United States v. Rock Island Motor Transit Co

• Decision Date: 26 February 1951
• Docket Number: No. 25,25
• Citation: 95 L.Ed. 391,71 S.Ct. 382,340 U.S. 419
• Parties: UNITED STATES et al. v. ROCK ISLAND MOTOR TRANSIT CO. et al
• Court: U.S. Supreme Court

340 U.S. 419

71 S.Ct. 382

95 L.Ed. 391

UNITED STATES et al.

v ROCK ISLAND MOTOR TRANSIT CO. et al.

No. 25.

Argued Nov. 7, 1950.

Decided Feb. 26, 1951.

Rehearing Denied April 9, 1951.

See 341 U.S. 906, 71 S.Ct. 609.

[Syllabus from pages 419-421 intentionally omitted] Mr. Daniel W. Knowlton, Washington, D.C., for appellants.

Mr. Harry E. Boe, Chicago, Ill., for appellee Rock Island Motor transit co.

Mr. Einar Viren, Omaha, Neb., for appellee Omaha Chamber of Commerce.

Messrs. Ernest Porter, Des Moines, Iowa, Bert F. Wisdom, Ida Grove, Iowa, for appellee Iowa State Commerce Comm'n.

Mr. Justice REED delivered the opinion of the Court.

Questions of the power of the Interstate Commerce Commission to tighten the restrictions on operations of a railroad's motor-carrier affiliate are raised by this appeal. In the Commission's view the operations must be modified in order to make them truly auxiliary to or supplemental of the rail service. They are conducted (1) under a certificate of convenience and necessity issued in 1941 under § 207 of the Interstate Commerce Act, 49 U.S.C.A. § 307, and (2) under an order of 1944 approving the acquisition of another motor carrier. The certificate contains the condition that the Commission might impose other terms to restrict the holder's operation to service which is auxiliary to or supplemental of rail service. The order contains neither this condition nor any other relating to the specific operating rights of the carrier.

The issues involve a basic power of the Commission to regulate the operations of motor carriers affiliated with railroads so as to assure that at all times the motor operations shall be consonant with the National Transportation Policy, 54 Stat. 899, 49 U.S.C.A. preceding section 301. The Commission has decided that that policy requires the motor operations of railroads and their affiliates to be auxiliary to and supplemental of train service. This raises questions as to how the planned auxiliary and supplemental service is to be achieved. Differences also exist as to what phases of motor-carrier operations are auxiliary to and supplemental of rail or train service.

The Rock Island Motor Transit Company, a wholly-owned corporate subsidiary of the Chicago, Rock Island and Pacific Railroad Company and its predecessors, is a common carrier by motor vehicle engaged in transporting property in interand intrastate commerce, exclusively, for all practical purposes, along the rail lines of its parent corporation in Arkansas, Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, Tennessee, Texas and Kansas. Many of Transit's operations alongside its parent are in different localities and under other I.C.C. authorities than the certificate and order here involved.

This appeal deals with additional operating restrictions placed subsequent to the Commission's formal approval of Transit's purchase and operation, upon two of Transit's acquisitions. The first is a segment of the so-called White Line Purchase. The Line was in process of perfecting its 'grandfather rights' under § 206(a), Motor Carrier Act, 49 U.S.C.A. § 306(a), at the time of appellees' agreement to purchase. The order directing issue of the certificate to Rock Island recognized this. This purchase was authorized under § 213, Motor Carrier Act of 1935, 49 Stat. 555, April 1, 1938, Docket No. MC—F—445; reported 5 M.C.C. 451, 15 M.C.C. 763. The segments of the White Line Purchase here involved are those between Des Moines, Iowa, and Omaha, Nebraska, and Des Moines, Iowa, and Silvis, Illinois, included in Transit's certificate of convenience and necessity issued in M.C. 29130, December 3, 1941.

That certificate had only the following provisions in any way applicable to this controversy:

'Service is authorized to and from the intermediate points on the above-specified routes which are also stations on the lines of The Chicago, Rock Island and Pacific Railway Company.

'The operations authorized on the abovespecified routes are subject to such further limitations, restrictions, or modifications as we may find it necessary to impose or make in order to insure that the service shall be auxiliary or supplementary to the train service of The Chicago, Rock Island and Pacific Railway Company and shall not unduly restrain competition.'

