Decker v. CSX Transp., Inc.

• Decision Date: 26 May 1988
• Docket Number: CIV-87-1391C.,No. CIV-87-1147C,CIV-87-1147C
• Citation: 688 F. Supp. 98
• Parties: Thomas A. DECKER, As Local Chairman for the U.T.U.; U.T.U., Local 377; and Robert W. Earley, General Chairman, U.T.U. General Committee of Adjustment C & T, B & O System, Plaintiffs, v. CSX TRANSPORTATION, INC., Defendant. CSX TRANSPORTATION, INC., Plaintiff, v. UNITED TRANSPORTATION UNION ("UTU"); F.A. Hardin, President (UTU); J.A. Cianciotti, General Chairman, (UTU(E)); Robert Earley, General Chairman, B & O General Committee of Adjustment (UTU (C & T)); United Transportation Union Yardmasters Department ("RYA"); B.R. Carver, President (RYA); Richard P. Degenova, General Chairman (RYA); American Train Dispatchers Association ("ADTA"); R.J. Irvin, President (ATDA); D.W. Branham, General Chairman (ATDA); Brotherhood of Locomotive Engineers ("BLE"); L.D. McFather, President (BLE); J.A. LeClair, General Chairman ("BLE"); Brotherhood of Maintenance of Way Employees ("BMWE"); G.N. Zeh, President (BMWE); B.J. Twigg, General Chairman (BMWE); Transportation Communications Union ("TCU"); R.D. Kilroy, International President (TCU); R.F. Malcolm, General Chairman, C & O System Board of Adjustment, Brotherhood of Railway, Airline and Steamship Clerks ("BRAC"); L.H. Tackett, General Chairman, B & O System Board of Adjustment No. 6, BRAC; Transportation Communications Union, Carmen Division ("Carmen"); C.E. Wheeler, President, (Carmen); M.L. Crawford, General Chairman (Carmen); and International Association of Machinists and Aerospace Workers ("IAM"), Defendants.
• Court: U.S. District Court — Western District of New York

688 F. Supp. 98

Thomas A. DECKER, As Local Chairman for the U.T.U.; U.T.U., Local 377; and Robert W. Earley, General Chairman, U.T.U. General Committee of Adjustment C & T, B & O System, Plaintiffs, v. CSX TRANSPORTATION, INC., Defendant.

CSX TRANSPORTATION, INC., Plaintiff, v. UNITED TRANSPORTATION UNION ("UTU"); F.A. Hardin, President (UTU); J.A. Cianciotti, General Chairman, (UTU(E)); Robert Earley, General Chairman, B & O General Committee of Adjustment (UTU (C & T)); United Transportation Union Yardmasters Department ("RYA"); B.R. Carver, President (RYA); Richard P. Degenova, General Chairman (RYA); American Train Dispatchers Association ("ADTA"); R.J. Irvin, President (ATDA); D.W. Branham, General Chairman (ATDA); Brotherhood of Locomotive Engineers ("BLE"); L.D. McFather, President (BLE); J.A. LeClair, General Chairman ("BLE"); Brotherhood of Maintenance of Way Employees ("BMWE"); G.N. Zeh, President (BMWE); B.J. Twigg, General Chairman (BMWE); Transportation Communications Union ("TCU"); R.D. Kilroy, International President (TCU); R.F. Malcolm, General Chairman, C & O System Board of Adjustment, Brotherhood of Railway, Airline and Steamship Clerks ("BRAC"); L.H. Tackett, General Chairman, B & O System Board of Adjustment No. 6, BRAC; Transportation Communications Union, Carmen Division ("Carmen"); C.E. Wheeler, President, (Carmen); M.L. Crawford, General Chairman (Carmen); and International Association of Machinists and Aerospace Workers ("IAM"), Defendants.

Nos. CIV-87-1147C, CIV-87-1391C.

United States District Court, W.D. New York.

May 26, 1988.

