The opinion of the court was delivered by: HIGGINBOTHAM
The above action was brought by Ira Clemens on his behalf, and for others similarly situated, against the defendant railroads. The plaintiffs seek an order from this Court to compel the defendants to submit their dispute to arbitration. The defendants have filed motions to dismiss or in the alternative for summary judgment.
In April of 1960, the defendant, Lehigh and New England Railway acquired control of the Lehigh and New England Railroad. The Railway obtained the approval of the Interstate Commerce Commission for the abandonment of approximately 77% of the trackage of its acquisition. Approval of this request was granted by the Commission in 1961. Interstate Commerce Commission Finance Docket No. 21155. The Commission imposed, and the defendants accepted certain conditions for the protection of employees of the Railroad as part of its order authorizing the acquisition and abandonment. Essentially, the conditions imposed for the protection of adversely affected workers were derived from the Washington Job Protection Agreement of May, 1936. Briefly, that agreement called for the payment of compensation to railroad workers who have been displaced because of carrier mergers or consolidations.
In seeking permission the Railway informed the Commission that such abandonment would entail severing the employment of approximately one hundred and ten men. Railway, in early 1960, approached the three local lodges
with the proposal of revising their collective bargaining agreement so that when an employee reached age sixty-five he would be required to retire without severance pay. This proposal was rejected. Thereafter, in November of 1961, the Railway severed the employment relationship of thirty men who were at that time over sixty-six years of age and paid them severance pay in accordance with the Washington Job Protection Agreement.
In January of 1962, each of the three unions, after approval of their membership, entered into an agreement with Railway which provided for compulsory retirement of all workers when they reached the age of sixty-five. These agreements were ratified by the majority of the members of each of the unions involved. As a consequence of this agreement the plaintiff Clemens, and others, who had been employees of the Railway, were retired at the age of sixty-five without severance pay. Some of these adversely affected workers then brought suit against the Railway Company and the unions. See Roberts v. Lehigh and New England Railway Company, 211 F. Supp. 379 (E.D. Pa. 1962), affirmed 323 F.2d 219 (3 Cir. 1963).
In Roberts, the plaintiffs' complaint was dismissed by Chief Judge Clary, and this dismissal was affirmed by the Court of Appeals. The complaint was dismissed on the ground that the dispute was one over which the National Railroad Adjustment Board had primary jurisdiction, and that the Courts were without jurisdiction to decide the matter. In Chief Judge Clary's judgment the subject of the dispute revolved around the interpretation of the various agreements and not their validity. The Court of Appeals affirmed.
Subsequent to the dismissal of the complaint in Roberts, two new complaints were filed, and it is the second of these complaints that the defendants now seek to have dismissed. The unions who were joined as defendants in Roberts are not now before this Court. In addition Lehigh and New England Railway Company and its parent, the Central Railroad Company of New Jersey, who were not joined in Roberts have now been joined as defendants.
At the threshold, we are faced with the question of whether this Court can order arbitration in view of the Roberts case. If we are to determine the validity of the defendants' contentions it must first be made clear what was actually decided in that case. When the Roberts case was decided in this Court by Chief Judge Clary, the decision turned on the assumption that the only statute applicable to the cause was the Railway Labor Act, 45 U.S.C. § 151 et seq. See 211 F. Supp. 379, 381-82. Chief Judge Clary held that the contentions raised by the plaintiffs constituted a "dispute between employees and carriers as to the interpretation of (a) collective bargaining agreement" within the Railway Labor Act. 211 F. Supp. 379, at p. 381. The resolution of this dispute, Chief Judge Clary held, was within the exclusive primary jurisdiction of the National Railroad Adjustment Board. The Court of Appeals upheld Chief Judge Clary's decision dismissing the plaintiffs' complaint for failure to state a claim for which relief can be granted. Thus it would appear that no decision on the merits was rendered. The defendants, however, point to certain language of the Court of Appeals' opinion which they claim precludes this action.
In the earlier suit the plaintiffs had attacked the retirement agreements because they discriminated against the older workers in favor of the younger ones. In response to this argument the Court made the following observations:
However, the allegations in the complaint do not set forth any facts from which hostile discrimination on the part of defendants would be a permissible inference. There is no assertion that the provision was agreed upon by the Railway for the purpose of weakening one lodge in preference to another, or that it was accepted by the three lodges by reason of fraud or coercion or in 'bad faith and ill will'. Each lodge consented to the inclusion of the provision in the agreement only after a majority of its members voted in favor of it. The fact that the provision may favor younger workers who outnumber older ones with greater seniority rights is not a basis for a claim of hostile discrimination. See Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S. Ct. 681, 97 L. Ed. 1048 (1953) and Steele v. Louisville & N.R. Co., 323 U.S. 192, 203, 65 S. Ct. 226, 89 L. Ed. 173 (1944). (323 F.2d 219 (1963) at p. 223.)
