Massachusetts Bay Transp. Authority v. Boston Safe Deposit & Trust Co.

• Decision Date: 25 February 1965
• Citation: 348 Mass. 538,205 N.E.2d 346
• Parties: MASSACHUSETTS BAY TRANSPORTATION AUTHORITY v. BOSTON SAFE DEPOSIT AND TRUST COMPANY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 346

205 N.E.2d 346

348 Mass. 538

MASSACHUSETTS BAY TRANSPORTATION AUTHORITY v. BOSTON SAFE DEPOSIT AND TRUST COMPANY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 27, 1965.

Decided Feb. 25, 1965.

James W. Perkins and Raya S. Dreben, Boston, for plaintiff.

Austin S. Ashley and Wilmot R. Hastings, Boston, for defendants.

Before WHITTEMORE, CUTTER, KIRK, SPIEGEL, and REARDON, JJ.

WHITTEMORE, Justice.

This proceeding for declaratory relief has been reported without decision on the pleadings and a stipulation that brings before us as a case stated the facts established by the pleadings. The allegations of the bill are admitted. The Attorney General has acknowledged notice that constitutional questions are involved. G.L. c. 231A, § 8. The questions relate to St.1964, c. 563, which by § 18 inserted G.L. c. 161A.

Chapter 161A, by § 2, creates the Massachusetts Bay Transportation Authority and makes the territory of seventy-eight municipalities of Greater Boston and their inhabitants 'a body politic and corporate and a political subdivision of the commonwealth.' Fourteen of these cities and towns, Boston and communities adjacent or close to Boston (which constituted the Metropolitan Transit Authority under St.1947, c. 544, § 1), are differentiated from the other sixty-four cities and towns.

The statute grants the Authority extensive powers in respect of mass transportation facilities. It may own and operate such facilities. It may contract with, subsidize, and lease facilities to private companies. It may borrow money on bonds or notes. The statute provides for annual payments by the Commonwealth to the Authority of its 'net cost of service,' and the apportionment of such deficit payments among the seventy-eight cities and towns on a weighted basis. The statute also provides for additional payments from the Commonwealth under contracts of assistance, the effect of which will be to reduce the deficit payments by cities and towns and place certain financial burdens on the Commonwealth. It contemplates that the Authority will receive revenue from its operations and may receive grants or gifts. Provisions of the statute, so far as material to the issues before us, will be discussed later in this opinion.

The Transportation Crisis and the Authority's Immediate Plans.

The financial situation of the majority of the railroads providing commuter service to Boston is critical. Permission of the Interstate Commerce Commission to abandon service is being sought or has been given. Help by the Authority is necessary because of imminent cessation of commuter service and the cost and diffculty of reestablishing service once abandoned. There is a similar crisis in bus service in the Greater Boston area. The Authority can best furnish aid to bus companies by leasing new facilities and equipment at rentals 'calculated to provide the necessary financial aid.' It must issue bonds under § 23 in order to acquire such property for such leasing.

The Authority must also issue bonds or notes under § 23 to meet its ordinary needs for new equipment and capital improvements and for expansion and improvement of publicly owned and operated mass transportation in Metropolitan Boston. State assistance is required so that the Authority may meet the large capital needs of public transportation and the needs for assistance to privately owned transportation companies.

The Commonwealth through the Executive Office for Administration and Finance (Executive Office) has contracted with the Authority to furnish such assistance. As a means of providing necessary financing the Authority has also contracted with the defendant banks for the purchase by the banks of $1,000,000 of temporary notes under §§ 12 and 27 and the Authority has voted to make the borrowing.

The Controversy--The Issues.

The contract with the banks is subject to four conditions: (1) That the notes be valid obligations of the Authority; (2) That the notes have the security mentioned in §§ 12 and 13; (3) That the Authority and the Executive Office contract for State aid; (4) That State assistance may lawfully be granted in respect of the notes. Upon the basis of the opinion of counsel to the effect that they are unable to certify that the four conditions have been met, the banks decline to go through with the purchase of the notes.

The following are the principal issues: (1) Does G.L. c. 161A establish constitutionally adequate standards under which the Authority is to disburse to private companies the funds received from the notes? (2) Is the Commonwealth primarily liable so that there is in effect a borrowing by it without a two-thirds vote as required by art. 62, § 3, of the Amendments to the Constitution? (3) Is the Commonwealth pleading its credit for the purpose of making payments to a limited class of private companies in contravention of art. 62, § 1? (4) Is there a loan of the Commonwealth's credit without a two-thirds vote in violation of art. 62, § 1, as amended by vote of the electorate, November 3, 1964? (5) Are the provisions for apportionment of net transportation costs among the seventy-eight cities and towns within constitutional limits?

