Court Opinion

ID: 194579
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:20:27+00
Date Added: 2024-06-11T15:26:31.140641
License: Public Domain

March 9, 1993     UNITED STATES COURT OF APPEALS

                      FOR THE FIRST CIRCUIT

                                           

No. 92-1854

          RAILWAY LABOR EXECUTIVES' ASSOCIATION, ET AL.,

                     Plaintiffs, Appellants,

                                v.

        GUILFORD TRANSPORTATION INDUSTRIES, INC., ET AL.,

                      Defendants, Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                    FOR THE DISTRICT OF MAINE

           [Hon. D. Brock Hornby, U.S. District Judge]
                                                     

                                           

                              Before

                Torruella and Cyr, Circuit Judges,
                                                 

                   and Keeton,* District Judge.
                                              

                                           

     John O'B. Clarke, Jr., with whom Highsaw, Mahoney &  Clarke,
                                                                 
P.C., were on brief for appellants.
    
     Anthony R.  Derosby, with  whom Charles S.  Einsiedler, Jr.,
                                                                
Julianne  Cloutier,  Pierce,  Atwood,  Scribner, Allen,  Smith  &
                                                                 
Lancaster, Ernest  J. Babcock, Mary  Ann E. Rousseau,  Friedman &
                                                                 
Babcock, John H. Broadley, and Jenner  & Block, were on brief for
                                              
appellees.

                                           

                          March 9, 1993
                                           

                    

*  Of the District of Massachusetts, sitting by designation.

          TORRUELLA,  Circuit Judge.   Appellants,  Railway Labor
                                   

  152 (1986).  The district court dismissed appellants' complaint
railway  labor   employees,  allege  that   appellees1  abrogated
Executives'  Association  and  other  labor  unions  representing

appellants' collective bargaining  agreements and  representation

rights in violation of  the Railway Labor Act ("RLA"),  45 U.S.C.

for abuse  of market  power.   49  U.S.C.    10505(a).   Under   
10505(a), the transaction is exempt  from "the antitrust laws and
from all  other  law, including  [s]tate  and municipal  law,  as
                    
policy  of the  Interstate  Commerce Act  ("ICA"),  and that  the
finds such regulation unnecessary to carry out the transportation

transaction  is of limited scope or does not create the potential
Commerce Commission ("ICC") proceedings,  we affirm the dismissal
constituted  an  impermissible  collateral  attack  on Interstate

to  craft, under  separate  agreements.   After the  acquisition,
          In  the early  1980's,  appellee Guilford  acquired two
                            BACKGROUND
                                      
on different grounds than relied upon by the district court.

lines initially  belonged to separate unions, organized according
railroad lines and  their subsidiaries.   The employees of  these
on  unclear  grounds.   Because  we find  that  appellants' claim

brought all  of the  employees within the  representation of  the

the  Maine  Central  Railroad  Company  ("Maine   Central"),  the
Springfield union.  The  ICC approved these transactions pursuant

carriers.  49  U.S.C.    11343(a).  Once  the ICC approves  these
("Guilford"), Boston  and Maine  Corporation ("Boston &  Maine"),
1    Appellees include  Guilford Transportation  Industries, Inc.

                    
to 49 U.S.C.   11343(a) (1992).2    

Springfield Terminal Railway ("Springfield Terminal").

2   The  ICC  must approve  mergers  and consolidations  by  rail
Portland   Terminal  Company   ("Portland  Terminal"),   and  the
Guilford leased  these lines to Springfield,  its subsidiary, and

transactions,  it may  exempt them  from other  regulation if  it
          Appellants  sought declaratory and injunctive relief in

the  United States  District  Court for  the  District of  Maine,

alleging  that   appellees  executed  the  leases   in  order  to

streamline appellants'  union contracts in violation  of the RLA.

The  district court dismissed the case for lack of subject matter

jurisdiction,  finding that  the ICC had  exclusive jurisdiction.

See Railway  Labor Executives'  Ass'n v. Guilford  Transp. Indus.
                                                                 

("RLEA I"), 667 F. Supp.  29 (D. Me. 1987), aff'd, 843  F.2d 1383
                                                 

(1st   Cir.   1988),  cert.   denied,   492   U.S.  905   (1989).
                                    

