Norfolk and Western Railway Company v. American Train Dispatchers Association/Opinion of the Court

The Interstate Commerce Commission has the authority to approve rail carrier consolidations under certain conditions. 49 U.S.C. § 11301 et seq. A carrier in an approved consolidation "is exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction. . . ."  § 11341(a). These cases require us to decide whether the carrier's exemption under § 11341(a) "from all other law" extends to its legal obligations under a collective-bargaining agreement. We hold that it does.

* A.

"Prior to 1920, competition was the desideratum of our railroad economy." St. Joe Paper Co. v. Atlantic Coast Line R. Co., 347 U.S. 298, 315, 74 S.Ct. 574, 584, 98 L.Ed. 710 (1954). Following a period of Government ownership during World War I, however, "many of the railroads were in very weak condition and their continued survival was in jeopardy." Id., at 315, 74 S.Ct., at 584. At that time, the Nation made a commitment to railroad carrier consolidation as a means of promoting the health and efficiency of the railroad industry. Beginning with the Transportation Act of 1920, ch. 91, 41 Stat. 456, "consolidation of the railroads of the country, in the interest of economy and efficiency, became an established national policy . . . so intimately related to the maintenance of an adequate and efficient rail transportation system that the 'public interest' in the one cannot be dissociated from that in the other." United States v. Lowden, 308 U.S. 225, 232, 60 S.Ct. 248, 252, 84 L.Ed. 208 (1939). See generally St. Joe Paper Co. v. Atlantic Coast Line R. Co., supra, 347 U.S., at 315-321, 74 S.Ct., at 583-587.

Chapter 113 of the Interstate Commerce Act, recodified in 1978 at 49 U.S.C. § 11301 et seq., contains the current statement of this national policy. The Act grants the Interstate Commerce Commission exclusive authority to examine, condition, and approve proposed mergers and consolidations of transportation carriers within its jurisdiction. § 11343(a)(1). The Act requires the Commission to "approve and authorize" the transactions when they are "consistent with the public interest." § 11344(c). Among the factors the Commission must consider in making its public interest determination are "the interests of carrier employees affected by the proposed transaction." § 11344(b)(1)(D). In authorizing a merger or consolidation, the Commission "may impose conditions governing the transaction." § 11344(c). Once the Commission approves a transaction, a carrier is "exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction." § 11341(a).

When a proposed merger involves rail carriers, the Act requires the Commission to impose labor-protective conditions on the transaction to safeguard the interests of adversely affected railroad employees. § 11347. In New York Dock Railway-Control-Brooklyn Eastern Dist. Terminal, 360 I.C.C. 60, 84-90, aff'd ''sub nom. New York Dock Railway v. United States,'' 609 F.2d 83 (CA2 1979), the Commission announced a comprehensive set of conditions and procedures designed to meet its obligations under § 11347. Section 2 of the New York Dock conditions provides that the "rates of pay, rules, working conditions and all collective bargaining and other rights, privileges and benefits . . . under applicable laws and/or existing collective bargaining agreements . . . shall be preserved unless changed by future collective bargaining agreements." 360 I.C.C., at 84. Section 4 sets forth negotiation and arbitration procedures for resolution of labor disputes arising from an approved railroad merger. Id., at 85. Under § 4, a merged or consolidated railroad which plans an operational change that may cause dismissal or displacement of any employee must provide the employee and his union 90 days' written notice. Ibid. If the carrier and union cannot agree on terms and conditions within 30 days, each party may submit the dispute for an expedited "final, binding and conclusive" determination by a neutral arbitrator. Ibid. Finally, the New York Dock conditions provide affected employees with up to six years of income protection, as well as reimbursements for moving costs and losses from the sale of a home. See id., at 86-89 (§§ 5-9, 12).

The two cases before us today involve separate ICC orders exempting parties to approved railway mergers from the provisions of collective-bargaining agreements.

