Simmons v. I.C.C., 84-1352
| Decision Date | 15 July 1985 |
| Docket Number | No. 84-1352,84-1352 |
| Citation | 766 F.2d 1177 |
| Parties | 120 L.R.R.M. (BNA) 2314 Patrick W. SIMMONS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Illinois Central Gulf Railroad Company and Cisco Cooperative Grain Company, Intervening Respondents. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gordon P. MacDougall, Washington, D.C., for petitioner.
Sidney L. Strickland, Jr., I.C.C., Washington, D.C., for respondents.
Richard M. Kamoski, Chicago, Ill., for Ill. Cent. Gulf R. Co.
Before ESCHBACH and FLAUM, Circuit Judges, and DOYLE, Senior District Judge. *
The primary question presented by this petition for review of an order of the Interstate Commerce Commission ("Commission" or "ICC") is whether the Commission is authorized to impose labor-protective conditions in a "forced" or "involuntary" sale under 49 U.S.C. Sec. 10905 ("Sec. 10905"). For the reasons stated below, we agree with the Commission's conclusion that it was without authority to impose such conditions in an "involuntary" Sec. 10905 sale; the petition for review will be denied.
The facts of this dispute may be summarized as follows:
In January 1982, the Illinois Central Gulf Railroad Company ("Illinois Central") filed a notice of intent to abandon approximately 13 1/2 miles of railway line between Cisco and Green's Switch, Illinois. See 49 U.S.C. Sec. 10903. A complete application for abandonment was filed by Illinois Central in February 1982. In May 1982, the ICC issued its decision granting Illinois Central's abandonment application.
Under Sec. 10905, however, after the ICC approves an abandonment of a line, any "financially responsible person" who will provide continued rail service over the line may file within 10 days of the ICC's approval an offer to purchase the line. Cisco Cooperative Grain Company ("Cisco") did in fact file such an offer within the time period and was found by the Commission to be "financially responsible." The ICC then postponed the issuance of the certificate of abandonment to allow Illinois Central and Cisco either to negotiate a price or to request that the Commission set the terms of the sale. See Sec. 10905(d). The parties were unable to come to an agreement; Cisco then petitioned the Commission to establish the terms. The ICC did in fact determine the values of the properties involved, but on appeal that decision was remanded by this court for reconsideration. Illinois Central Gulf Railroad Co. v. Interstate Commerce Commission, 717 F.2d 408 (7th Cir.1983).
When this action was again before the Commission on remand, petitioner Simmons--the Illinois Legislative Director for the United Transportation Union, which is the collective-bargaining representative for the majority of persons employed by Illinois Central in freight-train service--filed a petition on November 21, 1983, to intervene for the purpose of seeking the imposition by the ICC of labor-protective conditions in the proposed Sec. 10905 purchase. In an order dated February 13, 1984, the Commission denied the petition to intervene and cited its decision in Illinois Central Gulf Railroad Co.--Abandonment, 366 I.C.C. 911 (1983), aff'd sub nom. Simmons v. Interstate Commerce Commission, 760 F.2d 126 (7th Cir.1985) ("Simmons I" ), in which the agency ruled that it was without authority to impose labor-protective conditions in a Sec. 10905 transaction. The Commission then redetermined the value of the properties and Cisco ultimately accepted these terms. Accordingly, the ICC in an order dated March 12, 1984, approved the transfer of the line to Cisco and dismissed the abandonment application. See Sec. 10905(e). No labor-protective conditions were imposed. Simmons now seeks review of the Commission's denial of his petition to intervene.
Simmons first argues that the Commission improperly denied his petition to intervene. We initially note that Simmons sought to intervene solely for the purpose of seeking the imposition of labor-protective conditions in the impending Sec. 10905 transaction. As we read its order, the Commission reached the merits of the intervention petition and concluded that the agency was without authority to impose such conditions. Because the ICC found itself unable as a matter of law to provide petitioner with the relief he sought, any further proceedings on the question of labor-protective conditions would have been an exercise in futility; accordingly, the petition to intervene was denied. We add, however, that Simmons's petition was denied on this narrow ground alone. Thus, we do not understand the Commission's denial to extend any further than the question of the imposition of labor-protective conditions. 1
In considering the propriety of the Commission's denial of the petition for intervention, we must first determine whether the agency was correct in its conclusion that it was without authority to impose labor-protective conditions in a Sec. 10905 transaction. 2 If the agency was correct, then no further administrative proceedings are necessary.
