San Antonio Met. Transit Authority v. Donovan

• Decision Date: 18 February 1983
• Docket Number: Civ. A. No. SA-79-CA-457.
• Parties: SAN ANTONIO METROPOLITAN TRANSIT AUTHORITY, Plaintiff, and American Public Transit Association, Plaintiff-Intervenor, v. The Honorable Raymond J. DONOVAN, Secretary of Labor of the United States, Defendant, and Joe G. Garcia, Defendant-Intervenor.
• Court: U.S. District Court — Western District of Texas

557 F. Supp. 445

SAN ANTONIO METROPOLITAN TRANSIT AUTHORITY, Plaintiff, and American Public Transit Association, Plaintiff-Intervenor, v. The Honorable Raymond J. DONOVAN, Secretary of Labor of the United States, Defendant, and Joe G. Garcia, Defendant-Intervenor.

Civ. A. No. SA-79-CA-457.

United States District Court, W.D. Texas, San Antonio Division.

February 18, 1983.

George P. Parker, Jr., Charles J. Fitzpatrick, Lewis T. Tarver of Matthews & Branscomb, San Antonio, Tex., for San Antonio Metropolitan Transit Authority.

William T. Coleman, Jr., Donald T. Bliss, Zoe E. Baird of O'Melveny & Meyers, Washington, D.C., Hubert W. Green of Green & Kaufman, Inc., San Antonio, Tex., for American Public Transit Ass'n.

Dennis Linder, Mark Rutzick of Dept. of Justice, Washington, D.C., Edward C. Prado, U.S. Atty., San Antonio, Tex., for Honorable Raymond J. Donovan, Secretary of Labor.

Linda R. Hirshman, Kalman D. Resnick of Jacobs, Burns, Sugarman & Orlove, Chicago, Ill., Les Mendelsohn of Branton & Mendelsohn, Inc., San Antonio, Tex., for Joe G. Garcia.

MEMORANDUM OPINION

SHANNON, District Judge.

At issue in this case is whether operation of a local transit authority by the San Antonio Metropolitan Transit Authority (SAMTA), a political subdivision of the State of Texas, is a "traditional" governmental function entitled to the Tenth Amendment immunity recognized in National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976).

On November 17, 1981, this Court granted Summary Judgment for SAMTA, finding that it performed a traditional state function that met all the requirements for Tenth Amendment immunity from the minimum wage and overtime pay provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. A direct appeal to the Supreme Court pursuant to 28 U.S.C. § 1252 followed. The Supreme Court remanded the case for reconsideration in light of its intervening holding in United Transportation Union v. Long Island Railroad Co., 455 U.S. 678, 102 S.Ct. 1349, 71 L.Ed.2d 547 (1982) (hereinafter LIRR). 457 U.S. ___, 102 S.Ct. 2897, 73 L.Ed.2d 1309 (1982).

Upon further consideration, this Court finds nothing in LIRR that compels a change in its previous conclusion that operation of a public transit system is a governmental function entitled to Tenth Amendment immunity. When the factors considered by the Supreme Court in LIRR are applied to public transit, they indicate that it is once again appropriate to grant Summary Judgment for the Plaintiff and Plaintiff-Intervenor.

In Usery, the Supreme Court cut short the long reach of Congress' Commerce Clause power when it held that the Tenth Amendment prohibits the use of Commerce Clause power "to force directly upon the States its (Congress') choices as to how essential decisions regarding the conduct of integral governmental functions are to be made." 426 U.S. at 855, 96 S.Ct. at 2476. The distinguishing characteristic entitling a state function to Tenth Amendment protection from federal regulations has been described variously as "integral", "essential", "basic", and "traditional". Despite the abundance of adjectives, identifying which particular state functions are immune remains difficult. Until LIRR the Supreme Court had not supplied guidelines for the application of its constitutional rule. Even after LIRR, the Court's own efforts at identifying a sovereign state function have been marked by disagreement. See, Federal Energy Regulatory Commission v. Mississippi, ___ U.S. ___, 102 S.Ct. 2126, 2141 n. 30, 72 L.Ed.2d 532 (1982).

Like LIRR, this case deals with the third part of the analysis used in Hodel v. Virginia Surface Mining & Reclamation Assoc., Inc., 452 U.S. 264, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981): whether the states' compliance with federal law directly impairs their ability to structure integral operations in areas of traditional functions. Usery has already decided that structuring wages is an integral operation. The only question is, therefore, whether public transit is one of "the numerous line and support activities which are well within the area of traditional operations of state and local governments." Usery, 426 U.S. at 851 n. 16, 96 S.Ct. at 2474 n. 16 (emphasis added)

LIRR indicates at least three factors must be considered. First, historical reality is important. A long record of state activity in an area is one indication that a function is one of the essential types of activities that states have the primary responsibility for performing and must be free to perform if they are to meet their responsibilities to their citizens.

