Court Opinion

ID: 769545
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:02:09+00
Date Added: 2024-06-11T15:19:20.385181
License: Public Domain

219 F.3d 671 (7th Cir. 2000)
Area Transportation, Inc., Plaintiff-Appellant,v.Joel P. Ettinger, Regional Administrator of the Federal Transit Administration for Region V, United States Department of Transportation, Defendant-Appellee.
No. 99-4141
In the  United States Court of Appeals  For the Seventh Circuit
Argued April 18, 2000Decided July 18, 2000

Appeal from the United States District Court  for the Northern District of Illinois, Eastern Division.  No. 99 C 3287--Ruben Castillo, Judge.
Before Flaum, Ripple, and Williams, Circuit Judges.
Flaum, Circuit Judge.

1
Area Transportation, Inc.  ("Area Transport") filed suit against the Federal  Transit Administration ("FTA"), seeking (1) a  declaration that a non-party bus service is  ineligible for future grants due to past  violations of a grant condition; and (2) an order  directing the federal agency to require the non-  party grantee to repay all transit assistance  funds that it received while in violation of the  grant agreement. The district court dismissed the  suit for lack of standing, and we affirm.

Background

2
Area Transport is a privately-owned provider of  school bus services in the Flint, Michigan area.  The FTA awards grants to assist state and local  agencies in financing the implementation and  operation of mass transportation facilities. To  receive a grant, a recipient must comply with  various conditions, including an agreement that  the recipient will not provide exclusive school  bus service in competition with a private (non-  grant recipient) school bus company. See 49  U.S.C. sec. 5323(f)(1).

3
On August 18, 1998, Area Transport filed an  administrative complaint with the FTA Region V  Administrator. Area Transport alleged that a  grant recipient, Mass Transportation  Administration of Flint, Michigan ("MTA"), was  providing exclusive school bus service in  violation of the applicable prohibition.

4
Following investigation, the FTA issued a  written decision on May 5, 1999, concluding that  MTA had violated the bus service prohibition. The  FTA ordered MTA "to cease and desist in providing  illegal service," and further held that failure  to comply with this order could lead to  additional penalties.

5
Shortly thereafter, Area Transport filed suit in  district court under the federal transit laws and  the Administrative Procedure Act, 5 U.S.C. sec.  701. The complaint alleged that the FTA did not  appropriately sanction MTA. Specifically, Area  Transport requested a declaration that MTA is  ineligible for future FTA grants and also sought  to have the district court compel the FTA to  order MTA to repay all grant funds received  during the period that it was in violation of the  non-compete grant agreement. The FTA moved to  dismiss, and the district court granted the  dismissal for lack of standing, finding that Area  Transport's purported injury is not fairly  traceable to the FTA decision under review and  that the requested relief would not redress the  particular injury of which Area Transport  complains. Area Transport now appeals.

Discussion

6
To establish standing under the Administrative  Procedure Act, a plaintiff must satisfy the  Article III constitutional standing requirements  and also fall within the "zone of interests" to  be protected or regulated by the regulatory  statute at issue. See Association of Data  Processing Serv. Orgs., Inc. v. Camp, 397 U.S.  150, 153 (1970); City of Evanston v. Regional  Transp. Auth., 825 F.2d 1121, 1123 (7th Cir.  1987). The district court in this case concluded  that Area Transport is in the class of entities  protected by sec. 5323(f), but then concluded  that Area Transport failed to meet the Article  III standing requirements.

7
Article III standing requires a party to  demonstrate three elements (1) that it suffered  an "injury in fact"--an invasion of a legally  recognized interest that is concrete and  particularized, actual or imminent, and not  conjectural or hypothetical; (2) that there is a  causal link between that injury and the  defendant's action, such that the injury is  fairly traceable to the action complained of and  not the result of actions by some third party not  before the court; and (3) that a favorable  decision will likely redress the injury. See  Friends of the Earth, Inc. v. Laidlaw Env.  Servs., Inc., 120 S.Ct. 693, 704 (2000);  Wisconsin v. FERC, 192 F.3d 642, 646 (7th Cir.  1999). The district court found that Area  Transport has adequately shown an injury in fact-  -that it suffered harm to its "competitive  interest" because of the improper federal grants  to MTA-- but it found Area Transport's showing  with respect to the second and third standing  requirements lacking. Although the FTA disputes  on appeal whether Area Transport's purported  injury is legally cognizable, we need not reach  that issue because we agree with the district  court that Area Transport has failed to meet the  causation and redressability prongs of standing.

8
Area Transport's argument begins with its  allegation that MTA unfairly built a strong  competitive position in the Flint area school bus  service market because for a period of time it  was able both to receive federal grants and to  operate a school bus service. According to Area  Transport, because MTA has improperly obtained a  strong market position, the FTA's failure to go  beyond a cease and desist order and to require  repayment of previous, unlawfully obtained grants  is a cause of Area Transport's ongoing injury to  its "competitive interests." Only a declaration  that the FTA must seek from MTA repayment of  prior grants and must deny MTA any future grants  will level the competitive playing field.

