Airport Shuttle Service, Inc. v. I. C. C., 80-2503

• Decision Date: 27 April 1982
• Docket Number: No. 80-2503,80-2503
• Citation: 676 F.2d 836
• Parties: AIRPORT SHUTTLE SERVICE, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Henry R. Kesterson d/b/a Galaxy Limousine Service, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 836

676 F.2d 836

219 U.S.App.D.C. 238

AIRPORT SHUTTLE SERVICE, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents Henry R. Kesterson d/b/a Galaxy Limousine Service, Intervenor.

No. 80-2503.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 2, 1981.

Decided April 27, 1982.

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

James F. Flint, for petitioner.

Linda Joachim, Atty., I. C. C., for respondents. Richard A. Allen, Gen. Counsel, Kathleen M. Dollar, Associate Gen. Counsel, I. C. C., Robert B. Nicholson and Susan J. Atkinson, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondents.

Lawrence H. Schecker, Atty., I. C. C., Washington, D. C., also entered an appearance for respondents, I. C. C.

Chester A. Zyblut and R. Emery Clark, Washington, D. C., were on the brief, for intervenor.

Before LUMBARD ^*, Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, and ROBB and MIKVA, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROBB.

ROBB, Circuit Judge:

The petitioner, Airport Shuttle Service, Inc., asks us to review a decision by the Interstate Commerce Commission, granting to intervenor Galaxy Limousine Service, Inc., authority to expand its service as a motor common carrier of passengers. ¹ See Henry R. Kesterson, No. MC-129768 (I.C.C. Div. No. 1, Oct. 3, 1980). Finding that the Commission's decision is not supported by substantial evidence, we reverse.

Before it sought the additional authority granted by the Commission in this proceeding, Galaxy had been authorized to operate a passenger service between designated points in the northeastern United States. ² On March 20, 1979 Galaxy requested an increase in its authority, so as to include service between all points in Kent and Sussex Counties, Del., on the one hand, and, on the other, Atlantic City, N.J., Baltimore, Md., Newark, N.J., New York, N.Y., Philadelphia, Pa., Washington, D. C., Dulles International Airport, Va., and McGuire Air Force Base, N.J. In support of its application Galaxy submitted twenty-four questionnaires completed by persons residing or working in Kent and Sussex Counties. Each questionnaire contained twenty-two questions. ³ Seven of the questions solicited background information concerning the person completing the questionnaire (Questions Nos. 1-7). Three questions concerned the quality of the existing service provided by Galaxy (Questions Nos. 14-16). The twelve remaining questions solicited data concerning the public demand or need for the authority requested. Of those twelve questions, six called for "yes" or "no" responses (Questions Nos. 8 & 9, 13, 18 & 19, 22). The final six questions were answerable in brief phrases (Questions Nos. 10-12, 17, 20 & 21); only in answering one of these questions would detail have been appropriate (Question No. 20). As might have been expected, all the answers were laconic and lacking in detail. Except for an affidavit given by Henry R. Kesterson, the sole owner of Galaxy, no additional evidence was offered in support of the application. Mr. Kesterson's affidavit added nothing substantial to the material contained in the questionnaire.

Three common carriers intervened in the proceedings to oppose Galaxy's application. They were Airport Shuttle, J. G. Exec., Inc., and Lewes Tours, Inc. Each of these carriers had previously been authorized by the Commission to provide passenger services that overlapped in part the extended authority sought by Galaxy. The intervenors submitted evidence in support of their argument that a grant of additional authority to Galaxy would impact adversely on their existing operations in a way that would harm the public interest.

On June 20, 1980 the Commission's Review Board No. 1 issued a decision granting Galaxy's application for extended authority. The Review Board explained:

(Galaxy) presents statements from 24 present or potential future supporting users of its service .... In identical format, the statements provide a bare minimum of information as to the requirements of the parties involved....

The evidence establishes a need for the proposed service. Applicant has provided supporting statements which, although somewhat lacking in detail, attest to a need for the proposed expansion of applicant's operations. Although they are not as precise as we might desire, the supporting statements provide adequate support for the proposed service.

Henry R. Kesterson, No. MC-129768, slip op. at 1-3 (I.C.C.Rev.Bd. No. 1, June 20, 1980), aff'd (I.C.C. Div. No. 1, Oct. 3, 1980). See also Joint Appendix at 62-64.