The focus on historical reality was not, however, intended "to impose a static historical view of state functions". 102 S.Ct. at 1354. Therefore, any other factors that, like historical reality, indicate that a function is presently a basic state prerogative, interference with which would impede the states' ability to fulfill their role in the federalist system, should also be considered. Analogy to the non-exclusive list of traditional functions set out in Usery and analysis under the four-part test developed in Amersbach v. City of Cleveland, 598 F.2d 1033, 1037 (6th Cir.1979) are both useful for this purpose.

Finally, in the special case of recent conversion of a private sector function to public ownership and operation, the history and scope of federal regulation must be considered to determine whether the conversion has the prohibited effect of eroding longstanding federal authority.

I. Historical Reality

Overseeing, maintaining, and regulating local and regional transportation systems historically has been a state responsibility. Peel v. Florida Department of Transportation, 600 F.2d 1070, 1083 (5th Cir.1979). These functions are matters of a "peculiarly local nature", and the states' exercise of their prerogatives in this field has been given great deference. Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 523-24, 79 S.Ct. 962, 964-965, 3 L.Ed.2d 1003 (1959) (State highway regulations carry a strong presumption of validity.) See also, Molina-Estrada v. Puerto Rico Highway Authority, 680 F.2d 841, 845-46 (1st Cir.1982) (State agency that oversees roads and plans to build a mass transit system performs governmental activities traditional "from time immemorial".); Amersbach, 598 F.2d at 1037 ("Airports are indispensable" to "a principal mode of passenger transportation" and are therefore "traditional-integral governmental functions."); United States v. Best, 573 F.2d 1095, 1102-03 (9th Cir.1978) (Licensing of drivers is an integral state function.); United States v. State Road Department of Florida, 255 F.2d 516, 518 (5th Cir.1958) (Building and maintenance of a system of state roads is essentially a governmental function.)

Mass transit is an integral component of a state's transportation system. It has been treated as such from the time of the earliest transportation regulation in Texas up until the present day.¹

The historical reality of mass transit reveals a long record of state concern and activity in the field. The historical record is not one of predominately public ownership and operation of transit services.² Kramer v. New Castle Area Transit Authority, 677 F.2d 308, 309 (3rd Cir.1982), cert. denied, ___ U.S. ___, 103 S.Ct. 786, 74 L.Ed.2d 993 (1983). Instead of owning and operating these services, states chose to manifest their interest through regulation of fares, routes, schedules, franchising, and safety. For example, a 1913 Texas statute gave cities the authority to regulate fares and operations of vehicles used to provide carriage for hire. See, fn. 1, supra. A 1915 City of San Antonio ordinance established franchising, insurance, and safety requirements for all passenger vehicles operated for hire. Ordinance OF1-1 (March 8, 1915). The City continued regulation through ordinances up until 1959, when the first steps in the transformation of the system from private to public hands were taken.

This record of state regulatory activity indicates that mass transit has traditionally been a state prerogative and responsibility, not a federal concern. That states chose to leave ownership and operation in private hands and to effect their interest through regulation does not negate the inference of sovereignty that arises from history. Usery sought to guarantee states the freedom to select the most suitable means to accomplish their goals in areas of unique and special concern to them. States would be victims of a strange irony if they are to be told that they are free to make their own decisions, but that they made the wrong choice and, therefore, decisions that otherwise meet the requirements for Tenth Amendment immunity³ will be displaced by federal regulations.

II. Recent Conversion and Prior Federal Regulation

Notwithstanding indications of Tenth Amendment immunity arising from a review of history, LIRR precludes Tenth Amendment immunity when it would erode federal authority over previously private functions recently converted to public ownership. 102 S.Ct. at 1355. The recent history of both mass transit in general and of SAMTA in particular⁴ includes such a conversion. Kramer, 677 F.2d 309. Unlike the railroad in LIRR, however, neither labor relations nor other aspects of mass transit have been the subject of federal regulation that will be eroded by recognizing a Tenth Amendment immunity.

In LIRR, the federal statute under attack was the Railway Labor Act (RLA), 45 U.S.C. § 151 et seq. The Court found the act to be the most recent in a long history of federal railway labor relations statutes going back to 1888. 102 S.Ct. at 1355.

In this case, the federal statute under attack is the FLSA. Unlike the RLA, the FLSA is not a current manifestation of a traditional federal concern for labor relations in the mass transit field. Transit was specifically exempted from coverage from the time of the Act's original passage in 1938 until 1961 amendments...