Carolina Freight Carriers Corporation v. United States

• Decision Date: 03 November 1969
• Docket Number: Civ. A. No. 2496.
• Citation: 307 F. Supp. 723
• Court: U.S. District Court — Western District of North Carolina
• Parties: CAROLINA FREIGHT CARRIERS CORPORATION, a Corporation, Cherryville, North Carolina, and Mercury Motor Express, Inc., a Corporation, Tampa, Florida, Plaintiffs, v. The UNITED STATES of America and the Interstate Commerce Commission, Defendants, and R-C Motor Lines, Inc., Intervenor-Defendant.

307 F. Supp. 723

CAROLINA FREIGHT CARRIERS CORPORATION, a Corporation, Cherryville, North Carolina, and Mercury Motor Express, Inc., a Corporation, Tampa, Florida, Plaintiffs, v. The UNITED STATES of America and the Interstate Commerce Commission, Defendants, and R-C Motor Lines, Inc., Intervenor-Defendant.

Civ. A. No. 2496.

United States District Court W. D. North Carolina, Charlotte Division.

November 3, 1969.

COPYRIGHT MATERIAL OMITTED

Frank A. McCleneghan, Hall Morrison Johnston, Jr., McCleneghan, Miller, Creasy & Johnston, Charlotte, N. C., Edwar G. Villalon, David C. Venable, Jon F. Hollengreen, McInnis, Wilson, Munson & Woods, Washington, D. C., for Carolina Freight Carriers Corp., Cherryville, N. C., and Mercury Motor Express, Inc., Tampa, Fla., plaintiffs.

Richard W. McLaren, Asst. Atty. Gen., Robert A. Hammond, III, Acting Asst. Atty. Gen., John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., Keith S. Snyder, U. S. Atty., Asheville, N. C., for the United States, defendant.

Robert W. Ginnane, Gen. Counsel, and Nahum Litt, Atty., Interstate Commerce Commission, Washington, D. C., for Interstate Commerce Commission, defendant.

Joseph M. Griffin, Griffin & Gerdes, Charlotte, N. C., and J. Edward Allen, Glickstein, Crenshaw, Glickstein, Hulsey & Fay, Jacksonville, Fla., for R-C Motor Lines, Inc., Jacksonville, Fla., intervening defendant.

Before CRAVEN, Circuit Judge, and JONES and McMILLAN, District Judges.

MEMORANDUM OF DECISION AND ORDER

WOODROW WILSON JONES, Chief District Judge:

This action was instituted by the plaintiffs Carolina Freight Carriers Corporation and Mercury Motor Express, Inc., to set aside, enjoin and annul a determination and order made and entered by the Interstate Commerce Commission in a proceeding entitled, R-C Motor Lines, Inc.—Extension—Florida, Docket No. MC-75651, (Sub. No. 57). The complaint challenges the action of the Commission in granting R-C Motor Lines (hereinafter referred to as "R-C") authority to transport general commodities, with the usual exceptions, over certain regular routes between Jacksonville, Florida, and certain points in Florida, including Miami, Tampa, and Sarasota, serving all intermediate points and the off-route points of Cape Kennedy, Umatilla, Eustis, and Groveland and points in Florida within a 25-mile radius of Jacksonville, Orlando, Haines City and Tampa. At the present time R-C Motor Lines operates between Boston and Jacksonville serving numerous States and areas between, and operates a daily scheduled service between authorized points in the transportation of less-than truckload shipments with a call and demand service afforded for the handling of truckload and substantial volume quantities. The proposed service would eliminate interchange at Jacksonville on shipments moving from and to Florida points.

The application filed by R-C on February 11, 1965, was opposed originally by sixteen trucking firms operating in the Florida area but four of them withdrew their opposition and another did not present evidence. Hearings were conducted before a Joint Board named and constituted pursuant to Section 205 of the Interstate Commerce Act, 49 U.S.C.A. § 305, which extended over a period from October 18, 1965, to November 10, 1966, resulting in more than 15,000 pages of testimony and 700 exhibits. The Board filed a report and recommended order on April 3, 1968. The Commission entered its Decision and Order on February 3, 1969, adopting the Board's statement of facts, conclusions and findings and affirmed the Joint Board's recommended order. On March 12, 1969, plaintiffs filed a joint petition for leave to file a petition for reconsideration and for further hearing, which was denied by the Commission on May 1, 1969.

The plaintiffs contend the order of the Commission was arbitrary, capricious, unreasonable, and was based upon an unwarranted general and conclusionary interpretation of the facts of record. They further contend that the Commission abused its administrative discretion and failed to properly evaluate the evidence of record, and that its order was based upon misinterpretation of both the law and the evidence.

