New York State School Bus Operators Ass'n v. Nassau County

• Decision Date: 28 June 1974
• Parties: NEW YORK STATE SCHOOL BUS OPERATORS ASSOCIATION on Behalf of its members et al., Plaintiffs, v. COUNTY OF NASSAU et al., Defendants.
• Court: New York Supreme Court

Page 641

357 N.Y.S.2d 641

79 Misc.2d 352

NEW YORK STATE SCHOOL BUS OPERATORS ASSOCIATION on Behalf of its members et al., Plaintiffs, v. COUNTY OF NASSAU et al., Defendants.

Supreme Court, Nassau County.

June 28, 1974.

Samuel B. Zinder, Great Neck, for plaintiffs.

Joseph Jaspan, Mineola, for defendants County of Nassau and Bd. of Supervisors of the County of Nassau.

Seward & Kissel, New York City, for defendants Metropolitan Transp. Authority and Metropolitan Suburban Bus Authority.

MEMORANDUM

BERTRAM HARNETT, Justice.

Bus transportation in Nassau County traditionally has been performed by a series of unrelated private companies. But, over the past decade, the service quality, profitability, and inter-company coordination of multiple bus routes deteriorated, and became subject to increasing public challenge.

As a remedial step in 1967, under then newly enacted State legislation, the County took over a number of the private bus concerns and leased their facilities to the Metropolitan Suburban Bus Authority (MSBA), an organizational child of the Metropolitan Transit Authority (MTA). MSBA then operated the busses principally over street 'line' routes between the numerous population centers in the County.

Now, MSBA, with County approval, is undertaking two additional aspects of bus service: school bus and charter transportation. Five bus companies operating in Nassau County and the New York State School Bus Operators Association have taken up litigative arms to stop this. But, the Court finds the extension of bus service to schools and charters is permissible and survives their challenge.

I. Framework of the Case

This controversy is formed by three converging motions for summary judgment by the bus companies, the County, and the MSBA.

A. Nassau County Local Law and the MSBA Contract

The County and MSBA entered the Nassau bus field through a series of enabling statutes and then an agreement between them.

In 1972, Local Law No. 15--1972 was adopted by the County Board of Supervisors, providing in broad opening terms:

'Section 1. The county of Nassau is hereby authorized to acquire, own and operate public transportation facilities of any nature within its boundaries'.

In the remaining three substantive sections of Local Law No. 15--1972, the County was granted the power to acquire and contract for the operation of such 'public transportation facilities'. On July 25, 1973, Nassau County acquired by condemnation the busses, equipment, routes, and facilities of eleven private bus companies in Nassau County.

Previously, on January 15, 1973, the County agreed that MSBA should lease and operate the busses and facilities it acquired by condemnation.

The County-MSBA agreement in Section 2 provided that MSBA should:

'. . . use the leased assets for the provision of omnibus service. . . within the County of Nassau, or from points within the said county to other points within the Metropolitan Commuter Transportation District . . .'.

It was agreed MSBA would keep the operating revenues and pay the expenses of 'providing the omnibus service' required 'with such financial assistance as may be provided by the COUNTY and others'. Nassau County made an initial 'financial contribution' of $500,000 to get the MSBA started, with provisions for MSBA to require the County to authorize more.

Concededly, some County-MSBA activity has begun in both school and charter bus service in addition to the regularly scheduled street route transportation.

B. The Contentions

1. By the Private Bus Operators

Plaintiffs, who are essentially private bus operators, argue along three general propositions.

a. Unconstitutionality of the local law generally, in that it allows municipal operation of 'public transportation' beyond New York's statutory and constitutional grants of power to localities to operate 'mass transportation'.

b. Offensiveness of school and charter bus activities, in that they violate the Constitution, state statutes, Local Law No. 15--1972, and the actual MSBA agreement.

c. Waste of public monies, in the County's financial assistance to MSBA.

2. By the Defending Public Bodies

The County and MSBA also center their arguments in three lines.

a. Denial of exceeding any statutory or constitutional authority.

b. Necessary parties missing, in that the other private bus companies of the County are not suing or being sued.

c. No legally protected interest shown by the bus operators.

II. Procedural Points

We reject any contentions that the bus operators and their association have insufficient interest and that the case is fatally defective because All the Nassau County private bus operators were not joined in the suit.

A. Substantial Interest

The Court rules that the private bus operators here do have the standing to challenge the validity of government competition which affects their businesses. A genuine pecuniary and operational interest is at stake. Daum v. Meade, 35 A.D.2d 598, 313 N.Y.S.2d 625; Matter of Bauman v. Fusco, 21 A.D.2d 470, 472, 251 N.Y.S.2d 166. The issues are important to the public and are being raised by parties who may be adversely affected by their resolution. See, Berkey v. Downing, 68 Misc.2d 595, 598, 327 N.Y.S.2d 921, affd. 39 A.D.2d 1008.

