CSX Transportation's sale of a 400-mile branch line between Buffalo, N.Y. and Eidenau, Pa. to the Buffalo and Pittsburgh Railroad could wind up in the Supreme Court.
CSX closed the deal last week, less than a day after the 2nd U.S. Circuit Court of Appeals in New York lifted a stay that had thwarted the CSX Corp. subsidiary's efforts to sell the line.The 2nd Circuit extended the stay in June following an appeal by attorneys for the Railway Labor Executives' Association and the United Transportation Union.
On Friday, Ed Witkin, a spokesman for the RLEA in Washington, D.C., said attorneys for his group and the UTU would likely appeal the case to the Supreme Court.
Both groups sought to halt the sale on the basis it constituted a major labor issue under the Railway Labor Act. Several recent court decisions on similar issues have agreed with labor's position that such sales are major.
Unions are free to strike if major disputes are not resolved, but they cannot strike over minor ones.
Mr. Witkin said because the stay was lifted, it's assumed the court would deem the sale a minor issue.
He said had the sale been considered a major dispute, it would have given labor the right to be included in negotiations, similar to the situation in the sale of the Pittsburgh & Lake Erie.
At issue in the B&P sale, as in most short-line sales, is job protection. Already 40 conductors and trainmen have lost their jobs on B&P, according to Robert W. Earley, UTU's general chairman for CSX.
He said B&P had offered jobs to 184 of 230 UTU employees on the line, but it turns out B&P will take only 140. He added 113 have been hired by B&P.
Gerald E. Johnson, president of Genesee & Wyoming Industries Inc., which owns half of B&P, said Friday he knew of no employees that had lost their jobs. It's possible some did not accept our offer, but as far as I know, we're filling our positions, he said.
Another B&P owner is Arthur T. Walker Estate Corp. of Pennsylvania, which has interests in coal mining.
The line has 225 miles of mainline, 114 miles on six branch lines and 31 miles of yard trackage. It's part of the Sea-Land Service double-stack intermodal line that runs from Tacoma, Wash., to New York.
B&P is Leicester, N.Y.-based GWI's fifth railroad property. The other four are: Dansville & Mt. Morris Railroad; Genesee & Wyoming; Louisiana & Delta and Rochester & Southern. ATW operates the Pittsburgh & Shawmut.
CSX said it decided to sell the line because it is marginally profitable. The company is reducing its track system from 21,000 miles to a core system of about 15,000 miles. Neither B&P or CSX would disclose the purchase price.
Until the B&P sale, CSX managed to avoid the headaches associated with short-line sales by Class I railroads. Such sales have been popular because the Interstate Commerce Commission has exempted them from labor-protecti on requirements.
With the ability to operate as non-union properties or with less costly wage rates and work rules, buyers have been quick to purchase many branch lines that major railroads could not operate profitably.
Recent court decisions, however, such as the one in the PL&E case have given labor the right to be included in sale negotiations and mandated labor- protection payments. These rulings have thrown the future of the short-line industry in doubt.
But unions have fought these exemptions tenaciously and with differing rulings from two appellate circuits, the Supreme Court is expected to rule eventually on labor's rightful role in the sale of such branch lines.