Railway Labor Executives' Ass'n v. Chesapeake Western Railway

738 F. Supp. 1544, 135 L.R.R.M. (BNA) 2353, 1990 U.S. Dist. LEXIS 7259, 1990 WL 80641
CourtDistrict Court, E.D. Virginia
DecidedJune 13, 1990
DocketCiv. A. 89-1157-A
StatusPublished
Cited by11 cases

This text of 738 F. Supp. 1544 (Railway Labor Executives' Ass'n v. Chesapeake Western Railway) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Railway Labor Executives' Ass'n v. Chesapeake Western Railway, 738 F. Supp. 1544, 135 L.R.R.M. (BNA) 2353, 1990 U.S. Dist. LEXIS 7259, 1990 WL 80641 (E.D. Va. 1990).

Opinion

MEMORANDUM OPINION

ELLIS, District Judge.

Introduction

This Railway Labor Act (“RLA”) dispute, brought by fourteen labor unions and the Railway Labor Executives’ Association (“RLEA”) against a group of railroads, grows out of the railroads’ sale, lease, and abandonment of various of the railroads’ spur lines. Plaintiffs contend that defendants violated their duties under the RLA (i) to exert every reasonable effort to settle all disputes, maintain agreements and bargain only with designated employee representatives; (ii) to give written notice to bargain with its employees’ representatives regarding defendants’ decision to enter into intra-corporate leases and trackage rights agreements; and (iii) to comply fully with RLA bargaining and status quo obligations triggered by Section 6 notices when defendants discontinued operations and implemented lease transactions and trackage rights agreements. The defendant railroads deny plaintiffs’ contentions and contend instead that the Court lacks subject matter jurisdiction because the parties’ dispute is arguably over the interpretation and application of existing labor agreements and the RLA requires that such so-called “minor disputes” be resolved exclusively by arbitration. Defendant railroads further counterclaim for a permanent strike injunction to prevent the unions and RLEA from “attempting, by strike, work stoppage, or otherwise, to force [the railroads] 1 to complete the process of bargaining” with the unions in connection with the Section 6 notices served by the unions prior to “selling, leasing, or otherwise disposing of” railroad lines.

The parties filed cross-motions for summary judgment and; as there were no disputed issues of material fact, the Court, on February 16, 1990, ruled that it lacked subject matter jurisdiction because plaintiffs’ complaint indeed presented a “minor dispute” under the RLA. Accordingly, the Court dismissed the labor plaintiffs’ claim and left the parties to their RLA arbitration remedy. Arbitration proceedings are currently ongoing. 2 As an alternative basis for summary judgment, the Court also concluded that the Interstate Commerce Commission (“ICC”) has exclusive jurisdiction over transactions authorized and conducted pursuant to 49 U.S.C. § 11343. Finally, the Court held in abeyance defendants’ request for an injunction to prevent plaintiffs from engaging in self-help or striking over the minor dispute. An appropriate order issued reflecting these rulings. 3 The Court gave the parties leave to file further briefs regarding the propriety of the Court’s granting injunctive relief. *1547 Both parties filed briefs and the Court heard oral argument. As defendants represented that no strike was then imminent, the Court, by Order dated May 15, 1990, declined to grant injunctive relief. This Memorandum Opinion records the Court’s reasons for its February 16 and May 15 decisions. 4

Background

Plaintiffs consist of the RLEA, an unincorporated association of the chief executive officers of seventeen national and international railway labor unions of the United States, and fourteen individual rail labor unions that represent defendants’ employees for the purposes of collective bargaining. These entities are collectively referred to as the “labor plaintiffs.”

Defendants are transportation holding companies and common carriers by rail 5 that operate rail lines in the Mid and South Atlantic region of the United States and within this Court’s jurisdiction. Norfolk Southern Corporation (“NS”) is the holding company that controls Norfolk and Western Railway Company (“NW”) and Southern Railway Company (“Southern”). NS operates these railroads as a coordinated system often referred to as the “NS system.” Chesapeake Western Railway Company (“CW”), a subsidiary of NW, is also part of the system.

This dispute was spawned by a series of sales and leases of certain NS track lines. While the details of these transactions are not material to the disposition of the case, a brief summary is included as explanatory background.

