Respondent Railroad, formerly under private ownership, was
acquired by New York State in 1966 and is engaged in interstate
commerce. Some 13 years later, petitioner Union, representing the
Railroad's employees, and the Railroad failed to reach an agreement
after conducting collective bargaining negotiations pursuant to the
Railway Labor Act, and mediation efforts also failed to produce
agreement. This triggered a 30-day cooling-off period under that
Act, at the expiration of which the Act permits a union to resort
to a strike. Anticipating that New York would challenge the Railway
Labor Act's applicability to the Railroad, the Union sued in
Federal District Court, seeking a declaratory judgment that the
labor dispute was covered by that Act and not the Taylor Law, the
New York law prohibiting strikes by public employees. The Railroad
then filed suit in a New York state court, seeking to enjoin an
impending strike by the Union under the Taylor Law. Before the
state court acted, the Federal District Court held that the
Railroad was subject to the Railway Labor Act, and that that Act,
rather than the Taylor Law, was applicable. The District Court
rejected the Railroad's argument that application of the Railway
Labor Act to a state-owned railroad was inconsistent with
National League of Cities v. Usery, 426 U.
S. 833, wherein it was held that Congress could not
impose the requirements of the Fair Labor Standards Act on state
and local governments. The Court of Appeals reversed, holding that
the operation of the Railroad was an integral state governmental
function, that the Railway Labor Act displaced "essential
governmental decisions" involving that function, and that the
State's interest in controlling the operation of the Railroad
outweighed the federal interest in having the federal Act
apply.
Held: Application to a state-owned railroad of
Congress' acknowledged authority to regulate labor relations in the
railroad industry does not so impair a state's ability to carry out
its constitutionally preserved sovereign function as to come in
conflict with the Tenth Amendment. Pp.
455 U. S.
682-690.
(a) One of the requirements under
National League of Cities,
supra, at
426 U. S. 852,
for a successful claim that congressional commerce power is invalid
is that a state's compliance with federal law would directly impair
its ability to "structure integral operations in areas of
traditional governmental
Page 455 U. S. 679
functions." Operation of a railroad engaged in interstate
commerce is clearly not an integral part of traditional state
activities generally immune from federal regulation. And federal
regulation of state-owned railroads, whether freight or passenger,
simply does not impair a state's ability to function as a state.
Pp.
455 U. S.
683-686.
(b) To allow individual states, by acquiring railroads, to
circumvent the federal system of railroad collective bargaining, or
any of the other elements of federal regulation of railroads, would
destroy the longstanding and comprehensive uniform scheme of
federal regulation of railroads and their labor relations thought
essential by Congress, and would endanger the efficient operation
of the interstate rail system. Moreover, a state acquiring a
railroad does so knowing that the railroad is subject to such
scheme of federal regulation. Here, New York knew of and accepted
federal regulation, and, in fact had operated under it for 13 years
without claiming any impairment of its traditional sovereignty. Pp.
455 U. S.
686-690.
634 F.2d 19, reversed and remanded.
BURGER, C.J., delivered the opinion for a unanimous Court.
Page 455 U. S. 680
CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to decide whether the Tenth Amendment
prohibits application of the Railway Labor Act to a state-owned
railroad engaged in interstate commerce.
I
The Long Island Rail Road (the Railroad), incorporated in 1834,
provides both freight and passenger service to Long Island.
[
Footnote 1] In 1966, after 132
years of private ownership and a period of steadily growing
operating deficits, the Railroad was acquired by New York State
through the Metropolitan Transportation Authority.
Thereafter, the Railroad continued to conduct collective
bargaining pursuant to the procedures of the Railway Labor Act. 44
Stat. (part 2) 577, as amended, 45 U.S.C. § 151
et seq.
