Akers Motor Lines, Inc. v. United States

• Decision Date: 04 June 1968
• Docket Number: Civ. No. 2236.
• Citation: 286 F. Supp. 213
• Court: U.S. District Court — Western District of North Carolina
• Parties: AKERS MOTOR LINES, INC., Johnson Motor Lines, Inc., and McLean Trucking Company, Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Malone Freight Lines, Inc., Intervening Defendant.

286 F. Supp. 213

AKERS MOTOR LINES, INC., Johnson Motor Lines, Inc., and McLean Trucking Company, Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants and Malone Freight Lines, Inc., Intervening Defendant.

Civ. No. 2236.

United States District Court W. D. North Carolina.

June 4, 1968.

COPYRIGHT MATERIAL OMITTED

Francis W. McInerny and James Lawson, Macdonald & McInerny; Donald E. Cross and Thomas M. Knebel, Rea, Cross & Knebell, Washington, D. C., and Charles T. Myers, Myers & Sedberry, Charlotte, N. C., for plaintiffs.

Donald F. Turner, Asst. Atty. Gen., and John H. D. Wigger, Atty., Department of Justice, Washington, D. C., and William Medford, U. S. Atty., Asheville, N. C., for defendant United States of America.

Robert W. Ginnane, General Counsel, and Henri F. Rush, Jr., Atty., Interstate Commerce Commission, Washington, D. C., for defendant Interstate Commerce Commission.

Beverley S. Simms, Rhodes & Simms, Washington, D. C., and Robert R. Williams, Jr., Williams, Williams & Morris, Asheville, N. C., for intervening defendant.

Before CRAVEN, Circuit Judge, and WARLICK and STANLEY, District Judges.

CRAVEN, Circuit Judge:

This appeal is taken from an order of the Interstate Commerce Commission discontinuing an investigation instituted by the Commission under sections 204 (c), 49 U.S.C.A. §§ 304(c) and 212(a), 49 U.S.C.A. § 312(a), of the Interstate Commerce Act into certain practices of Malone Freight Lines, Inc., the intervening defendant in this court. Jurisdiction is founded on sections 1336, 1398, 2284 and 2321 through 2325 of Title 28, United States Code. The order of the Commission dated May 4, 1966, is annulled and set aside and the case is remanded to the Commission for further proceedings.

The chronology of events in this case began in 1942 with the acquisition by G & M Transfer Co., Inc., of a certificate of public conveyance¹ which had been acquired by G & M's predecessor under the grandfather provision of the Motor Carrier Act of 1936, 49 U.S.C.A. § 306. The differences between the relevant portion of this certificate and the certificate of Malone Freight Lines, Inc., now at issue, are insubstantial. In essence they both confer on the carrier authority to transport general commodities over irregular routes from Elkin and Statesville, North Carolina, to points and places in a described eleven state area, and from points and places in the eleven state area to points and places in North Carolina. The problem of construction which is now before us to review is occasioned because two sub-paragraphs were used in the certificates to describe the base area for outbound traffic (Elkin and Statesville) and the base area for inbound traffic (all of North Carolina).

In 1942 G & M filed a petition with the Commission for clarification of the scope of authority granted to it, contending that the language used authorized service between points and places in the eleven state area by "tacking" the common points of Elkin and Statesville, North Carolina. This construction of the certificate would have authorized "cross-haul" service between points within the eleven state area so long as the service was performed through the common joinder points. In G & M Motor Transfer Co., Inc., Common Carrier Application, 43 M.C.C. 497 (1944), the Commission denied the petition, holding that the G & M certificate only authorized service which either began at Elkin or Statesville or ended at a point in North Carolina. The trucking industry jargon used to describe this construction of the authority granted is that it is a single grant of radial authority with a base area for outbound traffic smaller than the base area for inbound traffic. A cease and desist order was entered, and, subsequently, after repeated violations, G & M was enjoined by this court, in Interstate Commerce Commission v. G & M Motor Transfer Co., 64 F.Supp. 302 (W.D.N.C. 1945), from performing cross-haul service.

