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CSX TRANSPORTATION, INC. v. NATIONAL MEDIATION BOARD

August 29, 2005.

CSX TRANSPORTATION, INC., Plaintiff,
v.
NATIONAL MEDIATION BOARD, Defendant.



The opinion of the court was delivered by: RICHARD ROBERTS, District Judge

MEMORANDUM OPINION

Plaintiff CSX Transportation, Inc., filed this case seeking declaratory and emergency preliminary and permanent injunctive relief to enjoin defendant, the National Mediation Board ("NMB"), from enforcing or implementing an NMB Order dated April 7, 2004 ("Order"), which consolidates 31 arbitration boards ("PLBs") established to hear disputes between plaintiff and the Brotherhood of Maintenance of Way Employees ("BMWE"), the collective bargaining representative for some of plaintiff's employees. Upon the parties' representations that the motion for preliminary injunction was appropriate to consolidate with a proceeding on the merits under Federal Rule of Civil Procedure 65(a)(2), the court directed the parties to submit their dispositive motions. Plaintiff has moved for summary judgment and defendant has moved to dismiss or, in the alternative, for summary judgment. Because the Railway Labor Act, 45 U.S.C. §§ 151-188 (2000) ("RLA") permits only carriers and unions, or under certain circumstances, specially designated members, to establish and assign cases to a PLB, defendant's Order is a gross violation of the RLA. Plaintiff's motion for summary judgment will be granted and defendant's motion to dismiss or, in the alternative, for summary judgment will be denied.

BACKGROUND

  Plaintiff operates an interstate railroad system and is a common carrier within the definition of the RLA. See 45 U.S.C. § 151 First; Pl.'s Statement of Undisputed Facts ("Pl.'s Stmt.") ¶ 1; Def.'s Resp. to Pl.'s Statement of Material Facts ("Def.'s Resp.") ¶ 1. The Brotherhood of Maintenance of Way Employees ("BMWE") is a labor union and a representative within the meaning of the RLA, which represents plaintiff's maintenance of way employees. (Pl.'s Stmt. ¶ 2; Def.'s Resp. ¶ 2.) Plaintiff and BMWE are parties to collective bargaining agreements, including the June 1, 1999 System Agreement ("System Agreement"). (Pl.'s Stmt. ¶ 3; Def.'s Resp. ¶ 3.) Plaintiff and BMWE have been involved in multiple disputes, and BMWE has filed grievances regarding plaintiff's decisions to contract out work covered by the scope rule of the System Agreement. (Pl.'s Stmt. ¶¶ 4-5; Def.'s Resp. ¶¶ 4-5.) In March 2000, BMWE was enjoined from engaging in a work stoppage against plaintiff by a federal court which ruled that the dispute was "minor" under the RLA and that BMWE and plaintiff were required to engage in a mandatory arbitration process. (Def.'s Statement of Material Facts ("Def.'s Stmt.") ¶ 5; Pl.'s Resp. to Def.'s Statement of Material Facts ("Pl.'s Resp.") ¶ 5.) Accordingly, BMWE initially submitted its contracting out grievances to the National Railroad Adjustment Board ("NRAB" or "Adjustment Board") for arbitration. (Pl.'s Stmt. ¶ 6; Def.'s Resp. ¶ 6.) In February 2002, pursuant to the RLA, BMWE requested that the defendant appoint arbitrators to decide 57 contracting out cases pending at the NRAB. (Def.'s Stmt. ¶ 6; Pl.'s Resp. ¶ 6.) On March 5, 2002, plaintiff asked the defendant to "appoint a neutral to establish an agreement creating a public law board for certain contracting out disputes" between plaintiff and BMWE. (Def.'s Stmt. ¶ 7; Pl.'s Resp. ¶ 7.) Plaintiff urged defendant to "expeditiously . . . provide a strike list of seven referees from which the parties can select a procedural neutral to fashion a PLB agreement." (Id.) Subsequently, plaintiff and BMWE entered into an agreement in which they agreed that 61 cases would be heard by eight PLBs that the parties would agree to establish pursuant to the second unnumbered paragraph of Section 3, Second of the RLA, 45 U.S.C. § 153. (Pl.'s Stmt. ¶ 7; Def.'s Resp. ¶ 7.) Plaintiff and BMWE also agreed that once a decision was issued by the first PLB, "one PLB will be held per month for successive months." (Pl.'s Stmt. ¶ 8; Def.'s Resp. ¶ 8.) Plaintiff and BMWE then entered into eight PLB agreements establishing eight PLBS, each to hear between eight and ten separate cases concerning plaintiff's right to contract out work under various circumstances. (Pl.'s Stmt. ¶ 9; Def.'s Resp. ¶ 9.) As BMWE continued to file additional grievances, plaintiff and BMWE established additional PLBs, totaling 34, to resolve the disputes regarding plaintiff's right to contract out work. (Pl.'s Stmt. ¶ 10; Def.'s Resp. ¶ 10.) There are currently 31 PLBs outstanding with a total of 290 cases before them. (Pl.'s Stmt. ¶ 11; Def.'s Resp. ¶ 11.) Each of the PLB agreements identified specific cases to be heard by that PLB, and each agreement states that cases can be withdrawn from a PLB only by mutual consent of the parties. (Pl.'s Stmt. ¶¶ 12-13; Def.'s Resp. ¶¶ 12-13.) The PLB agreements provide that each PLB "shall continue in existence until it has disposed of the disputes submitted to it under this agreement" and that the PLB "shall have jurisdiction only over the disputes shown on Attachment `A.' No other claim or grievances shall be submitted to the Board except by mutual consent of the parties to this Agreement." (Pl.'s Stmt. ¶¶ 14-15; Def.'s Resp. ¶¶ 14-15.)

