Brotherhood of Loc. Eng. v. Chicago & North Western Ry. Co.

• Decision Date: 03 April 1963
• Docket Number: No. 17098.,17098.
• Citation: 314 F.2d 424
• Parties: BROTHERHOOD OF LOCOMOTIVE ENGINEERS, an Unincorporated Association, et al., Appellants, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

314 F.2d 424 (1963)

BROTHERHOOD OF LOCOMOTIVE ENGINEERS, an Unincorporated Association, et al., Appellants, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, a Corporation, Appellee.

No. 17098.

United States Court of Appeals Eighth Circuit.

March 7, 1963.

Rehearing Denied April 3, 1963.

H. E. Wilmarth, Cedar Rapids, Iowa, for appellants; V. C. Shuttleworth and W. R. Shuttleworth, of Elliott, Shuttleworth & Ingersoll, Cedar Rapids, Iowa, with him on the brief.

Jordan Jay Hillman, Chicago, Ill., for appellee; Frank W. Davis, of Davis, Huebner, Johnson, Burt & Fulton, Des Moines, Iowa, with him on the brief.

Before SANBORN, VAN OOSTERHOUT and MATTHES, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

Plaintiff Chicago and North Western Railway Company (North Western) brought this action against the defendant labor organizations and officers thereof for declaratory judgment as authorized by 28 U.S.C.A. §§ 2201, 2202, to determine the rights of the parties with respect to the lawful procedures to be followed in adjusting seniority rights of employees affected by the consolidation of plaintiff's railroad yard with the newly acquired Minneapolis & St. Louis Railway Company (M. & St. L.) yard at Marshalltown, Iowa.

North Western and M. & St. L. are common carriers by railroad engaged in interstate commerce and are subject to the provisions of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., as well as the Railway Labor Act, 45 U.S.C.A. § 151 et seq. It is conceded that each of the railway employees affected by the consolidation is represented by a defendant labor organization. Railway Labor Executives' Association (RLEA) is the duly authorized representative of the defendant labor organizations.

Jurisdiction as asserted by reason of 28 U.S.C.A. § 1337 was challenged and upheld by the trial court. The issue presented is thus stated by the trial court:

"The basic question presented herein is, whether the parties are required to follow the procedures of the Railway Labor Act (45 U.S.C.A. § 151 et seq.) in effecting the proposed coordination of North Western\'s railroad yards at Marshalltown, Iowa, or whether the parties are required to follow the procedures prescribed by the `stipulation\' entered into by the parties and authorized by the Interstate Commerce Commission in its order approving the merger under the provisions of Section 5(2) (f) and Section 5(11) of the Interstate Commerce Act, 49 U.S. C.A. § 5(2) (f), 5(11)."

The trial court thus resolved such issue:

"1. That the Railway Labor Act (45 U.S.C.A. § 151 et seq.) is inapplicable to the proposed coordination of plaintiff\'s Marshalltown railroad yards.

"2. The parties hereto in carrying out the proposed coordination are required to follow the procedures prescribed by the stipulation entered into on August 4, 1960 and filed in Finance Docket No. 21115 before the Interstate Commerce Commission."

The trial court's well-considered opinion setting out the pertinent facts and applicable law is reported at 202 F.Supp. 277.

Defendants as a basis for reversal urge:

"I. The District Court erred in holding that it had jurisdiction of the controversy under Section 1337 of Title 28, U.S.C.

"II. The District Court should have dismissed the action as involving an abstract question.

"III. The Court erred in its ruling and judgment as to jurisdiction and as to the merits of the controversy."

As a background for the consideration of the errors asserted, we will set out some of the pertinent facts. There is no dispute between the parties as to the basic facts. On October 13, 1960, by order entered in Finance Docket No. 21115, the Interstate Commerce Commission (ICC), acting under § 5(2) of the Interstate Commerce Act, after considering appropriate applications on file and after due notice and hearing, entered an order authorizing North Western to acquire by purchase the railroad properties and operating rights of M. & St. L. The purchase authorized was consummated. North Western took over the operation of M. & St. L. on November 1, 1960.

