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Bradford School Bus Transit Inc. v. Chicago Transit Authority

decided: July 7, 1976.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 75 C 694 FRANK J. McGARR, Judge.

Hastings, Senior Circuit Judge, Sprecher and Tone, Circuit Judges.

Author: Sprecher

SPRECHER, Circuit Judge.

This appeal concerns a class action for declaratory and injunctive relief brought by Bradford School Bus Transit Incorporated ("Bradford") and the Illinois School Transportation Association ("ISTA"), against the Chicago Transit Authority ("CTA"), the Urban Mass Transportation Administration ("UMTA") and Judith T. Connor, Administrator of the Urban Mass Transportation Administration. The questions presented here are whether private school bus operators have standing to challenge the actions of the Urban Mass Transportation Administration and if so, whether those actions are judicially reviewable.


In June 1974, in accordance with the terms of the Urban Mass Transportation Act ("Act"), 49 U.S.C. §§ 1601 et seq., UMTA entered into a grant contract with the CTA to provide financial assistance for purchasing passenger buses, rapid transit cars and related equipment, Project No. IL-03-0040. Pursuant to Sections 1602(g) and 1602a(b) of the Act, the grant contract included a provision which under certain conditions specifically prohibited the CTA from engaging in school bus operations in competition with private bus operators.*fn1 UMTA later agreed to provide additional financial assistance to the CTA and the project was expanded to include the acquisition and construction of additional capital items.

Shortly thereafter, in December 1974, the Chicago Board of Education solicited bids from various bus companies for the transportation of students attending the Chicago Public Schools. Plaintiff Bradford and defendant CTA submitted bids to provide those services. The CTA's bid was accepted and it has been providing bus transportation for Chicago school children since January 1975.

Plaintiffs then brought this suit individually and on behalf of all private school bus operators in CTA's service area seeking a declaration that the CTA is engaged in school bus operations in violation of the Act and of the grant contract. They also sought to enjoin UMTA from providing further financial assistance to the CTA. The district court, granting a defense motion, dismissed plaintiffs' complaint for lack of standing and concluded that UTMA's action was not subject to judicial review. Plaintiffs now appeal from that order.


We shall first consider the issue of plaintiffs' standing. In dismissing the plaintiffs' complaint for lack of standing, the district court relied solely upon South Suburban Safeway Lines, Inc. v. City of Chicago, 416 F.2d 535 (7th Cir. 1969). In South Suburban, a private bus company sought to challenge a grant to the CTA for a proposed extension of its rail operations which had been authorized by UMTA. Section 1602(c) of the Act, (now § 1602(e)) prohibited UMTA from providing financial assitance to a public transit corporation for the purpose of acquiring or operating in competition with a private transit corporation, unless, among other things, the Secretary of Transportation found this operation to be essential to a coordinated urban transportation system. In that case we held that the company lacked standing to complain. In our view, the district court's reliance on South Suburban was misplaced.

The Administrative Procedure Act grants standing to persons "suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702. The Supreme Court has reviewed the question of standing to challenge agency action with respect to this provision. In Hardin v. Kentucky Utilities Co., 390 U.S. 1, 19 L. Ed. 2d 787, 88 S. Ct. 651 (1968), which involved a section of the TVA Act designed primarily to protect against TVA competition, the Court held that the plaintiff, Kentucky Utilities Co., had standing to sue and stated:

It has been the rule, at least since the Chicago Junction Case, 264 U.S. 258 [68 L. Ed. 667, 44 S. Ct. 317] (1924), that when the particular statutory provision invoked does reflect a legislative purpose to protect a competitive interest, the injured competitor has standing to require compliance with that provision. See Alton R. Co. v. United States, 315 U.S. 15, 19 [86 L. Ed. 586, 62 S. Ct. 432] (1942); Chicago v. Atchison, T. & S. F. R. Co., 357 U.S. 77, 83 [2 L. Ed. 2d 1174, 78 S. Ct. 1063] (1958).

Id., at 6. And, as Justice Douglas observed in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 154, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970):

Where statutes are concerned, the trend is toward enlargement of the class of people who may protest administrative action. The whole drive for enlarging the category of ...

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