Buckner Trucking, Inc. v. United States
| Decision Date | 23 February 1973 |
| Docket Number | Civ. A. No. 71-H-531. |
| Parties | BUCKNER TRUCKING, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and United States Steel Corporation et al., Intervening Defendants. |
| Court | U.S. District Court — Southern District of Texas |
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Marvin Schulman, Prappas, Caldwell & Moncure, Houston, Tex., for plaintiff.
Anthony J. P. Farris, U. S. Atty., Houston, Tex., Walter B. Comegys, Acting Asst. Atty. Gen., John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., for defendant United States of America.
Fritz R. Kahn, Gen. Counsel, Charles H. White, Jr., Atty., I.C.C., Washington, D. C., for defendant Interstate Commerce Comm.
Wayne L. Emery, Pittsburgh, Pa., Richard P. Keeton, Vinson, Elkins, Searls & Smith, Houston, Tex., for intervening defendant United States Steel Corp.
Austin L. Hatchell, Lanham, Hatchell & Sedberry, Austin, Tex., for intervening defendants Roy L. Jones, Inc. and Western Lines, Inc.
James W. Hightower, Hightower & Alexander, Dallas, Tex., for intervening defendants J. H. Rose Truck Lines, Inc., F. B. Walker, Inc., Wales Transp., Inc., Parkhill Truck Co. and H. J. Jeffries Truck Line, Inc.
Joe G. Fender, Fender & Crawford, Houston, Tex., for intervening defendants Hill & Hill Truck Line, Inc. and E. Jack Walton Trucking Co.
Phillip Robinson, Mert Starnes, Paul D. Angenend, Robinson, Felts, Starnes & Nations, Austin, Tex., for intervening defendants H. S. Anderson Trucking Co. and Tom Hicks Transfer Co.
Thomas E. James, Morgan Nesbitt, Dallas, Tex., for intervening defendant C & H Transportation Co.
Before INGRAHAM, Circuit Judge, NOEL and BUE, District Judges.
In this action plaintiff Buckner Trucking, Inc. seeks to set aside and enjoin enforcement of certain orders of defendant Interstate Commerce Commission (Commission) which resulted in the grant of certificates of public convenience and necessity to twelve intervening defendants. Jurisdiction is invoked under 28 U.S.C. §§ 1336, 2321-2325 and 5 U.S.C. §§ 702-706. A three-judge court was convened pursuant to 28 U.S.C. § 2284.
The proceedings before the Commission which led to the issuance of the orders in issue can be briefly summarized. On October 29, 30, 31 and November 3, 1969, twelve applications were filed with the Commission seeking certificates of public convenience and necessity. These would authorize the applicants to operate motor vehicles in interstate commerce as common carriers of iron and steel articles from Baytown and East Baytown, Texas (points in the Houston, Texas Commercial Zone) to points in Arkansas, Kansas, Louisiana, Mississippi, New Mexico and Oklahoma. These applications were occasioned by the opening of a new United States Steel Corporation plant within the Houston Commercial Zone at East Baytown, Texas. Between November 27 and December 4, 1969, notices of the filing of the applications were published in the Federal Register.1 Protests to the applications were duly filed by five motor carriers, and United States Steel Corporation then intervened in support of all the applications. The applications were subsequently consolidated and set for hearing before a hearing examiner on September 16, 1970. Notice of the hearing was sent to all parties of record in compliance with the Commission's rules of practice. Prior to the scheduled hearing the protests of the five motor carriers were withdrawn. On September 16, 1970, a hearing was held. On October 14, 1970, the hearing examiner filed a report and entered an order recommending that appropriate certificates be issued. The time for filing exceptions to this report and recommended order was extended by the Commission to November 25, 1970.
