Atlanta-New Orleans Motor Fr. Co. v. United States

• Decision Date: 10 August 1953
• Docket Number: Civ. A. 4568.
• Parties: ATLANTA-NEW ORLEANS MOTOR FREIGHT CO., et al., Complainants, v. UNITED STATES of America and The Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — Northern District of Georgia

155 F. Supp. 68

ATLANTA-NEW ORLEANS MOTOR FREIGHT CO., et al., Complainants, v. UNITED STATES of America and The Interstate Commerce Commission, Defendants.

Civ. A. 4568.

United States District Court N. D. Georgia, Atlanta Division.

August 10, 1953.

Reuben G. Crimm and Allen Watkins, Atlanta, Ga., Edgar Watkins, Washington, D. C., for complainants.

Edward M. Reidy and Isaac K. Hay, Interstate Commerce Commission, Washington, D. C., for defendants.

Before RUSSELL, Circuit Judge, HOOPER, Chief Judge, and SLOAN, District Judge.

HOOPER, Chief Judge.

This action was brought on April 22, 1953 by nine motor common carriers holding certificates of convenience and necessity,¹ to set aside an order entered February 16, 1953 by the Interstate Commerce Commission which granted a certificate of public convenience and necessity to Malone Freight Lines, Inc., hereinafter referred to as Malone.² Interventions were filed and allowed in behalf of certain competing railroads³ and other motor common carriers,⁴ all joining in the prayers of plaintiffs' petition. Malone Freight Lines, Inc., on its own motion, was made a party defendant, and various textile mills (shippers) intervened as defendants.⁵ Arguments were had before this three-judge court on June 23, 1953, and helpful briefs filed by all counsel.

A summary of the proceedings in this matter before the Commission is as follows:

Malone filed with the Commission on August 2, 1948 his application for a certificate authorizing operation as a common carrier by motor vehicles of textiles, textile products and other related articles, over irregular routes between Alabama and Georgia on the one hand, and on the other, points including North Carolina, South Carolina, Virginia, West Virginia, Delaware, Maryland, New Jersey, Pennsylvania, New York, Massachusetts, Rhode Island, and Connecticut.

Hearings were had before an examiner who recommended that the application be denied. Upon exceptions filed thereto by Malone, Division 5, comprised of three commissioners, on April 30, 1952 granted a portion of authority sought. Complainants and others filed a petition for reconsideration, the matter was reopened November 3, 1952 and submitted to the entire Commission which, on February 16, 1953, by majority vote of six members (four dissenting, one being absent) found that the application should be granted in part. Accordingly, the Commission vacated the order of April 30, 1952 entered by Division 5 and entered the order herein complained of, being the same as the order granted by Division 5 with only slight modifications.

The order herein complained of issues to Malone Freight Lines, Inc. a certificate of convenience and necessity allowing it to transport:

"textiles and textile products, from points in Alabama within 125 miles of Montgomery, Ala., including Montgomery, and points in Georgia within 125 miles of West Point, Ga., including West Point to points in Virginia, West Virginia, Delaware, Maryland, New Jersey, Pennsylvania, and those in New York on and south of a line beginning at Oswego and extending along U. S. Highway 104 to Mexico, thence along New York Highway 69 to Rome, thence along New York Highway 49 to Utica, thence along New York Highway 5 to Schnectady, thence along New York Highway 7 to Troy, and thence along New York Highway 2 to the New York-Massachusetts State line;"

On March 5, 1953 an extraordinary petition for consideration was filed, denied April 20, 1953, and this complaint then filed seeking to set aside the order of February, 16, 1953 above quoted.