1. In No. 89-1027, the Commission approved an application by NWS Enterprises, Inc., to acquire control of two previously separate rail carriers, petitioners Norfolk and Western Railway Company (N & W) and Southern Railway Company (Southern). See Norfolk Southern Corp.-Control-Norfolk & W.R. Co. and Southern R. Co., 366 I.C.C. 173 (1982). In its order approving control, the Commission imposed the standard New York Dock labor-protective conditions and noted the possibility that "further displacement [of employees] may arise as additional coordinations occur." 366 I.C.C., at 230-231.

In September 1986, this possibility became a reality. The carriers notified the American Train Dispatchers' Association, the bargaining representative for certain N & W employees, that they proposed to consolidate all "power distribution" the assignment of locomotives to particular trains and facilities for the N & W-Southern operation. To effect the efficiency move, the carriers informed the union that they would transfer work performed at the N & W power distribution center in Roanoke, Virginia, to the Southern center in Atlanta, Georgia. The carriers proposed an implementing agreement in which affected N & W employees would be made management supervisors in Atlanta, and would receive increases in wages and benefits in addition to the relocation expenses and wage protections guaranteed by the New York Dock conditions. The union contended that this proposal involved a change in the existing collective-bargaining agreement that was subject to mandatory bargaining under the Railway Labor Act (RLA), 44 Stat. 577, as amended, 45 U.S.C. § 151 et seq. The union also maintained that the carriers were required to preserve the affected employees' collective-bargaining rights, as well as their right to union representation under the RLA.

Pursuant to § 4 of the New York Dock procedures, the parties negotiated concerning the terms of the implementing agreement, but they failed to resolve their differences. As a result, the carriers invoked the New York Dock arbitration procedures. After a hearing, the arbitration committee ruled in the carriers' favor. The committee noted that the transfer of work to Atlanta was an incident of the control transaction approved by the ICC, and that it formed part of the "additional coordinations" the ICC predicted would be necessary to achieve "greater efficiencies." The committee also held it had the authority to abrogate the provisions of the collective-bargaining agreement and of the RLA as necessary to implement the merger. Finally, it held that because the application of the N & W bargaining agreement would impede the transfer, the transferred employees did not retain their collective-bargaining rights.

The union appealed to the Commission, which affirmed by a divided vote. It explained that "[i]t has long been the Commission's view that private collective bargaining agreements and [Railway Labor Act] provisions must give way to the Commission-mandated procedures of section 4 [of the New York Dock conditions] when parties are unable to agree on changes in working conditions required to implement a transaction authorized by the Commission." App. to Pet. for Cert. in No. 89-1027, p. 33a. Accordingly, the Commission upheld the arbitration committee's determination that the "compulsory, binding arbitration required by Article I, section 4 of New York Dock, took precedence over RLA procedures whether asserted independently or based on existing collective bargaining agreements." Id., at 35a. The Commission also held that because the work transfer was incident to the approved merger, it was "immunized from conflicting laws by section 11341(a)." Ibid. Noting that "[i]mposition of the collective bargaining agreement would jeopardize the transaction because the work rules it mandates are inconsistent with the carriers' underlying purpose of integrating the power distribution function," the Commission upheld the decision to override the collective-bargaining agreement and RLA provisions. Id., at 37a.

2. In No. 89-1028, the Commission approved an application by CSX Corporation to acquire control of the Chessie System, Inc., and Seaboard Coastline Industries, Inc. CSX Corp.-Control-Chessie System, Inc., and Seaboard Coastline Industries, Inc., 363 I.C.C. 521 (1980). Chessie was the parent of the Chesapeake and Ohio Railway Company and the Baltimore and Ohio Railway Company; Seaboard was the parent of the Seaboard Coast Line Railroad Company. In approving the control acquisition, the Commission imposed the New York Dock conditions and recognized that "additional coordinations may occur that could lead to further employee displacements." 363 I.C.C., at 589.

In August 1986, the consolidated carrier notified respondent Brotherhood of Railway Carmen that it planned to close Seaboard's heavy freight car repair shop at Waycross, Georgia, and transfer the Waycross employees to Chessie's similar shop in Raceland, Kentucky. The carrier informed the Brotherhood that the proposed transfer would result in a net decrease of jobs at the two shops. Pursuant to New York Dock, the carrier and the union negotiated concerning the terms of an agreement to implement the transfer. The sticking point in the negotiations involved a 1966 collective-bargaining agreement between the union and Seaboard known as the "Orange Book." The Orange Book provided that the carrier would employ each covered employee and maintain each employee's work conditions and benefits for the remainder of the employee's working life. The Brotherhood contended that the Orange Book prevented CSX from moving work or covered employees from Waycross to Raceland.

