Goff v. Dakota, Minnesota, 01-1110

• Decision Date: 18 October 2001
• Docket Number: No. 01-1110,01-1110
• Citation: 276 F.3d 992
• Parties: (8th Cir. 2002) RONALD I. GOFF, APPELLEE, v. DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION, APPELLANT. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 992

276 F.3d 992 (8th Cir. 2002)

RONALD I. GOFF, APPELLEE, v. DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION, APPELLANT.

No. 01-1110

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: October 18, 2001

January 14, 2002

Appeal from the United States District Court for the District of South Dakota. [Copyrighted Material Omitted] Mark E. Salter, Sioux Falls, SD, argued, for appellant.

Robert L. Morris, Belle Fourche, SD, argued, for appellee.

Before Bowman, Richard S. Arnold, and Hansen, Circuit Judges.

Hansen, Circuit Judge

Ronald Goff, a locomotive engineer for the Dakota, Minnesota & Eastern Railroad (DM&E), was operating a DM&E train which derailed in South Dakota. A postaccident drug test revealed the presence of a marijuana metabolite in Goff's system. After an investigation and a disciplinary hearing, DM&E terminated Goff as a result of his drug use. Goff appealed his dismissal to a Public Law Board (the Board), convened pursuant to the Railway Labor Act (RLA), 45 U.S.C. §§ 151-188. The Board reinstated Goff with seniority and benefits but denied his claim for lost wages. Goff sought further review in the district court, which reversed and remanded the Board's decision, finding that DM&E had committed fraud during the Board hearing and had denied Goff due process. Upon review, we conclude that the district court clearly erred in its findings, and accordingly, we reverse and remand for reinstatement of the Board's order.

I.

Following the August 22, 1995, derailment near New Underwood, South Dakota, DM&E directed Goff to move the undamaged section of the train on eastwardly. Once relieved by a crew change, Goff and his crew were transported to a local medical center in Rapid City to provide urine and blood samples for a toxicology screening. The medical center split Goff's urine sample into two testable portions. On August 29, 1995, DM&E Vice President of Transportation Robert Irwin informed Goff that his urine sample tested positive for tetrahydrocannabinol (THC), a marijuana metabolite. Goff requested that the untested half of his split urine sample be tested by another laboratory. The second test also came back positive for THC. Irwin ordered Goff removed from service pending a hearing.

Irwin presided over Goff's postsuspension hearing. Goff, the DM&E account technician, the DM&E trainmaster, the President and Conductors Local chairman, and the Locomotive Engineers Local chairman were also in attendance at the hearing. Goff never denied using marijuana, but he asserted that DM&E had failed to follow regulations promulgated by the Department of Transportation's Federal Railroad Administration (FRA) with respect to the tests. Ultimately, Irwin found against Goff and terminated his service effective October 12, 1995, for violation of company rules regarding having prohibited substances in employees' bodily fluids while on duty. Goff appealed the decision. Under the terms of DM&E's collective bargaining agreement with Goff's union, Irwin was assigned to hear Goff's appeal. Irwin upheld the postsuspension decision to terminate Goff, and Goff then invoked the grievance procedure of the RLA and presented his claims before the Board.

On August 27, 1996, the Board, made up of one union member, one employer member--James McIntyre, president and CEO of DM&E--and a neutral member who acted as the chairman, conducted Goff's arbitration hearing. DM&E had tape- recorded the postsuspension proceedings and had transcribed the recording for the Board to review. Neither Goff nor his union presented any new evidence or called any outside witnesses before the Board. Goff asserted that the drug test results were not admissible evidence because the test was improper under the FRA and therefore could not serve as the basis for disciplinary action.

The Board concluded that DM&E permissibly conducted the drug test pursuant to the collective bargaining agreement, that dismissal of Goff was too harsh, and that he was to be reinstated as a locomotive engineer. The Board ordered Goff to undergo a physical examination, be subjected to random drug and alcohol testing for 60 months, and be terminated if he abused any substances in the future. The Board reinstated Goff's employee benefits and seniority but denied his request for back pay. Goff sought district court review of the Board's decision, arguing he did not receive a full and fair hearing because DM&E failed to disclose who ordered the postaccident drug test and therefore acted fraudulently and violated his due process rights. After holding an evidentiary hearing, the district court agreed with Goff and vacated the Board's decision. DM&E appeals, arguing that the district court exceeded its authority under the RLA.

