Opinion
CIV. 99-5018.
Filed January 11, 2000.
Robert L. Morris, Quinn, Day Barker, Belle Fourche, SD, Attorney for Plaintiff
Brian J. Donahoe, Mark E. Salter, Cutler, Donahoe Mickelson, Sioux Falls, SD, Attorneys for Defendant
MEMORANDUM OPINION AND ORDER OF REMAND
PROCEDURAL HISTORY
[¶ 1] Petitioner Ronald I. Goff seeks judicial review of the arbitration decision of the Public Law Board pursuant to the Railway Labor Act, 45 U.S.C. § 151-188. Goff argues that the Public Law Board decision was the result of fraud and was entered without procedural due process. The employer, Dakota, Minnesota Eastern Railroad Corporation (DME), filed a counterclaim seeking enforcement of the award, or in the alternative, that the Public Law Board decision be vacated on public policy grounds. DME moved for summary judgment.
FACTS
[¶ 2] Goff was a locomotive engineer for DME. On August 22, 1995, a portion of the train Goff was operating derailed near New Underwood, South Dakota, ultimately causing $40,800 in structural and equipment-related damage. There were no fatalities, injuries, passengers, or hazardous materials involved in the derailment.
[¶ 3] Goff and the crew continued to operate the train for two and a half hours. Goff and the crew were then transported to the Rapid Care Clinic at Rapid City where both urine and blood samples were taken for toxicological testing. The laboratory technician used a Federal Drug Testing Custody and Control form to submit the samples for testing.
[¶ 4] On August 29, 1995, DME was notified that Goff's urine sample tested positive for the presence of marijuana metabolites, or THC. On or about that same day, DME's Medical Review Officer discussed the results with Goff. Because of his test results, Goff was removed from service pending a hearing.
[¶ 5] DME conducted a post-suspension hearing on September 20, 1995. The hearing officer was Robert Irwin, Vice President of Transportation at DME. Irwin was the random drug testing program administrator for DME. He was also the DME official who ordered the testing after the train derailment.
[¶ 6] During the hearing Irwin called for a short recess. Goff alleges that during the recess Irwin talked to one of the witnesses, Trainmaster Hatfield. After the recess, DME changed its position through the testimony of Trainmaster Hatfield and began asserting that DME tested Goff pursuant to company policy instead of the Federal Railway Authority rules, regulations, and guidelines, as DME had contended previously. DME took the position that the lab technician checked the wrong box on the federal form, and this clerical error led to the misperception that the test was done pursuant to the FRA.
[¶ 7] During the post-suspension hearing, Goff questioned several individuals about the identity of the person who ordered the drug test. DME did not produce this information. Irwin, who sat as the chief hearing officer, did not volunteer that he was the person who ordered the test. At the conclusion of the hearing, Irwin found against Goff and recommended his dismissal.
[¶ 8] Goff appealed this decision. Irwin served as the highest appeal and review official pursuant to the Collective Bargaining Agreement. Goff again raised the question of who ordered the drug tests, and Irwin stated that the operation supervisor on duty informed the crew about the tests. Irwin again did not volunteer that he ordered the tests. Irwin's decision was upheld on appeal.
[¶ 9] Goff requested arbitration before the Public Law Board pursuant to 45 U.S.C. § 157. Sitting on the Board were James McIntyre, carrier member; Bruce Wigent, organization member; and Robert Peterson, chairman and neutral member. The Board reviewed the record of the post-suspension hearing and did not hear new evidence.
[¶ 10] During the arbitration proceedings, Goff alleged that the drug test results were not admissible evidence because he had been wrongfully subjected to a drug test under the Federal Railway Administration Post-Accident Toxicological Test rules. When Goff asked who ordered the drug test during the Board hearing, Board member McIntyre shrugged his shoulders and raised his palms upward. DME acknowledged that it did not have authority to subject Goff to drug tests under the FRA and claimed that the drug tests were conducted pursuant to its company policy. In reaching the conclusion that the drug tests were conducted pursuant to company policy, the Board found persuasive the evidence that the notice of hearing sent to Goff by DME charged Goff with a violation of company policy and not a violation of the FRA guidelines, and that the rescheduling notice also charged a violation of company policy. At neither time did Goff object to the way in which the charge was worded. The Board also noted that Trainmaster Hatfield testified that the drug testing was ordered pursuant to the carrier's drug and alcohol policies and rules.
