Petition for Writ of Certiorari — CSX Transportation, Inc. v. Brotherhood of Railway Carmen (Nos. 89-1028, 89-1027)

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No. j Suseme Cour’, U.S,

—_ | i

In The ‘1 DEC 28 29ee

"MN SR,

Supreme Court of the United States >

@ctoher Term, 1989

—_——

CSX TRANSPORTATION, INC.,

Petitioner,

BROTHERHOOD OF RAILWAY CARMEN, DIVISION

OF TRANSPORTATION-COMMUNICATIONS

INTERNATIONAL UNION, INTERSTATE

COMMERCE COMMISSION, AND UNITED STATES

OF AMERICA,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

James S. WHITEHEAD

(Counsel of Record)

Siptey & AUSTIN

One First National Plaza

Chicago, Illinois 60603

(312) 853-7703

Nicuo.as 8S. YOvVANOVIC

James D. ToMOoLA

Csx TRANSPORTATION, INC.

500 Water Street

Jacksonville, Florida 32202

Attorneys for Petitioner

Csx TRANSPORTATION, INC.

Date: December 27, 1989

€zE———~———————————————————————————

American Reprographics Management, Inc ™ (312) 332-2764

Foon ep hom 24 ob

Does § 11341(a) of the Interstate Commerce Act empower

res cn ne artes of

agreement where necessary to do so in

So

to be in the public interest from being obstructed by such

agreement?

LIST OF PARTIES

AND RULE 28.1 LIST

The parties before the Court of Appeals and this Court are

all listed in the caption.!

CSX Transportation, Inc. (“CSXT”) is a wholly-owned

subsidiary of CSX Corporation (“CSX”). The subsidiaries and

affiliates of CSXT or CSX, other than those wholly owned by

Augusta and Summerville Railroad Company;

The Baltimore and Cumberland Valley Railroad

Extension Company;

The Baltimore and Philadelphia Railroad Company;

Beaver Street Tower Company;

Central Transfer Railway and Storage Company;

Chatham Terminal Company;

Clearfield and Mahoning Railway Company;

The Cleveland Terminal & Valley Railroad Company;

Dayton and Michigan Railroad Company;

Dayton and Union Railroad Company;

The Home Avenue Railroad Company;

The Lakefront Dock and Railroad Terminal Company;

Mid-Allegheny Corporation;

TAELE OF CONTENTS

LIST OF PARTIES AND RULE 28.1 LIST .0...00....000ccccccccceee see. ii

Nc scunmmussunonesestonen 2

a 2

Nee ssusesnassonannenss 2

gS 3

REASONS FOK GRANTING THE WRIT o.0.0.0..0.....cccccccccceseeeees s

I. The Court of Appeals’ Interpretation of ICA

§ i1341(a) Conflicts with Decisions of This

TD 8

Il. The Court of Appeals’ Ruling that Congress

Did Not Intend the Immunity from “All Other

Law” in ICA § 11341(a) to Include Collective

Bargaining Agreements Is Contrary to the

Act’s Purpose and Legislative History....................... 14

19

APPENDIX (Separately Bound)

Opinion and Judgment of the Court of Appeals in

Brotherhood of Railway Carmen v. Interstate

Commerce Commission, 880 F.2d 562 (D.C. Cir. 1989).......... la

September 29, 1989, orders of the Court of Appeals

Tee cecccssesecesees 30a

Decision of the Interstate Commerce Commission in

CSX Corporation—Control—Chessie System, Inc. and

Seaboard Coast Line Industries, Inc., 4 1.C.C.2d 641

(1988) oc 33a

iv

Opinion and Award, In the Matter of the Arbitration

Between Brotherhood Railway Carmen—Division of

BRAC, Organization, and CS¥ Transportation, Inc. and

the Chesapeake and Ohio Railway Company, Carriers,

March 23, 1987

Page

Transportation Act of 1920, § 407, 41 Stat. 480

Emergency Railroad Transportation Act of 1933, Title I,

§ 10(a), 48 Stat. 215, and Title II, § 202, 48 Stat. 217,

EEE

Transportation Act of 1940, § 7, 54 Stat. 908-09

118a

119a

Z att es ae pee

Vv

TABLE OF AUTHORITIES

Judicial Decisions: Page

Addyston Pipe & Steel Co. v. United States, 175 USS.

