327 U.S. 515 (1946), 74, United States v. Pierce Auto Freight Lines, Inc.

Docket Nº:No. 74
Citation:327 U.S. 515, 66 S.Ct. 687, 90 L.Ed. 821
Party Name:United States v. Pierce Auto Freight Lines, Inc.
Case Date:March 11, 1946
Court:United States Supreme Court

Page 515

327 U.S. 515 (1946)

66 S.Ct. 687, 90 L.Ed. 821

United States


Pierce Auto Freight Lines, Inc.

No. 74

United States Supreme Court

March 11, 1946

Argued January 28, 1946




1. Each of two motor carriers made application to the Interstate Commerce Commission under Part II of the Interstate Commerce Act for a permit to operate between points A and C. One was then operating between A and B; the other between B and C, and they operated joint service between A and C by freight interchange. Each applicant opposed the other's application, and competing carriers opposed both. The applications were heard separately by different joint boards, but were dealt with by the Commission in a single report.

Held: that an order of the Commission granting both applications was valid. Pp. 517, 523.

2. Neither the fact that the Commission dealt with both applications in one report nor the fact that the Commission granted both applications invalidated its order. P. 523.

Page 516

3. The Commission's disposition of the applications did not inject into the proceedings as a "new issue" the question whether both applications should be granted. P. 526.

4. That the Commission did not determine each case exclusively on the record therein, but considered the evidence in both proceedings, does not warrant invalidating its order in the absence of ay showing of specific prejudice. P. 528.

5. Where the Commission's report contains all the required findings, it is not obliged to annotate to each finding the evidence supporting it. P. 529.

6. The fact that an administrative agency has considered matters dehors the record does not invalidate its action unless substantial prejudice is shown. P. 530.

7. The order of the Commission granting both applications was supported by the findings and the evidence. P. 530.

8. The Commission's ultimate finding as to the fitness and ability of one of the applicants in this case was supported by a sufficient basic finding and by evidence. P. 533.

9. Rehearings before administrative bodies are within their own discretion, and only the clearest abuse, not shown upon the record in this case, will sustain an exception to the rule. Atchison, T. & S.F. R. Co. v. United States, 284 U.S. 248, distinguished. P. 534.

10. The Interstate Commerce Commission, and not the reviewing court, is the arbiter of the paramount public interest. The judicial function is limited to ascertaining whether the order has support in the law and in the record. P. 535.

57 F.Supp. 192, reversed.

Appeal from a decree of a district court of three judges which suspended an order of the Interstate Commerce Commission and remanded the cause to the Commission for a rehearing. 57 F.Supp. 192. Reversed, p. 536.

Page 517

RUTLEDGE, J., lead opinion

MR. JUSTICE RUTLEDGE delivered the opinion of the Court.

The validity of an order of the Interstate Commerce Commission is in question. The order granted to appellants, Consolidated Freightways, Inc., and Oregon-Nevada-California Fast Freight, Inc., certificates of public convenience and necessity authorizing extensions of their operations as motor carriers. Appellees, competing carriers, some of whom are railway-affiliated, were protestants in the proceedings before the Commission. They successfully attacked the order in a specially constituted District Court on grounds questioning the sufficiency of the findings and the evidence, as well as the propriety and fairness of the Commission's procedure. The District Court's decree, 57 F.Supp. 192, "suspended" the order and remanded the cause to the Commission for rehearing although a stay pending appeal was denied.

The shortened statement of the major thing in controversy is whether the appellants, Consolidated and O.N.C., properly were allowed by the Commission to substitute wholly independent and competing through services between Portland, Oregon, and San Francisco, California, for the service which they jointly rendered between those cities prior to the filing of these applications by interchanging freight at intermediate points. The protesting appellees were carriers competing with the joint service of Consolidated and O.N.C., and will be competitors of each, as those companies will be with each other, if the Commission's order is sustained. This fact is the source of the controversy, and is important to bear in mind for full understanding of the detailed facts and issues, as well as of what is ultimately at stake. Although each appellant

Page 518

originally sought exclusive authority to conduct the proposed through operation in substitution for the former joint service, and thus opposed the other's application, both now seek to sustain the Commission's order, as, of course, does the Commission itself.

