Amicus Curiae Brief — Missouri-Kansas-Texas Railroad Co. Co. v. Brotherhood of Locomotive Engineers (Nos. 85-793, 85-792)

J.. U—ñZU——ᷓ

Supreme Court, U.S,

> | FILED

. JUN @ 168

Nos. 85-792 and 85-793 JOSEPH F. SPANIOL, JR,

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

INTERSTATE COMMERCE COMMISSION and

MISSOURI-KANSAS-TEXAS RAILROAD COMPANY,

‘ Petitioners,

BROTHERHOOD OF LOCOMOTIVE ENGINEERS and

UNITED TRANSPORTATION UNION,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF OF THE '

ASSOCIATION OF AMERICAN RAILROADS AND

NATIONAL RAILWAY LABOR CONFERENCE

AS AMICI CURIAE IN SUPPORT OF THE PETITIONERS

KENNETH P. KOLSON RICHARD T. CONWAY

ASSOCIATION OF (Counsel of Record)

AMERICAN RAILROADS WILLIAM F. SHEEHAN

50 F Street, N.W. SHEA & GARDNER

Washington, D.C. 20001 1800 Massachusetts Ave., N.W.

(202) 639-2100 Washington, D.C. 20036

Daum P. LEE (202) 828-2000

General Counsel

NATIONAL RAILWAY

LABOR CONFERENCE -

1901 L Street, N.W.

Washington, D.C. 20036

(202) 862-7218

Counsel for Amici Curiae

June 7, 1986

WILSON - EPES PRINTING Co. INC. - 789-0096 - WASHINGTON, D.C. 2000

TABLE OF CONTENTS

Ee

INTEREST OF AMICI CURIAE ........................-.-------

—— ————— - —

INTRODUCTION AND SUMMARY OF ARGU-

MENT

ARGUMENT

eee ee ee ee eel

I. THE COMMISSION ADEQUATELY EX-

ren

THE COMMISSION’S CONCLUSIONS WERE

e

II.

A.

D.

The Interstate Commerce Act Provides A

Comprehensive Scheme Encouraging Rail

Consolidation And Protecting the Interests

r

. The Railway Labor Act, If It Applied, Would

Interfere With and Could Defeat the Goals

of the Interstate Commerce Act ....................

The ICC, Following BLE v. CNW, Rightly

Ruled That the Railway Labor Act Is Super-

r

Override of the Railway Labor Act Is Re-

e A

III. SECTION 11341(a) IS SELF-EXECUTING....

IV. THE 4-R ACT DID NOT AMEND THE LAW

TO ALLOW THE RAILWAY LABOR ACT TO

INTERFERE WITH TRANSACTIONS AP-

PROVED BY THE COMMISSION .....................

r A em ee

10

10

13

30

ii

TABLE OF AUTHORITIES

CASES: Page

American Airlines v. CAB, 445 F.2d 891 (2d Cir.

1971), cert. denied, 404 U.S. 1015 (1972)........ 7

Anderson v. Norfolk & Western Ry. Co., 773 F.2d

or, %˖˖ & ae 30

Bowman Transp., Inc. v. Arkansas-Best Freight

Systems, Inc., 419 U.S. 281 (1974) .........--......... 9

Brotherhood of Locomotive Engineers v. Boston

and Maine Corp., 122 LRRM 2020 (ist Cir.,

e 18, 23

Brotherhood of Locomotive Engineers v. Chicago

and North Western Ry., 314 F.2d 424 (8th

Cir.), cert. denied, 375 U.S. 819 (1963) -............ passim

Brotherhood of Maintenance of Way Employes v.

United States, 366 U.S. 169 (1961) 11,17

Brotherhood of Railroad Trainmen v. Jacksonville

Terminal Co., 394 U.S. 369 (19697 14

Bundy v. Penn Central Co., 455 F.2d 277 (6th Cir.

DEI ecccccccnssuincnpininitinsncctisiiitsiedica i liciaiiamacaai i elas 18

Burlington Northern, Inc. v. American Railway

Supervisors Ass’n, 503 F.2d 58 (7th Cir. 1974),

cert. denied, 421 U.S. 975 (1975).....................----- 18

Burlington Northern R.R. v. UTU, No. 86-5013-

c en ee mE 16

Chicago & E. I. R. Co. Trackage Rights, 254 JI. C. C.

r OE Fe LL 3

Colorado Interstate Gas Co. v. FPC, 324 U.S. 581

6 7, 10

Congress of Railway Unions v. Hodgson, 326 F.

Supp. 68 (D.D.C. 1971)

Detroit and Toledo Shore Line R. R. v. UTU, 396

R ! 14

Division 1287, Amalgamated Transit Union v.

Kansas City Area Transp. Authority, 582 F.2d

444 (8th Cir. 1978), cert. denied, 439 U.S. 1090

/ aan: 28

Division No. 14, Order of R.R. Tel v. Leighty,

298 F.2d 17 (4th Cir.), cert. denied, 369 U.S.

885 (1962) 12

Dixie Cotton Oil Co. v. St. Louis, 1. M. & S. Ry.,

27 I. C. C. 295 (1913) 2

iii

TABLE OF AUTHORITIES—Continued

Edmonds v. Compagnie Generale Transatl., 443

eren

Elgin, Joliet & Eastern Ry. v. Burley, 325 U.S.

NEE ES

Employees Protective Ass’n v. Norfolk & Western

Ry., 511 F.2d 1040 (4th Cir. 197552

Engineers v. Burlington Northern, Inc., 92 LRRM

EEE TI ee

Guilford Transp., Ind., Inc.—Control—-Boston and

Maine Corp., 366 I. C. C. 292 (1982), affirmed in

relevant part, Lamoille Valley R.R. v. ICC, 711

VJ sceeenpeaccece

Guilford Transp. Ind., Inc.—Control—Delaware

and Hudson Ry., 366 I. C. C. 396 (1982), af-

firmed in relevant part, Central Vermont Ry. v.

ICC, 711 F.2d 331 (D.C. Cir. 1983)

Gulf, M. & N. R. Co. Abandonment of Operations,

ä EE SS

Hayfield Northern R.R. v. Chicago and North

Western Transp. Co., 467 U.S. 622 (1984)

International Ass'n of Machinists v. Boston and

Maine Corp., No. 84-3703-T (D. Mass.) ............

International Ass’n of Machinists v. Northeast

Airlines, 400 F. Supp. 372 (D. Mass. 1975),

aff’d, 536 F.2d 975 (Ist Cir.), cert. denied, 429

ESE

International Ass'n of Machinists v. Northeast

Airlines, 536 F.2d 975 (Ist Cir.), cert. denied,

r ...

International Ass’n of Machinists v. Northeast

Airlines, 473 F.2d 549 (Ist Cir.), cert. denied,

r RE

ICC v. Columbus & Greenville Ry., 319 U.S. 551

r EES IEE

SSS ˙ ..

Jackson Transit Authority v. Local Division 1285,

Amalgamated Transit Union, 457 U.S. 15

(1982)

Page

26

14

30

29

15

19

2 0

IV

TABLE OF AUTHORITIES—Continued

Kent v. CAB, 204 F.2d 263 (2d Cir.), cert. de-

BO EE ee ee

Locomotive Engineers v. New York Dock Rail

Road, 94 Labor Cases J 13,704 (E. D. N. V. 1981),

subsequent opinion, 97 Labor Cases {] 10,007

r reer

Missouri Pac. R. R. v. UTU, 782 F.2d 107 (8th

Cir. 1986), pdg. on pet. for a writ of cert.,

c

Missouri Pac. R. R. v. UT U, 580 F. Supp. 1490

(E. D. Mo. 1984), af d, 782 F.2d 107 (8th Cir.

1986), pdg. on pet. for a writ of cert., No. 85-

110

Nemitz v. Norfolk & Western Ry., 436 F.2d 841

(6th Cir.), aff'd on other grounds, 404 U.S. 37

c EP ES OWA ORI Sa

New York Dock Ry.—Control—Brooklyn Eastern

District, 360 I. C. C. 60, aff'd, New York Dock

Ry. v. United States, 609 F.2d 83 (2d Cir.

— —— . ——— 6, 13,

Norfolk and Western Ry. v. Nemitz, 404 U.S. 37

(1971)

Norfolk and Western Ry.—Trackage Right—BN,

354 I. C. C. 605 (1978), as modified by, Mendo-

cino Coast Ry.—Lease and Operate—California

Western R.R., 360 I. C. C. 653 (1980), aff’d, Rail-

way Labor Exec. Ass’n v. United States, 675

pe OS een

Oregon Short Line R.R. Co.—Abandonment—

Goshen, 354 I. C. C. 76 (1977)

Oregon Short Line R. R. Co. A bandon ment

Goshen, 360 I. C. C. 91 (1979).........

Railway Clerks v. Florida East Coast Ry., 384

r,, .

