author: MOTLEY, Chief Judge.

text:
    ROSENTHAL & ROSENTHAL INC. and Broadway 41st Street Realty Corporation, Plaintiffs, v. The NEW YORK STATE URBAN DEVELOPMENT CORPORATION; the Times Square Redevelopment Corporation; William J. Stern as Chairman and President of both the Urban Development Corporation and the Times Square Redevelopment Corporation; Mario M. Cuomo as Governor of the State of New York; the City of New York; Edward I. Koch as Mayor of the City of New York; Park Tower Realty Corporation; and George E. Klein, Defendants.
    No. 84 Civ. 7229 (CBM).
    United States District Court, S.D. New York.
    Jan. 8, 1985.

      LeBoeuf Lamb Leiby & MacRae by Jacob Friedlander, New York City, Norman Dorsen, New York City, for plaintiffs.
    Leahey & Johnson, P.C. by Peter James Johnson, New York City, for defendants N.Y.S. Urban Development Corp., Times Square Redevelopment Corp., and Stern.
    Robert Abrams, Atty. Gen. of the State of N.Y. by Barrie L. Goldstein, Asst. Atty. Gen., New York City, for defendant Cuomo.
    Frederick A. 0. Schwartz, Jr., Corp. Counsel by Gary Schuller, New. York City, for defendants Koch and City of New York.
    Shea & Gould by Dean G. Yuzek, New York City, for defendants Park Tower and Klein.
   OPINION

MOTLEY, Chief Judge.

Plaintiffs, owner and lessee of an office building located on the corner of 41st Street and Broadway in Manhattan, sue to enjoin condemnation of their building to make way for the proposed Forty-Second Street Development Project. Plaintiffs allege that the proposed taking of their building is neither for nor rationally related to a public purpose, and therefore amounts to an unconstitutional taking in violation of the fifth and fourteenth amendments. Plaintiffs bring their claim pursuant to 42 U.S.C. section 1983. All defendants have moved to dismiss on essentially three different theories: 1) failure to state a claim on which relief may be granted, 2) the doctrines of ripeness, abstention, and comity, and 3) improper joinder of parties. The court halted all discovery in this action pending resolution of the motions to dismiss, and ordered that these motions be addressed solely to the face of the complaint. Therefore, since plaintiffs have had no opportunity to develop the factual basis of their complaint, the court has taken no notice of the factual affidavits submitted by defendants in support of these motions. For the reasons set forth below, however, defendants’ motion to dismiss is granted. FACTS:

This case is one of several to arise out of the large scale joint effort by the City and State to redevelop the Times Square area. For purposes of these motions, the factual background contained in the complaint will suffice.

On or about June 27, 1980, defendants Urban Development Corporation (UDC) and the City entered into a Memorandum of Understanding providing that the City and UDC would jointly prepare a plan and designate a developer to redevelop the Times Square vicinity, and that the UDC would have responsibility for implementation of the plan. In November, 1982, the UDC formed the Times Square Redevelopment Corporation (TSRC) as its subsidiary with primary responsibility for the development of Times Square.

Pursuant to the Memorandum of Understanding, the City and the TSRC have formulated the Forty-Second Street Development Project. The UDC has stated that the goals of the Project are “to eliminate blight on 42nd Street between Broadway and Eighth Avenue, to revitalize this vital crossroad and integrate it into the theatrical, cultural and commercial life of the city.” Complaint paragraph 16.

The Project consists of several elements: Renovation of nine theaters on 42nd Street, subway station improvements, a new hotel, a large wholesale merchandise mart, and four new office towers ranging from 29 to 56 stories in height. One of the four towers, planned for the southern edge of the Project area, would be built partially on the site now occupied by the Rosenthal building. The site for the office towers will be assembled by the UDC through the use of the power of eminent domain. The actual construction of the buildings, however, will be undertaken by the designated private developer, defendant Park Tower Realty, of which defendant Klein is a principal. The buildings will be leased to Park Tower on a long-term basis and operated by Park Tower as private office buildings. In return, Park Tower will make contributions towards the subway and theater improvements.

Since the filing of the complaint in October, the City’s Board of Estimate has approved the project and the UDC has published its findings in connection with the proposed condemnation, which could commence this spring. However, the condemnation may be delayed by the pendency of state and federal proceedings challenging the project.

Plaintiffs have owned and done business in their building for approximately 25 years. For the purposes of these motions, the court accepts as true plaintiffs’ assertions that the building is structurally sound, attractively maintained, fully occupied, and in no way blighted. Plaintiffs maintain that since they do not contribute to the spread of blight, the condemnation of their building is not rationally related to the UDC’s stated goal of combatting blight. Plaintiffs urge that the taking of their building therefore be declared unconstitutional on two different grounds: First, that the building is being condemned solely to make money for defendant Klein, which is alleged to be a constitutionally illegitimate private purpose, and second, that the use of condemnation to raise funds for subway and theater renovations is an unconstitutional substitution for taxation.

Defendants urge this court to abstain from reaching the merits of plaintiffs’ claims on the basis that the controversy is not yet ripe, and under the doctrines of abstention and comity. Defendants suggest that proceedings challenging the Project's blight findings under section 207 of the State’s Eminent Domain Procedure Law should be allowed to proceed prior to any federal court intervention. In addition, all defendants except the UDC, the TSRC, and Stern argue that they are improperly joined since they either lack the power of condemnation or will not exercise it in this case; the injunctive relief sought therefore cannot be had against them. Finally, all defendants urge that the complaint be dismissed on its face under the well established doctrine that the courts will not second-guess the contours of a public redevelopment plan so long as a legitimate public purpose for the plan exists.

Plaintiffs argue in turn that the imminence of state condemnation proceedings makes this case ripe for decision, that the availability of a state forum does not require the federal court to abstain from reaching a claim pursuant to section 1983, and that in any event the available state forum is inadequate. Plaintiffs further argue that the close cooperation between all defendants in formulating and executing the Project makes appropriate their joinder as defendants here. Finally, plaintiffs urge that notwithstanding the long line of cases requiring judicial deference to state redevelopment plans, this case nevertheless requires the court to intervene to prevent a taking entirely for private gain, which has never been approved in prior cases.

DISCUSSION:

Defendants’ procedural arguments can be disposed of summarily. Any doubt that objections to the condemnation of property for the Project presented a ripe controversy at the time of the filing of this complaint have been dispelled by the Project’s approval by the Board of Estimate and the publication of the UDC’s findings. Condemnation is imminent and so is plaintiffs’ alleged loss. Moreover, assuming that plaintiffs have pleaded a substantial constitutional cause of action, this court sees no need to abstain in deference to possible state proceedings filed after the commencement of this action.

The argument of some defendants that they are not proper parties to this action gives the court more pause. However, while the relief sought here technically is only injunction of the condemnation of plaintiffs’ building, this court believes that the concerted activity of all defendants in bringing about this project justifies their joinder here. See Archer Gardens, Ltd. v. Brooklyn Center Dev. Corp., 468 F.Supp. 609, 613 (S.D.N.Y.1979) (private developer acting in concert with state officials is proper party to section 1983 action challenging alleged taking). If plaintiffs state a valid cause of action, it may be possible for them to show that all defendants acted under color of state law to deprive them of their rights. If there is no valid cause of action, then the question is moot. The court proceeds, therefore, to the question of whether the complaint in this case states a claim upon which relief may be granted.

Defendants rely largely on the landmark case of Berman v. Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27 (1954), in which the Supreme Court established the now-familiar principle that courts will not second-guess the decisions of local government in land use and redevelopment. Berman held that the elimination of blight is a legitimate governmental goal and that condemnation and redevelopment are within the police powers of the state in attaining that goal. Id. at 33-34, 75 S.Ct. at 102-103. The Court rejected a property owner’s claim that the taking was improper because his property was not blighted and because the property in question would be put into private hands. Since the government had legitimately found the area blighted, the Court would not sit in judgment over the boundary lines of the project. Id. at 35-36, 75 S.Ct. at 103-104.

So well settled is the principle of deference to land use decisions that at least one federal court has held that it lacked even subject matter jurisdiction over an attempt to challenge a local sewage plan in the setting of a civil rights action. “Section 1983 was never intended as a vehicle for federal supervision of land use policy.” City of Oak Creek v. Milwaukee Metropolitan Sewerage District, 576 F.Supp. 482, 487 (E.D.Wis.1983). Such a claim must be dismissed absent “compelling evidence of a genuine civil rights violation.” Id.

The Supreme Court most recently reaffirmed the central themes of Berman in Hawaii Housing Authority v. Midkiff, — U.S. -, 104 S.Ct. 2321, 81 L.Ed.2d 186 (1984). In Midkiff, the Court upheld a state land reform procedure aimed at breaking up large land holdings in Hawaii, rejecting a claim that it amounted to an unconstitutional taking. The Court concluded that since the purpose of eliminating oligarchical control of land was a legitimate one, Hawaii could use a condemnation-like proceeding to put land ownership into more diverse hands.

The mere fact that property taken outright by eminent domain is transferred in the first instance to private beneficiaries does not condemn that taking as having only a private purpose. The Court long ago rejected any literal requirement that condemned property be put into use for the general public.

Id., — U.S. at -, 104 S.Ct. at 2331, 81 L.Ed.2d at 199.

These fixed principles narrow our inquiry. Recognizing this, plaintiffs maintain that this case involves a purely private taking with no public purpose whatsoever, which the Midkiff court held would be unconstitutional and void. Id., — U.S. at -, 104 S.Ct. at 2331-2332, 81 L.Ed.2d at 200. Plaintiffs argue strenuously that there is a serious factual dispute as to the true nature of this project, and that their version requires us to distinguish this case from Midkiff and Berman.

