United States District Court, Northern District of Illinois, E.D
June 10, 1968
SOUTH SUBURBAN SAFEWAY LINES, INC., PLAINTIFF,
THE CITY OF CHICAGO; CHICAGO TRANSIT AUTHORITY; DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, ROBERT C. WEAVER AS SECRETARY OF HOUSING AND URBAN DEVELOPMENT, LEO J. CUSICK AS DIRECTOR OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, URBAN MASS. TRANSPORTATION ADMINISTRATION, AND WILLIAM HURD, DEPUTY DIRECTOR OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, URBAN TRANSPORTATION ADMINISTRATION, DEFENDANTS.
The opinion of the court was delivered by: Robson, District Judge.
MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS
The defendants have moved to dismiss this suit for a
declaratory judgment and for an injunction. For the reasons
set forth below, this court is of the opinion that these
motions should be granted.
The plaintiff, South Suburban Safeway Lines, Inc., is an
Illinois corporation which operates under a certificate of
public convenience and necessity from the Illinois Commerce
Commission. It provides motor bus services to and from points
south of Chicago in Illinois and points in south central
Chicago. It has served this area in some form since 1927. Its
four principal routes, accounting for 82% of its annual
revenue, follow the Dan Ryan Expressway. The defendants City
of Chicago and the Chicago Transit Authority (C.T.A.) are
building a rapid transit extension down the middle of the Dan
Ryan Expressway, from about 18th Street to 95th Street south.
The federal defendants are providing financial aid to the city
and the C.T.A. under the Urban Mass. Transportation Act,
49 U.S.C. § 1601 et seq.
The plaintiff claims that, because of this
federally-subsidized competition, it will be irreparably
injured should this transit system go into operation. It
claims that its status as a public utility gives it a legal
right that is protected from invasion by the Fifth and
Fourteenth Amendments to the Constitution. The federal
defendants are alleged to have granted money to the other
defendants without meeting the requirements of the Urban Mass.
Transportation Act, and that even if the requirements were
met, that statute is unconstitutional. The plaintiff in its
prayer for relief asks for (1) a declaration that the
requirements of the Act were not met; (2) a declaration that
"just compensation" be paid to plaintiff for this invasion of
its "property right," and (3) an injunction to restrain the
federal defendants from granting any further funds to the
local defendants, unless and until the requirements of the Act
are met, or just compensation is paid.
All the defendants argue that the plaintiff has no standing
to bring this suit in this court. This question must be
decided first, since, if the plaintiff is found to lack
standing, the suit must be dismissed for lack of jurisdiction.
E.g., Central Illinois Public Service Co. v. City of Bushnell,
Illinois, 109 F.2d 26, 30 (7th Cir. 1940).
In order for the plaintiff to show that it has standing, it
must show that it has suffered, or will suffer in the future
a "direct injury," i.e., a wrong which directly results in the
violation of a legal right. Alabama Power Co. v. Ickes,
302 U.S. 464, 479, 58 S.Ct. 300, 82 L.Ed. 374 (1938). This "legal
right" may be a property right, a contractual right, a right
protected against tortious invasion, or a right conferred by
a statute or constitutional provision. Tennessee Electric
Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 137, 59
S.Ct. 366, 83 L.Ed. 543 (1939). The plaintiff here claims that
it has a right conferred on it by the Constitution or a
statute, and that it has a property right under Illinois law.
The Urban Mass. Transportation Act, however, confers no
express right on the plaintiff to sue in this court. In fact,
there is no provision for judicial review at all. Kendler v.
Wirtz, 388 F.2d 381, 383 (3rd Cir. 1968). Cf. Harrison-Halsted
Community Group, Inc. v. Housing and Home Finance Agency,
310 F.2d 99, 104 (7th Cir. 1962).
The plaintiff, however, contends that there is an "implied"
right to sue under that Act. Because, the plaintiff argues,
the statute mentions the need to co-ordinate private
facilities with the overall plan for an urban transit system,
this supplies the necessary "implied" right to sue. This
contention is not well founded. Cf. Berry v. Housing and Home
Finance Agency, 340 F.2d 939 (2nd Cir. 1965), and Pennsylvania
Railroad Co. v. Dillon, 118 U.S.App.D.C. 257, 335 F.2d 292,
If the statute had allowed judicial review of administrative
decisions by "persons or parties aggrieved," then perhaps the
plaintiff would have been under the doctrine of Federal
Communications Commission v. Sanders Brothers Radio Station,
309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940). In that case,
the Supreme Court determined that a radio station, by virtue
of its status as an economic competitor with another applicant
station in the same area, had standing under the "person
aggrieved" section of the Communications Act, 47 U.S.C. § 402
(b), in order to raise questions of public importance. Federal
Communications Commission v. National Broadcasting Co., Inc.
