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Parties Involved:
Brotherhood of Locomotive Engineers and Trainmen
Petitioner
Kansas City Southern Railway Company
Intervenor
Kaw River Railroad, Inc.
Intervenor
Surface Transportation Board
Respondent
United States of America
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 23, 2006 Decided July 25, 2006

No. 05-1233

BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN,

A DIVISION OF THE RAIL CONFERENCE-INTERNATIONAL

BROTHERHOOD OF TEAMSTERS,

PETITIONER

v.

SURFACE TRANSPORTATION BOARD AND

UNITED STATES OF AMERICA,

RESPONDENTS

KANSAS CITY SOUTHERN RAILWAY COMPANY AND

KAW RIVER RAILROAD, INC.,

INTERVENORS

On Petition for Review of an Order of the

Surface Transportation Board

Gordon P. MacDougall argued the cause and filed the briefs

for petitioner.

Marilyn R. Levitt, Attorney, Surface Transportation Board,

argued the cause for respondent. With her on the brief were

Thomas O. Barnett, Acting Assistant Attorney General, U.S.

Department of Justice, John J. Powers, III and Robert J.

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Wiggers, Attorneys, Ellen D. Hanson, General Counsel, Surface

Transportation Board, and Craig M. Keats, Deputy General

Counsel.

Before: GINSBURG, Chief Judge, and BROWN and GRIFFITH,

Circuit Judges.

GINSBURG, Chief Judge: The Kaw River Railroad, Inc.

(KRR) secured the authorization of the Surface Transportation

Board to acquire by lease, sublease, and assignment some 18.2

miles of track controlled by the Kansas City Southern Railway

Company (KCS). The Brotherhood of Locomotive Engineers

and Trainmen, which represents employees of the KCS, argues

the Board did not have jurisdiction to approve the transfer

because the track is “switching” track and therefore excepted

from STB authority pursuant to 49 U.S.C. § 10906. We dismiss

the petition because the Union does not have standing to seek

review.

I. Background

Under the Interstate Commerce Act, as amended, a

noncarrier may “acquire a railroad line or acquire or operate an

extended or additional railroad line, only if the Board issues a

certificate authorizing” the action. Id. § 10901(a)(4); cf. id. §§

10901-03, 11323 (rail carrier generally must obtain Board

authorization before it may construct, acquire, or initiate or

cease operations over, rail line). The Board must exempt a

transaction from the authorization process, however, when it

determines regulation is unnecessary to carry out the policies of

the statute. See id. § 10502. 

In 2004 the KRR, then a noncarrier, filed with the Board a

“Notice of Exemption” pursuant to the Board’s “class

exemption” procedure, seeking authority to acquire from the

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KCS and operate 18.2 miles of track as a common carrier. See

Class Exemption for the Acquisition & Operation of Rail Lines

Under 49 U.S.C. 10901, 1 I.C.C.2d 810 (1985) (exempting

nearly all acquisitions and operations from § 10901 unless

adversely affected party files petition to revoke exemption); 49

C.F.R. §§ 1150.31-1150.35. Before the KRR made its filing, the

KCS had been conducting switching and other operations over

the tracks.

The Union filed a petition to revoke the exemption pursuant

to 49 U.S.C. § 10502(d), arguing the Board could not approve

the transaction because, as “switching” track, it was excepted

from the Board’s authority. See id. § 10906 (“Notwithstanding

section 10901 .... [t]he Board does not have authority under this

chapter over ... spur, industrial, team, switching, or side tracks”).

Unlike a transaction exempted under § 10502 from the rigors of

§ 10901, a transaction excepted under § 10906 is outside the

Board’s authority altogether, so that prior Board approval is

neither required nor appropriate.

Whether a transaction is exempt under § 10502 or excepted

under § 10906, the result is the same: The Board does not

regulate it. The difference was significant to the Union,

however, because of the collective bargaining agreement (CBA)

the Union had negotiated with the KCS. That CBA provided

with respect to transactions “authorized under § 10901,” but not

with respect to transactions excepted from the Board’s authority,

that “the arrangements provided [herein] shall be deemed to

fulfill all of the parties’ bargaining obligations that may exist

under any applicable statute, agreement or other authority with

respect to such transaction.” In other words, the KCS did not

have to bargain with the Union before it consummated a

transaction authorized under (or exempted from) § 10901. The

upshot was that the Union argued the KRR’s filing for

exemption was “a scam” intended to change the “rates of pay,

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rules or working conditions of its employees, ... as embodied in

agreements” between the Union and the KCS, 45 U.S.C. §§ 152

Seventh, 156, without following the collective bargaining

procedures required by the Railway Labor Act, id. § 151 et seq.

