Arnold v. Louisville and Nashville Railroad Company

• Decision Date: 19 January 1960
• Docket Number: 2652.,Civ. A. No. 2650,2651
• Citation: 180 F. Supp. 429
• Court: U.S. District Court — Middle District of Tennessee
• Parties: John R. ARNOLD et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant. James C. BATTS et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant. Leonard H. MONTGOMERY et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant.

180 F. Supp. 429

John R. ARNOLD et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant.

James C. BATTS et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant.

Leonard H. MONTGOMERY et al., Plaintiffs, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Defendant.

Civ. A. Nos. 2650, 2651, 2652.

United States District Court M. D. Tennessee, Nashville Division.

January 19, 1960.

Walter Harwood and Judson Harwood, of Harwood, Breedlove & Mittwede, Nashville, Tenn., for plaintiffs.

David Keeble, of Hooker, Keeble, Dodson & Harris, Nashville, Tenn., H. G. Breetz, Louisville, Ky., for defendant.

WILLIAM E. MILLER, District Judge.

These actions have been submitted upon plaintiffs' amended complaints and defendants' motions to dismiss. The motions present identical legal questions.

The facts, as disclosed by the amended complaints, the motions to dismiss, and the affidavits filed in support of the motions, are as follows:

Prior to August 14, 1957, plaintiffs were employed by the Nashville, Chattanooga & St. Louis Railway and by the Louisville and Nashville Railroad Company. On March 1, 1957, the Interstate Commerce Commission, in Finance Docket No. 18845, Louisville & Nashville Railroad Company et al., Merger, etc., approve the acquisition of the properties and franchises of the Nashville, Chattanooga & St. Louis Railway by the Louisville and Nashville Railroad Company through a merger of the two railroads into the Louisville and Nashville Railroad Company, the defendant in each of the cases. The actual merger was effected on August 14, 1957, at which time all of the plaintiffs became employees of the defendant. They allege that they were subsequently discharged as a result of the merger of the two railroads and that under the conditions imposed by the Commission for the protection of employees who would be adversely affected by the merger the defendant is required to pay them the amounts they are seeking to recover. They ground their claim of Federal jurisdiction upon four sections of the United States Code, namely, 28 U.S.C. §§ 1336 and 1337, and 49 U.S.C.A. §§ 8, 9.¹

The grounds for the motion to dismiss are, in substance, that the court lacks jurisdiction of the subject matter because (1) jurisdiction is not conferred by any of the provisions of the Code under which the actions were brought, (2) the amended complaints do not show an exhaustion of administrative remedies provided for by the orders of the Commission, (3) the amended complaints do not show an exhaustion of administrative remedies provided for by the orders of the Commission as implemented by a collective bargaining agreement executed by defendant and the duly authorized representatives of plaintiffs, or by the Railway Labor Act (45 U.S.C.A. § 151 et seq.), and (4) "* * * the only remedies available to plaintiffs are the administrative remedies of arbitration" as provided for by the order of the Commission as implemented by the collective bargaining agreement, or having the Commission resolve the dispute.

The merger was effected with the approval of the Commission under the provisions of 49 U.S.C.A. § 5(2). Subparagraph (f) of that section provides that the Commission shall, as a condition of its approval of a merger, require a fair and equitable arrangement to protect the interests of the employees affected.²

Complying with this statutory mandate, the Commission approved the merger subject to the conditions and arrangements for the protection of employees as set out in its report of March 1, 1957 (295 I.C.C. 501). These conditions and arrangements were the same as those imposed in New Orleans Passenger Terminal Case, 282 I.C.C. 271, wherein the Commission found that a fair and equitable arrangement for the protection of affected employees would be provided by applying the terms of "The Washington Agreement of May 21, 1936." The Washington Agreement referred to contains the following provisions pertinent here:

"Section 7(a). Any employee of any of the carriers participating in a particular coordination who is deprived of employment as a result of said coordination shall be accorded an allowance (hereinafter termed a coordination allowance), based on length of service which * * * shall be a monthly allowance equivalent * * *

* * * * * *

"Section 9. Any employee eligible to receive a coordination allowance under section 7 hereof may, at his option at the time of coordination, resign and (in lieu of all other benefits and protections provided in this agreement) accept in a lump sum a separation allowance determined in accordance with the following schedule:

                       "Length of Service                Separation Allowance
                     1 year   & less than  2 years          3 months' pay
                     2 years     "    "    3   "            6   "      "
                     3   "       "    "    5   "            9   "      "
                     5   "       "    "   10   "           12   "      "
                    10   "       "    "   15   "           12   "      "
                    15 years and over                      12   "      "
                

"In the case of employees with less than one year's service, five days' pay * * * for each month in which they performed service will be paid in a lump sum."

