County of Marin v. United States
Headline: Limits federal agency power by blocking approval of a paper split-up transferring Bay Area bus routes, leaving intrastate commuter service regulation to the state commission.
Holding: The Court concluded the proposed paper split-up of Bay Area bus operations was not an "acquisition" under the federal merger provision, so the Interstate Commerce Commission lacked power to approve it under that provision.
- Limits federal approval for carrier split-ups that evade state rate regulation.
- Leaves intrastate route transfers subject to state public utilities commission approval.
- Permits federal certificate-transfer authority to cover interstate rights instead.
Summary
Background
Pacific Greyhound, a motor bus company, proposed transferring its San Francisco Bay Area operations to Golden Gate Transit Lines, a subsidiary set up for that purpose. Golden Gate would receive operating rights, equipment, and cash while Pacific Greyhound would receive all Golden Gate stock. Two counties and their commuter associations opposed the plan and challenged the federal agency’s authority to approve the transaction, arguing it would evade state rate and service regulation.
Reasoning
The central question was whether the proposed transfer counted as an "acquisition" that the federal agency could approve under the federal merger statute. The Court found Golden Gate was essentially a corporate shell and that the plan would split one carrier into two, dissipating Pacific Greyhound’s control. That split-up, the Court said, was not what Congress authorized in the merger provision, which aimed to permit consolidations, not to bless paper reorganizations designed to avoid state regulation. Administrative practices cited by the agency did not overcome the statute’s plain language and purpose.
Real world impact
Because the transaction falls outside the federal merger provision, intrastate operating rights remain primarily subject to the state public utilities commission. The Court said the federal agency may still use its certificate-transfer power under a different statutory provision for interstate certificates, but it cannot claim exclusive, plenary merger authority here. The case was reversed and sent back for proceedings consistent with this opinion.
Dissents or concurrances
Four Justices would have affirmed the lower court’s judgment, disagreeing with the Court’s narrow reading of the federal merger authority.
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