Delpro Co. v. National Mediation Bd. of USA

• Decision Date: 06 March 1981
• Docket Number: Civ. A. No. 80-517.
• Citation: 509 F. Supp. 468
• Parties: DELPRO COMPANY, Plaintiff, v. NATIONAL MEDIATION BOARD OF the U. S. A. et al., Defendants.
• Court: U.S. District Court — District of Delaware

509 F. Supp. 468

DELPRO COMPANY, Plaintiff, v. NATIONAL MEDIATION BOARD OF the U. S. A. et al., Defendants.

Civ. A. No. 80-517.

United States District Court, D. Delaware.

March 6, 1981.

Richard G. Elliott, Jr., Richards, Layton & Finger, Wilmington, Del., for plaintiff; Ray J. Schoonhoven, Philip V. Carter, and Valerie J. Hoffman, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., of counsel.

James W. Garvin, Jr., U. S. Atty., Peggy L. Ableman, Asst. U. S. Atty., Wilmington, Del., Alice Daniel, Asst. Atty. Gen., Sandra M. Schraibman, and Daniel J. Metcalfe, Dept. of Justice, Washington, D. C., for defendants.

OPINION

MURRAY M. SCHWARTZ, District Judge.

Delpro, Inc., ("Delpro"), a Delaware corporation, and a wholly owned subsidiary of Trailer Train Company ("Trailer Train"), is engaged in the business of repairing railroad freight cars. Trailer Train, also a Delaware corporation, is engaged in the business of leasing railroad cars to railroads. The stock of Trailer Train is owned by twenty-nine operating railroads, the trustees of two former operating railroads and one freight forwarding company. Delpro's railroad car repair work is done exclusively for Trailer Train and for the Railbox Company, another subsidiary of Trailer Train. Trailer Train owns two other subsidiaries engaged in the repair of railroad equipment and also contracts out to independent repair shops a substantial amount of work.

On August 20, 1980, the Brotherhood Railway Carmen of the United States and Canada ("Railway Carmen") filed with the National Mediation Board ("NMB" or "Board") an application pursuant to Section 2, Ninth, of the Railway Labor Act¹ requesting the NMB to investigate an alleged representation dispute among the employees of Delpro. Subsequent to the Railway Carmen's application Delpro submitted to the NMB written material in support of its position that it is not a "carrier" within the meaning of the Railway Labor Act² and that it therefore is not subject to the jurisdiction of the NMB. The NMB issued a Determination of Jurisdiction on October 1, 1980, in which it found that Trailer Train and Delpro are carriers within the meaning of the Act because both are owned and controlled by rail carriers, and both "exist solely to facilitate rail transportation by supplying or maintaining equipment to be used by rail carriers, which equipment historically has been owned and maintained by rail carriers." The National Mediation Board therefore concluded that it had jurisdiction over Delpro and directed that a Board Representative be assigned to complete the investigation of the alleged representation dispute. Delpro immediately informed the NMB of its intention to seek reconsideration of the Board's jurisdictional decision and requested either a formal hearing or an opportunity to submit evidence and legal arguments on the question of the Board's jurisdiction over Delpro. On October 2, 1980, the NMB granted Delpro until October 8, 1980, "to make a prima facie showing," through written submissions, that the Board's determination of jurisdiction over Delpro was erroneous, and reserved decision on whether a hearing would be necessary. On October 8 Delpro filed a formal Petition for Reconsideration, with supporting affidavits and exhibits, in which it argued that neither Delpro nor Trailer Train was a carrier within the meaning of the Railway Labor Act, and requested the Board to either overrule its earlier determination of jurisdiction over Delpro or to order a formal hearing on the matter. On October 15, 1980, the Board denied Delpro's Petition for Reconsideration, concluding that the evidence submitted by Delpro did not support Delpro's contention that it was not a carrier, and denied Delpro's request for a hearing.

This action was commenced on October 23, 1980, when Delpro filed a complaint against the National Mediation Board, in essence alleging that the Board had exceeded its statutory jurisdiction, and seeking a declaratory judgment that Delpro is not a carrier within the meaning of the Railway Labor Act and preliminary and permanent injunctive relief that would restrain the NMB from conducting any further proceedings in connection with the alleged representation dispute at Delpro. Delpro filed with its complaint a motion for preliminary injunction to restrain any further proceedings by the NMB. The Board, on November 17, 1980, moved to dismiss the action for want of subject matter jurisdiction, arguing that the claims raised by Delpro were not ripe for judicial review.

