Refrigerated Transport Co., Inc. v. I. C. C.

• Decision Date: 05 May 1980
• Docket Number: No. 79-2539,79-2539
• Citation: 616 F.2d 748
• Parties: REFRIGERATED TRANSPORT COMPANY, INC., and Seawheels, Inc., Petitioners, v. The INTERSTATE COMMERCE COMMISSION and the United States of America, Respondents. Summary Calendar. *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 748

616 F.2d 748

REFRIGERATED TRANSPORT COMPANY, INC., and Seawheels, Inc., Petitioners, v. The INTERSTATE COMMERCE COMMISSION and the United States of America, Respondents.

No. 79-2539

Summary Calendar. ^*

United States Court of Appeals Fifth Circuit.

May 5, 1980.

Serby & Mitchell, Alan E. Serby, Atlanta, Ga., for petitioners.

Denise M. O'Brien, Atty., I.C.C., Ron M. Landsman, Antitrust Div., Dept. of Justice, John J. Powers, III, Washington, D. C., for I.C.C.

Arnold L. Burke, Chicago, Ill., for Intervenor Belford Trucking Co., Inc.

Petition for Review of an Order of the Interstate Commerce Commission.

Before GODBOLD, REAVLEY and ANDERSON, Circuit Judges.

PER CURIAM:

Petitioners, Refrigerated Transport Co., Inc. and Seawheels, Inc., bring this action to reverse an order of the Interstate Commerce Commission granting Belford Trucking Company a certificate of public convenience and necessity to operate as a common carrier over irregular routes transporting frozen fruits and vegetables from Jacksonville, Florida, to points in Florida, restricted to the transportation of traffic having immediately prior movement by water. We affirm the ICC's license grant insofar as it gives Belford operating authority between Jacksonville and the supporting shipper's plant at Plant City, Florida. We reverse the order to the extent that it grants Belford operating authority to destination points other than Plant City, Florida, and we remand the case to the ICC for further proceedings consistent with this opinion.

Belford applied for a certificate of public convenience and necessity authorizing it to operate as a motor common carrier over irregular routes, to transport frozen fruits and vegetables from Jacksonville, Florida, to points in Florida, restricted to traffic having an immediately prior movement by water. Belford's application was supported by evidence of its fitness, willingness and ability to provide the proposed service and by the statement of a single shipper, Southland Frozen Foods, Inc. Petitioners, Refrigerated Transport and Seawheels, filed timely objections to Belford's application and supported their objections with verified statements. ¹ By order served January 12, 1979, the ICC granted Belford's license application. Petitions for administrative review were denied by order served May 1, 1979. Petitioners ask this Court to review both the grant of operating authority and the scope of that authority. They allege that the decision of the ICC to grant any operating authority is not supported by substantial evidence. They also allege that the decision to grant statewide operating authority from an origin point at Jacksonville, Florida, is not supported by substantial evidence, i. e., it grants statewide operating authority on the basis of evidence relating only to service needed between Jacksonville and Plant City, Florida, and that it is capricious and contrary to law because it fails to properly exercise a balancing of the appropriate criteria. They do not challenge the ICC's findings on the fitness, willingness and ability of the applicant carrier to provide the proposed service.

THE LICENSE APPLICANT'S BURDEN

The task of the license applicant, Belford Trucking Company, was to demonstrate to the ICC Belford's fitness, willingness and ability to provide the proposed service, and to show that the service is or will be required by public convenience and necessity. ² In applying the public convenience and necessity aspect of the test, the ICC is guided by the criteria set forth in Pan Am Buslines Operation, 1 M.C.C. 190 (1936). There, the Commission explained what it means to show that a proposed service is or will be required by the present or future public convenience and necessity.

The question, in substance, is whether the new operation or service will serve a useful public purpose, responsive to a public 1 M.C.C. 190, 203. The Pan Am guidelines make clear that the Commission, in evaluating an application, is required to balance the advantages of the proposed service to the public against the possible disadvantages to competing carriers.

demand or need; whether this purpose can and will be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest.