The United Transportation Union, petitioner in this case,
represents the Railroad's conductors, brakemen, switchmen, firemen,
motormen, collectors, and related train crew employees. In 1978,
the Union notified the Railroad that it desired to commence
negotiations, and the parties began collective bargaining as
provided by the Act. They failed to reach agreement during
preliminary negotiations,
Page 455 U. S. 681
and, in April 1979, the Railroad and the Union jointly
petitioned the National Mediation Board for assistance. Seven
months of mediation efforts by the Board failed to produce
agreement, however, and the Board released the case from mediation.
This triggered a 30-day cooling-off period under the Act; absent
Presidential intervention, the Act permits the parties to resort to
economic weapons, including strikes, upon the expiration of the
cooling-off period.
The Union anticipated the State's challenge to the applicability
of the Act to the Railroad; on December 7, 1979, one day before the
expiration of the 30-day cooling-off period, it sued in federal
court seeking a declaratory judgment that the dispute was covered
by the Railway Labor Act, and not the Taylor Law, New York's law
governing public employee collective bargaining and prohibiting
strikes by public employees. [
Footnote 2] The next day, the Union commenced what was to
be a brief strike. Pursuant to the Act, the President of the United
States intervened on December 14, thus imposing an additional
60-day cooling-off period which was to expire on February 13, 1980.
[
Footnote 3] A few days before
the expiration of the 60-day period, the State converted the
Railroad from a private stock corporation to a public benefit
corporation, apparently believing that the change would eliminate
Railway Labor Act coverage and bring the employees under the
umbrella of the Taylor Law.
The Railroad then filed suit in state court on February 13,
1980, seeking to enjoin the impending strike under the Taylor Law.
Before the state court acted, the United States District Court for
the Eastern District of New York heard and decided the Union's suit
for declaratory relief, holding that the Railroad was a carrier
subject to the Railway Labor Act,
Page 455 U. S. 682
that the Act, rather than the Taylor Law, was applicable, and
that declaratory relief was in order. 509 E. Supp. 1300 (1980).
In a footnote, the District Court rejected the argument, now
presented to this Court, that application of the Act to a
state-owned railroad was inconsistent with
National League of
Cities v. Usery, 426 U. S. 833
(1976). 509 F. Supp. at 1306, n. 4. The District Court noted that,
in
National League of Cities, the Supreme Court
"specifically held that the operation of a railroad in interstate
commerce is not an integral part of governmental activity" and
affirmed the rulings in
California v. Taylor, 353 U.
S. 553 (1957), and
United States v. California,
297 U. S. 175
(1936), which held that the Railway Labor Act and the Safety
Appliance Act could be applied to state-owned railroads. 509 F.
Supp. at 1306, n. 4.
The Court of Appeals reversed, holding that the operation of the
Railroad was an integral state governmental function and that the
federal Act displaced "essential governmental decisions" involving
that function. 634 F.2d 19 (CA2 1980). The court applied a
balancing approach, and held that the State's interest in
controlling the operation of its railroad outweighed the federal
interest in having the federal Act apply.
We granted certiorari, 452 U.S. 960 (1981), and we reverse.
II
There can be no serious question that, as both the District
Court and the Court of Appeals held, the Railroad is subject to the
terms of the Railway Labor Act, [
Footnote 4] or that the Commerce
Page 455 U. S. 683
Clause grants Congress the plenary authority to regulate labor
relations in the railroad industry in general. [
Footnote 5] This dispute concerns the application
of this acknowledged congressional authority to a state-owned
railroad; we must decide whether that application so impairs the
ability of the State to carry out its constitutionally preserved
sovereign function as to come into conflict with the Tenth
Amendment. [
Footnote 6]
A
The Railroad claims immunity from the Railway Labor Act, relying
on
National League of Cities v. Usery, supra, where we
held that Congress could not impose the requirements of the Fair
Labor Standards Act on state and local governments. [
Footnote 7] The Fair Labor Standards Act
generally requires covered employers to pay employees no less than
a minimum hourly wage and to pay them at one and one-half times
their regular hourly rate for all time worked in any workweek in
excess of 40 hours. Prior to 1974, the Act excluded most
governmental employers. However, in that year, Congress amended the
law to extend its provisions in somewhat modified form to "public
agencies," including state governments and their political
subdivisions. [
Footnote 8] We
held that the 1974 amendments were invalid
"insofar as [they] operate to directly displace the States'
freedom to structure integral operations in areas of
traditional governmental functions. . . ."