211 (1899) (SE 9

Altman v. Central of Georgia Ry Co., 488 F.2d 1302

ee 14

American Airlines v. C.A.B., 445 F.2d 891 (2d Cir. 1971),

cert. denied, 404 U.S. 1015 (1972) ...........:ccccccessceeseeeesseeeseeeeeees 12

American Train Dispatchers’ Ass’n v. I.C.C., No. 88-1694

aa ii

Andrews v. Louisville & N. R. Co., 406 U.S. 320 (1972)............. 13

Brotherhood of Locomotive Engineers v. Boston & Maine

Corp., 788 F.2d 794 (1st Cir.), cert. denied, 479 U.S. 829

SSD 12

Brotherhood of Locomotive Engineers v. Chicago & N.W.

Ry Co., 314 F.2d 424 (8th Cir.), cert. denied, 375 U.S. 819

aia scinctncetscnsasesntnessssetsosssosecccocsees 11,17

Brotherhood of Locomotive Engineers v. I.C.C., 761 F.2d 714

(D.C. Cir. 1985), vacated, 482 U.S. 270 (1987) ...........cccccccceeeeee 10

Brotherhood of Locomotive Engineers v. I.C.C., 885 F.2d 446

(8th Cir. 1989) atic ctiatcrrarmengeneseenee 12

Bundy v. Penn Central Co., 455 F.2d 277 (6th Cir. 1972).......... 12

Burlington Northern, Inc. v. American Ry Supervisors

Ass’n, 503 F.2d 58 (7th Cir. 1974), cert. denied, 421 U.S.

ass cssssnssnsenenccncscoresoscesees 11

Burlington Northern R.R. v. United Transportation Union,

848 F.2d 856 (8th Cir.), cert. denied sub nom.

Interstate Commerce Commission v. United

Transportation Union, 109 S.Ct. 499 (1988) ...............0000es0e 12

_ California v. Taylor, 353 U.S. 553 (1957) ill

of Palestine, Texas v. United States, 559 F.2d 408

ir. 19777), cert. denied, 435 U.S. 960 (1978) + Eee 14

e?

vi

Page

Colorado v. United States, 271 U.S. 153 (1926) 9

Connolly v. Pension Benefit Guaranty Corp., 475 US.

SR COTE cceciiccrtecctitnttia i)

County of Marin v. United States, 356 U.S. 412 (1958)............... 8

Detroit & Toledo Shore Line R.R. v. United Transportation

Union, 396 U.S. 142 (1969) 13

International Ass’n of Machinists v. Central Airlines, Inc.,

372 U.S. 682 (1963) .. 13

International Ass’n of Machinists v. Northeast Airlines,

Inc., 473 F.2d 549 (1st Cir.), cert. denied, 409 U.S. 845

(1972)...... 12

International Ass’n of Machinists v. Northeast Airlines,

~ — Inc., 536 F.2d 975 (1st Cir.), cert. denied, 429 U.S. 961

(1976) 12

Interstate Commerce Commission v. Brotherhood of

Locomotive Engineers, 482 U.S. 270 (1987) 10, 18

Kent v. C.A.B., 204 F.2d 263 (2d Cir.), cert. denied, 346 U.S.

826 (1953).. 11, 12

Kesinger v. Universal Airlines, Inc., 474 F.2d 1127

(6th Cir. 1973) ........ 12

Missouri Pacific R. Co. v. United Transportation Union, 782

F.2d 107 (8th Cir. 1986), cert. denied, 482 U.S. 927

(1987) 12

Nemitz v. Norfolk & W. Ry Co., 436 F.2d 841 (6th Cir.),

aff'd on other grounds, 404 U.S. 37 (1971) 11

New York v. United States, 257 U.S. "91 (1922) 9

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

(2d Cir. 1979) 4

Norman v. Baltimore & O. R.R. Co., 294 U.S. 240 (1935)......000-.. 9

Pittsburgh & Lake Erie R.R. Co. v. Railway Labor

Executives’ Ass’n, 109 S.Ct. 2584 (1989) 18

Page

Railway Labor Executives’ Ass’n v. Guilford

Transportation Industries, Inc., 667 F.Supp. 29 (D. Me.

