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United Motorcoach Association, Inc. v. Welbes

May 5, 2009


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff United Motorcoach Association, Inc., has sued Matthew J. Welbes,*fn1 in his official capacity as Acting Deputy Administrator of the Federal Transit Authority for the U.S. Department of Justice, under the Administrative Procedures Act, 5 U.S.C. § 706 ("APA"). Defendant has moved to dismiss based on lack of subject matter jurisdiction, or, alternatively, for summary judgment. Based on the record before the Court and for the reasons set forth below, the motion to dismiss will be granted.


Plaintiff United Motorcoach Association, Inc. ("UMA") is an association of professional bus and motorcoach companies that primarily transports passengers for charter, rather than over fixed routes on regular schedules. (Compl. ¶ 4.) Starline Luxury Coaches of Seattle, Washington ("Starline"), a division of Transportation Demand Management, Inc., is a member of UMA. (Id. ¶ 8.) Starline sought to provide charter transportation service to fans during the 2008 Seattle Mariners major league baseball season. However, pursuant to a June 27, 2008 decision of the Administrator of the Federal Transit Authority ("FTA"), the King County Department of Transportation's Metro Transit Division ("King County Metro"), a federally funded transit agency, was granted permission to provide that service under an exemption from the FTA's charter service regulations, which generally prohibit recipients of federal funding from providing charter bus service in competition with private sector entities who express interest in providing the charter service. (Id. at 1.) Plaintiff therefore has brought suit to challenge this decision under the APA.


Under the Federal Transit Act, 49 U.S.C. § 5301 et seq.,the FTA Administrator executes and administers the federal promotion and funding of local mass transportation services. See 49 C.F.R. §§ 1.45, 1.51 (delegating authority to the FTA Administrator). The FTA's primary role is to dispense federal financial resources to support a variety of locally planned, constructed, and operated public transportation systems throughout the United States, including buses. See generally 49 U.S.C. § 5301(f).

The FTA is charged with regulating federally funded transit agencies receiving FTA funding to ensure, inter alia, that those federally funded assets are not used to compete against the private sector. See generally 49 U.S.C. § 5301 et seq.; 49 C.F.R. Ch. VI. Of relevance here is a condition that recipients of FTA funding generally may not "provide charter bus transportation service outside the urban area in which it provides regularly scheduled public transportation service." 49 U.S.C. § 5323(d)(1). The purpose of this provision is:

to ensure that the [federal] assistance will not enable a governmental authority or an operator for a governmental authority to foreclose a private operator from providing intercity charter bus service if the private operator can provide the service.

49 U.S.C. § 5323(d); see also 49 C.F.R. § 604.1 ("49 U.S.C. [§] 5323(d), . . . protects private charter operators from unauthorized competition from recipients of Federal financial assistance under the Federal Transit Laws.").

There are, however, multiple exceptions under which recipients of FTA funding may provide charter service. Recipients may provide charter service if "all registered charter providers [i.e., private sector companies*fn2 ] in the geographic area" agree. 49 C.F.R. § 604.10. Recipients may also provide charter service if, after receiving notice of the service need, no registered charter provider expresses interest in providing such service. 49 C.F.R. § 604.9. In addition, recipients may provide charter service if they have obtained an exception to the charter service regulations from the FTA Administrator. 49 C.F.R. § 604.11.*fn3

There are three primary grounds for exceptions. The charter service regulations provide that a recipient of federal assistance may petition the Administrator for "an exception to the charter service regulations to provide charter service directly to a customer for":

(1) Events of regional or national significance;

(2) Hardship (only for non-urbanized areas under 50,000 in population or small urbanized areas under 200,000 in population); or

(3) Unique and time sensitive events (e.g., funerals of local, regional or national significance) that are in the public's interest.

49 C.F.R. § 604.11. The regulations further provide that the Administrator may grant a "permanent or temporary exemption from FTA rules as allowed by law." 49 C.F.R. § 601.32(a).

The Administrator reviews petitions for exceptions and issues a written decision denying or granting the request in whole or in part. 49 C.F.R. § 604.11(c). In reaching a decision, the Administrator "may seek such additional information as the Administrator deems necessary." Id. Any exception granted under the charter service regulations "shall be effective only for the event identified . . . ." 49 C.F.R. § 604.11(d). Final decisions and orders ...

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