Source: http://ny.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19860522_0040652.C02.htm/qx
Timestamp: 2017-07-21 10:55:46
Document Index: 541833042

Matched Legal Cases: ['§ 151', '§ 10905', '§ 151', '§ 10905', '§ 2321', '§ 10903', '§ 10903', '§ 156', '§ 10903', '§ 10905', '§ 10905', '§ 10904', '§ 10905', '§ 10905', '§ 10905', '§ 10905', '§ 152', '§ 2321']

| Railway Labor Executives' Association v. Staten Island Railroad Corp.
Railway Labor Executives' Association v. Staten Island Railroad Corp.
RAILWAY LABOR EXECUTIVES' ASSOCIATION, PLAINTIFF-APPELLANT,v.STATEN ISLAND RAILROAD CORPORATION AND STATEN ISLAND RAILWAY CORPORATION, DEFENDANTS-APPELLEES, INTERSTATE COMMERCE COMMISSION AND UNITED STATES OF AMERICA, INTERVENORS-APPELLEES
Appeal from a judgment of the United States District Court for the Eastern District of New York (Sifton, J.), dismissing the Railway Labor Executives' Association's claims under the Railway Labor Act, 45 U.S.C. §§ 151-164, for benefits due employees affected by the sale of a rail line by the Staten Island Railroad Corporation to the Staten Island Railway Corporation under 49 U.S.C. § 10905. Affirmed as modified.
The Railway Labor Executives' Association ("RLEA")*fn1 appeals from a judgment of the United States District Court for the Eastern District of New York (Sifton, J.), dismissing for lack of subject matter jurisdiction, Fed. R. Civ. P. 12 (b)(1), its complaint under the Railway Labor Act ("RLA"), 45 U.S.C. §§ 151-164, arising from the sale of railroad track from the Staten Island Railroad Corporation ("SIRC") to the Staten Island Railway Corporation ("SIRY") under the abandonment/sale provisions of 49 U.S.C. § 10905. The district court concluded that it could not fashion a remedy for RLEA's claims without impinging upon an order of the Interstate Commerce Commission ("ICC") approving and mandating the sale. Accordingly, because the authority to enjoin or modify an ICC order rests exclusively with this and other circuit courts, 28 U.S.C. §§ 2321, 2342, the district court determined that it lacked jurisdiction over the action. We agree with the district court that dismissal of the complaint was proper but believe that this dismissal was more appropriately accomplished under Fed. R. Civ. P. 12 (b)(6). We therefore modify the judgment of the district court to declare that the complaint is dismissed with prejudice under Rule 12 (b)(6) and affirm the judgment as modified.
At the time of the transaction at issue, SIRC, a wholly owned subsidiary of the Maryland and West Virginia Company, operated a rail system consisting of 31.16 miles of track and trackage rights running across Staten Island and into northern New Jersey. In December of 1984, SIRC filed an application to abandon its rail system pursuant to 49 U.S.C. § 10903, claiming loss of profits and poor conditions of the lines as the bases for its decision.*fn2 Section 10903 provides that a rail carrier may abandon its rail lines "only if the [ICC] finds that the present or future public convenience and necessity require or permit the abandonment or discontinuance." Id. § 10903(a). SIRC's application requested that the ICC impose no labor protective conditions on the abandonment, since SIRC was attempting to abandon its entire line and therefore would no longer be in the business of providing rail service.
During the pendency of SIRC's application before the ICC, RLEA became concerned over the potential impact of an abandonment upon the rights, guaranteed by current collective bargaining agreements, of SIRC employees whom its member unions represented. Consequently, four member unions of the RLEA served "Section 6 notices" on SIRC, 45 U.S.C. § 156. Section 6 of the RLA governs disagreements between carriers and employees over the formation of, or changes to, a collective bargaining agreement. It requires thirty days notice of proposed changes to a collective bargaining agreement and provides for negotiations between the carrier and union over such changes. Id. If no agreement is reached, either party may request mediation from the National Mediation Board, which in turn may suggest that the parties arbitrate the dispute. Id. If the parties do not agree to arbitration, a thirty-day cooling-off period is imposed for the parties to resort to various self-help measures. Id. Throughout the entire process, the RLA directs the parties to maintain the status quo.
Here, the unions' notices sought to amend their collective bargaining agreements to require SIRC to give them six-months advance notice of any abandonment of SIRC's rail system, and, if such an abandonment were to occur, for SIRC to impose labor protective conditions as set forth in Oregon Short Line Co. - - Abandonment -- Goshen, 360 I.C.C. 91 (1975),*fn3 upon all employees affected by the abandonment. Alternatively, if SIRC were to sell its lines to another party, the unions requested that SIRC require the purchaser to employ all those SIRC employees affected by the sale, to assume the unions' collective bargaining agreements with SIRC, and to apply labor protective conditions as set forth in New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979),*fn4 to all such employees.
