Allied Van Lines Co. v. United States

• Decision Date: 28 August 1969
• Docket Number: Civ. No. 68-1347.
• Citation: 303 F. Supp. 742
• Court: U.S. District Court — Central District of California
• Parties: ALLIED VAN LINES CO., Lyon Van Lines, Inc., North American Van Lines, Inc., United Van Lines, Inc., and Wheaton Van Lines, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Pyramid Van Lines, Inc., Intervening Defendant.

303 F. Supp. 742

ALLIED VAN LINES CO., Lyon Van Lines, Inc., North American Van Lines, Inc., United Van Lines, Inc., and Wheaton Van Lines, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants Pyramid Van Lines, Inc., Intervening Defendant.

Civ. No. 68-1347.

United States District Court C. D. California.

August 28, 1969.

Denning & Wohlstetter, Washington, D. C., Charles M. Walters, Chicago, Ill., Gregory M. Rebman, St. Louis, Mo., Martin A. Weissert, Fort Wayne, Ind., and Knapp, Gill, Hibbert & Stevens, by Warren N. Grossman, Los Angeles, Cal., for plaintiffs.

Edwin M. Zimmerman, Asst. Atty. Gen., and John H. D. Wigger, Atty., U. S. Dept. of Justice, Washington, D. C., Wm. M. Byrne, U. S. Atty., Frederick M. Brosio, Jr., Asst. U. S. Atty., Chief, Civil Div., David Anderson, Asst. U. S. Atty., Los Angeles, Cal., Robert W. Ginnane, Gen. Counsel, Raymond M. Zimmett, Betty Jo Christian, Attys., Interstate Commerce Commission, Washington, D. C., for defendants.

Handler, Baker & Greene, by Marvin Handler, San Francisco, Cal., Kilroy & Sullivan, by Paul F. Sullivan, Washington, D. C., and Russell & Schureman, Los Angeles, Cal., for intervening defendant.

Before KOELSCH, Circuit Judge, and HAUK and PREGERSON, District Judges.

DECISION and ORDER AFFIRMING ACTION OF INTERSTATE COMMERCE COMMISSION

HAUK, District Judge:

This matter arises upon plaintiffs' complaint for review of administrative action of the Interstate Commerce Commission, jurisdiction in this Court being founded upon several provisions of the Judicial Code: 28 United States Code Sections 1336(a),¹ 1398(a),² and 2321-2325.³ Plaintiffs seek a Court order suspending, enjoining, setting aside and annulling the Orders issued by the I.C.C. in certain proceedings designated as Pyramid Van Lines, Inc., Extension — Elimination of Gateways, Docket No. MC 33500, sub. 16. The Orders in question were dated October 31, 1967, April 5, 1968, and May 9, 1968, and are administratively final. A District Court of three judges, as required by 28 U.S.C. § 2325, has been convened pursuant to the provisions of 28 U.S.C. § 2284.⁴

After trial and hearing, at which full opportunity was given all parties — plaintiffs, defendants and intervening defendant—to present their evidence, oral and documentary, and their respective contentions of fact and law, the Court has taken the matter under submission and now renders its decision and order denying plaintiffs' application for a decree setting aside and annulling the I.C.C. Orders.

SUMMARY OF FACTS

On May 19, 1966, Pyramid Van Lines filed an application for a certificate of public convenience and necessity authorizing transportation of household goods between points in numerous states throughout the country. Plaintiffs, major nationwide carriers of household goods, filed protests to the application, and requested that an oral hearing be held. Due to its increasing work load, and in accordance with its Rules of Practice, General Rule 53 (49 C.F.R. § 1100.53) and Special Rule 247 (49 C.F.R. § 1100.247), the I.C.C. determined that the proceeding should be conducted without oral hearing and placed the matter on its Modified Procedure Docket, to be determined solely upon written evidence.

Thereafter, Pyramid submitted verified statements and affidavits from numerous supporting witnesses, including persons who had experienced inadequate service from the plaintiffs, persons who found Pyramid's services to be satisfactory, other motor carriers who claimed that an extension of Pyramid's service would permit them to compete with the other nationwide carriers. In addition, Pyramid offered statistics which projected increases in the demand and need for movers of household goods.

Plaintiffs responded to Pyramid's evidence by attempting to refute the supporting statements which had been offered by Pyramid, and by contending that Pyramid's evidence did not distinguish between competitive and noncompetitive traffic that Pyramid handled. Plaintiffs demanded the right to cross-examine every supporting witness of Pyramid's application at an oral hearing, and they also sought to inspect the freight bills which supported Pyramid's exhibits concerning past shipments.

