Petition for Writ of Certiorari — Railway Labor Executives' Ass'n v. Southern Pacific Transportation Co.

Supreme Court, U.S.

FILED

OFFIVE UF THE ULERK

IN THE

Suprene Court of the United States

OCTOBER TERM, 1993

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, ef al.,

Petitioners,

Vv.

SOUTHERN PACIFIC TRANSPORTATION COMPANY, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

WILLIAM G. MAHONEY

JOHN O’B. CLARKE, JR.*

HIGHSAW, MAHONEY &

CLARKE, P.C.

Suite 210

1050 17th Street, N.W.

Washington, D.C. 20036

(202) 296-8500

A ttorneys for Petitioners

Date: Januarv 19, 1994 * Counsel of Record

WILSON - EPES PRINTING CO INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Do the federal courts, and not the Interstate Comm: se

Commission (ICC), have jurisdiction to consider a claim

arising under the Railway Labor Act where the claim

requires the district court to determine whether, ur«éer

49 U.S.C. § 11341(a), it is necessary to relieve a rail

carrier of its obligations tu its employees under applicable

collective bargaining agreements in order to enable that

rail carrier to carry out an order of the ICC authorizing

it to control another rail carrier?

(i)

ii

PARTIES TO THE PROCEEDING

Petitioners, who were plaintiffs and appellants below,

are:

Railway Labor Executives’ Association (a list of

RLEA’s affiliated labor organizations is repro-

duced herein as Appendix F at 26a);

International Association of Machinists and Aero-

space Workers; and the

International Brotherhood of Electrical Workers.

Respondents, who were defendants and appellees below,

are:

Southern Pacific Transportation Company;

St. Louis Southwestern Railway Company;

Denver & Rio Grande Western Railroad Company;

and

Rio Grande Industries, Inc.

TABLE OF CONTENTS

ig 8 yy: |

PARTIES TO THE PROCEEDING .........0000000. ww...

Fy hy |

CN

ios scrcirencntantoobionnnes sigtdeealaleinaiineies

CONSTITUTIONAL PROVISIONS AND STATUTES

gk Ss |: esthhiatiidenhaanesniestlelaaiictunbiontie

STATEMENT OF THE CASE .....0..200.......2002..--2000--0 saliehale

A. Factual Background .......................... iddiaabacocuumiotand

B. District Court Proceedings |... 000.0

C. New York Dock Decisions ..........................---------

D. Court of Appeals’ Decision ............

REASONS FOR GRANTING THE WRIT ...................

I. THIS CASE PRESENTS AN IMPORTANT

QUESTION CONCERNING JURISDICTION

OF FEDERAL COURTS TO ENFORCE THE

COMMANDS OF THE RAILWAY LABOR

ACT IN AREAS WHERE DISPUTES UNDER

THAT LABOR STATUTE ARISE AS A RE-

SULT OF MERGERS OR CONSOLIDATIONS

ee 8 Ga | > + ee

II. THE COURT OF APPEALS HAS DECIDED

THIS IMPORTANT ISSUE OF FEDERAL

LAW IN A MANNER THAT IS IN CON-

FLICT WITH THE DECISION OF THIS

COURT IN SEABOARD AIR LINE R.R. v.

DANIEL AND WITH THE DECISION OF

THE EIGHTH CIRCUIT IN BLE v. CHICAGO

Oy As sy 1, )

(iii)

13

17

iia is

iv

TABLE OF CONTENTS—Continued

Page

to Pl NS eRe Benet SNS Re RLM LL 21

APPENDIX A

Opinion of Court of Appeals .000000000000..ee eee cece la

APPENDIX B

Oral Opinion of the District Court .............2..2..020....... 16a

APPENDIX C

District Court’s Order To Dismiss ...................22022....-- 18a

APPENDIX D

District Court’s Order Denying Reconsideration... 19a

APPENDIX E

Constitutional Provisions And Statutes Involved... 22a

1. Constitution of the United States, 20.0000... 23a

Article I, § 8, cl. 3

Article III, §§ 1 and 2, Cl. 1

ARTO TIO 24a

Section 11841 (a), 49 U.S.C. § 11341 (a)

eg tg RS AR ER ee ee 25a

Section 7 First, 45 U.S.C. § 157 First

APPENDIX F

List Of RLEA Affiliated Organizations ..................... 26a

Vv

TABLE OF AUTHORITIES

CASES RELIED UPON: Page

Brotherhood of Locomotive Engineers v. Chicago

& North Western Ry., 314 F.2d 424 (8th Cir.),

cert. denied, 375 U.S. 819 (1963) 0. 4, 12-13, 20

Brotherhood of Locomotive Engineers’ v. Inter-

state Commerce Commission, 761 F.2d 714

(D.C. Cir. 1985), vacated, 482 U.S. 270 (1987) .. 15

Brotherhood of Railway Carmen v. CSX Transpor-

tation, Inc., 855 F.2d 745 (11th Cir. 1988), cert.

denied, 489 A Ek; 12, 21

Commodity Futures Trading Commission v. Schor,

ee rn ee I 19

Conley v. Gibson, 355 U.S. 41 (1957) 16

Denver & Rio Grande Western R.R.—Trackage

Rights, served October 25, 1983 (unpublished),

vacated sub nom. BLE v. ICC, 761 F.2d 714

(D.C. Cir. 1985), vacated, 482 U.S. 270 (1987). 14, 21

ICC v. Brotherhood of Locomotive Engineers, 482

Se ee CHE oc 4,12, 14, 15-16, 18

McLean Trucking Co. v. United States, 321 U.S. 67

REE OR AT SANA ASR alee 16, 18

New York Dock Ry.—Control, 360 I.C.C. 60, aff’d

sub nom. New York Dock v. United States, 609

ae Oe ee ID idee eek. 5, 7-8

Norfolk & Western Railway Co. v. American Train

Dispatchers’ Association, 499 U.S. 117 (1991)... passim

Pittsburgh & Lake Erie R.R. v. RLEA, 491 U.S.

