JLS, Incorporated v. Public Service Commission of W, No. 08-1331 (4th Cir. 2009)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 08-1331 JLS, INCORPORATED, Plaintiff - Appellee, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, Defendant, and DUNCAN S MOTEL, INCORPORATED; WILLIAMS TRANSPORT, Movants, and C & H COMPANY; CIMARRON COACH OF VIRGINIA, INCORPORATED; D & L LIMOUSINE, INCORPORATED; TAXI LEASING, LIMITED; TAXI SERVICE, INCORPORATED, d/b/a Yellow Cab, Movants Appellants. No. 08-1338 JLS, INCORPORATED, Plaintiff - Appellee, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, Defendant, and C & H COMPANY; CIMARRON COACH OF VIRGINIA, INCORPORATED; D & L LIMOUSINE, INCORPORATED; TAXI LEASING, LIMITED; TAXI SERVICE, INCORPORATED, d/b/a Yellow Cab, Movants, and DUNCAN S MOTEL, INCORPORATED; WILLIAMS TRANSPORT, Movants Appellants. Appeals from the United States District Court for the Southern District of West Virginia, at Charleston. Joseph R. Goodwin, Chief District Judge. (2:07-cv-00586) Argued: January 28, 2009 Decided: March 20, 2009 Before TRAXLER, DUNCAN, and AGEE, Circuit Judges. Reversed and remanded by unpublished per curiam opinion. ARGUED: James David Kauffelt, KAUFFELT & KAUFFELT, Charleston, West Virginia, for Appellants. Jeremy Kahn, KAHN AND KAHN, Washington, D.C., for Appellee. ON BRIEF: Michael W. Carey, S. Benjamin Bryant, CAREY, SCOTT, DOUGLAS, P.L.L.C., Charleston, West Virginia, for Appellants Williams Transport and Duncan s Motel, Incorporated. Robert R. Rodecker, LAW OFFICES OF ROBERT R. RODECKER, Charleston, West Virginia, for Appellee. Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: In this suit, a motor passenger carrier seeks injunctive relief and a declaration that its transportation of railroad employee different train crew points transportation Virginia. members even Several motor vehicles railroad along in lines constitutes when the moves companies now motions to intervene as defendants. are appeal wholly the to and from interstate within denial of West their We reverse and remand. I. The plaintiff, JLS, Inc., is a motor passenger carrier registered with the Federal Motor Carrier Safety Administration. JLS is in the business of transporting railroad crew members in motor vehicles to and from different points along railroad lines, and JLS holds a federal permit authorizing the making of such trips in interstate commerce. Counsel for JLS sent a letter in July 2007 to the Director of Transportation of the West Virginia Public Service Commission ( PSC ) asserting that its transportation of crew members to and from points within West Virginia constituted interstate commerce that was subject only to federal regulation. that JLS planned subsequently to telephoned proceed a on PSC that staff The letter stated assumption. attorney, who Counsel allegedly advised counsel that JLS would need a permit from PSC in order 3 to transport rail crew members within West Virginia. filed this Virginia action Public on September Service 19, Commission JLS then 2007, against the West ( PSC ), seeking an order from the district court declaring that its proposed activities moves wholly within West Virginia constitute interstate transportation and therefore are subject only to federal, not state, regulation. The suit also requests an injunction prohibiting PSC from attempting to take any enforcement action regarding such activities. J.A. 24. JLS moved for summary judgment on October 19, one month before PSC s answer was due. In support of the motion, JLS filed an affidavit of its president, W. Scott Boyes ( the Boyes Affidavit ). Pursuant to local rules, PSC s response to JLS s summary judgment motion was due on November 2. That date being more than two weeks before PSC s answer was due, the district court extended PSC s deadline for responding to the summary judgment motion to December 3. PSC filed its answer on November 19. The next day, C&H Company; D&L Limousine, Inc.; Cimarron Coach of Virginia, Inc; Taxi Service, Inc., Leasing, Ltd., all Williams Transport doing moved and business to as intervene. Duncan s Motel, Yellow Two Inc., separate motion to intervene one month later. all seven companies collectively as Movants. 4 Cab; more and Taxi companies, later filed a We will refer to Movants represent that they are engaged in activities similar to JLS, including wholly intrastate transportation of passengers, and that they hold intrastate authority granted by PSC. Each alleges that it is entitled to intervene as a matter of right because it has an interest in the transaction that is the subject of the action, PSC cannot adequately represent its interest, and denial of its intervention request may impair or impede its ability to protect its interest. The interest that Movants claim is an economic one. They maintain that if JLS obtains the relief it is seeking, JLS and other similarly situated companies will not be subject to PSC rules and requirements and will therefore be better able to compete for railroad crew transportation business within West Virginia. Each Movant asserts that the intrastate transportation of railroad crews represents a significant part of their total business. They further represent that their knowledge of the railroad crew transportation business exceeds PSC s and that no one from PSC has ever visited them or inquired about how such crews are transported. They assert that PSC could not adequately represent and defend their interests in this suit because of PSC s lack of knowledge and because the Movants revenue and interest in the continued employment of its workers gives them a much greater incentive to litigate the suit vigorously. 