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Judge Throws Out Lawsuit Against Megabus Stop

By Mathew Katz | April 18, 2012 11:40am | Updated on April 18, 2012 8:01pm
Passengers load onto a bus at the new Megabus hub at Port Authority Bus Terminal on Feb 16, 2012.
Passengers load onto a bus at the new Megabus hub at Port Authority Bus Terminal on Feb 16, 2012.
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DNAinfo/Mathew Katz

MANHATTAN — A New York Supreme Court Judge has thrown out a case against the Department of Transportation that sought to stop it from allowing Megabus to use a free pick-up spot at the Port Authority Bus Terminal.

The legal proceedings were begun in February by a coalition of bus companies that pay millions to operate out of the Port Authority Bus Terminal, including Greyhound, Peter Pan Bus Lines and Adirondack Transit Lines.

The carriers argued that awarding Megabus a stop on West 41st Street between Eighth and Ninth Avenues for no charge created a non-competitive environment, giving the discount carrier all the benefits of operating at the city's bus station without any of the fees — which the carriers said add up to about $10 million a year.

They demanded the city be barred from granting Megabus permission to continue its curbside pickups.

But in her April 10 decision, Judge Eileen Rakower wrote that the coalition of bus companies failed to prove that they were actually harmed by the presence of Megabus nearby.

"The party must demonstrate that it 'will actually be harmed by the challenged administrative action' and that 'the injury suffered is personal to the party [and] distinct from that of the general public,' she wrote.

"Petitioners have failed to establish that they have suffered an injury in fact."

The DOT could not immediately confirm whether the decision means that Megabus will remain at the new Port Authority stop indefinitel, but Mark Muschenheim, a lawyer with the city's Law Department, praised the judge's decision.

"We are pleased the case was dismissed," he said in a statement.

Establishing curbside access is one of DOT's core functions, and this bus stop authorization was made only after a comprehensive evaluation." 

Carolyn Daly, a spokeswoman for the Port Authority carriers, said they will appeal, citing successful cases against free curbside stops for Megabus in other cities and gathering support from some locals that have spoken out against the carrier.

"We know there's a lot of angry people out there. We're tapping their shoulders," she said.

She added that BoltBus, a discount carrier owned by Greyhound and Peter Pan and the main competitor to Megabus had been directly harmed by the decision: it recently had to leave the Port Authority because the fees were too cumbersome for their business model.

"We had to pay both terminal fees and departure fees and now we have to shrink our own bus terminal," she said.

The victory for Megabus comes at a time when the discount carrier is under attack from neighborhood activists and city and state organizations have begun to investigate claims that the company's double-decker buses are too heavy for city streets.

"Megabus looks forward to continuing to provide New Yorkers with safe, reliable and affordable transportation and is vindicated by the Court’s decision dismissing its competitors’ attempts to shut down its operations,” said George Lence, a spokesman for the company.