1987), aff'd per curiam, 843 F.2d 1383 (1st Cir. 1988),

cert. denied, 109 S.Ct. 3213 (1989).............cccceeeeceeeeeeeeersereeenres 12

Railway Labor Executives’ Ass’n v. I.C.C., 883 F.2d 1079

(D.C. Cir. 1989) alain nestnanerears 12

Railway Labor Executives’ Ass’n v. United States, 339 U.S.

Nc 17, 18

Schwabacher v. United States, 334 U.S. 182 (1948) ................ 8,9

Texas v. United States, 292 U.S. 522 (1934) 00.2... 9, 15,17

United States v. Lowden, 308 U.S. 225 (1939) ............0.0000 8,9, 10

United Transportation Union v. Norfolk & Western Ry Co.,

332 F.Supp. 1170 (N.D. Ohio 1971)...........ccccecseceserserereeneeeereeees 12

Interstate Commerce Commission Decisions:

Brandywine Valley R.R. Co.—Purchase—CSX

Transportation, Inc., Lines in Florida, 5 1.C.C.2d 764

EE SES SES aR TEE 12

CSX Corporation—Control—Chessie System, Inc. and

Seaboard Coast Line Industries, Inc., 363 L.C.C. 521

Tar ctatenenenecemsenstnanencustsszeeseemnsssensseseneesenecseese 3

Gulf, Mobile & Ohio R. Co.—Abandonment, 282 L.C.C.

Ai a nresictiiactecntnentncensecntenseveqceenezccsceecsenccee 14

New York Dock Ry—Control—Brooklyn Eastern Dist. Term.,

360 LC.C. 60 (1979), aff'd sub nom. New York Dock Ry v.

United States, 609 F.2d 83 (2d Cir. 1979) ...........ccccccesseeereeeeeeeee 4

Southern Ry Co.—Control—Central of Georgia Ry Co., 331

TT tide beneecnendennevccesecseeneneseseocsecoceecocooscsoooee 15

Statutes and Rules:

Emergency Railroad Transportation Act of 1933, 48 Stat.

211 16

Title I 16, 17, 18

Title I, § 10(a), 48 Stat. 215 16

Title I 3,17

Title II, § 202, 48 Stat. 219 16

Interstate Commerce Act

§5 17

§ 5(8) 15

§ 5(11) 18

§ 5(15) 16, 17

§ 10901, 49 U.S.C. §10901 18

§ 11341(a), 49 U.S.C. § 11341(a) passim

§ 11343(a), 49 U.S.C. § 11343(a) 3

§ 11344(b\(1)(D), 49 U.S.C. § 11344(b\1(D) 3

§ 11344(c), 49 U.S.C. § 11344(c) 4

§ 11347, 49 U.S.C. § 11347 4,7,12

Pub. L. No. 95-473, § 3(a), 92 Stat. 1466 18

Railway Labor Act, 45 U.S.C. § 151 et seq passim

Transportation Act of 1920, § 407, 41 Stat. 480 3,15

Transportation Act of 1940, § 7, 54 Stat. 908-09 3, 18

28 U.S.C. § 1254(1) 2

28 U.S.C. § 2321(a) 7

28 U.S.C. § 2342(5) 7

Supreme Court Rule 20.4 eal ceteeieeetineeintl

84 Cong. Rec. (1939) a

Hearings on H.R. 2531 Before the House Comm. on

Interstate and Foreign Commerce, 76th Cong., Ist

Sees (19B9).....-.cecececvseveneeneresnesnssnenssnsnesnernssrsnennsnsnsensnesesens

Hearings on H.R. 5641 Before the House Comm. on

Interstate and Foreign Commerce, 70th Cong., lst

Seas. (192B)....-.-c-ceceecsveveevenenenenensesensnsnensnesnsnsnenenensnssnensnseees

Hearings on S.J. Res. 161 Before the Se:.ste Comm. on

Interstate Commerce, 71st Cong., 2d Sess. (1930) ..........

No.

In The

Supreme Court of the United States

@ctober Term, 1989

CSX TRANSPORTATION, INC.,

Petitioner,

BROTHERHOOD OF RAILWAY CARMEN, DIVISION

OF TRANSPORTATION-COMMUNICATIONS

INTERNATIONAL UNION, INTERSTATE

COMMERCE COMMISSION, AND UNITED STATES

OF AMERICA,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner CSX Transportation, Inc. (“CSXT”) respectfully

of certiorari issue to review the judgment and

States Court of Appeals for the District

entered in the above-entitled proceeding on

2

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

District of Columbia Circuit is reported at 880 F.2d 562 and is

reprinted in the separately bound Appendix at la.