Railway Labor Exec. Ass’n v. Butte, Anaconda

and Pac. R. R., No. 85-3875 (9th Cir.) ))

Railway Labor Exec. Ass’n v. ICC, 784 F.2d 959

(9th Cir. 1986)

——— G O eee ee ee

Page

7,19

18

19

—

26, 29

18

V

TABLE OF AUTHORITIES—Continued

Page

Railway Labor Exec. Ass’n v. Staten Island R. R.,

— F.2d — (2d Cir., No. 85-7483, May 22,

111118 ² AA—̃ ͤ-—ñ̃ — —————— 7, 15

Railway Labor Fxec. Ass’ n V. United States, 339

U.S. 142 (1950) 12, 17

Schwabacher v. United States, 334 U.S. 182

( 22

Shepard v. NLRB, 459 U.S. 344 (1983) 10

Simmons v. ICC, 760 F.2d 126 (7th Cir. 1985) .... 6

Simmons v. ICC, 766 F.2d 1177 (7th Cir. 1985),

cert. denied, 106 S.Ct. 791 (1986) _................... 6

Southern Ry. Co.—Control—Control of Georgia

pe we III 28

Texas & New Orleans R.R. v. Brotherhood of

Railroad Trainmen, 307 F.2d 151 (5th Cir.

1962), cert. denied, 371 U.S. 952 (1963)........ 19, 20

Texas and New Orleans R.R. v. Brotherhood of

Railway and Steamship Clerks, 281 U.S. 548

0 ———— 14

Thompson v. Texas Mexican R. Co., 328 U.S. 134

111 2

Transit Comm’n v. United States, 289 U.S. 121

r 2

Union Paciſie- Control. Missouri Pacific, 366 I. C. C.

462 (1982), aff'd, Southern Pacific Transp. Co.

v. ICC, 736 F.2d 708 (D.C. Cir. 1984), cert. de-

nied, 105 S.Ct. 1171, 1172 (1988) 3

United States v. Lowden, 308 U.S. 225 (1939). 5, 11, 20

United States v. Pierce Auto Freight Lines, Inc.,

r,, 10

UTU v. Norfolk & Western Ry., 332 F. Supp.

RT Ee 18, 19

Watt v. Alaska, 451 U.S. 259 (198177 26

STATUTES:

Civil Aeronautics Act, as amended:

49 U.S.C. app. § 1378 (1982 ed.) 7,19

Interstate Commerce Act, as amended:

SIE ET 5, 7, 18

vi

TABLE OF AUTHORITIES—Continued

Page

ü — 4, 5, 6, 7, 15

.E1(1— 4, 5

/ — 4, 5

49 U.S.C. 8 10905 —_ a @&¢

8989988 passim

ht, eT RT passim

49 U.S.C. § 11348 ..... c passim

TATE ICE ET 8, 12, 22, 23

, passim

National Labor Relations Act, as amended:

Section 8(e), 73 Stat. 543, 29 U.S.C.

D 10

Norris-La Guardia Act

49 Stat. 70 (1932) 19

Rail Passenger Service Act of 1970 (“Amtrak

Act“), Pub. L. No. 91-518, 84 Stat. 1327

(1970):

Section 405, 84 Stat. 1337 25, 27

Railroad Revitalization and Regulatory Reform

Act of 1976, Pub. L. No. 94-210, 90 Stat. 31

(1976) passim

Section 101, 90 Stat. 33, 45 U.S.C. § 81 11

Section 401, 90 Stat. 61-62 _........-..---.---02.2........ 2

Section 462, 90 Stat. 66. ĩ„%1.gder. 24, 26

Railway Labor Act, as amended, 45 U.S.C. § 151

et seq. ..passim

Staggers Rail Act of 1980, Pub. L. No. 96-448,

R 6

Transportation Act of 1920, 41 Stat. 456 (1920) 11

Transportation Act of 1940, 54 Stat. 898 (1940) .. 2, 5, 11,

12,17

Urban Mass Transportation Act of 1964, § 13(c),

2 a ene em... 27

MISCELLANEOUS:

121 Cong. Rec. 41340 (1975) 27

H.R. 10979, 94th Cong., Ist Sess. (1975 26

vii

TABLE OF AUTHORITIES—Continued

Page

H.R. Rep. No. 94-725, 94th Cong., Ist Sess. 1

—177 —ͤ x ——ůů 26

S. 2718, 94th Cong., Ist Sess. (1975 26

S. Rep. No. 94-499, 94th Cong., Ist Sess. (1975),

reprinted in 1976 U.S. Code Cong. & Ad. News

gee ERIS es oe LE Te RIE, co at NN RO 11

1 LL. Sharfman, The Interstate Commerce Com-

STE . Se EF NN co 11

Supplemental Hearings on H.R. 17849 and S.3706

before the Subcommittee on Transportation qnd

Aeronautics of the House Committee on Inter-

state and Foreign Commerce, 91st Cong., 2d

r . 27

—

BRIEF OF THE

ASSOCIATION OF AMERICAN RAILROADS AND

NATIONAL RAILWAY LABOR CONFERENCE

AS AMICI CURIAE IN SUPPORT OF THE PETITIONERS

INTEREST OF AMICI CURIAE

The Association of American Railroads is the trade

association for the nation’s railroads. Its members em-

ploy approximately 94% of the workers, operate approx-

imately 92% of the trackage, and account for approxi-

mately 97% of the freight revenues of all railroads in

the United States. The Association represents its mem-

ber railroads before courts, agencies, and the Congress

when matters of common concern are at issue.

Almost all of the nation’s Class I railroads are mem-

bers of the National Railway Labor Conference. The

Conference represents member railroads both in national

collective bargaining pursuant to the Railway Labor Act

with unions representing their employees and in regard

to other labor-management relations problems that are

of concern to the railroads generally. In addition, the_

Conference serves as a clearing house of information re-

garding, and renders assistance and advice to member

railroads concerning, employee protection issues that arise

out of mergers and other railroad transactions governed

by the Interstate Commerce Act.

This case raises the question whether labor-manage-

ment disagreements arising out of rail carrier efforts to

implement transactions approved by the Interstate Com-

merce Commission are to be resolved according to the

procedures prescribed by the Interstate Commerce Act,

or the procedures prescribed by the Railway Labor Act.

This question is critical. Under the Interstate Commerce

Act such disputes are resolved promptly by mandatory,

binding arbitration; under the Railway Labor Act they

may lead to strikes and other forms of self-help, inter-

fering with interstate commerce and possibly blocking

altogether the realization of transactions held to be in

the public interest.

2

The decision of the court of appeals in this case mis-

construes the relationship between the two statutes and

misunderstands the effect of an approval by the Commis-

sion under the Interstate Commerce Act. It threatens

serious interference with and delay to the ability of rail-

roads to implement not only Commission-approved track-

age rights transactions by operation with their own

crews as traditionally has been done—which is the sub-

ject of this case—but also other kinds of transactions

approved by the Commission. The AAR and the NRLC

accordingly file this brief in support of the petitioners

herein.“

STATEMENT

This case has its beginning in the approval by the

Interstate Commerce Commission of the merger of the

Union Pacific (“UP”) and Missouri Pacific (“MP”)

railroads. To ameliorate the anticompetitive effect of

that merger, the Commission simultaneously granted two

competing carriers—the Missouri-Kansas-Texas (“MKT”)

and the Denver Rio Grande Western (“DRGW”)—rights

to operate their trains over tracks owned by MP.“ And

to protect the interests of any employees who might ve

adversely affected by the exercise of those rights, the

Commission imposed on the carriers certain “employee

1 Written consents from all parties to the filing of this brief have

been filed with the Clerk of the Court.

2 It has long been “a well-recognized practice among carriers to

agree as to trackage rights and privileges between one another for

the common use of a part of the line of one in such a manner as

to make the tracks subject to the agreement a part of both roads.”

Dixie Cotton Oil Co. v. St. Louis, I. M. & S. Ry., 27 I. C. C. 295, 297

(1913). The acquisition of trackage rights by a carrier “consti-

tute[s] an ‘extension’ of its own railroad” and “serves the same

purpose as would the acquisition of such lines by purchase or the

construction by it of a like extension“ * *.” Transit Comm’n v.

United States, 289 U.S. 121, 128-129 (1933). The Transportation

Act of 1940 gave the Commission “explicit powers over trackage

rights,” including “fixing terms and conditions * * * for any track-

age agreements entered into * * *.” Thompson v. Texas Mezican

R. Co., 328 U.S. 134, 146 (1946).

3

protection” obligations, more fully described below. Un-

ion Pacific-Control-Missouri Pacific, 366 I. C. C. 462

(1982), aff'd, Southern Pacific Transp. Co. v. ICC, 736

F.2d 708 (D.C. Cir. 1984).

