In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 06-2542

BROTHERHOOD OF LOCOMOTIVE ENGINEERS

AND TRAINMEN GENERAL COMMITTEE OF

ADJUSTMENT, CENTRAL REGION,

Plaintiff-Appellant,

v.

UNION PACIFIC RAILROAD COMPANY,

Defendant-Appellee.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 2401—Virginia M. Kendall, Judge.

____________

On Petition for Rehearing

____________

DECIDED AUGUST 11, 2008

____________

Before EASTERBROOK, Chief Judge, and POSNER, FLAUM,

RIPPLE, KANNE, ROVNER, WOOD, EVANS, WILLIAMS, SYKES,

and TINDER, Circuit Judges.

On April 23, 2008, plaintiff-appellant filed a petition

for rehearing with a suggestion for rehearing en banc, and

on May 16, 2008, defendant-appellee filed an answer to the

petition. All of the judges on the panel voted to deny
2 No. 06-2542

rehearing. No judge in regular active service has called

for a vote on the suggestion for rehearing en banc. The

petition is therefore Denied. Chief Judge Easterbrook

concurs in the denial of rehearing en banc. His concurrence, in which Judge Posner joins, is attached.

EASTERBROOK, Chief Judge, with whom POSNER, Circuit

Judge, joins, concurring in the denial of rehearing en banc.

Relying on Pokuta v. Trans World Airlines, Inc., 191 F.3d

834 (7th Cir. 1999), the panel held that decisions of the

National Railroad Adjustment Board may be set aside on

due-process grounds, notwithstanding Union Pacific R.R.

v. Sheehan, 439 U.S. 89 (1978), and the omission of due

process from the statutory grant of reviewing authority,

45 U.S.C. §153 First (q). Three circuits have held after

Sheehan that review of due-process arguments is forbidden. See United Steelworkers v. Union R.R., 648 F.2d 905 (3d

Cir. 1981); Kinross v. Utah Ry., 362 F.3d 658 (10th Cir. 2004);

Henry v. Delta Air Lines, 759 F.2d 870 (11th Cir. 1985).

Another has agreed in dictum. Jones v. Seaboard R.R., 783

F.2d 639, 642 n.2 (6th Cir. 1986). But four other circuits are

on the panel’s side of this conflict. See Shafii v. PLC British

Airways, 22 F.3d 59 (2d Cir. 1994); Locomotive Engineers v. St.

Louis Southwestern Ry., 757 F.2d 656 (5th Cir. 1985); Goff v.

Dakota, Minnesota & Eastern R.R., 276 F.3d 992 (8th Cir.

2002); Edelman v. Western Airlines, Inc., 892 F.2d 839 (9th

Cir. 1989). There is little to be gained from making the

conflict 5-4 one way rather than 5-4 the other way. Only
No. 06-2542 3

Congress or the Supreme Court can bring harmony, and

neither institution seems much interested in doing so. (This

conflict is 23 years old.)

Lurking behind the panel’s decision is a question that

the petition for rehearing en banc does not mention:

whether the Board did offend the Constitution’s due process clause. The litigants dispute whether papers filed

with the Board must show that the parties attempted to

work out their differences “on the property” (that is,

through the carrier’s auspices) before turning to the

agency. No one doubts that informal dispute resolution is

required. The novel question is whether a demonstration

to that effect is a precondition to the Board’s review. Our

panel assumed (as the parties’ briefs also did) that, if the

Board adopted this requirement in the course of decision—that is, by adjudication rather than prospective

rulemaking—then it violated the Constitution. The bulk of

the panel’s opinion is devoted to the question whether

the Board has adopted a new requirement and thus acted

unconstitutionally.

That assumption is questionable. Lawmaking in the

course of adjudication is a staple of any common-law

system, and rules adopted in that fashion apply not only

to the parties but also to all similar cases. See, e.g., James B.

Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991). Administrative agencies no less than courts may adopt new rules

by adjudication. See NLRB v. Bell Aerospace Co., 416 U.S. 267,

290–95 (1974). Any suggestion that common-law developments are limited to substantive norms—that the Constitution does not tolerate changes that metaphorically

“close the courthouse door”—would be hard to justify. Why

may an agency or court change a substantive rule retroactively, and penalize conduct that seemed lawful when it
4 No. 06-2542

occurred, but not change a procedural rule? Cf. Landgraf v.

USI Film Products, 511 U.S. 244, 273–80 (1994) (suggesting

that retroactive procedural changes are easier to justify

than retroactive substantive changes).

Distinguishing between substantive and procedural

changes also would be difficult to square with decisions

such as Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007),

and Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501

U.S. 350 (1991). In Bell Atlantic the Justices modified

federal pleading requirements and threw out a complaint

that would have been deemed sufficient earlier; in Lampf

Pleva the Court revamped the statute of limitations for

securities actions and dismissed hundreds of proceedings

in which plaintiffs, relying on older law, had delayed in

filing suit. And, when Congress tried to honor those reliance interests and allow the suits to continue, the Justices

held that statute unconstitutional, on the ground that final

judgments cannot be changed by legislative action. Plaut v.

Spendthrift Farm, Inc., 514 U.S. 211 (1995).

Because all parties to this case assumed that a change

of law during the course of administrative adjudication

offends the Constitution, it would be inappropriate for the

court en banc to tackle that issue. The court will have time

enough to address this subject when the question is

squarely presented.

8-11-08