Opinion ID: 391168
Heading Depth: 2
Heading Rank: 2

Heading: The Implied Cause of Action.

Text: 27 We turn now to discuss whether the Union has a private federal remedy under Section 13(c). The statute itself is silent on the question. We must therefore decide whether such a remedy arises by implication. 28 The Seventh Circuit had no difficulty resolving this issue: 29 We agree with Judge Doyle's statement: Congress intended that the contracts embodying the 'fair and equitable arrangements' were to be enforceable contracts. It would be fatuous to suggest otherwise. Because the contracts were to be enforceable, it follows that they were to be enforced at the instance of the parties to the contracts. 445 F.Supp. at 811. 30 Based upon this premise, it follows that since the test for federal question jurisdiction has been met the remedy lies in federal court. The statutory scheme outlined in the Urban Mass Transportation Act and the policy underlying § 13(c) of the Act implies a federal private remedy. Support for this holding is found in Central Airlines. There the Court implicitly recognized the existence of a federal private remedy. 585 F.2d at 1349-50. 31 The court went on to state that an analysis under Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975) is unnecessary. Id. 585 F.2d at 1350. 32 Whether necessary or not to this decision, an inquiry similar to that in Cort reinforces our conclusion that this action is properly in federal court. See Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir. 1980); Curran, et al v. Merrill Lynch, Pierce, Fenner and Smith, 662 F.2d 216 (6th Cir. 1980). Cort identified four characteristics of an implied cause of action: 33 First, is the plaintiff one of the class for whose especial benefit the statute was enacted, Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 39 (36 S.Ct. 482, 484, 60 L.Ed. 874) (1916) (emphasis supplied) that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? See, e. g., National Railroad Passenger Corp. v. National Assn. of Railroad Passengers, 414 U.S. 453, 458, 460 (94 S.Ct. 690, 693, 694, 38 L.Ed.2d 646) (1974) (Amtrak). Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? See, e. g., Amtrak, supra; Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 423 (95 S.Ct. 1733, 1740, 44 L.Ed.2d 263) (1975); Calhoon v. Harvey, 379 U.S. 134 (85 S.Ct. 292, 13 L.Ed.2d 190) (1964). And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? See Wheeldin v. Wheeler, 373 U.S. 647, 652 (83 S.Ct. 1441, 1445, 10 L.Ed.2d 605) (1963); cf. J. I. Case Co. v. Borak, 377 U.S. 426, 434 (84 S.Ct. 1555, 1560, 12 L.Ed.2d 423) (1964); Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 394-395 (91 S.Ct. 1999, 2003-2004, 29 L.Ed.2d 619) (1971); id., at 400 (91 S.Ct. at 2006) (Harlan, J., concurring in judgment). 422 U.S. at 78 (95 S.Ct. at 2087). 34 Of these four factors, legislative intent is the most significant. Touche Ross v. Redington, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11 (100 S.Ct. 242) 62 L.Ed.2d 146 (1979); Taylor v. Brighton Corp., 616 F.2d 256 (6th Cir. 1980). 35 Section 13(c) clearly satisfies the first Cort test. That provision was enacted for the especial benefit of transit employees and, as we have already held, creates federal rights on their behalves. 36 The Union's argument is further substantiated when we apply the second and third Cort criteria legislative intent, explicit or implicit, and consistency with the overall statutory scheme. The legislative history of Section 13(c) is simply not explicit. Our review of the Congressional debates establishes that the precise means of enforcing Section 13(c) agreements was not discussed. However, as Judge Doyle remarked: 37 Of course, the best key to construction of § 13(c), so obvious in my view as to be dispositive of the issue, is that § 13(c) clearly contemplates contracts as the vehicles embodying the fair and equitable arrangements; that contracts are meant to be enforceable, not unenforceable; and that enforceability means the existence of some remedy in some forum. 445 F.Supp. at 817. 38 The Act offers no administrative solution to the problem of enforcing Section 13(c) agreements. By contrast, the implementation of certain other provisions of the statute is specifically delegated to the Department of Transportation. Unless we impute to the Secretary of Transportation the responsibility for handling labor relations disputes an incongruous result which we decline to reach without a clear Congressional directive we are left, if only by default, with an implied private cause of action. See Lloyd v. Regional Transportation Authority, 548 F.2d 1277 (7th Cir. 1977). We do note, however, that if the Act had provided any administrative mechanism under Section 13(c), our resolution of this issue might have been altogether different. Transamerica Mortgage Advisors, Inc. v. Lewis, supra; Taylor v. Brighton Corp., supra; Bradford School Bus Transit, Inc. v. Chicago Transit Authority, 537 F.2d 943 (7th Cir. 1976). 39 The only question remaining is whether proceedings to enforce Section 13(c) agreements must be relegated to state court, as the District Judge held, or whether Congress intended to permit plaintiffs to sue in federal court. Jackson invokes the fourth Cort test, asserting that municipal employee labor relations are traditionally the province of state law. 40 In this context, it is important to remember that Jackson's transit employees were covered by the National Labor Relations Act while the employer was a private bus company. When, however, the employer became a municipal agency, N.L.R.A. coverage ended. 