City of Atlanta v. Metropolitan Atlanta Rapid Transit Authority, 80-7514

• Decision Date: 13 February 1981
• Docket Number: No. 80-7514,80-7514
• Citation: 636 F.2d 1084
• Parties: The CITY OF ATLANTA, a Georgia Municipality, and Maynard Jackson, Individually and as Mayor of the City for Atlanta, Plaintiffs-Appellants-Cross Appellees, and Fulton County, A Political Subdivision of the State of Georgia, etc., et al., Intervenors-Appellants-Cross Appellees, v. The METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY, etc., Defendant-Appellee- Cross Appellant. . Unit B
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1084

636 F.2d 1084

The CITY OF ATLANTA, a Georgia Municipality, and Maynard Jackson, Individually and as Mayor of the City for Atlanta, Plaintiffs-Appellants-Cross Appellees and Fulton County, A Political Subdivision of the State of Georgia, etc., et al Intervenors-Appellants-Cross Appellees, v. The METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY, etc Defendant-Appellee- Cross Appellant.

No. 80-7514.

United States Court of Appeals, Fifth Circuit.

Unit B

Feb. 13, 1981.

David E. Betts, Robert G. Young, Atlanta, Ga., for Fulton Co.

Ralph Witt, Ferrin Mathews, Atlanta, Ga., for City of Atlanta and Jackson.

John S. Graettinger, Jr., Atlanta, Ga., for Ethel Mathews.

Kutak, Rock & Huie, John R. Lowery and W. Stell Huie, Atlanta, Ga., for defendant-appellee-cross appellant.

Appeals from the United States District Court for the Northern District of Georgia.

Before MORGAN, ANDERSON and THOMAS A. CLARK, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

The City of Atlanta and Maynard Jackson, individually and as Mayor of Atlanta, brought an action seeking to enjoin the Metropolitan Atlanta Rapid Transit Authority (MARTA) from implementing a proposed fare increase for the MARTA bus/rail system. ¹ The plaintiffs, now appellants, challenged this increase, alleging a number of constitutional, statutory, and contractual violations by the defendant MARTA. Fulton County, Dorothy Bolden, the National Domestic Workers Union of America, Ethel Mathews, and the National Welfare Rights Organization were permitted to intervene as plaintiffs; DeKalb County was permitted to intervene as a defendant.

The District Court for the Northern District of Georgia granted a temporary restraining order enjoining the fare increase and scheduled a hearing on appellants' motion for a preliminary injunction. Following a hearing and the submission of supplemental briefs by the parties, the district court determined that appellants had failed to demonstrate a substantial likelihood of success on the merits. Accordingly, the court denied the motion for a preliminary injunction, dissolved the temporary restraining order, and entered its findings of fact and conclusions of law. The appellants appeal from the denial of the preliminary injunction, and MARTA cross-appeals from the denial of its motion for posting of security by the appellants. A panel of this court denied appellants' motion for a stay pending appeal but granted their request that the appeal be expedited. Finding no error requiring reversal in this case, we affirm the district court.

I.

During the 1960s, serious traffic and mass transportation problems developed in the Atlanta metropolitan area. To alleviate these problems the Georgia General Assembly, pursuant to authority granted by an amendment to the Georgia constitution, ² created MARTA as a "joint public instrumentality of the City of Atlanta and the counties of Fulton, DeKalb, Cobb, Clayton and Gwinnett." Metropolitan Atlanta Rapid Transit Act of 1965, § 4, 1965 Ga.Laws, p. 2243 et seq. (the MARTA Act). The legislature assigned MARTA the task of designing, purchasing, constructing, financing, and operating a rapid transit system for the Atlanta metropolitan area. MARTA Act § 7. MARTA was given "all powers necessary or convenient to accomplish" these purposes. Id. § 8. In particular, the legislature authorized MARTA to enter into contracts with the City of Atlanta and the named county governments for the performance of MARTA's public transportation services.

As originally enacted, the MARTA Act contemplated an eleven-member Board of Directors for the Authority: four members representing Atlanta, two representing Fulton County, two representing DeKalb County, one representing Cobb County, one representing Clayton County, and one representing Gwinnett County. Under the provisions of the Act, however, a local government could not be represented on the MARTA Board unless its voters approved a referendum authorizing participation in the transit authority. On June 16, 1965, the voters of Fulton, DeKalb, Clayton, and Gwinnett Counties approved further participation in MARTA, and the voters of Cobb County voted against further participation. Following the referenda the Georgia General Assembly confirmed participation in MARTA by the approving counties and the City of Atlanta. 1966 Ga.Laws, p. 3264. As a result, the original MARTA Board consisted of ten members.