Renee ye 14

ae Express Agency, Ine., Notes, 348 I.C.C.

ee! | SRE PEN ee eR orn SENET CITES 16

Regents of Georgia v. Carroll, 338 U.S. 586

8, aE ee ae ek ECE” Oe oe 20

RLEA v. Guilford Transportation Industries, Inc.,

ee bet! 2 Ae | ene 14, 21

RLEA v. United States, 987 F.2d 806 (D. C. Cir.

L___} RSCTA TILDE LN 25 a CA DN 92 Oe a 14

Rio Grande Industries, Inc., SPTC Holding, Inc.

and the Denver & Rio Grande Western Railroad

Company—Control—Southern Pacific Transpor-

tation Company, 4 1.C,.C.2d 834 (1988)... 6

—

vi

TABLE OF AUTHORITIES—Continued

Page

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

a Oe EE OT Ae 18

Seaboard Air Line R.R. v. Daniel, 333 U.S. 118

I La 4, 12, 18, 19

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

road Trainmen, 307 F.2d 151 (5th Cir. 1962),

cert, denied, 371 U.S. 952 (1968) ........................ 20

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

UTU v. Norfolk & Western Ry., 822 F.2d 1114

(D.C. Cir. 1987), cert. denied, 484 U.S. 1006

a 21

CONSTITUTIONAL MATERIALS:

Art. I, § 2, cl. 2, Constitution of United States _.... 2

Art. ITI, § 1, Constitution of United States .....2, 10, 19, 20

Art. III, § 2, cl. 1, Constitution of United States... 2, 10,

19, 20

STATUTES AND OTHER MATERIAL:

Interstate Commerce Act, 45 U.S.0C. § 10101, et

RE Se a Se TS OE AEE Eee passim

Section 5(11) (repealed), 49 U.S.C. §5(11)

ea ERE a ann MES SC RTT fehl ee 4

Section 11341 (a), 49 U.S.C. § 11841 (a) 00... passim

Section 11343 (a), 49 U.S.C. § 113843 (a) 0000. 5

Section 11344, 49 U.S.C. § 11344... Parise 15

Section 11344(b) (1), 49 U.S.C. § 11344 (b)

a al che ila ahaa, eee Micasci 3

Section 11347, 49 U.S.C. § 11847... 3,5

Rail Passenger Service Act, Section 405, 45 U.S. C.

aa aa eaniibneaccotiannseteas 5

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

Section 2 Seventh, 45 U.S.C. § 152 Seventh....... 17

Beceem G, 4B UBC. 8 WG ... nc vecceecwnnececcevesscecceeess 6

Section 7 First, 45 U.S.C. § 157 First 2,8, 10,11

TD a. cclivscmensssinicteneiieensdloaneens esate 2

28 UBC. § 1506 ..........-..-. Eo ee WE ee A 17

| eee 17

vii

TABLE OF AUTHORITIES—Continued

Page

EERE a A eee SE OS 2

BS ER RSTO TE 10, 11

REISE ET ne Raa oe ane 10

Public Law No. 102-306, 106 Stat. 260 (1992) .......... 7

Public Law No. 102-29, 105 Stat. 169 (1991) 7

Public Law No. 95-473, 92 Stat. 1887 (1978) ........ 5, 13

IN THE

Siprene Court of the United States

OCTOBER TERM, 1993

No.

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

” Petitioners,

SOUTHERN PACIFIC TRANSPORTATION COMPANY, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioners, Railway Labor Executives’ Association

(RLEA),’ International Association of Machinists and

Aerospace Workers (IAM),’ and the International Broth-

erhood of Electrical Workers (IBEW), respectfully request

that this Court issue a writ of certiorari to the United

States Court of Appeals for the Ninth Circuit to review

the judgment of that court in RLEA v. Southern Pacific

Transportation Co., 7 F.3d 902 (9th Cir. 1993).

1RLEA is a voluntary, unincorporated association of the chief

executive officers of eleven labor organizations which collectively

represent a majority of the rail employees in ‘his country. A list of

the labor organizations whose chief executives comprise RLEA is

reproduced herein as Appendix F at 26a.

2 When this litigation was commenced in March 1991, petitioner

IAM was affiliated with RLEA. However, as of September 1991,

its chief executive officer withdrew his membership from RLEA.

4

OPINIONS BELOW

The opinion of the court of appeals will be reported at

7 F.3d 902 and is reproduced herein as Appendix A at

la-15a. The opinion of the United States District Court

for the Northern District of California, which was af-

firmed by the court of appeals, was issued orally and is

not reported; it is reproduced herein as Appendix B at

16a-17a. The orders of the district court granting re-

spondents’ motion to dismiss and then denying petitioners’

motion to alter or amend are not reported and are repro-

duced herein as Appendices C (18a) and D (19a-21a),

respectively.

JURISDICTION

The opinion and judgment of the court of appeals was

issued on October 21, 1993. This petition is timely under

28 U.S.C. §2101(c) and seeks to invoke this Court’s

jurisdiction under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

This case presents the issue of which forum—the Inter-

state Commerce Commission fhereinafter, “ICC” or

“Commission”] or the federal courts—has jurisdiction

to determine whether Section 11341(a) of the Inter-

state Commerce Act [hereinafter, “ICA”], 49 U.S.C.

§ 11341(a), operates to relieve a rail carrier of its obliga-

tions under the Railway Labor Act [hereinafter, “RLA”],

45 U.S.C. § 151, et seq. Section 11341(a) of the ICA

is reproduced herein in Appendix E at 24a. Section 7

First of the RLA, 45 U.S.C. § 157 First, is also involved

in this case, and it is reproduced herein in Appendix E

at 25a. Finally, petitioner has asserted throughout this

litigation that granting jurisdiction to the ICC violates the

Separation of Powers doctrine; therefore, Articles I, § 8,

cl. 3 and III, §$ 1 and 2, cl. 1 of the Constitution of the

United States are also involved and are reproduced herein

in Appendix E at 23a.