The June 8, 1988, decision of the Interstate Commerce

Commission, which was reviewed by the Court of Appeals, is

reported at 4 1.C.C.2d 641 and is reprinted in the Appendix at

33a.

The March 23, 1987, arbitration decision, which was reviewed

by the Interstate Commerce Commission, has not been reported.

It is reprinted in the Appendix at 53a.

JURISDICTION

~~ ‘The United States Court of Appeals for the District of

Columbia Circuit entered its judgment on July 25, 1989. App.

29a. CSXT timely filed a petition for rehearing, which was denied

by the Court of Appeals by order dated September 29, 1989.

App. 30a.! The jurisdiction of this Court to review the judgment

of the Court of Appeals is invoked under 28 U.S.C. § 1254(1).

This petition has been filed within the time period provided by

Supreme Court Rule 20.4.

STATUTES INVOLVED

Interstate Commerce Act (“ICA”), § 11341(a), 49 U.S.C.

§ 11341(a) (excerpt):

The authority of the Interstate Commerce Commission

under this subchapter is exclusive. A carrier or cor-

poration participating in or resulting from a transac-

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tion approved by or exempted by the Commission

under this sub-chapter may carry out the transaction,

own and operate property, and exercise control or

franchises acquired through the transaction without

the approval of a State authority. A carrier, corpora-

tion, or person participating in that approved or

exempted transaction is exempt from the antitrust laws

and from all other law, including State and municipal

law, as necessary to let that person carry out the

transaction, hold, maintain, and operate property, and

exercise control or franchises acquired through the

transaction.

Section 11341(a)’s predecessors, found in § 407 of the

Transportation Act of 1920, 41 Stat. 480; Title II, § 202 of the

Emergency Railroad Transportation Act of 1933, 48 Stat. 219,

and § 7 of the Transportation Act of 1940, 54 Stat. 908-09, are

located in the Appendix at 118a-120a.

STATEMENT OF THE CASE

I. The Creation of the Consolidated CSX

Rail System

In 1980, the ICC approved, pursuant to 49 U.S.C. § 11343(a),

the application of CSX Corporation to control the rail subsidiaries

of Chessie System, Inc. and Seaboard Coast Line Industries, Inc.?

CSX Corporation-Control-Chessie System, Inc. and Seaboard

4

rail system and, accordingly, that the proposal was consistent

with the public interest. 49 U.S.C. § 11344(c). 363 LC.C. at 597-

98. The Commission conditioned its approval with its standard

New York Dock \abor conditions,’ which comply with the

requirements of 49 U.S.C. § 11347. Id. at 589.4

Following the Commission’s decision in CSX-Control, the

rail carriers controlled by CSX Corporation embarked on a series

of actions - facility consolidations and operational coordinations

- designed to realize the economies and efficiencies the ICC had

found to be in the public interest.

3 New York Dock Ry-Control-Brooklyn Eastern Dist. Term., 360 1.C.C.

60 (1979), aff'd sub nom. New York Dock Ry v. United States, 609 F.2d

83 (2d Cir. 1979).

The conditions also contain an bargaining’ arbitration

for the establishment of a agreement

ieee 0 See t

by an ppro agreemen

prescribes the method for selecting and employees in order

to that result such a consolidation.

accomplish

Under Art. 1, § 4(a) of New York the carrier must give the employees

and their unions at least 90 days written notice of an operational

Ot ee SS ee

prey ded pa ——— Lb -- for the selection

all on

5

II. The Waycross-Raceland Shop Consoli-

dation and the LaRocco Arbitration

Award

On August 29, 1986, CSXT and C&O gave the notice required

under New York Dock Art. I, § 4(a) of their intent to close the

CSXT freight car heavy repair shop in Waycross, Georgia, and

to consolidate that work with that being performed in the

counterpart C&O shop at Raceland, Kentucky, as a further part

of the overall consolidation approved in CSX-Control. When

bargaining with the Brotherhood of Railway Carmen (“BRC”)

over the terms of an implementing agreement to govern the shop

consolidation was unsuccessful, both the railroads and BRC

invoked arbitration under New York Dock Art. I, § 4(a).

