injunction. Because the court relies on parts of the record which are outside the scope of the complaint, it treats both parties' motions as motions for summary judgment.
Before proceeding to the merits, the court addresses the defendants' claim that the court should refrain from deciding this dispute because the issues are not ripe. According to the defendants, the court's disposition of the dispute at this time is premature because defendants have not as yet received the UMTA funds, and have not yet made any final decision about how those funds will be allocated. Plaintiffs hotly contest the facts submitted in defendants' affidavits regarding the status of the UMTA grant, as well as the finality of defendants' plans to deny plaintiffs access to any part of that grant. The court finds it unnecessary to resolve these factual disputes, however, because it concludes that even under the facts undisputed by defendants the case is ripe for review.
The ripeness doctrine as developed by the Supreme Court contains two elements, the first of which is jurisdictional in the sense that it is an essential precondition to a federal court's exercise of its authority, see Regional Rail Reorganization Act Cases, 419 U.S. 102, 138, 42 L. Ed. 2d 320, 95 S. Ct. 335 (1974), and the other of which is a matter of discretion, permitting the court to "exercise judicial restraint from decisions of unnecessary . . . issues", id. The first element arises from the requirement of Article III that there be a live "case or controversy," and ensures that the parties will have a "sufficient 'personal stake'" in the matter to present "a real and substantial controversy admitting of specific relief through a decree of conclusive character, as distinguished from an opinion advising what the law would be on a hypothetical set of facts." Buckley v. Valeo, 424 U.S. 1, 12, 46 L. Ed. 2d 659, 96 S. Ct. 612 (1976) (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241, 81 L. Ed. 617, 57 S. Ct. 461 (1937)). That requirement has clearly been met in this case. Given the substance of letters and memoranda which have been made part of the record, defendants cannot dispute that they have at least threatened sanctions against plaintiffs for engaging in the Route 9 service, and plaintiffs' affidavits further establish that defendants have taken substantial steps in carrying out those threats.
In this factual context, the court's evaluation of plaintiffs' claims that defendants have no right to deny them UMTA funding for the reasons articulated would hardly constitute adjudication of the "hypothetical" kind of controversy that Article III places beyond this court's jurisdiction.
Nor does the court consider it appropriate to invoke the prudential element of the ripeness doctrine in this case. Defendants' argument in support of such a conclusion appears to be that the court should decline to decide the merits of the case until their denial of the funds to Suburban Trails has been finalized, since they may moot the issue by changing their minds in the meantime. The court concludes, however, that it would be inappropriate to postpone adjudication of this action based on defendants' mere suggestion that they may decide to depart from a course of action that they have already clearly set. As indicated by the Supreme Court, an agency's final enforcement of its articulated policies should not be viewed as a necessary prerequisite to adjudication if those policies require plaintiffs to adjust their conduct "with serious penalties attached to noncompliance." Abbott Laboratories v. Gardner, 387 U.S. 136, 153, 18 L. Ed. 2d 681, 87 S. Ct. 1507 (1967); see also Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Comm'n, 461 U.S. 190, 201, 75 L. Ed. 2d 752, 103 S. Ct. 1713 (1983).
The court believes that defendant's threats are sufficiently sincere, and the threatened harm is sufficiently serious, to warrant adjudication at this time.
2. Supremacy Clause
Proceeding to the merits, the court first addresses plaintiffs' claim that defendants' actions violate the supremacy clause because they conflict with the Interstate Commerce Act as amended by the Bus Regulatory Reform Act.
It is a fundamental tenet of this nation's political system that where state regulatory actions conflict with federal law, the former are preempted by the latter. Application of this precept can, however, take a number of different forms, depending on the seriousness of the federal interests involved and the directness of the conflict. The Supreme Court has articulated three general inquiries to guide the courts in their evaluation of preemption claims. According to the Court's precedent, the most likely candidate for a finding of preemption is a situation where an "act of Congress fairly interpreted is in actual conflict with the law of the state," Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 10 L. Ed. 2d 248, 83 S. Ct. 1210 (1963); see also Free v. Bland, 369 U.S. 663, 8 L. Ed. 2d 180, 82 S. Ct. 1089 (1962). But even where there exists no direct conflict with an express federal regulation, a finding of preemption may be warranted when the state regulation is in actual conflict with the objectives that underlie a federal enactment. Thus, a state regulation must be invalidated if its effect is to discourage conduct that a federal statute or regulation seeks to encourage. Nash v. Florida Industrial Comm'n, 389 U.S. 235, 19 L. Ed. 2d 438, 88 S. Ct. 362 (1967); City of Burbank v. Lockheed, 411 U.S. 624, 36 L. Ed. 2d 547, 93 S. Ct. 1854 (1973); Jones v. Rath Paking Co., 430 U.S. 519, 97 S. Ct. 1305, 51 L. Ed. 2d 604 (1977). Finally, even where there exists no federal regulation directly affecting the conduct being regulated by the state, the state's very power to regulate that conduct may be found to be superseded either because the field is thoroughly occupied by a federal regulatory scheme, or because the matters at issue may impinge on such important federal interests, or because Congress has preempted state authority by so stating in express terms. See Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S. Ct. 3014, 73 L. Ed. 2d 664 (1982); Pacific Gas & Electric Co. v. State Energy Resources & Development Comm'n, 461 U.S. 190, 203-04, 75 L. Ed. 2d 752, 103 S. Ct. 1713 (1983).
