Amicus Curiae Brief — Pittsburgh & Lake Erie R. Co. v. Railway Labor Executives' Assn.

No. 87-1589

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

THE PITTSBURGH & LAKE ERIE RAILROAD COMPANY,

" Petitioner,

RAILWAY LABOR EXECUTIVES’ ASSOCIATION,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

BRIEF FOR THE

NATIONAL RAILWAY LABOR CONFERENCE AS

AMICUS CURIAE IN SUPPORT OF THE PETITION

-

RICHARD T. CONWAY

(Counsel of Record)

RALPH J. MOORE, JR.

D. EUGENIA LANGAN

SHEA & GARDNER

1800 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 828-2000

DAVID P. LEE

Vice Chairman & General Counsel

National Railway Labor Conference

1901 L Street, N.W.

Washington, D.C. 20056

(202) 862-7200

Attorneys for Amicus Curiae

National Railway Labor Conference

Date: April 19, 1988

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

STATEMENT

TABLE OF CONTENTS

eg

INTEREST OF AMICUS CURIAE ......000000000000000.........

REASONS FO

R GRANTING THE WRIT .......

A. The Issue Presented Is Important

B. The Dec

CONCLUSION

Appendix A:

Appendix B:

iston Batow Is Wrome ..............................

Judgment in Jllinois Commerce Com’n

v. I1.C.C., 817 F.2d 145 (D.C. Cir.

REPEC ene ioe ae OR

FRVR_ Corporation—Exemption Ac-

quisition and Operation—-Certain Lines

of Chicago and North Western Trans-

portation Company—Petition For Clar-

ification of Rights, Finance Docket No.

i

19

la

3a

ii

TABLE OF CITATIONS

Cases: Page

Boston and Maine Corp. v. Lenfest, 799 F.2d 795

(Ist Cir. 1986), cert. denied, 55 U.S.L.W. 3571

ESIIIIPE B cconenuncnsenecaseuasssnsercunseensnssenssneuasscemiennsumiasmeadenas 17

Boys Markets vy. Clerks Union, 398 U.S. 235

(1970) ooccceccecccccccceeceeeeeeeeeeereeeeeeeeeeeeeeereeeeeeeeeeeeeseeeeene 11,13

Brotherhood of Railway, Etc. v. REA Express

Inc., 523 F.2d 164 (2d Cir. 1975), cert. denied,

423 U.S. 1017 (1976)

Burlington Northern Railroad Co. vy. Brotherhood

of Maintenance of Way Employes, U.S.

, 55 U.S.L.W. 4576 (1987) 00. 4

Class Exemption for the Acquisition and Opera-

tion of Rail Lines Under 49 U.S.C. 10901, 1

L.C.C.2d 810 (1985) occ. passim

CMC Real Estate Corp. v. I.C.C., 807 F.2d 1025

CIDA. GOW. TBBB) 2 .ncnceccnnccccececncsccececcesessnsccerentecsemsene 2

Fall River Dyeing & Finishing Corp. v. NLRB,

U.S. , 55 U.S.L.W. 4706 (1987)........ 8

FRVR Corporation, Etec., Finance Docket No.

BE GEE CIID cctcicccepnvencvsicunsicnnntesiiicinicasdbotei tiles td 7-9, 16

G. & T. Terminal Packaging vy. Consolidated Rail,

830 F.2d 1230 (3d Cir. 1987), cert. denied, 56

Ff | | eee, 2

I1.C.C. Vv. Railway Labor Assn., 315 U.S. 373

ITT ceiecscssbaigeveidiedebchiscsbbsnamehiaatesiasemadbantscninenatietananne 2, 13, 14

Illinois Commerce Com’n vy. 1.C.C., 817 F.2d 145

ee TEs. TUITE. sniscs:vicisisiceadettiidsiiatebmmigentahnece cra. 8

Jacksonville Bulk Terminals vy. Longshoremen,

Ge CE CD ccvenininiinictibbbei eee 11

Maintenance Employes v. United States, 366 U.S.

EP. SEDIIIIIIDD . <accisusecicsidsiinteisenteisenenpnsiebislicinetaielaas aanaanaas 14

Matter of Chicago, M., St. P. & Pac. R. Co., 658

F.2d 1149 (7th Cir. 1981), cert. den. sub. nom.,

RLEA V. Olgivie, 455 U.S. 1000 (1982) ............ 8

Missouri Pacific R. Co. v. United Transp. Union,

782 F.2d 107 (8th Cir. 1986), cert. denied, 55

Ft A As RES 18

iii

TABLE OF CITATIONS—Continued

Page

Peopl. of State of Ill. v. United States, 604 F.2d

519 (7th Cir. 1979), cert. denied, 445 U.S. 951

CRBTIOD . ...ncnccstnncnasiicsscisemesnsttaapiiaiaimmaaainain 2,15

Railroad Trainmen v. Terminal Co., 394 U.S. 369

CBIDD . ...ccicesewssrsnemcccuesstemnaieiiiamentegdieaamanaan 4

Railway Clerks v. Florida E.C.R. Co., 384 U.S. 238

PETE .cacseissersissaninenriamastitepanniiiinnesniaaaaanalia 4

Railway Labor Assn. v. United States, 339 U.S.

YF re ee ee ee 14

Railway Labor Executives’ Ass'n Vv. 1.C.C., 784

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

Railway Labor Executives’ Ass'n Vv. United States,

697 F.2d 285 (10th Cir. 1983) ............................. 2

Railway Labor Executives’ Ass'n vy. United States,

bs ft Fo 8 2,15

Shore Line v. Transportation Union, 396 U.S. 142

CEI <cccisnnsicestiesatcsistbnierennitanesitetiibaenimiiianeansiatadinaiadasiuane 4

Simmons v. ICC, 697 F.2d 326 (D.C. Cir. 1982)... 15

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

cert. denied, 474 U.S. 1055 (1986) _...................... 15

Telegraphers v. Chicago & N.W. R. Co., 362 U.S.

SEP CIIITD . cecenscicsiateististiscommninncotiiesnetinistninehenemsdamitabaienl 12

Trainmen v. Chicago R. & I.R. Co., 353 U.S. 30

CIID ccsistssiscssiddaniintiliisipisinisititassettamneiaivmasaiintidtiieniiaianadin 11, 12

United States v. Lowden, 308 U.S. 225 (1939)... 13, 14

United Transp. Union v. Norfolk and Western R.

Co., 822 F.2d 1114 (D.C. Cir. 1987), cert. de-

nied, 56 U.S.L.W. 5457 (1988) ............................. 2

Statutes:

Federal Railroad Safety Act, 45 U.S.C. §$§ 421 et

OU v cctseeesainanihedeeeadeninenieamiasiiniainiatinabinesianneanennieie 17

Interstate Commerce Act, 49 U.S.C.:

ii TT cseicessupenesdesecsdnnbshienneuinestninnuiatsantermesnageasessen 2,11

i ITI oti cea dehininicitabaiinenepieinehiniiabiomemanennaneiananinen 2

Be PEED ericrarsecnsesiusisncmmpapesermienmatsseveseasans 2

ST chau ls cai tiel abhseaienignenstenbanaieaneaitenseneetine 2

NII | stisdcesnsdinccbeneocinteesonintaietimnompsrenenses 2

iv

TABLE OF CITATIONS—Continued .

Page

EO at a ee passim

I 1

| anaes ee 1

I ee: cacvnbaedaaitiatiessiaite 15

ENS il RR a a Se Te ae 15

i 15

a 15

§ 111083(¢c) (2) Re baisdbiess poiindaesiiai tents, 15

EE NE RS a 15

Milwaukee Railroad Restructuring Act of 1979,

SS EO 16

Northeast Rail Services Act of 1981, 95 Stat. 669.. 16

Norris-LaGuardia Act, 29 U.S.C. §§$ 101 et seq.....passim

Rail Passenger Service Act of 1970, 45 U.S.C.

EE SS Re A te ee A 16

Railroad Revitalization and Regulatory Reform

ee eee a 14

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

Regional Rail Reorganization Act of 1974, 45

ALL 16

Rock Island Railroad Employee Assistance Act of

1980, 45 U.S.C. §§ 1001 et seq. ...........000000.... 16

Staggers Act of 1980, 94 Stat. 1895 ey 15

Transportation Act of 1920, 41 Stat. 456. 13, 15

Transportation Act of 1940, 54 Stat. 898 ___. psenibenie 14

Miscellaneous:

H. Rept. No. 669, 72d Cong., Ist Sess. (1932) at

SES Ss saheailasepetenediialdiinaniaadadiadbenpidataabaaniaileieeicniaiee iec 11

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-1589

THE PITTSBURGH & LAKE ERIE RAILROAD COMPANY,

Petitioner,

v.

RAILWAY LABOR EXECUTIVES’ ASSOCIATION,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

BRIEF FOR THE

NATIONAL RAILWAY LABOR CONFERENCE AS

AMICUS CURIAE IN SUPPORT OF THE PETITION

This amicus brief is being filed with the written con-

sent of the parties pursuant to Supreme Court Rule 36.1.

STATEMENT OF THE CASE

Under § 10901 of the Interstate Commerce Act

(“ICA”), a non-carrier can acquire and operate a rail-

road line “only if the [Interstate Commerce] Commission

finds that the present or future public convenience and

necessity require or permit” that to be done. 49 U.S.C.

§10901(a). If the Interstate Commerce Commission

(“ICC” or “Commission”) so finds, it may approve the

acquisition “with conditions the Commission finds neces-

sary in the public interest... .” 49 U.S.C. § 10901

(ce) (1) (A) (ii). The ICC thus has discretion to condition

its approval, when in the public interest, upon protection

2

of employees who may be adversely affected by the ac-

quisition.’

