United Transp. Union v. Surface Transp. Bd., s. 96-1201

Citation325 U.S.App. D.C. 34,114 F.3d 1242
Decision Date13 June 1997
Docket NumberNos. 96-1201,96-1202,s. 96-1201
Parties155 L.R.R.M. (BNA) 2549, 325 U.S.App.D.C. 34, 134 Lab.Cas. P 10,009 UNITED TRANSPORTATION UNION, Petitioner, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents, CSX Transportation, Inc., Intervenor. RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Petitioners, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

On Petitions for Review of an Order of the Surface Transportation Board.

Norton N. Newborn, for United Transportation Union, and John O'B. Clarke, Jr., for Railway Labor Executives' Association, et al., argued the cause for the petitioners. William G. Mahoney and Richard S. Edelman were on brief.

Louis Mackall, V, Attorney, Surface Transportation Board, argued the cause for the respondents. Henri F. Rush, General Counsel, Surface Transportation Board, was on brief. John J. Powers, III, and Robert J. Wiggers, Attorneys, United States Department of Justice, entered appearances.

Ronald M. Johnson argued the cause for intervenor CSX Transportation, Inc.

Before SILBERMAN, WILLIAMS and HENDERSON, Circuit Judges.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The United Transportation Union (UTU) and the Railway Labor Executives' Association (RLEA) (together the Unions) petition for review of an order of the Surface Transportation Board (STB or Board) 1 concluding that a coordination of railway service sought by CSX Transportation, Inc. (CSXT) was to be carried out pursuant to the labor protective conditions imposed by the STB's New York Dock rules rather than pursuant to the Railway Labor Act (RLA), 45 U.S.C. §§ 151 et seq. The Unions contend that the STB lacked jurisdiction to enter its order and that even if the STB had jurisdiction its decision was arbitrary and capricious. We deny the petition for review.

I.

In 1980 the Interstate Commerce Commission (ICC) authorized the CSX Corporation (CSX) to merge with the Chessie System Inc. (Chessie) and Seaboard Coast Line Industries, Inc. (SCLI) and thereby acquire control of the railroads that had been Chessie and SCLI subsidiaries. See CSX Corp.--Control--Chessie Sys., Inc. & Seaboard Coast Line Indus., Inc., 363 I.C.C. 521 (1980), aff'd sub nom. Brotherhood of Maintenance of Way Employees v. ICC, 698 F.2d 315 (7th Cir.1983), (CSX Control). As required by the Interstate Commerce Act (ICA or Act), 49 U.S.C. §§ 10101 et seq., 2 the ICC conditioned its common control approval on CSX's compliance with conditions known as the New York Dock conditions, see New York Dock Ry.--Control--Brooklyn E. Dist., 360 I.C.C. 60, aff'd, 609 F.2d 83 (2d Cir.1979), designed to protect employees from any adverse effects of the merger. See CSX Control, 363 I.C.C. at 588.

Following CSX Control, additional mergers occurred whence CSXT, a subsidiary of CSX, ultimately emerged in 1987 as a single entity controlling the operations of, among others, the former Chesapeake & Ohio Railway Company(C&O), the Louisville & Nashville Railroad Company (L&N) and the Clinchfield Railroad Company (Clinchfield). 3 Notwithstanding the consolidations, work continued to be allocated as if the original entities retained their separate identities. For example, former C&O employees worked only sections of track formerly operated by C&O. Under CSX Control, the work allocation could be changed only by implementing a service coordination pursuant to the New York Dock rules. One such service coordination, implemented by negotiated agreement in 1981 (1981 Agreement), provided for coordinated operations over approximately 230 miles of track in southeastern Kentucky and western Virginia (Coordinated Territory) that had previously been separately operated by the C&O, the L&N and the Clinchfield.

In 1993 CSXT decided to implement a new coordination of train operations (1993 Proposed Coordination) involving the Coordinated Territory covered by the 1981 Agreement as well as additional track not subject to the 1981 Agreement. Pursuant to article 1, section 4 of the New York Dock conditions, CSXT notified UTU that it wished to negotiate a New York Dock implementing agreement to effect the expansion of the Coordinated Territory. UTU refused to negotiate on the ground that any modifications to the 1981 Agreement had to be negotiated pursuant to the RLA procedures rather than the New York Dock procedures. 4 Specifically, UTU relied on the following language of Article XVIII of the 1981 Agreement:

This Agreement shall remain in full force and effect until revised or modified in accordance with the Railway Labor Act, as amended.

