                              In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 06-2542
BROTHERHOOD OF LOCOMOTIVE ENGINEERS
AND TRAINMEN GENERAL COMMITTEE OF
ADJUSTMENT, CENTRAL REGION,
                                  Plaintiff-Appellant,
                         v.

UNION PACIFIC RAILROAD COMPANY,
                                                  Defendant-Appellee.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 05 C 2401—Virginia M. Kendall, Judge.
                          ____________
                  On Petition for Rehearing
                       ____________
                  DECIDED AUGUST 11, 2008
                       ____________


  Before EASTERBROOK, Chief Judge, and POSNER, FLAUM,
RIPPLE, KANNE, ROVNER, WOOD, EVANS, WILLIAMS, SYKES,
and TINDER, Circuit Judges.
  On April 23, 2008, plaintiff-appellant filed a petition
for rehearing with a suggestion for rehearing en banc, and
on May 16, 2008, defendant-appellee filed an answer to the
petition. All of the judges on the panel voted to deny
2                                                 No. 06-2542


rehearing. No judge in regular active service has called
for a vote on the suggestion for rehearing en banc. The
petition is therefore Denied. Chief Judge Easterbrook
concurs in the denial of rehearing en banc. His concur-
rence, in which Judge Posner joins, is attached.




  EASTERBROOK, Chief Judge, with whom POSNER, Circuit
Judge, joins, concurring in the denial of rehearing en banc.
Relying on Pokuta v. Trans World Airlines, Inc., 191 F.3d
834 (7th Cir. 1999), the panel held that decisions of the
National Railroad Adjustment Board may be set aside on
due-process grounds, notwithstanding Union Pacific R.R.
v. Sheehan, 439 U.S. 89 (1978), and the omission of due
process from the statutory grant of reviewing authority,
45 U.S.C. §153 First (q). Three circuits have held after
Sheehan that review of due-process arguments is forbid-
den. See United Steelworkers v. Union R.R., 648 F.2d 905 (3d
Cir. 1981); Kinross v. Utah Ry., 362 F.3d 658 (10th Cir. 2004);
Henry v. Delta Air Lines, 759 F.2d 870 (11th Cir. 1985).
Another has agreed in dictum. Jones v. Seaboard R.R., 783
F.2d 639, 642 n.2 (6th Cir. 1986). But four other circuits are
on the panel’s side of this conflict. See Shafii v. PLC British
Airways, 22 F.3d 59 (2d Cir. 1994); Locomotive Engineers v. St.
Louis Southwestern Ry., 757 F.2d 656 (5th Cir. 1985); Goff v.
Dakota, Minnesota & Eastern R.R., 276 F.3d 992 (8th Cir.
2002); Edelman v. Western Airlines, Inc., 892 F.2d 839 (9th
Cir. 1989). There is little to be gained from making the
conflict 5-4 one way rather than 5-4 the other way. Only
No. 06-2542                                                    3


Congress or the Supreme Court can bring harmony, and
neither institution seems much interested in doing so. (This
conflict is 23 years old.)
  Lurking behind the panel’s decision is a question that
the petition for rehearing en banc does not mention:
whether the Board did offend the Constitution’s due pro-
cess clause. The litigants dispute whether papers filed
with the Board must show that the parties attempted to
work out their differences “on the property” (that is,
through the carrier’s auspices) before turning to the
agency. No one doubts that informal dispute resolution is
required. The novel question is whether a demonstration
to that effect is a precondition to the Board’s review. Our
panel assumed (as the parties’ briefs also did) that, if the
Board adopted this requirement in the course of deci-
sion—that is, by adjudication rather than prospective
rulemaking—then it violated the Constitution. The bulk of
the panel’s opinion is devoted to the question whether
the Board has adopted a new requirement and thus acted
unconstitutionally.
  That assumption is questionable. Lawmaking in the
course of adjudication is a staple of any common-law
system, and rules adopted in that fashion apply not only
to the parties but also to all similar cases. See, e.g., James B.
Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991). Adminis-
trative agencies no less than courts may adopt new rules
by adjudication. See NLRB v. Bell Aerospace Co., 416 U.S. 267,
290–95 (1974). Any suggestion that common-law develop-
ments are limited to substantive norms—that the Con-
stitution does not tolerate changes that metaphorically
“close the courthouse door”—would be hard to justify. Why
may an agency or court change a substantive rule retroac-
tively, and penalize conduct that seemed lawful when it
4                                                 No. 06-2542


occurred, but not change a procedural rule? Cf. Landgraf v.
USI Film Products, 511 U.S. 244, 273–80 (1994) (suggesting
that retroactive procedural changes are easier to justify
than retroactive substantive changes).
   Distinguishing between substantive and procedural
changes also would be difficult to square with decisions
such as Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007),
and Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501
U.S. 350 (1991). In Bell Atlantic the Justices modified
federal pleading requirements and threw out a complaint
that would have been deemed sufficient earlier; in Lampf
Pleva the Court revamped the statute of limitations for
securities actions and dismissed hundreds of proceedings
in which plaintiffs, relying on older law, had delayed in
filing suit. And, when Congress tried to honor those reli-
ance interests and allow the suits to continue, the Justices
held that statute unconstitutional, on the ground that final
judgments cannot be changed by legislative action. Plaut v.
Spendthrift Farm, Inc., 514 U.S. 211 (1995).
  Because all parties to this case assumed that a change
of law during the course of administrative adjudication
offends the Constitution, it would be inappropriate for the
court en banc to tackle that issue. The court will have time
enough to address this subject when the question is
squarely presented.




                            8-11-08
