Railway Labor Executives’ Assn. v. Gibbons

PETITIONER:Railway Labor Executives’ Assn.
LOCATION:José Aponte de la Torre Airport, formerly Roosevelt Roads Naval Station

DOCKET NO.: 80-415
DECIDED BY: Burger Court (1981-1986)

CITATION: 455 US 457 (1982)
ARGUED: Dec 02, 1981
DECIDED: Mar 02, 1982

Daniel R. Murray – for non-federal appellees
Elinor Hadley Stillman – for federal appellees in support of the appellant
John B. O’Clarke, Jr. –

Facts of the case


Media for Railway Labor Executives’ Assn. v. Gibbons

Audio Transcription for Oral Argument – December 02, 1981 in Railway Labor Executives’ Assn. v. Gibbons

Audio Transcription for Opinion Announcement – March 02, 1982 in Railway Labor Executives’ Assn. v. Gibbons

Warren E. Burger:

The judgment and opinion — judgments and opinions of the Court in Railway Labor Executives Association against Gibbons and the related cases will be announced by Justice Rehnquist.

William H. Rehnquist:

This case grows out of bankruptcy proceedings involving the Rock Island Railroad which had been pending before the United States District Court for the Northern District of Illinois since 1975.

After a labor strike in 1979 rendered the railroad unable to pay its operating expenses, the District Court concluded that reorganization was impossible and directed the Rock Island Trustee to liquidate the estate’s assets.

In June 1980, the District Court ordered the abandonment of the Rock Island system and disallowed any claim of — or arrangement for labor protection payments payable out of the estates assets.

Three days before the District Court’s order, however, the President signed into law the Rock Island Railroad Transition and Employee Assistance Act called RITA.

Under RITA, the trustee must pay benefits of up to $75 million to Rock Island employees who were not hired by other carriers.

The estate’s employee obligations under RITA must be considered to be administrative expenses of the estate for purposes of establishing the priority of the employee’s claims to the estate’s assets.

The appellees, who are the trustees and others, filed a complaint with the District Court challenging the constitutionality of RITA.

The District Court issued a preliminary injunction against the enforcement of RITA’s employee protection provisions holding that a constituted uncompensated taking of private property for public purpose in violation of the Just Compensation Clause of the Fifth Amendment.

Congress responded to this injunction by an enacting Section 701 of the Staggers Rail Act of 1980, which reenacted the employee protection provisions of RITA in amended form.

The District Court likewise enjoined the enforcement of this Act and the Court of Appeals for the Seventh Circuit affirmed by an equally divided court.

We granted certiorari and we now affirm the judgment of the Court of Appeals.

We find it unnecessary to determine whether the amended RITA violates the Just Compensation Clause of the Fifth Amendment because we find that the employee protection provisions are repugnant to Article I, Section 8, Clause 4 of the constitution which empowers Congress to enact uniform laws on the subject of bankruptcy throughout the United States.

Although the uniformity requirement is not a straightjacket that forbids Congress from distinguishing among classes of creditors nor from treating railroad bankruptcies as a distinctive problem it nonetheless has force of its own.

It does not deny Congress power to fashion legislation directed at geographically isolated problem.

By its terms however, RITA applies to only one regional bankrupt railroad, only Rock Island’s creditors are affected by RITA’s employee protection provision and only Rock Island employees may benefit from this arrangement.

The conclusion is inescapable it seems to us that RITA is not a response either to the particular problems of major railroad bankruptcies or to any other geographically isolated problem.

It is a response to the problems caused by the bankruptcy of the one regional railroad which it applies.

Since the law cannot be said to apply uniformly to all creditors and all debtors it therefore violates the previously mentioned constitutional provision.

Justice Marshall joined by Justice Brennan has filed an opinion concurring in the judgment.

Warren E. Burger:

Thank you, Justice Rehnquist.