UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE FOR THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY CONSOLIDATED BONDS, FORTIETH AND FORTY-FIRST SERIES; ON ITS OWN BEHALF AND ON BEHALF OF ALL HOLDERS OF CONSOLIDATED BONDS OF THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT-CROSS-RESPONDENT, v. THE STATE OF NEW JERSEY; BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY; AND WILLIAM F. HYLAND, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS-CROSS-APPELLANTS. DANIEL M. GABY, PLAINTIFF-CROSS-APPELLANT, v. THE PORT OF NEW YORK AUTHORITY, JAMES C. KELLOGG, III, HOYT AMMIDON, GUSTAVE L. LEVY, JAMES G. HELLMUTH, ANDREW C. AXTELL, WILLIAM J. RONAN, W. PAUL STILLMAN, WALTER H. JONES, BERNARD J. LASKER, PHILIP B. HOFFMAN, AND JERRY FINKELSTEIN, COMMISSIONERS OF THE PORT OF NEW YORK AUTHORITY, AUSTIN J. TOBIN, EXECUTIVE DIRECTOR OF THE PORT OF NEW YORK AUTHORITY, AND WILLIAM T. CAHILL, GOVERNOR OF THE STATE OF NEW JERSEY, DEFENDANTS-CROSS-RESPONDENTS, AND UNITED STATES TRUST COMPANY OF NEW YORK, ETC., INTERVENOR.
Supreme Court of New Jersey
Argued October 7, 1975 — Decided February 25, 1976. Appeal Dismissed June 28, 1976. See 96 S. Ct. 3185. Probable Jurisdiction Noted June 28, 1976. See 96 S. Ct. 3188.
69 N.J. 253
For reversal and remandment—Justices MOUNTAIN, SULLIVAN, PASHMAN and SCHREIBER and Judge CONFORD—5.
For affirmance—None.
Mr. Murray J. Laulicht and Mr. Michael I. Sovern, of the New York bar, Special Counsel to the Attorney General, argued the cause for respondents-cross-appellants State of New Jersey, Brendan T. Byrne and William F. Hyland (Mr. William F. Hyland, Attorney General of New Jersey, attorney; Mr. Laulicht, Mr. Sovern and Mr. Harold Edgar, of the New York bar, Special Counsel to the Attorney General, on the brief).
Mr. Howard Stern argued the cause for plaintiff-cross-appellant Daniel M. Gaby (Messrs. Shavick, Stern, Schotz, Steiger and Croland, attorneys; Mr. Stern on the brief, Mr. Stern and Mr. Theodore W. Kheel of the New York bar and Messrs. Battle, Fowler, Stokes and Kheel of the New York bar, of counsel).
PER CURIAM. The judgment is affirmed, substantially for the reasons set forth in the opinion of Judge Gelman, 134 N. J. Super. 124 (Law Div. 1975). The observations which follow are occasioned by Justice Pashman‘s suggested remedy in the Gaby suit.1
Whatever persuasive force might be accorded the argument that as a matter of policy the Port Authority should devote more of its energies and resources to the mass transit field, the fact remains that the remedy fashioned by our Brother is neither pressed for by Gaby on this appeal nor within the powers of this Court to direct and enforce.
Gaby‘s class action complaint for a declaratory judgment that the 1962 Covenant was unconstitutional asked for “multifarious relief,” including a request that the Port Authority be directed “to formulate and submit to the court a plan for the development of mass transit facilities within the Port District,” 134 N. J. Super. at 131. However, the trial judge, having concluded in the United States Trust Co. suit that “the repeal legislation was a reasonable and hence valid exercise of the states’ police power which is not prohibited by the Contract Clause of either the Federal or the State Constitution,” id. at 197, found it unnecessary to reach the issue of the 1962 Covenant‘s asserted invalidity. He therefore dis-
In his brief filed in the Court after direct certification of his aрpeal, 68 N. J. 175 (1975), Gaby conceded his limited purpose in pursuing the appeal as being “to preserve the issue of the constitutionality of the 1962 Covenant.” The point of this in turn was, as he put it, to furnish “an alternative ground for affirming the decision below.”2 Whatever issues may have been preserved by his appeal and whatever desire there may have been to present “all the issues,” the fact remains that Gaby‘s brief raises and discusses only the validity of the Covenant in constitutional terms. No argument is made there for any special relief; and, understandably, the Port Authority has likewise not briefed the question at all in this Court. At oral argument the subject was adverted to only in a limited fashion.
Ordinarily, we would have no occasion to decide an issue which, while portentous in itself, has become so remote and peripheral to the central thrust of this litigation. However, inasmuch as the minority opinion raises and discusses in extenso this question of considerable public significance, namely, the involvement of the Port Authority in mass transit and particularly the propriety of this Court ordering as a specific remedy the submission of a plan for development of mass transit facilities, we overlook whatever infirmities may exist in the record before us, compounded by the practical disadvantage of not having the views of the parties, and proceed to address the point.
