Petition for Writ of Certiorari — Rives v. Interstate Commerce Commission

Supreme Court brief1992

Ask Donna

What actually matters in this document.

Text

Supreme Court, us | |

“ a?

Sl-11238 Fit&D

No. NOV 195 199)

FICE OF THE CicnK f§

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1991

CHARLES F. RIVES, II,

Marv A. Seurer; Ronald D. Pester,

Tom Hampleman; R.D. Griffin;

John A. Cameron; Marv Slusser;

and Gene Dudley,

Petitioners,

Vv;

INTERSTATE COMMERCE COMMISSION,

United States of America,

Respondents.

UNION PACIFIC MOTOR FREIGHT COMPANY,

Intervenor.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT

Of Counsel:

M.J. Ogborn A.M. Lewandowski*

Harding & Ogborn Dysart Taylor

1200 17th Street 4420 Madison Ave.

Denver, CO 80202 Kansas City, MO

(303) 629-0300 (816) 931-2700

Attorneys for Petitioners

*Counsel of Record

DATE: November 15, 1991

QUESTIONS PRESENTED

1. Whether in a railroad

consolidation the employees of a

wholly-owned motor carrier sub-

sidiary limited to “auxiliary to and

supplemental of” to rail service are

within the class of employees en-

titled to mandatory labor protective

conditions under 49 U.S.C. §11347?

2. Whether the nature of the

work performed and not simply the

identity of the employer is’ the

determining component of entitlement

to mandatory labor protective

conditions under 49 U.S.C. §11347?

3. Whether the precedent

establishing mandatory labor pro-

tective conditions for employees of

wholly-owned motor carrier sub-

sidiaries in a railroad consol--

idation is the proper inter-

pretation of 49 U.S.C. §11347 or

whether the decision of the U.S.

Court of Appeals for the Tenth

Circuit in the Interstate Commerce

Commission denying mandatory labor

protection in this case is’ the

proper interpretation of that

statute?

4. Whether the determination

of the nature of the work performed

is an unnecessary and undesirable

role for the Commission?

5. Whether 49 U.S.C. §11347 is

sufficiently ambiguous to warrant an

unqualified affirmation of the

Commission action under Chevron

U.S.A., Inc. v. Natural Resources

Defense Council.

6. Whether the U.S. Court of

Appeals erred in declining review of

the employees’ entitlement to a

discretionary labor protection by

affirming the Interstate Commerce

Commission’s refusal to award

discretionary benefits?

eS |

PARTIES TO THE PROCEEDINGS BELOW

Petitioners are former employees of

the Union Pacific Motor Freight

Company ("upMF”) 2/, a wholly-owned

subsidiary of the Union Pacific

Railroad Company (”UP”).

Petitioners: Charles F. Rives, II

Marv a. Seurer

Ronald D. Pester

Tom Hampleman

R.D. Griffin

John A. Cameron

Marv Slusser

Gene Dudley

Respondents: Interstate Commerce

Commission

United States of

America

Intervenor: Union Pacific Motor

Freight Company

+/ petitioners believe UPMF is but

one segment of a large group of

companies. The specific identify of

those other corporations or entities

is unknown.

TABLE OF CONTENTS

PAGE

QUESTIONS PRESENTED. ..... i

PARTIES TO THE PROCEEDINGS

i ee a ee i ee ee a ee a |

TABLE OF AUTHORITIES ..... viii

PRIOR OR RELATED APPEALS ... xX

OPINIONS BELOW .......- - 2

JURISDICTIONAL STATEMENT .. . 2

STATUTES INVOLVED. ..... . 3

STATEMENT OF THE CASE. ... . “

REASONS FOR GRANTING THE WRIT. 18

I. THE DECISION OF THE U.S.

COURT OF APPEALS HAS —

CREATED A CONFLICT WITH A

PREVIOUS DECISION OF THE

U.S. COURT OF APPEALS FOR THE

EIGHTH CIRCUIT WHICH SHOULD

BE RESOLVED BY THIS COURT. .. 18

A. THE EIGHTH CIRCUIT

PREVIOUSLY RULED

iN COSe. Ve. 1.C.C.,

741 F.2d 1077 (1984,

cert. denied 471 U.S.

1110 (1985), THAT

EMPLOYEES OF A

WHOLLY-OWNED MOTOR

CARRIER SUBSIDIARY

OF A RAILROAD WHICH

WAS LIMITED BY THE

Icc TO PERFORM

SERVICES IN AUXILIARY

OR SUPPLEMENTAL RAIL

SERVICE WERE ENTITLED

TO LABOR PROTECTIVE

CONDITIONS ..... 18

B. THE COURT OF APPEALS

ERRED IN ITS RELIANCE

ON KANSAS CITY SOUTHERN

INDUSTRIES, INC. V.

