Suburban Trails, Inc. v. New Jersey Transit Corp., Civ. A. No. 85-1398.

• Decision Date: 31 October 1985
• Docket Number: Civ. A. No. 85-1398.
• Citation: 620 F. Supp. 1383
• Parties: SUBURBAN TRAILS, INC. and Suburban Transit Corp., Plaintiffs, v. NEW JERSEY TRANSIT CORPORATION, New Jersey Transit Bus Operations, Inc., John P. Sheridan, Jr., Jerome C. Premo, Albert R. Hasbrouck, III, George W. Heinle, Martin Brody, Edward Borrone, David Lehmkuhl, Prentis C. Nolan, III, John L. McGoldrick, Bogle, Richard B. Standiford, and Roger A. Bodman, Defendants.
• Court: U.S. District Court — District of New Jersey

620 F. Supp. 1383

SUBURBAN TRAILS, INC. and Suburban Transit Corp., Plaintiffs, v.NEW JERSEY TRANSIT CORPORATION, New Jersey Transit Bus Operations, Inc., John P. Sheridan, Jr., Jerome C. Premo, Albert R. Hasbrouck, III, George W. Heinle, Martin Brody, Edward Borrone, David Lehmkuhl, Prentis C. Nolan, III, John L. McGoldrick, Bogle, Richard B. Standiford, and Roger A. Bodman, Defendants.

Civ. A. No. 85-1398.

United States District Court, D. New Jersey.

October 31, 1985.

COPYRIGHT MATERIAL OMITTED

Wilentz, Goldman & Spitzer, Woodbridge, N.J., for plaintiffs.

Robert H. Stoloff, Deputy Atty. Gen., Trenton, N.J., for defendants.

OPINION

SAROKIN, District Judge.

Over the past thirty years, this nation's use of its mass transportation systems has undergone a steady decline as Americans have turned from public transportation to private automobiles.¹The result has been a steady deterioration in mass transit systems, leading in some areas to the abandonment of individual lines or entire systems.²Since 1964, Congress has attempted to counteract this trend by means of the Urban Mass Transit Act (UMTA), 49 U.S.C. § 1601 et seq., which provides for the appropriation of funds in order to aid the states in the maintenance and improvement of their transit systems.More recently, Congress has addressed the problem in another way, by encouraging deregulation of private interstate carriers in the Bus Regulatory Reform Act of 1982, 49 U.S.C. § 10101 et seq.

In this case, which involves a suit by a private carrier against the New Jersey Transit Corporation for withholding UMTA funds from that company because of its decision to commence operating a public transit route along a highway already serviced by New Jersey Transit's subsidiary bus company, the court is faced with motions to dismiss and for summary judgment which require it to determine whether the state agency's decision to place such a restriction on the allocation of UMTA funds conflicts with the goals of the Bus Regulatory Reform Act and thereby violates the supremacy clause, or whether such action violates the antitrust principles of the Sherman Act.

BACKGROUND

1.The federal regulatory scheme

When Congress passed the Urban Mass Transit Act of 1963, it declared:

... that the welfare and vitality of urban areas, the satisfactory movement of people and goods within such areas, and the effectiveness of housing, urban renewal, highway and other federally aided programs are being jeopardized by the deterioration or inadequate provision of urban transportation facilities, the intensification of traffic congestion, and the lack of coordinated transportation and other development planning on a comprehensive and continuing basis; and

... that Federal financial assistance for the development of efficient and coordinated mass transportation systems is essential to the solution of these urban problems.

Pub.L. 88-365 § 2,78 Stat. 302, codified at 49 U.S.C. § 1601(a)(2)-(3).As Congress further explained with amending language in 1970, it envisioned the Act"to create a partnership which permits the local community, through Federal financial assistance, to exercise the initiative necessary to satisfy its urban mass transportation requirements."Pub.L. 91-453 § 1,84 Stat. 962, codified at 49 U.S.C. § 1601a.The remaining provisions of the Act set out the guidelines of the regulatory scheme to be used to implement these goals.Thus, 49 U.S.C. § 1602 authorizes the Secretary of Transportation "in accordance with the provisions of this chapter and on such terms and conditions as the Secretary may prescribe,"³ to make loans and grants to states and local public bodies for the acquisition, construction, and improvement of facilities and equipment for mass transportation services, "and the coordination of such service with highway and other transportation".With regard to dispersal of the funds at the local level, 49 U.S.C. § 1604(b) invokes state and local participation by establishing that the funds are to be received and dispensed by a "designated recipient" selected by state and local officials and approved by the Secretary.Local participation is further encouraged by 49 U.S.C. § 1604(g), which requires that the funding is to be made available only after the state or local community has established that it is to be used in the context of a locally developed long-range transportation plan or program, as defined in 49 U.S.C. § 1607.Finally, 49 U.S.C. § 1608 authorizes the Secretary of Transportation to prescribe further necessary rules to carry out the provisions of the Act, to sue and be sued, and to take "such actions as may be necessary" to require state and local agencies to comply with the terms of their grant applications.In sum, the thrust of UMTA is twofold; not only to make federal funds available to finance current revitalization, but also to use those funds as an incentive to encourage state and local bodies to exercise their "partnership" duties responsibly by implementing long-range mass transit planning and coordination.