Hearing on Delpro's motion for a preliminary injunction and on the Board's motion to dismiss was held on December 8, 1980. At argument Delpro took the position that the Board lacked jurisdiction over it, and that if the investigation and certification proceedings continued Delpro would suffer irreparable harm.³ Delpro thus sought an injunction that would promptly halt all proceedings by the Board, and thus foreclose the possibility that the Board would certify a labor representative for Delpro's employees. The Board opposed Delpro's motion for a preliminary injunction, arguing that the Court lacked subject matter jurisdiction to review a National Mediation Board determination of jurisdiction while the Board was still carrying out its administrative responsibilities of investigating the alleged representation dispute, holding an election and certifying a representative if warranted. Thus the relief sought by both Delpro and the Board hinged upon the pendency of NMB proceedings: Delpro, because the alleged irreparable harm being suffered was attributed to the continuing NMB certification proceedings, and the NMB because its argument was that the controversy was not ripe for adjudication prior to the time it had certified a representative. At the December 8, 1980, hearing, the parties informed the Court that the certification process was nearing completion and that the NMB might certify a representative as early as December 15, 1980. In fact, on December 17, 1980, the NMB certified the Railway Carmen as representative of the class of carmen, helpers and apprentices at Delpro. Since the Court had not yet ruled on Delpro's motion for a preliminary injunction or the Board's motion to dismiss, the procedural posture of the controversy was substantially altered with the Board's issuance of its certification of the Railway Carmen.⁴

The change in circumstances prompted Delpro to file, on December 29, 1980, a supplemental complaint and a "Motion for Stay of Certification." Delpro alleged in its complaint that it will suffer irreparable injury unless the certification is stayed, including possible civil and criminal fines and penalties should it refuse to bargain with the Railway Carmen, inevitable disruption of Delpro's workforce should Delpro refuse to bargain with the union, including potential strikes and picketing, and economic loss as a result of the labor disputes. Delpro expressly seeks a stay of certification in lieu of its earlier requested preliminary injunction. The Board responded on January 5, 1981, by filing a supplemental motion to dismiss on two grounds: (1) pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure because the NMB's determination of jurisdiction was not "a patently gross violation of a statutory prohibition" and the Court therefore lacks subject matter jurisdiction of the controversy; and (2) pursuant to Rule 12(b)(6) because the NMB's determination of jurisdiction was correct as a matter of law, and Delpro's complaint, as supplemented, therefore fails to state a claim upon which relief can be granted.

I

I will first address the NMB's contention that this Court lacks subject matter jurisdiction to review its determination of jurisdiction over Delpro.

It is well established that the federal courts have very limited jurisdiction to review actions of the National Mediation Board. In the leading case of Switchmen's Union v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61 (1943), the Supreme Court laid down the rule that factual determinations made during the course of certification proceedings, and which have been expressly delegated by statute to the Board, are not subject to judicial review. Thus, when the Board determined that all yardmen employed in the New York Central rail system should participate in a single representation election, and then certified the victorious union as representative of all yardmen, the district court lacked jurisdiction to hear a claim by a rival union that the Board should have divided the yardmen into separate crafts or classes and then permitted each group of yardmen to elect separate representatives. The court held that the Board's action was unreviewable because the Railway Labor Act expressly gave the Board the power to determine the appropriate craft or class in which an election should be held, and because to permit review would, contrary to Congress's intent, impede and drag out the established procedures for expeditiously certifying a representative. See 320 U.S. at 300-01, 305, 64 S.Ct. at 99. More recently, in Brotherhood of Railway and Steamship Clerks v. Association for the Benefit of Non-Contract Employees,⁵ the Court held that the NMB's designation of the appropriate craft or class to participate in a representation election is not subject to judicial review provided that the Board, prior to defining the group of employees eligible to participate in the election, has conducted the statutorily required investigation. See 380 U.S. at 668, 85 S.Ct. at 1201. In addition, the Court held that the Board's selection of a ballot for use in a representation election is a necessary incident of its duty to resolve representation disputes, and that such a decision is not subject to judicial review absent a showing that the Board "acted in excess of its statutory authority." 380 U.S. at 669, 85 S.Ct. at 1202. It is thus clear that Congress has vested the NMB with...