When negotiations broke down, both the union and the carrier invoked the arbitration procedures under § 4 of New York Dock. The arbitration committee ruled for the carrier. It agreed with the union that the Orange Book prohibited the proposed transfer of work and employees. It determined, however, that it could override any Orange Book or RLA provision that impeded an operational change authorized or required by the ICC's decision approving the original merger. The committee then held that the carrier could transfer the heavy repair work, which it found necessary to the original control acquisition, but could not transfer employees protected by the Orange Book, which it found would only slightly impair the original control acquisition. Both parties appealed the award to the Commission.

A divided Commission affirmed in part and reversed in part. The Commission agreed the committee possessed authority to override collective-bargaining rights and RLA rights that prevent implementation of a proposed transaction. It reasoned, however, that "[i]mposition of an Orange Book employee exception would effectively prevent implementation of the proposed transaction." CSX Corp.-Control-Chessie System, Inc. and Seaboard Coast Line Industries, Inc., 4 I.C.C.2d 641, 650 (1988). The Commission thus affirmed the arbitration committee's order permitting the transfer of work but reversed the holding that the carriers could not transfer Orange Book employees.

3. The unions appealed both cases to the United States Court of Appeals for the District of Columbia Circuit. The Court of Appeals considered the cases together and reversed and remanded to the Commission. Brotherhood of Railway Carmen v. ICC, 279 U.S.App.D.C. 239, 880 F.2d 562 (1989). The court held that § 11341(a) does not authorize the Commission to relieve a party of collective-bargaining agreement obligations that impede implementation of an approved transaction. The court stated various grounds for its conclusion. First, because the court did not read the phrase "all other law" in § 11341(a) to include "all legal obstacles," it found "no support in the language of the statute" to apply the statute to obligations imposed by collective-bargaining agreements. Id., at 244, 880 F.2d, at 567. Second, the court analyzed the Transportation Act, 1920, ch. 91, § 407, 41 Stat. 482, which contained a predecessor to § 11341(a), and found that Congress "did not intend, when it enacted the immunity provision, to override contracts." 279 U.S.App.D.C., at 247, 880 F.2d, at 570. The court noted that Congress had "focused nearly exclusively . . . on specific types of laws it intended to eliminate-all of which were positive enactments, not common law rules of liability, as on a contract." Ibid. The court further noted that Congress had often revisited the immunity provision without making it clear that it included contracts or collective-bargaining agreements. Ibid. Finally, the court did not defer to the ICC's interpretation of the Act, presumably because it determined that the Commission's interpretation was belied by the contrary " 'unambiguously expressed intent of Congress,' " id., at 244, 880 F.2d, at 567 (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984)).

In ruling that § 11341(a) did not apply to collective-bargaining agreements, the court "decline[d] to address the question" whether the section could operate to override provisions of the RLA. Brotherhood of Railway Carmen, supra, at 247-250, 880 F.3d, at 570-573. It also declined to consider whether the labor protective conditions required by § 11347 are exclusive, or whether § 4 of the New York Dock conditions gives an arbitration committee the right to override provisions of a collective-bargaining agreement. 279 U.S.App.D.C., at 250, 880 F.2d, at 573. The court remanded the case to the Commission for a determination on these issues.

After the Court of Appeals denied the carriers' petitions for rehearing, the carriers in the consolidated cases filed petitions for certiorari, which we granted on March 26, 1990. 494 U.S. 1055, 110 S.Ct. 1522, 108 L.Ed.2d 762 (1990). We now reverse. II

". . . A carrier, corporation, or person participating     in that approved or exempted transaction is exempt from the      antitrust laws and from all other law, including State and      municipal law, as necessary to let that person carry out the      transaction, hold, maintain, and operate property, and      exercise control or franchises acquired through the      transaction. . . ."