9
In this case, the propositions that the FTA's  decision and remedy cause Area Transport economic  injury and that imposing harsher penalties  against MTA will alleviate this injury are too  speculative to satisfy the standing requirements.  See Simmons v. ICC, 900 F.2d 1023, 1026 (7th Cir.  1990) (holding that the petitioners failed to  make a sufficient showing that their competitive  injury was fairly traceable to the ICC's action).  The FTA's ruling already requires MTA to cease  providing illegal school bus service if it wants  federal grants. Assuming for the purposes of  argument that Area Transport still demonstrates  a continuing injury in fact, causation in this  case requires showing that such injury is fairly  traceable to the FTA's decision not to impose  harsher sanctions than it did. There is no  indication in the record that, since the FTA  issued its cease and desist order, MTA is still  even competing with Area Transport.1  Presumably--and Area Transport's complaint and  other filings below leave us in the position of  having to presume--Area Transport is concerned  that MTA can now compete with Area Transport in  the exclusive school busing market having already  fattened its coffers with improper federal funds.  But to the extent that such an outcome requires  not only that MTA react to the FTA's cease and  desist order by forgoing future federal grants in  favor of continuing its school bus service, but  also that MTA do so successfully, this scenario  is both highly speculative and dependent on  uncertain actions by MTA, who is not before us.  See Perry v. Village of Arlington Heights, 186  F.3d 826, 829 (7th Cir. 1999) (explaining that  standing requires "a causal relationship between  the injury and the challenged conduct, such that  the injury can be fairly traced to the challenged  action of the defendant and not from the  independent action of some third party not before  the court").

10
Area Transport's failure to demonstrate  redressability also stems from the vagueness and  severe uncertainty of this causal chain. The  requirement of "'actual injury redressable by the  court,' . . . tends to assure that the legal  questions presented to the court will be resolved  . . . in a concrete factual context conducive to  a realistic appreciation of the consequences of  judicial action." Valley Forge Christian College  v. Americans United for Separation of Church and  State, Inc., 454 U.S. 464, 472 (1982) (citations  omitted). As the district court pointed out, any  potential repayment of grant monies would go to  the FTA, not to Area Transport. Perhaps the  disgorgement of MTA's improper monies would  negatively impact MTA's business, but the  prospect that Area Transport will at that point  find itself in a stronger position to win future  service bids is pure conjecture. See Lujan v.  Defenders of Wildlife, 504 U.S. 555, 561 (1992)  ("it must be 'likely,' as opposed to merely  'speculative,' that the injury will be 'redressed  by a favorable decision'"); Harp Advertising  Ill., Inc. v. Village of Chicago Ridge, 9 F.3d  1290, 1292 (7th Cir. 1993) (stating that a key  ingredient of standing is a demonstration by the  plaintiff that his injury likely will be  redressed by a favorable decision).2  Ironically, the remedy Area Transport seeks--that  MTA be barred from receiving future federal  transportation grants--might very well undermine  Area Transport's market position. As it stands,  MTA is currently prohibited under the statute and  the FTA's order from providing exclusive school  bus services so long as it continues to receive  federal grants. If MTA were barred from receiving  those grants, it would have greater freedom to  compete with Area Transport. We agree with the  district court that Area Transport has not  established causation or redressability, and  accordingly the case was properly dismissed.3

Conclusion

11
For the reasons stated herein, we AFFIRM the  decision of the district court.

Notes:

1
 Area Transport refers us to Bradford School Bus  Transit, Inc. v. Chicago Transit Authority, 537  F.2d 943 (7th Cir. 1976), where we held that a  private bus company had standing to sue a city  transit authority and the Urban Mass  Transportation Administration (UMTA), seeking a  declaration that the transit authority was  engaged in school bus operations in violation of  the Urban Mass Transportation Act. That case  differs from this one, among other reasons,  because Bradford could point to particular  contracts for which it had bid but that were  awarded to CTA and because the UMTA was  continuing to provide grants to CTA when CTA was  still providing school bus service in violation  of the non-compete agreement. Here, Area  Transport does not claim that the FTA is  overlooking a current violation of federal  regulations by MTA.

2
 This case is distinguishable from such cases as  American Federation of Gov't Employees v. Cohen,  171 F.3d 460 (7th Cir. 1999), and Safir v.  Gibson, 417 F.2d 972 (2d Cir. 1969), in which  this Court and the Second Circuit concluded that  injuries to competitive interests were  redressable through re-bidding on contracts and  disgorgement, respectively. The Cohen court so  concluded only after finding that the plaintiff's  allegations established "a good chance of gaining  some of this work," and distinguishing that case  from the D.C. Circuit's decision in National  Maritime Union of America v. Commander, Military  Sealift Command, 824 F.3d 1228 (D.C. Cir. 1987),  which was read to stand for the proposition that  the redressability requirement was not met where  the record did not even suggest that the employer  of union members would participate in re-bidding  after the union challenged the bidding process.  171 F.3d at 467. The Safir opinion deals only  with standing to sue under the statute at issue,  not the constitutional standing requirements, and  the court in that case based its rulings on  several particular factual allegations by the  plaintiff regarding its future business  activities. 417 F.2d at 977-78.

3
 Having concluded that Area Transport lacks  standing, we need not consider the FTA's claims  on appeal that there is no private right of  action under sec. 5323(f) to seek review of  sanctions imposed against a competitor or that  the FTA's decision is discretionary and  unreviewable under the APA.