The 1921 Compact between the States of New York and New Jersey, whereby the Port Authority was created,
If, then, the Authority is in the position of being empowered (as we acknowledge) rather than mandated to act in the area of mass transit, its exercise of that power becomes a matter of discretion and judgment. As is made abundantly clear by the voluminous record in this сase, the trial court‘s opinion, and the concurring and partially dissenting opinion here, the Authority has more than once in recent years broached the question of whether it should pursue a policy of encouraging mass transit and has determined that it shall not. The remedy suggested in the minority opinion is designed to overrule that decision. As such it is in the nature of the former prerogative writ of mandamus, now invocable under proceedings for relief in lieu of prerogative writs,
Finally, we observe that in this particular area of bistate operations, there is close and continuing supervision of the Port Authority by the other branches of government. Hence, the proposed remedy would not only tend to usurp the influence over the Authority vested in the Governors of the States of New York and New Jersey, but would also intrude upon the functions of the legislatures of the respective States, whose task it is in the final analysis to enact appropriate legislation and take such other action as may be required to remedy whatever deficiencies may exist with respect to mass transit.
Affirmed.
I
INTRODUCTION TO GABY COMPLAINT
My Brothers today affirm a lower court decision which was the product of two separate and distinct actions consolidated for trial. United States Trust Co. v. State, 134 N. J. Super. 124 (Law Div. 1975). In the first action, brought by plaintiff United States Trust Company, the trial court sustained the State‘s repeal of the 1962 statutory covenant (
In dismissing plaintiff‘s cause of action, the trial court found that the 1974 “repealer,”
The second action, Gaby v. Port of New York Authority, et al., was likewise concerned with the repeal of the 1962 covenant. Expanded into a class action on behalf of citizens, residents and taxpayers whose occupations are dependent upon the existence of mass transportation, plaintiff cites the 1962 covenant as an impediment to the improvement and expansion of these facilities. While the State of New Jersey sought the repeal of the covenant as an ultimate end in the United States Trust Co. action, plaintiff Gaby visualizes a repeal as merely a means to a larger end. This is because the vindication of Gaby‘s interests is only partially dependent on freeing the financial resources from the restrictions of the 1962 covenant and placing them at the Port Authority‘s disposal. More problematical and essential to the relief which he desires is the necessity to overcome the administrative inertia which has characterized the agency‘s efforts in the area of mass transportation. Consequently, Gaby requested in his complaint that the trial court:
. . . [D]irect and order the Port Authority, its Commissioners, and its Executive Director to formulate and submit to this Court, or a Special Master to be appointеd by this Court, a plan for the
development of mass transportation facilities in the Port District. . . . [Plaintiff Gaby‘s complaint at 17]
This action was pretried on February 22, 1973 and oral arguments were heard on September 26, 1973 on the parties’ respective motions for summary judgment. Judgment was deferred and arguments were later rescheduled to permit the submission of briefs on additional issues and the intervention of United States Trust Company as a party defendant representing the interests of Port Authority bondholders. Prior to these arguments, the pendency of legislation repealing the covenant recommended that the trial court withhold further review. Accordingly, the proceedings were stayed to permit consideration of the anticipated legislation.
The statutory repealer which was signed into law by Governor Brendan T. Byrne on April 30, 1974 precipitated the United States Trust Co. action, which was instituted on the same day. On the basis of common subject matter, this later action was consolidated on December 10, 1974 with the previously filed Gaby case by order of the trial court. These matters then proceeded to trial in February 1975.
The trial was largely confined to the factual issues of bondholder reliance on the 1962 covenant and resultant damage to the secondary bond market caused by the repeal of the covenant. The information which was thus elicited formed the basis for the trial court‘s reported opinion, 134 N. J. Super. 124, in which the constitutionality of the 1974 repealer was sustained. Although reasons upon which the court‘s decision was grounded were clearly distinguishable from the constitutional arguments advanced by Gaby, the court‘s ultimate decision—the rejection of the 1962 covenant—coincided with Gaby‘s interests. Regardless of whether that result was achieved by sustaining the 1974 repealer as the trial court did, or whether it was achieved by finding the 1962 covenant itself unconstitutional as suggested by Gaby, the result indicated the possibility of granting the further relief sought by Gaby. A more activist role
Similar to his presentation before the trial court, Gaby‘s arguments are again directed towards a declaration of the unconstitutionality of the 1962 covenant. This is more the result of strategic considerations, however, than devotion to substantive principle. Recognizing the limited nature of the trial court‘s factual findings and disposition, Gaby has taken what appears to be a most advisable legal course. By preserving the issue of the constitutionality of the 1962 covenant on appeal, he has simultaneously preserved one of his major contentions should this or any other court reverse the trial court on the constitutionality of the 1974 repealer.
Furthermore, in his Supreme Court brief, Gaby explained that his contentions with regard to the 1962 Cоvenant are inextricably tied to his request for greater involvement of the Port Authority in mass transit projects:
The Appellant‘s Brief of Gaby is concerned with the validity of the 1962 Covenant (
N. J. S. A. 32:1-35.50 et seq.). Central to the issue of the validity of the Covenant is the question whether the mass transportation of people within the Port District was one of the principal activities authorized by the Compact (N. J. S. A. 32:1-35.50 et seq.); whether the insulation of the Port Authority from that activity was in such derogation of the Compact as to frustrate its meaning and intent and so material as to require Congressional approval. [Plaintiff-Cross Appellant‘s brief at 3].
