California v. Taylor/Opinion of the Court

The question presented here is whether the Railway Labor Act of May 20, 1926, 44 Stat. 577, as amended, 45 U.S.C. § 151 et seq., 45 U.S.C.A. § 151 et seq., applies to the State Belt Railroad, a common carrier owned and operated by the State of California and engaged in interstate commerce. For the reasons hereafter stated, we hold that it does.

The operations of the State Belt Railroad have been described by this Court in Sherman v. United States, 282 U.S. 25, 51 S.Ct. 41, 75 L.Ed. 143; United States v. State of California, 297 U.S. 175, 56 S.Ct. 421, 80 L.Ed. 567; and State of California v. Latimer, 305 U.S. 255, 59 S.Ct. 166, 83 L.Ed. 159. It parallels the San Francisco waterfront, serves wharves and industrial plants, and connects with car ferries, steamship docks and three interstate railroads. It is a common carrier engaged in interstate commerce and files tariffs with the Interstate Commerce Commission.

For over 65 years, the Belt Railroad has been owned by the State of California. It is operated by the Board of State Harbor Commissioners for San Francisco Harbor, composed of three Commissioners appointed by the Governor. Its employees number from 125 to 255 and are appointed in accordance with the civil service laws of the State. These laws prescribe procedures for hirings, promotions, layoffs and dismissals, and authorize the State Personnel Board to fix rates of pay and overtime.

On September 1, 1942, the Board of State Harbor Commissioners entered into a collective-bargaining agreement with the Brotherhood of Locomotive Firemen and Enginemen and the Brotherhood of Railroad Trainmen as the representatives of the Belt Railroad's operating employees. This agreement established procedures for promotions, layoffs and dismissals. It also fixed rates of pay and overtime. Those procedures and rates differed from their counterparts under the state civil service laws.

The collective-bargaining agreement conformed to the Railway Labor Act and was observed by the parties at least until January 1948. At that time, a successor Harbor Board instituted litigation in the state courts of California in which it contended that the Railway Labor Act had no application to the Belt Railroad, and that the wages and working conditions of the Railroad's employees were governed by the State's civil service laws rather than by the agreement. This contention was rejected by a local trial court and by the California District Court of Appeal. State of California v. Brotherhood of Railroad Trainmen, Cal.App., 222 P.2d 27. It was, however, accepted by the Supreme Court of California, with one justice dissenting, 37 Cal.2d 412, 422, 232 P.2d 857, 864, certiorari denied 342 U.S. 876, 72 S.Ct. 166, 96 L.Ed. 658.

Shortly thereafter, five employees of the Belt Railroad instituted the present action in the United States District Court for the Northern District of Illinois against the ten members of the National Railroad Adjustment Board, First Division, and its executive secretary. The employees alleged that they had filed with the First Division, pursuant to § 3, First (i), of the Railway Labor Act, claims relating to their classifications, extra pay and seniority rights under the agreement. They charged that the five carrier members of the Division had refused to consider these claims on the ground that the Board was without jurisdiction, because, under the above decision of the Supreme Court of California, the Belt Railroad was not subject to the Railway Labor Act. The employees alleged that this refusal created an impasse in the ten-member Division and they sought a court order requiring action on their claims. The United States, answering on behalf of the First Division and its executive secretary, supported the complaint and prayer for relief. The carrier members, answering through their own attorneys, opposed the complaint, as did the present petitioner, the State of California, which intervened as a party defendant.

The District Court granted California's motion for summary judgment and dismissed the complaint. 132 F.Supp. 356. The Court of Appeals reversed. 233 F.2d 251. It held that the Railway Labor Act applied to the Belt Railroad, and remanded the cause to the District Court with directions to enter a decree granting the relief sought. We granted certiorari to resolve the conflict between the United States Court of Appeals and the California Supreme Court as to the applicability of the Railway Labor Act to a railroad owned and operated by a State. 352 U.S. 940, 77 S.Ct. 261, 1 L.Ed. 236. We invited the Solicitor General to file a brief as amicus curiae and, in doing so, he urged that the Railway Labor Act was applicable to the State Belt Railroad.

The Railway Labor Act of 1926, 44 Stat. 577, evolved from legislative experimentation beginning in 1888. The evolution of this railroad labor code was marked by a continuing attempt to bring about self-adjustment of disputes between rail carriers and their employees To this end, specialized machinery of mediation and arbitration was established. The 1926 Act-unique in that it had been agreed upon by the majority of the railroads and their employees -incorporated practically every device previously used in settling disputes between carriers and their employees. These included (1) conferences between the parties; (2) appeal to a Board of Adjustment; (3) recourse to the permanent Board of Mediation; (4) submission of the controversy to a temporary Board of Arbitration; and (5) the establishment of an Emergency Board of Investigation appointed by the President.

