Barnes Freight Line, Inc. v. I.C.C.
| Decision Date | 17 March 1978 |
| Docket Number | Nos. 76-2437,76-2442,76-2545,76-2439,76-2438,76-2441,76-2440,s. 76-2437 |
| Parties | BARNES FREIGHT LINE, INC., Petitioner, v. The INTERSTATE COMMERCE COMMISSION and the United States of America, Respondents, Ross Neely Express, Inc., Intervenor-Respondent. BOWMAN TRANSPORTATION, INC., et al., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Ross Neely Express, Inc., Intervenor-Respondent. GEORGIA HIGHWAY EXPRESS, INC., Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Ross Neely Express, Inc., Intervenor-Respondent. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Frank D. Hall, Atlanta, Ga., for petitioner, Barnes Freight Line, Inc.
Arthur J. Cerra, Gen. Counsel, I.C.C., Carl E. Howe, Jr., Griffin B. Bell, U. S. Atty. Gen., Lloyd John Osborn, Atty., U. S. Dept. of Justice, Washington, D. C., for I.C.C Robert S. Richard, William K. Martin, Montgomery, Ala., for Ross Neely Express, Inc.
Edward G. Villalon, Washington, D. C., Maurice F. Bishop, Birmingham, Ala., for Bowman Transp. et al.
Phineas Stevens, Jackson, Miss., for Campbell Sixty-Six Express.
Bates Block, Atlanta, Ga., for Georgia Highway Express.
William Somerville, Mel P. Booker, Jr., Alexandria, Va., for Baggett.
Richard R. Sigmon, Drew L. Carraway, Washington, D. C., for Mercury Freight.
Petitions for Review of Orders of the Interstate Commerce Commission.
Before WISDOM and GEE, Circuit Judges, and VAN PELT *, District Judge.
These cases concern orders of the Interstate Commerce Commission involving motor carriers' applications for permanent and temporary operating authority. The implications of the cases extend beyond the arcane realm of motor carrier law. They bring into question the integrity of the administrative process in I.C.C. proceedings. We hold that the Commission abused its authority by reinstating the temporary authority of Ross Neely Express. We set aside that order.
The Court consolidated these seven cases for a single hearing. Six involved petitions by carriers for review of Interstate Commerce Commission orders reinstating a voluntarily dismissed application for permanent authority by Ross Neely Express (RNX), and its attendant temporary authority. 1 The seventh was the petition of Barnes Freight Lines, Inc. (Barnes), for review of the Commission's denial to it of similar operating authority. The petitions for review were brought to this Court under 28 U.S.C. § 2321. 2 Both the Commission and the United States were named respondents. 28 U.S.C. § 2322. RNX has intervened in support of the respondents.
The events which generated this controversy began in 1973. Cherokee Truck Line, Inc., and Dowda Motor Freight, Inc., were providing interline service between Atlanta and various locations in Alabama. Cherokee had operating authority for the Alabama locations; Dowda had the authority necessary for the Georgia sections of the route. Each company had authority to transport general commodities. In late 1973 Cherokee ceased operations. RNX at that time was authorized to serve many points in Alabama. At the request of a district director of the I.C.C., RNX took over Cherokee's portion of the joint line operations.
In 1974 this solution was upset. Dowda went through a change in ownership and emerged as Sun Motor Lines, Inc. Baggett Transportation Co., originally a petitioner here, filed a complaint against both Sun and Cherokee with the I.C.C. As a result of that complaint, Sun and Cherokee agreed to cancel their operating authority. By October 1974, the joint operations between Atlanta and Alabama could no longer continue. RNX had participated in that service for about one year.
RNX responded by filing an application for emergency temporary operating authority. This was to allow RNX to maintain by itself what had previously been interline service to Atlanta. The Commission granted the application. In December, RNX applied for temporary operating authority, authorized by Section 210a of the Interstate Commerce Act, 49 U.S.C. § 310a. 3 The Commission granted temporary authority in March 1975 which supplanted the emergency temporary authority. In April RNX applied for the corresponding permanent authority, under 49 U.S.C. §§ 306, 307. 4 Many carriers protested the RNX applications. The Commission scheduled hearings on the application for permanent authority for October 14, 1975, before Joint Board 157. 5
The order scheduling the hearing required RNX to prepare all its direct testimony in written form. This testimony was served on the Commission and the protesting carriers ten days before the hearing. On October 14, 1975, the hearing began with Ross Neely, Jr., president of RNX, testifying. He identified the operating exhibit prepared by RNX for the hearing. After that, the hearing recessed for the day to enable opposing counsel to familiarize themselves with the data underlying the exhibit.
