Citizens Committee to Save the Land Grant Railroads v. Burlington Northern, Inc.

This is a suit by several unions, creditors, and shareholders of Burlington Northern, Inc. (Burlington) and an unincorporated association of customers of Burlington to enjoin Burlington from consummating a corporate reorganization. After the complaint was filed, Burlington created a holding company of which a railroad-based operating company is one subsidiary. Burlington then began the transfer of certain assets of the.former Burlington corporation to the holding company and its non-railroad subsidiaries. Plaintiffs contend that these transactions violate the terms of the land grant act that established Burlington’s corporate predecessor and the terms of various Burlington bond indentures. The district court dismissed these claims on grounds of lack of a private federal right of action and lack of federal jurisdiction, respectively. We have jurisdiction under 28 U.S.C. § 1291 (1976). We affirm, but on a different, basis.

I

In 1864, Congress passed a land grant act (the Act), which chartered the corporate predecessor of Burlington for the purpose of securing the construction and maintenance of a railroad and telegraph line between Lake Superior and Puget Sound. Northern Pacific…