Appeal from a judgment of the United States District Court for the District of Connecticut, Jon O. Newman, Judge, in favor of the defendants in an action to enjoin implementation of a "demonstration project" financed under the Urban Mass Transportation Act of 1964. The Court of Appeals enjoined further federal funding of the project pending compliance with certain procedural requirements of the Act. Affirmed in part, reversed in part and remanded with instructions.
Friendly, Gurfein and Meskill, Circuit Judges.
The purpose of the Urban Mass Transportation Act of 1964, as amended, 49 U.S.C. § 1601 et seq. ("the Act"), is to improve urban mass transportation systems. 49 U.S.C. § 1601(b).*fn1 It seeks to advance this purpose by providing, among other things, financial assistance to mass transportation projects of various kinds, including so-called "demonstration projects." 49 U.S.C. § 1605(a).*fn2 The instant case is one in which a federally funded demonstration project to be conducted by a public mass transportation company has encountered the opposition of an existing private transportation company which, for competitive reasons, has sought to enjoin the implementation of the project.
Defendant-appellee Westport Transit District ("Transit District") is a government entity formed by Westport, Connecticut in 1969 to organize, coordinate and provide mass transportation services in Westport. Conn. Gen. Stat. § 7-273b. Its appointed directors are defendants-appellees Paul R. Green, John E. Meyers and Richard Bradley. In April, 1975, the Transit District applied to the federal Urban Mass Transportation Administration ("UMTA") for a $25,000 grant to study the possibility of developing an integrated and coordinated transportation system for the community. The study had two immediate goals: first, to develop a plan for a complete transportation system that would utilize and coordinate existing and potential transportation services; second, to design a demonstration project to implement and experiment with various aspects of the plan. Such studies are eligible for funding under 49 U.S.C. § 1605(c). On June 26, 1975, the Administrator of the UMTA, to whom the powers of the Secretary of Transportation under the Act have been delegated, 49 C.F.R. § 1.51, approved the study grant. The study was conducted, and a demonstration project was proposed. Early in 1976, the Transit District applied for a grant of roughly $610,000 to implement the project. In July of 1976, the Administrator approved a grant for a two-year project. The basic question on this appeal is whether certain of the Act's procedural requirements had to be complied with prior to the Administrator's approval of the two-year implementation grant.
Plaintiff-appellant Westport Taxi Service, Inc. ("Westport Taxi") is a small taxi company owned by two brothers, plaintiffs-appellants Michael and Anthony Gilbertie. It operates under a certificate of public convenience and necessity from the Connecticut Public Utilities Control Authority ("PUCA"). Conn. Gen. Stat. § 16-320. The type of service offered by Westport Taxi is known as "exclusive-ride" taxi service and is governed by PUCA regulation § 16-319-15, which requires that the consent of the first person to hire a taxicab be obtained before the taxi may take on additional riders. Westport Taxi's "fleet" consists of five aging taxicabs; its financial condition is precarious.
The Transit District's demonstration project will provide several new types of services. Principal among them will be a "shared-ride" taxi service provided with eleven new twelve-passenger vans that will compete directly with Westport Taxi. Plaintiffs fear that their taxi company will be destroyed if the project goes forward. Given their present financial condition, these fears appear to be well-founded.
Plaintiffs brought this action to enjoin the Secretary of Transportation from funding the project and the Transit District from implementing it. They argue that the Transit District failed to comply with two subsections of the Act. The first is 49 U.S.C. § 1602(d), which provides:
Any application for a grant or loan under this chapter to finance the acquisition, construction, reconstruction, or improvement of facilities or equipment which will substantially affect a community or its mass transportation service shall include a certification that the applicant --
(1) has afforded an adequate opportunity for public hearings pursuant to adequate prior notice, and has held such hearings unless no one with a significant economic, social, or environmental interest in the matter requests a hearing;
(2) has considered the economic and social effects of the project and its impact on the environment; and
(3) has found that the project is consistent with official plans for the comprehensive development of the urban area.
Notice of any hearings under this subsection shall include a concise statement of the proposed project, and shall be published in a newspaper of general circulation in the geographic area to be served. If hearings have been held, a copy of the transcript of the hearings shall be submitted with the application.
The Transit District concedes that the certification required by this subsection was not included in its application. The second is ...