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BEE LINE v. EUGENE H. NICKERSON ET AL. (09/04/69)

SUPREME COURT OF NEW YORK, SPECIAL TERM, NASSAU COUNTY 1969.NY.42796 <http://www.versuslaw.com>; 303 N.Y.S.2d 950; 60 Misc. 2d 931 September 4, 1969 BEE LINE, INC., ET AL., PLAINTIFFS,v.EUGENE H. NICKERSON ET AL., DEFENDANTS James F. Conway for plaintiffs. Morris H. Schneider, County Attorney, for defendants. Steven B. Derounian, J. Author: Derounian


Steven B. Derounian, J.

Author: Derounian

 Plaintiffs are omnibus corporations organized under the Transportation Corporations Law of New York State, engaged in operating bus routes in Nassau County and in intercounty routes between Nassau and Queens or Nassau and Suffolk Counties. Some of the plaintiffs have operated the same routes since 1925, pursuant to order of the Public Service Commission of the State of New York, granting them a certificate of public convenience and necessity.

Defendants are the County Executive, and members of the Board of Supervisors of Nassau County, and the County Director of Franchises.

The plaintiffs' operations are subject to the provisions of subdivision 1 of section 63-d of article 3-A of the Public Service Law, which provides, in part, as follows: "No omnibus corporation shall operate an omnibus line without first having obtained the permission and approval of the commission and its certificate of public convenience and necessity, after a hearing had upon notice."

In addition, subdivision 2 of section 63-d of the Public Service Law provides, in part, as follows: "Except as otherwise provided in section sixty-three-e, no such certificate of public convenience and necessity shall be issued until there be filed in the office of the commission by the applicant therefore a verified statement showing that the required consent of the proper city or other municipal authorities has been obtained as required by the transportation corporations law or in the county of Nassau by the county government law of Nassau county." Subdivision 2 of section 63-d specifies the local consent as a condition precedent to filing an application with the Public Service Commission (hereinafter referred to as "P.S.C.") for a certificate of public convenience and necessity.

To obtain the consent required by subdivision 2 of section 63-d of the Public Service Law, plaintiffs applied to the Nassau County Board of Supervisors, pursuant to article XIV of the County Government Law of Nassau County, subdivision 2 of section 1401, which provides as follows: "No stage, omnibus line, stage route, motor vehicle line or route, nor any vehicle in connection therewith, and no vehicle carrying passengers upon a designated route or routes within the limits of the county shall be operated wholly or partly upon or along any street, avenue or public place in the county, nor shall a certificate of public convenience and necessity be issued therefor, until the owner or owners thereof shall have procured, after public notice and a hearing, the consent of the board of supervisors to such operation, upon such terms and conditions as said board may prescribe. Such terms and conditions may include provisions relating to description of route, rate of speed, compensation for wear and tear of pavement of routes and bridges, and safeguarding passengers and persons using the streets. Operation upon the streets of the county shall not be permitted until the owner or operator of such vehicles or proposed line or route, if required by the board of supervisors, shall have executed and delivered a bond to the county in an amount fixed by such board and in form prescribed by the county attorney with sureties satisfactory to the comptroller, which bond may be required to provide adequate security for the prompt payment of any sum accruing to the county, the performance of any other obligations under the terms and conditions of such consent, as well as for the payment by such owner of any damages occurring to, or judgments recovered by, any person on account of the operation of such line, route or vehicles. However, no such consent shall be granted by the board of supervisors for a route wholly within a single city or village unless the previous consent in writing by the governing board of such city or village shall have been filed with the board of supervisors. No consent shall be given by the board of supervisors for a route or routes over a city or village street unless the previous consent in writing by such village or city shall have been filed with the board of supervisors. The requirement for consent by a city or village shall not be deemed to restrict the board of supervisors from giving a consent for the operation of any such vehicle over any state, county or town highway or road. Sections sixty-six, sixty-seven, sixty-eight and sixty-nine of the transportation corporations law conferring upon cities, towns and villages the power to grant consents and terminable permits shall not apply to cities, towns and villages in the county of Nassau." (L. 1936, ch. 879, as amd. by L. 1950, ch. 755; emphasis supplied.)