The trackage rights applications submitted to and ap-

proved by the Commission stated that the MKT would

use its own employees to man its trains, and that the

DRGW would have the option of doing so. (Pet. App.

62a.)* When the tenant carriers exercised their track-

age rights the Brotherhood of Locomotive Engineers

(“BLE”) and the United Transportation Union (“UTU”)

protested to the Commission on behalf of the MP em-

ployees. They argued that the tenants’ operation of their

own trains with their own crews over MP tracks

amounted to a change in the collective bargaining agree-

ments relating to the working conditions of MP employ-

ees; that such a change could be lawfully effected only

through collective bargaining pursuant to the major dis-

pute procedures of the Railway Labor Act; and that the

Commission has no power under the Interstate Com-

meree Act, to authorize a transaction effecting such a

change without resort to the procedures of the Railway

Labor Act. (Pet. App. 57a-59a.)

Pet. App.” references are to the Appendix to the petition of the

Interstate Commerce Commission. Operation by the tenant carrier

“with its own engines and crews * * * is the usual method by which

one carrier uses tracks of another.” Gulf, M. & N. R. Co. Abandon-

ment of Operations, 233 I. C. C. 294, 297 (1939). Indeed, it has been

held that an agreement under which the owner carrier “would fur-

nish all necessary locomotives and crews” is not a true trackage-

rights agreement, which “necessarily include[s] an operating right”

in the tenant carrier. Chicago & E. I. R. Co. Trackage Rights, 254

I. C. C. 603, 604, 605 (1943)

* Both the BLE and the UT U participated in t:.. initial ICC pro-

ceeding and opposed the trackage rights applications generally.

Neither, however, opposed the applications insofar as they would

allow the tenants to use their own crews and neither raised that

issue on appeal to the D.C. Circuit from the approval of the applica-

tions. Moreover, those unions also represent employees of the tenant

carriers. The record shows that the unions, on behalf of those

4

In addition, the UTU threatened to strike the MP

unless the MP refused to permit MKT crews to operate

MKT trains on MP tracks. That threatened strike was

enjoined. Missouri Pac. R. R. v. UTU, 580 F. Supp. 1490

(E. D. Mo. 1984), affd, 782 F.2d 107 (8th Cir. 1986),

pdg. on pet. for a writ of cert., No. 85-1054.

The Commission rejected the unions’ arguments. It

concluded, among other things, that the tenants were

free to use their own crews, even if that did amount to

a change in the working conditions of MP employees, be-

cause the Railway Labor Act did not apply but had been

superseded for the reasons stated at length in Brother-

hood of Locomotive Engineers v. Chicago and North

Western Ry., 314 F.2d 424, 430-31 (8th Cir. 1963).

(Pet. App. 60a.)

A divided court of appeals found the Commission’s ex-

planation inadequate. It sought to distinguish the case

on which the Commission relied, and it vacated the Com-

mission’s orders on the asserted ground that the agency

“did not give a shred of reasoning to support its view

that completion of the transactions required shielding

crew selection from the Railway Labor Act.” (Pet. App.

19a, footnote omitted.)

INTRODUCTION AND SUMMARY OF ARGUMENT

1. Introduction. The Interstate Commerce Act con-

tains, in Chapters 109 and 113 of Title 49 of the U.S.

Code, a comprehensive and meticulous scheme for the

regulation of changes in rail carrier control or operation.

Chapter 109 (“Licensing”) governs the extension or con-

struction of a line of railroad (§ 10901), the sale of a

line of railroad from a carrier to a noncarrier (id.),

the abandonment of a line or the discontinuance of op-

erations over a line (§ 10903), and the purchase of a line

noticed and approved for abandonment (§ 10905). Chap-

employees, have entered into agreements with the MKT—pursu-

ant to the procedures prescribed by the Interstate Commerce Act—

regarding the crewing of MKT’s trains used in trackage-rights

operations.

5

ter 113 (“Combinations”) governs the consolidation and

merger of carriers, purchases or leases or contracts to

operate the properties of other carriers, acquisitions of

control, and acquisitions of trackage rights over another

carrier's lines (§ 11343). Before any of these actions

may be taken the approval of the Interstate Commerce

Commission is required.“

Under that statutory scheme the Commission for nearly

50 years has had power to impose employee protections

as a condition of its approval of most of the actions just

described. Thus, before 1940 the Commission in its dis-

cretion and without specific authority imposed protec-

tions as a condition of its approval of transactions now

falling under Chapter 113. United States v. Lowden,

308 U.S. 225 (1939). Such protections were required

after the Transportation Act of 1940, which “made man-

datory with respect to unifications the protections for

workers that had previously been discretionary.” ICC

v. Railway Labor Exec. Ass'n, 315 U.S. 373, 379 (1942)

(footnote omitted). Similarly, before 1976 the Commis-

sion had and exercised discretionary power to impose con-

ditions under the predecessors to Chapter 109 provisions.

See id. In that year the Railroad Revitalization and Reg-

ulatory Reform Act amended those provisions to require

protections in the case of abandonments (§ 10903) and

to codify the Commission’s discretion in the case of ac-

quisitions and extensions or constructions of rail lines

(10901). See Railway Labor Exec. Ass’n v. ICC. 784

F. 2d 959, 945 (9th Cir. 1986).

Under § 10505, the Commission may exempt “a person, class of

persons, or a transaction or service” from requirements of the Act,

including those contained in Chapters 109 and 113, but such an

exemption does not “relieve a carrier of its obligations to pro-

tect the interests of employees as required” in those chapters

(810505 (g)). Hence, the preemptive effect upon the Railway Labor

Act is the same regardless of whether the Commission approves a

transaction under applicable provisions of Chapter 109 or 113 or

exempts the transaction from those provisions.

The one exception to the foregoing is that the Commission has

no power to impose protections in connection with the purchase of a

6

Chapters 109 and 113 share more than a common his-

tory of the Commission’s power to impose protections.

Both chapters have the goal of an efficient and economic

rail transportation system, see ICC v. Railway Labor

Exec. Ass’n, supra, 315 U.S. at 376; the justifications

for protections as recognized by this Court apply equally

to both chapters, see id., 315 U.S. at 377; the protections

that the Commission imposes under both chapters are

virtually identical; and the Railway Labor Act, if it

applied, would frustrate and possibly block altogether

transactions under both chapters approved by the Com-

mission as being in the public interest. For these reasons

the amici Association of American Railroads and Na-

tional Railway Labor Conference believe that the Rail-

way Labor Act is overridden by the Interstate Commerce

Act with respect to all transactions subject to Commis-

sion approval, whether falling under Chapter 109 or 113.

This case involves a trackage rights transaction, cov-

ered by Chapter 113. As we show below, there is an

additional reason for concluding that the Railway Labor

Act is superseded with respect to Chapter 113 transac-

tions—namely, the provision in § 11341(a) that carriers

participating therein are “exempt * * * from all other

laws * as necessary to carry out the t-ansac-

tion.” But neither the presence of that provision in

Chapter 113, nor our reliance on it in this case, detracts

from the force of the arguments that the Railway Labor

line approved for abandonment under § 10905 (added by the 1976

Act but significantly amended by the Staggers Rail Act of 1980,

Pub. L. No. 96-448, § 402(c), 94 Stat. 1895, 1942-45). Simmons

v. ICC, 766 F.2d 1177 (7th Cir. 1985); Simmons v. ICC, 760 F.2d

126 (7th Cir. 1985).

Compare New York Dock Ry.—Control—Brooklyn Eastern Dis-

trict, 360 I. C. C. 60, affirmed, New York Dock Ry. v. United States,

609 F.2d 83 (2d Cir. 1979) (merger protections under Chapter 113),

with Oregon Short Line R.R.—Abandonment—Goshen, 360 I. C. C. 91

(1979) (abandonment protections under Chapter 109).

7

Act is superseded by Chapter 109 as well.“ The amici

make this point out of a concern that a decision by this

Court favorable to petitioners in this case that relied on

the presence of § 11341(a) in Chapter 113 could con-

ceivably be construed by lower courts to prejudice the

position of carriers in cases arising under Chapter 109.“

2. Summary. We show in Part I below that the court

of appeals erred in ruling that the Commission’s explana-

tion for its conclusion was inadequate. The Commis-

sion’s decision set forth the union’s claims, and then the

reasons for rejecting them. It relied heavily on, and

adopted as its own, the reasoning behind Brotherhood of

Locomotive Engineers v. Chicago and North Western Ry,.,

314 F.2d 424 (8th Cir. 1963), which held that the Rail-

way Labor Act is superseded by the Interstate Commerce

Act in cases such as this one. In short, “[t]he path which

it followed can be discerned.” Colorado Interstate Gas

Co. v. FPC, 324 U.S. 581, 595 (1945).

