Court Opinion

ID: 8974126
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:49:21.384288+00
Date Added: 2024-06-11T17:10:31.072997
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
dissenting:
Because cases decided by this Court often return to us like the proverbial bad penny, we have established the practice, whenever feasible, of assigning the returned case to a panel which includes at least one member of the original panel. This sensible practice insures that at least one member of the second panel will be personally familiar with the issues and arguments presented to the first and with the reasoning that led to the original holding. Eleven years ago, I sat on a panel with two of the strongest members of this Court, Judges Friendly and Timbers. We listened to the identical arguments that the Port Authority made to the present panel, and we rejected them.
Principal among those arguments was PATH’S alleged role in relieving congestion on all the bridges, including the Staten Island and George Washington Bridges. The Federal Highway Administrator, whose decision was being appealed, held that PATH was “used and useful” for the convenience of both passenger vehicles and trucks using the Staten Island and George Washington Bridges. Our response to these statements was as follows:
The question was not whether PATH requires a subsidization but whether, in the absence of Congressional action such as the 1952 legislation concerning DRPA, the huge deficits of PATH can properly be loaded onto users of the PA bridges— three of which have almost no functional relationship and the fourth, the George Washington Bridge, only a small one. There was no showing that it was the level of the previous tolls rather than the convenience of the bridges and tunnels that was drawing traffic away from PATH or that the higher ones would increase PATH ridership. The higher bridge tolls are paid not simply by commuters who opt to use the George Washington Bridge when they could as readily have used PATH but by commuters for whom PATH was not a feasible alternative, by non-commuter passengers including many who were not destined to or did not originate in Manhattan or nearby New Jersey, and even by trucks.
592 F.2d at 672.
The Federal Highway Administrator had no problem thereafter in interpreting correctly our 1979 decision:
The Circuit Court’s criticism of the Administrator’s prior decision in 1976 including PATH in the rate base is well taken.... If the Port Authority were allowed a revenue requirement based on its total activities or on its total surface transportation facilities, it would be free to invest in deficit operations secure in the knowledge that they could charge the bridge users for support of such activities. A finding along those lines would be contrary to the statutory duty to protect the bridge users’ interests and would be an abdication of statutory responsibilities.
*426As a matter of law, the rate base for the bridge tolls is limited to the four bridges, two tunnels, and the bus terminal.
Investigation Report and Recommendations, F.H.W.A. Dkt. No. 841-T, 15-16, 18 (June 14, 1985), adopted and incorporated by reference, Order of the Federal Highway Administrator, F.H.W.A. Dkt. No. 841-T, 2 (June 19, 1985).
I respectfully disagree with my present colleagues’ attempts to distinguish our 1979 decision. Although I do not profess to have greater legal acumen than they, I have something that they lack — firsthand knowledge of what transpired on the prior appeal. With the benefit of this background, I am convinced that there is no material difference between the 1979 case and the instant case. In short, the instant appeal is a classic example of deja vu. Accordingly, because I am unable to reconcile my colleagues’ present holding with our 1979 decision, I dissent. However, I want to make it clear that, even if I were approaching this matter de novo, I would conclude, as I did before, that it is manifestly unfair and improper to saddle captive bridge users with the enormous deficits of PATH.
One need glance only briefly at a map of the United States to see that New York City is the gateway to all of Long Island and southern New England for interstate vehicular traffic from the west and south. The Port Authority, a statutory monopoly, N.Y.Unconsol.Laws § 6513 (McKinney 1979), holds the key to the gate. This means that a motorist taking the most direct route from a city such as Pittsburgh, Pennsylvania to New Haven, Connecticut must pay the Port Authority a fee for the use of that key; so also must a motorist going from a city such as Washington, D.C. to Riverhead, Long Island. The most convenient passageways through the gate for such motorists would be the George Washington Bridge and the Staten Island bridges.
