Maine Cent. R. Co. v. Brotherhood of Maintenance of Way Employes, 650 F. Supp. 615 (D. Me. 1986)

Ralph Moore, Shea & Gardner, Washington, D.C., Charles S. Einsiedler, Pierce, Atwood, Scribner, Portland, Me., for plaintiffs.

John O'B. Clarke, Jr., Thomas P. Murphy, Highsaw & Mahoney, Washington, D.C., Craig J. Rancourt, Bruce M. Read, Biddeford, Me., for defendant.

GENE CARTER, District Judge.

Presently before the Court is a motion by Plaintiffs, Maine Central Railroad Company and Portland Terminal Company (the "Railroad"), to stay the effectiveness of the arbitration award between Plaintiffs and Defendant, Brotherhood of Maintenance of Way Employes (the "Organization"), entered on October 30, 1986, and filed in this Court on November 3, 1986. This award represents the resolution of the "unresolved implementing issues" remaining *616 after Congress imposed a settlement of the ongoing labor dispute between the parties by the enactment of Public Law No. 99-431. The Railroad's motion arises from its petition to set aside the award, filed within ten days of the filing of the award in this Court as required by 45 U.S.C. § 159, Second. The Court finds it has jurisdiction under 28 U.S.C. §§ 1331, 1337 and 45 U.S.C. § 159.

The Railroad has alleged two grounds for the relief it seeks. First, the Railroad argues that the Court should grant a stay analogous to the stay authorized by Fed.R. Civ.P. 62(d) if the Railroad were to comply with the requirements of the Rule by posting a supersedeas bond. In the alternative, the Railroad argues that the Court should employ its inherent equitable powers to restrain temporarily the effectiveness of the award pending a decision on the merits of the Railroad's petition to impeach the award. For the reasons set forth below, the Court determines that it may not apply Rule 62(d) by analogy. Furthermore, the Court also determines that the Railroad has not met its burden for temporary relief.

Congress expressly provided that the arbitration award currently challenged by the Railroad is to be enforceable under section 9 of the Railway Labor Act, 45 U.S.C. § 159. Pub.L. No. 99-431(a) (3) (B). The Federal Rules of Civil Procedure do in some instances apply to section 159 proceedings. Rule 81 expressly provides that the Rules apply to "proceedings under ... Title 45, § 159, relating to boards of arbitration of railway labor disputes, ... only to the extent that matters of procedure are not provided for in [that statute]." Fed.R. Civ.P. 81(a) (3). In order to determine whether the Court may apply Rule 62(d), the Court must examine both the scope of Rule 62(d) and the nature of the proceeding before it in light of the mandate of Rule 81(a) (3).

Rule 62(d) applies to only appeals by appellants. The proceeding before this Court is not, however, an appeal. Instead, it is a petition to impeach the award arising out of specific statutory grounds for impeachment. 45 U.S.C. § 159, Third. The statute also provides for an appeal of an arbitration award; an appeal arises only after this Court has rendered its decision on the petition to impeach. Id. § 159, Fifth. Clearly, Rule 62(d) is not directly applicable.

In addition, the Court finds that it should not apply the Rule by analogy. First, the Railroad has cited no case law actually employing its proffered rationale for drawing this analogy, nor has the Court discovered any through its own research. But see In re Certain Carriers, 231 F. Supp. 519, 521 (D.D.C.1964) (noting that an award is enforceable even if an action to impeach the award has been brought where the action did not include an application for a stay), modified on other grounds, 349 F.2d 207 (D.C.Cir.1965). Second, if the Court were to look to the Rules for an analogy to the present proceeding, the Court would more likely find it in Fed.R.Civ.P. 60, relief from judgment, a procedure which does not affect the finality of a judgment or suspend its operation. Finally, Rule 81(a) (3) appears to preclude this type of analogy-drawing by the Court. Consequently, the Court finds that it may not apply Rule 62(d), either directly or by analogy, because the Rule does not encompass a matter of procedure not provided for by section 159 with regard to the proceeding before this Court.