The tests of 'suable interest' in modern society cannot rest with archaic rules of property law. If law is to fulfill its role in relieving social tension, there must be recognition of reasonable relationship to a happening. Slevin v. Long Island Jewish Medical Center, 66 Misc.2d 312, 314, 319 N.Y.S.2d 937.

Where parties are directly affected by specific public conduct, the courts may allow suit. See, Scarsdale Supply Company v. Village of Scarsdale, 8 N.Y.2d 325, 328, 206 N.Y.S.2d 773, 170 N.E.2d 198. The Court is satisfied that in economic terms the bus operators are substantially affected by the involvement here. They are not remote to the claimed harm. Considering the facts of business competition, they are reasonably related to the complained conduct.

The State Bus Operators Association is a trade association with some 20 or more members resident in Nassau County. As a 'bona fide organization representing (a) class with a specific interest in the litigation in question', the Association is more than a 'concerned bystander' and 'has the requisite standing to bring this action. Matter of National Organization For Women v. State Division of Human Rights, 34 N.Y.2d 416, 358 N.Y.S.2d 124, 314 N.E.2d 867, dated June 19, 1974; Halpern v. Lomenzo, 35 A.D.2d 41, 43, 312 N.Y.S.2d 756.

B. Parties Sufficient Here

The absence of other private companies in the County presents no bar to declaring the rights of parties here. 'Complete relief (may be) accorded between the persons who are parties to the action.' CPLR 1001(a). Moreover, while an adverse decision here might have precedential impact, Cf. CPLR 1001(b), the missing bus operators would not be 'inequitably affected' here since they would not be barred from bringing their own suits by any adjudication in this matter. See, Newburger v. Newburger, 5 N.Y.2d 953, 183 N.Y.S.2d 804, 157 N.E.2d 172.

III. Statutory Elements

A series of constitutional and statutory provisions from the legal backdrop.

A. General Authority for 'Transit Facilities' Acquisition by Localities

In New York State, the Constitution allocates power between the state and localities. Local governments are created by the State Legislature under Article 9, § 2(a). They have only those powers specifically delegated to them by the State. Seaman v. Fedourich, 16 N.Y.2d 94, 101, 262 N.Y.S.2d 444, 209 N.E.2d 778.

Article 9, § 2(c)(7) of the New York Constitution permits a local government to enact laws permitting:

'The acquisition of its transit facilities and the ownership and operation thereof'.

The Municipal Home Rule Law § 10, subd. 1(ii), (a)(7) repeats this very provision in enumerating the activities counties may undertake, although neither the statute or Constitution defines 'transit facilities'.

B. 'Mass Transportation'--Authority of Localities

Article 5--I of the General Municipal Law, entitled 'Mass Transportation and Airport and Aviation Facilities' was enacted in 1967. See, L.1967, C. 717. It prescribes the terms of local involvement in 'mass transportation'.

General Municipal Law § 119--r(1) provides in pertinent part:

'To assure the provision of mass transportation services to the public at adequate levels and at reasonable cost, every city, town, village or county not wholly contained within a city, shall have power to adopt local laws to authorize:

(a) The acquisition . . . equipment, maintenance or operation of one or more mass transportation projects . . .

(b) The making of a contract . . . for the acquisition by purchase of . . . an existing mass transportation facility actually used and useful for the convenience of the public.

(d) The making of a contract . . . for mass transportation services to be rendered to the public by a privately-owned or operated mass transportation facility'.

C. Legality of MSBA Operation of Bus Service

MSBA was organized as a 'public benefit corporation' subsidiary to MTA, pursuant to Public Authorities Law § 1266(5). This statute enables MTA to undertake its authorized functions by 'one or more wholly-owned subsidiary corporations . . . subject to the restrictions and limitations to which (MTA) may be subject'. MTA and its prescribed standards of operation have been upheld constitutionally. MTA v. Nassau County, 35 A.D.2d 739, 315 N.Y.S.2d 1002, affd. 28 N.Y.2d 385, 322 N.Y.S.2d 228, 271 N.E.2d 213.

Public Authorities Law § 1266(1) and (2) set forth the general grant of power to MTA so that MSBA may acquire by lease and operate:

'any transportation facility, wholly or partially within the metropolitan commuter transportation district'.

IV. Essential Validity of Local Law No. 15--1972 and MSBA Agreement

Local Law No. 15--1972 must be tested on its face against the constitutional and...