United Transp. Union-Illinois Legislative Bd. v. Surface Transp. Bd.

• Decision Date: 07 May 1999
• Docket Number: No. 98-1278,UNION-ILLINOIS,98-1278
• Citation: 175 F.3d 163
• Parties: UNITED TRANSPORTATIONLEGISLATIVE BOARD, Petitioner, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 163

175 F.3d 163

UNITED TRANSPORTATION UNION-ILLINOIS LEGISLATIVE BOARD, Petitioner, v. SURFACE TRANSPORTATION BOARD and United States of America Respondents.

No. 98-1278.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 4, 1999.

Decided May 7, 1999.

On Petition for Review of an Order of the Surface Transportation Board.

Gordon P. MacDougall argued the cause and filed the briefs for petitioner.

Louis Mackall, V, Attorney, Surface Transportation Board, argued the cause for respondents. With him on the brief were Joel I. Klein, Assistant Attorney General, U.S. Department of Justice, John J. Powers, III, and Robert J. Wiggers, Attorneys, and Henri F. Rush, General Counsel, Surface Transportation Board.

Before: GINSBURG, HENDERSON, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

The Surface Transportation Board approved the application of the Chicago SouthShore & South Bend Railroad (CSS) to acquire operating rights over approximately nine miles of track owned by the Illinois Port District. Chicago Rail Link (CRL) also operates over that stretch of track. The United Transportation Union-Illinois, which represents both CSS and CRL employees, petitions for review of the STB's decision.

The Union argues that the Board applied the wrong section of the Interstate Commerce Act, 49 U.S.C. § 10101 et seq. (1994), and that the Board should have conditioned its approval of the transaction upon the imposition of protective provisions for the benefit of the employees of CSS and CRL. For the reasons set out below, we deny the petition for review.

I. Background

For several years CRL alone operated a rail service over and maintained the Port's track in the Lake Calumet area of Chicago. In October, 1994 the Port entered into a three-year agreement authorizing CSS also to operate trains on that track. (CRL would remain solely responsible for maintenance.)

CSS applied to the Interstate Commerce Commission for approval of this acquisition of operating rights under 49 U.S.C. § 10901 (1994), subsection (a)(3) of which provided: "A rail carrier ... subject to the jurisdiction of the [ICC] ... may ... acquire or operate an extended or additional railroad line" only if the ICC found that public convenience so required or permitted. The UTU opposed the application, contending that CSS's transaction with the Port was governed not by § 10901 but by § 11343 (1994), subsection (a) of which lists, among the "transactions involving carriers [that] ... may be carried out only with the approval and authorization of the Commission: ... (6) acquisition by a rail carrier of trackage rights over ... a railroad line ... operated by another rail carrier." If the ICC approved the transaction under § 11343, then it would have had to require the carriers "to provide a fair arrangement ... protective of the interest of employees who are affected by the transaction." § 11347 (1994). If it approved the transaction under § 10901, however, then it would have discretion whether to impose such employee protective conditions, see § 10901(e) (1994), and as a matter of policy it would do so only upon a showing of "exceptional circumstances." See Class Exemption for Acquisition & Operation of Rail Lines under 49 U.S.C. 10901, 1 I.C.C.2d 810, 819 (1985), aff'd sub nom., Illinois Commerce Comm'n v. ICC, 817 F.2d 145 (D.C.Cir.1987) (table). The UTU sought protection for the employees of both CSS and CRL.

The ICC rejected the Union's petition and approved CSS's acquisition under § 10901, noting that the Commission's regulations "specifically state that [ § 10901] applies when an existing carrier seeks to operate a line owned by a noncarrier," such as the Port. The Commission then declined to exercise its discretion to impose employee protective conditions on the ground that the UTU had not shown that exceptional circumstances warranted such protection.

While the UTU's petition to reopen that decision was pending before the ICC, the Congress passed the ICC Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803, which transferred jurisdiction over rail carriers to the STB as of January 1, 1996. A savings clause in the ICC-TA provides that it "shall not affect any proceedings ... pending before the [ICC] at the time this Act takes effect." Id. § 204(b)(1), 109 Stat. 941.

