Capital Transit Co. v. United States

• Decision Date: 23 April 1951
• Docket Number: Civ. A. No. 398-51.
• Parties: CAPITAL TRANSIT CO. v. UNITED STATES et al.
• Court: U.S. District Court — District of Columbia

97 F. Supp. 614

CAPITAL TRANSIT CO. v. UNITED STATES et al.

Civ. A. No. 398-51.

United States District Court District of Columbia.

Argued March 15, 1951.

Decided April 23, 1951.

COPYRIGHT MATERIAL OMITTED

Edmund L. Jones, F. G. Awalt and Daryal A. Myse, all of Washington, D. C., for plaintiff.

John F. Baecher and William J. Hickey, Washington, D. C., for defendant.

Manuel J. Davis and S. Harrison Kahn, Washington, D. C., for intervenor Oriole Motor Coach Lines, Inc.

Daniel W. Knowlton and H. L. Underwood, Washington, D. C., for intervenor Interstate Commerce Commission.

Before WASHINGTON, Circuit Judge, and KIRKLAND and BASTIAN, District Judges.

WASHINGTON, Circuit Judge.

The Capital Transit Company brings this suit to set aside an order of the Interstate Commerce Commission dated January 8, 1951, granting an application by Oriole Motor Coach Lines, Inc., for a certificate of convenience and necessity, pursuant to section 207 of the Motor Carrier Act of 1935, 49 U.S.C.A. § 307(a), to transport passengers in interstate commerce between certain points in Maryland and the District of Columbia. The net effect of the Commission's order is to lift certain restrictions on Oriole's operations which were imposed by a previous certificate of convenience and necessity issued by the Commission. These restrictions prohibited the rendition of service to persons traveling between points in the District of Columbia and points on Oriole's routes south of the intersection of Forest Glen Road and Maryland Highway 97, as well as south of the intersection of Old Bladensberg Road (Maryland Highway 193) and Colesville Road (U. S. Highway 29). Thus, while Oriole buses rendered service from the District of Columbia to points beyond these intersections, and their buses traversed this area, they could neither take passengers from the District of Columbia to points south of the intersections, nor pick up passengers south of the intersections for transportation to the District of Columbia.¹ The Capital Transit Company operates routes in Montgomery County which are generally similar to those operated by Oriole, except that Oriole's routes continue for a substantial distance beyond the Montgomery County termini of the Capital Transit lines. Capital Transit's lines are on an unrestricted basis as far as picking up passengers is concerned, and thus the lifting of the restrictions on Oriole would place the latter in direct competition with Capital Transit in this area. At the southern end, both companies' lines terminate at Georgia Avenue and Alaska Avenue, just inside the District of Columbia boundary line.²

Capital Transit intervened in the proceedings before the Interstate Commerce Commission which led up to the order granting the certificate of convenience and necessity to Oriole. Capital Transit took an active part in the proceedings, seeking chiefly to establish that its own service in Montgomery County over the routes in question was adequate, and that the grant of the proposed certificate to Oriole would not be in the public interest. In the present action its principal contentions are (1) that there was no substantial evidence to support the Commission's conclusion that the proposed service by Oriole is or will be required by present or future public convenience and necessity; (2) that the Commission had no substantial evidence before it to support its conclusion that Oriole is fit, willing and able properly to perform the service proposed and to conform to the provisions of the Motor Carriers Act and the requirements of the rules and regulations of the Commission; (3) that the Interstate Commerce Commission did not make the necessary findings of fact to support its determination, under section 8(b) of the Administrative Procedure Act, 5 U.S.C.A. § 1007 (b).

