Chesapeake & Ohio Railway Co. v. United States , 571 F.2d 1190 ( 1977 )

Opinion for Court filed by LEVEN-THAL, Circuit Judge.

Dissenting Opinion filed by MacKINNON, Circuit Judge.

LEVENTHAL, Circuit Judge:

In 1974 the United Transportation Union petitioned the Interstate Commerce Commission pursuant to § 5(9) of the Interstate Commerce Act¹ to reopen the proceeding which had previously culminated in an order of December 31,1962, 317 I.C.C. 261, by which the Commission authorized the Chesapeake & Ohio Railway Company to acquire control of .the Baltimore & Ohio Railway Company. At first the Commission denied the petition to reopen. Subsequently after its order was challenged in the three-judge district court for Northern Ohio, the Commission sua sponte reconsidered, and issued an Order on June 20, 1975, in which the Commission clarified its intent in the 1962 order in regard to the provisions imposed on the merger for the protection of employees under § 5(2)(f) of the Act.

The petitioners say that this so-called clarification was really a disguised modification of the 1962 order. There is much to be said for the petitioner’s view that the 1962 order provided protection only for those employees adversely affected within four years of the Commission’s order. That is the language of Articles I and II of Appendix VIII (“Conditions for the benefit of employees of carriers”), 317 I.C.C. at 346, 348-49.²

On the other hand, the Commission is not without a predicate for the ruling now protested, in the text of the 1962 report preceding the Appendix. While the language of the Appendix is cast in terms of cutting off the protective scheme at the end of four years from the date of the order, the text of its order — really an opinion or report — indicated that the ICC intended to impose the “New Orleans conditions” (slightly modified to require arbitration).³ These conditions, as appears below, had the basic characteristic, in effect, of giving protection to the employee for a period calculated from the time of adverse impact (subject to a limit of five years from the date of coordination).

In ascertaining the intention of the 1962 order, as incorporating the New Orleans conditions, it is not irrelevant that at that time the C & O-B & 0 themselves urged the New Orleans conditions.⁴ While we do not refer to this in the sense put forward in the government’s brief as constituting waiver or estoppel as to the railroads, we think it material as to the legitimacy of the ICC’s current effort to ascertain its intent in its 1962 order.

The history of conditions protective of employees goes back to the Washington Agreement of May 21, 1936, worked out by the Federal Coordinator of Transportation, pursuant to the Emergency Railroad Transportation Act of 1933.⁵ The Washington Agreement protected both those employees immediately affected by the coordination, and those not adversely affected until later, by providing that as to the latter, protection would begin as of the time of the adverse effect, and would continue for a total period not exceeding five years from the effective date of the coordination.

Subsequent to the lapse of the 1933 Act, the enactment in 1940 of § 5(2)(f) required that in all merger cases the Commission “require a fair and equitable arrangement to protect the interests of the railroad employees affected.” The second sentence provided that this arrangement must accord full financial protection for four years from the effective date of the order if an affected employee had been employed for four years. At first the ICC considered this the maximum protection authorized. Accordingly, the Commission devised the so-called Oklahoma conditions,⁶ which afforded protection only to those employees affected within the first four years after the effective date of the Commission’s order. The Supreme Court held, however, that this was a minimum protection and remanded for further consideration by the Commission.⁷

On remand, the Commission determined that the protection of the Oklahoma conditions — four years from the effective date of the order — would not be sufficient to discharge its duty to provide fair and equitable conditions. Consequently, it established what are now normally called the New Orleans conditions,⁸ which incorporated by reference both the Washington Agreement and the Oklahoma conditions.