Pyramid replied and offered additional affidavits from persons who had received unsatisfactory service from plaintiffs, including some who had filed earlier affidavits and now offered additional facts to refute plaintiffs' claim of having no records of having served such persons. Pyramid also offered a letter from the Department of the Army, Headquarters, Western Area, indicating a serious decline in the quality of carrier service in that area, as well as statistics showing that plaintiffs had continued to grow substantially in the amount of their operating revenues no matter which competing carriers had been certified by the I.C.C., refuting plaintiffs' claim of diversion of traffic. Finally, Pyramid offered to forward the underlying freight bills, which plaintiffs had requested for examination at an oral hearing, to the Commission's offices for plaintiffs' inspection.

On October 31, 1967, the I.C.C. denied plaintiffs' requests for oral hearing, and found that the present and future public convenience and necessity justified issuance of a certificate to Pyramid Van Lines. On April 5, 1968, the I.C.C. denied plaintiffs' petitions for reconsideration. On May 9, 1968 the I.C.C. denied plaintiffs' petitions for a determination that a matter of general transportation importance was involved. And on May 23, 1968, the I.C.C. issued to Pyramid a Certificate of Public Convenience and Necessity.

ISSUE INVOLVED

Pursuant to stipulation between the parties, the only issue for this Court's determination is: Whether the I.C.C.'s actions in granting operating authority and routes to Pyramid under the Certificate was erroneous, unlawful, unsupported by evidence and findings, arbitrary, capricious and violative of due process requirements.

SCOPE OF REVIEW

The position has been consistently taken by the Federal courts that orders of the Interstate Commerce Commission should not be set aside, modified or disturbed by judicial review if they are supported by findings which are neither capricious nor arbitrary, are adequately sustained by the record as a whole, and there is a rational basis for the administrative conclusion. Illinois C. R. Co. v. Norfolk & W. R. Co., 385 U.S. 57, 69-70, 87 S.Ct. 255, 17 L.Ed.2d 162 (1966); Stanislaus County v. United States, 236 F.Supp. 146, 148 (N.D.Cal. 1964). Yet while the scope of judicial review is limited, the court is bound to inquire into the proceedings conducted by the Commission to determine if there is a rational basis for the conclusions approved by the administrative body. Nashua Motor Express, Inc. v. United States, 230 F.Supp. 646 (D.N.H. 1964).

DISCUSSION

In essence, plaintiffs contend that the I.C.C.'s refusal to grant an oral hearing for the purpose of cross-examining witnesses and examining freight documents was contrary to law, arbitrary, capricious and deprived them of property rights without due process of law. Specifically, they contend that: (1) They were entitled to a "trial-type" hearing as a matter of due process; (2) the denial of cross-examination was violative of the I.C.C.'s precedent decisions and the Administrative Procedure Act; (3) there was no sufficient finding supporting the denial of an oral hearing; and (4) material facts were clearly in dispute, and thus a hearing was required. We will deal with each of these contentions separately.

1. Due Process Does Not Require "Trial-Type" Hearing Here.

Plaintiffs contend that due process requires that they be granted a "trial-type" hearing with an opportunity to cross-examine Pyramid's supporting witnesses. Moreover, they contend that whenever governmental agencies adjudicate or make decisions which directly affect the legal rights of individuals, the safeguards of a trial, (i. e., apprisal, confrontation, and cross-examination) apply. Hannah v. Larche, 363 U.S. 420, 445-446, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960); Greene v. McElroy, 360 U.S. 474, 497, 79 S.Ct. 1400, 3 L.Ed.2d 1377 (1959). They cite Movers Conference of America v. United States, 205 F.Supp. 82 (S.D.Cal.1962) to establish that the holder of a certificate of public convenience and necessity (which all of the plaintiffs have) possesses a property right which is entitled to constitutional protection.

It is clear that plaintiffs have no absolute right to an oral hearing (Kingpak, Inc., Investigation of Operations, 103 M.C.C. 319, 344 (1966)); and they have not cited any cases which specifically hold that an application for a certificate of public convenience and necessity requires an oral hearing. The I.C.C., due to its heavy work load of this type of application has decided that some of these applications should be held pursuant to its modified procedure whereby all parties are allowed ample opportunity to present all their evidence, including rebuttal, in writing.

Moreover, the I.C.C.'s Special Rule 247 requires that anyone seeking an oral hearing must specify with particularity the facts relied upon and give a specific explanation why the evidence to be presented cannot reasonably be submitted in the form of affidavits. (49 C.F.R. § 1100.247(d) (3) & (4).) Analysis of the plaintiffs' requests for an oral hearing clearly shows that this was not done. Plaintiffs made no showing of what facts they would develop at the requested oral hearing, and did not specify any particular facts which made the hearing necessary.

Moreover, the I.C.C.'s decision is not an adjudication which deprives plaintiffs of substantial rights. The duty of the I.C.C. is to consider the facts presented by both sides and then make a determination: 1) whether a new operation will serve a useful public purpose, responsive to a public demand or need; 2) whether this purpose can and will be served as...