Before considering these questions, it may be appropriate to outline the proceedings before the Commission: Pursuant to the provisions of section 205 of the Motor Carriers Act, 49 U.S.C.A. § 305, the Commission appointed a Joint Board (No. 120), consisting of a representative of Maryland and a representative of the District of Columbia, to consider Oriole's application. On August 26, 1949, the Joint Board held a hearing. Oriole introduced testimony to the effect that it was now operating its buses with a large number of vacant seats. It further introduced evidence showing that the population of Silver Spring and Montgomery County had substantially increased in recent years, and put on a number of witnesses whose testimony tended to show that there was a demand for increased transportation service among residents of Montgomery County along the routes of Oriole and Capital Transit which are here in question. Among these witnesses was the President of the Board of Trade of Silver Spring, who testified that the merchants of the community desired additional transportation service from outlying areas into the Silver Spring shopping center. He stated that the lifting of the restrictions on Oriole would be of benefit to Silver Spring and its residents. (Tr. 93, 106) A witness appearing for the Allied Civic Group, composed of some 20 citizens' associations in the Silver Spring area, testified on a similar basis. Some nine other witnesses also supported the application.

Capital Transit, in opposing Oriole's application, offered the testimony of its chief engineer, who testified in general terms that for a period of years Capital Transit had suffered a loss through its Maryland operations, and that if the restrictions on Oriole were lifted this loss would be increased. During the course of the proceeding it was intimated that under such circumstances Capital Transit might cease operating lines competing with Oriole in the Silver Spring area. Capital Transit also endeavored to bring out, through its engineer and through cross-examination of the public witnesses, that its services were adequate, and that the public would suffer if, as a result of competition, Capital Transit decided to cease some or all of its Maryland operations.³

Such, in general, was the nature of the evidence adduced as to the need for additional service. Joint Board No. 120 rendered a report, served November 2, 1949, recommending the grant to Oriole of the certificate for which it had applied. The report included findings of fact that the present and future public convenience and necessity "require operation by applicant * * *" in the manner proposed, that "applicant is fit, willing, and able properly to perform such service and to conform to the requirements of the act and our rules and regulations thereunder; and that an appropriate certificate should be issued." Exceptions to the report and recommended order were filed by Capital Transit.

Division 5 of the Commission, which reviewed the report of the Joint Board, rendered a report dated August 7, 1950. The evidence was recited at some length and the testimony offered by Oriole and Capital Transit was fully discussed. Its decision was in favor of granting the certificate. Capital Transit then filed a petition for reconsideration and further hearing. In that petition it offered more specific statements as to its losses from operations in the area, though apparently these were not accompanied by a full statement of the accounting methods employed.⁴ Nor was any explanation given for failure to submit these figures to the Joint Board or Division 5.⁵ The Interstate Commerce Commission at a general session held on January 8, 1951, denied Capital Transit's petition, "for the reason that the evidence of record substantiates the findings of Division 5," and that Capital Transit had not established "that it is in a position to present additional material evidence at a further hearing which would alter the conclusions already reached."

Turning now to Capital Transit's first contention: namely, that the Commission's determination of public convenience and necessity is not supported by substantial evidence on the record considered as a whole, as required by section 10(e) of the Administrative Procedure Act, 5 U.S.C.A. § 1009(e). The Supreme Court has lately interpreted that section as applied to a labor practice proceeding before the National Labor Relations Board. The Court held that section 10(e), as well as the provisions of the Labor Management Relations Act governing judicial review, required the reviewing court to consider the entire record of evidence and to apply the following principle: "The Board's findings are entitled to respect; but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board's decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both." Universal Camera Corp. v. National Labor Relations Board, 71 S.Ct. 456, 465. The "substantial evidence" rule of section 10(e) (5) of the Administrative Procedure Act applies by its terms to cases "subject to the requirements of sections 7 and 8 of the Administrative Procedure Act or otherwise reviewed on the record of an agency hearing provided by statute". The Supreme Court has recently held that proceedings of the present character are subject to the requirements of sections 7 and 8 of the Administrative Procedure Act, 5 U.S.C.A. §§ 1006, 1007. Riss & Co., Inc. v. United States, 71 S.Ct. 620. Accordingly, we shall follow here the principles set forth in the Universal Camera decision.

In applying that standard we must keep in mind that the Commission is, like the Labor Board, "one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect." And even where expertise is not required, the court may not substitute its own view for that of the Commission on a "choice between two...