We address the narrow question whether the exemption in § 11341(a) from "all other law" includes a carrier's legal obligations under a collective-bargaining agreement.

By its terms, the exemption applies only when necessary to carry out an approved transaction. These predicates, however, are not at issue here, for the Court of Appeals did not pass on them and the parties do not challenge them. For purposes of this decision, we assume, without deciding, that the Commission properly considered the public interest factors of § 11344(b)(1) in approving the original transaction, that its decision to override the carriers' obligations is consistent with the labor protective requirements of § 11347, and that the override was necessary to the implementation of the transaction within the meaning of § 11341(a). Under these assumptions, we hold that the exemption from "all other law" in § 11341(a) includes the obligations imposed by the terms of a collective-bargaining agreement.

As always, we begin with the language of the statute and ask whether Congress has spoken on the subject before us. "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, supra, 467 U.S., at 842-843, 104 S.Ct., at 2781. The contested language in § 11341(a), exempting carriers from "the antitrust laws and all other law, including State and municipal law," is clear, broad, and unqualified. It does not admit of the distinction the Court of Appeals drew, based on its analysis of legislative history, between positive enactments and common-law rules of liability. Nor does it support the Court of Appeals' conclusion that Congress did not intend the immunity clause to apply to contractual obligations.

By itself, the phrase "all other law" indicates no limitation. The circumstance that the phrase "all other law" is in addition to coverage for "the antitrust laws" does not detract from this breadth. There is a canon of statutory construction which, on first impression, might seem to dictate a different result. Under the principle of ejusdem generis, when a general term follows a specific one, the general term should be understood as a reference to subjects akin to the one with specific enumeration. See Arcadia v. Ohio Power Co., 498 U.S. 73, 84-85, 111 S.Ct. 415,, 112 L.Ed.2d 374 (1990). The canon does not control, however, when the whole context dictates a different conclusion. Here, there are several reasons the immunity provision cannot be interpreted to apply only to antitrust laws and similar statutes. First, because "[r]epeals of the antitrust laws by implication from a regulatory statute are strongly disfavored," ''United States v. Philadelphia Nat. Bank,'' 374 U.S. 321, 350, 83 S.Ct. 1715, 1734, 10 L.Ed.2d 915 (1963), Congress may have determined that it should make a clear and separate statement to include antitrust laws within the general exemption of § 11341(a). Second, the otherwise general term "all other law" "includ[es]" (but is not limited to) "State and municipal law." This shows that "all other law" refers to more than laws related to antitrust. Also, the fact that "all other law" entails more than "the antitrust laws," but is not limited to "State and municipal law," reinforces the conclusion, inherent in theword "all," that the phrase "all other law" includes federal law other than the antitrust laws. In short, the immunity provision in § 11341 means what it says: A carrier is exempt from all law as necessary to carry out an ICC-approved transaction.

The exemption is broad enough to include laws that govern the obligations imposed by contract. "The obligation of a contract is 'the law which binds the parties to perform their agreement.' " Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398, 429, 54 S.Ct. 231, 237, 78 L.Ed. 413 (1934) (quoting Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122, 197, 4 L.Ed. 529 (1819)). A contract depends on a regime of common and statutory law for its effectiveness and enforcement.

"Laws which subsist at the time and place of the making of a     contract, and where it is to be performed, enter into and      form a part of it, as fully as if they had been expressly      referred to or incorporated in its terms.  This principle      embraces alike those laws which affect its construction and      those which affect its enforcement or discharge." Farmers     and Merchants Bank of Monroe v. Federal Reserve Bank of      Richmond, 262 U.S. 649, 660, 43 S.Ct. 651, 655, 67 L.Ed. 1157     (1923).

A contract has no legal force apart from the law that acknowledges its binding character. As a result, the exemption in § 11341(a) from "all other law" effects an override of contractual obligations, as necessary to carry out an approved transaction, by suspending application of the law that makes the contract binding.

