ME. CENT. R. v. BROTH. OF MAINTENANCE OF WAY EMP., Civ. No. 86-0366 P.

• Citation: 663 F. Supp. 425
• Decision Date: 03 June 1987
• Docket Number: Civ. No. 86-0366 P.
• Parties: MAINE CENTRAL RAILROAD COMPANY, and Portland Terminal Company, Plaintiffs, v. BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES, Defendant.
• Court: U.S. District Court — District of Maine

663 F. Supp. 425

MAINE CENTRAL RAILROAD COMPANY, and Portland Terminal Company, Plaintiffs, v. BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES, Defendant.

Civ. No. 86-0366 P.

United States District Court, D. Maine.

June 3, 1987.

Richard T. Conway, Shea & Gardner, Washington, D.C., Charles S. Einsiedler, Portland, Me., for plaintiffs.

John O. Clarke, Jr., Highway & Mahoney, Washington, D.C., Craig J. Rancourt, Biddeford, Me., for defendant.

MEMORANDUM OF DECISION AND ORDER

GENE CARTER, District Judge.

I.

On September 30, 1986, Congress ended a long labor dispute¹ between Plaintiffs, Maine Central Railroad Company and Portland Terminal Company (the Railroad), and Defendant Brotherhood of Maintenance of Way Employes (BMWE) by transforming the recommendations of Presidential Emergency Board No. 209 (the Emergency Board) into a binding agreement between the parties. Pub.L. 99-431, 100 Stat. 987 (1986).² Congress mandated that if the implementation of these recommendations required the resolution of any unsettled issues, these issues were to be submitted to binding arbitration. Id. (3)(A). This arbitration has occurred, and an award was entered on October 30, 1986.

On November 13, 1986, the Railroad challenged the validity of this award by filing the present petition to impeach.³ The parties have now brought the merits of the petition before the Court on Cross Motions for Summary Judgment.

Congress expressly provided that sections 7 and 9 of the Railway Labor Act, 45 U.S.C. §§ 157, 159 (1982), were to govern both the conduct of the arbitration and the enforceability of the present award, 100 Stat. 987(3)(B), thus giving this Court jurisdiction under 45 U.S.C. § 159 and 28 U.S.C. §§ 1331, 1337. The Railroad has met the jurisdictional requirements of section 9 by filing its petition ten days after the arbitration board filed the award in this Court on November 3, 1986. See 45 U.S.C. § 159, Second.

The Railroad has alleged five defects in the arbitration award: Count I, the arbitration board prevented the Railroad from presenting certain evidence; Count II, the board failed to make and failed to file in this Court a transcript of the proceedings; Count III, the board exceeded its authority by setting an excessive rate for per diem allowances; Count IV, the board exceeded its authority by including retroactive and lump sum payments as part of the rates of pay to be set by national wage settlement agreements; and Count V, the board exceeded its authority by imposing a two-year moratorium on the arbitrated agreement. The Court finds that there is no genuine issue of material fact as to Counts II, III, IV, and V and, for the reasons articulated infra, grants summary judgment for BMWE on these counts. The Court finds, however, that there are genuine issues of material fact as to Count I and therefore denies summary judgment to either party on this count. Before discussing the merits of each count, the Court first considers the statutory restraints upon its review.

II. Scope of Judicial Review

Section 9 of the Railway Labor Act delineates three exclusive grounds upon which the Railroad may impeach the award: one, for failure to comply with the Act; two, for failure to confine the award to the agreement to arbitrate; and three, for fraud. 45 U.S.C. § 159 Third.⁴ In addition to these standards, both parties rely in part on the case law that has interpreted the standards for judicial review applicable to section 3 of the Act, although at oral argument BMWE contended that there are subtle distinctions between the two sections.⁵ The Court finds that it may look to the standards articulated in cases decided under section 3 as Congress clearly intended to make the scope of judicial review in section 3 identical to that provided in section 9 despite the more circumscribed language in section 3. See S.Rep. No. 1201, 89th Cong. 1st Sess., reprinted in 1966 U.S.Code Cong. & Admin.News 2285, 2287 ("The limited grounds for judicial review provided in the present amendment to section 3 are the same grounds that are provided in section 9 of the Railway Labor Act...."); H.R.Rep. No. 1114, 89th Cong. 1st Sess. 15-16, reprinted in Subcomm. on Labor, Comm. on Labor & Public Welfare, U.S. Senate, Legislative History of the Railway Labor Act, As Amended (1926 through 1966), at 1321-22 (1974) (the three tests for judicial review under section 3 are "the tests traditionally applicable to awards of arbitration tribunals, as set out in section 9 of the Railway Labor Act.").