I.

The Constitutionality of the Broad Purpose of the Statute.

The general purpose of G.L. c. 161A is, as the defendants recognize, clearly public. Opinion of the Justices, 337 Mass. 800, 806-807, 152 N.E.2d 90, and cases cited. Transportation concerns every inhabitant of the Commonwealth and every aspect of our society. Even if private enterprise were able to provide it, the public interest would support public action. Where private enterprise has failed, the public interest and the legislative duty to serve that interest by specific enactment are plain. Provisions empowering the Authority to coperate with private enterprise to accomplish the public purpose are not made invalid by resulting incidental private advantage. Court St. Parking Co. v. Boston, 336 Mass. 224, 227-231, 143 N.E.2d 683.

II.

The Adequacy of the Statutory Standards.

A. Standards for Action by the Authority

1. The Authority is that kind of agency of the sovereign for which broad general powers and standards are appropriate. See Opinion of the Justices, 334 Mass. 721, 739, 743, 136 N.E.2d 223. To meet the public need the Legislature has created a 'policital subdivision of the Commonwealth.' G.L. c. 161A, § 2. The Authority has some resemblance to a county, a regional school district, or a fire, improvement or incinerator district. G.L. c. 34; c. 71, §§ 14-16H; c. 48, §§ 60-80; c. 40, §§ 44, 44A-44K. The Authority is suitably placed within the existing political framework of the Commonwealth. Its operations are cordinated with the operation of existing agencies. It is subject to appropriate controls.

The Authority is managed (§ 6) by a board of five directors appointed by the Governor for five year terms subject to approval--two by the council, one by the advisory board of the Authority, one by the fourteen cities and towns, and one by the sixty-four cities and towns, with provisions for weighted votes. The board must include a person experienced in transportation, a member of a national or international labor organization, and a person experienced in administration and finance.

The Authority by § 3 has general powers appropriate to a political subdivision including the power to make by-laws and rules and regulations (§ 3[e]); to grant easements (§ 3[m]); to take real property by eminent domain (§ 3[o]); and to buy, sell, lease, pleadge, and otherwise deal with property 'as may be necessary for or incident to' accomplishing the purposes of the statute (§ 3[q]).

Certain action requires the approval of the advisory board. This, by § 7, consists of representatives of the seventy-eight municipalities: the city manager in Plan D or Plan E cities and in other cities, the mayor, and the chairman of the selectmen of each town. The voting of these members is weighted in relation to the assessments under the statute.

The Authority, like other political subdivisions, must operate under a budget approved by representatives of the people who are its inhabitants. Section 5(i) specifies that current expenses be in accordance with an itemized budget that is to be approved by the advisory board, 'subject to such itemized reductions therein as the advisory board shall deem appropriate.' There may be supplementary budgets over which the advisory board has liek power.

The Authority by § 5(h) reports annually to the Governor, the advisory board, and the Legislature 'its operations for the preceding calendar year, including therein a description of the organization of the authority, its recommendations for legislation, and its comprehensive program for mass transportation as most recently revised.' By § 17, the State Auditor is required to make an annual audit of the accounts of the Authority and to 'make a report thereon to the directors, the governor and the general court.'

2. The standards for action to carry out a declared legislative policy may be found not only in the express provisions of a statute but also in its necessary implications. The purpose, to a substantial degree, sets the standards. A detailed specification of standards is not required. The Legislature may delegate to a board or officer the working out of the details of a policy adopted by the Legislature. Commonwealth v. Sisson, 189 Mass. 247, 75 N.E. 619, 1 L.R.A.,N.S., 752; Chelsea v. Treasurer & Recr. Gen., 237 Mass. 422, 431, 130 N.E. 397; Commonwealth v. Hudson, 315 Mass. 335, 341-342, 52 N.E.2d 566; Scannell v. State Ballot Law Commn., 324 Mass. 494, 501, 87 N.E.2d 16; Opinion of the Justices, 330 Mass. 713, 719, 113 N.E.2d 452; Opinion of the Justices, 334 Mass. 721, 743, 136 N.E.2d 223 (Massachusetts Port Authority had wide scope as to provisions of an authorized trust agreement).

In Butler v. Town of East Bridgewater, 330 Mass. 33, 37-38, 110 N.E.2d 922, 925,...