Document: 455 U.S. 457 102 S.Ct. 1169 71 L.Ed.2d 335 RAILWAY LABOR EXECUTIVES' ASSOCIATION, Appellant,v.William M. GIBBONS, Trustee, et al. Appellant, v. William etc., Nos. 80-415, 80-1239. Argued Dec. 2, 1981. Decided March 1982. Rehearing Denied April 19, See 456 939, 1997. Syllabus In 1975, the Chicago, Rock Island and Pacific Railroad Co. (Rock Island) petitioned District Court for reorganization under Bankruptcy Act of 1898, thereafter continued operation protection that until September 1979, when it ceased as a result labor strike. The concluded was not possible directed appellee Trustee Island's estate (hereafter appellee) to liquidate estate's assets. On June 1980, court ordered abandonment system no claim or arrangement "for employee payable out assets Debtor's is allowed required by this Court." However, three days before court's order, Transition Employee Assistance (RITA) signed into law. Under §§ 106 110 statute, must pay benefits up $75 million those employees who are hired other carriers, United States guarantees obligations. statute also requires such obligations be considered administrative expenses purposes determining priority employees' claims 5, complaint filed in challenging constitutionality RITA seeking injunctive relief. 9, issued preliminary injunction against enforcement 110, holding provisions constituted an uncompensated taking private property creditors' interests assets) public purpose violation Just Compensation Clause Fifth Amendment. Pursuant 28 U.S.C. § 1252, Court's order appealed (No. 80-415). Congress responded enacting 701 Staggers Rail which re-enacted added provision avoid any implication creditors had been deprived Tucker remedy otherwise available pursue their takings States. Thereafter, denied motion appellant vacate its 9 on asserted ground rendered moot passage Act, new enjoining implementation RITA, amended Act. This Appeals pursuant 124(a)(1) affirmed, appeal then taken 80-1239). Held: 1. enactment accordingly judgment vacated injunction. P. 465. 2. Appeals' affirmed No. 80-1239 because repugnant Art. I, 8, cl. 4, Constitution, empowers enact "uniform Laws subject Bankruptcies throughout States." Pp. 465-473. (a) exercise Congress' power Clause, rather than Commerce Clause. Although bankruptcies incapable final definition, "bankruptcy" has defined "subject relations between insolvent nonpaying fraudulent debtor his creditors, extending relief." Wright Union Central Ins. Co., 304 502, 513-514, 58 1025, 1032, 82 L.Ed. 1490. By terms, matter relationship bankrupt railroad creditors; did nothing less prescribe manner distributed among creditors. events surrounding RITA's passage, well legislative history, indicate exercising powers 465-468. (b) Clause's uniformity requirement does prohibit from distinguishing classes debtors, treating distinctive problem. Nor deny fashion legislation resolve geographically isolated problems. response either particular problems major applies only one regional railroad; affected may take benefit arrangement. language itself compels conclusion bankruptcy law within enact. meager, debate Constitutional Convention regarding supports prohibits laws specifically apply affairs named debtor. 468-473. remanded; 80-1239, 645 F.2d 74, affirmed. John O'B. Clarke, Jr., Washington, D. C., appellant. Elinor H. Stillman, federal appellees support Daniel R. Murray, Ill., non-federal appellees. Justice REHNQUIST delivered opinion Court. 1 Northern Illinois 77 added, 47 Stat. 1474, amended, 11 205. 77, operate approximately four one-half years all operations 1979 strike depleted cash reserves. 49 11125 (1976 ed., Supp.IV), Interstate Commission (ICC) Kansas City Terminal Railway provide rail service over lines. January 25, possible. It prepare plan liquidation, continue planning cessation upon 1980 expiration ICC's order. App. 239a-240a. Since entry liquidating estate. 2 various railroads organizations representing reached agreement carriers acquiring trackage. covered matters hiring preferences, monetary protection, seniority, but cover employed carriers. 3 14, confirm lines operations. referred petition ICC recommendation. May 23, dissolution operating necessary. 4 total discontinuance service. found indefinitely at loss public's would violate "Fifth Amendment rights have security interest enterprise. Brooks-Scanlon Commission, 251 396 [40 183, 64 323] (1920)." Id., 270a. "no kind nature Court" 17(a) Milwaukee Restructuring (MRRA), Pub.L. 96-101, 93 744, 45 915(a) Supp.IV).1 271a. reasoned MRRA total, systemwide railroad. 263a-264a. 5 crisis resulting demise (RITA), Pub.L.96-254, 94 399, 1001 seq. Supp.IV). President 30, At issue these cases protections provisions. Sections 1062 1103 require economic carriers.4 1005, 1008. Benefits paid liquidation. 6 declare unconstitutional enjoin enforcement. prohibiting RITA. suggested might constitutional infirmities, reasoned: "[T]he corporation with more operations, left Whatever labor, arrive contract appropriate existing Retirement operates fix . But, based law, rights, contracts, believes can legislate burden comes me startling concept." 