The majority today chooses to overlook this relationship in its reluctance to transcend the judgmental confines of the trial court and in its affirmation of that court‘s dismissal of Gaby‘s complaint. This disposition, undertaken in an unusually cavalier fashion, is not a product of some misunderstanding as to the essential relief which Gaby requests. On the contrary, the majority recognizes the strategic con-
The majority justifies its truncated consideration of Gaby‘s plea by referring to an isolated phrase, taken out of context from a sentence which Gaby adopted as representative of his position in his cross-motion for certification. When more appropriately considered within the sentence in which it originally appeared, the phrase—“an alternative ground for affirming the decision below“—assumes an entirely different meaning from that which the majority attaches to it:
The purposes of this cross motion are identical with those stated by the State of New Jersey in its cross motion for certification: “. . . bring before the Supreme Court all of the issues submitted to Judge Gelman and to avoid the possibility that some of the issues submitted to Judge Gelman might have to be determined in the first instance by the Appellate Division. Because of the urgency and public importance of this case, it would be most unwise to require a piecemeal, appellate process, particularly since the [first] issue presented by this cross motion could be an alternative ground for affirming the decision below. . . .” [Plaintiff-cross appellant‘s appendix at 47a-48a; emphasis supplied].
While the “first issue” refers to the constitutionality of the 1962 covenant, I believe it would be wrong to confuse Gaby‘s real interest in stimulating improvement of urban mass transportation with his more temporal interest in having the 1962 covenant declared unconstitutional. The majority not only fails to make this distinction, but fails to do so despite Gaby‘s expressed desire to present “all of the issues” to this Court.
This failure is only compounded by the majority‘s persistent willingness to ignore the Gaby complaint and the relief which it warrants. In spite of plaintiff‘s overindulgent concern for the constitutionality issue, the statement of his case reflects
Yes, as we read the compact between the states, the affirmative obligation of the Port Authority in this area is to plan. The immediate affirmative obligation . . . and indeed in these briefs and elsewhere, there is a suggestion that if the Covenant is invalid or the repealer upheld, either way, that it would be appropriate for the Court to direct the Port Authority to study mass transit needs in the Port Authority area and make proper proposals. Then when it comes to implementation, then you‘re talking about legislation of the two states, but the affirmative obligation of the Port Authority is to study the problem as it affects the Port area.
It should be noted in passing, that this statement not only affirms the relief desired by plaintiff, but also embodies a request for a remedy which parallels that which I suggest below, infra at 287-288.
Therefore, although my Brothers remove the constricting fiscal shackles of the 1962 covenant, they fail to take the additional steps which flow as natural concomitants to the action which they affirm. This failure, as I see it, stems, in part, from a reluctance to go farther and faster in an area plagued by administrative inaction and intransigence. It also constitutes an indulgence in the meaningless gesture of sustaining the 1974 repealer without concurrently authorizing the relief needed to implement the initiative which the Legislature sought to instill in the Port Authority by that repeal.
As I fear, the administrative foot-dragging which was implicit in the 1962 covenant, may be only symptomatic of the inertia which has characterized the Port Authority in the field of mass transit operations. The majority‘s decision can only serve to perpetuate this sad state of affairs.
In light of the rapidly deteriorating condition of mass transit operations in the metropolitan area, this disposition is most unfortunate. Faced with the ever-increasing deficits which are inherent in this mode of public transportation, mass transit operations have been repeatedly shunned by the Port
Unlike today‘s majority, I am unwilling to assign plaintiff Gaby‘s case to death or to a peaceful somnambulism. This is particularly so where within the historical and evidential materials presented to the trial court reside the seeds for a more sweeping and effective disposition. I cannоt sanction the mere repeal of the 1962 covenant without a concurrent assurance that the Port Authority will assume those responsibilities for which it was created and, which to this point, it has effectively avoided. The recalcitrance of the Port Authority has not been altered by the trial court‘s disposition and will not be altered by merely affirming that decision. A more effective disposition is needed.
II
HISTORY OF THE OBLIGATION OF THE PORT AUTHORITY TO PROVIDE MASS TRANSIT FACILITIES
In its opinion, the majority grudgingly acknowledges the Port Authority‘s obligation to become involved in mass transportation. After a perfunctory reading of the statutory framework of the Port Authority, the majority concludes that the existence of such a mandate is “a singularly appropriate subject for specific legislative directive, conspicuously absent here.” Ante at 258.
While specific statutory directives have served as vehicles for recent Port Authority projects,
A. Origins and Early Development; Compact and Comprehensive Plan
The Port Authority is a statutory product of a compact which was entered into by the States of New Jersey and New York in 1921.1 Modeled after the recommendations of a joint
The future development of such terminal, transportation and other facilities of commerce will require the expenditure of large sums
of money, and the cordial co-operation of the states of New York and New Jersey in the encouragement of the investment of capital, and in the formulation and execution of the necessary physical plans. . . . [
N. J. S. A. 32:1-1 ]
While the Compact delineated the framework for the Port Authority and its operations, the necessity for a more specific implementation was recognized in Article X, which directed the state legislatures to adopt “a plan or plans for the comprehensive development of the port of New York” “as soon as may be practicable.”
