United Motorcoach Ass'n, Inc. v. Welbes

• Decision Date: 05 May 2009
• Docket Number: Civil Action No. 08-1648 (ESH).
• Parties: UNITED MOTORCOACH ASSOCIATION, INC., Plaintiff, v. Matthew J. WELBES, Acting Deputy Administrator, Federal Transit Administration, United States Department of Transportation, Defendant.
• Court: U.S. District Court — District of Columbia

Page 1

614 F.Supp.2d 1

UNITED MOTORCOACH ASSOCIATION, INC., Plaintiff, v. Matthew J. WELBES, Acting Deputy Administrator, Federal Transit Administration, United States Department of Transportation, Defendant.

Civil Action No. 08-1648 (ESH).

United States District Court, District of Columbia.

May 5, 2009.

COPYRIGHT MATERIAL OMITTED

Dan R. Mastromarco, David R. Burton, The Argus Group, Lorton, VA, for Plaintiff.

John G. Interrante, Jayme Kantor, U.S. Attorney's Office, Washington, DC, for Defendant.

MEMORANDUM OPINION

ELLEN SEGAL HUVELLE, District Judge.

Plaintiff United Motorcoach Association, Inc., has sued Matthew J. Welbes,¹ in his official capacity as Acting Deputy Administrator of the Federal Transit Authority for the U.S. Department of Justice, under the Administrative Procedures Act, 5 U.S.C. § 706 ("APA"). Defendant has moved to dismiss based on lack of subject matter jurisdiction, or, alternatively, for summary judgment. Based on the record before the Court and for the reasons set forth below, the motion to dismiss will be granted.

BACKGROUND

Plaintiff United Motorcoach Association, Inc. ("UMA") is an association of professional bus and motorcoach companies that primarily transports passengers for charter, rather than over fixed routes on regular schedules. (Compl. ¶ 4.) Starline Luxury Coaches of Seattle, Washington ("Starline"), a division of Transportation Demand Management, Inc., is a member of UMA. (Id. ¶ 8.) Starline sought to provide charter transportation service to fans during the 2008 Seattle Mariners major league baseball season. However, pursuant to a June 27, 2008 decision of the Administrator of the Federal Transit Authority ("FTA"), the King County Department of Transportation's Metro Transit Division ("King County Metro"), a federally funded transit agency, was granted permission to provide that service under an exemption from the FTA's charter service regulations, which generally prohibit recipients of federal funding from providing charter bus service in competition with private sector entities who express interest in providing the charter service. (Id. at 1.) Plaintiff therefore has brought suit to challenge this decision under the APA.

I. THE FTA ADMINISTRATIVE SCHEME

Under the Federal Transit Act, 49 U.S.C. § 5301 et seq., the FTA Administrator executes and administers the federal promotion and funding of local mass transportation services. See 49 C.F.R. §§ 1.45, 1.51 (delegating authority to the FTA Administrator). The FTA's primary role is to dispense federal financial resources to support a variety of locally planned, constructed, and operated public transportation systems throughout the United States, including buses. See generally 49 U.S.C. § 5301(f).

The FTA is charged with regulating federally funded transit agencies receiving FTA funding to ensure, inter alia, that those federally funded assets are not used to compete against the private sector. See generally 49 U.S.C. § 5301 et seq.; 49 C.F.R. Ch. VI. Of relevance here is a condition that recipients of FTA funding generally may not "provide charter bus transportation service outside the urban area in which it provides regularly scheduled public transportation service." 49 U.S.C. § 5323(d)(1). The purpose of this provision is:

to ensure that the [federal] assistance will not enable a governmental authority or an operator for a governmental authority to foreclose a private operator from providing intercity charter bus service if the private operator can provide the service.

49 U.S.C. § 5323(d); see also 49 C.F.R. § 604.1 ("49 U.S.C. [§ ] 5323(d), ... protects private charter operators from unauthorized competition from recipients of Federal financial assistance under the Federal Transit Laws.").

There are, however, multiple exceptions under which recipients of FTA funding may provide charter service. Recipients may provide charter service if "all registered charter providers [i.e., private sector companies²] in the geographic area" agree. 49 C.F.R. § 604.10. Recipients may also provide charter service if, after receiving notice of the service need, no registered charter provider expresses interest in providing such service. 49 C.F.R. § 604.9. In addition, recipients may provide charter service if they have obtained an exception to the charter service regulations from the FTA Administrator. 49 C.F.R. § 604.11.³

There are three primary grounds for exceptions. The charter service regulations provide that a recipient of federal assistance may petition the Administrator for "an exception to the charter service regulations to provide charter service directly to a customer for":

(1) Events of regional or national significance;

(2) Hardship (only for non-urbanized areas under 50,000 in population or small urbanized areas under 200,000 in population); or

(3) Unique and time sensitive events (e.g., funerals of local, regional or national significance) that are in the public's interest.