Plaintiffs assert that the Forty-Second Street Project is a very different kind of project from that which has been approved before. The Project, they argue, is not a wholesale clearing of blighted areas and does not involve the upgrading of housing as in Berman, but is merely an attempt to use redevelopment to eliminate the social blight of drugs and crime in Times Square. Here, plaintiffs argue, since defendants have chosen not to level the whole neighborhood but selectively to demolish, restore, or leave alone each building within the project area, the decision of which buildings are to be demolished must not be arbitrary and capricious if the Project is to withstand the rational relationship test. This is not a case where a private landowner seeks to protect a small pocket of non-blight and holds up development of a blighted area. Rather, plaintiffs argue, the project is being enlarged to take in desirable, non-blighted property for the sole purpose of generating additional profit for Klein.

Plaintiffs assert that the Candler and Hotel Carter buildings, in much worse condition and more centrally located in the project area, will be left untouched for illegitimate reasons—the Candler building because its owner is said to be well-connected politically, and the Hotel Carter because the government allegedly seeks to avoid paying relocation costs to the welfare families who live there.

Plaintiffs also point out that a “white paper” prepared by the law firm of Cadwalader, Wickersham, and Taft for Milstein Properties, a rival developer, raises serious questions of improper political influence in the selection of Klein as developer. Plaintiffs allege that when Milstein was about to be chosen as developer of the merchandise mart that will be built as part of the Project, the City threatened to back out of the Project unless Klein, who is a supporter of Mayor Koch, were given half the job. Park Tower, plaintiffs assert, will earn about $650 million on the Project, while contributing only about five percent of that for subway and theater improvements.

All of the foregoing, say plaintiffs, establishes that this is primarily a private real estate development for Klein’s profit, replacing one non-blighted office building with another, with marginal public benefit. To the extent that the developer contributes money for public amenities, plaintiffs argue that that is an improper use of eminent domain to raise money in lieu of taxation. Even if legitimate, the comparatively modest amount of money involved could be raised from two large office towers, instead of the four planned. The only reason for the additional two buildings, which necessitate the taking of plaintiffs’ property, is to make more money for Klein. Plaintiffs insist that the complaint therefore states a cause of action under Midkiff, because this allegedly private taking is not rationally related to a public purpose.

In sum, plaintiffs argue that Midkiff and Berman provide for a narrow role for courts which is appropriate to exercise here: when a taking is planned solely for a private purpose, it must be held unconstitutional. If the taking of the Rosenthal building is permitted, they argue, New York real estate will be fundamentally changed, because politically connected developers will be able to assemble sites for development with the aid of eminent domain, freely condemning desirable property adjacent to arguably blighted areas.

Plaintiffs are correct that Midkiff provides a narrow role for this court—a very narrow role indeed. Absent evidence that a proposed taking treads on a specific constitutional right, we are concerned only that a taking is rationally related to some legitimate public purpose. It is clear from the foregoing recitation that many of plaintiffs’ assertions are far too broad to address this limited concern, and are clearly precluded by the settled law of Berman and Midkiff It is too late in the day to assert that it makes any difference that this Project does not involve housing, that it will give property to private developers, that those developers will make a profit, that the boundary lines could have been drawn differently, that plaintiffs’ property is not blighted, or even that the Project is poorly designed to serve its goals. These matters are, for better or worse, squarely within the discretion of the political branches. Even if this court were to conclude that this Project is a mammoth boondoggle, socially and architecturally ill-advised, it would still be a question for the political process, not a federal court.

But plaintiffs here allege more: They allege that fighting blight is not, as a matter of fact, the motivation behind this Project. They assert that the actual reason for the project is to make money, specifically for a developer who is alleged to be a close supporter of the Mayor and other politicians. In other words, without disputing that the state basically may do what it likes so long as it intends to fight blight and might reasonably believe that this project would further the goal, plaintiffs assert that defendants here did not so believe or so intend. They were motivated instead simply by the desire to make money for Klein.

Defendants conceded at oral argument that if plaintiffs’ allegations, in this extreme form, were literally true, then the complaint would state a cause of action. Defendants maintain, however, that the suggestion that no public purpose of any kind exists for the Forty-Second Street Project must be rejected on the face of the complaint. This court agrees. The complaint itself refers to the broad public purposes behind this Project: To eradicate blight in Times Square and to revitalize the area culturally and commercially. Defendants argue that this court can take judicial notice of the violent crime, drug traffic, and physical deterioration of the Times Square area, and plaintiffs do not appear to dispute the point. In fact, plaintiffs do not even plead that the Project lacks a public purpose. Instead, they limit their allegations to the purpose underlying the taking of the Rosenthal building. See Complaint paragraphs 21-23.

It is clear, then, that a substantial, legitimate public purpose underlies the Project, and that a large scale redevelopment plan such as is described in the complaint is rationally related to serving that purpose. Plaintiffs would have us avoid this conclusion by permitting them to prove that the “true” motivation behind the project is private profit. Such an argument flies in the face of reality, even as portrayed in plaintiffs’ own pleading. It is not enough that the Project planners were partially motivated by the desire to make money for private developers. Such mixed motivations seem politically inevitable and perhaps are necessary to the success of this kind of project. To constitute a purely private taking and thus fit within the narrow exception of Midkiff, plaintiffs must demonstrate that no public purpose exists for the Project. This they cannot do.

To the extent that plaintiffs can prove favoritism in the selection of one developer over another, there may be a violation of state law necessitating a new selection, but this does not go to plaintiffs’ constitutional claim. In order to state a constitutional cause of action, plaintiffs would have to charge a level of corruption beyond that pleaded or reasonably inferred from the pleading here. Plaintiffs would have to be able to plead that the public purposes put forth for the plan were a sham and a fraud on the public, and that the project existed to profit defendant Klein—not merely that it was shaped in such a way as to make it more profitable for him. Since this would amount to a serious allegation of public fraud, it would have to be pleaded with specificity. Despite the complaint’s conclusory allegation that the taking of the Rosenthal building is solely for Klein’s benefit, the court does not understand the plaintiffs to allege that this kind of fraud is taking place. Once a legitimate public purpose for the overall project is conceded, however, the court cannot get involved in parsing the particular degree of public or private motivation behind the inclusion of a particular site in the Project area, so long as that inclusion could rationally be related to the public purpose of the plan as a whole.

Plaintiffs also argue that since Midkiff approved Hawaii’s plan aimed at breaking up oligarchical land holdings, New York may not now use this Project to concentrate land ownership in the Times Square area in fewer hands. This argument, too, must be rejected. Midkiff does not represent Supreme Court endorsement of diversified rather than centralized land ownership. Rather, the case stands for the more general proposition that states have broad discretion to define public purposes and to formulate plans within the police power to address them. Nothing in the Constitution prevents a state from deciding that in a particular area diversity of land ownership stands in the way of full economic development, and that assembling a major site to be developed as a piece is the best way to serve the public purposes of eliminating blight, creating jobs, and broadening the tax base.

In evaluating plaintiffs’ argument that the raising of money for subway and theater renovation through the condemnation of the Rosenthal building is a constitutionally illegitimate substitute for taxation, the court must again look at the overall goals of the project. It would be simplistic to view this fundraising mechanism in a vacuum, apart from the total development plan. Plaintiffs cite Courtesy Sandwich Shop v. Port of New York Authority, 12 N.Y.2d 379, 388, 240 N.Y.S.2d 1, 5, 190 N.E.2d 402, 406 (1963) for the proposition that a condemnation solely undertaken to produce revenue, with no other primary purpose, would be unconstitutional. In that case, however, the New York Court of Appeals found acceptable the use of portions of the World Trade Center development to produce incidental revenue for other parts of the port development project. Such incidental fundraising “does not vitiate the public purpose of the development as a whole.” Id. at 390, 240 N.Y.S.2d at 7, 190 N.E.2d at 408.

Similarly, it is perfectly legitimate that portions of the Forty-Second Street Project will help generate funds to support other aspects of the Project. The court rejects the suggestion that since these office towers replace other office buildings their only possible purpose is to raise a few million dollars for subway and theater improvements. These buildings are a major part of the overall redevelopment scheme, and it would be quite reasonable for the project planners to conclude that this kind of large scale redevelopment, bringing thousands of new people into the neighborhood and radically changing the physical configuration of the area, would further the Project’s overall goals of eliminating blight and revitalizing Times Square.

Plaintiffs insist that if this taking is permitted the worst excesses of the New York real estate industry will flourish unchecked, with choice properties plucked at random from their rightful owners through eminent domain and turned over to politically-connected developers. If the Forty-Second Street Project is permitted to reach down to Forty-First Street to encompass a non-blighted office building, ask plaintiffs, what is to stop the state from condemning Herald Square or Gramercy Park for redevelopment, with the profits to support subway improvements and theater renovations?

The short answer is that the political process will stop it. Within very broad constitutional parameters monitored by the courts, our system leaves such land use questions to the elected representatives of the people. It is through political give and take in the legislative and executive branches that some areas are landmarked, others designated for redevelopment, still others left to the free market. This process does not always result in plans that are wise, tasteful, or even fair. The court is confident, however, that the political process will not permit defendant Klein or anybody else to turn Central Park into condominium apartments.

The federal courts remain available for challenges to truly private or truly irrational takings, as the Supreme Court acknowledged in Midkiff. We do not face such a situation here, and need not dwell on hypothetical. The Forty-Second Street Project has emerged from the political process as a comprehensive attempt to address the implacable problems of crime and decay in Times Square. It addresses legitimate public purposes in a reasonable way, and the inclusion of the Rosenthal building, less than a block from the core area of blight, is certainly not irrational. Absent a particularized pleading of public fraud, or evidence of some other specific constitutional violation, that is enough to pass the scrutiny of this court.

For the foregoing reasons, the court holds that plaintiffs fail to state a cause of action on which relief may be granted. Defendants’ motion to dismiss is granted.


source: Caselaw Access Project

author: ALLEN, Chief Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. ALCAN ALUMINUM LIMITED, Alcan Aluminum Corporation, and Atlantic Richfield Company, Defendants.
    Civ. A. No. C 84-1028 L(A).
    United States District Court, W.D. Kentucky, Louisville Division.
    Jan. 15, 1985.