The Board denied the Union’s petition, thereby allowing the

transaction to go forward exempt from § 10901. The KRR had

disputed the Union’s assertion that all the track at issue was

switching track, but the Board concluded that “even if the track

in question could have been characterized as switching track

under 10906 when operated by the previous operator,” it was the

KRR’s prospective use of the track that controlled its

characterization. See Effingham R.R., STB Docket No. 41986,

1997 WL 564155 (STB served Sept. 12, 1997), aff’d sub nom.

United Transp. Union-Illinois Legislative Bd. v. STB, 183 F.3d

606 (7th Cir. 1999); Bhd. of Locomotive Eng’rs v. STB, 101 F.3d

718, 726-28 (D.C. Cir. 1996) (transaction subject to Board

authority where switching operation had “effect of substantially

extending the tenant railroads’ lines into new territory”). The

Board reasoned that because the “new operation made possible

by this transaction constitutes KRR’s entire line of railroad,” the

track was “encompassed by 10901” and the KRR needed either

the Board’s authorization under, or an exemption from, § 10901.

“Merely characterizing the proposed operations as switching

does not relieve a rail operator of the obligation to obtain a

Board license if the operator is holding out common carrier

service to the public over a line of railroad.” The Union

petitions for review of this decision.

II. Analysis

The Union argues on review that the Board could not

lawfully approve the KRR’s acquisition of track from the KCS

through its class exemption procedure because the transaction is

excepted from the Board’s authority under § 10906. The Board

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argues the Union lacks prudential standing because its sole

interest here is in requiring the KCS to bargain under the RLA.

See Bhd. of Locomotive Eng’rs, 101 F.3d at 723 (in addition to

constitutional requirements of standing, party claiming to be

aggrieved by agency action must show “interest sought to be

protected by the complainant [is] arguably within the zone of

interests to be protected or regulated by the statute ... in

question”) (quoting Ass’n of Data Processing Serv. Orgs., Inc.

v. Camp, 397 U.S. 150, 153 (1970)). 

We begin our analysis, as we must, with the question of our

jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523

U.S. 83, 93 (1998). Because we conclude we lack jurisdiction

under Article III of the Constitution of the United States, we do

not address the Board’s prudential standing argument. See High

Plains Wireless, L.P. v. FCC, 276 F.3d 599, 605 (D.C. Cir.

2002) (court has independent duty to assure itself of its

jurisdiction); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,

585 (1999) (“It is hardly novel for a federal court to choose

among threshold grounds for denying audience to a case on the

merits”); Free Air Corp. v. FCC, 130 F.3d 447, 448 n.1 (D.C.

Cir. 1997) (passing over respondent’s prudential standing

argument where petitioner lacked Article III standing). 

Three elements are necessary to establish the “irreducible

constitutional minimum of standing”: (1) “injury in fact,” (2) “a

causal connection between the injury and the conduct

complained of,” and (3) a likelihood the injury “will be

‘redressed by a favorable decision.’” Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560 (1992) (citation omitted). The

Union argues the injury in this case is twofold. First, it claims

the KRR’s acquisition of track previously owned or leased by

the KCS caused some KCS employees to lose some job shifts to

KRR employees and thereby to suffer a partial “loss of

employment,” a “reduction in earnings,” or a displacement to

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“less desirable work ... at less desirable locations.” Second, the

Union claims the Board’s exemption of the transaction

prevented the Union from invoking the bargaining procedures

of the RLA.

We fail to see how the former injury is redressable. If the

Union prevails here, the transaction would be excepted from

Board authority pursuant to § 10906 rather than exempted from

the procedures of § 10901 pursuant to § 10502. The Union

advances no reason to believe that as a result the Union’s

members would be restored to their prior shifts, higher wages,

and more desirable work. 

The latter injury is redressable, however; if it prevails, the

Union would have the opportunity to negotiate with the KCS

under the procedures of the RLA because it would avoid the

provision in its negotiated collective bargaining agreement, in

which it waived the right to bargain anew in the event of a

transaction exempted from § 10901. And that is sufficient to

meet both the injury and the redressability requirements of the

standing inquiry. See Bhd. of Locomotive Eng’rs, 101 F.3d at

724 (“The 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”).

The Union’s claim derails, however, when it hits the

requirement of causation. In order to establish causation, the

claimed injury -- here the Union’s inability, under the terms of

its CBA with the KCS, to invoke its right to bargain as provided

in the RLA -- must be “fairly ... trace[able] to the challenged

action” of the Board, that is, exemption of the track here at

issue. Defenders of Wildlife, 504 U.S. at 560 (quoting Simon v.