I.C.C., 902 F.2d 423

(5th Cir. 1990), WHICH

IS CLEARLY FACTUALLY

DISTINGUISHABLE FROM

THE FACTS IN THIS

CABE. © © © © © «© @ oe

Cc. THE COURT OF APPEALS’

HOLDING HAS CONFLICTING

IMPLICATIONS FOR THE

TRANSPORTATION

INDUSTRY. . ...-..- 29

II. THE COURT OF APPEALS’

RELIANCE ON THE ANALYSIS OF

CHEVRON U.S.A., INC. V. NATURAL

RESOURCES DEFENSE COUNCIL

IS MISPLACED BECAUSE 49 U.S.C.

§11347 IS NOT AMBIGUOUS.

THE COURT, THEREFORE ERRED

IN AFFIRMING THE DECISION OF

THE ICC WHICH CONFLICTS WITH

PREVIOUS COURT PRECEDENT. . . . 32

III. THE COURT OF APPEALS’

HOLDING THAT THESE EMPLOYEES

WERE NOT ENTITLED TO REVIEW OF

THE INTERSTATE COMMERCE

COMMISSION’S REFUSAL TO

EXERCISE ITS DISCRETION TO

AWARD LABOR PROTECTIVE

BENEFITS WHEN THE

INTERSTATE COMMERCE COMMISSION

HAD MORE THAN SUFFICIENT

EVIDENCE AND LAW BEFORE

IT TO MAKE A DIS-

CRETIONARY DETERMINATION

WAS IN ERROR. .... +. 6 © « « 36

CONCLUSION. . «. «© «© © © © «© « « 46

APPENDIX. . «© © © © © « © © «© « La

vil

TABLE OF AUTHORITIES

PAGE

American Trucking Associations,

Inc. v. U.S., 425 F.Supp.

903 (D.D.C. 1975),

aff’d 425 U.S. 955 (1976) ... 24

Chevron U.S.A., Inc. Vv.

Natural Resources Defense

Council, ine., 467 U.8. 837

qg.. | Peer ee ee eee |

Cosby, et al. v. ICC, 741 F.2d

1077 (8th Cir. 1984), cert.

denied 471 U.S. 1110 (1985) .. 18

"Improvement of TOFC/COFC

Regulations, Railroad-Affiliated

Motor Carriers and Other Motor

Carriers”,

2 SetsGeae COGS CAST) « « «© « « 25

Kansas City Southern Industries,

LG. Vs Bees Bee F.2G 423

Sem Gar. SOO) « ss st te wt te 27

Maislin Industries U.S. v.

Primary Steel, Inc., ee.

, 220 Bets 27599,

111 L.Ed.2d 94 (1990) ..... 34

Nemitz v. Norfolk & Western

Railway Company,

S08 GU.Bs 37 URBTA) 08 lt te th le CS

New York Dock Ry. v. U.S.,

609 F.2d 83,

‘t,o See oy) er er ee ee

viii

New York Dock Railway--Control--

Brooklyn Eastern District Terminal,

360 I.C.C. 60 (1979), aff’d

sub nom New York Dock Rwy. v.

U.S., 609 F.2d 83

[au Gees BeTele- «© © «© ss ss » 8

Pennsylvania R.Co.--Merger-- -

New York Central R.Co.,

347 I.C.C. 536 (1974). o «© «© « 24

Railway Labor Executives’

Association v. United States,

2 4 3 Bs: | ee

Rives v. ICC, 934 F.2d 1171

eee Cee Se is ks se 6 2D

Union Pacific Corporation,

Pacific Rail System, Inc.,

and Union Pacific Railroad

Company--Control--Missouri

Pacific Corporation and

Missouri Pacific Railroad

Company, Gary W. McPherson v.

Union Pacific Motor Freight Co.

et al, Finance

DOGKet NO. 30,000 « «5 s« «+ <« » §

U.S. v. Rock Island Motor

Transit Co., 340 U.S. 419,

430, reh.den. 341 U.S. 906

es as ee reer

STATUTES

aA eee tt)!

ee 2 ae |:

49 U.S.C. §§11347 and 11344,

formerly §49 U.S.C. §5(2) (f)

and §5(2)(c) are set forth in the

Appendix at p.56a and 5la,

respectively.

aaa ae

PRIOR OR RELATED APPEALS

This proceeding arises from a

decision of the Interstate Commerce

Commission: Union Pacific--

Control--Missouri Pacific; Western

Pacific, 366 1.C.C. 462 (1982),

affirmed in Southern Pacific

Transportation Co. v. ICC, 736 F.2d

708 (D.C.Cir. 1984), cert. denied,

469 U.S. 1208 (1985).

This proceeding was before the

United States Courts of Appeal for

the Eighth and Tenth Circuits under

the following designations:

Creiger, et al. v. ICC,

Case No. 87-1723

(8th Cir. docketed June 3, 1987)

Rives v. ICC, No. 88-2957

(10th Cir. docketed June 3, 1987)

Seurer, et al. v. ICc,

Case No. 87-2037

(10th Cir. docketed June 19, 1987)

Seurer, et al. v. ICC, No. 88-2956

(10th Cir. docketed June 19, 1987)

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1991

No.