5 On November 29, the original five Movants filed a motion requesting that the deadline for responding to JLS s summary judgment motion be moved to after the completion of discovery ( the Motion to Enlarge Time ). The motion alternatively sought denial of the summary judgment motion without prejudice pending discovery or denial of summary judgment on the merits. Movants memorandum in support of the motion cited specific conflicts between their affidavits and the Boyes Affidavit on several material points and argued that discovery was needed on these points. summary Then, on December 3, PSC filed its response to JLS s judgment motion. PSC did not file any affidavit contradicting any fact alleged by JLS or an affidavit stating that further discovery was needed. Instead, it relied on two of the affidavits Movants had filed. Movants thereafter filed separate PSC and the five original motions to dismiss with supporting memoranda. On February 11, the district court denied all seven Movants motions to intervene and denied as moot the original Movants other outstanding motions. if the Movants transportation will face business if greater JLS The court ruled that even competition obtains the for relief rail it crew seeks, their interest in avoiding such competition is not sufficiently direct to justify intervention as a matter of right. The district court also ruled that because PSC apparently shared the 6 Movants ultimate intrastate and goal of supporting characterizing PSC s JLS s jurisdiction, a action as presumption arose that their interests were adequately represented, so that Movants were required to show adversity of interest, collusion, or nonfeasance. J.A. 350 (internal quotation marks omitted). The that court stated Movants had not alleged collusion or nonfeasance, and because the court had already determined that [Movants] do not possess an adequate interest, any effort to determine whether [Movants] have demonstrated interests that are adverse would be academic. J.A. 350. The court further concluded that the superiority of Movants knowledge about rail crew transportation would be immaterial to the success of JLS s suit. II. Movants argue that the district court abused its discretion in denying Westinghouse their motions Elec. Corp., to 542 (stating standard of review). intervene. F.2d 214, See 216 (4th Virginia Cir. v. 1976) We agree. Rule 24(a)(2), pertaining to intervention as a matter of right, provides that [o]n timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant s ability to protect its interest, unless existing parties adequately represent that interest. 7 Rule 24 does not specify what type of interest a party must have to intervene as a matter of right, but the Supreme Court has recognized that significantly F.2d 259, [w]hat protectable 261 (4th Cir. is obviously interest. 1991) meant Teague (quoting States, 400 U.S. 517, 531 (1971)). . v. . . is Bakker, Donaldson v. a 931 United When the party on whose side a movant seeks to intervene is pursuing the same result that the movant is urging, a presumption arises that the movant s interest is adequately represented, so that the movant must show adversity of interest, collusion, Westinghouse Elec. Corp., 542 F.2d at 216. or nonfeasance. However, the movant need not show that the representation by existing parties will definitely be inadequate in this regard. 404 U.S. 528, 538 n.10 (1972). See Trbovich v. UMWA, Rather, he need only demonstrate that representation of his interest may be inadequate. Id. For this reason, the Supreme Court has described the applicant s burden on this matter as minimal. Teague, 931 F.2d at 262 (quoting Trbovich, 404 U.S. at 538 n.10). Feller v. Brock, 802 F.2d 722 (4th Cir. 1986), demonstrates that Movants interest is adequate here. In Feller, this court reversed the denial of a request to intervene as defendants made by individual apple pickers in a case in which apple growers were plaintiffs ( DOL ) was the and the defendant. United The 8 States suit Department concerned the of Labor growers rights to be issued temporary foreign worker certifications on the basis of a wage litigated in a previous action. There were three groups of pickers seeking to intervene, one of which was composed of domestic pickers for West Virginia growers who were not plaintiffs in the suit. We held that this group of pickers had an interest in the suit sufficient to support intervention as a matter of right because the wages of the competing domestic workers would be expected to increase to the extent that the litigation resulted in foreign workers available