Cartwright Van Lines, Inc. v. United States, 72 CV 122 W-4.

• Decision Date: 04 August 1975
• Docket Number: No. 72 CV 122 W-4.,72 CV 122 W-4.
• Court: U.S. District Court — Western District of Missouri
• Parties: CARTWRIGHT VAN LINES, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Bekins Van Lines Co. et al., Intervenors.

400 F. Supp. 795

CARTWRIGHT VAN LINES, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Bekins Van Lines Co. et al., Intervenors.

No. 72 CV 122 W-4.

United States District Court, W. D. Missouri, W. D.

August 4, 1975.

James A. Polsinelli, Local Counsel, Kansas City, Mo., Charles Ephraim, Ephraim & Clark, Washington, D.C., for plaintiff.

Frederick O. Griffin, Local Counsel, Asst. U. S. Atty., Kansas City, Mo., Lloyd J. Osborn, Interstate Commerce Comm., Washington, D.C., for defendants.

Before WEBSTER, Circuit Judge, and COLLINSON and HUNTER, District Judges.

MEMORANDUM AND ORDER

ELMO B. HUNTER, District Judge.

This is an action to set aside an order of the Interstate Commerce Commission (Division I acting as an Appellate Division) dated January 31, 1973. Pursuant to 28 U.S.C. § 2325 requiring a district court of three judges to be convened in suits attacking orders of the Interstate Commerce Commission, the undersigned Court was designated to hear the case.

Plaintiff, Cartwright Van Lines, Inc., is a corporation organized and existing pursuant to the laws of the state of Washington, having its principal place of business in Grandview, Missouri. It is a small, class one motor common carrier of household goods, with gross, annual revenue (1970) of between three and four million dollars. It operates 41 trucks, 71 tractors and 85 trailers. It owns only 2 tractors and 27 trailers. The remainder of the fleet is owned either by agents or by owner-operators. Its 1970 net income before taxes was $43,643.00.

The defendants are the Interstate Commerce Commission, three carriers of household goods who were parties in opposition in the proceedings before the Commission, and the United States which was made a party on this appeal and which stands neutral in this controversy.

Cartwright's total authority to transport household goods was the sum of some thirty-four individual grants of authority to transport household goods between a limited number of points in forty-six states and the District of Columbia,¹ and did not include the right to operate directly between any and all points contained in its various grants of authority. Many of Cartwright's authorities touched another of its authorities so as to provide "gateways" which to some extent Cartwright used in its transportation operations.²

Believing the use of its gateways to be uneconomical and burdensome in that such use resulted in longer routes than would the use of a direct route, on October 20, 1969, Cartwright applied to defendant Commission for permission to eliminate 16 gateways and to be authorized to render direct service to all points it could serve through its tacking process. Cartwright also sought authority to serve the state of Nevada.³ Seven common carriers of property, specializing in the transportation of household goods, filed protests. The Department of Defense intervened in support of Cartwright's application. Fernstrom Storage and Van Company intervened as a party in opposition.

As a result of appropriate hearings, the Hearing Examiner found against Cartwright. Eventually his decision with one modificiation, was adopted on review by the appellate division of defendant Commission.⁴

Cartwright's Two Contentions

On this appeal Cartwright contends that (1) defendant Commission applied decisional standards or criteria in ruling Cartwright's application different from those employed by it respecting other like contemporary applications, thereby depriving Cartwright of a full and fair hearing; and (2) that defendant Commission failed to discharge its responsibilities under the National Environmental Policy Act of 1969 by summarily finding no significant effect upon the quality of the human environment "while contemporaneously finding that such issues have a significant environmental impact." Cartwright's counsel both in his supporting brief and in oral argument emphasized that Cartwright is not claiming that the action of defendant Commission, for reasons of substantial evidence, is lacking, and concedes that no substantial evidence problem is presented.

