Opposition Brief — United Transportation Union v. Maine Central Railroad

JOSEPH F. SPANIOL, Jp,

CLERK

No. 86-10 2

gn the

Supreme Court of the United States

October Term, 1985

UNITED TRANSPORTATION UNION, et ai.,

Petitioners,

v.

MAINE CENTRAL RAILROAD COMPANY, et ai.,

Respondents.

Brief in Opposition to Petition for Writ

of Certiorari to the United States

Court of Appeals for the First Circuit

STEPHEN M. OLSON

(Counsel of Record)

James E. HowarD Davip J. STRASSER

KIRKPATRICK & KIRKPATRICK &

LOCKHART LOCKHART

Exchange Place 1500 Oliver Building

53 State Street Pittsburgh, PA 15222

Boston, MA 02109 (412) 355-6500

(617) 227-6000

Counsel for Respondents

i

QUESTION PRESENTED

Should this Court grant the Petition to determine

whether the Court of Ay peals erred in its application of the

“obviously insubstantial” standard by holding that it was

not frivolous for Maine Central Railroad Company to

argue that the Agreement between the parties as supple-

mented by custom and practice arguably granted Maine

Central Railroad Company the right to enter into the

transaction in question and make necessary job abolish-

ments as a result?

il

LIST OF PARTIES

The parties to the proceeding below were the Respon-

dents, Maine Central Railroad Company, Portland Termi-

nal Company and Guilford Transportation Industries.

Inc.: Respondent Brotherhood of Maintenance of Way

Employees and Petitioners. United Transportation Union

and various officers of the Union.!

The following is a list as required by Rule 28.1 of the

Supreme Court Rules of all parent, subsidiary and affiliate

corporations of Maine Central Railroad Company, Port-

land Terminal Company and Guilford Transportation

Industries, Inc.

Guilford Transportation Industries, Inc.:;

Guilford Motor Express, Inc.;

Guilford Aviation Corporation;

Hudson River Estates, Inc.;

Railstar Control Technology. Inc.:

Maine Central Railroad Company:

Portland Terminal Company;

Boston and Maine Corporation;

Springfield Terminal Railway Company:

Cheshire Bridge Corporation:

The Mystic Terminal Company;

Stony Brook Railroad Corporation;

Northern Railroad;

Vermont and Massachusetts Railroad Company:

North Station Industrial Building, Inc.;

North Station Hotel Building, Inc.;

'The officers of the United Transportation Union involved in this

action are E. F. Lyden, E. A. Phillips. Harold Erickson. Peter Green.

Gregory Kennedy. Gregory Geagen. Leo Higgins. Dominic Maietta and

Robert Ash.

ill

Pine Tree Corporation:

Connecticut River Valley Company, Inc.:

Delaware and Hudson Railway Company:

Albany Port Railroad Corporation:

Napierville Junction Railway Co.:

Albany and Vermont Railroad Company:

Greenwich and Johnsonville Railway Company:

Wilkes-Barre Connecting Railroad Company:

Saratoga and Schenectady Railroad Company:

The Northern New York Development

Company;

Wyoming Valley Improvement Company.

lV

TABLE OF CONTENTS

Page

CFs PINTS? 5 oe Kea eG hese eane i

ee ee EG ate ic ol rt sen Sv ee etloue cc ebs il

TA SE CT vk ec ent vs vvcccecsecves iv

PE TIE FAAS PR 6 oc ci vem stwnisveee \

DEA PRUETT MOE COME CAD ooo cece ree escanes |

Wee) ge. ere 2

A. PU III occa cc ksebeuvecsecus 3

REASONS FOR DENYING THE WRIT........... 5

I. The Court Of Appeals’ Decision Is Not In

Conflict With This Court’s Decision In

Detroit & Toledo Shore Line .............. 6

II. The Court Of Appeals Correctly Applied

The “Obviously Insubstantiai” Standard .... 7

III. The Court Of Appeals’ Decision Is Not In

Conflict With The Tenth Circuit’s Decision

In St. Louis Southwestern Railway Co. vy.

