Alton Co v. United States United States v. Alton Co 19 8212 22, 1941

• Decision Date: 12 January 1942
• Docket Number: Nos. 110 and 267,s. 110 and 267
• Citation: 315 U.S. 15,62 S.Ct. 432,86 L.Ed. 586
• Parties: ALTON R. CO. et al. v. UNITED STATES et al. UNITED STATES et al. v. ALTON R. CO. et al. Argued Dec. 19—22, 1941
• Court: U.S. Supreme Court

315 U.S. 15

62 S.Ct. 432

86 L.Ed. 586

ALTON R. CO. et al.

v UNITED STATES et al.

UNITED STATES et al.

v. ALTON R. CO. et al.

Nos. 110 and 267.

Argued Dec. 19—22, 1941.

Decided Jan. 12, 1942.

Appeals from the District Court of the United States for the Eastern District of Michigan.

Mr. Amos M. Mathews, of Chicago, Ill., for Alton R. Co. et al.

Messrs. Francis Biddle, Atty. Gen., and Daniel W. Knowlton, of Washington, D.C., for the United States and Interstate Commerce Commission.

Mr. George S. Dixon, of Detroit, Mich., for John P. Fleming, doing business, etc.

Mr. Justice DOUGLAS delivered the opinion of the Court.

These cases are an appeal and a cross appeal under § 210, 28 U.S.C. § 47a, 28 U.S.C.A. § 47a, and § 238 of the Judicial Code as amended, 28 U.S.C. § 345, 28 U.S.C.A. § 345, to review a final decree of a district court of three judges (28 U.S.C. § 47, 28 U.S.C.A. § 47) which modified in part and sustained as modified (D.C., 36 F.Supp. 898) an order of the Interstate Commerce Commission (8 M.C.C. 469) granting appellee Fleming a certificate of public convenience and necessity as a common carrier by motor vehicle under the so-called 'grandfather clause' § 206(a) of the Motor Carrier Act of 1935.¹ 49 Stat. 543, 551, 49 U.S.C. § 306, 49 U.S.C.A. § 306(a).

The findings of the Commission may be briefly summarized as follows: Fleming on and since June 1, 1935, was engaged in bona fide operation as a common carrier by motor vehicle 'in driveaway service of new automotive vehicles, finished and unfinished, and new automotive vehicle chassis.' This driveaway or caravaning method of transportation is performed by individual driving of the vehicle under its own power, by driving one vehicle under its own power and towing a second vehicle attached to the first, or by driving under its own power a vehicle upon which another vehicle is partially or wholly mounted. Shipments by Fleming originated from the factories of automobile manufacturers in Detroit, Michigan, and were made to dealers and distributors in various states. Certain new cars were returned to Detroit in the same manner. Fleming commenced operations in 1933 and between January 1, 1934 and June 1, 1935 transported shipments to one point each in Arkansas and Alabama; to two points each in California, New York, Pennsylvania and Tennessee; to three points each in Washington, Oregon, Kentucky and North Carolina; to four points in Texas; to five points in South Carolina; and to seven points in Georgia. About 1200 vehicles were transported in this period and more than 2100 from 1933 to July 1936, the time of the hearing. Shipments consisted of from one to sixteen vehicles, shipments of two and four being the most common. Fleming's service was confined to deliveries at very few points in several states due to the fact that he was furnishing a highly specialized transportation service from manufacturers to dealers and distributors. Shipments to most of the states named were numerous. Shipments to other states were fewer in number. Thus the three shipments to Arkansas aggregated twenty-five vehicles, the four shipments each to Texas and Oregon aggregated fourteen vehicles and twenty-four vehicles respectively, and the five shipments to Washington aggregated twenty-eight vehicles. Operations in those four states started just prior to June 1, 1935; but they were sufficient in scope to establish that Fleming was in bona fide operation in them on the statutory date. Fleming held his services out to the public generally as a common carrier and operated as such; and he held himself out to transport by the driveaway method between any points in the states for which application was made.

Though his transportation of shipments was restricted to a few points in each of the enumerated states, the Commission held that he was entitled to transport to all points in all of the states served, with the exception of New York and Pennsylvania as respects which the application was denied. The District Court sustained the order of the Commission in all respects except the operation in Arkansas. As to that it held that his service had been abandoned.

