Akron, Canton & Youngstown R. Co. v. Barnes

215 F.2d 423, 34 L.R.R.M. (BNA) 2683, 1954 U.S. App. LEXIS 3910

• Court: Court of Appeals for the Seventh Circuit
• Decided: August 10, 1954
• Docket: 11116-11161_1
• Status: Published

Opinions

LINDLEY, Circuit Judge.

Plaintiffs, constituting the principal railroads of the United States, sued in the District Court for a declaratory judgment as to their statutory duty as interstate carriers to bargain upon two specific proposals submitted by defendants, bargaining agents for plaintiffs’ employees, under the pertinent provisions of the Railway Labor Act, 45 U.S.C.A. § 151 et sequi. The District Court dismissed the amended complaint because it believed that the facts presented did not present a justiciable controversy. The only issue before us on appeal is whether this determination was correct.

Accepting the averments of the complaint as true, as the court was bound to do, they reveal that defendants submitted certain written proposals to plaintiffs in negotiation of new union contracts. These included establishment of an insurance and welfare plan and free transportation for the affected employees and their families. Plaintiffs took the position that this subject matter did not affect “rates of pay, rules, and working conditions” as defined in the Railway Labor Act, 45 U.S.C.A. § 151a and refused to bargain with reference thereto. Defendants, on the other hand, refused to bargain on any other proposals, unless these two were included. Thus the parties reached a stalemate and negotiations ended.

The dispute was referred to the National Mediation Board, which exhausted its statutory function without resolution of the controversy and terminated its services. Defendants then circulated a strike ballot among the employees, the results of which are not known. On December 28,1953, the President created an Emergency Board to investigate and report to him with respect to the controversy. On May 15, 1954, the Board issued its report in which it held “that the questions as to whether the demands of the labor organizations for a health and welfare plan and for free transportation come within the language of the Railway Labor Act are ‘questions which the Board does not feel it should attempt to answer. They are questions involving statutory construction and for the courts to determine.’ ”

The amended complaint averred further that “The conference, negotiation and bargaining procedure established by Congress in the Railway Labor Act with respect to the making and maintaining of agreements concerning rates of pay, rules and working conditions has been and is being interfered with and thwarted by the wrongful action of the organizations * * * and of the employees whom they represent in insisting that the ‘free transportation’ and ‘health and welfare’ proposals are properly negotiable under the Railway Labor Act and in refusing to bargain and negotiate with respect to the plaintiffs’ proposals and the other proposals set out in the May 22, 1953 notice unless plaintiffs agree to bargain and negotiate upon the ‘free transportation’ and ‘health and welfare’ proposals, all to the injury and detriment both of the plaintiffs and of the public. In addition to the injury through such interference with the statutory bargaining process, plaintiffs’ public relations are threatened through the wrongful insistence and announcement of the said organizations that plaintiffs have violated and are violating their duty under the Railway Labor Act; a substantial portion of the public may cease dealing with plaintiffs and prospective employees may seek work elsewhere. The economic harm to plaintiffs, to the public and to other employees of plaintiffs which is threatened by way of strikes is predicated on the wrongful insistence of the said organizations and the employees whom they represent upon bargaining and negotiation with respect to the ‘free transportation’ and ‘health and welfare’ proposals and upon their refusal to bargain and negotiate as to their other May 22, 1953 proposals and the proposals of plaintiffs unless plaintiffs agree to bargain and negotiate as to those ‘free transportation' and ‘health and welfare’ proposals.”

Plaintiffs prayed that the court “declare and decree (a) that the said proposals to amend the existing agreements between the individual plaintiffs and their employees represented by the organizations named in Paragraph 5 of this Complaint so as to provide as set forth under the captions ‘Health and Welfare Plan,’ ‘Rights to Free Transportation’ and ‘Rules Applicable to Both Home Road and Foreign Road Transportation’ do not affect or concern ‘rates of pay, rules, or working conditions’ within the meaning of those terms in the Railway Labor Act; (b) that the said proposals are not proper subject matter for the collective bargaining required of plaintiffs by the Railway Labor Act; (c) that the plaintiffs are subject to no legal obligation or duty under the terms of the Railway Labor Act or otherwise to confer, treat, bargain or negotiate with their employees or the representatives of their employees as to the subject matter of the said proposals; and (d) that the plaintiffs have such other and further relief as may be just in the circumstances of this case.”

If plaintiffs are to prevail, a substantial controversy affecting present legal interests of the parties must be found to exist on the basis of this factual statement. Those interests must be determined in the light of the Act, the purposes of which pertinent to this inquiry are defined in Section 2, 45 U.S.C.A. § 151a, as follows: “(4) to provide for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions; * * Section 2, First, imposes the duty on all carriers to “exert every reasonable effort” to make agreements respecting rates of pay, rules and working conditions, “and to settle all disputes, whether arising out of the application of such agreements or otherwise,” in order to prevent interruptions of commerce. 45 U.S.C.A. § 152, First. Section 2, Sixth prescribes the procedure for convening conferences “In case of a dispute * * * arising out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions.” 45 U.S.C.A. § 152, Sixth. Either party to a dispute may invoke the services of the National Mediation Board in cases of “(a) A dispute concerning changes in rates of pay, rules, or working conditions not adjusted by the parties in conference”, and “(b) Any other dispute not referable to the National Railroad Adjustment Board and not adjusted in conference between the parties or where conferences are refused.” 45 U.S.C.A. § 155, First.