CHARLES F. RIVES, II,

Marv A. Seurer; Ronald D. Pester,

Tom Hampleman; R.D. Griffin;

John A. Cameron; Marv Slusser;

and Gene Dudley,

Petitioners,

Vv.

INTERSTATE COMMERCE COMMISSION,

United States of America,

Respondents.

UNION PACIFIC MOTOR FREIGHT COMPANY,

Intervenor.

PETITION FOR A WRI? OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT

The Petitioners respectfully

pray that a Writ of Certiorari issue

to review the judgment and opinion

of the United States Court of

Appeals for the Tenth Circuit

entered in this proceeding on June

6, 1991.

OPINIONS BELOW

The opinion of the Court of

Appeals is reported at 934 F.2d 1171

(10th Cir. 1991) anc appears in the

Appendix commencing at page la.

The April 3, 1987 Decision and

April 12, 1989 Reopened Decision

opinions of the Interstate Commerce

Commission, which have not been

reported, appear in the Appendix

commencing at 18a.

JURISDICTIONAL STATEMENT

The judgment cf the Court of

Appeals for the Tenth Circuit was

entered on June 6, 1991. A timely

Petition for Rehearing and sug-

gestions for rehearing en banc was

denied August 20, 1991. The juris-

diction of this Court is invoked

under 28 U.S.C. §1254(1) (1988).

STATUTES INVOLVED

Section 5(2)(f) of the Inter-

state Commerce Act, 49 U.S.C.

§5(2)(f) (1976), is set forth in the

Appendix at 72a. That section has

been recodified at 49 U.S.C. §11347

(1982). Section 11347 is set forth

in the Appendix at 5éa.

Section § (2) (c) of the

Interstate Commerce Act, 49 U.S.C.

§5(2)(c) (1976) is set forth in the

Appendix at 7la. That section has

been recodified, in pertinent part,

at 49 2.8.6. §11344(b) (2) -(c)

(1982). Section 11344(b)(2)-(c) is

set forth in the Appendix at 5la.

STATEMENT OF THE CASE

A. NEW YORK DOCK LABOR PROTECTIVE

CONDITIONS--GENERALLY

It has long been recognized

that the consolidation or merger of

carriers subject to the jurisdiction

of the Interstate Commerce Act could

have a “devastating effect[]” on the

employees of those carriers. 2/

Congress enacted The Transportation

Act of 1940 requiring the protection

of employees affected by a merger or

consolidation of Class I railroads.

That law was entitled 49 U.S.C.

§5(2) (f£) and was subsequently

recodified as 49 U.S.C. §11347.

This Court has addressed the in-

portance of labor protective

conditions on more than one

sf New York Dock Railway v. United

States, 609 F.2d 83, 86 (2q Cir.

1979).

. 3 .

occasion.>/ See also Nemitz ov.

Norfolk & Western Railway Company,

404 U.S. 37 (1971).

Over the years the ICC moulded

and refined the labor protective

conditions. The most recent vintage

is the so-called "”New York Dock

Conditions” which provide for dis-

missal, displacement, fringe bene-

fits and moving allowances. 4/

Pursuant to 49 U.S.C. §11347, labor

protective conditions are a man-

datory aspect for approving a con-

af Railway Labor Executives’

Association v. United States, 339

i # 142 (1950), discusses the

origination of employee protective

conditions in the Washington Job

Protection Agreement of 1936 which

was a voluntary arrangement between

railroads and their labor unions and

was designed to limit labor strife

during railroad mergers.

~ New York Dock Railway--Control--

Brooklyn Eastern District Terminal,

360 I.C.C. 60 (1979), aff’d sub nom

New York Dock Railway v. United

States, 609 F.2d 83 (2d Ci. 1979).

solidation or merger of two Class I

railroads. Those conditions were

requiread to be "no less protective

of the interest of employees than

those heretofore imposed” .>/ The

Appendix to the New York Dock case

setting forth the level of

protection is found commencing at

Appendix 57a. During the re-

codification process, the language

of former §5(2)(f) referring to

“railroad employees” was deleted and

in its place the term “employees”

was inserted in new §11347 for

clarity.°/

>/ pub. L. No. 94-210, 4402(a), 90

Stat. 31 (1976), amending 49 U.S.C.

§5(2)(f). Under this amendment the

level of protection was required to

be no less favorable than the

conditions previously imposed.

8/u.R.Rep.No. 95-1395, 95th Cong.,

2a Sess. 166 (1978).