On September 1, 1971, the City of Atlanta and Fulton, DeKalb, Clayton, and Gwinnett Counties entered into an agreement with MARTA for the purpose of commencing the construction and operation of the rapid transit system. This agreement, the Rapid Transit Contract and Assistance Agreement, was to be binding upon the local governments only after their voters gave their approval in a referendum. Voter approval of the rapid transit contract would, under the MARTA Act, permit a local government to levy a one percent sales tax within its geographical area. MARTA Act § 15. The contract and the consequent sales tax were approved by the voters of Fulton and DeKalb, which includes the City of Atlanta, but rejected by the voters of Clayton and Gwinnett. Nevertheless, representatives from Clayton and Gwinnett remained on the MARTA Board of Directors. The propriety of their membership on the Board is one of the issues in this case.

In 1976 the Georgia General Assembly amended section 6(a) of the MARTA Act to add four members to the MARTA Board of Directors. The Board's membership was increased by the addition of one representative from DeKalb County and three members, serving ex officio, representing the State of Georgia. ³ The plaintiffs argue that this change in the composition of the MARTA Board violated due process and equal protection and impaired the Rapid Transit Contract and Assistance Agreement executed by MARTA and the local governments.

The MARTA Act gives the Board of Directors the sole authority to determine transit fares. Section 9(c) provides that the Board "shall determine by itself exclusively" the fares to be charged for transit services. The Act further provides that "the function of the Board under subsection (c) and (d) shall not be delegated or exercised by any other person or body under any circumstances." MARTA Act § 9(e). The Board does not, however, have absolute free rein in exercising its rate-making function. Under section 9(c) of the Act the Board is required to establish such fares and transportation charges as shall be sufficient, when added to MARTA's revenues from other sources, to meet the Authority's financial obligations. ⁴ On the other hand, MARTA's official policy "is one of low fares, virtually removing any cost barrier to the use of the system." ⁵ The tension between these competing considerations is the basis for much of the controversy in this case.

In 1979 the Georgia General Assembly imposed certain budgetary and expenditure restraints upon MARTA in the operation of its rapid transit system. Section 9(h)(1) of the MARTA Act requires that at least thirty-five percent of the operating costs of the system must be derived from transit operating revenue i. e., from fare box income. Similarly, section 25(i) of the Act provides that no more than fifty percent of the annual proceeds of the one percent sales tax authorized by the Act may be used to subsidize the operating costs of the system. Plaintiffs allege that these amendments to the Act impair MARTA's obligations under the Rapid Transit Contract and Assistance Agreement and violate the Urban Mass Transit Act, 49 U.S.C. § 1604.

II.

This court has identified four prerequisites to the extraordinary relief of preliminary injunction. The district court should issue the injunction only if the moving party bears the burden of establishing: (1) a substantial likelihood that the movant will ultimately prevail on the merits, (2) a substantial threat that the movant will suffer irreparable injury unless the injunction is issued, (3) that the threatened injury to the movant outweighs the harm the injunction may do to the defendant, and (4) that granting the injunction will not be adverse to the public interest. Canal Authority v. Callaway, 489 F.2d 567, 572 (5th Cir. 1974). The grant or denial of a preliminary injunction rests in the sound discretion of the district court and, absent an abuse of this discretion, the court's decision will not be overturned on appeal. Vision Center v. Opticks, Inc., 596 F.2d 111, 114 (5th Cir. 1979).

In this case the district court denied the preliminary injunction after it determined that appellants had failed to establish a substantial likelihood that they would prevail on the merits. We have reviewed appellants' claims challenging the MARTA fare increase and conclude that the district court did not abuse its discretion in finding that these claims lack substantial merit. We will briefly discuss each of appellants' claims seriatim.

A. Due Process and Equal Protection Claims.

The City of Atlanta argues that the addition in 1976 of the three state officials to the MARTA Board of Directors deprived its citizens of due process and equal protection of the laws by "diluting" their representation on the Board. Similarly, Fulton County argues that the representatives from Clayton and Gwinnett counties were unauthorized to serve on the MARTA Board and consequently that its citizens were denied due process when the illegally constituted Board voted to increase transit fares.

MARTA is a "joint public instrumentality" created by the Georgia General Assembly to implement a mass transportation system in the Atlanta metropolitan area. The Authority is not simply an arm of the local governments or a combination of local governments but is a distinct corporate entity authorized to contract with the local governments. Camp v. MARTA, 229 Ga. 35, 39, 189 S.E.2d 56 (1972). The nature and function of MARTA, including the composition of its Board of Directors, is established...