426 U.S. at
426 U. S. 852.
(Emphasis supplied.)
Page 455 U. S. 684
Only recently we had occasion to apply the
National League
of Cities doctrine in
Hodel v. Virginia Surface Mining
& Reclamation Assn., Inc., 452 U.
S. 264 (1981). In holding that the Surface Mining and
Reclamation Act of 1977, 30 U.S.C. § 1201
et seq. (1976
ed., Supp. IV), did not violate the Tenth Amendment by usurping
state authority over land use regulations, we set out a three-prong
test to be applied in evaluating claims under
National League
of Cities:
"[I]n order to succeed, a claim that congressional commerce
power legislation is invalid under the reasoning of
National
League of Cities must satisfy each of three requirements.
First, there must be a showing that the challenged regulation
regulates the 'States as States.' [426 U.S.] at
426 U. S.
854. Second, the federal regulation must address matters
that are indisputably 'attributes of state sovereignty.'
Id. at
426 U. S. 845. And third, it
must be apparent that the States' compliance with the federal law
would directly impair their ability 'to structure integral
operations in areas of traditional governmental functions.'
Id. at
426 U. S. 852."
452 U.S. at
452 U. S.
287-288. [
Footnote
9] The key prong of the
National League of Cities test
applicable to this case is the third one, which examines
whether
"the States' compliance with the federal law would directly
impair their ability 'to structure integral operations in areas of
traditional governmental functions.'"
B
The determination of whether a federal law impairs a state's
authority with respect to "areas of traditional [state] functions"
may, at times, be a difficult one. In this case, however, we do not
write on a clean slate. As the District Court
Page 455 U. S. 685
noted, in
National League of Cities, we explicitly
reaffirmed our holding in
United States v. California,
297 U. S. 175
(1936), and in two other cases involving federal regulation of
railroads: [
Footnote 10]
"The holding of
United States v. California . . . is
quite consistent with our holding today. There, California's
activity to which the congressional command was directed was not in
an area that the States have regarded as integral parts of their
governmental activities. It was, on the contrary, the operation of
a railroad engaged in 'common carriage by rail in interstate
commerce. . . .' 297 U.S. at
297 U. S.
182."
426 U.S. at
426 U. S. 854,
n. 18. It is thus clear that operation of a railroad engaged in
interstate commerce is not an integral part of traditional state
activities generally immune from federal regulation under
National League of Cities. See also Lafayette v.
Louisiana Power & Light Co., 435 U.
S. 389,
435 U. S.
422-424 (1978) (concurring opinion). [
Footnote 11] The Long Island is concededly
a railroad engaged in interstate commerce.
The Court of Appeals undertook to distinguish the three railroad
cases discussed in
National League of Cities, noting
Page 455 U. S. 686
that they dealt with freight carriers, rather than primarily
passenger railroads such as the Long Island. That distinction does
not warrant a different result, however. Operation of passenger
railroads, no less than operation of freight railroads, has
traditionally been a function of private industry, not state or
local governments. [
Footnote
12] It is certainly true that some passenger railroads have
come under state control in recent years, as have several freight
lines, but that does not alter the historical reality that the
operation of railroads is not among the functions traditionally
performed by state and local governments. Federal regulation of
state-owned railroads simply does not impair a state's ability to
function as a state.
III
In concluding that the operation of a passenger railroad is not
among those governmental functions generally immune from federal
regulation under National League of Cities, we are not merely
following dicta of that decision or looking only to the past to
determine what is "traditional." In essence,
National League of
Cities held that, under most circumstances, federal power to
regulate commerce could not be exercised in such a manner as to
undermine the role of the states in our federal system. This
Court's emphasis on traditional governmental functions and
traditional aspects of state sovereignty was not meant to impose a
static historical view of state functions generally immune from
federal regulation. Rather, it was meant to require an inquiry into
whether the federal regulation affects basic state prerogatives
Page 455 U. S. 687
in such a way as would be likely to hamper the state
government's ability to fulfill its role in the Union and endanger
its "separate and independent existence." 426 U.S. at
426 U. S.
851.
