Opinion ID: 548336
Heading Depth: 2
Heading Rank: 1

Heading: Control Decision

Text: 20 In challenging the Control Decision, petitioners argue that within the meaning of section 11347, CNW was involved in Itel's continued control of FRVR and CNW's employees were affected by the control transaction such that they were entitled to labor protection. In petitioners' view, the control and acquisition proceedings were two necessary and mutually dependent steps in a single transaction; for example, FRVR's acquisition of CNW's line was dependent upon Itel Rail's continued control of FRVR because Itel Rail's equity contribution and loan guarantee had financed the purchase. The underlying allegation, of course, is that Itel created FRVR so that Duck Creek South could be acquired by a noncarrier, thus qualifying the acquisition for section 10901 treatment, preventing CNW from being a party to the control proceeding, and thereby avoiding mandatory labor protection under section 11343. Therefore, petitioners assert, the Commission should have looked to the true nature and practical effects of the transaction, from which perspective CNW was certainly involved in, and its employees affected by, the control transaction. 21 Whatever Itel's supposed ulterior motives may have been, the Commission's view that section 11347 does not require labor protection for employees of nonapplicant carriers like CNW is firmly supported by previous decisions in this and other circuits. See Lamoille Valley R.R. v. ICC, 711 F.2d 295, 323-24 (D.C.Cir.1983); Southern Pacific Transp. Co. v. ICC, 736 F.2d 708, 725 (D.C.Cir.1984) (adopting holding and reasoning of Lamoille Valley ), cert. denied, 469 U.S. 1208, 105 S.Ct. 1171, 84 L.Ed.2d 322 (1985); see also Missouri-Kansas-Texas R.R. v. United States, 632 F.2d 392, 410-12 (5th Cir.1980), cert. denied, 451 U.S. 1017, 101 S.Ct. 3005, 69 L.Ed.2d 388 (1981); Crounse Corp. v. ICC, 781 F.2d 1176, 1192-93 (6th Cir.), cert. denied, 479 U.S. 890, 107 S.Ct. 290, 93 L.Ed.2d 264 (1986). 22 In Lamoille Valley, we reviewed the Commission's approval of a merger of the Maine Central Railroad with the Boston & Maine Railroad pursuant to section 11343. The Commission imposed labor protection for employees of the merging carriers but not for those of competing railroads who might lose their jobs as a result of the merger. We affirmed the ICC's interpretation of section 11347 as requiring it to protect only employees of the merging railroads and not employees of other railroads. 711 F.2d at 323. 23 Petitioners nonetheless argue that Lamoille Valley and the other cases we have cited are distinguishable in that they relate only to whether labor protection in the case of a merger should be extended to employees of competitors, and not to the particular facts before us. Those cases cannot be so narrowly limited. Although it is true that protection was sought for employees of competitors, the decisions are not predicated on that fact. In Lamoille Valley, for example, we looked first to the language of the statute and reasoned as follows: 24 The second sentence of Sec. 11,347 provides that the arrangement may be made by the rail carrier and the authorized representative of its employees. (Emphasis added.) The phrase the rail carrier presumably refers back to the preceding sentence and thus includes only a rail carrier ... involved in the transaction. But an arrangement between a rail carrier involved in the transaction and its employees will not protect employees of other carriers. Thus, Congress must not have contemplated protecting employees of nonapplicant railroads. 25 Id. In addition, we explained that the Commission's interpretation was supported by the legislative history, by considerations of practicality and administrative economy, by the consistency of the Commission's view of section 11347 since its original enactment in 1940, and by the precedent of other courts. Id. at 323-24. None of this reasoning distinguishes employees of competitors from those of non-applicants generally; all of it supports the Commission's contention that CNW's employees are not entitled to the protections of section 11347 for the compelling reason that CNW was not a party to the control proceeding. 26 Finally, even if the prior cases did not definitively address whether under section 11347 a non-applicant carrier could ever be sufficiently involved in a transaction for which approval is sought to trigger labor protection for affected employees, we conclude that the ICC's interpretation of involved to mean only those who formally participate as parties to a transaction is reasonable. See Chevron, 467 U.S. at 843 & n. 11, 104 S.Ct. at 2781-82 & n. 11. We do not decide whether a control transaction might be structured in such a way as to include as parties to the transaction entities that are neither the controlled nor the controlling party, and would thus not be applicants before the Commission. Petitioners have not challenged the Commission's finding that CNW was not a party to the control transaction and consequently the issue is not before us. Accordingly, we affirm the Control Decision.