Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 77-1379

• Citation: 559 F.2d 841,182 U.S.App.D.C. 220
• Decision Date: 05 July 1977
• Docket Number: No. 77-1379,77-1379
• Parties: WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION, Appellant, v. HOLIDAY TOURS, INC., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 841

559 F.2d 841

182 U.S.App.D.C. 220

WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION, Appellant, v. HOLIDAY TOURS, INC., et al.

No. 77-1379.

United States Court of Appeals, District of Columbia Circuit.

July 5, 1977.

Gregory P. Barth, Gen. Counsel, and Gregory M. Murad, Asst. Gen. Counsel, were on the motion for appellant.

John D. Grad and Philip J. Hirschkop, Alexandria, Va., were on the opposition to the motion for appellees.

Before WRIGHT, LEVENTHAL and ROBB, Circuit Judges.

LEVENTHAL, Circuit Judge:

The District Court granted the Washington Metropolitan Area Transit Commission a permanent injunction restraining Holiday Tours from operating a motor coach sightseeing service without a certificate of public convenience and necessity. Then, on motion of Holiday Tours, the District Court stayed its injunction pending appeal. We deny the Commission's motion to vacate the District Court's stay, and in doing so find it necessary to refine the discussion in Virginia Petroleum Jobbers Association v. FPC, 104 U.S.App.D.C. 106, 259 F.2d 921 (1958).

On the merits, this appeal turns on the proper interpretation of Holiday Tours, Inc. v. Washington Metropolitan Area Transit Commission, 125 U.S.App.D.C. 336, 372 F.2d 401 (1967), in which we affirmed the Commission's ruling that Holiday Tours was not entitled to a certificate of public convenience and necessity under the "grandfather clause" of the pertinent statute. In our concluding paragraph of that opinion, we stated (at 402):

Finally, we note that the Commission concedes that appellant may continue to operate in the future a sightseeing business by limousine, as well as with buses and drivers supplied by licensed bus operators.

This language is central to the current dispute because Holiday Tours, which was primarily a limousine tour service when our earlier opinion was rendered, has recently transformed itself into primarily a bus tour service. Holiday Tours contends that this conversion is authorized by the quoted language so long as the buses are rented from licensed operators rather than owned by Holiday Tours itself. The Commission, however, argues that the language is merely the court's observation that no certificate is required if Holiday Tours occasionally rents buses to accommodate additional customers as an adjunct to its primary business of providing limousine tours. The Commission emphatically rejects an interpretation which sanctions Holiday Tours' conversion from a limousine to a bus tour service.

The District Court adopted the Commission's interpretation but stayed the permanent injunction pending appeal. Although the District Court did not make detailed findings, it recited that all four of the Virginia Petroleum Jobbers factors favored a stay. ¹

These factors are by now familiar to both the bench and bar in this Circuit. (1) Has the petitioner made a strong showing that it is likely to prevail on the merits of its appeal? Without such a substantial indication of probable success, there would be no justification for the court's intrusion into the ordinary processes of administration and judicial review. (2) Has the petitioner shown that without such relief, it will be irreparably injured? . . . (3) Would the issuance of a stay substantially harm other parties interested in the proceedings? . . . (4) Where lies the public interest? . . .

Virginia Petroleum Jobbers Ass'n, supra, at 925.

Despite the Commission's protestations to the contrary, the final three factors enumerated above clearly favored the District Court's grant of a stay. The harm to Holiday Tours in the absence of a stay would be its destruction in its current form as a provider of bus tours. ² In contrast to this irreparable harm, there is little indication that a stay pending appeal will result in substantial harm to either appellee Commission or to other tour bus operators. ³ As to harm to the public interest, this is not a case where the Commission has ruled that the service performed by appellant is contrary to the public interest. Indeed for all that the record discloses, appellant might obtain a certificate, perhaps not precisely for the operation it prefers, if it made application. The interest of the Commission and of the riding public is largely the same as that of the general public in having legal questions decided on the merits, as correctly and expeditiously as possible. But the question is whether there is a further interest, that precludes maintaining the status quo while the merits are being decided on appeal.

In this context, Holiday Tours was undoubtedly not entitled to a stay on a showing "that it is likely to prevail on the merits of its appeal." ⁴ Implicit in the Commission's argument against the stay is the view, commonly shared by litigants interpreting Virginia Petroleum Jobbers, that a stay is never appropriate unless the movant can show that success on appeal is "probable." Adherents of this view maintain that a lesser showing, of, say, a chance of prevailing that is only fifty percent or less is insufficient even though the "balance of equities," as determined by a consideration of the other three factors, clearly favors a stay.

Although this approach adopts a linguistically permissible interpretation of Virginia Petroleum Jobbers, it is mandated only if one assumes that the Court was using language in an exceedingly precise, technical sense. In light of the unnecessarily harsh results sometimes engendered by this approach, we decline to entertain this assumption. Instead, we hold that under Virginia Petroleum Jobbers a court, when confronted with a case in which the other three factors strongly favor interim relief may exercise its discretion to grant a stay if the movant has made a substantial case on the merits. The court is not required to find that ultimate success by the movant is a mathematical probability, and indeed, as in this case, may grant a stay even though its own approach may be contrary to movant's view of the merits. The necessary "level" or "degree" of possibility of success will vary according to the court's assessment of the other factors.

This approach is reflected in the Virginia Petroleum Jobbers opinion at 925, where the court wrote:

But injury held insufficient...