Railway Labor Executives' Ass'n v. City of Galveston, Tex., By and Through Bd. of Trustees of Galveston Wharves

• Decision Date: 14 March 1990
• Docket Number: No. 87-6169,87-6169
• Citation: 897 F.2d 164
• Parties: 134 L.R.R.M. (BNA) 2022, 114 Lab.Cas. P 12,059 RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Plaintiffs-Appellants, v. The CITY OF GALVESTON, TEXAS, acting By and Through the BOARD OF TRUSTEES OF THE GALVESTON WHARVES, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 164

897 F.2d 164

134 L.R.R.M. (BNA) 2022, 114 Lab.Cas. P 12,059

RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Plaintiffs-Appellants, v. The CITY OF GALVESTON, TEXAS, acting By and Through the

BOARD OF TRUSTEES OF THE GALVESTON WHARVES,

Defendants-Appellees.

No. 87-6169.

United States Court of Appeals, Fifth Circuit.

March 14, 1990.

William J. Birney, Highway & Mahoney, Washington, D.C., for plaintiffs-appellants.

Ralph J. Moore, Jr., Shea & Gardner, Washington, D.C., for amicus curiae, Nat. Railway Labor Conference.

Dick Dent, Fulbright & Jaworski, Houston, Tex., Benjamin R. Powel, McLeod, Alexander, Powel & Apffel, Galveston, Tex., for City of Galveston.

Kelvin J. Dowd and Donald G. Avery, Slover & Loftus, Washington, D.C., for Galveston Ry.

Before RUBIN, POLITZ, and DUHE, Circuit Judges.

ON PETITION FOR REHEARING

(Opinion Aug. 28, 1989, 5th Cir. 883 F.2d 16)

ALVIN B. RUBIN, Circuit Judge:

The Railway Labor Executives' Association (RLEA) asks us to reconsider our recent order remanding this case to the district court. ¹ We decline to do so. Because the RLEA's petition raises questions concerning the proper interpretation to be given the Supreme Court's recent opinion in Pittsburgh & Lake Erie Railroad Co. v. Railway Labor Executives' Association, ² questions that, because of their public importance, demand thorough and considered treatment, we will set forth the reasons for our decision in detail.

I.

We decided the RLEA's appeal before the Supreme Court issued its opinion in P & LE, an opinion that changed the relevant legal landscape considerably. Not surprisingly, some of the facts contained in the record but not discussed in our original opinion have become relevant. We therefore find it necessary to supplement our earlier statement of the facts. ³

The City of Galveston, a home-rule city, has for many years owned wharves and real estate near the entrance to Galveston Bay. Pursuant to the City's charter, Galveston Wharves, the port authority for the City, owned and operated a terminal railroad facility that served the wharves. At the time that this dispute arose, Galveston Wharves employed a number of persons whose responsibilities were in some way connected with the operation of the railroad. Although the RLEA alleges that there were 85 such employees, testimony taken at the hearing on the preliminary injunction indicates that there may have been as few as 24, of whom 11 were on furlough.

The various crafts and classes of employees were represented by several unions, each of which had entered into a collective bargaining agreement with Galveston Wharves. All but one of the unions also had entered into "standby agreements" with Galveston Wharves, which provided that the parties would be bound by certain "national agreements" that had been reached by representatives of the various unions and the National Railway Conference, the representative of several major carriers. The national agreements, which expired on June 30, 1988, forbade the parties to initiate negotiations, pursuant to Sec. 6 of the Railway Labor Act (RLA), ⁴ to change the agreements before April 1, 1988.

Galveston Wharves sustained severe economic losses during 1985 and 1986, mostly as a result of its railroad operations. It could not simply stop operating the railroad whose service was essential to the operation of the wharves. Therefore, it decided that it must either reduce railroad operating expenses dramatically or find a buyer for the railroad. Galveston Wharves, however, faced a serious obstacle to an outright sale of the railroad: the City itself still held the title to the land on which the rails and switching stations were situated. Galveston Wharves therefore proposed to sell its other railroad assets and to lease those assets that it could not sell.

After obtaining a tentative commitment from a prospective buyer-lessee, Galveston Railway, Inc. (GRI), Galveston Wharves announced its plans to the railway unions and informed them that it would proceed with the transactions unless they agreed to accept a 26.4 percent reduction in existing wages and benefits. Galveston Wharves' investment banking advisor had calculated that a reduction in labor costs of that magnitude would have been necessary for it to achieve the same savings afforded by the sale-lease agreement. The unions balked.