In Part II we address the merits of the Commission’s

conclusions. We show that the procedures for resolving

disputes under that Act, which ai their end contemplate

the union’s right to strike if its demands are not met,

must yield to the mandatory arbitration provisions pre-

scribed by the Commission as the means for resolving

We are supported in our view of the preemptive effect of

Chapter 109 by the experience under the Civil Aeronautics Act.

Labor protections imposed on air carriers under that Act have been

held to supersede inconsistent agreements under, or provisions of,

the Railway Labor Act without reference to any express statutory

exemption. E. g., Kent v. CAB, 204 F.2d 263 (2d Cir. 1953) ; accord,

International Ass’n of Machinists v. Northeast Airlines, 473 F.2d

549 (Ist Cir. 1972); International Ass’n of Machinists v. Northeast

Airlines, 536 F.2d 975 (ist Cir. 1976) ; American Airlines v. CAB,

445 F.2d 891 (2d Cir. 1971).

Pending cases involving the relatio ship between Chapter 109

(either directly or indirectly by reason of a § 10505 exemption) and

the Railway Labor Act include Railway Labor Exec. Ass’n v. Butte,

Anaconda and Pac. R.R., No. 85-3875 (9th Cir.) and Railway Labor

Exec. Ass'n v. Staten Island R.R., —— F.2d —— (2d Cir., No. 85-

7483, May 22, 1986).

8

disputes stemming from carrier efforts to implement

transactions the Commission has approved as being in

the public interest. A contrary result would mean that

labor, already entitled in many instances under the In-

terstate Commerce Act to federally imposed protections

unparalleled elsewhere in American industry, would have

a veto power over the implementation by carriers of ap-

proved transactions. As a host of lower court decisions

supporting our view demonstrates, Congress meant to

encourage rail consolidations under the Interstate Com-

merce Act, and could not have meant to frustrate that

goal by giving rail labor, in addition to the statutorily

mandated protections, the right to delay or block those

transactions altogether.

3. In Part III we support the Commission’s construc-

tion of § 11341 (a) as self-executing. That section of the

Interstate Commerce Act requires no action by the Com-

mission whatever. The factors required to be considered

by the Commission appear in §§ 11343 and 11344. Once

the Commission after considering those factors approves

a transaction, a question may subsequently arise as to

whether or not it is “necessary” under § 11341(a) for

the carrier participants to be relieved of the operation of

some other law, but the answer will ordinarily not de-

pend on whether the Commission has made any “neces-

sity” determination as part of its decision approving the

transaction in the first place.

4. Finally we show that the unions err in contending

that the Railroad Revitalization and Regulatory Reform

Act of 1976 amended the Interstate Commerce Act to

somehow revivify the role of the Railway Labor Act in

the implementation of ICC-approved transactions. The

provision in the 4-R Act on which the unions rely was

added without a shred of debate and it is inconceivable

that Congress was effecting so major a change in the

law, and introducing so large a hurdle to the accom-

plishment of the goals of the Interstate Commerce Act,

without a word being said about the matter by any mem-

ber of Congress or any representative of rail labor or

management.

9

ARGUMENT

I. THE COMMISSION ADEQUATELY EXPLAINED

ITSELF

The Commission’s reasoning in its October 19, 1983

decision “may reasonably be discerned.” Bowman Transp.,

Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281,

285-86 (1974). It set out the issues for decision by stat-

ing the unions’ claims: “that this Commission has no

jurisdiction over crew assignment disputes and that they

must, be settled under the procedures of the Railway

Labor Act” and that the Commission’s approval of the

trackage rights transaction could not “immunize [that!

transaction from the requirements of the RLA” or au-

thorize the carriers to make “unilateral changes of col-

lective bargaining agreements.” (Pet. App. 57a.) The

Commission than went on to reject those arguments, rul-

ing that its approval of a transaction covered by § 11343—

“exempts such a transaction from the requirements

of all laws as necessary to permit the transaction

to be carried out, and includes an -exemption from

the requirements of the RLA. See Brotherhood of

Loc. Eng. v. Chicago & North Western Ry. Co., 314

F.2d 424, 432 (8th Cir. 1963), cert. denied 375 U.S.

819 (1963).” (Pet. App. 59a.)

It also ruled (id. 60a) :

“To the extent that exis.ing working conditions and

collective bargaining agreements conflict with a

transaction which we have approved, those conditions

and agreements must give way to the implementa-

tion of the transaction.”

And then the Commission explained why (id.) :

“If our approval of a transaction did not include

authority for the railroads to make n

changes in working conditions, subject to payment

of specified benefits, our jurisdiction to approve

transactions requiring changes of the working con-

ditions of any employees would be substantially nul-

lified. Such a result would be clearly contrary to

10

congressional intent. The discussion of this point

in Brotherhood of Loc. Eng. [v. Chicago and North

Western Ry. Co., 314 F.2d 424, 430-31 (8th Cir.

1963) ] is persuasive and we conclude that this rea-

soning is unaffected by the enactment of the 4-R

Act.”

The Commission’s two citations to the Eighth Circuit’s

decision in the Chicago and North Western case (herein-

after “BLE v. CNW”), and its adoption of the reasoning

there as its own, make clear the basis for its finding that

the crew selection provisions of the approved trackage

rights agreements were exempt from the provisions of

the RLA.” In short, while the organization of the deci-

sion of the Commission may not be flawless, [t] he path

which it followed can be discerned.” Colorado Interstate

Gas Co. v. FPC, 324 U.S. 581, 595 (1945). See also

United States v. Pierce Auto Freight Lines, Inc., 327

U.S. 515, 532-33 (1946); ICC v. Columbus & Greenville

Railway, 319 U.S. 551, 555 (1943).

II. THE COMMISSION’S CONCLUSIONS WERE

CORRECT

A. The Interstate Commerce Act Provides A Compre-

hensive Scheme Encouraging Rail Consolidations

And Protecting the Interests of Labor.

The Interstate Commerce Act favors rail mergers and

other types of rail consolidations. That has been true for

over 60 years. The post-World War I period was a time

of great uncertainty and financial crisis for the nation’s

10 See Shepard v. NLRB, 459 U.S. 344, 348-52 (1983), in which

this Court upheld the Board’s decision to forgo a requirement of

reimbursement as a remedy for violation of § 8 (e) of the National

Labor Relations Act. The Board’s reasoning on that issue was

confined to a footnote and was “something less than a model of

precise expository prose,” but the Court was able to glean “the

sense of the Board’s explanation,” in part by a reading of a decision

that the Board had merely cited in the explanatory footnote.

Id. 350.

Ee

11

railroads, largely because of waste and inefficiency caused

by extensive duplication of facilities and services.‘ Con-

gress responded with the Transportation Act of 1920, 41

Stat. 456, where “consolidation of the railroads of the

country, in the interest of economy and efficiency, became

an established national policy * * *.” United States v.

Lowden, 308 U.S. 225, 232 (1939). That Act, however,

left consolidation largely to the Commission’s efforts, and

proved insufficient to its end. Congress accordingly re-

affirmed and reinforced the national policy by giving rail

carriers principal authority to initiate unifications in the

Transportation Act of 1940, 54 Stat. 898, the chief goal

of which was “ ‘to facilitate merger and consolidation in

the national transportation system.’” Brotherhood of

Maintenance of Way Employes v. United States, 366

U.S. 169, 173 (1961).

The Railroad Revitalization and Regulatory Reform

Act of 1976, Pub. L. No. 94-210, 90 Stat. 31, continued

pursuit of the national policy. It “was an attempt to

restructure the railroad industry in the face of chronic

financial losses and line closures.” Railway Labor Exec.

Ass'n v. ICC, 784 F.2d 959, 965 (9th Cir. 1986). It

sought to promote an efficient rail transportation system

through (among other things) “the encouragement of

efforts to restructure the system on a more economically

justified basis, including planning authority [for mer-

gers] in the Secretary of Transportation, an expedited

procedure for determining whether merger and consolida-

tion applications are in the public interest, and continu-

ing reorganization authority * .“ §101(a) (2), 90

Stat. 33, 45 U.S.C. § 801 (a) (2).

11 See 1 I. L. Sharfman, The Interstate Commerce Commission

172-178 (1981).

12 See Senate Rep. No. 94-499, 94th Cong., Ist Sess. 20-21 (1975),

reprinted in 1976 U.S. Code Cong. & Ad. News 14, 34 (“Title IV

of this bill is intended to encourage mergers, consolidations and

joint use of facilities that tend to rationalize and improve the

12

Throughout this entire period the Commission’s ap-

proval has been required for mergers, consolidations and

other transactions falling within what is now § 11343. The

Commission’s jurisdiction over these transactions is “ex-

clusive,” and carriers participating in approved transac-

tions are “exempt * * * from all other law * as

necessary to let that person carry out the transaction

***” § 11341 (a).

A more efficient and hence viable rail transportation

system will ultimately benefit the public at large and pre-

serve jobs for rail labor. Yet Congress has long recog-

nized that the economies it sought to encourage through

rail mergers are often achieved by the abolishment of

duplicative facilities, resulting in the dismissal of em-

ployees or their displacement to lower paying jobs.“ Its

response, since the Transportation Act of 1940, has been

to require the Commission in determining whether to

grant an application subject to § 11343 to consider

(among other things) “the interest of carrier employees

affected by the proposed transaction,” § 11344 (b) (1) (D),

and if it approves the application the Commission “shall

require the carrier to provide a fair arrangement” to

protect employees adversely affwcted by the transaction.