Plaintiffs contend on appeal that the Act imposes on them a duty to treat with employee representatives only with respect to “rates of pay, rules, or working conditions;” that these terms do not include the health and welfare and free transportation proposals; and that the dispute between the parties and the stalemate on the interpretation of plaintiffs’ duty under the Act presents a justiciable controversy.

The purpose of the Declaratory Judgments Act, 28 U.S.C. § 2201, is to remove uncertainty from legal relations and clarify, quiet and stabilize them before irretrievable acts have been undertaken ; Delaney v. Carter Oil Co., 10 Cir., 174 F.2d 314, certiorari denied Dille v. Delaney, 338 U.S. 824, 70 S.Ct. 71, 94 L. Ed. 501; to avoid multiplicity of suits; Crosley Corp. v. Hazeltine Corp., 3 Cir., 122 F.2d 925, certiorari denied 315 U.S. 813, 62 S.Ct. 798, 86 L.Ed. 1211; and to provide a remedy to a suitor, who otherwise can not have his question adjudicated until his adversary takes the initiative. Employers’ Liability Assur. Corp. v. Ryan, 6 Cir., 109 F.2d 690, certiorari dismissed 311 U.S. 722, 60 S.Ct. 1107, 85 L.Ed. 470. The courts quite generally agree that it was the intent of Congress to afford means for settlement of relief for uncertainties respecting legal rights whether before or after a stage of coercion has been reached. See Sunshine Mining Co. v. Carver, D.C., 41 F.Supp. 60; Hann v. Venetian Blind Corp., D.C., 15 F.Supp. 372, affirmed 9 Cir., 111 F.2d 455. Thus, in the Sunshine case, the District Court took jurisdiction where a mining company brought suit against labor unions for a declaration that plaintiff was not engaged in interstate commerce. A civil service employee may have a declaratory judgment as to whether the statute justifies his threatened discharge. United Public Workers of America v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L. Ed. 754; In American Federation of Labor v. W. U. Tel. Co., 6 Cir., 179 F.2d 535, the court held that the District Court had jurisdiction of an action by a labor union for a declaratory judgment as to the interpretation of an existing contract, while in Bowie v. Gonzales, 1 Cir., 117 F.2d 11, the decision was that the District Court had jurisdiction of an action for declaratory judgment to the effect that Congress intended to exempt certain employees from the provisions of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. and that, because of the conflicting contentions concerning the applicability of the Act to certain employees, a justiciable controversy existed. In Oil Workers International Union, Local No. 463, v. Texoma Natural Gas Co., 5 Cir., 146 F.2d 62, certiorari denied 324 U.S. 872, 65 S.Ct. 1017, 89 L.Ed. 1426, a controversy arose with respect to the rights of the parties under a labor contract. An action was brought to determine the seniority status of certain employees and to determine what the rights of the parties were under the correct interpretation of the contract. The court said, 146 F.2d at page 65: “The court below found that the controversy between the parties related to their legal rights and liabilities under their contract; that the parties had taken adverse positions with respect to their respective rights and obligations; that, therefore, a justiciable controversy existed, appropriate for judicial determination under the Declaratory Judgment[s] Act. We agree. An employer may establish the seniority rights of an employee in dispute with other employees, as well as general rights which their contract relationship establishes, without waiting to be sued for breach or for damages or for specific performance, and thus secure an ‘interpretation of the contract during its actual operation’ and stabilize an ‘uncertain and disputed relation.’ Exhaustion of the administrative remedies granted by the War Labor Disputes Act, 50 U.S.C.A. Appendix, § 1501 et seq., and Executive Order No. 9017, of January 12, 1942, 50 U.S.C.A.Appendix, § 1507 note, to employer and employee is not a prerequisite to the bringing of a court action by either party for an alleged violation by the other of a labor agreement.” “The statute -* * * should be liberally construed to accomplish the purpose intended, i. e., to afford a speedy and inexpensive method of adjudicating legal disputes without invoking the coercive remedies of the old procedure, and to settle legal rights and remove uncertainty and insecurity from legal relationships without awaiting a violation of the rights or a disturbance of the relationships.” Aetna Casualty 6 Surety Co. v. Quarles, 4 Cir., 92 F.2d 321, 325. In E. Edelmann & Co. v. Triple-A Specialty Co., 7 Cir., 88 F.2d 852, 854, certiorari denied 300 U.S. 680, 57 S.Ct. 673, 81 L.Ed. 884, we said: “It was the congressional intent to avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication without waiting until his adversary should see fit to begin suit, after damage had accrued.”

