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These are two consolidated petitions to review two Interstate Commerce Commission ("ICC") orders approving the sale under 49 U.S.C. § 10905 of 16.68 miles of railroad track by the Staten Island Railroad Corporation ("SIRC") to the Staten Island Railway Corporation ("SIRY"), a newly formed, wholly owned subsidiary of the New York, Susquehanna & Western Railway Corporation ("NYS & W"), and exempting from the provisos of 49 U.S.C. § 10901 the collateral assignment by SIRC to SIRY of trackage rights over 14.48 miles of track, owned by the Staten Island Rapid Transit Authority ("SIRTOA").[1] The Railway Labor Executives' Association ("RLEA"), whose member unions represent for collective bargaining purposes thirty-one SIRC employees affected by the transactions, filed these petitions to challenge the ICC's determination not to impose any labor protective conditions upon the parties.

The petitions raise the issues whether SIRC's initial application to abandon its rail service was a subterfuge to permit it to sell its lines to a carrier through the financial assistance provisions of 49 U.S.C. § 10905; whether the ICC is empowered to impose labor protective conditions on the parties to a section 10905 sale; whether the line acquisition provisions of 49 U.S.C. § 10901, governing acquisitions by noncarriers, encompass the assignment of trackage rights by a rail carrier to a noncarrier; and, if such transactions are included within section 10901, whether a newly formed, wholly owned subsidiary of a rail carrier may be considered to be a noncarrier for the purpose of a trackage rights acquisition under section 10901. We hold that RLEA's failure to raise its subterfuge argument before the ICC precludes us from reviewing the issue here. We further conclude that the ICC's interpretation of section 10905, which prohibits the imposition of labor protective conditions in sales under that provision, and of section 10901, which embraces trackage rights acquisitions of the type at issue here, are reasonable. Accordingly, we affirm the ICC's orders and deny and dismiss the petitions.


791 F.2d 994 (1986)

RAILWAY LABOR EXECUTIVES' ASSOCIATION, Petitioner, v. UNITED STATES of America, and Interstate Commerce Commission, Respondents, The Staten Island Railroad Corporation, the Staten Island Railway Corporation, Intervenors.

Nos. 413, 414. Docket 85-4093, 85-4107.

United States Court of Appeals, Second Circuit.

Argued December 9, 1985. Decided May 22, 1986.

New York Law School location: Box #31, File #88