§ 11347. The Commission accordingly has established a

comprehensive set of “protections” to be afforded em-

Nation’s rail system, and requires the Commission * * * to reach a

[prompt] decision * * *.” Section 401 “empowers the Secretary to

develop plans, proposals and recommendations for mergers, con-

solidations and other coordination projects .“).

18 See Railway Labor Exec. Ass'n v. United States, 339 U.S. 142,

147-148 (1950), noting “a widespread awareness in the railroad

industry that many of the economies to be gained from consolida-

tions * * * could be realized only at the expense of displaced railroad

labor” and that [the legislative history of §5(2)(f) [now

§ 11347] shows that one of its principal purposes was to provide

mandatory protection for the interests of employees affected by

railroad consolidations.”; Division No. 14, Order of R.R. Tel. v.

Leighty, 298 F.2d 17, 17-18 (4th Cir. 1962).

13

ployees adversely affected as a result of approved rail

mergers, consolidations and common control transac-

tions,“ and lease and trackage rights transactions.”

Under these protective conditions, an employee who is

dismissed from a job or displaced to a lower paying posi-

tion as a result of the approved transaction will continue

to receive, generally for six years, the equivalent of the

wage he or she was earning at the time of the adverse

effect, indexed in accordance with subsequent general

wage increases; moving expenses are provided if reloca-

tion is necessary; and transfers of work are subject to

“implementing agreement” provisions regarding the al-

location of seniority or other contract rights of affected

employees. In addition, if the carrier and the union rep-

resenting its affectet® employees are unable to come to

terms over an implementing agreement, the parties must

submit their dispute to expedited, binding arbitration.

See New York Dock Ry. v. United States, supra, 609 F.2d

at 94.

B. The Railway Labor Act, If It Applied, Would Inter-

fere With and Could Defeat the Goals of the Inter-

state Commerce Act. 1

The carefully constructed statutory scheme we have

just described would be set at naught if unions could

insist that carriers, in addition to securing the approval

of the Commission to engage in the transactions listed

in § 11343, and complying with the employee protective

14 New York Dock Ry.—Control—Brooklyn Eastern District, 360

I. C. C. 60, 84-90 (1979) ,"afirmed, New York Dock Ry. v. United

States, 609 F.2d 83 (2d Cir. 1979). The Second Circuit’s decision in

this case contains an extensive history of the conditions imposed

over the years by the Commission.

15 Norfolk and Western Ry.—Trackage Rights—BN, 354 I.C.C.

605 (1978), as modified by Mendocino Coast Ry.—Lease and Oper-

ate—California Western R. R., 360 I. C. C. 653 (1980), affirmed,

Railway Labor Exec. Ass’n v. United States, 675 F.2d 1248 (D.C.

Cir. 1982).

14

conditions imposed by the Commission under § 11347,

must also follow the “major dispute” procedures of the

Railway Labor Act (“RLA”) before consummating a

transaction that the Commission has appr ved as being

in the public interest.

“Major” disputes arise under that Act when labor or

management seeks to change the rates of pay, rules, or

working conditions established in existing collective bar-

gaining agreements. Elgin, Joliet & Eastern Ry. v. Bur-

ley, 325 U.S. 711, 723 (1945). Because the major pur-

pose of Congress in passing the Railway Labor Act was

‘to provide a machinery to prevent strikes, Texas and

New Orleans R.R. v. Brotherhood of Railway and Steam-

ship Clerks, 281 U.S. 548, 565 (1930), the Act requires

the parties to such a dispute to follow certain prescribed

procedures designed to maximize the possibility of reach-

ing agreement. Those procedures are “purposely long

and drawn out,” Railway Clerks v. Florida East Coast Ry.,

384 U.S. 238, 246 (1966), and their exhaustion is “almost

an interminable process.” Detroit and Toledo Shore Line

R. R. v. UTU, 396 U.S. 142, 149 (1969). It is not un-

16 In Brotherhood of Railroad Trainmen v. Jacksonville Terminal

Co., 394 U.S. 369, 378 (1969), this Court described the Act’s “de-

tailed framework to facilitate the voluntary settlement of major

disputes” ;

“A party desiring to effect a change of rates of pay, rules, or

working conditions must give advance written notice. §6. The

parties must confer, §2 Second, and if conference fails to

resolve the dispute, either or both may invoke the services of

the National Mediation Board, which may also proffer its

services sua sponte if it finds a labor emergency to exist. § 5

First. If mediation fails, the Board must endeavor to induce

the parties to submit the controversy to binding arbitration,

which can take place, however, only if both consent. §§ 5 First,

7. If arbitration is rejected and the dispute threatens sub-

stantially to interrupt interstate commerce to a degree such as

to deprive any section of the country of essential transportation

service, the Mediation Board shall notify the President,’ who

may create an emergency board to investigate and report on

the dispute. § 10.”

15

common for the procedures to drag on for two years or

more. At their ultimate conclusion, however, the parties

may resort to self-help, including a strike by a union if

its demands have not been met. E.g., Railway Clerks v.

Florida East Coast Ry., supra, 384 U.S. at 243-44.

Those demands may be inconsistent with the carrier’s

ability to implement the transaction approved by the

Commission, as an example may illustrate. Recently the

Commission approved the common control of three rail-

roads in the Northeast.’* It did so because common own-

ership would produce “substantial” public benefits in

several areas, including operating efficiencies to be

“achieved through consolidation of maintenance and re-

pair facilities.“ “ Yet when the carriers sought to con-

solidate their facilities the International Association of

Machinists sued to prevent them from doing so, arguing

that the carriers were obliged to bargain under the RLA

over demands by the union that each of three carriers

add to its collective bargaining agreement a provision

effectively barring the transfer of repair work from one

carrier to another. Those demands, if agreed to by the

carriers, would have forbidden the consolidation.“

11 Guilforc Transp. Ind., Inc. Control Boston and Maine Corp.,

366 I. C. C. 292, 338 (1982), aff'd in relevant part, Lamoille Valley

R. R. v. ICC, 711 F. 2d 295 (D.C. Cir. 1983); Guilford Transp. Ind.,

Inc. Control Delaware and Hudson Ry. Co., 366 I. C. C. 396 (1982),

aff'd in relevant part, Central Vermont Ry. v. ICC, 711 F.2d 331

(D.C. Cir. 1983).

18 366 I. C. C. at 388; see also id. at 402.

19 Complaint in International Assoc. of Machinists v. Boston and

Maine Corp., No. 84-3703-T (D. Mass.). A Stipulated Order of

Dismissal ended the case on February 24, 1986.

Another recent example (though arising under Chapter 109) can

be found in Railway Labor Ezec. Ass’n v. Staten Island R. R..

F.2d —— (2d Cir., No. 85-7488, May 22, 1986). In December 1984

the carrier applied for ICC approval of a proposed transaction.

Four unions later served bargaining demands that the carrier pro-

16

In other cases, a union may strike if a carrier imple-

ments an approved transaction without first seeking to

change the existing collective bargaining agreement

through the RLA major dispute procedures, as would

have occurred in connection with the approved transac-

tion involved in this case but for the strike injunction

recently affirmed by the Eighth Circuit. See p. 4 supra.

If the carrier should be required to utilize the RLA pro-

cedures, the result at a minimum will be delay in its

ability to implement the approved transaction. And if

at the end of those procedures the union has not agreed

to change the collective bargaining agreement, then the

carrier will face the choice either of foregoing what the

Commission has approved as being in the public interest,

or taking a strike.

C. The ICC, Following BLE v. CNW, Rightly Ruled

That the Railway Labor Act Is Superseded.

Because the application of the RLA could defeat the

Interstate Commerce Act scheme for approving mergers,

ete. subject to employee protections, the Eighth Circuit,

in the BLE v. CNW decision relied on by the Commis-

sion, ruled that the RLA was among the laws from

which carrier participants in ICC-approved transactions

are exempt. It relied in turn on the legislative history

vide them 6 months’ advance notice of such proposed transactions.

The ICC issued an order of approval on April 24, 1985 and the next

day the unions sued to enjoin the transaction, arguing that the

carrier in implementing the approved transaction had violated the

RLA by changing the status quo during the pendency of bargaining

demands. The complaint was dismissed for failure to state a claim

upon which relief may be granted.