At the same time, RLEA strenuously opposed SIRC's request before the ICC for approval of its application without the imposition of labor protective conditions. In its formal comments to the ICC on the application, RLEA requested that the ICC impose labor protective conditions on SIRC pursuant to 49 U.S.C. § 10903 (b)(2), which mandates the imposition of such conditions upon all partial line abandonments. On February 1, 1985, the ICC issued a decision approving the abandonment application and the issuance to SIRC of a certificate of public convenience and necessity. In light of RLEA's comments and the requirements of section 10903 (b)(2), however, the ICC imposed on SIRC Oregon Short Line conditions.
Within days of the ICC's approval of the application, the New York Susquehanna & Western Railway Corporation ("NYS&W"), on behalf of SIRY, its new subsidiary, made an offer to purchase SIRC's rail system under the provisions of 49 U.S.C. § 10905. Section 10905, entitled "Offers of financial assistance to avoid abandonment and discontinuance," is a "forced sale" provision which attempts to preserve rail service over lines that otherwise would be abandoned. Under section 10905, within ten days of the publication of the ICC's decision on the abandonment, "any person may offer to pay the carrier a subsidy or offer to purchase the line." Id. § 10905(c). The effective date of the abandonment certificate simultaneously is stayed pending a determination of the legitimacy of any offers. Id. § 10904 (c)(4). If within fifteen days after the publication an offeror is determined to be financially responsible and the offer statutorily satisfactory, the ICC is required to "postpone the issuance of a certificate" in order to give the parties an opportunity to negotiate a final sale. Id. § 10905(d). If the parties are able to reach an agreement for the sale which ensures continued rail service on the line, "the Commission shall approve the transaction and dismiss the application for abandonment or discontinuance." Id. § 10905(e). If, however, the parties are unable to reach an agreement, either party may request that the ICC fix a price for the sale, based upon the fair market value of the line. Id. § 10905 (f)(1). The ICC's decision then becomes binding on the parties unless the offeror withdraws its offer to purchase the line within ten days of the ICC's decision. Id. § 10905 (f)(2).
On February 20, 1985, the ICC issued a decision finding NYS&W's offer to be bona fide and NYS&W to be financially responsible under section 10905(d).*fn5 Accordingly, the ICC postponed the issuance of SIRC's abandonment certificate to give SIRC and NYS&W an opportunity to negotiate a sale. In mid-March 1985, SIRC, NYS&W and SIRY informed the ICC that they had reached an agreement for the sale of the track under section 10905 and requested final approval of the sale. The parties further requested that the ICC impose no labor protective conditions. RLEA opposed approval of the sale without the imposition of such conditions, arguing that the requirements of section 10903 (b)(2) should be read to apply to the sale at issue.
On April 19, 1985, following the directives of section 10905(e), which requires the ICC to approve a sale and dismiss the application for abandonment of the line once an agreement between the purchasing and selling parties has been reached, the ICC authorized the sale to SIRY. In so doing, it tacitly declined to impose labor protective conditions on the sale, consistent with its prior view that the lack of any specific reference to such conditions within the text of section 10905 foreclosed the ICC from imposing them in such a sale. Illinois Central Gulf Railroad -- Abandonment -- in Alexander County, Illinois, 366 I.C.C. 911 (1983), aff'd sub nom. Simmons v. I.C.C., 760 F.2d 126 (7th Cir. 1985), cert. denied, 474 U.S. 1055, 106 S. Ct. 791, 88 L. Ed. 2d 769, 54 U.S.L.W. 3460 (U.S. Jan. 13, 1986). The ICC decision made no mention of the Section 6 notices or the RLA and noted that SIRC "must complete the sale so long as the buyer consummates." The Staten Island Railroad Corporation - Abandonment and Discontinuance of Service - In Richmond County, NY and Union County, NJ, Docket No. AB-231, at 1 (April 19, 1985) (" SIRC Abandonment ").
On the day the ICC served its decision, SIRC and SIRY consummated the sale, ignoring the outstanding Section 6 notices and the procedures governing such notices under the RLA. The next day, RLEA commenced this action, alleging that SIRC's sale of its rail system to SIRY without negotiated labor protective conditions and without adhering to the unions' Section 6 notices constituted a change in the existing rates of pay, rules or working conditions of its employees as embodied in the collective bargaining agreement, in violation of Section 2, First and Section 6 of the RLA, 45 U.S.C. §§ 152 First, 156. In its complaint, RLEA sought declaratory and injunctive relief requiring SIRC and SIRY to negotiate the desired changes to the collective bargaining agreements and to require the carriers to comply with the status quo provisions of Section 6.
The district court dismissed the complaint on the ground that it lacked subject matter jurisdiction over the claims. Fed. R. Civ. P. 12 (b)(1). It reasoned that no remedy could be granted to RLEA that would not impinge upon the ICC's order granting SIRC and SIRY approval for the final sale of the rail system. Because exclusive jurisdiction to review ICC orders rests with the federal courts of appeals, 28 U.S.C. §§ 2321, 2342, the court ...