Under § 10505 of the ICA, the Commission “shall ex-

empt a person, class of persons, or a transaction or serv-

ice” from various regulatory provisions of the ICA if the

application of those provisions “is not necessary to carry

out the transportation policy” set forth in 49 U.S.C.

$ 1010la. 49 U.S.C. § 10505(a) (1). Among other things,

however, such an exemption “does not relieve a carrier

of its obligation to protect the interests of employees”

insofar as such protection is afforded by the ICC under

$ 10901 or other provisions of the ICA. 49 U.S.C.

§$ 10505(g) (2). And, the “Commission may revoke an

exemption” when “necessary to carry out the transporta-

tion policy of section 1010la....” 49 U.S.C. 10505(d).

The ICC thus retains its regulatory jurisdiction over ex-

empt transactions including any duty or discretion to

require protection of adversely-affected employees.?

In Ex Parte No. 392 (Sub-No. 1), the ICC adopted

under § 10505 a class exemption from the procedures that

otherwise would apply to a line transaction under § 10901

and established expedited procedures under which, among

other things, such a transaction could be consummated

seven days after the filing of notice of the transaction

1 See, e.g., 1.C.C. Vv. Railway Labor Assn., 315 U.S. 373 (1942)

(predecessor provision); People of State of Ill. v. United States,

604 F.2d 519 (7th Cir. 1979), cert. denied, 445 U.S. 951 (1980);

Railway Labor Executives’ Ass’n v. United States, 697 F.2d 285

(10th Cir. 1983); Railway Labor Executives’ Ass'n v. I1.C.C., 784

F.2d 959 (9th Cir. 1986); Railway Labor Executives’ Ass’n V.

United States, 791 F.2d 994 (2d Cir. 1986); CMC Real Estate Corp.

Vv. 1.C.C., 807 F.2d 1025 (D.C. Cir. 1986).

2 See, e.g., United Transp. Union v. Norfolk and Western R. Co.,

$22 F.2d 1114, 1122-1123 (D.C. Cir. 1987), cert. denied, 56 U.S.L.W.

3457, 3460 (1988); G. & T. Terminal Packaging v. Consolidated

Rail, 830 F.2d 1230, 1234-1235 (3d Cir. 1987), cert. denied, 56

U.S.L.W. 3682 (1988).

3

with the Commission. Class Exemption for the Acquisi-

tion and Operation of Rail Lines Under 49 U.S.C. 10901,

1 1.C.C.2d 810 (1985) (“Ex Parte 392”).

Rejecting arguments by Respondent Railway Labor

Executives’ Association (“RLEA”) to the contrary, the

ICC concluded that employee protections normally

should not be required as a condition upon transactions

approved pursuant to that exemption procedure. 1

I.C.C.2d at 813-815. However, the ICC expressly reserved

jurisdiction to “revoke the exemption, in whole or in

part, and impose labor protection” upon “an exceptional

showing of circumstances” in an individual case. 1

I.C.C.2d at 815. On appeal by RLEA and others, Ex

Parte 392 was affirmed “for the reasons set forth in the

decision of the Commission,” in a per curiam judgment

attached as Exhibit A hereto. See Illinois Commerce

Com’n V. 1.C.C., 817 F.2d 145 (D.C. Cir. 1987).

Petitioner, the Pittsburgh & Lake Erie Railroad Co.

(“P&LE”), which is in dire financial condition, agreed

to sell all its rail lines to a noncarrier pursuant to

§ 10901 and the Ex Parte 392 procedure. Notice of that

transaction was filed with the ICC on September 19,

1987, the ICC denied RLEA’s request for a stay of the

effectiveness of the exemption under that procedure, and

thus the ICC’s exemptive approval of the transaction be-

came effective on September 26, 1987. A _ petition by

RLEA to revoke that exemption is pending before the

ICC. In the meantime, however, the RLEA had filed a

complaint with the district court below to enjoin the sale

3In a decision served on February 29, 1988 in Ex Parte 392

(Sub-No. 1), the ICC made some adjustments (not relevant here)

in the procedures thus adopted, but concluded (page 2) that in

general “the exemption process has been successful” and that the

ability of new carriers under that process “to begin operations

promptly is a key to the exemption’s success” in facilitating the

establishment of “new carriers” which “preserve service, jobs, and

rail investment” and which “typically provide better service, more

tailored to individual shippers’ needs.” See 53 Fed. Reg. 5981.

4

unless and until P&LE exhausted the procedures of the

Railway Labor Act (“RLA”), 45 U.S.C. §§ 151 et seq.,

through collective bargaining with RLEA’s member

unions over the carrier’s decision to sell its rail lines and

over the effects of any such sale upon its employees.*

And, on September 15, 1987, the P&LE was struck by

those unions.

On October 8, 1987, the district court preliminarily en-

joined that strike (Pet. App. B.). Judge Bloch concluded

that the strike was intended to negate the ICC’s deter-

mination that employee protections should not be required

in such § 10901 transactions; that the ICA relieved the

P&LE of any duty to bargain with the unions that other-

* Those procedures include conferences, mediation and, at the

discretion of the President, investigation and recommendations by

en emergency board. See Railroad Trainmen vy. Terminal Co., 394

U.S. 369, 378 (1969). With good reason, they have been char-

acterized by this Court as “long and drawn out,” Railway Clerks v.

Florida E.C.R. Co., 384 U.S. 238, 246 (1966), as “almost inter-

minable,” Shore Line v. Transportation Union, 396 U.S. 142, 149

(1969), and “as virtually endless,” Burlington Northern Railroad

Co. Vv. Brotherhood of Maintenance of Way Employes, U.S.

, 55 U.S.L.W. 4576, 4580 (1987). In NRLC’s experience, it is

not at all unusual for the exhaustion of those procedures to take

two years or more. Moreover, if exhausted without agreement, the

union may strike the railroad with which the dispute exists and

secondarily picket all other railroads. Burlington Northern, supra.

Requiring P&LE to exhaust those procedures would nullify the

ICC’s authorization of the sale. The lower courts almost uniformly

have rejected complaints by RLEA and member unions seeking to

enjoin such line sales on the basis of an alleged duty by the selling

carrier to bargain with the unions under the RLA. See Pet. at 13-

14. The sole exceptions are the decision by the district court,

following the Third Circuit’s remand in this case, reversing its

prior decision on the RLA issue (see Pet. at 10-11); and the

April 8, 1988 decision by the Third Circuit affirming that decision

by the district court (Docket No. 87-3797). We understand that

P&LE intends to petition for a writ of certiorari to review also

that decision by the Third Circuit, which we believe to be erroneous.

A grant of that petition and the instant petition will enable this

Court to review all legal aspects of this line sale controversy.

5

wise might exist under the RLA; and that $4 of the

Norris-LaGuardia Act, 29 U.S.C. § 104, must be accom-

modated to the purposes of the ICA and to the jurisdic-

tion of the ICC thereunder to determine what employee

protections, if any, should be required in § 10901 line

sales. Pet. at B-7 and B-8. On October 26, 1987, the

Third Circuit summarily reversed in an opinion that was

limited to the Norris-LaGuardia issue {Pet. App. A.).

While the Third Circuit acknowledged decisions by this

Court holding that Norris-LaGuardia should be accom-

modated to other statutes “adopted as a part of a pattern.

of labor legislation,” in its view § 10901 of the ICA is

not such a statute because the “ICC’s authority to con-

sider the incidental effects of the transaction on labor

and its discretionary authority to require provisions that

protect employees do not make the Interstate Commerce

Act comparable to the Railway Labor Act, which contains

a comprehensive scheme of alternative dispute resolution

mechanism.” Pet. at A-6 and A-9.

INTEREST OF AMICUS CURIAE

The National Railway Labor Conference (“NRLC”) is

an unincorporated association which includes almost all of

the nation’s class I railroads among its members. NRLC

represents member railroads in multi-employer collective

bargaining under the RLA as well as in regard to a

variety of other labor relations matters of concern to

the railroad industry generally.

NRLC does not participate in and has no control over

decisions by a member railroad to sell or otherwise dis-

pose of a line, or as to whether to bargain with a union

about such matters, or in any bargaining that may occur.

On occasions in the past, however, NRLC has been con-

fronted with union proposals for a national agreement

in regard to protections for employees affected by a

transaction approvec. by the ICC, has maintained that

such issues should be determined by the ICC, and has

6

never agreed to such protections on behalf of members

participating in such national bargaining. Since the de-

cision below radically departs from what NRLC hereto-

fore has understood to be the law, a reversal of that

decision is of importance to NRLC in its role as the na-

tional bargaining representative for member railroads.

Reversal of that decision also is of paramount impor-

tance to the individual railroads, to potential future rail-

roads that may acquire a line or lines from an existing

railroad, and to shippers. The class I railroads long have

been seriously handicapped in their efforts to operate

profitably in the face of ever-increasing truck competi-

tion by obsolete work rules and a mileage basis of pay

(in which 100 miles of operation generally was equated

to eight hours of work), often dating back to the nine-

teenth century, which resulted in gross overmanning, a

lack of flexibility in operating trains, and labor costs

that often consumed 50% or more of gross operating

revenues. Although some progress has been made, par-

ticularly in recent years, in negotiating collective bar-

gaining agreements—including national agreements ne-

gotiated by the NRLC—that have afforded some amelio-

ration, that usually has been the work of decades stretch-

ing over several rounds of bargaining, and much re-

mains to be done. This situation has been a factor in

the series of railroad bankruptcy that brought about

creation of a government-subsidized Conrail out of the

Penn Central and several other bankrupt northeastern

railroads, without which much of the northeast could

have been deprived of any railroad service; to the dis-

memberment in bankruptcy of such major railroads as

the Milwaukee and the Rock Island; and to the abandon-

ment of thousands of miles of track which often deprived

agricultural areas, towns and even substantial cities, and

of course shippers located therein, of railroad service.