Dissatisfaction with the operation of this legislation led to its 1934 amendments. 48 Stat. 1185. One of the most significant changes was the creation of the National Railroad Adjustment Board composed of equal numbers of carrier representatives and representatives of unions national in scope. The Board was divided into four divisions, each with jurisdiction over particular crafts or classes and their disputes. § 3. This arrangement made available a National Board to settle disputes in case the carrier and its employees could not agree upon a system, group or regional board. The National Board was given jurisdiction over 'minor disputes,' meaning those involving the interpretation of a collective-bargaining agreements in a particular set of facts. Either party to such a dispute could bring the other before the Board in what was, in fact, compulsory arbitration. Brotherhood of Railroad Trainmen v. Chicago River & I.R. Co., 353 U.S. 30, 77 S.Ct. 635, 1 L.Ed.2d 622. Provisions were made for the enforcement of a Board order against a carrier in a United States District Court. § 3, First (p).

Section 2, Fourth, of the 1934 amendments insured to railroad employees the right to organize their own unions and the right of a majority of any craft or class of employees to select the representative of that craft or class. Section 2, Ninth, authorized the newly created National Mediation Board to hold representation elections and to certify the representative with which the carrier must deal. Section 2, Fourth, provided that the employees shall have the right to bargain collectively through representatives of their own choosing. On numerous occasions, this Court has recognized that the Railway Labor Act protects and promotes collective bargaining. Virginian R. Co. v. System Federation No. 40, 300 U.S. 515, 548-549, 553, 57 S.Ct. 592, 599 600, 602, 81 L.Ed. 789; Switchmen's Union of North America v. National Mediation Board, 320 U.S. 297, 300, 302, 64 S.Ct. 95, 97, 88 L.Ed. 61; Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 346-347, 64 S.Ct. 582, 585, 88 L.Ed. 788; Steele v. Louisville & N.R. Co., 323 U.S. 192, 202, 65 S.Ct. 226, 232, 89 L.Ed. 173; Railway Employes' Dept. v. Hanson, 351 U.S. 225, 233, 235, 76 S.Ct. 714, 718, 719, 100 L.Ed. 1112.

If the Railway Labor Act applies to the Belt Railroad, then the carrier's employees can invoke its machinery established for adjustment of labor controversies, and the National Railway Adjustment Board has jurisdiction over respondents' claims. Moreover, the Act's policy of protecting collective bargaining comes into conflict with the rule of California law that state employees have no right to bargain collectively with the State concerning terms and conditions of employment which are fixed by the State's civil service laws. This state civil service relationship is the antithesis of that established by collectively bargained contracts throughout the railroad industry. '(E)ffective collective bargaining has been generally conceded to include the right of the representatives of the unit to be consulted and to bargain about the exceptional as well as the routine rates, rules, and working conditions.' Order of Railroad Telegraphers v. Railway Express Agency, Inc., supra, 321 U.S. at page 347, 64 S.Ct. at page 585. If the Federal Act applies to the Belt Railroad, then the policy of the State must give way.

' * *  * a State may not prohibit the exercise of rights which      the federal Acts protect. Thus, in Hill v. State of Florida,     325 U.S. 538, 65 S.Ct. 1373, 1375, 89 L.Ed. 1782, the State     enjoined a labor union from functioning until it had complied      with certain statutory requirements. The injunction was     invalidated on the ground that the Wagner Act included a      'federally established right to collective bargaining' with      which the injunction conflicted.' Weber v. Anheuser-Busch,      Inc., 348 U.S. 468, 474, 75 S.Ct. 480, 484, 99 L.Ed. 546.

Under the Railway Labor Act, not only would the employees of the Belt Railroad have a federally protected right to bargain collectively with their employer, but the terms of the collective-bargaining agreement that they have negotiated with the Belt Railroad would take precedence over conflicting provisions of the state civil service laws. In Railway Employes' Dept. v. Hanson, 351 U.S. 225, 232, 76 S.Ct. 714, 718, 100 L.Ed. 1112, involving § 2, Eleventh, of the Railway Labor Act, which permits the negotiation of union-shop agreements notwithstanding any law of any State, we stated that 'A union agreement made pursuant to the Railway Labor Act has, therefore, the imprimature of the federal law upon it and, by force of the Supremacy Clause of Article VI of the Constitution, could not be made illegal nor vitiated by any provision of the laws of a State.'