153a. determined longer railroad, bondholders' remaining serve providing displaced employees. 154a. Appellant 1252 7 96-448, 1959. With certain modifications,5 110. 124 1018 sought States.6 October 1980. 8 Six previously, moved basis moot. addition, argued irreparable injury could shown amendments provided 1346, if were constitute taking. 15, "Rock Act." App., Juris.Statement p. 6a. 1018(a)(1) Supp.IV),7 forthe Seventh Circuit. without equally divided vote. re R.I. & P.R. 74 (1980) (en banc). noted probable jurisdiction postponed question 80-415 our hearing case merits. 451 936, 101 2014, 68 322 (1981). we 1980.8 We affirm conclude Constitution. therefore find unnecessary determine whether Constitution.9 10 Article Constitution provides shall "establish uniform necessary first contended appellees, Distinguishing congressional admittedly easy task, two Clauses closely related. As James Madison observed, "[t]he establishing so intimately connected regulation commerce, will prevent many frauds where parties lie removed different States, expediency seems likely drawn question." Federalist 42, 285 (N.Y. Heritage Press 1945). Sturges Crowninshield, Wheat. 122, 195, 17 529 (1819) (Marshall, C. J.) ("The said grow exigencies commerce"). definition," previously Life 1031-1032, 1490 (1938). Continental National Bank Trust 294 648, 673, 55 595, 605, 79 1110 (1935). "contemplate[s] adjustment failing debtor's obligations." Ibid. "extends causes distributed, creditors." Hanover Moyses, 186 181, 186, 22 857, 860, 46 1113 (1902). "includes discharge contracts legal liabilities, distribute property. grant involves impair obligation forbidden do." 188, 860. 12 An examination think, demonstrates Section authorizes impose "a fair equitable" After imposed, "the immediately authorize direct trustee implement arrangement." 106(c), 1005(c) 106(e)(2) treated 1005(e)(2) 108(a) elects receive "shall deemed waive employee" subtitle IV Title Code, applicable agreement. 1007(a) Claims "otherwise available" accorded expense 1007(c). 1008(a) itself, guarantee 1008(b). 13 sum, imposes duty large sums money employees, establishes mechanism through "obligations" satisfied. commercial bondholders, shareholders. follows supra, S.Ct., 1032. goes far alter claimants 14 responding entity. passed almost five after initiated proceedings months unable expenses. addition continuation acquired protection. wanted make liquidation costly House Conference Report explains, "it intention imposed involving do promote liquidations, detriment interest." H.R.Conf.Rep.No. 96-1430, pp. 138-139 (1980), U.S.Code Cong. Admin.News 3978, 4170. Moreover, attempting eliminate confusion existed time 11347 applied arguably common carrier responsibilities. 126 Cong.Rec. 4870 (remarks Sen. Kassebaum). intended included part 15 understand argue Unlike contains affirmative limitation restriction power: Such applicability Hodel Indiana, 452 314, 332, 2376, 2387, 69 40 (1981); Secretary Agriculture Roig Refining 338 604, 616, 70 403, 409, 381 (1950) (distinguishing 4). Thus, hold nonuniform eradicate laws. us 16 Prior today, never invalidated lack uniformity. straightjacket forbids distinguish nor recognizing state treat transactions manner. A yet "may recognize State particulars, although recognition lead results Stellwagen Clum, 245 613, 38 215, 217, 62 507 (1918). elimination differences governing transactions. Vanston Bondholders Protective Committee Green, 329 156, 172, 67 237, 244, 91 162 (1946) (Frankfurter, J., concurring). U.S., 189-190, 861, held give effect allowance exemptions prescribed violating requirement. requirement, moreover, permits "railroad special problem" "does account exist parts country, problems." [Blanchette Connecticut General Corps.] Regional Reorganization Cases, 419 102, 159, 95 335, 366, 42 320 (1974) (3R Cases ). 3R upheld transportation Northeast. proceeding pending outside region 1973 Act), 87 985, seq., fact operated uniformly proceedings. But quite sort "uniformity" presented cases. railroad.10 Only situation there currently proceedings,11 thus inevitable problem: caused neither class debtors type problem, problem Albeit grand scale, bill frequently enacts authority spend money.12 18 hardly country enforced having Sink, 27 361, 362 (WD Va.1928), dism'd per stipulation, 30 1019 (CA4 1929). history indicates, 468, deem sound policy railroads. specific however, cannot even "apply debtors." 160, 367. 19 think lends some 20 introduced August 29, 1787, Charles Pinckney during discussion Full Faith Credit proposed following Congress: "To establish bankruptcies, respecting damages arising protest foreign bills exchange." Farrand, Records Federal 447 (1911). Two later, Rutledge recommended powers: bankruptcies." 483. adopted 3, Roger Sherman voting against. 489.13 21 drafting least followed practice passing Acts relieve individual debtors. Nadelmann, Origin Am.J.Legal Hist. 221-223 (1957). Given sovereign status questions raised relief given another State. Millar Hall, Dall. 229, 113 (Pa.Sup.Ct.1788); Allen, (Pa.Ct. Common Pleas 1786). Uniformity insolvency impossibility abuse legislators honest. surprising Framers enforceable 224-227. Similarly, drafted Black, Prohibitions (1887) (States discriminated British creditors). States' impossible.14 Our today ability define structure accordingly. industry region. (1974). that, To survive scrutiny confined uniform. allow repeal 23 accomplished process document amendment, instructions dismiss Munsingwear, Inc., 340 36, 39, 104, 106, 36 (1950). 