Chicago Transit Authority v. Adams

• Decision Date: 29 November 1979
• Docket Number: No. 78-2396,78-2396
• Citation: 607 F.2d 1284
• Parties: CHICAGO TRANSIT AUTHORITY, a municipal corporation, Plaintiff-Appellee, v. Brock ADAMS, Secretary of the Department of Transportation et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1284

607 F.2d 1284

CHICAGO TRANSIT AUTHORITY, a municipal corporation, Plaintiff-Appellee, v. Brock ADAMS, Secretary of the Department of Transportation et al., Defendants-Appellants.

No. 78-2396.

United States Court of Appeals Seventh Circuit.

Argued Sept. 14, 1979.

Decided Nov. 29, 1979.

Rehearing & Rehearing In Banc Denied Jan. 10, 1980.

Bruce G. Forrest, Dept. of Justice, Civ. Div., Washington, D. C., for defendants-appellants.

Joseph P. Della Maria, Jr., Chicago, Ill., for plaintiff-appellee.

Before SWYGERT, TONE and WOOD, Circuit Judges.

SWYGERT, Circuit Judge.

This appeal concerns section 164(b) of the Federal-Aid Highway Act of 1973, 49 U.S.C. § 1602a(b), section 3(g) of the Urban Mass Transportation Act of 1964, As amended, 49 U.S.C. § 1602(g), and the regulations promulgated thereunder, 49 C.F.R. § 604 Et seq. ¹ At issue is whether a grantee of the The decision of the chief counsel of UMTA that such bus service constituted impermissible school bus operations by a federal grantee was overturned by the district court on the ground that the UMTA decision violated an agency regulation. We have concluded that the chief counsel's decision was a reasonable interpretation of the statute and regulations and therefore must be reinstated. The decision of the district court is accordingly reversed.

Urban Mass Transportation Administration ("UMTA") can provide daily bus service in buses purchased with federal funds for students traveling to their schools of regular attendance from a common departure point at a neighborhood school each morning and back to the neighborhood school for delivery at the end of the school day.

I.

The services at issue are daily bus transportation of groups of Chicago public school students each morning from a common pick-up point at a neighborhood school to a common delivery point at the school that the children attend and back from the school attended to the neighborhood school delivery point at the end of the school day. These services have been used to transfer students from neighborhood schools to less crowded schools or schools offering special facilities or programs. Recently, they have been used to implement the Chicago Board of Education's voluntary desegregation program.

In June 1974, the Chicago Transit Authority ("CTA") entered into an agreement with UMTA in accordance with the terms of the Urban Mass Transportation Act of 1964, As amended, 49 U.S.C. §§ 1601 Et seq., whereby the federal agency agreed to provide financial assistance for CTA's purchase of passenger buses, rapid transit cars and related equipment (Project No. IL-03-0040). The grant contract included a provision prohibiting CTA from engaging in school bus operations in competition with private school bus operators, as required by sections 1602a(b) and 1602(g) of Title 49. ²

Shortly thereafter, in December 1974, the Chicago Board of Education solicited bids from various bus companies for the transportation of students attending Chicago public schools. Bradford School Bus Transit, Inc. ("Bradford") and the CTA were among those bidding to provide these services, which are identical to the kind of services at issue here. The CTA's bid was accepted, and it has been providing bus transportation for Chicago public school children since January 1975.

In December 1976, Bradford and other private school bus operators, including A & D Davenport Transportation, filed a complaint with UMTA against the CTA, alleging that CTA had violated its June 1974 agreement with UMTA by engaging in school bus operations. ³ In his decision, the chief counsel of UMTA concluded that according to UMTA's regulations, the bus service at issue did not constitute school bus operations but was instead permissible incidental Bradford filed a second complaint with UMTA in April 1977, challenging services provided by CTA which were identical in character to those challenged in the first suit but which involved different contracts and different bus routes. After considering Bradford's complaint and the CTA's response, the chief counsel of UMTA concluded that the Davenport case had been decided erroneously and that the disputed services were school bus operations. Bradford School Bus Transit, Inc. v. Chicago Transit Authority, decided April 25, 1978. The chief counsel decided that the multiple as opposed to single pick-up and delivery point distinction relied on in Davenport did not determine whether services were "school bus operations," and that the regulation was silent on the issue of whether school bus service included anything more than multiple pick-ups and deliveries. After examining the legislative history the chief counsel decided that the disputed services were prohibited school bus operations. The Bradford decision made clear that UMTA was reversing its earlier decision and would hereinafter consider the daily use of UMTA funded buses for transportation of groups of students to their schools of regular attendance to be school bus operations.

charter service. ⁴ He reached this decision because the disputed services did not involve multiple student pick-ups and deliveries but rather had a common pick-up and delivery point for all students. A & D Davenport Transportation, et al. v. Chicago Transit Authority, decided May 5, 1977.

