Polich v. Burlington Northern, Inc.

• Citation: 48 F.Supp.2d 1247
• Decision Date: 15 November 1995
• Docket Number: No. CV-86-044-BU-PGH.,CV-86-044-BU-PGH.
• Parties: Victor J. POLICH and Paul Warfel, et al., Plaintiffs, v. BURLINGTON NORTHERN, INC., and Burlington Northern Railroad Company, Delaware corporations, Defendants.
• Court: U.S. District Court — District of Montana

48 F.Supp.2d 1247

Victor J. POLICH and Paul Warfel, et al., Plaintiffs, v. BURLINGTON NORTHERN, INC., and Burlington Northern Railroad Company, Delaware corporations, Defendants.

No. CV-86-044-BU-PGH.

United States District Court, D. Montana, Butte Division.

November 15, 1995.

Alexander Blewett, III, Hoyt & Blewett, Great Falls, MT, for plaintiffs.

Randy J. Cox, Boone, Karlberg & Haddon, Missoula, MT, for defendants.

Randy J. Cox, (See above), for Burlington Northern Railroad Company, a Delaware corporation, defendant.

MEMORANDUM AND ORDER

HATFIELD, Chief Judge.

Burlington Northern Railroad Company and Burlington Northern, Inc. (collectively referred to as "Burlington Northern"), interstate railroad carriers, previously maintained locomotive repair shop facilities in Livingston, Montana, related to the carrier's former operation of the "southern line" across a portion of Montana.¹ The Burlington Northern also maintained a terminal at Livingston, Montana, for the handling of freight and dispatching of train crews. In February of 1986, the Burlington Northern closed its Livingston shop facilities. Subsequently, on October 31, 1987, the Burlington Northern sold its Montana southern line to an entity identified as Montana Rail Link.² The plaintiffs are individuals formerly employed by the Burlington Northern either at the shop facilities or terminal maintained by the Burlington Northern at Livingston. By way of their complaint, as amended a third time, the plaintiffs assert the Burlington Northern's closure of the Livingston shop facilities and the terminal constitutes a "move" of a railroad "terminal" within the meaning of Mont.Code Ann. § 69-14-1002 (1987), which plaintiffs claim entitles them to be compensated for the diminution in the value of their respective residences resulting from the closure of the "terminal".³ The matter is presently before the court upon cross-motions for summary judgment, each of the parties seeking judgment, as a matter of law, upon the issue of whether the Burlington Northern's closure of its Livingston facilities constituted the "move" of a "terminal" within the meaning of Mont.Code Ann. § 69-14-1002 (1987). In addition, Burlington Northern seeks summary judgment upon the following alternate bases: (1) application of Mont.Code Ann. § 69-14-1002 (1987) to the Burlington Northern's closure of its Livingston facilities is preempted by the Interstate Commerce Act ("ICA"), 49 U.S.C. §§ 10101-11917 (1988); (2) application of Mont.Code Ann § 69-14-1002 (1987) to the Burlington Northern's closure of its Livingston facilities is preempted by the Railway Labor Act ("RLA"), 45 U.S.C. §§ 151-163 (1983); (3) Mont.Code Ann. § 69-14-1002 (1987) violates the Commerce Clause of the United States Constitution; (4) Mont.Code Ann. § 69-14-1002 (1987) violates the right of the Burlington Northern to equal protection of the law as protected by the Fourteenth Amendment to the United States Constitution; (5) the plaintiffs are not individuals falling within the purview of Mont.Code Ann. § 69-14-1002 (1987), and to whom the Legislature of the State of Montana intended to extend the benefit embodied in the referenced statute; (6) Mont.Code Ann. § 69-14-1002 (1987) constitutes "special legislation" proscribed by Article V, Section 12 of the Montana Constitution (1972) (formerly Article V, Section 26 of the Montana Constitution (1889)).

BACKGROUND

This action was initially prosecuted by the plaintiffs, as former employees of the Burlington Northern, and their spouses, all of whom resided in Livingston, Montana. The original complaint advanced claims for actual and constructive fraud emanating from the Burlington Northern's alleged promise to employees, and those employees' spouses, that it would keep its Livingston facilities open and operational; a promise purportedly made during the course of two different corporate reorganizations.⁴

The Burlington Northern moved to dismiss the original complaint on the ground the plaintiffs' claims were preempted by the ICA and the RLA. Prior to disposition of the motion to dismiss, the plaintiffs moved this court to file a third amended complaint to include allegations that Burlington Northern violated Mont.Code Ann. § 69-14-1002 (1987). This court denied the plaintiffs' motion requesting leave to file a third amended complaint, and dismissed the action in its entirety. The plaintiffs appealed.