It is at this point in the administrative proceedings that plaintiff makes its first appearance. On November 16, and November 18, 1970, plaintiff filed a petition for leave to intervene, for a further hearing and for leave to file exceptions to the report and recommended order. On December 7, 1970, the Commission denied plaintiff's various pleadings for the reason that "no sufficient or proper cause appears at this time, for permitting petitioner to participate as a party to the concerned cases or for giving further consideration to the tendered matter."2 The Commission also indicated that since no exceptions to the recommended order had been timely filed by a party, this recommended order had become the Order of the Commission as of November 25, 1970, pursuant to Rule 97, 49 C.F.R. § 1100.97, of the Commission's General Rules of Practice. Plaintiff's subsequent motion for reconsideration of the Commission's order and motion to stay effective date of the order approving the applications was denied on March 11, 1971, by Division One of the Commission acting as an Appellate Division upon consideration of plaintiff's pleadings and the response thereto of the various parties.3 Shortly thereafter on April 2, 1971, both the filing of plaintiff's petition seeking a finding that these proceedings involve an issue of general transportation importance and its motion to withhold issuance of the certificates were denied because it was determined that plaintiff was not a party to the proceedings pursuant to Rule 101, 49 C.F.R. § 1100.101, of the Commission's General Rules of Practice.
Plaintiff has traversed virtually the entire spectrum of potential error in asserting its numerous allegations of misfeasance on the part of the Commission in conducting the administrative proceedings. Basically, plaintiff attacks the propriety of certain of the Commission's rules of practice—particularly Special Rule 247, 49 C.F.R. § 1100.247. These contentions can be summarized as follows: (1) The notice of the applications as published in the Federal Register was insufficient to apprise plaintiff that the ensuing order of the Commission would authorize the transportation of iron and steel articles from Houston, Texas; (2) The plaintiff had a statutory right to intervene in the administrative proceedings and to attempt to establish that the certificates should not be issued, since plaintiff's existing transportation service was adequate and the authorization embodied within the certificates should have been restricted to the transportation of iron and steel articles from the plant site; (3) The Commission abused its discretion by arbitrarily refusing to consider plaintiff's exceptions to the report and recommended order, the petition to reconsider and the petition for a finding of general transportation importance; and (4) The order of the Commission granting the certificates is not supported by substantial evidence, and the various orders of the Commission denying plaintiff's petitions lack sufficient findings and conclusions to comply with the Administrative Procedure Act.
On the other hand, the joint answer of the United States and Interstate Commerce Commission basically alleges that plaintiff lacks standing to attack the order of the Commission granting the certificates since it was not a party to the proceedings, its petition for leave to intervene having been properly denied as untimely and without sufficient cause, pursuant to the Commission's General Rules of Practice. Defendants further claim that there is substantial evidence to support the Commission's findings and that the Commission applied proper legal standards in denying plaintiff's petitions and granting the certificates. The answers of the intervening defendant motor carriers take essentially the same position.
The scope of review of a three-judge court is governed by the Administrative Procedure Act, 5 U.S.C. § 706. Ace Lines, Inc. v. United States, 197 F.Supp. 591 (S.D.Iowa 1960) (three-judge court). The standard of judicial review under the Administrative Procedure Act requires that the order of the Commission be presumed to be valid. Bell Lines, Inc. v. United States, 306 F. Supp. 209 (S.D.W.Va.1969) (three-judge court), aff'd per curiam, 397 U.S. 818, 90 S.Ct. 1517, 25 L.Ed.2d 804 (1970). The function of the Court is necessarily limited to deciding if there is substantial evidence to support the Commission's findings and if the Commission applied proper legal standards. Florida East Coast Railway Co. v. United States, 242 F.Supp. 490 (M.D.Fla.) (three-judge court), aff'd per curiam, 382 U.S. 161, 86 S.Ct. 316, 15 L.Ed.2d 228 (1965). As a result, the judicial function is exhausted when some rational basis is found to support the conclusion of the Commission. Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 286-287, 54 S.Ct. 692, 78 L.Ed. 1260 (1934). Review is limited to the record compiled before the Commission. National Trailer Convoy, Inc. v. United States, 240 F. Supp. 286 (N.D.Okl.1965) (three-judge court), aff'd per curiam, 382 U.S. 40, 86 S.Ct. 161, 15 L.Ed.2d 33 (1966).
The Interstate Commerce Act, 49 U.S.C. §§ 301-327, provides for the regulation of motor carriers operating in interstate commerce. The central provisions of the regulatory scheme are sections 206 and 207, 49 U.S.C. §§ 306 and 307, which prohibit motor carriers from operating in interstate commerce unless they hold a certificate of public convenience and necessity. These provisions reflect that such a certificate is, in essence, a revocable license. Section 207 of the Act, 49 U.S.C. § 307 provides that:
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