Cartwright's First Contention

Illuminating its contention that defendant Commission applied different decisional standards or criteria in denying Cartwright's application from those employed by it in granting other like contemporaneous applications, Cartwright asserts the Commission in Fernstrom Storage and Van Company Extension-Nationwide Service, 110 M.C.C. 452 (1969) aff'd sub nom. Aero Mayflower Transit Co., Inc. v. United States, 1970-1972 Fed.Carr.Rep. #83,308 at 55,442 (S.D.Ind.1972), not otherwise reported, and in King Van Lines, Inc., Extension —48 States, 114 M.C.C. 866 (1972) adopted new and different criteria applicable only to a select number of applicants who somewhat contemporaneously filed for nationwide type authority to transport household goods, and did not give Cartwright the benefit of that criteria, although Cartwright had filed its application prior to the time some who successfully received that beneficial treatment had filed. Defendants respond that the Commission did not adopt new and different criteria and had applied the same traditional criteria to all.

Some preliminary discussion of background matters will aid in understanding our resolution of the issues presented.

An application to eliminate gateways is an application for a new authority requiring a certificate of convenience and necessity. This is so because even though a carrier might perform service from point A to point C by tacking its separate authorities from A to B and from point B to C via its gateway, the carrier has never been granted authority to operate directly between points A and C. No public need has been shown for that service (A to C) and no consideration has been given to the effect of that service on those carriers authorized to service directly those two points, A to C.⁵

The required finding for any certificate of convenience and necessity to issue is set out in Section 207(a) of the Interstate Commerce Act, 49 U.S.C. § 307(a) which provides, "that the proposed service . . . is or will be required by the present or future public convenience and necessity . . .." The burden of proof on the issue of public convenience and necessity rests on the particular applicant for authorization of the proposed service.

The traditional underlying criteria for showing the requisite pubic convenience and necessity for the proposed service are: (1) whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; (2) whether this purpose can or will be serviced as well by existing carriers; and (3) whether this purpose can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest. Pan American Bus Lines Operation, 1 M.C.C. 190 (1936). Thus, the traditional method by which a carrier may show that the public convenience and necessity requires the proposed service is to present evidence of supporting shippers demonstrating the inadequacies of the existing service and the need for additional service.

However, with regard to applications for direct authority to eliminate the necessity for observing gateways, the Commission has adopted alternative criteria by which a carrier may show that the public convenience and necessity requires the proposed service without presenting shippers evidence of public need. Rather, it is sufficient for the applicant to show: (1) that the elimination of the gateways will result in more economical operations; (2) that applicant is actually transporting a substantial volume of traffic from and to the points involved by operating in good faith through the gateways, and (3) that elimination of the gateways would not enable it to institute a new service or a service so different from that presently provided as to materially improve its competitive position to the detriment of existing carriers. Childress-Elimination of Sanford Gateway, 61 M.C.C. 421 (1952); Service Trucking Co., Inc., Extension-Frozen Pie and Pastries, 88 M.C.C. 697 (1962).

In support of its contention that a new and third standard was established in Fernstrom and King, Cartwright notes that in the latter part of the 1960's the defendant Commission became acutely aware of a need for more carriers in the household goods area to have nationwide or equivalent authority.⁶ Cartwright quotes from King Van Lines, Inc., Extension — 48 States, 114 M.C.C. 866 (1972), page 869-70: "This (King) application is one of several requests for transcontinental household goods authority which were filed shortly after the issuance of the entire commission's decision in Fernstrom Storage and Van Company—Nationwide, 110 M.C.C. 452 (1969). Nationwide authority has been granted in seven of these proceedings essentially on the basis of finding (1) that the applicants are already effective competitors for household goods traffic over much of the country, and (2) that conditions prevailing in the industry at the time of filing were such as to warrant the authorization of additional nationwide service. * * * As can be readily observed we are following the criteria established in the Fernstrom case.. . ." * * * The instant application, filed contemporaneously with the application (of Lyon, Red Ball and Neptune) must be decided on the same standards as those applications, and accordingly must be granted."⁷ Cartwright spotlights the words above quoted, "established in the Fernstrom case" as establishing a new, third and favorable standard or criteria which the Commission failed to carry forward and apply to Cartwright.

Recognizing that opinion writing is not an exact science, we have very carefully examined the Fernstrom and King cases and are convinced they did not establish a third set of standards or criteria but simply applied the...