In addition, Roberts correctly pointed out that a bargaining representative, within the limits of its constitution, may agree to a change in the terms of a collective bargaining agreement provided such change does not violate the Railway Labor Act. It appears to me that the arguments and opinions in Roberts proceeded on the assumption that the terms of the Washington Job Protection Agreement were merely terms privately agreed upon by the unions and railroads. A careful study of the complaint, answers, and the briefs filed in Roberts reveals that at no time did the plaintiffs assert that the provisions of the Washington Job Protection Agreement represented not merely a private collective bargaining agreement between the parties, but conditions imposed by the Interstate Commerce Commission for the protection of workers affected by a consolidation - as it is empowered to do by 49 U.S.C. § 5(2)(f).
Thus, considering the facts which were then before it, the following language of the Court of Appeals is perfectly understandable:
It is clear, therefore, that the Roberts case proceeded on two assumptions: (1) That the agreements involved were all private agreements - which was not the case; and (2) that the applicable statute was the Railway Labor Act - which also was not entirely the case. Assuming, as did the plaintiffs in Roberts, that the Railway Labor Act was applicable, the Court of Appeals appropriately found that the agreements did not violate that act.
The plaintiffs now argue that the applicable statute is section five of the Interstate Commerce Act - and I agree. The question now becomes whether they are estopped from raising this issue by the doctrine of res judicata.
The defendants rely on two cases which in their judgment preclude the plaintiffs from seeking arbitration. They are Bruszewski v. United States, 181 F.2d 419 (3 Cir. 1950) and Williamson v. Columbia Gas and Electric Corp., 186 F.2d 464 (3 Cir. 1950). The plaintiffs argue that in this suit, unlike Roberts, the unions are not parties, and that the parent railroad and one of its subsidiaries have been joined as parties, therefore any res judicata problems have been obviated. I agree with the plaintiffs that this action is not barred, but not because some of the defendants were not joined in the first action.
Bruszewski establishes the doctrine that where a binding final judgment has been entered against a party he cannot relitigate the matter by bringing the same action against another defendant where the claim depends on the same acts or omissions. In the instant case not only are the alleged acts or omissions identical but the joined parties are clearly in privity with the defendants in Roberts and would be able to have the benefit of the judgment in that case. Therefore, if the judgment in Roberts is not binding here, it is not because the parties are different, but for the reason that the issues are different and, in the absence of a previous judgment on the merits, they can be raised here.
The defendants, however, argue that Williamson v. Columbia Gas & Electric Corp., supra, is binding here. In that case, the plaintiff brought two actions for damages alleging violations of the anti-trust statutes. In one suit he alleged that certain acts of the defendant violated the provisions of the Sherman Act. In the second suit he alleged that the same acts violated provisions of the Clayton Act. The complaint based on the Clayton Act was dismissed with prejudice because the action was barred by the statute of limitations. The defendant claimed that the judgment of dismissal in that case had res judicata effect on the Sherman Act complaint. The plaintiff asserted that res judicata did not apply because the two suits were different "causes of action." The Court upheld the defendants' contention that res judicata applied:
Another difference claimed by the plaintiff in the two actions is that one suit is said to rest on the Sherman Act and the other on the Clayton Act. This argument carries no weight. While the rule may not have been clear at one time, we think it is now clear that the fact that different statutes are relied on does not render the claims different "causes of action " for purposes of res judicata. (at p. 468).
The defendants argue that the instant case presents a situation very similar to the one in Williamson, supra, and thus the same result should follow.
The defendant contended that the action was barred by the statute of limitations because the suit was brought beyond three years of the accrual of the cause of action. The plaintiff, on the other hand, argued that an anti-trust action was analogous to the common-law action of "debt on a specialty," and that the applicable limitations period was twenty years. The action, therefore, would not be barred until January 1, 1951.
Highly relevant to an understanding of the case, is the fact of the absence of a limitation period in both the Clayton and Sherman Acts at that time. The district court rightly held that since the anti-trust statutes did not contain their own limitation period Delaware's statute of limitations was applicable. The Court was then faced with the problem of determining which time period was the correct one:
In order to apply a statute of limitations, such as that of Delaware, which reads in terms of common law actions, to a civil action brought in a district court, it is necessary for the court through a consideration of the nature of the cause of action disclosed in the complaint to determine the form of action which would have been brought upon it at common law. It is evident that the complaint in the case before us discloses a cause of action which, under the common law of Delaware, would be enforceable in an action on the case and not in an action of debt on a specialty. The district court, therefore, properly held that the action was barred by the Delaware statute of limitations. (110 F.2d 15, at p. 20.)