[¶ 11] Goff contended that the laboratory technician's use of a Federal Drug Testing Custody Control form proved that the test was conducted under the FRA. The Board found that certain actions of the carrier and the laboratory technician's use of the FDTCC form contributed to the dispute over whether the test was administered under the FRA's or DME's rules. The Board found that Goff was drug tested pursuant to DME rules of conduct and that he tested positive for the prohibited substance marijuana.
[¶ 12] Goff contended that the Locomotive Engineer Review Board `s (LERB's) decision to overturn DME's revocation of Goff's engineer certification should result in the exoneration of Goff in this action. The Board determined the LERB action alone did not overcome DME's finding that Goff violated operating and safety rules. The Board found that the decision of the LERB did not preempt or alter DME's authority to terminate Goff.
[¶ 13] After making its findings, the Board ordered that Goff be reinstated as a locomotive engineer at DME contingent upon his passing a company medical/physical examination including a drug screening test. Goff was granted his seniority and "other benefits" unimpaired. As part of his continued employment, Goff was also subject to unannounced random drug and alcohol tests for a period of 60 months with future violations of any test resulting in termination of Goff's employment. The Board issued its opinion on May 7, 1997.
[¶ 14] On February 16, 1996, Goff filed a request under the Freedom of Information Act (FOIA) seeking copies of documents from the investigation that was conducted by the Federal Railroad Administration into irregularities that occurred during the drug testing. Goff received the requested information on May 13, 1997, which was six days after the Board's decision was issued. During this investigation, Irwin admitted to the FRA investigators that he ordered the drug tests. At the conclusion of this investigation, the Federal Railroad Administration determined that DME violated 49 C.F.R. § 219.104 (c)(1) when it authorized Irwin to be the charging official as well as serve as the presiding officer at Goff's post-suspension hearing.
STANDARD OF REVIEW
[¶ 15] Under the Railway Labor Act, the district court has jurisdiction to affirm the order of the Board or set it aside, in whole or in part, or it may remand the proceeding to the Board for such further action as it may direct. 45 U.S.C. § 153 First(q).
[¶ 16] DME moved for summary judgment. Under Rule 56(c) of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if the movant can "show that there is no genuine issue as to any material fact and that [the movant] is entitled to judgment as a matter of law." In determining whether summary judgment should issue, the facts and inferences from those facts are viewed in the light most favorable to the nonmoving party, and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986).
[¶ 17] In determining whether a genuine issue of material fact exists, the Court views the evidence presented based upon which party has the burden of proof under the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986). The Supreme Court has instructed that "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy, and inexpensive determination of every action.'" Celotex, 106 S.Ct. 2548 at 2555. The nonmoving party "must do more than show that there is some metaphysical doubt as to the material facts," and "[w]here the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita, 106 S.Ct. at 1356.
ANALYSIS
[¶ 18] The Railway Labor Act was passed by Congress to promote stability in relations between labor and management by establishing a comprehensive framework to peacefully resolve labor disputes. Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252, 114 S.Ct. 2239, 2243, 129 L.Ed.2d 203 (1994); Atchison, Topeka Santa Fe Ry. v. Buell, 480 U.S. 557, 562, 107 S.Ct. 1410, 1414, 94 L.Ed.2d 563 (1987); see also 45 U.S.C. § 151a.
[¶ 19] The RLA recognizes two separate classes of disputes. Hawaiian Airlines, 512 U.S. at 252-53. The first class is major disputes which relate to the formation of collective bargaining agreements or efforts to secure a collective bargaining agreement. Id.; Consolidated Rail Corporation (Conrail) v. Railway Labor Executives' Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 2480, 105 L.Ed.2d 250 (1989); Elgin, J. E. Ry. v. Burley, 325 U.S. 711, 723, 65 S.Ct. 1282, 1290, 89 L.Ed. 1886 (1945). The second class is minor disputes which deal with disputes arising out of the interpretation or application of agreements regarding rates of pay, rules, or working conditions. Hawaiian Airlines, 512 U.S. at 253.
[¶ 20] Goff and DME agree the present matter is a minor dispute. The claim involves an interpretation of the collective bargaining agreement. Minor disputes must be resolved only through mechanisms created by the RLA. Hawaiian Airlines, 512 U.S. at 253.