      Ronald Meredith, U.S. Atty., Louisville, Ky., Steven C. Douse, U.S. Dept. of Justice, Antitrust Div., Washington, D.C., for plaintiff.
    James D. Moyer, Louisville, Ky., Jerome G. Shapiro, Ronald A. Stern, Washington, D.C., Edward E. Clark, Los Angeles, Cal., William E. Jackson, Charles Westland, New York City, Richard W. Pogue, A. Theodore Gardiner, III, Cleveland, Ohio, William E. Swope, Washington, D.C., Sanford Yosowitz, Alcan Alum Corp., Cleveland, Ohio, for defendants.
   MEMORANDUM OPINION

ALLEN, Chief Judge.

This action is submitted to the Court upon the motion of the parties to enter a Consent Judgment. It is the Court’s duty to review the proposed Consent Judgment, pursuant to 15 U.S.C. § 16(e), which requires in part that before entering any consent judgment proposed by the United States under this section, the Court shall determine that the entry of such judgment is in the public interest.

In 1984 the United States, acting through its Department of Justice, brought this action under Section 7 of the Clayton Act, 15 U.S.C. § 18, challenging the acquisition by Alcan Aluminum Limited (hereinafter “Al-can”) of an aluminum rolling mill in Logan County, Kentucky, from Atlantic Richfield Company (hereinafter “ARCO”), which is a domestic corporation engaging primarily in the petroleum business.

In 1977 Alcan acquired Anaconda Aluminum Company (hereinafter Anaconda). Alcan is a Canadian corporation which is the largest producer of aluminum in the world. Its wholly owned subsidiary is Al-can Aluminum Corporation (hereinafter “Alcancorp.”), a United States corporation which is the fourth largest manufacturer of aluminum can body stock in the United States. The three largest producers are Aluminum Company of America (hereinafter “Alcoa”), Reynolds Metals Company (hereinafter “Reynolds”), and Kaiser Aluminum and Chemical Corporation (hereinafter “Kaiser”).

Arco has recently completed a rolling mill in Logan County, Kentucky, at a total cost of at least $250,000,000. It is the only complete rolling mill built in the United States in the last ten years, and its current capacity of approximately 315,000,000 lbs. is devoted entirely to the production of aluminum can body stock, which represents 14.4 percent of total 1983 shipments. It can be expanded to double its present capacity.

Arco has not engaged in the production of aluminum can body stock. When its proposed sale of its Logan County Plant to Alcan became known, the United States sought, by its complaint in this action, to prohibit the sale on the grounds that it violated Section 7 of the Clayton Act. Subsequent to the filing of the complaint, the parties agreed and have tendered to the Court the Consent Decree, which provides that the Plant shall be owned 60% by Arco and 40% by Alcan. The Consent Decree does, however, allow Alcan to acquire more than a 40% ownership interest in the Logan County Plant if it funds more than 40% of a future capital improvement in which Arco or its successor declines to participate fully-

The Decree also allows either party to finance up to 100% of a future capital improvement, and to have the use of such improvement in proportion to its ownership interest, in the event that the other party does not choose to participate. However, the Decree provides that in that event, Alcan’s greater participation in a future capital improvement would not decrease Arco’s capital utilization rights in the original facility to which it is entitled by reason of its 60% ownership interest.

The Decree prohibits Arco from selling, leasing or transferring to Alcan any part of its ownership interest in the Logan County Plant during the ten-year term of the Consent Decree. Both Alcan and Arco are prevented by the Consent Decree from transferring their interest in the Plant to any of the three major domestic competitors, Alcoa, Reynolds or Kaiser. Any transfer by Arco of less than all of its interest to any other entity may not be made without the consent of the Department of Justice or the Court.

The Decree also provides that if, within three years of entry of the Final Judgment, Arco sells its interest in the Logan County Plant, and during that period Alcan undertakes a capital improvement of the heavy gauge cold mill production center, in which Arco has failed to acquire up to a 60% interest, the successor to Arco’s interest will be accorded the right to purchase up to 60% interest in that improvement. The Decree also provides that the Plant will be operated by an independent management company to be owned 60% by Arco and 40% by Alcan. This proportion will remain constant during the ten-year term of the Decree, regardless of any possible changes in the parties’ ownership interest in the Plant, resulting from the disproportionate funding of capital improvements. A majority of the management company's board of directors will be designated by Arco, and each party will designate an independent director. Neither party may offer a position of officer, director or employee to an independent director of the management company.

The Decree requires Arco to set up a separate marketing organization and sell its share of the Plant’s output independently of Alcan. It also requires that each party to the joint venture make marketing decisions independently as to the products produced for it at the Logan County Plant.

The Decree also prohibits Alcan and Arco from selling aluminum can body stock to each other, except for temporary shortages or other emergencies, not to exceed 1,000,-000 lbs. a year.

The Decree also prohibits Alcan and Arco from communicating with each other, either directly or independently, or through the management company, with regard to competitively sensitive matters, including future production schedules, present or future terms or conditions of sale, sales forecasts, marketing plans, and sales or proposed sales to specific customers.

The only objections to the proposed Consent Decree have emanated from Alcoa and Reynolds. Both companies object to Section IV, Paragraph B 6 of the Consent Judgment. That section reads as follows:

Each party to the joint venture may utilize any unused portion of the other party’s capacity by assuming the variable costs, but not the fixed costs, attributable to the added production.

Both Alcoa and Reynolds argue that this section provides a loophole that could subvert the remedial purposes of the Consent Decree.

The Government responded to this charge with the argument that because of financial incentives built into the Decree, the provision is not likely to have any effect at all; and secondly, that if it were to become effective, the risk of subversion of the Decree is more than offset by the economic benefit of achieving greater utilization of the Plant’s production capacity. In addition to the objections made by Alcoa, Reynolds argues that there should be a flat prohibition on the exchange of competitively sensitive information.

The authority vested in this Court under the statute is one of insuring that the Government has not breached its duty to the public in consenting to the Consent Decree. The Court is not required to determine whether the Decree is the one that will best serve society, but whether it is “within the reaches of public interest.” See United States v. Bechtel Corporation, 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083, 102 S.Ct. 638, 70 L.Ed.2d 617 (1981). See also, United States v. American Telephone and Telegraph Company, 552 F.Supp. 131, 151 (D.C.D.C.1982).

Judge Greene, in United States v. American Tel. and Tel. Co., supra, held that while the court is not as free to exercise its discretion in fashioning a remedy as it would be upon a finding of liability, it does not follow that it must unquestionably accept a consent decree as long as it somehow, and, however inadequately, deals with the antitrust problems implicated in the lawsuit. Id. at 151.

Using the principles stated above as general guidelines, the Court believes that the proposed Decree should be approved, even though it falls short of the remedy that the Court might have imposed had the matter been litigated. Taken as a whole, the Decree provides for the entry of a new competitor, that is, Arco, into the market. Also, of course, the Decree allows Alcan to increase its share of the market in what is a highly concentrated market. These two considerations offset each other to some extent, but the pro-competitive interests advanced outweigh the antitrust competitive interests.

It is true also that the provision that the concerns expressed by Alcoa and Reynolds with regard to Section IV, Paragraph B 6 do touch upon an area that might conceivably subvert the general purposes of the Consent Decree. But here again, that possibly is at least countered to a significant extent by the fact that this provision gives an incentive to Arco to see to it that the production of the Plant is maintained at relatively high levels.

Finally, we think it significant that no consumers of aluminum can body stock have appeared to voice any objections to the proposed Consent Decree, and that the only objections come from companies which have a higher share of the market than the parties to the Decree.

In conclusion, we will sign the Consent Decree tendered by the United States.

FINAL JUDGMENT

Plaintiff, United States of America, having filed its complaint herein on October 5, 1984, and the plaintiff and defendants, by their respective attorneys, having consented to the entry of this final judgment without trial or adjudication of any issue of fact or law herein and without this final judgment constituting any evidence against or an admission by any party with respect to any issue of law or fact herein;

Now, therefore, before the taking of any testimony and without trial or adjudication of'any issue of fact or law herein, and upon consent of the parties hereto, it is hereby

ORDERED, ADJUDGED AND DECREED:

I.

This Court has jurisdiction of the subject matter of this action and each of the defendants consenting hereto. The complaint states a claim upon which relief may be granted against each defendant under Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18.

II.

As used in this final judgment:

A. “Alcan” means the defendants Alcan Aluminium Limited and Alcan Aluminum Corporation, each division, subsidiary, or controlled affiliate of either of them, each officer, director, employee, attorney, agent, or other person acting for or on behalf of any of them, and each successor to their interest in the Logan plant, except that the management company shall not be deemed an affiliate of Alcan for the purposes of this final judgment;

B. “Arco” means the defendant Atlantic Richfield Company, each division, subsidiary, or controlled affiliate thereof, each officer, director, employee, attorney, agent, or other person acting for or on behalf of any of them, and each successor to its interest in the Logan plant, except that the management company shall not be deemed an affiliate of Arco for the purposes of this final judgment;

C. “Party to the joint venture” means Alcan or Arco;

D. “Logan plant” means the aluminum rolling mill located in Logan County, Kentucky;

E. “Management company” means the corporation that has been, or will be, formed by Alcan and Arco to operate the Logan plant;

F. “Production center” means that portion of the Logan plant dedicated to one of the following functions: melting and casting, scalp and saw, preheat, hot roll, heavy gauge cold mill, light gauge cold mill, doubler and separator, anneal, coat, slit, level, and pack and ship;

G. “Heavy gauge cold mill production center” means the production center consisting of the existing Wean United cold rolling mill and any other cold rolling mill added to the Logan plant that is designed to be used or is capable of being used economically to produce can stock;

H. “Capital improvement” means any alteration, addition, expansion, replacement, enhancement, or other improvement to one or more of the Logan plant’s production centers that constitutes a capital investment within the generally accepted meaning of that term and which is designed or intended to increase production capacity, quality, or efficiency;

I. “Fixed costs” means the costs and expenses incurred in operating the Logan plant listed in exhibit 6 to this final judgment;

J. “Variable costs” means operating costs and expenses other than fixed costs;

K. “Capacity” means the ability of the Logan plant to produce rolled aluminum products, or of an individual production center to perform a distinct function that is part of the production of rolled aluminum products, as measured by maximum tonnage produceable on an annual basis or by total available machine hours on an annual basis, whichever is appropriate for the type of production center involved;

L. To “sell” an interest in the Logan plant or the management company means to sell, lease, or otherwise transfer or dispose of, in any manner, all or any part of that interest;

M. To “acquire” an interest in the Logan plant means to acquire, purchase, lease, or otherwise obtain, in any manner, all or any part of that interest; and

N. “Person” means any natural person, corporation, association, firm, partnership, or other business or legal entity.

III.

