Bray Lines, Inc. v. United States

• Decision Date: 29 January 1973
• Docket Number: No. Civ. 72-284.,Civ. 72-284.
• Citation: 353 F. Supp. 1240
• Parties: BRAY LINES, INC., et al., Plaintiffs, and The Atchison, Topeka and Santa Fe Railway Company, et al., Intervening Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and American Farm Lines, Intervening Defendant.
• Court: U.S. District Court — Western District of Oklahoma

353 F. Supp. 1240

BRAY LINES, INC., et al., Plaintiffs, and The Atchison, Topeka and Santa Fe Railway Company, et al., Intervening Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and American Farm Lines, Intervening Defendant.

No. Civ. 72-284.

United States District Court, W. D Oklahoma.

January 29, 1973.

Marion F. Jones, Denver, Colo., Robert E. Joyner, Memphis, Tenn., John R. Sims and Harold Hernly, Arlington, Va., Eugene T. Liipfert, John S. Fessenden, William O. Turney, Peter T. Beardsley, Brenda P. Murray, Nelson J. Cooney, Paul Sullivan, J. G. Dail, Jr., and John R. Bagileo, Washington, D. C., Alan Foss, Fargo, N. D., Phillip Robinson, Austin, Tex., and Max G. Morgan, Oklahoma City, Okl., for plaintiffs.

Harold Dodson, Oklahoma City, Okl., and Ed White, Chicago, Ill., for intervening plaintiffs.

Thomas E. Kauper, Asst. Atty. Gen., Joel Davidow, Dept. of Justice, Anti-Trust Div., Washington, D. C., William R. Burkett, U. S. Atty., W. D. Oklahoma, for the United States.

Fritz R. Kahn and Hanford O'Hara, Washington, D. C., for Interstate Commerce Commission.

Joseph A. Califano, Jr., Thomas E. Patton and Harry Ross, Washington, D. C., William L. Peterson, Oklahoma City, Okl., for intervening defendant.

Before HOLLOWAY, Circuit Judge, and DAUGHERTY and EUBANKS, District Judges.

MEMORANDUM OPINION

EUBANKS, District Judge.

This is an action brought to permanently suspend, enjoin, annul and set aside a report and order of the Interstate Commerce Commission, certificating the Intervening Defendant, American Farm Lines, as a common carrier, thereby authorizing it to transport Class A and B explosives and also general commodities, except commodities in bulk and household goods, moving between points in nine midwestern states and four western states, when moving on Government bills of lading.

The specific questions presented herein are as follows:

1. Whether an agricultural cooperative association performing exempt motor transportation pursuant to section 203(b)(5) of the Interstate Commerce Act, 49 U.S.C. § 303(b)(5), is precluded from obtaining motor common carrier authority?

2. Whether the for-hire transportation of an agricultural cooperative association is limited to the fifteen percent requirement of section 203(b)(5) of the Interstate Commerce Act, regardless of whether performed under exemption or under certification?

3. Whether the certification of an agricultural cooperative association to perform for-hire transportation in addition to its member farm-related transportation would be contrary to the public interest and antithetical to the national transportation policy?

4. Whether the finding of the Commission that public convenience and necessity require the transportation service sought to be provided by American Farm Lines is supported by substantial evidence on the record and whether the Commission's report discloses that basis?

5. Whether, in consideration of its past for-hire operations, American Farm Lines has properly been found fit to be the recipient of a motor common carrier certificate?

For reasons that will be detailed below, we have concluded that numbered questions one through three, inclusive, should be answered in the negative, while questions four and five should be answered in the affirmative.

