Petition for Writ of Certiorari — Amalgamated Transit Transit Union Local No. 1338 v. Dallas Area Rapid Transit (No. 08-1173)

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Supreme Coit, U.S.

"7 (1) FILED

No. 08-__ 08117 3 MAR 19 2009

OFFICE OF THE CLERK

Wittara K. Suter, Clerk

IN THE

Supreme Court of the Gnited States

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Petitioner,

Vv.

DALLAS AREA RAPID TRANSIT,

Respondent,

On Petition for a Writ of Certiorari to the

Supreme Court of Texas

PETITION FOR A WRIT OF CERTIORARI

HAL K. GILLESPIE *

JOSEPH H. GILLESPIE

GILLESPIE, ROZEN, WATSKY

& JONES, P.C.

3402 Oak Grove Avenue,

Suite 200

Dallas, Texas 75204

* Counsel of Record (214) 720-2009

NEEL IB yp PISAIDE QUALI IIS, MEE GS CET

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 - WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

The Supreme Court held in Jackson Transit Au-

thority v. Local Division 1285, Amalgamated Transit

Union, AFL-CIO-CLC, 457 U.S. 15 (1982), that a

union does not have a federal cause of action to sue

in federal court to enforce the provisions of a

“Section 13(c)”! arrangement and a collective bar-

gaining agreement negotiated pursuant to such

arrangement against a local transit authority under

the Urban Mass Transit Act of 1964, as amended,

49 U.S.C.A. § 1609(c)X(“UMTA”).* Jackson Transit

Authority held that any such suit must be filed under

state law. The Texas Supreme Court held in Dallas

Area Rapid Transit v. Amalgamated Transit Union

Local No. 1338, 273 S.W.3d 659, 2008 WL 5266379

(Tex. 2008) that Texas governmental immunity law

is not preempted by Section 13(c) of UMTA and

therefore the local transit authority (Dallas Area

Rapid Transit) is immune from a breach of contract

suit filed by a union in state court regarding an

alleged violation of the parties’ 13(c) arrangement.

The questions presented are:

1. Whether the decision of the Texas Supreme

Court conflicts with the decision of the United States

Supreme Court in Jackson Transit Authority?

2. Whether federal preemption applies to Texas-

state immunity law that otherwise would bar a

union’s state court suit against a governmental entity

for alleged violations of a Section 13(c) arrangement?

‘Section “13(c)” is now codified under section 5333(b) of the

Transportation Code.

* UMTA is now known as the Federal Public Transportation

Act, as amended.

(1)

3. Whether UMTA gives a union the right to

pursue a contract action in state court, regardless of

state law that provides governmental entity immun-

ity from suit, for alleged violation of a Section 13(c)

arrangement and agreements reached pursuant to

the Section 13(c) arrangement?

4. Whether the Court in Jackson Transit Authority

intended the “right” to “pursue a contract action in

state court” merely meant that the union could file

suit, subject to summary dismissal because of

governmental immunity, or whether the Supremacy

Clause dictates that 13(c) arrangements and

agreements reached pursuant to those arrangements

can both be filed and considered on the merits in

state court?

LIST OF PARTIES AND RULE 29.6

STATEMENT

The parties before the Texas Supreme Court and

this Court are Amalgamated Transit Union Local No.

1338 (petitioner before this Court, respondent before

the Supreme Court of Texas) and Dallas Area Rapid

Transit (respondent before this Court, petitioner be-

fore the Supreme Court of Texas). To Petitioner’s

knowledge, Dallas Area Rapid Transit and Amalga-

mated Transit Union Local No. 1338 have no parent

corporations owning 10% or more of the corporations’

stock.

TABLE OF CONTENTS

QUESTIONS PRESENTED.........................cc0000

LIST OF PARTIES AND RULE 29.6 LIST........

FAB OF ALTHORIETIRG.......00secoveccrosessseccneess

PETITION FOR WRIT OF CERTIORARI .........

SY MN occicdncekocccacsvadentaceinnnendansexiocen

I aod lice aiccsaxsaresunssnsdasuxarcevapioacasavens

FRE Os Oe BE Fr EBD ve sssvessvcsvencvavenectsacccosveners

STATEMENT OF THE CASE ............ccccossssseosese

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

II.

The Texas Supreme Court Decision

Conflicts with the United States

Supreme Court Decision in a Manner

that Impacts Federal Law.....................044

In the Alternative, if Jackson Transit

Authority did not By Implication Hold

That State Immunity Law Is Preempted

When a Union Pursues a Breach of

Contract Action Over a 13(c) Matter in

State Court, the Unresolved Issue Is an

Important Federal Question that Should

be Settled by the Supreme Court and

the Holding of the Supreme Court of

Texas is Repugnant to the Constitution

and Laws of the United States.................

A. This is an Important Federal Ques-

tion That Should be Settled by the

COR SIS si vases swninchstiaccieuciavsens

B. The Holding of the Supreme Court of

Texas is Repugnant to the Constitu-

tion and Laws of the United States.....

(v)

TABLE OF CONTENTS—Continued

TE asi cdinkscpasatecesitbarnnseivesaasinsnessbecsiaiads

APPENDIX

APPENDIX A: Opinion of the Texas Supreme

a aa a ia cad cine

APPENDIX B: Opinion of Texas Fifth District

Be A IID aiiiiss ssassssccvescacnencdesvesecsiocvsane

APPENDIX C: Judgment of Texas Fifth Dis-

CPOE CPE OE FI DORIS oe .eccceccsscscosceesevescoveess

APPENDIX D: Order of Texas Fifth District

Court of Appeals Denying Rehearing..........

APPENDIX E: Order on Plea To the Juris-

diction of 191st Judicial District Court,

ee a caahbuakeudueotes

APPENDIX F: Plaintiff Amalgamated Transit

Union Local No. 1338’s Original Petition

I Noi indskescanesestissisccansssecsansses

APPENDIX G: General Grievance Resolution

ee pcan aoa

APPENDIX H: Defendant DART’s Original

ta ETRE RIE Fe Sr oe

APPENDIX I: Plaintiff Amalgamated Transit

Union Local No. 1338’s Amerded Original

SRE aS ke Nee ee a

APPENDIX J: Defendant DART’s Plea to the

Sa REE ORS IO OT

APPENDIX K: Parties’ 13(c) Arrangement ....

APPENDIX L: Portions of DART HEM ..........

24a

33a

34a

35a

Vl1l

TABLE OF CONTENTS—Continued

APPENDIX M: Plaintiff Amalgamated Transit

Union Local No. 1338’s Second Amended

CE PN iiss ook cdacccacddekccbpcteceneracassie

APPENDIX N: Plaintiff Amalgamated Transit

Union Local No. 1338's Supplemental

Briefing to Defendant’s Plea to the

SI fides ts nedevncdcacbisneanssnvekchceiwvineccdonkets

APPENDIX O: Excerpt of Federal Register

Vol. 69, No. 10, Thursday, Jan. 15, 2004.....

Page

124a

134a

165a

Vill

TABLE OF AUTHORITIES

CASES Page

Dallas Area Rapid Transit v. Amalga-

mated Transit Union Local No. 1338,

273 S.W.3d 659, 2008 WL 5266379 (Tex.

MT ivadancddihia Glob vacisseadubigdareseshbcsniaseienduiininne passim

Dallas Area Rapid Transit v. Plummer,

841 S.W.2d 870 (Tex. App.-Dallas, 1992,

iii ind dstcd vkuntvabeoainsccesiavsectbecsinecs 6

Eichelberger v. Eichelberger, 582 S.W.2d

Be Bis cocccckasccvivccsivcaseeetieceslenses 10

Geier v. Am. Honda Motor Co., 529 U.S.

a 7

Jackson Transit Authority v. Lecal Divi-

sion 1285, Amalgamated Transit Union,

AFL-CIO-CLC, 457 U.S. 15 (1982).......... passim

Lindsey v. Dallas Area Rapid Transit, et

al., 2009 WL 453769 (N.D. Tex. 2009)

(Civ. Action No. 3:08cv1096, Feb. 23,

ee 17

STATUTES

Te class neivecadsensspinentabens 2

49 U.S.C. § 1GO9(C) ....c.ceccccecesecessscscesscecarcocees i

ee ees I Oe TE ns hbncvivetcnesoxscteccecvcnene 4

Or Ste I Ke ckcsssindacevecssccssscasivesesey’ 2:3,

Tex. Transportation Code, Chapter 452

OTHER

2007 FTA Funding Obligations by State:

http://www. fta.dot.gov/documents/TABLE

_6_OBLIGATIONS_BY_ PROGRAMS A

I i IN fois pcnexsnenatvaduisccdedeensishents 15

Fed. Register, Vol. 69, No. 10 at 2458,

#3 Private Mass Transportation Com-

I ane dard cca sk Fert keusaboccavassssvacenubexien canes 4, 165a

IN THE

Supreme Court of the Anited States

No. 08-__-

AMALGAMATED TRANSIT UNION LOCAL No. 138388,

Petitioner,

Vv.

DALLAS AREA RAPID TRANSIT,

Respondent,

On Petition for a Writ of Certiorari to the

Supreme Court of Texas

PETITION FOR A WRIT OF CERTIORARI

Petitioner Amalgamated Transit Union Local No.

1338 respectfully submits this petition for a writ of

certiorari to review the opinion of the Supreme Court

of Texas.

OPINIONS BELOW

The opinion of the Supreme Court of Texas is pub-

lished as Dallas Area Rapid Transit v. Amalgamated

Transit Union Local No. 1338, 273 S.W.3d 659, 2008

WL 5266379 (Tex. 2008). Pet. App. la. The opinion

of the Court of Appeals for the Fifth District of Texas

is published as 173 S.W.3d 896 (Tex.App. Dallas,

2005). Pet. App. 24a. The Judgment of the Court of

Appeals for the Fifth District of ‘Texas is attached in

the appendix. Pet. App. 33a. The Order denying

DART’s motion for rehearing before the Court of Ap-

peals for the Fifth District of Texas is attached in the

appendix. Pet. App. 34a. The unpublished order of

the District Court, 191lst Judicial District, Dallas

County, Texas, the Hon. Catharina Haynes, February

1, 2005, Cause No. 04-06740-J, is attached in the ap-

pendix. Pet. App. 35a. Excerpts of the record, rele-

vant for the Court’s review of this petition for certi-

orari, are also contained in the Appendix. Pet. App.

37a-168a.

JURISDICTION

The Supreme Court of Texas entered its opinion

and judgment on December 19, 2008. The jurisdic-

tion of this Court is invoked pursuant to 28 U.S.C.

§1257(a).

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED

The Supremacy Clause within Article VI of the

U.S. Constitution provides, in relevant part:

This Constitution, and the laws of the United

States which shall be made in pursuance thereof,

and all treaties made, or which shall be made,

under the authority of the United States, shall be

the supreme law of the land; and the judges in

every state shall be bound thereby, anything in

the Constitution or laws of any State to the con-

trary notwithstanding.

U.S. CONST. art. VI, cl. 2.

UMTA provides in relevant part:

As a condition of financial assistance under sec-

tions... of this title, the interest of employees

affected by the assistance shall be protected un-

der arrangements the secretary of Labor con-

cludes are fair and equitable .... Arrangements

under this subsection shall include provisions

that may be necessary for — (A) the preservation

of rights, privileges, and benefits (including con-

tinuation of pension rights and benefits) under

existing collective bargaining agreements or oth-

erwise; (B) the continuation of collective bar-

gaining rights....

49 U.S.C. 5333(b).

STATEMENT OF THE CASE

Petitioner Amalgamated Transit Union Local No.

1338 (“ATU 1338”) is a labor organization that

represents employees of Dallas Area Rapid Transit

(“DART”). DART is a regional transportation au-

thority organized and existing under Texas Transpor-

tation Code, Chapter 452. ATU 1338 and DART are

parties to a Section 13(c) arrangement under the Ur-

ban Mass Transportation Act, 49 U.S.C. §5333(b)

(““UMTA”).

This Court previously discussed UMTA, Section

13(c) protective arrangements, and the legislative

history behind UMTA in Jackson Transit Authority v.

Local Division 1285, Amalgamated Transit Union,

AFL-CIO-CLC, 457 U.S. 15 (1982). When UMTA was

drafted, in approximately 1963, Congress was aware

that several financially suffering private mass trans-

portation companies across the country were being

purchased by local governments and those local gov-

ernments needed assistance from the federal gov-

ernment. Jackson Transit Authority, 457 U.S. at 17.

At the same time, Congress recognized that as those

private companies were purchased by public entities,

the existing collective bargaining rights of the mass

transit employees were at risk because several states

had anti-collective bargaining laws for public em-

ployees. Jd. Congress recognized the importance of

preserving and protecting the existing and future

rights of those employees to continue collective bar-

gaining in a way that would still allow the federal

government to provide financial assistance to the lo-

cal governments. /d.

Due to this concern, and to prevent federal funds

from being used to destroy collective bargaining,

Congress included Section 13(c) in UMTA. ZId. Sec-

tion 13(c), now 49 U.S.C. 5333(b), requires a state or

local government to make arrangements to preserve

transit workers’ rights for that entity to receive fed-

eral assistance pursuant to §5307 et seq. of the Act.

Id. at 15. Subject to a Section 13(c) arrangement,

DART receives millions of dollars in federal grants

every year from the Federal Transit Authority

(“FTA”) and must remain eligible for federal funding

by submitting anrual Certifications and Assurances

to the FTA stating that DART acknowledges its com-

pliance with 49 U.S.C. 5333(b). See, Fed. Register,

Vol. 69, No. 10 at 2458, #3 Private Mass Transporta-

tion Companies. Pet. App. 165a. The 13(c) ar-

rangement between DART and ATU 1338, is the par-

ties’ protective arrangement for purposes of satisfying

the requirements of §5333(b), without which DART

would be ineligible for federal funding under UMTA.

In April 2001, in accordance with the parties’ 13(c)

arrangement, ATU 1338 filed a “General Group

Grievance” seeking improvements in wages and

working conditions. In order to address the griev-

ance, and pursuant to the parties’ 13(c) arrangement,

the parties met and conferred to address the griev-

ance issues. The parties’ 13(c) arrangement, consis-

tent with Texas law, does not permit collective bar-

gaining between DART and the union. In place of

collective bargaining, the 13(c) arrangement requires

DART to meet and confer about proposed changes or

modifications to wages and working conditions,

through a “general grievance” process. That process,

like collective bargaining, fosters agreements be-

tween the parties to resolve disputes and to encour-

age labor peace. An agreement between DART and

ATU 1338 may be reached before or after “fact find-

ing.” Non-binding fact finding is included in the gen-

eral grievance process to encourage the parties to

reach agreements. If the parties fail to reach an

agreement, DART makes the final decision. State

law does not provide for interest arbitration and does

not permit strikes by public employees.

Through the meet and confer sessions, in June

2002 DART and ATU 1338, without fact finding,

reached certain agreements and entered into a Gen-

eral Grievance Resolution (“Resolution Agreement”)

that the parties ratified and signed. Pet. App. 48a.

The Resolution Agreement resolved the parties’ labor

dispute and, among other things, provided for annual

4% salary and wages increases for operating em-

ployees in October 2001, October 2002, and October

2003 and stated that DART would not make any un-

ilateral changes to the parties’ Hourly Employment

Manual (“HEM”) except for issues not addressed

within the Resolution Agreement. /d.

In September 2003, the DART Board of Directors

approved DART’s 2003-2004 budget but did not pro-

vide for the 4% general pay increase required by the

parties’ Resolution Agreement. DART also made sev-

eral unilateral changes to the HEM.

Alleging that DART had viclated the 13(c) ar-

rangement and the Resolution Agreement reached

pursuant to the 13(c) arrangement, ATU 1338 filed

suit in district court in Texas in July 2004. Pet. App.

37a. ATU 1338 asserted that its breach of contract

action in state court was in conformity with Jackson

Transit Authority as previously ruled upon in Dallas

Area Rapid Transit v. Plummer, 841 S.W.2d 870

(Tex. App. Dallas, 1992, writ denied). Pet. App. 41a.

DART filed a plea to the jurisdiction, seeking dismis-

sal of the suit based upon DART’s state governmental

immunity. Pet. App. 68a.

On November 16, 2004, the District Court heard

DART’s plea to the jurisdiction and requested addi-

tional briefing from the parties regarding whether or

not the Supremacy Clause of the United States Con-

stitution would in any way preempt DART from be-

ing able to claim governmental immunity when ATU

1338 brought suit in state court to enforce the par-

ties’ 13(c) arrangement. On December 17, 2004, ATU

1338 timely filed its supplemental briefing to the dis-

trict court regarding the issue of federal preemption.

Pet. App. 134a. The trial court denied DART’s plea

to the jurisdiction in an order signed by district court

judge, Catharina Haynes, on February 1, 2005.’

DART took an interlocutory appeal to the Texas

Fifth District Court of Appeals. Before the appellate

court, preemption was the central issue. On October

14, 2005, Justices Whittington, Francis, and Lang en-

tered an opinion and judgment denying DART’s plea

to the jurisdiction. Pet. App. 24a. The Court of Ap-

peals decision quoted extensively from Jackson Tran-

sit Authority in determining that UMTA “preempts

state governmental immunity law in this case.” Pet.

App. 26a and 3la.

—— ++

' Judge Haynes now sits on the United States Court of

Appeals for the Fifth Circuit.

Relying upon this Court’s precedent, the Court of

Appeals held that federal law impliedly preempts

state law if it is impossible for a private party to

comply with both state law and federal requirements

or if state law obstructs accomplishing and executing

Congress’s full purposes and objectives. See Geier v.

Am. Honda Motor Co., 529 U.S. 861, 882 (2000) Pet.

App. 3la. The Fifth District Court of Appeals noted

that in Texas, state law prohibits collective bargain-

ing by government employees but that DART is a

party to an, “Arrangement Pursuant to Section 13(c)

of the Urban Mass Transportation Act of 1964,” un-

der which DART agreed the “existing rights of em-

ployees covered by this Arrangement to present

grievances concerning their wages, hours of work, or

conditions of work, individually or through a repre-

sentative ... shall be preserved and continued.” Pet.