Brotherhood of Railroad Signalmen ........ y

IV. The Court Of Appeals’ Decision Is Not In

Conflict With The Second Circuit’s Deci-

sion In Local 553, Transport Workers

Union of America v. Eastern Airlines, Inc. ... 11

V. The Question Presented Does Not Warrant

UE TY GUO COE occ co ccc ccceebees 12

AOE MN 5 oss Eee ae awd cn dak OE ee POA 14

Vv

TABLE OF AUTHORITIES

CASES

Page

Airline Stewards & Stewardesses Association v.

Caribbean Atlantic Airlines, 412 F.2d 289

AP 9 2 MOC Te ae 4, 7, 10. 12

Carbone v. Meserve, 645 F.2d 96 (lst Cir.),

cert. denied, 454 U.S. 859 (1981) ........ 7, AZ

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

Transportation Union, 396 U.S. 142 (1969)..... 6.7

Local 553, Transport Workers Union of America

v. Eastern Air Lines, Inc., 695 F.2d 668

(2 Ce TR eos ce nena ae ee ee eee ees | me

Railway Express Agency v. Brotherhood of Railway,

Airline and Steamship Clerks, 437 F.2d 388

(5th Cir.), cert. denied, 403 U.S. 919 (1971)...... 7

Railway Labor Executives Association y. Atchison,

Topeka & Sante Fe Railway Co.,

430 F.2d 994 (9th Cir. 1970), cert. denied,

BOD VE: Gee CEST voc eek ea eee ees 8

St. Louis Southwestern Railway Co. vy. Brotherhood

of Railroad Signalmen, 665 F.2d 987

(10th Cir. 1981), cert. denied,

O56 UID. PRP RIE oo eee eek eres 9.10. 11

United Transportation Union vy. Baker,

O02 Fe oe ee BG es be i te ees 12

United Transportation Union v. Penn Central

Transportation Co., 505 F.2d 542

(2b ae. FOE os ens ou cower Ce raeerse roe 12

vi

Page

STATUTES

Railway Labor Act

45 U.S.C. §§151 et seg.

TN ere vy CLAM ES ORV ERK EP ER CRASS 3

|

No. 86-10

In the

Supreme Court of the United States

October Term, 1985

UNITED TRANSPORTATION UNION, et ai.,

Petitioners,

Vv.

MAINE CENTRAL RAILROAD COMPANY, ef al.,

Respondents.

Brief in Opposition to Petition for Writ

of Certiorari to the United States

Court of Appeals for the First Circuit

The Respondents, Maine Central Railroad Company.

Portland Terminal Company and Guilford Transportation

Industries. Inc., respectfully request that this Court deny

the Petition for a Writ of Certiorari seeking review of the

decision and judgment of the United States Court of

Appeals for the First Circuit rendered on Aprii 9. 1986.

reported at 787 F.2d 780.

STATEMENT OF THE CASE

Maine Central Railroad Company (““MeC”) operates a

railroad in the Northeastern United States and is engaged

in the intrastate and interstate transportation of freight.

5

Portland Terminal Company is a wholly-owned subsidiary

of MeC and operates the terminal facilities at Rigby Yard

near Portland, Maine through which passes freight traffic

in interstate commerce. MeC is a wholly-owned subsidiary

of Guilford Transportation Industries. Inc.

A. The Lease Transaction

MeC serves hundreds of customers throughout its sys-

tem, including major paper mills and related industries in

fourteen of Maine’s sixteen counties. Boise Cascade Cor-

poration (“Boise”), engaged in the manufacture of paper

and paper products, is one of the many customers of MeC.

Much of Boise’s shipping needs in Maine is handled by

MeC, which owns approximately nine miles of track in a

yard (“Rumford Yard”) adjacent to Boise’s paper mill at

Rumford, Maine. Members of the United Transportation

Union (“UTU”) and the Brotherhood of Maintenance of

Way Employees (““BMWE’’) were employed by MeC,

respectively, to perform switching operations and to main-

iain the track at the Rumford Yard.

On October 1, 1985, due to Boise’s dissatisfaction

with MeC’s switching operations, MeC leased the Rum-

ford Yard trackage to Boise, with an option allowing Boise

to assume responsibility for the switching and mainte-

nance operations. Thereafter, Boise notified MeC of its

intention to exercise the option effective November 13,

1985. MeC notified the UTU and the BMWE of certain job

abolishments at the Rumford Yard which would be effec-

tive November 13, 1985. Upon learning of the proposed

transfer of switching and maintenance responsibilities and

of the proposed job abolishments, the UTU threatened to

strike both MeC and Portland Terminal Company.