The second acquisition is the so-called Frederickson Purchase, authorized November 28, 1944, Docket No. MC—F—2327, under § 5, Interstate Commerce Act, 54 Stat. 905, by which Transit acquired, from the holders of a certificate of convenience and necessity, a route between Atlantic, Iowa, and Omaha, Nebraska. Neither the report nor the order contained provisions alike or akin to these just quoted from the White Line certificate. No order for a certificate has yet been entered and no certificate has been issued.

The routes here involved are a major part of the Rock Island's truck route between Chicago and Omaha. The eastern end of that route from Silvis, Illinois, to Chicago is operated under other I.C.C. authority.

Transit has been operating the above routes since their respective dates. Under those authorities, Transit states it has engaged in trucking service as follows: '(a) a coordinated rail-service, at rail rates auxiliary to the existing service of appellee's affiliated railroad; (b) a motor service in substitution of rail service, at rail rates; and (c) a motor common carrier service at rates and tariffs observed and applied by appellee's predecessors, as modified from time to time.'

On February 5, 1945, the Commission directed reopening of the dockets to give reconsideration to the above certificate and order, 'solely to determine (a) the conditions or restrictions, if any appear necessary, which should be imposed to insure that the motor carrier service performed by The Rock Island Motor Transit Company is limited to that which is auxiliary to, or supplemental of, rail service, and (b) the condition, if any appears necessary, which should be imposed so as to make the authority granted to The Rock Island Motor Transit Company subject to such further conditons or restrictions as the Commission may find necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, rail service.'

At the end of that reconsideration, an order was entered to modify the White Purchase certificate and the Frederickson order in the following respects:

'1. The service to be performed by The Rock Island Motor Transit Company shall be limited to service which is auxiliary to, or supplemental of, train service of The Chicago, Rock Island and Pacific Railroad Company, hereinafter called the Railroad.

'2. The Rock Island Motor Transit Company shall not render any service to or from any point not a station on a rail line of the Railroad.

'3. No shipments shall be transported by The Rock Island Motor Transit Company between any of the following points, or through, or to, or from, more than one of said points: Omaha, Nebr., Des Moines, Iowa, and collectively Davenport and Bettendorf, Iowa, and Rock Island, Moline, and East Moline, Ill.

'4. All contractual arrangements between The Rock Island Motor Transit Company and the Railroad shall be reported to us and shall be subject to revision, if and as we find it to be necessary, in order that such arrangements shall be fair and equitable to the parties.

'5. Such further specific conditions as we, in the future, find it necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, train service.' Rock Island Motor Transit Co., 55 M.C.C. 567, 597—598, affirming 40 M.C.C. 457.

It is from those modifications that Transit sought relief through §§ 1336 and 2325 of 28 U.S.C., 28 U.S.C.A. §§ 1336, 2325 from a three-judge district court. The relief was granted and the orders were annulled and their enforcement enjoined. 90 F.Supp. 516. The United States and the Interstate Commerce Commission appealed under 28 U.S.C. § 1253, 28 U.S.C.A. § 1253. We noted probable jurisdiction.

Transit's objection to the order modifying the provisions under which it operates these routes may be generalized as a contention that the Commission's order changes or revokes a part of Transit's operating authority, previously granted by the Commission, without any failure by Transit to comply with any term, condition or limitation of the Commission authority under which Transit functions. Changes or revocations may only be made under § 212(a) of the Interstate Commerce Act, 49 U.S.C.A. § 312(a), for such failures.¹

The Commission, on the other hand, takes the position that there is no change in or revocation of its authoriza- tion to operate as a motor common carrier. It looks upon the certificate for the White Line route and the order for the Frederickson Purchase as being controlled by the Interstate Commerce Act and Transit's applications for purchase approval. The Commission understands the Declaration of Policy, § 202(a) of the Motor Carrier Act, enacted at the inception of federal regulation of motor carriers in 1935, 49 Stat. 543, 49 U.S.C.A. § 302, as directing it to preserve the inherent advantages of such transportation in the public interest. It finds support for this view in the National Transportation Policy set out in the 1940 amendments to the Interstate Commerce Act, 54 Stat. 899, declaring that the Act should be administered so as to recognize and preserve the inherent advantages of rail, motor and water transportation.² It treats § 213 of the Motor Carrier Act of 1935 and present § 5 of the Interstate Commerce Act as authorizing mergers, consolidations and acquisitions between rail and motor carriers only within the Transportation Policy.³ Although § 207, providing for the issuance of certificates of convenience and necessity, has no clause requiring special justification for railroads to receive motor-carrier operating rights, such as appears in the proviso in former § 213 and...