App. 28a. The Court of Appeals then held that pur-

suant to Jackson Transit Authority, ATU 1338 may

bring a contract action in state court to enforce the

13(c) arrangement that has been allegedly breached

by DART. Pet. App. 3la. The Court of Appeals’

holding regarding preemption was explicit:

Assuming state law provides that DART, as a

governmental entity, is immune from suit, this

immunity would obstruct accomplishing and ex-

ecuting Congress’s full purposes and objectives

under the UMTA. See Geier, 529 U.S. at 882,

120 S.Ct. 1913. The UMTA, as interpreted in

Jackson Transit Authority, is clear: state law is

to control labor relations between local govern-

ments and unionized transit workers, as long as

the workers’ collective-bargaining rights are pre-

served before a local government receives federal

aid. See Jackson Transit Auth., 457 U.S. at 17,

27, 102 S.Ct. 2202. Congress designed section

13(c) of the UMTA “as a means to accommodate .

state law to collective bargaining.” Although sec-

tion 13(c) may be narrowly drafted to minimize

its effects on state labor law, Congress’s clear in-

tent was to preserve collective-bargaining rights.

Where state immunity law would preclude en-

forcement of the rights preserved under section

13(c), Congress’ objectives could not be accom-

plished. Therefore, state immunity law “is

preempted and has no effect.”

Pet. App. 3la. DART sought rehearing before the

Texas Court of Appeals. On October 31, 2005, DART’s

motion for rehearing was denied. Pet. App. 34a.

DART appealed to the Supreme Court of Texas.

Oral arguments were held on November 17, 2007.

On December 19, 2008, the Supreme Court of Texas

reversed the Texas Court of Appeals and dismissed

the union’s suit based upon Texas governmental! im-

munity and the Supreme Court of Texas’ interpreta-

tion of Jackson Transit Authority and UMTA. The

Texas Supreme Court based its jurisdiction to hear

the interlocutory appeal upon its determination that

the Texas Court of Appeals’ decision conflicted with

this Court’s decision in Jackson Transit Authority.

The Texas Supreme Court held that, contrary to the

ruling of the appellate court, Jackson Transit Au-

thority did not touch upon the issue of federal

preemption and Texas governmental immunity law

was not preempted by UMTA. Pet. App. 14-15a. In-

terpreiing UMTA and Jackson Transit Authority, the

Supreme Court of Texas ruled that a 13(c) arrange-

ment can meet the requirements of section 13(c)

without any availability of judicial enforcement the-

reof, and thus, that nothing in UMTA preempts state

immunity law. Pet. App. 23a. The Supreme Court of

Texas determined that ATU 1338’s mechanism for

“enforcing” the parties 13(c) agreement, and general

grievance agreements reached pursuant to the par-

ties 13(c) agreement, is to “simply file another gen-

eral grievance,” and that this is sufficient under

UMTA. Pet. App. 23a.

REASONS FOR GRANTING THE WRIT

I. The Texas Supreme Court Decision

Conflicts with the United States Supreme

Court Decision in a Manner that Impacts

Federal Law

A writ of certiorari is important in this case to de-

termine whether the decision of the Supreme Court

of Texas conflicts with the decision of this Court in

Jackson Transit Authority. The Texas Supreme

Court decision rests upon its interpretation of the

Supremacy Clause, Jackse.. Transit Authority, and

UMTA. The Supreme Court of Texas’ opinion re-

garding these matters directly conflicts with the trial

court decision and the Texas Court of Appeals deci-

sion, both of which squarely held that federal

preemption and Jackson Transit Authority defeated

DART’s plea of state governmental immunity. The

Supreme Court of Texas would concede that if the

Texas Court of Appeals decision is correct, the deci-

sion of the Supreme Court of Texas directly conflicts

with this Court’s decision in Jackson Transit

Authority.

The Texas Supreme Court based its jurisdiction to

hear the interlocutory appeal by DART upon the

premise that the court of appeals’ decision conflicts

with Section 13(c) of UMTA and Jackson Transit Au

thority. Pet. App. 14-15a. The Supreme Court of

Texas held that it had jurisdiction over the interlocu-

tory appeal because it “possesses the power, and thus

the duty, to correct a decision of a Court of Civil Ap-

peals that conflicts with the ‘supreme law of the land’

as established by Congress and Supreme Court of the

United States.” Pet. App. 13-14a. The Supreme Court

of Texas acknowledged it has been nearly thirty

years since it has invoked its constitutional jurisdic-

tion to remove an alleged conflict between a Texas

appellate court and the United States Supreme

Court. Pet. App. 14a, citing to Eichelberger v. Eichel-

berger, 582 S.W.2d 395 (Tex. 1979).

The Supreme Court of Texas summarized Jackson

Transit Authority and ruled upon the issue of federal

preemption by stating:

ijn Jackson Transit Authority, the public trans-

portation authority in Jackson, Tennessee had a

13(c) arrangement that guaranteed its em-

ployees’ collective-bargaining rights, but the au-

thority later refused to abide by a collective-

bargaining agreement. The union sued the

authority in federal court for breach of both the

13(c) arrangement and the collective-bargaining

agreement, but the district court dismissed the

suit for want of subject-matter jurisdiction. The

court of appeals reversed, holding the district

court had federal-question jurisdiction because

the union’s claim arose under the laws of the

United States, and additionally, that section

13(c) implicitly provides for a federal cause of ac-

tion. The Supreme Court agreed that the district

court had federal-question jurisdiction but held

that section 13(c) did not create a federal cause of

action for breach of either the 13(c) arrangement

or the collective-bargaining agreement.

Pet. App. 16a.

The Supreme Court of Texas then addressed and

rejected the argument of ATU 1338 that had been ac-

cepted by the appellate court:

ATU 1338 argues that the right to sue a trans-

portation authority to enforce its agreements is

implicit in the Supreme Court’s opinion. The

court of appeals agreed with ATU 1338, but we

think both DART’s and ATU 1338’s arguments

read far too much into the Supreme Court’s opi-

nion. The issue of federal preemption of

state immunity law was simply not

presented in the case, and we do not think

the Supreme Court would have resolved it

merely by implication. Even if we were

mistaken about the Supreme Court’s intention,

we see no way to infer from its opinion

what view it might take of the preemption

issue. The court of appeals’ decision is in-

consistent with Jackson Transit Authority because

the court of appeals read the opinion in that case

to decide the preemption issue in the present case.

Pet. App. 19a (emphasis added). Thus: (1) the Texas

court of appeals decided that this Court’s decision in

Jackson Transit Authority ruled the union has a right

under 13(c) to sue a transportation authority in state

court to enforce its agreements and implicitly held

that the Supremacy Clause preempted state immun-

ity law. (2) The Texas Supreme Court held the oppo-

site—that Jackson Transit Authority does not impli-

citly hold that state immunity law is preempted when

the union brings a 13(c) suit against a transportation

authority in state court.

The Supreme Court’s opinion in Jackson Transit

Authority discussed the Congressional history and

intent in the passage of UMTA at great length. The

following passages from Jackson Transit Authority are

relevant to this petition, and show that the Texas

Supreme Court’s decision conflicts with this Court’s

holding:

. . . Congress was aware that public ownership

might threaten existing collective-bargaining

rights to unionized transit workers employed by

private companies. If for example, state law for-

bade collective bargaining by state and local gov-

ernment employees, the workers might lose their

collective bargaining rights when a private com-

pany was acquired by a local government. To

prevent federal funds from being used to destroy

the collective-bargaining rights of organized

workers, Congress included §13(c) in the Act.

Section 13(c) requires, as a condition of federal

assistance under the Act, that the Secretary of

Labor certify that “fair and equitable arrange-

ments” have been made “to protect the interest of

employees affected by [the] assistance.” The sta-

tute lists several protective steps that must be

taken before a local government may receive fed-

eral aid; among these are the preservation of

benefits under existing collective-bargaining

agreements and the continuation of collective

bargaining rights.

457 U.S. at 17-18 (citations omitted).

Because of the importance of the interpretation

of §$13(c) for local transit labor relations, we

granted certiorari.

457 U.S. at 20.

Indeed, since §13(c) contemplates protective ar-

rangements between grant recipients and unions

as well as subsequent collective-bargaining

agreements between those parties, it is reasona-

ble to conclude that Congress expected the §13(c)

agreement and the collective bargaining agree-

ment, like ordinary contracts, to be enforceable

by private suit upon breach.

457 U.S. at 20-21.

The Court plainly stated that a union may pursue

(not just file) a suit in state court to enforce 13(c) ar-

rangements and collective bargaining agreements

created pursuant to those arrangements, by stating

in text: “The legislative history indicates that Con-

gress intended those contracts to be governed by

state law applied in state courts.” 457 U.S. at 29.

The Court added:

The union, of course, can pursue a contract

action in state court. In addition, the Federal

Government can respond by threatening to

withhold additional financial assistance.

Id., n.13 (emphasis added). Concurring justices Pow-

ell and O’Connor added opinions that cut completely

against the reasoning of the Supreme Court of

Texas—that Jackson Transit Authority gives a right

to sue in state court, but does not hint that the suit

may be pursued in the face of a claim of governmen-

tal immunity:

Congress here provided for the making of con-

tracts that it must have intended to be enforced.

457 U.S. at 30 (Powell and O’Connor, concurring).

This Court, in Jackson Transit Authority, held that

in passing UMTA, Congress intended that private

parties to §13(c) protective arrangements could “of

course” sue in state court to enforce the §13(c) ar-

rangements and collective bargaining contracts

reached pursuant to the §13(c) arrangement. The

Supreme Court of Texas, in disagreeing with the trial

court and the unanimous decision of the Fifth Dis-

trict Court of Appeals, has ruled that Jackson Transit

Authority made no such implicit holding and that the

union’s suit must be dismissed outright due to go-

vernmental immunity. The Texas Supreme Court

opined that this Court in Jackson Transit would not

have resolved the immunity issue by implication and

added emphatically “we see no way to infer from its

opinion what view it might take of the preemption

issue.” Pet. App. 19a. If Appellant, the district court

and the appeal courts in Texas are right, and Jackson

Transit necessarily implies that immunity is over-

come when it states that “[t}he union ‘of course’ can

pursue a contract action in state court,” there is a di-

rect and important conflict between this Court’s

holding in Jackson Transit Authority and the Texas

Supreme Court decision in this case. Granting the

writ of certiorari is appropriate.

II. In the Alternative, if Jackson Transit

Authority Did Not by Implication Hold

That State Immunity Law Is Preempted

When a Union Pursues a Breach of

Contract Action Over a 13(c) Matter in

State Court, the Unresolved Issue Is an

Important Federal Question that Should

be Settled by the Supreme Court and the

Holding of the Supreme Court of Texas is

Repugnant to the Constitution and Laws

of the United States.

The Texas Supreme Court opines that while the

Jackson Transit Authority decision stated that a un-

ion could, “of course, pursue a contract action in state

court,” this Court by implication offered that it might

permit a public transit company to plead immunity

so the suit would be summarily dismissed.

A. This is an Important Federal Question

That the Court Should Settle

If the Supreme Court of Texas correctly held that

Jackson Transit Authority did not provide unions the

right to sue in state court (unfettered by governmen-

tal immunity) for breach of a 13(c) arrangement and

the Resolution Agreement reached pursuant to the

13(c) arrangement, a writ of certiorari is fully appro-

priate. This Court should determine whether Con-

gress intended for parties to §13(c) arrangements to

have enforceable rights somewhere. Did Congress

mean for the “right” to sue in state court to be a

worthless Catch-22, where the union’s suit would be

summarily dismissed due to state court immunity law?

This Court should determine whether 13(c) ar-

rangements and agreements reached pursuant to

those arrangements can both be filed and considered

on the merits in state court—whether the Supremacy

Clause of the Unites States Constitution preempts

any state governmental immunity laws for such suits.

The impact of the Supreme Court of Texas’ holding

in this matter is likely to be felt in every state within

the nation that has governmental transit authorities

that receive federal funding pursuant to UMTA. In

2007, the Federal Transit Authority (FTA) obligated

approximately $10.5 billion dollars in federal funds to

states and territories for transit needs. All fifty

states received federal funding through the FTA for

transit.” Texas ranked 6th among states receiving

A ti ~ ey

* For a state-by-state breakdown of 2007 FTA funding

obligations, see: http://www.fta.dot.gov/documents/TABLE 6

OBLIGATIONS_BY_ PROGRAMS _AND_STATES.xls

federal FTA transit funds, and received approx-

imately $486.6 million dollars in 2007.

Even if states do not currently have governmental

immunity provisions that mirror Texas law, there is

nothing to prevent state governments from enacting

similar laws. The Supreme Court of Texas defines the

terms of 13(c) arrangements for governmental enti-

ties in Texas. Public transit authorities in Texas may

enter into 13(c) arrangements to get federal funds

and avoid enforcement of those arrangements and

the agreements that flow from them by invoking

state law governmental immunity. Logic indicates

that other states will want the Texas deal. The in-

tent of Congress is at stake.

B. The Holding of the Supreme Court of

Texas is Repugnant to the Constitution

and Laws of the United States

The Texas Supreme Court has held that while

Jackson Transit Authority says that unions have the

right to sue transit authorities in state court to re-

medy breaches of Section13(c) arrangements and

agreements reached pursuant to Section 13(c) ar-

rangements, Jackson Transit Authority did not impli-

citly hold that unions may maintain their suits if

faced with a plea of immunity under state law. The

Texas Supreme Court concluded that despite Jackson

Transit Authority and UMTA, there is no preemption

of Texas state laws that prevent governmental agen-

cies such as DART, from being sued for breach of con-

tract. Therefore, in Texas, if a transit authority such

as DART breaches a 13(c) arrangement or an agree-

ment reached between the parties through the meet

and confer process created by and dictated in the

13(c) arrangement, the union can sue the public ent-

ity, but the suit will be summarily dismissed based

upon Texas governmental immunity law. Whether

read broadly where immunity bars all state court

suits by unions to enforce 13(c) rights or more nar-

rowly to bar suits as to some 13(c) claims, the ruling

is repugnant to the Constitution and laws of the

United States.

The first reported decision that interprets the deci-

sion of the Texas Supreme Court reads it as a

sweeping judicial pronouncement that immunity bars

any suit against the public entity to enforce Section

13(c) rights. Senior United States District Judge A.

Joe Fish did not consider whether the Texas Supreme

Court “got it right,” and stated:

One might conclude that in order to enforce [13c]

arrangements, the transit authority must be

subject to suit. The Texas Supreme Court, how-

ever, has already addressed this exact issue in

Dallas Area Rapid Transit v. Amalgamated

Transit Union Local No. 1338, ____ S.W.3d ____,

2008 WL 5266379, *7 (Tex. Dec. 19, 2008).

There, the plaintiff argued that “by preventing

suit to enforce the [arrangement], state immun-

ity law stands as an obstacle to achieving the full

purpose of section 13(c) to protect transit em-

ployees’ interest.” Jd. at *8. The court disagreed,

holding that transit employees can protect their

interest through an administrative process. 7d.

Thus, where the section 13(c) arrangement pro-

vides for an administrative process to enforce the

details of that arrangement, the state agency

remains immune from suit. 7d. at 9.

Lindsey v. Dallas Area Rapid Transit, et al., 2009 WL

453769 (N.D. Tex. 2009)Civ. Action No. 3:08ev 1096,

Feb. 23, 2009).

A close reading of the Texas Supreme Court deci-

sion suggests a nuanced (and implausible®) holding,

based on the perception of the Texas Supreme Court

of the intent of Congress, that some suits against a

public entity to enforce Section 13(c) rights would not

be barred by immunity. In Part III of its decision,

the Texas Supreme Court appears to accept DART’s

concession that DART would not be immune from

suit by ATU 1338 “to require that the grievance pro-

cedures laid out in the Arrangement be followed .. .

lilf for example DART refused to provide the hearing

called for, or to engage in the prescribed fact-finding

process, DART acknowledges that ATU 1338 could

sue to enforce the Arrangement.” Pet. App. 20a. The

Texas Supreme Court then discusses the intent of

Congress, opining “section 13(c) requires only that a

transportation authority make arrangements that

‘the Secretary of Labor concludes are fair and equita-

ble.” Pet. App. 21a. The general grievance scheme is

designed to foster labor peace and to encourage and

assist the parties to reach agreements, even though

* It seems implausible that DART would be immune from

some 13(c) suits by the union and not others. One would think

DART is either entirely immune, or that it is not immune; that

there either is or is not preemption. But the Texas Supreme

Court decision suggests that DART would not be immune from

suit if DART refused to meet with the union, despite being

required to do so by the 13(c) arrangement’s required general

grievance process. The Texas Supreme Court then also

implausibly (in light of the purpose of Section 13(c)) holds that

where the process “works” and the parties reach an agreement

as a result of the meetings, the Union may not sue to enforce the

agreement. In other words, because DART will go through the

motions and meet with the union and because the union can

engage in a futile series of meetings, agreements reached,

breaches of agreements, and new grievances, DART is immune

from suit.

absent an agreement, DART has the final say. The

end result of the general grievance scheme is either:

(1) an agreement, or (2) no agreement and DART has

the final say. The Texas Supreme Court missed the

point of the general grievance scheme. Instead, it

observed (as if agreement would not happen) that the

“end result” of the fact-finding process is a non-

binding report and recommendation. Pet. App. 21a.

Next, the Texas Supreme Court delves into the me-

rits of the union’s suit against DART, interpreting

the Grievance Resolution to be non-binding, so that a

violation of the agreement by DART merely provides

as a “remedy” that ATU 1338 may file another gen-

eral grievance ahead of schedule.* Pet. App. 23a.

The Texas Supreme Court rules that judicial en-

forcement of the agreement reached via the general

grievance process is not protected from immunity by

preemption because a satisfactory arrangement exists

so long as the union has a right to file another griev-

ance, even though any agreement reached pursuant

to the new grievance will also be unenforceable. /d.

* The Texas Supreme Court misstates the language of the

Resolution Agreement—that if DART fails to abide by the

agreement “the consequence would only be to relieve ATU 1338

of a commitment to a moratorium on filing general grievances.”

Pet. App. 22a, (emphasis added). This is a merits issue, and

ATU 1338's merits position is that the language addressed

(which does not include the word “only”) relieves the union of

the moratorium commitment, but that judicial enforcement

under Jackson Transit Authority is also available. On the merits

(1.e., after the suit proceeds despite a claim of immunity), DART

can point to language about DART’s position that it cannot not

enter into contracts and the union can point to the fact that the

language does not state the union agrees with DART’s position

and other language that supports an enforceable contract.

