## Facts

- The Washington Metropolitan Area Transit Commission regulated motor carrier operations in the Washington metropolitan area, including sightseeing services requiring a certificate of public convenience and necessity.
- Holiday Tours previously was denied a certificate under a “grandfather” provision; an earlier appellate decision noted Holiday Tours could continue limousine sightseeing and could use buses and drivers supplied by licensed bus operators.
- After that decision, Holiday Tours shifted from primarily limousine tours to primarily bus (motor coach) sightseeing tours, using buses rented from licensed carriers.
- The Commission asserted the earlier language allowed only occasional bus rentals as an adjunct to limousine operations, not conversion into a full-scale bus tour service without a certificate.
- A federal district court entered a permanent injunction barring Holiday Tours from operating motor coach sightseeing service without a certificate.
- The district court stayed enforcement of its injunction pending appeal, referencing the four-factor test for stays pending appeal.
- The Commission moved in the D.C. Circuit to vacate the stay; the merits appeal of the injunction remained pending.

## Issues

1. Whether the district court abused its discretion by staying a permanent injunction pending appeal, allowing Holiday Tours to continue motor coach tours without a certificate during the appeal.
2. Whether a stay pending appeal requires a strong likelihood of success on the merits, or may issue when serious legal questions exist and the balance of equities strongly favors interim relief.

## Decision

- The D.C. Circuit denied the Commission’s motion to vacate the stay.
- The court held the district court did not abuse its discretion in granting a stay pending appeal.
- The court ruled a stay does not require a strong probability of success when the appeal presents serious legal questions and the balance of hardships strongly favors the movant.
- The court accepted that immediate enforcement risked irreparable injury to Holiday Tours, including potential destruction of its business.
- The court found the Commission’s and competitors’ claimed harms from temporary continued operation were comparatively speculative and limited, and that maintaining the status quo pending appeal would not substantially harm the public interest.

## Legal Principles

- A stay pending appeal is assessed under four factors: (1) likelihood of success on the merits, (2) irreparable injury absent a stay, (3) injury to other parties if a stay is granted, and (4) the public interest.
- The likelihood-of-success factor is flexible; a movant need not show a “mathematical” or high probability of success if the case presents “serious, substantial, difficult and doubtful” questions.
- When serious legal questions are shown, a stay may issue if the balance of hardships tips decidedly toward the movant.
- Preservation of the status quo pending appellate review is favored where interim continuation is unlikely to cause substantial noncompensable harm to others or to the public interest.
- Threatened destruction of an ongoing business can constitute irreparable harm supporting interim relief.

## Conclusion

The D.C. Circuit allowed a stay of an injunction pending appeal because the appeal raised substantial interpretive questions and the equities—especially the risk of irreparable business harm—favored maintaining the status quo while appellate review proceeded.


Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841 (D.C. Cir. 1977)