American Trucking Ass'ns, Inc. v. U.S., s. 78-1407
| Decision Date | 26 June 1979 |
| Docket Number | Nos. 78-1407,78-1717,s. 78-1407 |
| Citation | 195 U.S.App.D.C. 266,602 F.2d 444 |
| Parties | AMERICAN TRUCKING ASSOCIATIONS, INC., Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Crete Carrier Corporation, Contract Carrier Conference, Cargo Contract Carrier Corporation, Leaseway Transportation Corporation, Whirlpool Corporation, Chromalloy American Corporation, et al., Intervenors. The ATCHISON, TOPEKA AND SANTA FE RAILROAD COMPANY, et al., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, Chromalloy American Corporation et al., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Kenneth E. Siegel, Washington, D.C., with whom Nelson J. Cooney, Washington, D.C., was on the brief, for petitioner in No. 78-1407.
James E. Sykes, Chicago, Ill., a member of the bar of the Supreme Court of Illinois, pro hac vice, by special leave of court, with whom Robert G. Seaks, Washington, D.C., was on the brief, for petitioner in No. 78-1717.
James P. Tuite, Atty., I.C.C., Washington, D.C., with whom Mark L. Evans, Gen. Counsel, Frederick W. Read, III, Associate Gen. Counsel, I.C.C., John J. Powers, III, Asst. Chief, and Peter L. de la Cruz, Atty., Dept. of Justice, Washington, D.C., were on the brief, for respondents.
Daniel Joseph, Washington, D.C., with whom Randall Sarosdy and Edward F. Schiff, Washington, D.C., were on the brief, for intervenors Leaseway Transp. Corp. and Whirlpool Corp. in No. 78-1407.
E. Stephen Heisley and Lester R. Gutman, Washington, D.C., were on the brief for intervenor Chromalloy American Corp., et al. in Nos. 78-1407 and 78-1717.
Thomas A. Callaghan, Jr. and Rick A. Rude, Washington, D.C., were on the brief for intervenor Contract Carrier Conference, Inc. in No. 78-1407.
Robert J. Gallagher, Washington, D.C., was on the brief for intervenor Cargo Contract Carrier Corp. in No. 78-1407.
Rick A. Rude, Washington, D.C., also entered an appearance for intervenor Crete Carrier Corp. in No. 78-1407.
Before TAMM and WILKEY, Circuit Judges, and CORCORAN, * Senior District Judge for the United States District Court for the District of Columbia.
Opinion for the Court filed by CORCORAN, Senior District Judge.
The petitioners 1 in these consolidated cases seek to set aside a final rule promulgated by the Interstate Commerce Commission (ICC or the Commission) on April 6, 1978, in a case styled Dual Operations, Ex Parte No. 55 (Sub. No. 27).
The petitioners contend (1) that the Commission lacked statutory power to adopt the rule, (2) that the Commission acted arbitrarily and capriciously in adopting the rule and (3) that the rule denies the petitioners due process in that it denies them a fair hearing before the Commission. Several intervenors 2 as well as the Department of Justice and the Department of Transportation support the Commission.
We find the rule to be procedurally and substantively reasonable and within the ICC's statutory authority to adopt. Accordingly we affirm the Commission.
Under the Interstate Commerce Act, as amended by the Transportation Act of 1940, (the Act) 3 one may engage in the transportation by motor vehicle of passengers or property in interstate or foreign commerce either as a "common carrier" or a "contract carrier."