STATEMENT OF THE CASE

Since 1983, rail labor and our nation’s railroad man-

agement have been embroiled in a dispute over whether

the railroads may use the ICC’s authority over rail eco-

nomic matters to modify their contractual obligations to

employees under collective bargaining agreements. Ac-

cording to the railroads, Section 11341(a) of the ICA®

relieves them of whatever contractual obiigations they

might have to their employees that would interfere with

their ability to consolidate their operations economically

and quickly; rail labor disagrees and asserts that it is

“unnecessary” to override statutory provisions, such

as the RLA, which are designed to resolve disputes

by requiring that contracts be maintained and establishing

negotiation as the means to change those contracts. This

Court recently sought to resolve that dispute when it

decided Norfolk & Western Ry. v. ATDA [fhereinafter,

“Dispatchers’|, 499 U.S. 117 (1991), and concluded

that Section 11341(a) of the ICA, in the appropriate cir-

cumstances, could operate to relieve a rail carrier partici-

pating in a merger or consolidation transaction from its

contractual obligations under collective bargaining agree-

ments negotiated under the RLA. However, in reaching

that conclusion, this Court “assume[d], without deciding,

that the Commission properly considered the public inter-

est factors of § 11344(b)(1) in approving the original

transaction, that its decision to override the carriers’ obli-

gations is consistent with the labor-protective requirements

of § 11347, and that the override was necessary to the

implementation of the transaction within the meaning of

§ 11341(a).” 499 U.S. at 127.

This case begins where Dispatchers left off, for this

case poses the question of which forum—the ICC or the

% As relevant here, 49 U.S.C. §11341(a) provides that a rail

carrier participating in a merger or consolidation approved by the

ICC, is “exempt from the antitrust laws and from all other law...

as necessary to let that person carry out the transaction” approved

by the Commission.

4

federal courts—has jurisdiction to determine whether the

purported override of the employees’ collective bargaining

rights is necessary. Rail labor maintains that it is the

forum which has jurisdiction to determine whether the

carriers action is violating “some ‘other law’ [that] has

the responsibility of determining whether an exemption”

is in fact “necessary.” ICC v. BLE, 482 */.5. 270, 300

n.13 (1987) (Stevens, J., concurring in juagment). Re-

spondent railroads argued, and the courts below ruled,

however, that Section 11341(a) gives the Commission

exclusive jurisdiction over rail mergers and consolidations,

and thus (App. A at 8a):

[W]here a railroad which has been a party to an

ICC-approved merger claims that certain proposed

actions are incident to that merger and exempt from

RLA procedures under section 11341(a), the ICC

has exclusive authority to resolve a challenge to these

claims.

It is that ruling which this petition seeks to have this

Court review. That ruling, petitioners respectfully submit,

is inconsistent with the Separation of Powers doctrine, for it

confers upon an agency, which exercised legislative powers

to create rights for the railroads, the authority to adjudi-

cate whether those new rights it has created supersede

rights of third parties—rights which were in existence

when the railroads sought those new rights and which

were not subject to that agency’s regulation. Moreover,

the lower court’s ruling is contrary to the decision of this

Court in Seaboard Air Line R.R. v. Daniel, 333 U.S. 118

(1948), and to the decision of the United States Court

of Appeals for the Eighth Circuit in BLE v. Chicago &

North Western Ry., 314 F.2d 424 (8th Cir.), cert. de-

nied, 375 U.S. 819 (1963), both of which held that it

was the court called upon to enforce the “other law”

which had jurisdiction to determine whether Section

11344(a) did in fact override that other law.*

4 Both Seaboard and Chicago & North Western involved 49 U.S.C.

§5(11), which was renumbered as § 5(12) in 1976 and then recodi-

A. Factual Background

In 1988, respondent Rio Grande Industries, Inc. (RGI),

which at that time controlled the Denver & Rio Grande

Western Railroad Company (D&RGW), filed an applica-

tion with the Commission for authority under Section

11343(a) of the ICA, 49 U.S.C. § 11343(a), to acquire

control over respondent Southern Pacific Transportation

Company (SP) and its subsidiaries, including respondent

St. Louis Southwestern Railway Company (SSW). During

the course of that proceeding before the Commission,

respondent RGI did not ask to be relieved of any con-

tractual or statutory obligations to the employees of the

applicant carriers, but instead, informed the Commission

thaf if the application to acquire control were approved,

the carriers intended to “[{hlonor existing labor agree-

ments.” Excerpts of Record in Ninth Circuit [hereinafter,

“ER”] at 157. In September 1988, the Commission

issued its decision approving that acquisition of con-

trol and, in compliance with Section 11347 of the ICA,*

imposed what are known as the New York Dock con-

ditions " for the protection of employees who might be

fied without substantive change as § 11341(a) by Public Law No.

95-473, 92 Stat. 18337 (1978). See, Id. at § 3, 92 Stat. at 1466.

5°49 U.S.C. § 11347 provides in pertinent part that:

When a rail carrier is involved in a transaction for which

approval is sought under sections 11344 and 11345 or section

11346 of this title, the Interstate Commerce Commission shall

require the carrier to provide a fair arrangement at least as

protective of the interests of employees who are affected by

the transaction as the terms imposed under this section before

February 5, 1976, and the terms established under section 405

of the Rail Passenger Service Act (45 U.S.C. 565)....

® The New York Dock conditions were promulgated in New York

Dock Ry.—Control, 360 1.C.C. 60, aff'd New York Dock Ry. v. United

States, 609 F.2d 83 (2d Cir. 1979). Those protections are intended

to eliminate, to the maximum extent possible, the adverse impact

that a railroad merger or consolidation might have on employees so

that the employees do not pay for the public benefit to be obtained

from that merger or consolidation. See, United States v. Lowden,

308 U.S. 225, 238 (1989).

6

affected by actions taken by the carriers pursuant to that

ICC-authorization. Rio Grande Industries, Inc.—Control,

4 1.C.C.2d 834, 972 (1988).