Usually, an applicant meets the requirement of showing a public need for the proposed new service that existing carriers do not meet through evidence supplied by supporting shippers. May Trucking Co. v. U. S., 593 F.2d 1349 (D.C.Cir.1979). In John Novak Contract Carrier Application, 103 M.C.C. 555 (1967), the Interstate Commerce Commission explained that shippers supporting an application for operating authority should, as the minimum showing to prove an applicant's prima facie case, " 'identify clearly the commodities they ship or receive, the points to or from which their traffic moves, the volume of freight they would tender to applicant, the transportation services now used for moving their traffic, and any deficiencies in existing services.' " 103 M.C.C. 555, 557. Petitioners concede that the Novak criteria are not mandatory in every case, but urge that they are useful to a reviewing court in determining whether substantial evidence exists for the Commission's findings.

THE STANDARDS OF JUDICIAL REVIEW

Our task, as a court reviewing an agency decision, is to determine whether that agency's findings and conclusions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" or "unsupported by substantial evidence." 5 U.S.C. § 706(2)(A and E). Bowman Transportation, Inc. v. Arkansas-Best Freight Systems, Inc., 419 U.S. 281, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). There, the Supreme Court ruled, "(U)nder the 'arbitrary and capricious' standard the scope of review is a narrow one. A reviewing court must 'consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment . . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.' " 419 U.S. at 285, 95 S.Ct. at 442, quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971).

In Chem-Haulers, Inc. v. United States, 536 F.2d 610, 617 (5th Cir. 1976), this Court noted that the Supreme Court has defined "substantial evidence" in the context of court review of an administrative agency decision as " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion' " Consolo v. Federal Maritime Commission, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966), quoting Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938). Substantial evidence is "something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo, supra, 383 U.S. at 620, 86 S.Ct. at 1026, citing to other cases. The Consolo "substantial evidence" standards apply to judicial review of ICC grants of operating authority to a carrier. Chem-Haulers, supra, 536 F.2d at 617; Florida Terminals & Trucking Co. v. United States, 363 F.Supp. 1355, 1360 (M.D.Fla.1973).

THE EVIDENCE

Our review of the evidence in this case persuades us, in light of the Pan Am guidelines, supra, and the Novak criteria, supra, that the Commission's decision was supported by substantial evidence, but only to the extent that the license grants Belford authority to transport frozen fruits and vegetables to the supporting shipper's plant at Plant City, Florida. The evidence showed clearly that the commodities shipped by the supporting shipper were frozen fruits and vegetables. The evidence showed that the points between which the traffic moved were Jacksonville and Plant City, Florida. ³

Although the supporting shipper did not specify precisely what volume of freight was to be tendered to the applicant, it made the following statement related to its import volume:

Southland Frozen Foods, Inc. imports from our division in the Dominican Republic approximately 4,000,000 pounds of product per year through the ports of Miami and Jacksonville, Florida. These products are entered in house-to-house containers at a rate of between 5 and 25 containers per month, depending on the particular product and the growing seasons. Depending on equipment availability and other variables of an operational nature, we can estimate that Belford Trucking Company, Inc. could reasonable (sic) expect to transport approximately 50% of this volume. All of this merchandise, whether entered through Miami or Jacksonville would be consigned to our warehouse at Plant City, Florida.

As is readily apparent, there was no clear identification of the volume of imported product which entered through Jacksonville, the only port at issue in this application. The ICC review board found that the amount of traffic involved is "substantial," and the ICC acting as an appellate division did not disturb that finding. We think that the Commission could reasonably have concluded, in light of the evidence before it, that the volume of freight to be tendered to the applicant would be "substantial." We therefore find the Commission's conclusion supported by substantial evidence.

Similarly, we find that the conclusion of the Commission ⁴ that the applicant, through its supporting shipper, had demonstrated a need for additional service is supported by substantial evidence. Supporting shipper Southland identified Refrigerated Transport and Seawheels as carriers which provided transportation for its traffic. ⁵ Southland asserts that while its experience with Refrigerated Transport has been...