Akin, Gump, Strauss, Hauer & Feld (Ronald M. Johnson, of counsel), Washington, D.C., Moot & Sprague (Courtland LaVallee, of counsel), Buffalo, N.Y., for plaintiffs.

Highsaw & Mahoney, P.C. (John O'Brien Clarke, Jr., of counsel), Washington, D.C., Collins, Collins & DiNardo (John F. Collins, of counsel), Buffalo, N.Y., for defendants.

CURTIN, Chief Judge.

This case presents an important question, still unsettled by prior precedent, as to the interaction of two federal statutes: the Railway Labor Act, 45 U.S.C. §§ 151-188 RLA, and the Interstate Commerce Act, 49 U.S.C. §§ 10101-11917 ICA. The issue arises in the context of the pending sale by CSX Transportation, Inc. CSXT, plaintiff in this action for injunctive and declaratory relief, of a line of railroad between Buffalo, New York, and Eidenau, Pennsylvania, to the Buffalo and Pittsburgh Railroad, Inc. B & P, a newly formed corporation. Specifically, the question presented is whether a railroad has a duty to refrain from completing a sale of one of its rail lines pending bargaining under the RLA over the effects of that sale on the employees of that line when the Interstate Commerce Commission ICC has granted expedited approval to the proposed sale without imposition of labor protective conditions. In order to properly resolve this question, it will be helpful to the court to review the relevant statutory background, the factual and procedural background of the instant case, and the status of the relevant case law before addressing the specific areas of dispute between the parties.

Statutory Background

The RLA was enacted in 1926 to regulate labor relations on the nation's railroads by establishing an "elaborate machinery for negotiation, mediation, voluntary arbitration, and conciliation." Detroit and Toledo Shore Line Railroad v. United Transportation Union, 396 U.S. 142, 148-49, 90 S.Ct. 294, 298, 24 L.Ed.2d 325 (1969). Central to the RLA's purposes is the duty imposed on rail labor and carriers by § 2 First,

to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.

45 U.S.C. § 152 First; see Chicago & N.W. Railway Co. v. United Transp. Union, 402 U.S. 570, 574-75, 91 S.Ct. 1731, 1733-34, 29 L.Ed.2d 187 (1971). The disputes to which § 2 First refers fall into two categories — "major" disputes, which involve efforts to formulate new collective bargaining agreements or proposals to change existing agreements, and "minor" disputes, which involve the interpretation or application of a specific provision of an existing collective bargaining agreement.¹

Minor disputes are resolved through a formal grievance process that culminates in binding arbitration performed by the National Railroad Adjustment Board, as set forth in § 3, 45 U.S.C. § 153. When a minor dispute arises, the parties are not precluded from changing the status quo while arbitration is pending. See, e.g., United Transp. Union v. Penn Central Transp. Co., 505 F.2d 542, 545 (3d Cir. 1974). However, strikes over minor disputes are prohibited, and may be enjoined by the district court to preserve the jurisdiction of the Adjustment Board. Brotherhood of Railway Trainmen v. Chicago River & Indiana R.R. Co., 353 U.S. 30, 77 S.Ct. 635, 1 L.Ed.2d 622 reh'g denied, 353 U.S. 948, 77 S.Ct. 823, 1 L.Ed.2d 857 (1957). Major disputes, on the other hand, invoke a status quo obligation until the RLA bargaining processes have been exhausted. 45 U.S.C. §§ 152, 156; see Detroit & Toledo Shore Line, 396 U.S. at 150-53, 90 S.Ct. at 299-301.

Courts have the power to grant injunctive relief when a party violates the RLA procedures by unilaterally altering the status quo. Detroit v. Toledo Shore Line, 396 U.S. at 150, 90 S.Ct. at 299. Once the RLA processes are finally exhausted and it becomes clear that the parties will not reach an agreement, the status quo obligations are removed and the parties are free to resort to self-help. Brotherhood of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369 at 378-80, 89 S.Ct. 1109 at 1115-16, 22 L.Ed.2d 344 (1969).