29 U.S.C. § 152(2). Congress was well aware of the potential problems this transition could create, and enacted Section 13(c) to ensure that federal funds would not be used to deprive transit employees of certain benefits they had long enjoyed: 41 The principle of protecting workers affected as a result of adjustments in an industry carried out under the aegis of Federal law is not new, particularly in the transportation industry. Thus, railroad employees for years have enjoyed Federal protection against adverse effects attendant upon railroad consolidations. The problems of worker protection presented by the bill are not necessarily identical to those presented under other laws. The committee believes, however, that workers for whom a standard of benefits has already been established under other laws should receive equally favorable treatment under the proposed new program. The committee also believes that all workers adversely affected by adjustments under the bill should be fully protected in a fair and equitable manner, and that Federal funds should not be used in a manner that is directly or indirectly detrimental to legitimate interests and rights of such workers. U.S. Code of Congressional and Administrative News 1964, Vol. 2 at 2569, 2584. 42 It is indisputable that Section 13(c) reflects national labor policy. See 109 Cong.Rec. 5670. Indeed, the legislative history reveals that several senators were concerned about possible conflicts between Section 13(c) and state law, particularly in the area of the right to strike. Id. at 5672-73. Senator Morse, the chief sponsor of the bill which became Section 13(c), assured his colleagues that state laws forbidding public employee strikes would supercede national labor policy, but only where the right to strike was concerned; all other collective bargaining rights would be protected. Id. at 5671-73. Senator Morse made the following comments on the bill:It is impossible to satisfy all Senators. The reason why it is impossible to satisfy them all is that we cannot satisfy each instance and protect the Federal policy, because some changes are going to have to be made in some of the States to conform to the Federal policy. 43 I do not think there would be any great wrong done if we simply said to a State You do not qualify for this Federal grant. It does not mean they are entitled, as a matter of right, to the Federal grants irrespective of the fact that they are not following a policy that is in conformity with a Federal policy .... Id. at 5675. 44 Jackson points out, correctly, that Section 13(c) was designed to encourage flexibility in formulating labor protective arrangements. Senator Morse himself suggested that if local law prohibits collective bargaining by municipal employees, alternative solutions such as entrusting management of the transit authority to a private commission which could legally bargain with the union might be explored. See also Department of Labor Guidelines, 43 F.R. 13558 (3-31-78). The point, of course, is not that Congress was willing to make allowances for local problems. Rather, the point is that to qualify for federal funds, municipalities must, one way or another, undertake to protect the collective bargaining rights required by national labor policy. 45 In summary, the rights Section 13(c) preserves are federal rights. In Transamerica Mortgage Advisors, Inc. v. Lewis, supra, the Supreme Court found that Section 215 of the Investment Advisors Act creates a limited private right of action. In determining the appropriate forum for such an action, the Court observed: 46 One possibility, of course, is that Congress intended that claims under § 215 would be raised only in state court. But we decline to adopt such an anomalous construction without some indication that Congress in fact wished to remit the litigation of a federal right to the state courts. 444 U.S. at 20, n. 8, 100 S.Ct. at 247 n. 8. 47 Applying that approach to the present case, we hold that the Union is entitled to pursue its claim in federal court. 48 In reaching this decision, we note a recent tendency on the part of the Supreme Court to limit the inference of private actions from federal statutes. In Touche Ross v. Redington, supra, Justice Rehnquist was explicit on this point: 49 To the extent our analysis in today's decision differs from that of the Court in Borak, (J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964)), it suffices to say that in a series of cases since Borak we have adhered to a stricter standard for the implication of private causes of action, and we follow that stricter standard today ... The ultimate question is one of congressional intent, not one of whether this Court thinks that it can improve on the statutory scheme that Congress enacted into law. 442 U.S. at 578 (99 S.Ct. at 2490). (citation omitted.) See also Transamerica Mortgage Advisors, Inc. v. Lewis, supra. 50 A careful reading of those cases, however, persuades us that neither Touche Ross nor Transamerica requires a different result here. 51 In Touche Ross, the Court declined to infer a private right of action from Section 17(a) of the Securities Exchange Act of 1934, which requires broker-dealers to maintain certain records and file certain reports with the SEC. The Court emphasized that Section 17(a) neither grants private rights to the members of an identifiable class, nor prohibits specific conduct. 442 U.S. at 569, 99 S.Ct. at 2485. Here, by contrast, we have already found that Section 13(c) of the Act does confer federal rights on transit employees, including the right to continued collective bargaining. 52 Transamerica involved not only Section 215 of the Investment Advisors Act, noted above, but Section 206 of that statute as well. The Court held that Section 206 does not imply a private cause of action. Unlike the statute in Touche Ross, Section 206 does explicitly prohibit investment advisors from engaging in certain fraudulent practices. Concededly, it was enacted for the protection of investment advisors' clients. However, the Court makes clear that the dispositive issues in Transamerica were the overall statutory scheme, which includes no fewer than three enforcement provisions yet omits any reference to private suits, and the legislative history, which strongly suggests that Congress did not intend to imply a private right of action. No such benchmarks appear in the present case. We have found nothing in the Act or its history which indicates that Congress intended to deny transit employees an opportunity to enforce their federal rights in federal court. 53