1. The “Thoroughbred Short Line” Program

NS has determined that some lines within its railroad system have so little traffic originating and terminating on them that they are unprofitable to operate. Other NS lines are marginally profitable today, but would require substantial capital investment for continued operation. NS has therefore determined that it must dispose of these two categories of lines by way of sale, lease or abandonment. If the lines are not disposed of to an entity who will continue their rail service, shippers and others served by the lines may lose their access to rail service.

By October, 1987, NS had identified approximately 2700 miles of unprofitable or marginally unprofitable lines. NS further determined that 1500 miles of this total had no potential for profitable operation by anyone and had to be abandoned. The remaining 1200 miles were judged to have the potential for profitable operation by “short line” operators. NS therefore decided to lease these lines, typically for 20 year periods, on terms requiring relatively low initial investments by the short line operators and providing incentives for the operators to maintain the flow of traffic connecting with the NS system. Specifically, the *1548 leases are designed to establish a rental obligation that produces a reasonable return based on the line’s liquidation value, but also to provide for a credit against rental payments for every rail car interchanged with NS. This credit is calculated so that if the new operator produces traffic equal to the traffic on the line in recent years, the operator pays no rent at all. This leasing program, entitled the “Thoroughbred Short Line” (“TSL”) program, was approved by NS management in early 1988, and implemented immediately.

The first TSL lease, consummated in November 1988, involved 72 miles of line in Virginia. Since the initial lease, NS and its subsidiaries have completed 14 such leases, involving an aggregate of approximately 810 miles of line. 6 Additional TSL leases are planned. Generally, the TSL leases have been carried out pursuant to ICC authorization. A provision of the Interstate Commerce Act (“ICA”), 49 U.S.C. § 11343, governs, inter alia, transfers of rail lines from one carrier to another. Ordinarily, transactions subject to § 11343 may be carried out only after the participants receive prior ICC approval. Under 49 U.S.C. § 10505, however, the ICC exempts certain transactions from the prior approval requirement of § 11343. Exemptions were sought and obtained for all TSL leases subject to § 11343. In all such cases, 49 U.S.C. §

Related

Radzikowski v. Delaware & Hudson Corp.
870 F. Supp. 480 (W.D. New York, 1994)
Railway Labor Executives Association American Railway & Airway Supervisors Association American Train Dispatchers Association Brotherhood of Locomotive Engineers Brotherhood of Maintenance of Way Employees Brotherhood of Railroad Signalmen Brotherhood of Railway Carmen International Association of MacHinists & Aerospace Workers International Brotherhood of Boilermakers and Blacksmiths International Brotherhood of Electrical Workers International Brotherhood of Firemen and Oilers Sheet Metal Workers International Association Transportation Communications International Union Railroad Yardmasters of America United Transportation Union, and Hotel Employees and Restaurant Employees International Union International Longshoremen's Association National Marine Engineer's Association Seafarers International Union of North America Transport Workers Union of America v. Chesapeake Western Railway Southern Railway Company Norfolk & Western Railway Company Norfolk Southern Corporation, and Carolina Coastal Railway, Incorporated, Railway Labor Executives Association American Railway & Airway Supervisors Association American Train Dispatchers Association Brotherhood of Locomotive Engineers Brotherhood of Maintenance of Way Employees Brotherhood of Railroad Signalmen Brotherhood of Railway Carmen International Association of MacHinists & Aerospace Workers International Brotherhood of Boilermakers and Blacksmiths International Brotherhood of Electrical Workers International Brotherhood of Firemen and Oilers Sheet Metal Workers International Association Transportation Communications International Union Railroad Yardmasters of America United Transportation Union, and Hotel Employees and Restaurant Employees International Union International Longshoremen's Association National Marine Engineer's Association Seafarers International Union of North America Transport Workers Union of America v. Chesapeake Western Railway Southern Railway Company Norfolk & Western Railway Company Norfolk Southern Corporation, and Carolina Coastal Railway, Incorporated
915 F.2d 116 (Fourth Circuit, 1990)

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738 F. Supp. 1544, 135 L.R.R.M. (BNA) 2353, 1990 U.S. Dist. LEXIS 7259, 1990 WL 80641, Counsel Stack Legal Research, https://law.counselstack.com/opinion/railway-labor-executives-assn-v-chesapeake-western-railway-vaed-1990.