Several months after that control authorization was

given, respondents SP, SSW and D&RGW entered into

separate agreements with petitioners IAM and IBEW in

March 1989 to “commingle” certain repair and periodic

inspections of locomotives. Prior to that agreement, no

D&RGW employee could perform repairs or inspections

on SP and SSW engines, and similarly, no SP or SSW em-

ployee could perform such maintenance on D&RGW en-

gines. This was because the carriers were parties to agree-

ments with the IAM and IBEW which preserved to

employees with seniority under those agreements the ex-

clusive right to perform work within the scope of those

agreements on engines of the carrier on which they held

that seniority. However, the March 1989 agreements

provided that (ER at 20-21; 26) (emphasis in original):

In the event an employee is furloughed, the Carrier

will apply one of two options:

a. Cancel this agreement; or

b. Provide protection to the furloughed em-

ployee pursuant to New York Dock conditions

as imposed by the ICC in Finance Docket No.

32000 [i.e., RGI’s control application].

In December 1989, the carriers notified petitioners [AM

and IBEW that employees were being furloughed and that

they were exercising their option to cancel the agreements.

ER at 30, 32.

In 1989, the respondent carriers, in cooperation with

other carriers which were bargaining through the National

Carriers Conference Committee, served notices on peti-

tioners IAM and IBEW under Section 6 of the Railway

Labor Act, 45 U.S.C. § 156, to modify their existing

agreements to establish, inter alia, “system-wide” agree-

ments, which would permit repairs, inspections and main-

7

tenance of engines to be performed at any point on a multi-

carrier system under common control. ER at 10. When the

parties to that bargaining were unable to resolve their dif-

ferences either by direct bargaining or with the assistance

of the National Mediation Board (NMB), the NMB even-

tually released the parties. First, petitioner IBEW, along

with several other unions, was released and after the re-

port and recommendations of Presidential Emergency

Board No. 219 (PEB 219) did not enable the parties to

resolve their disputes, Congress enacted Public Law No.

102-29, 105 Stat. 169 (1991), on April 18, 1991, which

essentially imposed the recommendations of PEB 219 as

the agreement of the carriers and the IBEW, among oth-

ers. PEB 219 did not make any recommendation on the

carriers’ “system-wide” agreement proposal, and thus, that

proposal was effectively withdrawn. A similar fate was

imposed on the carriers’ system-wide agreement proposal

to the IAM when Congress enacted Public Law No. 102-

306, 106 Stat. 260 (1992), on June 26, 1992. Conse-

quently, because of the “moratorium” which PEB 219

recommended and Congress imposed, the carriers must

wait until November 1994, to use the RLA’s contract

modification procedures to once again propose such a

modification to their agreements.

While they were using the bargaining provisions of the

RLA in an effort to obtain the contractual right to com-

mingle their locomotive repairs and inspections, respond-

ents SP, SSW and D&RGW served notices on petitioners

[AM and IBEW under Article I, Section 4 of the New

York Dock conditions* on July 20, 1990, to commingle

7 Article I, §4 of the New York Dock conditions provides in

pertinent part that when a carrier contemplates a “transaction”

(which is defined in Article I, §1(a) of the conditions as “any

action taken pursuant to the authorizations of this Commission on

which these provisions have been imposed”) that “may cause the

dismissal or displacement of any employees, or rearrangement of

forces,” the carrier had to give ninety-days advance notice and,

if requested, negotiate or, if necessary, arbitrate an “implementing

8

their locomotive repair and inspection work. Both the IAM

and the IBEW opposed the use of the New York Dock

conditions to commingle that work because, they asserted,

the carriers were seeking to modify collective bargaining

agreements, something which they maintained the car-

riers could not accomplish under conditions imposed to

protect employee interests. Petitioner IAM refused to

meet with the carriers, and when the carriers threatened

to invoke the arbitration procedures of the New York

Dock conditions to arbitrate the implementing agreement,

petitioner IAM responded by stating that it was relying

upon Section 7 First of the RLA to refuse to arbitrate

changes to its existing agreements.” ER at 13, 46-48.

Petitioner IBEW also maintained that Section 7 First

of the RLA gave it the absolute right to refuse to arbi-

trate changes to its agreements, but it agreed to meet

with the carriers to see if an agreement could be reached

which would not require the modification of the existing

agreements. Petitioner IBEW soon concluded that the

carriers’ proposal could not be accomplished without mod-

ifying existing agreements and, when the carriers re-

quested that the IBEW arbitrate under the New York

Dock conditions the arrangement to implement such com-

mingling, the IBEW refused, relying upon Section 7 First

of the RLA. On March 7, 1991, respondents requested

agreement.” The implementing agreement is to accomplish two

things: first, it is to provide for the “application of the terms and

conditions of this appendix [i.e., the New York Dock conditions|”

to the particular transaction, and second, it is to “provide for the

selection of forces from all employees involved on a basis accepted

as appropriate for application in the particular case and any assign-

ment of employees made necessary by the transaction shall be made

on the basis of an agreement or [arbitrated] decision under this

section 4.” 360 I.C.C. at 85.

8 45 U.S.C. § 157 First provides in pertinent part that “the failure

or refusal of either party to submit a controversy to arbitration

shall not be construed as a violation of any legal obligation imposed

upon such party by the terms of this Act or otherwise,”

9

the NMB to appoint an arbitrator to devise the implement-

ing arrangement with the IBEW. ER at 14.

According to respondents, they have the right under

the New York Dock conditions to propose actions that

are contrary to existing collective bargaining agreements

so long as those actions further the economies sanctioned

by the ICC’s control authorization. ER at 81. Respond-

ents further maintained that arbitrators appointed to de-

vise implementing arrangements under Article I, Section 4

of the ICC’s New York Dock conditions have the au-

thority, because of Section 11341(a) of the ICA. to

modify a carrier’s obligations under its collective bargain-

ing agreements, and that, if labor maintained that such

modifications were “unnecessary,” they must present that

argument to the ICC. ER at 125.