The Texas Supreme Court finds that Congress’ in-

tent is met by a circular process under which the un-

ion can keep filing general grievances, keep getting

“agreements,” and DART can break any of those

agreements with impunity (due to immunity). The

Texas Supreme Court finds this is “fair and equita-

ble” since the union can always file another griev-

ance. Building on its earlier finding that Jackson

Transit Authority does not implicitly permit a union

both to sue and to maintain the suit despite a plea of

governmental immunity, the Texas Supreme Court

holds: “Given that an arrangement can meet the re-

quirements of section 13(c) without providing for

judicial enforcement of grievance resolutions, nothing

in the statute implicitly preempts state immunity

law.” Jd. This conclusion would provide as “fair and

equitable” a cynical system where agreements mean

nothing but false promises and the “remedy” is to file

another futile grievance. Instead of fostering labor

peace and agreements, the process the Texas Su-

preme Court finds adequate in place of judicial en-

forcement would make the general grievance process

a frustrating and time-consuming hoax. Agreements

would not be worth pursuing. Talks would not be

worth conducting. Agreements would not be agree-

ments. Such a holding misstates the intent of Con-

gress and is repugnant to UMTA and the Supremacy

Clause.

CONCLUSION

For all the reasons stated herein, the Petition for

Writ of Certiorari should be granted.

Respectfully submitted,

HAL K. GILLESPIE *

JOSEPH H. GILLESPIE

GILLESPIE, ROZEN, WATSKY

& JONES, P.C.

3402 Oak Grove Avenue,

Suite 200

Dallas, Texas 75204

* Counsel of Record (214) 720-2009

March 19, 2009

APPENDIX

APPENDIX A

SUPREME COURT OF TEXAS.

No. 06-0034

DALLAS AREA RAPID TRANSIT,

Petitioner,

Vv.

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Respondent.

Argued Nov. 14, 2007.

Decided Dec. 19, 2008.

Justice HECHT delivered the opinion of the Court.

Section 13(c) of the federal Urban Mass Transit Act

of 1964 (the “UMTA”, now the Federal Transit Act)

conditions a public transportation authority’s receipt

of federal financial assistance on “arrangements the

Secretary of Labor concludes are fair and equitable”

to protect “the interests of employees affected by the

assistance”.’ Such arrangements “shall include provi-

sions that may be necessary for .. . the preservation

' Pub.L. No. 88-365, § 10(c), 78 Stat. 302, 307, redesignated as

§ 13(c) by Pub.L. No. 89-562, § 2, 80 Stat. 715, 716, as amended,

now codified at 49 U.S.C. § 5333(b) (2006) (“As a condition of

financial assistance under .. . this title, the interests of em-

ployees affected by the assistance shall be protected under ar-

rangements the Secretary of Labor concludes are fair and equit-

able. The agreement granting the assistance . . . shall specify

the arrangements.”).

of rights, privileges, and benefits . . . [and] the protec-

tion of individual employees against a worsening of

their positions related to employment”.”

In this case, a public transportation authority and

its employees’ union, operating under a 13(c) ar-

rangement, resolved a general grievance over wages

and benefits. The authority did not adhere to the res-

olution, and the union sued for breach of contract.

The lower courts concluded that the authority is not

immune from suit.*? The issue before us is whether

section 13(c) preempts an authority’s immunity from

suit under state law. We hold that immunity is not

preempted and that the union’s recourse is to the

procedures approved in the 13(c) arrangement. Ac-

cordingly, we reverse the judgment of the court of ap-

peals and dismiss the case.

Petitioner Dallas Area Rapid Transit is a regional

public transportation authority* that performs only

2 Id. § 5333(b)(2) (‘Arrangements under this subsection shall

include provisions that may be necessary for-(A) the preserva-

tion of rights, privileges, and benefits (including continuation of

pension rights and benefits) under existing collective bargaining

agreements or otherwise; (B) the continuation of collective bar-

gaining rights; (C) the protection of individual employees

against a worsening of their positions related to employment;

(D) assurances of employment to employees of acquired public

transportation systems; (EF) assurances of priority of reemploy-

ment of employees whose employment is ended or who are laid

off; and (F) paid training or retraining programs.”).

* 173 S.W.3d 896, 900 (Tex.App.-Dallas 2005).

* See TEX. TRANSP. CODE 8&§ 452.001-.720.

governmental functions® and is immune from suit un-

der Texas law.® Created in 1983 and funded with a

one-cent sales tax,’ DART assumed the operations of

the Dallas Transit System, which the City of Dallas

had acquired in 1963 from the privately owned Dallas

Transit Company.® Company employees, and later

System employees, were represented by Amalga-

mated Transit Union Local No. 1338, which now

represents DART employees. ATU 1338 engaged in

collective bargaining with the Company,” but Texas

law prohibits a state political subdivision from collec-

tive bargaining with public employees.*® This prohi-

° Id. § 452.052(c) (‘An authority is a governmental unit...

and the operations of the authority are not proprietary functions

for any purpose... .”).

® See Guillory v. Port of Houston Auth., 845 S.W.2d 812, 812-

815 (Tex.1993) (treating a port authority with only governmen-

tal functions as a political subdivision of the State for purposes

of governmental immunity).

? See DART HISTORY, DALLAS AREA RAPID TRANSIT,

http://www.dart.org/about/history.asp (last visited October 31,

2008).

8 See Dallas Area Rapid Transit v. Plummer, 841 S.W.2d 870,

872 (Tex.App.-Dallas 1992, writ denied), disapproved in part on

other grounds by Texas Educ. Agency v. Leeper, 893 S.W.2d 432,

445-446, n. 17 (Tex. 1994); Amalgamated Transit Union Local

1338 v. Dallas Public Transit Bd., 430 S.W.2d 107, 109

(Tex.Civ.App.-Dallas 1968, writ refd n.r.e.), cert. denied, 396

U.S. 838, 90 S.Ct. 99, 24 L.Ed.2d 89 (1969).

° See Local 1338, 430 S.W.2d at 109-110.

10 TEX. GOV’T CODE § 617.002(“(a) An official sf the state or

of a political subdivision of the state may not enter into a collec-

tive bargaining contract with a labor organization regarding

wages, hours, or conditions of employment of public employees.

(b) A contract entered into in violation of Subsection (a) is void.

may not recognize a labor organization as the bargaining agent

bition has been held to apply to the System,’ DART,”

and their employees, and ATU 1338 does not chal-

lenge its application here.’* But public employees

may “present grievances concerning their wages,

hours of employment, or conditions of work either in-

dividually or through a representative that does not

claim the right to strike,”“* and ATU 1338 has pre-

sented grievances for DART employees.

DART receives federal financial assistance condi-

tioned on a 13(c) Arrangement that was negotiated

with ATU 1338 and approved by the Secretary of La-

bor on September 30, 1991. Attachment B to the 1991

Arrangement sets out “general grievance procedures

for a group of public employees.”), formerly TEX.REV.CIV.

STAT. ANN. art. 5154c, first enacted by Act of April 17, 1947,

50th Leg., R.S., ch. 135, 1947 Tex. Gen. Laws 231.

" Local 1338, 430 S.W.2d at 113-114.

12 Stephens v. Dallas Area Rapid Transit, 50 S.W.3d 621, 632-

634 (Tex.App.-Dallas 2001).

3 Similar governmental entities are treated as state political

subdivisions. See TEX. GOV'T CODE § 791.003(5) (“In this

chapter: .. . ‘Political subdivision’ includes any corporate and

political entity organized under state law.”); TEX. LOCAL

GOVT CODE § 335.075(a) (referring to “a political subdivision,

including a metropolitan rapid transit authority created under

Chapter 451, Transportation Code”); id. § 391.002(1) (“In this

chapter: .. . ‘Governmental unit’ means a[n] .. . authority ... or

other political subdivision of the state.”); TEX. NAT. RES.

CODE § 11.082(d)(4) (“In this section: . . . ‘Political subdivision’

means a .. . special-purpose district or authority.”); TEX.

TRANSP. CODE § 228.251(2) (“In this subchapter: . . . ‘Local

governmental entity’ means a political subdivision of the state,

including .. . a transportation corporation created under Chap-

ter 431.”); id. § 366.003(8) (same); id. § 370.003(8) (same); id.

370.032(a) (*[A regional mobility authority] is a body politic and

corporate and a political subdivision of this state.”).

'* TEX. GOWT CODE § 617.005.

... for the purpose of giving an employee, individually

or through such employee’s representative, the op-

portunity to present grievances and appeals regard-

ing establishment of, or failure to establish, specified

wages, hours or conditions of work”. For our pur-

poses, those procedures may be summarized as follows:

General grievances must be presented in writing

to the human resources department head, who

must meet with the employee or representative,

provide a full hearing and review, and issue a

written decision.

The employee or representative may appeal to

the executive director or invoke a fact-finding

process.

The fact-finding process is conducted by a three-

member panel. One member is selected by each

side, and the third is selected from a list of neu-

trals. After gathering facts, conducting hearings,

and considering the opposing positions, the panel

must issue a written report, making recommen-

dations on unresolved issues.

If the panel is unanimous, “the recommendations

shall be deemed agreed upon as a final resolution

of the issues submitted, except as otherwise

modified by the parties’ mutual agreement.” But

either partisan member of the panel may dissent.

The panel must publish its findings and recom-

mendations, and any dissents, in the local media.

“(T]he fact-finding report and recommendations

shall be advisory only” and shall not be binding

on either party."

** The clause adding that the report and recommendations

“shall not be binding” appears in DART’s Hourly Employment

Manual.

The provisions of Attachment B, with minor

changes, were included as section 8.10 of DART’s

Hourly Employment Manual.

In April 2001, ATU 13388 filed a general group

grievance on behalf of DART employees seeking wage

increases and better benefits. The grievance did not

result in a fact-finding panel report under the At-

tachment B procedures; instead, DART and ATU

1338 signed a “General Grievance Resolution” in

June 2002. The Resolution provided, among other

things, that hourly employees would receive three

annual 4% pay increases effective October 2001, Oc-

tober 2002, and October 2003. The Resolution stated

that it “constitute[d] a final resolution to the issues

raised in the General Grievance”, barred ATU 1338

from filing another general grievance “concerning

terms and conditions of employment, specified wages,

hours, and conditions of work” for three years, and

stated that “DART agrees that for the three year pe-

riod it will not make any unilateral changes to

DART’s Hourly Employment Manual except. for those

issues remaining open herein.” But the Resolution

also contained important reservations under the

heading, “Management Rights”:

1. DART, at its sole discretion, possesses the

right in accordance with applicable laws, to

manage all operations, including the direction of

the working force and the right to plan, direct

and control the operation of all equipment and

other property of DART, except as modified by

Section 8.10 of the DART Hourly Employment

Manual and Section 617.005 of the Texas Gov-

ernment Code and DART’s 13(c) Capital Ar-

rangement certified by the Department of Labor

on September 30, 1991 pursuant to USC § 5333\(b),

if applicable . .. . [Nothing herein changes DART’s

position that it has a unilateral right to establish

employment conditions, set wages, hours of

employment or conditions of work. In the event

that DART makes any unilateral change except

for issues remaining open herein during the term

of this Resolution, such change relieves Local 1338

of its commitment not to file a General Grievance

from October 1, 2001 to September 30, 2004.

2. Matters of inherent managerial policy are re-

served exclusively to DART under law. These in-

clude but shall not be limited to such areas of

discretion or policy as the functions and pro-

grams of DART, standards of service, its overall

budget, utilization of technology, the organiza-

tional structure and selection and direction of

personnel.

3. The listing of specific rights in this article is

not intended to be, nor should be considered, re-

strictive or a waiver of any rights of management

not listed and not specifically surrendered herein

whether or not such rights have been exercised

by DART in the past.

4. DART intends to abide by the provisions

herein, and to resolve the general grievance as

herein stated. By resolving this general griev-

ance, DART does not intend to waive its legal

obligations, including those set forth in its 13(c)

Arrangement and its position that it may not le-

gally enter into a legally binding and bilateral

agreement with a labor organization regarding

wages, hours, or conditions of employment of

public employees. This general grievance is

therefore resolved subject to all the foregoing li-

mitations.

DART gave its employees the pay raises in 2001 and

2002, but not in 2003, and it unilaterally reduced

other benefits, asserting that declining sales tax rev-

enues required cost-saving measures. ATU 1338 sued

for breach of contract based on DART’s failure to

comply with the 2002 Resolution. ATU 1338 sought

money damages and injunctive relief. DART filed a

plea to the jurisdiction claiming governmental im-

munity, which the trial court denied. On DART’s in-

terlocutory appeal, the court of appeals affirmed,

holding that section 13(c) of the UMTA, as inter-

preted by the United States Supreme Court in Jack-

son Transit Authority v. Local Div. 1285, Amalga-

mated Transit Union,’* preempted DART’s immunity

from ATU 1338's suit:

Assuming state law provides that DART, as a go-

vernmental entity, is immune from suit, this im-

munity would obstruct accomplishing and

executing Congress’s full purposes and objectives

under the UMTA. The UMTA, as interpreted in

Jackson Transit Authority, is clear: state law is

to control labor relations between local

governments and unionized transit workers, as

long as the workers’ collective-bargaining rights

are preserved before a local government receives

federal aid. Congress designed section 13(c) of

the UMTA “as a means to accommodate state

law to collective bargaining.” Jackson Transit

Auth., 457 U.S. at 27, 102 S.Ct. 2202, 72 L.Ed.2d

639. Although section 13(c) may be narrowly

drafted to minimize its effects on state labor law,

Congress’s clear intent was to preserve collective-

bargaining rights. Where state immunity law

would preclude enforcement of the _ rights

'6 457 U.S. 15, 102 S.Ct. 2202, 72 L.Ed.2d 639 (1982).

preserved under section 13(c), Congress’s

objectives could not be accomplished. Therefore,

state immunity law “is preempted and has no

effect.”""

We granted DART’s petition for review. '®

We begin with ATU 1338’s argument that we lack

jurisdiction over this interlocutory appeal. DART con-

tends that we have jurisdiction because the court of

appeals’ decision conflicts with section 13(c) and

Jackson Transit Authority. We first consider the ex-

tent of our jurisdiction and then how to apply it in

this case.

Without an intermediate appellate court in Texas,

this Court’s workload soon became unmanageable.”

The Constitution of 1876 limited the Supreme Court’s

appellate jurisdiction to civil cases and created a

court of appeals for criminal cases and civil cases

from county courts” but this did little to alleviate the

burden.*' To preserve a right of appeal that was both

broad and effective, constitutional amendments

17 173 S.W.3d 896, 900 (Tex.App.-Dallas 2005) (citations

omitted).

8 50 Tex. Sup.Ct. J. 929 (June 29, 2007).

See 1 GEORGE D. BRADEN ET' AL., THE CONSTITU-

TION OF THE STATE OF TEXAS: AN ANNOTATED AND

COMPARATIVE ANALYSIS 399 (1977).

*° TEX. CONST. art. V, §§ 3, 6 (1876).

2! See 1 BRADEN, supra note 19, at 365 (“Despite the trans-

fer of all criminal jurisdiction and some civil cases to the court of

appeals in 1876, the supreme court’s docket remained over-

crowded.”).

10a

adopted in 1891 restructured the judiciary.** The Su-

preme Court’s jurisdiction remained limited to civil

cases.” The court of appeals became the Court of

Criminal Appeals, with jurisdiction over criminal

cases only.** The Legislature was required to divide

the State into separate judicial districts and establish

in each district a court of civil appeals with appellate

jurisdiction over all civil cases in that district,” the-

reby placing appellate courts closer to the litigants

and relieving the burden on the Supreme Court. To

ensure uniformity in the development of the civil law,

the 1891 constitutional amendments gave the Su-

preme Court appellate jurisdiction over “questions of

law arising in the cases in the Courts of Civil Appeals

in which the Judges of any Court of Civil Appeals

may disagree, or where the several Court of Civil Ap-

peals may hold differently on the same question of

law”,”°

The enabling legislation enacted in 1892 reflected

this constitutional priority while shifting the burden

of appellate caseloads to the intermediate courts. The

Supreme Court’s jurisdiction was limited to cases in

which the Courts of Civil Appeals had rendered a fi-

nal judgment, as opposed to remanding for further

proceedings, but there were exceptions to that limita-

tion for cases in which Supreme Court review even at

an intermediate stage was important. Three excep-

2 Id. at 399 (“The supreme court was falling so far behind

that either the right to appeal had to be severely curtailed or the

system had to be radically revised.”).

“’ TEX. CONST. art. V, § 3 (1891).

*4 Id. §§ 4-5,

*° Id.§ 6.

*Id.§3

lla

tions were for “[clases in which a civil court of ap-

peals overrules its own decisions or the decision of

another court of civil appeals or of the supreme

court”, “{clases in which the judges of any court of

civil appeals may disagree”, and “[c]ases in which any

two of the courts of civil appeals may hold differently

on the same question of law”.?” As we observed in

1895, these exceptions “were inserted for the purpose

of enabling this court, upon the first opportunity, to

settle questions of law upon which conflicting opi-

nions were held by any of the courts having appellate

jurisdiction,-so far, at least, as the opinion of this

court can settle such questions”.** Obviously, allow-

ing conflicts in the law among the Courts of Civil Ap-

peals to go unresolved could generate confusion that

would offset the gains in efficiency those courts were

designed to accomplish. The Supreme Court’s juris-

diction was enlarged to provide for resolution of such

conflicts. In 1913, the Court’s jurisdiction was ex-

tended to all cases from the Courts of Civil Appeals,

even if remanded,” and that remains the law.”

The 1892 legislation made decisions in a few types

of cases final in the Courts of Civil Appeals, irrespec-

tive of conflicts among the courts. These were boun-

27 Act approved April 13, 1892, 22nd Leg., 1st C.S., ch. 14, § 1,

1892 Tex. Gen. Laws 19, 20, reprinted in 10 H.P.N. Gammel,

The Laws of Texas 1822-1897, at 383, 384 (Austin, Gammel

Book Co. 1898), formerly TEX.REV.CIV. STAT. ANN art. 1728

(1925).

*8 Sturgis Nat'l Bank v. Smyth, 87 Tex. 649, 30 S.W. 898, 898

(1895) (emphasis added).

29 Act approved March 28, 1913, 33rd Leg., R.S., ch. 55, § 1,

1913 Tex. Gen. Laws 107, 107.

%° Act approved March 28, 1913, 33rd Leg., R.S., ch. 55, § 1,

1913 Tex. Gen. Laws 107,107.

12a

dary and election disputes, slander and divorce cases,

interlocutory appeals, and cases within the constitu-

tional county courts’ jurisdiction except probate mat-

ters and cases involving revenue laws or the validity

of a statute.*’ But by 1953, the Legislature had con-

cluded that the Supreme Court’s jurisdiction should

extend to all cases “in which the judges of the Courts

of Civil Appeals may disagree upon any question of

law material to the decision, or in which one of the

Courts of Civil Appeals holds differently from a prior

decision of another Court of Civil Appeals or of the

Supreme Court upon a question of law”. That is the

current law.”