On many rail properties unions recently have served bargaining

demands that if agreed to by the carriers would block or impede

ICC-approved transactions. The carriers generally view the de-

mands as nonmandatory subjects of bargaining. Some litigation on

that score has commenced (e.g., Burlington Northern R.R. v. UTU,

No. 86-5013-CV-SW-C (D.Mo.)) and more is inevitable.

17

of the Transportation Act of 1940, which as noted ebove

amended the Interstate Commerce Act to make employee

protective conditions mandatory in Chapter 113 trans-

actions. In passing that Act Congress rejected a proposed

amendment — he “Harrington” amendment that would

have forbidden carriers from abolishing jobs or impair-

ing existing employment rights as a result of a merger or

other transaction needing the Commission’s approval un-

der § 11343. That amendment, the Eighth Circuit noted,

“threatened to prevent all consolidations to which it

related. Id. at 430 (quoting Railway Labor Execu-

tives’ Ass’n v. United States, supra, 339 U.S. at 151).

Its defeat fortified tue conclusion that Congress intended

the ICC-prescribed protective conditions rather than the

RLA to govern the adjustments caused by merger imple-

mentations, for if the RLA were to govern it would

allow the nullification of Commission-approved trans-

actions:

“(T]he ICC power to authorize mergers would be

completely ineffective if authority to adjust work

realignments through fair compensation did not

exist. Under the Railway Labor Act in a major

dispute employees cannot be compelled to accept or

arbitrate as to new working rules or conditions.

* * * Thus under the Railway Labor Act provisions,

it is possible for either party to completely block any

change in working conditions by refusing to agree

to a change and by refusing to arbitrate. Like the

Harrington amendment, the Railway Labor Act, if

it applied, would threaten to prevent many consoli-

dations.” Id. at 430-431.

20 This Court, in Brotherhood of Maintenance of Way Employes

v. United States, supra, 366 U.S. at 173-77, relied heavily upon the

legislative history growing out of the Harrington amendment in

rejecting a union contention that the predecessor of § 11347 re-

quired a “job freeze,” and holding that compensatory employee pro-

tections are adequate.

18

The Eighth Circuit accordingly concluded that the RLA

was one of the laws from which carrier participants in

ICC-approved transactions are exempt under § 11341 (a)

in implementing those transactions. Id. at 431-32.”

That decision does not stand alone. Others to the same

effect include Brotherhood of Loc. Eng. v. Boston & Maine

Corp., 122 LRRM 2020, 2025 (Ist Cir., April 9, 1986)

(ICC exemption of lease transaction and imposition of

employee protections under § 10505 “exempted B&M from

the conditions of the RLA with respect to major dis-

putes.”) ; Missouri Pac. R. R. v. UTU, 782 F.2d 107, 111

(8th Cir. 1986) (affirming district court holding “that

MOPAC is exempted under § 11341(a) * * * from the

requirements of the Railway Labor Act”); Burlington

Northern, Inc. v. American Railway Supervisors Ass’n,

503 F.2d 58, 62-63 (7th Cir. 1974) (employee protec-

tions ordered by ICC pursuant to merger are controlling

in case of conflict with RLA procedures) ; Bundy v. Penn

Central Co., 455 F.2d 277, 279-80 (6th Cir. 1972) (minor

dispute procedures of RLA are overridden by ICC-im-

posed order under § 5 (2) (f) [now 8 11847]); UTU v.

21In BLE v. CNW the employee protective conditions imposed by

the ICC were agreed to by the carrier and the union before the

merger. The statute permits the parties to make such pre-merger

agreements and to submit them to the Commission for approval.

49 U.S.C. § 11347. If it approves, the agreement has the force of and

becomes a Commission order. Norfolk and Western Ry. v. Nemitz,

404 U.S. 87 (1971).

Respondents may seek to distinguish BLE v. CNW by suggesting

that the result there reflected a determination by the court that the

union having agreed to the protective conditions thereby waived its

ability to invoke RLA procedures. But no such analysis appears in

the decision and in any event would be incorrect if it led to the

conclusion chat unions which do not enter into pre-merger agree-

ments are free to invoke the RLA. As the Eighth Circuit ruled,

the transaction is exempted from the restraints of the RLA to the

extent necessary to carry out the transaction (314 F.2d at 432), not

on a theory of union waiver but because otherwise unions could

stymie Commission-approved transactions.

19

Norfolk & Western Ry., 332 F. Supp. 1170, 1174 (N. D.

Ohio 1971) (“plain language” of Interstate Commerce Act

conferred “exclusive and plenary jurisdiction upon the

ICC to approve mergers and relieve carriers from all other

restraints of federal law, without carving a specific ex-

ception with regard to the Railway Labor Act“). And

the Sixth Circuit ruled in Nemitz v. Norfolk & Western

Ry., 436 F.2d 841, 845 (6th Cir.), aff'd on other grounds,

404 U.S. 37 (1971), in language echoing the Eighth Cir-

cuit’s quoted above:

“The authority vested in the I.C.C. to effectuate pro-

posed mergers would be rendered ineffective if au-

thority to adjust work realignments through fair

compensation did not exist. Since, under the Rail-

Way Labor Act, employees cannot be compelled to

accept or arbitrate new working rules or conditions,

the application of the Railway Labor Act to situa-

tions such as that presented here, like the Harring-

ton Amendment, would threaten to prevent many

consolidations, and, therefore, should not be applied.”

See Kent v. CAB, supra, 204 F.2d at 266, which held

that a collective bargaining contract under the RLA

“must yield to the paramount power of the [Civil Aero-

nautics] Board to perform its duties under the” Civil

Aeronautics Act to approve mergers “upon such terms

as it determines to be just and reasonable in the public

interest.” Accord, IAM v. Northeast Airlines, 400 F.

Supp. 372, 373-74 (D. Mass. 1975), aff'd, 536 F.2d 975

(Ist Cir. 1976) (RLA “is not applicable where the dis-

pute arises out of a merger” because “Congress has pro-

vided a special mechanism for resolving the numerous

problems attendant on such a merger’); see also cases

cited note 8, p. 7, supra.”

22 Texas & New Orleans R. R. v. Brotherhood of Railroad Train-

men, 307 F.2d 151 (5th Cir. 1962), conflicts in certain respects with

the authorities cited in the text. There the court ruled that the

Norris-LaGuardia Act barred it from enjoining a threatened strike

20

D. Override of the Railway Labor Act Is Required in

This Case.

The result reached in the many cases just mentioned

has special—and we might add obvious—force in this

case. The rights of the MKT and the DRGW to use their

own crews were expressly recognized by the Commission

to be material terms of each of the trackage rights appli-

cations it approved as being in the public interest. (Pet.

App. 67a.) If the RLA were to apply to the crew selec-

tion process, the transaction approved by the Commis-

sion could be postponed while the “almost interminable”

major dispute procedures of that Act were exhausted, or

indeed frustrated altogether by threat of or resort to

strike. Indeed, as we have noted, the MP’s employees

have already threatened and been enjoined from striking

over this very matter.

The possibility that MP crews could resort to self help

against the tenants has, if anything, even graver conse-

quences. The very purpose of the grant of trackage

rights was to protect and foster a competitive relation-

ship between the tenants and the MP. It is inconceivable

in the first instance that the MKT (for example) should

have to bargain with and rely on MP employees in seek-

ing to wrest new or protect existing traffic from the MP.

And it would be astonishing if, as a result of a trans-

action approved by the Commission to maintain competi-

tion between the MP and the MKT, Congress intended

to permit MP employees to interfere with and possibly

over the carrier’s effort to implement an ICC-approved transaction.

We believe that the court erred in holding that § 11347 [then

8502) (f)] of the Interstate Commerce Act is not part of the

pattern of the national labor legislation to which the Norris-

LaGuardia Act must be accommodated. See United States v.

Lowden, 308 U.S. 225, 286-38 (1939). In any event, even in that

case the court acknowledged that union resorts to the RLA that

were “contrary to the public interest” in the context of ICC-

approved transactions would be unenforceable. 307 F.2d at 161-62.

21

shut down the MKT’s entire operations. Moreover, if

the MP employees demand, upon pain of strike, that MP

ban MKT trains with MKT crews, and the MKT’s em-

ployees demand, upon pain of strike, that MKT not hire

MP crews, a stalemate will result. Commerce will be

interrupted and the Commission’s approval of the track-

age rights applications will be nullified. And finally, use

of MP crews to operate MKT trains obviously would re-

quire the approval of the MP, which would thus be em-

powered to frustrate the competition that the Commis-

sion intended to protect and preserve.