The petition for temporary restraining order was heard by Honorable James B. McMillan, District Judge, and the Commission was restrained from issuing operating rights or a Certificate of Convenience and Necessity to R-C, pending decision of a three-judge court on the merits of the case. The case was set for hearing before a three-judge court pursuant to 28 U.S.C.A. § 2284, and was heard before Circuit Judge J. Braxton Craven, Jr., and District Judges Woodrow W. Jones and James B. McMillan on August 18, 1969.

We affirm the Commission, dissolve the restraining order, and dismiss the action.

The pleadings and briefs filed by the plaintiffs contain some fourteen specific instances in which they claim the Commission erred. By consolidation, these assignments of error can be stated as follows:

1. The Commission committed error in deciding the proceeding was administratively final when order of February 10, 1969, was issued, and erred in not allowing plaintiffs to file a petition for reconsideration.

2. The Commission erred in failing properly to consider the impact of new services authorized after the close of the record in this case but before order of February 10, 1969, and erred in describing authority in terms of a mileage radius.

3. The Commission erred in failing to properly weigh, consider and discuss the evidence presented.

4. The Commission's order was not supported by substantial evidence of record.

5. The Commission erred in placing the initial burden of proof on plaintiffs to prove they could meet the proposed service standards of R-C Motor Lines, without first requiring R-C, as applicant, to prove its ability to meet those standards, and to prove it was in a position to render the proposed service.

6. The Commission erred in not finding that R-C had failed to sustain the burden of establishing a need for public convenience and necessity.

The test on this judicial review is whether the action of the Commission is supported by substantial evidence on the record as a whole, and whether the Commission's procedures have denied the plaintiffs any substantive rights. 5 U.S.C.A. § 706 (formerly § 1009); Illinois Central Ry. Co. v. Norfolk & W. Ry. Co., 385 U.S. 57, 87 S.Ct. 255, 17 L.Ed.2d 162; Youngblood Truck Lines v. United States., 221 F.Supp. 809 (W.D. N.C.1963); Clay Hyder Trucking Lines v. United States, 234 F.Supp. 673; and Carolina Freight Carriers Corp. v. United States, 297 F.Supp. 848 (W.D. N.C.1969).

Under these broad and basic issues, the Court will consider all the material assignments of error contained in the pleadings and briefs.

Did the Commission's procedures deny the plaintiffs any substantive rights?

Plaintiffs contend that the Commission's action in using its "Dando" or Short Form Decisional Process was arbitrary and capricious and that if its use were discretionary, the Commission abused its discretion. They contend that the Commission used the Short Form and adopted the findings and conclusions of the Joint Board and affirmed its report without considering certain important happenings subsequent to the hearing and which were pertinent to the decision. They further contend that the Commission admits and recognizes in its short decision that mistakes of various kinds appear in the Joint Board's report but these mistakes are not identified and there is no indication what consideration was given them. These contentions are without merit.

The Commission adopted the Joint Board's statement of facts and conclusions of law using the following language: "We find, That the evidence considered in the light of the pleadings does not warrant a result different from that reached by the joint board; and that the statement of facts, the conclusions, and the findings of the joint board, being proper and correct in all material respects, should be, and they are hereby, affirmed and adopted as our own."

It is now settled law that when the Commission finds no material error in the statement of facts and the conclusions thereon of the Joint Board or hearing examiner, it is not required to prepare a detailed report, but may affirm and adopt the report of such board or examiner as its own. This application was filed February 11, 1965, and now after four and one-half years, 15,000 pages of testimony and 700 exhibits, we are asked to send it back for further hearings because the Commission did not prepare its own detailed report. Judge Brown of the Fifth Circuit, in the case of F.T.C. v. J. Weingarten, Inc., 336 F.2d 687 (1964), after referring to a case in which the Supreme Court of the United States had deplored the "nigh interminable" delay in connection with some administrative agency proceedings, said:

"And we are the first to emphasize that agencies must exert the greatest resourceful, imaginative ingenuity in devising procedures which in a day of ever-expanding dockets will permit the regulatory process to function properly with reasonable dispatch. Hill v. FPC, 335 F.2d 355 (5th Circuit 1964)."

In Younger Brothers, Inc. v. United States, 238 F.Supp. 859 (S.D.Tex.1965), the Court said:

"This leaves only the tag end contention that in its disposition of the case, the Commission failed to comply with the requirements of § 8(b), 5 U.S.C.A., § 1007(b) (Now § 557) of the APA, that the order reflect the reasons and basis for the findings and conclusions. If this is a claim that Division 1, otherwise fully satisfied with Examiner's Report, has to go through the laborious process of issuing its own decision-report, it quickly fails. The Commission, as do other adjudicatory tribunals, court or administrative, has the right, if not the duty, to exercise imaginative resourcefulness and judicial inventiveness in developing procedures which enable it to stem the tide of ever increasing backlogs. See FTC v. J.

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