Plaintiffs bring a consolidated action in lieu of prerogative writs to invalidate two Atlantic City ordinances imposing fees upon charter buses and special operations buses. While plaintiffs' motion for summary judgment was pending, the city replaced the challenged ordinances with two ordinances of similar language, but imposing higher fees. Plaintiffs amended their complaints to include the same challenged to the replaced ordinances. This court grants plaintiffs' motion for summary judgment and finds that Atlantic City Ordinances 68 and 72 of 1980, and any prior similar ordinances in effect since December 31, 1972, are ultra vires in part and contravene N.J.S.A. 48:4-14.1 in part.
On October 29, 1979 plaintiff Trailways, Inc. (Trailways), a Delaware corporation doing business in New Jersey, filed a complaint in lieu of prerogative writs (Docket L-10433-79 P.W.)
pursuant to R. 4:69 et seq. against the City of Atlantic City, its Board of Commissioners, its Department of Revenue and Finance and its Director of Revenue and Finance. Trailways demands judgment in three respects. Initially, the complaint seeks a declaration that Atlantic City Ordinances 23 and 54 of 1978, and any prior similar ordinances in effect since December 31, 1972, are invalid because said ordinances contravene N.J.S.A 48:4-14.1. Ordinance 23 of 1978, adopted on April 27, 1978, provided, among other things, that every charter bus entering Atlantic City pay a $50 fee. Ordinance 54 of 1978 adopted on August 17, 1978, provided, among other things, that prior to commencing its operation into the city, any special bus service must have obtained a permit costing $50 and be assessed a fee of 75 cents per passenger brought into the city. Secondly, Trailways seeks reimbursement for any and all taxes and fees paid pursuant to the said ordinances, with interest. Thirdly, Trailways demands judgment ordering defendants to cease and desist from collecting, or attempting to collect, the taxes and fees required by said ordinances.
On November 19, 1979 plaintiff Manhattan Transit Co., Inc. (Manhattan), a New Jersey corporation, filed a similar complaint in lieu of prerogative writs (Docket L-14103-79 P.W.) pursuant to R. 4:69 et seq. against the same defendants, demanding judgment in the same three respects. On December 3, 1979 defendants filed an answer to Trailways' complaint, asserting as four separate defenses that the ordinances referred to are a valid exercise of a municipality's police powers; that the provisions of N.J.S.A. 48:4-14.1 do not apply to special or charter buses; that Trailways has not exhausted its administrative remedies, and that each defendant is entitled to governmental immunity. In addition, defendants' answer included a counterclaim for bills due and owing pursuant to Atlantic City Ordinances 23 and 54 of 1978, and demanded compensatory damages with interest. On December 7, 1979 Trailways filed a reply to the four separate defenses and an answer to the counterclaim. Trailways asserted that the said ordinances are invalid because
they contravene N.J.S.A. 48:4-14.1; that the provisions of N.J.S.A. 48:4-14.1 do not except special or charter buses from its applications; that there is no administrative tribunal available to determine this matter, and that the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 et seq. , does not apply to this action. Trailways responded to defendants' counterclaim by way of general denial.
On December 7, 1979 defendants filed an answer to plaintiff Manhattan's complaint, an answer similar to the one filed in response to Trailways' complaint. On December 10, 1979 Manhattan filed a reply to the four separate defenses raised in defendants' answer similar to the reply in response to defendants' answer to Trailways' complaint.
On April 3, 1980 Manhattan and Trailways sought consolidation and summary judgment, but a hearing was continued at defendants' request due to personnel changes in the Atlantic City Solicitor's Office.
Between April 13 and 18, 1980 defendants filed a responding brief asserting the necessity of discovery prior to a hearing on summary judgment. On April 18, 1980 this court allowed discovery until May 3, 1980 and continued the summary judgment motion.
On May 10, 1980 defendants tentatively scheduled depositions of city officials, which to date have never been taken, nor has discovery been sought in any respect.
On June 11, 1980 defendants represented that they were retaining co-counsel in this matter, and defendants were thus granted an indefinite postponement.
On July 31, 1980 defendant Board of Commissioners of Atlantic City adopted Ordinances 72 (which repeals the subject Ordinance 54 of 1978 and provides for increased fees for special buses entering Atlantic City, including fixed fees for permits, and a 90 cents per passenger head tax) and 68 of 1980 (which repeals subject Ordinance 23 of 1978 and provides for increased fees for charter buses entering Atlantic City).