49 C.F.R. § 604.11. The regulations further provide that the Administrator may grant a "permanent or temporary exemption from FTA rules as allowed by law." 49 C.F.R. § 601.32(a).

The Administrator reviews petitions for exceptions and issues a written decision denying or granting the request in whole or in part. 49 C.F.R. § 604.11(c). In reaching a decision, the Administrator "may seek such additional information as the Administrator deems necessary." Id. Any exception granted under the charter service regulations "shall be effective only for the event identified...." 49 C.F.R. § 604.11(d). Final decisions and orders of the Administrator are subject to judicial review. 49 C.F.R. § 604.50; see also 5 U.S.C. §§ 701-706.

II. THE FTA ADMINISTRATOR'S APRIL 29 AND JULY 27, 2008 DECISIONS

For the past ten years, King County Metro, a federally subsidized transit service operated by local government, provided public transit service for fans riding to and from Seattle Mariners home baseball games. (A.R. § III, No. 1; Compl. ¶ 8.) Under the prior regulations, such service was not considered charter service because it was controlled by the transit agency as opposed to a third party, was open to the public, and was widely advertised. However, pursuant to the newly amended charter service regulation, King County Metro's Mariners service constituted "charter service."⁴ Thus, effective April 30, 2008, King County Metro could no longer provide this transportation service if a private registered charter provider expressed interest in providing the same service unless it obtained an exception from the charter service regulations. See 49 C.F.R. § 604.9(b).

On March 31, 2008, King County Metro petitioned the Administrator for an exception that would allow it to provide charter transportation services for the entire 2008 Mariners baseball season, or, alternatively, for a ninety-day exception "to allow for some reasonable transition time for the Mariners and any interested registered private charter service providers to negotiate and implement a replacement service." (A.R. § III, No. 1.) In support of its petition for a "unique and time sensitive event" exception, King County Metro explained that the first home game of the 2008 Mariners season was on March 31, 2008, that King County Metro had previously entered into a contract with the Mariners to provide charter service, and that King County Metro's charter service had already been "widely" advertised to the public. (Id.; see also A.R. § III, No. 2 (clarifying that King County Metro's March 31, 2008 request sought application of the "unique and time sensitive event" exception under 49 C.F.R. § 604.11(a)(3)).)

On April 29, 2008, the Administrator denied King County Metro's petition, finding the Mariners baseball games did not satisfy the "unique and time sensitive event" exception.⁵ (A.R. II, No. 1.) The Administrator did, however, grant King County Metro a sixty-day exception to "either consult [] registered charter providers in support of a petition for an exception for an event of regional or national significance or issue a notice to turn over all of the service to an interested registered charter provider." (Id. at 2.) The Administrator also required King County Metro to submit a compliance plan. (Id.) The sixty-day period was to expire on June 30, 2008.

On May 5, 2008, King County Metro submitted its compliance plan, which stated that on May 2, 2008, King County Metro had issued a "Notice of Charter Service Request" detailing the Mariners charter transportation service needs and providing registered charter providers fourteen days to express interest in operating the service to Mariners home games. (A.R. § III, No. 3.)

In response to the notice, Starline expressed interest in providing the charter service for the remainder of the Mariners 2008 season. (A.R. § IV, No. 1.) Although Starline and the Mariners corresponded regarding the provision of charter service, they were unable to reach a final agreement. (See A.R. § III, Nos. 4-6, 7, at 2; id. at § IV.)

On June 25, 2008, King County Metro again filed a petition for an exception to the charter service regulations for the remainder of the 2008 Mariners season pursuant "either to the Administrator's discretion," or to "49 C.F.R. § 604.11(a)(1) for events of regional or national significance." (A.R. § III, No. 7, at 1.) The petition stated that King County Metro had engaged "in protected and good faith efforts to facilitate negotiations between the Mariners and interested party providers, primarily Starline," and it worked "closely with regional and national FTA representatives both to keep them informed of the ongoing efforts to establish a suitable private transportation service" and "to seek their assistance and guidance in implementing the new Charter Service Regulations vis-à-vis the Mariners service and other significant event services," but "no suitable replacement service has been established." (Id. at 2.)

With respect to Starline,...