C & H Transp. Co., Inc. v. I.C.C.

• Decision Date: 13 May 1983
• Docket Number: No. 81-4269,81-4269
• Citation: 704 F.2d 834
• Parties: C & H TRANSPORTATION CO., INC. and J.H. Rose Truck Line, Inc., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 834

704 F.2d 834

C & H TRANSPORTATION CO., INC. and J.H. Rose Truck Line Inc., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America Respondents.

No. 81-4269.

United States Court of Appeals Fifth Circuit.

May 13, 1983.

Thomas E. James, Dallas, Tex., James M. Doherty, Austin, Tex., for petitioners.

Colleen J. Bombardier, Craig M. Keats, Gen. Counsel, I.C.C., Robert B. Nicholson, Margaret G. Halpern, Attys., Dept. of Justice, Antitrust Div., Washington, D.C., for respondents.

Arthur J. Cerra, Kansas City, Mo., for intervenor Ricky Shaw & Sons Transp. Co., Inc.

Petition for Review of an Order of the Interstate Commerce Commission.

Before THORNBERRY, REAVLEY and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

This is a petition for review of an order of the Interstate Commerce Commission ("ICC") granting the intervenor's application for a motor common carrier certificate of convenience and necessity to transport metal products, nonelectrical machinery, and transportation equipment between points in the United States. The principal questions are whether the intervenor was required to prove, as part of its fitness to perform the proposed service, the operational feasibility, from a quantitative standpoint, of its conducting a nationwide service, and whether there is a rational relationship between the geographical scope of the public need shown for the proposed service and the geographical breadth of the authority granted intervenor by the ICC to satisfy that need. We hold that the intervenor was not required to so demonstrate the operational feasibility of its proposal, and that the ICC's order is rational and supported by substantial evidence. We therefore affirm its grant of nationwide authority to the intervenor.

THE FACTS

Intervenor Ricky Shaw Transportation Company, Inc. ("Ricky Shaw"), is a motor common carrier operating in the commercial zone of Kansas City, Missouri and Kansas, and in Missouri intrastate commerce under the authority of the Missouri Public Service Commission. Ricky Shaw also has nationwide authority from the ICC to serve the United States Department of Defense by transporting contractors' machinery, equipment, materials and supplies, iron and steel articles, metal tanks, highway and off-highway motor vehicle equipment and component and replacement parts, and commodities, which, because of size and weight, require the use of special equipment. See 45 F.R. 43286; Transportation of Government Property, 131 M.C.C. 845, 860 (1979).

On September 24, 1980, Ricky Shaw filed an application with the ICC requesting a certificate of convenience and necessity to transport lumber or wood products, primary metal products, fabricated metal products, machinery and supplies, and transportation equipment over irregular routes between points in the United States. The application shows that Ricky Shaw owns a single terminal in Kansas City, seven power units, and fifteen trailers. ¹ In its application In a verified statement, Julius Wright, General Manager of Ricky Shaw, testified that Ricky Shaw would operate seven days a week, twenty-four hours a day, and render an on-call and demand irregular route service; that it would move its shippers' equipment or products from the shippers' main facilities, or from any point where the products or equipment were purchased, to the customers who bought or leased them; and that when an equipment or product item was leased and the job completed or the lease terminated, it would transport the item to the next lease site.

                Ricky Shaw also states that it is "financially able to lease or purchase additional equipment when and if it is needed."    The application contains a balance sheet and an income statement which show that Ricky Shaw has assets of $251,861.77, and that during the first eight months of 1980, it had total operating revenues of $168,416.20, total expenses of $129,526.97, and a profit before taxes of $38,889.23
                

Twelve shippers, all of whom are domiciled in the Kansas City commercial zone, supported Ricky Shaw's application by filing verified certificates of shipper support. ²

Seven of the shippers complained of an inability to obtain carrier commitments when needed. Three of the shippers also stated that they used private carriers to transport their equipment or products.