II.

We review the district court's conclusions of law de novo and its factual findings for clear error. Bhd. of Maint. of Way Employees v. Soo Line R.R., 266 F.3d 907, 909 (8th Cir. 2001). "We therefore owe no special deference to the district court's decision to vacate the Board's award." Id. The scope of judicial review of a Board's decision under the RLA is "among the narrowest known to the law." Union Pac. R.R. v. United Transp. Union, 23 F.3d 1397, 1399 (8th Cir. 1994) (internal quotations omitted). Generally, the Board's findings and its order are conclusive on the parties involved in a minor dispute. See Bhd. of Locomotive Eng'rs v. Louisville & N.R.R., 373 U.S. 33, 39 (1963) (noting Congress intended the remedies provided by these boards "to be the complete and final means for settling minor disputes"); see also 45 U.S.C. § 153 First (q). ¹ "[T]he fact that 'a court is convinced [the Board] committed serious error does not suffice to overturn [the] decision.'" Major League Baseball Players Ass'n v. Garvey, 121 S. Ct. 1724, 1728 (2001) (quoting E. Associated Coal Corp. v. United Mine Workers of Am., 531 U.S. 57, 62 (2000)). "The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards." United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960). In keeping with federal policy favoring the enforcement of arbitration awards, a Board's decision may be set aside only for (1) failure to comply with RLA requirements, (2) failure to confine itself to matters within its jurisdiction, or (3) fraud or corruption by a Board member. 45 U.S.C. § 153 First (q); Union Pac. R.R. v. Sheehan, 439 U.S. 89, 93 (1978) (discussing standard of review for National Railroad Adjustment Board decisions).

The district court found that the Board's decision was premised upon the fraud or corruption of a Board member. See 45 U.S.C. § 153 First (q). Goff must prove the existence of fraud by clear and convincing evidence, that the fraud was not discoverable by due diligence before or during the proceeding, and that the fraud was materially related to an arbitrated issue. Gingiss Int'l, Inc. v. Bormet, 58 F.3d 328, 333 (7th Cir. 1995); Pac. & Arctic Ry. & Navigation v. United Transp. Union, 952 F.2d 1144, 1148 (9th Cir. 1991). Fraud is established if the plaintiff proves that "the defendant made false representations of material fact, intended to induce plaintiff to act, the representations were made with knowledge of, or reckless disregard for, their falsity, and the plaintiff justifiably relied upon those false representations to [his] detriment." Pac. & Arctic Ry., 952 F.2d at 1147 (internal quotations omitted). The appearance of impropriety is insufficient to constitute fraud. Id. at 1148 (stating "because of the strong federal policy favoring arbitration," fraud under § 153 requires "a greater level of improper conduct"). Contrary to the district court's analysis, we conclude that Goff has failed to demonstrate fraud sufficient to overturn the Board's decision.

The evidence illustrates that Goff suspected from the postsuspension hearing forward that Irwin had ordered the test. During the course of his hearings with DM&E, Goff filed a complaint with the FRA in which he contended that the postaccident drug test was improper and that DM&E refused to disclose who ordered the test. Pursuant to Goff's complaint, an FRA representative spoke with Irwin in January 1996 while investigating the circumstances surrounding the drug test. Irwin admitted to the investigator that he ordered the test. In February 1996, Goff requested documentation pursuant to the Freedom of Information Act (FOIA) from the FRA regarding his investigation. Goff did not receive the FOIA documents that confirmed Irwin ordered the test until May 1997, nine months after the hearing before the Board. However, in March or April 1996, several months before the Board hearing, the FRA investigator told Goff that indeed Irwin had ordered the test, and Goff informed his union accordingly. Morever, Goff admitted during the district court hearing that he had suspected Irwin had done so as early as the conclusion of the postsuspension hearing in October 1995.

Goff argues that DM&E President and CEO James McIntyre intentionally misled both him and the Board regarding McIntyre's knowledge of the circumstances surrounding the drug test. Goff contends that McIntyre knew that Irwin ordered the drug test all along and when Goff's union representative asked during the arbitration hearing who ordered the test, McIntyre essentially refused to answer by merely shrugging his shoulders. McIntyre testified that he had no recollection of any such question being asked at the Board hearing or of any shoulder shrugging by him. No other evidence of what transpired before the Board is in the record. Goff further points to a letter he wrote requesting...