The Railroad has also drawn arguments from the standards applied in cases concerning other types of arbitrations. Although the express language of section 9 might be interpreted as requiring a narrower review than is permitted under these more generalized standards, the Court accepts this additional case law in light of the weight of authority that has disclaimed any distinctions among the various statutory provisions and common law principles. See, e.g., Brotherhood of Locomotive Eng'r v. Atchison, T. & S.F. Ry., 768 F.2d 914, 921 (7th Cir.1985) (drawing analogy between section 3 of the Railway Labor Act and the inquiry necessary to set aside arbitration awards in industries subject to section 301 of the Taft-Hartley Act, 29 U.S.C. § 185 (1982), and section 10 of the United States Arbitration Act, 9 U.S.C. § 10(d) (1982)); Loveless v. Eastern Air Lines, 681 F.2d 1272, 1276 (11th Cir.1982) (finding the aforementioned sections to be codifications of the basic principles governing the finality of arbitration); accord Gunther v. San Diego & A.E. Ry., 382 U.S. 257, 261, 263 (1965) (upholding, under section 3 of the Railway Labor Act, arbitrators' interpretation of collective bargaining agreement that was not "wholly baseless and completely without reason" and finding that the decisions of section 3 boards have "the same finality that a decision of arbitrators would have."); S.Rep. No. 1201, supra, at 2287 (noting that courts would retain the power under the amended version of section 3 to set aside awards that are "actually and indisputedly without foundation in reason or fact"). See generally Annot., 9 A.L.R.Fed. 533 (1971).

This scope of review is considered "among the narrowest known to the law." Union Pacific R.R. v. Sheehan, 439 U.S. 89, 91, 99 S.Ct. 399, 401, 58 L.Ed.2d 354 (1978), reh'g denied, 439 U.S. 1135, 99 S.Ct. 1060, 59 L.Ed.2d 98 (1979) (describing the restrictions under section 3); accord Myron v. Consolidated Rail Corp., 752 F.2d 50, 52 (2d Cir.1985); Denver & Rio Grande Western R.R. v. Blackett, 538 F.2d 291, 293 (10th Cir.1976). Judge Posner has suggested that

perhaps "review" is a misnomer. The district court ... does not review the correctness of the arbitration award, even under a highly deferential standard, such as "clearly erroneous" or "clear abuse of discretion." All it asks ... is whether the arbitrators did the job they were told to do — not whether they did it well, or correctly, or reasonably, but simply whether they did it.

Brotherhood of Locomotive Eng'r, 768 F.2d at 921.

This Circuit, however, has developed its own standards for determining the validity of labor arbitration awards. Local 1445, United Food & Commercial Workers Int'l Union v. Stop & Shop Co., 776 F.2d 19, 21 (1st Cir.1985). Although some of these standards are identical to those provided under section 9 of the Railway Labor Act, see Courier-Citizen Co. v. Boston Electrotypers Union, 702 F.2d 273, 281 (1st Cir. 1983) (arbitrators cannot resolve issues not submitted to them), others do not necessarily accord the arbitration process the same degree of deference as might be implied from Judge Posner's description.

For instance, courts in this Circuit may vacate an arbitration award if the arbitrators make manifest errors of law, Bettencourt v. Boston Edison Co., 560 F.2d 1045, 1049 (1st Cir.1977), or gross errors of fact, International Brotherhood of Firemen & Oilers v. Great Northern Paper Co., 765 F.2d 295, 296 (1st Cir.1985). Contra Brotherhood of Locomotive Eng'r, 768 F.2d at 922 (criticizing those courts that have blurred the distinction between gross errors and ultra vires acts). A manifest error is one that is "`unfounded in reason and fact', or is based on reasoning `so palpably faulty that no judge, or group of judges, could ever conceivably have made such a ruling', or is mistakenly based on a crucial assumption which is `concededly a non-fact.'" Bettencourt, 560 F.2d at 1050 (citations omitted). This type of error may occur if the arbitrators undertake to disregard or modify the unambiguous provisions of the underlying collective bargaining agreement, S.D. Warren Co. v. United Paperworkers' Int'l Union, 815 F.2d 178 (1st Cir.1987); Hoteles Condado Beach v. Union de Tronquistas, 763 F.2d 34, 41-42 (1st Cir.1985), or to impose a remedy that is neither customary in arbitration awards nor provided for by the agreement, Bacardi Corp. v. Congreso de Uniones Industriales, 692 F.2d 210, 214 (1st Cir.1982); cf. Courier-Citizen 702 F.2d at 281 (a remedy not expressly stated in the submission but widely and commonly employed by arbitrators is "within the contemplation of the parties") (dicta). Although the question of whether the Circuit would apply its own standards to an arbitration conducted under section 9 of the Railway Labor Act is a question of first impression, the Court finds that these standards are alternative expressions of the "wholly baseless and completely without reason" standard articulated in Gunther and thus considers the above cases to be binding authority. Cf. Keay v. Eastern Air Lines, 440 F.2d 667 (1st Cir.1971) (affirming section 3 arbitration without discussing general labor law arbitration standards).

Turning now to the issues before it, the Court notes that the five defects alleged by the Railroad all fall within two of the exclusive grounds for impeachment provided by section 9. The first three support a claim that the award exceeds the...