AMERICAN TRUCKING ASS'NS v. United States

• Decision Date: 17 July 1944
• Docket Number: Civil Action No. 285.
• Citation: 56 F. Supp. 394
• Court: U.S. District Court — Eastern District of Virginia
• Parties: AMERICAN TRUCKING ASS'NS, Inc., et al. v. UNITED STATES et al.

56 F. Supp. 394

AMERICAN TRUCKING ASS'NS, Inc., et al. v. UNITED STATES et al.

Civil Action No. 285.

District Court, E. D. Virginia.

July 17, 1944.

COPYRIGHT MATERIAL OMITTED

J. Ninian Beall, of Washington, D. C., S. W. Shelton, of Richmond, Va., and Roland M. Rice, of Washington, D. C., for plaintiffs.

Edward Dumbauld, Sp. Asst. to Atty. Gen., and John V. Cogbill, Asst. U. S. Atty., of Richmond, Va., for the United States.

Daniel H. Kunkel, of Washington, D. C., for Interstate Commerce Commission.

Thomas L. Preston, and Charles T. Abeles, both of Norfolk, Va., for receivers of Seaboard Air Line Ry. Co., intervenors.

Before DOBIE, Circuit Judge and PAUL and BARKSDALE, District Judges.

DOBIE, Circuit Judge.

This is a civil action, 28 U.S.C.A. §§ 41 (28), 44, 45, 45a, 46, 47, 48, in which we are asked to set aside certain orders of the Interstate Commerce Commission (hereinafter called the Commission) and to grant certain incidental relief. These orders of the Commission granted to Legh Powell, Jr., and Henry Anderson, Receivers of the Seaboard Air Line Railway Company (hereinafter collectively referred to as Seaboard), certificates of public convenience and necessity, authorizing Seaboard to engage in interstate operations as a motor carrier over 14 routes in the States of Virginia, North Carolina, South Carolina, and Florida. Plaintiffs are the American Trucking Associations, Inc. (an organization formed in the interest of the highway trucking industry), and 6 motor carriers operating over the routes covered by the challenged certificates. Seaboard, by intervention, 28 U.S.C.A. § 45a, has been joined as a party defendant.

The 14 applications of Seaboard for certificates (with which we are concerned) were filed by Seaboard with the Commission (pursuant to the provisions of the Interstate Commerce Act, Part II, § 206, 49 U.S.C.A. § 306) at various times from February 23, 1937, to August 15, 1938. In due course, the Commission referred each application (severally and individually) to a Joint Board, composed of one member from each State in which there was any part of the operation covered by the specific application, 49 U.S.C.A. § 305(a).

The Joint Boards, after hearings on each of Seaboard's applications, issued reports, and appropriate certificates were, in every instance, granted by the Commission, subject to certain restrictions. One of these restrictions limited Seaboard's motor service to that which was strictly auxiliary to Seaboard's rail operations — that is, all transportation by motor was forbidden under the certificates unless there was a prior or subsequent shipment, in each instance, by rail. Seaboard, contending that this prior-or-subsequent-rail-haul restriction seriously impaired the value and utility of the certificates, petitioned the Commission for a rehearing. This was granted by the Commission and the case was re-opened only for oral argument on this condition. Then the Commission eliminated the compulsory-rail-haul condition from the certificates and substituted therefor a so-called "key-station-plan," which restricted Seaboard's motor service in connection with the designated key-points. Later again Seaboard sought and obtained another rehearing, limited to modification of the key-points as these had been prescribed by the Commission. At this juncture, the Antitrust Division of the Department of Justice intervened, claiming that Seaboard's motor operations would bring about a monopoly and strangulation of the independent motor trucking industry. This stage of the proceedings marks also the initial appearance of the American Trucking Associations, Inc., one of the plaintiffs in the instant civil action. The Commission modified certain portions of the key-point restrictions.

We now proceed to consider the questions raised in this case which we deem are of sufficient merit to deserve discussion.