Just as the Federal Government cannot usurp traditional state
functions, there is no justification for a rule which would allow
the states, by acquiring functions previously performed by the
private sector, to erode federal authority in areas traditionally
subject to federal statutory regulation. Railroads have been
subject to comprehensive federal regulation for nearly a century.
[
Footnote 13] The Interstate
Commerce Act -- the first comprehensive federal regulation of the
industry -- was passed in 1887. [
Footnote 14] A year earlier, we had held that only the
Federal Government, not the states, could regulate the interstate
rates of railroads.
Wabash, St. L. & P. R. Co. v.
Illinois, 118 U. S. 557
(1886). The first federal statute dealing with railroad labor
relations was the Arbitration Act of 1888; [
Footnote 15] the provisions of that Act were
invoked by President Cleveland in reaction to the Pullman strike of
1894. Federal mediation of railroad labor disputes was first
provided by the Erdman Act of 1898 [
Footnote 16] and strengthened by the Newlands Act of
1913. [
Footnote 17] In 1916,
Congress mandated the 8-hour day in the railroad industry.
[
Footnote 18] After federal
operation of the railroads during World War I, Congress passed the
Transportation Act of 1920, [
Footnote 19] which further enhanced federal involvement
in
Page 455 U. S. 688
railroad labor relations. Finally, in 1926, Congress passed the
Railway Labor Act, which was jointly drafted by representatives of
the railroads and the railroad unions. [
Footnote 20] The Act has been amended a number of
times since 1926, but its basic structure has remained intact. The
Railway Labor Act thus has provided the framework for collective
bargaining between all interstate railroads and their employees for
the past 56 years. There is no comparable history of longstanding
state regulation of railroad collective bargaining or of other
aspects of the railroad industry.
Moreover, the Federal Government has determined that a uniform
regulatory scheme is necessary to the operation of the national
rail system. In particular, Congress long ago concluded that
federal regulation of railroad labor relations is necessary to
prevent disruptions in vital rail service essential to the national
economy. A disruption of service on any portion of the interstate
railroad system can cause serious problems throughout the system.
Congress determined that the most effective means of preventing
such disruptions is by way of requiring and facilitating free
collective bargaining between railroads and the labor organizations
representing their employees.
Page 455 U. S. 689
Rather than absolutely prohibiting strikes, Congress decided to
assure equitable settlement of railroad labor disputes, and thus
prevent interruption of rail service, by providing mediation and
imposing cooling-off periods, thus creating "an almost
interminable" collective bargaining process.
Detroit & T.
S. L. . Co. v. Transportation Union, 396 U.
S. 142,
396 U. S. 149
(1969).
"[T]he procedures of the Act are purposely long and drawn out,
based on the hope that reason and practical considerations will
provide in time an agreement that resolves the dispute."
Railway & Steamship Clerks v. Florida E. C. R. Co.,
384 U. S. 238,
384 U. S. 246
(1966). [
Footnote 21] To
allow individual states, by acquiring railroads, to circumvent the
federal system of railroad bargaining, or any of the other elements
of federal regulation of railroads, would destroy the uniformity
thought essential by Congress, and would endanger the efficient
operation of the interstate rail system.
In addition, a state acquiring a railroad does so knowing that
the railroad is subject to this longstanding and comprehensive
scheme of federal regulation of its operations and its
Page 455 U. S. 690
labor relations.
See California v. Taylor, 353 U.S. at
353 U. S. 568.
Here, the State acquired the Railroad with full awareness that it
was subject to federal regulation under the Railway Labor Act. At
the time of the acquisition, a spokesman stated:
"We just have a new owner and a new board of directors. We're
under the Railway Labor Act, just as we've always been. The people
do not become state employes, they remain railroad employes and
retain all the benefits and drawbacks of that."
