Brotherhood of. Eng., Trainmen v. Surface Transp.

• Decision Date: 25 July 2006
• Docket Number: No. 05-1233.,05-1233.
• Citation: 457 F.3d 24
• Parties: BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN, A DIVISION OF THE RAIL CONFERENCE-INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Petitioner v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents. Kansas City Southern Railway Company and Kaw River Railroad, Inc., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

457 F.3d 24

BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN, A DIVISION OF THE RAIL CONFERENCE-INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Petitioner v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents.

Kansas City Southern Railway Company and Kaw River Railroad, Inc., Intervenors.

No. 05-1233.

United States Court of Appeals, District of Columbia Circuit.

Argued March 23, 2006.

Decided July 25, 2006.

On Petition for Review of an Order of the Surface Transportation Board.

Gordon P. MacDougall argued the cause and filed the briefs for petitioner.

Marilyn R. Levitt, Attorney, Surface Transportation Board, argued the cause for respondent. With her on the brief were Thomas O. Barnett, Acting Assistant Attorney General, U.S. Department of Justice, John J. Powers, III and Robert J. Wiggers, Attorneys, Ellen D. Hanson, General Counsel, Surface Transportation Board, and Craig M. Keats, Deputy General Counsel.

Before: GINSBURG, Chief Judge, and BROWN and GRIFFITH, Circuit Judges.

GINSBURG, Chief Judge.

The Kaw River Railroad, Inc. (KRR) secured the authorization of the Surface Transportation Board to acquire by lease, sublease, and assignment some 18.2 miles of track controlled by the Kansas City Southern Railway Company (KCS). The Brotherhood of Locomotive Engineers and Trainmen, which represents employees of the KCS, argues the Board did not have jurisdiction to approve the transfer because the track is "switching" track and therefore excepted from STB authority pursuant to 49 U.S.C. § 10906. We dismiss the petition because the Union does not have standing to seek review.

I. Background

Under the Interstate Commerce Act, as amended, a noncarrier may "acquire a railroad line or acquire or operate an extended or additional railroad line, only if the Board issues a certificate authorizing" the action. Id. § 10901(a)(4); cf. id. §§ 10901-03, 11323 (rail carrier generally must obtain Board authorization before it may construct, acquire, or initiate or cease operations over, rail line). The Board must exempt a transaction from the authorization process, however, when it determines regulation is unnecessary to carry out the policies of the statute. See id. § 10502.

In 2004 the KRR, then a noncarrier, filed with the Board a "Notice of Exemption" pursuant to the Board's "class exemption" procedure, seeking authority to acquire from the KCS and operate 18.2 miles of track as a common carrier. See Class Exemption for the Acquisition & Operation of Rail Lines Under 49 U.S.C. 10901, 1 I.C.C.2d 810 (1985) (exempting nearly all acquisitions and operations from § 10901 unless adversely affected party files petition to revoke exemption); 49 C.F.R. §§ 1150.31-1150.35. Before the KRR made its filing, the KCS had been conducting switching and other operations over the tracks.

The Union filed a petition to revoke the exemption pursuant to 49 U.S.C. § 10502(d), arguing the Board could not approve the transaction because, as "switching" track, it was excepted from the Board's authority. See id. § 10906 ("Notwithstanding section 10901 .... [t]he Board does not have authority under this chapter over ... spur, industrial, team, switching, or side tracks"). Unlike a transaction exempted under § 10502 from the rigors of § 10901, a transaction excepted under § 10906 is outside the Board's authority altogether, so that prior Board approval is neither required nor appropriate.

Whether a transaction is exempt under § 10502 or excepted under § 10906, the result is the same: The Board does not regulate it. The difference was significant to the Union, however, because of the collective bargaining agreement (CBA) the Union had negotiated with the KCS. That CBA provided with respect to transactions "authorized under § 10901," but not with respect to transactions excepted from the Board's authority, that "the arrangements provided [herein] shall be deemed to fulfill all of the parties' bargaining obligations that may exist under any applicable statute, agreement or other authority with respect to such transaction." In other words, the KCS did not have to bargain with the Union before it consummated a transaction authorized under (or exempted from) § 10901. The upshot was that the Union argued the KRR's filing for exemption was "a scam" intended to change the "rates of pay, rules or working conditions of its employees, ... as embodied in agreements" between the Union and the KCS, 45 U.S.C. §§ 152 Seventh, 156, without following the collective bargaining procedures required by the Railway Labor Act, id. § 151 et seq.