Six of the shippers, engaged in a nationwide business of buying, selling, or renting bulky equipment or products, stated that because some or all of their shipments were so costly to transport, their practice was to buy the items at the auction or sales site, which might be in almost any state, and then to transport them from that site directly to the ultimate buyer, who likewise might be located anywhere in the continental United States, or to lease an item to one customer and then transport it directly from that customer's location to another customer, without returning it to the shippers' plant sites in or near Kansas City. These shipments were not made between regularly recurring locations. Another shipper, engaged in the manufacture of iron pipe and cast-iron fittings, expressed a need for a carrier to transport these items from its distribution facilities directly to its customers' job sites, which might be in almost any state. Three of the shippers also expressed a need for a carrier who would transport shipments of light, but bulky, items.

All of the shippers failed to list specific cities, other than Kansas City, as the origin and destination points for their shipments. Five of the shippers listed specific states as the origin and/or destination points. ³ Two other shippers also listed specific states, but added that their traffic moved from certain points in the listed states or state to "all points in the United States" or to "all 47 states." ⁴ Two shippers stated that their commodities moved both from Kansas City to points in the United States and from points in the United States to Kansas City. ⁵ And, three of the shippers stated only that their shipments moved "between points in the United States," or "between all points in the United States," or "all points between the 48 states of the Continental United States." ⁶

Fifteen carriers, including petitioner C & H Transportation Co., Inc. ("C & H") and J.H. Rose Truck Line, Inc. ("Rose"), two large and well-established nationwide carriers, opposed Ricky Shaw's application based upon its alleged lack of fitness to provide a responsive nationwide service, its alleged failure to show a need for the proposed service, and the potential loss of their revenue and traffic to Ricky Shaw. Petitioners asked the ICC to conduct an oral hearing on the application, but the ICC refused the request and decided the application under its modified procedure, 49 C.F.R. Sec. 1100.43. ⁷ On February 4, 1981, the ICC's Review Board No. 2 granted Ricky Shaw the authority sought in its application, except that the Commission denied Ricky Shaw authority to transport lumber products. On May 14, 1981, the Review Board's decision was upheld by the ICC's Division No. 1, acting as an appellate division. ⁸

Petitioners present two main contentions. First, they assert that Ricky Shaw failed to make a prima facie showing that it was able to provide a responsive nationwide service, and that approval of its application would serve a useful public purpose, responsive to a public demand or need. Second, assuming that Ricky Shaw made a prima facie showing, petitioners contend that they proved that approval of its application would have a material adverse effect upon their operations to an extent contrary to the public interest.

THE STANDARD OF REVIEW

A decision of the ICC is presumptively valid. Interstate Commerce Commission v. City of Jersey City, 322 U.S. 503, 512-13, 64 S.Ct. 1129, 1133-34, 88 L.Ed. 1420, 1427 (1944). Its decision can be set aside only if it is arbitrary, capricious, an abuse of discretion, not in accordance with law, or unsupported by substantial evidence. Alamo Express, Inc. v. Interstate Commerce Commission, 673 F.2d 852, 856 (5th Cir.1982).

"Under the 'arbitrary and capricious' standard the scope of review is a narrow one. A reviewing court must 'consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of Substantial evidence, while something less than the weight of the evidence, is "such evidence as a reasonable mind might accept as adequate to support a conclusion." Refrigerated Transport Company, Inc. v. Interstate Commerce Commission, 663 F.2d 528, 531 (5th Cir.1981).

                judgment....  Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one.  The court is not empowered to substitute its judgment for that of the agency.'   Citizens to Preserve Overton Park v. Volpe, supra [401 U.S. 402] at 416, 28 L.Ed.2d 136 [91 S.Ct. 814 at 823].  The agency must articulate a 'rational connection between the facts found and the choice made.'   Burlington Truck Lines v. United States, 371 U.S. 156, 168, 9 L.Ed.2d 207, 83 S.Ct. 239  (1962).  While we may not supply a reasoned basis for the agency's action that the agency itself has not given, SEC v. Schenery Corp., 332 U.S. 194, 196, 91 L.Ed. 1995, 67 S.Ct. 1575 [1577] (1947), we will uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned.   Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 595, 89 L.Ed. 1206, 65 S.Ct. 829  (1945)."   Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284-85, 95 S.Ct. 438, 441, 42 L.Ed.2d 447, 455-56 (1974).
                

A PRIMA FACIE CASE

Before issuing a certificate of public convenience and necessity, the ICC must find, in addition to a public need for the transportation services proposed by the applicant, that the applicant is "fit, willing, and able" to provide those transportation services, and to comply with the Interstate Commerce Act...