B. STATUTORY AUTHORITY FOR LABOR

PROTECTIONS

1. Mandatory Labor Benefits

Mandatory labor protection is

afforded to “employees affected by”

a railroad consolidation under 49

U.S.C. §11347 (1982), which is

reproduced in the Appendix at 56a.

Prior to the re-codification of this

section, 49 U.S.C. §5(2)(f) governed

these benefits and required the

Commission to consider the effect of

a consolidation on “che interests of

the railroad employees affected”.

Appendix at 7la. The language change

between the old Section 5(2) (f)

“railroad employees” and new Section

11347 “employees” was made “for

Clarity” .-

1/4 .R.Rep.No. 95-1395, 95th Cong.,

2d Sess. 166 (1978).

2. Discretionary Labor

Benefits

Discretionary labor protection

is codified at 49 U.S.C.

11344(b)(2)(C) (1982) and is re-

produced in the Appendix at 5la to

$Sa. The Commission is afforded

discretion to fashion protective

conditions whenever consistent with

the public interest.

C. HISTORY OF THE CASE

This case concerns the granting

of labor protective conditions in a

major rail consolidation, the

unification of the Union Pacific

Railroad Company ("Ur"), the

Missouri Pacific Railroad Company

(“MP”) and the Western Pacific

Railroad Company (”WP”). In 1982

the ICC approved this consolidation

in a proceeding entitled Union

Pacific Corporation, Pacific Rail

System, Inc., and Union Pacific

Railroad Company--Control--Missouri

Pacific Corporation and Missouri

Pacific Railroad Company, Gary MW.

McPherson v. Union Pacific Motor

Freight Co., et al, Finance Docket

No. MC-30,000. Prior to this

consolidation, there were two

wholly-owned motor carrier sub-

sidiaries operated by the UP and MP,

namely Union Pacific Motor Freight

(“UPMF”) and Missouri Pacific Truck

Line ("MPTL”). UPMF held a

Certificate of Public Convenience

and Necessity from the ice

authorizing it to perform trucking

services but limiting the authority

to auxilliary to or supplemental of

UP rail service. Included in the

application for corsolidation, au-

thority was sought co acquire joint

control over UPMF and MPTL in Docket

No. MC-F-14449. The motor carrier

aspects and the rail aspects of the

entire transaction were consolidated

by the Icc. In its Order approving

the consolidation, the ICC ordered

the standard level cf New York Dock

labor protective benefits.

This case arose when~ the

Petitioners lost their employment

with UPMF following the consol-

idation. The Petitioner, who had

been employed by UPMF from twelve to

twenty-five years and who performed

ramping and deramping functions on

TOFC (trailers on flat cars) and

COFC (containers on flat cars) rail

shipments, believed they were

entitled to labor protection under

the New York Dock Conditions. The

ICC reopened the proceeding at the

request of the Petitioners but

determined the Petitioners were not

-10-

entitled to the New York Dock

Condition benefits because they were

employees of the wholly-owned

sibaddiory, UPMF, rather than tech-

nical employees of the railroad. ®/

At this point it is necessary

to digress. Initially there were

seven (7) claimants who worked at

the UPMF facility :n Kansas City;

seven (7) claimants who worked at

the UPMF facility in Denver; and an

unrelated claimant, Gary W.

McPherson (who is not involved in

this Petition) who sought benefits.

In the early post-consolidation

proceeding before tke ICC, the seven

Denver Petitioners and Mr. McPherson

were not represented by present

counsel. Subsequer.tly, the seven

s/ Union Pacific Corp., et al. Vv.

Union Pac. Motor Freight Co., et

al., Finance Docket No. MC-30,000

(served April 27, 1987).

-ll-

Denver claimants employed present

counsel. Following the initial

denial by the ICC, the seven Kansas

City claimants filed a Petition for

Review with the United States Court

of Appeals for the Eight Circuit in

Creiger v. I1.C.C., No. 87-1723 and

the seven Denver claimants filed a

Petition for Review before the

United States Court of Appeals for

the Tenth Circuit in Seurer vv.

1.C.C., No. 87-2037. Because the

Eighth Circuit proceeding was

first-filed, both appeals were

consolidated and transferred to the

Eighth Circuit.

Before the issues were briefed

in the Eighth Circuit, UPMF

requested the zCc reopen the

proceeding and requested the Eighth

Circuit to defer the consolidated

Petition for Review until the ICC

-12-

acted. On August 17, 1987, the ICC

issued a Decision reopening the

proceeding and requiring additional

evidence and briefs to consider

whether UPMF employees had

sufficient notice of consequences of

the consolidation and the labor

protection they migh* receive.

While awaiting a decision from

the CC; six of the original

Petitioners in Creiger entered a

Settlement Agreement with UP and

withdrew their Petition for Review.