On September 18, 1980 this court granted the motion for consolidation and entertained oral argument on the motion for summary judgment.
In Judson v. People's Bank and Trust Co. of Westfield , 17 N.J. 67 (1954), the court established the scope of the summary judgment procedure, holding in part, (at 73) that "the role of the judge in that procedure is to determine whether there is a genuine issue as to material fact, but not to decide the issue if he finds it to exist." See, also R. 4:46-2. In noting that the moving party must clearly sustain its burden "to exclude any reasonable doubt as to the existence of any genuine issue of material" or show that "palpably" no such issue exists, the court further held that "[a]ll inferences of doubt are drawn against the movant in favor of the opponent of the motion" and that the issues of credibility are to be reserved for the trier of fact. Id. at 74-75. Applying the standard to the present case, this court finds that there are no genuine issues as to material fact.
Plaintiffs Trailways and Manhattan are major national carriers of passengers by bus. For years Trailways and Manhattan have carried bus patrons to Atlantic City, an activity presently including three basic modes of service. The first mode, not the subject of this litigation, is by regularly scheduled inter-city bus passenger and package service between termini in other cities and the Atlantic City Municipal Bus Terminal. This service is not taxed by Atlantic City. The second mode is by the operation of Special Operations Bus Service, whereby patrons and other cities may purchase individual tickets for transportation to and from special designations within Atlantic City, usually the casinos, which tickets may include meals, lodging, entertainment or other amenities. This service is regulated by Atlantic City under Municipal Ordinance 72 of 1978. The third mode of service provided by plaintiffs is the operation of charter bus service, whereby group patrons and other cities charter Trailways and Manhattan buses for transportation to and from Atlantic City, including trips to hotels, casinos, Convention Hall, and such other designations as may be desired by the chartering
groups. This service is regulated by Atlantic City under Ordinance 68 of 1980. Trailways and Manhattan have secured such permits and have paid substantial sums to Atlantic City for the fees imposed under Ordinances 68 and 72 of 1980. Whether or not the bus companies elect to park on the municipal lot provided for special operations and chartered buses at Huron and Tennessee Avenues in Atlantic City, the regulatory fee imposed includes such a parking charge. Although the precise amounts paid by plaintiffs under the cited ordinances remain to be precisely determined, there is no dispute that such amounts can readily be determined in event that a judgment issues declaring the fees invalid and unlawful. In light of these facts it remains for this court to make findings of law.
The gravamen of the bus companies' complaints is that Atlantic City, by enacting Ordinances 68 and 72 of 1980 is engaging in the practice of charging a "franchise tax" or a "municipal license fee," in contravention of N.J.S.A. 48:4-14.1. However, Atlantic City contends that the contested ordinances are neither a "franchise tax" nor a "municipal license fee" in contravention of N.J.S.A. 48:4-14.1, but a "municipal charge" countenanced under N.J.S.A. 40:60-25.30 to defer the costs of a necessary regulatory scheme and parking facility. Because the contested ordinances operate in the exercise of municipal police powers for the guarantee of the health, safety and welfare of the residents and visitors of the city, Atlantic City maintains that the said ordinances are valid and comply with municipal obligations in this regard.
In rebuttal, the bus companies aver that if the exactions imposed by the city are cognizable under N.J.S.A. 40:60-25.30, and the bus companies are forced to use the municipal terminal facilities whether or not they have their own terminal within the city or elect to park outside the city, Atlantic City is operating a monopoly in contravention of federal antitrust laws. In addition, if the bus companies do not elect to park in the municipal terminal, the exaction becomes either a "license fee" or "franchise
tax" to use the city streets both prohibited by N.J.S.A. 48:4-14.1.
Atlantic City defends its ordinances by asserting that the federal antitrust laws do not affect the municipality in the exercise of its police powers, or in its health, safety and welfare regulations. The city posits that its regulatory scheme does not tax the use of the streets, but rather defers the charges necessary for parking and other regulatory services.
At the outset, it is appropriate to consider plaintiffs' contention that the Public Utilities Commission preempts municipal regulation and taxation of charter and special operations buses. A municipal corporation, being a government of enumerated powers, has no inherent power to adopt ordinances or regulations except those affirmatively delineated by the Legislature, and must act ...