In the case at bar the court of appeals sought to dis-

tinguish BLE v. CNW on the ground that the Eighth

Circuit in that case “recognized that immunity attached

only to obstacles that would frustrate fruition of the”

ICC-approved transaction. (Pet. App. 18a.) But as we

have shown above, and as the Commission ruled below,

the RLA major dispute procedures, if applicable to the

crew selection process, would be an obstacle to fruition

of the approved trackage rights transactions. Thus the

court’s distinction is one without a difference. The ra-

tionale of that case is fully applicable to this one and

the Commission adopted it in concluding that the car-

riers herein are exempt from the major dispute proce-

dures of the RLA in implementing the approved trackage

rights transactions.

III. SECTION 11341(a) IS SELF-EXECUTING

Section 11341(a) provides in pertinent part:

“A carrier * participating in * * * a transaction

approved by * * * the Commission under this sub-

chapter may carry out the transaction * * * without

the approval of a State authority. A carrier

participating in that approved * * * transaction is

exempt from the antitrust laws and from all other

law, including State and municipal law, as n

to let that person carry out the transaction * .“

(Emphasis added. )

22

As that plain language makes clear, the Commission

is not called upon to do anything under § 11341(a). The

types of transactions (including trackage rights transac-

tions) that require Commission approval are set out in

§ 11343, and the criteria according to which the Commis-

sion is directed by Congress to grant or deny approval

are set forth in § 11344. In particular, § 11344(c) pro-

vides that the Commission shall grant approval if “it

finds the transaction is consistent with the public inter-

est.” Section 11341(a) then provides, without requiring

further Commission interposition, that a carrier partici-

pant “is exempt from the antitrust laws and from all

other law * * * as necessary to let that person carry out”

the transaction that the Commission has approved. The

Commission itself, in determining under § 11344 whether

the public interest warrants approval of a proposed trans-

action, is not required to determine, or to make any find-

ings, whether it would be “necessary” to override some

particular law to effectuate the transaction if approved.

See Schwabacher v. United States, 334 U.S. 182 (1948).*

That is the point the Commission was making when, in

answer to the contention of the unions that its initial or-

ders approving the trackage rights applications did not

expressly state that the carriers were exempt from the

RLA, it said (Pet. App. 60a) :

23 In Schwabacher, the Court explained that Commission approval

of a proposed railroad merger “is dependent upon three, and upon

only three considerations,” those then set forth in the predecessor

to § 11344. Following Commission approval, the “approved transac-

tion goes into effect without need for invoking any »pproval under

state authority, and the parties are relieved of ‘restraints, limita-

tions, and prohibitions of law, Federal, State, or municipal, insofar

as may be necessary to enable them to carry into effect the transac-

tion so approved“ .“ 334 U.S. at 194-195. BLE v. CNW and

other such decisions by the lower courts in cases involving the RLA

are consistent with that decision; the decision below is not.

“The terms of section 11341 immunizing an ap-

proved transaction from any other laws are self-

executing and there is no need for us expressly to

order or to declare that a carrier is specifically re-

lieved from certain restraints.”

And that is precisely what the Eighth Circuit ruled in

rejecting a similar contention by the union in BLE v.

CNW that the Commission had failed to make an express

finding of exemption. The court held that the Commis-

sion’s approval of a transaction, and its imposition of

the required employee protections, “carried with it any

exemption from the restraints of other laws as contem-

plated by §5(11) [now § 11341 (a)] to the extent neces-

sary to carry out the merger.” 314 F.2d at 432. See

Brotherhood of Locomotive Engineers v. Boston and

Maine Corp., supra, 122 LRRM at 2025 (“We also

note that the exemption provision, § 11341(a), is self-

executing.”’) .

It is true that the Commission’s approval of a transac-

tion immunizes the carrier participants from the RLA

only to the extent necessary to implement the transaction.

Thus it may be that, subsequent to the Commission’s or-

der of approval, a union will argue that the carriers are

seeking more immunity from the major dispute proce-

dures of the RLA than is necessary to implement the

approved transaction. In such a case the issue for deci-

sion will be whether application of the RLA would frus-

trate or impede an action intended to implement the

approved transaction; if so, then the carriers are exempt

from the RLA under § 11341(a); if not, the RLA may

apply. The issue will not turn on whether the Commis-

sion, in its order of approval, made any findings of the

need for an exemption under § 11341(a) from some other

statute for, as shown above, that section requires no ac-

tion whatever by the Commission in passing on an ap-

plication subject to § 11343. Rather, the function of the

Commission under § 11344 is to determine whether a

= 24

grant of the application is in the public interest and

otherwise comports with the standards specified therein.“

The court of appeals’ misunderstanding of § 11341 (a)

led it to the erroneous conclusion that the Commission

“rejected the notion that it had to provide some basis for

concluding that waiver of the Railway Labor Act was

necessary” to the transaction it had approved. (Pet. App.

10a.) As we have shown, the Commission correctly con-

strued § 11341(a) as not requiring findings with respect

to exemption in the initial order of approval. When the

issue of exemption subsequently arose, the Commission

adequately explained why the crew selection process nec-

essarily was exempt from the RLA. On both counts the

Commission’s decision is squarely in keeping with the

statute and with BLE v. CNW and the other decisions

cited above.

IV. THE 4-R ACT DID NOT AMEND THE LAW TO

ALLOW THE RAILWAY LABOR ACT TO INTER-

FERE WITH TRANSACTIONS APPROVED BY THE

COMMISSION

In the court below the respondents urged that the re-

sult in BLE v. CNW was overturned by the Railroad

Revitalization and Regulatory Reform Act of 1976 (the

“4-R Act”). Section 402(a) of that Act (90 Stat. 62)

added a sentence to § 11347 (then 8502) (f)) requiring

that henceforth the employee protective conditions to be

imposed by the Commission shall be “no less protective

* * * than those heretofore imposed pursuant to this sub-

division and those established pursuant to section 405 of

the Rail Passenger Service Act (45 U.S.C. 565).” (Em-

24 This is not to say that an opponent of an application could not

contend in the initial agency proceeding that the grant of the appli-

cation would be contrary to the public interest in a particular case

if the result would be to override rights under another statute such

as the RLA. The Commission might well have a duty to consider

such a contention, although no such conteation was made in the

initial agency proceeding below regarding the terms of the trackage

right applications relative to crew selection.

25

phasis added.) The latter act created Amtrak and per-

mitted railroads providing intercity passenger service to

transfer that service to Amtrak by contract. Section 405

required such contracts to contain employee protective

conditions certified as “fair and equitable” by the Secre-

tary of Labor, and it directed the inclusion of such pro-

tective conditions as may be

“necessary for (1) the preservation of rights, priv-

ileges, and benefits, (including continuation of pen-

sion rights and benefits) to such employees under

existing collective-bargaining agreements or other-

wise; (2) the continuation of collective-bargaining

rights; (3) the protection of such individual employ-

ees against a worsening of their positions with re-

spect to their employment; [etc.].”

On April 17, 1971, the Secretary approved and certified

certain conditions which came to be known as the “Ap-

pendix C-1” conditions, so called because they were an

appendix to the standard contract between Amtrak and

the contracting railroads.* In keeping with § 405’s di-

rection, Article I, §2 of those conditions included the

following:

“The rates of pay, rules, working conditions and

all collective bargaining and other rights, privileges

and benefits * * * of railroad’s employees under ap-

plicable laws and/or existing collective bargaining

agreements or otherwise shall be preserved unless

changed by future collective bargaining agreements

or applicable statutes.” **

Since that is one of the conditions “established pursuant

to Section 405 of the“ Amtrak Act, the Commission after

25 In Congress of Railway Unions v. Hodgson, 326 F. Supp. 68, 76

(D. D. C. 1971) the court upheld the Appendix C-1 conditions against

a challenge from labor that they were insufficiently protective of

employees.

26 The Amtrak Appendix C-1 conditions are reproduced as an

appendix to Oregon Short Line R. Co.—Abandonment—Goshen, 354

I. C. C. 76, 90-96 (1977).

passage of the 4-R Act has included it (with minor

changes) in those imposed under § 11347 of the Inter-

state Commerce Act. See, e. g., Article I, § 2 of the New

York Dock conditions, 360 I.C.C. at 84; see generally

New York Dock Ry. v. United States, 609 F.2d 83 (2d

Cir. 1979). Respondents asserted below that that condi-

tion imported the RLA into the implementation of trans-

actions approved under Chapter 113.

We have shown above that the RLA, if it applied, would

gravely threaten the success of the long-standing congres-

sional goal of encouraging rail mergers and consolida-

tions. A similar threat, in the form of the Harrington

amendment forbidding changes in existing employment

rights as a result of a merger, was turned back by Con-

gress in 1940. Page 17, supra. It stands to reason that

if by passage of the 4-R Act Congress meant to thrust

the major dispute procedures of the RLA in the way of

carrier efforts to implement ICC-approved mergers, and

permit unions to delay and indeed strike over such ef-

forts, some notice would have been taken. Yet the legis-

lative history of the 4-R Act on this point is silent. See

New York Dock Ry. v. United States, supra, 609 F.2d

at 93.27 “This silence is most eloquent, for such reticence

while contemplating an important and controversial

change in existing law is unlikely.” Edmonds v. Com-

pagnie Generale Transatl., 443 U.S. 256, 266-67 (1979);

see Watt v. Alaska, 451 U.S. 259, 270-271 (1981).

