Petition to review an order of the Interstate Commerce Commission granting respondent Monsey Transportation Corp. authority to operate as a common carrier of passengers and their baggage in special and charter operations, over irregular routes beginning and ending at Monsey, New York, and extending to points in New York and Kings Counties, New York. Order reversed.
Feinberg and Danaher,*fn* Circuit Judges, and Dooling,*fn** District Judge.
Respondent Monsey Transportation Corp. in July 1975 applied for authority to engage in operation, in interstate commerce, as a contract carrier by motor vehicle over regular routes in the transportation of passengers with their hand baggage in special or charter operations with Chassidic Jews and religious groups, organizations, congregations and synagogues of the Chassidic Jewish sect. See 49 U.S.C. §§ 303(a), 309(a)(1). Two routes were described. One embraced transportation from five points in Monsey, New York, to two points in Brooklyn and two in Manhattan and return. The other covered transportation from five or six points in Monsey to one point in upper Manhattan and return. The routes of travel were described with particularity; they included travel through New Jersey. At the opening of the hearing on the application before Administrative Law Judge J. Lee Benice on April 20, 1976, Monsey Transportation amended the application to request authority to operate as a contract carrier over irregular routes transporting passengers with their baggage between a described area in Monsey and five points in New York City, three of them in Manhattan and two in Brooklyn --
". . . . under continuing contracts with Jewish Orthodox congregations and Yeshivas located in the described Monsey area; with transportation restricted to members of said congregations and Yeshivas."
Upon the acceptance of the amendment by Judge Benice, the protests of Rockland Coaches, Inc., Transport of New Jersey and Hudson Transit Lines, Inc. were withdrawn; all three protestants remained parties of record for the purpose of receiving notice of further proceedings in the case.
The evidence at the hearing was that Monsey is an unincorporated village about twenty-two miles from New York City. It was founded by Orthodox Jewish families from New York City, and at the time of the hearing in 1976 about 2,500 Orthodox Jewish families lived in Monsey. They made up the greater part of the village's population, which was 8,797 in 1970. Most of the working people in Monsey do not have skills for which they can find employment in or near Monsey; they must commute to jobs in New York City, in the needle trades and in related industry, in the diamond center and in small peddler firms. Most of them do not own automobiles, and the nearest established common carrier bus route is two or three miles from Monsey. Residents who work in the city get there by using car pools, in "mini-buses" arranged by some of the congregations, or by getting to the nearest bus station by any means that are at hand. Commutation for the working population is expensive, time-wasting, and, as two of the witnesses described it, a "hassle."
There are about thirty-two Orthodox Jewish congregations in Monsey, a great many but not all of them Chassidic (or Hassidic) congregations, and there are a number of associated Yeshivas. The congregations vary in membership from as few as thirty to as many as two hundred fifty. The applicant's principal officer testified that the congregations were prepared to contract with the applicant for the planned bus service. No service other than that for families of the members of the congregations was contemplated. According to Orthodox Jewish custom men and women passengers would be seated separately, men on one side, women on the other. Seating provision would be made for passengers who wished to read prayers or to study in transit.
There would be no bus service on Saturday, the Sabbath. On Friday, the buses would return to Monsey several hours before sundown.
The Administrative Law Judge found that the applicant would provide a unique and highly specialized service designed to meet the peculiar transportation needs of the Orthodox Jewish Community in Monsey, a community constituting nearly the entire population of Monsey; found that the people absolutely require a bus service to and from their New York City jobs that will be consistent with their religious beliefs and customs; found that religious practices of the Monsey people are so incompatible with common carriage and normal bus operations of existing carriers that the carriers have declined to provide the service; found that the operation would be almost perfectly balanced and would be economically feasible, that the applicant is fit, willing, able and uniquely qualified to provide the service, that existing carriers would be unaffected by the grant of authority to applicant and that denial of the grant would be harmful to the prospective passengers and would result in substitute methods of transportation that are less efficient and are wasteful of fuel. Judge Benice reasoned that the grant contemplated would provide the greatest flexibility of service while retaining the essential character of contract carriage. The contracting congregations were not to be named in the permit; to do so would be burdensome, and it would require the obtaining of new authority each time a congregation was dropped, added, or merged into another. The decision continued,
"It should also be noted that the total number of contracting organizations could reach a substantial figure and thereby suggest to some (aware of the decision in Umthun Trucking Co. Ext. -- Phosphatic Feed Supplements, 91 M.C.C. 691) that the operation had lost its character as a contract carriage operation. However, it is apparent from a close examination of the Umthun case (see Umthun, supra, at 696 and 697) and from a close examination of both the authority that will be granted and the nature of the operation that is to be conducted, that as long as the limitations in the permit are observed, the operation will necessarily retain the character of contract carriage and will be wholly irreconcilable with common carriage."