When Neely returned to the stand on Wednesday morning, October 15, he faced cross-examination about the RNX exhibits. One exhibit in particular drew a number of questions. This exhibit, Appendix O, purported to be a complete listing of the shipments from Atlanta to Alabama points for the five Tuesdays of April 1975. The point of the appendix was to demonstrate the fast shipping times for RNX service. RNX argued that its service was superior to that of its competitors because it offered substantially one day service. Counsel for the opposing carriers questioned Neely on Wednesday morning concerning the absence of any order in the listing of shipments, as well as the possibility that some records of shipments were missing. App. at 4-10. During the lunch recess Neely, Villalon, the chief counsel for RNX, and John Foster, executive vice president of RNX in charge of shipping, conferred. Foster had compiled Appendix O. RNX contends that Foster admitted at this meeting that he had falsified Appendix O. He had not included records of certain shipments with particularly long transit times.
After the lunch-break the cross-examination of Neely resumed. Throughout that afternoon he was questioned about the various RNX exhibits. Neither Neely nor his counsel made any reference to Foster's falsification of Appendix O. When the cross-examination resumed the next morning, Thursday, October 16, Neely continued to testify. Some of the questions again pertained to Appendix O, although RNX contends that none of the questions specifically went to the validity of the appendix. At about 11:30 Thursday morning, questioning returned to the lack of numerical sequence in the records of the shipments in Appendix O. At that time Villalon requested a conference with the Joint Board. In that conference he finally revealed that the appendix was false. App. at 33-52. The Board decided to continue the hearing after a lunch recess, over the objection of the protesting carriers.
The afternoon was given over to the testimony of Foster concerning the falsified appendix. He maintained that he acted on his own initiative, out of an excess of zeal for the company's fortunes. In spite of warnings from the Board and counsel for the protestants that he was potentially subject to criminal prosecution under 18 U.S.C. § 1001, Foster chose to testify. He also chose not to retain his own counsel, but relied on counsel for RNX.
The next morning the cross-examination of Foster was to continue. Instead, Villalon announced that RNX and Foster had reconsidered their earlier decision to have him testify. On Fifth Amendment grounds, he refused to let Foster take the stand. App. at 153-54. The protesting carriers then attempted to recall Neely and ask him about the appendix. RNX objected to an examination of Neely on that issue. The Joint Board ruled that any cross-examination of Neely would have a scope wide enough to include questions of the falsified appendix. App. at 1509-21. At that point, faced with the prospect of Neely's being subjected to cross-examination on the falsified records, RNX moved to dismiss its application. The hearing recessed. Four days later, the Commission granted RNX's motion to dismiss. With the dismissal of the application for permanent authority, RNX's temporary authority automatically lapsed.
The matter rested this way for one week. Then, on October 28, 1975, RNX petitioned the Commission for "reinstatement" of both its application for permanent authority and its temporary operating authority. RNX attached to the petition an affidavit from Neely and statements of support from numerous shippers. The affidavit asserts that after further investigation, Neely discovered that Foster alone was implicated in the falsification. Neely maintained that had he known the true state of affairs, RNX would not have moved for dismissal. Neely averred that 151 employees would lose their jobs if the Atlanta-Alabama authority were not reinstated. He cited the large amount of freight carried by virtue of that authority, and referred to the attached shipper statements as demonstrations of the public interest in the RNX service. Neely reiterated both his personal innocence and that of the corporation, and volunteered to take a polygraph test in support of his affidavit.
The protesting carriers opposed the petition for reinstatement, but to no avail. On December 15, 1975, Division 1 of the I.C.C. entered an order reinstating both the permanent authority application and the temporary authority by a two to one vote. The order merely recited that the action was "for good cause appearing". The Division did not discuss either the facts or the reason for its decision. App. 622-23.
The protestants responded immediately. On December 20 they wired the Commission a petition seeking to stay the Division's order and to have the matter set for oral argument before the Commission as a whole. They also filed petitions for reconsideration. The same members who...
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