Am. Train Dispatchers Ass'n v. Nat'l Railway Labor Conference

• Decision Date: 09 March 2021
• Docket Number: Case No. 1:20-cv-02139 (TNM)
• Parties: AMERICAN TRAIN DISPATCHERS ASSOCIATION, et al., Plaintiffs, v. NATIONAL RAILWAY LABOR CONFERENCE, et al., Defendants.
• Court: U.S. District Court — District of Columbia

525 F.Supp.3d 107

AMERICAN TRAIN DISPATCHERS ASSOCIATION, et al., Plaintiffs,

v.NATIONAL RAILWAY LABOR CONFERENCE, et al., Defendants.

Case No. 1:20-cv-02139 (TNM)

United States District Court, District of Columbia.

Signed March 9, 2021

Elizabeth A. Roma, John J. Grunert, Jr., Guerrieri, Claymon, Bartos, Parcelli & Roma PC, Washington, DC, for Plaintiffs.

Donald J. Munro, Jones Day, Washington, DC, Aaron Samuels Markel, Jones Day, Washington, MI, for Defendants.

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

This case is about what dispute resolution process applies to a disagreement between railroads and their employees. A group of unions representing railroad employees ("Unions") sue to prevent various railroads from implementing changes to their health benefit plans outside collective bargaining. The railroads want to reorganize the current vendors that contract with the employees’ health care providers. The railroads also seek to adopt a program designed to manage opioid prescription use. The Unions contend that both proposals qualify as "major" disputes subject to the formal bargaining processes under the Railway Labor Act ("RLA").

The railroads move to dismiss for lack of jurisdiction. They claim that both proposals constitute "minor" disputes because they arguably relate to the plans’ "administration," and the parties assigned a "neutral" to exclusively resolve such disputes if the parties deadlocked.

There is a strong presumption that a dispute is "minor" under the RLA. The Court need only find that the employer's contested action is "arguably justified" under the parties’ existing agreement. The railroads clear this low bar. The Court will therefore dismiss the case.

I.

Defendants are several railroads and the National Railway Labor Conference, an association of railroads that represents its members with labor relations (collectively, "Railroads").¹ Compl. ¶¶ 15–22, ECF No. 1. The Railroads and Unions² maintain two multiemployer health benefit plans ("Plans") that provide health care benefits to rail employees and their families. See id. ¶¶ 3, 32; Decl. of Dennis R. Pierce ("Pierce Decl.") ¶ 8, ECF No. 10-1. The Plans’ benefits are provided through the Managed Medical Care Program ("MMCP") and the Comprehensive Health Care Benefit ("CHCB") program. Pierce Decl. ¶ 42. MMCP offers "enhanced benefits" if members "utilize in-network medical service providers." Id. CHCB "generally provides uniform benefit levels for medical services without financial incentives to utilize particular providers." Id.

The Plans use UnitedHealthcare, Aetna, and Highmark Blue Cross/Blue Shield ("Highmark") as the network vendors that manage the MMCP preferred healthcare providers throughout the country. Id. A network's availability depends on the geographic region. Decl. of Brendan M. Branon in Supp. Defs.’ Mot. Dismiss ("Branon Decl.") ¶ 14, ECF No. 7.

The parties collectively bargain over changes to the Plans. Pierce Decl. ¶ 9; Branon Decl. ¶¶ 8–10. Each plan incorporates a Summary Plan Description ("SPD") detailing the benefits offered. Pierce Decl. ¶ 10; Branon Decl. ¶ 10. The SPDs are updated to reflect changes to the Plans. Pierce Decl. ¶ 10; Branon Decl. ¶ 10.

A joint committee with equal representation from labor and management administers the Plans ("Joint Committees"). The Joint Plan Committee ("JPC") administers the Railroad Employees National Health and Welfare Plan ("National Plan"), and the Governing Committee administers the National Railway Carriers and United Transportation Union Health and Welfare Plan ("UTU Plan"). See Compl. ¶¶ 33–34, 36; Pierce Decl. ¶ 9. These Joint Committees serve as fiduciaries to the Plans. See Branon Decl. Ex. 1 Art. VI §§ 6.1, 6.3 at 73–74, ECF No. 7-1; id. Ex. 2 Art. VI §§ 6.1, 6.4 at 8, 11, ECF No. 7-2.³

The Joint Committees also include a "neutral."⁴ This member must vote when the labor and management representatives "deadlock" on any matter "arising out of the interpretation, application or administration (including investment policy) of the Plan":

A neutral shall be retained by and at the expense of the Plan for the duration of this [ ] Agreement to consider and vote on any matter brought before the Joint Plan Committee (formerly the Joint Policyholder Committee), arising out of the interpretation, application or administration (including investment policy) of the Plan, but only if the [JPC] is deadlocked with respect to the matter. A deadlock shall occur whenever the carrier members of the [JPC], who shall have a total of one vote regardless of their number, and the organization members of the [JPC], who shall also have a total of one vote regardless of their number, do not resolve a matter by a vote of two to nil and either side declares a deadlock.