The CTA had argued that, even if the services were decided to be school bus operations, it was exempt from the prohibition because of the "grandfather" clauses contained in both sections:

. . . . (T)his subsection shall not apply with respect to any State or local public body or agency thereof if it . . . was so engaged in school bus operations any time during the twelve-month period immediately prior to (the date of enactment).

49 U.S.C. § 1602a(b), 49 U.S.C. § 1602(g).

Section 164(b) of the Federal-Aid Highway Act, 49 U.S.C. § 1602a(b), was enacted on August 13, 1973, and section 3(g) of the Urban Mass Transportation Act, 49 U.S.C. § 1602(g), was enacted on November 26, 1974. It was undisputed that the CTA was providing service during both of these periods. However, UMTA decided that even a grantee who was exempted from the school-bus prohibition by the grandfather clauses could not provide school bus service in federally-funded buses. The CTA buses had been purchased with federal funds. CTA was permitted to complete its contract for the 1977-78 school year but was prohibited from performing the services after that time.

CTA responded to the UMTA decision by bringing this action in the United States District Court for the Northern District of Illinois for declaratory and injunctive relief against enforcement. Named as defendants were the Secretary of Transportation and the administrator and chief counsel of UMTA. In an opinion and order dated August 23, 1978, the district court held that the agency's Bradford decision was invalid and must be set aside because UMTA's own regulations mandated a finding that the disputed services were charter rather than

school bus operations. ⁵ The district court remanded the case to UMTA to determine whether the service was "incidental" as well as "charter," since only "incidental charter service" is permissible. ⁶ From the decision of the district court, setting aside the opinion of the chief counsel, UMTA brings this appeal.

II.

A. School Bus Regulations and the Safety Standard

The regulation defining school bus operations contains a cross-reference to Highway Safety Program Standard No. 17:

. . . transportation by bus exclusively for school students . . . in Type I and Type II school vehicles as defined in Highway Safety Program Standard No. 17.

49 C.F.R. § 605.3(b).

Highway Safety Program Standard No. 17, 23 C.F.R. § 1204.4, promulgated by the National Highway Traffic Safety Administration ("NHTSA"), defines Type I vehicles as "any motor vehicle used to carry more than 16 pupils to and from school," and Type II vehicles as motor vehicles "used to carry 16 or less pupils to or from school." 23 C.F.R. § 1204.4. ⁷ UMTA and the district court disagree about the significance of the cross-referenced safety standard to the decision of this case. According to the district judge, the "to and from school" language in the safety standard is an "operational definition" of school bus operations. He has interpreted "to and from school" to encompass only home to school transportation and not the school to school services disputed here. The trial judge thus concluded that the disputed services were not school bus operations because they were not transportation "to and from school." Safety Standard No. 17, 23 C.F.R. § 1204.4. ⁸ UMTA, on the other hand, did not consider the "to and from school" language contained in the safety standard in reaching its decision. The agency believed the cross-reference in its regulation defined only the "physical characteristics of school bus vehicles," was not an "operational definition," and was not relevant to the decision of the case.

The cross-referenced safety standard "to and from school" language is more restrictive than the language in the school bus operations regulation itself. The regulation, 49 C.F.R. § 605.3(b), defines school bus operations as "transportation by bus exclusively for school students," but that language could include transportation that is not "to and from school" as required by the safety standard, 23 C.F.R. § 1204.4. We therefore conclude that the cross-referenced language in the standard limits the language in the regulation, and the district court was correct to consider the phrase "to and from school" in interpreting the regulation defining school bus operations. However, an analysis of the safety standard language and its interpretation by NHSTA, which promulgated the standard compels us to disagree with the district court's conclusion. We are persuaded, as UMTA has argued on appeal, that "to and from school" includes the services at issue here.

The starting point for understanding the "to and...