The parties proceeded along those premises for the next 13
years, with both sides making use of the procedures available under
the Railway Labor Act, and with Railroad employees covered by the
Railroad Retirement Act, the Railroad Unemployment Insurance Act,
and the Federal Employers' Liability Act. Conversely, Railroad
employees were not eligible for any of the retirement, insurance,
or job security benefits of state employees.
The State knew of and accepted the federal regulation; moreover,
it operated under federal regulation for 13 years without claiming
any impairment of its traditional sovereignty. Indeed, the State's
initial response to this suit was to acknowledge that the Railway
Labor Act applied. It can thus hardly be maintained that
application of the Act to the State's operation of the Railroad is
likely to impair the State's ability to fulfill its role in the
Union or to endanger the "separate and independent existence"
referred to in
National League of Cities v. Usery, 426
U.S. at
426 U. S.
851.
Accordingly, the judgment of the Court of Appeals is reversed,
and the case is remanded for proceedings consistent with this
opinion.
Reversed and remanded.
[
Footnote 1]
The Railroad's western terminus is Pennsylvania Station in
Manhattan; there it connects with lines of railroads which serve
other parts of the country. The eastern terminus is at Montauk
Point, at the tip of Long Island, but most of its main and branch
line traffic originates in the western half of Long Island, in the
boroughs of Brooklyn and Queens, and in the suburbs of Nassau and
western Suffolk Counties. By far the bulk of the Railroad's
business is carrying commuters between Long Island's suburban
communities and their places of employment in New York City.
However, the Railroad supplies Long Island's only freight service;
it does a significant volume of freight business, with 1979 freight
revenue of over $12 million.
[
Footnote 2]
On January 17, 1980, the Railroad responded to the Union's suit
for declaratory judgment by asserting that no justiciable
controversy existed because the Railroad did not believe the Taylor
Law applied, and therefore had no intention to invoke its
provisions.
[
Footnote 3]
The Presidential intervention also triggered the creation of a
Presidential Emergency Board to investigate and report on the
matter.
[
Footnote 4]
The Railroad acknowledges in its brief that its freight service,
which is admittedly engaged in interstate commerce, "eliminat[es]
any dispute regarding its coverage by the RLA." Brief for
Respondents 23.
In the Court of Appeals, the Railroad maintained that Congress
did not intend the Act to apply to state-owned passenger railroads.
634 F.2d at 23. Whatever merit that claim may have had, it is no
longer tenable. After that court rendered its decision, Congress
amended the Act to add § 9a, 95 Stat. 681, 45 U.S.C. § 159a (1976
ed., Supp. V). Section 9a establishes special procedures to be
applied to any dispute "between a publicly funded and publicly
operated carrier providing rail commuter service . . . and its
employees."
[
Footnote 5]
See Texas & N. O. R. Co. v. Railway Steamship
Clerks, 281 U. S. 548
(1930).
[
Footnote 6]
The Tenth Amendment provides:
"The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are reserved to
the States respectively, or to the people."
[
Footnote 7]
The Fair Labor Standards Act is codified at 29 U.S.C. § 201
et seq.
[
Footnote 8]
88 Stat. 55. The 1974 amendments modified several of the
definitions contained in 29 U.S.C. § 203.
[
Footnote 9]
However, even if these three requirements are met, the federal
statute is not automatically unconstitutional under the Tenth
Amendment. The federal interest may still be so great as to
"justif[y] state submission." 452 U.S. at
452 U. S. 288,
n. 29.
Cf. Case v. Bowles, 327 U. S.
92 (1946).
[
Footnote 10]
Parden v. Terminal R. Co., 377 U.
S. 184 (1964);
California v. Taylor,
353 U. S. 553
(1957).
[
Footnote 11]
"[T]here [is] certainly no question that a State's operation of
a common carrier, even without profit and as a 'public function,'
would be subject to federal regulation under the Commerce Clause. .
