Local Div. No. 714, Amalgamated Transit Union, AFL-CIO v. Greater Portland Transit Dist. of Portland, Me., AFL-CIO

• Decision Date: 15 November 1978
• Docket Number: No. 78-1077,AFL-CIO,78-1077
• Citation: 589 F.2d 1
• Parties: 100 L.R.R.M. (BNA) 2516 LOCAL DIVISION NO. 714, AMALGAMATED TRANSIT UNION,, an Unincorporated Association, Plaintiff, Appellant, v. GREATER PORTLAND TRANSIT DISTRICT OF PORTLAND, MAINE, a Body Politic,Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 1

589 F.2d 1

100 L.R.R.M. (BNA) 2516

LOCAL DIVISION NO. 714, AMALGAMATED TRANSIT UNION, AFL-CIO an Unincorporated Association, Plaintiff, Appellant, v. GREATER PORTLAND TRANSIT DISTRICT OF PORTLAND, MAINE, a Body Politic,Defendant, Appellee.

No. 78-1077.

United States Court of Appeals First Circuit.

Argued June 7, 1978.

Decided Nov. 15, 1978.

Lawrence J. Zuckerman, Gray, Me., with whom Earle W. Putnam, Washington, D. C., was on brief, for plaintiff, appellant.

Brenda T. Piampiano, Portland, Me., with whom F. Paul Frinsko, and Bernstein, Shur, Sawyer & Nelson, Portland, Me., were on brief, for defendant, appellee.

Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

This appeal concerns an action brought in the District Court for the District of Maine by Local Division 714, Amalgamated Transit Union (the Union) seeking a declaratory judgment and injunction against the Greater Portland Transit District (the District) for its refusal to submit the parties' dispute regarding terms of a new collective bargaining agreement to binding arbitration. Arbitration of the terms of a new contract known as "interest arbitration" is alleged to be required by an agreement the parties entered into pursuant to § 13(c) of the Urban Mass Transportation Act, 49 U.S.C. § 1609(c) (UMTA). The court below, ruling from the bench, dismissed the Union's suit for lack of subject matter jurisdiction, and the Union has appealed. We are thus faced with the narrow but important question of whether the federal courts are vested with the authority to hear labor disputes of this type between the recipients of UMTA grants and their employees.

I.

Under the UMTA, state and local agencies may obtain federal financial assistance for the providing of mass transportation services in urban areas. 49 U.S.C. § 1602. Section 13(c) of the Act, 49 U.S.C. § 1609(c), establishes as "a condition of any assistance . . . that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees affected by such assistance." The section then proceeds to specify what the labor protective arrangements are to accomplish, including the preservation of existing collective bargaining rights. Finally, § 13(c) directs that the "terms and conditions of the protective arrangements" shall be specified in the financial assistance contract itself viz. the contract between the local authority and federal government. ¹ In practice, the statute seems to have been read as leaving to the applicant for federal assistance and its employees, or their bargaining representative, the negotiating of a written agreement (called a § 13(c) agreement) containing the precise terms of mutually satisfactory protective arrangements, followed by approval of that agreement by the Secretary of Labor.

The case before us arises out of several financial assistance contracts between the District and the federal government. The District, a Maine state agency, has as its purpose the providing of motor vehicle mass transportation in the greater Portland area. From 1970 until early 1973, the District owned the office and garage facilities where buses were parked and maintained, but leased the facilities to the Greater Portland Transit Company, a private corporation, which operated the transportation services. Before and during this period, the Transit Company's employees were protected by the Labor Management Relations Act, 29 U.S.C. §§ 141-87, and the Union and the Transit Company were parties to successive collective bargaining agreements.

In late 1972, the District arranged to purchase the Transit Company. The District entered into a Capital Grant Contract (Grant No. 1) with the United States, pursuant to the UMTA, to receive federal funds for the project. The "project" was defined as the purchase of the Transit Company's assets, 15 new buses, and 15 locked registering fare boxes. The grant contract obliged the District to complete the project under the labor protective provisions of a § 13(c) agreement between the District and the Union dated December 8, 1972 ("1972 § 13(c) Agreement"), which the Secretary of Labor had approved; these provisions were incorporated by reference into the grant contract. The § 13(c) agreement provided in part for binding arbitration of labor disputes, including interest arbitration of the terms of new collective bargaining agreements. ²