The Port Authority itself describes the George Washington Bridge as a “key link in the northern metropolitan bypass system” which provides connections between Route 80, the main interstate highway across New Jersey, and the New York Thruway, “as well as other regional highway systems in each state.” Upon closer observation, the aforesaid map would show also that Yonkers, White Plains, Mount Vernon, New Rochelle, and numerous other population enclaves all are located immediately north of the George Washington Bridge, which serves as their interstate gateway to and from the south and west. While approximately fifty million vehicles cross the George Washington Bridge in an easterly direction each year, it is undisputed that the bulk of this traffic is not headed for the central business district of Manhattan, which is the district served by PATH.
My colleagues belittle this undisputed “origin and destination” evidence concerning the bridge traffic and emphasize the so-called “spillover” or “domino” effect that they say would result if PATH were eliminated. Apparently, my colleagues believe that this “spillover” effect was not considered by the prior panel. If this is what they believe, they are in error:
The PA witness stated that, because of its location, the George Washington Bridge traffic is “predominately peripheral” (Ex. PA 7, p. 25); shutting down PATH thus would affect it in the first instance less than the tunnels; it is the overcrowding of the latter that might congest the Bridge.
592 F.2d at 672.
The prior panel was well aware of the off-bridge traffic problems that a motorist would encounter should he or she decide to participate in a “spillover” from the two tunnels to the George Washington Bridge. It is approximately ten, heavily-traveled miles from the west end of the Lincoln Tunnel to the George Washington Bridge if the motorist elects to go by way of the tolled New Jersey Turnpike. It is approximately eight equally-crowded miles if the motorist proceeds along secondary roads. From the Holland Tunnel to the George Washington Bridge, the distance via the Turnpike is approximately thirteen miles, *427and, via secondary roads, approximately eleven miles. From the east end of the George Washington Bridge, the distance along the most direct city streets to the east end of the Lincoln Tunnel is approximately seven miles; via the FDR Drive, it is approximately ten miles. From the east end of the Bridge to the east end of the Holland Tunnel, a motorist traversing city streets will drive about ten miles before reaching the Holland Tunnel. If the motorist proceeds by way of the FDR Drive, he or she will travel about thirteen miles.
I was prepared in 1979 to take judicial notice of the fact that travel conditions on the FDR Drive during morning and evening rush hours are extremely bad, and I continue to be so prepared. In my opinion, few, if any, intelligent motorists headed for the central business district of Manhattan will drop out of line at either the Holland or Lincoln Tunnels during the morning rush hours, detour some fifteen to twenty miles to cross the George Washington Bridge and join the morning traffic from the Triborough Bridge crawling south on the FDR Drive. Travel along the east bank of the Hudson River would be no better than on the FDR Drive, as witness the recent much-litigated, but unsuccessful, effort to construct the “Westway.” See Sierra Club v. United States Army Corps of Engineers, 776 F.2d 383, 386 (2d Cir.1985), cert. denied, 475 U.S. 1084, 106 S.Ct. 1464, 89 L.Ed.2d 720 (1986).
The relationship between the Staten Island bridges and PATH is equally remote. A survey by the Port Authority of the traffic patterns on these bridges states that they form “the southern route ... around the congested Manhattan Central Business District” and concludes:
[Ujnlike the facilities which feed the Manhattan Central Business District, transit plays virtually no role in this market.
Port Authority of New York and New Jersey, Staten Island Bridges Study 4, 9 (1987).
I am unpersuaded by my colleagues’ “spillover” argument that travelers whose destination is Long Island rather than the central business district of Manhattan might shift from the tunnels to the Staten Island bridges. This argument assumes that a substantial number of motorists using the two tunnels during rush hours are headed for Long Island rather than the central business district, an assumption without support in the record and equally unsupportable as a practical proposition.
Treatment of the Port Authority’s bridges, tunnels, bus terminal, bus programs and PATH as “an integrated interdependent transportation system”, takes no cognizance of the fact that there are several other transit systems available for use by New Jersey residents, the New Jersey Transit and Amtrak trains running from Newark to the Pennsylvania Station and the New Jersey Transit trains running from Newark to Hoboken. It also overlooks the fact that there are trans-Hudson ferries, and that, when the district court’s opinion was written, two new ferries were scheduled to begin operations in the then near future, and are now operating. The argument that the closure of PATH will force all commuters to transfer to the tunnels and bridges just doesn’t wash.