A. The provisions of this final judgment shall apply to the defendants Alcan and Arco, their respective successors and assigns, the management company, and to all other persons in active concert or participation with any of them who shall have received actual notice of this final judgment by personal service or otherwise.

B. Each defendant shall require as a condition of the sale of its interest in the Logan plant that the person acquiring such interest agree to be bound by the provisions of this final judgment. A copy of the acquiring person’s agreement to be bound shall be filed with plaintiff and the Court prior to consummation of the sale.

C. Each defendant shall provide written notice to the plaintiff no later than 30 days subsequent to the effective date of any action whereby the defendant (1) changes its name, (2) liquidates or otherwise ceases operation, (3) declares bankruptcy, or (4) is acquired by or becomes a subsidiary of another firm.

IV.

A. Alcan shall- not acquire from Arco, and Arco shall not sell to Alcan, any interest in the Logan plant, except in accordance with the terms of this final judgment.

B. Alcan and Arco may enter into a joint venture for the operation of the Logan plant pursuant to the agreements attached as exhibits 1 through 5 to this final judgment, as such agreements may be amended from time to time in conformity with sections IV(B)(16) and (17) of this final judgment, subject to the following limitations:

1. Alcan shall not acquire more than a 40 percent ownership interest in the Logan plant or in any of its individual production centers, except by funding more than 40 percent of a capital improvement as permitted by section IV(B)(2) of this final judgment, and in such event the addition to Alcan’s ownership interest shall be in proportion to the percentage of the capital improvement funded by Alcan.

2. Arco shall be given the opportunity to participate in any capital improvement undertaken at the Logan plant by funding up to 60 percent of its cost. If Arco elects not to participate in a proposed capital improvement, or elects to fund less than 60 percent of its total cost, Alcan may fund the remaining cost of the improvement, up to 100 percent. If Alcan elects not to participate in a proposed capital improvement, or elects to fund less than 40 percent of its total cost, Arco may fund the remaining cost of the improvement, up to 100 percent. The ownership interests of Alcan and Arco in the Logan plant and in its individual production centers may be adjusted in proportion to their funding of capital improvements. In no event shall a capital improvement decrease the initial capacity utilization rights to which Arco is entitled under section IV(B)(4) of this final judgment by reason of its initial 60 percent ownership interest in the Logan plant.

3. If within three years of the entry of this final judgment Arco sells its interest in the Logan plant, and if prior to the sale of Arco’s interest (a) a capital improvement of the heavy gauge cold mill production center has been undertaken, (i) of which Arco has elected to fund less than 60 percent, or (ii) in which Arco has failed or declined to participate, or (b) a capital improvement has been proposed and the time period available to Arco to decide whether it should participate has not yet expired, then the person acquiring Arco’s interest shall have the right, within six months after its acquisition of that interest, to serve notice upon Alcan of its intent to purchase up to 60 percent of such capital improvement. The purchaser shall acquire the interest in the capital improvement eighteen months from the date of the notice or on such other date as may be agreed to by the parties. The purchase price for any portion of a capital improvement acquired pursuant to this provision shall be the amount agreed upon by Alcan and the purchaser of Arco’s interest; however, failing such agreement, the purchase price shall be an amount which in constant dollars would be equal to the purchaser’s pro rata share of (a) the costs of the studies relating to the capital improvement and (b) the capital cost of such capital improvement, including start-up costs, adjusted to reflect imputed depreciation calculated on a straight-line basis over a period of 20 years.

4. Each party to the joint venture shall have the right to use the capacity of the Logan plant in proportion to its ownership interest. Capacity utilization rights shall be determined individually for each production center in the plant. Capacity utilization rights for each production center shall be in the same proportion as the parties’ ownership interests in the plant, unless the parties’ relative interests have been altered by a capital improvement, in which case the parties’ capacity utilization rights for the improved production centers shall be adjusted accordingly.

5. Each party to the joint venture shall contribute to the fixed costs of operating each production center of the Logan plant in proportion to its ownership interest in that individual production center. Other fixed costs relating to the Logan plant shall be borne in proportion to the parties’ equity interests in the plant as a whole. A party’s failure to utilize all of the capacity of any production center to which it is entitled shall not reduce its obligation to pay its full share of fixed costs attributable to that production center. This obligation must be discharged at least annually. Neither party to the joint venture shall reimburse the other directly or indirectly for any of its fixed costs, except as currently provided for in section 7.2(b) of the Logan Joint Venture Agreement attached as exhibit 1 to this final judgment.

6. Each party to the joint venture may utilize any unused portion of the other party’s capacity by assuming the variable costs, but not the fixed costs, attributable to the added production.

7. Within the constraints imposed by its share of the capacity of the various production centers at the Logan plant, each party to the joint venture shall independently of the other party determine the character, specifications, and level of output of the products made for it at the Logan plant.

8. Each party to the joint venture shall independently set the terms and conditions of sale of the products made for it at the Logan plant. Each party shall maintain a separate marketing organization and shall undertake independently to sell or use internally its share of the output of the Logan plant. Except for technical support and shipping services furnished by the management company, each party to the joint venture shall be solely responsible for its own sales, customer service, customer relations, credit, billing, and collection functions.

9. Alcan and Arco shall not sell or transfer to each other or for each other’s account any can stock, excepting such limited quantities (not to exceed one million pounds annually unless the Department of Justice agrees otherwise) as may be necessary to round out an order or to respond to temporary shortages or other emergencies.

10. The Logan plant shall be operated by a management company in which Alcan shall have no more than a 40 percent ownership interest. The management company shall administer the joint venture in accordance with the terms of this final judgment. It shall be solely responsible for the physical operation of the Logan plant, including but not limited to acquiring necessary supplies and services, hiring employees and independent contractors, scheduling production, computing costs and production rights, and carrying out capital improvements.

11. The management company shall be controlled by a board of directors, a majority of which shall be designated by Arco. Alcan and Arco shall each designate one independent director who shall not be a present or past officer, director, or employee of Alcan or Arco. Neither Alcan nor Arco shall offer a position as an officer, director, or employee of either company to an independent director of the management company during the director’s term of service.

12. A quorum of the management company board of directors shall consist of at least three directors, one of whom shall be an independent director and a majority of whom shall be directors designated by Arco. A majority vote of the directors present at a meeting at which there is a quorum shall be sufficient to decide all matters coming before it, except as otherwise provided by this final judgment or the existing terms of the Logan Aluminum Inc. By-Laws or Certificate of Incorporation attached as exhibits 4 and 5 to this final judgment. Additional exceptions may not be adopted without approval of the Department of Justice.

13. The chief executive officer of the management company shall be appointed by a majority of the directors of the management company designated by both Al-can and Arco and may be removed by a majority vote of the directors designated by either Alcan or Arco.

14. The management company board of directors may operate through committees, provided that at least one independent director shall be a member of each such committee, and provided further that the committees may be dissolved by a majority vote of the directors designated by either Alcan or Arco.

15. No officer or employee of the management company may be simultaneously an officer, director, or employee of Alcan or Arco.

16. Any amendment to the agreements establishing the joint venture, attached as exhibits 1 through 5 to this final judgment, shall be filed with the Department of Justice at least 30 days prior to its effective date.

17. The terms of this final judgment shall prevail over any inconsistent provisions in the agreements establishing the joint venture, attached as exhibits 1 through 5 to this final judgment, or in any amendments or supplements to those agreements that may hereafter be made by the parties to the joint venture.

18. Forthwith upon the formation of the management company, Alcan and Arco shall cause it to execute a stipulation in the form annexed hereto as exhibit 7 pursuant to which the management company agrees and consents to be bound by the terms and provisions of this final judgment.

V.

A. Alcan and Arco shall not agree or communicate with each other, directly or indirectly, regarding each other’s future production schedules for specific rolled aluminum products, present or future prices or other terms or conditions of sale, volume of shipments, marketing plans, sales forecasts, or sales or proposed sales to specific customers of aluminum products; provided, however, that nothing in this provision shall prevent Alcan and Arco from communicating with each other concerning bona fide purchase and sale transactions between them or from communicating information that is or has been generally announced or generally published.

B. Neither party to the joint venture shall communicate with the management company or any of its officers or employees regarding the other party’s future production schedule for specific rolled aluminum products, present or future prices or other terms or conditions of sale, volume of shipments, marketing plans, sales forecasts, or sales or proposed sales to specific customers of aluminum products; provided, however, that nothing in this provision shall prevent Alcan and Arco from communicating with the management company concerning bona fide purchase and sale transactions between them or from communicating information that is or has been generally announced or generally published.

VI.

A. Arco shall not sell part or all of its interest in the Logan plant or the management company to Alcan.

B. Neither Alcan nor Arco shall sell part or all of its interest in the Logan plant or the management company to Aluminum Company of America, Reynolds Metals Company, or Kaiser Aluminum and Chemical Corporation, or any of their respective parents, subsidiaries, affiliates, successors, or assigns.