E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). The

Board’s decision means the Union is not entitled to bargain over

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the effects of the transaction only because the Union agreed to

that limitation in its CBA. This injury was not in any

meaningful way “caused” by the Board; rather, it was entirely

self-inflicted and therefore insufficient to confer standing upon

the Union. See Petro-Chem Processing, Inc. v. EPA, 866 F.2d

433, 438 (D.C. Cir. 1989) (self-inflicted injury does not support

standing if it is “so completely due to the [complainant’s] own

fault as to break the causal chain”) (quoting 13 C. Wright, A.

Miller & E. Cooper, Fed. Practice & Procedure: Jurisdiction

2d § 3531.5 (2d ed. 1984)); see also McConnell v. FEC, 540

U.S. 93, 228 (2003) (no standing for political candidates who

claimed injury from law increasing limits on “hard money”

contributions; injury was caused by “their own personal ‘wish’

not to solicit or accept large contributions”); Pennsylvania v.

New Jersey, 426 U.S. 660, 664 (1976) (rejecting plaintiff states’

standing to challenge defendant states’ tax on income of

nonresident employees; diminution of taxes paid to plaintiff

states was “self-inflicted” by their decisions to credit taxpayers

for income taxes paid to other states and no state “can be heard

to complain about damage inflicted by its own hand”); Taylor v.

FDIC, 132 F.3d 753, 767 (D.C. Cir. 1997) (no standing for

plaintiffs who claim constructive discharge based upon

voluntary resignations); McKinney v. U.S. Dep’t of Treasury,

799 F.2d 1544, 1555-56 (Fed. Cir. 1986) (union of

longshoremen sued by third parties for members’ refusal to

handle Soviet goods lacked standing to bring own suit to

challenge government’s refusal to block importation of same as

products of forced labor).

As the Board points out, had the Union not traded away its

right to bargain over the effects of exempted transactions, it

would have no interest -- at least no interest it has identified here

-- in seeing the KCS/KRR transaction excepted from the

authority of the Board rather than exempted by the Board; its

right to bargain would be the same in either event. Therefore,

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the Union can no more claim standing than could a person who

placed a wager upon the outcome of an agency decision and lost

the bet, his rights being otherwise unaffected. Although the

gambler would not have lost the wager “but for” the agency’s

decision, we explained in Huddy v. FCC, 236 F.3d 720, 724

(2001), that “acceptance of such ‘but for’ causation would

effectively enable parties to secure constitutional standing

purely at their own volition.” See id. (“Suppose that two

persons, without interests at stake in an agency process, had bet

a sum of money on its outcome. If ‘but for’ causation of the

kind involved here were enough, the party picking the losing

side would satisfy the causation prong, and, unless the wager

were illegal, standing would ensue.”) (dictum); see also William

Blackstone, 3 Commentaries *452 (describing the “feigned

wager” by which, in order to have issue at equity heard by jury

at law, the pretended plaintiff “declares that he laid a wager ...

with the defendant, that A. was heir at law to B. ...; and thus the

verdict of the jurors at law determines the fact in the court of

equity”). But see Cmty. Nutrition Inst. v. Block, 698 F.2d 1239,

1247 (D.C. Cir. 1983), rev’d on other grounds, 467 U.S. 340

(1983) (“A plaintiff need only make a reasonable showing that

‘but for’ defendant’s action the alleged injury would not have

occurred”) (dictum). The harm suffered, “insofar as it is

incurred voluntarily,” is simply not “fairly ... trace[able]” to the

challenged action of the agency. Petro-Chem Processing, 866

F.2d at 438.

The Union argues the cause of its plight is the Board’s

exemption of the transaction because the exemption would have

limited its rights under the RLA even if there were no CBA.

The Union cites two cases in support of this proposition. First,

in its reply brief it cites Pittsburgh & Lake Erie R.R. v. Ry.

Labor Executives’ Ass’n, 491 U.S. 490, 512 (1989) (P&LE),

which involved an exempted sale of all the employer’s assets to

a noncarrier. The Court held that, although the employer could

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be required to bargain with its union over the effects of the sale,

the union could not in the interim prevent the sale from going

forward pursuant to § 6 of the RLA, as amended, 45 U.S.C. §

156 (rates of pay, rules, or working conditions cannot be

changed by carrier until completion of bargaining). P&LE, 491

U.S. at 512. In the present case the Union (which implicitly

assumes the same rule applies to the sale or lease of less than all

a carrier’s assets) argues that, even if it had not traded away its

right to bargain over the effects of an exempt transaction, the

Board’s approval under (or exemption from) § 10901 would

have prevented it from getting an injunction against the

KCS/KRR transaction. The Union may be correct, but its point

is irrelevant. The relevant question is whether it could have

gotten an injunction were the transaction not exempted under §

10502 but instead excepted from the Board’s authority under §

10906, and the answer supplied by P&LE is no. 