We are met at the outset with the question of the standing of the appellant railroad companies (seventy-one in number) to bring and maintain the suit in the District Court. All but a few intervened in the hearing before the Commission. Each is a common carrier and a competitor of Fleming in some portion of the territory which Fleming is authorized to serve. They rest their right to sue on § 205(h) of the Motor Carrier Act,² 49 U.S.C.Supp. § 305(h), 49 U.S.C.A. § 305(h), which provides that 'Any final order made under this part (chapter) shall be subject to the same right of relief in court by any party in interest as is now provided in respect to orders of the Commission made under part I (chapter 1) * * *.' Sec. 1(20) of Part I, 49 U.S.C. § 1(20), 49 U.S.C.A. § 1(20), authorizes 'any party in interest' to sue to enjoin any construction, operation or abandonment of a railroad made contrary to § 1(18) or (19). Such suits may be maintained not only where the railroad proceeds without authorization of the Commission but also where it proceeds under a certificate of the Commission whose validity is challenged. Claiborne-Annapolis Ferry Co. v. United States, 285 U.S. 382, 52 S.Ct. 440, 76 L.Ed. 808. Hence we conclude that § 205(h) has incorporated by reference the 'party in interest' provision of § 1(20). We do not stop to inquire what effect, if any, the status of appellant railroad companies as intervenors before the Commission had on their right to bring and maintain this suit. Cf. Chicago Junction Case, 264 U.S. 258, 44 S.Ct. 317, 68 L.Ed. 667, with Pittsburgh & West Virginia Ry. Co. v. United States, 281 U.S. 479, 50 S.Ct. 378, 74 L.Ed. 980. They clearly have a stake as carriers in the transportation situation which the order of the Commission affected. They are competitors of Fleming for automobile traffic in territory served by him. They are transportation agencies directly affected by competition with the motor transport industry—competition which prior to the Motor Carrier Act of 1935 had proved destructive. S.Doc. No. 152, 73d Cong., 2d Sess., pp. 13-27. They are members of the national transportation system which that Act was designed to coordinate. S.Rep. No. 482, 74th Cong., 1st Sess.; H.Rep.No. 1645, 74th Cong., 1st Sess. Hence they are parties in interest within the meaning of § 205(h) under the tests announced in Texas & Pacific Ry. Co. v. Gulf, Colorado & Santa Fe Ry. Co., 270 U.S. 266, 46 S.Ct. 263, 70 L.Ed. 578; Western Pacific California R. Co. v. Southern Pacific Co., 284 U.S. 47, 52 S.Ct. 56, 76 L.Ed. 160, and Claiborne-Annapolis Ferry Co. v. United States, supra.

The appellant railroad companies earnestly contend that the Commission was without authority to authorize Fleming to serve a whole state where, as here, his services had been in fact limited to only a few points in the state. The argument is that any rights obtained under the 'grandfather clause' should be delimited to the actual area in which the applicant was in bona fide operation during the period in question. Sec. 206(a) provides for the issuance of a certificate of public convenience and necessity without proof beyond the fact that the applicant or his predecessor in interest 'was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time.' Sec. 208(a) provides that such certificate 'shall specify the service to be rendered and the routes over which, the fixed termini, if any, between which, and the intermediate and off-route points, if any, at which, and in case of operations not over specified routes or between fixed termini, the territory within which, the motor carrier is authorized to operate.' The authority granted Fleming was to operate in the designated territory 'over irregular routes' through specified states. It is plain from the statute that operations need not be restricted to specified routes or between fixed termini. But the question remains as to the power of the Commission to authorize operation in an entire state where only a few points in that state had been served.

'Territory' is not a word of art. The characteristics of the transportation service involved as well as the geographical area serviced are relevant to the territorial scope of the operations which may be authorized under the 'grandfather clause'. While the test of 'bona fide operation' within a specified 'territory' includes 'actual rather than potential or simulated service' (McDonald v. Thompson, 305 U.S. 263, 266, 59 S.Ct. 176, 178, 83 L.Ed. 164), it does not necessarily restrict future operations to the precise points or areas already served. The characteristics of the transportation service rendered may of necessity have made trips to any specified locality irregular or sporadic. And they may likewise have restricted prior operations to but a few points in a wide area which the carrier held itself out as being willing and able to serve. The Commission has taken the characteristics of various transportation services into consideration in determining the scope of the territory covered by certificates under the 'grandfather clause'. Thus operations on irregular routes within a wide territory have been authorized in case of common carriers of household goods. Bruce Transfer & Storage Co., 2 M.C.C. 150; William J. Wruck, 12 M.C.C. 150. Similar broad authority has been granted common carriers of oil-field equipment and supplies. Charles B. Greer, Jr., 3 M.C.C. 483; Union City Transfer, 7 M.C.C. 717; L. C. Jones Trucking Co., 9 M.C.C. 740. And a like result has been reached in case of automobile transporters such as the applicant in the instant case. George Cassens & Sons, 1 M.C.C. 771. And see Charles E. Danbury, 17 M.C.C. 243...