C. Subject to the prohibitions against sale to the persons identified in sections VI(A) and (B), Arco shall not sell less than all of its interest in the Logan plant or the management company to any person without the prior written approval of the Department of Justice or the Court. At least 45 days in advance of any such sale, the selling party shall notify the Department of Justice of the proposed sale, identify the proposed purchaser, describe the terms of the transaction, and promptly furnish such additional data as the Department may request. Within 30 days of its receipt of such notice, the Department of Justice shall notify the selling party if it objects to the proposed sale. If the Department does not object, the sale may be consummated. If the Department objects, the sale may not be consummated unless approved by the Court.

D. The seller of an interest in the Logan plant or management company that is not covered by sections VI(A) through (C) shall comply with the premerger notification and waiting period provisions of 15 U.S.C. § 18a, if applicable to such sale, or, if not, it shall give notice and, on request, additional information, as provided in section VI(C). In the event that the Department of Justice files suit in opposition to the sale of an interest in the Logan plant or management company, the selling party shall not object to such suit being filed in the district in which this final judgment is entered.

VII.

A. Within 30 days of the date of entry of this final judgment, and annually thereafter, Alcan Aluminum Limited and Atlantic Richfield Company shall provide a copy of the final judgment (excluding exhibits) to each of their officers and directors, and to each of Alcan’s and Arco’s North American managerial and marketing personnel for aluminum rolling mill products, and the management company shall provide a copy of the final judgment (excluding exhibits) plus the stipulation referred to in section IV(B)(18) to its officers, directors, and managerial or supervisory employees. Persons appointed to any of these positions more than 30 days after entry of the final judgment shall be provided a copy of the judgment within 30 days of their appointment.

B. Each person who receives a copy of the final judgment pursuant to section VII(A) shall sign an acknowledgment stating that he or she has read and understands the final judgment and agrees to abide by its requirements.

C. Within 60 days of the date of entry of this final judgment, and annually thereafter, Alcan, Arco and the management company shall notify the Department of Justice in writing that the requirements of sections VII(A) and (B) have been complied with and shall provide the Department with a list of the persons to whom a copy of the final judgment was provided and who signed the acknowledgment specified in section VII(B).

VIII.

A. For the purposes of determining or securing compliance with this final, judgment, and subject to any legally recognized privilege, from time to time:

1. Duly authorized representatives of the Department of Justice shall, upon written request of the Attorney General or of the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to a defendant or the management company made to its principal office, be permitted:
a. access during office hours of such defendant or the management company to inspect and copy all books, ledgers, accounts, correspondence, memoranda, and other records and documents in the possession or under the control of such defendant or the management company, who may have counsel present, relating to any matters contained in this final judgment;
b. access during business hours to the Logan plant; and
c. subject to the reasonable convenience of such defendant or the management company and without restraint or interference from it, to interview officers, employees, and agents of such defendant or the management company, who may have counsel present, regarding any such matters.
2. Upon the written request of the Attorney General or of the Assistant Attorney General in charge of the Antitrust Division made to a defendant’s or the management company’s principal office, such defendant or the management company shall submit such written reports, under oath if requested, with respect to any of the matters contained in this final judgment as may be requested.

B. Minutes shall be kept of all meetings of the management company stockholders, board of directors, and committees designated by the management company board of directors, and these shall be provided to the Department of Justice on request.

C. Alcan, Arco, or the management company shall, upon the written request of the Department of Justice, submit to the Department of Justice such further information as it may request relating to the operation of the joint venture or of the Logan plant, including but not limited to the amount of each product made for each party to the joint venture at the Logan plant, the identity of the customers to which each party sold can stock, the amount sold to each and prices and terms of sale, a description of every capital improvement approved or proposed to the management company, and copies of annual reports or year-end financial reports prepared by the management company.

D. No information or documents obtained by the means provided in this section VIII shall be divulged to any person other than a duly authorized representative of the Executive Branch of the United States, except in the course of legal proceedings to which the United States is a party (including grand jury proceedings), or for the purpose of securing compliance with this final judgment, or as otherwise required by law.

E. If at the time information or documents are furnished by a defendant or the management company to the Department of Justice pursuant to this section VIII such defendant or the management company represents and identifies in writing the material in any such information or documents to which a claim of protection may be asserted under Rule 26(c)(7) of the Federal Rules of Civil Procedure, and said defendant or the management company marks each pertinent page of such material, “Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of Civil Procedure,” then ten days notice shall be given by the Department of Justice to such defendant or the management company pri- or to divulging such material in any legal proceeding (other than a grand jury proceeding) to which that defendant or the management company is not a party.

IX.

Jurisdiction is retained by this Court for the purpose of enabling any of the parties to this final judgment or the management company to apply to this Court at any time for such further orders or directions as may be necessary or appropriate for the construction or carrying out of this final judgment, for the modification of any of its provisions, for the enforcement of compliance with it, and for the punishment of any violation of it.

X.

This final judgment will expire on the tenth anniversary of its date of entry.

XI.

Entry of this final judgment is in the public interest.


author: BATTISTI, Chief Judge.

text:
    Rory BROWN, Thomas G. Douglas, Michael W. Oswald, Plaintiffs, v. CONSOLIDATED RAIL CORPORATION, Defendant.
    No. C79-1230.
    United States District Court, N.D. Ohio, E.D.
    Jan. 16, 1985.

      Marcia W. Johnson, Asst. U.S. Atty., Mary Anne Garvey, Cleveland, Ohio, U.S. Dept. of Justice, Dept. of Labor, Washington, D.C., for plaintiffs.
    Thomas R. Skulina, Riemer, Oberdank & Skulina, Cleveland, Ohio, for defendant.
   MEMORANDUM OPINION AND ORDER

BATTISTI, Chief Judge.

This matter is before the Court on cross-motions for summary judgment. Under well-settled rules, the Court may grant summary judgment only if one of the moving parties has proven that it is entitled to summary judgment as a matter of law upon facts to which no genuine issue of materiality exists. For the reasons set forth below, the Court grants partial summary judgment for the plaintiffs in this action.

I.

The above-captioned case was commenced by the plaintiffs under the Vietnam Veteran’s Readjustment Assistance Act of 1974, 38 U.S.C. § 2021 et seq., (the Readjustment Act) to recover sums allegedly due them from the defendant. The action has been filed on behalf of the plaintiffs by the United States Attorney for the Northern District of Ohio in accordance with 38 U.S.C. § 2022.

The plaintiffs were all employed by the Erie-Lackawanna Railroad (the railroad) in non-temporary positions. Plaintiff Rory Brown was first hired by the railroad in April, 1970 as a trackman, but left on October 23, 1970 upon his induction into military service. Mr. Brown received an honorable discharge from the Air Force on June 29,1974 and thereafter made a timely application for reemployment with the railroad. Upon his rehire, he subsequently was promoted to Track Foreman and was awarded a retroactive seniority date in the latter position of August 23, 1971.

Plaintiff Thomas Douglas first worked for the Erie-Lackawanna Railroad in June 1966. On August 15, 1966, Douglas left his position as an Electrician’s Helper to enter the Air Force. Upon his honorable discharge from the Air Force on July 13, 1970, Mr. Douglas also made a timely application for re-employment with his employer and was reinstated in August 1970. He began his re-employment as an Electrician’s Apprentice and upon the completion of the apprenticeship was promoted to the position of a Journeyman Electrician (Mechanic) in December 1975. He was then given a retroactive seniority date in that position of March 30, 1971.

Plaintiff Michael Oswald was originally hired by the railroad in March 1966. On January 30, 1969, Mr. Oswald entered the Air Force after leaving his position with his employer as an Electrician’s Helper. Mr. Oswald received an honorable discharge from the Air Force on November 2, 1970 and was reinstated by the railroad that same month. He began his reemployment as an Electrician’s Apprentice and was eventually promoted to the position of Journeyman Electrician in June 1975. Thereafter he received a retroactive seniority date of February 15, 1971.

The Erie-Lackawanna Railroad, plaintiffs’ employer, was one of a number of bankrupt railroads whose operations were taken over by a government-chartered corporation, the Consolidated Rail Corporation (Conrail), pursuant to the Regional Rail Reorganization Act of 1973, 45 U.S.C. § 701 et seq., (the Regional Rail Act). In incorporating Conrail, Congress established a system of hiring for the railroad that dovetailed the seniority of the employees of the affected railroads and a fund which sought to provide financial protection for certain employees of the predecessor railroads which had been combined to form Conrail. Among the protections to be afforded the employees was a monthly displacement allowance (MDA), 45 U.S.C. § 775(b). The MDA was available to eligible protected employees, who either did not qualify due to their seniority for any position with Conrail or whose hours or positions were curtailed or lowered on account of others having higher priorities regarding seniority and rights to a new position. The plaintiffs qualified as such for MDA’s.

The amount of the MDA was determined by a statutory formula which was originally contingent upon the total compensation of the affected employee. The total compensation considered was to include vacation allowances and monthly compensation guarantees received during the last twelve calendar months prior to the time the employee was adversely affected. In order to qualify as a “countable” 12-month period, the employee had to work more than 50% of his or her normal work schedule in each of the twelve months. The formula was later changed to one relying upon total compensation received during the twelve full calendar months immediately preceding February 26, 1975 and was finally amended to include compensation earned in the twelve months prior to January 1, 1975 (the uniform test period).

Each of the plaintiffs was paid according to the statutory formula. Plaintiff Brown’s MDA was computed based on his actual earnings during his last seven months prior to his departure for the military, April 1970 to October 1970, and the first five months following his return, August 1974 to December 1974. Plaintiff Oswald’s MDA was calculated on the basis of the compensation he actually earned during the uniform test period, from February 1974 to January 1975. Plaintiff Douglas’s MDA was also based on his actual wages earned during the uniform test period.

II.

In moving for summary judgment, defendant asserts that the plaintiffs have failed to exhaust their administrative reme-, dies under the Regional Rail Act and the Railway Labor Act, 45 U.S.C. § 151 et seq., and as such that this Court lacks jurisdiction to hear the matter.