. ."
"
* * * *"
"The
National League of Cities opinion focused its
delineation of the 'attributes of sovereignty' . . . on a
determination as to whether the State's interest involved
'functions essential to separate and independent existence.' [426
U.S. at
426 U. S. 845], quoting
Coyle v. Oklahoma, 221 U. S. 559,
221 U. S.
580 (1911). It should be evident, I would think, that
the running of a business enterprise is not an integral operation
in the area of traditional government functions. . . . Indeed, the
reaffirmance of the holding in
United States v. California,
supra, by
National League of Cities, supra, at
426 U. S. 854, n. 18,
strongly supports this understanding."
435 U.S. at
435 U. S.
422-424 (BURGER, C.J., concurring in part and in
judgment).
[
Footnote 12]
At the time of this suit, there were 17 commuter railroads in
the United States; only 2 of those railroads were publicly owned
and operated, both by the Metropolitan Transportation Authority.
American Public Transit Assn., Transit Fact Book 74-75 (1979).
Those two public railroads -- the Long Island and the Staten Island
-- were originally private railroads. The Staten Island was founded
in 1899 and acquired by the Metropolitan Transportation Authority
in 1971. Moody's Transportation Manual 97 (1979).
[
Footnote 13]
The initial exercise of the federal authority over railroads
occurred before the completion of the first transcontinental
railroad.
See the Pacific Railroad Act of 1862. 12 Stat.
489. Of course, federal regulation of interstate transportation
goes back many more years than that.
See the 1793 Act
regulating coastal trade discussed in
Gibbons v.
Ogden, 9 Wheat. 1 (1824).
[
Footnote 14]
24 Stat. 379.
[
Footnote 15]
Ch. 1063, 25 Stat. 501.
[
Footnote 16]
30 Stat. 424.
[
Footnote 17]
Ch. 6, 38 Stat. 103.
[
Footnote 18]
Adamson Act of 1916, ch. 436, 39 Stat. 721.
[
Footnote 19]
41 Stat. 456.
[
Footnote 20]
Railway Labor Act of 1926, 44 Stat. (part 2) 577, as amended, 45
U.S.C. § 151
et seq. The purposes of the Railway Labor Act
are set out in § 2 of the Act, 45 U.S.C. § 151a:
"The purposes of the chapter are: (1) to avoid any interruption
to commerce or to the operation of any carrier engaged therein; (2)
to forbid any limitation upon freedom of association among
employees or any denial, as a condition of employment or otherwise,
of the right of employees to join a labor organization; (3) to
provide for the complete independence of carriers and of employees
in the matter of self-organization to carry out the purposes of
this chapter; (4) to provide for the prompt and orderly settlement
of all disputes concerning rates of pay, rules, or working
conditions; (5) to provide for the prompt and orderly settlement of
all disputes growing out of grievances or out of the interpretation
or application of agreements covering rates of pay, rules, or
working conditions."
[
Footnote 21]
Under the recent amendments to the Act, adding a new § 9a, 95
Stat. 68, 45 U.S.C. § 159a (1976 ed., Supp. V), the process has
been made even more "long and drawn out" insofar as it applies to
publicly owned commuter rail lines such as the Long Island. The law
now provides for a "cooling-off period" of up to 240 days after
failure of mediation. Any party to the dispute, or the Governor of
any state through which the rail service operates, may request
appointment of a Presidential Emergency Board to investigate and
report on the dispute. If the dispute is not settled within 60 days
after creation of the Emergency Board, the National Mediation Board
must hold a public hearing at which each party must appear and
explain any refusal to accept the Emergency Board's
recommendations. The law then requires appointment of a second
Emergency Board at the request of any party or Governor of an
affected state. That Emergency Board must examine the final offers
submitted by each party and must determine which is the most
reasonable. Finally, if a work stoppage occurs, substantial
penalties are provided against the party refusing to accept the
offer determined by the Emergency Board to be most reasonable.