A minor dispute in the railroad industry is subject to binding and compulsory arbitration before the National Railroad Adjustment Board, or before any adjustment board established by the employer and the union representing the employees. Conrail, 109 S.Ct. at 2481. The NRAB, which includes adjustment boards, has exclusive jurisdiction over minor disputes. Id.
[¶ 21] Judicial review of the arbitral decision is extremely narrow. Id.; Union Pac. R.R. v. Sheehan, 439 U.S. 89, 91, 99 S.Ct. 399, 401, 58 L.Ed.2d 354 (1978) (per curiam). Such review should be among the narrowest known to law. Sheehan, 439 U.S. at 91; Union Pac. R.R. v. United Transp. Union, 3 F.3d 255, 258 (8th Cir. 1993). Because of Congress's intent to create a comprehensive regulatory scheme, there are very few circumstances in which a district court has jurisdiction to review a public law board determination. Sheehan, 439 U.S. at 93.
[¶ 22] The RLA limits judicial review of arbitration decisions to three specific grounds: (1)failure of the board to comply with the provisions of the RLA; (2) failure of the board to conform or confine itself to matters within the scope of its jurisdiction; or (3) fraud or corruption by a member of the board making the order. 45 U.S.C. § 153 First (q). See also Sheehan, 439 U.S. at 93.
[¶ 23] I. Goff's Claims
[¶ 24] A. Fraud
[¶ 25] Goff alleges that fraudulent evidence was presented to the Board in the form of an altered Federal Drug Testing Custody Control form and in DMR's failure to disclose who ordered the drug tests. Therefore, Goff contends the decision of the Board should be vacated as a fraudulent order.
[¶ 26] Fraud is one of the three grounds for review recognized in the RLA. 45 U.S.C. § 153 First (q). The RLA does not define fraud. The Ninth Circuit Court of Appeals in Pacific Arctic Ry. v. United Transp. Union, 952 F.2d 1144 (9th Cir. 1991), recognized that fraud was established at common law if it was proved that the alleged fraudulent party made false representations of material fact which were intended to induce the other party to act, that the representations were made with the knowledge of, or reckless disregard for, their falsity and the other party justifiably relied upon these false representations to its detriment. Id. at 1147.
[¶ 27] Fraud must be proved by clear and convincing evidence and cannot be discoverable by due diligence before or during the proceeding. Id., Federal Arbitration Act, 9 U.S.C. § 10(a), and Federal Rule of Civil procedure 60(b)(3). A finding of fraud under the RLA demands "a greater level of improper conduct" than the common law level to establish fraud. Id. Because of the strong federal policy favoring arbitration, fraud can only be established by clear and convincing proof of an extremely high degree of improper conduct such as dishonesty. Id. Obtaining an award by perjured testimony constitutes fraud. Dogherra v. Safeway Stores, Inc., 679 F.2d 1293 (9th Cir. 1982).
[¶ 28] In the present case, Irwin ordered the drug tests after the train derailed. While sitting as the hearing officer during the post-suspension hearing, Irwin heard DME witnesses fail to respond to Goff's inquiries regarding who ordered the drug tests. During the appeal, Goff asked Irwin who ordered the drug tests and Irwin stated that the operation supervisor on duty informed the crew about the tests. He did not admit that he ordered the tests. When McIntyre was asked who ordered the drug tests during the hearing before the Board, he shrugged his shoulders and raised his palms upward. It was only after the Board issued its ruling that Goff discovered through the FOIA materials that Irwin was the person who ordered the drug tests, that when Irwin ordered the drug tests he was not aware of any facts that indicated the derailment was caused by train handling and Irwin had not been informed of any train-handling irregularities. Irwin also indicated that he received an anonymous call suggesting that the engineer be tested, but that this call came after he had ordered the tests.
[¶ 29] The parties agree that the drug tests could not have been lawfully ordered under the FRA. Drug tests under the DME policy were permissible as follows:
In addition to the requirements of Rule G of the General Code of Operating Rules, the Company prohibits the possession, sale, or use at any time, on or off duty, of illegal drugs. The Company reserves the right to conduct " reasonable cause" urine and blood testing of any employee for alcohol or drug use at any time and will follow FRA imposed requirements and other legal or mandatory testing with all employees. A separate Drug/Alcohol testing policy is posted on bulletin boards at all work locations.