The ICA was enacted in 1887 and has been substantively amended several times since.² It vests in the ICC exclusive jurisdiction to approve and regulate acquisitions of rail lines. See, e.g., 49 U.S.C. §§ 10901(a), 11343(a); see also Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 319-20, 101 S.Ct. 1124, 1131-32, 67 L.Ed.2d 258 (1981). Section 10901 governs the acquisition of rail lines by newly formed carriers and sets up a procedure whereby the new carrier may obtain prior approval of the transaction only upon a finding by the ICC "that the present or future public convenience and necessity require or permit" the transaction to proceed. 49 U.S.C. § 10901(a). The ICC has discretion to condition its approval on the provision of "a fair and equitable arrangement for the protection of the interests of railroad employees who may be affected by the transaction.." § 10901(e). Compare with 49 U.S.C. § 11347 (regulating consolidations, mergers, or acquisitions involving existing rail carriers) ("Commission shall require" labor protective conditions) (emphasis added). Pursuant to § 10505, the ICC may exempt any § 10901 transaction from the prior approval requirements when it finds that such regulation "is not necessary to carry out" national rail transportation policy and is "not needed to protect shippers from the abuse of market power." 49 U.S.C. § 10505(a).

As a means of facilitating entry into the railroad business, the ICC, in a 1985 rulemaking proceeding, decided to exempt from regulation under § 10901 the entire class of transactions involving acquisitions by non-carriers. See Ex Parte No. 392 (Sub. No. 1), Class Exemption for the Acquisition and Operation of Rail Lines Under 49 U.S.C. 10901, 1 I.C.C.2d 810 (1985) hereinafter Ex Parte 392, review denied mem. sub nom. Illinois Commerce Comm'n v. ICC, 817 F.2d 145 (D.C.Cir. 1987). Under Ex Parte 392, an exemption becomes effective, and a transaction deemed approved, seven days after the acquiring entity files notice of exemption with the ICC, 49 C.F.R. § 1150.32(b); 1 I.C.C.2d at 820, unless a petition to revoke the exemption has been filed or the transaction is stayed by the Commission. See 49 U.S.C. § 10505(d); 49 C.F.R. § 1150.34; 1 I.C.C.2d at 815.

Factual and Procedural Background

The following facts are not disputed. CSXT is a Class 1 railroad subject to the jurisdiction of the ICC under the ICA, and is also a "carrier" within the meaning of the RLA. CSXT operates rail lines in 20 states and in the province of Ontario, Canada. As part of its system, CSXT owns and operates a 369-mile line of railroad between Buffalo, New York, and Eidenau, Pennsylvania. This line was formerly part of the Baltimore and Ohio Railroad B & O which, along with the Chesapeake and Ohio Railroad C & O, was ultimately merged into CSXT as of 1987. CSXT presently administers all collective bargaining agreements between the former B & O and the unions representing employees on the Buffalo-Eidenau line. Item 31, pp. 1-2; Item 33, p. 2. (Item numbers refer to file No. CIV-87-1391C unless otherwise noted.)

Defendants are labor organizations and certain named officers of those organizations which represent various crafts or classes of CSXT employees, including those employees currently working on the Buffalo-Eidenau line. Defendants are representatives within the meaning of the RLA, 45 U.S.C. § 151, Sixth, and are all parties to collective bargaining agreements with CSXT. Item 33, p. 3.

CSXT asserts, and defendants do not dispute, that traffic on the Buffalo-Eidenau line has diminished to the point of marginality, and thus, in 1986, CSXT began looking for a buyer for that line.³ Upon learning of the carrier's intention to sell, a number of defendant unions served notices on CSXT under § 6 of the RLA seeking to preserve the status quo until negotiations could be conducted regarding the effects of the proposed sale on railroad employees. CSXT responded that these notices violated the moratorium provisions of the respective collective bargaining...