Pursuant to 45 U.S.C. § 777, any “dispute or controversy with respect to the interpretation, application, or enforcement” of the provisions of the Regional Rail Act are to be submitted to an Adjustment Board for a final and binding decision as provided for in the Railway Labor Act, 45 U.S.C. § 153 Second. The Railway Labor Act was created by Congress “to promote stability in labor-management relations ... by providing effective and efficient remedies for the resolution of railroad-employee disputes arising out of the interpretation of collective bargaining agreements.” Union Pacific Railroad Co. v. Sheehan, 439 U.S. 89, 94, 99 S.Ct. 399, 402, 58 L.Ed.2d 354 (1978). Its provisions establish the exclusive procedures under which an employee or employer in the covered industry may seek review of disputes governed by the Act. In enacting the statute, Congress sought to create a forum in which the special problems arising out of railroad management could be determined by individuals with widespread knowledge in the railroad field.

When Congress chartered the Consolidated Rail Corporation and merged various carriers into the new entity, it chose to create and call upon an Adjustment Board operating pursuant to the Railway Labor Act and the mandatory arbitration procedures provided therein to resolve disputes arising from all collective bargaining agreements covering the constituent parts of the new Conrail system. See Local 194 C & T v. Consolidated Rail Corporation, 672 F.2d 621, 625 (7th Cir.1982). The defendant here argues that the plaintiffs’ complaint represents the type of dispute that was meant to be covered by 45 U.S.C. § 777 and that this Court is without jurisdiction to hear this matter. A careful reading of the two statutes and the relevant case law persuades the Court, however, that it does in fact possess primary jurisdiction over the dispute involved herein.

Defendant argues that this matter involves a dispute with respect to the interpretation of 45 U.S.C. § 775(b), namely whether the computation of monies received in determining plaintiffs’ MDA should take account of the time the plaintiffs spent in the military. Defendant fails however to realize that plaintiffs are not seeking rights granted to them under the collective bargaining agreements entered into pursuant to the enactment of the Regional Rail Act. Rather, the plaintiffs seek judgment under a federal statute providing for important rights granted to those who faithfully served their country in time of war.

This very issue was addressed and decided in favor of direct access to a federal judicial forum by the U.S. Supreme Court in McKinney v. Missouri-Kansas-Texas Railroad Co., 357 U.S. 265, 78 S.Ct. 1222, 2 L.Ed.2d 1305 (1958). In that case, plaintiff sued to obtain an earlier seniority date for his position with defendant railroad based on his contention that he would have obtained the position sooner had he not entered the military during the Korean War. In defending the suit, the railroad argued that the rights plaintiff asserted, to bid for a job posted during his absence, were governed by a collective bargaining agreement to which plaintiff’s union was a signatory and which obligated employees to pursue their grievance before the National Rail Adjustment Board under 45 U.S.C. § 153.

The Supreme Court rejected such an interpretation. Although recognizing that the proper determination of the rights asserted by the plaintiff might necessarily involve interpretation of the collective bargaining agreement, the Court held that the rights alleged were created by a federal statute. The plaintiff therefore sued as a veteran for special rights created by federal policy and not as an employee under a collective bargaining act; as such, he was not to be forced to go through administrative procedures.

The matter before the Court is in fact almost identical to that which faced the court in Kidder v. Eastern Air Lines, Inc., 469 F.Supp. 1060 (S.D.Fla.1978). There the plaintiff sued for holiday pay allegedly due on account of his absence from work due to military service. In response to the claim that the Railway Labor Act conveyed exclusive jurisdiction over the dispute to the Adjustment Board, the court held that the plaintiff did not seek the interpretation of a contract provision but rather claimed a remedy expressly granted by the Readjustment Act, a remedy that required construction by a federal court of the federal law in the context of a clear contract provision. The plaintiff was permitted to pursue his remedy before the court. The fact that 45 U.S.C. § 777 addresses arbitration in the context of the Regional Rail Act adds nothing to defendant’s argument. As previously discussed, the Regional Rail Act utilized and affirmed private collective bargaining agreements in its enactment. A reading of the legislative history of the Regional Rail Act reveals absolutely no indication that 45 U.S.C. § 777 was intended in any way to repeal or overlay the rights and procedures contained in the Readjustment Act. When two statutes are alleged to conflict it is a cardinal principle that the more specific grant of jurisdiction will prevail. See Moe v. Eastern Airlines, Inc., 246 F.2d 215 (5th Cir.1957), cert. denied, 357 U.S. 936, 78 S.Ct. 1380, 2 L.Ed.2d 1550 (1958); Armstrong v. Baker, 394 F.Supp. 1380 (N.D.W.Va.1975).

III.

The Vietnam Veteran’s Readjustment Assistance Act of 1974 constitutes the most recent recodification of the Selective Training and Service Act of 1940, ch. 720, § 8, 54 Stat. 890 (1940) (hereinafter referred to as the “Selective Service Act”). The Selective Service Act, the nation’s first program for peacetime conscription, was enacted in preparation for World War II, and contained provisions to mitigate the disruptive effects to the economy that were likely to occur with the completion of compulsory military service. To that end, the Selective Service Act provided that qualifying returning veterans were to be given the status and positions that they occupied prior to their entry into military service.

The protections afforded veterans who served in the military during the Vietnam War are codified in 38 U.S.C. § 2021. The statute provides in pertinent part:

Right to reemployment of inducted persons; benefits protected

(a) In the case of any person who is inducted into the Armed Forces of the United States under the Military Selective Service Act (or under any prior or subsequent corresponding law) for training and service and who leaves a position (other than a temporary position) in the employ of any employer in order to perform such training and service, and (1) receives a certificate described in section 9(a) of the Military Selective Service Act (relating to the satisfactory completion of military service), and (2) makes application for reemployment within ninety days after such person is relieved from such training and service or from hospitalization continuing after discharge for a period of not more than one year—...
(B) if such position was in the employ of a State, or political subdivision thereof, or a private employer, such person shall—
(i) if still qualified to perform the duties of such position, be restored by such employer or his successor in interest to such position or to a position of like seniority, status, and pay: ...
(b)(2) It is hereby declared to be the sense of the Congress that any person who is restored to or employed in a position in accordance with the provisions of clause (A) or (B) of subsection (a) of this section should be so restored or remployed in such manner as to give such person such status in his employment as he would have enjoyed if such person had continued in such employment continuously from the time of such person’s entering the Armed Forces until the time of such person’s restoration to such employment, or reemployment.

The Readjustment Act serves a “very important but limited purpose [—] to assure that those changes and advancements in status that would necessarily have occurred simply by virtue of continued employment will not be denied the veteran because of absence in the military service.” McKinney v. Missouri-Kansas Texas Railroad Co., 357 U.S. 265, 272, 78 S.Ct. 1222, 1226, 2 L.Ed.2d 1305 (1958). The Supreme Court has repeatedly emphasized from its first encounter with the Selective Service Act that courts should construe the legislation liberally in an effort to benefit those who have left private life to serve their country. See Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 285, 66 S.Ct. 1105, 1111, 90 L.Ed. 1230 (1946). More recently, the Supreme Court has noted its belief that the courts must apply the words of the Selective Service Act in a manner to effectuate the Congressional intent, stating that the “requirements of the 1940 Act are not satisfied by giving returning veterans seniority in some general abstract sense and then denying them the perquisites and benefits that flow from it.” Accardi v. Pennsylvania Railroad Co., 383 U.S. 225, 230, 86 S.Ct. 768, 771, 15 L.Ed.2d 717 (1966). It is from this focus that the Court must now examine the instant matter.

IV.

Less clear than the Congressional intent behind the Selective Service Act is the proper means to define whether a benefit or advancement claimed by a returning veteran is a right associated with seniority. The Supreme Court has identified two methods of analysis to evaluate the issue:

If the benefit would have accrued, with reasonable certainty, had the veteran been continuously employed by the private employer, and if it is in the nature of a reward for length of service, it is a ‘perquisite of seniority’. If, on the other hand, the veteran’s right to the benefit at the time he entered the military was subject to a significant contingency, or if the benefit is in the nature of short term compensation for services rendered, it is not an aspect of seniority within the coverage of [the Selective Service Act].

Alabama Power Co. v. Davis, 431 U.S. 581, 589, 97 S.Ct. 2002, 2007, 52 L.Ed.2d 595 (1977).

It has been noted by both courts and commentators that the tests ennunciated and applied by the Supreme Court have failed to produce clear and consistent guides to decision. See, e.g., Goggin v. Lincoln St. Louis, 702 F.2d 698 (8th Cir.1983); Haggard, Veterans’ Reemployment Rights and the “Escalator Principle,” 51 B.U.L.Rev. 539 (1971). Given the vagueness of the statutory language, any criticism is better directed at Congress. For four decades Congress has been aware of the questions facing the courts concerning the proper scope of the statute, but has failed to make any changes in the Selective Service Act, preferring instead to leave interpretation of the statute to the courts on a case-by-case basis.

Therefore, the Court must now attempt to determine whether the MDA’s claimed by plaintiffs are “perquisites of seniority” in light of Supreme Court precedents and reasoning.

A.

The first half of the Alabama Power test asks whether a claimed benefit would have accrued with reasonable certainty had the veteran been continuously employed by the private employer or, on the other hand, if the right to the benefit was subject to a significant contingency at the time he entered the military. If the benefit is of the former variety, then it may qualify as a “perquisite of seniority.”

In the instant matter, the plaintiffs left the employ of the Erie-Lackawanna for service in the military at a time when they were serving in apprenticeship positions. Upon their reemployment with the railroad, they were reinstated in their previous positions. They then completed the apprenticeship requirements and upon fulfillment of such requirements were advanced to new positions. Upon advancement, each plaintiff was given a retroactive seniority date for his new position.

