Simmons v. I.C.C.

• Decision Date: 02 May 1985
• Docket Number: Nos. 83-1474,83-2820,s. 83-1474
• Citation: 760 F.2d 126
• Parties: 118 L.R.R.M. (BNA) 3099, 53 USLW 2490 Patrick W. SIMMONS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. Illinois Central Gulf Railroad, Intervening Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 126

760 F.2d 126

118 L.R.R.M. (BNA) 3099, 53 USLW 2490

Patrick W. SIMMONS, Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents Illinois Central Gulf Railroad, Intervening Respondent.

Nos. 83-1474, 83-2820.

United States Court of Appeals Seventh Circuit.

Argued Jan. 21, 1985.

Decided March 15, 1985.

As Amended May 2, 1985.

Rehearing and Rehearing En Banc Denied May 2, 1985.

Gordon P. McDougall, Washington, D.C., for petitioner.

J. Carol Brooks, I.C.C., Washington, D.C., for respondents.

John H. Doeringer, ICG Railroad, Chicago, Ill., for intervening respondent.

Before BAUER and POSNER, Circuit Judges, and JAMESON, Senior District Judge. ^*

POSNER, Circuit Judge.

These petitions to review two related orders of the Interstate Commerce Commission require us to consider a question of first impression under the provision of the Interstate Commerce Act governing offers of financial assistance to head off the abandonment of a railroad line, 49 U.S.C. Sec. 10905. The question is whether the Commission is authorized or required to impose labor-protective conditions on either or both of the parties to a section 10905 sale. Patrick Simmons, the Illinois legislative director of a union representing employees of the selling railroad, has asked us on the Union's behalf to set aside a Commission order that approved such a sale without such conditions, the Commission's ground being that they were not required or even authorized. Illinois Central Gulf R.R.--Abandonment--in Alexander County, Il, 366 I.C.C. 911 (1983). A subordinate dispute over a trackage-rights agreement entered into by the parties to the sale and approved by the Commission in a separate order is discussed at the end of this opinion.

Section 10905 dates from the Railroad Revitalization and Regulatory Reform Act of 1976 (see 90 Stat. 129) but was significantly amended by the Staggers Rail Act of 1980, and in its present form provides as follows. Within 10 days after the Commission announces its decision to allow a railroad to abandon a line, anyone (including another railroad, as the Commission held in this case, 366 I.C.C. at 914 n. 3, and the petitioner does not dispute) may offer to buy the line. 49 U.S.C. Sec. 10905(c). If within 15 days after the announcement the Commission finds that the offeror is financially responsible and that the offer satisfies certain minimum conditions, it must suspend its permission to abandon in order to give the parties time to negotiate the purchase. Sec. 10905(d). If as in this case the parties come to terms, "the Commission shall approve the transaction and dismiss the application for abandonment," provided the terms include an agreement to continue providing rail service on the line. Sec. 10905(e). But if the parties are unable to come to terms, and either of them requests the Commission to fix the terms for them, the Commission shall do so, based on the fair market value of the line. Secs. 10905(e)-(f). The provision for forced sale was added in 1980. Before then all the Commission could do was delay abandonment for six months to give a prospective purchaser a chance to negotiate with the railroad before the line was abandoned. See Chicago & N.W. Transport Co. v. United States, 678 F.2d 665, 667-68 (7th Cir.1982).

In 1982 the Illinois Central Gulf Railroad applied to the Commission for permission to abandon an 18-mile line in rural Illinois. A local railroad owned and operated by three men, the Cairo Terminal Railroad Company, filed an application under section 10905 to acquire all but one half mile of the line. The two railroads arrived at mutually satisfactory terms for the sale, and the Commission approved it. The Commission also approved the abandonment of the remaining half mile, subject to Oregon Short Line protective conditions, which the Commission routinely imposes in abandonment cases and which among other things require the abandoning railroad to pay, for six years, the wages of employees as a result of the abandonment. See Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91, 93-95, 98-103 (1979). The Commission refused to impose any conditions on the sale of the 17.5 mile stretch to the Cairo Terminal Railroad Company, rejecting Simmons' argument for New York Dock conditions. These are the same as Oregon Short Line conditions, but are imposed on both parties to railroad mergers and consolidations governed by 49 U.S.C. Sec. 11343. See New York Dock Ry.--Control--Brooklyn Eastern Dist. Terminal, 360 I.C.C. 60, 84-90, aff'd under the name of New York Dock Ry. v. United States, 609 F.2d 83 (2d Cir.1979). The Oregon Short Line conditions were designed for abandonments, and in most abandonment cases there is only one party, the abandoning railroad.

