Air Transp. Ass'n Of America Inc. v. Nat'l Mediation Bd., Civil Action No. 10-0804(PLF).

Decision Date28 June 2010
Docket NumberCivil Action No. 10-0804(PLF).
PartiesAIR TRANSPORT ASSOCIATION OF AMERICA, INC., et al., Plaintiffs, v. NATIONAL MEDIATION BOARD, et al., Defendants.
CourtU.S. District Court — District of Columbia

OPINION TEXT STARTS HERE

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Stephen Dudley Brody, Irv Gornstein, Micah William Janso Smith, O'Melveny & Myers, LLP, Washington, DC, Chris A. Hollinger, O'Melveny & Myers LLP, San Francisco, CA, Robert A. Siegel, O'Melveny & Myers, Los Angeles, CA, for Plaintiffs.

Tamra Tyree Moore, Thomas David Zimpleman, U.S. Department of Justice, Washington, DC, for Defendants.

OPINION

PAUL L. FRIEDMAN, District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment. The Court heard oral argument on the motions on June 21, 2010. After careful consideration of the parties' papers and attached exhibits, the Final Rule and portions of the administrative record, the oral argument made by counsel in open court, and the relevant case law and statutes, the Court granted the defendants' motions, denied the plaintiffs' motions, and entered judgment for the defendants on June 25, 2010. This Opinion explains the reasoning underlying the Court's June 25 Order.

I. BACKGROUND

The National Mediation Board (the Board), the federal agency that oversees labor-management relations involving railroads and airlines, is required by the Railway Labor Act (“RLA”) to investigate representation disputes “among a carrier's employees as to who are the representatives of such employees ... and to certify to both parties, in writing ... the name or names of the individuals or organizations that have been designated and authorized to represent the employees involved in the dispute, and to certify the same to the carrier.” 45 U.S.C. § 152, Ninth. The Board may hold an election by secret ballot or use “any other appropriate method” to determine what representative, if any, the employees have selected. Id. The carrier is obligated to “treat” with the certified organization as the employee's bargaining representative. Id.

The Board's traditional policy in conducting elections, which had been in place for 75 years, required that a majority of all eligible voters in the craft or class must cast valid ballots in favor of representation (the “Original Rule”) before the Board would certify the election. See Representation Election Procedure, 75 Fed.Reg. 26,062, 26,062 (May 11, 2010) (to be codified at 29 C.F.R. pts. 1202, 1206). This policy was based on the Board's construction of Section 2, Fourth of the RLA. Id.

On May 11, 2010, after an informal rulemaking process involving notice and comment, the Board issued a Final Rule which changed this policy (the “New Rule”). See 75 Fed. Reg. at 26,062. The New Rule amends the Board's rules to provide that, in representation disputes, a majority of the valid ballots that are actually cast will determine the craft or class representative. See id. at 26,062. It does not require that a majority of the craft or class participate in the election.

On May 17, 2010, plaintiff Air Transport Association of America, Inc. (ATA) filed this lawsuit, asserting that the New Rule violates the RLA, 45 U.S.C. § 152, Fourth, and that it is arbitrary, capricious, and not in accordance with law under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et seq. Two days later, ATA moved for a preliminary injunction to enjoin the New Rule from going into effect as scheduled on June 10, 2010. At an initial status conference, the government agreed to stay the effective date of the New Rule until June 30, 2010, to permit the litigation before the Court to proceed at a more measured pace. In the time since ATA's complaint was filed, numerous parties have intervened on both sides of the case: the Chamber of Commerce and five individual Delta employees as plaintiffs, and the International Brotherhood of Teamsters, the Aircraft Mechanics Fraternal Association, and the United States Airline Pilots Association as defendants.

In connection with the motion for a preliminary injunction, ATA also filed a motion to take expedited discovery to support its contention that two members of the Board acted with unalterably closed minds regarding the New Rule and predetermined the outcome of the rulemaking process in violation of the APA. After hearing oral argument, the Court denied the motion. See Opinion and Order, Dkt. No. 44 (June 4, 2010). Thereafter, because the entire case would be resolved based on the administrative record, which was filed on June 14, 2010, the parties agreed to convert the briefing on ATA's motion for a preliminary injunction into cross-motions for summary judgment.

