Watkins Motor Lines, Inc. v. I. C. C., 80-5289

• Decision Date: 09 April 1981
• Docket Number: No. 80-5289,80-5289
• Citation: 641 F.2d 1183
• Parties: WATKINS MOTOR LINES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents. Summary Calendar. . Unit B
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1183

641 F.2d 1183

WATKINS MOTOR LINES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America,

Respondents.

No. 80-5289

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

Unit B

April 9, 1981.

Paul M. Daniell, Atlanta, Ga., for petitioner.

John J. Powers, III, Kenneth P. Kolson, Attys., U. S. Dept. of Justice, Richard A. Allen, General Counsel, Cecelia E. Higgins, Deputy Gen. Counsel, ICC, Washington, D. C., for respondents.

Maurice F. Bishop, Birmingham, Ala., for Osborn Transp.

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

Before GODBOLD, Chief Judge, KRAVITCH and HATCHETT, Circuit Judges.

KRAVITCH, Circuit Judge.

Watkins Motor Lines, Inc. petitions this court to set aside respondent Interstate Commerce Commission's (ICC) order granting Osborn Transportation, Inc. authority to transport general commodities between Los Angeles and seven southeastern states. Petitioner maintains that the order was arbitrary, capricious, and unsupported by substantial evidence and should be set aside under 5 U.S.C. § 706. For the reasons given below, we affirm in part and reverse and remand in part.

I. Prior Proceedings

In September of 1978, Osborn Transportation, Inc., a motor common carrier, applied to the ICC for authority to transport commodities between Seattle and Tacoma, Washington, and Los Angeles, California, on the one hand, and, on the other, points in seven southeastern states, ¹ restricted to the transportation of commodities having a prior or subsequent movement by water.

The ICC referred the application to an administrative law judge (ALJ), who, after a hearing, granted the full authority applied for. Petitioner, a protesting carrier, filed exceptions, challenging only that portion of the ALJ's decision which granted authority between Los Angeles and the seven southeastern states. In February of 1980, the ICC affirmed the ALJ's decision, adopting his statement of facts and conclusions. On April 10, 1980, petitioner filed with this court a petition for review. Osborn was granted permission to intervene.

The focus of the dispute before this court is the significance of the testimony of Grindrod, the traffic analyst for the Harbor Department of Los Angeles, before the ALJ. Osborn relied primarily on Grindrod's supporting testimony. His job entails assuring that Los Angeles provides common carrier services competitive with those available at other ports. Thus, he is knowledgeable on the needs of shippers.

Grindrod testified to the current and future increased need for motor carriage of "all types of commodities" (but "predominantly consumer goods, ... bicycles and tricycles and motorcycles and automobiles to a great extent"), which arrive at Los Angeles by water to be transported to the Southeast. He also testified that there would be a need for "mini-bridge service" (transportation from a port on one coast to a port on the other coast) to and from five port cities, ² each in one of the seven states involved in the application. He explained that the need for carriage to those five cities would grow, primarily due to the increased tolls and uncertain future of the Panama Canal. He recognized that there was no current demand for such service because of cheaper rail transportation, but he felt this would change, apparently because the tremendous demand could not be handled by rail alone and because of motor carriers' superior capacity for in-transit stops.

II. The Applicable Law

On July 1, 1980, Congress in the Motor Carrier Act of 1980, amended the section, 49 U.S.C. § 10922(a), which provides the standards the ICC is to use in deciding whether to grant common carrier authority. Thus, in reviewing this order, we must determine the applicable law. Prior to July 1, 1980, § 10922(a) read:

(a) Except as provided in this section and Section 10930(a) of this title, the Interstate Commerce Commission shall issue a certificate to a person authorizing that person to provide transportation subject to the jurisdiction of the Commission under subchapter II or III of chapter 105 of this title as a motor common carrier or a water common carrier, respectfully, if the Commission finds that

(1) The person is fit, willing and able

(a) to provide the transportation to be authorized by the certificate; and

(b) to comply with this sub-title and regulations of the Commission; and

(2) The transportation to be provided under this certificate is or will be required by the present or future public convenience and necessity.