only at a higher wage. being unavailable or See Feller, 802 F.2d at 730. Here, the interest that Movants seek to protect is very similar to that in Feller. Although Movants have no property rights at stake, the result of this suit will determine the level of competition that Movants will have, amount of income they can expect to earn. and hence, the All Movants derive substantial revenue from transporting railroad crews under their PSC authority. If JLS is awarded the relief it seeks, Movants would face competition from an entity perhaps multiple entities in the future that does not have to do what they have done obtain authority from PSC and which orders, rules, and regulations. is not subject to PSC s In contrast, according to JLS itself, the hurdles that it will face if it is subject to PSC s authority would be enormous; indeed, it would be virtually impossible for JLS to obtain PSC intrastate authority to provide 9 rail-crew service. distinguishing J.A. Feller, we 38. Seeing conclude adequate as a matter of law. that no rationale Movants for interest is See also Utahns for Better Transp. v. United States Dep t of Transp., 295 F.3d 1111, 1115 (10th Cir. 2002) (holding that transportation association could intervene as a matter of right on the side of the Department of Transportation in a suit about a regional transportation plan because [t]he threat of economic injury from the outcome of litigation undoubtedly gives a petitioner the requisite interest ). JLS does not dispute that this interest would be impaired if JLS obtained the relief it sought. issue of the adequacy of PSC s We therefore turn to the representation of Movants interest. Movants have not alleged collusion on the part of PSC. a conflict of interest or Rather, they allege nonfeasance. They maintain that because of PSC s relative lack of knowledge of rail crew transportation and because it lacks the motivation that Movants have to defeat JLS, PSC has not litigated and will not litigate this action sufficiently vigorously and effectively to protect their interest. We conclude that Movants clearly satisfied burden their minimal of showing that PSC s representation of their interests may be inadequate in this regard. Trbovich, 404 U.S. at 10 538 n.10 (internal quotation marks omitted); cf. district court erred would-be intervenors Teague, in 931 finding superior F.2d at financial (holding that representation adequate 262 when resources created a significant chance that they might be [more] vigorous in their defense of the action than the named defendants). Initially, we note that even when a governmental agency s interests appear aligned with those of a particular private group at a particular moment in time, the government s position is defined by the public interest, [not simply] the interests of a particular group of citizens. Feller, 802 F.2d at 730; see In re Sierra Club, 945 F.2d 776, 780 (4th Cir. 1991). Movants point out that if Movants intervention is denied, PSC could settle this case in a manner that could harm Movants interests. Moreover, in this case, Movants have leveled more effective challenges than has PSC to the facts JLS has conceded are material to its case. For example, JLS has represented that it is into seeking to enter contracts to provide rail crew transportation to Norfolk Southern and CSX Railroads in West Virginia. trains move JLS concedes that its assertion that NS and CSX between material to its case. points in different J.A. 215-A. states is a fact However, Movant Yellow Cab s Jamie Marlowe counters in his affidavit that, in his experience, entirely intrastate train moves are not rare, but are common, and may be a majority of those conducted by Yellow Cab. 11 J.A. 154. He also states that about 75% of railroad crew trips conducted by Yellow Cab were transportation of local crews, meaning a trip beginning at a train station or motel in West Virginia and ending at a train in West Virginia, or the reverse, without leaving the state. This is supported by several other of Movants affidavits. JLS also concedes that it is material that Norfolk Southern and CSX won t enter into contract[s] with JLS if JLS can t provide complete service, including transportation within West Virginia. J.A. 215A. Movants have argued that the Boyes Affidavit is not sufficient by itself to establish the positions of these two railroad companies and urge that further discovery is needed to establish that point. They also challenge JLS s assumption that JLS could not provide complete service to these railroads without obtaining the relief it seeks in this case. Several Movants affidavits stated that there was at least one company that provided rail crew transportation to and from points within West Virginia without having received operating authority from PSC. prior to the Movants further allege that a few days district court s opinion one Movant received a proposed contract from Norfolk Southern explicitly allowing for the subcontracting of transportation to other entities, suggesting that JLS could subcontract the transportation duties at issue in this case. These 12 factual challenges