In P&LE, there was no agreement between the railroad and

the union, express or implied, that the carrier would not go out

of business or sell its assets. 491 U.S. at 503-04. For this

reason, the sale could not be stayed under § 156. Id. at 512. Nor

was the sale a change in “working conditions” governed by §

156 even in the absence of an agreement, pursuant to Detroit &

Toledo Shore Line R.R. v. United Transp. Union, 396 U.S. 142

(1969). See P&LE, 491 U.S. at 504-11. The Court was clear

that its holding “rest[ed] on [its] construction of the RLA and

not on the pre-emptive force of [§ 10901].” Id. at 512; see also

id. at 509 (“we find nothing in the RLA to prevent the

immediate consummation of P&LE’s contract to sell”). The

Court’s rationale applies equally to limit the Union’s ability to

enjoin a transaction excepted from the Board’s authority under

§ 10906. It follows that the Union could not have enjoined the

sale under the RLA whether the transaction was exempted or

excepted. With respect to an injunction, therefore, neither the

CBA nor the Board’s exemption decision made the Union any

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worse off; with respect to bargaining, however, the Union still

has only the CBA to blame.

At oral argument counsel also invoked Brotherhood of

Railway Carmen v. ICC, 880 F.2d 562 (D.C. Cir. 1989),

reversed on appeal sub nom. Norfolk & Western Railway v.

American Train Dispatchers’ Ass’n, 499 U.S. 117 (1991), in

support of its argument that, quite apart from the CBA, its right

under the RLA to bargain was cut off by the Board’s exempting

the transaction from § 10901 rather than deeming it excepted

under § 10906. The significance of that case is to the contrary,

however: The Union had the same statutory right to bargain

over the effects of the KCS/KRR transaction regardless whether

it was exempted from § 10901 or excepted from the Board’s

authority per § 10906; only the CBA limited its right to bargain

over an exempt transaction.

In the cited case, the Supreme Court held agency approval

of a merger under what is now 49 U.S.C. § 11323 (Board

approval required for consolidation, merger, or acquisition of

control of one rail carrier by another) superseded, to the extent

necessary to carry out the transaction, the employer’s obligation

under the RLA to bargain with the union representing its

employees. Am. Train Dispatchers, 499 U.S. at 131. In doing

so, the Court relied upon both § 11341(a) (now § 11321(a)),

which provides that consolidations are “exempt from ... all other

law ... as necessary to ... carry out the transaction,” and upon

other provisions of “the Act [imposing] a number of laborprotecting requirements to ensure that the Commission

accommodates the interests of affected parties to the greatest

extent possible.” See Am. Train Dispatchers, 499 U.S. at 132-

33. Neither aspect of that rationale applies to a transaction

subject to § 10901. Unlike a consolidation, merger, or

acquisition covered by § 11323, the acquisition of a rail line by

a noncarrier subject to § 10901 is not made immune from “all

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other law” by § 11321; and § 10901(c) expressly precludes the

imposition of labor-protective measures as a condition for

approval of a transaction under § 10901. Therefore, as the

Supreme Court has made clear, § 10901 does not cut off the

Union’s right under the RLA to bargain over the effects of an

exempt transaction. See P&LE, 491 U.S. at 512 (railroad

obligated to bargain over effects on working conditions of sale

exempted from § 10901). Nor would the Union’s right to

bargain have been limited were the transaction excepted from

the Board’s authority pursuant to § 10906, which neither

displaces “all other law” -- such as the RLA -- nor permits the

Board to impose labor-protective conditions. Accordingly, the

Union’s rights under the RLA would have been identical

regardless whether the transaction was exempted or excepted --

had it not negotiated away its right to bargain with respect to an

exempt transaction. 

III. Conclusion

The Union has failed to identify any injury that is fairly

traceable to the Board’s decision exempting the KCS/KRR

transaction from § 10901. Its only injury -- inability to bargain

over the transaction -- is attributable to the Union’s having

agreed to a CBA waiving its right to bargain over any

transaction exempt from § 10901. This injury being selfinflicted, the Union lacks standing to seek review of the Board’s

decision and its petition is accordingly

 Dismissed.

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