American Farm Lines v. Black Ball Freight Service Interstate Commerce Commission v. Black Ball Freight Service

• Decision Date: 20 April 1970
• Docket Number: 382,Nos. 369,s. 369
• Citation: 25 L.Ed.2d 547,90 S.Ct. 1288,397 U.S. 532
• Parties: AMERICAN FARM LINES, Appellant, v. BLACK BALL FREIGHT SERVICE et al. INTERSTATE COMMERCE COMMISSION, Appellant, v. BLACK BALL FREIGHT SERVICE et al
• Court: U.S. Supreme Court

397 U.S. 532

90 S.Ct. 1288

25 L.Ed.2d 547

AMERICAN FARM LINES, Appellant,

v BLACK BALL FREIGHT SERVICE et al.

INTERSTATE COMMERCE COMMISSION, Appellant,

v. BLACK BALL FREIGHT SERVICE et al.

Nos. 369, 382.

Argued Feb. 25, 1970.

Decided April 20, 1970.

Joseph A. Califano, Jr., Washington, D.C., at appellant American Farm lines.

Arthur J. Cerra, Washington, D.C., for appellants Interstate Commerce Commission and the United States.

William H. Dempsey, Jr., Washington, D.C., for appellees.

Mr. Justice DOUGLAS delivered the opinion of the Court.

The Interstate Commerce Commission has statutory power to grant motor carriers temporary operating authority 'without hearings or other proceedings' when the authority relates to a 'service for which there is an immediate and urgent need' and where there is 'no carrier service capable of meeting such need.' ¹ Interstate Commerce Act § 210a, 52 Stat. 1238, as amended, 49 U.S.C. § 310a. The ICC processes applications for such authority under rules promulgated in 1965. 49 CFR pt. 1131.² Among other things, those require that an applicant accompany his application with supporting statements of shippers that contain information 'designed to establish an immediate and urgent need for service which cannot be met by existing carriers.' Id., § 1131.2(c). Each such supporting statement 'must contain at least' 11 items of information³ including the following:

'(8) Whether efforts have been made to obtain the service from existing motor, rail, or water carriers, and the dates and results of such efforts.

'(9) Names and addresses of existing carriers who have either failed or refused to provide the service, and the reasons given for any such failure or refusal.'

Appellant American Farm Lines (AFL) filed an application for temporary operating authority.⁴ The application was accompanied by a supporting statement of the Department of Defense (DOD). The ICC Tem- porary Authorities Board denied the application on the ground that the 'applicant has not established that there exists an immediate and urgent need for any of the service proposed.' Divison I of the ICC (acting as an Appellate Division) reversed the Board and granted AFL temporary authority. Protesting carriers sought review of this action in the United States District Court for the Western District of Washington. A single judge of the District Court temporarily restrained the operation of the ICC order and the ICC thereupon ordered postponement of the operation of its grant. At that time numerous petitions for reconsideration were pending before the Commission and the stay order did not direct the Commission to stay its hand with respect to them. The record was indeed not filed with the court until much later. Meanwhile, the Commission granted the petitions and reopened the proceeding to receive a further supporting statement of DOD. This took the form of the verified statement of Vincent F. Caputo, DOD Director for Transportation and Warehousing Policy, which was submitted as a purported reply to the pending petitions for reconsideration. Based upon this statement, the ICC entered a new order granting the AFL application. A single judge of the District Court restrained the operation of the new order. Thereafter a three-judge District Court conducted a full hearing on the merits.⁵ The ICC admitted at that stage that its first order 'may not have been based upon evidence to support its conclusion,' but argued that there was no infirmity in the new order. The three-judge court set aside both orders. 298 F.Supp. 1006. Both AFL and ICC appealed to this Court and we noted probable jurisdiction.⁶ 396 U.S. 884, 90 S.Ct. 173, 24 L.Ed.2d 159.

I

The first alleged error in the case is the failure of the Interstate Commerce Commission to require strict compliance with its own rules. The rules in question, unlike some of our own, do not involve 'jurisdictional' problems but only require certain information to be set forth in statements filed in support of applications of motor carriers for temporary operating authority.