Accordingly, the Union's petition to reopen this proceeding was transferred to the STB, which, applying the law as it was prior to the ICC-TA, adhered to the decision of the ICC in all respects. The STB also determined that, if the UTU petitioned a court for review and the court remanded the case, then the Board on remand would be required to apply the Interstate Commerce Act as amended by the ICC-TA. The Board further noted that in the ICC-TA the Congress had limited the requirement that the Board impose employee protective conditions upon transactions under § 11343 (recodified at 49 U.S.C. § 11323) to those involving Class I or Class II carriers. See 49 U.S.C. § 11326(c). Finding that both CSS and CRL were Class III carriers, the Board concluded that, even if a court agreed with the UTU that the Board should have evaluated the transaction between CSS and the Port under § 11343 rather than under § 10901, "neither employees of CSS nor employees of CRL would be entitled to protection."

II. Analysis

In its petition for review the UTU argues that the decision of the Board was contrary to the plain meaning of § 11343. We review the Board's order under the deferential standard of the Administrative Procedure Act: we must uphold the decision unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); see McCarty Farms, Inc. v. STB, 158 F.3d 1294, 1300 (D.C.Cir.1998). We review the Board's interpretation of the statute it administers using the familiar two-step analysis of Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Caribbean Shippers Ass'n v. STB, 145 F.3d 1362, 1364 (D.C.Cir.1998).

A. Standing

The Board contends that "[e]ven if UTU were able to establish that this case should be construed as a multi-carrier transaction involving CRL, no meaningful relief could be accorded [the UTU] on remand." Because this argument draws the Union's standing into question, we must determine whether the court has jurisdiction of the case before we may turn to the merits of the Union's petition for review. See Skaggs v. Carle, 110 F.3d 831, 834 (D.C.Cir.1997) ("to establish ... standing to sue under Article III of the Constitution, the appellant[ ] must show that ... the injury is likely to be redressed by a court decision in [its] favor"); Steel Co. v. Citizens for Better Env't, 523 U.S. 83, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998) ("The requirement that jurisdiction be established as a threshold matter 'spring[s] from the nature and limits of the judicial power of the United States' and is 'inflexible and without exception' ").

We have previously held that a dispute over employee protective conditions is sufficient to confer standing upon the union that represents the affected employees. See Brotherhood of Locomotive Eng'rs v. United States, 101 F.3d 718, 724 (1996) (" '[T]he possibility' that one characterization of the transaction could lead to greater labor protection than another ... 'yields sufficient potential for greater protection to [the] employees to provide a justiciable injury' "). Accordingly, if the ICA as it was prior to the ICC-TA would arguably apply on remand, then the UTU has standing based upon its claim that the Board should have approved CSS's acquisition under § 11343, with its mandatory provision for employee protective conditions. The Board, however, argues that the ICC-TA, and not the ICA, clearly would apply on any remand; that the mandatory employee protection provisions in the ICC-TA are expressly made inapplicable to transactions involving only Class III carriers; and, therefore, that no matter how the transaction between CSS and the Port is characterized the UTU cannot get the relief it seeks. Consequently, the UTU's standing depends upon whether its interpretation of the ICC-TA, under which that statute either would not apply on remand or alternatively would not preclude the relief it seeks, is non-frivolous. See Steel Co., 118 S.Ct. at 1019 & n.9 ("frivolous claims are themselves a jurisdictional defect"). Because we conclude that the UTU has standing even if the ICC-TA would apply on remand, we need not resolve the question whether the ICA would arguably apply on remand.

The UTU argues that nothing in the ICC-TA constrains the Board's discretion to impose employee protective conditions upon a transaction approved under § 11323. The Union first points to the command in 49 U.S.C. § 11324(c): the "Board shall approve and authorize a transaction [referred to in § 11323] when it finds the transaction is consistent with the public interest." The Union then directs our attention to United States v. Lowden, 308 U.S. 225, 60 S.Ct. 248, 84 L.Ed. 208 (1939), in which the Court held that the ICC's authority in the corresponding section of the Interstate Commerce Act to impose upon covered transactions such conditions as "will promote the public interest" invested the agency with the discretion to impose employee protective conditions. Id. at 232.

In the decision here under review, the STB did not address the scope of its discretion under § 11324(c); it held only that "neither employees of CSS nor employees of CRL would be entitled to protection" because both railroads are Class III carriers. Nor does the STB address this issue in its brief. Arguably, therefore, the STB still has discretion under § 11324(c), in approving a transaction under § 11323 involving only Class III carriers, to impose employee protective conditions.

Consequently, we cannot say that the UTU's ...