B. District Court Proceedings

On March 26, 1991, petitioners filed a complaint with

the United States District Court for the Northern District

of California against respondents seeking a declaratory

judgement to resolve the dispute between the IAM and

IBEW and respondents over the impact of Section

11341(a) on the RLA. In particular, petitioners asked

the district court to examine whether an override of Sec-

tion 7 First of the RLA and a modification of the existing

collective bargaining agreements as proposed by respond-

ents in their New York Dock notices was necessary in

order to enable respondents to carry out the control au-

thorized by the ICC in 1988. ER at 17. Respondents

challenged the district court’s jurisdiction to consider peti-

tioners’ complaint, and in July 1991, the district court

entered an order dismissing the complaint for lack of

jurisdiction. App. C at 18a. According to the district

court, even though it had jurisdiction over RLA issues,

this Court’s decision in Dispatchers made it “clear” that

“modification of a collective bargaining agreement to let

an approved transaction go forward is a matter within the

10

province of the” ICC. App. B at 16a. As the court

stated, Section 11341(a)’s exemption is “broad and

sweeping” (/d.), and “the ability to weigh the importance

of these conflicting public policies is one that in the first

instance ought by logic to be made by the administrative

agency itself.” /d. at 16a-17a.

Petitioners asked the district court to reconsider its rul-

ing, asserting that vesting the ICC with jurisdiction to

determine the “necessity” issue was contrary to the Sepa-

ration of Powers doctrine since it gave to the administra-

tive agency which created new rights the power that

Article III of the Constitution of the United States vested

in the Judicial Branch of the Government to adjudicate

the impact of those new rights on existing rights of a

third party. That argument, the district court concluded,

was unpersuasive. App. D at 20a. According to the dis-

trict court, whatever decision the ICC might make on the

necessity issue is reviewable by the courts of appeal under

28 U.S.C. $$ 2321(a) and 2342. Even though that re-

view is on a deferential standard, the district court opined,

it satisfies Article III since Article II] does not guarantee

de novo review. App. D at 20a.

C. New York Dock Decisions

Following the district court’s decision, respondents SP,

SSW and D&RGW submitted their New York Dock im-

plementing arrangement dispute with the IBEW to the

arbitrator appointed by the NMB. Petitioner IBEW par-

ticipated in that arbitration, but only to the extent of

challenging the arbitrator’s jurisdiction and the carriers’

assertion that their commingling proposal was contem-

plated by the ICC’s control authorization. Additionally,

the IBEW’s participation was without prejudice to its posi-

tion that Section 7 First of the RLA gave it the right to

refyse to arbitrate changes to its agreements. In April

1992. the arbitrator issued his award finding that the car-

riers’ proposed actions arose from the merger authorized

by the ICC. He further concluded that the New York

1]

Dock conditions applied and gave him the authority to

permit the commingling of maintenance work.

Subsequent to that decision, respondents reactivated

their request that the IAM arbitrate the New York Dock

dispute and the NMB appointed an arbitrator. However,

the IAM declined to participate in that arbitration, rely-

ing upon Section 7 First of the RLA. In March 1993, the

arbitrator issued an award in that dispute, essentially

adopting the first arbitrator’s award and implementing

arrangement.

D. Court of Appeals’ Decision

On October 21, 1993, the Ninth Circuit issued its deci-

sion affirming the district court’s dismissal of petitioners’

complaint. The panel observed that Dispatchers “did not

directly address” the question presented by the appeal—

“who is to decide” whether the override of RLA rights is

necessary (App. A at 7a)—but it nevertheless concluded

that “the holding of Dispatchers and its overall concep-

tion of the statutory scheme [was] determinative of this

case.” App. A at 8a. After noting that Section 11341(a)

provides that the ICC has exclusive jurisdiction over rail-

road consolidations, the appellate court stated (/d.):

We are persuaded that because the ICC had exclu-

sive authority to approve the Rio Grande merger

and thereby exempt the Railroads from:any procedu-

ral or substantive law which might otherwise impede

that merger, it should have exclusive authority to

clarify the scope of its own approval and the corre-

sponding breadth of the section 11341(a) exemp-

tion. Such orders would, of course, be subject to

appellate review in the circuit court of appeals, under

28 U.S.C. § 2321(a), with the appropriate standard

of deference in the agency decision. A contrary re-

sult would interfere with the exclusive authority that

the statutory scheme confers upon the ICC in this

area.

———————————

That conclusion, the appellate court stated, was “con-

sistent with the objectives which inform section 11341(a)”

(App: A at 9a), which this Court observed in Dispatchers,

were to “‘promote “economy and efficiency in interstate

transportation by [removing] the burdens of excessive ex-

penditure.”’” /d., quoting, 499 U.S. at 132. Moreover,

the panel stated, its decision was consistent with the deci-

sion of the Eleventh Circuit in BRC v. CSX Transporta-

tion, Inc., 855 F.2d 745 (11th Cir. 1988), cert. denied,

489 U.S. 1016 (1989), in which the appelate court, rely-

ing upon the authority of the court of appeals to review

ICC orders, had concluded that the district court lacked

jurisdiction over a suit by a union to avoid arbitration

under the New York Dock conditions. App. A at 10a-

lla. However, the Ninth Circuit observed that its decision

rested on a different footing, for its holding “emphasizes

that the district court did not have jurisdiction over the

subject matter of the lawsuit, ab initio, regardless of the

fact that arbitration awards were later rendered.” App. A

at lla n.2.

Following that analysis, the Ninth Circuit opined that

its decision was not inconsistent with the authority upon

which petitioners had relied. First, that decision was

not contrary to Seaboard Air Lines R.R. v. Daniel, supra,

in which this Court held that the State court in that case

had jurisdiction to make the necessity determination under

what is now Section 11341(a). According to the Ninth

Circuit, that case was unique, for the “ICC could not have

granted the injunctive relief that the railroad sought” in

that case to prevent the State from enforcing its laws.

