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Port Authority v. Baum Bus Co.

Decided: January 12, 1977.

PORT AUTHORITY TRANS-HUDSON CORP., PLAINTIFF,
v.
BAUM BUS COMPANY, INC., ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS, V. CITY OF JERSEY CITY, THIRD-PARTY DEFENDANT



Tarleton, J.s.c.

Tarleton

[156 NJSuper Page 587] Plaintiff Port Authority Trans-Hudson Corporation (PATH), defendants Baum Bus Company, Inc., et al. and third-party defendant City of Jersey City have moved for summary judgment. Defendants have also

moved to stay further action in the case pending a final determination of the Board of Public Utility Commissioners (PUC) based upon a petition filed on September 16, 1975 and later amended on June 10, 1976.

PATH's complaint alleges that it established a schedule of charges for the use of the Journal Square Transportation Center bus facility; that defendant bus companies have been using this facility since April 7, 1975 and have refused to pay use charges despite numerous demands by PATH.

Defendants have answered and counterclaimed. In their answer they contend that PATH lacks the power to levy charges, claiming that such lies within the jurisdiction of the PUC; that the charges are based upon an illegal contract between PATH and Jersey City, and that they have been subjected to economic duress by PATH's illegal acts.

Defendants' counterclaim alleges that in October 1967 PATH and Jersey City entered into an agreement which obligated PATH to construct the Transportation Center and the city to eliminate certain bus stops in the Journal Square area; that Jersey City passed an ordinance eliminating several bus stops on defendants' route and that PATH "fraudulently induced" the city to enter into the agreement by misrepresenting that the Transportation Center would be economically feasible. Defendants seek an accounting of all funds received and spent on construction of the Transportation Center and a judgment declaring that the agreement is either void as contrary to public policy or voidable for lack of consideration.

Defendants also contend that elimination of the bus stops constituted a taking of property without due process and without just compensation, in violation of the Federal and State Constitutions. Defendants recently expanded the constitutional argument to include a claim of denial of equal protection of the law.

Defendants filed a third-party complaint against Jersey City, alleging that the elimination of the bus stops was

illegal; that the agreement with PATH recited no consideration to Jersey City; that it amounted to a usurpation of a future legislative function and constituted a taking of property without due process and just compensation, in violation of the State and Federal Constitutions.

Defendants' petition filed with PUC seeks an order compelling the city to re-establish the eliminated bus stops, compelling PATH to cease and desist in its efforts to collect charges imposed upon defendants for use of the Transportation Center or, in the alternative, for a hearing on the reasonableness of the charges and "these matters."

On October 8, 1976 leave was granted PUC to intervene. PUC takes no position on the question of charges but urges that the case be stayed to enable it to make factual findings to determine the extent of its jurisdiction with respect to the elimination of the bus stops.

In addition to the affidavits filed with the motion papers, I requested and received the following material:

(a) An exhibit map of Jersey City depicting the Transportation Center and location of the ten eliminated bus stops;

(b) Jersey City Ordinances J-512 and J-513;

(c) Agreement dated January 20, 1967 between Jersey City and PATH;

(d) The January 29, 1962 proposal pertaining to the Hudson and Manhattan World Trade Center project;

(e) Rules and regulations of the Journal Square Transportation Center dated April 4, 1975;

(f) Schedule of charges for use of bus facilities of the Journal Square Transportation Center dated April 7, 1975;

(g) Affidavit of Jack Rosen, Director of the Terminals Department of the Port Authority, dated November 15, 1975, recommendation and report, bar graph.

After completion of construction of the Transportation Center, and on February 18, 1975, Jersey City, by Ordinances

J-512 and J-513, abolished certain bus stops in the Journal Square area.

By resolution of February 13, 1975 PATH's board of directors adopted a schedule of charges for the use of the bus facilities of the Transportation Center. The minutes of the board of directors' meeting of February 13, 1975 containing the resolution adopting the schedule of charges were forwarded to the Governors of New York and New Jersey for approval as provided by N.J.S.A. 32:1-35.62, N.J.S.A. 32:2-6 to 32:2-9.

The relevant portion of the schedule called for a charge of 50 cents for each bus departure operating on a route originating and terminating at Journal Square. The 50-cent charge was arrived at after consultation with the Department of Transportation of New Jersey and a study conducted on behalf of PATH pertaining to the cost of providing bus facilities at the Transportation Center.

According to PATH's analysis, and based upon projected costs of the bus terminal portion of the Transportation Center, it was anticipated that the expense to PATH per bus round trip would be $2.05. In structuring the bus charges no attempt was made to recoup any portion of federal aid provided for construction of the Transportation Center or for land acquisition costs. According to PATH's calculations, the elimination of debt service from expenses would reduce the expense per bus round trip to the terminal to $1.38, a charge considered still excessive in light of the need to encourage use of the Transportation Center and the public benefits to be obtained from use by bus companies. The charges ultimately adopted for use of the Transportation Center are less than that being charged for allegedly similar service at the Port Authority Bus Terminal and the George Washington Bridge Bus Station in New York.

Rules and regulations for the Transportation Center were adopted April 7, 1975 and these, among other things, provided that any charges adopted and applicable be supported

by the user's records and books of account and subject to audit by PATH.

Defendant Lafayette-Greenville Bus Owners Association is comprised of 19 individual corporate members operating as bus companies in Jersey City under franchises granted by PUC. The Association was formed to share operating expenses on a pro rata basis, coordinate the schedules of its members and act as bargaining agent for labor negotiations. The affidavit of its president discloses that along with representatives of other bus companies he attended a meeting in late 1974 or early 1975 at Jersey City City Hall. At this meeting the bus companies were informed that buses would be routed through the Transportation Center and the charge for each trip would be in excess of $2. Defendants' president attended another meeting at the Transportation Center in February or March 1975, at which time the bus companies were informed that the charge for use of the Transportation Center would be 50 cents and that bus stops around Journal ...


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