Mercury Motor Express, Inc. v. Brinke

• Decision Date: 15 March 1973
• Docket Number: No. 72-1110.,72-1110.
• Parties: MERCURY MOTOR EXPRESS, INC., et al., Plaintiffs-Appellants, v. Norman C. BRINKE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

475 F.2d 1086 (1973)

MERCURY MOTOR EXPRESS, INC., et al., Plaintiffs-Appellants, v. Norman C. BRINKE, Defendant-Appellee.

No. 72-1110.

United States Court of Appeals, Fifth Circuit.

March 15, 1973.

COPYRIGHT MATERIAL OMITTED

George D. Gold, Bernard C. Pestcoe, Miami, Fla., for plaintiffs-appellants.

James J. Kenny, William G. Earle, Miami, Fla., J. Raymond Clark, Washington, D. C., for defendant-appellee.

Before RIVES, THORNBERRY and GOLDBERG, Circuit Judges.

THORNBERRY, Circuit Judge:

Plaintiffs below sought a temporary restraining order, a preliminary injunction, and a permanent injunction to prevent defendant Brinke from unlawfully operating as a freight forwarder without an Interstate Commerce Commission (ICC) permit. The district court denied preliminary injunctive relief and in the same order stayed further proceedings pending final action by the ICC on Brinke's freight forwarder permit application. Invoking this court's jurisdiction under 28 U.S.C.A. § 1292(a)(1), plaintiffs appeal from both parts of the interlocutory order. Initially, this appeal presents a question of appellate jurisdiction to review the district court's stay order. Concluding that we have jurisdictional power to review the stay order as well as the denial of injunctive relief, we vacate the stay and affirm the denial of a preliminary injunction.

The eight plaintiffs in this case are freight forwarders who operate as such under statutorily¹ required ICC permits. A freight forwarder may be described as follows:

A freight forwarder is one who in the ordinary course of business assembles and consolidates small shipments into a single lot, assumes responsibility for the transportation of such property from a point of receipt to a point of destination, utilizes the services of carriers by rail, water or motor vehicle to help accomplish the movement, breaks the consolidated shipment up into its component parts, and distributes the goods to their destination point.

Since the original shipments are usually small, the customer is charged on a basis of freight rates applicable to less-than-truckload or less-than carload shipments. The freight forwarder, who consolidates multiple small shipments into one large one, secures the cheaper transportation rate applicable to full truckload or carload lots. The difference between the two freight rates accounts for his gross profit.

Household Goods Carriers' Bureau v. United States, N.D.Cal.1968, 288 F. Supp. 641, 642, aff'd per curiam, 393 U.S. 265, 89 S.Ct. 477, 21 L.Ed.2d 426; see also Acme Fast Freight, Inc. v. United States, S.D.N.Y.1940, 30 F.Supp. 968, 969-971, aff'd per curiam, 309 U.S. 638, 60 S.Ct. 810, 84 L.Ed. 993. Freight forwarders are to be distinguished on the one hand from rail or pipe line carriers, water carriers, and motor carriers, which are expressly excluded from the statutory freight forwarder definition,² and on the other hand from brokers,³ who generally perform the more limited role of arranging for transportation by motor carrier without consolidating or distributing shipments or assuming responsibility for the property en route. An appropriate ICC certificate or license is required for lawful operation as a carrier⁴ or a broker,⁵ just as a permit is required for doing business as a forwarder.

Defendant Brinke holds an ICC broker's license, which was issued to him in 1964, but he has no freight forwarder permit. He applied to the ICC for a freight forwarder permit in December of 1963, about a month before he applied for the broker's license, but his application, adrift on an administrative odyssey which has already lasted over nine years, has not yet received final action.

Plaintiffs alleged in their complaint below that Brinke, despite his lack of an appropriate permit, is functioning as a freight forwarder in blatant violation of the permit requirement of 49 U.S.C.A. § 1010, and that they are injured by competition from his unlawful enterprise. Suing under § 417(b)(2) of the Interstate Commerce Act, 49 U.S.C.A. § 1017(b)(2), which confers jurisdiction on the district court to enjoin a "clear and patent violation of section 1010" on application of "any person injured thereby," plaintiffs sought a temporary restraining order and a preliminary injunction as well as a permanent injunction to halt Brinke's allegedly unlawful operation. Brinke appears not to have contested the characterization of his business as a freight forwarding operation. He moved to dismiss, however, on the theory that his broker's license at least colorably authorizes the services he renders so that there was no "clear and patent" violation of § 1010, and he moved alternatively for a stay of proceedings pending final action by the ICC on his freight forwarder permit. The district court after a hearing granted the alternative motion to stay, reserved ruling on the motion to dismiss, and denied plaintiffs' application for a temporary restraining order and a preliminary injunction. Plaintiffs then took this interlocutory appeal from the stay order and denial of injunctive relief.