The present controversy arising out of the aforesaid merger proceedings relates to the provision made for the protection of the employees and to the Commission's right to make such provisions which conflict with existing collective bargaining agreements and the prescribed procedures set forth in the Railway Labor Act. The ICC report reads in part:

"Applicants also entered into a stipulation with railway labor organizations represented by the Railway Labor Executives\' Association for the protection of all employees of the applicants whose bargaining representatives are members of the association. The stipulation is of the character contemplated by section 5(2) (f) of the act for the protection of railway employees who may be adversely affected by the transaction authorized. As to the employees covered by the stipulation, no conditions in our order are necessary."

The stipulation referred to in the report and order was made between North Western and M. & St. L. and RLEA, the authorized representative of the employees. Material portions of the stipulation are set out at pages 280, 281, 285 and 286 of 202 F.Supp. The stipulation followed generally the pattern of the Washington Job Protection Agreement of 1936,¹ with some modifications.

The stipulation provides "the Commission may accept this agreement as one providing a fair and equitable arrangement for the protection of the interests of such employes as provided in Section 5(2) (f) of the Interstate Commerce Act, as amended."

The stipulation incorporating the employees' agreement filed with the Commission states: "the protection of the interests of the employees of the carrier parties to the above-entitled proceeding has been provided by said agreement, and any report and order issued by the Commission in said proceeding approving the application may so state."

The stipulation provides the basis for determining compensation to be paid employees adversely affected by the merger. Section 5 of the Washington Agreement, incorporated in and made a part of the stipulation, reads:

"Each plan of coordination which results in the displacement of employes or rearrangement of forces shall provide for the selection of forces from the employes of all the carriers involved on bases accepted as appropriate for application in the particular case; and any assignment of employes made necessary by a coordination shall be made on the basis of an agreement between the carriers and the organizations of the employes affected, parties hereto."

The stipulation further provides that in event a controversy cannot be decided as set out above, it may be referred to an arbitration committee composed of one member selected by each party and a third member to be selected by such members, or if they are unable to agree, either party may request the National Mediation Board to appoint a third member and that "the decision of the majority of the arbitration committee shall be final and conclusive."

On December 16, 1960, North Western gave notice in the manner prescribed in the stipulation that it contemplated coordinating its yard and the yard formerly operated by M. & St. L. at Marshalltown, Iowa, not earlier than March 17, 1961, and that such consolidation would result in the abolishment of one yard engine assignment (one engineer, one fireman, one foreman and two helper assignments). North Western also sent letters to the representatives of the yard employees requesting conferences contemplated by the stipulation for the purpose of reaching an agreement as to employees to be released and the solution of the labor problems flowing from the coordination. Numerous letters were exchanged between plaintiff and defendants wherein plaintiff contended that the controversy should be settled in the manner provided by the stipulation while defendants contended that the dispute must be handled under the provisions of § 6 of the Railway Labor Act. After it became apparent that any attempt to adjust the differences by negotiation would be futile, plaintiff invoked the arbitration provisions of the stipulation, notifying the defendants of the identity of its arbitrator, and plaintiff later requested the National Mediation Board to designate the neutral arbitrator pursuant to the stipulation provisions. Defendants, upon the basis that the Railway Labor Act controls, refused to name an arbitrator. The National Mediation Board did not act upon plaintiff's request that it appoint a neutral arbitrator.

Defendants' first point, to the effect that the court lacks jurisdiction, is without merit. The trial court states in its opinion, "The problem is not one of interpretation of collective agreements, but as heretofore set out, primarily involves the interpretation and effect of Section 5(11) of the Interstate Commerce Act on an agreement for the protection of employees approved by the Interstate Commerce Commission under Section 5(2) of the Act."

28 U.S.C.A. § 1337 confers jurisdiction upon federal courts over actions arising under any act of Congress regulating commerce. We agree with the contention of the parties that Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70, prescribes the rules to be applied in determining whether an action arises under the provisions of the Interstate Commerce Act and the Railway Labor Act. Gully thus states the test of jurisdiction: "The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another." 299 U.S. 112, 57 S.Ct. 97, 81 L.Ed. 70. The problem of statutory construction here presented is a substantial one and fully satisfies the Gully test.

Defendants' contentions that the action should be dismissed as presenting only an abstract question and that the court erred in ruling upon the merits present complex problems of statutory interpretation and...