Even though BRC had initially sought arbitration of the

dispute, the union argued to the three-man arbitration committee,

headed by Neutral Referee John LaRocco, that the committee

lacked authority to impose an implementing agreement moving

carmen and their work from the BRC agreement with the SCL

at Waycross to the BRC agreement with the C&O at Raceland.

BRC asserted that the carriers first had to exhaust the bargaining

procedures prescribed in the Railway Labor Act (“RLA”), 45

U.S.C. § 151 et seg. In addition, BRC claimed that certain

of that agreement be moved beyond the boundaries of the former

SCL system.

The arbitration committee ruled that the Commission where

agreement providing for the movement of both the work and

employees who perform it from Waycross to Raceland, notwith-

standing any inconsistent provisions in existing collective

bargaining agreements. The committee adopted an implementing

agreement transferring the car repair work to Raceland and

overriding a provision of the Orange Book that it found precluded

that work transfer. However, the Committee refused to override

a provision of the Orange Book agreement that it found precluded

Orange Book-protected employees from being transferred from

Waycross to Raceland. App. 85a.*

Ill. The Commission’s Ruling on Appeal

Both BRC and CSXT appealed the arbitration award to the

Commission. In its June 8, 1988, decision (4 ICC 2d 641;

App. 33a), the Commission affirmed the arbitration committee’s

determination that it had the authority to prescribe an imple-

menting agreement moving both work and employees, notwith-

standing BRC’s claims that it lacked such authority and that

any change in existing agreements and working conditions could

be accomplished only through the RLA's bargaining procedures.

4 LC.C.2d at 649; App. 43a. However, the Commission reversed

the award with regard to the arbitration committee’s refusal to

override the Orange Book provision that the committee found

prohibited the transfer of employees outside the former SCL

system. The Commission found that this Orange Book provision

served as an impediment to the implementation of the rail

consolidation it had authorized:

Once it is determined that a proposed transaction is

authorized by the Commission ..., the carrier is

permitted to carry out and fully implement the tran-

saction despite potential impediments in existing

agreements upon compliance with the provisions for

the protection of the rights of employees contained in

New York Dock or imposed by the Commission upon

the involved transaction.

4 LC.C.2d at 650; App. 44a.’

IV. The Court of Appeals Decision

BRC sought review of the Commission’s decision by the D.C.

Circuit under 28 U.S.C. §§ 2321(a) and 2342(5). The court, in a

July 25, 1989, opinion, reversed the Commission’s decision and

remanded the record to the Commission for further proceedings.

The Court of Appeals ruled that ICA § 11341(a) did not empower

the Commission to override contracts, including collective

bargaining agreements.® The court based its decision on the fact

that the § 11341(a) exemption includes “all other law” but does

not specifically refer to “contracts.” In addition, the court saw

no support for the Commission’s interpretation of that section

in its language or history, or in the design of the ICA as a whole.

880 F.2d at 567-68; App. 12a-13a. The court remanded the record

to the Commission for consideration of whether the Commission's

modification of collective bargaining agreement provisions that

would stand in the way of approved rail consolidations might

be supported by other provisions of the ICA.9

7 Accordingly, the Commission did not consider CSXT’s alternate

contention that the arbitration committee had misinterpreted the Orange

Book as prohibiting the transfer of work and employees outside the

former Seaboard system. The Court of Appeals did not address this

issue either.

at 650; App. 44-. Accordingly, Orange Book-protected carmen transfer-

ring to Raceland would take their Orange Book income protection with

25a-26a. Sieailasty the court

8

REASONS FOR GRANTING THE WRIT

This case presents questions of exceptional importance for

the railroad industry in that, if not corrected, the decision will

thwart the achievement of the national transportation policy of

fostering and encouraging rail carrier consolidations.'°

The Court of Appeals’ decision is in conflict with at least

two decisions of this Court: Schwabacher v. United States, 334

U.S. 182 (1948), and United States v. Lowden, 308 U.S. 225 (1939).

Furthermore, it is in conflict with decisions from the Courts of

Appeals of at least four circuits. These decisions, virtually ignored

by the court below, have consistently recognized that Congress

intended the ICA to take precedence over all obstacles arising

under both state and federal “law”, including contracts.