App. A at 12a-13a. Similarly, the appellate court stated

that Justice Stevens’ concurrence in JCC v. BLE, 482

U.S. at 300 n.13, “when considered in its context, eluci-

dates the circumstances under which a section 11341 (a)

exemption is appropriate, but says nothing of who is to

make this determination.” App. A at 13a. And finally,

the court concluded that the Eighth Circuit’s analysis in

BLE v. Chicago & North Western Ry., in which that

13

court had concluded that the district court had jurisdic-

tion to construe what is now Section 11341(a), was not

“persuasive.” That analysis, the Ninth Circuit stated, did

“not consider the exclusivity of the ICC’s authority in

the area of railroad mergers” (App. A at 14a), and “did

not have the benefit of the Supreme Court’s reasoning in”

Dispatchers. App. A at 13a, 14a-15a.

REASONS FOR GRANTING THE WRIT

I. THIS CASE PRESENTS AN IMPORTANT QUES-

TION CONCERNING JURISDICTION OF FED-

ERAL COURTS TO ENFORCE THE COMMANDS

OF THE RAILWAY LABOR ACT IN AREAS

WHERE DISPUTES UNDER THAT LABOR STAT-

UTE ARISE AS A RESULT OF MERGERS OR

CONSOLIDATIONS APPROVED BY THE ICC

Railroads have been subject to regulation under both

the Interstate Commerce Act and the Railway Labor Act

since 1926. Moreover, Congress has regulated both the

railroads’ economic affairs and aspects of their labor

relations for the entire period that Section 11341(a) and

its predecessors have been a part of the Interstate Com-

merce Act.” Nevertheless, during that entire period of

side-by-side regulation, the two forms of regulation com-

plemented each other and, indeed, operated together with-

out a conflict until this past decade when the Commis-

sion concluded that Section 11341(a) relieved rail car-

* Section 11341(a) traces its origins to § 407 of the Transporta-

tion Act, 1920, 41 Stat. 456, 482. Its wording was modified in 1933

18 Stat. 211, 219), 1940 (54 Stat. 908-09), and again in 1978 (92

Stat. 1434). None of those changes affected the coverage of the

exemption. In fact, the 1978 changes were simply housekeeping

in nature and the result of the 1978 Recodification Act, 92 Stat.

1337, which expressly provided in Section 3(a) that the restatement

“may not be construed as making a substantive change in the laws

replaced.” 92 Stat. 1466. See, note 4, supra. The last change

occurred in 1982, 96 Stat. 1102, 1122, but that change dealt with

motor carriers and not railrsads.

14

riers of their contractual and Railway Labor Act obliga-

tions to their employees. ICC Finance Docket No. 30,000

Sub-No. 18), Denver & Rio Grande Western R.R.—

Trackage Rights, served October 25, 1983 (unpublished),

vacated sub nom. BLE v. ICC, 761 F.2d 714 (D.C. Cir.

1985), vacated, 482 U.S. 270 (1987); see also, Pitts-

burgh & Lake Erie R.R. v. RLEA, 491 U.S. 490, 516

(1989) (Stevens, J. dissenting). Since that time, rail

labor and management have been embroiled in almost

continuous litigation to determine whether the ICC was

correct and, if it were, what limitations exist on the Com-

mission’s exemptive powers. That litigation has involved

this Court on two occasions (Norfolk & Western Ry. vy.

ATDA, 499 U.S. 117 (1991); ICC v. BLE, 482 US.

270 (1987)), but the controversy still exists virtually in

the same state of flux as in 1983 when it began. Compare,

RLEA vy. United States, 987 F.2d 806, 813-14 (D.C.

Cir. 1993), with, RLEA v. Guilford Transportation In-

dustries, Inc., 989 F.2d 9 (1st Cir. 1993).

As the Ninth Circuit observed, this Court’s decision

in Dispatchers that “the term ‘altother law’ in § 11341 (a)

includes any obstacle imposed by law[,]” including “the

substantive and remedial laws respecting enforcement of

collective-bargaining agreements” (499 U.S. at 133),

“did not directly address” the question presented by this

petition. App. A at 7a. Disptchers clearly provides some

guidance for the issue presented here, but as this Court

observed in that decision, Section 11341(a) “does not

exempt carriers from all law, but rather from all law

necessary to carry out an approved transaction.” 499

U.S. at 134 (emphasis added). Consequently, a threshold

question which must be resolved before one of the crucial

issues left open by Dispatchers—i.e., the “standard of

necessity’—can be decided, is which forum has jurisdic-

tion to determine if the immunity which may be conferred

by Section 11341(a) is necessary: the ICC, as the Ninth

Circuit concluded, or the court with jurisdiction to enforce

inner

15

the law which the carriers claim is overridden, as this

Court has previously concluded?

In 1986, this Court sought to address that threshold

jurisdictional question, along with a broader question as

to whether the Commission had to enumerate in its deci-

sion the laws from which a carrier was being exempted,

when it granted the ICC’s petition for a writ of certiorari

to review BLE vy. ICC, 761 F.2d 714 (D.C. Cir. 1985).’°

However, this Court did not answer that question because

it resolved the case on another jurisdictional basis—the

ICC’s orders from which the petitions to review had been

filed were unreviewable. ICC v. BLE, 482 USS. at 282.

285. Nevertheless, Justice Stevens, on behalf of himself

and three other Justices, would have addressed this issue.

According to Justice Stevens in his concurrence, the court

of appeals’ decision in that case, which required the ICC

to explain why it was relieving a carrier of its RLA obli-

gations, was “based on a misunderstanding of § 11341.”

482 U.S. at 298 (Stevens, J., concurring in judgment).

After observing that Section 11341(a) was automatic in

that it was “self-executing” (482 U.S. at 298-99), Justice

Stevens stated (482 U.S. at 300) (emphasis added):

Of course, as the Commission explained, in con-

ducting the public interest inquiry under 49 U.S.C.