I. Jurisdiction

It is clear that this court has jurisdiction under 28 U.S.C.A. § 1292(a)(1) to review an order denying a preliminary injunction, but not an order denying a temporary restraining order. See, e. g., Smith v. Grady, 5th Cir. 1969, 411 F.2d 181; Connell v. Dulien Steel Products, 5th Cir. 1957, 240 F.2d 414, see also C. Wright, Federal Courts § 102 (2d ed. 1970). Accordingly, we shall consider the propriety of the district court's denial of the preliminary injunction and pretermit consideration of the denial of the temporary restraining order.

The basis of appellate jurisdiction to review the portion of the order staying proceedings is less obvious, but no less certain. Plainly, the stay order is not appealable as a final order under 28 U.S.C.A. § 1291. Further, we can say with certainty that the stay order standing alone—that is, considered independently of the order denying a preliminary injunction—would not be appealable under § 1292(a)(1).⁶ The settled rule governing appealability of stay orders is:

An order staying or refusing to stay proceedings in the District Court is appealable under § 1292(a)(1) only if (A) the action in which the order was made is an action which, before the fusion of law and equity, was by its nature an action at law; and (B) the stay was sought to permit the prior determination of some equitable defense of counterclaim.⁷

Jackson Brewing Company v. Clarke, 5th Cir. 1962, 303 F.2d 844, 845, cert. denied, 371 U.S. 891, 83 S.Ct. 190, 9 L.Ed. 2d 124, reh. denied, 371 U.S. 936; 83 S. Ct. 305, 9 L.Ed.2d 272; J. S. & H. Construction Company v. Richmond County Hospital Authority, 5th Cir. 1973, 473 F.2d 212 1973; see generally 9 Moore's Federal Practice ¶ 110.203 (2d ed. 1972); C. Wright, Federal Courts § 102 (2d ed. 1970). In this case, the first requirement of the jurisdictional rule is not met since the action for injunctive relief under 49 U.S.C.A. § 1017(b)(2) is clearly equitable in nature. See Ephraim Freightways, Inc. v. Red Ball Motor Freight, Inc., 10th Cir. 1967, 376 F.2d 40, cert. denied, 389 U.S. 829, 88 S.Ct. 92, 19 L.Ed.2d 87. Thus, the stay is not itself an appealable order.

Because this case is properly before the court as an appeal from the denial of an injunction under 28 U.S.C.A. § 1292(a)(1), however, our permissible scope of review extends to the stay order as well. A court of appeals normally will not consider the merits of a case before it on an interlocutory appeal except to the extent necessary to decide narrowly the matter which supplies appellate jurisdiction, e. g., Time, Inc. v. Ragano, 5th Cir. 1970, 427 F.2d 219, but this rule is one of orderly judicial administration and not a limit on jurisdictional power. "Once a case is lawfully before a court of appeals, it does not lack power to do what plainly ought to be done." 9 Moore's Federal Practice ¶ 110.251 (2d ed. 1972); see also Kohn v. American Metal Climix, Inc., 3rd Cir. 1971, 458 F.2d 255, cert. denied, 409 U.S. 874, 93 S.Ct. 120, 34 L.Ed.2d 126 (1972); Korn v. Franchard Corporation, 2d Cir. 1971, 443 F.2d 1301, 1306; Semmes Motors, Inc. v. Ford Motor Company, 2d Cir. 1970, 429 F.2d 1197; Carter v. American Telephone & Telegraph Company, 5th Cir. 1966, 365 F.2d 486, cert. denied, 385 U.S. 1008, 87 S.Ct. 714, 17 L.Ed.2d 546; 3 W. Barron & A. Holtzoff, Federal Practice and Procedure § 1440 (Wright ed. Supp.1971). The Supreme Court has affirmed the power of an appellate court to reach the merits of a case before it on an interlocutory appeal and dismiss the action. Deckert v. Independence Shares Corporation, 1940, 311 U.S. 282, 61 S.Ct. 229, 85 L.Ed. 189; Smith v. Vulcan Iron Works, 1897, 165 U.S. 518, 17 S.Ct. 407, 41 L.Ed. 810. The Second Circuit has exercised its broad jurisdictional power on an interlocutory appeal from denial of a preliminary injunction to direct the entry of judgment for the plaintiffs. Hurwitz v. Directors Guild of America, Inc., 2d Cir. 1966, 364 F.2d 67, cert. denied, 385 U.S. 971, 87 S.Ct. 508, 17 L.Ed.2d 435. This court has previously exercised its jurisdictional power to review an otherwise non-appealable stay order in an interlocutory appeal from the denial of a preliminary injunction under § 1292(a)(1), and we think it is appropriate to exercise this power power for the same purpose in this case. Carter v. American Telephone & Telegraph Company, supra; see also Semmes Motors, Inc. v. Ford Motor Company, supra.

II. The Stay Order

The district court stayed further proceedings below pending final action by the ICC on Brinke's freight forwarder permit because it concluded that central issues in the case lay "within the particular expertise and primary jurisdiction of the Interstate Commerce Commission."⁸ We do not believe, however, that the doctrine of primary jurisdiction may properly be invoked to stay a suit brought under 49 U.S.C.A. § 1017(b)(2).

The judge-made...