In addition, the Court of Appeals’ interpretation of § 11341(a)

is manifestly contrary to Congress’s expressed intent. Congress

has demonstrated that it fully intended and understood that

collective bargaining agreements are within the scope of the ICA

immunity provisions.

I. The Court of Appeals’ Interpretation of

ICA § 11341(a) Conflicts with Decisions

of this Court and Other Circuits

The Court of Appeals reached its unprecedented interpre

tation of ICA § 11341(a) through a most simplistic analysis. The

court noted that the word “contract” is not literally found in

that section, and it located no legislative history that it believed

demonstrated that Congress had intended to include contracts

within the reach of that provision. But see Section II, infra. On

this basis, it declared that contracts, including collective

9

ruled that Congress in fact intended that private contracts, and

collective bargaining agreements in particular, not stand in the

way of the implementation of rail consolidations found to be

in the public interest.

A. The panel cited no precedent for its blanket conclusion

that § 11341(a) does not give the ICC authority to override

contracts even where necessary to implement an approved rail

consolidation.'! This Court held directly to the contrary in

Schwabacher v. United States, 334 U.S. 182, 188, 199 (1948), when

it concluded that the ICC had authority to supersede “contract

rights under Michigan law” flowing from a rail corporation’s

charter. This Court observed that, as a result of the ICA’s

immunity provisions, “{iJn matters within [the ICA’s] scope it

is the supreme law of the land.” 334 U.S. at 198. See also Texas

v. United States, 292 U.S. 522, 531 (1934) (“Even explicit charter

provisions must yield to the paramount regulatory power of the

Congress.” ); Colorado v. United States, 271 U.S. 153, 165 (1926)

(semble); New York v. United States, 257 U.S. 591, 601 (1922)

(semble).'2

Moreover, this Court recognized in United States v. Lowden,

supra, that ICC-approved rail consolidations will inevitably result

in major changes in the working conditions of rail employees,

including changes in conditions, such as_ seniority

't The Court of Appeals reasoned, “Under the ICC’s reading, it could

set to naught, in order to facilitate a merger, a carrier's solemn

undertaking, in a bond indenture or a bank loan, to refrain from entering

into any such transaction without the consent of its creditors. ... We

court below BRC claimed that the ICC’s actions amounted

“taking” of its members’ property in violation of the Fifth

The Court of Appeals did not reach this issue. 880 F.2d

26a. This Court has long recognized that contracts that

— matter appropriately regulated by the federal

the commerce power may be modified without

Fifth Amendment. See, e.g., Connolly v. Pension Benefit

475 U.S. 211, 225 (1986); Norman v. Baltimore & O.

11 (1935); New York v. United States, 257

US. at 601; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211,

10

rights,embodied in collective bargaining agreements. “Not only

must unification result in wholesale dismissals and extensive

transfers, involving expense to transferred employees, but in the

loss of seniority rights which, by common practice of the railroads

are restricted in their operation to those members of groups who

are employed at specified points or divisions.” 308 U.S. at 233.

This Court ruled in Lowden that the ICC could properly impose

labor protective conditions to ameliorate the effects of such

changes to collective bargaining agreements on employees.

In addition, four members of this Court have also declared

that an ICC consolidation order supersedes the RLA and its

collective bargaining agreement terms as a result of § 11341(a).

In Interstate Commerce Commission v. Brotherhood of Locom-

otive Engineers, 482 U.S. 270 (1987), the union argued that its

members had rights under the RLA and their collective bargain-

ing agreements to perform certain work and that those rights

were violated by an ICC trackage rights order that approved

other labor arrangements. 482 U.S. at 295. The railroads

responded that they were immune from complying with these

agreement terms and the RLA as a result of § 11341(a). A panel

of the D.C. Circuit ruled that the Commission was required to

make explicit findings of “necessity” before the immunity

provision would apply. Brotherhood of Locomotive Engineers v.