My final observation on the “spillover” effect is that it hypothesizes a crisis that in fact does not exist, a crisis predicated on the erroneous proposition that the tolls paid by captive users of the bridges and tunnels are the only proper source of additional funds for PATH’S needs. I suggest that, before taking up the question how much the largely unaffected users of the George Washington Bridge and the Staten Island bridges can be expected to contribute to the operation of PATH, both the Port Authority and the courts should make a thorough and fair inquiry into whether PATH is contributing its fair share of the Port Authority’s earnings, see The Minnesota Rate Cases, 230 U.S. 352, 434-35, 33 S.Ct. 729, 754-55, 57 L.Ed. 1511 (1913); Smyth v. Ames, 169 U.S. 466, 541, 18 S.Ct. 418, 432, 42 L.Ed. 819 (1898), and how much the users of PATH should be expected to pay to accomplish this result. See Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979).
*428On several occasions, the Federal Highway Administrator, whose decision we reviewed in 1979, expressed a concern that bridge users should not be saddled with exorbitant tolls for the purpose of subsidizing the users of PATH:
As the legislative history of the General Bridge Act makes clear, one guiding purpose of the statute was to prevent the operators of toll bridges from exploiting what was often a monopoly position to exact excessively high tolls from bridge users.
Decision of Federal Highway Administrator, F.H.W.A. Dkt. No. 76-9, 5 (August 9, 1977).
In this regard, it should be repeated that while a fair rate of return is an important element of financial need in a bridge toll proceeding such as this, the burden of maintaining such a rate cannot be allowed to fall exclusively on users of the subject bridges.
Decision of Federal Highway Administrator, F.H.W.A. Dkt. No. 76-9, 12 (November 7, 1977). See also The Minnesota Rate Cases, supra, where the Court said that “the carrier cannot justify unreasonably high rates on domestic business because only in that way is it able to meet losses on its interstate business.” 230 U.S. at 435, 33 S.Ct. at 755.
The Administrator concluded:
Because any future toll increase must be passed upon by the Administrator, adequate safeguards exist to prevent discrimination against bridge users in favor of mass transportation users.
F.H.W.A. decision of November 7, 1977, supra, at 12.
When Congress transferred the exercise of these safeguards to the district courts, it surely anticipated that the courts would not approve the Authority’s claim of reasonableness without receiving and passing upon facts and figures to support it. See Lincoln Gas & Electric Light Co. v. Lincoln, 223 U.S. 349, 361-65, 32 S.Ct. 271, 273-75, 56 L.Ed. 466 (1912); Chicago, Milwaukee & St. Paul Ry. v. Tompkins, 176 U.S. 167, 179-80, 20 S.Ct. 336, 340-41, 44 L.Ed. 417 (1900). I regret to say that I do not believe that has occurred in the instant case. I find nothing in the record that justifies PATH’S fare of $1.00, a fare that pays about half the expense of running the railroad and has caused an increase in the PATH deficit from $34 million in 1977 to $87 million in 1987, and to a projected 1991 deficit of $133 million.
The district court correctly found that the Port Authority did not conduct any formal studies on the effect of various PATH fare levels on PATH ridership. 706 F.Supp. at 277. Unlike my colleagues, I do not believe that the district court’s finding that the “PATH Board ‘knew’ that every ten-cent increase in PATH fares produces about $6 million in revenues if ridership remains constant” indicates a thoughtful analysis of possible fare increases. Id. A third-grade student could multiply PATH’S sixty million annual passenger figure by ten cents and come up with a figure of $6 million. The same student could determine even more quickly that, if ridership remained constant, an increase of $1.00 in PATH fares would produce $60 million in increased revenues. The decision-making process involved in fare increases does not follow such a simple course.