Since Oregon Short Line conditions are identical to New York Dock Ry. conditions so far as length of job protection is concerned, it might seem to make no difference whether or not the Commission was required or allowed to impose the latter conditions, or any conditions, on the sale of the 17.5 mile stretch to the Cairo Terminal Railroad Company. But it might make a difference. The arbitrator (see below) might decide that not all of the workers affected by the sale of the 17.5 mile stretch were also affected by the abandonment of the remaining half mile, in which event some workers would lose out who would have been protected if conditions had been imposed on the entire transaction. And some workers might fare better if the Cairo Terminal Railroad Company shared the labor-protective obligations of the Illinois Central Gulf Railroad, as it would if New York Dock conditions were imposed. Labor protection doesn't just mean guaranteeing dismissed workers six years of full pay. In fact that is just a residual benefit to which they are entitled if they are terminated. They must first be given a chance to get permanent jobs elsewhere on the railroad, and they have a right to arbitrate any dispute with the railroad over the latter's failure to find them permanent jobs. See Southern Pac. Transport. Co. v. ICC, 736 F.2d 708, 714 (D.C.Cir.1984) (per curiam); Walsh v. United States, 723 F.2d 570, 573-74 (7th Cir.1983). Maybe some of the affected workers in this case could force the Cairo Terminal Railroad Company to take them on if that railroad as well as Illinois Central has an obligation to consider their claims to permanent jobs--though, given the minute size of the Cairo Terminal Railroad Company, this seems pretty unlikely.

Since the question whether the Commission was required or allowed to impose labor-protective conditions--specifically the New York Dock conditions--is not moot, let us turn to it, noting first the Supreme Court's recent and emphatic directive to give great weight to an administrative agency's interpretation of the statutes it enforces. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., --- U.S. ----, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). The Commission's interpretation of section 10905 is reasonable, and we think correct. The statute says nothing about labor-protective conditions and, what is more important, contains no suggestion that the Commission has discretion to impose conditions of any sort on transactions within the statute's scope, unless the parties fail to come to terms and the Commission has to fix the terms if requested to do so by either party. But the terms that it fixes in such cases are "the price and other terms of sale," Sec. 10905(f)(1)(C)--not conditions protecting labor. And if the offer to purchase the about-to-be-abandoned line is accepted and provides for a continuation of rail service, the Commission "shall approve the transaction," period. Sec. 10905(e). This is quite different from what the Commission is required to do when it approves the abandonment of a line, which is to issue a certificate that shall "contain provisions to protect the interests of employees." 49 U.S.C. Sec. 10903(b)(2). And section 10901 empowers (but does not require) the Commission to impress labor protection on acquisitions of individual lines, while section 11347 makes such protection mandatory for rail mergers and consolidations. The statute that the Supreme Court construed in ICC v. Railway Labor Executives Ass'n, 315 U.S. 373, 62 S.Ct. 717, 86 L.Ed. 904 (1942), to allow the Commission to impose labor-protective conditions empowered the Commission to impose "such terms and conditions as in its judgment the public convenience and necessity may require." Id. at 375, 62 S.Ct. at 719. There is no similar provision here. Against this background, the silence of section 10905 on the matter of conditions has a certain eloquence, especially when we consider the active participation of the railroad unions in revisions of the Interstate Commerce Act.

Nor is a transaction under section 10905 a transaction under another section as well--either 10901 (acquisition of a line) or 11343 (rail merger or consolidation). The Commission once thought it was, see Abandonment of Railroad Lines & Discontinuance of Service, 354 I.C.C. 252, 270 (1976), but changed its mind, and rightly so, after the Staggers Act amended section 10905. See Abandonment of Railroad Lines & Discontinuance of Service, 365 I.C.C. 249, 259-60 (1981); 49 C.F.R. Sec. 1152.27(j)(2). For as the section now reads, a transaction under it cannot be an abandonment, because when the Commission approves a section 10905 sale it must dismiss the abandonment proceeding. And it cannot be a line acquisition or a railroad consolidation, as section 10905 requires the Commission to act peremptorily if the conditions in the section are satisfied, regardless of whether the criteria used in evaluating other transactions are satisfied. See 49 U.S.C. Secs. 10901(a), 11344(d).

Against this it can be argued that a transaction (a section 10905 purchase) that is in effect a composite of two transactions which if done separately would...