The Supreme Court has said, in Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240-241, 57 S.Ct. 461, 464, 81 L.Ed. 617: “The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests. South Spring [Hill] Gold Co. v. Amador Gold Co., 145 U.S. 300, 301, 12 S.Ct. 921, 36 L.Ed. 712; Fairchild v. Hughes, 258 U.S. 126, 129, 42 S.Ct. 274, 275, 66 L.Ed. 499; Com. of Massachusetts v. Mellon, 262 U.S. 447, 487, 488, 43 S.Ct. 597, 601, 67 L.Ed. 1078. * * * Where there is such a concrete case admitting of an immediate and definitive determination of the legal rights of the parties in an adversary proceeding upon the facts alleged, the judicial function may be appropriately exercised although the adjudication of the rights of the litigants may not require the award of process or the payment of damages. Nashville, C. & St. L. Ry. Co. v. Wallace, supra, 288 U.S. 249, at page 263, 53 S.Ct. 345, 348, 77 L.Ed. 730; Tutun v. United States, 270 U.S. 568, 576, 577, 46 S.Ct. 425, 426, 70 L.Ed. 738; Fidelity National Bank & Trust Co. of Kansas City v. Swope, 274 U.S. 123, 132, 47 S.Ct. 511, 514, 71 L.Ed. 959; Old Colony Trust Co. v. Commissioner, supra, 279 U.S. 716, at page 725, 49 S.Ct. 499, 502, 73 L.Ed. 918. And as it is not essential to the exercise of the judicial power that an injunction be sought, allegations that irreparable injury is threatened are not required. Nashville, C. & St. L. Ry. Co. v. Wallace, supra, 288 U.S. 249, at page 264, 53 S.Ct. 345, 348, 77 L.Ed. 730.”

Borchard, in his “Declaratory Judgments,” 2d Ed. 58, points out that: “Perhaps the principal contribution that the declaratory judgment has made to the philosophy of procedure is to make it clear that a controversy as to legal rights is as fully determinable before as it is after one or the other party has acted in his own view of his rights and perhaps irretrievably shattered the status quo.”

We think we may safely apply the language of the Supreme Court in the Aetna case to the facts presented here by way of paraphrase as follows: There is here, as between the parties who face each other in adversary pleading, a dispute relating to their legal rights and obligations arising under the United States statutes. This controversy is definite and concrete, not hypothetical or abstract, for, prior to the suit, the parties have taken adverse positions with respect to their existing obligations, including specifically the question of whether the two proposals insisted upon by the defendants are within the statute governing the parties’ duty to negotiate. On the one side the employers claimed that there was no obligation on their part to bargain on the proposals. On the other side, the employees insisted that it was the employers’ duty to negotiate with reference thereto and, in view of the railroads’ refusal to bargain upon the two proposals, refused to negotiate upon any other matter, withdrew from conference and initiated a vote upon whether a strike would be called. The controversy was as to the present specific rights and duties of the respective parties. Such a dispute is manifestly susceptible of judicial determination. It does not call for an advisory opinion upon a hypothetical basis but seeks an adjudication of the present respective rights and duties of the parties under the statute. This, we think, is a fair paraphrase of the language of the Supreme Court applicable to the present ease, as it appears on page 242 of 300 U.S., on page 464 of 57 S.Ct.

We must bear in mind that the Railway Labor Act provides for compulsory bargaining on the subjects described in the Act, and creates legal rights and obligations in that respect. The report of the Advisory Board to the president concluded that whether the proposals in question come within the Act was not for the Board but for the courts. It seems to us that there could be no clearer case of an actual ripened legal controversy between the parties as to their respective statutory rights and obligations. Because the parties could not settle that controversy, negotiations were broken off and the purpose of the Railway Labor Act defeated, for, instead of industrial peace and amicable negotiations, there ensued a complete refusal to negotiate, a breakdown of the procedure created by Congress, and a threat of a nationwide strike. In the absence of relief by way of a declaratory judgment, the parties are left to their ordinary remedies. Suit after suit may be instituted. The employees themselves might have demanded from the court a mandate for negotiations, Virginian Ry. Co. v. System Federation, No. 40, 300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789, but instead of doing so, thus promoting industrial peace, they withdrew on the ground that the railroads were wrongfully refusing to bargain as to the two proposals and disorder, discord and injury were threatened. It was to meet just such disturbing situations, we think that Congress authorized declaratory action before injury occurs. We do not believe that, after the impasse, with a sharply controverted legal question as to statutory obligations remaining unsettled, either party was bound to wait until the other took physical action, or until a strike or lockout was actually instituted. The courts are not powerless to adjudicate the rights of parties, where it is obvious that there is an actual controversy which can be judically determined and to settle which will prevent multiplicity of suits and continued dissension and prevent defeat of the beneficent purposes of the Railway Labor Act.

The judgment is reversed.