  The PLB agreements state that the compensation and expenses of the Neutral Member of the PLB "shall be set and paid for by the National Mediation Board pursuant to Public Law 89-456 [codified as the second unnumbered paragraph of 45 U.S.C. § 153 Second]." (Pl.'s Stmt. ¶ 16; Def.'s Resp. ¶ 16.) Plaintiff and BMWE requested that the defendant appoint Arbitrator Robert Douglas to be the neutral member of the parties' first PLB, PLB 6508, which had jurisdiction to hear eight cases. (Pl.'s Stmt. ¶ 17; Def.'s Resp. ¶ 17.) PLB 6508 held a hearing on August 19, 2002. (Pl.'s Stmt. ¶ 18; Def.'s Resp. ¶ 18.) Arbitrator Douglas issued an award in PLB 6508 on October 14, 2003. (Id.)*fn1 Arbitrator Douglas concluded in his PLB 6508 decision that the contracting out disputes must be determined "on a case-by-case basis after strict scrutiny of the justification offered by the Carrier to support the need for contracting out scope-covered work." (Pl.'s Stmt. ¶ 21; Def.'s Resp. ¶ 21.)

  Plaintiff and BMWE selected Arbitrator Ann Kenis to be the neutral member of the second PLB, PLB 6509. (Pl.'s Stmt. ¶ 22; Def.'s Resp. ¶ 22.) Plaintiff and BMWE agreed to settle the eight cases pending before PLB 6509 before the PLB held a hearing. (Id.) Plaintiff and BMWE selected Arbitrator Elliott Goldstein to be the neutral member of the third PLB, PLB 6510. (Pl.'s Stmt. ¶ 23; Def.'s Resp. ¶ 23.) A hearing on PLB No. 6510 took place on April 21, 2004. (Id.) None of the remaining 31 PLBs has held a hearing. (Pl.'s Stmt. ¶ 24; Def.'s Resp. ¶ 24.)

  In August 2003, defendant issued an advance notice of proposed rulemaking with respect to whether defendant should require the consolidation of arbitration cases involving similar issues pending before the NRAB. (Pl.'s Stmt. ¶ 25; Def.'s Resp. ¶ 25.) On March 1, 2004, defendant sent a letter to plaintiff and BMWE requesting that they show cause as to why the remaining 31 PLBs should not be consolidated in the interest of economy and efficiency. (Pl.'s Stmt. ¶ 26; Def.'s Resp. ¶ 26.) Plaintiff and BMWE responded to the show cause order stating defendant lacked statutory authority to consolidate PLBs. (Pl.'s Stmt. ¶ 27; Def.'s Resp. ¶ 27.)