Although the statutes governing this Court’s juris-

diction have specifically addressed conflicts between

our intermediate appellate courts and this Court,

none has addressed conflicts between those courts

and the United States Supreme Court. Such a conflict

was presented in a 1979 divorce case, Eichelberger v.

3! Act approved April 13, 1892, 22nd Leg., Ist C.S., ch. 15, § 5,

1892 Tex. Gen. Laws 25, 26, reprinted in 10 H.P.N. Gammel,

The Laws of Texas 1822-1897, at 389, 390 (Austin, Gammel

Book Co. 1898), formerly TEX.REV.CIV. STAT. ANN art. 1821

(1925).

% Act of May 19, 1953, 53rd Leg., R.S., ch. 424, § 2, 1953 Tex.

Gen. Laws 1026, 1027; see State v. Wynn, 157 Tex. 200, 301

S.W.2d 76, 77-78 (1957) (per curiam); Cone v. Cone, 153 Tex.

149, 266 S.W.2d 860, 861 (1954) (per curiam).

33 TEX. GOVT CODE § 22.225(c). Pursuant to a constitu-

tional amendment adopted in a 1980 election, the courts of civil

appeals were renamed courts of appeals, and given criminal ju-

risdiction in 1981. TEX. CONST. art. V § 6; Tex. S.J. Res. 36,

66th Leg., R.S., 8§ 5, 7, 1979 Tex. Gen. Laws 3223, 3224-3225,

3226 (effective Sept. 1, 1981); Act of June 1, 1981, 67th Leg.,

R.S., ch. 291, §§ 101-102, 149, 1981 Tex. Gen. Laws 761, 801-

802, 820 (amending TEX.CODE CRIM. PROC. arts. 4.01, 4.03,

effective Sept. 1, 1981).

13a

Eichelberger.** At that time, decisions in divorce

cases were still final in the courts of civil appeals ab-

sent conflicts among Texas courts.* The court of civil

appeals had held that federal law did not preempt a

divorce court’s division of future railroad retirement

benefits between spouses.*° While the case was pend-

ing in this Court, the United States Supreme Court

reached the opposite conclusion.*’ Although there

was no statutory basis for this Court to take jurisdic-

tion of the case, we concluded that we were constitu-

tionally required to do so:

We hold that under Article V, Sections 1°° and

3,°° of the Constitution of Texas, the Supreme

Court of Texas possesses the power, and thus the

duty, to correct a decision of a Court of Civil Ap-

peals that conflicts with the “supreme law of the

** 582 S.W.2d 395 (Tex.1979).

% This finality was removed in 1987. Act of May 29, 1987,

70th Leg., R.S., ch. 1106, § 2, 1987 Tex. Gen. Laws 3804, 3804.

°° Eichelberger v. Ejichelberger, 557 S.W.2d 587, 589

(Tex.Civ.App.-Waco 1977), rev'd and rendered in part and affd

in part, 582 S.W.2d 395 (Tex.1979).

7 Hisquierdo v. Hisquierdo, 439 U.S. 572, 585-586, 99 S.Ct.

802, 59 L.Ed.2d 1 (1979).

33 TEX. CONST. art. V, § 1 states in part: “The judicial power

of this State shall be vested in one Supreme Court, in one Court

of Criminal Appeals, in Courts of Appeals, in District Courts, in

County Courts, in Commissioners Courts, in Courts of Justices

of the Peace, and in such other courts as may be provided by law.”

9 Id. art. V, § 3 states in part: “The Supreme Court shall

exercise the judicial power of the state except as otherwise pro-

vided in this Constitution ... . Its appellate jurisdiction shall be

final and shall extend to all cases except in criminal law matters

and as otherwise provided in this Constitution or by law.”

14a

land”*® as established by the Congress and Su-

preme Court of the United States.

Consistent with the Supreme Court’s decision, we

reversed the judgment of the court of civil appeals in

part and rendered judgment. **

In the nearly thirty years since we decided Lichel-

berger, we have not invoked our constitutional juris-

diction to remove a conflict between a Texas appel-

late court and the United States Supreme Court,”

but we adhere to our holding that this Court has such

jurisdiction. From 1892 to 1953, the decisions of the

courts of civil appeals were final in some cases and

not subject to this Court’s review, but this Court has

never lacked jurisdiction to prevent an intermediate

appellate court from conflicting with one of this

Court’s decisions.** It is fundamental to the very

structure of our appellate system that this Court’s

decisions be binding on the lower courts.*® We have

* U.S. CONST. art. VI, cl. 2 (“This Constitution, and the

Laws of the United States which shall be made in Pursuance

thereof .. . shall be the supreme Law of the Land; and the

Judges in every State shall be bound thereby, any Thing in the

Constitution or Laws of any State to the Contrary notwith-

standing.”).

*! Richelberger, 582 S.W.2d at 397.

2 Td. at 403.

*° Cf. County of Dallas v. Sempe, 262 S.W.3d 315, 315-316

(Tex.2008) (per curiam) (concluding that the court of appeals’

decision did not conflict with a decision of the United States Su-

preme Court).

* Even if appellate jurisdiction were restricted, we have

noted that such a conflict could be corrected by writ of manda-

mus. State v. Wynn, 157 Tex. 200, 301 S.W.2d 76, 78 (1957) (per

curiam).

* In re K.M.S., 91 S.W.3d 331, 331 (Tex.2002) (per curiam)

(“[I}n reaching their conclusions, courts of appeals are not free

15a

no less authority to ensure that the lower courts fol-

lows the United States Supreme Court.

Nor should our holding in Eichelberger apply with

any less force in interlocutory appeals.*® On the con-

trary, the fact that provision has been made for an

interlocutory appeal indicates that the Legislature

has determined that appellate review before a final

judgment is important. It is surely no less important

when a court of appeals’ decision conflicts, not with

another court of appeals’ decision or a decision of this

Court, but with a decision of the United States Su-

preme Court.

Accordingly, we conclude that we have jurisdiction

over this case if the court of appeals’s decision con-

flicts with the United States Supreme Court’s deci-

sion in Jackson Transit Authority.

We turn, then, to the question whether such a con-

flict exists. A court of appeals holds differently from

this Court “when there is inconsistency in their re-

spective decisions that should be clarified to remove

unnecessary uncertainty in the law and unfairness to

litigants.”*” We use this same standard in determin-

ing whether the court of appeals in this case has held

differently from the United States Supreme Court.

to disregard pronouncements from this Court .... ”); Lofton uv.

Texas Brine Corp., 777 S.W.2d 384, 386 (Tex.1989) (“This court

need not defend its opinions from criticism from courts of ap-

peals; rather they must follow this court’s pronouncements.”).

pressly refusing to reach the issue).

*? TEX. GOV'T CODE § 22.001 (e).

16a

In Jackson Transit Authority, the public transpor-

tation authority in Jackson, Tennessee had a 13(c)

arrangement that guaranteed its employees’ collec-

tive-bargaining rights, but the authority later refused

to abide by a collective-bargaining agreement.* The

union sued the authority in federal court for breach

of both the 13(c) arrangement and the collective-bar-

gaining agreement, but the district court dismissed

the suit for want of subject-matter jurisdiction.*” The

court of appeals reversed, holding that the district

court had federal-question jurisdiction” because the

union’s claim arose under the laws of the United

States, and additionally, that section 13(c) implicitly

provides for a federal cause of action.*’ The Supreme

Court agreed that the district court had federal-

question jurisdiction” but held that section 13(c) did

not create a federal cause of action for breach of ei-

ther the 13(c) arrangement or the _ collective-

bargaining agreement.”

Under Tennessee law, the Jackson Transit Au-

thority was authorized to enter into collective-

*8 457 U.S. 15, 18-19, 102 S.Ct. 2202, 72 L.Ed.2d 639 (1982).

The authority contended that the union’s agreement was with

the authority’s former manager, not with the authority itself. Id.

at 19 n. 3, 102 S.Ct. 2202; see Local Div. 1285, Amalgamated

Transit Union v. Jackson Transit Auth., 1990 Tenn.App. LEXIS

901, at *5-*9, 1990 WL 210310, at *2-*4 (Tenn.Ct.App. Dec. 26,

1990).

# 457 US. at 19, 102 S.Ct. 2202; 447 F.Supp. 88, 93-95

(W.D.Tenn.1977).

°° 28 U.S.C. § 1331 (2006).

*! 457 U.S. at 19-20, 102 S.Ct. 2202; 650 F.2d 1379, 1383 (6th

Cir.1981).

52 457 U.S. at 21 n. 6,102 S.Ct. 2202.

53 Id. at 29, 102 S.Ct. 2202.

17a

bargaining agreements with its employees at the

time its dispute with the union arose,“ and the

authority did not contend that it was immune from

suit to enforce its agreements. Thus, the Supreme

Court was not confronted wi.: any issue of federal

preemption of state governmental immunity. But

DART and ATU 1338 argue that passages in the

Supreme Court’s opinion indicate its views on the

subject. As DART points out, the Supreme Court

emphasized that Congress intended section 13(c)

arrangements and agreements under them to be

governed by state law, not federal law:

A consistent theme runs throughout the consid-

eration of § 13(c): Congress intended that labor

relations between transit workers and local gov-

ernments would be controlled by state law.”

* * *

Thus, Congress made it absolutely clear that it

did not intend to create a body of federal law

applicable to labor relations between local

governmental entities and transit workers.

Section 13(c) would not supersede state law, it

would leave intact the exclusion of local

government employers from the National Labor

Relations Act, and state courts would retain

jurisdiction to determine the application of state

policy to local government transit labor relations.

** See TENN.CODE ANN. §§ 7-56-101 to -109. Prior to 1971,

when these statutes were enacted, one court had held in Weak-

ley County Mun. Elec. Sys. v. Vick, 43 Tenn.App. 524, 309

S.W.2d 792 (1957), that a governmental entity could not engage

in collective bargaining with its employees. See Local Div. 1285,

1990 Tenn.App. LEXIS 901, at *4, 1990 WL 210310, at *1.

*5 457 U.S. at 24, 102 S.Ct. 2202.

18a

Congress intended that § 13(c) would be an

important tool to protect the _ collective-

bargaining rights of transit workers, by ensuring

that state law preserved their rights before

federal aid could be used to convert private

companies into public entities. But Congress

designed § 13(c) as a means to accommodate

state law to collective bargaining, not as a means

to substitute a federal law of collective bargaining

for state labor law.”®

DART argues that federal law should not preempt

state immunity law any more than state labor law.

But as ATU 1338 points out, other passages contem-

plate state-court actions to enforce section 13(c) ar-

rangements and agreements under them:

Indeed, since § 13(c) contemplates protective ar-

rangements between grant recipients and unions

as well as subsequent collective-bargaining

agreements between those parties, it is reasona-

ble to conclude that Congress expected the § 13(c)

agreement and the collective-bargaining agree-

ment, like ordinary contracts, to be enforceable

by private suit upon abreach.... |

The issue, then, is not whether Congress in-

tended the union to be able to bring contract ac-

tions for breaches of the two contracts, but

whether Congress intended such contract actions

to set forth federal, rather than state, claims.*”

* * *

Given this explicit legislative history, we cannot

read § 13(c) to create federal causes of action for

°° Id. at 27-28, 102 S.Ct. 2202 (footnotes and citation omitted).

57 Td. at 20-21, 102 S.Ct. 2202 (citation omitted).

19a

breaches of § 13(c) agreements and collective-

bargaining contracts between UMTA aid

recipients and transit unions. The legislative

history indicates that Congress intended those

contracts to be governed by state law applied in

state courts.”

ATU 1338 argues that the right to sue a transpor-

tation authority to enforce its agreements is implicit

in the Supreme Court’s opinion.

The court of appeals agreed with ATU 1338, but we

think both DART’s and ATU 1338's arguments read

far too much into the Supreme Court’s opinion. The

issue of federal preemption of state immunity law

was simply not presented in the case, and we do not

think the Supreme Court would have resolved it

merely by implication. Even if we were mistaken

about the Supreme Court’s intention, we see no way

to infer from its opinion what view it might take of

the preemption issue. The court of appeals’ decision is

inconsistent with Jackson Transit Authority because

the court of appeals read the opinion in that case to

decide the preemption issue in the present case. The

court of appeals’ decision creates uncertainty in the

law that is certainly unnecessary and may result in

unfairness to litigants. The importance of clarity in

the area is illustrated by the fact that the Supreme

Court granted certiorari in Jackson Transit Author-

ity” [blecause of the importance of the interpretation

of § 13(c) for local transit labor relations”.*® For the

Same reason, we conclude it is important for this Court

to reach the preemption issue presented in this case.

® Id. at 29, 102 S.Ct. 2202 (footnote omitted).

°° Id. at 20, 102 S.Ct. 2202 (footnote omitted).

20a

Ill

We come at last to the issue itself, which is a nar-

row one. DART, for its part, concedes that it would

not be immune from suit by ATU 1338 to require that

the grievance procedures laid out in the Arrangement

be followed. If, for example, DART refused to provide

the hearing called for, or to engage in the prescribed

fact-finding process, DART acknowledges that ATU

1338 could sue to enforce the Arrangement. ATU

1338, on the other hand, does not challenge the ade-

quacy of the 1991 Arrangement under section 13(c) or

argue that Texas law prohibiting collective bargain-

ing by public employees is inapplicable to DART or is

preempted by section 13(c). And while ATU 1338 ar-

gued below that DART is not immune from suit on its

agreements, it has abandoned those arguments in

this Court. We accept without comment all these con-

cessions for purposes of this case. The issue before us

comes down to this: does section 13(c) preempt

DART’s immunity from ATU 1338's suit to enforce

the 2002 Resolution?

Federal law can preempt state law expressly or

implicitly.°° ATU 1338 does not contend that the

UMTA contains any express preemption of state law.

The United States Supreme Court has summarized

implicit preemption as follows:

[A] federal statute implicitly overrides state law

either when the scope of a statute indicates that

Congress intended federal law to occupy a field

exclusively, or when state law is in actual conflict

with federal law. We have found implied conflict

S.Ct. 1483, 131 L.Ed.2d 385 (1995); Great Dane Trailers, Inc. v.

Estate cf Wells, 52 S.W.3d 737, 743 (Tex.2001).

2la

pre-emption where it is impossible for a private

party to comply with both state and federal re-

quirements, or where state law stands as an ob-

stacle to the accomplishment and execution of

the full purposes and objectives of Congress.°

ATU 1338 focuses on the latter component of im-

plied preemption, arguing that by preventing suit to

enforce the 2002 Resolution, state immunity law

stands as an obstacle to achieving the full purpose of

section 13(c) to protect transit employees’ interests.

But section 13(c) requires only that a transporta-

tion authority make arrangements that “the Secre-

tary of Labor concludes are fair and equitable.”” The

1991 Arrangement was negotiated with ATU 1338

and was approved by the Secretary of Labor. As we

have noted, ATU 1338 does not argue that the Ar-

rangement is less than fair and equitable as required

by section 13(c). The Arrangement, which achieves

the full purposes of section 13(c), does not provide for

binding or judicially enforceable general grievance

resolutions. Under Attachment B, a hearing must be

conducted, and if the grievance is not resolved, a fact-

finding process ensues. But the end result of that

process is an arbitration panel’s report and recom-

®! Freightliner, 514 U.S. at 287, 115 S.Ct. 1483 (citations and

internal quotation marks omitted); see also Great Dane, 52

S.W.3d at 743.

62 Pub.L. No. 88-365, § 10(c), 78 Stat. 302, 307, redesignated

as § 13(c) by Pub.L. No. 89-562, § 2, 80 Stat. 715, 716, as

amended, now codified at 49 U.S.C. § 5333(b) (2006) (“As a con-

dition of financial assistance under . . . this title, the interests of

employees affected by the assistance shall be protected under

arrangements the Secretary of Labor concludes are fair and

equitable. The agreement granting the assistance . . . shall spe-

cify the arrangements.”).

22a

mendations that are expressly “advisory only” and

not binding on either party. The report must be pub-

lished in the local media, suggesting that the parties’

recourse is then through political processes. Munici-

palities that are part of DART may be pressured to

instruct the members each appoints to DART’s go-

verning board to adopt certain policies,“ and

municipalities may withdraw from DART altogether.™

ATU 1338 acknowledges that a fact-finding report

produced under Attachment B cannot be enforced in

court but argues that the 2002 Resolution is differ-

ent. ATU 1338 cannot explain, however, why it

should be entitled to enforce a general grievance res-

olution to which DART agreed when the process

would not have produced an enforceable result had it

continued to the end. The Resolution expressly rec-

ognized that it did not change DART’s “position that

it has a unilateral right to establish employment

conditions, set wages, hours of employment or condi-

tions of work.” The Resolution also recognized that

DART was not waiving “its position that it may not

legally enter into a legally binding and bilateral

agreement with a labor organization regarding

wages, hours, or conditions of employment of public

employees.” Although the Resolution recited DART’s

intention to comply with its terms, it also provided

that if DART made any unilateral change, the conse-

quence would only be to relieve ATU 1338 of its

commitment to a moratorium on filing general

grievances.

ATU 1338 argues that for DART to be immune

from this suit makes the Resolution pointless. But

*} See TEX. TRANSP. CODE §§ 452.571-.580.

*4 Id. §§ 452.651-662.

23a

ATU 1338’s complaint is with the 1991 Arrangement,

not state immunity law. The Arrangement gave ATU

1338 no judicial recourse. DART’s immunity from

suit takes nothing away from ATU 1338 to which it

was entitled under section 13(c). ATU 1338 argues

that if it cannot sue to enforce the Resolution, it is

left with no recourse at all. But the Resolution itself

contemplates that if DART unilaterally failed to

comply with its terms, ATU 1338 could simply file

another general grievance and invoke the process

provided by Attachment B.

Given that an arrangement can meet the require-

ments of section 13(c) without providing for judicial

enforcement of grievance resclutions, nothing in that

statute implicitly preempts state immunity law. Ac-

cordingly, we conclude that section 13(c) does not

preempt DART’s immunity from this suit.

* * *

The judgment of the court of appeals is therefore

reversed and the case is dismissed.

24a

APPENDIX B

COURT OF APPEALS OF TEXAS,

DALLAS.