The question of whether or not an agricultural cooperative association may be licensed as a common carrier by the Interstate Commerce Commission is one of first impression. We do have, however, a wealth of decisional law relating to the exempt operations of cooperatives and delimiting and proscribing the activities that may be carried on by an agricultural cooperative. Many, if not most, of those authorities seem to infer that an agricultural cooperative association, upon proper showing, may be certificated by the Interstate Commerce Commission. Indeed, the Intervening Defendant in this case, American Farm Lines, was granted emergency authority to transport Class A and B explosives, which authorization was upheld as being proper by the Supreme Court of the United States. See American Farm Lines v. Black Ball Freight Service et al., 397 U. S. 532, 90 S.Ct. 1288, 25 L.Ed.2d 547. It is true that the precise issue was not before the High Court in that case, but if any impediment to licensing existed by reason of the fact that the applicant was a cooperative, it surely would have been mentioned there. We think it noteworthy that the Congress, while considering the 1968 amendments to the Interstate Commerce Act 49 U.S.C. § 303(b)(5), said nothing indicative of a legislative intent to prohibit agricultural cooperatives from seeking certification. Many courts, including this one, in passing upon the limitations imposed upon cooperatives and in restraining activities outside of those described in section 303(b)(5) and section 15(a) of the Agricultural Marketing Act 12 U.S.C. § 1141j(a), have suggested that an agricultural cooperative may be certificated by holding that some hauling may not be performed "without first obtaining a certificate or permit under the provisions of the Interstate Commerce Act." See Munitions Carriers Conference, Inc. v. American Farm Lines, 415 F.2d 747 (CA10, 1969); Munitions Carriers Conference, Inc. v. American Farm Lines, D.C., 303 F.Supp. 1078, affirmed 440 F.2d 944 (CA10, 1971); Interstate Commerce Commission v. Milk Producers Marketing Company, 405 F.2d 639 (CA10, 1969); Northwest Agricultural Cooperative Association v. Interstate Commerce Commission, 350 F.2d 252 (CA9, 1965), cert. denied 382 U.S. 1011, 86 S.Ct. 620, 15 L.Ed.2d 526 (1966); Agricultural Transportation Association of Texas v. United States, 274 F.Supp. 528 (N.D.Tex., 1967); Interstate Commerce Commission v. All American Association, 281 F.Supp. 18 (N.D.Tex., 1968). Supportive of the argument that agricultural cooperatives are not disqualified from being licensed by the Interstate Commerce Commission is the legislative history of the 1968 amendments to section 203(b)(5), wherein Chairman Staggers of the House Interstate and Foreign Commerce Committee, made it clear that cooperatives were eligible to seek certification and further made it clear that the amendments were enacted only to limit the non-member transportation of goods that could be performed by a cooperative without first obtaining a certificate or permit under the provisions of the Interstate Commerce Act. See H.R.Rep. No. 1667, 90th Cong., 2d Sess. 4 (1968); S.Rep. No. 1152, 90th Cong., 2d Sess. 10 (1968). Also the remarks of Representative Terry appearing at 79 Cong. Rec. p. 12,221, shed further light upon Congressional intent. He said: "Where the cooperatives go into the regular trucking business as such, * * * they should come within the provisions of the bill as to reasonable regulation."

49 U.S.C. § 303(b)(5) as amended in 1968 provides:

Vehicles excepted from operation of law

(b) Nothing in this chapter, except the provisions of section 304 of this title relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include * * *

(5) Motor vehicles controlled and operated by a cooperative association as defined in the Agricultural Marketing Act, approved June 15, 1929, as amended, or by a federation of such cooperative associations, if such federation possesses no greater powers or purposes than cooperative associations so defined, but any interstate transportation performed by such a cooperative association or federation of cooperative associations for nonmembers who are neither farmers, cooperative association, nor federations thereof for compensation, except transportation otherwise exempt under this chapter, shall be limited to that which is incidental to its primary transportation operation and necessary for its effective performance and shall in no event exceed 15 per centum of its total interstate transportation services in any fiscal year, measured in terms of tonnage: Provided, That, for the purposes hereof, notwithstanding any other provision of law, transportation performed for or on behalf of the United States or any agency or instrumentality thereof shall be deemed to be transportation performed for a nonmember: Provided further, That any such cooperative association or federation which performs interstate transportation for nonmembers who are neither farmers, cooperative associations, nor federations thereof, except transportation otherwise exempt under this chapter, shall notify the Commission of its intent to perform such transportation prior to the commencement thereof: And provided further, That in no event shall any such cooperative association or federation which is required hereunder to give notice to the Commission transport interstate for compensation in any fiscal year of such association or federation a quantity of property for nonmembers which, measured in terms of tonnage, exceeds the total quantity of property transported interstate for itself and its members in such fiscal year;

From the foregoing we glean that the intent of the Congress was to define and delimit the exempt operations of agricultural cooperatives and said Act does not and was never intended to make cooperatives ineligible to obtain Commission certification.

The Plaintiffs and Intervening Plaintiffs call our attention to Geraci Contract Carrier, 7 M.C.C. 369 and Ralph A. Veon, Inc., Contract Carrier Application, 92 M.C.C. 248, and argue that under the Geraci-Veon rationale, an agricultural cooperative should not be certificated because such would give it an unfair advantage over the regular common carriers. Under the decision of the Commission in Geraci-Veon, an exempt private carrier is precluded from obtaining a certificate of convenience and necessity, but we do not believe that an agricultural cooperative presents an analogous situation. In Interstate Commerce Commission v. Milk Producers Marketing...