Opinion ID: 564889
Heading Depth: 2
Heading Rank: 2

Heading: ICC Review of the Cassle Arbitration

Text: 19 The Unions assert that the ICC acted arbitrarily or capriciously in its review of the Cassle arbitration because it exceeded the permissible limits of review set forth in Lace Curtain, 3 I.C.C.2d 729 (1987). Although the Unions do not challenge the ICC's authority to review arbitration decisions, this circuit has not yet addressed the issue. Accordingly, we first determine whether the ICC properly may review arbitration decisions resolving disputes over the interpretation, application or enforcement of labor protective conditions imposed by the ICC. We conclude that it may. 20 Prior to 1987, the ICC excluded itself from the arbitration process, deferring to the expertise of the arbitrators in resolving the matters submitted to them for resolution. See, e.g., Haskell H. Bell v. Western Maryland Railway Co., 366 I.C.C. 64 (1981). In 1987, however, the ICC announced that it would review arbitral decisions issued under employee protective conditions originally imposed by the Commission. Chicago & North Western Transportation Co., 3 I.C.C.2d 729 (1987) (Lace Curtain ). The ICC noted that the Civil Aeronautics Board exercised the power to review arbitrations applying its labor protective conditions even though no statute authorized such review. See Wallace v. CAB, 755 F.2d 861 (11th Cir.1985). Because the Steelworkers Trilogy and other cases generally limited the scope of review of arbitration decisions, the ICC determined that it would limit its review to recurring or otherwise significant issues of general importance regarding the interpretation of our labor protective conditions. Id. at 736. The ICC further stated that it would not review arbitrators' decisions on the issue of causation, the calculation of benefits, or other factual questions. 21 The Commission's decision to review arbitration awards relating to its protective conditions is consistent with the ICC's statutory powers. As the ICC points out, an arbitration award issued pursuant to labor protective conditions prescribed by the Commission is an order of the ICC. United Transp. Union v. Norfolk & Western Ry. Co., 822 F.2d 1114, 1120 (D.C.Cir.1987), cert. denied, 484 U.S. 1006, 108 S.Ct. 700, 98 L.Ed.2d 651 (1988). The Commission has the power to change its orders if it gives a reasoned explanation of the change. Central States Enterprises, Inc. v. ICC, 780 F.2d 664, 674 (7th Cir.1985). In addition, the ICC may issue supplemental orders upon a showing of cause. 49 U.S.C. Sec. 11351 (1990); People of State of Illinois v. ICC, 713 F.2d 305, 310 (7th Cir.1983). 22 The District of Columbia Circuit has upheld the Commission's authority to review arbitration awards. In International Broth. of Elec. Workers v. ICC, 862 F.2d 330 (D.C.Cir.1988), the court held that the ICC's determination that it had statutory authority to review arbitration awards was a permissible construction of its governing statute, the Interstate Commerce Act (ICA), 49 U.S.C. Sec. 10101 (1988) et seq. The court reasoned that the ICA is silent on the issue, and the ICC's decision to review is consistent with the terms of the statute, the relevant case law, and the ICC's own decisions. Id. at 338. We agree with the court's reasoning and adopt its rule. 23 In the present case, the ICC reviewed the Cassle award pursuant to its authority to issue supplemental orders. The ICC explained that Cassle had misinterpreted the labor protective conditions and exceeded the scope of his authority. Because the ICC adequately explained its decision to review, and cited good cause to issue a supplemental order, we conclude that the ICC could permissibly review the Cassle award. The fact that the ICC decided to review the Cassle award on its own initiative (BA & P did not specifically request the ICC to review the award) does not trouble us. Pursuant to 49 U.S.C. Sec. 10327(g)(1) (1988), the Commission may at any time on its own initiative reopen a proceeding because of material error. Accordingly, we proceed to the merits of the Unions' argument. 24 The Unions challenge the ICC's initial basis for reviewing the Cassle award--its determination that Arbitrator Cassle exceeded his jurisdiction. The Unions assert that Arbitrator Cassle did not exceed his jurisdiction; the arbitration panel was directed to decide whether the control transaction adversely affected BA & P employees and the panel answered in the affirmative. The Unions contend that the Cassle award is comprised of many documents and orders which must be reviewed as a whole. According to the Unions, the ICC improperly analyzed the rationale of the Cassle award, placing too much emphasis on Cassle's statement in the Nunc Pro Tunc order that BA & P employees were entitled to New York Dock benefits regardless of cause. Cassle's ruling in the Nunc Pro Tunc order, the Unions assert, was based on alternative theories. Although Cassle determined that BA & P might be liable for benefits on the basis of the implied contract, he also found that BA & P employees were adversely affected by the control transaction. 