(KOA) et al., 319 U.S. 239, 247, 63 S.Ct. 1035, 87 L.Ed. 1374
(1943). The Communications Act expressly made it clear that
judicial review was desired and encouraged. The only question
for the court there was whether Sanders Brothers' injury was
legally cognizable under the terms of that Act. Where there is
no such provision for judicial review, the Sanders Brothers
doctrine does not apply. As the Second Circuit Court of Appeals
said in dealing with this point:
"There can be little doubt * * * that if this
[Bituminous Coal] Act made no provisions for
review in a Court of Appeals and if (without any
statutory provision covering the mode of bringing
such actions) petitioner had brought a suit in a
district court, * * * dismissal of the suit [on
the ground of lack of standing] would have been
necessary." Associated Industries of New York
State, Inc. v. Ickes, 134 F.2d 694, 702 (2nd Cir.
This consideration renders many of the cases cited by the
plaintiff inapplicable as to this point to the case before
this court: Federal Communications Commission v. National
Broadcasting Co., Inc. (KOA) et al., supra; Scripps-Howard
Radio, Inc. v. Federal Communications Commission, 316 U.S. 4,
62 S.Ct. 875, 86 L.Ed. 1229 (1942); National Coal Association
v. Federal Power Commission, 89 U.S.App.D.C. 135, 191 F.2d 462
(1951); Associated Industries of New York State, Inc. v.
Ickes, supra, and Seatrain Lines, Inc. v. United States of
America, 152 F. Supp. 619 (D.Del. 1957).
The plaintiff's contention that it has standing because
there is a mention of private companies and the need to
include them in a mass transit plan, would, therefore, need
more support in the statute than such a mention: There would
have to be a judicial review section which
could be construed to include the plaintiff in its terms. The
court in Atchison, Topeka and Santa Fe Ry. Co. v. Summerfield,
97 U.S.App.D.C. 203, 229 F.2d 777 (1955), made it quite clear
that, although there was no provision for judicial review,
that the action of the defendant was not simply one which
created competition. There were specific statutes that
required the railroads to purchase certain equipment, and the
defendant's actions actually and directly called for
retirement of much of this equipment. Also see Pennsylvania
Railroad Co. v. Dillon, supra. In the absence of such a
provision for judicial review, the plaintiff must look
elsewhere to find support for its claim to standing.
Another statute which plaintiff argues gives it standing is
Section 10 of the Administrative Procedure Act (A.P.A.),
5 U.S.C. § 702. That section provides:
"A person suffering legal wrong because of
agency action, or adversely affected or aggrieved
by agency action within the meaning of a relevant
statute, is entitled to judicial review thereof."
It is conceded, for the purpose of argument, that the
plaintiff will be harmed sufficiently to be "adversely
affected or aggrieved by agency action." There must be,
however, a "legal wrong" or harm which is "within the meaning
of a relevant statute." Since the Urban Mass. Transportation
Act does not expressly or impliedly give standing to the
plaintiff, the plaintiff must find another "relevant statute"
which might give them a right to judicial review. Also see
Harrison-Halsted Community Group, Inc. v. Housing and Home
Finance Agency, supra, 310 F.2d at 105. The only remaining
"relevant statutes" that could conceivably give the plaintiff
standing are the Fifth and Fourteenth Amendments to the
Constitution,*fn1 which form the basis of plaintiff's
argument that defendants' actions here violate the protections
against deprivation of "property" without due process of law.
It is clear to this court that the plaintiff must show that it
was a victim of some "legal wrong" or that it was deprived of
"property" without due process, in order to come within the
A.P.A. provisions. But this is the same inquiry that the
Alabama Power case, supra, requires. It therefore appears to
this court that plaintiff's claim to standing rises or falls
with the scope of the "property right" given to the plaintiff
as a holder of a certificate of public convenience and
The plaintiff argues that its certificate of public
convenience and necessity from the Illinois Commerce
Commission gives it a "property right" which cannot be
abridged without compensation by a municipal corporation's
competition. The two pillars that support this argument are
(1) that plaintiff's franchise creates an exclusive monopoly
which prevents any competitor from entering the field, and (2)
that the franchise creates a limited monopoly (or "regulated"
monopoly) under the "carrier in the field" doctrine. Neither
of these pillars stand up under the weight of the Illinois
The first ground is expressly negated by statute. S.H.A.Ch.
111 2/3, § 56, ¶ 7, leaves no doubt on this point: "No
certificate of public convenience and necessity shall be
construed as granting a monopoly or an exclusive privilege,
immunity or franchise." E.g., Chicago Railways Co. v. Commerce
Commission, 336 Ill. 51, 70, 167 N.E. 840, 67 A.L.R. 938
(1929); Central Illinois Public Service Co. v. City of
Bushnell, Illinois, 109 F.2d 26, 29 (7th Cir. 1940).
