Opinion ID: 414219
Heading Depth: 2
Heading Rank: 2

Heading: Publicly-owned Urban Mass Transit--A Traditional

Text: 24 Governmental Function? 25 The distinctive characteristic of those protected activities identified in National League as traditionally governmental is that they are all functions which the states have historically provided their citizens. In describing the state and local functions immune from federal regulation under the FLSA, the National League Court repeatedly employed the adjective traditional. 6 Only through gross oversight could we ignore the conceptual attribute of traditional when determining whether public mass transit is an integral governmental function. 26 A number of courts have confronted this issue and have concluded that the maximum hour provisions of the FLSA cannot constitutionally be applied to public transit employees. See, e.g., Molina-Estrada v. Puerto Rico Highway Auth., 680 F.2d 841 (1st Cir.1982); Dove v. Chattanooga Transp. Auth., 539 F.Supp. 36 (E.D.Tenn.1981), appeal docketed, No. 81-56-36 (6th Cir. Sept. 2, 1981). 7 We choose not to follow these decisions, however, in light of United Transp. Union v. Long Island R.R., 455 U.S. 678, 102 S.Ct. 1349, 71 L.Ed.2d 547 (1982). In Long Island R.R., the Supreme Court unanimously reversed the Second Circuit and held that a state-owned and operated railroad primarily engaged in commuter transportation in metropolitan New York City is not a traditional government function within the meaning of National League. The Court concluded that the tenth amendment did not bar application of the Railway Labor Act (including its right to strike) to employees of the commuter railroad. Just as we do here, the Long Island R.R. Court focused on that prong of the Hodel standard which examines whether compliance with the federal statute in question directly impairs the state's ability  'to structure integral operations in areas of traditional functions.'  Long Island R.R., 455 U.S. at 684, 102 S.Ct. at 1353, 71 L.Ed.2d at 553 (quoting National League, 426 U.S. at 852, 96 S.Ct. at 2474). 27 Significant to the Long Island R.R. Court's determination that a publicly-operated commuter railroad is not a traditional governmental function is the fact that passenger transit operations, unlike those traditionally-public activities listed in National League, have historically been performed by the private sector. Emphasizing that the Second Circuit's distinction between freight carriers and passenger railroads did not justify a contrary result, the Court stated: 28 Operation of passenger railroads, no less than operation of freight railroads, has traditionally been a function of private industry, not state or local governments. It is certainly true that some passenger railroads have come under state control in recent years, as have several freight lines, but that does not alter the historical reality that the operation of railroads is not among the functions traditionally performed by state and local governments. Federal regulation of state-owned railroads simply does not impair a State's ability to function as a State. 29 Long Island R.R., 455 U.S. at 686, 102 S.Ct. at 1354, 71 L.Ed.2d at 554 (footnote omitted). 30 The result in Long Island R.R. has prompted a reversal in a case presenting the issue that is before us. In Kramer v. New Castle Area Trans. Auth., 677 F.2d 308 (3rd Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 786, 74 L.Ed.2d ---- (No. 82-701), the Third Circuit reversed the district court basing its decision squarely upon Long Island R.R. The Third Circuit held that the operation of a public mass transit system is not a function traditionally performed by state and local governments so as to prevent application of the FLSA's overtime provisions to the bus operators employed by the New Castle Area Transit Authority. Unpersuaded by the reality that mass transit systems are being taken over by municipalities and public transportation authorities with increasing regularity, the Kramer court stated that [s]tates are not free to assume functions historically performed by the private sector and thereby insulate those activities from federal regulation of interstate commerce. 667 F.2d at 309. 31 More damaging to the cities' position in the instant case is the action taken by the Supreme Court in Donovan v. San Antonio Metropolitan Trans. Auth., --- U.S. ----, 102 S.Ct. 2897, 73 L.Ed.2d 1309 (1982). In that case, the district court held that local public mass transit systems constitute integral operations in areas of traditional government functions under National League and, therefore, the Secretary of Labor cannot enforce the minimum wage and overtime provisions of the FLSA against local public mass transit systems. San Antonio Metropolitan Trans. Auth. v. Donovan, Civ. No. SA-79-CA-457 (W.D.Tex. Nov. 17, 1981). The government appealed the decision directly to the Supreme Court pursuant to 28 U.S.C.A. Sec. 1252 (1979). The Supreme Court vacated the district court's judgment and remanded the case for further consideration in light of United Transportation Union v. Long Island R.R. Co., 455 U.S. 678, 102 S.Ct. 1349, 71 L.Ed.2d 547 (1982). --- U.S. at ----, 102 S.Ct. at 2897, 73 L.Ed.2d at 1309. By implication therefore, the Supreme Court considers Long Island R.R. of critical importance to the disposition of this issue. 32 Summarizing the holding of National League, the Long Island R.R. Court stated that the 33 emphasis on traditional governmental functions and traditional aspects of state sovereignty was not meant to impose a static historical view of state functions generally immune from federal regulations. Rather it was meant to require an inquiry into whether the federal regulation affects basic State prerogatives in such a way as would be likely to hamper the state government's ability to fulfill its role in the Union and endanger its separate and independent existence. 