Having found that the Railroad's first argument for its current motion fails, the Court turns to the Railroad's request for equitable relief. The Court construes this request as a request for preliminary injunctive relief. In order to prevail, the Railroad must satisfy each of four essential requirements. This Court has articulated these requirements on many prior occasions, most recently in several applications for preliminary relief requested by the Railroad in related cases. See Maine *617 Central R.R. v. Brotherhood of Maintenance of Way Employees, 646 F. Supp. 367 (D.Me.1986); Maine Central R.R. v. Brotherhood of Maintenance of Way Employees, ___ F.Supp. ___ Civil No. 86-0083-P, slip op. (D.Me. March 5, 1986). They are:

"It is well settled law that, in the ordinary case, a plaintiff must satisfy four criteria in order to be entitled to a preliminary injunction. The Court must find: (1) that the plaintiff will suffer irreparable injury if the injunction is not granted; (2) that such injury outweighs any harm which the granting of injunctive relief would inflict on the defendant; (3) that plaintiff has exhibited a likelihood of success on the merits; and (4) that the public interest will not be adversely affected by the granting of the injunction."

Stanton by Stanton v. Brunswick School Dep't, 577 F. Supp. 1560, 1567 (D.Me.1984) (quoting UV Industries, Inc. v. Posner, 466 F. Supp. 1251, 1255 (D.Me.1979) (per Gignoux, J.)).

The Court begins its review of the Railroad's likelihood of success on the merits by noting the extremely narrow standard of review applicable to arbitration awards under section 9 of the Railroad Labor Act, 45 U.S.C. § 159. Cf. Union Pacific R.R. v. Sheehan, 439 U.S. 89, 90, 99 S. Ct. 399, 400, 58 L. Ed. 2d 354 (1978) (noting that the courts have described the similar restrictions under section 3 of the Act, 45 U.S.C. § 153, as "among the narrowest known to the law"), reh'g denied, 439 U.S. 1135, 99 S. Ct. 1060, 59 L. Ed. 2d 98 (1979); accord Myron v. Consolidated Rail Corp., 752 F.2d 50, 52 (2d Cir. 1985); Denver & Rio Grande Western R.R. v. Blackett, 538 F.2d 291, 293 (10th Cir.1976). In order to succeed on the merits, the Railroad must impeach the award only on one of the three following grounds:

(a) That the award plainly does not conform to the substantive requirements laid down by this chapter for such awards, or that the proceedings were not substantially in conformity with this chapter;

(b) That the award does not conform, nor confine itself, to the stipulations of the agreement to arbitrate; or

(c) That a member of the board of arbitration rendering the award was guilty of fraud or corruption; or that a party to the arbitration practiced fraud or corruption which fraud or corruption affected the result of the arbitration....

45 U.S.C. § 159, Third. In addition, the Court is to construe the award liberally, "with a view to favoring its validity." Id.

The Railroad has alleged five defects in the arbitration award: (1) the failure of the arbitration board to allow the Railroad to present certain evidence; (2) the failure of the board to prepare a transcript of the proceedings or to make a tape recording of the proceedings available to the Railroad; (3) the failure of the Board to adhere to the recommendations of the Emergency Board in the setting of per diem allowances; (4) the allowance of the retroactive and lump sum payments in accordance with national wage settlement agreements; and (5) the imposition of a two-year moratorium on the arbitrated agreement. These defects as alleged appear to fall within the defined statutory grounds: the first two allege failures to conform the proceedings to the mandate of the statute; the last three allege that the award exceeds the scope of the congressionally imposed mandate to arbitrate.

It is not clear to the Court at this juncture that the Railroad will succeed on either ground of its statutory challenge.^[1] With regard to the first ground, based on the allegations currently before the Court, it appears that the Railroad may have waived any defects in the proceedings, if in fact there were any defects at all, by pursuing this ground for the first time in this Court. Krieter v. Lufthansa German Airlines, Inc., 558 F.2d 966, 968 (9th Cir. *618 1977); Order of Railway Conductors v. Clinchfield R.R., 407 F.2d 985, 988 (6th Cir.), cert. denied, 395 U.S. 841, 90 S. Ct. 104, 24 L. Ed. 2d 92 (1969). With regard to the second ground, the Court is not convinced that the arbitration board exceeded its mandate when the Court construes the agreement, as it is commanded to do by statute, "with a view to favoring its validity." Plaintiffs have, therefore, not demonstrated a likelihood of success on the merits.