II. LEGAL FRAMEWORK
A. The Administrative Procedure Act

The National Mediation Board's rulemaking is subject to review under Section 706 of the Administrative Procedure Act. See, e.g., U.S. Airways, Inc. v. National Mediation Board, 177 F.3d 985, 989 & n. 2 (D.C.Cir.1999); Ry. Labor Executives' Ass'n v. National Mediation Board, 29 F.3d 655, 672-73 (D.C.Cir.1994) (Randolph, J., concurring). The standard of review under Section 706 of the APA “is a highly deferential one. It presumes agency action to be valid.” Humane Soc'y of the United States v. Kempthorne, 579 F.Supp.2d 7, 12 (D.D.C.2008) (quoting Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C.Cir.1976)). Nevertheless, a reviewing court must reject agency action if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Agency action is arbitrary and capricious if the agency

relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). If the agency has “considered the relevant factors and articulated a rational connection between the facts found and the choices made,” its decision cannot be considered arbitrary and capricious. Balt. Gas & Elec. Co. v. Natural Resources Defense Council, Inc., 462 U.S. 87, 105, 103 S.Ct. 2246, 76 L.Ed.2d 437 (1983); see also City of Portland v. EPA, 507 F.3d 706, 713 (D.C.Cir.2007).

As explained in more detail below, one of the plaintiffs' principal arguments calls into question the Board's interpretation of the RLA. When the action under review involves an agency's interpretation of a statute that the agency is charged with administering, the Court applies the familiar analytical framework set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). “Under step one of Chevron, [the court] ask[s] whether Congress has directly spoken to the precise question at issue, in which case [the court] must give effect to the unambiguously expressed intent of Congress.” Sec'y of Labor, Mine Safety & Health Admin. v. National Cement Co. of California, Inc., 494 F.3d 1066, 1073 (D.C.Cir.2007) (internal quotation marks and citation omitted); see also Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. at 842-43, 104 S.Ct. 2778. In determining whether Congress has directly spoken to the precise question at issue, the Court should use all the “traditional tools of statutory construction,” including textual analysis, structural analysis, and (when appropriate) legislative history. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. at 843 n. 9, 104 S.Ct. 2778; see also Bell Atlantic Tel. Co. v. FCC, 131 F.3d 1044, 1047 (D.C.Cir.1997). If, after employing these tools, the Court concludes that “the statute is silent or ambiguous with respect to the specific issue ..., [the Court] move[s] to the second step and defer[s] to the agency's interpretation as long as it is ‘based on a permissible construction of the statute.’ Sec'y of Labor, Mine Safety & Health Admin. v. National Cement Co. of California, Inc., 494 F.3d at 1074 (quoting Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. at 843, 104 S.Ct. 2778); see also In Defense of Animals v. Salazar, 675 F.Supp.2d 89, 94 (D.D.C.2009).

In the D.C. Circuit, Chevron step two review is similar to (but conceptually distinct from) the standard ‘arbitrary and capricious' style analysis” described in the first paragraph of this subsection. Continental Air Lines, Inc. v. DOT, 843 F.2d 1444, 1452 (D.C.Cir.1988). 1 Thus, a ‘reasonable’ explanation of how an agency's interpretation serves the statute's objectives is the stuff of which a ‘permissible’ construction is made ...; an explanation that is ‘arbitrary, capricious, or manifestly contrary to the statute,’ however, is not.” Northpoint Technology Ltd. v. FCC, 412 F.3d 145, 151 (D.C.Cir.2005) (quoting Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. at 844, 104 S.Ct. 2778). ‘Reasonableness' in this context means ... the compatibility of the agency's interpretation with the policy goals ... or objectives of Congress.” Continental Air Lines Inc. v. DOT, 843 F.2d at 1452. As a result, “the critical point is whether the agency has advanced what the Chevron Court called ‘a reasonable explanation for its conclusion that the regulations serve the ... objectives [in question].’ Continental Air Lines Inc. v. DOT, 843 F.2d at 1452; see also 1 Richard J. Pierce, Jr., Administrative Law Treatise § 3.6 at 172-73 (4th ed. 2002) (under Chevron step two, courts must determine, among other things, “whether the agency adequately discussed the relationship between the interpretation and pursuit of the goals of the statute). 2

B. Summary Judgment

Summary judgment may be granted “if the pleadings, the...

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