It is generally accepted that a substantial increase in the cost of public transportation will create what is known as a “resistance factor.” See Powell v. Washington Metropolitan Area Transit Comm’n, 485 F.2d 1080, 1083 n. 17 (D.C.Cir.1973). What a reviewing court needs to know, therefore, is what effect the resistance factor would have on any proposed fare increase. We know here that PATH fares have been increased on several occasions and its trains still are running at capacity. No facts, figures, or projections have been introduced into the record to indicate that PATH would not continue to operate at capacity if its fares were increased:
Q. Did you or anyone under your direction prepare any study to determine what the loss in ridership would be under various permutations and combinations of the toll increase, assuming the toll increase was 25 cents to a dollar at that time, assuming it was 50 cents to a $1.25, *429assuming that it was 75 cents to a $1.50, did anyone prepare any studies as to what the expected ridership would be under the various permutations and combinations?
A. Not to my knowledge.
Q. Did you make any study as to whether if you had increased the PATH fare to $1.50 you would lose any substantial amount of ridership?
A. No study was made of that.
Testimony of John Haupert, Port Authority Treasurer, Joint Appendix at 265-67.
The reliance placed by the district court and my colleagues upon the “administrative convenience of charging ‘round figures’ for its tolls and fares” is mystifying to me. This “administrative convenience” argument was explained by Mr. Haupert as follows:
On the PATH, what I was trying to point out to you was that we were going to a four quarter system, which meant that people would have to insert four quarters into the turnstiles. If we went to a five quarter system or a six quarter system it would slow down the amount of people we could get through the turnstiles which would have been an added inconvenience on the passengers. We did reflect that in our thinking as to what would be the appropriate fare.
Joint Appendix at 263.
Undoubtedly, it would take a second or two longer for a passenger to deposit six quarters in a slot than it would take to deposit four. However, to use this as a justification for increasing tolls on the George Washington Bridge some $50 million a year borders on the absurd. Whatever minimal delay might result from the insertion of two more quarters readily could be compensated for by installing an additional turnstile at each station.
If the Port Authority wishes to encourage the use of dollar bills, a fare of $1.50 would require only one bill and two quarters, and a fare of $2.00 would require only one additional bill. Such increases, which easily could be handled without material delay, would help to reduce the $87 million deficit which the Port Authority has placed on the backs of captive bridge motorists and truckers.
I am equally mystified by the district court’s statement that PATH’S tolls are in line with “other urban subway transit systems”, 706 F.Supp. at 277, a finding upon which my colleagues rely in holding that a comparison of fares with the New York City subways is an “appropriate factor”. PATH is not an “urban subway transit system”. It is an interstate “Railroad”, formerly known as the Hudson and Manhattan Railroad Company, and, like other railroads, it operates “Trains”. Neither the Port Authority nor the district court has pointed to any similarities between PATH and the New York subway system that justify such a comparison. The Port Authority’s proof with regard to the New York subway system can be summed up in one sentence:
Well, we looked at the New York City fare of one dollar and thought that a comparable fare on PATH would be readily acceptable.
Testimony of John Haupert, Joint Appendix at 262.
Admittedly, one of the most frequently used methods of testing the reasonableness of a rate is to compare it with rates on similar traffic in adjacent territories. See Aluminum Co. of America v. I.C.C., 581 F.2d 1004, 1008 (D.C.Cir.1978); Alldredge, Rate-Making for Common Carriers, 94 (1929); 13 C.J.S. Carriers § 297f at 678-80 (1939). However, comparisons of rates have little probative value unless the conditions of operation are essentially the same. Aluminum Co., supra, 581 F.2d at 1008; Chicago & Eastern Illinois Ry. v. Commerce Comm’n, 343 Ill. 117, 125, 175 N.E. 8 (1931); 13 C.J.S., supra, at 679-80; 64 Am.Jur.2d Public Utilities § 213 at 720 (1972). In contrast to the lack of similarity between PATH and the New York City subway system, there are a number of other commuter railroads serving New York City whose services are very similar to those furnished by PATH. I take judi*430cial notice of both their existence and their published fares.