24 ordered. 25 MARSHALL, whom BRENNAN joins, concurring judgment. 26 I agree violates write separately, accords broader scope language, justify. particular, am concerned rationale unduly restrict respect needs finds application single (or limited debtors) serves national apart class, identified justifies failure satisfy stringent test, unconstitutional. argues affecting believe invariably multiplicity term "uniform" necessarily imply specifying affect contexts, "legitimate one." Nixon Administrator Services, 433 425, 472, 97 2777, 2805, 53 867 (1977) (rejecting applying, referring name, former attainder). Cf. Morey Doud, 354 457, 1344, 1485 (1957) (invalidating expressly exempting American Express name), overruled New Orleans Dukes, 427 297, 96 2513, 511 (1976) (per curiam reviewing scanty notes principal conflict concerning insolvency. That concern, course, satisfied simply interstate Supremacy Another purpose, according Court, references contained debates examples failed credit Acts. extent about Acts, remains they disable applying specified promoting general policies simple 29 view most relevant case, ), though eight geographic squarely rejected argument nonuniformity violated "The surface merit overlooks flexibility inherent provision." 158, 366. Reviewing earlier cases, emphasized "to applied. satisfies "designed solve 'the evil remedied.' " 161, 367, quoting Head Money [Edye Robertson ] 112 580, 247, 252, 798 (1884). analysis too, "has appeal." If debtor, invalid; valid i.e., designed evil. magical specifies object. discern principled refusing same test regard number businesses regulated law.1 31 every instance. specify what (which often thing) portion legislation. constraint uniformity, "evil." requirements reorganization; present legislated power, furthering policies, specificity defensible terms then, Where, here, subjects treatment, especially clear findings justify narrowness 32 close, policy. Rather, indicates attempt protect consequences bankruptcy. No explanation narrow application. statutory findings, stated "uninterrupted services dependent adequate provisions," seriously economies shipping public. explicitly refer, Railroad. sure, recite purposes. Congressional Reports advert need "bankruptcy carriers," 139 4171, disruption undue displacement employees." 96-1041, 1156, 1187. S.Rep.No. 96-614, (1980). recitation where, explain treatment comparable now, be, reorganization. ante, 470, n. 11. railroads, service—the "evil"—that purported address Because fail demonstrate addressed 33 railroad." Ante, 470-471. presents problem." If, example, Consolidated Corp. fail, prohibited peculiar created Nation's freight carriers.2 34 For foregoing reasons, concur part: "In authorizing section, protective section title 49." Supp.III) February 1976, established 565 45. approving transaction worse position related employment effective date action Commission." originally enacted, "(a) later assistance Mediation Board, enter adversely reduction include, to, relocation incentive compensation, moving expenses, separation allowances. "(b) subsection submit Commission. equitable unless authorized representatives entered subsection, 'fair equitable' means afforded (45 908), limitations set forth title. "(c) shall, * "(e)(1) Any allowances [Railroad Retirement] Board "(2) own accordance title, Railroad." 401-402 (emphasis added). guaranteed aggregate unpaid amount exceed $75,000,000. "(d) liability connection "(e) Except incur title." 403. Those Supra, 460. 106(a) (b), respective limits shortened judicial review 106(d) modified substantially. 110(e), words employees" "liability," apparently reference alluded 124(c). 124(c) "[n]othing chapter limit right person commence ." 1018(c) 124(a)(1), 1018(a)(1), "any decision Circuit." sections declared court. Amendment, challenged principles powers, equal component Due Process reach additional contentions. contrast, lessors leased Penn Central. 108-109, n.3, 341-342, n.3. York, Susquehanna Western 1898. S. W. 504 F.Supp. 851 (NJ 1980), aff'd, 673 1301 (CA3 1981). undergoing 1978, 1161-1174 Auto-Train Corp., B.R. 418 (Bkrtcy.DC Road income-based MRRA, 904, 908 108 occasion consider MRRA. Nevertheless, similar appears contend. estate, Equal Protection bankrupts. very Island. 1001, 1007-1008 defines identifying characteristics 156-160, 365-367. "Mr. observed punishable death England—& He chuse done here." 489 Framers' intent achieve reflected Contract Apart independently obligations, 197-199, (1819), prospectively. Ogden Saunders, 213, 606 (1827). implies Again, formalistic reason striking down indeed ironic approach, Conrail invalid. reorganized viable private, profit corporation. difficult why muster 156-161, 365-367, successor not.

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