(Emphasis added.)
[¶ 30] To determine whether DME had "reasonable cause" to order the drug tests under its company policy, the information that was known by Irwin when he ordered the tests was material relevant evidence. Irwin and other DME officials knew who ordered the drug tests and their failure to candidly respond to Goff's inquiries resulted in the Board's reliance on the false representations. As a hearing officer, Irwin was in a position to uncover the truth, not to bury the truth. His conduct was highly improper and dishonest and the fraud has been proven by clear and convincing evidence.
[¶ 31] The failure of DME to disclose Irwin's identity as the individual who ordered the test constitutes fraud. Goff used due diligence to discover the evidence and should not be penalized for the Federal Railroad Administration's fourteen-month delay in responding to his FOIA request. This Court is of the opinion that the Board could not have made a proper determination of whether the drug tests were ordered under DME's policy after a finding of "reasonable cause" until it heard the testimony of Irwin. Therefore, in light of the new evidence obtained by Goff in response to his FOIA request, this issue is remanded back to the Board to determine whether the drug tests were properly ordered under DME's drug policy.
[¶ 32] Goff also alleges that the copy of the Federal Drug Testing Custody Control form that was admitted as evidence by the Board was altered by DME to prevent the form from being identified as a FDTCC form. Goff claims the form was altered so DME could mislead the neutral arbitrator into believing the drug test was ordered pursuant to company policy rather than FRA rules. The Board's decision describes the form used by the laboratory technician as a "Federal Drug Testing Custody Control Form" reserved for the handling and processing of Department of Transportation (DOT) (here FRA) mandated drug/alcohol test. Thus, even if DME intended to make false representations to the Board, the Board did not rely on those false representations in reaching its decision and thus no fraud occurred regarding the form that would justify vacating the Board's decision.
[¶ 33] B. Due Process Violation
[¶ 34] In addition to the statutory grounds for district court review of arbitration awards, a district court may vacate such an award if a violation of procedural due process has occurred. United Pac. R.R. v. Price, 360 U.S. 601, 616, 79 S.Ct. 1351, 3 L.Ed.2d 1460 (1959); Armstrong Lodge No. 762 v. Union Pac. R.R., 783 F.2d 131, 135 (8th Cir. 1986).
[¶ 35] An employee's due process rights should be protected in proceedings before the NRAB and associated entities because the tribunal was created by Congress to resolve certain disputes in the railroad industry. Thus, its decisions are that of government and must not deprive anyone of life, liberty, or property without due process of law. Shafii v. PLC British Airways, 22 F.3d 59 (2d Cir. 1994); English v. Burlington Northern R.R., 18 F.3d 741 (9th Cir. 1994).
[¶ 36] Courts which have allowed judicial review of Board awards on due process grounds restrict the review to actions taken by the Board. English, 18 F.3d at 744. For purposes of the RLA, due process requires that (1)the Board be presented a "full statement of the facts and all supporting data bearing upon the disputes," 45 U.S.C. § 153 First(i), and (2) the parties must be heard either in person, by counsel, or by other representatives and the Board must give due notice of all hearings to the employee. 45 U.S.C. § 153 First(j). See also English, 18 F.3d at 744.
[¶ 37] The Eighth Circuit has not articulated the due process requirements under the RLA, but it did outline the requirements of procedural due process in a public employee termination scenario. In Agarwal v. Regents of the University of Minnesota, 788 F.2d 504 (8th Cir. 1986), the following requirements of procedural due process were identified:
1. clear and actual notice of the reasons for termination in sufficient detail to enable him or her to present evidence relating to the reasons for termination;
2. notice of both the names of those who have made allegations against the employee and the specific nature and factual basis for the charges;
3. a reasonable time and opportunity to present testimony in his or her own defense; and
4. a hearing before an impartial board or tribunal.
Id. at 508.
[¶ 38] In the present case, Goff's initial post-suspension hearing was conducted before Irwin. According to the conclusions reached by the FRA after an investigation and hearing, Irwin was the individual who charged Goff with violating the alcohol and drug regulations and who removed Goff from service. Irwin was also the person who ordered the drug tests and he admitted that he did so without knowledge of any facts that indicated the derailment was caused by train handling. The FRA found that DME violated 49 C.F.R. § 219.104(c)(1), which requires the presiding officer to be someone other than the charging official.