In its report of March 1, 1957, the Commission further provided that disputes as to particular employees or groups of employees affected by actions of the railroads in consummating the merger may be resolved by following the procedures set forth in Condition No. 8 of the conditions prescribed in Oklahoma Ry. Trustee Abandonment, 257 I.C.C. 177, such condition being in these terms:

"In the event that any dispute or controversy arises with respect to the protection afforded by the foregoing conditions * * * which cannot be settled by the carriers and the employee, or his authorized representatives, within 30 days after the controversy arises, it may be referred, by either party, to an arbitration committee for consideration and determination, the formation of which committee, its duties, procedure, expenses, etc., shall be agreed upon by the carriers and the employee, or his duly authorized representatives."

On January 10, 1958, defendant and the duly authorized representatives of its employees executed a Memorandum of Agreement effective January 16, 1958, the material provisions of which are as follows:

"The Nashville, Chattanooga and St. Louis Railway has been merged into the Louisville and Nashville Railroad Company by authority of an order of the Interstate Commerce Commission in Finance Docket No. 18845 which became effective August 14, 1957.

"The Interstate Commerce Commission prescribed conditions for the protection of employes employees who may be adversely affected by the transaction. Therefore, it is understood that the protective provisions of the New Orleans Union Passenger Terminal consolidation, 282 I.C.C. 271, will govern in this instance except as changed or supplemented herein.

* * * * * *

"Lump Sum Settlement

"Any employe employee eligible to receive a dismissal allowance may at his option at the time he is adversely affected, * * * resign and (in lieu of all other benefits and protection herein provided for) accept a lump sum separation allowance determined in accordance with Section 9 of the Washington Agreement.

* * * * * *

"Handling of Disputes

"(a) Claims arising under the provisions of this agreement or the protective conditions imposed by the Interstate Commerce Commission may be handled by the employes employees or their representatives directly with the Chief Personnel Officer. * * *

"In the event that any dispute arises with respect to protection * * * which cannot be settled by the carrier and the authorized representatives of the employe employee or employes employees involved within thirty days after the controversy arises, it may be referred, by either party, to an arbitration board selected as follows: * * * Decision of the dispute shall be by majority of the arbitration board and shall be final and binding on both parties."

All of the plaintiffs were discharged after the execution of the Memorandum of Agreement effective January 16, 1958.

Upon termination of their employment, plaintiffs severally filed claims with defendant asserting their rights to the protective benefits, and notifying defendant that they were electing "to accept a lump sum settlement as provided in said Memorandum of Agreement in lieu of all other benefits and protection afforded therein * * *."

In their original complaints, plaintiffs asserted their rights under the orders of the Commission as implemented by the Memorandum of Agreement effective January 16, 1958. With the Court's permission, they later filed amended complaints in which all references to the Memorandum of Agreement effective January 16, 1958, have been eliminated, and they now rest their claims solely upon the order of the Commission approving the merger and the conditions imposed therein for their protection. The first question thus presented is whether plaintiffs' rights, and their causes of action, now derive from the order of the Commission or from the Memorandum of Agreement effective January 16, 1958.

Plaintiffs' argument, as the Court understands it, is that their rights are not affected by the Memorandum of Agreement, as their collective bargaining representatives were without authority to "bargain away" rights which they derived under the order of the Commission. This argument, however, ignores the specific provision of the statute wherein it is stated:

"Notwithstanding any other provisions of this chapter * * *, an agreement pertaining to the protection of the interest of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees."

Thus, while the statute requires the Commission to make provisions for the protection of employees adversely affected, it specifically reserves to the railroad employees the...