25 In support, the Unions point to Cassle's February 3, 1984 order in which Cassle stated that there was a direct causal relationship, and the September 26, 1984 order indicating that Cassle was concerned about the establishment of a causal nexus. The Unions contend that if the Cassle panel was in fact attempting to award benefits to all employees regardless of cause, every claim that had been submitted by BA & P employees would have been honored. According to the Unions, Arbitrator Cassle rejected 30 of the 63 claims submitted to him because he concluded there was not a direct causal relationship in those cases. 26 We are not persuaded by the Unions' arguments. First, our review of the record shows that none of the thirty claims were dismissed for failure to show a causal connection. The reasons for the rejections were stated by Arbitrator Cassle in his ruling dated March 23, 1986 and May 15, 1986, and included retirement of the claimant, failure of the claimant to protect seniority or to return to work pursuant to recall, or absence of jurisdiction in the panel to hear the particular employee's claim. One claim was denied without explanation. 27 Second, after examining the Cassle award, we conclude that the ICC did not err in its conclusion that Arbitrator Cassle exceeded the scope of his jurisdiction. Arbitrator Cassle clearly did not confine himself to the bounds of his authority. Instead, he fashioned an agreement that simply did not exist. The ICC rejected Cassle's finding that the Commission had approved or adopted such an agreement. As the ICC noted, such an agreement is contrary to the purpose of the New York Dock conditions, which is to protect employees from adverse effects of the transaction approved by the ICC. Because the Cassle panel exceeded the scope of its jurisdiction, the ICC's decision to vacate that award was neither arbitrary, nor capricious, nor in excess of its jurisdiction. 28 The Unions next argue that even if the ICC permissibly reviewed and vacated the Cassle award, the Commission exceeded the scope of its jurisdiction by modifying Arbitrator Cassle's factual findings on the issue of causation. The Organizations point to the following language in the ICC decision: 29 In CNW, supra, 3 I.C.C.2d at 736, we stated that we will not review factual issues of causation. These issues are best left to the arbitrator. Here, however, the Neutral's determination of causation issues was based on the flawed premise.... His conclusions, particularly on post-transaction job changes, are thus faulty and the facts need to be reevaluated. 30 According to the Organizations, the ICC should have remanded the case to the Cassle panel for reconsideration of its findings on causation. 31 Because we conclude that the ICC did not substitute its findings of fact for those of the Cassle panel, we need not determine whether the ICC may exceed the permissible scope of review that it established for itself in Lace Curtain. See Wallace v. Civil Aeronautics Bd., 755 F.2d 861, 864-65 (11th Cir.1985) (upholding the Civil Aeronautics Board's (CAB) scrutinizing review of an arbitral decision and reapplication of the arbitrator's findings of facts despite the CAB's earlier proclamation of its limited review powers). The ICC's determination that the adverse effects suffered by BA & P employees were caused by changing market conditions does not differ significantly from Arbitrator Cassle's earlier conclusion that the only effects to the employees of the BA & P after the acquisition would be those that might result from economic conditions. (Emphasis in the original.) The ICC merely reiterated Arbitrator Cassle's earlier findings. 32 Finally, the Unions argue that the ICC's findings of fact and conclusions of law are arbitrary and capricious because they ignore the evidence in the record. We disagree. As noted above, the ICC's findings were virtually identical to those initially made by Arbitrator Cassle, and they are supported by the record.
33 The Unions challenge the Sickles arbitration decision served February 2, 1988 and the ICC's September 12, 1989 order. The Unions argue that Arbitrator Sickles should have been bound by the res judicata effect of the earlier Cassle award. The Unions contend that, by refusing to review the Sickles award, the ICC conferred upon Arbitrator Sickles a greater power to nullify an award than that possessed by the courts and the ICC. 34 Because we have concluded that the ICC properly reviewed and vacated the Cassle award, this issue is moot. The reversed Cassle decision cannot provide a basis for issue preclusion. 3 35 Accordingly, the orders of the ICC are AFFIRMED.