§ 11344 the Commission must consider the legal

consequence of approving the transaction as _pro-

posed will be to exempt the parties from the dictates

of “other laws” to the extent necessary to carry out

10 See, ICC v. BLE, Sup. Ct. No. 85-792, which presented the

following question:

Whether the majority of the panel of the court below has

improperly superimposed a findings requirement not contem-

plated by Congress upon the exemption from all other laws

afforded by 49 U.S.C. §11341(a) to consolidations approved

by the Interstate Commerce Commission under 49 U.S.C.

= 11344 by requiring the Commission to anticipate and enu-

merate at the time of its approval all legal obstacles being

waived in order for the statutory exemption to be effective

against a subsequent challenge,

16

the transaction.'"* See McLean Trucking Co. v.

United States, 321 U.S. 67, 79-88 (1944).

18 This does not mean, as respondents fear, that a party

claiming an exemption on the basis of § 11341 need merely

assert that its conduct is “necessary” in order to prevai! in

its claim. Any tribunal that is faced with a claim that a party

is violating some “other law” has the responsibility of deter-

mining whether an exemption is ‘‘necessary to let that person

carry out the transaction, hold, maintain, and operate prop-

erty, and exercise control or franchises acquired through the

transaction.” 49 U.S.C. § 11341. See Railway Express Agency,

[Jne., Notes, 348 I.C.C. 157] at 215-218 [ (1975) }.

Since the ICC does not have authority to determine

whether a party is violating any law other than the ICA

(e.g., McLean Trucking Co. v. United States, 321 U.S.

at 79-88), it is apparent that Justice Stevens was not

referring to the ICC when he used the term “any tribunal”

in Footnote 13.

That reasoning shows that the Ninth Circuit’s decision

in this case, which centered upon the economic justifica-

tion for Section 11341(a)’s exemption and not upon the

manner in which that exemption is effectuated, is similarly

based on a “misunderstanding” of § 11341(a), and should

be reviewed by this Court.

Indeed, this case is an excellent vehicle to review this

question, for the district court decided this issue on a

motion to dismiss where the facts must be viewed in the

light most favorable to petitioners. Conley v. Gibson, 355

U.S. 41, 45-46 (1957). Thus, it must be accepted that

the “commingling” of engine repair and inspections is

something that the carriers are prohibited from doing by

their current collective-bargaining agreements; indeed, the

carriers do not contest this point. App. A at 3a-4a. Addi-

tionally, the New York Dock arbitrators have both con-

cluded that the “commingling” of locomotive repair and

maintenance is something that was contemplated by the

ICC when it authorized respondent RGI to control the

SP system. Thus, there is no need to refer this matter to

17

the ICC under 28 U.S.C. § 1336 for its input as to its

intent. And finally, petitioners’ complaint asserts that the

agreements which respondents reached with the IAM

and IBEW in March 1989, respondents’ commitment to

the ICC that they would “honor” their collective bargain-

ing agreements, and the time which has elapsed since the

control approval was granted by the ICC, show that it is

not “necessary,” as that term is used in Section 11341(a),

that the carriers be relieved of their RLA and contractual

obligations at issue in order to carry out the control au-

thorization which they received in 1988.

That contention obviously presents an issue as to the

proper meaning of Section 11341(a) which federal courts

should have jurisdiction to consider under 28 U.S.C.

§ 1337(a), especially since that contention arises in an

action involving the RLA. Moreover, this case has a very

real significance for employees represented by petitioners

IAM and IBEW, because if petitioners are correct as to

the relationship of the two Acts, then respondents are

liable to the employees for breaching the scope clauses

of the agreement each time they exercise the putative

authority granted to them by the New York Dock arbi-

trators and violate those scope clauses and Section 2

Seventh of the RLA, 45 U.S.C. § 152 Seventh. Conse-

quently, the question presented by this petition is straight-

forward and clearly important to petitioners and to the

entire rail industry.

Il. THE COURT OF APPEALS HAS DECIDED THIS

IMPORTANT ISSUE OF FEDERAL LAW IN A

MANNER THAT IS IN CONFLICT WITH THE

DECISION OF THIS COURT IN SEABOARD AIR

LINE R.R. v. DANIEL AND WITH THE DECISION

OF THE EIGHTH CIRCUIT IN BLE v. CHICAGO &

NORTH WESTERN RY.

In concluding that the ICC had exclusive jurisdiction to

determine whether Section 11341(a) operated to relieve

respondents of their RLA obligations in this case, the

Ninth Circuit opined that its decision was compelled by

18

this Court’s decision in Dispatchers and by that decision’s

“overall conception of the statutory scheme... .” App.

A at 8a. That statutory scheme, the appellate court stated,

gave the ICC exclusive authority over mergers and con-

solidations and was intended to “ ‘promote “economy and

efficiency”’” by removing the “‘burdens of excessive

expenditure.’” Jd. at 9a, quoting, Dispatchers, 499 U.S.

at 132. Consequently, the appellate court reasoned, “[iJf

we held that parties could litigate in federal court the

scope of an approved merger and the corresponding

breadth of the section 11341(a) [exemption], we would

surely interfere with the ICC’s ability to efficiently facili-

tate mergers.” App. A at 9a.

In reaching that conclusion, however, the Ninth Circuit

failed to recognize that Dispatchers dealt with the breadth

of Section 11341(a)’s exemption and not with the manner

in which that section applied. Justice Stevens addressed

the mechanics of the exemption in his concurring opinion

in JCC v. BLE, and he explained that Section 11341 (a)

“automatically exempts a person from ‘other laws’ when-

ever an exemption is ‘necessary to let that person carry

out the transaction’” authorized by the Commission. 482

U.S. at 298. Justice Stevens’ opinion does not stand

alone, for this Court concluded in three cases during the

1940s that the ICC’s role under Section 11341 (a)’s prede-

cessor is limited to defining what the carrier is authorized

to do in carrying out the merger order, and that the ex-

emption then becomes “self-executing.” See McLean

Trucking Co. v. United States, 321 U.S. at 79-88 (ICC

has no jurisdiction to enforce antitrust laws, but must

consider the policies of those laws in determining the pub-

lic interest under what is now § 11344(b)(1)); Seahoard

Air Line R.R. v. Daniel, 333 U.S. at 122-23; Schwabacher

v. United States, 334 U.S. 182, 194, 198 (1948) (ICC

must decide at time of initial decision “public interest”

considerations, and its role then ends; thereafter, the im-

munity granted by § 11341(a) is self-executing). What

the Ninth Circuit and district court failed to consider in

this case is that the time to balance the policies of the

19

ICA and RLA occurred at the time that the ICC was

asked to approve the control in 1988, and not when the

carriers sought to use that authority to commingle their

engine repair and inspection work.

