JLS, Inc. v. Public Service Commission of West VA

UNPUBLISHED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Reversed and remanded by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
In this suit, a motor passenger carrier seeks injunctive
relief and a declaration that its transportation of railroad
employee train crew members in motor vehicles to and from
different points along railroad lines constitutes interstate
transportation even when the moves are wholly within West
Virginia. Several companies now appeal the denial of their
motions to intervene as defendants. 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. The letter stated
that JLS planned to proceed on that assumption. Counsel
subsequently telephoned a PSC staff attorney, who allegedly
advised counsel that JLS would need a permit from PSC in order
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to transport rail crew members within West Virginia. JLS then
filed this action on September 19, 2007, against the West
Virginia Public Service Commission (“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., doing business as Yellow Cab; and Taxi
Leasing, Ltd., all moved to intervene. Two more companies,
Williams Transport and Duncan’s Motel, Inc., later filed a
separate motion to intervene one month later. We will refer to
all seven companies collectively as “Movants.”
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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.
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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. Then, on December 3, PSC filed its response to JLS’s
summary 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. PSC and the five original
Movants thereafter filed separate 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. The court ruled that even
if the Movants will face greater competition for rail crew
transportation business if JLS obtains the relief it 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
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Movants’ ultimate goal of characterizing JLS’s action as
intrastate and supporting PSC’s jurisdiction, a 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 court stated that 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 their motions to intervene. See Virginia v.
Westinghouse Elec. Corp., 542 F.2d 214, 216 (4th Cir. 1976)
(stating standard of review). 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.
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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 “‘[w]hat is obviously meant . . . is a
significantly protectable interest.’” Teague v. Bakker, 931
F.2d 259, 261 (4th Cir. 1991) (quoting Donaldson v. United
States, 400 U.S. 517, 531 (1971)). 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, or nonfeasance.”
Westinghouse Elec. Corp., 542 F.2d at 216. However, the movant
need not show that the representation by existing parties will
definitely be inadequate in this regard. See Trbovich v. UMWA,
404 U.S. 528, 538 n.10 (1972). 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 and the United States Department of Labor
(“DOL”) was the defendant. The suit concerned the growers’
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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 being unavailable or
available only at a higher wage. 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, and hence, the
amount of income they can expect to earn. 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 is not subject to PSC’s
orders, rules, and regulations. 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
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rail-crew service.” J.A. 38. Seeing no rationale for
distinguishing Feller, we conclude that Movants’ interest is
adequate as a matter of law. 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. We therefore turn to the
issue of the adequacy of PSC’s representation of Movants’
interest.
Movants have not alleged a conflict of interest or
collusion on the part of PSC. 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 their “minimal” burden of showing that PSC’s
representation of their interests “may be inadequate” in this
regard. Trbovich, 404 U.S. at 538 n.10 (internal quotation
10
marks omitted); cf. Teague, 931 F.2d at 262 (holding that
district court erred in finding adequate representation when
would-be intervenors’ superior financial 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 seeking to enter into contracts to provide rail crew
transportation to Norfolk Southern and CSX Railroads in West
Virginia. JLS concedes that its assertion that “NS and CSX
trains move between points in different states” is a fact
material to its case. J.A. 215-A. 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. J.A.
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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. Movants further allege that a few days
prior to the 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 factual challenges support
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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, 2003), as
factually “indistinguishable” from the present case. J.A. 113.
In its responding memorandum, PSC acknowledged JLS’s citation of
the case but failed to distinguish it. In contrast, in their
reply to JLS’s opposition to 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 Renzenberger, Inc., 2003 WL 21263616 (Pa. P.U.C. May 5,
2003). 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.
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Furthermore, in their memorandum supporting their motion to
dismiss, the original Movants cited to Public Service Commission
of Utah v. Wycoff Co., 344 U.S. 237 (1952), a case not
identified by PSC. Wycoff concerned facts nearly identical to
those of the 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 interstate, not intrastate, commerce. The Court
held that the plaintiff could not be entitled to injunctive
relief as there was “no proof of any threatened or probable act
of the defendants which might cause the irreparable injury
essential to equitable relief by injunction.” 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
courts to award such relief. See id. 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
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relevant facts might have changed by that time. See id. at 246.
The Court also reasoned that issuing a 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. See id. at 247. The Court also
stated that it was “doubtful” that it had 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 case should be dismissed on the grounds
already discussed. See id. at 248-49.
JLS 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 of the jurisdictional import of Wycoff,
however, Movants’ citation of the case is still clearly a
significant contribution as it may very well prevent JLS from
obtaining the relief it seeks.
For these reasons, Movants have convincingly shown that
their litigation of this suit has been, and would be,
significantly more vigorous and effective than PSC’s. Having
15
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 to the denial of their motions to intervene—the
Motion to Enlarge Time. Because we reverse 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 sum, we reverse the denial of Movants’ motion to
intervene and we remand to the district court for further
proceedings.
REVERSED AND REMANDED
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