Thereafter, on the request of the

Icc and UPMF, the Eighth Circuit

referred the matter back to the

Tenth Circuit based on the residency

of the eight remaining Petitioners,

i.e., Kansas and Colorado. The

Tenth Circuit renumbered the _ two

Petitions for Review as Seurer, et

al. v. ICC, No. 88-2956 and Rives v.

-13-

I.C.C., No. 88-2957. Undersigned

counsel references the settlement

Simply for the purpose of explaining

how the various Petitions for Review

were transferred from one Circuit to

the other.

Finally, by Decision dated

April 12, 1989, the ICC issued its

ruling on the reopened proceeding

(hereinafter the "Decision”) .2/ In

the reopered proceeding, the Icc

again denied benefits to the

Petitioners in a three to two

Decision. In that split decision,

Vice Chairman Simmons”~ dissented

forcefully concerning the majority’s

disregard for cortrolling legal

precedent, stating: “(Tjhe Conm-

mission must take into account the

/ Union Pacific Corp, et al. v.

Union Pac. Motor Freight Co., et

al., Finance Docket No. 30,000

(served (April 20, 1989), set forth

in the Appendix at 36a to 50a.

-l4-

Cosby decision and not simply shrug

it. off. While we may view that

decision as inconsistent with

prevailing Commission precedent, it

is ... controlling and binding until

otherwise reversed by the courts or

legislation.” 22/ (emphasis added).

In addition, Commissioner

Lamboley stated in dissent: “the

majority’s position runs contrary to

statute and precedent. Nothing in

the legislative history limits or

precludes eligibility for pro-

tections of persons employed by

motor carriers providing services

substantially integrated with and

directly beneficial to the rail

carrier...*.22"

10/t¢c¢ pecision, April 20, 1989,

p.4, set forth commencing at

Appendix p. 36a.

11/4.

-15-

The Petitioners then sought

review before the United States

Court of Appeals for the Tenth

Circuit, from which this case

arises. That Court of Appeals

affirmed the Decision of the Icc

primarily based upon this Court’s

interpretation of administrative law

in Chevron. 22/ In so doing, it

found the intent of Congress was not

Clear and, therefore, the adminis-

trative agency coulde interpret the

statute as it deemed desirable. The

Petitioners submit the Court of

Appeals for the Tenth Circuit erred

in several respects and most

particularly in not following the

precedent enunciated by its sister

court, the United States Court of

Appeals for the Eighth Circuit in a

as/ Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467

U.S. 837 (1984).

-16-

virtually identical case. Con-

sequently, this Petition for Writ of

Certiorari is being filed.

-l7-

REASONS FOR GRANTING THE WRIT

I. THE DECISION OF THE U.8. COURT

OF APPEALS HAS CREATED A CONFLICT

WITH A PREVIOUS DECISION OF THE U.8.

COURT OF APPEALS FOR THE EIGHTH

CIRCUIT WHICH SHOULD BE RESOLVED BY

THIS COURT.

A. THE EIGHTH CIRCUIT

PREVIOUSLY RULED IN COSBY

Ve. I.C.C., 7412 FP.2@ 1077

(1984), cert. denied 471

U.8s. 1110 (1985), THAT

EMPLOYEES OF A WHOLLY-

OWNED MOTOR CARRIER SUB-

SIDIARY GF A RAILROAD

WHICH WAS LIMITED BY THE

ICC TO PERFORM SERVICES IN

AUXILIARY OR SUPPLEMENTAL

RAIL SERVICE WERE ENTITLED

TO LABOR PROTECTIVE CON-

DITIONS.

The first and foremost reason

for granting this Petition is to

resolve the obvious conflict between

the opinion of the Court of Appeals

for the Tenth Circuit with a

previous decision of the Court of

Appeals for the Eighth Circuit.29/

The facts in this case are virtually

i3/ Cosby v. I.C.C., 741 F.2@ i077

(8th Cir. 1984), cert. denied 471

U.S. 1110 (1985).

-i18-

identical to the facts in Cosby. In

Cosby the Burlington Northern

Railroad Company (”BN”) consolidated

with the St. Louis-San Francisco

Railway Company (”Frisco”). Both BN

and Frisco operated a wholly-owned

motor carrier subsidiary. The ICC

approved the consolidation as well

as the control of the motor carriers

and in so doing, conditioned the

approval on the issuance of labor

protection as required by 49 U.S.C.