In recent years, line sales to newly-created carriers

have become an incre. singly important aspect of efforts

7

to rationalize the railroad structure and thus to enable

the railroad industry to compete more effectively while

continuing to provide railroad service. This development,

its causes and consequences, have recently been de-

scribed by the ICC in FRVR Corporation, Ete., Finance

Docket No. 31205, served January 29, 1988, a copy of

which is attached as Appendix B hereto ‘appeal pending,

Docket No. 88-1280, 8th Cir.).

Since 1980, “nearly 200 short-line and regional rail-

roads have come into existence—partially reversing the

industry’s long trend of exit and contraction.” App. at

la. This “trend away from abandonment and towards

the formation of short-!ine and regional carriers ... was

given impetus by a change in 1982 in Commission labor

protection policy ....” App. at 4a. Prior to that time,

the Commission’s approval of a sale to a non-carrier

“might have been conditioned upon comprehensive (and

potentially quite expensive) labor protection,” but by

1982 the ICC “had determined that the expense of labor

protection foreclosed short-line development, forcing the

less attractive abandonment alternative ....” App. at

5a. The ICC thus exercised its discretion in individual

cases to deny labor protection, and after “consideration

of scores of individual applications, the Commission de-

cided” in Ex Parte 392 “that the development of new

small railroads was overwhelmingly beneficial and should

be encouraged and allowed to proceed with a minimum

of regulatory cost and delay.”” App. at 5a.

That “policy has been validated by practical results’”—

“(njew railroad formation quickened, abandonments fell,

service was maintained and typically improved, and rail

jobs that might otherwise have been lost were preserved.”

App. at 6a. An analysis by the Commission’s staff dem-

onstrated “that employment on the new lines, particu-

larly the larger regional carriers, is typically drawn

from the work force of the selling carrier.” App. at 6a

n. 11. The employees of those new carriers, of course,

8

have the same right as employees of existing carriers

under § 2 Ninth of the RLA to select, through the vote

of a majority in a craft or class, a union to represent

them in collective bargaining with that new carrier. 45

U.S.C. § 152 Ninth. However, even if the new carrier is

a “successor” to the selling carrier in legal contemplation,

it has no obligation to assume the collective bargaining

agreements made by the vendor company. Rather, it may

establish unilaterally the rates of pay, rules and working

conditions applicable to its employees, so that the onus

is upon the unions to bring about a change through the

procedures of the RLA.® This new start in labor agree-

ments is largely responsible, in NRLC’s opinion, for the

fact found by the ICC that “|mJarkets that produce

losses When operated by Class I railroads can produce

profits for smaller, more efficient local carriers.” App.

at 4a.

Although this ICC policy facilitating line sales gen-

erally has been “supported and welcomed,” it “has been

consistently opposed by organized rail labor.” App. at

6a-7a. The rail unions recently have extended that op-

position from arguments to the ICC, and on appeal there-

from to the courts, to a concerted campaign, apparently

coordinated by the RLEA, of litigation and strikes or

threatened strikes contesting the implementation of au-

thorized line sales, in reliance upon the RLA and Norris-

LaGuardia. While much of the resulting litigation is still

working its way through the lower courts, that cam-

5 Those principles have been established by this Court under the

National Labor Relations Act, in decisions recently reaffirmed and

amplified in Fall River Dyeing & Finishing Corp. v. NLRB,

U.S. , 55 U.S.L.W. 4706 (1987). They have been applied by

the lower courts under the RLA, and apparently no longer are con-

tested by the railroad unions. See, e.g., Matter of Chicago, M.,

St. P. & Pac. R. Co., 658 F.2d 1149, 1174-1175 (7th Cir. 1981),

cert. denied sub nom., RLEA vy. Olgivie, 455 U.S. 1000 (1982);

Brotherhood of Railway, Etc. v. REA Express Inc., 523 F.2d 164,

170 (2d Cir. 1975), cert. denied, 423 U.S. 1017, 1073 (1976).

$

paign was unsuccessful insofar as judicial decisions are

concerned (although sometimes successful in delaying im-

plementation of approved transactions pending decision)

until the decision by the Third Circuit in this case. As

the ICC also found, that “decision has had an immediate

impact on the formation of small railroads,” and is

“threatening to halt the revitalization of the marginal

railroad sectors—a restructuring that the Commission

has found to be in the interest of carriers, labor, and the

shipping public.”’ App. at 12a.

The interest of the NRLC and of member carriers in

securing a reversal by this Court of that decision not only

is obvious, therefore, but also accords with the public

interest as found by the ICC.

REASONS FOR GRANTING THE WRIT

The Petition presents an important issue of law, in-

volving the relationship between the ICA and the Norris-

LaGuardia Act, which was wrongly decided by the court

below in an opinion which conflicts with principles estab-

lished by this Court and applied by other courts of ap-

peals.

A. The Issue Presented Is Important.

Briefly stated, the Congress has given the ICC discre-

tionary jurisdiction to determine whether protections for

employees (and the extent of such protections if ordered)

is in the public interest when a line sale is authorized

under § 10901 of the ICA; the ICC has determined pur-

suant to that jurisdiction as a matter of general policy

that employee protections are not in the public interest

and will not be imposed in the absence of exceptional

circumstances; that policy determination has been sus-

tained by the federal courts on direct review instigated

by, and over the opposition of, RLEA among others; the

ICC has applied that general policy in authorizing the

sale of P&LE’s lines without labor protections; the RLEA

10

struck the P&LE so as to prevent implementation of that

sale without the employee protections which it demands;

the Third Circuit, without in any way questioning the

ICC’s jurisdiction or the validity of its authorization of

the sale, has held that Norris-LaGuardia deprives the

federal courts of jurisdiction to enjoin that strike; and

the ICC, as well as the P&LE, the NRLC and others,

disagrees with that decision.

This case thus presents an apparent conflict between

important federal statutes, and a disagreement between a

federal court and a federal agency as to how that issue

should be resolved, which this Court should resolve even

if the underlying issue were not of much intrinsic im-

portance. But however that may be, the importance of

that issue in itself can hardly be gainsaid. We need not

repeat, although we reiterate, the foregoing explanation

(pp. 6-9 supra) of the importance of line sales to the

railroad industry and to the public—and thus of the deci-

sion below which threatens to prevent the consummation

of such sales despite their authorization by the ICC. The

efforts by the RLEA and member unions to frustrate such

government-authorized sales, through reliance upon the

RLA and the Norris-LaGuardia Act, is the most-litigated

and most important railway labor-management contro-

versy now facing the federal courts. Review by this

Court of the decision below should go far towards laying

that controversy to rest.®

B. The Decision Below Is Wrong.

The Congress enacted the Norris-LaGuardia Act in

1932 (47 Stat. 70) “to remedy the growing tendency of

® Moreover, while line sales to new carriers are the heart of the

current controversy, the ramifications of the decision below are

not limited to such transactions. The ICC also has jurisdiction

(including the employee protections, if any, to be imposed) over

many other railroad transactions, such as abandonments and a

variety of multicarrier transactions, including mergers, consolida-

tions, and line sales to existing carriers. See pp. 13-16 infra.

11

federal courts to enjoin strikes by narrowly construing

the Clayton Act’s labor exemption from the Sherman

Act’s prohibition against conspiracies to restrain trade

.. 2? Jacksonville Bulk Terminals v. Longshoremen,

457 U.S. 702, 708 (1982).7 Although this Court “has

consistently given the anti-injunction provisions of the

. Act a broad interpretation,” the Court also has held

those provisions to be inapplicable “where necessary to

accommodate the Act to specific federal legislation or

paramount congressional policy.” Jbid. In short, the

“accommodation” doctrine simple reflects the general rule

of “[{s]tatutory interpretation” that “consideration must

be given to the total corpus of pertinent law and the

policies that inspired ostensibly inconsistent provisions.”

Boys Markets v. Clerks Union, 398 U.S. 235, 250 (1970).

Among other things, this means that Norris-LaGuardia is

accommodated so that it does not prevent the effectuation

of statutes in which “congressional emphasis shifted from

protection of the nascent labor movement to the encour-

agement of collective bargaining and to administrative

techniques for the peaceful resolution of industrial dis-

putes.” Id. at 251 (emphasis added). See also, e.g., T'rain-

men V. Chicago R. & I.R. Co., 353 U.S. 30, 39-42 (1957).

Although the Third Circuit acknowledged that Norris-

LaGuardia should be accommodated when “necessary to

enfo.ve some other overriding and equally clear federal

labor policy,” (Pet. at A-6), in its view § 19901 is not

“a labor law” (Pet. at A-8) because protection of the

interests of labor is only one of “fifteen policies relevant

to the regulation of the railroad industry” set forth in

the national transportation policy, 49 U.S.C. § 10101a.

Pet. at A-7. “The ICC’s authority to consider the inci-

™*The purpose of the bill is to protect the rights of labor in the

same manner the Congress intended when it enacted the Clayton

Act ..., which act, by reason of its construction and application

by the Federal courts, is ineffectual to accomplish the congressional

intent.” H. Rept. No. 669, 72d Cong., Ist Sess. (1932) at 3.

12

dental effect of the transaction on labor and its discre-

tionary authority to require provisions that protect em-

ployees do not make the Interstate Commerce Act com-

parable to the Railway Labor Act, which contains a

comprehensive scheme of alternative dispute resolution

mechanisms.” Pet. at A-9.*

This grudging acknowledgment of the accommodation

doctrine would convert that doctrine into a mechanical

comparison of other statutory provisions to the RLA

rather than a consideration of “the total corpus of perti-

nent laws and the policies that inspired ostensibly incon-

sistent provisions” so as to accommodate Norris-LaGuardia

“to specific federal legislation or paramount federal poli-

cies.” But even on the Third Circuit’s terms, the juris-

diction of the ICC to determine the extent of labor pro-

tections to be imposed in authorizing line sales under

$ 10901 of the ICA surely constitutes “an overriding and

equally «lear federal labor policy.” The Congress has

thus provided an “administrative technique[] for the

peaceful resolution” of labor disputes at least as clearly

as it did in requiring the arbitration of grievance dis-

putes under the RLA to which Norris-LaGuardia was

accommodated in Chicago R. & I.R. Co., supra, or in au-

thorizing agreements to arbitrate grievance disputes by

’ The Third Circuit also erred in relying upon Telegraphers v.

