Cross-Sound Ferry Services, Inc. v. U.S., CROSS-SOUND

Decision Date13 March 1978
Docket NumberCROSS-SOUND,D,No. 607,607
Parties, 8 Envtl. L. Rep. 20,311 FERRY SERVICES, INC., Petitioner, v. The UNITED STATES of America and Interstate Commerce Commission, Respondents, National Railroad Passenger Corporation (AMTRAK) and Mascony Transport and Ferry Service, Inc., et al., Intervenors. ocket 77-4162.
CourtU.S. Court of Appeals — Second Circuit

Peter A. Greene, Washington, D. C. (Caldwell & Greene, Washington, D. C.), for petitioner, Cross-Sound Ferry Services, Inc.

Cadwalader, Wickersham & Taft, New York City, John J. Walsh and Howard W. Burns, New York City, on brief for Cross-Sound Ferry Services, Inc. and Shelter Island and Greenport Ferry Co.

Gordon P. MacDougall, Washington, D. C., on brief for The Bridgeport and Port Jefferson Steam-Boat Co.

Robert W. Tasker, Greenport, N. Y., on brief for Shelter Island and Greenport Ferry Co.

John J. Munzel, Riverhead, N. Y., for Incorporated Village of Greenport.

Ellen K. Schall, Atty., I. C. C., Washington, D. C. (Mark L. Evans, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, John H. Schenefield, Asst. Atty. Gen., Robert B. Nicholson and Andrea Limmer, Attys., Dept. of Justice, Washington, D. C., of counsel), for Interstate Commerce Commission and The United States of America.

Arthur D. Bernstein, Washington, D. C. (Galland, Kharasch, Calkins & Short, Washington, D. C., Robert W. Ginnane and Olga Boikess, Washington, D. C., of counsel), for intervenor Mascony Transport and Ferry Service, Inc.

Frank J. Weiner and Wesley S. Chused, Boston, Mass. and Richard T. Haefeli, Riverhead, N. Y. (McNulty, DiPietro, Nesci & Haefeli, Riverhead, N. Y.), on brief for intervenor Mascony Transport and Ferry Service, Inc.

Peter R. Reilly, Counsel, National Railroad Passenger Corp., Washington, D. C., for intervenor, National Railroad Passenger Corporation.

Before FRIENDLY, SMITH and TIMBERS, Circuit Judges.

SMITH, Circuit Judge:

This is a petition for review of orders issued by the Interstate Commerce Commission ("ICC") granting Mascony Transport and Ferry Service, Inc. ("Mascony") a conditional certificate of public convenience and necessity, pursuant to 49 U.S.C. § 909(c). 1

Petitioners Cross-Sound Ferry Services, Inc. ("Cross-Sound"), successor-in-interest to New London Freight Service, Inc. ("NLFL"), the Bridgeport and Port Jefferson Steamboat Co. ("B&PJ"), the Incorporated Village of Greenport ("VG"), and the Shelter Island and Greenport Ferry Co. ("SI&G") oppose the ICC's grant of the certificate to Mascony. 2

This court has jurisdiction over the petition pursuant to 28 U.S.C. §§ 2321(a) and 2342.

Petitioners argue here that the grant of operating rights was invalid for three principal reasons:

(1) The ICC acted arbitrarily and capriciously in permitting Mascony to offer additional evidence after the close of the record, while forbidding the admission of additional evidence offered by the petitioners.

(2) The ICC did not act in conformity with the requirements of the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq.

(3) The ICC erred in finding that Mascony was "fit, willing, and able properly to perform" the requested service.

We have examined the extensive record in this case, and find that the ICC acted properly and within the scope of its discretion in granting Mascony a certificate of public convenience and necessity which was limited to a three-year term. Accordingly, we deny the petition.

History and Facts of the Case

Because the petitioners' argument turns, in large measure, on claimed procedural irregularities in the ICC proceedings, it is necessary to recount the procedural history of this case in some detail.

The Mascony Transport and Ferry Service, Inc. filed an application with the ICC on May 29, 1973, seeking authority:

to engage in operation, in interstate or foreign commerce, as a common carrier by water in the transportation of general commodities and passengers by self-propelled vessels, between the ports of New London, Conn., and Greenport, Long Island, N. Y. . . .

This application was opposed by NLFL (and later by its successor in interest, Cross-Sound, which was substituted as a party in these proceedings on November 19, 1976) and B&PJ, and by intervenors below, SI&G and the East End Supply Co. Also intervening were the Connecticut Department of Transportation, the New York Department of Transportation, and the Planning Board of the Village of Greenport.