34 455 U.S. at 686-687, 102 S.Ct. at 1354-55, 71 L.Ed.2d at 554 (quoting National League, 426 U.S. at 851, 96 S.Ct. at 2474). Despite the intimations to the contrary, however, the Long Island R.R. Court found it extremely difficult to overlook the historical reality that operation of railroads have traditionally been performed by private industry. Kramer, 677 F.2d 308, 309. 8 35 Historically, mass transit systems have been owned and operated by private companies. Public ownership is a fairly recent development. As late as 1960, 95% of local transit services were privately-owned and operated. H.R.Rep. No. 204, 88th Cong. 2nd Sess. reprinted, [1964] U.S.Code Cong. & Ad.News, 2569, 2590. By 1967 the shift from private to public ownership had accelerated to the point that over 50% of transit riders were carried by publicly-owned transit systems. American Public Transit Association, Transit Fact Book 55 (1978-79 ed.). By 1978 publicly-owned systems generated 90% of all total operating revenues, and carried 91% of all passengers conveyed by American transit. Id. Recent studies indicate, however, that between 45% and 52% of all transit operations in the United States are still privately-owned. U.S. Dept. of Transportation, Urban Mass Transportation Administration, A Directory of Regularly Scheduled, Fixed Route, Local Rural Public Transportation Service, 6 (1980); U.S. Dept. of Transportation, Urban Mass Transportation Administration, A Directory of Regularly Scheduled, Fixed Route, Local Public Transportation Service, 17 (1979). The recent conversion of mass transit systems from private to public ownership has been accomplished in many instances through the impetus of federal funding. The City of Augusta is a prime example. Finding the nation's transit systems in a state of deterioration, Congress enacted the Urban Mass Transportation Act (UMTA) to provide massive federal financial assistance to State and local governments and their instrumentalities in financing [transit] systems, to be operated by public or private mass transportation companies as determined by local needs. 49 U.S.C.A. Sec. 1601(b)(3) (1976). Through UMTA, local governments with transit operations are eligible to receive up to 80% of capital outlays, including the cost of acquiring private systems and capital improvements, and up to 50% of operating expenses. 49 U.S.C.A. Secs. 1603(a), 1604(e) (1976 & Supp. III 1979). The City of Macon acquired the assets of Bibb Transit Co. and took over operation of mass transit in Macon without the use of UMTA funds. Although contrary to the process through which Augusta acquired its transit system, this fact does not affect the result we reach today. 36 Like the Third Circuit, we are of the opinion that expanding state involvement in mass transit does not alter the historical reality of the fact that mass transit is not a function traditionally performed by the state or its subordinate political bodies. Kramer, 677 F.2d 308, 310. As explained in Kramer, 37 the states are precluded from claiming, at this late date, that mass transit is a service which they traditionally provide. Tradition must be gauged in light of what actually happened, and what happened is a federal program of local transit service in which the state participate as late comer junior partners. There is, therefore, no tradition of the states qua states providing mass transportation. Moreover, since it is undisputed that the national government can set the employment relations in the area of mass transit, it would be unjustified to allow the states, by acquiring functions previously performed by the private sector, to erode federal authority in this area. 38 677 F.2d at 310 (footnote omitted). 39 The evidence of transit captive citizens in Macon does not change our view. Although a small percentage of Macon's population require public transit, the overwhelming majority of Macon's inhabitants rely upon their own automobiles for transportation. The fact that mass transit is a necessity for a segment of the population does not mean that a municipality's providing of transit service automatically turns the service into a traditional function of government. Our result is not altered by the probability that private transit companies are doomed to extinction, thus requiring local governments to shoulder the burden abandoned by the private sector. See Kramer, 677 F.2d 308, 310 n. 1. As the statistics set out above indicate, local mass transit has historically been a function of the private sector. 40 When analyzed together, the similarities between the Long Island Railroad, the Macon Transit System and Augusta Transit Department reinforce our decision that the FLSA is constitutionally applicable to the plaintiff classes of bus operators. All three systems primarily involve the transportation of commuter passengers within an urban metropolitan area. Like the commuter train service of the Long Island Railroad, Macon and Augusta's transit systems had been privately-owned and operated for years. The Long Island Railroad was acquired by the Metropolitan Transit Authority in 1966; Macon and Augusta purchased existing transit operations in 1973. Based on the Supreme Court's analysis in Long Island R.R., we hold that the services provided by the Macon Transit System and the Augusta Transit Department cannot be classified as traditional governmental functions. Federal regulation of both transit systems through the FLSA does not impair Macon's or Augusta's ability to function as a municipality nor endanger [their] separate and independent existence. Long Island R.R., 455 U.S. at 687, 102 S.Ct. at 1355, 71 L.Ed.2d at 554 (quoting National League, 426 at 851, 96 S.Ct. at 2474).