In denying the petition, the Commission relied on its decision in Simmons I for the conclusion that it was without authority under Sec. 10905 to impose labor-protective conditions. As indicated above, that decision was recently upheld by this court. Thus, it is clear that, in the case of a "voluntary" sale under Sec. 10905, the ICC is unable to impose such conditions. 3 The issue then in the instant case is whether the reasoning of Simmons I applies to a "forced" or "involuntary" sale under the statute. For the reasons stated below, we agree with the Commission that it does. 4
The history and procedures of Sec. 10905 have been discussed elsewhere, 5 and will not be reiterated here. For the purposes of the instant dispute, however, it should be noted that in the original version of Sec. 10905, see 49 U.S.C. Sec. 1a(6) (1976), the Commission was not empowered to set the terms of compensation in the event that the parties were unable to come to an agreement. The Staggers Rail Act of 1980, P.L. No. 96-448, Sec. 402(c), 94 Stat. 1895, 1942-45 ("Staggers Act"), made two fundamental changes in Sec. 10905. First, in response to "hold out" and other problems created by the original statute, see Hayfield Northern Railroad Co. v. Chicago & Northwestern Transportation Co., --- U.S. ----, 104 S.Ct. 2610, 2615-16, 81 L.Ed.2d 527 (1984), Congress authorized the ICC on request from either party to determine "the price and other terms of sale," Sec. 10905(f)(1)(C), if the parties initially fail to agree on these terms. In no case, however, is the Commission to set a price that is below the fair market value of the line. The terms established by the ICC are binding on the "seller," although the "buyer" may withdraw its offer to purchase within 10 days of the Commission's decision. Second, Sec. 10905(e) now provides that, if the buyer and seller enter into an agreement, the Commission "shall approve the transaction and dismiss the application of abandonment or discontinuance." 6
The first argument of the Commission, which was upheld in Simmons I, is that the mandatory requirements under Sec. 10905(e) of both approval of the transaction and dismissal of the abandonment certificate demonstrate that the labor-protective conditions attached to the agency's approval of the abandonment, see, e.g., Sec. 10903(b)(2), do not come into play when a Sec. 10905 transaction is completed. See also 49 C.F.R. Sec. 1152.27(f)(2), (h)(6) (1984); cf. Abandonment of Railroad Lines & Discontinuance of Service, 365 I.C.C. 249, 259-61, 272 (1981). However, these requirements--without more--do not determine whether labor-protective conditions may be imposed under Sec. 10905. Nonetheless, they do show that any authority the Commission may have to condition a transaction under other provisions does not "carry through" in a Sec. 10905 transaction. As a result, Sec. 10905 is an independent and discrete procedure, and any authority to impose such conditions must be derived from that provision alone.
After Simmons I, it is clear that, in the context of a "voluntary" sale, the Commission cannot impose labor-protective conditions. Thus, the question presented by the instant petition for review is whether the Commission's ability to set the "price and other terms of sale" under Sec. 10905(f)(1)(C) allows it to impose labor-protective conditions in an "involuntary" sale. Certainly the language of Sec. 10905 does not expressly state that the Commission has this authority. As we found in Simmons I, 760 F.2d at 129, a common-sense reading of Sec. 10905(f)(1)(C) does not suggest that it refers to labor-protective conditions. Furthermore, as the Commission forcefully asserted in its second argument of Simmons I, see 366 I.C.C. at 913-14, other provisions of the Staggers Act stand in stark contrast to Sec. 10905(f)(1)(C), because they specifically refer to the protection of employees. 7 The language of these contemporaneous amendments indicates that Congress simply does not use the phrase "price and other terms of sale" to refer to labor-protective conditions. Petitioner has not referred this court to any contrary indications in the legislative history. Indeed, the committee reports discussing Sec. 10905 are silent on the subject of labor protection. See H.Conf.Rep. No. 1430, 96th Cong., 2d Sess. 125 (1980), U.S.Code Cong. & Admin.News 1980, pp. 3978, 4110; S.Rep. No. 470, 96th Cong., 1st Sess. 40 (1979).
In his reply brief, Simmons acknowledges that labor-protective conditions are not "terms of sale," but rather that they are "imposed by the I.C.C. as a condition to the agency's approval of a transaction." Thus, petitioner in fact acknowledges that these conditions would not ordinarily be imposed when the Commission sets the terms...
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