JA 61. When the parties could not agree on the applicable procedures, they submitted the issue to arbitration. The arbitration panel concluded that, according to the terms of the 1981 Agreement, the RLA provided the applicable procedures for the 1993 Proposed Coordination. CSXT petitioned for review to the ICC. The STB, which by then had replaced the ICC, see supra n. 1, vacated the arbitration panel's decision and ordered the parties to negotiate--or arbitrate if necessary--an agreement implementing the 1993 Proposed Coordination using New York Dock procedures. CSX Corp.--Control--Chessie Sys., Inc. & Seaboard Coast Line Industries, Inc., Finance Docket No. 28905 (Sub-No. 26), 1996 WL 203539 (S.T.B. Apr. 15, 1996). The Unions then petitioned for review to this court.

II.
A. Jurisdiction

The Unions first argue that the STB lacked jurisdiction to enter its order vacating the arbitration panel's decision. They have, however, waived any jurisdictional argument. First, in its opposition to CSXT's petition to review the arbitration decision, UTU stated "it is appropriate for ICC to review the award." JA 228. 5 Moreover, the Unions concede they did not make a jurisdictional argument until this appeal. Pet'rs Joint Reply Br. at 3 ("[I]t is correct that Petitioners did not argue below that the STB did not have jurisdiction."). The Unions are therefore precluded from raising their jurisdictional argument now because "claims not presented to the agency may not be made for the first time to a reviewing court." United Transp. Union v. ICC, 43 F.3d 697, 701 (D.C.Cir.1995) (quoting Washington Ass'n for Television & Children v. FCC, 712 F.2d 677, 680 (D.C.Cir.1983)). They attempt to avoid this result by arguing that, although the STB's jurisdiction over the specific issue raised by CSXT's petition for review was conceded, the STB in fact exceeded its authority and decided a different issue. The Unions claim that because the STB's unauthorized assertion of authority was not manifest until it rendered its decision, the Unions were free to petition this court for review and to challenge the Board's jurisdiction for the first time. Specifically, the Unions contend that, while the STB had jurisdiction to decide whether the parties had the power to agree that future implementation agreements would be governed by procedures other than the New York Dock rules, it was without jurisdiction to interpret Article XVIII of the 1981 Agreement. The latter question, the Unions contend, involves the interpretation of a collective bargaining agreement (i.e., the 1981 Agreement) and is therefore to be decided by the adjustment boards established under the RLA. 45 U.S.C. § 153.

The Unions' argument does not excuse their waiver because the question of the interpretation of Article XVIII was presented to the STB. CSXT's petition for review to the STB manifests that CSXT sought review of the arbitrators' conclusion that the 1981 Agreement "preclude[d] further coordinations unless the procedures of the Railway Labor Act ... were followed." JA 8. Thus CSXT presented not only the issue of whether the parties were authorized to substitute RLA procedures for New York Dock procedures but also whether the 1981 Agreement did in fact work such a substitution.

The Unions also suggest that because their claim involves "subject matter jurisdiction," Pet'rs Joint Reply Br. at 3, it can be raised at any time, just as a district court's subject matter jurisdiction can be raised at any time under Federal Rule of Civil Procedure 12(h)(3). Arguments as to agency jurisdiction, however, cannot be raised for the first time on appeal except in the very limited case, not presented here, where the challenge is to "the very composition or 'constitution' of an agency." Mitchell v. Christopher, 996 F.2d 375, 378 (D.C.Cir.1993).

B. The Merits

The Unions argue that the STB's vacatur of the arbitration panel's decision was arbitrary and capricious. The scope of the STB's review of arbitration proceedings is set forth in the Board's Lace Curtain decision. See Chicago & N.W. Transp. Co.--Abandonment, 3 I.C.C.2d 729 (1987), aff'd sub nom. International Bhd. of Elec. Workers v. ICC, 862 F.2d 330 (D.C.Cir.1988). Under Lace Curtain, the STB reviews an arbitration if it involves "recurring or otherwise significant issues of general importance regarding the interpretation of ... labor protective provisions," id. at 736, and will vacate an arbitral award only if "there is egregious error, the award fails to draw its essence from the collective bargaining agreement, or the arbitrator exceeds the specific contract limits on his authority," id. at 735. The Unions' primary argument is that, because the plain language of Article XVIII of the 1981 Agreement makes RLA procedures applicable to the 1993 Proposed Coordination, the arbitrators could not have committed "egregious error" in finding those procedures applicable.

We disagree that the language of Article XVIII requires the application of RLA procedures to implement the 1993 Proposed Coordination. Article XVIII states:

This Agreement shall remain in full force and effect until revised or modified in accordance with the Railway Labor Act, as amended.

JA 61. Like the STB, we believe that the language is susceptible...

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