Prior to the enactment of chapter 755 of the Laws of 1950, some of the plaintiffs obtained local consents from various municipalities, pursuant to the provisions of section 66 and 67 of the Transportation Corporations Law of New York State. The plaintiffs*fn* received an omnibus consent from the County Board of Supervisors, pursuant to Resolution No. 67-1969, adopted March 3, 1969, which became an ordinance on that date with the approval of the County Executive Eugene H. Nickerson; which consent is effective until December 31, 1970.

Subsequent to the issuance of the aforesaid omnibus consent, one of the plaintiffs, Bee Line, Inc., filed a proposed tariff increase with the P. S. C., predicated on losses sustained during the operating period set forth in said proposal. This application by one of the plaintiffs was made without prior application to the County of Nassau Department of Franchises. The County of Nassau objects to this action, based on article IV of the omnibus consent, entitled "Fares", which reads in paragraph (1) as follows: "All petitions for changes in tariff shall be submitted to the Department of Franchises for its consideration prior to filing with the Public Service Commission. If the Department of Franchises approves the petition, it may thereupon be immediately filed with the Public Service Commission. If the Department of Franchises disapproves of the petition, it may not be filed with the Public Service Commission until sixty days after such disapproval. In the event the Department of Franchises fails to act on the petition within sixty days after its receipt, the petition may then be filed with the Public Service Commission. This provision shall not affect the filing of a petition with the Public Service Commission for changes in tariff where such petition is filed within thirty days following the execution of an employee contract and the increase requested is alleged to be necessary to provide funds for the implementation of that contract."

Under the Public Service Law, the bus companies have a right to apply directly to the P. S. C., at any time, for a fare increase, by following the procedural requirements of the Public Service Law and the rules and regulations of the P. S. C. There is no requirement in the Public Service Law whereby bus companies are required first to proceed by petition when they seek a fare increase. The company prepares a set of exhibits in support of the proposed tariff and then discusses them with the Tariff Bureau of the P. S. C. When the Tariff Bureau of the P. S. C. indicates it has no objection to the proposed tariff charge based on the information furnished by carrier, this is then an alert to the company that it may then file a new tariff.

The plaintiff Bee Line, Inc. refused to comply with article IV (1) of the omnibus consent, entitled "Fares", which provides for an application to the county for fare increase as a condition precedent to filing with the P. S. C.

Plaintiffs commenced an action for a declaratory judgment, alleging that article IV, "Fares", of the omnibus consent is an illegal attempt by the county to regulate fares, inasmuch as fare regulation is a matter entirely within the province of the P. S. C.

Plaintiffs have asked the court to grant judgment declaring that:

(1) The P. S. C. of New York State has exclusive jurisdiction and control over tariff and the fares which may be charged by plaintiffs.

(2) The Board of Supervisors has no legal authority to include in its omnibus consent, issued pursuant to Ordinance No. 67-1969, the provisions of article IV (supra).

(3) Article IV (1) infringes on the right of plaintiffs to pursue their rights under subdivisions 5 and 15 of section 61 of the Public Service Law (quoted hereinafter).

(4) The County Executive has no power under the terms of Ordinance No. 67-1969 and the omnibus consent issued pursuant thereto, or under the law, to direct the County Attorney, or to employ any attorney, to enforce against plaintiffs any claimed right arising out of article IV (1) of the omnibus consent.

The county argues that the condition set forth in article IV of the omnibus consent is a proper exercise of the legislative grant of power. The county relies upon the Public Service Law and the County Charter in support of its position (Public Service Law, ยง 63-d, subd. 2; Nassau County Govt. Law, art. XIV).

The county in its answer, requested a judgment declaring that:

(1) The terms and conditions imposed in consents are within legal authority of Board of Supervisors.

(2) The terms and conditions included are valid and enforceable.

Two of the plaintiffs, Bee Line, Inc. and Hempstead Bus Corporation, and the defendants, moved against each other for an injunction during the pendency of the action and until final judgment. Plaintiffs, in their application, alleged they anticipated the county would commence an action to compel compliance, or cancel the omnibus consent, or make objection before the P. S. C. The county sought a temporary injunction to restrain collection of any increased fare that the Public Service Commission might grant to plaintiffs prior to the conclusion of this litigation.

Both applications for a preliminary injunction were denied for the reasons set forth in the decision of Mr. Justice Wachtler, Special ...


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