§11347 through the s:zandard New York

Dock Conditions. Following the

consolidation, employees of the

wholly-owned motor carrier sub-

sidiary of Frisco were laid off and

they sought benefits under the New

York Dock Conditions. Those benefits

were denied by BN and the denial was

initially approved by the Icc for

the stated reason that employees of

-19-

a subsidiary were not ine the

intended class to be protected under

the statute. An appeal was taken in

the United States Court of Appeals

for the Eighth Circuit which

reversed the Decisicn of the ICC and

held that the emplovees of a motor

carrier subsidiary were covered by

the protective conditions. Pivotal

to that case and also present herein

was the fact the operating authority

of the wholly-owned motor carrier

subsidiary in Cosby was limited by

the Tce to auxiliary to or

supplemental of rail service

transportation. The facts herein

are almost identical. If there is a

difference, the facts gravitate to

higher protection rather than lower

protection inasmuch as_ the _ in-

dividual claimants herein worked

-20-

with TOFC and COFC shipments which

were transported by rail .2¢/

Notwithstanding the inter-

pretation of the statute by the

Court in Cosby, the majority for the

Icc steadfastly refused benefits to

the employees in this proceeding for

the same reason tke claimants in

Cosby were initially denied, namely

that the employees of a wholly-owned

motor carrier subsidiary were not

entitled to the protective benefits

even though the scope of their work

was limited to auxiliary to and

supplemental of rail service. The

Court of Appeals for the Tenth

Circuit affirmed that decision under

the Chevron doctrine which creates

the obvious conflict between the

Circuits.

14/ygain, TOFC refers to trailers on

flat © cars and COFC refers to

containers on flat cars.

-21-

In ignoring the precedential

value of the Cosby decision, the

Court of Appeals and the ICC have

also ignored the historic

differentiation between railroads

and truck lines impcsed by the ICc.

Decades ago it was decided that the

National Transportation Policy was

best served by having a strong truck

industry and a strong rail industry

to permit the shipping and consuming

public an alternative choice of

transportation modes and to provide

for the naticnal defense in the

event of an emergency. To achieve

the goals of the National

Transportation Policy, Congress and

the ICC greatly limited the ability

of railroads to own or _ = operate

trucking companies. In balancing

the needs of the two industries,

railroads were permitted to own and

operate wholly-owned subsidiary

truck lines with certain’ strict

limitations. That history was best

announced by this Court in U.S. v.

Rock Island Motor Transit co. 22/

Therein, the Court found that a

railroad’s operation of a motor

carrier was prohibited by the Motor

Carrier Act of 19352/ and the

Interstate Commerce acti of 1940

unless the motor carrier service

would be auxiliary to or

supplemental of rail service .29/

Although the prohibition has been

somewhat eroded, the law in effect

at the time of the consolidation

still limited a railroad’s motor

carrier operation to auxiliary to or

15/340 U.S. 419, 430 (1951).

16/49 stat. 543.

17/54 stat. 899.

sS/ ta. wt 434:

-23-

supplemental of raii service unless

: . 19

special circumstances were shown .22/

Further, the ICC has a long-

standing policy of considering a

rail carrier and its subsidiaries as

a single transportation system. The

Cosby Court correctly referred to

the single system doctrine when it

stated:

The Commission has “long

considered that a carrier

and its subsidiaries con-

stitute a single trans-

portation system with

respect to transactions

under Section 5 of the

Act. “Pennsylvania Rail-

road Co.--Merger--New York

COntral B.Ge., 247 £026.

536, 546 (1974) (citing

Louisville & J.B.& R.Co.-

“Merger, 290 I1.C.C. 723,

7333; 295 I.C.C. 113; Woods

Industries, Inc.--Con-

trol--United Transports,

inc., 85 4.C.C. 672, 675).

As the Commission noted in

Pennsylvania Railroad,

“the parent, bv reason of

ownership, has the legal

19/ 49 g.8.€. §10922; American

Trucking Associations, Inc. v. U.S.,

425 F.Supp. 903 (D.D.C. 1975), aff’d

425 U.S. 955 (1976).

-24-

right to direct the

affairs of the subsid-

iaries and the latter have

no alternative but to

accept this direction,

even if such were to

result...in complete a-

bandonment of the - sub-

sidiaries’ operations or

the extinction of their

corporate existence”.

(Citation omitted).

Cosby, et al. v. I.C.C., 741 F.2d

1071, 1080 (1984). As_ previously

stated, the Decision of the ICC in

this matter was divided on a three

to two vote. Vice Chairman Simmons

noted in his dissent that the ICC

has previously declared that

railroad affiliated motor carrier

operations involving TOFC and COFC

services are “”related to a rail

carrier” in the ICC_ proceeding

entitled ”Improvement of TOFC/COFC

Regulations, Railroad-Affiliated

Motor Carriers and Other Motor

-25-

Carriers”. 2°/ Vice Chairman Simmons

further noted in his dissent that in

order to adopt that policy, the ICC

first made the determination that

the type of transportation provided

by the motor carrier affiliated is

“related to a rail carrier” under 49

U.S.C. §10505. In a separate

dissenting opinion, Commissioner

Lamboley noted that the record

indicates that UPMF was intimately

and Significantly tied to’ the

railroad’s main service functions as

an integral part of the. overall

transportation system and cited

instances where the ICC exempted the

merger of motor carriers re-

spectively owned by merging rail

carriers based on the obvious

significant nexus of activity

between the integrated motor carrier

a2/'s I.C.C.2d 869 (1987).