B. Proceedings Below

Faced with a threatened strike, MeC and Portland

Terminal Company commenced an action against the

UTU and various officers of the UTU by filing, on

November 8, 1985, a Verified Complaint for Declaratory

and Injunctive Relief seeking to enjoin the UTU from

striking. MeC and Portland Terminal Company asserted

that the objections of the UTU to the lease and job abol-

ishments gave rise to a “minor” dispute subject to §3 of the

Railway Labor Act (“RLA”), 45 U.S.C. §153, over which

the UTU cannot lawfully strike.

The UTU filed an Answer and Counterclaim against

MeC for injunctive relief. The BMWE filed a Complaint

for Injunctive Relief against MeC and Guilford Transpor-

tation Industries, Inc. and, without objection, successfully

moved to have the two cases consolidated. The UTU and

the BMWE sought a so-called “status quo” injunction

against MeC on the asserted ground that the lease and job

abolishments presented a “major” dispute subject to §6 of

the RLA, 45 U.S.C. §156.

On November 12, 1985, the Honorable Judge Gig-

noux issued a Temporary Restraining Order enjoining the

UTU from striking and denied the UTU’s and the

BMWE’s motions for temporary restraining orders. The

Court found that MeC and Portland Terminal Company

were likely to prevail on their claim that the disputes

between the parties arising out of the lease of track from

MeC to Boise were minor disputes. Petitioners’ Appendix

at 2g. By stipulation, the BMWE agreed to be bound by the

Temporary Restraining Order. As a result. Boise assumed

responsibility for train operations and track maintenance

on the leased track by contracting with an independent

third party, viz., Trafic Services Co.

4

On January 9. 1986. the District Court, per the Honor-

able Judge Carter. heard oral argument on the various

motions for permanent injunctions and issued an Order in

which it held that the dispute was major within the mean-

ing of the RLA and. therefore. a status quo injunction

should issue against MeC and no injunction should issue

against the UTU and its officers. The District Court rea-

soned that the labor contract language in question did not

serve to authorize or prohibit expressly the lease transac-

tion and the resulting job abolishments. The District Court

further rejected. as not being sufficiently parallel to the

Boise lease. the three examples of past practice submitted

by MeC to establish that previous transactions of this type

had been treated by the parties as governed by the existing

labor contract. Petitioners’ Appendix at le-2e. On January

15, 1986, the District Court issued the Permanent Injunc-

tion requiring MeC to resume switching and maintenance

responsibilities at Rumford Yard with MeC employees.

Petitioners’ Appendix F. This Order was stayed by the

United States Court of Appeals for the First Circuit pend-

ing appeal.

On appeal, the First Circuit reversed the District

Court. The First Circuit found that the District Court had

exceeded its proper role by actually interpreting the par-

lies’ agreements, thereby misapplying the “obviously

insubstantial” standard as set forth by the First Circuit in

Airline Stewards & Stewardesses Association v. Caribbean

Atlantic Airlines, Inc., 412 F.2d 289 (1st Cir. 1969).

According to Airline Stewards, the test to determine if a

dispute is major or minor 1s:

whether the company’s contractual defense was so

obviously insubstantial as to be an attempt to circum-

vent §6 of the Railway Labor Act.

5

It may be that the District Court's interpretation of

the contract will ultimately prove to be correct. But in

deciding whether to assume jurisdiction to grant

injunctive relief, the court's task is not to interpret the

contract. It is to determine whether the contractual

defense is frivolous. Otherwise the arbitration

machinery mandated by the Railway Labor Act will

be dealt a crippling blow.

Id. at 291.

The Court of Appeals held that the District Court had

violated this standard by analyzing and distinguishing the

examples of past practice. In effect. the District Court

usurped the role of an arbitrator by rendering a decision on

the merits rather than applying the “obviously insubstan-

tial” standard. The Court of Appeals went on to hold that

the Carter Milling lease was sufficiently parallel to the

Boise lease transaction that MeC’s defense was not frivo-

lous and, therefore, the dispute was minor and subject to

resolution before an arbitrator.