Chicago & N.W. R. Co., 362 U.S. 330 (1960). See Pet. at A-9 and

10. While some of the station closings were approved by state regu-

latory agencies, that was done pursuant to state law (rather than

pursuant to the ICA as the Third Circuit erroneously stated). See

362 U.S. at 332-333, 347-348, 353 & n.18. Telegraphers did reject an

“argument that the operation of unnecessary stations . .. runs

counter to the congressional policy ... to foster an efficient na-

tional railroad system,” 363 U.S. at 342, but that argument was

based upon the general transportation policies of the ICA rather

than upon a specific statutory provision, such as § 10901, requiring

ICC approval of a transaction and empowering that agency to

condition its approval upon employee protections when in the public

interest.

13

employees and unions under the National Labor Rela-

tions Act to which Norris-LaGuardia was accommodated

in Boys Markets, supra. Indeed, line sales under § 10901

are only one of numerous categories of railroad transac-

tions for which ICC approval is required under the ICA

in proceedings that include consideration of labor protec-

tions.

The Transportation Act of 1920 (41 Stat. 456) amended

the ICA to include provisions giving the ICC jurisdiction

over abandonments, line sales to non-carriers and other

single-carrier transactions (§§1(18) and (20), 41 Stat.

477-478), and over mergers and other multicarriers trans-

actions (§$5(2), 41 Stat. 481), and also enacted the

predecessor of the RLA (41 Stat. 469-474). In United

States v. Lowden, 308 U.S. 225, 235 (1939), this Court

described both aspects of that 1920 Act as part of the

“now extensive history of legislation regulating the rela-

tions of railroad employees and employers.” The Court

confirmed the discretionary authority of the ICC to con-

dition its approval of mergers and other multicarrier

transactions pursuant to § 5(2) of the amended ICA upon

protection of employees when in the public interest. That

authority may “promote the public interest in its statu-

tory meaning by facilitating the national policy of rail-

road consolidation” by, among other things, “prevent [ing]

interruption of interstate commerce through labor dis-

putes growing out of labor grievances... .” 308 U.S.

at 238.

In ICC v. Railway Labor Assn., 315 U.S. 373 (1942),

this Court held that the ICC had the same discretionary

authority to condition its approval of abandonments and

other single-carrier transactions pursuant to §§ 1/18)

and (20) of the amended ICA upon protection for em-

ployees. As is true of the comparable “public interest”

standard involved in Lowden, those provisions required

consideration of “the national interest in the stability of

the labor supply available to the railroads,” as the “pos-

sible unstabilizing effects on the national railroad system”

14

of labor problems “are no smaller in the case of an aban-

donment like the one before us than in a consolidation

like that involved in the Lowden case.” 315 U.S. at 377.

The Transportation Act of 1940 (54 Stat. 898) amended

$5 of the ICA to mandate employee protections as a con-

dition upon the ICC’s approval of mergers and other

multicarrier transactions thereunder (§ 5(2) (f), 54 Stat.

906-907). That provision merely gave “legislative em-

phasis to a policy and practice already recognized by

$5(4)(b) by making the practice mandatory instead of

discretionary ....” United States v. Lowden, supra, 308

U.S. at 239; accord, ICC v. Railway Labor Assn., supra,

315 U.S. at 379. Indeed, those mandatory protections con-

stituted a minimum and the ICC retained discretion to

impose additional labor protections. Railway Labor Assn.

v. United States, 339 U.S. 142 (1950). But in thus man-

dating employee protections as to approved mergers, etc.,

the Congress had modified a proposed Harrington Amend-

ment which otherwise “threatened to prevent all consoli-

dations to which it related” by prohibiting ICC approval

“if such transaction will result in unemployment or dis-

placement of employees . . . or in the impairment of

existing employment rights of said employees.” 339 U.S.

at 150-151. Thus, even as to such transactions, the Con-

gress intended to require only limited compensatory pro-

tections rather than a job freeze. Maintenance Employes

v. United States, 366 U.S. 169, 174-177 (1961).

The Railroad Revitalization and Regulatory Reform

Act of 1976 (90 Stat. 31) included provisions, enacted as

$ la of the ICA (90 Stat. 127-130), separating abandon-

ments from other single-carrier transactions which had

been governed by § 1(18) and mandating employee pro-

tections for certain approved abandonments (§ la(4),

90 Stat. 128). However, the Commission retained “wide

discretion” to fit employee protections “to the facts and

circumstances attending a particular abandonment,” in-

cluding the imposition of “labor protection only upon the

15

existing carrier, not upon a non-carrier that may acquire

an abandoned line in order to resume service,” and “re-

frain[ing] from imposing any labor protection at all...

in whole line abandonments.”’ Simmons v. ICC, 697 F.2d

326, 335-336 (D.C. Cir. 1982). The ICC continued to have

discretion under § 1(18) as reenacted (90 Stat. 123-124)

to determine what employee protections, if any, are in

the public interest in regard to line sales to non-carriers.

People of State of Ill. v. United States, supra, 604 F.2d

at 524-527.

The ICA was codified and reenacted in 1978 as Sub-

title IV of 49 U.S. Code. 92 Stat. 1337. The authority of

the ICC over line sales and other single-carrier trans-

actions apart from abandonments was codified as $ 10901;

its authority over abandonments was codified as $ 10903;

and its authority over mergers and other multicarrier

transactions was codified as §§ 13341-13347; all without

substantive change. The Staggers Act of 1980 (94 Stat.

1895) further amended the ICA to provide for mandatory

or discretionary labor protections in connection with the

abolition of rate bureaus (Sec. 219(g), 94 Stat. 1928),

feeder line sales (49 U.S.C. § 10910(j) ), reciprocal switch-

ing agreements (49 U.S.C. § 11103(c)(2)), and the

construction of new rail lines (49 U.S.C. § 10901(e)).

Moreover, the Congress precluded any employee protec-

tions in establishing a procedure (49 U.S.C. $ 10905) for

sales, including forced sales, of lines approved by the

ICC for abandonment. Railway Labor Executives’ Ass’n

v. United States, supra, 791 F.2d at 1001-1003; Simmons

v. ICC, 760 F.2d 126 (7th Cir. 1985), cert. denied, 474

U.S. 1055 (1986).

Hence, as the ICC has observed, since the provisions

initially enacted by the Transportation Act of 1920 “Con-

gress has routinely affirmed and expanded the importance

of the Interstate Commerce Act as a part of the complex

of laws governing labor relations in the rail industry

For more than fifty years the Commission has

16

exercised its authority in this field, frequently at the re-

quest and with the support of labor, and our decisions

have had enormous impact on the shape of rail labor re-

lations throughout this period.” FRVR Corporation,

App. at 14a-15a.® Surely, those provisions of the ICA

and the decisions of the ICC and the courts thereunder

are “a part of the pattern of labor legislation” to which

Norris-LaGuardia at the minimum should be accommo-

dated.

Despite the view of the court below to the contrary,

that is no less true because the ICC in carrying out its

functions under § 10901 and related provisions of the

ICA must take into consideration policies and interests

in addition to the interests of rail labor. We agree with

the ICC, as stated in FRVR Corporation (App. at 17a) :

“That the concern for labor equity is only one of

many conflicting aspects of National Transportation

Policy should not be seen as derogation of the agency’s

authority—rather it is precisely the reason why the

Interstate Commerce Act must be recognized to nave

preeminence. It is the public policy of this Nation

to regulate and supervise transportation at the na-

® The Congress also has statutorily dealt with the issue of protec-

tion for railroad employees in the Rail Passenger Service Act of

1970, 45 U.S.C. §§ 501 et seq., which created Amtrak (see 84 Stat.

1337, as amended, 45 U.S.C. § 565) ; in the Regional Rail Reorganiza-

tion Act of 1974, 45 U.S.C. §§ 701 et seq., which created Conrail

(see Title V, 87 Stat. 1012-1020, which as thereafter amended was

repealed by the Northeast Rail Services Act of 1981, 95 Stat. 669;

which also enacted substitute—and reduced—labor protections as

Title VII of the 3-R Act, 45 U.S.C. §§ 797 et seq.) ; in the Milwaukee

Railroad Restructuring Act of 1979, 45 U.S.C. §§ 901 et seq., which

governed the dismemberment of the bankrupt Milwaukee railroad

(see 93 Stat. 740-746, as amended, 45 U.S.C. §§ 907-912, 915); and

in the Rock Island Railroad Employee Assistance Act of 1980, 45

U.S.C. §§ 1001 et seg., which generally concerned protection for

employees affected by the dismemberment of the bankrupt Rock

Island railroad.

17

tional] level so as to ensure the essential benefits of a

critical aspect of commerce. While the means of reg-

ulation have changed markedly over the decades, the

exclusive and plenary nature of the Commission’s

jurisdiction over consolidations, sales and abandon-

ments have been consistently upheld. In the discharge

of our responsibilities, we are charged with the ex-

pert resolution of many-sided conflicts between dis-

putants, public and private. The recitation above of

the factors leading to our [Ex Parte 392) policy il-

lustrates the complexity of the process and informa-

tion that led to our present policy.”