With the order now before us the Commission, in establishing the conditions set by its New Orleans, order, reaffirmed and applied the reasoning of that order. The Commission perceived that the protection of the Oklahoma conditions was inadequate to provide a fair and equitable arrangement, and so determined that, in addition, employees should be protected from the time they are adversely affected (subject to a maximum of five years from the effective date of coordination), as was true under the Washington Agreement.⁹

Petitioners say it is obvious that the language in the 1962 Appendix only provides the Oklahoma protection — four years from the date of the order. But the same language which is before us today was used by the Commission in its 1962 Southern-Central of Georgia case.¹⁰ That order came to the Commission for clarification, on remand by the Supreme Court.¹¹ It was another issue that had been brought to the Supreme Court, but when the Commission came to take a full look at the situation, as it had both the occasion and authority to do on the remand,¹² the Commission stated that its intent in the Southern-Central of Georgia conditions was to impose the New Orleans conditions with only one modification, a compulsory arbitration procedure. Southern Railway — Control—Central of Georgia Railway, 331 I.C.C. 151, 164 (1967).

The Supreme Court’s remand to the agency did not require the agency to limit itself to the issue previously before the Court, but gave the agency authority to clarify its intention and make revisions in any respect that was within its statutory authority.¹³

In sum, while petitioners stress the language of the 1962 Appendix, the construction now stated by the Commission is supported by (a) its 1962 opinion, accompanying that Appendix, which set forth its approach (the New Orleans conditions); (b) the fact that the approach was accepted by both C&O-B&O and the unions; and (c) the fact that its construction of identical language in a contemporaneous 1962 order, as embodying the New Orleans conditions, was made clear in a 1967 action, when its intentions and recollections were fresh, and before any contrary possibilities could have frozen.

The action of the Commission was hardly tidy. We have had occasion to be concerned previously regarding ICC clarifications and interpretations that are really substantial changes, and we agree with petitioners that the courts are not to rubber stamp the label put on this matter by the Commission.¹⁴ But while we are not entirely comfortable with the record before us, we think that on balance we must say that the Commission has not acted beyond the range of its authority. We find a basis for the ICC’s actions in the discernment of an ambiguity that needed clarification.

* * * * * *

Receipt of the dissenting opinion’s extended presentation of the wording of the 1962 Appendix, and the contrast with language used in other orders, prompts us to acknowledge that if all we had before us were the language of the Appendix there would indeed be a strong case for the petitioners. But even in the construction of statutes, the “plain meaning rule” is only a primary source of understanding, not conclusive, and it must yield on occasion to an intention otherwise discerned in terms of equity, legislative history, or other sources.

Here the “plain meaning” of the words in the Appendix is different from the “plain meaning” of the order setting forth the Commission’s contention. We have no clue as to why the wording in the Appendix was not conformed at the time — perhaps ineptitude; perhaps lack of concern on a point where the carriers were not in disagreement; perhaps laziness in using the hándy language of the statute, without insertion to carry forward the manifested intention to provide more than the minimal statutory protection; perhaps a combination of these. In any event, we find the kind of ambiguity in the ICC 1962 action that provided a basis for the current clarification.

In the last analysis, our result is dictated by our function. Our task is not the same as that of a court that construes a contract between parties, with freedom to decide for itself what is the proper construction without any deference to other sources. Here the pertinent doctrine bids us sustain the agency’s interpretation of its own order unless it is arbitrary or capricious. As we said before, the ICC’s handling of this issue was not tidy, but it was not arbitrary or capricious.

Affirmed.

1 . 49 U.S.C. § 5(9).

2 . Article I(l)(e) defines “protective period” as that period of time from the date on which an employee is displaced or dismissed to the expiration of 4 years from the effective date of the order authorizing the transaction; provided, however, that the protective period for any particular employee shall not continue for a longer period following the effective date of said order than the period during which such employee was in the employ of the carrier prior to the effective date of the order.

Article 1(2) provides, in pertinent part:

Displacement allowances. — (a) So long after his displacement as he is unable, in the exercise of his seniority rights under existing agreements, rules and practices, to obtain a position producing compensation equal to or exceeding the compensation he received in the position from which he was displaced, during the protective period a displaced employee shall be paid a monthly displacement allowance. .

Article 1(3) provides, in pertinent part:

Dismissal allowances. — (a) A dismissed employee shall be paid a monthly dismissal allowance, from the date he is deprived of employment and continuing during the protective period. .