Having concluded that the District Court exceeded its

authority in regard to its analysis of the past practice

offered by MeC, the First Circuit did not consider MeC’s

initial contention that its actions were not forbidden by the

express language of the contract and, therefore, were per-

mitted as an exercise of management prerogative.

REASONS FOR DENYING THE WRIT

The Court of Appeals fully considered and correctly

decided the issues raised below. Petitioners raise four

grounds in support of their Petition for Certiorari. None of

these arguments warrant granting the Petition.

6

I. The Court Of Appeals’ Decision Is Not In Con-

flict With This Court’s Decision In Detroit &

Toledo Shore Line

Petitioners argue that the Court of Appeals’ decision

permitting a single instance of past practice to constitute a

working condition between the union and carrier is in

direct conflict with this Court’s decision in Detroit &

Toledo Shore Line R.R. vy. United Transportation Union,

396 U.S. 142 (1969).

The issue before this Court in Detroit & Toledo Shore

Line was whether the objective working conditions which

must be maintained under the RLA status quo require-

ments included working conditions not set forth in a writ-

ten agreement. In answering this question in the affirma-

tive, this Court noted that:

It would be virtually impossible to include al! working

conditions in a collective bargaining agreement.

Where a condition is satisfactorily tolerable to both

sides, it is often omitted from the agreement, and it

has been suggested that this practice is more frequent

in the railroad industry than in most others.

Id. at 154-55.

The Court further stated that, in order for a condition

to be included among the objective working conditions, it

must have “occurred for a sufficient period of time with

the knowledge and acquiescence of the employees to

become in reality a part of the actual working conditions.”

Id. at 154.

The Court of Appeals’ decision. rather than being in

conflict with Detroit & Toledo Shore Line, is a proper

application of that standard. The question facing the Court

of Appeals was whether it was frivolous to argue that the

-

prior lease transactions proffered by MeC had “occurred

for a sufficient period of time with the knowledge and

acquiescence of the employees to become in reality a party

of {the agreement]. The Court of Appeals held that, given

the infrequency of lease transactions, it was not “frivo-

lous” to argue that. based on one prior transaction. the

objective working conditions include the right of MeC to

lease trackage and make necessary job abolishments. The

First Circuit’s decision does not present a conflict, but

rather represents a logical and justifiable application of

Detroit & Toledo Shore Line to the unique factual circum-

stances of the case at bar.

Il. The Court Of Appeals Correctly Applied The

“Obviously Insubstantial” Standard

Petitioners argue that the Court of Appeals’ decision

has expanded the “obviously insubstantial” standard for

determination of minor disputes by permitting a single

instance of past practice to support a finding that MeC’s

argument is not frivolous. To the contrary, this decision

follows an unbroken line of authority in the First Circuit

establishing the “obviously insubstantial” standard. See

Airline Stewards & Stewardesses Association v. Caribbean

Atlantic Airlines, 412 F.2d 289 (1st Cir. 1969) and Carbone

v. Meserve, 645 F.2d 96 (1st Cir.) cert. denied, 454 U.S. 859

(1981).

Furthermore, the First Circuit decision is consistent

with the law of other cirevits. For example. in Rai/way

Express Agency v. Brotherhood of Railway, Airline and

Steamship Clerks, 437 F.2d 388 (Sth Cir.), cert. denied, 403

U.S. 919 (1971), the carrier asserted the right to make

unilateral transfers of work. The agreement between the

parties neither permitted nor prohibited the carrier’s

8

action. The carrier argued that there was. however, a his-

tory of unilateral transfers of work with no apparent objec-

tion from the union. The Fifth Circuit held that the dispute

presented was minor since the asserted past practice at

least gave the carrier the arguable right to make the unilat-

eral transfer of work. The decision of whether the carrier

actually had such a right must be left to the arbitrator. /d.

at 392.

Similarly, in Railway Labor Executives Association v.

Atchison, Topeka & Sante Fe Railway Co., 430 F.2d 994

(9th Cir. 1970), cert. denied, 400 U.S. 1021 (1971), the

Adjustment Board was held to have jurisdiction to adjudi-

cate a claim notwithstanding the fact that nothing in the

agreement applied to this situation. The carrier had filed

with the Interstate Commerce Commission (“ICC”) a

statement of its intention to discontinue service on two

trains. Upon receiving notification from the ICC that it

would not oppose the discontinuance and twenty days

prior to the date stated in the posted notices. the carrier

discontinued service.