Although the purposes of the Federal Railroad Safety

Act (45 U.S.C. §§ 421 et seg.) extend beyond the safety

of employees (see 45 U.S.C. § 421), it has been held that

Norris-LaGuardia does not prevent an injunction pro-

hibiting a strike over a dispute as to whether hazardous

conditions justify an employee’s refusal to work in view

of a FRSA provision making such disputes arbitrable

(45 U.S.C. § 441(c)). Boston and Maine Corp. v. Len-

fest, 799 F.2d 795, 800-804 (1st Cir. 1986), cert. denied,

55 U.S.L.W. 3571 (1987). “Only the availability of in-

junctive relief can insure that the FRSA will operate

consistently with its purpose . . . to give -employees the

right to avoid hazardous conditions on the railroad, and

to channel any such dispute into binding arbitration.” Jd.

at 803. So, too, only the availability of injunctive relief

can insure that the ICA can operate consistently with its

purpose that the ICC determine whether line sales and

various other railroad transactions are in the public in-

terest and to resalve any dispute as to the employee pro-

tections to be provided in connection with such trans-

actions.

Insofar as we have discovered, there is not a word in

the legislative histories of the statutory provisions con-

ferring upon the ICC jurisdiction over line sales and

other railroad transactions which indicates that the Con-

gress either contemplated or intended that rail labor

18

would nonetheless have the power to block effectuation

of an approved transaction through strikes and picketing,

either because Norris-LaGuardia would prevent an in-

junction against such strikes and picketing or otherwise.

Certainly, none has been cited by RLEA or by the court

below.

In Missouri Pacific R. Co. v. United Transp. Union,

782 F.2d 107, 111-112 (8th Cir. 1986), cert. denied, 55

U.S.L.W. 3837 (1987), the Eighth Circuit held that

Norris-LaGuardia must be accommodated to the power of

the ICC to authorize multicarrier transactions (in that

case, a trackage right agreement). Otherwise, a union

could “frustrate ... a consolidation approved by the

ICC,” and “Congress did not intend that affected em-

ployees have such power to block consolidations which are

in the publie interest.” Jbid. That is equally true in re-

gard to § 10901 line sales that the ICC has found to be

in the public interest. This is particularly so since the

Congress, in providing “administrative processes for the

peaceful resolution” of labor disputes concerning the pro-

tection of employees affected by an approved transaction,

has enabled the unions to present their views in that re-

gard to the ICC and, on appeal therefrom, to the courts,

just as the RLEA did in the Ex Parte 392 proceeding.

As the Eighth Circuit further stated in Missouri Pacific,

it “is inconceivable that Congress intended that a labor

union would be able to participate in ICC approval pro-

ceedings and then, if the union was dissatisfied with the

result or a part thereof, strike a carrier to obtain the

advantage it desired.” 782 F.2d at 112.

We submit that the Eighth Circuit in Missouri Pacific

correctly applied the accommodation doctrine as explained

by this Court while the Third Circuit in the case now

before this Court did not. But however that may be, this

Court should take this opportunity to leave no doubt about

the correct resolution of this important issue.

19

CONCLUSION

For the reasons stated above and in P&LE’s Petition,

this Court should grant a writ of certiorari and review

the decision by the Third Circuit.

Respectfully submitted,

RICHARD T. CONWAY

(Counsel of Record)

RALPH J. MOORE, JR.

D. EUGENIA LANGAN

SHEA & GARDNER

1800 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 828-2000

DAvip P. LEE

Vice Chairman & General Counsel

- National Railway Labor Conference

1901 L Street, N.W.

Washington, D.C. 20036

(202) 862-7200

Attorneys for Amicus Curiae

National Railway Labor Conference

Date: April 19, 1988

APPENDICES

a

la

APPENDIX A

“UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Nos. 86-1107

86-1131

ILLINOIS COMMERCE COMMISSION, et al.,

Petitioners ,

Vv.

ICC & USA,

Respondents

Petition for Review of an Order of the

Interstate Commerce Commission

Before: EDWARDS and SILBERMAN, Circuit Judges,

and District Judge PARKER,* United States District

Court for the District of Columbia .

JUDGMENT

[Filed May 12, 1987]

This cause came on to be heard on a petition for re-

view of an order of the Interstate Commerce Commission,

and was briefed and argued by counsel. While the issues

presented occasion no need for an opinion, they have been

accorded full consideration by the Court. See Local Rule

13(c). On consideration thereof, it is

* Sitting by designation pursuant to 28 U.S.C. § 292(a) (1982).

2a

ORDERED and ADJUDGED, by this Court, that the

petition for review of the order of the Interstate Com-

merce Commission in this matter is hereby denied for the

reasons set forth in the decision of the Commission. It is

FURTHER ORDERED, by this Court, sua sponte,

that the Clerk shall withhold issuance of the mandate

herein until seven days after disposition of any timely

petition for rehearing. See Local Rule 14, as amended

on November 30, 1981 and June 15, 1982. This instruc-

tion to the Clerk is without prejudice to the right of any

party at any time to move for expedited issuance of the

mandate for good cause shown.

Per Curiam

FOR THE COURT

/s/ George A. Fisher

GEORGE A. FISHER

Clerk

3a

APPENDIX B

[Service Date Jan. 29, 1988]

INTERSTATE COMMERCE COMMISSION

DECISION

FINANCE DOCKET NO. 31205

FRVR CORPORATION—EXEMPTION ACQUISITION AND

OPERATION—CERTAIN LINES OF CHICAGO AND

NORTH WESTERN TRANSPORTATION COMPANY—

PETITION FOR CLARIFICATION

Decided: January 28, 1988

This decision is issued in response to a petition filed by

the Chicago and North Western Transportation Company

(CNW) and FRVR Corporation. FRVR is a new corpo-

ration formed for the purpose of acquiring and operating

certain rail lines of the CNW. Petitioners seek a state-

ment of this agency’s views as to our jurisdiction over

labor issues arising out of the formation of short-line

railroads. The matter has become controversial! in the

past several yeurs, due to the acceleration in the creation

of regional and short-line railroads.

Since partial deregulation under the Staggers Rail Act

of 1980' nearly 200 short-line and regional railroads

come into existence—partially reversing the industry’s

long trend of exit and contraction. These new roads now

operate approximately 13 thousand miles of rail lines

with 4 thousand workers handling more than 1.3 million

carloads yearly.

1 Pub. L. No. 96-448, 94 Stat. 1941-45.

4a

Up until the Staggers Act, the principal means of exit

for large “Class I” railroads from unprofitable markets

had been through abandonment. Substantial deregulation

of motor freight under the 1980 Motor Carrier Act?

threatened to accelerate this trend through new and in-

creasingly efficient truck competition. Abandonment, by

its nature, is most often a painful, disappointing process.

It normally entails the permanent loss of jobs and rail-

road service, even though it has not always occurred in

markets that are inherently unserviceable by rail. Mar-

kets that produce losses when operated by Class I rail-

roads can produce profits for smaller, more efficient local

carriers. These new carriers are potentially beneficial to

nearly all concerned. They preserve rail service for the

local economies and provide traffic feed for the larger

carriers, enhancing employment prospects for rail labor

—both on the smaller lines and throughout a reinvigor-

ated Class I system—and they foster optimal recognition

of the energy efficiencies and environmental benefits of

rail service.*

The trend away from abandonment and towards the

formation of short-line and regional carriers developed in

response to the new business environment created by the

Staggers Act. This development was given impetus by a

change in 1982 in Commission labor protection policy

which was in part based upon a provision of the Staggers

Act which establishes a branch line sale process in which

labor protection was foreclosed by the statute. In the

2 Pub. L. No. 96-296, 94 Stat. 793.

8’ The National Rail Transportation Policy charges the Commis-

sion with the responsibility of ensuring the development of a sound

rail transportation system, while encouraging fair wages and safe

and suitable working conditions for labor. The Commission is also

to encourage and promote energy conservation. See 49 U.S.C.

10101a.

#49 U.S.C. 10905. See Simmons vy. ICC, 760 F.2d 126 (7th Cir.

1985).

5a

past, the typical sale of a short-line carrier might have

been conditioned upon comprehensive (and _ potentially

quite expensive) labor protection.’ By 1982 the Commis-

sion had determined that the expense of labor protection

foreclosed short-line development, forcing the less attrac-_

tive abandonment alternative or an abandonment and

sale under the provisions of 49 U.S.C. 10905. As labor

protection in short-line sales to new entrants is within

the Commission’s discretion, the Commission began to

withhold protection in individual applications* on the

three-part theory that (1) in doing so rail service would

be preserved, (2) the new railroads provided the best

prospect for protecting the employment prospects of the

affected labor and (3) it made no sense to force railroads

to go through the more cumbersome process of abandon-

ment under 49 U.S.C. 10903 and sale under 49 U.S.C.

10905 to achieve the same result. After consideration_of

scores of individual applications, the Commission decided

in a 1986 notice and comment rulemaking that the de-

velopment of new small railroads was overwhelmingly

beneficial and should be encouraged and allowed to pro-

ceed with a minimum of regulatory cost and delay. The

Commission issued rules exempting certain classes of line

sales from drawn out Commission regulation, retaining

for itself the unqualified right to review and correct any

5 See e.g., Durango and Silverton Narrow Gauge Railroad Co.—

Acquisition and Operation, 363 I.C.C. 292 (1979), aff'd sub nom.

Railway Labor Executives’ Association v. United States, 697 F.2d

285 (10th Cir. 1983) (Review Board decision noting that imposition

of labor protection was discretionary ).

® See Knox and Kane Railroad Co.—Gettysburg Railroad Co.—

Petition for Exemption, 366 1.C.C. 439 (1982).