The philosophy behind the Bus Regulatory Reform Act of 1982 is quite different.As noted in Senate ReportNo. 97-411, 1982 U.S.Code Cong. & Ad.News 2308, that legislation was intended to "eliminate outdated and cumbersome regulation, thereby allowing greater flexibility of service and increased competition."Id.The Act, which is administered by the Interstate Commerce Commission(ICC), seeks to achieve this goal by liberalizing the standards under which the ICC may authorize entry into, 49 U.S.C. § 10922, and exit from, 49 U.S.C. § 10935, the interstate carrier industry, and by removing state regulatory restrictions on intercity bus operations, 49 U.S.C. § 11501(e).⁴

2.The facts of this case

U.S. Route 9 is a major corridor used by highway traffic travelling from New Jersey to New York City.Plaintiff Suburban Trails is a private bus company which holds the right to transport passengers along that corridor under a certificate of public convenience and necessity issued by the ICC pursuant to the liberalized standards of the Bus Regulatory Reform Act.As a private company providing mass transit services, it is also within the class of entities potentially eligible for UMTA funding.49 U.S.C. § 1609(e).Defendant New Jersey Transit is an agency established by the state of New Jersey to coordinate the state's transit services.To this end, it has been designated the state's "recipient" of UMTA funds under 49 U.S.C. § 1604.In addition, New Jersey Transit has two wholly-owned subsidiary corporations, New Jersey Transit Bus Operations, Inc., and New Jersey Transit Rail, Inc., which operate regular common carrier bus and rail passenger services.

For a number of years prior to 1980, two private bus companies, Lincoln Transit Company and Transport of New Jersey, operated a coordinated commuter bus schedule along Route 9.In 1980, Transport of New Jersey was purchased by New Jersey Transit, and in 1983 Lincoln Transit declared bankruptcy, whereupon New Jersey Transit assumed responsibility for the entire service along the Route 9 corridor.Meanwhile, however, Suburban Trails had purchased Lincoln Transit's outstanding certificate of public convenience and necessity for operations along Route 9, and had thereafter received a renewal of the certificate from the ICC.By mid-1984 it had commenced plans to operate a Route 9 commuter bus service, and it actually instituted such service in December of 1984.

According to plaintiffs, New Jersey Transit began to express strong opposition to their decision to commence Route 9 service almost immediately upon learning of the plan.New Jersey Transit's dissatisfaction was made most apparent when it informed Suburban Trails that the portion of the 1983 UMTA capital equipment grant that it had requested in order to fund the purchase of twenty-five new Suburban Trails buses would be withheld until Suburban Trails agreed in writing not to operate on Route 9 in competition with New Jersey Transit Bus.Plaintiffs then filed suit, claiming that in so penalizing Suburban Trails' exercise of its right to use its certificate of public convenience along Route 9, New Jersey Transit has violated the Interstate Commerce Actas amended by the Bus Regulatory Reform Act of 1982, 49 U.S.C. § 10101, the supremacy clause, U.S. Const. Art. III, the Sherman Antitrust Act, 15 U.S.C. § 1, and the due process clause of the fourteenth amendment.Plaintiffs' complaint further alleges that to the extent that defendants' actions were authorized by Title 16, Subtitle L of the New Jersey Administrative Code, such provisions are in violation of the same constitutional and federal statutory provisions.Defendants now move to dismiss the complaint, and plaintiffs cross-move for a preliminary injunction, summary judgment and a permanent injunction.Because the court relies on parts of the record which are outside the scope of the complaint, it treats both parties' motions as motions for summary judgment.

DISCUSSION

1.Ripeness

Before proceeding to the merits, the court addresses the defendants' claim that the court should refrain from deciding this dispute because the issues are not ripe.According to the defendants, the court's disposition of the dispute at this time is premature because defendants have not as yet received the UMTA funds, and have not yet made any final decision about how those funds will be allocated.Plaintiffs hotly contest the facts submitted in defendants' affidavits regarding the status of the UMTA grant, as well as the finality of defendants' plans to deny plaintiffs access to any part of that grant.The court finds it unnecessary to resolve these factual disputes, however, because it concludes that even under the facts undisputed by defendantsthe case is ripe for review.

The ripeness doctrine as developed by the Supreme Court contains two elements, the first of which is jurisdictional in the sense...