* The provision which became § 402 (a) of the 4-R Act first

appeared in H.R. 10979, the House version of the Act, in identical

form in all relevant respects to its final enactment. The House

Report of the Committee on Interstate and Foreign Commerce

accompanying the bill paraphrases but otherwise does not discuss

the amendment. The Senate bill, S. 2718, contained no provision

comparable to what became § 402(a). The Conference Report does

not mention why the House-proposed amendment to § 5(2) (f) was

agreed upon.

Floor debate concerning the meaning of employee protection pro-

vision in the 4-R Act was similarly limited. Only one Congressman,

Representative Skubitz, commented on the extent of such protection

and that comment came in the context of a provision mandating

27

The Commission’s construction of the statute as pre-

serving existing collective bargaining rights only to the

extent that they do not conflict with the implementation

of an approved transaction (Pet. App. 59a-60a), furthers

rather than frustrates the goals of the Act and accord-

ingly warrants respect here. Hayfield Northern R. R. v.

Chicago and North Western Transp. Co., 467 U.S. 622,

634 (1984) (“The Commission’s position, of course, is

entitled to considerable deference since it represents the

construction of a regulatory statute by the agency charged

with the statute’s enforcement.”’).

The history of the Amtrak Act § 405 conditions fur-

ther supports the Commission’s construction. Section 405

was copied almost verbatim—and almost without discus-

sion—from §13(c) of the Urban Mass Transportation

Act of 1964, 49 U.S.C. app. § 1609 (e).“ That Act pro-

vided federal aid to state and local governments for the

provision of mass transportation facilities and equipment.

The purpose of § 13(c) was to preserve the collective bar-

gaining rights of affected employes when federal funds

were utilized to purchase a private transit company, since

many state and local governments denied such rights to

employee protection arrangements in abandonments. That section,

Congressman Skubitz stated, only provided “a restatement of what

the Commission already does * *.“ 121 Cong. Rec. 41340 (1975).

28 Representatives of labor said that [the protective provisions

in this section are drawn literally from the comparable provisions

of the Urban Mass Transportation Act of 1964 * * * and are de-

signed to serve the identical policy expressed in these laws.” Sup-

plemental Hearings on H.R. 17849 and S. 3706 before the Subcom-

mittee on Transportation and Aeronautics of the House Committee

on Interstate and Foreign Commerce, 91st Cong., 2d Sess. 122

(1970) (Statement of Al H. Chesser, National Legislative Director,

United Transportation Union, also representing the Congress of

Railway Unions). Secretary of Labor Shultz noted: “I assume that

the coverage under the protective arrangement provision * * * is

substantially of the same scope as the protective arrangements pro-

vision * * * of the Urban Mass Transportation Act.” Id. at 65

(letter from George P. Shultz).

their employees. See Jackson Transit Authority v. Local

Division 1285, Amalgamated Transit Union, 457 U.S. 15,

17 (1982); Division 1287, Amalgamated Transit Union

v. Kansas City Area Transp. Authority, 582 F.2d 444

(8th Cir. 1978).

It was not the intention of the Amtrak conditions,

however, to allow collective bargaining rights and agree-

ments to prevent implementation of an approved transac-

tion. Rather, Article I, § 4, of Appendix C-1 (reproduced

at 354 I.C.C. 90-91) provided for the negotiation of im-

plementing agreements with respect to a transaction

“which will result in a dismissal or displacement of em-

ployees or rearrangement of forces” (354 J. C. C. at 91)

and, in default of such an agreement, for binding arbi-

tration. Except for allowing greater expedition, which

was justified by, among other things, “the time element

written into the [Amtrak] statute,” that provision in

Appendix C-1 was patterned after Sections 4 and 5 of

the Washington Job Protection Agreement as incorporated

by the I. C. C. in prior employee protection conditions.

Congress of Railway Unions v. Hodgson, supra, 326 F.

Supp. at 75-76. Sections 4 and 5 provided a means

whereby prohibitions in collective agreements that would

impede implementation of a transaction, such as a “pro-

hibition against transferring work from one railroad to

another,” could be overcome without resort to the pro-

cedures of the Railway Labor Act. Southern Ry. Co.—

Control—Central of Georgia Ry. Co., 331 I. C. C. 151, 165

(1967). [Without something comparable to it, section

6 of the Railway Labor Act * * * would seriously impede

mergers.” Id. at 171. Thus, for example, an arbitration

award under Art. I, § 4, of Appendix C-1 provided for

29 The Act required Amtrak to commence passenger service within

six months of its enactment. See 826 F. Supp. at 76. In the Hodgson

case, the unions contended (unsuccessfully) that Sections 4 and 5

of the Washington Agreement should have been “incorporate[d]

verbatim” into Appendix C-1, rather than that a provision for such

implementing agreements and arbitration was inappropriate alto-

gether. 326 F. Supp. at 75.

29

the use of Milwaukee engineers—rather than Burlington

Northern engineers—in operating Amtrak trains over

some 11 miles of BN track so as to eliminate an other-

wise unnecessary stop to change crews east of Minneapo-

lis. See Engineers v. Burlington Northern, Inc., 92

LRRM 3436 (D. Minn. 1976).

As we have noted, the conditions imposed under § 11347

include a similar provision for implementing agreements

and for arbitration in default of an agreement.“ Indeed,

in connection with the New York Dock transaction itself,

an arbitration award arising out of that provision pro-

vided for consolidation of the employees and seniority

rosters of the merged railroads as New York Dock em-

ployees subject to a common seniority roster under New

York Dock’s collective agreements, thus displacing the

seniority roster and collective agreements of the carrier

acquired by New York Dock insofar as its employees were

concerned. See Locomotive Engineers v. New York Dock

Rail Road, 94 Labor Cases 13,704 (E.D.N.Y. 1981),

subsequent opinion, 97 Labor Cases 7 10,007 (E. D. N. v.

1982). 1

0 Article I, §4, of New York Dock (see 360 I. C. C. at 85) more

closely followed Sections 4 and 5 of the Washington Agreement as

incorporated in prior ICC protective conditions in that it did not

include the greater expedition authorized by the cognate provision

in Appendix C-1, while Article I, § 4, of the Norfolk and Western

and Mendocino Coast conditions (see 354 I.C.C. at 610-611) did pro-

vide for such expedition. The unions supported the New York Dock

conditions in New York Dock Ry. v. United States, supra, 609 F.2d

83, and objected (unsuccessfully) to the expediting aspects of

the latter conditions in Railway Labor Exec. Ass'n v. United

States, supra, 675 F.2d at 1248, but did not object then—as they

did not object in regard to Appendix C-1—to provision for imple-

menting agreements and arbitrations under which work and forces

could be rearranged in a manner inconsistent with provisions in

collective bargaining agreements. That tactic of so objecting was

not adopted until after the terms of the employee protective condi-

tions had been fixed.

1 Such consolidation of seniority rights—which necessarily in-

volves departures from collective agreement provisions—is among

30

In sum, virtually without discussion a provision con-

ditioning federal grants on the willingness of local gov-

ernment to permit their mass transit employees to engage

in collective bargaining has made its way into the em-

ployee protections provided under the Interstate Com-

merce Act. However, both the provenance of that provi-

sion and its application demonstrate that the Commission

correctly concluded that the 4-R Act was not intended to

amend existing law in a manner that would allow the

RLA to interfere with transactions approved under Chap-

ter 113 of the Interstate Commerce Act.

CONCLUSION

The judgment of the court of appeals should be

reversed.

Respectfully submitted,

KENNETH P. KOLSON RICHARD T. CONWAY

ASS CIATION OF (Counsel of Record)

AMERICAN RAILROADS WILLIAM F. SHEEHAN

50 F Street, N.W. SHEA & GARDNER

Washington, D.C. 20001 1800 Massachusetts Ave., N.W.

(202) 639-2100 Washington, D.C. 20036

Davin P. LEE (202) 828-2000

General Counsel

NATIONAL RAILWAY

LABOR CONFERENCE

1901 L Street, N.W.

Washington, D.C. 20036

(202) 862-7218

Counsel for Amici Curiae

June 7, 1986

the more common functions of implementing agreements and arbi-

tration under ICC protective conditions. See, e.g., Anderson v. Nor-

folk & Western Ry. Co., 773 F.2d 880 (7th Cir. 1985); Employees

Protective Ass’n v. Norfolk & Western Ry., 511 F.2d 1040, 1043

(4th Cir. 1975).