Division 1287, Amalgamated Transit Union, AFL-CIO v. Kansas City Area Transp. Authority

• Decision Date: 21 September 1978
• Docket Number: No. 78-1255,A,AFL-CI,78-1255
• Citation: 582 F.2d 444
• Parties: 99 L.R.R.M. (BNA) 2408, 48 A.L.R.Fed. 611 DIVISION 1287, AMALGAMATED TRANSIT UNION,ppellee, v. KANSAS CITY AREA TRANSPORTATION AUTHORITY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 444

582 F.2d 444

99 L.R.R.M. (BNA) 2408, 48 A.L.R.Fed. 611

DIVISION 1287, AMALGAMATED TRANSIT UNION, AFL-CIO, Appellee, v. KANSAS CITY AREA TRANSPORTATION AUTHORITY, Appellant.

No. 78-1255.

United States Court of Appeals Eighth Circuit.

Submitted June 15, 1978.

Decided Aug. 21, 1978.

As Amended on Denial of Rehearing and Rehearing En Banc

Sept. 21, 1978.

Howard F. Sachs, Spencer, Fane, Britt & Browne, Kansas City, Mo., for appellant; Harry L. Browne and James R. Willard, Kansas City, Mo., on the brief.

Linda R. Hirshman, Jacobs, Burns, Sugarman & Orlove, Chicago, Ill., for appellee; Earle Putnam, Gen. Counsel, Amalgamated Transit Union, Washington, D. C., on the brief.

Before STEPHENSON, Circuit Judge, INGRAHAM, Senior Circuit Judge, ^* and HENLEY, Circuit Judge.

HENLEY, Circuit Judge.

This is an action for declaratory and injunctive relief brought in the United States District Court for the Western District of Missouri (The Honorable John W. Oliver, District Judge) by Division 1287, Amalgamated Transit Union (Union) against the Kansas City Area Transportation Authority (Authority), which is a public agency that provides mass urban transportation in the general metropolitan area that includes the Cities of Kansas City, Missouri, and Kansas City, Kansas. The Authority was formed in 1967 as a result of a congressionally approved interstate compact between Missouri and Kansas and has received federal financial assistance running into many millions of dollars under the terms of the Urban Mass Transportation Act of 1964, as amended, 49 U.S.C. § 1601 Et seq. (the Act).

The suit was filed to compel the Authority to engage in what is known as interest arbitration ¹ to settle the terms and conditions of a collective bargaining agreement to take the place of one that expired on November 14, 1977.

The Union contends that it is entitled to interest arbitration by the terms of § 13(c) of the Act, 49 U.S.C. § 1609(c), by the terms of agreements entered into between the Union and the Authority as required by § 13(c) (§ 13(c) agreements), and by the grant contracts that have been entered into between the Authority and the government from time to time since 1968 which contracts have incorporated by reference the prevailing § 13(c) agreements. The Union takes the position that the suit arises under the Act, that the amount in controversy is in excess of $10,000.00, exclusive of interest and costs, and that federal jurisdiction existed in the district court by virtue of 28 U.S.C. § 1331(a).

The Authority contends that the district court lacked subject matter jurisdiction and that in any event the Union was not entitled to the relief that it sought.

The case was submitted to the district court largely on stipulations of fact. Judge Oliver filed detailed findings of fact, conclusions of law and comments. He concluded that he had jurisdiction and that the Union was entitled to prevail. An appropriate decree having been entered, this appeal followed.

I

The Union represents persons employed in certain capacities by private transit companies and public transportation agencies all over the United States. The record indicates that the Union is a strong believer in the proposition that labor disputes in the urban transportation industry should be settled by arbitration, including interest arbitration, rather than by strikes or lockouts.

As is well known, the urban mass transit industry in this country has been in a deteriorating condition for a long period of time. By 1964, and indeed earlier, Congress had concluded that many private companies would have to be taken over by public agencies, and that federal funds would have to be made available to those agencies in order to permit them to effect the take-overs. The result of that determination was the statute involved in this case.

The Act authorizes grants or loans of federal funds to state or local public authorities to enable them to acquire private transit companies. Employees of those companies will presumably become employees of the public agencies, and when it passed the Act Congress was concerned with the economic risks that such employees might incur as a result of the take-overs. Those risks might include loss of collective bargaining rights, loss of the right to strike, and loss of pension and retirement benefits. Section 13(c) of the Act is designed to protect, at least in large measure, the rights and interests of such employees from such risks.

