AMERICAN TRUCKING ASS'NS v. United States

• Decision Date: 14 December 1951
• Docket Number: Civ. No. 6758.
• Citation: 101 F. Supp. 710
• Parties: AMERICAN TRUCKING ASS'NS, Inc. et al. v. UNITED STATES et al.
• Court: U.S. District Court — Northern District of Alabama

101 F. Supp. 710

AMERICAN TRUCKING ASS'NS, Inc. et al. v. UNITED STATES et al.

Civ. No. 6758.

United States District Court, N. D. Alabama, S. D.

December 14, 1951.

COPYRIGHT MATERIAL OMITTED

Marc Ray Clements, Tuscaloosa, Ala., Edgar S. Idol, Harry E. Boot, and Francis W. McInerny, all of Washington, D. C., James W. Wrape and Wrape & Hernly, all of Memphis, Tenn., George S. Dixon, Detroit, Mich., Herbert Baker, Columbus, Ohio, Joseph H. Blackshear, Gainesville, Ga., Noel F. George, Columbus, Ohio, William R. Hefferan, Detroit, Mich., for plaintiffs.

For Intervenors in support of Plaintiffs:

M. W. Wells and Maguire, Voorhis & Wells, all of Orlando, Fla., for Florida Citrus Commission, and Growers and Shippers League of Florida.

Charles W. Bucy, Associate Solicitor, Henry A. Cockrum, Atty., Washington, D. C., for Secretary of Agriculture.

Lewis Petteway, General Counsel, Florida Railroad & Public Utilities Commission, Tallahassee, Fla., for Florida Railroad & Public Utilities Commission.

Walter, Burchmore & Belnap, Chicago, Ill., for The National Industrial Traffic League.

Harold J. Waples, Wilber M. Brucker, Arthur P. Boynton and Robert A. Sullivan, and Clark, Klein, Brucker & Waples, all of Detroit, Mich., for L. R. Burnham, et al. d/b/a Burnham's Van Service.

J. Douglas Harris, Alabama Public Service Commission, Montgomery, Ala., Guyte P. McCord, Jr., Florida Railroad & Public Utilities Commission, Tallahassee, Fla., Bland Godwin, Jr., Georgia Public Service Commission, Atlanta, Ga., for Southeastern Association of Railroad and Utilities Commissioners, Amicus Curiae.

J. Howard McGrath, Atty. Gen., John F. Baecher, Special Assistant to the Attorney General, John H. D. Wigger, Special Assistant to the Attorney General, Department of Justice, Washington, D. C., John D. Hill, U. S. Atty., Birmingham, Ala., for the United States.

Daniel W. Knowlton, Chief Counsel, E. M. Reidy, Associate Chief Counsel and S. R. Howell, Assistant Chief Counsel, Interstate Commerce Commission, all of Washington, D. C., for Interstate Commerce Commission.

For Intervenors in support of Defendants:

Joseph F. Johnston, Birmingham, Ala., Charles Clark, Washington, D. C., Frank W. Gwathmey, Washington, D. C., Joseph H. Hays, James W. Nisbet, Chicago, Ill., R. T. Wilson, Jr., Richmond, Va., and Carl Helmetag, Jr., Philadelphia, Pa., for Railroads.

Burton K. Wheeler, Edward K. Wheeler, Robert G. Seaks, J. Albert Woll, and Wheeler & Wheeler, all of Washington, D. C., for International Brotherhood of Teamsters-Chauffeurs-Warehousemen & Helpers of America.

Clarence D. Todd, Jr., Dale C. Dillor, Ralph E. Curtiss; Todd, Dillon & Curtiss, all of Washington, D. C., for Contract Carrier Conference of the American Trucking Associations.

Smith Troy, Atty. Gen., and Don Cary Smith, Asst. Atty. Gen. of the State of Washington, for the State of Washington, Amicus Curiae.

Before McCORD, Circuit Judge, and KENNAMER and LYNNE, District Judges.

LYNNE, District Judge.

Invoking the jurisdiction of this duly constituted district court of three judges pursuant to the provisions of 28 U.S.C.A. §§ 1336, 1398, 2284, and 2321 to 2325, plaintiffs,¹ consisting of three associations of truckers together with fourteen motor common carrier corporations, instituted this action to enjoin, set aside or annul an order of defendant,² Interstate Commerce Commission (hereinafter referred to as the Commission), entered May 8, 1951.³

By the order complained of the Commission undertook to prescribe rules governing the practices of authorized carriers of property by motor vehicle in interstate or foreign commerce in the augmentation and interchange of equipment and the rental of vehicles or equipment to private carriers or shippers.⁴

On its own motion by order dated January 9, 1948, the Commission instituted an investigation into the lawfulness of the practices of the motor common and contract carriers subject to its jurisdiction respecting: the performance by such carriers of transportation with vehicles owned by others; the interchange of vehicles between such carriers; and the lease of vehicles by such carriers either with or without drivers to private motor carriers and shippers. All motor common and contract carriers subject to the Commission's jurisdiction were made respondents. Upon each of them was served a copy of such order containing an appendix in which was set forth rules and regulations in tenative form and substance, compiled by the Commission's Bureau of Motor Carriers. In addition, copies thereof were published in the Federal Register and in the office of the Secretary of the Commission.