The District after receiving funding under the Act purchased the Transit Company's assets on January 1, 1973. Pursuant to the 1972 § 13(c) Agreement, the District succeeded to the Company's obligations under the then-existing collective bargaining agreement, which was due to terminate on December 31, 1973. When the agreement terminated, the Union and the District arrived at a new collective bargaining agreement apparently by utilizing, after impasse had been reached, the dispute settlement procedures provided by the Maine Public Employees Relations Law, 26 M.R.S.A. §§ 961 Et seq., rather than the binding interest arbitration provided by the 1972 § 13(c) Agreement. One procedure used was fact-finding in which both the District and the Union participated. The resulting 1974 collective bargaining agreement, as had the previous collective bargaining agreements, provided for non-interest arbitration but explicitly denied any requirement of interest arbitration. This collective bargaining agreement had an expiration date of December 31, 1976.

In February 1975, the District and the Union entered into a § 13(c) agreement ("1975 § 13(c) Agreement"), in relation to an application by the District for UMTA funding for the purchase of 35 new buses and fare boxes. This agreement again mandated binding interest arbitration. The agreement provided further that it would be "independently binding and enforceable by and upon the parties thereto . . . ." The Secretary of Labor approved this 1975 § 13(c) Agreement, and its employee protections became part of a Capital Grant Contract (Grant No. 2) with the United States for funding for the purchase of 39 new buses and fare boxes, which was executed in November 1975. At the same time, the District and the United States entered into an Operating Assistance Grant Contract (Grant No. 3) covering the District's operating expenses for calendar year 1975.

A year later, in November 1976, the District became a party to another § 13(c) agreement. This was the "National § 13(c) Agreement," which had been executed by the American Public Transit Association and the Transit Employee Labor Organizations in July 1975. The District became a party thereto by notifying the appropriate parties of its desire to have that agreement apply to the District's grants of operating assistance under the UMTA. The District requested specifically that "all applications submitted for Federal Operating Assistance under Section 5 and 3(h) of the Act for the period November 26, 1974 through September 30, 1977 Not heretofore certified by the Department of Labor be certified on the basis of the (National § 13(c) Agreement)." The Secretary of Labor certified the National § 13(c) Agreement for the District and the Union in November 1976. As the District's only previous application for operating assistance (Grant No. 3) already had been certified by the Secretary, however, the National § 13(c) Agreement apparently did not become part of a contract of assistance until April 1977. At that time the District and the United States entered into an Operating Assistance Contract (Grant No. 4) to cover the District's operating expenses for calendar year 1976. The National § 13(c) Agreement provided for binding non-interest arbitration, but did not itself provide for interest arbitration. Arguably, however, it incorporated the interest arbitration requirements of the prior § 13(c) agreements.

After the National § 13(c) Agreement was executed but before it was incorporated into the Grant No. 4 contract, the 1974 collective bargaining agreement terminated and the instant litigation arose. During the two months prior to the December 31, 1976 termination date, the District and the Union negotiated toward a new collective bargaining agreement. Early in January 1977, the negotiations reached impasse, and the parties were unable to agree as to what was the appropriate dispute settlement procedure to follow. The Union requested binding interest arbitration pursuant to the 1975 § 13(c) Agreement. The District refused, and instead had a mediator appointed by the Maine Labor Relations Board.

In March of 1977, the Union filed this complaint in the United States District Court for the District of Maine, asking for a declaration and injunction requiring the District to submit the disputed terms of the new collective bargaining agreement to binding interest arbitration pursuant to the 1975 § 13(c) Agreement. The complaint contains four counts: (1) that the District's refusal to arbitrate was a breach of the 1975 § 13(c) Agreement and thereby did not comply with § 13(c) of the UMTA; (2) that the District's refusal to arbitrate violated Maine law; (3) that the District's refusal violated the National § 13(c) Agreement; and (4) that the District violated the 1974 collective bargaining agreement by refusing to bargain in good faith. The Union premised jurisdiction on 28 U.S.C. §§ 1331 and 1337. The District's answer denied that the 1975 § 13(c) Agreement was in "full force and effect," denied that it was an industry affecting commerce (as required by § 1337), alleged as a defense that it was a quasi-municipal corporation and a political subdivision of the State of Maine, and asserted that the court lacked subject matter jurisdiction.

Since this appeal does not deal with the merits of the present dispute, we need not delve deeply into the parties' substantive contentions. The Union, suffice to say, feels the 1975 § 13(c) Agreement, mandating interest...