Delaware & Hudson R. Corporation v. Williams, 7841

• Decision Date: 20 July 1942
• Docket Number: 7842.,No. 7841,7841
• Parties: DELAWARE & HUDSON R. CORPORATION et al. v. WILLIAMS, et al.
• Court: U.S. Court of Appeals — Seventh Circuit

129 F.2d 11 (1942)

DELAWARE & HUDSON R. CORPORATION et al. v. WILLIAMS, et al.

Nos. 7841, 7842.

Circuit Court of Appeals, Seventh Circuit.

June 18, 1942.

Rehearing Denied July 20, 1942.

Anan Raymond and Robert Z. Hickman, of Chicago, Ill., Joseph Rosch and James L. Fitzgerald, both of Albany, N. Y. (Poppenhusen, Johnston, Thompson & Raymond, of Chicago, Ill., of counsel), for appellant Delaware & Hudson R. Corporation.

Sydney R. Prince, Jr., of Baltimore, Md. (Sidney C. Murray, J. C. James, and C. H. Woods, all of Chicago, Ill., of counsel), for appellant E. W. Fowler and others.

Leo J. Hassenauer, of Chicago, Ill., for appellee.

Before EVANS, SPARKS, and KERNER, Circuit Judges.

EVANS, Circuit Judge.

The plaintiff Railroad¹ complains of the District Court's dismissal² of its suit brought to force a Division of the National Railroad Adjustment Board to proceed, and conclude the arbitration proceedings of 170 employee railroad disputes, 73 of which had been heard and a memorandum decision submitted by the Referee member of the Board. This Referee had been appointed by the National Mediation Board, pursuant to statute, upon certification that the Division, composed of five carrier members and five employee members, was deadlocked in its determination of these disputes.

The employees notified the Division of their withdrawal of these disputes from the Division's consideration. As to five cases, there has now been a resubmission to the Division, by the same disputants, and it was alleged that all the remaining cases would imminently be resubmitted, thereby burdening plaintiff with the undertaking anew of complete hearings thereof.

The motion to dismiss was granted upon the pleadings, which consisted of complaint and answer. Fact allegations of the complaint must therefore be accepted as true.

The District Court's dismissal was presumably predicated on its lack of jurisdiction of a suit to compel the National Railroad Adjustment Board to proceed with the arbitration of disputes submitted to it.

The suit arises out of, and calls for the application of the Federal Railway Labor Act, 45 U.S.C.A. § 153 et seq., the pertinent provisions of which are set forth in the margin.³

This Act received consideration by the Court in the case of Moore v. Illinois Central R. Co., 312 U.S. 630, 61 S.Ct. 754, 85 L.Ed. 1089, but the controverted issue there presented was whether an employee had to pursue the administrative remedies under the Act before he could sue for a wrongful discharge. The Court held the employee's administrative and judicial remedies were concurrent, and he might resort to the courts before exhausting his administrative remedy.

More particularly, the facts in the instant suit are:

During the period beginning June 17, 1936, and ending August 23, 1939, there were referred to the First Division of the National Railroad Adjustment Board, 170 disputes between the Railroad and its employees, growing out of interpretation of working agreements concerning rates of pay. The Division is constituted of ten members, five representing the carriers and five the employees. The Division, being deadlocked, could reach no decision on the 170 disputes, and in accordance with the statute, the National Mediation Board appointed a "referee" to be the eleventh member of the Division, who would cast the deciding vote. The Board selected the Hon. Royal A. Stone, a justice of the Supreme Court of Minnesota.

The Division then held hearings on the 170 disputes. The hearings were concluded and the cases taken under advisement. On April 18, 1940, the Brotherhood of Locomotive Engineers notified the Division by phone and by wire of their withdrawal of all the disputes from the consideration of the Division.

On May 13, 1940, the Referee, Justice Stone, who had the determining vote, wrote the members of the Division a letter, accompanying a long and seriously thought out memorandum, disposing of the 73 disputes, generally in favor of the Railroad. We set forth excerpts from that letter and a letter which he sent to the Secretary of the National Mediation Board, in the margin.⁴

The legal question in this case is one without a precise judicial precedent, — May a District Court, in a suit where mandatory relief is sought, direct the National Railroad Adjustment Board to proceed and dispose of railroad labor disputes, heretofore heard and submitted to it, but later withdrawn by the labor unions, when they become cognizant of the probability that the eleventh, and deciding, member of the Division was about to hold against them?

At common law, the rule was quite well settled that either party to an ordinary arbitration agreement might withdraw at any time prior to the announcement of the award. The cases on the subject are many.⁵ These holdings arose from a desire not to impair or diminish the jurisdiction of courts. (Several decisions, however, held that, even at common law, there may be no revocation of submission to arbitration after the proceedings have been submitted for determination.⁶)

We have progressed from the views which existed at common law, and, deeming arbitration to be a desirable and effective means of expeditiously and finally settling labor and other disputes, many states have enacted legislation making contracts for arbitration, and submission thereunder, irrevocable.

The Federal Government has such an act dealing with another matter. 9 U.S.C. A. Sec. 1 et seq. Section 2 reads:

"A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

Section 4 of this Act provides:

"A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any court of the United States which, save for such agreement, would have jurisdiction under the judicial code at law, in equity, or in admiralty of the subject matter of the suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. * * * If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. * * * If * * * the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof."

Section 4 of this Act expressly provides, when the facts warrant the relief, the "court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof."

It must be conceded that this Act does not cover railroad employees' labor contracts. In fact, it excludes them specifically, and from the fact that there is another, a specific Act, covering such controversies, it may well be argued that we should entirely exclude this Act from our consideration. To show that Congress had in mind the same purpose, as when enacting the other legislation, our attention is called to Sec. 3(p) of the Railway Labor Act, which provides, "The district courts are empowered * * * to make such order * * *, by writ of mandamus or otherwise, as may be appropriate to enforce * * * the order of the division."

We are much impressed by the modern legislative and judicial trend in arbitration matters. Formerly, arbitration matters were frowned upon. They were, for the most part, futile, because the arbitration proceedings could be so easily thwarted.

We can not, and should not, ignore the changes which have taken place, and which find manifestation in Acts like the two above-quoted. Nor should we close our eyes to the facts behind such legislation. Most significant of such facts is the realization that we are dealing with railroad labor disputes, where the public interest is large. Peace in railroad labor relations, uninterruption in railroad movements, the public welfare, and a recognition of the commanding interest of the public in securing uninterrupted transportation services, are the worthy and much sought objectives of this legislation. They must, and do, afford the background for our construction of the Act and the powers of the court when called upon to assist in its enforcement.

The Court in the Moore case, supra, 312 U.S. 630, 61 S.Ct. 756, 85 L.Ed. 1089, gave expression to this view, when it said:

"* * * the legislative history of the Railway Labor Act shows a consistent purpose on the part of Congress to establish and maintain a system for peaceful adjustment and mediation voluntary in its nature."

We are helped to our conclusion by the equities of the situation.

Each of these relatively minor disputes had been heard in full by the Division. There is no question as to the adequacy, completeness, or fairness of the hearings. After such hearings, the cases were taken under advisement by the Division — and since the ten regular members thereof had been deadlocked, much depended on the judgment of the eleventh member. It was possible he might sway some of the others, but it seems to be taken for granted that, as he decided, so would go the decision of the Division. He conferred with and consulted the other members of the Division, and they all, including the members representing the employees, were fully apprised of his determination. After such information came to the employees, they decided to withdraw the submission of their disputes. More, they wanted to take another chance, with the same administrative tribunal and try all over again — probably with the...