No. 05-—05-—00241-CV.

DALLAS AREA RAPID TRANSIT,

Appellant,

Vv.

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Appellee.

Oct. 14, 2005.

Before Justices WHITTINGTON, FRANCIS, and

LANG.

OPINION

Opinion by Justice WHITTINGTON.

Amalgamated Transit Union Local No. 1338 sued

Dallas Area Rapid Transit for violations of a general

grievance resolution. DART filed a plea to the juris-

diction, claiming governmental immunity. The trial

judge denied the plea. DART appeals, arguing in a

single issue that the trial court did not have jurisdic-

tion over ATU 1338’s suit. We affirm the trial court’s

order.

BACKGROUND

ATU 1338 is a labor organization representing

employees of DART, a regional transportation au-

25a

thority. See TEX. TRANSP. CODE ANN. 8§ 452.001-—

720 (Vernon 1999 & Supp.2004—-05). In 2001, ATU

1338 filed a general group grievance on behalf of its

bargaining unit members. In June 2002, DART and

ATU 1338 entered into a general grievance resolution

agreement to resolve the dispute. The resolution ad-

dressed salaries and wages for DART employees as

well as other issues. In this lawsuit, ATU 1338 al-

leges DART breached the resolution agreement by

failing to implement the pay increase included in the

resolution and taking other unilateral actions incon-

sistent with the resolution. DART filed a plea to the

jurisdiction, claiming the tral court lacked subject

matter jurisdiction over ATU 1338’s claims on the

grounds of governmental immunity. ATU 1338 ar-

gued in response that state governmental immunity

law was preempted by federal law. The trial judge

denied DART’s pla.

STANDARD OF REVIEW

A plea to the jurisdiction is a dilatory plea by which

a party challenges a court’s authority to determine

the subject matter of an action. Bland Indep. Sch.

Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).

Whether a trial court has subject matter jurisdiction

is a question of law to be reviewed de novo. Tex. Nat-

ural Res. Conservation Comm’n v. IT-Davy, 74

S.W.3d 849, 855 (Tex.2002). In performing this re-

view, we do not look to the merits of the plaintiffs

case but consider only the pleadings and the evidence

pertinent to the jurisdictional inquiry. County of Ca-

meron v. Brown, 80 S.W.3d 549, 555 (Tex.2002) (cit-

ing Tex. Natural Res. Conservation Comm’n v. White,

46 S.W.3d 864, 868 (Tex.2001)). Although federal

preemption is. not usually a jurisdictional question,

see Mills v. Warner Lambert Co., 157 S.W.3d 424, 427

26a

(Tex.2005) (federal preemption usually defense to

plaintiffs suit but does not ordinarily deprive state

court of jurisdiction), here it is asserted not to deprive

the state court of jurisdiction but to maintain it de-

spite DART’s plea.

DISCUSSION

DART argues the trial court did not have jurisdic-

tion for five reasons. First, DART argues its status as

a governmental entity provides it with immunity

from ATU 13838’s lawsuit. Second, DART argues it

has not waived its immunity. Third, DART asserts it

has not taken affirmative action to invoke the trial

court’s jurisdiction. Fourth, DART maintains federal

law does not preempt state law to confer jurisdiction

on the trial court. Fifth, DART argues ATU 1338's

sole redress is through an administrative grievance

process. Our resolution of the fourth argument is dis-

positive of the appeal. See TEx.R.ApP. P. 47.1.

DART’s first, second, third, and fifth arguments are

premised upon governmental immunity. We conclude

the federal Urban Mass Transportation Act (UMTA)

preempts state governmental immunity law in this

case. See 49 U.S.C.A. § 5333(b) (West Supp.2005)

(formerly designated as section 13(c) and referred to

as section 13(c) in case law).

“If a state law conflicts with federal law, it is

preempted and has no effect.” Great Dane Trailers,

Inc. v. Estate of Wells, 52 S.W.3d 737, 743 (Tex.2001);

see also U.S. CONST. art. VI, cl. 2 (“The laws of the

United States are the ‘supreme Law of the Land...

any Thing in the Constitution or Laws of any State to

the Contrary notwithstanding”) (quoted in Great

Dane Trailers, 52 S.W.3d at 743). Preemption may be

express or implied. See Great Dane Trailers, 52

S.W.3d at 743. Federal law may impliedly preempt

27a

state law if it is impossible for a private party to

comply with both state and federal requirements or if

state law obstructs accomplishing and executing

Congress’s full purposes and objectives. Great Dane

Trailers, 52 S.W.3d at 743; see also Geier v. Am.

Honda Motor Co., 529 U.S. 861, 882, 120 S.Ct. 19138,

146 L.Ed.2d 914 (2000) (because rule of state tort law

upon which plaintiffs sued would have stood “as an

obstacle to the accomplishment and execution of” im-

portant objectives of federal motor vehicle safety

standard, it was preempted).

ATU 1338 contends application of state govern-

mental immunity law would thwart Congress’s intent

and the purposes of the UMTA. The United States

Supreme Court discussed the purposes of the UMTA

in Jackson Transit Authority v. Local Division 1285,

Amalgamated Transit Union, 457 U.S. 15, 102 S.Ct.

2202, 72 L.Ed.2d 639 (1982). At a time when many

private transportation companies across the country

were in “precarious financial condition,” the UMTA

“was designed in part to provide federal aid for local

governments in acquiring failing private transit com-

panies so that communities could continue to receive

the benefits of mass transportation despite the col-

lapse of the private operations.” Jackson Transit

Auth., 457 U.S. at 17, 102 S.Ct. 2202. Congress was

also aware, however, “that public ownership might

threaten existing collective-bargaining rights of

unionized transit workers employed by private com-

panies.” Jackson Transit Auth., 457 U.S. at 17, 102

S.Ct. 2202. The Court continued,

If, for example, state law forbade collective bar-

gaining by state and local government em-

ployees, the workers might lose their collective-

bargaining rights when a private company was

28a

acquired by a local government. To prevent fed-

eral funds from being used to destroy the collec-

tive-bargaining rights of organized workers,

Congress included § 13(c) in the Act. Section

13(c) requires, as a condition of federal assis-

tance under the Act, that the Secretary of Labor

certify that “fair and equitable arrangements”

have been made “to protect the interests of em-

ployees affected by [the] assistance.” The statute

lists several protective steps that must be taken

before a local government may receive federal aid

.... The protective arrangements must be speci-

fied in the contract granting federal aid.

Jackson Transit Auth., 457 U.S. at 17-18, 102 S.Ct.

2202 (citations omitted).

The Jackson Transit Authority Court noted Con-

gress’s concern that state law may forbid collective

bargaining by state and local government employees,

and thus “workers might lose their collective-

bargaining rights when a private company was ac-

quired by a local government.” See Jackson Transit

Auth., 457 U.S. at 17, 102 S.Ct. 2202. In Texas, state

law does prohibit collective bargaining by government

employees. See TEX. GOVT CODE ANN. § 617.002

(Vernon 2004) (official of state or political subdivision

may not enter into collective bargaining contract with

labor organization regarding wages, hours, or

conditions of employment of public employees; any

such contract void). DART, however, is a party to an

“Arrangement Pursuant to Section 13(c) of the Urban

Mass Transportation Act of 1964,” under which

DART agreed the “existing rights of employees

covered by this Arrangement to present grievances

concerning their wages, hours of work, or conditions

of work, individually or through a representative...

29a

shall be preserved and continued.” Arrangement

Pursuant to Section 13(c) of the Urban Mass

Transportation Act of 1964, J 4. DART makes annual

certifications and assurances of its compliance with

federal law and regulations to the Federal Transit

Authority to obtain federal assistance, and a significant

portion of DART’s annual budget is derived from

federal funds. Thus, the 13(c) arrangement between

DART and ATU 1338 is consistent with Congress’s

intent “to prevent federal funds from being used to

destroy the collective-bargaining rights of organized

workers.” See Jackson Transit Auth., 457 U.S. at 17,

102 S.Ct. 2202.

While the issue in Jackson Transit Authority was

whether Congress intended to create federal causes

of action for breaches of section 13(c) agreements and

collective bargaining contracts, see Jackson Transit

Auth., 457 U.S. at 21, 29, 102 S.Ct. 2202, the Court

noted “it is reasonable to conclude that Congress ex-

pected the § 13(c) agreement and the collective-

bargaining agreement, iike ordinary contracts, to be

enforceable by private suit upon a breach.” Jackson

Transit Auth., 457 U.S. at 20-21, 102 S.Ct. 2202. The

Court concluded the contracts at issue were to be go-

verned by state, not federal, law. See Jackson Transit

Auth., 457 U.S. at 29, 102 S.Ct. 2202. The Court ex-

plained, “Congress designed § 13(c) as a means to ac-

commodate state law to collective bargaining, not as

a means to substitute a federal law of collective bar-

gaining for state labor law.” Jackson Transit Auth.,

457 U.S. at 28, 102 S.Ct. 2202.

We have also noted “arrangements under section

13(c) of the Urban Mass Transportation Act are not

collective bargaining contracts,” but are “contracts,

albeit contracts required by federal statute.” Dallas

30a

Area Rapid Transit v. Plummer, 841 S.W.2d 870, 874

(Tex.App. Dallas 1992, writ denied), abrogated in

part on other grounds by Tex. Educ. Agency v. Leeper,

893 S.W.2d 4382, 446 (Tex. 1994) (Texas Uniform

Declaratory Judgment Act waives governmental im-

munity for awards of attorneys’ fees). Section 13(c)

protective arrangements are “valid and enforceable in

state courts.” Plummer, 841 S.W.2d at 874. “Em-

ployees covered by a section 13(c) agreement, or their

union, may bring a contract action in state court to

enforce the agreement.” Plummer, 841 S.W.2d at 874

(citing Jackson Transit Auth., 457 U.S. at 29 n. 13,

102 S.Ct. 2202).

DART argues ATU 1338’s claim is not for breach of

a section 13(c) arrangement, but only for breach of

the resolution agreement. We disagree. The general

grievance resolution agreement recites that ATU

1338’s grievance was addressed “in conformity with

Section 8.10 of the DART Hourly Employment Ma-

nual and Section 617.005 of the Governinent Code

and DART’s [Section] 13(c) Capital Arrangement cer-

tified by the Department of Labor on September 30,

1991.” As we noted in Plummer, “DART’s personnel

policy manual contains the grievance procedure

properly promulgated pursuant to section 13(c) and,

as part of the section 13(c) agreement, is binding on

DART.” Plummer, 841 S.W.2d at 874. We concluded

in Plummer the trial court “was correct in finding

that DART has a contractuai duty to implement the

Trial Board’s award and that failing to do so consti-

tutes a breach of that duty.” Plummer, 841 S.W.2d at

874. Asin Plummer, ATU 1338 “may bring a contract

action in state court to enforce the agreement.” See

Plummer, 841 S.W.2d at 874.

3la

Assuming state law provides that DART, as a go-

vernmental entity, is immune from suit, this im-

munity would obstruct accomplishing and executing

Congress’s full purposes and objectives under the

UMTA. See Great Dane Trailers, 52 S.W.3d at 743;

Geier, 529 U.S. at 882, 120 S.Ct. 1913. The UMTA, as

interpreted in Jackson Transit Authority, is clear:

state law is to control labor relations between local

governments and unionized transit workers, as long

as the workers’ collective-bargaining rights are pre-

served before a local government receives federal aid.

See Jackson Transit Auth., 457 U.S. at 17, 27, 102

S.Ct. 2202. Congress designed section 13(c) of the

UMTA “as a means to accommodate state law to col-

lective bargaining.” Jackson Transit Auth., 457 U.S.

at 27, 102 S.Ct. 2202. Although section 13(c) may be

narrowly drafted to minimize its effects on state labor

law, Congress’s clear intent was to preserve collec-

tive-bargaining rights. Where state immunity law

would preclude enforcement of the rights preserved

under section 13(c), Congress’s objectives could not be

accomplished. Therefore, state immunity law “is

preempted and has no effect.” See Great Dane Trai-

lers, 52 S.W.3d at 743.

Not all conflicts between federal statutes and state

immunity laws result in preemption. The United

States Supreme Court held the State of Maine was

immune from a suit by its employees under the Fed-

eral Fair Labor Standards Act because Congress

cannot abrogate a state’s sovereign immunity. Alden

v. Maine, 527 U.S. 706, 754, 119 S.Ct. 2240, 144

L.Ed.2d 636 (1999) (applying sovereign immunity

pursuant to Eleventh Amendment of United States

Constitution). The rule in Alden, however, does not

apply to DART in this case because DART is not an

“arm of the state.” See Alden, 527 U.S. at 756, 119

32a

S.Ct. 2240 (sovereign immunity bars suits against

State or “arm of the state” but not lesser governmen-

tal entity); Williams v. Dallas Area Rapid Transit,

242 F.3d 315, 322 (5th Cir.) (DART not “arm of the

state” entitled to assert federal Eleventh Amendment

immunity in case under Age Discrimination in Em-

ployment Act), cert. denied, 534 U.S. 1042, 122 S.Ct.

618, 151 L.Ed.2d 549 (2001); see also Hoff v. Nueces

County, 1538 S.W.3d 45, 49 (Tex. 2004) (per curiam)

(Eleventh Amendment immunity does not bar suit

against “lesser entities” such as county). As noted in

Alden, “certain limits are implicit in the constitu-

tional principle of sovereign immunity;” it “does not

bar all judicial review of state compliance with the

Constitution and valid federal law.” Alden, 527 U.S.

at 755, 119 S.Ct. 2240. Here, state immunity law

does not bar judicial review of ATU 1338's claims.

We affirm the trial court’s denial of DART’s plea to

the jurisdiction.

33a

APPENDIX C

[Logo]

COURT OF APPEALS

FIFTH DISTRICT OF TEXAS AT DALLAS

No. 05-05-00241-CV

DALLAS AREA RAPID TRANSIT,

Appellant,

Vv.

AMALGAMATED TRANSIT UNION LOCAL NO. 1338,

Appellee

Appeal from the 191st Judicial District Court of

Dallas County, Texas. (Tr.Ct.No. 04-06740-J).

Opinion delivered by Justice Whittington, Justices

Francis and Lang participating.

JUDGMENT

In accordance with this Court’s opinion of this date,

we AFFIRM the trial court’s order denying the plea

to the jurisdiction. We ORDER that appellee

Amalgamated Transit Union Local No. 1338 recover

its costs of this appeal from appellant Dallas Area

Rapid Transit.

Judgment entered October 14. 2005.

/s/ Mark Whittington

MARK WHITTINGTON

JUSTICE

34a

APPENDIX D

Order issued December 5, 2005

[Logo}

In The

COURT OF APPEALS

FIFTH DISTRICT OF TEXAS AT DALLAS

No. 05-05-00241-CV

DALLAS AREA RAPID TRANSIT,

Appellant

Vv.

AMALGAMATED TRANSIT UNION LOCAL NO. 1338,

Appellee

ORDER

Before Justices Whittington, Francis, and Lang

Appellant’s October 31, 2005 Motion for Rehearing

is DENIED.

/s/ Mark Whittington

MARK WHITTINGTON

JUSTICE

35a

APPENDIX E

IN THE DISTRICT COURT

191st JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

Cause No. 04-06740-J

AMALGAMATED TRANSIT UNION LOCAL No. 1338

Plaintiff,

Vs.

DALLAS AREA RAPID TRANSIT,

Defendant.

ORDER ON PLEA TO THE JURISDICTION

On the 16th day of November, 2004 came on for

hearing the Plea to the Jurisdiction of Dallas Area

Rapid Transit in the above styled and numbered

cause. All parties appeared through their counsel of

record. At the conclusion of the hearing the Court re-

quested additional briefing, which was _ provided.

Having considered the plea, the response, the brief-

ing, the applicable law, the jurisdictional evidence

presented and its file, this Court is of the opinion and

finds that the Plea to the Jurisdiction should be denied.

IT IS THEREFORE ORDERED that Dallas Area

Rapid Transit’s Plea to the Jurisdiction be, and it he-

reby is, denied.

36a

SIGNED this 1st day of Feb 2005.

/s/ Catharina Haynes

Judge Presiding

Approved as to Form Only:

/s/ Hal K. Gillespie

Hal K. Gillespie, Attorney for Plaintiff

/s/ Harold R. McKeever

Harold R. McKeever, Attorney for Defendant

37a

APPENDIX F

IN THE DISTRICT COURT

191 ST JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

Cause No. 04-06740

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Plaintiff,

Vv.

DALLAS AREA RAPID TRANSIT,

Defendants.

PLAINTIFF’S ORIGINAL PETITION AND

DEMAND FOR JURY TRIAL

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW Plaintiff Amalgamated Transit Un-

ion Local No. 1338 (“ATU 1338” or “Plaintiff), and

files this its Original Petition for damages and equit-

able relief, complaining of Defendant Dallas Area

Rapid Transit (“DART” or “Defendant”), and for cause

of action respectfully shows the following:

I, DISCOVERY

1. Discovery in this case shall be conducted under

Level 2 of Rule 190, Texas Rules of Civil Procedure.

Il. JURISDICTION AND VENUE

2. Plaintiff has fulfilled all of the jurisdictional re-

quirements prior to bringing this suit. Jurisdiction of

the Dallas County District Court is proper pursuant

to Section 24.007 of the Texas Government Code.

38a

3. Venue is proper in Dallas County, Texas, pur-

suant to Section 15.002 of the Texas Civil Practice &

Remedies Code in that a substantial part of the

events or omissions giving rise to the claims de-

scribed herein occurred in Dallas County, Texas. Ad-

ditionally, DART conducts and transacts business in

Dallas County, Texas, and maintains an office in

Dallas County, Texas.

Ill. PARTIES

4. Plaintiff ATU 1338 is a labor organization

representing employees (e.g. bus drivers) of DART.

ATU 1338's primary purpose and objective is to iden-

tify employment concerns and problem areas of tran-

sit workers of DART and to improve all aspects of the

work environment of transit workers, including the

establishment of clear, concise, and fair employment

policies, practices, and procedures.

5. Defendant DART is a regional transportation

authority organized and existing under Texas Trans-

portation Code, Chapter 452, having its principle

place of business in Dallas County, Texas. DART may

be served with citation in this action by serving its

agent for service of citation: Gary Thomas, President

Executive Director of DART, 1401 Pacific Avenue,

Dallas, Texas 75202.