  On April 7, 2004, defendant issued its Order consolidating the 31 PLBs into existing PLB 6511 and closed the remaining 30 PLBs. (Pl.'s Stmt. ¶ 28; Def.'s Resp. ¶ 28.) The Order states that the arbitrator selected for PLB 6511 will issue guidelines to resolve cases before the PLB and that the same arbitrator will decide the merits of the cases not resolved by plaintiff and BMWE pursuant to the guidelines. (Pl.'s Stmt. ¶¶ 29-30; Def.'s Resp. ¶¶ 29-30.) The Order states that the same arbitrator will issue expedited non-precedential one-page awards that (1) identify the case; (2) state whether the case is sustained in part, denied, or dismissed; and (3) state the monetary remedy, if any, due the claimants. (Pl.'s Stmt. ¶ 31; Def.'s Resp. ¶ 31.) The Order provides that any of the 290 consolidated cases not resolved by plaintiff and BMWE pursuant to the guidelines are to be decided by the arbitrator within 30 days. (Pl.'s Stmt. ¶ 32; Def.'s Resp. ¶ 32.)

  Plaintiff seeks to enjoin defendant from enforcing its Order closing 30 of 31 different PLBs established by agreements between plaintiff and BMWE, and to have the Order declared unenforceable. The Order transferred 290 cases originally assigned to 31 PLBs to one existing PLB and creates new procedures for that PLB to follow. Count I of the complaint alleges that defendant's action exceeds its delegated authority under the RLA, violates the express language of 45 U.S.C. § 153 Second, and abrogates plaintiff's statutory rights to establish PLBs and determine which cases to assign to each PLB. Count II alleges that the procedures for the consolidated PLB proceeding set out in the Order violate the clear language of the statute, including the statute's requirement of a description of the reasons for the determination, as well as plaintiff's due process rights. Defendant contends that it may consolidate and close PLBs pursuant to its authority to attach conditions to the expenditure of funds under 45 U.S.C. § 154 Third. DISCUSSION

  "Summary judgment is appropriate when evidence on file shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . . Not all alleged factual disputes represent genuine issues of material fact which may only be resolved by a jury. Material facts are those that might affect the outcome of the suit under governing law, and a genuine dispute about material facts exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Am.'s Cmty. Bankers v. FDIC, 200 F.3d 822, 831 (D.C. Cir. 2000) (quotations and citations omitted).

 
In deciding whether there is a genuine issue of material fact, the court must assume the truth of all statements proffered by the non-movant except for conclusory allegations lacking any factual basis in the record. Summary judgment may be granted even if the movant has proffered no evidence, so long as the non-movant "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."
Dist. Intown Props. L.P. v. District of Columbia, 198 F.3d 874, 878 (D.C. Cir. 1999) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). "Although the burden on the nonmoving party is not great, it is still required to show specific facts, as opposed to general allegations, that present a genuine issue worthy of trial." Palestine Info. Office v. Shultz, 853 F.2d 932, 944 (D.C. Cir. 1988) (quotation and citation omitted). The parties dispute the appropriate level of review the court should apply to the Order. Plaintiff contends that traditional review under the Administrative Procedure Act applies, which provides that agency action which is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" be set aside as unlawful. 5 U.S.C. § 706(2)(A). Defendant argues that the Order is subject to a more limited judicial review, in which the court may only take a "peek at the merits" to determine whether the challenged action constitutes a "gross violation" of the RLA, citing Switchmen's Union of North America v. NMB, 320 U.S. 297 (1943) and Professional Cabin Crew Ass'n v. Nat'l Mediation Bd., 872 F.2d 456, 459 (D.C. Cir. 1989). Defendant exceeded its statutory authority under either standard of review.

  I. STATUTORY FRAMEWORK

  "Enacted in 1926, the RLA is a comprehensive statute governing labor relations in the railroad and airline industries. In 1934, Congress amended the Act to create the National Mediation Board, a three-member agency whose primary function is to mediate labor disputes among employees and carriers covered by the RLA." Railway Labor Executives' Ass'n v. Nat'l Mediation Bd., 29 F.3d 655, 659 (D.C. Cir. 1994) (en banc) ("RLEA (1994)"). The 1934 amendments also created the National Railroad Adjustment Board. Gunther v. San Diego & A.E. Ry. Co., 382 U.S. 257, 259 (1965).

 
Section 3, First (i) of the Railway Labor Act provides that "disputes between an employee or group of employees and a carrier or carriers growing out of grievances or out of the interpretation or application of agreements" are to be handled by the Adjustment Board. . . . Congress has established the Adjustment Board to settle "minor" grievances . . . which arise from day to day in the railroad industry. . . . Congress, in the Railway Labor Act, invested the Adjustment Board with the broad power to arbitrate grievances and plainly intended that interpretation of these controversial provisions should be submitted for the ...

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