support Movants claims that their superior knowledge of railroad crew transportation and their greater incentive to defeat JLS gives them a significant advantage over PSC in their ability to litigate this case. Movants have also advanced some significant legal points that PSC did not present. For example, in its memorandum supporting its summary judgment motion, JLS relied on a decision of the Pennsylvania Public Utility Commission ( the PPUC ), In re Renzenberger, Inc., 98 Pa. P.U.C. 87 (Feb. 7, factually indistinguishable from the present case. 2003), as J.A. 113. In its responding memorandum, PSC acknowledged JLS s citation of the case but failed to distinguish it. reply to JLS s opposition to their In contrast, in their motion to intervene, the original Movants pointed out that the PPUC had substantially modified that decision, limiting it to covering crews that have just entered Pennsylvania from another state and are going to temporary housing or they will be traveling from temporary housing to leave Pennsylvania and travel to another state. In re 5, Renzenberger, 2003). Inc., 2003 WL 21263616 (Pa. P.U.C. May This modification is especially important in light of Movants affidavits stating that as many as 75% of all railroad trips performed by Movants do not involve crews from out of state or do not cross a state line. 13 Furthermore, in their memorandum supporting their motion to dismiss, the original Movants cited to Public Service Commission of Utah v. Wycoff identified by PSC. those of the Co., 344 U.S. 237 (1952), a case not Wycoff concerned facts nearly identical to present case. There, the plaintiff sought injunctive relief as well as a declaratory judgment against the Utah Public Service Commission stating that its transportation of motion picture film and newsreels between points within Utah constituted held that interstate, the not plaintiff intrastate, could not be commerce. entitled to The Court injunctive relief as there was no proof of any threatened or probable act of the defendants which might cause the irreparable essential to equitable relief by injunction. injury Id. at 241. As for declaratory relief, the Court noted that the Declaratory Judgment Act does not confer absolute rights to litigants to receive declaratory orders, but rather confers discretion on the See id. courts to award such relief. The Court held that, under the particular facts before it, declaratory relief should not be awarded. See id. at 245. In so ruling, the Court relied on the fact that the Utah PSC had not taken any concrete action against the declaratory judgment plaintiff. See id. at 245-46. The Court noted that characterizing plaintiff s transportation as intrastate or interstate would be premature since, if the Utah PSC ever were to undertake regulation of the plaintiff, the 14 relevant facts might have changed by that time. The Court also reasoned that issuing a See id. at 246. declaratory judgment before the Utah PSC took concrete action would be incompatible with a proper federal-state relationship because it would essentially preempt the initial right of the state to reduce its policies into a concrete order as might happen if that process were not short-circuited. stated that it was See id. at 247. doubtful that it had The Court also federal-question jurisdiction since the federal right asserted would only be a defense to a threatened action. Id. at 248. The Court chose not to decide that jurisdictional issue, however, since it had determined that the already discussed. JLS case should be dismissed on the grounds See id. at 248-49. contends that Wycoff is of little relevance here because it has been overruled to the extent that it suggested (in dictum) there was no case or controversy before the Court. See Aroostook Band of Micmacs v. Ryan, 404 F.3d 48, 60 (1st Cir. 2005). Regardless however, Movants of the citation jurisdictional of the case import is still of Wycoff, clearly a significant contribution as it may very well prevent JLS from obtaining the relief it seeks. For their these reasons, litigation of Movants this suit have has convincingly been, and shown that would be, significantly more vigorous and effective than PSC s. 15 Having noted the difficulty for a government entity in adequately representing the interests of a private group, see Feller, 802 F.2d at 730, we conclude that Movants clearly met their minimal burden of showing that PSC s representation of their interest may be inadequate. Trbovich, 404 U.S. at 538 n.10 (internal quotation marks omitted). We therefore reverse the denial of Movants motions to intervene. III. Movants next argue that the district court erred in denying as moot due Motion to to the Enlarge denial Time. of their Because motions we to reverse intervene the the denial of Movants motions to intervene, we will allow the district court to consider the Motion to Enlarge Time in the first instance on remand. IV. In intervene sum, and we we reverse remand the to denial the of Movants district court motion for to further proceedings. REVERSED AND REMANDED 16

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