PATH is a commuter train that runs from Newark, a major New Jersey city, to downtown Manhattan. En route it passes through Harrison and Jersey City. It also has a separate New York feeder running from Journal Square in Jersey City to Ho-boken, New Jersey and through it to Manhattan. New Jersey Transit and Amtrak also have lines running from Newark to Manhattan. The fare for this service on New Jersey Transit is $2.25, on Amtrak it is $5.75. New Jersey Transit trains also run from Newark to Hoboken. The fare for this service is $1.75, to which must be added the cost of transportation across the Hudson River. The fare by New Jersey Transit bus from Newark to Manhattan is $2.95. From Hoboken to Manhattan, the bus fare is $1.70. From Newark Airport to Manhattan, it is $7.00. The fare from Newark to Manhattan by Greyhound bus is $7.00.
Several commuter trains are run by the Metro-North Commuter Railroad. Fares for comparable distances on those lines are as follows:
From Mount Vernon, Pelham and New Rochelle—
$4.50, off-peak $3.50.
From Woodlawn and Wakefield—
$4.00, off-peak $3.00.
From Marble Hill and Riverdale—
$4.00, off-peak $3.00.
Where the Long Island Railroad, the busiest commuter railroad of all, competes with the New York subways, its fares are of necessity competitive. However, once Long Island leaves the subway area, its fares escalate rapidly. For example, the fares from Valley Stream, Garden City and Mineóla are $5.00.
Although the territories covered by the several lines of New Jersey Transit that connect with PATH at the Penn Station in Newark are not the same as that covered by PATH, a brief look at their fares for distances comparable to the distance between Newark and New York is enlightening. Thus, on the Raritan Valley Line, the fare from Garwood to Newark is $2.50. On the North Jersey Coast Line, the fare from Avenel to Newark is $3.00. On the Northeast Corridor Line, the fare from Rathway to Newark is $2.50. Several other New Jersey Transit Lines connect with PATH at Hoboken. On the Boonton Line, the fare from Glen Ridge to Hoboken is $2.50. On the Pascack Valley Line, the fare from Teterboro to Hoboken is $2.50.
Why is it that among all these commuter lines, PATH’S fare of $1.00 stands alone? The answer is clear; the motorists and truckers using the bridges and tunnels are being forced to pay the difference. I cannot accept this as just and reasonable.
I believe that our review of the district court’s decision should be no less demanding than that court’s review of PATH’S decision. We should not accept the district court’s generalized conclusion that PATH’S $1.00 fare is reasonable without being satisfied that it is supported by adequate underlying facts. Schneiderman v. United States, 320 U.S. 118, 129-31, 63 S.Ct. 1333, 4338-40, 87 L.Ed. 1796 (1943); Russo v. Central School Dist., 469 F.2d 623, 628-30 (2d Cir.1972); Monarch Beverage Co. v. Tyfield Importers, Inc., 823 F.2d 1187, 1192 (7th Cir.1987). Unlike my colleagues, I find such support totally lacking in the instant case.
The ultimate irony of my colleagues’ opinion is its recital of the benefits allegedly flowing to motorists and truckers proceeding across the George Washington and Staten Island Bridges as a result of the $1.00 PATH tolls and the concomitant $3.00 bridge tolls. Over one and one-half million users of these bridges are protesting these tolls, and they do not feel benefited. Indeed, their sentiments would find eloquent expression in the ancient proverb that a man can handle his enemies if someone will only protect him from his friends.
Although it plays no part in my decision, I cannot close this dissent without a reference to recently published reports that the Port Authority has adopted the practice of closing some of the toll booths on the George Washington Bridge because of insufficient budgeted funds. To the long-*431suffering users of the Bridge whose money is being used to subsidize PATH, this must be like having salt rubbed in their wounds.
I would hold, in accordance with our pri- or decision, that, until Congress authorizes the Port Authority to do otherwise, the Authority must limit the rate base for the George Washington and Staten Island Bridge tolls to the bridges, the tunnels and the bus terminals.
Alternatively, I would remand to the district court with instructions to return the matter to the Port Authority for reconsideration of all the tolls and the making of a reasonable and just allocation of fares and tolls, supported by complete and adequate factual findings.