We turn now to the applicability of the Railway Labor Act to the Belt Railroad. Section 1, First, of that Act defines generally the carriers to which it applies as 'any carrier by railroad, subject to the Interstate Commerce Act * *  * .' (Emphasis supplied.) The Interstate Commerce Act, 24 Stat. 379, as amended, 49 U.S.C. § 1(1), 49 U.S.C.A. § 1(1), applies to all common carriers by railroad engaged in interstate transportation. The Belt Railroad concededly is a common carrier engaged in interstate transportation. It files its tariffs with the Interstate Commerce Commission, and the Commission has treated it and other state-owned interstate rail carriers as subject to its jurisdiction. See California Canneries Co. v. Southern Pacific Co., 51 I.C.C. 500, 502-503; United States v. Belt Line R. Co., 56 I.C.C. 121; Texas State Railroad, 34 I.C.C.Val.R. 276. Finally, this Court has recognized that practice. United States v. State of California, 297 U.S. 175, 186, 56 S.Ct. 421, 425, 80 L.Ed. 567. See also, New Orleans V. Texas & P.R. Co., 5 Cir., 195 F.2d 887, 889.

With the exception of the Supreme Court of California's holding in State of California v. Brotherhood of Railroad Trainmen, 37 Cal.2d 412, 232 P.2d 857, federal statutes regulating interstate railroads, or their employees, have consistently been held to apply to publicly owned or operated railroads. Yet none of these statutes referred specifically to public railroads as being within their coverage. In United States v. State of California, supra, the United States sought to recover a statutory penalty for the State's operation of this Belt Railroad in violation of the Safety Appliance Act, 27 Stat. 531-532, as amended, 45 U.S.C. §§ 2, 6, 45 U.S.C.A. §§ 2, 6. That Act applied to 'any common carrier engaged in interstate commerce by railroad * *  * .' (Emphasis supplied.) The State contended there, as it does here, that the Act was inapplicable to the Belt Railroad because a federal statute is presumed not to restrict a constituent sovereign State unless it expressly so provides. This Court said that this presumption 'is an aid to consistent construction of statutes of the enacting sovereign when their purpose is in doubt, but it dost not require that the aim of a statute fairly to be inferred be disregarded because not explicitly stated.' 297 U.S. at page 186, 56 S.Ct. at page 425. See also State of California v. United States, 320 U.S. 577, 585-586, 64 S.Ct. 352, 356, 88 L.Ed. 322; Case v. Bowles, 327 U.S. 92, 98-100, 66 S.Ct. 438, 441-442, 90 L.Ed. 552. The Court then held unequivocally that the Safety Appliance Act was applicable to the Belt Railroad. 'We can perceive no reason for extending it (the presumption) so as to exempt a business carried on by a state from the otherwise applicable provisions of an act of Congress, allembracing in scope and national in its purpose, which is as capable of being obstructed by state as by individual action.' 297 U.S. at page 186, 56 S.Ct. at page 425.

Likewise, three courts have ruled that the Federal Employers' Liability Act, 35 Stat. 65, as amended, 45 U.S.C. § 51, 45 U.S.C.A. § 51, the coverage of which corresponded to that of the Safety Appliance Act, was applicable to public railroads. Mathewes v. Port Utilities Commission, D.C.E.D.S.C., 32 F.2d 913; Higginbotham v. Public Belt Railroad Commission, 192 La. 525, 188 So. 395 (Sup.Ct.La.); Maurice v. State, 43 Cal.App.2d 270, 110 P.2d 706 (Cal.Dist.Ct. of App.) (involving the Belt Railroad now before us). Similarly, a Federal Court of Appeals has held that the Carriers Taxing Act of 1937, 50 Stat. 435, as amended, 45 U.S.C. (1946 ed.) § 261 (a companion measure of the Railroad Retirement Act of 1937, 50 Stat. 307, as amended, 45 U.S.C. § 228a, 45 U.S.C.A. § 228a), the coverage of which was identical with that of the Railway Labor Act, was applicable to this Belt Railroad. State of California v. Anglim, 9 Cir., 129 F.2d 455. At least two federal courts have taken the position that the Railway Labor Act is applicable to railroads owned or operated by the public. National Council of Ry. Patrolmen's Unions, A.F. of L. v. Sealy, 56 F.Supp. 720, 722-723, affirmed 152 F.2d 500, 502; New Orleans Public Belt R. Commission v. Ward, 5 Cir., 195 F.2d 829; and see the opinion of the Attorney General of California, n. 9, supra.

Nothing in the legislative history of the Railway Labor Act indicates that it should be treated differently from the above-mentioned railway statutes, insofar as its applicability to a state-owned railroad is concerned. Congress apparently did not discuss the applicability of the Railway Labor Act to a state-owned railroad. This omission is readily explainable in view of the limited operations of publicly owned railroads. We are told by the parties that there are today 30 publicly owned railroads, all of which are switching or terminal roads, and only 11 of which are operated directly by the public. The fact that Congress chose to phrase the coverage of the Act in all-embracing terms indicates that state railroads were included within it. In fact, the consistent congressional pattern in railway legislation which preceded the Railway Labor Act was to employ all-inclusive language of coverage with no suggestion that state-owned railroads were not included.

