Braswell Motor Freight Lines, Inc. v. United States

• Decision Date: 31 July 1967
• Docket Number: Civ. A. No. 67-29-A.
• Parties: BRASWELL MOTOR FREIGHT LINES, INC., et al., Plaintiffs, v. UNITED STATES of America et al., Defendants.
• Court: U.S. District Court — Western District of Texas

271 F. Supp. 906

BRASWELL MOTOR FREIGHT LINES, INC., et al., Plaintiffs, v. UNITED STATES of America et al., Defendants.

Civ. A. No. 67-29-A.

United States District Court W. D. Texas, Austin Division.

July 31, 1967.

Clark, Thomas, Harris, Denius & Winters, Phillip Robinson, James, Robinson, Felts & Starnes, Austin, Tex., Morris G. Cobb, Amarillo, Tex., for plaintiffs.

Ernest Morgan, U. S. Atty., San Antonio, Tex., Fritz R. Kahn, Chief, Section of Litigation, Office of Gen. Counsel, I. C. C., Washington, D. C., W. D. Benson, Jr., Lubbock, Tex., for defendants.

Before THORNBERRY, Circuit Judge, SPEARS, Chief Judge, and ROBERTS, District Judge.

OPINION

SPEARS, Chief Judge:

This is an action to enjoin, annul and set aside a decision and order of the Interstate Commerce Commission which granted to Whitfield Transportation, Inc., a Certificate of Public Convenience and Necessity authorizing the conduct of certain motor carrier operations under the Interstate Commerce Act. 49 U.S.C. § 307(a). Since we are satisfied that the decision made and the procedures followed in this case were consistent with the applicable laws, the relief sought is denied.

This proceeding arose from an application filed by Whitfield with the Commission on July 30, 1964, seeking to operate as a common carrier by motor vehicle of general commodities, with certain exceptions, over specified routes, between Dallas, Texas and Albuquerque, New Mexico, on the one hand, and between Post, Texas and Tularosa, New Mexico, on the other.

The application was opposed by numerous carriers, including these plaintiffs, and, pursuant to 49 U.S.C. § 305, was assigned for hearing before Joint Board No. 33, composed of members from New Mexico and Texas. Appearing at the hearing as the New Mexico member was G. Y. Fails of the New Mexico State Corporation Commission. Texas waived its right to participate in the proceedings by failing to have a member present.

Joint Board No. 33 conducted hearings for a total of 22 days at Albuquerque, New Mexico, Las Cruces, New Mexico, and Dallas, Texas, extending over the period from November 9, 1964 to February 9, 1965, during which time all of Whitfield's evidence was presented, and after which a recess was called to allow the opposing carriers an opportunity to prepare their case. During the recess a New Mexico member of Joint Board No. 33 directed a telegram to the Commission, dated March 15, 1965, stating that:

"G. Y. Fails resigned therefore unable to complete Whitfield hearing Sub 99".

No request was made by New Mexico to substitute another member for Mr. Fails.

Based upon the actions of both states constituting the Joint Board, the Commission, by order dated March 26, 1965, and served on April 1, 1965, referred the matter to Examiner Samuel C. Shoup for continued hearing and the recommendation of an appropriate order, accompanied by the reasons therefor. Notice of this action was served upon all parties, as well as upon the New Mexico State Corporation Commission.

On April 12, 1965, the Illinois-California Express, Inc. (ICX), with Transcon Lines, Inc. (Transcon) concurring, filed a petition and motion contending that Joint Board No. 33 had not waived its participation, and requesting that the matter be re-assigned to that Board. The Commission, however, by order dated May 7, 1965, denied that request. Thereafter, commencing on May 10, 1965, and continuing for eight additional hearing days, the proceeding was presided over by Examiner Shoup for the taking of the opposing carriers' evidence. Subsequently, on December 20, 1965, the examiner submitted his report and recommendea order, which was adopted by the Commission in its order served on September 2, 1966.

This suit was filed on May 4, 1967 and a temporary restraining order pending "hearing and determination of this cause" was entered on May 5, 1967.