This plan envisioned an active and affirmative role for the Port Authority in the development of the Port District.5 Section 8 of the Comprehensive Plan provided:
The Port of New York Authority is hereby authorized and directed to proceed with the development of the port of New York in accordance with said comprehensive plan as rapidly as may be economically practicable and is hereby vested with all necessary and appropriate powers not inconsistent with the constitution of the United States or of either state, to effectuate the same, except the power to levy taxes or assessments. [
N. J. S. A. 32:1-33 ; emphasis supplied]
That fulfillment of this statutory mandate contemplated the involvement of the Port Authority in transportation matters of the Port District is undeniable. This responsibility, for
. . . railroads, steam or electric, motor truck or other street or highway vehicles, tunnels, bridges, boats, ferries, carfloats, lighters, tugs, floating elevators, barges, scows or harbor craft of any kind, aircraft suitable for harbor service, and every kind of transportation facility now in use or hereafter designed for use for the transportation or carriage of persons or property. [
N. J. S. A. 32:1-23 ; emphasis supplied]
The centrality of the railroads to the organizational and coordination schemes of the Port Authority was highlighted by the separate definition of “railroads.”6 This was a reflection of the final report by the New York, New Jersey Port and Harbor Development Commission, which in 1920 had recommended the establishment of a bi-state agency with appropriate jurisdiction. See footnote 2, supra. The report, whose factual findings served as the basis for the Cоmpact and the Comprehensive Plan, found the commercial inadequacies of the metropolitan area to be “primarily a railroad problem.” The absence of railroad coordination and accessibility at many places within the district consequently required “essentially a railroad plan.” The Commission summarized its suggestions in a proposal which entailed the establishment of railroad beltline systems between New Jersey and New York, and concluded:
This remodeled terminal railroad system, bringing every railroad of the Port to every part of the Port, and thus giving every part of the Port opportunity to develop and to have the economical trans-
portation service needed for its commercial and industrial growth and expansion, constitutes the comprehensive plan of the Commission—the plan which the Commission recommends for formal adoption by the two states. [New York, New Jersey Port and Harbor Development Commission, Joint Report, supra footnote 2, at 3]
This statutory responsibility to develop the transportation facilities of the Port District, and particularly facilities relating to railroad operations, contained an implicit obligation to foster passenger transportation service. Although the Port and Development Commission report concentrated on the freight shipment needs of the area, it did not preclude a comparable role for the Port Authority in passenger service. With one notable exception, the Port Authority‘s rоle in passenger service is confirmed by the early history of the agency. In this regard, however, even that exception, the 1928 veto message of Governor Alfred E. Smith of New York which rejected a New Jersey proposal for the development of a rapid transit system between the states, may be no more than a personal predilection.7 See 134 N. J. Super. at 149. Noting that the Port Authority should “stick to this program . . . [for] the solution of the great freight distribution problem,” Governor Smith at no time denied the agency‘s power to deal with passenger service, and only suggested a reordering of its priorities. More importantly, the position which he advocated was expressly repudiated by the Port Authority that same year. In a June 11, 1928 resolution supporting the continuation of a Suburban Transit Engi-
The Commissioners of the Port Authority have found in their studies that no adequate or effective interstate transportation development can take place without taking full account of transportation of passengers as well as of freight throughout the Port District.9 [Emphasis supplied]
B. Port Authority Involvement in the Area of Mass Transit; Reports, Studies and Legislation Concerning Mass Transit
The continuance of its role in mass transportation has been reaffirmed by the Port Authority from time to time. The obligation to provide for passenger service within the
ASSEMBLYMAN CRABIEL: Mr. Tobin, just to clear my mind on certain key points - I have been reading your report and listening to your talk - there is no question that, as far as the compact between the two states is concerned, the Legislatures could direct the Port Authority to do rapid transit and that that would be within their compact.
MR. TOBIN: Yes sir. There‘s no question about it. [Hearings on Assembly Bills No. 16 and 115 and Senate Bill No. 50, supra footnote 10, Nov. 24, 1958, at 44] (emphasis supplied).
