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).
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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.
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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).
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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
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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
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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.
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