The State contends that doubts are created about congressional intent to make the Railway Labor Act applicable to state-owned railroads by the fact that in certain other federal statutes governing employer-employee relationships, Congress has expressly exempted employees of the United States or of a State. We believe, however, that this argument cuts the other way. When Congress wished to exclude state employees, it expressly so provided. Its failure to do likewise in the Railway Labor Act indicates a purpose not to exclude state employees.

The Railway Labor Act is essentially an instrument of industry-wide government. See Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711, 749, 751, 65 S.Ct. 1282, 1302, 1303, 89 L.Ed. 1886 (dissenting opinion). The railroad world for which the Act was designed has been described as 'a state within a state. Its population of some three million, if we include the families of workers, has its own customs and its own vocabulary, and lives according to rules of its own making. * *  * This state within a state has enjoyed a high degree of internal peace for two generations; despite the divergent interests of its component parts, the reign of law has been firmly established.' Garrison, The National Railroad Adjustment Board; A Unique Administrative Agency, 46 Yale L.J. 567, 568-569 (1937). Congress has not only carved this singular industry out of the Labor Management Relations Act of 1947, 61 Stat. 156, 29 U.S.C. § 182, 29 U.S.C.A. § 182, but it has provided, by the Railway Labor Act, techniques peculiar to that industry. An extended period of congressional experimentation in the field of railway labor legislation resulted in the Railway Labor Act and produced its machinery for conciliation, mediation, arbitration and adjustments of disputes. A primary purpose of this machinery of railway government is 'To avoid any interruption to commerce or to the operation of any carrier engaged therein * *  * .' 48 Stat. 1186 (§ 2), 45 U.S.C. § 151a, 45 U.S.C.A. § 151a. See Slocum v. Delaware, L. & W.R. Co., 339 U.S. 239, 242, 70 S.Ct. 577, 578, 94 L.Ed. 795. Like the Safety Appliance Act, the Railway Labor Act is 'all-embracing in scope and national in its purpose, which is as capable of being obstructed by state as by individual action.' United States v. State of California, 297 U.S. 175, 186, 56 S.Ct. 421, 425, 80 L.Ed. 567. The fact that, under state law, the employees of the Belt Railroad may have no legal right to strike reduces, but does not eliminate, the possibility of a work stoppage. It was to meet such a possibility that the Act's 'reign of law' was established. A terminal railroad facility like the Belt Railroad is a vital link in the national transportation system. Its continuous operation is important to the national flow of commerce.

The fact that the Act's application will supersede state civil service laws which conflict with its policy of promoting collective bargaining does not detract from the conclusion that Congress intended it to apply to any common carrier by railroad engaged in interstate transportation, whether or not owned or operated by a State. The principal unions in the railroad industry are national in scope, and their officials are intimately acquainted with the problems, traditions and conditions of the railroad industry. Bargaining collectively with these officials has often taken on a national flavor, and agreements are uniformly negotiated for an entire railroad system. '(B) reakdowns in collective bargaining will typically affect a region or the entire nation.' Lecht, Experience under Railway Labor Legislation (1955), 4. It is by no means unreasonable to assume that Congress, aware of these characteristics of labor relations in the interconnected system which comprises our national railroad industry, intended that collective bargaining, as fostered and protected by the Railway Labor Act, should apply to all railroads. Congress no doubt concluded that a uniform method of dealing with the labor problems of the railroad industry would tend to eliminate inequities, and would promote a desirable mobility within the railroad labor force.

Finally, the State suggests that Congress has no constitutional power to interfere with the 'sovereign right' of a State to control its employment relationships on a state-owned railroad engaged in interstate commerce. In United States v. State of California, supra, this Court said that the State, although acting in its sovereign capacity in operating this Belt Railroad, necessarily so acted 'in subordination to the power to regulate interstate commerce, which has been granted specifically to the national government.' 297 U.S. at page 184, 56 S.Ct. at page 424. 'California, by engaging in interstate commerce by rail, has subjected itself to the commerce power, and is liable for a violation of the Safety Appliance Act, as are other carriers * *  * .' Id., 297 U.S. at page 185, 56 S.Ct. at page 424. That principle is no less applicable here. If California, by engaging in interstate commerce by rail, subjects itself to the commerce power so that Congress can make it conform to federal safety requirements, it also has subjected itself to that power so that Congress can regulate its employment relationships. See also, State of California v. United States, 320 U.S. 577, 586, 64 S.Ct. 352, 356, 88 L.Ed. 322; cf. Railway Employes' Dept. v. Hanson, 351 U.S. 225, 233-238, 76 S.Ct. 714, 718-721, 100 L.Ed. 1112.

The judgment of the Court of Appeals accordingly is affirmed.

Affirmed.

The CHIEF JUSTICE took no part in the consideration or decision of this case