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In re Complaint Petition of Five Mile Beach Electric Railway Co.

July 5, 2001


On appeal from the Final Decision of Department of Transportation, NJDOT Docket No. 96-082 and NJDOT Docket No. 00-023.

Before Judges Wefing, Cuff and Lisa.

The opinion of the court was delivered by: Lisa, J.A.D.


Argued June 4, 2001

In these back-to-back appeals, consolidated for the purpose of this opinion, Five Mile Beach Electric Railway Co., Inc. ("FMB") appeals orders of the Commissioner of the New Jersey Department of Transportation ("DOT") dismissing its petitions and denying all relief it requested. FMB operates bus lines in Cape May County, including a trackless trolley service between Cape May City and the terminal of the Cape May-Lewes Ferry, which is operated by the Delaware River and Bay Authority ("DRBA"). In 1996, New Jersey Transit ("NJT"), acting in cooperation with the DRBA, authorized a competitor of FMB, Lion Corporation ("Lion"), to operate this same route. The subject of one of FMB's appeals (A-4808-99T1) arises from its 1996 petition to the DOT alleging the NJT route created destructive competition, and its motion in 1999 to amend that petition to further allege that the DRBA's refusal to allow FMB's trolleys to stop at the ferry terminal and other conduct constituted additional acts of destructive competition by the DRBA. The subject of FMB's other appeal (A-4916-99T1) arises from its 2000 petition to the DOT, claiming the DRBA wrongly denied FMB access to the ferry terminal. The DOT dismissed the 1996 petition and denied the motion to amend it on the ground that NJT had exclusive jurisdiction and the DOT lacked jurisdiction. The DOT dismissed the 2000 petition on the ground of res judicata. On appeal, FMB argues the DOT did have jurisdiction over these matters and should not have dismissed. We disagree and affirm.

The DRBA, an agency created by interstate compact between New Jersey and Delaware, operates the Cape May-Lewes Ferry across the Delaware Bay. N.J.S.A. 32:11E-1. In the Summer of 1991, FMB, in cooperation with the DRBA, began providing its trolley service between the ferry terminal and downtown Cape May. FMB operated this route under a certificate of public convenience and necessity issued by the DOT. The trolleys stopped at the terminal three times daily during that first year of service, charging a one-way fare of $4.

In 1992, NJT put out for bid a new bus route to provide service between the ferry terminal and Cape May City, the same route FMB already served with its trolleys. The new bus route was established at the urging of the DRBA, which wanted to increase its foot passenger ridership on the ferry. NJT awarded the contract to Lion, which was to run minibuses over the route, charging a one-way fare of $1.

At first, FMB did not consider the minibuses a serious competitive threat since passengers preferred the trolleys. Subsequently, however, the DRBA started selling "intermodal" tickets, which included the ferry and bus fare in one all-inclusive price. These tickets were good only for the bus service provided by Lion, under contract with NJT; if FMB accepted one of these tickets, the DRBA refused to refund FMB the price of the fare. The DRBA's inclusion of ground transportation in the ferry ticket price "was devastating to [FMB's] cash-only ridership from the Ferry to Cape May."

Bids for this bus service were received annually, and each year a one-year contract was awarded. Some years a "sister company" of FMB, owned and operated by the same principal, was awarded the contract. Lion obtained the 1999 contract. On September 7, 1999, the DRBA denied FMB permission to enter the terminal property to pick-up and discharge passengers.

On May 2, 1996, FMB filed a complaint petition with the DOT against the DRBA and Lion, alleging the DRBA, contrary to the authority granted it under statute, entered into a contract in April 1996 with Lion for Lion to provide bus service between the ferry terminal and the Cape May Bus Depot. FMB provided trolley service along the same route. FMB alleged the activities of the DRBA and Lion constituted destructive competition and demanded the DOT issue an order to the DRBA and Lion to cease the described bus service and the DOT require the DRBA and Lion to file a petition with the DOT for operating authority before beginning any new bus service in Cape May County.*fn1

On August 25, 1998, the DOT transmitted the matter to the Office of Administrative Law ("OAL") for a hearing as a contested case. On October 4, 1999, FMB moved in the OAL to amend its complaint petition. In addition to the allegations contained in the original petition, FMB accused the DRBA of "conducting destructive competition" by prohibiting appellant from picking up and discharging passengers at the terminal building; discouraging passengers from using FMB's services; and refusing to pay FMB for services provided on the DRBA's intermodal tickets in 1993, 1996, and 1998. The proposed amended petition requested an order that the DRBA cease all such practices.

ALJ Tassini issued an initial decision on December 6, 1999, granting the DRBA's motion to dismiss FMB's petition and denying FMB's motion to amend that petition, on the primary ground that the DOT lacked jurisdiction over the matter. FMB filed exceptions to the initial decision. On March 10, 2000, James Weinstein, Commissioner of the DOT, issued a final decision adopting the initial decision of ALJ Tassini substantially for the reasons set forth therein. On April 12, 2000, the DOT issued a dismissal order. FMB appeals from the part of the order that denied its motion to amend the petition.

On March 14, 2000, FMB filed a separate complaint petition with DOT, seeking an order against the DRBA to cease and desist in preventing FMB from picking-up and discharging passengers at the ferry terminal. In a letter dated April 7, 2000, the DOT dismissed the petition for reasons of res judicata, since the relief requested in the petition was identical to that which FMB had requested and been denied in the motion to amend the previous petition. The letter stated this was a final decision that could be appealed directly to the Appellate Division. FMB also appeals from that decision.

Relying on N.J.S.A. 27:25-8b,*fn2 ALJ Tassini found that where NJT contracts with a public or private entity, it has jurisdiction over the service contracted for and any destructive competition claim resulting from that contract. He noted that FMB's complaint petition related to the 1996 contract between the DRBA, Lion, and NJT. Since NJT was a party to that contract, he concluded that it had "exclusive administrative authority over matters relating to ...

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