The Board denied the Union's petition, thereby allowing the transaction to go forward exempt from § 10901. The KRR had disputed the Union's assertion that all the track at issue was switching track, but the Board concluded that "even if the track in question could have been characterized as switching track under 10906 when operated by the previous operator," it was the KRR's prospective use of the track that controlled its characterization. See Effingham R.R., STB Docket No. 41986, 1997 WL 564155 (STB served Sept. 12, 1997), aff'd sub nom. United Transp. Union-Illinois Legislative Bd. v. STB, 183 F.3d 606 (7th Cir.1999); Bhd. of Locomotive Eng'rs v. STB, 101 F.3d 718, 726-28 (D.C.Cir.1996) (transaction subject to Board authority where switching operation had "effect of substantially extending the tenant railroads' lines into new territory"). The Board reasoned that because the "new operation made possible by this transaction constitutes KRR's entire line of railroad," the track was "encompassed by 10901" and the KRR needed either the Board's authorization under, or an exemption from, § 10901. "Merely characterizing the proposed operations as switching does not relieve a rail operator of the obligation to obtain a Board license if the operator is holding out common carrier service to the public over a line of railroad." The Union petitions for review of this decision.

II. Analysis

The Union argues on review that the Board could not lawfully approve the KRR's acquisition of track from the KCS through its class exemption procedure because the transaction is excepted from the Board's authority under § 10906. The Board argues the Union lacks prudential standing because its sole interest here is in requiring the KCS to bargain under the RLA. See Bhd. of Locomotive Eng'rs, 101 F.3d at 723 (in addition to constitutional requirements of standing, party claiming to be aggrieved by agency action must show "interest sought to be protected by the complainant [is] arguably within the zone of interests to be protected or regulated by the statute... in question") (quoting Ass'n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970)).

We begin our analysis, as we must, with the question of our jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Because we conclude we lack jurisdiction under Article III of the Constitution of the United States, we do not address the Board's prudential standing argument. See High Plains Wireless, L.P. v. FCC, 276 F.3d 599, 605 (D.C.Cir. 2002) (court has independent duty to assure itself of its jurisdiction); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) ("It is hardly novel for a federal court to choose among threshold grounds for denying audience to a case on the merits"); Free Air Corp. v. FCC, 130 F.3d 447, 448 n. 1 (D.C.Cir.1997) (passing over respondent's prudential standing argument where petitioner lacked Article III standing).

Three elements are necessary to establish the "irreducible constitutional minimum of standing": (1) "injury in fact," (2) "a causal connection between the injury and the conduct complained of," and (3) a likelihood the injury "will be `redressed by a favorable decision.'" Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citation omitted). The Union argues the injury in this case is twofold. First, it claims the KRR's acquisition of track previously owned or leased by the KCS caused some KCS employees to lose some job shifts to KRR employees and thereby to suffer a partial "loss of employment," a "reduction in earnings," or a displacement to "less desirable work ... at less desirable locations." Second, the Union claims the Board's exemption of the transaction prevented the Union from invoking the bargaining procedures of the RLA.

We fail to see how the former injury is redressable. If the Union prevails here, the transaction would be excepted from Board authority pursuant to § 10906 rather than exempted from the procedures of § 10901 pursuant to § 10502. The Union advances no reason to believe that as a result the Union's members would be restored to their prior shifts, higher wages, and more desirable work.

The latter injury is redressable, however; if it prevails, the Union would have the opportunity to negotiate with the KCS under the procedures of the RLA because it would avoid the provision in its negotiated collective bargaining agreement, in which it waived the right to bargain anew in the event of a transaction exempted from § 10901. And that is sufficient to meet both the injury and the redressability requirements of the standing inquiry. See Bhd. of Locomotive Eng'rs, 101 F.3d at 724 ("The possibility that one characterization of the transaction could lead to greater labor protection than another ... yields sufficient potential for greater protection to [the] employees to provide a justiciable injury").

The Union's claim derails, however, when it hits the requirement of causation. In order to establish causation, the claimed injury—here the Union's inability, under the terms of its CBA with the KCS, to invoke its right to bargain as provided in the RLA—must be "fairly ... trace[able] to the challenged action" of the Board, that is, exemption of the track...