The “reasonable certainty” test asks if the claimed benefit would have likely accrued to the veteran merely by passage of time in continuous employment or if the position claimed required a level of skill or advancement such that promotion is discretionary with the employer. Compare Bassett v. Texas Pacific Railway Co., 258 F.2d 819 (5th Cir.1958) with Beard v. Norfolk & Western Railway Co., 484 F.Supp. 758 (W.D.Va.1980). However, reasonable certainty need not be determined at the outset but rather can be judged by plaintiffs employment history both prior to and after completion of his military service. Alabama Power Co. v. Davis, 431 U.S. 581, 97 S.Ct. 2002, 52 L.Ed.2d 595 (1977); Almond v. United States Steel Corp., 499 F.Supp. 786 (E.D.Pa.1980).

In response to Requests for Admission proffered by the plaintiffs, defendant admitted that “retroactive seniority dates were awarded in recognition of the fact that, if it had not been for their periods of absence in military service, plaintiffs would have achieved the positions in question on (or about) such dates.” However, in its later-filed motion for summary judgment, defendant argued, without supporting affidavit or explanation, that plaintiffs’ promotions “were discretionary promotions encumbant upon ability and time in grade.”

The Court deems defendant’s admission to be binding for the purposes of this litigation pursuant to Federal Rule of Civil Procedure 36, and thus concludes that plaintiffs have satisfied the “reasonable certainty” requirement of the Alabama Power Co. test. Defendant has given the Court no reasons or facts to permit withdrawal or amendment of its admission. See, e.g., United States v. Cannon, 363 F.Supp. 1045 (D.Del.1973). Indeed, defendant has not even affirmatively requested that the Court permit such a motion. Rather, it has made a single undocumented and unexplained assertion in its brief urging the Court to find that plaintiffs’ promotions, which they received and for which they were given retroactive seniority dates, were not a reasonable certainty at the time they entered into the military. The Court therefore holds that plaintiffs have met their burden in proving a reasonable certainty to their promotions.

B.

The second prong of the Alabama Power Co. test asks whether the claimed benefit is in the nature of a reward for length and continuity of service or if it is in the nature of short term compensation for services rendered, the former being considered “seniority” within the meaning of the Readjustment Act.

The Courts have been called upon to construe and apply this part of the Alabama Power Co. test when considering whether veterans are entitled to company pensions and to the various layoff protection programs. As is the case with the vast majority of benefits sought by veterans under the provisions of the Selective Service Act, the demarcation between a benefit being a reward for length of service or being deferred short-term compensation is not clear. Smith v. Industrial Employers & Distributors Association, 546 F.2d 314 (9th Cir.1976). For instance, pension plans and the level of benefits due under them have been deemed to be rewards for length of service of an employee with a single employer, see, e.g., Alabama Power Co. v. Davis, 431 U.S. 581, 97 S.Ct. 2002, 52 L.Ed.2d 595 (1977); Schell v. Ohio Highway Patrol, 95 Lab.Cas. ¶ 13,887 (S.D. Ohio 1982). The availability of retirement with a pension promotes longevity and a stable work force, allowing greater productivity for the employer. However, it cannot be denied that the funding of pension plans and lay-off protection programs is a current cost to the employer and that pensions can be viewed as deferred compensation for work previously performed.

In evaluating various benefit entitlements, the Supreme Court has used two avenues of inquiry. First, the Court has examined the means by which benefits are calculated in an effort to determine whether the amount of the benefit is directly related to the work performed by the employee. If the relationship is direct, then the Court is more likely to deem the benefit at issue short-term compensation for work actually performed. Second, the Court has attempted to examine the “true nature” of the benefit at issue.

For example, in Coffy v. Republic Steel Corp., 447 U.S. 191, 100 S.Ct. 2100, 65 L.Ed.2d 53 (1980), the Supreme Court considered whether supplemental unemployment benefits provided to steelworkers pursuant to an industry-wide collective bargaining agreement were “perquisites of seniority.” Under a provision in the steel industry agreement, workers were to receive weekly benefits while they experienced periods of lay-off. The amount of the benefit was determined by the hourly wage rate prior to lay-off, the number of dependents, the amount of state unemployment compensation received, and the level of funding remaining in the plan. The length of receipt of benefits was tied to the number of credits an employee had accumulated prior to lay-off. One credit was received for each week an employee worked or received pay for hours not worked, as in the case of vacation or performance of union duties. Employees received benefits only after completing two years of continuous service before being laid off. After two years of continuous service, an employee received one week of benefits for each credit accumulated. At any time, a maximum of 52 weeks of benefits were allowed.

Upon examination, the Supreme Court held that the benefits, with the 52 week cap, were not so proportionate to the hours actually worked that the benefits should be considered compensation for work actually performed. Rather, the Court held that the benefits were meant to assure a stable work force during short-term periods of lay-off and as such were rewards for length of service.

Similarly, in Accardi v. Pennsylvania Railroad Co., 383 U.S. 225, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966), the Supreme Court considered whether severance payments to tugboat firemen were a reward for length of service. According to a provision of a collective bargaining agreement signed by plaintiffs’ union and the defendant, the position of fireman on diesel tugboats in New York Harbor was to be abolished, and all those individuals who were thus discharged but had over twenty years seniority were to receive severance pay. The amount of severance pay was determined by the length of “compensated service,” which was any month in which the employee worked one or more days. In computing this time, the defendant refused to include the months in which plaintiffs had served in the military during World War II.

Noting that the term “seniority” was to be given a meaning consonant with the intention of Congress as expressed in the Selective Service Act—to preserve the rights and benefits that automatically would have accrued but for leave of absence for military service—the Court concluded that the severance payments at issue were perquisites of seniority. Since a mere seven days of employment could equal a year of “compensated service”, the Court deemed that “compensated service” did not equate with actual total service rendered. The Court found that the real nature of the severance payment was to compensate employees who had worked their entire career with defendant railroad company for the loss of their jobs.

The Court must now examine the monthly displacement allowances at issue in the instant case and how they are calculated. As earlier described, the MDA is determined by computing total compensation received, in the case of plaintiff Brown, during the last twelve calendar months in which he worked more than 50% of his normal work schedule, and in the cases of plaintiffs Oswald and Douglas, on compensation they earned during the uniform test period. The amount of the MDA was in no event to exceed the sum of $2,500 in any month.

The duration of receipt of the displacement allowance varies with whether an employee had five or more years of service with the railroad. If on January 2, 1974 the protected employee had reached his fifth year with his employer, his MDA payments were to continue until his 65th birthday. For employees with less than five years of service, however, the duration of the MDA was not to exceed a period equal to an individual’s total prior years of service.

With respect to plaintiff Brown, the Court concludes that the MDA payments were benefits in the nature of a reward for length of service. Eligibility was dependent upon an employee’s compensation in any month in which he worked more than 50% of his normal work schedule. Like the situations in Accardi and Coffy this eligibility requirement does not so clearly equate with actual total service rendered. Since Brown’s compensation in any month in which he worked only 49% of his normal work schedule would not have counted towards calculation of his MDA calculation, the MDA cannot be said to equal total service.

The calculation of the MDA under the uniform test period for plaintiffs Oswald and Douglas presents slightly different considerations, since the MDA’s thus received would bear a greater relationship to actual total service rendered. The Court’s inquiry cannot stop at this point, however, but rather must proceed to determine the “true nature” of the benefit received.

The MDA’s at issue could not exceed $2,500 per month. Such a cap belies the view that MDA’s are short term compensation for actual work performed. Similarly, the duration of MDA’s is more akin to a pension benefit than to compensation. For example, an employee with five years of service might receive MDA’s for forty years, assuming he started with the railroad in 1969 at the age of twenty, whereas an employee of the same age starting in 1970 would receive only four years of MDA payments. This “vesting” characteristic of MDA’s undercuts the notion that MDA’s are short term compensation for work actually performed.

Most importantly, the Court must examine what purpose MDA’s were meant to serve. The MDA’s served as a level of protection for railroad employees with sufficient seniority to remain in the employ of Conrail but with insufficient seniority to obtain an actual position of employment with the railroad.

In sum, the Court concludes that MDA’s are benefits in the nature of rewards for length of service. The similarity of MDA’s to the benefits described by the Supreme Court in its most recent examination of the Service Act in Coffy convinces this Court that MDA’s are governed by the Readjustment Act.

Y.

Finally, defendant has raised during oral argument an issue that must be addressed by the Court. Defendant claims that irrespective of whether the MDA’s could properly be classified as “perquisites of seniority” the MDA’s are not covered by the Readjustment Act. Defendant suggests that plaintiffs’ MDA’s were calculated in accordance with the formula explicitly authorized by Congress in the Regional Rail Act. Defendant implies that the rights accorded by the Readjustment Act pertain solely to benefits created by private contract or agreement and that where a benefit is created by statute the Readjustment Act does not apply.

The Court rejects defendant’s broad statement. Indeed, in an analogous situation concerning the computation of pensions for state highway patrol officers, the United States District Court for the Southern District of Ohio held that the plaintiff’s pension had to be calculated to include the amount he would have been entitled to had he not left the highway patrol to serve in the military. Schell v. Ohio Highway Patrol, 95 Lab.Cas. ¶ 13,887 (S.D.Ohio 1982). When faced with the argument of defendant that it had calculated plaintiff’s pension in accordance with the statutory formula mandated by Ohio Revised Code § 5505 and that any other sum would be barred by the state statute, the court stated that to the extent that the state statute resulted in a denial of benefits the state statute was preempted by the Readjustment Act.

The question facing this Court, however, is not one of preemption but rather one of statutory interpretation—whether Congress, in enacting the Regional Rail Act and providing for MDA’s for adversely affected railroad employees, intended the formula it created to be applied without the protections of the Selective Service Act.