Having found that an anti-trust action sounded in tort under the relevant laws of Delaware it follows that when confronted with another complaint containing essentially the same allegations and demanding the same type of relief, the Court would apply the doctrine of res judicata. The correctness of this interpretation can be established by reference to the last Williamson opinion where the Court of Appeals observed that:
The best way to find out what is involved in the two actions is to look at the claims made by the plaintiff. Neither case went to trial on the facts so all we have is what the plaintiff charges, plus the supplementary affidavits, motions, and the like, which led up to the action of the Trial Judge dismissing plaintiff's action No. 1. The plaintiff alleges its organization and entry into the gas business. It says that the defendant, seeking to crush out a competitor, acquired the controlling shareholder interest in the plaintiff company and proceeded to manipulate its affairs to the disadvantage of the plaintiff and the advantage of the defendant. It says that after the plaintiff went into receivership the defendant named and controlled the receiver and the final result was that the plaintiff was forced into bankruptcy. This is a general statement; no attempt has been made to particularize individual charges. (186 F.2d 464, at p. 467.)
It must be recognized that the Clayton Act forbids acquisitions which tend to "lessen competition" or "tend to create a monopoly" whereas the Sherman Act proscribes existing monopolies. It should also be recognized that the dismissal of an action by reason of its being barred by the statute of limitations is an adjudication upon the merits. See Angel v. Bullington, 330 U.S. 183, 67 S. Ct. 657, 91 L. Ed. 832 (1947). Therefore, having found that the Clayton Act action was barred - thus ruling that the defendant's actions did not "tend to lessen competition" - the Sherman Act complaint charging actual monopolization was necessarily barred. Williamson, therefore, turned on a peculiar synthesis of the Delaware statute of limitations, common law forms of pleading, and a certain substantive overlapping of the federal anti-trust statutes.
A review of Williamson establishes the following. First, and foremost, the dismissal of the action was one on the merits. Second, the right violated and the legal wrong, in each case, were the same. The right could be described as the plaintiff's privilege to conduct its business free from illegal economic restraints. The wrong was the invasion of that right by acts which unlawfully restrained that right. Every action of the defendant alleged in the Sherman Act suit had its origin in the alleged unlawful acquisition of stock which was raised in the Clayton Act proceedings.
In the instant case the statutes involved do not overlap, nor, in fact, are they similar. In addition, they do not proscribe the same actions. The Roberts case correctly held that an involuntary retirement agreement does not violate the Railway Labor Act. However, the question of whether an otherwise valid retirement agreement could be applied to a group of employees entitled to protection under a provision of the Interstate Commerce Act could not be determined by an interpretation of the Railway Labor Act.
It might very well be the case that given the doctrine of the Williamson case, if the Court in Roberts had decided that the plaintiffs had no right to severance pay, under any circumstances, they (plaintiffs) would have been precluded from further action. That is to say, if the Court in Roberts had decided the case on the merits, res judicata would apply even if the wrong statute had been construed. The defendants could then have argued that the plaintiffs, having had the opportunity to raise the Interstate Commerce Act point and having failed to do so, were barred from challenging the Roberts decision. Fortunately, for the plaintiffs the Court of Appeals left the matter open.
The Court of Appeals decided, on the basis of the facts before it, that the interpretation of the agreements lay in the exclusive jurisdiction of the Railroad Adjustment Board. Even more crucial was the Court's statement that if the plaintiffs abandoned their desire for reinstatement and accepted their discharge as final, they could bring a civil action for damages. See Moore v. Illinois Central Railroad Co., 312 U.S. 630, 61 S. Ct. 754, 85 L. Ed. 1089 (1941).
. . . They (the plaintiffs) do not concede that the Railway had the right to retire them even though it paid them the proper amount of severance compensation. They argue that other employees with less seniority than they should have been furloughed instead. They do not ask for severance pay as such but are attempting to recover by way of punitive damages an amount equal to the total of the sums which would be paid them if they were considered as being deprived of their employment under the Washington Job Protection Agreement. (At p. 224.)
The decision in Roberts was based on the Court's lack of jurisdiction under the Railway Labor Act, and its finding - most proper under the circumstances - that primary jurisdiction lay elsewhere. That decision was not on the merits. Therefore, this Court is not precluded from finding that a different statutory scheme - one calling for arbitration - is applicable. Accordingly, the plaintiffs are correct in advancing this alternative avenue of relief. The doctrine of res judicata should not apply, where, as here, the litigation has not yet reached a state of repose.
Alternatively, the defendants argue that the complaint must be dismissed because the statutes on which the plaintiffs rely do not confer upon this Court jurisdiction over the subject matter. Insofar as the plaintiffs rely on 49 U.S.C. § 5(8) the defendants are correct. That section states that the "district courts of the United States shall have jurisdiction upon complaint of the Commission, alleging a violation of any * * * order issued by the Commission thereunder. . . ." It appears that it was contemplated that only actions brought by the Commission itself would be ...