Additionally,  the  court  noted  that  by  approving  the  lease

transactions,  the ICC  exempted  them from  any  law that  would
                                                     

impede  the transactions pursuant to 49  U.S.C.   10505, and that

according  to Brotherhood of Locomotive  Eng'rs v. Boston & Maine
                                                                 

Corp.,  788 F.2d  794  (1st Cir.),  cert.  denied, 479  U.S.  829
                                                 

(1986),  "any law" includes the RLA.  RLEA I, 667 F. Supp. at 35.
                                            

This court affirmed.  

          Subsequently, the ICC ordered the parties to negotiate,

and if  necessary arbitrate,  to achieve suitable  protection for

employees  affected by  the lease  transactions.   The arbitrator

required appellees to  honor pre-existing labor  agreements, with

several  exceptions.  On review, the  ICC upheld the arbitrator's

decision and held that this relief would not apply retroactively.

It also determined that the  affected employees were entitled  to

certain limited benefits.   An appeal from this order  is pending

                    

necessary to let that  person carry out the transaction . . . . "
49 U.S.C.   11341(a) (emphasis added). 

                               -3-

before the Circuit Court of Appeals for the District of Columbia.

          In 1991,  appellants brought the present  action in the

district  court,  again  alleging  RLA violations.    This  time,

however, they  requested  damages arising  out  of  "unauthorized

actions," in  contrast  to the  original  action arising  out  of

actions  authorized by the ICC.  The district court dismissed the

claim, apparently relying on  res judicata and a lack  of subject
                                          

matter jurisdiction.        DISCUSSION
                            DISCUSSION
                                      

I.  Res Judicata

          It  is  unclear whether  the district  court determined

that RLEA I precluded this  case in its entirety or if  it simply
           

found that RLEA I barred appellants from relitigating that case's
                 

finding  on  the  scope of  the    11341  exemption.3   Thus,  we

address both issues.  

          A.  Claim preclusion

          The  res  judicata  doctrine  provides  that  "a  final
                            

judgment  on the merits bars a  subsequent suit on the same cause

of action by the same parties and their privies."  Walsh v. Int'l
                                                                 

                    

3   The court stated,  "RLEA I  dismissed the RLA  claims on  the
                              
grounds that the   11341 exemption 'relieves the participants [in
the  exempted transaction]  from any  legal obstacles  that would
                                    
impede the transaction. . . .'   That ruling is res  judicata and
                                                             
applies  in all respects here."  Appellants assert that the court
decided that RLEA I precluded them from relitigating the scope of
                   
the    11341 exemption, while appellees argue that the court held
that RLEA I precludes appellants' entire claim.
           

   Technically,  res judicata represents  claim preclusion, while
                             
collateral estoppel refers to issue preclusion.   As evidenced by
                   
this  appeal, much  confusion  arises when  courts use  the terms
interchangeably.  

                               -4-

Longshoremen's Ass'n, 630 F.2d 864, 870 (1st Cir. 1980).  
                    

          Superficially,  the present  case seems  to fit  within

this test.    RLEA I  involved the  same parties  as the  present
                    

action.   In addition, as the court  in RLEA I dismissed the case
                                              

for  a lack of subject  matter jurisdiction, it  rendered a final

judgment on the  merits.  Id. (stating that once  a court finds a
                            

lack   of  subject   matter  jurisdiction,   res   judicata  bars
                                                           

relitigation of that issue).  However, the present case  does not

involve the same cause of action as RLEA I.   Although appellants
                                          

attack the same lease  transactions that were in dispute  in RLEA
                                                                 

I,  they could  not have  asserted their  present claims  in that
 

action, and thus cannot be precluded by res judicata.
                                                    

          In  RLEA  I, appellants  asked  the  district court  to
                     

prevent  actions by appellees that the ICC had authorized; in the

present  case, they  seek relief  based on  actions that  the ICC

never authorized.  When appellees implemented the leases, the ICC

informed them that it would impose labor protective conditions on

the leases in a separate decision.  ICC Finance Docket No. 30967,

MEC-Lease, Notice  of Exemption at 5-6, served  January 23, 1987.

The ICC specifically warned that  if appellees proceeded with the

leases and only minimal  levels of protection,4 they would  do so

at their own risk.   ICC Finance Docket No. 31015,  B&M-Lease and

Trackage Rights Exemption, Notice of Exemption at  6, served June

                    

4    The  protections  referred  to are  called  Mendocino  Coast
                                                                 
conditions.  They arose out of Mendocino Coast Ry., Inc.  - Lease
                                                                 
and Operate, 354 I.C.C.  732 (1978), as modified, 360  I.C.C. 653
                                                
(1980). 