The ultimate finding and the order were that operation as a contract carrier over irregular routes transporting passengers and their baggage between a described area in Monsey and five points in New York City, three in Manhattan and two in Brooklyn, "under continuing contracts with Jewish orthodox congregations and Yeshivas located in the described Monsey area; with transportation restricted to members of said congregations and yeshivas; will be consistent with the public interest and the national transportation policy"; that applicant was qualified to provide the service in conformity with the Interstate Commerce Act and the regulations of the Commission; and that "an appropriate permit should be issued."
There were no exceptions to the initial decision, but Review Board No. 2 stayed the order and, two weeks later, modified it materially. The Board decided that Judge Benice's decision granting the applicant contract carrier authority to transport passengers under continuing contracts with "an unlimited number of unnamed 'Jewish orthodox congregations or yeshivas' . . . . should be modified." It decided that, on the facts, if applicant contracted with each of the thirty-two congregations and with the yeshivas for transportation service and performed operations under the contracts
". . . . it could not be considered as engaging in transportation for a 'limited number of persons' as specified in the contract carrier definition of section 203(a)(15) of the Interstate Commerce Act [49 U.S.C. § 303(a)(15)]; that the operations proposed by applicant and shown to be required by the supporting witnesses may be described more appropriately in terms of motor common carrier special and charter operations; that the record amply shows the latter service to be required by the public convenience and necessity; and that said authority will be granted in lieu of the contract carriage recommended by the Administrative Law Judge . . . ."
The Board by the "Appendix" to its order modified the description of the service authorized to cover operation as a common carrier by motor vehicle over irregular routes of passengers with their baggage "in special and charter operations, beginning and ending at Monsey, N.Y., and extending to points in New York and Kings Counties, N.Y."
The Board emphasized that its authorization of the proposed service was based solely on Applicant's willingness, and existing carriers' apparent inability or unwillingness,
". . . . to respond to the specialized needs of that segment of the public represented by the supporting witnesses; that no preferential treatment based on religious or ethnic factors is conferred or intended by our grant of authority herein; and that the Commission has stated that where existing carriers are not providing an adequate service to any particular segments of the public, a grant of authority to cure this defect does not evince a discriminatory policy but is, instead, an award designed to provide a needed service, cf. Elegante Tours, Inc. -- Broker Application, 113 M.C.C. 156, 160 (1971) . . . ."
The Board found that the applicant had failed to establish that it was "fit, willing and able properly to perform the service of a contract carrier" as defined in 49 U.S.C. § 303(a)(15) and to comply with the Interstate Commerce Act and the Regulations under it and, therefore, denial of the contract carrier application was required under 49 U.S.C. § 309(b).*fn* Finally the Board found that in substance the service proposed was a common carrier service, that the public convenience and necessity required the operation by applicant of the service described in the Appendix, and that an appropriate certificate should be granted. The grant of the order implied also a finding under 49 U.S.C. § 307(a) that the applicant was "fit, willing and able properly to perform the service . . . . and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder . . . ."
Because of the change in proposed service a notice of the authority actually granted to the applicant was published in the Federal Register of August 19, 1976 (41 F.R.35113). Meanwhile, Rockland Coaches, Inc., petitioned for reconsideration and later Hudson Transit Lines, Inc., petitioned for reconsideration and National Bus Traffic Association petitioned for leave to intervene and, thereupon, for reconsideration. The Commission, Division 1, acting as an Appellate Division, denied the petitions on the ground that the findings of Review Board No. 2 were in accordance with the evidence and applicable law. Hudson Transit then petitioned the Commission for a finding that the issues were of general transportation importance (49 C.F.R. § ...