The union, while admitting that the dispute was

minor, brought what it characterized as a tort claim for the

violation of a statutory duty imposed by the Interstate

Commerce Act. The court held that. while there was no

express language covering this situation in the contract. the

question of “whether such a provision was omitted

because the parties relied on the language of the Interstate

Commerce Act, the “usage. custom and practice’ of the

industry or whether it was rejected following negotiation”

iS a question requiring the expertise of the Adjustment

Board. /d. at 996.

Even if, as Petitioners argue. this decision does

expand the “obviously insubstantial” standard. Petitioners

9

have not asserted any reason why such an expansion 1s

unwarranted or inconsistent with the Court of Appeals’

prior decisions, with other Courts of Appeals’ decisions or

with any of this Court’s decisions.

III. The Court of Appeals’ Decision is Not in Conflict

With the Tenth Circuit’s Decision in St. Louis

Southwestern Railway Co. v. Brotherhood of Rail-

road Signalmen

Petitioners argue that certiorari should be granted

because the Court of Appeals’ decision is in conflict with

the Tenth Circuit’s decision in St. Louis Southwestern

Railway Co. vy. Brotherhood of Railroad Signalmen, 665

F.2d 987 (10th Cir. 1981), cert. denied, 456 U.S. 945 (1982)

(“Cotton Belt”). Cotton Belt, however, is distinguishable

on its facts and on the applicable legal standard applied.

In Cotton Belt, the Tenth Circuit was faced with a

carrier’s contracting out of work for the first time in more

than thirty years. The Court first concluded that con-

tracting out during the emergency conditions of World

War II was too remote and dissimilar to the present condi-

tions to give the carrier the right to contract out again. The

Court then turned its attention to the parties’ agreement

and construed the scope clause as implicitly assuring that

the carrier’s signal work would be performed exclusively

by the union’s members. The Court further concluded that

the carrier’s several, unsuccessful attempts to negotiate a

clause permitting contracting out was an admission that

the agreement as written did not permit contracting out.

Hence, a major dispute existed

The Tenth Circuit's analysis is devoid of the standard

used in the First Circuit to define major and minor dis-

putes: viz., whether the carrier’s defense is “frivolous” or

10

“obviously insubstantial.” Airline Stewards; Carbone vy.

Meserve. Apparently, in assessing the validity of past prac-

tice, in interpreting contract provisions and in applying the

“obviously insubstantial” standard, the Tenth Circuit

applies a different test to major v. minor disputes than the

First Circuit.2 The fact that the Tenth Circuit has not

adopted this standard does not result in a direct conflict

between the case at bar and Cotton Belt. Significantly, Peti-

tioners are not challenging the First Circuit’s use of the

“obviously insubstantial’ standard, only the result

reached.

Such differences as to the applicable standard aside,

Cotton Belt is also distinguishable on its facts. First, Cotton

Belt involved the contracting out of work on property

which remained in the control, and under the responsibil-

ity, of the carrier. The Tenth Circuit, interpreting both the

contract and the Railway Labor Act, asserted numerous

times that the carrier’s work was being performed by non-

employees. Of course, in the case at bar, the dispute

involves track leased to. and under the responsibility of,

another party. The lessee is doing its own work pon the

leased track, not the work of MeC. This distinction

between contracting out and leasing property is significant

and is ignored by Petitioners.

Second, the Tenth Circuit noted that the carrier

attempted unsuccessfully several times to negotiate a pro-

vision in the agreement allowing contracting out: thus, it

was proper to conclude that the agreement did not permit

contracting out. By distinct contrast, it is the UTU here

which has attempted to amend the parties’ agreement by

serving a Section 6 Notice proposing an amendment to the

?As Petitioners admit in footnote 3 of their Petition. only the Tenth

Circuit has failed to adopt the “obviously insubstantial” standard.

11

labor contract prohibiting MeC from leasing or selling

track without guaranteeing that current MeC employees

will keep their jobs on the leased or sold track. If the Tenth

Circuit’s reasoning applied here, it would be proper to

conclude that the agreement now permits MeC to do

exactly what the UTU attempts to prohibit by Section 6

Notice: viz., leasing track where the lessee assumes respon-

sibility for train operations on the leased track.

