Norfolk and Western Railway Company v. American Train Dispatchers Association Csx Transportation, Inc v. Brotherhood of Railway Carmen

• Decision Date: 19 March 1991
• Docket Number: Nos. 89-1027,89-1028,s. 89-1027
• Citation: 111 S.Ct. 1156,113 L.Ed.2d 95,499 U.S. 117
• Parties: NORFOLK AND WESTERN RAILWAY COMPANY, et al., Petitioners, v. AMERICAN TRAIN DISPATCHERS ASSOCIATION et al. CSX TRANSPORTATION, INC., Petitioner, v. BROTHERHOOD OF RAILWAY CARMEN et al
• Court: U.S. Supreme Court

499 U.S. 117

111 S.Ct. 1156

113 L.Ed.2d 95

NORFOLK AND WESTERN RAILWAY COMPANY, et al., Petitioners,

v AMERICAN TRAIN DISPATCHERS ASSOCIATION et al.

CSX TRANSPORTATION, INC., Petitioner,

v. BROTHERHOOD OF RAILWAY CARMEN et al.

Nos. 89-1027, 89-1028.

Argued Dec. 3, 1990.

Decided March 19, 1991.

Syllabus

Once the Interstate Commerce Commission (ICC) has approved a rail carrier consolidation under the conditions set forth in Chapter 113 of the Interstate Commerce Act (Act), 49 U.S.C. § 11301 et seq., a carrier in such a consolidation "is exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction . . .," § 11341(a). In these cases, the ICC issued orders exempting parties to approved railway mergers from the provisions of collective-bargaining agreements. The Court of Appeals reversed and remanded, holding that § 11341(a) does not authorize the ICC to relieve a party of collectively bargained obligations that impede implementation of an approved transaction. Reasoning, inter alia, that the legislative history demonstrates a congressional intent that § 11341(a) apply to specific types of positive laws and not to common-law rules of liability, such as those governing contracts, the court declined to decide whether the section could operate to override provisions of the Railway Labor Act (RLA) governing the formation, construction, and enforcement of the collective-bargaining agreements at issue.

Held: The § 11341(a) exemption "from all other law" includes a carrier's legal obligations under a collective-bargaining agreement when necessary to carry out an ICC-approved transaction. The exemption's language, as correctly interpreted by the ICC, is clear, broad, and unqualified, bespeaking an unambiguous congressional intent to include any obstacle imposed by law. That language neither admits of a distinction between positive enactments and common-law liability rules nor supports the exclusion of contractual obligations. Thus, the exemption effects an override of such obligations by superseding the law—here, the RLA—which makes the contract binding. Cf. Schwabacher v. United States, 334 U.S. 182, 194-195, 200-201, 68 S.Ct. 958, 964-965, 967-968, 92 L.Ed. 1305. This determination makes sense of the Act's consolidation provisions, which were designed to promote economy and efficiency in interstate transportation by removing the burdens of excessive expenditure. Whereas § 11343(a)(1) requires the ICC to approve consolidations in the public interest, and § 11347 conditions such approval on satisfaction of certain labor-protective conditions, the § 11341(a) exemption guarantees that once employee interests are accounted for and the consolidation is approved, the RLA—whose major disputes resolution process is virtually interminable—will not prevent the efficiencies of consolidation from being achieved. Moreover, this reading will not, as the lower court feared, lead to bizarre results, since § 11341(a) does not exempt carriers from all law, but rather from all law necessary to carry out an approved transaction. Although it might be true that § 11341(a)'s scope is limited by § 11347, and that the breadth of the exemption is defined by the scope of the approved transaction, the conditions of approval and the standard for necessity are not at issue because the lower court did not pass on them and the parties do not challenge them here. Pp. 127-134.

279 U.S.App.D.C. 239, 880 F.2d 562, reversed and remanded.

KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O'CONNOR, SCALIA, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. ----.

Jeffrey S. Berlin, Washington, D.C. for petitioners. Jeffrey P. Minear, Washington, D.C., for federal respondents supporting petitioners. William G. Mahoney, Washington, D.C., for private respondents.

Justice KENNEDY delivered the opinion of the Court.

The Interstate Commerce Commission has the authority to approve rail carrier consolidations under certain conditions. 49 U.S.C. § 11301 et seq. A carrier in an approved consolidation "is exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction. . . ." § 11341(a). These cases require us to decide whether the carrier's exemption under § 11341(a) "from all other law" extends to its legal obligations under a collective-bargaining agreement. We hold that it does.

I

A.