The current version amended subsection (a) by inserting "of passengers" after "motor common carrier." A new subsection (b), which would control the case before us if the new law were to apply, was also inserted. It provides in relevant part:

(b)(1) Except as provided in this section, the Interstate Commerce Commission shall issue a certificate to a person authorizing that person to provide transportation subject to the jurisdiction of the Commission under subchapter II of chapter 105 of this title as a motor common carrier of property if the Commission finds

(A) that the person is fit, willing, and able to provide the transportation to be authorized by the certificate and to comply with this subtitle and regulations of the Commission; and

(B) on the basis of evidence presented by persons supporting the issuance of the certificate, that the service proposed will serve a useful public purpose, responsive to a public demand or need;

unless the Commission finds, on the basis of evidence presented by persons objecting to the issuance of a certificate, that the transportation to be authorized by the certificate is inconsistent with the public convenience and necessity.

(2) In making a finding under paragraph (1) of this subsection, the Commission shall consider and, to the extent applicable, make findings on at least the following:

(A) the transportation policy of section 10101(a) of this title; and

(B) the effect of issuance of the certificate on existing carriers, except that the Commission shall not find diversion of revenue or traffic from an existing carrier to be in and of itself inconsistent with the public convenience and necessity.

(3) The Commission may not make a finding relating to public convenience and necessity under paragraph (1) of this subsection which is based upon general findings developed in rulemaking proceedings.

The ICC and petitioner agree that the old § 10922(a) (hereinafter referred to as the "old law"; the amended statute is referred to as the "new law") should apply since the Commission's decision was issued prior to the effective date of the 1980 Act. Intervenor Osborn contends that the new law is applicable, citing Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974) (award of attorney's fees), which this circuit has recently interpreted to require the application of a new statute to "cases pending on the date of (its) enactment ... unless manifest injustice would result, or there is a statutory directive or legislative history to the contrary." Corpus v. Estelle, 605 F.2d 175, 180 (5th Cir. 1979) (award of attorney's fees).

We need not discuss the question of manifest injustice, ³ because for the reasons articulated below we hold Congress did not intend appellate courts to apply the Motor Carrier Act of 1980 to matters which, on July 1, 1980, had been decided by the ICC.

Under "Congressional Findings" in the note to 49 U.S.C. § 10101, Congress "finds ... that legislative and resulting changes should be implemented with the least amount of disruption to the transportation system consistent with the scope of reforms enacted." The ICC recognized that it would be highly "disruptive" to the industry if all pending cases required new applications, new opportunities for protest, and new preparation by the ICC. 45 Fed.Reg. 45538 (1980). At the same time the ICC implied that but for the "Congressional Finding," Bradley would mandate application of the new law. The ICC's solution, under its interim rules (effective July 3, 1980), which have the force of law, was to apply the old procedural and substantive law to applications pending on July 1, 1980, but to allow an applicant who was eventually denied authority under the old substantive law an opportunity for reconsideration under the new more liberal substantive law. Id. at 45537-38. The final rules subsequently issued apply only to applications filed on or after February 9, 1981, and implicitly preserve the interim rule on applications pending on July 1, 1980, by not addressing the subject. Id. at 86771. ⁴ Cf. Art Pape Transfer, Inc., Extension, 132 M.C.C. 84 (Sept. 12, 1980) (without mentioning the interim rules which control it in an application proceeding, the ICC provides a slightly different test for the applicability of the new law, but the difference is not relevant to our decision). ⁵

This ICC "pending application rule," which interprets and implements the Motor Carrier Act, indicates that we should apply the old law, at least when the authority has been granted. Were we to apply the new law, we would be compelled to remand almost all cases, a result contrary to the ICC policy with respect to applications pending on July 1, 1980. ⁶ It would be disruptive for parties before an appellate court to be thrust back to the beginning of the application process. ⁷ By reviewing the grant of authority under the old law, we are reducing this disruption without violating the intent of the new law. Affirming the grant of authority under the old law avoids the disruption of remand and is not inconsistent with the spirit of the new law which generally aims to establish more liberal standards governing the granting of authority. See 45 Fed.Reg. 45537-38 (the ICC used this same reasoning in adopting its interim rules). When we reverse, the ICC will on remand apply the new law, a result which clearly is not manifestly unjust.

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