[66 S.Ct. 690] At the time of Consolidated's application in December, 1939, it operated various routes in the Northwest, some extending eastward from the Portland and Seattle areas, in addition to the joint service by interchange with O.N.C. southward from Portland to San Francisco.1 Two of these routes, comprising part of the latter service, extended from Portland southerly to Medford and Klamath Falls, both of which lie just north of the Oregon-California boundary and were points of interchange with O.N.C.2 Insofar as it is now pertinent, Consolidated's application sought permission to extend its operations from Medford and Klamath Falls southward to San Francisco3 -- in other words, over the portion of the route previously used in the joint service for O.N.C.'s operations.

Page 519

Conversely, at the time of O.N.C.'s application in January, 1940, it was operating from San Francisco to Medford and Klamath Falls.4 It sought to extend its operations from Medford to Portland, and, as an alternative slightly longer route, from Klamath Falls to Portland through Goshen, Oregon.5

Thus, in effect, Consolidated and O.N.C. each sought to conduct operations independently throughout the entire distance between Portland and San Francisco.6 The occasion for the separate applications was O.N.C.'s refusal to join an association of connecting carriers which Consolidated was sponsoring.7

The applications were heard separately, as the statute requires, before different joint boards.8 However, because

Page 520

they were so closely related in their common features, the hearings were held at the same places, and one application was heard immediately after the other. Each applicant intervened in the proceeding on the [66 S.Ct. 691] other's application, and various parties, including the appellees,9 appeared in opposition in both proceedings. The parties stipulated that much of the evidence presented in the O.N.C. hearing should be introduced by reference into the Consolidated record. This included all of the appellees' affirmative evidence in opposition to the two applications. The hearings thus were substantially coordinated, though not technically consolidated, for the common features of the applications.

As neither joint board could agree upon the recommendations to be made, both matters were referred to an examiner.10 In separate reports, he recommended the denial of both applications. Division 5, with one commissioner dissenting, dealt with both in a single report. It reversed the examiner in both cases, and ordered that each

Page 521

application be granted.11 Appellees' petition for rehearing was denied. They thereupon brought this suit in the District Court.12

The findings of fact and the court's opinion, 57 F.Supp. 192, disclose that it held the Commission's order invalid on several grounds. One was that

the Commission considered the separate records as though the case was a consolidated one. Evidence which appeared only in one record was used by the Commission to support general findings in the Report concerning both Consolidated and O.N.C. In each proceeding embraced within the Report and the Commission's order, evidence not offered or received in such proceeding and not a part of the record therein was drawn upon and considered by the Commission.

The court also found that there was no evidence in either record to support the Commission's finding that "the present and future public convenience and necessity require both the operations" by Consolidated and those by O.N.C. (Emphasis added.) And it further found that at no time in the proceeding had there been notice to the parties, the witnesses, or the general public that both

Page 522

applications might be granted; that, indeed,

the whole basis of the original proceeding before the Joint Boards was the question of whether any through-line operation between San Francisco and Portland should be allowed, and, if so, which one of the two separate applications;

and that

no opportunity was given to plaintiffs to maintain their rights or to present appropriate protests and defenses to the institution of two competing through-line operations between San Francisco and Portland.

(Emphasis added.) Finally, the court held that, in granting both applications, the Commission had not considered the public interest, and suggested that its denial of the petition for rehearing was improper.13

For all these supposed errors, the District Court suspended the Commission's [66 S.Ct. 692] order and remanded the cause "for rehearing." In doing so, it said:

This action will be taken in order that all parties may be placed on notice as to what type hearing will be held, whether joint or several, and in order that appropriate findings be made as to the public convenience and necessity which requires the authorization of two new...

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