Grounds of Objections To Orders Granting Certificate

In Paragraphs IX to XVII inclusive, of the complaint, the protesting carriers set forth in detail the reasons why they allege this order is arbitrary, capricious and unlawful, their grounds of complaint being substantially as follows:

That the evidence before the Commission was not sufficient to show the need for the additional services offered by the applicants (see Paragraphs IX, XI, XIII and XIV), that the order of the Commission granting the certificate was based "upon the unreasonableness of certain rates on textiles and textile products, which are unidentified in said report, and the reasonableness of rates was not in issue in said case," (see Paragraph XVII) and was based on alleged rate stops which had been adopted by the objecting carriers and which could not under the law constitute a sufficient ground for granting a certificate to Malone (see Paragraphs XII, XVII, XVIII). The contention that the order was based on evidence concerning rates is the one most earnestly insisted upon. It is also contended the Commission should not have considered a period of time during which Malone had operated without the scope of its authority (Paragraph XV), and that Malone's ability to comply with the certificate was not shown (see Paragraph XV). The order of the Commission is also criticized as failing to conform to provisions of the Administrative Procedure Act, 5 U.S.C.A. § 1007(b), in that it fails to state pertinent findings, conclusions, or reasons for its decision (Paragraph XVI).

The Order of The Commission Was Not Based On Rate Considerations.

It is quite true, as complainants insist, that the evidence before the Commission is replete with references to "rate restrictions", "minimum rates", and "rate stops". These expressions, it is explained by counsel for complainants, "merely refer to a level of rates or charges applicable to transportation of particular traffic, which rate levels or charges, because of the rate consideration factors involved, are higher than the use of classification ratings applied to a class rate scale." It is quite true, as complainants contend, that if the only complaint that the shippers (certain textile mills) had as to existing service concerned the matter of rates, there was available to them an administrative remedy whereby they could seek a change in such rates (see Interstate Commerce Act, Part II, § 216 (g), 49 U.S.C.A. § 316(g).

This court finds, however, that although the matter of rate stops, minimum rates and rate restrictions did figure prominently in the hearing before the Commission they were not directly involved therein, they were not the subject matter of the proceedings, and it appears that the Commission disclaimed that its order granting the certificate to Malone was based on rate considerations (sheet 10 of the order). It also appears that there was sufficient evidence before the Commission, independent of evidence as to rates, to support the Commission's order.

A careful reading of the record in this case,¹ including the testimony given before the Commission by representatives of the textile mills, will disclose the difficulties which these mills, located in Alabama and in the western part of Georgia, were experiencing in their efforts to obtain reasonably prompt delivery to the eastern markets of their textile products, particularly in less than truckload lots; their inability to compete on equal terms with mills in North Carolina and South Carolina which had superior facilities of transportation to such markets; their difficulty in many instances in prevailing on carriers to accept certain shipments; and the necessity on occasion of tracing shipments misplaced on route. The following portion of the Commission's order seems to picture their difficulties:

"The complaints of these shippers about existing motor carrier service are similar in all important respects. Each uses motor carriers extensively and has to depend mostly on two and three-line service to reach many points in the destination territory. Each has to compete with mills in North and South Carolina, in markets located in Virginia, West Virginia, Delaware, Maryland, New Jersey, and New York, hereinafter called the eastern states. The mills located in the Carolinas have direct 48-hour single-line motor carrier service to many points in the eastern states and are thus able to reach these markets without delay. The experience of one shipper with existing service is that its shipments of towels moving in two-line service, were being held up at Atlanta, Ga., the interchange points. This shipper presently uses one of the intervening motor carriers which provides direct service, but at the time of the hearing herein that carrier had placed an embargo on all shipments of less than 2,000 pounds. One shipper cannot compete with the mill at LaGrange, in markets in the eastern states, because this mill has had the advantage of applicant's direct service. The mill at Lanett has received satisfactory service from one of the intervening motor carriers to points served direct, or in two-line service to points in southern territory, but beyond southern territory rate stops have been used, and it has been difficult to find connecting carriers. Shipments are delayed on interline movements and are frequently located in the warehouses of the originating carrier. One shipper has experienced incidents which tend to establish that connecting carriers are not prone to accept its traffic. One of the intervening motor carriers suggested that its service be not used for shipments destined to points in the New England States. One shipper using two-line service is receiving seven-day service at Philadelphia and New York and longer to points beyond. The experience of another shipper has been that shipments to points in Pennsylvania must be interchanged either at Atlanta, Baltimore, or Philadelphia and the delays which have occurred make the service impractical. This shipper has shifted from carrier to carrier in an effort to find satisfactory service. Although one intervening carrier, used by this

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