-26-

subsidiaries and the merged rail

carriers.

It is obvious the ICC has

adopted a ”“Monday-Tuesday” approach.

On the one hand, it considers

wholly-owned motor carrier sub-

sidiaries of a railroad as a part of

a single transportation system for

its regulatory purposes but, on the

other hand, when it comes to the

payment of protective benefits, the

majority believes the companies are

entirely separate and, therefore,

the protective conditions are not

due the employees.

B. THE COURT OF APPEALS ERRED

IN ITS RELIANCE ON KANSAS

CITY SOUTHERN INDUSTRIES,

Inc. V. 2I.C.C., 902 F.2d

423 (5th Cir. 1990), WHICH

IS CLEARLY FACTUALLY DIS-

TINGUISHABLE FROM THE

FACTS IN THIS CASE.

The Court of Appeals for the

Tenth Circuit seemingly indicates a

-27-

conflict existed between the

Circuits prior to this case. It

cites Cosby for one viewpoint and

Kansas City Southern Industries,

Inc. v. t.c.c.2/ for a different

viewpoint. The facts in Cosby and

the Kansas City Southern cases are

Clearly distinguishable. In Kansas

City Southern the motor. carrier

subsidiary was not limited to

auxiliary to or supplemental of rail

service by the ICcc. Further, the

work of the motor carrier subsidiary

employees appears not to be in-

timately tied to rail trans-

portation. In this case, the Pe-

titioners operated machinery known

as a piggy packer which was utilized

to onload and offload containers and

trailers from railroad flatcars,

ramped and derampeu trailers from

21/902 F.2d 423 (5th Cir. 1990).

-28-

railroad flatcars and hostled the

trailers around the rail yard.

Commissioner Lamboley was correct in

his dissent that the work of the

Petitioners was intimately tied with

rail work. Unfortunately, neither

the majority of the ICC nor the

Court of Appeals chose to consider

those facts. Rather, the bd mo

majority found the determination of

the nature of the work was an

"unnecessary and undesirable role”

for the ICC.

Cc. THE COURT OF APPEALS ’

HOLDING EAS CONFLICTING

IMPLICATIONS FOR THE

TRANSPORTATION INDUSTRY.

The Circuit Decisions have

conflicting implications for’ the

transportation industry as the

precedent in the Eighth Circuit is

that employees of a motor carrier

subsidiary of a railroad in a merger

-29-

transaction are required to be

afforded mandatory labor protection

but employees of a motor carrier

subsidiary of a railroad in a merger

transaction in the Tenth Circuit are

not entitled to mandatory labor

protective conditions and in

addition, it appears may not even be

entitled to discretionary labor

protective conditions.

The ICC appears to have decided

to provide labor protective benefits

to only those railroad workers who

received paychecks directly from a

railroad. The Federal Court pre-

cedent is that employees of railroad

motor carrier subsidiaries are

entitled to labor benefits.

Railroads and their motor carrier

subsidiaries are faced with an

impossible situation with these

conflicting precedents when plan-

-30-

ning merger and consolidation

transactions. In recent years, the

railroad industry has succumbed to

numerous mergers. Since 1980

deregulation of the transportation

industry under the Motor Carrier Act

of 198022/ and the Staggers Rail Act

of 198022/ barriers to railroad

acquisition of motor carriers have

been eliminated. Significant merger

and acquisition activity will

result. By sending conflicting

signals the Tenth Circuit, Eighth

Circuit and ICC have undermined

national decision-making in the

calculation of merger and = ac-

quisition costs. The Tenth Circuit’s

failure to follow on-point precedent

and resolve the conflict between

22/pub.L.No. 96-296, 94 Stat. 793

(1980).

23/pub.L.No. 96-448. 94 Stat. 1897

(1980).

-3l-

federal agency decision-making and

federal court precedent clearly

requires prompt correction.

II. THE COURT OF APPEALS’ RELIANCE

ON THE ANALYSIS OF CHEVRON U.S.A.,

INC. V. NATURAL RESOURCES DEFENSE

COUNCIL IS MISPLACED BECAUSE 49

U.S.C. §11347 IS NOT AMBIGUOUS. THE

COURT, THEREFORE ERRED IN AFFIRMING

THE DECISION OF THE ICC WHICH

CONFLICTS WITH PREVIOUS COURT

PRECEDENT.

The Court of Appeals’ principal

reason for denying relief to the

Petitioners and affirming the Icc

was based upon Chevron. 24/ The

panel’s reliance on Chevron is

inappropriate in this instance. The

statute, 49 7.8.C. §11347, is

unambiguous in mandating merger

protective benefits for the

“Carrier” employees. The opposition

will argue as before that the

recodification of the Interstate

ss/ Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467

U.S. 837 (1984).