Article 11(1) provides:

Any employee adversely affected as a result of the transaction, within 4 years from the effective date of the order approving the transaction, shall receive as a minimum the protection afforded by article I hereof for the period he is adversely affected prior to the expiration of 4 years from the effective date of the order of approval, and any such employee so adversely affected who has received under such conditions total dismissal or displacement compensation less than that which he would receive by applying the Washington Agreement of May 21, 1936, as limited by paragraph 2 of this article, for the full protective period therein provided from the time he is first adversely affected, shall continue to receive benefits under the terms of the Washington Agreement, as limited, until the total compensatory benefits provided therein for the particular period of service have been paid.

3 .In the text of the 1962 order, the Commission stated:

It is our opinion that the protection afforded by the New Orleans conditions, as modified in the Southern Control case [to require arbitration] will more than meet the minimum requirements of section 5(2)(f). In effect, the New Orleans conditions superimpose upon the Oklahoma conditions (Oklahoma Ry. Co. Trustees Abandonment, 257 I.C.C. 177) the provisions of the Washington Agreement, the protection of the Oklahoma conditions to be applied as a minimum. As we stated in the Southern Control case, the New Orleans conditions “were imposed for the specific purpose of giving protection to those employees who knowingly were not to be adversely affected in their employment until a substantial period elapsed after the date of the order authorizing the transaction and who otherwise would have received little or no protection under the Oklahoma conditions.”

As modified in the Southern Control case, the New Orleans conditions will be fair to the affected employees and to the carriers involved in the transaction. In the past, these conditions have been acceptable to employees as well as carriers. It is observed that many of the provisions specifically requested by the association are similar to, or based upon language used in the Washington Agreement. Of course, to the extent that the Washington Agreement becomes applicable, the terms and conditions thereof will apply.

4 . The C&O and B&O urge that, in lieu of the conditions recommended by the examiner, we impose the conditions prescribed in New Orleans Union Passenger Terminal case, 282 I.C.C. 271, with some modifications which would provide a workable arbitration clause.

317 I.C.C. at 286-87.

5 . Both the Chesapeake & Ohio and the Baltimore & Ohio were parties to the Washington Job Protection Agreement of May, 1936.

6 . The Oklahoma conditions were set in Oklahoma Ry. Trustees-Abandonment of Operations, 257 I.C.C. 177 (1944).

7 . Railway Labor Executives Assn. v. United States, 339 U.S. 142, 70 S.Ct. 530, 94 L.Ed. 721 (1950).

8 . The New Orleans conditions were established in New Orleans Union Passenger Terminal Case, 282 I.C.C. 271 (1952).

9 . It is clear that the Commission, in its New Orleans order, determined that protection extending beyond the provisions of the Oklahoma conditions was required to meet the “fair and. equitable” standard under the facts of that case:

The problem now presented is to determine what, if any, protective conditions in addition to those prescribed in the previous report are necessary to provide a fair and equitable arrangement for the employees who have been or will be adversely affected by the transaction .

282 I.C.C. at 274.

[A] finding herein that the Oklahoma conditions alone with the time limit therein prescribed, having in mind not only the 4-year maximum but also the limitation as to time worked prior to the effective date of our order [another limitation of the Oklahoma conditions] would provide a fair and equitable arrangement, would not be consistent with the circumstances in this case nor in conformity with the decision of the Supreme Court of the United States. It then is necessary to decide what type of conditions are necessary to meet the requirements of the statute.

Id. at 280.

By referring to the “New Orleans conditions” in its 1962 order, the Commission obviously expressed a similar determination that protection beyond that provided by the Oklahoma conditions was required by the case before it.

10 . Southern Ry. — Control—Central of Ga. Ry., 317 I.C.C. 557 (1962).

11 . RLEA had challenged the failure of the ICC to include Sections 4, 5 and 9 of the Washington Agreement in its codified provisions, and the Supreme Court’s remand referred to those provisions only.

12 . FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 141-44, 60 S.Ct. 437, 84 L.Ed. 656 (1940).

13 . See note 12 supra.

14 . Southern Railway Company v. U.S. & ICC, 412 F.Supp. 1122 (D.D.C.1976).