[¶ 39] In light of Irwin's role as both the presiding officer at the hearing and charging officer, it is clear that Goff was denied due process at the post-suspension hearing. In most instances, the informal grievance procedures that precede arbitration before the Board do not merit constitutional protection. Elmore v. Chicago Illinois Midland Ry., 782 F.2d 94 (7th Cir. 1986); Steffens v. Brotherhood of Ry., 797 F.2d 442 (7th Cir. 1986). Here, however, the parties did not present new evidence during the arbitration hearing and relied on the record created during the post-suspension hearing. As a result, the evidence was initially presented before a biased hearing officer and the Board then relied upon this tainted evidence to reach its decision. Furthermore, the requirement that the presiding officer be someone other than the charging official is required by federal regulation rather than a private negotiated agreement between the parties and thus can be the basis for a denial of due process allegation.
[¶ 40] In addition, Irwin's identity as the person who ordered the drug tests was not disclosed prior to the arbitration hearing. Thus, Goff was denied the opportunity to effectively cross-examine the person who was making the allegations against him. The information known by Irwin at the time that he ordered the drug tests was relevant and material evidence for the arbitrators to consider in determining whether DME had "reasonable cause" to order the drug tests under the company policy. Goff was denied due process by the failure of DME to disclose prior to the arbitration hearing who ordered the drug tests, by allowing Irwin to act as both the charging official and hearing officer, and by allowing a biased hearing officer to create the record that was then used as the basis for the Board's decision. This Court is of the opinion that the Board could not make a proper determination of whether DME had "reasonable cause" to order the drug tests unless it considered the evidence regarding the information known by Irwin at the time he ordered the drug tests. Therefore, this issue is remanded back to the Board for a determination of whether the drug tests were properly ordered under DME's drug policy.
[¶ 41] II. DME's Public Policy Claim
[¶ 42] DME alleges that the decision by Public Law Board No. 5884 to reinstate Goff violates public policy. Federal courts possess the authority to vacate arbitration awards under the Railway Labor Act on public policy grounds. Union Pac. R.R. v. United Transp. Union, 3 F.3d 255, 258 (8th Cir. 1993). However, a court is not free to overturn any award that it may disagree with. Id. at 260. United Paperworkers Int'l Union, AFL-CIO v. Misco., Inc., 484 U.S. 29, 43, 108 S.Ct. 364, 373, 98 L.Ed.2d 286 (1987)). A court must rely on existing laws and legal precedents, not its own considerations of the public interest. Union Pacific, 3 F.3d at 261. Additionally, a court may not engage in factfinding beyond that established by the public law board. Id.
[¶ 43] The Eighth Circuit has concluded that a well-defined and dominant public policy exists against the employment by the railway of individuals who have impaired judgment due to the use of drugs or alcohol. Union Pacific, 3 F.3d at 261; Union Pacific, 23 F.3d at 1400. Such practice may seriously threaten public safety. Union Pacific, 3 F.3d at 261; Union Pacific, 23 F.3d at 1400; see also 49 C.F.R. § 219.1. The purpose of the regulations is to prevent accidents and casualties in railroad operations that result from impairment of employees by alcohol or drugs. Union Pacific, 3 F.3d at 261.
[¶ 44] Relying on this legal and precedential standard, however, is not enough. Whether Goff's employment would violate this established public policy is a fact determination which should be made by the Board in the first instance. Union Pacific, 23 F.3d at 1400. It does not appear that the Board made a fact determination regarding whether Goff's judgment was impaired due to the use of drugs and if so, whether such impaired judgment could seriously threaten public safety. This Court is not in the position of factfinder regarding a violation of public policy. Union Pacific, 3 F.3d at 260 (citing United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 44-45, 108 S.Ct. 364, 374-75, 98 L.Ed.2d 286 (1987)). Therefore, this issue is remanded back to the Board for a determination of facts related to this public policy issue. It is hereby
[¶ 45] ORDERED that this matter is remanded to the Board to conduct a further evidentiary hearing consistent with this opinion.
[¶ 46] IT IS FURTHER ORDERED that defendant's motion for summary judgment (Docket 17) is denied.