One month later, the trustees of Galveston Wharves approved the documents required to complete the transaction. The lease, which has a term of ten years, provides that GRI will provide switching services in accordance with Galveston Wharves' existing tariffs and contracts. It further reserves to Galveston Wharves the right to manage and inspect the facilities and to approve any changes in the tariffs. Later, the ICC approved this agreement.

After the ICC had registered its approval, the RLEA, an association of the chief executive officers of the unions that represented the organized railroad workers at Galveston Wharves, filed this suit. The RLEA sought two forms of relief. First, it sought a declaratory judgment that the proposed transaction would bring about changes in existing collective bargaining agreements in violation of Sec. 6 of the RLA. Second, it requested a preliminary and permanent injunction restraining Galveston Wharves from completing the transaction and from abrogating its collective bargaining agreements with the railroad employees. The district court denied the preliminary injunction. Observing that the ICC had approved the Galveston Wharves-GRI agreement and that the courts of appeals have exclusive jurisdiction to review orders of the ICC, ⁵ that court concluded that the RLEA's effort to block the agreement constituted an impermissible collateral attack on such an order.

The day after the district court's ruling, Galveston Wharves and GRI consummated the agreement. Galveston Wharves then promptly discharged all of the employees in its railroad department. It nevertheless retained several employees--most of them clerical workers--who had been represented by the railway unions but had not actually worked in the railroad department.

On appeal, we remanded to the district court with instructions that it provide a statement of the grounds on which it had concluded that the leased facilities were rail lines subject to the jurisdiction of the ICC. ⁶ After the district court had complied with this order, ⁷ the parties resubmitted the case. Relying on the reasoning of the Third Circuit in Railway Labor Executives' Association v. Pittsburgh & Lake Erie Railroad Co., ⁸ we concluded that the injunction sought by the RLEA would not have impermissibly contravened the ICC's approval of the transaction. We therefore reversed the district court's ruling and remanded for the district court to determine whether the RLA required that the injunction be issued. ⁹

The Galveston Wharves & GRI promptly filed an application for a writ of certiorari with the United States Supreme Court. While that application was pending, the Court reversed the Third Circuit's judgment in P & LE. ¹⁰ The Court then vacated our judgment in this case and remanded the case to us "for further consideration in light of Pittsburgh & Lake Erie Railroad Company v. Railway Labor Executives' Association." ¹¹ We in turn remanded to the district court with directions that it deny the request for the injunction and take such further action, if any, that would be consistent with the opinion of the Supreme Court in P & LE. ¹²

II.

The RLEA concedes that the case should be remanded, but "for the limited purpose of entering findings of fact and conclusions of law concerning the Railway Labor Act obligations of the Wharves, and whether these obligations can be enforced, including by injunction." ¹³ The RLEA's contention is premised on the assumption that additional factfinding is necessary before this court can determine whether the RLA authorized the issuance of an injunction against Galveston Wharves. For the reasons set forth below, however, we conclude that even if the factual allegations of the RLEA are correct, the RLA nevertheless does not entitle it to injunctive relief.

III.

A.

In its petition for rehearing, the RLEA maintains that Sec. 6 of the RLA authorizes the issuance of an injunction restraining Galveston Wharves from going through with its agreement with GRI. Its conclusion can be reached through either of two routes, the first of which is relatively simple. The sale/lease transaction with GRI itself required a "change in agreements affecting rates of pay, rules, or working conditions" of the terminated employees. Under the terms of Sec. 6, Galveston Wharves was therefore required to provide notice of the transaction and, before completing it, to bargain with the unions about the effects of the transaction. In this argument, the RLEA apparently does not maintain that Galveston Wharves was required to bargain with the unions about the decision to enter into the agreement with GRI, but only about the impact this agreement would have had on Galveston Wharves' employees.

The second proposed route is more tortuous. In connection with the transaction between Galveston Wharves and GRI, the RLEA contends, Galveston Wharves changed the rates of pay and working conditions of the retained employees during the term of the collective bargaining agreements, a change that triggered the notice, bargaining, and status-quo requirements of Sec. 6. The RLEA asserts that this third requirement forbade Galveston Wharves to implement its agreement with GRI.

1.

The answer to the RLEA's first argument is found in P & LE. P & LE, a small rail carrier faced with enormous recurring operating losses, agreed to sell almost all of its assets to a newly organized rail company, CWP. CWP planned to operate the railroad as had P & LE, except that it would not assume the collective bargaining agreements between P & LE and the employees' unions and would employ a workforce only...