                               -5-

5,  1987.    Appellees  continued  implementing  the  leases  and

provided only minimal protections, allegedly violating the RLA in

the process.   It was not until February 19,  1988, almost a year

after  RLEA I, that the  ICC decided to  require additional labor
             

protections.   Delaware  & Hudson  Ry. Co.  - Lease  and Trackage
                                                                 

Rights Exemption  - Springfield Terminal Ry. Co., 4 I.C.C.2d 322,
                                                

323  (1988).    As appellees  did  not  provide these  additional

protections until the ICC explicitly required them, their initial

actions were  unauthorized.  Essentially, appellees  gambled that

they  would  convince  the  ICC  that  their  actions  should  be

authorized, and they were unsuccessful.  

          Appellants could  not have asserted  their claims based

on the lack of  authorization of certain actions by  appellees in

RLEA I because  they did  not know during  that litigation  which
      

actions  the ICC authorized.   Thus, they are  not precluded from

asserting these claims  now.   Car Carriers, Inc.  v. Ford  Motor
                                                                 

Co.,  789 F.2d 589, 593 (7th  Cir. 1986) (although mere change in
   

legal theory  does not create a new cause of action, res judicata
                                                                 

will not bar parties from raising issues that they could not have

raised  in first  litigation);  see also  United  States v.  Alky
                                                                 

Enters., 969 F.2d 1039, 1311 (1st Cir. 1992).  
       

          B.  Issue Preclusion

          Appellants  do  not  challenge  the   district  court's

finding  of res  judicata  provided that,  by  res judicata,  the
                                                           

district court meant issue  preclusion with respect to  the scope

of the    11341 exemption.  As the parties agree on this point of

                               -6-

law, we need not analyze it further.       

II.  Relationship with the ICC decision

          Having determined  that res judicata does  not bar this
                                              

claim,  we now  decide whether  appellants properly  brought suit

before the district court.  

          Disputes concerning the  interpretation or  enforcement

of  the  ICC's labor  protective  decisions must  be  resolved by

arbitration  or the ICC.  Augspurger v. Brotherhood of Locomotive
                                                                 

Eng'rs, 510 F.2d 853, 860 (8th Cir. 1975).  
      

          In the  present case, the ICC and  two arbitrators have

thoroughly  examined  appellees'  actions  in   implementing  the

leases.  As  a result, the ICC determined  that employees of rail

carriers who were adversely affected by the transactions were not

entitled  to retroactive  relief,  but were  entitled to  certain

benefits.  These benefits included a maximum of seventy five days

of make-whole benefits and  up to six years of  protective period

benefits  beginning at  the later  of the  effective date  of the

implementing  agreement imposing the  required conditions and the

date when the  adverse effect  began.  Finance  Docket No.  30965

(Sub-Nos. 1 &  2), Delaware &  Hudson Ry. Co. Lease  and Trackage

Rights  Exemption -Springfield  Terminal  Ry. Co.  at 15,  served

April 2, 1992.   Appellants were unable to persuade the  ICC that

further labor  protection could be reconciled  with the essential

purposes  of the  leases.   If appellants  disagree with  the ICC

determinations, their recourse is  through appeal.  Indeed, their

appeal  of the ruling is currently pending before another circuit

                               -7-

court.  

          By  asking  the  district  court  to  make  independent

findings regarding  the extent of  labor protection which  can be

reconciled  with  the disputed  leases,  they  are initiating  an

impermissible  collateral attack  upon  the ICC's  decisions, see
                                                                 

Boston   &  Maine  Corp.,  788  F.2d  at  799,  and  risking  the
                        

possibility of inconsistent judgments  between this court and the

Court  of  Appeals  for the  District  of  Columbia.   We  cannot

countenance  such a  situation.   Thus,  we  affirm the  district

court's dismissal of the claim albeit on different grounds.5  

          Affirmed.
                  

                    

5    The district  court apparently  based  its dismissal  on the
ground  that the  ICC, not the  district court,  should determine
whether  an exemption from the RLA is  necessary to carry out the
lease transactions as required  by   11341.  Since we  affirm the
district court's dismissal on  the ground that the claim  posed a
collateral attack on an ICC determination, we need not reach this
issue.  

                               -8-