1. Constitution of Joint Boards—Consolidation of the Individual Applications.

Plaintiffs vigorously attack the assignment of each application to a Joint Board, composed of one member from each State in which a motor service was sought in that application. This procedure satisfied the Motor Carrier Act, Part II, § 205 (a) and followed a well-established administrative practice. See United States v. American Trucking Ass'ns, Inc., 310 U.S. 534, 60 S.Ct. 1059, 84 L.Ed. 1345. In the absence of fraud (which is discussed later), the Commission, in determining the constitution and membership of the Joint Board, has consistently followed the scope of the proposed operations as these operations are designated and described in the application. See Argo and Collier Truck Lines Common Carrier Application, 27 M.C.C. 563, 566; and Atlantic Coast Line Railroad Company Extension of Operation, 30 M.C.C. 490, 491-2. Courts should give due weight to long continued administrative practice. See United States v. Moore, 95 U.S. 760, 24 L.Ed. 588; Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 77 L.Ed. 796. The Commission has often pointed out the inherent administrative difficulties in enforcing the Motor Carrier Act under any other interpretation. See 17 M.C.C. 413, 416, 417. Even when minor defects in the composition of the Joint Boards do appear, the courts have been (and should be) slow to set aside an order of the Commission on this ground. Empire Trails, Inc., v. United States, D.C., 53 F.Supp. 373; North Coast Transportation Co. v. United States, D.C., 54 F.Supp. 448.

Section 205(a), Part II, of the Motor Carrier Act provides, in part:

"The Commission shall, when operations of motor carriers or brokers conducted or proposed to be conducted involve not more than three States, and the Commission may, in its discretion, when operations of motor carriers or brokers conducted or proposed to be conducted involve more than three States, refer to a joint board for appropriate proceedings thereon, any of the following matters arising in the administration of this part with respect to such operations as to which a hearing is required or in the judgment of the Commission is desirable: Applications for certificates, * * *. The joint board to which any such matter is referred shall be composed solely of one member from each State within which the motor carrier or brokerage operations involved in such matters are or are proposed to be conducted * * *. In acting upon matters so referred, joint boards shall be vested with the same rights, duties, powers, and jurisdiction as are hereinbefore vested in members or examiners of the Commission to whom a matter is referred for hearing and the recommendation of an appropriate order thereon: * * *."

Early and late, before the Joint Boards and before the Commission, timely motions and petitions were filed, praying for a stay of the proceedings and for a consolidation of the several applications, so that these applications could be referred to, and considered by, "properly constituted" Joint Boards, consisting of one member from each State in which an operation was desired under any of the applications. These motions and petitions for consideration were denied by the Joint Boards and the Commission.

Plaintiffs contend that this action was arbitrary and capricious and forms a ground for the setting aside by us of the Commission's orders. We find no merit in this contention. Such motions to consolidate are addressed to the sound discretion of the Commission. And we can discern in this record no warrant to justify us in holding that here the Commission has either abused this discretion or acted arbitrarily and capriciously. From all the testimony before it, the Commission was in a peculiar position to judge accurately whether the service sought under totality of the applications was of such unified nature and such comprehensive scope as to call for consolidation of these applications and for their reference to a Joint Board which would be differently constituted. It is not without importance, in this connection, that, after these certificates were issued, some of the services thereunder authorized have never been inaugurated, while others, after being commenced by Seaboard, were subsequently abandoned.

2. Exclusion of Evidence—Fair Hearing.

Protesting motor carriers next complain of the refusal of the Joint Board to receive and consider certain evidence offered by protestants. As a result, we are told: "Every effort of plaintiffs to have the proceedings conducted under any semblance of a fair, reasonable and statutory hearing was summarily rejected by the Commission.

This complaint of plaintiffs is cognate to the Commission's refusal to consolidate the several applications of Seaboard. This preferred evidence covered a wide field and much of it might have been relevant had the Commission consolidated the applications. This evidence seems to have been excluded by the Joint Boards on the ground that each Joint Board was necessarily limited to deciding upon, and only upon, the particular application, or applications, before that Board.

Some evidence on the points which the protestants sought to develop did filter into the hearings before the Joint Boards. The Commission had before it the reports of all the Joint Boards. When, therefore, the Commission decided against consolidation, against a reopening of the case and against a rehearing of the matters, with the applications considered together as a whole, we think this contention of plaintiffs falls to the ground. Then, too, it is open to very serious question whether this excluded evidence would have, if admitted, influenced the decisions of the Commission.

3. Use of Improper Criteria as to Public Convenience and Necessity.

Very great stress is laid by plaintiffs on the contention that the Commission used false and improper criteria in arriving at its finding of public convenience and necessity in favor of Seaboard. It is urged upon us that the Commission substituted railroad...