Argo-Collier Truck Lines Corp. v. U.S.

• Decision Date: 13 December 1979
• Docket Number: ARGO-COLLIER,No. 77-3373,77-3373
• Parties: TRUCK LINES CORPORATION and Refrigerated Transport Co., Inc., Petitioners-Appellees, v. The UNITED STATES of America and the Interstate Commerce Commission, Respondents-Appellants. Watkins Motor Lines, Inc., Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 149

611 F.2d 149

ARGO-COLLIER TRUCK LINES CORPORATION and Refrigerated

Transport Co., Inc., Petitioners-Appellees, v. The UNITED STATES of America and the Interstate Commerce

Commission, Respondents-Appellants.

Watkins Motor Lines, Inc., Intervenor.

No. 77-3373.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 17, 1979.

Decided Dec. 13, 1979.

Richard M. Tettelbaum, Serby & Mitchell, P. C., Bruce Mitchell, Atlanta, Ga., for respondents-appellants.

Griffin Bell, Atty. Gen. of United States, Dept. of Justice, Washington, D. C., Robert B. Nicholson, Robert Wiggers, Gen. Counsel, L. Marie Guillory, I. C. C., Washington, D. C., for petitioners-appellees.

Before CELEBREZZE, BROWN and KENNEDY, Circuit Judges.

CORNELIA G. KENNEDY, Circuit Judge.

Petitioners Argo-Collier Truck Lines (Argo) and Refrigerated Transport (Refrigerated) established carriers, seek to have reviewed and set aside the order of the Interstate Commerce Commission (ICC) certifying Watkins Motor Lines (Watkins) as a common carrier of foodstuffs from Illinois to points in several southeastern states. The application of Watkins, supported by shipper Anderson Clayton Foods (Anderson), was filed March 24, 1974. As a petitioner seeking a new grant of authority, the burden is upon Watkins to prove such a grant is supported by the public convenience and necessity. Ace Doran Hauling & Rigging Co. v. United States, 545 F.2d 1046, 1047 (6th Cir. 1976).

Review Board Number 2 of the ICC initially denied Watkins' application. It held that although the shipper indicated new products were continually being developed, it stated no definite plans for expansion. (App. 190); that while the shipper made general complaints of availability of equipment no specific problems were alleged; (App. 191); that Argo had underused equipment in the Jacksonville area and that Refrigerated was capable of carrying additional traffic; (App. 191) and that indeed there was no specific complaint by Anderson about the existing service (App. 191). On the basis of the evidence presented and relying on the principle that existing carriers are entitled to transport all traffic they can handle adequately and efficiently the Review Board concluded the application should be denied.

Following the applicant's request for reconsideration, however, Division 1 of the ICC reversed the prior decision and granted certification, Watkins Motor Lines, Inc., Extension, 125 M.C.C. 713 (1976). It found that the shipper planned a reduction of rail service and warehousing and had developed a new need for carriers with multiple-delivery, multiple-stop-off capacity, Id. at 715; that service was occasionally unavailable, Id. at 715-16; and that carriers are generally unwilling to deadhead equipment from Chicago, where most Illinois shipments terminate, Id. at 716. It further found that the shipper had no intent to divert traffic from Argo and Refrigerated, Id. at 716, and that direct service in place of the use of rail and warehousing would be of real benefit to the shipper, Id. at 717. Finally, the ICC held that the ability of protestants to provide additional service to meet the increased volume was unclear and that Argo and protestants would suffer no material adverse effects from the granting of the application. Id. at 718.

Petitioners challenge the ICC's decision on the grounds that it was arbitrary and capricious and an abuse of discretion in that it is unsupported by substantial evidence. Administrative Procedure Act, 5 U.S.C. § 706(3)(A) and (E). As stated in Bowman Transportation v. Arkansas-Best Freight System, 419 U.S. 281, 95 S.Ct. 438, 42 L.Ed.2d 447 (1975):

Under the "arbitrary and capricious" standard the scope of review is a narrow one. A reviewing court must "consider whether the decision was based on a consideration of the relevant factors and whether there was a clear error of judgment . . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency." Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S.Ct. 814, 28 L.Ed.2d 136. The agency must articulate a "rational connection between the facts found and the choice made." Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962).

