Joel Yohalem v. Washington Metropolitan Area Transit Commission, D. C. Transit System, Inc., Intervenor

436 F.2d 171
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 12, 1970
Docket22865_1
StatusPublished
Cited by4 cases

This text of 436 F.2d 171 (Joel Yohalem v. Washington Metropolitan Area Transit Commission, D. C. Transit System, Inc., Intervenor) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Joel Yohalem v. Washington Metropolitan Area Transit Commission, D. C. Transit System, Inc., Intervenor, 436 F.2d 171 (D.C. Cir. 1970).

Opinions

TAMM, Circuit Judge:

The instant petition challenges the action of the respondent Washington Metropolitan Area Transit Commission in granting fare increases to intervenor D. C. Transit System, Inc., pursuant to an order issued December 23, 1968. For the reasons hereinafter stated, we affirm the Commission’s decision and order.

I. THE PROCEDURAL BACKGROUND

For present purposes, the convoluted procedural history of the instant controversy begins on October 8, 1968, with the issuance of this court’s opinions in Williams v. WMATC, 134 U.S.App.D.C. 342, 415 F.2d 922 (en banc), cert. denied sub nom. D. C. Transit System, Inc. v. Williams, 393 U.S. 1081, 89 S.Ct. 860, 21 L.Ed.2d 733 (1969) and Payne v. WMATC, 134 U.S.App.D.C. 321, 415 F.2d 901. In Williams we held, inter alia, that the Commission had erred in granting certain fare increases in 1963 to D.C. Transit, and that a previous remand to the Commission had not cured the defects in the original order; therefore, we ordered the Commission to supervise the creation and maintenance of a “riders’ fund” through which D.C. Transit would make restitution of the excess fares collected pursuant to the invalid order, to the extent that these fares had exceeded a level conceded by the protestants to be a fair rate of return. In the Payne decision a panel of this court concluded in general that the Commission had acted reasonably and within the scope of its authority in its 1967 grant of interim and final approval to rate increases for D.C. Transit. However, the cause was remanded to the Commission for a determination of whether the prevailing uniform fare for travel within the District of Columbia was unduly discriminatory in favor of suburban passengers, and thus violative of the applicable statutory standard. In ordering further [173]*173proceedings in Payne, we pointed out that “we do not view our holding in this regard as requiring that the rate increases ordered by the Commission [in 1967] be rescinded, and we leave the matter of any immediate fare adjustments to the Commission’s discretion.” 134 U.S.App.D.C. at 341, 415 F.2d at 921.

When these opinions issued, the Commission was in the process of concluding yet another proceeding, Docket No. 186, in which D.C. Transit was seeking fare increases. On October 18, 1968, the Commission issued Order No. 880, which summarized the results of the formal hearings in Docket No. 186. In this order, the Commission found:

[F]or the first time in our experience, the formal parties * * * are all in substantial agreement on the revenue and expense projections. These projections show beyond question that under the present fare structure, the company will not receive sufficient revenues during the year ending July 31, 1969, to pay the operating expenses and interest charges which it will incur.

(Order No. 880, slip op. at 3-4.) The order also contained several other findings relevant to the present petition. The Commission noted that “the basic reason for this present rise in the fares is the increase in the cost of operating the bus system,” and that this upward trend in costs was primarily attributable to increased labor expenses. (Id. at 4-5.) In addition, some doubts were expressed concerning the usefulness as a predictive tool of the available data on the company’s recent financial history. This uncertainty was created by a number of events which had had an adverse impact on D.C. Transit’s ridership levels: the April, 1968 civil disorders, the Poor People’s Campaign, and work stoppages due to the robbery of D.C. Transit drivers. These events, the Commission concluded, had been a material factor contributing to the company’s loss of nearly $900,000 during the first seven months of calendar year 1968. (Id. at 7). However, the Commission assumed that these difficulties were only temporary, and adjusted the historical revenue and expense figures to eliminate the impact of these unusual occurrences. (Id. at 7-8.) Finally, turning to the problems posed by the recent Williams remand, the Commission concluded that “the wisest use of the riders’ fund is to eliminate return to the equity holders until such time as full restitution is made of the amounts which the court has held were improperly obtained from the riding public.” (Id. at 41). Therefore, the Commission ordered that the record in Docket No. 186 be reopened to receive additional evidence on the question of what changes should be made in the existing fare structure in order to bring the company to the breakeven point, and further suspended D.C.' Transit’s proposed tariff’s until November 4, 1968.

On October 29, 1968, the Commission issued Order No. 882 which authorized, among other things, an interim increase to a basic fare of 30 cents cash or four tokens for $1.05. These fares were designed to bring the company’s revenues to the break-even point for a temporary period until the issues presented by the Williams remand had been clarified; the order also had the effect of further suspending the tariffs filed by D.C. Transit until December 13, 1968, which was the last day of the suspension period permitted by the Washington Metropolitan Area Transit Regulation Compact.1 On December 13, with the suspension period expiring, the Commission issued Order No. 894, terminating the proceedings in Docket No. 186. In this order, the Commission noted that D.C. Transit had filed a petition for certiorari in the Supreme Court, seeking review of this court’s decision in Williams; this action operated to stay our mandate in Williams pending disposition of the petition, and left the riders’ fund issue in doubt. Nonetheless, the Commission elected to continue its [174]*174policy of requiring the company to operate at the break-even point:

It may be argued that until a definite riders’ fund is established the company should be entitled to earn a return for the stockholders, and if a riders’ fund does develop, adjustments can be made on the company’s books accordingly. It cannot be denied, however, that while those monies may be subject to refund, the rider of today is not necessarily the rider of tomorrow. This is particularly true in view of the transient nature of the population of the Washington Metropolitan area. It is therefore our duty to look at the background of all these consequences and, where a choice must be made between the ratepayer and the stockholder, find for the ratepayer.

(Order No. 894, at 4.) Thus, the Commission determined to keep in effect the basic fare structure approved in Order No. 882; at the same time, it noted that “certain vexing and difficult problems have come to our attention during the interim period between Order No. 882 and this order.” (Id.) These problems related to the deteriorating ridership levels experienced by the company during the five weeks in which the interim fares had been in effect: preliminary data indicated that D.C. Transit’s farebox revenues during this period had fallen approximately $40,000 per week below the amount calculated to maintain the company at the break-even point. (Id.

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436 F.2d 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joel-yohalem-v-washington-metropolitan-area-transit-commission-d-c-cadc-1970.