7 Ex Parte No. 392 (Sub No. 1), Class Exemption for the Acquisi-

tion and Operation of Rail Lines Under 49 U.S.C. 10901, aff'd sub

nom. Illinois Commerce Commission Vv. 1.C.C., 817 F.2d 145 (DC

Cir. 1987). This decision is in keeping with the National Trans-

portation Policy of minimizing the need for Federal regulation

(49 U.S.C. 10101a(2)), as well as the policies noted in footnote 3

above.

6a

unique problems that might arise out of exceptional cir-

cumstances.*®

The Commission’s policy has been validated by practi-

cal results. New railroad formation quickened,® aban-

donments fell,’ service was maintained and typically im-

proved, and rail jobs that might otherwise have been lost

were preserved.'' Most observers supported and wel-

8 The Staggers Act expanded the Commission’s exemption author-

ity. Further, as is stated in the Conference Report, the Commission

is actively to pursue exemptions for transportation and is to have

a policy of reviewing carrier actions after the fact to correct abuses.

See H.R. Rep. No. 96-1430, 96th Cong., 2d Sess. 104-105.

9 New Railroad Formation

Year Est. Number

1982 25

1983 20

1984 31

1985 28

1986 45

1987 * 70

* Preliminary figure based on notices filed.

10 Miles of Lines Abandoned

Year Miles

1982 5151

1983 2454

1984 3083

1985 2343

1986 2087

1987 1932

11 The Commission’s Office of Transportation Analysis is engaged

in continuing study and research on the effect of the Commission’s

policy and the short-line/regional phenomenon. This study has

included on-site interviews with labor and management, as well

as data collection and analysis. This analysis demonstrates that

employment on the new lines, particularly the larger regional car-

riers, is typically drawn from the work force of the selling carrier.

Further, while initial employment levels are below those of the

departing carrier, employment on some lines has grown over time

as improved service attracts new business to the lines.

Ta

comed the Commission’s policy initiative, but it has been

consistently opposed by organized rail labor. Under the

rules adopted in 1986, opposition to individual transac-

tions is presented in petitions to revoke the grant of ex-

emption. Such petitions have been filed in approximately

20 of the 120 transactions processed under the 1986

rules. Where petitions to revoke are filed, the Commis-

sion evaluates the basis for the revocation request, and

has well-defined authority to correct any abuses that are

shown.'* The Commission’s authority includes the power

to impose labor protective conditions through partial

revocation,’® although under the rules this step will be

taken only where exceptional circumstances are shown.

The Commission would consider as exceptional, situations

in which there was misuse of the Commission’s rules or

precedent,’* or where existing contracts specified that

line sales were subject to procedural or substantive pro-

tection.'"* Further, the exemption will be modified where

labor can demonstrate injury that was unique, dispro-

portionate to the gains achieved for the local transport

system, and which can be compensated without causing

termination of the transaction or substantially undoing

12 See Consolidated Rail Corporation—Declaratory Order—Ex-

emption, 1 1.C.C.2d 895 (1986), cited approvingly, GAT Terminal

Packaging Co., Inc. v. Consolidated Rail Corp., CA 84-1173 Slip op.

(D.N.J. October 23, 1986). See also legislative history of the

Staggers Act in footnote 8 above.

13 See Maryland Midland Railway, Inc.—-Exemption from 49

U.S.C. 11343 and 11301 (not printed), served January 6, 1987.

14 Cf. Order of Investigation, served May 18, 1987, in F.D. No.

30965, Delaware and Hudson Railway Company—Lease and Track-

age Rights Exemption—Springfield Terminal Railway Company.

15 It is the Commission’s standard labor protection policy in

restructuring proceedings to preserve existing employment con-

tracts insofar as possible, consistent with the merger, consolidation

cr abandonment authorized. See section 2 of the standard New York

Dock conditions, 360 I.C.C. 84 (1979).

8a ~

the prospective benefits of the Commission’s existing pol-

icy for other communities and locales."

The exemption proposal filed by CNW and FRVR cor-

responds quite well to our expectations and experience

with the use of the Ex Parte 392 (Sub-No. 1) rules. At

issue are 208 miles of light density lines in Eastern Wis-

consin in the area between Green Bay and Milwaukee.

The paper industry is the principal source of traffic and

holds the greatest potential for traffic growth on. the

FRVR line. But to achieve growth means reversing the

paper industry’s increasing reliance on truck service. A

verified statement filed by Petitioners indicates that rail

market share of the outbound paper market was 54 per-

cent of the total in 1977, but had fallen to under 20 per-

cent by 1986. The number of motor carriers operating

in the region has doubled and price competition is

strenuous. The lines of the CNW may now be under ad-

ditional pressure since its rail competition (which had

been the Soo Line operating at relatively standard Class

I costs) is a new regional operator, the Wisconsin Cen-

tral. Wisconsin Central, as organized, has distinct cost

advantages that will make long-term competition by

CNW almost certainly impossible, absent a substantial

improvement in efficiency and productivity."

To work its way out of this predicament, CNW seeks

to sell its line to the newly formed FRVR. FRVR has

a management team drawn from the Wisconsin area and

from which the rail industry, with experience in running

a small railroad and marketing rail transportation to the

paper industry. It intends to draw its work force from

existing CNW employees where possible, and anticipates

vA

16 Ct. Northern Pacific Acquiring Corp. and Eureka Southern

Railroad Co.—Exemption F.D. 30555 (Decision served January 8,

1988).

17Two petitions to revoke the Wisconsin Central exemption

(F.D. No. 31102) are now before the Commission.

9a

that it will operate as a union-represented company.” Its

wage rates will be approximately 85 percent of the Class

I standard, and its work rules will give it substantial

productivity improvement over the CNW operations. The

company also anticipates use of an incentive bonus plan

to further productivity. It will own its own engines, op-

erate its own facilities, and rely principally on the CNW

for car supply. It has trackage rights over CNW to con-

nect into Milwaukee, and it has connections with other

roads at points on the system. The company has already

contacted shippers along the lines, and it filed 25 shipper

letters acknowledging anticipated support and coopera-

tion with its petition.

CNW estimates that the impact of the sale on its em-

ployees will be minimized by FRVR’s commitment to the

use of former CNW employees. For its part, CNW states

that it has employment shortages elsewhere on its system,

and that it will make these jobs available to workers af-

fected by the FRVR sale. It anticipates that approxi-

mately 20 employees might still be left without employ-

ment either on FRVR or the CNW. It has offeted a

commitment of $30,000 per employee as a separation

allowances for any employee unable to secure continued

employment with either CNW, by exercising seniority,

or with FRVR, under the right of first hire.” CNW has

offered to meet with its unions to discuss this offer and

related issues. According to Petitioner, the unions believe

that such discussions must proceed under the auspices of

18 Verified Statement of S. P. Selby. Selby states that CNW

employees currently working on the affected lines are granted right

of first hire selected in accordance with qualifications, work records,

fitness and ability, and physical and medica} standards. Selby states

further that he has met with an officer of the Railway Labor

Executive’s Association to work out a suitable arrangement for

union representation of future employees. V.S., at 3-4.

19 Verified statement of Robert Schmiege.

10a

the Railway Labor Act (RLA).”° Bargaining under the

RLA requires maintenance of the status quo, and permits

resort to strikes, lockouts or other form of self-help if an

impasse cannot be mediated. CNW takes the position

that such bargaining gives labor the power to defeat the

FRVR transaction, and is not required. However, in-

formal discussions have taken place, but no agreements

have been reached.

CNW has petitioned for a declaration as to the Com-

mission’s view of its role in resolving any labor disputes

which may arise in connection with the implementation

of this Commission authorized transaction.*’ CNW as-

serts such an action is required to ensure a smooth im-

plementation of the authorized transaction.

The Railway Labor Executives’ Association (RLEA)

has filed in opposition to the Petition of FRVR and

CNW. RLEA believes that the Commission is without

jurisdiction to issue the clarifying decision requested by

Petitioners, and that Petitioners’ argument on the merits

is based on erroneous legal interpretations.

DISCUSSION AND CONCLUSIONS

The first of RLEA’s propositions appears to be based

on a misapprehension of the nature of a declaratory

order. It seems beyond question that the Commission has

the authority to issue declaratory opinions.**? RLEA does

20 45 U.S.C. 151.

21 Pursuant to our class exemption rules, 49 CFR 1150.31 et seq.,

the CNW/FRVR exemption became effective December 30, seven

days after filing. Petitioners indicated that they intend to defer

consummation until the Commission responds to their petition for

clarification. A related petitioa for exemption of a control relation-

ship between FRVR and its parent corporation has also been filed.

22 Pursuant to 5 U.S.C. 554(e), an administrative agency is em-

powered in its discretion to issue declaratory orders to terminate

controversy or remove uncertainty.

lla

not directly address this authority, arguing instead that

the Interstate Commerce Act (ICA) does not vest this

agency with the power “to decide the applicability and

scope of other statutes”—that the “Commission is clearly

not the tribunal to determine how to resolve conflicting

mandates of the ICA and other statutes.” That is true

enough, if understood to mean that the Commission’s

opinions on statutory interpretation are, when challenged,

subject to judicial review and possible override. There is

no dispute over the fact of judicial primacy, but it does

not follow that the Commission is foreclosed from ex-

pressing its viewpoint, or that such expressions may not

issue in declaratory form, when related to the discharge

of explicit statutory power, such as the power to approve

or exempt the sale of a line of railroad. There is no

need to deprive private parties and reviewing courts of

the benefit of a clear statement of the Commission’s view-

point. The reason for declaratory opinions is to aid in

clarifying and resolving controversies.

A part of the present controversy that requires clarifi-

eation is whether the Railway Labor Act must be accom-

modated (in RLEA’s words, subordinated) to the Inter-

state Commerce Act in the circumstances of an approved

or exempted line sale arising under section 10901 of the

ICA. A related issue is the immunity from injunction

under the Norris-LaGuardia Act of a strike that threat-

ens to prevent the consummation of a transaction so ap-

proved or exempted.