The manifestations of this responsibility have been insignificant such as the separate sections which the Authority devoted to “Suburban Transit” in its earlier Annual Reports (a practice by the way, which has been resumed since the Port Authority‘s acquisition of the H & M railroad in 1962). See T. W. Kheel & R. J. Kheel, “The Port Authority 1962 Covenant - Bar to Mass Transportation,” 27 Rutgers L. Rev. 1, 5 (1973); The Port of New York Authority, Annual Report for 1923, “Commuter Passenger Traffic,” 35-36 (Jan. 19, 1924); Annual Report for 1924, “Congestion of Passenger-Traffic,” 23-24 (Jan. 24, 1925); Annual Report for 1929, “Suburban Transit,” 27-28 (Dec. 31, 1930). More indicative, however, of the Port Authority‘s
For at least 35 years, there has been a growing public awareness of the importance of mass transportation in the metropolitan region in the State of New Jersey. At least 14 more or less extensive studies have been made of the problem by various committees and commissions. Nothing has ever come of them, and in the mean-time the problem has been becoming progressively more acute. [Assembly Hearings, Nov. 24, 1958, at 70A]
See also 2d Hearing before N. J. Sen. Comm‘n (Created un-
These studies, in conjunction with the annual reports which are issued by the Port Authority, possess several characteristics worth noting. First, virtually none of the studies resulted from the Port Authority‘s own initiative. Most of the studies were the product of either legislative or other governmental requests for pertinent information and proposals. See footnote 11, supra. While the failure to take affirmative administrative or investigatory action may not necessarily be indicative of an agency‘s abdication of responsibility in the case of the Port Authority, the failing is particularly suspect. This is because the duties expressly imposed on the Port Authority by the 1921 Compact were those to “make plans for the development of said district, supplementary to or amendatory of any plan theretofore adopted;”12 and to suggest to the state legislatures recommended means to improve Port commerce.13
Second, none of these studies contains an expressed commitment (much less a recommendation of such a commitment) by the Port Authority to undertake the construction or implementation of a mass transit system. Instead, most of them recommend the assumption of these obligations by other governmental or quasi-governmental bodies and agencies. See The Port of New York Authority, Suburban Transit for Northern New Jersey, 10 (1937); The Port of New York Authority, Annual Report for 1958, 38-42. In conjunction with this, it should be noted that the Authority was one of the staunchest supporters of two New Jersey legislative proposals, S-50 and A-115, which were introduced and discussed in 1958. See Assembly Hearings, supra, Nov. 24, 1958, at 44, 49 (Statements of Austin J. Tobin, Executive Director, Port of New York Authority). Not surprisingly both of these measures presented plans for the establishment of an independent agency to handle matters relating to mass transportation. Conversely, the Port Authority was strongly opposed to a companion proposal, A-16, which would have authorized the agency itself to develop, improve and coordinate the rapid transit facilities in the Port District. Assembly Hearings, supra, Nov. 24, 1958, at 18-19 (Statements of Austin J. Tobin, Executive Director, Port of New York Authority).14
While hundreds of millions of dollars have been spent in urban rapid transit during the past decade, no commensurate amounts have been expended on suburban rapid transit, and the commuter has reached the limit of his endurance where the trunk lines leading into New York City are incapable of handling both suburban and through traffic. The passenger service of every railroad in the Port District is taxed to its limit by the requirements of this service. There is barely room during the rush hours for the trains carrying freight because of the commuter service, while passengers and freight must both necessarily move during these hours. [The Port of New York Authority, Annual Report for 1924, 23 (Jan. 24, 1925)]
See also The Port of New York Authority, Annual Report for 1927, 10, 53 (Jan. 20, 1928). Over the years, this recognition has increased with the realization of the expanding dimensions of commuter congestion and the inability of privatе transit facilities to cope with the problem. The Port of New York and New Jersey, 1972 Annual Report, 10-15 (1972); 1973 Annual Report, 10-15 (1973); 1974 Annual Report, 4-6 (1974).
The Port Authority‘s ineffectual investigative efforts cannot be attributed to a theoretical lack of jurisdiction in mass transit operations. Such jurisdiction was given to the agency in the Compact of 1921. Nor is the lack of success due to the financial inability of the Port Authority to assume additional obligations. As the trial court found, the Authority is not only financially sound, but has suffered no detrimental effects from the repeal of the protective 1962 Covenant:
Suffice it to say that between 1962 and 1974 the security afforded bondholders had been substantially augmented by a vast increase in Authority revenues and reserves, and the Authority‘s financial ability to absorb greater deficits, from whatever source and without any
significant impairment of bondholder security, was correspondingly increased. [134 N. J. Super. at 194-95]
Rather, the limited effectiveness of these studies is merely symptomatic of an underlying limitation which the Port Authority has imposed on its own involvement in mass transportation. This limitation, which is derived from a narrow construction of its statutory powers, precludes an undertaking by the Authority unless the relevant project will be financially self-supporting, or will only generate deficits within conservatively defined limits. While the definition of the limitation is presented in purely financial terms, its effect has been to severely restrict the scope of activities in which the agency may engage. Because the majority оf mass transportation facilities are closely associated with high deficits, the practical operation of the Port Authority‘s self-imposed restriction has prevented the Authority from fulfilling its rapid transit obligations.
C. History of the Self-Supporting Concept
While the provisions of the Compact and Comprehensive Plan sketched a broad authorization in terms of the activities which were within jurisdiction of the Port Authority, the powers accorded to it were not commensurate with its tasks. Without the necessary power, the Authority could not unilaterally support its statutory mandates, much less initiate action in their behalf:
An impressive body of activities was thus laid out wherein the Port Authority could formulate the needs of the port as a whole and be vigilant to protect its interests. It would serve as a focus and agent of the forces of unity within the port. The primary requirement in this field would not be legal power but adequate funds and continuous application. The Port Authority never lacked support with respect to the former, and was well conceived to function with respect to the latter. But success along this line of endeavor would depend upon cooperation from public agencies and private interests. Where conflicts developed it could make progress very slowly, if at all. [Bard, supra, footnote 2, at 58-59]
While this new objective in the early years of the Port Authority was tempered by a “rule of economic practicability,” The Port of New York Authority, Annual Report for 1926, 5 (Jan. 20, 1927), its importance was later elevated by the increased emphasis placed on self-sufficiency. In other words, because the fiscal stability of the Port Authority was dependent upon the revenues of its facilities, it was necessary for all projects to demonstrate their self-supporting capacity before the Authority would undertake their implementation. Thus, James C. Kellogg, III, the then Vice-Chairman of the Port Authority, read from a prepared statement before a Senate Commission in 1960, as follows:
In order that the Port Authority might carry out the tremendous and continuing task of developing the public terminal and transportation facilities of this metropolitan area, the two Legislatures clothed it with all nеcessary and appropriate powers of port and terminal development, with the important exception of the power to tax or to levy assessments. This reservation is the key to the whole concept of the Port Authority, which is that of a self-supporting agency, whose public projects are carried on through the development of their own revenues and charges, and which imposes no burdens on the general taxpayer. [Hearings before N. J. Sen. Comm‘n Created under Sen. Res. No. 7 (1960) to Study the Financial Structure and Operations of the Port of New York Authority, September 27, 1960, 7-8 (Statement of James C. Kellogg, III, Vice-Chairman of the Port Authority)].