"Prior to 1920, competition was the desideratum of our railroad economy." St. Joe Paper Co. v. Atlantic Coast Line R. Co., 347 U.S. 298, 315, 74 S.Ct. 574, 584, 98 L.Ed. 710 (1954). Following a period of Government ownership during World War I, however, "many of the railroads were in very weak condition and their continued survival was in jeopardy." Id., at 315, 74 S.Ct., at 584. At that time, the Nation made a commitment to railroad carrier consolidation as a means of promoting the health and efficiency of the railroad industry. Beginning with the Transportation Act of 1920, ch. 91, 41 Stat. 456, "consolidation of the railroads of the country, in the interest of economy and efficiency, became an established national policy . . . so intimately related to the maintenance of an adequate and efficient rail transportation system that the 'public interest' in the one cannot be dissociated from that in the other." United States v. Lowden, 308 U.S. 225, 232, 60 S.Ct. 248, 252, 84 L.Ed. 208 (1939). See generally St. Joe Paper Co. v. Atlantic Coast Line R. Co., supra, 347 U.S., at 315-321, 74 S.Ct., at 583-587.

Chapter 113 of the Interstate Commerce Act, recodified in 1978 at 49 U.S.C. § 11301 et seq., contains the current statement of this national policy. The Act grants the Interstate Commerce Commission exclusive authority to examine, condition, and approve proposed mergers and consolidations of transportation carriers within its jurisdiction. § 11343(a)(1). The Act requires the Commission to "approve and authorize" the transactions when they are "consistent with the public interest." § 11344(c). Among the factors the Commission must consider in making its public interest determination are "the interests of carrier employees affected by the proposed transaction." § 11344(b)(1)(D).¹ In authorizing a merger or consolidation, the Commission "may impose conditions governing the transaction." § 11344(c). Once the Commission approves a transaction, a carrier is "exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction." § 11341(a).

When a proposed merger involves rail carriers, the Act requires the Commission to impose labor-protective conditions on the transaction to safeguard the interests of adversely affected railroad employees. § 11347. In New York Dock Railway-Control-Brooklyn Eastern Dist. Terminal, 360 I.C.C. 60, 84-90, aff'd sub nom. New York Dock Railway v. United States, 609 F.2d 83 (CA2 1979), the Commission announced a comprehensive set of conditions and procedures designed to meet its obligations under § 11347. Section 2 of the New York Dock conditions provides that the "rates of pay, rules, working conditions and all collective bargaining and other rights, privileges and benefits . . . under applicable laws and/or existing collective bargaining agreements . . . shall be preserved unless changed by future collective bargaining agreements." 360 I.C.C., at 84. Section 4 sets forth negotiation and arbitration procedures for resolution of labor disputes arising from an approved railroad merger. Id., at 85. Under § 4, a merged or consolidated railroad which plans an operational change that may cause dismissal or displacement of any employee must provide the employee and his union 90 days' written notice. Ibid. If the carrier and union cannot agree on terms and conditions within 30 days, each party may submit the dispute for an expedited "final, binding and conclusive" determination by a neutral arbitrator. Ibid. Finally, the New York Dock conditions provide affected employees with up to six years of income protection, as well as reimbursements for moving costs and losses from the sale of a home. See id., at 86-89 (§§ 5-9, 12).

B

The two cases before us today involve separate ICC orders exempting parties to approved railway mergers from the provisions of collective-bargaining agreements.

1. In No. 89-1027, the Commission approved an application by NWS Enterprises, Inc., to acquire control of two previously separate rail carriers, petitioners Norfolk and Western Railway Company (N & W) and Southern Railway Company (Southern). See Norfolk Southern Corp.-Control-Norfolk & W.R. Co. and Southern R. Co., 366 I.C.C. 173 (1982). In its order approving control, the Commission imposed the standard New York Dock labor-protective conditions and noted the possibility that "further displacement [of employees] may arise as additional coordinations occur." 366 I.C.C., at 230-231.

In September 1986, this possibility became a reality. The carriers notified the American Train Dispatchers' Association, the bargaining representative for certain N & W employ- ees, that they proposed to consolidate all "power distribution" the assignment of locomotives to particular trains and facilities for the N & W-Southern operation. To effect the efficiency move, the carriers informed the union that they would transfer work performed at the N & W power distribution center in Roanoke, Virginia, to the Southern center in Atlanta, Georgia. The carriers proposed an implementing agreement in which affected N & W employees would be made management supervisors in Atlanta, and would receive increases in wages and benefits in addition to the relocation expenses and wage protections guaranteed by the New York Dock conditions. The union contended that this proposal involved a change...