Id. Ex. 20 Art. III Part A § 3 at 10, ECF No. 7-22; see also id. Ex. 2 Art. VI § 6.2(f)(4) at 10 (containing similar provision for neutral member under UTU Plan). The neutral has never been used. Compl. ¶ 61.

The Railroads and Unions are currently engaged in bargaining over proposed amendments to their collective bargaining agreements. Id. ¶¶ 30–31. As part of that bargaining, the Railroads "seek to modernize the [Plans’] design and administrative practices," which includes to "[a]dopt all pharmacy management rules and programs to ensure appropriate medications are being prescribed" and to "[r]econfigure the medical vendor network to utilize networks with favorable provider discounts and overall cost of care." Id. ¶ 38 (cleaned up); see also Pierce Decl. ¶ 23.

Meanwhile, the Railroads raised similar proposals through the Joint Committees. Compl. ¶¶ 39, 48. Two are relevant here. First, the Railroads want an Advanced Opioid Management Program ("AOM Program"). Id. ¶ 39. The AOM Program "would, among other things, limit prescription amounts, dosages and permissible usage, require prior authorizations, and limit the locations where a prescription could be filled by a patient." Id. ¶ 40. Second, the Railroads re-raised their proposal to reconfigure the Plans’ health care network vendors "to utilize networks with favorable provider discounts and overall cost of care." Id. ¶¶ 38, 54. The Unions’ representatives rejected both proposals in the Joint Committees, arguing that the parties must handle them through collective bargaining. Id. ¶¶ 51, 55–56.

The Railroads disagreed. They claimed that the Joint Committees can (and should) adopt both proposals and that a "failure to do so violated their fiduciary duty to the Plans." Id. ¶ 58. The Railroads also asserted that the neutral should resolve any dispute over the proposals. Id.

The Unions now sue the Railroads. They claim that the Railroads’ "position here is a gross misuse" of the Joint Committees and "nothing short of a thinly veiled attempt to circumvent the collective bargaining process and their obligation to engage in good faith bargaining" under the RLA. Id. ¶ 62. The Unions bring a single count of "[v]iolation of the RLA." Id. at 25. Under the Unions’ theory, the Railroads’ "intention to force the Unions to bargain over these proposed health and welfare changes" through the Joint Committees "is contrary to the RLA and its duty to bargain in good faith with the Unions." Id. ¶ 67. The Unions seek declaratory and injunctive relief to force the Railroads to address the network realignment and AOM Program proposals through the collective bargaining process, not the Joint Committees. Id. at 27.

The Railroads move to dismiss the complaint for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1). See Defs.’ Mot. Dismiss, ECF No. 6. They contend that the Joint Committees’ neutral must resolve this dispute over the two proposals because they are matters of Plan "administration." Statement of P. & A. in Supp. Defs.’ Mot. Dismiss ("Defs.’ Mem.") at 32–37, ECF No. 6-1. The motion is ripe for disposition.

II.

To survive a dismissal motion under 12(b)(1), the plaintiff bears the burden of establishing the court's jurisdiction over the claims. See Moms Against Mercury v. FDA , 483 F.3d 824, 828 (D.C. Cir. 2007). "The court must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion because subject-matter jurisdiction focuses on the court's power to hear the claim." Adams v. U.S. Capitol Police Bd. , 564 F. Supp. 2d 37, 40 (D.D.C. 2008). A court may also consider materials outside the pleadings to evaluate whether it has jurisdiction. See Herbert v. Nat'l Acad. of Scis. , 974 F.2d 192, 197 (D.C. Cir. 1992).

Jurisdiction here rests on whether the parties’ dispute is "major" or "minor" under the RLA.⁵ Classifying the dispute as major or minor dictates the track the parties must take to resolve their dispute. Minor disputes are "first to be handled according to the grievance procedure agreed upon in the CBA and, if unsuccessful, are submitted to mandatory arbitration before the National Railroad Adjustment Board or ... a special board of adjustment established by the carrier and union." Int'l Bhd. of Teamsters v. Atlas Air, Inc. , 435 F. Supp. 3d 128, 134 (D.D.C. 2020). "The district court has jurisdiction to compel arbitration of such disputes." Ass'n of Flight Attendants, AFL-CIO v. United Airlines, Inc. , 71 F.3d 915, 917 (D.C. Cir. 1995). Courts, however, retain jurisdiction to resolve major disputes. See Consol. Rail Corp. v. Ry. Lab. Execs.’ Ass'n , 491 U.S. 299, 302–03, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) (" Conrail ").

"[M]ajor disputes seek to create contractual rights, minor disputes to enforce them." Id. at 302, 109 S.Ct. 2477. Major disputes relate to "the formation of collective agreements or efforts to secure them." Elgin, J. & E. Ry. Co. v. Burley , 325 U.S. 711, 723, 65 S.Ct. 1282, 89 L.Ed. 1886 (1946). "They arise where there is no such agreement or where it is sought to change the terms of one, and therefore the issue is not whether an existing agreement controls the controversy." Id.

Minor...