ICC, 761 F.2d 714, 723 (D.C. Cir. 1985).'*

The majority of this Court did not reach this issue, ruling

that the D.C. Circuit had lacked jurisdiction over the union’s

petition for administrative review. 482 U.S. at 277-87. Justice

Stevens, in a concurring opinion joined by Justices Brennan,

Marshall, and Blackmun, however, would have reached the

merits and would have reversed the D.C. Circuit on the grounds

ll

§ 11341(a) does not supersede the RLA or obligations arising

out of collective bargaining agreements in the rail industry.

B. Prior to the Court of Appeals’ decision herein, at least

four Courts of Appeals have ruled that an ICC-authorized

consolidation or merger supersedes inconsistent terms in

collective bargaining agreements and the RLA, from which they

originate, as a result of the ICA immunity provisions in § 11341(a).

In the seminal decision in Brotherhood of Locomotive Engineers

v. Chicago & N.W. Ry Co., 314 F.2d 424 (8th Cir.), cert. denied,

375 U.S. 819 (1963), the Eighth Circuit rejected arguments that

a carrier’s rearrangement of forces after a merger unilaterally

and unlawfully changed agreements, concluding, “{TJhe ICC[’s]

power to authorize mergers would be completely ineffective if

authority to adjust work realignments through fair compensation

did not exist.” 314 F.2d at 430. The Eighth Circuit observed,

“ ‘A private contract must yield to the paramount power of the

[Commission] to perform its duties under the statute creating

it to approve mergers ....’ ” 314 F.2d at 430, quoting Kent v.

Civil Aeronautics Board, 204 F.2d 263, 266 (2d Cir.), cert. denied,

346 U.S. 826 (1953).

The Seventh Circuit has also ruled that the ICC in connection

with a rail merger could supersede the RLA and its bargaining

agreements as a result of the ICA’s immunity provisions.

Burlington Northern, Inc. v. American Ry Supervisors Ass'n,

503 F.2d 58, 62-63 (7th Cir. 1974), cert. denied, 421 U.S. 975 (1975)

(Merger protection agreement found not to be inconsistent with

RLA but “if it were its provisions would be controlling.” ). The

Sixth Circuit similarly has acknowledged the necessity for

supplanting bargaining agreements and the RLA in an ICC-

authorized transaction in Nemitz v. Norfolk & W. Ry Co., 436

F.2d 841, 845 (6th Cir.), aff'd on other grounds, 404 U.S. 37 (1971):

The authority vested in the I.C.C. to effectuate proposed

mergers would be rendered ineffective if authority to

adjust work realignments through fair compensation

did not exist. Since, under the Railway Labor Act,

employees cannot be compelled to accept or arbitrate

new working rules or conditions, the applicac:on of the

Railway Labor Act... , like the Harrington Amend-

ment, would threaten to prevent many consolidations,

and, therefore, should not be applied.

tation Industries, Inc., 667 F Supp. 29, 35 (D. Me. 1987), aff'd

per curiam, 843 F.2d 1383 (1st Cir. 1988), cert. denied, 109 S.Ct.

3213 (1989); Brotherhood of Locomotive Engineers v. Boston &

Maine Corp., 788 F.2d 794, 800 (ist Cir.), cert. denied, 479 US.

829 (1986) (“ICC has the power to approve a transaction and

exempt its participants from legal obstacles that would impede

its fruition.”).“

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Furthermore, the Court of Appeals committed a fundamental

and unprecedented error of analysis when it considered the

impact of § 11341(a) on collective bargaining agreements apart

from the effects of that section on the RLA. In none of the

decisions cited above did a Court of Appeals create such an

artificial dichotomy between the RLA and collective bargaining

agreements existing thereunder. Rail collective bargaining

agreements are creatures of, and solely enforceable under, the

RLA. See, e.g., Detroit & Toledo Shore Line R.Co. v. United

Transportation Union, 396 U.S. 143, 156 (1969) (RLA § 2 Seventh

“operates to give legal and binding effect to collective agree-

ments”); Andrews v. Louisville & N. R. Co., 406 U.S. 320, 323

(1972) (an RLA agreement is “a federal contract and ... therefore

governed and enforceable by federal law, in the federal courts,”

quoting International Ass’n of Machinists v. Central Airlines,

Inc., 372 U.S. 682, 692 (1963)). Indeed, as creatures of the RLA

- a federal law - rail collective bargaining agreements supersede

inconsistent provisions of state law under the Supremacy Clause.