The Caputo statement asserted that part of the tremendous volume of traffic that DOD moved in the territories involved had to be moved 'in the most expeditious manner possible,' and that, since air transport was prohibitively expensive 'except in the most extreme emergencies,' there was an 'imperative' need for the most expeditious motor carrier service. The need for this expeditious transport did not rest merely on a desire to obtain the most efficient service, but in addition rested on the need to coordinate arrival times of shipments with factory production schedules and with shiploading or airlift times for overseas shipments. The particular inadequacies in existing service were pointed out, namely, the delays inherent in joint-line service, regular-route service, and the use of single drivers. The statement did not assert that none of the existing carriers provided sufficiently expeditious service to meet DOD needs; rather it claimed that the carriers providing satisfactory service in the territories in question were so few in number that the additional services of AFL were required to meet DOD's transportation needs.

Concededly, the Caputo statement did not give the dates of DOD's efforts to secure service from other existing carriers or a complete list of the names and addresses of the carriers who failed or refused to provide service, as required by the terms of subsections (8) and (9), 49 CFR § 1131.2(c). Such a complete listing of this in- formation, given the volume of traffic involved, would indeed have been a monumental undertaking.

The failure of the Caputo statement to provide these particular specifics did not prejudice the carriers in making precise and informed objections to AFL's application. The briefest perusal of the objecting carriers' replies, which cover some 156 pages in the printed record of these appeals, belies any such contention. Neither was the statement so devoid of information that it, along with the replies of the protesting carriers, could not support a finding that AFL's service was required to meet DOD's immediate and urgent transportation needs. In our view, the District Court exacted a standard of compliance with procedural rules that was wholly unnecessary to provide an adequate record to review the Commission's decision.

The Commission is entitled to a measure of discretion in administering its own procedural rules in such a manner as it deems necessary to resolve quickly and correctly urgent transportation problems. It is argued that the rules were adopted to confer important procedural benefits upon individuals; in opposition it is said the rules were intended primarily to facilitate the development of relevant information for the Commission's use in deciding applications for temporary authority.

We agree with the Commission that the rules were promulgated for the purpose of providing the 'necessary information' for the Commission 'to reach an informed and equitable decision' on temporary authority applications. ICC Policy Release of January 23, 1968. The Commission stated that requests for temporary authority would be turned down 'if the applications do not adequately comply with (the) * * * rules.' Ibid. (Emphasis added.). The rules were not intended primarily to confer important procedural benefits upon indivduals in the face of otherwise unfettered discretion as in Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012; nor is this a case in which an agency required by rule to exercise independent discretion has failed to do so. United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681; Yellin v. United States, 374 U.S. 109, 83 S.Ct. 1828, 10 L.Ed.2d 778. Thus there is no reason to exempt this case from the general principle that '(i)t is always within the discretion of a court or an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it. The action of either in such a case is not reviewable except upon a showing of substantial prejudice to the complaining party.' NLRB v. Monsanto Chemical Co., 8 Cir., 205 F.2d 763, 764. And see NLRB v. Grace Co., 8 Cir., 184 F.2d 126, 129; Sun Oil Co. v. FPC, 5 Cir. 256 F.2d 233; McKenna v. Seaton, 104 U.S.App.D.C. 50, 259 F.2d 780.

We deal here with the grant of temporary authority similar to that granted in Estes Express Lines v. United States, D.C., 292 F.Supp. 842, aff'd, 394 U.S. 718, 89 S.Ct. 1469, 22 L.Ed.2d 673. There the grant of temporary authority was upheld even though there may not have been literal compliance with subsections (8) and (9) of the Commission's rules. That result was in line with § 210a(a) of the Act which was designed to provide the Commission with a swift and procedurally simple ability to respond to urgent transportation needs. That functional approach is served by treating (8) and (9) not as inflexible procedural conditions but as tools to aid the Commission in exercising its discretion to meet 'an immediate and urgent need' for services where the existing service is incapable of meeting that need. Unlike some rules, the present ones are mere aids to the exercise of the agency's independent discretion.

II

After the Commission issued its first order, petitions for reconsideration were filed and before they were passed upon, some carriers filed suit and a single judge temporarily restrained operation of that first order. It was after that order issued and over a month before the case was argued to the three-judge court that the Commission granted the petitions for rehearing and reopened the record and received the Caputo verified statement.

The District Court held that the pendency of the review proceedings deprived the Commission of jurisdiction to reopen the administrative record.

Congress has provided as respects some regulatory systems...