Pennsylvania Greyhound Lines v. Board of PU Com'rs, Civ. No. 650.

• Decision Date: 25 September 1952
• Docket Number: Civ. No. 650.
• Citation: 107 F. Supp. 521
• Parties: PENNSYLVANIA GREYHOUND LINES, Inc. v. BOARD OF PUBLIC UTILITY COM'RS et al.
• Court: U.S. District Court — District of New Jersey

107 F. Supp. 521

PENNSYLVANIA GREYHOUND LINES, Inc. v. BOARD OF PUBLIC UTILITY COM'RS et al.

Civ. No. 650.

United States District Court D. New Jersey.

September 25, 1952.

McCarter, English & Studer, Augustus C. Studer, Jr., Newark, N. J., for plaintiff, Donald S. Bowie, Jr., Newark, N. J., Harold J. Drescher, New York City, of counsel.

Theodore D. Parsons, Atty. Gen. of State of New Jersey, Edward S. Binkowski, Deputy Atty. Gen. of State of New Jersey, for defendants.

FORMAN, Chief Judge.

This is a motion by the plaintiff for summary judgment in favor of the plaintiff and against the defendants made pursuant to rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.

The plaintiff in this case is Pennsylvania Greyhound Lines, Inc., a Delaware corporation, with its principal office in the city of Cleveland, Ohio. The defendants are the Board of Public Utility Commissioners, Department of Public Utilities, State of New Jersey, and Theodore D. Parsons, Attorney General of the State of New Jersey.

The essence of the complaint is that an Interstate Commerce Commission order, made pursuant to a valid federal statute and regulations, permitting the plaintiff to be a self-insurer, renders inoperative the requirement of the defendant Board of Public Utility Commissioners that plaintiff carry insurance. Plaintiff demands a judgment declaring:

"(a) The legality, constitutionality and validity of the provisions of N.J. R.S. 48:4-19 N.J.S.A. with respect to the autobuses of plaintiff operating in interstate commerce in and through the State of New Jersey and subject to the provisions of part II of the Interstate Commerce Act and the rules and regulations promulgated by the Interstate Commerce Commission under and by virtue of said Act, particularly the provisions thereof with respect to security for the protection of the public;

"(b) That the provisions of part II of the Interstate Commerce Act, U.S. Code, Title 49, Sections 301-327, particularly Section 315 49 U.S.C.A. §§ 301-327, 315, and the rules and regulations of the Interstate Commerce Commission promulgated by its order in Ex Parte No. MC-5 under and by virtue of said Act of Congress have superseded N.J.R.S. 48:4-19 N.J.S.A. and that said Act of Congress and said rules and regulations of the Interstate Commerce Commission have rendered said statute of the State of New Jersey unconstitutional and inoperative with respect to the autobuses of plaintiff operating in interstate commerce in and through the State of New Jersey;

"(c) That defendant, Board of Public Utility Commissioners, Department of Public Utilities, is without jurisdiction, authority or power to require or compel plaintiff to comply with the provisions of N.J.R.S. 48:4-19 N.J.S.A. with respect to its autobuses operating in interstate commerce in or through the State of New Jersey;

"(d) The rights and other legal relations of the plaintiff in the premises."

Plaintiff is a motor carrier engaged in the transportation of passengers for compensation by autobus in interstate commerce in and through twelve contiguous states, including the State of New Jersey. Plaintiff either transports passengers through the State between points outside of it, or receives or discharges, but does not receive and discharge passengers within the State.

Under New Jersey law it is provided that:

"The board of public utility commissioners may require operators of such interstate busses to carry insurance equal in amount to that required by law of operators of busses carrying passengers between points in this state, against loss by reason of the liability imposed by law for damages on account of bodily injury or death suffered by any person as a result of an accident occurring by reason of the ownership, maintenance or use of such autobusses.

"The board may require the operators of such autobusses to file with it duplicates of insurance policies or such other records as in the judgment of the board will show that the operators carry insurance against loss for liability for damages. * * *" N.J.S.A. 48:4-19.

Plaintiff, acting pursuant to the requirements of the Board, has carried and continues to carry insurance in amounts required by the Board and has filed duplicates of the policies or certificates of insurance.