In substance, § 13(c) provides that as a condition to a federal grant or loan the public agency applying for the same must enter into a protective agreement with the employees of the company to be taken over or with the collective bargaining agent of those employees. The agreement must be approved by the Secretary of Labor, and when approved it becomes a part of the grant contract between the agency and the government.

A § 13(c) agreement must preserve the rights of employees existing at the time of the public take-over, must preserve collective bargaining rights, and must protect employees from the worsening of their conditions of employment. The protection that must be provided against worsening of employment conditions must be at least equal to the protection that is afforded by 49 U.S.C. § 5(2) (f) to employees of rail carriers subject to the jurisdiction of the Interstate Commerce Commission who may be adversely affected by combinations or mergers of railroads.

II

For many years prior to the Authority's establishment and take-over of mass transportation in the Kansas City area, patrons of mass transportation services relied principally on Kansas City Transit Company and on nine much smaller companies.

The employees of Kansas City Transit Company (Transit) were covered by the National Labor Relations Act, and the Union was their bargaining representative. The collective bargaining agreements that were in force between the Union and Transit from time to time contained no-strike clauses and also provided a procedure whereby the parties could agree to continue bargaining after the expiration of a contract and to submit to binding arbitration any contract terms with respect to which they found themselves unable to agree.

The last of the agreements between the Union and Transit was executed on December 6, 1967 and covered an initial period between November 1, 1967 and October 31, 1968. It was automatically to be renewed from year to year thereafter unless the Union or Transit gave notice of termination not less than sixty days from the anniversary date of the contract. If a notice of termination was not given within that period or was withdrawn before the termination of the contract, a new contract was to be negotiated between the parties and terms on which they could not agree would be settled by interest arbitration.

Having been duly formed, the Authority in 1968 applied successfully to the government for a multi-million dollar grant to enable it to take over Transit and the smaller companies, to buy new busses, and to improve transit services in the Kansas City area. As required by the Act, a § 13(c) agreement was worked out between the Authority and the Union, was approved by the Secretary of Labor, and became a part of the grant contract between the Authority and the government.

The Authority took over urban transit operations in the Kansas City area in 1969, and since that time it has applied for and obtained numerous additional large grants of federal funds. In connection with the new grants new § 13(c) agreements have been entered into or it has been agreed that an existing agreement would be applicable to the new grant.

The Authority and the Union have entered into a number of collective bargaining agreements. At times the parties have not been able to agree as to the terms of a new agreement, and their disputes have been resolved by interest arbitration.

The most recent collective bargaining agreement between the Authority and the Union was executed in March, 1974 but was back-dated to November 1, 1973. The contract was to continue in force from year to year unless one of the parties gave written notice of termination not less than sixty days prior to the anniversary date of the contract.

By the fall of 1977 a number of differences between the Authority and the Union had arisen and on September 16, 1977 the Authority gave notice to the Union that the existing agreement would be terminated. The Union promptly demanded interest arbitration, and this suit was filed when the Authority refused to submit to arbitration as to the terms and conditions of a new contract.

III

We address ourselves, first, to the question of whether the district court had subject matter jurisdiction of the complaint. The position of the Authority is that this is simply a suit on a contract and does not arise under the Constitution or laws of the United States. The defendant also contends that there is an absence of the amount in controversy that is requisite in order to confer jurisdiction under 28 U.S.C. § 1331(a).

As to jurisdictional amount, the district court found that the evidence was insufficient to establish "to a legal certainty" that the amount in controversy was not in excess of $10,000.00, exclusive of interest and costs, as to each employee of the Authority, and the district court also found that the Union's financial interest in the case exceeded the jurisdictional minimum. On this question it is sufficient to say that we agree with the district court. Hunt v. Washington Apple Advertising Commission, 432 U.S. 333, 346-48, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977); Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Gibbs v. Buck, 307 U.S. 66, 72-76, 59 S.Ct. 725, 83 L.Ed. 1111 (1939); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-90, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Local Div. 519, Amalgamated Transit Union v. LaCrosse Municipal Transit Utility and the City of...