
USCA1 Opinion

	




          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                                      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).                                          -3-          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          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                    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.                                           -4-          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).                                          -5-          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                    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                                         -6-          law, we need not analyze it further.                 II.  Relationship with the ICC decision          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                                         -7-          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.                                           -8-