See California v. Taylor, 353 U.S. 553, 561 (1957). Each of the

Courts of Appeals that has addressed this question, with the

sole exception of the court below, has recognized this fundamental

truth and has ruled that the ICC has the authority under

§ 11341(a) to override both collective bargaining agreements that

impede approved rail consolidations and the RLA.

15

§ 11341(a) originated,"* and the 1926 RLA, "’ and professed to

14

Finally, the Courts of Appeals have similariy ruled that the

Commission can supersede contracts other than collective

bargaining agreements, following this Court’s decision in

Schwabacher. See Altman v. Central of Georgia Ry Co., 488 F.2d

1302, 1305-07 (D.C. Cir. 1973) (claims for payment of dividends

allegedly due under railroad charter and bylaws barred by ICC

find no relevant later indications that Congress intended to bring

collective bargaining agreements within the reach of § 11341(a).

880 F.2d at 567, 570; App. 13a, 18a-19a. In addition to misreading

the limited legislative history it did consider, the Court of Appeals

ignored other relevant history that demonstrates that Congress

understood and intended that the ICA immunizes consolidating

decision as a result of ICA immunity provision). Cf. City of

Palestine, Texas v. United States, 559 F.2d 408, 414 (6th Cir. 1977),

rail carriers from collective bargaining agreement provisions to

cert. denied, 435 U.S. 950 (1978) (assuming that Congress gave

ICC power to abrogate contracts). '®

Accordingly, Petitioner CSXT submits that a writ of certiorari

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the extent necessary to carry out I[CC-authorized mergers and

consolidations.

Rail labor first sought the passage of amendments to the

ICA in both 1928 and 1930 that would have required the ICC,

as a condition of a merger authorization, to preserve existing

collective bargaining agreement provisions. '* Such amendments

would have been wholly unnecessary if carriers were not already

permitted under the ICA to rearrange forces and change working

conditions notwithstanding impediments in such agreements.

Congress’ intent that collective bargaining agreements not

be exempted from the ICA immunity provisions was most clearly

demonstrated in connection with its enactment of the Emergency

Railroad Transportation Act of 1933 (“ERTA” ). 48 Stat. 211.

As part of the temporary, emergency measures located in Title

I of ERTA, Congress passed an immunity provision, modeled

after that in the Transportation Act of 1920, that applied to rail

carriers that were consolidating under the emergency authority

given in ERTA to the new office of Federal Railroad Coordinator.

ERTA Title I, § 10(a); 48 Stat. 215; App. -. However, the temporary

immunity provision in Title I of ERTA expressly excepted from

In Title II, § 202 of ERTA Congress amended and reenacted

the permanent consolidation provisions of the ICA. The immunity

provision was modified and became renumbered ICA § 5(15).

48 Stat. 219; App. 119a. Significantly, however, Congress did

17

marked contrast to the temporary immunity provision in Title

I.'* Thus, under the temporary, emergency provisions of ERTA,

carrier consolidations resulting from orders of the Federal

Railroad Coordinator were subject to compliance with the terms

of collective bargaining agreements. Following ERTA's expira-

tion in 1936, however, consolidating rail carriers continued to

be relieved of all “restraints or prohibitions by or imposed under

authority of law, State or Federal!” without any such exception

for collective bargaining agreements, as a result of ICA § 5(15),

the predecessor of § 11341(a). App. 119a.

In 1940, Congress substantially amended the ICA’s merger

provisions. See generally Railway Labor Executives’ Ass'n v.

United States, 339 U.S. 142 (1950). At the urging of rail labor,

a bill was introduced by Representative Lea that would have

amended the ICA’s immunity provision to include language

identical to that of Title I of ERTA that would have provided

an exception for collective bargaining agreements. H.R. 2531,

an amendment to the ICA even more favorable to labor that

would have prevented the impairment of any collective bargain.

ing agreement terms as well as the layoff or displacement of

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inconsistent with the relevant legislative history For this further

reason, a writ of certiorari should be issued to review that decision.

CONCLUSION

Respectfully submitted,

James S. WurreHeap

(Counsel of Record)

Sipo.ey & Austin

One First Nationa! Plaza

Chicago, Dlinois 60603

(312) 853-7703

Nicuo.as S. Yovanovic

James D. Tomoia

Attorneys for Petitioner

Csx Transportation. Inc

Date: December 27, 1989