The Railroad's claim of irreparable injury rests solely on the "immediate financial burden of the award." Economic injury standing alone, however, generally does not constitute irreparable injury. McDonough v. Trustees of University System of New Hampshire, 704 F.2d 780, 784 n. 2 (1st Cir.1983). Nevertheless, the Railroad argues that it falls within the narrow exception recognized in Itek Corp. v. First National Bank, 511 F. Supp. 1341, 1348-50 (D.Mass.1981), aff'd, 730 F.2d 19 (1st Cir. 1984). In Itek, the trial court had found that the plaintiff lacked an adequate remedy at law since its "only recourse would be a lawsuit against the Iranian Government" and "the present domestic situation there has rendered access to Iranian courts futile." Id. at 1349. Thus, the court concluded that the monetary damages at issue, which were unrecoverable despite the facial availability of a remedy at law, were in fact irreparable.

The Railroad argues that the workers destined to receive these funds will likely spend most or all of the money immediately. In addition, it argues that the cost of litigation to recover the funds would likely exceed the amount recoverable. These allegations, however, fail to demonstrate to this Court that the Railroad's harm is irreparable. First, the Railroad offers no support for its allegations regarding the workers' behavior other than its view that the result it envisions is "likely." The Court has absolutely no information before it regarding the financial situation of the individual workers. It is not shown that the payments awarded are likely to be immediately attached by creditors or that the workers in question are on the brink of insolvency. The Court has no factual predicate upon which to make a finding of irreparable harm. Without such facts, it is not clear to the Court that attempts to recover the funds, should recovery become appropriate, would be futile.

Nor does the Railroad's reliance on Railway Labor Executives' Association v. Gibbons, 448 U.S. 1301, 100 S. Ct. 2668, 65 L. Ed. 2d 1094 (Stevens, J., Circuit Justice), stay denied per curiam, 448 U.S. 909, 100 S. Ct. 3057, 65 L. Ed. 2d 1140 (1980), alter the Court's conclusion in this respect. In that case, Justice Stevens found that the protection payments of up to $75 million at issue would be unrecoverable, based on the facts before him, including, presumably, the findings of the district court. Unfortunately, the Justice did not enumerate these facts, nor did the district judge publish his findings in the case below, In re Chicago Rock Island & P. R.R., No. 75-B-2697 (N.D.Ill., June 5, 1980). Consequently, this Court cannot determine whether the factual circumstances are similar to those alleged by the Railroad.

Finally, the Court does not believe that the cost of the litigation necessary to recover any monies found to be wrongfully awarded in and of itself renders access to the remedy at law futile. The high cost of litigation is an unfortunate reality. It may indeed make a legal remedy appear unattractive. This unattractiveness has not, however, become the equivalent of the futility recognized by the court in Itek.

It also appears to the Court that the immediate economic injury of which the Railroad complains is in reality much narrower than it asserts in support of this motion. The scope of the harm envisioned by the Railroad appears to rest in part on the statutory provision that mandates that the Court set aside the entire award if any part is found to be invalid. 45 U.S.C. *619 § 159, Fourth. The Railroad ignores, however, the exception to that mandate: the parties may agree that the valid and invalid parts are separable and thereby allow the Court to set aside only the invalid part. Id. The amounts actually in controversy in the Railroad's underlying petition include a challenge to the eligibility of four employees for protective allowances, "roughly $38,000 in back pay, and roughly $112,000 in the first two installments of the lump sum payment provision." The Court is unconvinced that economic injury of this magnitude, even if it proves to be such, is irreparable in nature. See Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C.Cir. 1985). Moreover, the Court does not believe it to be likely that, if it were to find the challenged part of the award invalid, the parties would thereafter be unable to agree, after principled consideration, that the invalid portion was separable.

Having been unpersuaded by the Railroad's arguments regarding the first two requirements for temporary relief, the Court will address the last two only briefly. Certainly, the balance of interests between the parties is apparently equal: each side wishes to receive or retain the economic benefits at issue. In actuality, the individual workers may suffer more from a deprivation of these funds, perhaps over a considerable period of time, were the Court to delay the entire award, many aspects of which are not in actual controversy in this action. The public interest, however, appears to the Court to weigh heavily in favor of upholding the resolution of this dispute a resolution which Congress has attempted to effectuate, with the considered approval of the President, and which the controlling statute mandates should be construed to be valid if possible.

Accordingly, the Railroad's requests for a stay or injunctive relief, filed on November 13, 1986, is hereby DENIED.

So ORDERED.

[1] The Court also notes that it has recently refused to enjoin the enforcement of Public Law No. 99-431, which authorized the arbitration award currently challenged. Maine Central R.R. v. Brotherhood of Maintenance of Way Employees, 646 F. Supp. 367 (D.Me.1986).