Hearings before Examiner Henry C. Lawton, to whom the matter was assigned, occupied nineteen days between October 14, 1948, and January 27, 1949. Eighty witnesses testified. Interested participants, represented by able counsel, exhibited throughout an understandable zeal and partisanship responsible for the compilation of a record consisting of 3,640 pages of testimony and 120 exhibits.

Proceeding to an analysis of the evidence and the positions of the parties, the Examiner found that the leasing and interchange practices of motor carriers have resulted in widespread and flagrant violations of the Act and the Commission's regulations⁵ and concluded that the Commission had the statutory power to and should promulgate a new set of rules and regulations to cope with the situation. On August 26, 1949, he filed a Recommended Report diagnosing the ills and suggesting the remedies.⁶

Salient and most controversial features of the Examiner's proposals centered around his Rule II, providing that carriers augmenting their fleets with leased vehicles would be required to have written leases of at least thirty days' duration; that vehicles be driven by employes of the carrier; and that the compensation paid for the use of such vehicles be computed upon some basis other than a percentage of the revenues received for transporting commodities in the leased equipment. Rules preventing the carriers from leasing vehicles with drivers to shippers and requiring carriers to use their own employes to operate interchanged equipment were also included.

In the numerous exceptions to the Examiner's Proposed Report filed in behalf of the motor carrier parties the predominant note is negation of the Commission's authority to prescribe such rules. Expressions of dissatisfaction, disassociated from the question of statutory power, indicate an inability on the part of the affected carriers to agree among themselves as to the means which should be adopted to end the law evading practices existing in their industry. Some were apparently out of sympathy with the Examiner's views that the Commission should implement its regulatory efforts by clear and concise rules relating leasing and interchange practices to their proper function in the transportation field; others felt less stringent regulations could be evolved which could deal effectively with the situation without disturbing existing leasing arrangements.

On June 26, 1950, Division 5 of the Commission filed a Report and Order establishing rules and regulations governing the leasing and interchanging of motor vehicles by the authorized motor carriers.⁷ Somewhat less restrictive than those proposed by the Examiner, they omitted the two polemical features of the latter, namely that the leases of owner-operator vehicles be of at least thirty days' duration and that the rental paid for leased vehicles be other than a percentage of the revenues received for transporting the commodities in leased equipment. In their report the members of Division 5 made it clear that they entertained no doubts as to the statutory authority of the Commission to regulate the leasing and interchange practices of motor carriers.⁸

Thereafter, upon consideration of the several Petitions for Reconsideration, oral arguments were heard by the entire Commission on October 30-31, 1950, in which counsel for the interested parties fully explored the authority of the Commission and the factual basis for the proposed rules.

On May 8, 1951, the Commission issued a Report and Order substantially modifying the action of Division 5. The rules and regulations prescribed by the entire Commission⁹ virtually accepted the Examiner's proposals. While not requiring the motor carriers to use their own employes on leased equipment, Rule 207.4(a) (3) provides that leases of vehicles to be driven by the owners thereof shall be of at least thirty days' duration. Rule 207.4(a)(5) provides that the compensation for leased vehicles shall not be computed on the basis of any division or percentage of the rates received for transporting commodities in leased equipment. Rule 207.5(c) provides that where equipment is interchanged among carriers, each carrier must assign its own employe to operate the equipment while it is being run over the particular carrier's route. The remaining provisions of the rules merely implement the foregoing which are the heart of the regulatory scheme devised by the Commission.

Before resorting to this court plaintiffs exhausted their administrative remedies by petitions for reconsideration of the Commission's order, which by its terms was to have become effective August 1, 1951. Intervening orders have postponed the compliance date to February 1, 1952.

The antecedent history of conditions existing in that area of the total transportation system of this nation occupied by motor carriers illumines the proceedings before the Commission, to which we have adverted. The prevalence of practices thought to be inimical alike to the public safety and economy was brought to the attention of the Congress by the Federal Coordinator of Transportation in a report submitted in March, 1934,¹⁰ to which was attached a proposed bill bearing the indorsement of the Commission as "imperatively necessary under present conditions." Fundamentally, the conditions to which the...