Thus. both on the law and on the facts. the differences

between the case at bar and Cotton Belt may signify two

identifiable approaches, but do not present a direct conflict

as asserted by the UTU.

IV. The Court Of Appeals’ Decision Is Not In Con-

flict With The Second Circuit’s Decision In Local

553, Transport Workers Union of America v. East-

ern Airlines, Inc.

Finally, Petitioners argue that certiorari should be

granted because the Court of Appeals’ decision is in con-

flict with the Second Circuit’s decision in Local 553,

Transport Workers Union of America vy. Eastern Air Lines,

Inc., 675 F.2d 668 (2d Cir. 1983). Petitioners argue that the

conflict arises due to the failure of the First Circuit to

“recognize that in making the ‘major/minor dispute’ deter-

mination, a court must focus on the extent of the disrup-

tion likely to be caused by the carrier action.” Petition at

page 5.

In the first instance, the Second Circuit discussed use

of an “extent of disruption” standard only in dictum. In

fact, the Second Circuit affirmed the District Court’s find-

ing of a major dispute on the ground that the pertinent

12

contract language did not give the carrier even an “argua-

ble” defense. As a result, there is no genuine conflict

between Local 553 and the case at bar.

Furthermore, to the extent that Local 553 suggests

that a court focus on such a factor in making the major/

minor dispute determination, it is distinguishable from the

present case since that is not part of the test applied by the

First Circuit. Indeed, if any decision is out of the main-

stream of decisional law in this area ii is Local 553. No

other case addressing this issue has established this addi-

tional factor. See e.g., Airline Stewards; Carbone vy.

Meserve; United Transportation Union y. Penn Central

Transportation Co., 505 F.2d 542 (3d Cir. 1974); United

Transportation Union y. Baker, 482 F.2d 228 (6th Cir.

1973).

Again, it is significant to note that Petitioners have not

challenged the First Circuit’s use of the “obviously insub-

stantial”’ standard, but only the result; thus, the issue of

whether the First Circuit should require the additional fac-

tor suggested by the Second Circuit is not even before this

Court.

V. The Question Presented Does Not Warrant

Review By This Court

The sole question presented by the Petitioners is

whether the Court of Appeals correctly held that MeC’s

defense to an alleged contract violation, based on a single

past practice, is not “obviously insubstantial” or “frivo-

lous.” It is clear that this decision is of limited application.

Petitioners only challenge the application of the legal stan-

dard to the unique facts in this case. No sweeping principle

of law is in question, since the case turns on its particular

facts.

13

Indeed, if this Court were to find that a single instance

of past practice cannot support MeC’s argument, this

Court would likely remand the case for a decision on

whether the LaMoille Valley transaction (and the Wood-

land transaction) supplies an additional instance of past

practice which would be further evidence supporting

MeC’s argument. In its opinion, the Court of Appeals

states:

It is perhaps arguable that the LaMoille Valley ICC

matier is not so readily disposed of, since the Union

there voiced no objection. As against this, however, it

would seem arguable that the union’s acquiescence

was not in recognition of the contract, but because of

satisfaction with the so-called Mendocino Coast

employee protection conditions {citation omitted]. We

need not resolve this question, however. The Carter

Milling matter was free of any strings.

Petitioners’ Appendix at 6b.

Furthermore, the Court of Appeals did not consider

MeC’s initial contention that, because the contract was

silent, its actions were permitted as an exercise of manage-

ment prerogative. Thus, it is clear that the situation

presented before this Court will be resolved not upon legal

issues of national importance, but upon factual conclu-

sions related only to these specific circumstances.

14

CONCLUSION

For all the foregoing reasons, Respondents Maine

Central Railroad Company, Portland Terminal Company

and Guilford Transportation Industries, Inc. respectfully

request that this Court deny the Petition for a Writ of

Certiorari.

Respectfully submitted,

STEPHEN M. OLSON

Counsel of Record

DavibD J. STRASSER

KIRKPATRICK & LOCKHART

1500 Oliver Building

Pittsburgh, PA 15222

(412) 355-6500

James E. HowarD

KIRKPATRICK & LOCKHART

Exchange Place

53 State Street

Boston, MA 02109

(617) 227-6000