IV. FACTUAL BACKGROUND

6. On April 24, 2001, in accordance with Section

8.10 of the DART Hourly Employment Manual

(“HEM”), ATU 1338 filed a “General Group Griev-

ance” on behalf of its bargaining unit members.

7. In order to address the grievance, and in confor-

mity with Section 8.10 of the DART HEM, Section:

617.005 of the Government Code, and DART’ s 13(c)

39a

Capital Arrangement certified by the Department of

Labor on September 30, 1991, the parties (DART and

ATU 1338) met and conferred to address the griev-

ance issues.

8. As a result of the meeting regarding the griev-

ance issues, DART and ATU 1338 entered into a

General Grievance Resolution (“Resolution Agree-

ment”) which was ratified and signed by Gary Tho-

mas, President Executive Director of DART, Roland

Castaneda, General Counsel for DART, and Kenneth

Kirk, then presiding President and Business Agent

for ATU 1338. A true and correct copy of the Resolu-

tion Agreement is attached hereto as Exhibit A.

9. Paragraph B of the Resolution Agreement pro-

vides for increases in the “Salaries and Wages for

Operating Employees.” Paragraphs B(1-3) specifically

provide:

1. Effective the first full pay period in October

2001, each hourly employee who is in an ac-

tive pay status shall receive a general pay in-

crease of four percent (4%).

2. Effective the first full pay period in October

2002, each hourly employee who is in an ac-

tive pay status shall receive a general pay in-

crease of four percent (4%).

3. Effective the first full pay period in October

2003, each hourly employee who is in an ac-

tive pay status shall receive a general pay in-

crease of four percent (4%).

(emphasis added).

10. Paragraph P of the Resolution Agreement es-

tablishes that the terms of the Resolution Agreement

are final and entered into by the parties in order to

40a

resolve the issues raised in ATU 1338's general

grievance. Paragraph P specifically provides:

This Resolution of the General Grievance filed

April 24, 2001 constitutes a final resolution to

the issues raised in the General Grievance. Fur-

thermore, Amalgamated Transit Union, Local

1338 shall not file a General Grievance concern-

ing terms and conditions of employment, speci-

fied wages, hours, and conditions of work for a

period of three (3) years. Said term shall run

from October 1, 2001 to September 30, 2004.

DART agrees for the three (3) year period it will

not make any unilateral changes to DART’s

hourly employment manual except for those is-

sues remaining open herein.

(emphasis added).

11. Paragraph S of the Resolution Agreement de-

scribes the “Management Rights” of DART and fur-

ther illustrates that DART agreed to abide by the

terms of the Resolution Agreement in order to resolve

the underlying general grievance. Paragraph S(4)

specifically provides:

DART intends to abide by the provisions herein,

and to resolve the general grievance as herein

stated. By resolving this general grievance,

DART does not intend to waive its legal obliga-

tions, including those set forth in its (13)(c) Ar-

rangements and its position that it may not le-

gally enter into a legally binding and bilateral

agreement with a labor organization regarding

wages, hours, or conditions of employment of

public employees. This general grievance’ is

therefore resolved subject to all the foregoing

limitations.

4la

(Emphasis added).

12. Despite DART’s “position” that it may not enter

into a legally binding and bilateral agreement with a

labor organization regarding wages, hours, or condi-

tions of employment with public employees, ATU

1338 never agreed to this “position” of DART. Fur-

thermore, Texas law is definitively contrary to

DART’s position. In Dallas Area Rapid Transit v.

Plummer, a lawsuit involving DART and a member of

ATU 1338, the Dallas Court of Appeals held inter alia

that employees, or their union, covered by a section

13(c) Urban Mass Transportation Act agreement,

may bring a contract action in state court to enforce

the agreement and that such agreements are binding

on DART. Dallas Area Rapid Transit v. Plummer,

841 S.W.2d 870, 874 (Tex. App.-Dallas, 1992, writ

denied).

13. The Resolution Agreement is a final resolution

of a general grievance brought pursuant to Section

8.10 of the DART HEM and in conformity with

DART’s 13(c) Capital Arrangement certified by De-

partment of Labor. Just as in Plummer, the Resolution

Agreement is a binding contract upon which ATU

1338 may enforce through legal action in state court.

14. On or about September 23, 2003, the DART

Board of Directors approved DART’s 2003-2004

budget. In doing so, the Board did not provide for

DART employees’ 4% general pay increase for the

year 2003 - 2004 as provided for in Paragraph B(3) of

the Resolution Agreement. To date, DART has not

provided the 4% general pay increase agreed to in

Paragraph B(3) of the Resolution Agreement.

15. DART has unilaterally changed its policy on the

amount of life insurance available to employees. Pre-

viously, in accordance with the HEM, an employee

42a

was eligible for life insurance at two to three times

the employee’s annual salary level. DART has unila-

terally decreased this benefit to allow employees to be

eligible for life insurance at one time the employee’s

annual salary level. This unilateral policy change vi-

olates paragraph P of the Resolution Agreement

which states that “DART agrees that for the three

year period it will not make any unilateral changes to

DART’s Hourly Employment Manual...”

16. DART has unilaterally changed its policy on the

amount of Service Incentive Pay (SIP) provided to

employees. DART has frozen the level of SIP at 2002

pay rates instead of increasing SIP to 2003 level pay

rates. The unilateral freezing of the SIP level violates

the terms of the HEM and is a unilateral policy

change that violates paragraph P of the Resolution

Agreement which states that “DART agrees that for

the three year period it will not make any unilateral

changes to DART’s Hourly Employment Manual...”

17. DART has unilaterally instituted a new acci-

dent policy for the maintenance department which

DART is calling, “SOP” or “Standing Operating Pro-

cedure.” The unilateral creation of this new policy vi-

olates paragraph P of the Resolution Agreement

which states that “DART agrees that for the three

year period it will not make any unilateral changes to

DART’s Hourly Employment Manual...”

18. DART has unilaterally instituted a new policy

of not providing full benefits to new full time em-

ployees until after ninety days of employment, and is

not allowing new full time employees to invest in a

401k plan until after six months of employment. Pre-

viously, when an employee was hired as a new full

time employee, he/she would immediately receive full

benefits and full 401k benefits. The unilateral change

43a

of this policy violates paragraph P of the Resolution

Agreement which states that “DART agrees that for

the three year period it will not make any unilateral

changes to DART’s Hourly Employment Manual...”

19. On or about September 30, 2003, ATU 1338

President/Business Agent iCenneth Kirk sent a letter

to DART Chairman of Board of Directors Robert

Pope, and President/Executive Director Gary Thomas

informing DART that ATU 1338 was asking DART to

take all necessary action to implement the 4% gen-

eral pay increase called for in Paragraph B(3) of the

Resolution Agreement and that DART’s failure to do

so violated the Resolution Agreement.

20. The actions complained of herein directly affect

and injure ATU 1338 and the members of the ATU

1338. The claims asserted herein are germane to

ATU 1338’s purpose and objective. Moreover, ATU

1338 is directly affected by the complained of acts

through a reduction in its membership’s salaries and

wages, and a weakening of ATU 1338’s negotiating

strength on behalf of its members.

21. Plaintiff has retained the undersigned attor-

neys in order to prosecute this action.

22. Plaintiff hereby demands a trial by jury on all

claims and defenses in this action.

V. FIRST CAUSE OF ACTION - Breach of contract

23. Plaintiff realleges and incorporates the allega-

tions contained in Paragraphs 1 through 22 as if fully

contained herein.

24. Defendant breached the Resolution Agreement

contract with Plaintiff when Defendant ceased to per-

form under the contract as stated supra when Defen-

dant: (1) failed to implement the 4% general pay in-

44a

crease agreed to in Paragraph B(3) of the contract, (2)

unilaterally changed the life insurance policy, (3) un-

ilaterally changed its SIP policy, (4) unilaterally in-

stituted a new maintenance accident policy, and (5)

unilaterally changed the policy for payment of bene-

fits to new full time employees.

25. The Resolution Agreement contract between

Defendant and Plaintiff was supported by adequate

consideration. The parties mutually agreed to all re-

levant terms. All conditions precedent to Defendant’s

performance under the contract have been performed

or have occurred. Performance by Defendant was not

excused and DART agreed that for a three year pe-

riod (running from October 1, 2001 to September 30,

2004), DART would abide by the terms of the resolu-

tion and not make any unilateral changes to DART’s

HEM.

26. Plaintiff has performed its obligations under

the contract. In particular, prior to Defendant’s

breach of the contract, Plaintiff withheld from filing

any general grievance concerning terms and condi-

tions of employment, specified wages, hours, or condi-

tions of work.

27. As a result of Defendant’s breach of the con-

tract, as set out in the preceding paragraphs of this

petition, Plaintiffs members have sustained financial

injury and lost the benefits expected under the con-

tract. Furthermore, Defendant’s complained of acts

have harmed Plaintiff by not increasing its members’

salaries and wages, and by weakening ATU 1338’s

negotiating strength on behalf of its members.

28. On September 30, 2003, Plaintiff notified De-

fendant that DART’s actions were in violation of the

Resolution Agreement. Defendant has refused to

45a

honor the Resolution Agreement by: (1) failing to im-

plement the 4% general pay increase agreed to in Pa-

ragraph B(3) of the contract, (2) unilaterally chang-

ing the life insurance policy, (3) unilaterally changing

the SIP policy, (4) unilaterally instituting a new

maintenance accident policy, and (5) unilaterally

changing the policy for payment of benefits to new

full time employees

29. Furthermore, ATU 1338 is entitled to recover

its reasonable and necessary attorneys’ fees because

this is a claim on an oral or written contract within

the meaning of Civil Practice and Remedies Code

§38.001.

30. ATU 1338 hereby demands trial by jury on all

claims and defenses in this action.

VI. PRAYER

WHEREFORE, Plaintiff ATU 1338 requests that

Defendant Dallas Area Rapid Transit (DART) be

cited to appear and answer, and that after trial by jury,

ATU 1338 have judgment against DART as follows:

1. Actual damages;

2. Pre-judgment interest in the maximum

amount allowed by law;

3. Reasonable and necessary attorneys’ fees;

4. Post-judgment interest in the maximum

amount allowed by law;

5. Costs of suit;

6. An injunction ordering DART to retroactively

implement the 4% general pay increase agreed

to in Paragraph B(3) of the Resolution

Agreement with retroactive application of the

injunction to the first full pay period in

October 2003;

46a

7. An injunction ordering DART to restore the

level of life insurance benefits previously of-

fered to DART employees by providing DART

employees life insurance benefits at two to

three times their annual salary level;

8. An injunction ordering DART to retroactively

restore and pay SIP at increased levels in ac-

cordance with the HEM;

9. An injunction ordering DAK’! to invalidate

and nullify the new Standard Operating Pro-

cedure policy which DART has unilaterally

implemented for the maintenance department;

10. An injunction ordering DART to provide full

benefits to all newly hired employees in ac-

cordance with the HEM and to retroactively

provide full benefits upon any employee de-

nied benefits during their first 90 days of em-

ployment with DART; and

11. Such other and further relief to which Plain-

tiff may justly be entitled.

Respectfully submitted,

GILLESPIE, ROZEN,

WATSKY, & MOTLEY, P.C.

3402 Oak Grove Avenue,

Suite 200

Dallas, Texas 75204

Telephone.: (214) 720-2009

Telecopier: (214) 720-2291

Date: 7/14/04 By: /s/ Hal K. Gillespie

Hal K. Gillespie (attorney-in-charge)

State Bar No. 07925500

Joseph H. Gillespie

State Bar No. 24036636

47a

IN THE DISTRICT COURT

___ JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

Cause No.

AMALGAMATED TRANSIT UNION LOCAL NO. 1338,

Plaintiff,

Vv.

DALLAS AREA RAPID TRANSIT,

Defendants.

PLAINTIFF'S JURY DEMAND

COMES NOW Amalgamated Transit Union Local

No. 1338, Plaintiff in the above-styled cause, and he-

reby demands a jury trial on all issues, claims, de-

fenses, and actions in the above-styled cause.

Respectfully submitted,

GILLESPIE, ROZEN,

WATSKY, & MOTLEY, P.C.

3402 Oak Grove Avenue,

Suite 200

Dallas, Texas 75204

Telephone.: (214) 720-2009

Telecopier: (214) 720-2291

Date: 7/19/04 By: /s/ Hal K. Gillespie

Hal K. Gillespie (attorney-in-charge)

State Bar No. 07925500

Joseph H. Gillespie

State Bar No. 24036636

48a

APPENDIX G

GENERAL GRIEVANCE RESOLUTION

WHEREAS, Amalgamated Transit Union, Local

Division 1338 (“ATU”) filed a “General Group Griev-

ance” on April 24, 2001 in accordance with Section

8.10 of the Dallas Area Rapid Transit (“DART”)

Hourly Employment Manual (“HEM”); and

WHEREAS, in conformity with Section 8.10 of the

DART Hourly Employment Manual and Section

617.005 of the Government Code and DART’s 13(c)

Capital Arrangement certified by the Department of

Labor on September 30, 1991, the parties did meet

and confer to address the grievance issues stated in

the General Grievance; and

WHEREAS, it is the intent of DART to resolve the

issues raised in the General Grievance;

NOW THEREFORE, these issues are resolved as

follows:

A: DART HOURLY EMPLOYMENT MANUAL

Attached as Exhibit 1 are the agreed proposed

revisions that will be subject to the Hourly Employ-

ment Manual (HEM) 8.12 modification process.

B: SALARIES AND WAGES FOR OPERATING

EMPLOYEES

1. Effective the first full pay period in October

2001, each hourly employee who is in an

active pay status shall receive a general pay

increase of four percent (4%).

2. Effective the first full pay period in October

2002, each hourly employee who is in an

active pay status shall receive a general pay

increase of four percent (4%).

49a

3. Effective the first full pay period in October

2003, each hourly employee who is in an

active pay status shall receive a general pay

increase of four percent (4%).

C: QUARTERLY INCENTIVE BONUS PROGRAM

DART will continue the quarterly incentive bo-

nus program governed by the same provisions pre-

sently in effect through FY 2004. Military Leave

Without Pay will not be characterized as an unsche-

duled absence. This program continues uninterrupted

and retroactive to October 1, 2001.

D: SERVICE AWARD CALCULATION

Part-time service at DART will be included in the

calculation of time for the purpose of service awards.

E: RAIL YARD OPERATOR SHIFT DIFFERENTIAL

PAY

Operators who are regularly scheduled work as-

signed to the rail yard will be compensated twenty-

five cents ($0.25) over their base pay rate for all

hours worked while assigned to the rail yard.

F: RAIL YARD OPERATOR AND RAIL EXTRA

BOARD ALLOWANCE

Regular full-time employees who work regularly

scheduled work assigned to the rail yard or rail extra

board will be provided shoe/foul weather gear.

G: MATERIAL CONTROL EMPLOYEE

ALLOWANCE

Regular full-time employees who work regularly

scheduled work assigned to Materials Control will be

given $200.00 as the annual shoe/foul weather gear

allowance, effective October I, 2001 through the con-

clusion of this agreement.

50a

H: MAINTENANCE EMPLOYEE TOOL

ALLOWANCE

Regular full-time skilled employees who work

regularly scheduled work assigned to the Mainten-

ance Department will be given $325.00 as the annual

tool allowance, effective October 1, 2001 through the

conclusion of this agreement.

I: MAINTENANCE EMPLOYEE SHOE

ALLOWANCE

All full-time Maintenance Department em-

ployees who are employed on October lst of each ca-

lendar will be given $115.00 as the annual shoe al-

lowance, effective October 1, 2001 through the

conclusion of this agreement.

J: MAINTENANCE EMPLOYEE-SICK LEAVE PAY

All absence hours up to 80 hours in a rolling

twelve-month period will no longer be subject to sick

leave ineligibility for failure to provide medical verifi-

cation. In order to maintain eligibility for sick leave

pay for absence hours beyond the 80 hours, em-

ployees must present to their supervisor a medical

verification, consistent with Maintenance Depart-

ment Attendance Control Procedure (HEM, Section

MD-I5) prior to the completion of their shift upon the

first day of their return to work. Employees not com-

plying with this requirement will forfeit sick leave

pay for those unscheduled hours in excess of the ac-

cumulated 80 hours. Absences while participating in

the Alternative Duty Program are not automatically

exempt from being classified as “unscheduled” and

shall be considered as any other absence.

K: EYEGLASS ALLOWANCE

Regular full-time employees will be given an

available open enrollment option through Aetna U.S.

5la

Healthcare of a three hundred dollar ($300.00) bi-

ennial eyewear/contact/lenses allowance. See the

health benefits materials for more infatuation.

L: TRANSPORTATION ADMINISTRATION OF

DISCIPLINE

DART shall remove from each hourly employee

all preventable accidents prior to October 1, 1999.

Subject to the foregoing, operators with 2 or 3 pre-

ventable accidents currently on record will be held in

abeyance for 120 calendar days (beginning November

28, 2001); if no additional preventable accidents occur

during the time of abeyance, the oldest preventable

accident will be dropped from record (applicable to

operators who had 2 or 3 preventable accidents on

their record as of 11/28/01). ATU agrees that opera-

tors with three (3) preventable accidents in a 30-

month period may be discharged. Preventable acci-

dents do not include passenger accidents.

M: H.O.V. PROCEDURES

Attached as Exhibit 2 are the agreed H.O.V. Pro-

cedures, to be used departmentally for H.O.V. em-

ployees only.

N: MODIFIED LIGHT RAIL TRANSFER

ARRANGEMENT

Attached as Exhibit 3 are the agreed changes to

IV. 2. of the current arrangement. DART agrees to

submit the modification to Department of Labor

(DOL) to be considered with the next applicable

grant. ATU will agree to and not oppose the

modifications.

O: OTHER POLICY MATTERS AND

CLARIFICATIONS

It is understood that there are remaining policy

matters arising from the “General Grievance,” dated

52a

April 24, 2001. Therefore, DART and ATU agree that

those remaining matters shall be acted on within the

first quarter of calendar year 2002. The remaining

matters are as follows:

a. Establish process team to review transporta-

tion travel time options;

b. Establish timeline to complete review and im-

plement changes to HEM Chapter 10, Sub-

stance Abuse Policy.

It is understood between DART and ATU that

certain acknowledgements arise from the “General

Grievance,” dated April 24, 2001. Therefore, the fol-

lowing are those acknowledgements:

a. Customer Service acknowledges it has im-

proved training and increased internal promo-

tion opportunities and agrees to continue to do

SO;

b. ATU acknowledges and agrees it will waive the

need for divisional mark-up, only when

planned service changes necessitate multiple

general mark-ups in a 12-month period.