Preferably, and in the main, therefore, the Port Authority regards itself, rather as the guardian and guide of the Port District, protecting it against attacks both from within and without, and directing its activities and developments with a view to procuring the greatest cooperation of existing agencies, the utmost efficiency and the minimum of cost. If such is to be its primary function it should not be expected to be self-supporting. [The Port of New York Authority, Annual Report for 1924, 9-10 (Jan. 24, 1925); emphasis supplied]
Moreover, the self-supporting concept as a fundamental precept of the Port Authority‘s financial scheme is belied both by the projects upon which it embarked after its creation and by subsequent developments in its financial structure. As the trial court observed, because of the heavy investment required by these early projects, the Port Authority was confronted with large deficits from the outset. 134 N. J. Super. at 140. However, rather than restricting the Authority‘s activities, New Jersey and New York encouraged such projects by advancing funds, transferring control of lucrative facilities (such as the Holland Tunnel) to the Authority, and permitting the Authority to issue “open-ended” bonds. This latter device, in particular, helped free the Port Authority from absolute reliance on self-supporting projects. By placing all revenues derived from the sale of open-ended bonds into a common fund, the Port Authority was able to free deficit operations from the inadequate sales of their particular bonds. Goldberg, A History of the Port of New York Authority Financial Structures, 5 (1964). The pooling of resources not only permitted the Port Authority to finance debt-ridden facilities through those which were profitable, but simultaneously afforded bondholders a certain degree of security regardless of the success or failure of any given project. The open-ended financing of the Port
With the adoption of the CBR the “self-supporting” facility concept which had governed earlier authority financing ceased to have the significance previously attached to it; for under the CBR the Authority‘s financial structure is based on a unitary enterprise concept and all revenues from all facilities are pooled. Individual facilities are not financed independently of the rest of the Authority. The facilities contribute their revenues for debt service on all Authority bonds according to their earning power and without regard to the amount of bonds issued for the construction of any particular facility. [134 N. J. Super. at 143]
Enactments such as the General Reserve Fund and the Consolidated Bond Resolution created the possibility for the involvement of the Port Authority in traditionally deficit operations such as mass transportation. Nonetheless, the translation of this new financial freedom into practical action was not forthcoming from the Port Authority:
That cashbox, so long empty, was full now, thanks to the postwar traffic boom, . . . the Port Authority‘s was worth $700,000,000. Long on cash, moreover, the Port Authority wаs short on dreams. The visionaries who had created it were long gone from its councils; Julius Henry Cohen had been replaced by money men like Cullman and Colt and Pope whose eyes were brightened by the balances in the Authority‘s ledgers, not by the potentialities for improving the common weal that those balances represented. The purpose for which the Authority had been created - the development of an overall transportation system to knit together a great port - had been lost sight of for years. Plans the Authority had aplenty, of course, but unrelated plans, plans for individual projects, joined by no link other than the fact that their construction would return the agency profit. [Caro, supra, footnote 10, at 922-23]
The underlying rationale for these actions was unmistakably attributable to retention of the self-supporting limitation to which the Port Authority had previously adhered. This was made clear by Executive Director Tobin of the Port Authority when questioned at a 1958 hearing about the manner in which future revenues and reserves would be committed:
Well, it is closed unless those future bond issues have to do with projects that can be made self-supporting and in which the Commissioners of the Port Authority will not only certify as a matter of conscience and a matter of record that they believe that they can be made self-supporting and will add to the general credit of the Port Authority; but also if they can demonstrate arithmetically on sound projections of its existing net revenues and its maximum future debt service that those projects will not hurt this bondholder. That‘s all he has. If that bondholder has an open end bond without those restrictions, he has a piece of paper. [Assembly Hearings, supra, November 24, 1958, at 38 (Statement of Austin J. Tobin, Executive Director, Port of New York Authority); emphasis supplied]
This self-limitation has exacerbated the Port Authority‘s demonstrated lack of initiative. For example, although the Port Authority in 1955 agreed to provide the Metropolitan Rapid Transit Commission with $800,000 for that body‘s study of a metropolitan scheme of mass transit, the price which the Authority extracted for its financial support was a “Memorandum of Understanding” which precluded its own role in any deficit operations which the Commission
ASSEMBLYMAN CRABIEL: What I‘m getting at here is, you‘re saying categorically that you cannot take a deficit. Now, I‘m raising the point that as far as the Legislatures of the two states, when they established the compact there was nothing in the compact and nothing in the instructions from the Legislatures to the Port Authority that they could not undertake a deficit operation.
MR. TOBIN: Well, excuse me, sir. I‘d say that there was. I would say that the way the statutes are phrased, it could undertake nothing except a self-supporting operation. We have no way of financing anything but a self-supporting operation.