The Ninth Circuit Court of Appeals affirmed that aspect of this court's judgment dismissing the plaintiffs' claims predicated upon fraud and constructive fraud, concluding the claims of the employee-plaintiffs were preempted by the RLA. Polich v. Burlington Northern, Inc., 942 F.2d 1467, 1470-71 (9th Cir.1991). The appellate court further held the claims of the employee-plaintiffs were properly dismissed for failure to state a claim upon which relief could be granted. Id., at 1471-72. The appellate court, however, reversed the judgment to the extent it pertained to the employee-plaintiffs' request for leave to file an amended pleading for the purpose of advancing a claim for relief under Mont.Code Ann. § 69-14-1002 (1987). Id., at 1472-73. The appellate court concluded this court had erred when it dismissed this action, in its entirety, without affording the employee-plaintiffs leave to amend their complaint to add a cause of action pursuant to Mont.Code Ann. § 69-14-1002 (1987), stating as follows:

[Employee-plaintiffs] have stated a cause of action pursuant to the Montana statute, and the amendment should have been permitted. If the statute is invalid as a burden on commerce, or is subject to some other defense, those questions can be resolved in the trial court.

Polich, supra, 942 F.2d at 1472.⁵ In so doing, the appellate court held the claims of the employee-plaintiffs under the Montana statute were not preempted by the RLA. 942 F.2d at 1473. Because of its holding that the employee-plaintiffs' state statutory claim was not preempted by the RLA, the court proceeded to address the issue of preemption under the ICA. 942 F.2d at 1473. The appellate court stated its conclusion relative to the issue of whether the ICA preempted the employee-plaintiffs' state statutory claim in the following terms:

[Employee-plaintiffs] claim under the Montana statute has no connection with violation of any provisions of a merger. The statute provides that employees should be compensated for the loss in value of their homes anytime a railroad closes a terminal in the state, regardless of the reason for the closure. [Employee-plaintiffs] do not need to show any wrongdoing on the part of the railroad to recover under this statute, and arguments regarding approval of the merger have no relevance to this claim. Thus, this claim is not preempted by jurisdiction of the [Interstate Commerce Commission]. (Emphasis supplied).

942 F.2d at 1473.

Upon remand, the employee-plaintiffs filed a third amended complaint advancing their respective claims for relief under Mont.Code Ann. § 69-14-1002 (1987). The parties advocate quite differing interpretations of the appellate court's decision as applicable to the facts now before this court. The employee-plaintiffs, in what is tantamount to a "law of the case" argument, take the position the appellate court's decision resolved all legal issues relating to the application of Mont.Code Ann. § 69-14-1002 (1987) to Burlington Northern's closure of its Livingston facilities, as well as all legal issues relating to whether application of the statute is preempted by the ICA or the RLA. Consequently, in the employee-plaintiffs' opinion, summary judgment upon the issue of liability is appropriate, with only the damage claim of the individual employee-plaintiffs remaining to be determined. The employee-plaintiffs essentially dismiss, as without merit, the equal protection, commerce clause, and "special statute" challenges mounted by the Burlington Northern to the application of Mont.Code Ann. § 69-14-1002 (1987).

The Burlington Northern, on the other hand, takes the position the appellate court's decision is not properly viewed as determinative of all issues relating to the application of Mont.Code Ann. § 69-14-1002 (1987) to Burlington Northern's sale of the Montana southern line to Montana Rail Link, and the concomitant cessation of Burlington Northern's operation of the Livingston "terminal". The Burlington Northern finds support for its position in the appellate court's statement acknowledging that "if [Mont.Code Ann. § 69-14-1002 (1987)] is invalid as a burden on commerce, or is subject to some other defense, those questions can be resolved in the trial court." 942 F.2d at 1472. The Burlington Northern also emphasizes that the appellate court's decision was obviously limited to the facts of the record before that tribunal; a record which did not include facts relating to the Burlington Northern's sale of its Montana southern line to Montana Rail Link.⁶ Finally, the Burlington Northern emphasizes the record before the appellate court contained limited information regarding the express provisions of the collective bargaining agreements and the employee-plaintiffs, grouped by union affiliation, and particularly those provisions pertaining to protective benefits relating to an employee's residential real estate. The precise terms of the pertinent collective bargaining agreements, the Burlington Northern urges, bear significantly upon the preemption analysis under the RLA.⁷

DISCUSSION

A. INTERSTATE COMMERCE ACT PREEMPTION

The appellate court's ICA preemption analysis focused upon the referenced 1970 and 1980 mergers which resulted in the formation of Burlington Northern, Inc.; mergers approved by the Interstate Commerce Commission ("ICC"). 942 F.2d at 1473. Focusing upon the fraud claims of the employee-plaintiffs and the plaintiff-spouses, the court held that "to the extent that appellants' claims stem from alleged fraud in connection with the ICC's...