P: TERM OF RESOLUTION

This Resolution of the General Grievance filed

April 24, 2001, constitutes a final resolution to the

issues raised in the General Grievance. Furthermore,

Amalgamated Transit Union, Local 1338, shali not

file a General Grievance concerning terms and condi-

tions of employment, specified wages, hours or condi-

tions of work for a period of three (3) years. Said term

shall run from October 1, 2001 to September 30,

2004. DART agrees that for the three year period it

will not make any unilateral changes to DART’s

Hourly Employment Manual except for those issues

remaining open herein.

53a

Q: CONFLICT OF LAWS

The legal invalidity or unenforceability of provi-

sions of this resolution shall not affect the remaining

provisions thereof.

R: RATIFICATION AND APPROVAL

The Union has obtained ratification by their

membership in conformity with their constitution.

S: MANAGEMENT RIGHTS

1. DART, at its sole discretion, possesses the

right in accordance with applicable laws, to manage

all operations, including the direction of the working

force and the right to plan, direct and control the op-

eration of all equipment and other property of DART,

except as modified by Section 8.10 of the DART

Hourly Employment Manual and Section 617.005 of

the Texas Government Code and DART’s 13(c) Capi-

tal Arrangement certified by the Department of La-

bor on September 30, 1991 pursuant to USC §

5333(b), if applicable. Notwithstanding subpart N. of

this agreement, nothing herein changes DART’ s po-

sition that it has a unilateral right to establish em-

ployment conditions, set wages, hours of employment

or conditions of work. In the event that DART makes

any unilateral change except for issues remaining

open herein during the term of this Resolution, such

change relieves Local 1338 of its commitment not to

file a General Grievance from October 1, 2001 to Sep-

tember 30, 2004. |

2. Matters of inherent managerial policy are re-

served exclusively to DART under law. These include

but shall not be limited to such areas of discretion or

policy as the functions and programs of DART, stan-

dards of service, its overall budget, utilization of

54a

technology, the organizational structure and selection

and direction of personnel.

3. The listing of specific rights in this article is

not intended to be nor should be considered, restric-

tive or a waiver of any rights of management not

listed and not specifically surrendered herein

whether or not such rights have been exercised by

DART in the past.

4. DART intends to abide by the provisions

herein, and to resolve the general grievance as herein

stated. By resolving this general grievance, DART

does not intend to waive its legal obligations, includ-

ing those set forth in its 13(c) Arrangement and its

position that it may not legally enter into a legally

binding and bilateral agreement with a labor organi-

zation regarding wages, hours, or conditions of em-

ployment of public employees, This general grievance

is therefore resolved subject to all the foregoing !imi-

tations.

IN WITNESS WHEREOF, DART and ATU ac-

knowledge the General Grievance Resolution and the

changes to be made to the DART Hourly Employment

Manual.

AMALGAMATED TRANSIT UNION

/s/ Kenneth Kirk

Kenneth Kirk .

President, Local ATU 1338

Date: June 5, 2002

55a

DALLAS AREA RAPID TRANSIT

/s/ Gary Thomas

Gary Thomas

President/Executive Director

Date: June 11, 2002

APPROVED AS TO FORM:

/s/ Roland Castaneda

Roland Castaneda

DART General Counsel

56a

APPENDIX H

IN THE DISTRICT COURT

191st JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

[Filed Sept. 17, 2004]

Cause No. 04-06740-J

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Plaintiff,

VS.

DALLAS AREA RAPID TRANSIT,

Defendant.

DEFENDANT'S ORIGINAL ANSWER

Defendant Dallas Area Rapid Transit (“DART”)

files this its Orignal Answer to Plaintiffs Original

Petition (the “Petition”) as follows:

ZNERAL DENIAL

Pursuant to Texas Rule of Civil Procedure 92,

DART denies each and every allegation contained in

the Petition, as -he same may be amended, and

demands strict proof thereof by a preponderance of

the credible eviderce.

II.

AFFIRMATIVE DEFENSES

Pursuant to Texas Rule of Civil Procedure 94,

DART makes the following affirmative defenses:

1. At the time and on the occasion of the

incident made the basis of this lawsuit, DART

57a

was lawfully engaged in the performance of a

governmental function in that it was operating a

regional public transit system named Dallas

Area Rapid Transit. DART would show that by

legislative declaration, Article 1118y, Texas Re-

vised Civil Statutes, codified in Texas Trans-

portation Code, Chapter 452, the activities of

Dallas Area Rapid Transit constitute a public

and essential governmental function. By reason

thereof, DART invokes the defense of govern-

mental immunity.

WHEREFORE, PREMISES CONSIDERED, DART

prays that the Plaintiff take nothing by this action,

and that DART recover all costs together with any

such other and further relief, general or special, at

law or in equity, to which DART may be entitled.

Respectfully submitted,

By: /s/ Harold R. McKeever

HAROLD R. MCKEEVER

Senior Assistant General Counsel IV

State Bar No. 13700520

Swanson Angle

General Counsel

State Bar No. 24009132

DALLAS AREA RAPID TRANSIT

P.O. Box 660163

Dallas, Texas 75266-7255

Telephone (214) 749-3043

Facsimile (214) 749-3660

ATTORNEYS FOR DEFENDANT

58a

APPENDIX I

IN THE DISTRICT COURT

191st JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

[Filed OCT. 21, 2004]

CAUSE NO. 04-06740-J

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Plaintiff,

Vv.

DALLAS AREA RAPID TRANSIT,

Defendants.

PLAINTIFF’S AMENDED ORIGINAL PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW Plaintiff Amalgamated Transit

Union Local No. 1338 (“ATU 1338” or “Plaintiff), and

files this its Amended Original Petition for damages

and equitable relief, complaining of Defendant Dallas

Area Rapid Transit (“DART” or “Defendant”), and for

cause of action respectfully shows the following:

I. DISCOVERY

1. Discovery in this case shall be conducted under

Level 2 of Rule 190, Texas Rules of Civil Procedure.

Il. JURISDICTION AND VENUE

2. Plaintiff has fulfilled all of the jurisdictional

requirements prior to bringing this suit. Jurisdic-

tion of the Dallas County District Court is proper

pursuant to Section 24.007 of the Texas Government

Code.

59a

3. Venue is proper in Dallas County, Texas,

pursuant to Section 15.002 of the Texas Civil Practice

& Remedies Code in that a substantial part of the

events or omissions giving rise to the claims

described herein occurred in Dallas County, Texas.

Additionally, DART conducts and transacts business

in Dallas County, Texas, and maintains an office in

Dallas County, Texas.

Ill. PARTIES

4. Plaintiff ATU 1338 is a labor organization

representing employees (e.g. bus drivers) of DART.

ATU 1338’s primary purpose and objective is to

identify employment concerns and problem areas of

transit workers of DART and to improve all! aspects

of the work environment of transit workers, including

the establishment of clear, concise, and fair em-

ployment policies, practices, and procedures.

5. Defendant DART is a regional transportation

authority organized and existing under Texas Trans-

portation Code, Chapter 452, having its principle

place of business in Dallas County, Texas. DART may

be served with citation in this action by serving its

agent for service of citation: Gary Thomas, President

Executive Director of DART, 1401 Pacific Avenue,

Dallas, Texas 75202.

IV. FACTUAL BACKGROUND

6. On April 24, 2001, in accordance with Section

8.10 of the DART Hourly Employment Manual

(“HEM”), ATU 1338 filed a “General Group Griev-

ance” on behalf of its bargaining unit members.

7. In order to address the grievance, and in con-

formity with Section 8.10 of the DART HEM, Section

617.005 of the Government Code, and DART’s 13(c)

60a

Capital Arrangement certified by the Department of

Labor on September 30, 1991, the parties (DART and

ATU 1338) met and conferred to address the

grievance issues.

8. As a result of the meeting regarding the

grievance issues, DART and ATU 1338 entered into

a General Grievance Resolution (“Resolution Agree-

ment”) which was ratified and signed by Gary

Thomas, President Executive Director of DART,

Roland Castaneda, General Counsel for DART, and

Kenneth Kirk, then presiding President and Business

Agent for ATU 1338. A true and correct copy of

the Resolution Agreement is attached hereto as

Exhibit A.

9. Paragraph B of the Resolution Agreement pro-

vides for increases in the “Salaries and Wages for

Operating Employees.” Paragraphs B(1-3) specifically

provide:

1. Effective the first full pay period in October

2001, each hourly employee who is in an active

pay status shall receive a general pay increase

of four percent (4%).

2. Effective the first full pay period in October

2002, each hourly employee who is in an active

pay status shall receive a general pay increase

of four percent (4%).

3. Effective the first full pay period in October

2003, each hourly employee who is in an active

pay status shall receive a general pay increase

of four percent (4%).

(emphasis added).

6la

10. Paragraph P of the Resolution Agreement es-

tablishes that the terms of the Resolution Agreement

are final and entered into by the parties in order to

resolve the issues raised in ATU 1338's general

grievance. Paragraph P specifically provides:

This Resolution of the General Grievance filed

April 24, 2001 constitutes a final resolution to

the issues raised in the General Grievance. Fur-

thermore, Amalgamated Transit Union, Local

1338 shall not file a General Grievance concern-

ing terms and conditions of employment, spe-

cified wages, hours, and conditions of work for a

period of three (3) years. Said term shall run

from October 1, 2001 to September 30, 2004.

DART agrees for the three (3) year period it will

not make any unilateral changes to DART’ s

hourly employment manual except for those

issues remaining open herein.

(emphasis added).

11. Paragraph S of the Resolution Agreement de-

scribes the “Management Rights” of DART and

further illustrates that DART agreed to abide by the

terms of the Resolution Agreement in order to resolve

the underlying general grievance. Paragraph S(4)

specifically provides:

DART intends to abide by the provisions herein,

and to resolve the general prievance as herein

stated. By resolving this general grievance,

DART does not intend to waive its legal

obligations, including those set forth in its (13)(c)

Arrangements and its position that it may not

legally enter into a legally binding and bilateral

agreement with a labor organization regarding

wages, hours, or conditions of employment of

62a

public employees. This general grievance is

therefore resolved subject to all the foregoing

limitations.

(Emphasis added).

12. Despite DART’s “position” that it may not

enter into a legally binding and bilateral agreement

with a labor organization regarding wages, hours, or

conditions of employment with public employees,

ATU 1338 never agreed to this “position” of DART.

Furthermore, Texas law is definitively contrary to

DART’s position. In Dallas Area Rapid Transit uv.

Plummer, a lawsuit involving DART and a member of

ATU 1338, the Dallas Court of Appeals held inter alia

that employees, or their union, covered by a section

13(c) Urban Mass Transportation Act agreement,

may bring a contract action in state court to enforce

the agreement and that such agreements are binding

on DART. Dallas Area Rapid Transit v. Plummer,

841 S.W.2d 870, 874 (Tex. App. — Dallas, 1992, writ

denied).

13. The Resolution Agreement is a final resolution

of a general grievance brought pursuant to Section

8.10 of the DART HEM and in conformity with

DART’s 13(c) Capital Arrangement certified by De-

partment of Labor. Just as in Plummer, the Reso-

lution Agreement is a binding contract upon which

ATU 13388 may enforce through legal action in state

court.

14. On or about September 23, 2003, the DART

Board of Directors approved DART’s 2003-2004 bud-

get. In doing so, the Board did not provide for DART

employees’ 4% general pay increase for the year

2003 -2004 as provided for in Paragraph B(3) of the

Resolution Agreement. ‘iu date, DART has not

63a

provided the 4% general pay increase agreed to in

Paragraph B(3) of the Resolution Agreement.

15. DART has unilaterally changed its policy on

the amount of life insurance available to employees.

Previously, in accordance with the HEM, an em-

ployee was eligible for life insurance at two to three

times the employee’s annual salary level. DART has

unilaterally decreased this benefit to allow employees

to be eligible for life insurance at one time the

employee’s annual salary level. This unilateral pol-

icy change violates paragraph P of the Resolution

Agreement which states that “DART agrees that for

the three year period it will not make any unilateral

changes to DART’s Hourly Employment Manual. . .”

16. DART has unilaterally changed its policy on

the amount of Service Incentive Pay (SIP) provided to

employees. DART has frozen the level of SIP at 2002

pay rates instead of increasing SIP to 2003 level pay

rates. The unilateral freezing of the SIP level violates

the terms of the HEM and is a unilateral policy

change that violates paragraph P of the Resolution

Agreement which states that “DART agrees that for

the three year period it will not make any unilateral

changes to DART’s Hourly Employment Manual. . .”

17. DART has unilaterally instituted a new policy

of not providing full benefits to new full time

employees until after ninety days of employment, and

is not allowing new full time employees to invest in a

401k plan until after six months of employment.

Previously, when an employee was hired as a new

full time employee, he/she would immediately receive

full benefits and full 401k benefits. The unilateral

change of this policy violates paragraph P of the

Resolution Agreement which states that “DART

agrees that for the three year period it will not make

64a

any unilateral changes to DART’s Hourly Employ-

ment Manual. . .”

18. On or about September 30, 2003, ATU 1338

President/Business Agent Kenneth Kirk sent a letter

to DART Chairman of Board of Directors Robert

Pope, and President/Executive Director Gary Thomas

informing DART that ATU 1338 was asking DART

to take all necessary action to implement the 4%

general pay increase called for in Paragraph B(3) of

the Resolution Agreement and that DART’s failure to

do so violated the Resolution Agreement.

19. The actions complained of herein directly affect

and injure ATU 1338 and the members of the ATU

1338. The claims asserted herein are germane to

ATU 1338’s purpose and objective. Moreover, ATU

1338 is directly affected by the complained of acts

through a reduction in its membership’s salaries and

wages, and a weakening of ATU 1338's negotiating

strength on behalf of its members.

20. Plaintiff has retained the undersigned attor-

neys in order to prosecute this action.

21. Plaintiff hereby demands a trial by jury on all

claims and defenses in this action.

V. FIRST CAUSE OF ACTION—Breach of Contract

22. Plaintiff realleges and incorporates the alle-

gations contained in Paragraphs 1 through 21 as if

fully contained herein.

23. Defendant breached the’Resolution Agreement

contract with Plaintiff when Defendant ceased to

perform under the contract as stated supra when

Defendant: (1) failed to implement the 4% general

pay increase agreed to in Paragraph B(3) of the

contract, (2) unilaterally changed the life insurance

65a

policy, (3) unilaterally changed its SIP policy, and (4)

unilaterally changed the policy for payment of bene-

fits to new full time . nployees.

24. The Resolution Agreement contract between

Defendant and Plaintiff was supported by adequate

consideration. The parties’ mutually agreed to all

relevant terms. All conditions precedent to Defen-

dant’s performance under the contract have been

performed or have occurred. Performance by Defen-

dant was not excused and DART agreed that for a

three year period (running from October 1, 2001 to

September 30, 2004), DART would abide by the terms

of the resolution and not make any unilateral

changes to DART’s HEM.

25. Plaintiff has performed its obligations under

the contract. In particular, prior to Defendant’s

breach of the contract, Plaintiff withheld from filing

any general grievance concerning terms and condi-

tions of employment, specified wages, hours, or con-

ditions of work.

26. As a result of Defendant’s breach of the con-

tract, as set out in the preceding paragraphs of this

petition, Plaintiffs members have sustained financial

injury and lost the benefits expected under the con-

tract. Furthermore, Defendant’s complained of acts

have harmed Plaintiff by not increasing its members’

salaries and wages, and by weakening ATU 1338's

negotiating strength on behalf of its members.

27. On September 30, 2003, Plaintiff notified

Defendant that DART’s actions were in violation of

the Resolution Agreement. Defendant has refused to

honor the Resolution Agreement by: (1) failing to

implement the 4% general pay increase agreed to in

Paragraph B(3) of the contract, (2) unilaterally

66a

changing the life insurance policy, (3) unilaterally

changing the SIP policy, and (4) unilaterally chang-

ing the policy for payment of benefits to new full time

employees.

28. Furthermore, ATU 1338 is entitled to recover

its reasonable and necessary attorneys’ fees because

this is a claim on an oral or written contract within

the meaning of Civil Practice and Remedies Code

§38.001.

29. ATU 1338 hereby demands trial by jury on all

claims and defenses in this action.

VI. PRAYER

WHEREFORE, Plaintiff ATU 1338 requests that

Defendant Dallas Area Rapid Transit (DART) be

cited to appear and answer, and that after trial by

jury, ATU 1338 have judgment against DART as

follows:

1. Actual damages;

2. Pre-judgment interest in the maximum

amount allowed by law;

3. Reasonable and necessary attorneys’ fees;

4. Post-judgment interest in the maximum

amount allowed by law;

5. Costs of suit;

6. An injunction ordering DART to retroactively

implement the 4% general pay increase agreed

to in Paragraph B(3) of the Resolution Agree-

ment with retroactive application of the injunc-

tion to the first full pay period in October 2003;

7. An injunction ordering DART to restore the

level of life insurance benefits previously

67a

offered to DART employees by providing DART

employees life insurance benefits at two to

three times their annual salary level;

An injunction ordering DART to retroactively

restore and pay SIP at increased levels in

accordance with the HEM;

An injunction ordering DART to provide full

benefits to all newly hired employees in ac-

cordance with the HEM and to retroactively

provide full benefits upon any employee denied

benefits during their first 90 days of employ-

ment with DART; and

10.Such other and further relief to which Plaintiff

may justly be entitled.

Respectfully submitted,

GILLESPIE, ROZEN, WATSKY, & MOTLEY, P.C.

3402 Oak Grove Avenue, Suite 200

Dallas, Texas 75204

Telephone.: (214) 720-2009

Telecopier: (214) 720-2291

Date: October 20, 2004

By: /s/ Hal K. Gillespie

HAL K. GILLESPIE (attorney-in-charge)

State Bar No. 07925500

JOSEPH H. GILLESPIE

State Bar No. 24036636

68a

APPENDIX J

IN THE DISTRICT COURT

191st JUDICIAL DISTRICT

DALLAS COUNTY, TEXAS

[Filed OCT. 22, 2004]

CAUSE NO. 04-06740-J

AMALGAMATED TRANSIT UNION LOCAL No. 1338,

Plaintiff,

VS.

DALLAS AREA RAPID TRANSIT,

Defendant.