In 1947 Malone purchased G & M's transportation rights and succeeded to the authority in the G & M certificate. A certificate was issued to Malone in 1948 incorporating the Elkin-Statesville-eleven state area authority,² and on January 31, 1950, for reasons not material to this appeal, the certificate was reissued.³ In the reissued certificate, the Commission's staff, by inadvertance, had removed lettered designations from above the separately stated grants of authority (the designation "E" had preceded the Elkin-Statesville eleven state area commodity grant in the 1948 certificate) and had added, after the recital of the authorities, a "tacking clause" in form as follows:

"Carrier may combine two or more of the above described irregular route authorities provided the authorities have a point common to both to which the carrier may transport a given commodity under one authority and from which it may transport the same commodity under the other, and establish through service under such combination provided in each instance the commodity is transported through the common or gateway point, and provided further that this certificate does not contain any restriction or other indication that through service shall not be conducted."

Perceiving its error, in March 1950, the Commission issued a corrected Malone certificate, which contained, immediately below the Elkin-Statesville eleven state area authority, an express restriction against tacking the two subparagraphs in this authority.⁴ Immediately, Malone, by telegram, objected to the corrected certificate on the ground that it had been issued without notice and hearing.⁵ The Commission, by telegram, responded that the corrected certificate in no way lessened the authority Malone had acquired from G & M.⁶

There matters stood until 1959, when, after a period of administrative jockeying, the Commission issued an order vacating the corrected March 1950 certificate. This order revived the uncorrected Malone certificate of January 31, 1950, the certificate at issue on this appeal. Then, as is stipulated, between January 8, 1962, and December 12, 1962, Malone made twelve cross-haul shipments between points and places in the eleven state area through the joinder points of Elkin and Statesville. It is also stipulated by Malone that at the time of acquiring the Elkin-Statesville eleven state area authority, it was aware of the Commission's interpretation of this authority in G & M Motor Transfer Co., Inc., Common Carrier Application, supra, and of this court's injunction in Interstate Commerce Commission v. G & M Motor Transfer Co., supra.

The Commission investigation of Malone was instituted in 1963 under the provisions of 49 U.S.C.A. § 304(c) and 49 U.S.C.A. § 312(a), to determine if the cross-haul shipments were done in violation of 49 U.S.C.A. § 306(a), that is, without transportation authority conferred by the certificate then, and now, in effect, i. e., the uncorrected January 31, 1950 certificate. The plaintiffs were permitted to intervene in the investigation as interested parties, and pursuant to Commission order, the Commission's Bureau of Inquiry and Compliance also participated.

In the construction of transportation certificates the Commission's policy is not to consider matters extraneous to the face of the certificate, i. e., events antecedent or subsequent to its issuance, to determine the scope of authority granted unless the terms of the certificate themselves are "patently ambiguous." Morehouse — Investigation of Operations and Practices, 81 M.C.C. 614 (1959). The rationale is that it is important that certificates actually confer the transportation rights they purport to confer so as not to place upon carriers and the shipping public the burden of investigating the administrative history of certificates to determine the scope of authority granted. Certainly it is preferable that ordinarily certificates "speak for themselves." A second Commission policy, of relevance here, is that two or more separate, unrestricted authorities may be "tacked" by the carrier to permit cross-haul service through common gateway points whether so stated in the certificate or not. Transport Corp. of Virginia Extension — Maryland, 43 M.C.C. 716 (1944).

The trial examiner, after a full hearing, concluded that the terms of the Elkin-Statesville eleven state area authority were patently ambiguous. However, without "going behind the certificate" i. e., examining its administrative history, the examiner determined that it conferred only a single operating right, the separately stated paragraphs of which could not be tacked, and therefore Malone had exceeded its authority in performing cross-haul service. After further finding that Malone had performed the shipments under a "reasonable claim of right," the examiner concluded that the appropriate remedy was a cease and desist order, rather than suspension of the Malone certificate as the plaintiffs had asked.

In Malone Freight Lines, Inc., Investigation of Operations and Practices, 102 M.C.C. 163 (1966), Division One of the Commission (Vice Chairman Tucker dissenting) concluded, in reversing the trial examiner, that the shipments under investigation had been performed within the authority conferred on Malone. This conclusion was reached by finding that the terms of the Elkin-Statesville eleven state area authority were not patently ambiguous and that this finding prohibited going behind the certificate. The terms of the certificate were then construed as follows: "* * * the authorities in question are set forth in two separate paragraphs, namely (a) and (b),⁷ and they have common points of service, Elkin and Statesville. The rule is that a motor common carrier can tack two separate unrestricted authorities, such as we have here, where (1) there is a point of service common to both operating authorities and (2) the physical operation is actually conducted through such common points."⁸

In setting aside the...