In explicating the first test, the Court has stated that "[a] holding of federal exclusion of state law would be inescapable and requires no inquiry into congressional design where compliance with both federal and state regulations is a physical impossibility." Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 10 L. Ed. 2d 248, 83 S. Ct. 1210 (1963). Such would be the case here, for example, if the state permitted plaintiffs to operate on Route 9 only if they charged fares below a certain rate, whereas the ICC conditioned its certificate of convenience and public necessity on the requirement that plaintiffs charge fares above that rate. No such problem presents itself here. Indeed, it is evident that plaintiffs are physically capable of meeting all of the federal requirements which condition the grant of certificates of public convenience and necessity and the same time complying with New Jersey Transit's prohibitions on the operation of service along certain routes. Thus, there is "no inevitable collision between the two schemes of regulation," id. at 143, which would warrant a finding of preemption under the first tier of preemption analysis.
The court therefore turns to the more detailed investigation into Congressional intent which is required by the next stage of the analysis. In this stage, it is necessary to determine whether New Jersey Transit's attempt to regulate defendants' conduct "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" as it has defined them in the Interstate Commerce Act. See Florida Avocado Growers, 373 U.S. at 141 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 85 L. Ed. 581, 61 S. Ct. 399 (1941)); see also Amalgamated Transit Union, Div. 819 v. Byrne, 568 F.2d 1025, 1028 (3d Cir. 1977). As the Supreme Court made clear in Avocado Growers, 373 U.S. at 141, the mere fact that the federal government has issued a certificate of compliance with minimum federal standards is not in itself sufficient to warrant a conclusion that the licensed conduct is immunized from "inconsistent or more demanding state regulation". The court reads these words to mean that plaintiffs' possession of the certificate of public convenience and necessity to operate on Route 9 is not, standing alone, sufficient to bar all state regulation that might impinge on their use of the certificate. See also Huron Cement Co. v. Detroit, 362 U.S. 440, 447, 4 L. Ed. 2d 852, 80 S. Ct. 813 (1960). Rather, a finding of preemption is warranted only if the state regulation is necessarily in actual conflict with the objectives that underlie the federal government's grant of such a certificate.
Plaintiffs cite a number of provisions in the Interstate Commerce Act to support their claim that it does. For example, they point out that the Congressional Findings and Declaration of Policy in the Bus Regulatory Reform Act of 1982 specifically stated:
Sec. 3. . . . that State regulation of the motor bus industry has, in certain circumstances, unreasonably burdened interstate commerce; that overly protective regulation has resulted in operating inefficiencies and diminished price and service competition in the motor bus industry; that the objectives contained in the national transportation policy can best be achieved through greater competition and reduced regulation; that in order to reduce the uncertainty felt by the Nation's motor bus industry and those persons that rely on its services, the Interstate Commerce Commission should be given explicit direction for reduced regulation of the motor bus industry and should do everything within its power to promote competition in the motor bus industry.
Bus Regulatory Reform Act of 1982, Pub. L. 97-261 § 3, 96 Stat. 1102 (1982). Plaintiffs further cite the court to the Senate Report accompanying the Bus Act, which states in more detail the Senate Commerce Committee's dissatisfaction with the fact that the states had imposed significant regulation on the busing industry.
State regulation is one of several significant factors contributing to th[e] inadequate performance [by passenger bus companies]. State regulatory restrictions on entry, exit and/or service frequency, and slow action by State regulatory commissions on fare increases, often have significant adverse impacts on intercity bus operations. Thus, these actions impose an unreasonable burden on interstate commerce and must be preempted.