Plaintiff, being an interstate carrier, is subject to the provisions of part II of the Interstate Commerce Act and the rules and regulations promulgated by the Interstate Commerce Commission under this Act. Its interstate bus operations have been and are authorized by the Commission. Provision is made for insurance under the federal law as follows:

"No certificate or permit shall be issued to a motor carrier or remain in force, unless such carrier complies with such reasonable rules and regulations as the Commission shall prescribe governing the filing and approval of surety bonds, policies of insurance, qualifications as a self-insurer or other securities or agreements, in such reasonable amount as the Commission may require, conditioned to pay, within the amount of such surety bonds, policies of insurance, qualifications as a self-insurer or other securities or agreements, any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance, or use of motor vehicles under such certificate or permit, or for loss or damage to property of others. The Commission may, in its discretion and under such rules and regulations as it shall prescribe, require any such common carrier to file a surety bond, policies of insurance, qualifications as a self-insurer, or other securities or agreements, in a sum to be determined by the Commission, to be conditioned upon such carrier making compensation to shippers and/or consignees for all property belong (1) to shippers and/or consignees, and coming into the possession of such carrier in connection with transportation service. * * *" 49 U.S.C.A. § 315.

"(1) So in original."

The Interstate Commerce Commission, by its order in Ex parte No. MC-5, prescribed rules and regulations governing the filing by motor carriers subject to the Act of surety bonds, policies of insurance, and qualifications as a self-insurer and the approval thereof. These rules and regulations include a provision permitting a motor carrier to qualify as a self-insurer upon meeting certain conditions. Plaintiff applied to the Commission for authority to self-insure, and the Commission granted approval by its order No. Mc-1502, dated October 20, 1948.

On or about September 26, 1950, plaintiff applied to defendant, Board of Public Utility Commissioners, for leave to withdraw its evidences of insurance coverage filed with the Board pursuant to the provisions of N.J.R.S. 48:4-19, N.J.S.A., and to determine and direct that the New Jersey statutory provisions did not apply to the plaintiff, as these provisions had been superseded by federal regulation. The Board denied plaintiff's application by its decision in Docket No. 5229, dated April 11, 1951, stating:

"We are of the opinion that it is not our function as an administrative agency of the State to determine in the circumstances here present, the question of whether the statute of the State relating to financial coverage by interstate motor carriers was rendered unconstitutional and inoperative by the enactment of the Federal Motor Carrier Act of 1935. The determination of this question is the province of our courts."

Without seeking further adjudication of the question in the New Jersey courts, plaintiff instituted this suit for a declaratory judgment, alleging, in substance, the above facts. In their answer the defendants deny none of the material facts, though they claim no knowledge or belief as to whether plaintiff applied for permission and was authorized to act as a self-insurer and whether plaintiff did become a self-insurer. Defendant alleged three separate defenses:

(1) plaintiff has an adequate remedy for any relief to which it may be entitled in the courts of New Jersey;

(2) the New Jersey statute expresses an important State policy and as a valid exercise of the police power its construction should first be made by the State courts, and

(3) the State statute does not contravene and is not inconsistent with any laws of the United States.

Plaintiff moved for a summary judgment, supporting by affidavits those allegations of which defendant claimed no knowledge or belief. These affidavits are not controverted, and thus no issue of fact arises.

The questions which must be resolved are whether this court has jurisdiction to hear this case, and, if so, whether it should, in its discretion, exercise its jurisdiction.

Under 28 U.S.C. § 2281 no interlocutory or permanent injunction restraining the enforcement, operation or execution of any state statute by restraining the action of any officer of such state in the enforcement or execution of such statute or of an order made by an administrative board or commission acting under a state statute shall be granted upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges. In the present case, plaintiff seeks a declaratory judgment that, as applied to it, the New Jersey statute and regulation pursuant thereto are unconstitutional and inoperative, and the question arises as to whether the relief which plaintiff seeks would, in effect, restrain the enforcement of a state statute in the manner proscribed by § 2281 so as to require the consideration of a district court of three judges.

In deciding whether a suit for an injunction to restrain a state official upon the grounds of unconstitutionality of a state statute requires a three judge court, the United States Supreme Court has noted that two types of objections to state statutes have been made, both of which have their source in the United States Constitution. The substance...