DEFENDANT'S PLEA TO THE JURISDICTION

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Dallas Area Rapid Transit (“DART”),

Defendant, in the above-styled and numbered cause of

action and files its Plea to the Jurisdiction of the Court

and in support would show the follow:

FACTUAL BACKGROUND

This lawsuit arises out of a resolution to a 2001

General Grievance filed by Plaintiff with DART, a

Texas governmental entity and regional transpor-

tation authority under Chapter 452 of the Texas

Transportation Code.

69a

Il.

BRIEF STATEMENT ON AND

APPLICATION OF THE STANDARD OF REVIEW.

The trial court is not limited solely to the pleadings

when considering a plea to the jurisdiction:

[A] court deciding a plea to the jurisdiction is not

required to look solely to the pleadings but may

consider evidence and must do so when neces-

sary to resolve the jurisdictional issues raised.

The court should, of course, confine itself to the

evidence relevant to the jurisdictional issue.

Bland Independent School District v. Blue, 34 S.W.

3d 547, 555 (Tex. 2000).

II.

DART IS A TEXAS GOVERNMENTAL ENTITY

By legislative declaration, Texas Transportation

Code, Chapter 452 (formerly Article 1118y, Texas

Revised Civil Statutes), the activities of the Dallas

Area Rapid Transit constitute a public and essential

governmental function. Chapter 452 of the Texas

Transportation Code, states in pertinent part:

Sec. 452.052. NATURE OF AUTHORITY

(a) An authority:

(1) is a public political entity and corporate body;

(2) has perpetual succession; and

(3) exercises public and essential governmental

functions.

(b) The exercise of a power granted by this chapter,

including a power relating to a station or ter-

minal complex, is for a public purpose and is a

matter of public necessity.

70a

Chapter 101, Civil Practice and Remedies Code,

and the operations of the authority are not

proprietary functions for any purpose including

the application of Chapter 101, Civil Practice

and Remedies Code.

Furthermore, Defendant DART’s status as a Texas

governmental entity has been judicially recognized

See, Davis v. Mathis, 846 S.W.2d 84 (Tex. App. —

Dallas 1992, no writ), Dallas Area Rapid Transit v.

Stephens, 50 S.W.3d 621, 632-634 (Tex. App. —

Dallas 2001, pet. Denied); See also Dallas.Area Rapid

Transit v. Whitley, 104 S.W.3d 540 (Tex. 2003). (See

also Plaintiffs Original Petition, paragraph 5). Plain-

tiffs Original Petition does not allege grounds that

confer subject matter jurisdiction against a Texas

governmental entity, and therefore should be dis-

missed with prejudice.

IV.

GOVERNMENTAL IMMUNITY

A governmental entity that can only perform

governmental! functions is entitled to governmental

immunity. Port of Houston Authority v. Guillory, 814

S.W.2d 119, 122 (Tex. App. — Houston [1st Dist.]

1991) affirmed 845 S.W.2d 812 (Tex. 1993). By

statute, Texas Transportation Code § 452.052, DART

can only perform governmental functions and there-

fore is entitled to the governmental immunity. A

person who sues a governmental entity must estab-

lish the government’s consent to that lawsuit. See

Texas Department of Transportation v. Jones, 8

S.W.3d 636, 638-639 (Tex. 1999). “Since as early as

1847, the law in Texas has been that absent the

state’s consent to suit, a trial court lacks subject

matter jurisdiction.” Jd. Therefore, in the absence of a

T71la

specific statutory waiver of immunity, a Texas court

does not have subject matter jurisdiction over any

cause of action against a governmental unit. In the

case before the court, Plaintiff has not alleged a

specific statutory waiver of immunity and therefore

should be dismissed with prejudice.

PLAINTIFF'S SOLE REDRESS IS THOUGH

AN ADMINISTRATIVE GRIEVANCE PROCESS

The Texas Government Code provides:

Collective Bargaining by Public Employees

Prohibited

(a) An official of the state or of a political sub-

division of the state may not enter into a

collective bargaining contract with a labor

organization regarding wages, hours, or condi-

tions of employment or public employees.

(b) A contract entered into in violation of Sub-

section (a) is void.

division of the state may not recognize a labor

organization as the bargaining agent for a

group of public employees.

Tex. Gov't Code Ann. §617.002 (Vernon 1994). The

Texas Government Code further provides:

Effect of Chapter

This chapter does not impair the right of public

employees to present grievances concerning their

wages, hours of employment, or conditions of work

whether individually or through a representative

that does not claim the right to strike.

Tex. Gov’t Code Ann. 017.005 (Vernon 1994).

72a

In accordance with Chapter 617 of the Texas

Government Code and applicable federal law,’

DART’s Hourly Employment Manuai includes, under

Section 8.10, an administrative process by which

employees may individually or through their rep-

resentatives, present General Grievances, defined

under Section 8.8(a)(1), as grievances regarding

establishment of, or failure to establish, specified

wages, hours or conditions of work as provided under

Section 617.005 of the Texas Government Code. (See

Exhibits 1 and 2).

The document which is the subject of this lawsuit

is a General Grievance Resolution of an April 24,

2001 General Grievance filed by Plaintiff under

Section 8.10 of DART’s Hourly Employment Manual

and Section 617.005 of the Texas Government Code.

(See page 1 of the General Grievance Resolution,

Exhibit 3). By law, the General Grievance Resolution

is unilateral and therefore not a contract. To hold

it to be a bilateral contract would cause the Gen-

eral Grievance Resolution to be an illegal collective

bargaining agreement and therefore void under

Section 617.002 of the Texas Government Code. See,

Moreau v. Sheriffs Union, Local 154, 956 F.2d 516,

520 (5th Cir. 1992); Beverly v. City of Dallas, 292

S.W.2d 172, 176 (Tex. Civ. App. — El Paso 1956, writ

refused n.r.e.) (Section 617.005 permits the pres-

entation of grievances, a unilateral proceeding re-

sulting in no loss of sovereignty by the governmental

agency); Op. Tex. Att’y Gen. No. 97-038, p. 3 (1997)

(Exhibit 4) (Texas law does not prohibit grievance

‘ Urban Mass Transportation Act, 49 U.S.0 §5333, which in-

cludes a “13(c) Employee Protective Arrangement.”

* Each of the exhibits cited herein are attached and incor-

porated by reference as if fully set forth at length.

73a

discussions, but the governing authority “must retain

the right unilaterally to establish employment con-

ditions.”); Op. Tex Att'y Gen. No. JM-156 (1984)

(Exhibit 5). Plaintiffs redress for issues included in

this lawsuit is through the administrative grievance

process allowed by statute and contained in DART’s

Hourly Employment Manual. As such, this court

lacks jurisdiction to hear the complaints made by

Plaintiff herein. See generally, General Services

Commission v. Little—Tex Insulation Company, Inc.,

39 S.W.3d 591, 597 (Tex. 2001).

VI.

GENERAL GRIEVANCE RESOLUTION

STATES REDRESS

Moreover, The General Grievance Resolution dem-

onstrates that it is a unilateral resolution for which

Plaintiffs redress is to proceed through the admin-

istrative grievance process, and not a contract. The

General Grievance Resolution states in part:

.. nothing herein changes DART’s position that

it has a unilateral right to establish employment

conditions, set wages, hours of employment or

conditions of work. In the event that DART

makes any unilateral change except for issues

remaining open herein during the term of this

Resolution, such change relieves Local 1338 of its

commitment not to file a General Grievance from

October 1, 2001 to September 30, 2004.” (Gen-

eral Grievance Resolution Section S (1), p. 6,

Exhibit 3)

Matters of inherent managerial policy are re-

served exclusively to DART under law. These

include but shall not be limited to such areas

of discretion or policy as the functions and

74a

programs of DART, standards of service, its over-

all budget, utilization of technology, the organi-

zational structure and selection and direction of

personnel. (General Grievance Resolution Sec-

tion S (2), p. 6, Exhibit 3))

DART intends to abide by the provisions herein,

and to resolve the general grievance as here-

in stated. By resolving this general grievance,

DART does not intend to waive its legal obli-

gation, including those set forth in its 13(c)

Arrangement and its position that it may not

legally enter into a legally binding and bilateral

agreement with a labor organization regarding

wages, hours, or conditions of employment of

public employees. This general grievance is

therefore resolved subject to all the foregoing

limitations. (General Grievance Resolution Sec-

tion S (4), p. 6-7, Exhibit 3).

The General Grievance Resolution makes clear

that it is subject to DART’s inherent managerial

responsibility, including its budget. The four items of

which Plaintiff complains in this case, the failure to

give hourly employees a general increase of 4% as of

October 2004, freezing Service Incentive Pay at 2002

levels, requiring a waiting period for new hires to

obtain certain benefits and reducing the amount of

life insurance provided by DART relate in whole or in

part to budgetary issues caused by a down-turn in

sales tax revenue and are part of DART’s inherent

managerial responsibility. (Exhibit 6 and 7). Further,

the General Grievance Resolution allows Plaintiff to

file a grievance if DART makes unilateral changes

in contravention of the resolution before the ex-

piration of the term of the resolution and proceed

under the administrative general grievance process

75a

allowed under 8.10 of DART’s Hourly Employment

Manual. In fact, on or about May 7, 2004, Plaintiff

filed a General Grievance, which includes items for

wages, insurance benefits and Service Incentive Pay,

the same topics included in this lawsuit. (Exhibit 7).

Plaintiff may not file a breach of contract claim

because the General Grievance Resolution is not a

contract, and if it is so construed, it is illegal under

Section 617.002 of the Texas Government Code and

therefore void as a matter of law. Plaintiffs redress

for issues included in this lawsuit, as provided in

the General Grievance Resolution, is through the

administrative grievance process allowed by statute

and contained in DART’s Hourly Employment Man-

ual. As such, the court lacks jurisdiction to hear the

complaints made by Plaintiff herein. Jd.

WHEREFORE, DART prays that this plea be set

for hearing and upon notice and hearing, it be

granted and that it have judgment of the Court that

Plaintiffs lawsuit against DART be dismissed with

prejudice for lack of jurisdiction, that Defendant go

hence with its costs, without day, and for such other

and further relief, general or special, at law or in

equity, as to which Defendant may be entitled.

Respectfully submitted,

By: Harold R. McKeever

HAROLD R. MCKEEVER

Senior Assistant General Counsel IV

State Bar No. 13700520

76a

LEGAL DEPARTMENT

DALLAS AREA RAPID TRANSIT

1401 Pacific Avenue. 1st Floor

Mailing Address: P. O. Box 660163

Dallas, Texas 75266-7255

(214) 749- 3043

Fax (214) 749-3660

ATTORNEYS FOR DEFENDANT

FIAT

A hearing on the foregoing motion has been set for

the 16th day of November, 2004, at 8:30 o’clock A.M.

in the 191st Judicial District Court, 600 Commerce

Street, 3rd Floor, Dallas, Texas 75202.

Judge Presiding

77a

APPENDIX K

STATE OF TEXAS

COUNTY OF DALLAS

CERTIFICATION OF

PUBLIC RECORD

By attachment of its seal below, Dallas Area Rapid

Transit hereby certifies that the documents attached

hereto (current 13(c) employee protective arrange-

ment) is a public record of Dallas Area Rapid Transit

and is maintained pursuant to its governmental func-

tions, powers and responsibilities as a _ regional

transportation authority under Texas Transportation

Code chapter 452. These said pages of records are

kept by Dallas Area Rapid Transit, in the regular

course of its governmental duties, and it was the reg-

ular course of said governmental duties of Dallas

Area Rapid Transit for an employee or representative

of Dallas Area Rapid Transit with knowledge of the

act, event, condition, opinion, or diagnosis, recorded

to make the record or to transmit information thereof

to be included in such record; and the record was

made at or near the time or reasonably soon thereaf-

ter. The records attached hereto are the original or

exact duplicates of the original.

/s/ Lynda Jackson

LYNDA JACKSON

VICE-PRESIDENT

HUMAN RESOURCES

78a

U.S. Department of Labor

Deputy Under Secretary for

Labor Management Relations

and Cooperative Programs

Washington, D.C. 20210

SEP 30 1991

Mr. Wilbur E. Hare

Urban Mass Transportation Administration

Region VI

819 Taylor Street

Suite 9A32

Fort Worth, Texas 76102

Re: UMTA Applications

Dallas Area Rapid Transit Authority South

Oak Cliff Operating/Training Academy

(TX-03-0142)

Transit Centers

(TX-90-X103) Amendment t3

Purchase Buses, Vans, Bus Retrofit, Purchase

Land for Garland Center, etc.

(TX-90-X193) Revised

Dear Mr. Hare:

This is in reply to the request from your office that

we review the above captioned applications for grants

under the Urban Mass Transportation Act of 1964, as

amended.

The Dallas Area Rapid Transit Authority (DART)

and the Amalgamated Transit Union (ATU) Local

1338 had previously agreed that the terms and condi-

tions contained in a Resolution of DART’s Board of

Directors dated September 28, 1988, should be made

applicable to certain projects. However, because the

parties were unable to reach an agreement with re-

79a

spect to the application and interpretation of that

Resolution, they have failed to agree that the Resolu-

tion should be applied to the instant projects. After

the Department met with the parties and determined

that further mediatory efforts would not be produc-

tive, the Department asked the parties to submit po-

sition papers concerning the issues in dispute. The

following is a discussion of the issues which concludes

with the Department’s certification of the instant

projects.

DISCUSSION

“As a Result of the Project” Definition

The Department has ruled previously on this issue

and its determination with respect to the pending

projects is consistent with those earlier rulings.

Therefore, paragraph (1)(b) Section 13(c) Arrange-

ment shall include the phrase “events and actions

which are as a result of Federal assistance under the

Act.” Also, the word “solely” shall be included in that

paragraph. The revised version of the paragraph

(1)(b) reads as follows:

(b) The phrase “as a result of the Project” in-

cludes events occurring in anticipation of,

during, and subsequent to the Project and any

program of efficiencies or economies related

thereto and shall also include events and ac-

tions which are as a result of Federal assis-

tance under the Act; provided, however, that

volume rises and falls or business, or changes

in volume and character of employment

brought about solely by causes other than the

Project (including any economies, or efficien-

cies unrelated to the Project), are not within

the purview of this Arrangement.

80a

Format of the Protections

For the sake of simplicity and ease of expressing

the content of these protections, the Department has

chosen to use the existing format.

Duty to Minimize Effects

The Department has also previously made a de-

termination regarding the interpretation of the

phrase “Duty to Minimize Effects.” With respect to

the instant projects, the Department finds no com-

pelling reason to change its interpretation of that

phrase. Consistent with our previous interpretation

of the subject phrase, the Department has developed

the following language for inclusion in_ the

protections:

The Project shall be performed and carried out in

full compliance with the protective conditions de-

scribed in this angement and in such a man-

ner and upon such terms and conditions as will

not adversely affect employees covered by this

Arrangement. The duty to minimize effects is not

intended to preclude all actions which would ad-

versely affect employees, but to balance such ac-

tions in favor of the interest of employees.

If the parties wish any additional guidance re-

garding this matter, they should consult pages 5 and

6 of the Rural Transportation Employee Protection

‘Guidebook for a discussion of the Department’s in-

terpretation of this language.

“Departmental Rules” v. “Personnel Policies”

Consistent with the Department’s November 15,

1990 letter, the term “Departmental Rules” is used to

refer to the personnel policies of DART, exclusive of

the General Grievance Procedure.

8la

Preservation of Existing Rights, Privileges, and

Benefits

The Department’s repeated objective when making

determinations during the process of certifying em-

ployee protective arrangements for DART, pursuant

to Section 13(c), has been an attempt to preserve

what was in existence at the Dallas Transit System

(DTS) without diminishing or increasing the level of

employee protections. Consistent with this objective,

the Department will draw upon the language found

in the previous DTS Section 13(c) Arrangement for

this certification.

Fact Finding for All Modifications

While the Department will apply the principles

contained in the existing Modifications procedure to

the instant arrangements, the Department will add

to the protective Arrangement a provision that will

assure that DART cannot unilaterally alter the Mod-

ification procedure or the General Grievance proce-

dure. By assuring that DART cannot unilaterally al-

ter the Modification procedure or General Grievance

procedure (currently contained in Sections 8.10 and

8.11 of DART’S Personnel Policies and Employee

Benefits Manual), the Department is ensuring that

the existing collective bargaining process available to

DART employees shall be preserved.

ATU’s Paragraph (3) (c) Arbitration Provision

With the existing collective bargaining process ap-

plicable to DART employees preserved, it is not ne-

cessary to provide an additional arbitration proce-

dure for claims of violations of the protections

contained in the Section 13(c) arrangements beyond

that already existing in paragraph (16) of the Ar-

rangement.

82a

Standard for Triggering Notice

Although the parties have engaged in good faith

discussions on the instant projects, they remain in

disagreement concerning the language which ad-

dresses the standard for triggering notice of changes.

Although the language concerning “major” changes

which “will” affect a “significant” number of em-

ployees was the product of good faith discussions and

was applied to previous grants, the parties are now

unable to reach an agreement with respect to the in-

terpretation of the language. Accordingly, the De-

partment will impose a provision which is similar to

that contained in the “Model” 13(c) Agreement dated

June 23, 1975.

Employees Worsened and Make Whole Benefits

The Department has included language in Para-

graph (7) (c) of the protective Arrangement which

provides that an employee who is worsened as a re-

sult of the project shall be made whole. This language

is consistent with what the Department has deter-

mined to be fair and equitable in the past. Arbitra-

tors’ awards must wholly compensate employees for

the harm they suffer, but this does not always re-

quire the restitution of the precise benefit lost. At-

tempts should be made to provide such restitution,

but alternative remedies may be acceptable when

this is not possible and where the harm has an ascer-

tainable economic value or where payment of dam-

ages would result in a fair and equitable substitute.

The Department is confident that, notwithstanding

Texas State law limiting labor negotiations to a

“meet and confer” process, DART can meet the re-

quirements set forth in the above’ referenced

paragraph.

83a

Burden of Proof Requirement

This is another case where the parties are in disa-

greement over language previously agreed to through

good faith discussions. The Department has chosen to

impose language which is a widely accepted standard

in most Section 13(c) arrangements.

Arrangements To Be Imposed

It is not necessary for the parties to execute a for-

mal agreement prior to certification of this project by

the Department. However, the parties are encour-

aged to execute such an agreement prior to the ap-

proval of any subsequent DART grants of assistance.

Language in item three below indicates that em-

ployees represented by the ATU are intended third-

party beneficiaries of the employee protection provi-

sions of the grant contract. By executing the grant

contract with the Department of Transportation

(DOT), DART acknowledges that it assents to the

terms therein. Agree

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