This fundamental error in construing Section 11341 (a)

may be seen by the manner in which the Ninth Circuit

attempted to distinguish the contrary holding by this Court

in Seaboard Air Line R.R. v. Daniel. In Seaboard, this

Court raised the jurisdictional issue sua sponte and con-

cluded that a state court called upon to determine whether

a merged carrier was violating state law had jurisdiction

to “determine whether the [ICC] order, properly inter-

preted, did exempt [the railroad] . . . from compliance

with the state railroad corporation laws and, if so, whether

the Commission had transcended its statutory authority in

making the order.” 333 U.S. at 123. According to the

Ninth Circuit, Seaboard was not contrary to its decision,

because in the peculiar facts presented in Seaboard, “the

ICC could not have granted the injunctive relief that the

railroad sought, [and thus,] a contrary conclusion [as to

jurisdiction] would have left the railroad without a single

jurisdiction to which it could have applied for relief.”

App. A at 13a. That reasoning does not withstand analy-

sis, for if the Ninth Circuit is correct in asserting that the

ICC has exclusive jurisdiction to determine the necessity

question, then the state court in Seaboard would have

been without jurisdiction, and, thus, could not have been

a forum to which the railroad could have turned.

Moreover, in concluding that the Commission had ex-

clusive jurisdiction to determine the effect of its orders on

pre-existing contractual and non-ICA statutory rights of

employees, the Ninth Circuit has failed to give proper

weight to the Separation of Powers doctrine. That doc-

trine requires federal courts to conduct a “searching” in-

quiry into congressional intent whenever a statute is as-

serted to require the adjudication in an non-Article III

setting of questions which have traditionally been tried in

an Article III court. Commodity Futures Trading Com-

mission v. Schor, 478 U.S. 833, 854 (1986). Conflict of

20

laws issues are clearly traditional Article III issues, espe-

cially when, as here, they involve determining whether

contractual and statutory rights in third parties are extin-

guished by rights which an administrative agency has cre-

ated in others. See, Regents of Georgia v. Carroll, 338

U.S. 586, 600 (1950).

Significantly, in the seminal case_on which the railroads

usually rely to assert that Section 11341(a) of the ICA

overrides the RLA," BLE v. Chicago & North Western

Ry., the Eighth Circuit reached that issue only after it

first addressed whether the district court had jurisdiction

to consider that issue and concluded that it did. That de-

cision as to jurisdiction is in direct conflict with the Ninth

Circuit’s decision in this case. According to the Ninth

Circuit, the Eighth Circuit’s approach to the jurisdictional

issue was improper and failed “to consider the exclusivity of

the ICC’s authority in the area of railroad mergers... .”

App. A at 14a. That reading of the Eighth Circuit’s deci-

sion, however, is incorrect, for that appellate court relied

heavily upon both the self-executing nature of what is now

Section 11341(a) (314 F.2d at 432) and the exclusive

nature of the ICC’s jurisdiction over rail mergers (314

F.2d at 429-32) in addressing the merits of the issues

raised by that case. In short, the Eighth Circuit’s deci-

sion as to jurisdiction is consistent with this Court’s

decision in Seaboard, while the Ninth Circuit’s is at odds

with Seaboard and Chicago & North Western.

This Court should address this important jurisdictional

issue for, even though six circuits have addressed this

issue in one form or the other, there is no consistent posi-

tion as to where jurisdiction should lie. Prior to 1983,

the Fifth Circuit * and the Eighth Circuit had found no

jurisdictional bar to examining the impact of what is now

11 See, Dispatchers, 499 U.S. at 132.

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

men, 307 F.2d 151 (5th Cir. 1962), cert. denied, 371 U.S. 952

(1963).

21

Section 11341(a) on non-ICA rights. Following the

ICC's entry into the field of labor relations with its 1983

D&RGW decision, the D.C. Circuit concluded that the

ICC had exclusive jurisdiction to consider whether an

ICC employee protection arbitrator had improperly over-

ridden RLA rights, and so too did the Eleventh Circuit

in BRC v. CSX Transportation, Inc.., supra. Those cases

relied upon the exclusive jurisdiction of the courts of ap-

peals to review ICC decisions to conclude that the district

courts did not have jurisdiction to entertain those suits.

However, the Ninth Circuit in this case specifically ques-

tioned and disagreed with that rationale. App. A at

lla n.2. And finally, the First Circuit in RLEA v. Guil-

ford Transportation Industries, Inc., supra, relied upon

the ICC’s obligation to consider employee interests to

conclude that the ICC had exclusive jurisdiction over all

labor disputes arising from ICC rail decisions.

In short, the issue of where does jurisdiction lie to

determine the necessity question under Section 1134] (a)

is an important issue of federal law which should be ad-

dressed by this Court.

CONCLUSION

For the reasons set forth herein the writ Should be

granted. Respectfully submitted,

WILLIAM G. MAHONEY

JOHN O’B. CLARKE, JR.*

HIGHSAW, MAHONEY &

CLARKE, P.C.

Suite 210

1050 17th Street, N.W.

Washington, D.C. 20036

(202) 296-8500

Attorneys for Petitioners

Date: January 19, 1994 * Counsel of Record

13 UTU v. Norfolk & Western Ry., 822 F.2d 1114 (D.C. Cir. 1987),

cert. denied, 484 U.S. 1006 ( 1988).