Until quite recently, it had been an established rule

that the orders of the Commission approving the merger,

sale, or abandonment of 2 line of railroad were not sub-

ject to collateral attack in the courts, and could not be

frustrated by employee actions taken under the aegis of

the Railway Labor Act or otherwise.* “Congress did not

23 Brotherhood of Locomotive Engineers v. C&NW, 314 F.2d

424 (8th Cir.), cert. denied, 375 U.S. 819 (1963).

12a

intend employees have such power to block consolidations

which are in the public interest.” ** However, in a recent

Third Circuit proceeding, Pittsburgh & Lake Erie R.R.

v. Railway Labor Executives’ Association.~ (Lake Erie),

it has been held that a district court has no jurisdiction

to enjoin a strike taken to block an ICC-approved sale.

The Court based this holding on a finding that the

Norris-LaGuardia Act need not be accommodated to the

Interstate Commerce Act. This decision has had an im-

mediate impact on the formation of small railroads,”

threatening to halt the revitalization of the marginal rail-

road sectors—a restructuring that the Commission has

found to be in the interest of earriers, labor, and the

shipping public.

In its opposition response, RLEA takes the position

that the Third Circuit Lake Erie decision is correct,”” and

that the Commission should conclude that the Interstate

Commerce Act does not supersede the Railway Labor Act

or Norris-LaGuardia. RLEA argues that Brotherhood of

R.R. Trainmen vy. Chicago River and Indian R.R.* (Chi-

*4 Missouri Pacific Railroad Company v. UTU, 782 F.2d 107

(8th Cir. 1986), cert. denied, 107 S. Ct. 3209 (1987).

25 No. 87-3664, Slip op., October 26, 1987.

26 The Lake Erie decision has been followed by a Missouri fed-

eral district court, Burlington Northern Railroad vy. U.T.U., No.

86-5013, Slip op., October 26, 1987. (Missouri, Western District).

*7 The Lake Erie decision left open the issue of whether bargain-

ing under the Railway Labor Act was necessary. The case was

remanded to the district court on the RLA issue. The district court

held the RLA applicable to the proposed sale and enjoined con-

summation of the transaction pending compliance with that act,

finding that the Interstate Commerce Act does not operate to relieve

the parties from their RLA obligations. Railway Labor Executives’

Assoc. V. Pittsburgh & Lake Erie Railroad, No. 87-1745 Memoran-

dum Opinion (Wes Dis. PA., No. 24, 1987). The case is back in

the Third Circuit on appeal.

28 353 U.S. 30 (1957).

13a

cago River) and Boys Markets Inc. v. Retail Clerk’s

Union” (Boys Market)—Supreme Court “accommoda-

tion” cases relied on by Petitioners—are not controlling

since they do not address the Interstate Commerce Act,

but are limited to situations where aspects of national

labor statutes were in conflict.°° Hence, RLEA is in

agreement with the Lake Erie court that statutory pre-

emption of the Norris-LaGuardia no-injunction principle

is limited to the need to accommodate other labor stat-

utes. Without conceding its legitimacy, RLEA recognizes

certain precedent to the effect that ICC authorization of

a transaction under the merger provisions (49 U.S.C.

11343) will automatically relieve a carrier from the

necessity of compliance with the Railway Labor Act to

the extent necessary to go forward with the approved

transaction. However, RLEA argues that this precedent

has no relevance to 49 U.S.C. 10901 line sales. Unlike

line sales, merger orders are provided explicit preemption

authority in 49 U.S.C. 11341™ and, as income protection

and dispute resolution mechanisms are mandatory in

merger proceedings, labor is not “left out in the cold.” **

According to RLEA these are critical distinctions.

29 398 U.S. 235 (1970).

%© Thus, in Chicago River an injunction against a strike was

sustained where necessary to protect the Railway Labor Act’s

requirement that “minor” grievances be submitted to arbitration.

In Boys Markets the court reached a similar conclusion under the

Labor Management Relaticns Act.

31 A carrier or corporation participating in a transaction ap-

proved or exempted by the Commission under subchapter III of

Chapter 113 “is exempt from the antitrust laws and from all other

laws ... as necessary to let that person carry out the transaction

. .” By its terms, this section does not apply to line sales under

Chapter 109.

$2.49 U.S.C. 11347.

38 RLEA cites to language in Missouri Pacific R. Co. v. United

Transportation Union 782 F.2d 109 (8th Cir. 1986). This case

l4a

The broad issue presented by the CNW-FRVR Peti-

tion and the RLEA Opposition reply is whether the In-

terstate Commerce Act preempts the Railway Labor Act

to the extent necessary to allow the parties to consum-

mate a transaction previously authorized by the Commis-

sion. Every court that had ruled on this precise issue

prior to the Lake Erie decision had answered yes.** By

so doing, courts have recognized the importance of this

agency’s role in reconciling the conflicts between public

need for an efficient transportation system, (including

the need for fair equitable labor relations) and the pri-

vate disputes that arise invariably from consolidations

and restructurings within the rail system. The ICC has

inherent powers to impose labor protection where neces-

sary to ensure labor equity,*’ including the power to im-

pose income guarantees and comprehensive schemes for

alternative dispute resolution—mechanisms which may

include notice, negotiation, a status quo requirement and

arbitration. From the 1930’s, when the ICC actively be-

came involved in the administration of labor protection,

Congress has routinely affirmed and expanded the im-

portance of the Interstate Commerce Act as a part of the

held that a railroad is exempted u» der ICA Section 11341(a) from

the Railway Labor Act in connec ion with a transaction approved

under 49 U.S.C. 11343. Labor er ohasizes that the court there

reasoned that inferring preemption © the RLA was reasonable

because mandatory labor protection is applied 782 F.2d at 112.

There are chronological problems with placing much reliance on

the reasoning. The preemption provision was first enacted in 1920,

mandatory labor protection in 1940.

34 See Missouri Pacific R. Co. v. United Transportation Union,

supra; Brotherhood of Locomotive Engineers v. CQNW, 314 F.2d

424 (8th Cir.), cert. denied 375 U.S. 819 (1963). Cf. ICC v. Locomo-

tive Engineers, 55 USLW 4771 (June 9, 1987) (Concurring Opinion

of Justice Stevens, joined by Justices Brennan, Marshall and

Blackmun).

35 United States v. Lowden, 308 U.S. 225 (1939); ICC v. Railway

Labor Assn., 315 U.S. 373 (1942).

l5a

complex of laws governing labor relations in the rail in-

dustry. The Transportation Act of 1940* was a legisla-

tive affirmation of the Commission’s authority to impose

labor protection, mandating the use of labor protection in

mergers and consolidations.** The Railroad Revitaliza-

tion and Regulatory Reform Act of 1976** mandated

labor protection in trackage rights, lease transactions,

and abandonments. The Staggers Rail Act of 1980 made

labor protection mandatory in connection with the aboli-

tion of rate bureaus (Section 219 (g) and feeder line

sales—section 401), as well as giving the Commission ex-

plicit discretion to impose protective conditions on recip-

rocal switching and on the construction of new rail lines.

For more than fifty years the Commission has exercised

its authority in this field, frequently at the request and

with the support of labor, and our decisions have had

enoromus impact on the shape of rail labor relations

throughout this period.

It is primarily due to the policy decision to withhold

such protections taken in Ex Parte 392 (Sub-No. 1) (and

in earlier individual proceedings) that the Commission’s

authority is under challenge. However, the Commission’s

policy determinations have been repeatedly sustained, and

the existence of our jurisdiction may not hinge on the

policy choice made.

In the first place, labor has not been left out in the

cold. Affected parties were free to participate in the Ex

Parte rulemaking, and are free to petition for its re-

36 54 Stat. 899.

37 The Lowden court, while noting the pendency of the legislation

which was to become the 1940 Act, concluded that the legislative

initiatives did not militate against the conclusion that the Commis-

sion had implied power over labor protection in consolidations, but

rather that Congress merely sought to make mandatory what was

at the time discretionary. United States v. Lowden, supra, at 239.

38 90 Stat. 31.

16a

opening. Indeed, aspects of the rulemaking are now un-

der reconsideration in a reopened proceeding.” Further,

in individual cases through the revocation process parties

are given the opportunity to show that the policy norms

of the Ex Parte rulemaking ought not apply. Full par-

ticipation before the Commission is an important end in

itself as it helps to inform the Commission of the range

of problems and circumstances confronting transporta-

tion. If current policy does not provide routine protec-

tion, it is because experience has demonstrated that the

formation of new lines would be thwarted, to the overall

public detriment. Where exceptions are needed, the Com-

mission has the authority to fashion a full remedy.

Jurisdiction is not determined by outcome. The Com-

mission has exclusive and plenary jurisdiction over the

sale, merger, or abandonment of rail lines.*° This author-

ity was granted by Congress as a part of a regulatory

framework, to ensure a rail transportation system in the

publie interest. As a necessary component of this regu-

latory framework, the Commission has had to preempt on

occasion the operation of other laws to the limited extent

necessary to remove obstacles to Commission approved

transactions. Such preemption of labor legislation has

been upheld even in circumstances where the Commission

did not provide labor protection under its auspices.** We

believe this is the correct interpretation of the matter at

issue.

The fact that a particular “labor outcome” does not

dictate the extent or effect of ICC jurisdiction is a neces-

39 Class Exemption for the Acquisition and Operation of PRzil

Lines Under 49 U.S.C. 10901, Notice of Proposed Rulemaking

served October 2, 1987.

#9 Brotherhood of Locomotive Engineers v. C@NW, supra; Chi-

cago and North Western Transportation Co. v. Kalo Brick and

Tile Co., 450 U.S. 311 (1981).

41RLEA vy. Staten Island Railroad Corp., 792 F.2d 7 (2d Cir.

1986) cert. denied 107 S. Ct. 927 (1987).