419 U.S. at 285, 95 S.Ct. at 442.

In passing on a petition for additional authority, the ICC is required to determine whether the new service will serve a useful purpose and be responsive to a public need; whether existing carriers do or can provide the service; and whether the additional authority would endanger or impair the ability of existing carriers to serve the public need. West Nebraska Express, Inc., Extension, 118 M.C.C. 423, 427 (1973); Pan-American Bus Lines Operation, 1 M.C.C. 190, 203 (1936). It is the ICC's duty to identify the competing interests and then to strike a reasonable balance. Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., supra. In most cases, the ICC is to identify and resolve the often conflicting interests in promoting competition, maintaining sound economic conditions, preserving an adequate existing service, and providing for future needs. Trans-American Van Service, Inc. v. United States, 421 F.Supp. 308 (N.D.Tex.1976). It is not only the duty of the Commission to make findings of fact on these interests and to exercise reasonable judgment in resolving them, Chesapeake & Ohio Railway Co. v. United States, 283 U.S. 35, 42, 51 S.Ct. 337, 75 L.Ed. 824 (1931), but also to make a statement on the record including "findings and conclusions, and the reasons or basis therefore, on all the material issues of fact, law, or discretion presented on the record." 5 U.S.C. § 557(c)(A); Humboldt Express, Inc. v. ICC, 186 U.S.App.D.C. 141, 146, 567 F.2d 1134, 1139 (D.C.Cir.1977). These articulated findings must be supported by substantial evidence in the record. ICC v. J-T Transport Co., 368 U.S. 81, 93, 82 S.Ct. 204, 7 L.Ed.2d 147 (1961).

It is essential to the decisionmaking process that the ICC articulate clearly its findings on the factual issues which form the basis for its decisions. Without such findings, a reviewing court is unable to perform its function of ascertaining that the ultimate conclusions are derived from the record before the agency and not the result of discretion exercised in an arbitrary and capricious manner. Trans-American Van Service, Inc. v. United States, 421 F.Supp. 308, 319 (N.D.Tex.1976). Without such findings, the reviewing court must either suspend its critical judgment in affirming the agency or search out reasons which could support the agency decision, Humboldt Express, supra, at 1137, or reverse or remand. The rights of the parties also depend on the adequacy of fact finding by the agency. The ICC owes a duty to those who appear before it to address their arguments, unless frivolous, Pitre Brothers Transfer, Inc. v. United States, 580 F.2d 140, 144 (5th Cir. 1978). "A party is entitled, of course, to know the issues on which decision will turn and to be apprised of the factual material on which the agency relies for decision so that he may rebut it." Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 288 n.4, 95 S.Ct. 438, 443, 42 L.Ed.2d 447 (1974).

In the present case both the record created by the parties and the findings made by the ICC suffer from a failure to articulate clearly the facts which are asserted. This is particularly true of the facts asserted by Watkins, who as applicant has the burden of proof. The ICC, for its part, did not set forth the bases for its findings and did not address the assertions of error vigorously argued by the petitioners. In many instances there is simply no evidence in the record for particular findings of fact. As a result the decision must be reversed as not supported by substantial evidence and the application of Watkins denied.

The ICC found first that a reduction of rail service and warehousing, that is, a change in Anderson's methods of distribution, necessitated a new need for multiple-delivery, multiple-stop-off capacity. 125 M.C.C. at 715. The evidence in the record on this point is that there has been a growing demand by customers for shipment in refrigerated trucks (App. 26) and that currently some tonnage is moved by rail (App. 30). The shipper expressed an expectation that the company would in the future develop new products (App. 24) and that handling in transit was to be avoided because many items were perishable (App. 25). Anderson required multiple-stop-off capacity and prompt service, as well as the ability to handle loads of mixed items (App. 27-28). Argo stated that it has a call-and-demand service with multiple-stop-off capacity and offers less-than-truckload service. (App. 59). Its trucks are refrigerated. Its verified statement discloses that its present equipment is not used to full capacity and that it was capable of handling twice the shipper's total tonnage into the territory involved. (App. 60). Although there is ample support for the finding that Anderson requires shippers with multiple-delivery, multiple-stop-off capacity, there was no evidence the need was new. Petitioners had been supplying this service.

The ICC found that motor service has occasionally been unavailable. 125 M.C.C. at 715-16. The only evidence to support this finding is the following statement by the shipper.

This problem which we have experienced in shipping from Jacksonville to Southeastern states is that the supply of refrigerated truck equipment for southbound movement is tied closely to the equipment handling the northbound flow of perishable commodities from the Southeast to the Midwest. This shortage in southbound equipment can be seasonal, or can became a truck service factor in any given week of the year. We have had occasions where we have...