ASSEMBLYMAN CRABIEL: Well how do you account for the fact, then, that you have operated deficit operations?
MR. TOBIN: Because the pooled revenues have been sufficient. Because we believed also, when we went into those, that they could be self-supporting and we were wrong.
ASSEMBLYMAN CRABIEL: That‘s what I was pointing up. [Assembly Hearings, supra, November 24, 1958, at 45]
III
THE ROLE OF THE PORT AUTHORITY
Ultimately, those who are most hurt by the Port Authority‘s failure to enter the field of mass transportation are, of course, the commuters. Absence of Port Authority initiative in this area is a direct reflection of the deficits which are inherent in the provision of this public service:
Until the late 1950‘s, transit operations in the United States were generally profitable and, consequently, attractive to investment. Decline in patronage and increasing labor and equipment costs have completely reversed this trend to a point where today, public transit in its everyday operations in most cities is a losing proposition. The losses are not as great as sometimes presumed but, in most
See also Kneafsey and Edelman, “A Market-Oriented Solution to the Northeast Railroad Dilemma,” 41 I. C. C. Pract. J. 174 (1973-74). This problem concerning the financial weaknesses of mass transit facilities has been realized within the New York metropolitan area. This, no doubt, has resulted from both the unusually heavy demands which have been placed on these systems in the Port District, and the lack of a perceived common interest among the District‘s geographic and political components. Danielson, supra, footnote 14 at 21-22.
The Port Authority‘s failure to assume an active role in solving this problem has had a concurrent effect on the traveling habits of the average commuter. Faced with increasing service cutbacks and escalating fares, the commuter is left with fewer alternatives to the private automobile. Grubb, “Urban Transportation Alternatives to the Automobile,” 39 I. C. C. Pract. J. 19 (1971-72); Cooper, “Prospects for a Mass Movement to Public Transit,” 5 Urban Lawyer 679 (1973). His increasing resort to this mode of transportation in turn has caused a drastic increase in traffic congestion and air pollution which are commonly associated with the metropolitan area.
These problems have stimulated legislative responses on both the federal and state levels. The federal response consists primarily of the
These legislative enactments were most recently recognized in a report issued by the Joint Transportation and Communications Committee of the New Jersey Legislature. Report of the Senate and General Assembly Joint Transportation and Communications Committee (Pursuant to Assembly Concurrent Res. No. 211 of 1974), October 6, 1975. As the report noted:
The legislation passed by New Jеrsey during the last four years clearly reflects the determination on the part of its officials to direct the Port Authority towards making a greater financial commitment to mass transit. In order to determine whether New Jersey has been treated by the Port Authority in a fair and impartial manner the Committee has investigated the degree of Port Authority responsiveness to meeting the mass transportation needs of the State. [Id. at 13]
The Committee‘s conclusion was succinct as it was unfortunate:
The Committee recognizes that the Port Authority has acquired a reputation for its engineering, planning and management skills. It is the conclusion of the Committee, however, that in the area of mass transportation the Port Authority‘s performance has not been satisfactory. [Id. at 17]
The Committee‘s conclusions were premised upon the same type of factors which I have considered above. While the Committee was hopeful that the Port Authority would take its mass transportation responsibilities “more seriously” in the future, it nonetheless pledged “its vigilance to see that the
The sensitivity of the state government to the urgent need for more modern means of public transportation has not been confined to the legislative branch. In his recent “State of the State” address, Governor Byrne not only recognized this problem, but concurrently cited the Port Authority‘s responsibility for its solution. Perhaрs even more important, the Governor indicated his willingness to impose an affirmative sanction on the Port Authority should the desired action in the area of mass transit not be forthcoming:
How do we keep the railroads running at a time when the state subsidy program costs over $100 million a year and has been growing by more than 35 per cent a year? Should there be an overall operating agency for these lines? What about the communities and industries served by lines soon to be abandoned? Where can we find the $255 million required to match federal funding for the
modernization of two major commuter lines and the extension of PATH to Plainfield? The Port Authority of New York and New Jersey must increase its commitment to these efforts. If it is unwilling to do so, we will insist that it rescind the toll increases instituted last year for the specific purpose of funding improvements in the public transportation system. [Annual Message of Governor Brendan T. Byrne, Jan. 13, 1976, at 19]
I, too, would similarly take this opportunity to demonstrate the vigilance which has motivated the Joint Committee and the Governor. The Port Authority has too long neglected the responsibility with which it was statutorily charged in 1921. In So. Burlington Cty. NAACP v. Tp. of Mt. Laurel, 67 N. J. 151, 189 (1975), we recognized the significance of transportation to the overall development of an urban area. I would today reaffirm this significance.
IV
CONCLUSION
The relief which I recommend today is intended as an answer to a problem which has assumed crisis proportions. The Port Authority is the producer, the director and the main character of the play known as “The Disease of Mass Transportation.” This malady has suffered too long from the benign neglect of public agencies such as the Port Authority, and such neglect has permitted the disease to spread unattended. The resulting state of affairs may most accurately be described as one of emergency. While the appellation “emergency” was at one time reserved for calamitous and natural occurrences, the inadequate and deteriorating quality of mass transit in the metropolitan area has had an eroding effect on the urban environment in which it operates. This effect has been measurable not only in terms of the unending lines of commuters who have been inconvenienced by inefficient service, but also in terms of traffic congestion with its attendant pollution as well. The courts of this country have long recognized that such emergent circumstances may
For an Authority that is long on cash and short on dreams,16 it is time to respond for those who have long suffered the inconvenience and expense which have resulted from the Port Authority‘s inaction.