17a

sary correlative to the Commission’s discharge of its re-

sponsibilities. That the concern for labor equity is only

one of many conflicting aspects of National Transporta-

tion Policy should not be seen as a derogation of the

agency’s authority—rather it is precisely the reason why

the Interstate Commerce Act must be recognized to have

preeminence. It is the public policy of this Nation to

regulate and supervise transportation at the national

level so as to ensure the essential benefits of a critical

aspect of commerce. While the means of regulation have

changed markedly over the decades, the exclusive and

plenary nature of the Commission’s jurisdiction over con-

solidations, sales and abandonment has been consistently

upheld. In the discharge of our responsibilities, we are

charged with the expert resolution of many-sided con-

flicts between disputants, public and private. The recita-

tion above of the factors leading to our small-railroad

policy illustrates the complexity of the process and infor-

mation that led to our present policy.

As with all adversarial proceedings those which come

before the Commission generate winners and losers, but

it must also be clear that participants ought to, after ex-

hausting lawful appeals aimed at our authority and rea-

sonableness, be reconciled to the process. Allowing a

dispersion of authority will compound the problents to

the detriment of the public and the transportation system.

In the matter at hand, it cannot be doubted that a strike

to prevent ICC-approved abandonment is susceptible to

injunction. But it is now contended that such a strike

can be used to prevent the development of an advantageous

alternative to abandonment, despite the fact that Com-

mission jurisdiction over these two types of restructuring

is, in all relevant aspects, identical. Our expertise and

experience, combined with our system-wide responsibili-

ties, lead us to the conclusion that neither the public nor

labor is adequately protected by encouraging a system

that prefers abandonment to rejuvenation. We do not

believe the law is so structured as to compel that outcome.

18a

Organized as it is, FRVR stands a far better chance

of developing a self-sustaining rail operation than does

CNW. Over the past quarter century the miles of road

operated by CNW has decreased by a third.” Its man-

agement goals include further reduction in size, either

through line sales or abandonment. Whether the lines at

issue here could be abandoned immediately under existing

law has not been demonstrated. However, fierce trucking

competition combined with CNW’s comparative disadvan-

‘age in rail costs significantly increase the potential of

future abandonment. Clearly, the National Transporta-

tion Policy will be advanced by permitting the sale of

these lines to a willing, experienced and optimistic group

of managers, who will in turn rely on experienced labor

and a commitment to the local customer base in an at-

tempt to revive and preserve competitive rail transporta-

tion for this region of Wisconsin.

This aciion will not significantly affect either the hu-

man environment or energy conservation.

It is ordered:

The Petition of CNW and FRVR for an order clarify-

ing jurisdiction and other matters is granted.

By the Commission, Chairman Gradison, Vice Chair-

man Andre, Commissioners Sterrett, Lamboley and Sim-

mons. Commissioners Lamboley and Simmons dissented

with separate expressions.

NORETA R. MCGEE

Secretary

(SEAL)

42 Moody's Transportation Manual (1963 and 1987 issues) indi-

cates that CNW operated over 15 thousand miles of road in 1962

(including miles operated under contract and trackage rights) but

that total had declined to slightly over 10 thousands miles by 1986.

19a

COMMISSIONER SIMMONS, dissenting:

I would have denied the petition for clarification. I

have supported the policy expressed by the majority be-

cause I believe it has contributed, to some extent, to the

preservation of rail lines that otherwise would have been

abandoned. However, I do not agree with the majority’s

use of such glowing terms to describe the efficacy of the

Commission’s denial of labor protection in so-called “short”

line sales under 49 U.S.C. 10901. The language of the

decision strongly implies that there can be virtually no

valid justification for departure from this policy. Indeed,

the decision to grant the petition for clarification and

enter this declaratory order to enunciate a policy that

has long been settled and affirmed in the courts indicates

a certain lack of objectivity and fairness in the apnlica-

tion of that policy.

We must not lose sight of our responsibility to weigh

the interests of labor as a part of the public interest

considerations associated with section 10901 sales. Neither

this responsibility, nor the policy of which it is a part is

enhanced by the gratuitous declaratory order entered

here by the majority.

20a

COMMISSIONER LAMBOLEY, dissenting:

While no one disputes the authority of the Commission

to issue declaratory orders,' I believe to do so in this in-

stance is an inappropriate use of process. In my view,

there is insufficient evidence of controversy or uncer-

tainty to warrant the issuance of this “clarifying” deci-

sion.

In invoking the class exemption process under Ex Parte

No. 392 (Sub-No. 1) * petitioners have also requested that

the agency declare that its authority under 49 U.S.C.

10901 supersedes the provisions of the Railway Labor

Act (RLA) * and the Norris-LaGuardia Act.‘ They do

so because of an alleged “climate of uncertainty” which

it is claimed impedes consummation of the proposed

transaction. Upon closer examination it becomes evident

that the aileged controversy or uncertainty results from

judicial decisions as well as petitioner’s own conduct,

neither of which the declaratory order requested from

this agency will necessarily resolve. Indeed, this order

may well exacerbate matters not only for this case but

for constructive activities in this forum on such issues in

the future.

Petitioners argue such action is necessary because sev-

eral recent court decisions® “ret.ects a misapplication of

15 U.S.C. 554(e).

* Ex Parte No. 392 (Sub-No. 1), Class Exemption for Acquisition

and Operation of Rail Lines Under 49 U.S.C. 10901, 1 1.C.C.2d 810

(1985).

345 U.S.C. 151, et seq.

129 U.S.C. 101, et seq.

5 Railway Labor Evrecutives’ Association v. Pittsburgh & Lake

Frie R. Co——F.2d——-(No. 87-3664, 3rd Cir. October 26, 1987)

(P&LE 1) and Ra‘lway Labor Erecutives’ Association v. Pittsburgh

and Lake Erie R. Co., Civil Action No. 87-1745 (W. D. Pa. Nov.

2la

the accommodation doctrine and a misunderstanding of

this Commission’s role in addressing labor issues pertain-

ing to transactions within its jurisdiction.” The peti-

tioners do not agree with the outcome of judicial action

in which they did not participate, although the Commis-

sion did. Without more, the petitioners simply request

that the Commission here render a “proper” interpreta-

tion of applicable law by declaratory order. Petitioners

offer neither substantial reason nor purpose for their re-

quest as it may relate to judicial activity.

Additionally, the petitioners claim the Commission’s

declaratory order is necessary because, while the CNW

has met with the rail unions and informal discussions

have taken place, no agreements have been reached since

the unions believe (apparently contrary to petitioners)

that RLA procedures apply to such discussions. The pe-

titioners do not explain why they simply do not file a

request with the Commission to fashion and impose ap-

propriate protective conditions, with post consummation

negotiation and arbitration procedures, if need be. Such

request for relief would squarely address alleged con-

troversy or uncertainty concerns relating to the process

and substance of negotiation.

In sum, neither judicial action nor voluntary conduct

is sufficient premise upon which to establish controversy

or uncertainty as cause for declaratory relief in this

case.

Further, quite apart from the lack of any legitimate,

demonstrable need for declaratory relief, I fail to see

that this order makes any significant contribution toward

resolution of statutory “accommodation” issues. There is

little doubt that the Commission does not have the req-

uisite jurisdiction to interpret the applicability and scope

1987), appeal pending sub. nom. Railway Labor Executives’ Ass'n

v. Lake Erie Co., No. 87-3797 (3rd Cir. filed Nov. 25, 1987)

(P&LE 11).

22a

of statutes other than the ICA. Certainly the agency

may “express its viewpoint”. Such as it is. It is a posi-

tion which has been expressed repeatedly in court briefs °

submitted by the Commission, and is well known. This

decision appears to be little more than an attempt to sup-

plement arguments in briefs previously filed and bolster

prior discussion in Ex Parte No. 392 (Sub-No. 1).’ It is

self-serving and offers no new instruction.

Moreover, of particular concern here, is the eagerness

to justify a well known position, the effect of which

places the Commission in the position of apparent bias.

This is especially true here because, in addition to the

extended discussion of the Ex Parte No. 392 (Sub-No. 1)

and pre-emption matters, this decision addresses specific

employment security and displacement issues in this

transaction, and consequently, in anticipatory fashion,

effectively prejudices and precludes meaningful consider-

ation of any subsequent petition for revocation raising

protective condition issues. The lack of agency constraint

here has unfortunate ramifications.

Finally, after all things are considered, it is fair to

say that any instability or uncertainty over employment

security and displacement issues is largely a consequence

of our own doing by decisions such as this, as well as

those in Ex Parte No. 392 (Sub-No. 1) and its progeny.

Legitimate transportation transactions under the ICA

have been authorized in an manner which encourages and

permits unilateral abrogation of legitimate, collective

bargaining agreements and statutory requirements of

the RLA, without procedural or substantive accommoda-

tion of respective interests. Mutuality and reciprocity in

® See for example the Commission’s brief in P&LE II, also a

letter to District Judge dated October 8, 1987.

7 Ex Parte No. 392 (Sub-No. 1), Class Exemption for Acquisition

and Operation of Rail Lines Under 49 U.S.C. 10901, 1 1.C.C.2d 810

(1985).

23a

collective bargaining contemplated by the RLA and re-

sultant market-based arrangements have been nullified by

our approach. It is small wonder then that the incen-

tives for problem solving and dispute resolution through

the negotiation process have been diminished and rela-

tions have become unstable.

It has become abundantly clear in these cases that the

essence of the dispute is labor relations issues, not trans-

portation.* Assuming jurisdiction, the Commission’s cur-

rent fixed position prevents adjustment and resolution in

this forum.

8 See, also letter dated December 2, 1987 in Finance Docket No.

$1163, Winona Bridge Railroad Company Trackage Rights—Bur-

lington Northern Railroad Company.