A common carrier holds itself out to the general public to perform for-hire transportation and operates under a certificate of public convenience and necessity. 49 U.S.C. § 303(14). 4 On the other hand, a contract carrier renders specialized transportation services pursuant to contracts with one customer or a limited number of customers and operates under permit from the Commission. 49 U.S.C. § 303(15). 5
Section 210 of the Act, 49 U.S.C. § 310, is captioned "Dual Operation" and provides in pertinent part that no motor carrier may be granted authority to operate as both a common carrier and a contract carrier, i. e. to engage in dual operations, "(u)nless for good cause shown, the Commission shall find, or shall have found, that both a certificate and a permit may be so held consistently with the public interest and with the national transportation policy declared in this act. . . . " 6
The subject of dual operations was first addressed by Section 7(c) of the so-called Rayburn Bill, H.R. 6836, 73rd Cong.2d Sess. (1934), which proposed that dual operations be totally prohibited. However, in passing the Act, Congress chose to abandon that total ban in favor of the present flexibility of Section 210, but gave little explanation for so doing. Indeed, the entire legislative history of Section 210 is contained in the remarks of Senator Wheeler, the Act's sponsor and Chairman of the Senate Committee on Interstate and Foreign Commerce, who observed:
This section (210) prohibits any person from holding at the same time a common carrier certificate and contract carrier permit, unless for good cause shown the Commission finds that both may be held consistently with the public interest and with the policy declared in Section 202(a). There are instances in which both types of operations can advantageously be conducted by the same operator and without prejudice to the public interest, but the possibility of abuses developing makes It advisable to give the Commission the power to pass on all cases in which it is proposed to combine the two types of operations. (emphasis supplied) 79 Cong.Rec. 5654 (1935).
In the years immediately following the passage of Section 210, the Commission granted applications for dual operations on a fairly routine basis. 7
However, in 1940, in considering an application for dual operations in Canada Common Carrier Application, 26 M.C.C. 563, 565 (1940) the Commission concluded:
Clearly this (dual operations) cannot be done consistently with the public interest. Not only would it put applicant in a position to prefer by contract any shipper between points now authorized to be served while at the same time charging his full common-carrier rates to others, but equally objectionable, it would enable him by varying his contract-carrier charges to a particular shipper to grant, in effect, a rebate in his common-carrier charges between other points. We do not imply that any such practices would be indulged, but the mere possibility is enough to preclude the finding of consistency with the public interest required by Section 210. (emphasis supplied)
In Block Common Carrier Application, 49 M.C.C. 651, 654-655 (1949) the Commission articulated its rationale for adopting the "mere possibility of discrimination" standard:
In our administration of Section 210 of the act, we are charged with carrying out The clear and unmistakable intent of Congress to preclude the opportunity for discriminatory practices which might well result from the simultaneous holding, by two commonly controlled carriers, of both a certificate and a permit. Where the same shipper is or may be served in both capacities the door is open for objectionable practices even though the operations be wholly different. It is not necessary to point out the many and complex situations, involving substantial injustices to shippers and carriers, which are potentially present when a single carrier, or two commonly controlled carriers, are in a position to offer both common and contract-carrier services within the same territory. Neither is it necessary that we find the actual existence of such discrimination or even a probability thereof. We have consistently held that The mere possibility of discrimination warrants our refusal to relax the express prohibition contained in the statute. (Citations omitted) (emphasis supplied).
For a number of years, proceeding under the "mere possibility" test, the Commission remained wary of approving dual operations. 8
However, by 1977, the Commission had altered its stance and specifically concluded in Delaware Express Co. v. Milford Express, Inc., 126 M.C.C. 462, 466 (1977) that "(t)he 'mere potential or opportunity' for discrimination standard is in our view overly restrictive and can in certain circumstances lead to seemingly absurb results." The Commission determined, accordingly, that in future cases it would require, as a reason for denial of dual operating permits, a showing (1) that there existed a likelihood that the applicant would serve the same party both as a common carrier and as a contract carrier and (2) that a Realistic possibility of discrimination would result from granting the application. 9 At the same time the Commission expressed its continued belief that "(t)he determination as to whether a realistic possibility of discrimination will result from a grant of dual operating authority should of course be made on a case-by-case basis." Delaware Express Co. at 467.
Against this backdrop of Commission precedent, the ICC staff issued a report in July, 1977, entitled "Improving Motor-Carrier Entry Regulation" which dealt with the efficacy of the existing regulations governing the licensing of motor carriers. The staff noted that the report had its genesis in the wide-spread feeling that more competition should be encouraged in the motor transportation industry and that the congested state of the Commission's motor carrier docket should be eased.
With specific reference to dual operations, the staff found that instances of rate discrimination practiced by carriers engaged in dual operations were virtually non-existent. It therefore recommended that the Commission issue, after appropriate administrative hearings, a general, prospective finding that the holding of dual authority was consistent with the public interest. The staff additionally recommended that the Commission seek the legislative repeal of Section 210.
The Commission issued a notice of proposed rule-making...
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