A review of the legislative history of the Selective Service Act and its recodifications and of the Regional Rail Act is unfortunately of little assistance. The major concern of Congress in drafting the two statutes was not the calculation of veterans’ benefits or MDA’s but rather the creation of a national conscription program and the restructuring of the railroad freight system in the Eastern United States, respectively. Nowhere in the legislative history of either statute does Congress address the substantive questions in calculating benefits. Thus, the Court must attempt to discern whether Congress intended for the Readjustment Act to be inapplicable to the Regional Rail Act through other means.

Defendant argues that Congress intended that the Selective Service Act apply only to seniority systems established in private contractual agreements. Although Congress was aware of their existence of seniority systems and seniority rights when it passed the Service Act, Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 288, 66 S.Ct. 1105, 1112, 90 L.Ed. 1230 (1976), there is no indication that Congress intended that the sole target of the Selective Service Act were benefits provided within collective bargaining agreements. Such a conclusion is bolstered by the decision of the district court in Schell v. Ohio Highway Patrol, supra.

It is a commonly-stated maxim that remedial legislation, such as the Readjustment Act and the Regional Rail Act, should be construed broadly to effectuate the purposes for which they were enacted. Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 553, 19 L.Ed.2d 564 (1967). This does not mean, however, that a court should attach to a statute an objective or result which would negate the limits clearly intended by Congress to be placed on a particular piece of legislation. United States v. Sisson, 399 U.S. 267, 298, 90 S.Ct. 2117, 2134, 26 L.Ed.2d 608 (1970); United Shoe Workers of America, AFL-CIO v. Bedell, 506 F.2d 174 (D.C.Cir.1974); Bowman v. Texas Educational Foundation, Inc., 454 F.2d 1097 (5th Cir.1972). If two statutes concern the same subject and result in a conflict, a court should attempt to harmonize the two if possible, but upon a failure to do so a court should find applicable the more specific or later-enacted statute. Panama Canal Company v. Campania Nacional de Navegacion, S.A., 463 F.Supp. 330 (D.C.Canal Zone 1978). However, if two statutes serve distinct purposes, the later legislation should not be construed to modify, repeal, or supplant the older statute. Gray v. Benson, 443 F.Supp. 1284 (D.Kan.1978). “Legislation of a particular legislative body should not be construed, absent an intent to repeal, such that the benefits conferred by one statute are taken away by another.” Securities and Exchange Commission v. C.H. Wagner & Co., Inc., 373 F.Supp. 1214, 1220 (D.Mass.1974).

In the instant matter, the benefits conferred upon veterans by the Selective Service Act and its successors have been deemed a vital concern of the Congress: Congress has included the benefits provision in every recodification of the statute. In addition, the courts have attempted to give meaning to the provision in each instance in which the statute has been construed. Although it is true that the purpose of the Selective Service Act is limited and that the Act is not intended as a panacea for every economic woe suffered by returning veterans, this limitation does not mean that the legitimate purposes of the Selective Service Act are any less important. The plaintiffs in this case served their country honorably in time of war. In so doing, they were uprooted from their positions of employment and had their promotion patterns disrupted so that upon their return to civilian life they found themselves in positions junior and at salaries lower than what they would have been had they not served in the military.

When the Eastern railroads, including plaintiffs’ employer, suffered bankruptcy, Congress, in recognition of the importance of rail transport to the nation’s economy, restructured the railroads by creating Conrail. The streamlining of the rail system into Conrail entailed that the railroad work force be reduced. To protect those employees whose seniority was not great enough to guarantee them a position in the new Conrail system, Congress created a program of monthly displacement allowances. The MDA’s were to be calculated according to a formula drafted by representatives of the railroads and the unions representing railroad employees. See 1973 U.S.Code Cong. & Ad.News 3242, 3295. Defendant stated at oral argument that the formula agreed upon and incorporated in the Regional Rail Act was the choice of the unions because the uniform test period constituted a period of high overtime for the railroad employees. The defendant also argued that to allow the use of the Readjustment Act to further increase plaintiffs’ MDA’s in the present instance would do an injustice to Conrail.

The Court holds that the provisions of the Readjustment Act require that plaintiff’s MDA’s be calculated by use of the wages they would have earned had they not experienced a disruption in employment due to military service. The protections afforded by the Selective Service Act continually have been held to override other federal and state legislation. See, e.g., McKinney v. Missouri-Kansas-Texas Railroad Co., 357 U.S. 265, 78 S.Ct. 1222, 2 L.Ed.2d 1305 (1958) (Railway Labor Act); Schell v. Ohio Highway Patrol, 95 Lab. Cas. ¶ 13,887 (S.D.Ohio 1982). Where a statute is created to afford such protections, the passage of a later piece of legislation that at first glance may be construed to defeat the earlier protections should not be deemed to repeal the earlier conferred benefits.

For instance, in Securities and Exchange Commission v. C.H. Wagner & Co., Inc., 373 F.Supp. 1214 (D.Mass.1974), the court was faced with an argument that the protections afforded customers of securities under the Securities Investor Protection Act, 15 U.S.C. § 78aaa et. seq., were defeated by the defendant brokerage house’s filing for protection under the Bankruptcy Act. The court rejected such an argument and held that the customers’ claims could go forward under the former statute.

Where, as in the present instance, two statutes serve distinct purposes, a court, rather than attempting to set up an irresolvable conflict between the two pronouncements of Congress, should attempt to reconcile the statutes. Gray v. Benson, 443 F.Supp. 1284 (D.Kan.1978). The use of such a method in the instant case requires that plaintiffs MDA’s be recomputed to include the earnings he would have received but for their military service. In enacting 45 U.S.C. § 775 as a part of the Regional Rail Act, Congress created a unemployment fund to protect the interests of the employees of the railroads that were merged to form Conrail. The disbursement of the funds was to be made under a system that used seniority as the basis for calculation of the sums owed. That the fund and the MDA’s were created by Congressional enactment, and not as a result of collective bargaining between the management of Conrail and the unions representing the railroad workers, is not dispositive of plaintiffs’ claims. In passing 45 U.S.C. § 775 Congress was acting in the interests of the railroad employees. Having created a system to save the bankrupt Eastern railroads and thus providing benefits for the shareholders and creditors of the bankrupt railroads, and also to the other sectors of the nation’s economy whose viability was dependent upon the continuation of a rail freight system, Congress, through 45 U.S.C. § 775 sought to protect the employees of the rail system by shifting responsibility for payment of the MDA’s from the federal treasury to Conrail. Such a requirement should be seen as the forcing of a concession upon Conrail in return for the bail-out of the rail system.

To argue that the Selective Service Act’s protections are inapplicable to the Regional Rail Act because Congress (rather than plaintiffs’ union) “bargained” for the economic protection afforded by the MDA’s is not persuasive. Denying plaintiffs the additional MDA’s to which they would be entitled had they not served their nation during the Vietnam War would run afoul of the Supreme Court’s pronouncement in Accardi that the Service Act’s requirements cannot be satisfied by affording returning veterans seniority in the abstract but denying them the concrete benefits that flow from such seniority. Accardi v. Pennsylvania Railroad Co., 383 U.S. 225, 230, 86 S.Ct. 768, 771, 15 L.Ed.2d 717 (1966). This the Court refuses to do.

VI.

Accordingly, the Court grants plaintiffs’ motion for summary judgment on the issue of liability. In its cross-motion for summary judgment, defendant requested that the Court consider plaintiffs’ motion individually as to each plaintiff and not to plaintiffs as a group for the reason that plaintiff Brown’s case is different from those of plaintiffs Douglas and Oswald. Having made such a request, however, defendant did not state, either explicitly or by any inference whatsoever, what the differences were between the rights asserted by the different plaintiffs. Indeed, a reading of defendant’s brief but for the single sentence referred to above reveals that defendant attempted to treat the three cases the same. The Court is not expected to assume the role of an advocate and discern the distinctions in the cases that counsel perhaps could, but did not, make. Therefore, the Court finds that all three plaintiffs have met their burdens of proof in the instant matter and that their motions for summary judgment should be granted.

The plaintiffs are ordered to file a supplemental memorandum setting forth the correct measure of damages in the instant case within thirty (30) days, and defendant shall be given fourteen (14) days to file a response.

IT IS SO ORDERED.

      . See also Healen v. Eastern Airlines, Inc., 9 Empl.Prac.Dec. ¶ 10,023 (N.D.Ga.1973). In Healen, plaintiff alleged a violation of Title VII, 42 U.S.C. § 2000e et seq., in the denial of seniority accrual during maternity leave. The defendant asserted that the denial was compelled by the collective bargaining agreement to which plaintiff was a party and that the dispute was subject to mandatory arbitration under the Railway Labor Act. The Court rejected defendant’s argument, finding that the rights asserted by the plaintiff were rights flowing directly from a federal civil rights statute and not from a collective bargaining agreement. As such, the Court held that deferral was unwarranted and would only serve to deny plaintiff her specific federal rights.

        . A similar and related principle of statutory interpretation is that "repeals by implication are not favored.” Radzanower v. Touche Ross & Co., 426 U.S. 148, 154, 96 S.Ct. 1989, 1993, 48 L.Ed.2d 540 (1976). 38 U.S.C. § 2021 has been part of the law for many years. To assume that the enactment of the Regional Rail Act repealed the provisions of the various Veteran’s Acts in instances where our nation’s veterans seek their rights as employees of the railroadr, without any showing that Congress so intended, is contrary to this "cardinal principal" of construction. Id. at 154, 96 S.Ct. at 1993.

      . See also Barrett v. Grand Trunk Western Railroad Co., 581 F.2d 132 (7th Cir.1978).

      . It should be noted that the part of the Regional Rail Act providing for MDA’s has since been repealed. This fact, however, has no bearing on the characterization of the benefit as originally created.

      . As the Court understands the matter, although the Regional Rail Act provided that MDA’s be paid out of a fund created by Congress, the Act was later amended so that Conrail became responsible for the payment of MDA’s. In the present case, plaintiffs’ contested MDA’s are the obligation of Conrail, not the federal government.