Schwabacher v. United States, 334 U.S. 182, 68 S.Ct. 958, 92 L.Ed. 1305 (1948), which construed the immediate precursor of § 11341(a), § 5(11) of the Transportation Act of 1940, ch. 722, § 7, 54 Stat. 908-909, supports this conclusion. In Schwabacher, minority stockholders in a carrier involved in an ICC-approved merger complained that the terms of the merger diminished the value of their shares as guaranteed by the corporate charter and thus "deprived [them] of contract rights under Michigan law. . . ." 334 U.S., at 188, 68 S.Ct., at 962. We explained that the Commission was charged under the Act with passing upon and approving all capital liabilities assumed or discharged by the merged company, and that once the Commission approved a merger in the public interest and on just and reasonable terms, the immunity provision relieved the parties to the merger of "restraints, limitations, and prohibitions of law, Federal, State, or municipal," as necessary to carry out the transaction. Id., at 194-195, 198, 68 S.Ct., at 964-965, 966. We noted that before approving the merger, the Commission had a duty "to see that minority interests are protected," and emphasized that any such minority rights were, "as a matter of federal law, accorded recognition in the obligation of the Commission not to approve any plan which is not just and reasonable." Id., at 201, 68 S.Ct., at 968. Once these interests were accounted for, however, "[i]t would be inconsistent to allow state law to apply a liquidation basis [for valuation] to what federal law designates as a basis for continued public service." Id., at 200, 68 S.Ct., at 968. Relying in part on the immunity provision, we held the contract rights protected by state law did not survive the merger agreement found by the Commission to be in the public interest. Id., at 194-195, 200-201, 68 S.Ct., at 964-965, 967-968. Because the Commission had disclaimed jurisdiction to settle the shareholders' complaints, we remanded the case to the Commission to ensure that the terms of the merger were just and reasonable. Id., at 202, 68 S.Ct., at 968.

Just as the obligations imposed by state contract law did not survive the merger at issue in Schwabacher, the obligations imposed by the law that gives force to the carriers' collective-bargaining agreements, the RLA, do not survive the merger in this case. The RLA governs the formation, construction, and enforcement of the labor-management contracts in issue here. It requires carriers and employees to make reasonable efforts "to make and maintain" collective-bargaining agreements, 45 U.S.C. § 152 First, and to refrain from making changes in existing agreements except in accordance with RLA procedures, 45 U.S.C. §§ 152 Seventh, 156. The Act "extends both to disputes concerning the making of collective agreements and to grievances arising under existing agreements." Slocum v. Delaware, L. & W.R. Co., 339 U.S. 239, 242, 70 S.Ct. 577, 579, 94 L.Ed. 795 (1950). As the law which gives "legal and binding effect to collective agreements," Detroit & T. S. L. R. Co. v. United Transportation Union, 396 U.S. 142, 156, 90 S.Ct. 294, 302, 24 L.Ed.2d 325 (1969), the RLA is the law that, under § 11341(a), is superseded when an ICC-approved transaction requires abrogation of collective-bargaining obligations. See ICC v. Locomotive Engineers, 482 U.S. 270, 287, 107 S.Ct. 2360, 2370, 96 L.Ed.2d 222 (1987) (STEVENS, J., concurring in judgment); Brotherhood of Locomotive Engineers v. Boston & Maine Corp., 788 F.2d 794, 801 (CA1 1986);  Missouri Pacific R. Co. v. United Transportation Union, 782 F.2d 107, 111 (CA8 1986);  Burlington Northern, Inc. v. American Railway Supervisors Assn., 503 F.2d 58, 62-63 (CA7 1974);  Bundy v. Penn Central Co., 455 F.2d 277, 279-280 (CA6 1972);  Nemitz v. Norfolk & Western R. Co., 436 F.2d 841, 845 (CA6), aff'd, 404 U.S. 37, 92 S.Ct. 185, 30 L.Ed.2d 198 (1971); Brotherhood of Locomotive Engineers v. Chicago & N. W. R. Co., 314 F.2d 424 (CA8 1963); Texas & N. O. R. Co. v. Brotherhood of Railroad Trainmen, 307 F.2d 151, 161-162 (CA5 1962);  ''Railway Labor Executives Assn. v. Guilford Transp. Industries, Inc.,'' 667 F.Supp. 29, 35 (Me.1987), aff'd, 843 F.2d 1383 (CA1 1988).