The second ground deals with an exception to this
nonexclusivity rule. The doctrine of the "carrier in the
field" protects an existing carrier from being replaced or
placed in competition with another carrier until the Illinois
Commerce Commission determines, by appropriate
findings, that the existing carrier is either unwilling or
unable to provide the requested services. E.g., Citizens
Valley View Co. v. Illinois Commerce Commission, 28 Ill.2d 294,
192 N.E.2d 392 (1963). A municipal corporation when it
competes with a private utility changes the picture
A municipal corporation is exempted by definition from
regulation by the Illinois Commerce Commission. S.H.A. Ch. 111
2/3, § 10.3. A municipality may grant an "exclusive" right to a
municipal corporation or public authority to operate a street
railway, such as the one involved in this case. S.H.A.Ch. 24,
§§ 11-88-1 and 11-122-1. This the municipality can do
"even though the effect of the operation of the
Authority may be to prevent operation of other
transportation systems in the area and to thus
create a monopoly * * *."
"* * * Under the pronouncements of this court the
city council [of Chicago] has power to decide
whether the operation of a street railway in the
city shall be competitive or monopolistic."
People v. Chicago Transit Authority, 392 Ill. 77,
92, 95, 64 N.E.2d 4, 12 (1945).
The fact that another carrier like the plaintiff here has been
operating in a nearby area does not constitute a barrier to
the municipality entering the field, even if the privately
owned public utility would be damaged by the competition.
Central Illinois Public Service Co. v. City of Bushnell,
Illinois, supra; People ex rel. Buffalo Utility Co. v. Village
of Buffalo Grove, 85 Ill. App.2d 382, 229 N.E.2d 401
Although in the Buffalo Grove case, supra the privately owned
public utility was challenging the municipality's right to
enter an area which neither had served before, the court there
denied standing to the private company, and supported the above
point that the "carrier in the field" doctrine does not apply
when a municipality is the competitor.
More strongly supporting this court's view of plaintiff's
position is the Central Service case, supra.
In that case, a privately owned public utility sued to
enjoin the City of Bushnell, Illinois, from accepting a grant
from the federal government to build and operate a rival power
plant. The private company, like the plaintiff here, was the
holder of a non-exclusive franchise. The court said, 109 F.2d
"* * * [A] non-exclusive franchise to operate as
a public utility, standing alone, does not create
a right to be free of competition, and subsequent
competition from private or municipal
corporations does not violate the due process
clause of the federal constitution. * * * That is
to say, a municipality has a right to build and
operate a municipal power plant, even though such
a plant will compete with and finally destroy the
value of a private corporate plant, if the
municipality has proceeded according to state law."
That the defendants, the City of Chicago and the Chicago
Transit Authority, have proceeded according to state law seems
to be beyond question. The exclusivity of the right of the
C.T.A. and the City of Chicago to maintain a transit system
was adopted by referendum on June 4, 1945, and the ordinance's
constitutionality under the Metropolitan Transit Authority
Act, S.H.A.Ch. 111 2/3, § 301 et seq., was established by the
Illinois Supreme Court in People v. Chicago Transit Authority,
supra. The power to accept loans or grants from the federal
government was given to the C.T.A. and the City of Chicago in
that same statute. S.H.A.Ch. 111 2/3, § 315. In addition,
Illinois law provides that
"Extensions and additions to such local
transportation facilities may be authorized by
ordinance with or without provision for
referendum." S.H.A.Ch. 24, § 11-88-1.
The necessary ordinances apparently have been passed.
It thus appears that Illinois law has not granted to the
plaintiff a sufficient interest to give it standing in this
court to assert the invalidity of the Urban Mass.
Transportation Act, the unconstitutionality of the federal
defendants' funding the rapid transit extension down the Dan
Ryan Expressway, or the denial of due process from the lack of
compensation for the economic damage the competition will
allegedly create. Since the Illinois defendants were acting
properly according to Illinois law, the allegedly illegal acts
of the federal defendants cannot be inquired into by this
plaintiff. Alabama Power Co. v. Ickes, supra. The remedy, if
any exists, lies not in the courts, but in the Congress. Rural
Electrification Administration v. Central Louisiana Electric
Company, Inc., 354 F.2d 859, 865 (5th Cir. 1966); Kansas City
Power & Light Co. v. McKay, 96 U.S.App.D.C. 273, 225 F.2d 924,
Since it does not appear that the plaintiff has the
requisite standing, this suit must be dismissed for lack of
jurisdiction. It is so ordered.