Oral hearings were held before Administrative Law Judge David H. Allard during the period from October, 1973 to February, 1974. By order issued March 26, 1974, the record in these proceedings was closed as of March 19, 1974, with briefs to be submitted some two months later. 3

On June 19, 1974, the ALJ denied Mascony's application because of "operational considerations: safety at New London and environmental at Greenport."

Mascony filed exceptions to the decision, and petitioned the ICC to reopen the record for receipt of additional evidence. On October 22, 1975, the ICC's Appellate Division 1 ordered the reopening of the record to accept a limited amount of evidence from Mascony, and directed that an environmental impact study be conducted pursuant to the requirements of the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq.

Cross-Sound, successor in interest to NLFL, and B&PJ then petitioned for reconsideration of the October 22 order, and sought to reopen the record for receipt of evidence bearing on "changed circumstances" in their provision of transport services.

The ICC issued a draft environmental impact statement ("EIS") on February 3, 1976, and solicited comments from all interested parties. Comments were subsequently filed by many of the principals in this case. A final EIS, which reflected the consideration of all comments received by the ICC, was issued in June, 1976.

On November 19, 1976, Appellate Division 1, reversing the Administrative Law Judge's decision on June 19, 1974, granted Mascony a three-year certificate of convenience and necessity. Commissioner Murphy dissented from this order. The order further denied petitioners' request for reconsideration of the October 22 order, and denied their request to reopen the proceedings for further hearings. The Appellate Division reasoned that petitioners had not been denied an opportunity to rebut any evidence tendered by Mascony after the close of oral hearings, and that, because of the already protracted nature of the proceedings, it was within its discretion to preclude the introduction of evidence of changed circumstances.

On December 20, 1976, the petitioners moved for reconsideration of the Appellate Division's November 19 order. The Appellate Division denied this request, but later reopened the proceedings for the receipt of verified statements and verified replies relating to Mascony's terminal sites at Greenport, N.Y. and New London, Conn. These statements were subsequently filed. Mascony's "rebuttal verified statement" was rejected by the Commission.

In June, 1977, the National Railroad Passenger Corp. (Amtrak) filed a petition to intervene in this matter. This request was denied on the ground that issues sought to be raised by Amtrak had already been adequately considered in connection with the Commission's EIS. On June 16, 1977, Appellate Division 1 affirmed its earlier decision granting Mascony a conditional operating certificate.

Petitioners again requested a reconsideration of the Appellate Division's decision, and the U.S. Department of Transportation ("DOT") petitioned for leave to intervene. The Appellate Division denied these petitions.

In September, 1977, the Commission denied requests by Cross-Sound and Amtrak for a finding that the proceeding presented an issue of "general transportation importance," and denied a request for a stay of its order pending appeal. This court, too, denied petitioners' request for such a stay.

This petition followed.

The Nature of the Proposed Service

Mascony seeks authorization to operate a commercial ferry service between New London, Conn. and Greenport, N.Y. In March, 1973, it purchased the SS New Jersey, a vessel with a licensed capacity of 100 cars and 800 passengers, and contracted to acquire other vessels from the Delaware River and Bay Authority. The corporation has yet to procure safety and operating licenses from a variety of federal, state and local government agencies. In addition, it is unclear at this time whether Mascony will be able to procure suitable docking sites in New London and Greenport. Much of the testimony in this case concerns the practical feasibility of adopting alternative docking facilities.

Opposition to Mascony's planned ferry service is based primarily on the desire by Cross-Sound, which operates ferries between New London, Conn. and Orient Point, N.Y., and B&PJ, which operates ferries between Bridgeport, Conn. and Port Jefferson, N.Y., to minimize commercial competition.

In addition, the Village of Greenport, SI&G, Amtrak, and DOT oppose the operation of the new ferry for a variety of environmental and safety reasons.


It is necessary at the outset for us to address briefly the scope of review which is appropriate in a case of this type. The Administrative Procedure Act, 5 U.S.C. § 706, provides that:

The reviewing court shall

(2) hold unlawful and set aside agency action, findings, and conclusions found to be

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . . . .


(E) unsupported by substantial evidence . . . .

The standard of review here is narrow. Once it has been determined that decisions are supported by substantial evidence,

(a) reviewing court must "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although this inquiry into the facts is to be...

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