Peerless Stages, Inc. v. Santa Clara County Transit District

Opinion

KING, J.* Appellant Peerless Stages filed a. complaint for injunctive relief against respondent Santa Clara County Transit District and its director. Pursuant to stipulation, a first amended complaint was filed adding causes of action for damages and fraud. After trial by the court without a jury, judgment was entered for respondents and this appeal followed. Appellant is a bus company operating in Northern California. Prior to December 31, 1972, it was divided into five divisions: The Oakland Division, the Santa Clara County Division, Santa Cruz County Division, Palo Alto Division and the Charter Division. The Santa Clara County Division operated wholly within Santa Clara County and, including the operations of this division, more than 40 percent of appellant’s revenue vehicle miles were logged in Santa Clara County. As of the close of business on December 31, 1972, respondent purchased appellant’s Santa Clara County Division and thereafter less than 40 percent of appellant’s revenue vehicle miles were in Santa Clara County.

[506]Respondent district was created by the Santa Clara County Transit District Act codified in section 100000 et seq. of the Public Utilities Code of the State of California in 1969.1 The legislation authorized the district to acquire and operate bus lines “within or partly without” the county. (§ 100161.) However, it was precluded from operating in competition with an “existing system” until it had “completed the purchase of the existing system or any part thereof.” (§§ 100055, 100055.1.)

An “existing system” is defined by section 100021 as follows: “ ‘Existing system’ means any transit service or system of a publicly or privately owned public utility or division thereof operating entirely within Santa Clara County or at least '40 percent of whose revenue vehicle miles for the preceding calendar year were operated within the district but does not include a charter-party carrier or the charter service of a passenger stage corporation.”

In mid-1973, respondent began transit service between San Jose and the BART station in Fremont in Southern Alameda County. Prior to this, at the time BART had begun running to Fremont, appellant had experienced adverse effects on its Oakland Division, which had a route from Oakland to San Jose, by way of Fremont, running both express and local service. When respondent’s connection with the Fremont BART station occurred, appellant experienced a reduction in ridership and revenue leading to a reduction by appellant in its San Jose-Oakland service. The fare from Oakland to San Jose on the BART-Santa Clara County Transit District Lines was $1.30, whereas appellant’s fare for the same route was $2.25.