Administrative appeals were filed by the three intervening carriers. On October 3, 1980 the Commission's Division No. 1, sitting as an appellate body, summarily affirmed the Review Board's decision, concluding that "the findings of Review Board Number 1 are in accordance with the evidence and the applicable law." Henry R. Kesterson, No. MC-129768 (I.C.C. Div. No. 1, Oct. 3, 1980). See also Joint Appendix at 103. Airport Shuttle filed its petition for review by this court. ⁴

Under the Interstate Commerce Act as revised by the Act of October 17, 1978, Pub.L.No. 95-473, § 10921, 92 Stat. 1409 (current version at 49 U.S.C. § 10921 (Supp. III 1979)), an interstate motor common carrier of passengers cannot operate without a certificate issued by the Commission authorizing the specific service to be provided. The standard to be applied by the Commission in determining whether a certificate should issue is found in section 10922(a) of the Act of October 17, 1978. That section provides:

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 ... as a motor common carrier of passengers ... 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 subtitle and regulations of the Commission; and

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

Act of Oct. 17, 1978, Pub.L.No. 95-473, § 10922(a), 92 Stat. 1409, as amended by Act of July 1, 1980, Pub.L.No. 96-296, § 5(a)(1), 94 Stat. 794 (current version at 49 U.S.C.A. § 10922(a) (Supp.1981)).

The Commission traditionally has applied a three-part test in evaluating the evidence presented to satisfy the "present or future public convenience and necessity" standard of section 10922(a)(2) and its predecessors. Under this test the Commission must find (1) that the authority applied for will serve a useful public purpose in response to a public demand or need, (2) that the purpose cannot be served as well by existing carriers, and (3) that the purpose can be served by the applicant without impairing the operations of existing carriers in a way that would harm the public interest. See Pan-American Bus Lines Operations, 1 M.C.C. 190, 203 (1936). ⁵ The federal courts of appeals are in accord in deferring to this interpretation of the "present or future public convenience and necessity" standard. See, e.g., Watkins Motor Lines, Inc. v. ICC, 641 F.2d 1183, 1188-89 (5th Cir. 1981); Midwestern Transportation, Inc. v. ICC, 635 F.2d 771, 776 (10th Cir. 1980); P.A.K. Transport, Inc. v. United States, 613 F.2d 351, 354 (1st Cir. 1980); Argo-Collier Truck Lines Corp. v. United States, 611 F.2d 149, 152 (6th Cir. 1979); Greyhound Lines, Inc. v. United States, 195 U.S.App.D.C. 185, 187, 600 F.2d 999, 1001 (1979) (per curiam); Packer Transportation Co. v. United States, 596 F.2d 891, 895 & n.6 (9th Cir. 1979); Niedert Motor Service, Inc. v. United States, 583 F.2d 954, 959 (7th Cir. 1978); Tri-State Motor Transit Co. v. United States, 570 F.2d 773, 777 (8th Cir. 1978); Senn Trucking Co. v. ICC, 560 F.2d 1179, 1183 (4th Cir. 1977). Judicial review of the Commission's decisions is limited to a determination of whether findings under the three-part test are supported by substantial evidence and are not arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2)(A), (E) (1976). See also Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974). Because we determine that in the present case the Commission's findings under the first two parts of this test are not supported by substantial evidence, we reverse the agency's decision.

Substantial evidence can be "something less than the weight of the evidence." Consolo v. FMC, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966). At a minimum however a decision is not supported by substantial evidence unless there is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938). See also May Trucking Co. v. United States, 193 U.S.App.D.C. 195, 198, 593 F.2d 1349, 1352 (1979).

We have described the evidence relied on by the Commission. It simply cannot be said that the routine, laconic, and untested responses to the twelve standardized questions relating to public demand or need provide "such relevant evidence as a reasonable mind might accept as adequate to support" a finding that the authority applied for will serve a useful public purpose in response to a public demand or need. Furthermore, assuming a public need were shown, this evidence provides no support for finding that the need cannot be served as well by existing carriers. ⁶ We need not decide what type of evidence is necessary to support a finding of "present or future public convenience and necessity". We do conclude however that answers to questionnaires which are of limited...