Plaintiffs here contend that the Commission's order is arbitrary, capricious, and void because (1) the application should not have been assigned for hearing before a hearing examiner after 22 days of hearings before Joint Board No. 33; (2) the order is not based upon and supported by substantial evidence; (3) the order is not predicated upon a stated rationale, or upon basic and essential findings of fact and conclusions of law; (4) the Commission failed to rule upon proposed findings, conclusions, and exceptions; (5) the existing transportation facilities and services are shown by substantial evidence to be adequate; and (6) the Commission failed to make findings concerning the National Transportation Policy.

I

By said petition and motion filed on April 12, 1965, ICX contended that Joint Board No. 33 "should be Hearing Official for the remainder of this proceeding —as it has been during the first 23 hearing days—under the provisions of the Interstate Commerce Act"; that to "make the change contemplated in the Commission's order served April 1st will not only be in conflict with the provisions of the Interstate Commerce Act but will also result in much confusion in the future conduct and handling of the matter"; that the Act "clearly provides for the Joint Board procedures in extension applications involving two states, and any deviation from those provisions this far along in the instant proceedings will adversely affect the interested parties, including this protestant"; and that the Commission should rescind its order of April 1, 1965 and re-assign the matter to Joint Board No. 33 for the "continued hearing contemplated by the order".

In a brief filed on September 13, 1965, after the hearings had been concluded on May 20, 1965, the movants argued that the denial of their petition and motion had worked to their "material disadvantage and prejudice" because of a "dissimilarity" in the standards utilized by the two hearing officers. The examiner was of the opinion that the record revealed "no apparent indication wherein protestants have been prejudiced", and the Commission acquiesced in this when it adopted his report and recommendations.

From the facts hereinabove stated, it is clear that both Texas and New Mexico had withdrawn from any further participation in the Joint Board, and that the Commission merely substituted an examiner for the completion of the hearing and the issuance of a recommended report and order. After a review of the record, we are of the opinion that the Commission's action was proper, and that, in any event, plaintiffs, as protestants at the hearing, were not materially prejudiced by any variations in the standards employed by the officers,

It was not until exceptions and objection to the examiner's report and recommendations were filed on February 7, 1966, some nine months after the hearing was resumed, that plaintiffs for the first time raised the specific question concerning their right to have the recommended decision made by the same officer who presided at the reception of all evidence. They insisted then, as now, that the action of the Commission in referring the hearing to one of its own examiners deprived them of the kind of "credibility evaluation" contemplated in 5 U.S.C. § 1004(c) (now 5 U.S.C. § 554 (d)), and discussed in the case of Gamble-Skogmo, Inc. v. Federal Trade Commission, 211 F.2d 106 (8 Cir. 1954).

While we realize that from the legislative history of the Administrative Procedure Act it may be argued that 5 U.S.C. § 554(d) is not applicable here,¹ we do not consider it necessary to decide that question, because we are convinced that the "credibility evaluation" contention came too late.

Bearing in mind that Mr. Fails (the New Mexico member) had resigned, and protestants knew he was no longer available, it is significant that the only objection timely made by any of them with respect to the change of hearing officers, was that Joint Board No. 33, rather than the Commission's examiner, should continue with the hearing. Obviously, if someone other than Mr. Fails on the Joint Board from New Mexico, who was not present during the earlier hearing, had presided after the recess, he would not have been in any better position to evaluate the credibility of witnesses who had previously testified, than was Examiner Shoup. So, in the very nature of things, the motion could not, by any stretch of the imagination, be construed as an objection to having anyone other than Mr. Fails proceed with the hearing. Nor was any motion made prior to the resumption of proceedings, in which it was contended that the evidence and record in the case to that point should be stricken, and that the substitute examiner, whoever he might be, should be required to engage in a de novo hearing, in order that he might have an opportunity to see and hear the opposing witnesses and evaluate their credibility. Instead, as noted, two of the protestants chose to rely upon the sole proposition that Joint Board No. 33, and not the Commission's hearing examiner, should continue with the hearing, and none of the other eleven protestants even saw fit to join in that objection.

In Gamble-Skogmo, Inc. v. Federal Trade Commission, supra, 211 F.2d 106, at 113, the Court pointed out that "the affording of the opportunity for such credibility evaluation and the according of the benefit to parties * * * are fundamentally procedural grants and prescriptions and, as previously indicated, not substantive due-process requisites"....