Our determination that § 11341(a) supersedes collective-bargaining obligations via the RLA as necessary to carry out an ICC-approved transaction makes sense of the consolidation provisions of the Act, which were designed to promote "economy and efficiency in interstate transportation by the removal of the burdens of excessive expenditure." Texas v. United States, 292 U.S. 522, 534-535, 54 S.Ct. 819, 825, 78 L.Ed. 1402 (1934). The Act requires the Commission to approve consolidations in the public interest. 49 U.S.C. § 11343(a)(1). Recognizing that consolidations in the public interest will "result in wholesale dismissals and extensive transfers, involving expense to transferred employees" as well as "the loss of seniority rights," United States v. Lowden, 308 U.S. 225, 233, 60 S.Ct. 248, 252, 84 L.Ed. 208 (1939), the Act imposes a number of labor-protecting requirements to ensure that the Commission accommodates the interests of affected parties to the greatest extent possible. 49 U.S.C. §§ 11344(b)(1)(D), 11347; see also New York Dock Railway-Control-Brooklyn Eastern District Terminal, 360 I.C.C. 60 (1979). Section 11341(a) guarantees that once these interests are accounted for and once the consolidation is approved, obligations imposed by laws such as the RLA will not prevent the efficiencies of consolidation from being achieved. If § 11341(a) did not apply to bargaining agreements enforceable under the RLA, rail carrier consolidations would be difficult, if not impossible, to achieve. The resolution process for major disputes under the RLA would so delay the proposed transfer of operations that any efficiencies the carriers sought would be defeated. See, e.g., Burlington Northern R. Co. v. Maintenance of Way Employes, 481 U.S. 429, 444, 107 S.Ct. 1841, 1850, 95 L.Ed.2d 381 (1987) (resolution procedures for major disputes "virtually endless"); Detroit & T. S. L. R. Co. v. United Transportation Union, 396 U.S. 142, 149, 90 S.Ct. 294, 298, 24 L.Ed.2d 325 (1969) (dispute resolution under RLA involves "an almost interminable process"); Railway Clerks v. Florida East Coast R. Co., 384 U.S. 238, 246, 86 S.Ct. 1420, 1424, 16 L.Ed.2d 501 (1966) (RLA procedures are "purposely long and drawn out"). The immunity provision of § 11341(a) is designed to avoid this result.

We hold that, as necessary to carry out a transaction approved by the Commission, the term "all other law" in § 11341(a) includes any obstacle imposed by law. In this case, the term "all other law" in § 11341(a) applies to the substantive and remedial laws respecting enforcement of collective-bargaining agreements. Our construction of the clear statutory command confirms the interpretation of the agency charged with its administration and expert in the field of railroad mergers. We affirm the Commission's interpretation of § 11341(a), not out of deference in the face of an ambiguous statute, but rather because the Commission's interpretation is the correct one.

This reading of § 11341(a) will not, as the Court of Appeals feared, lead to bizarre results. Brotherhood of Railway Carmen v. ICC, 279 U.S.App.D.C., at 244, 880 F.2d, at 567. The immunity provision does not exempt carriers from all law, but rather from all law necessary to carry out an approved transaction. We reiterate that neither the conditions of approval, nor the standard for necessity, is before us today. It may be, as the Commission held on remand from the Court of Appeals, that the scope of the immunity provision is limited by § 11347, which conditions approval of a transaction on satisfaction of certain labor-protective conditions. See n. 2, supra. It also might be true that "[t]he breadth of the exemption [in § 11341(a) ] is defined by the scope of the approved transaction. . . ."  ICC v. Locomotive Engineers, supra, 482 U.S., at 298, 107 S.Ct., at 2376 (STEVENS, J., concurring in judgment). We express no view on these matters, as they are not before us here.

The judgment of the Court of Appeals is reversed, and the cases are remanded for proceedings consistent with this opinion.

It is so ordered.

Justice STEVENS, with whom Justice MARSHALL joins, dissenting.