-32-

Commerce Act which modified the

statute from railroad employees to

carrier employees was not intended

to be substantive. The Cosby Court

addressed that issue but found it

was not necessary to make a ruling

concerning the substantive dif-

ferentiation because the work

performed by the motor’. carrier

subsidiary employees for a company

that was limited to auxiliary to and

supplemental of rail service were,

in fact, railroad employees.

Petitioners submit that analysis was

correct. The deletion of the word

“railroad” and insertion of the word

“carrier” employees was simply a

Clarification of the original Con-

gressional intent. The Petitioners

herein were performing railroad

transportation work albeit through a

wholly-owned subsidiary. They were

-33-

employees of a carrier regulated by

the RE mt and, therefore, fall

squarely within the protected class

under 49 U.S.C. §11347.

The Chevron case does not stand

for the proposition that an agency

decision should automatically be

affirmed. If this Court had

intended that result, it would not

have overturned the action of the

Icc in what many consider to be a

well thought out and morally correct

policy concerning undercharge cases

filed by bankrupt carriers or their

collection agents as the Court did

in Maislin Industries i= # Vv.

Primary steel .2>/

The Decision of the majority of

the ICC pays tribute to form over

substance. Simply because there

Saf U.S. » £4190 S.Ct. 2759,

111 L.Ed.2da 94 (1990).

-34-

were historical limitations imposed

by the ICC on the operation of

trucks by railroads, wholly-owned

subsidiaries were formed. Even

though the men and women who work

for the wholly-owned subsidiaries

were carrier employees and performed

rail transportation functions, the

majority of the ICC has determined

they are not entitled to the same

level of protection as other

railroad employees because they were

technically employees of a motor

carrier subsidiary.

It is submitted the Chevron

criteria does not stand for the

proposition that any decision from

an administrative agency will be

automatically affirmed. While a

reviewing court skould uphold a

defensable construction of an

agency’s enabling act, it must not

-35-

rubber stamp a decision inconsistent

with a statutory mandate. The

history as well as the court

precedent concerning labor pro-

tective conditions in the- con-

solidation of rail carriers is well

established. The determination by

the IcC in this case that in-

dividuals who are carrier em-ployees

whe perform rail work are _ not

entitled to labor protective bene-

fits because they happen to be

technically employees of a= sub-

Sidiary corporation is not proper

and the Court of Appeals’ opinion

that this Court’s Chevron analysis

requires an affirmation of that ICC

Decision should be reversed.

III. THE COURT OF APPEALS’ HOLDING

THAT THESE EMPLOYEES WERE NOT

ENTITLED TO REVIEW OF THE INTERSTATE

COMMERCE COMMISSION’S REFUSAL TO

EXERCISE ITS DISCRETION TO AWARD

LABOR PROTECTIVE BENEFITS WHEN THE

-36-

INTERSTATE COMMERCE COMMISSION HAD

MORE THAN SUFFICIENT EVIDENCE AND

LAW BEFORE IT TO MAKE A

DISCRETIONARY DETERMINATION WAS IN

ERROR.

The Ice had more than

sufficient evidence and law before

it to exercise its discretion.

However, the Icc took the

opportunity to denegrate the evi-

dence presented as not being the

right kind upon which to base a

discretionary decision in order to

avoid a decision granting labor

protective benefits to employees of

a railroad motor carrier sub-

sidiary. Each and every pleading

filed with the ICC and with the

various courts cited the dis-

cretionary provisions of 49 U.S.C.

§11344.

The ICC requested information

from the Petitioners concerning

their relationship with the rail-

-37-

road. Pursuant to the requirements

of the ICC, Petitioners submitted

approximately 146 pages of verified

testimony (including that of the six

Petitioners who previously settled

with UP). For the sake of brevity,

all of that evidence will not be

restated herein. The Court’s atten-

tion is drawn to various highlights

including, but not limited to:

a. Petitioners were given

identification cards showing ”Union

Pacific Railroad”;

b. Petitioners were issued

payroll checks showing initially

“Union Pacific Railroad” and

thereafter showing "Union Pacific

Railroad and Missouri Pacific

Railroad”;

G. Petitioners performed

services in ramping and deramping

TOFC and COFC shipments;

d. Petitioners operated mo-

torized vehicles known as a “piggy

packer” and hostled trailers for the

loading and offloading of railroad

flatcars;

e. Petitioners were required

to attend safety meetings together

with other railroad craft employees

-38-

which were conducted by railroad

management personnel;

f. Petitioners received

safety awards, all of which bore the

name and logo of Union Pacific

Railroad;

Gg. Petitioners received ser-

vice pins for years of service, all

of which bore the name and logo of

Union Pacific Railroad;

h. Petitioners regularly re-

ceived magazines, newsletters and