I would order the Port Authority, its Commissioners and its Executive Director to not only complete those projects to which it is already committed, but to formulate and present plans and suggestions for a regional mass transportation scheme to the Legislatures of New York and New Jersey. Implicit in this would be the requirement that such efforts be completed in an expeditious fashion and within a fixed period of time. This injunction is necessary to bring home the importance of Authority action in the face of the current transportation crisis.
In proposing this relief, I should not be understood as advocating usurpation of the functions of either the executive or legislative branches of government. The majority‘s characterization of my position is in error. Ante at 259. My disposition does not contemplate ordering either the Governors or the Legislatures of the States of New Jersey and New York to undertake any particular course or courses of action. I would be loathe to intrude upon the relationships which have developed between these other branches of state government and the Port Authority. Nonetheless, I am all too aware of the fact that expertise in the field of mass transit operations resides in the body which was originally vested with both power and jurisdiction in that area, namely the Port Authority. By according the Authority a statutory mandate to
Although I am unsure whether it is the perception of my suggested order as a usurpation of executive and legislative function which underlies the majority‘s disagreement with such relief, I am, nonetheless, clear in my opposition to the lesson in civil procedure which the majority would impose on this case. I find that the majority‘s exercise of power under a writ of mandamus would ill-befit a remedy with such a Marshallian association. Marbury v. Madison, 5 U. S. (1 Cranch) 137, 2 L. Ed. 60 (1803). This is a direct result of not only the restrictive but the erroneous construction which the majority gives to the powers implicit in a mandamus. The writ of mandamus is a remedial process whose essential function is to compel the performance of a ministerial action or the exercise of a discretionary function. Roberts v. Holsworth, 10 N. J. L. 57 (Sup. Ct. 1828); Switz v. Middletown Tp., 23 N. J. 580 (1957). This mode of relief is particularly appropriate with regard to recalcitranсe by public officials or authorities. Bd. of Taxation v. Belleville, 92 N. J. Super. 338, 340-41 (Law Div. 1966). While the court has the power under a mandamus to compel action, it does not similarly have the power to control discretion in the performance of
By its construction of the mandamus, the majority would not only accord the authority discretion in the manner of performing the compelled action, but would permit the authority discretion as to whether the ordered action should be performed at all. Although the majority has recognized that the Port Authority has resisted efforts to promote its involvement in mass transportation, it would consider this to be an exercise of discretion which would preclude a mandamus or an order similar to the one which I have suggested:
As we have sought to demonstrate, the circumstances before us do not at all invite or accommodate the remedy proposed. This is so because the Authority (whose function is clearly not ministerial) has in fact exercised its discretion, even though that exercise has resulted in the rejection of a policy favoring mass transportation. Being a judgment decision its wisdom may be open to dispute; but as to the propriety of this Court‘s refusal to intrude on the underlying policy determination, there can be no question in the circumstances before us. Ante at 259.
I cannot subscribe to such reasoning, whose circular nature would undercut the relief which the majority otherwise feels is warranted under the circumstances and which would effectively emasculate the mandamus, or any similar relief, as a remedy.
I reject the majority‘s approach to the problem of this case within a procedural context. We have been taught that there are no rights without remedies. By stripping us of our remedies, the majority is most assuredly divesting us of our rights. Marbury v. Madison, supra, 5 U. S. (1 Cranch) at 163, 2 L. Ed. at 69. Furthermore, we have long passed the days wherein cases were decided on the niceties of procedural technicalities. Hodgson v. Applegate, 31 N. J. 29, 43 (1959); Edelstein v. Asbury Park, 51 N. J. Super. 368, 385 (App. Div. 1958). There is no need to resurrect in this case another of these manifestations of by-gone days.
The majority in Gaby v. Port of New York Authority has been unwilling to take the аction which I regard as imperative. From its disposition I must, therefore, respectfully dissent.
For affirmance - Justices MOUNTAIN, SULLIVAN and CLIFFORD and Judges CONFORD, CARTON and HALPERN - 6.
Concurring in part and dissenting in part - Justice PASHMAN - 1.
Notes
The port authority shall from time to time make plans for the development of said district, supplementary to or amendatory of any plan theretofore adopted, and when such plans are duly approved by the legislatures of the two states, they shall be binding upon both states with the same force and effect as if incorporated in this agreement. [Emphasis supplied]
The port authority may from time to time make recommendations to the legislatures of the two states or to the congress of the
A good many people in the New York area, particularly in New Jersey, could see no point in creating another agency, whether bi-state or tri-state, as long as the Port of New York Authority apparently possessed both the jurisdiction and financial capacity to tackle the regional rail problem. Time and again, the Port Authority fended оff these forays, emphasizing that there was an “absolute incompatibility between railroad deficits and the PNYS‘S contractual limitations with its bondholders . . . and to confine itself to self-supporting projects.” [Danielson, Federal-Metropolitan Politics and the Commuter Crisis, 23 (1965)].