Central Freight Lines, Inc. v. U.S.

• Citation: 669 F.2d 1063
• Decision Date: 11 March 1982
• Docket Number: No. 81-4219,81-4219
• Parties: CENTRAL FREIGHT LINES, INC., et al., Petitioners, v. The UNITED STATES of America and Interstate Commerce Commission, Respondents. . Unit A *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1063

669 F.2d 1063

CENTRAL FREIGHT LINES, INC., et al., Petitioners, v. The UNITED STATES of America and Interstate Commerce

Commission, Respondents.

No. 81-4219.

United States Court of Appeals, Fifth Circuit.

Unit A ^*

March 11, 1982.

Richard A. Allen, Gen. Counsel, I. C. C., William F. Smith, Atty. Gen., U. S. Dept. of Justice, Margaret G. Halpern, Antitrust Div., Robert B. Nicholson, Robert J. Grady, I.C.C., Washington, D. C., for respondents.

Lawrence A. Winkle, Dallas, Tex., for East Texas Motor Freight Lines, Inc.

Maxwell A. Howell, Washington, D. C., for Alamo Exp., Inc.

William O. Turney, Robert E. Campbell, Washington, D. C., for Roadway Exp., Inc.

Wentworth E. Griffin, Alex M. Lewandowski, Frank W. Taylor, Jr., Kansas City, Mo., for Transcon Lines.

Eugene T. Liipfert, Mark J. Andrews, Washington, D. C., for Consolidated Freightways Corp. of Delaware.

Donald B. Levin, Edward G. Bazelon, Chicago, Ill., for Yellow Freight System, Inc. and T.I.M.E., D.C., Inc.

Kenneth G. Thomas, Lubbock, Tex., for T.I.M.E., D.C., Inc.

Gerald D. Colvin, Jr., argued, Birmingham, Ala., for Ryder Truck Lines, Inc. and Bowman Transp., Inc.

Timothy Mashburn, argued, Joseph H. Hart, Phillip Robinson, Robinson, Felts, Starnes & Latting, a Professional Corp., Austin, Tex., for Central Freight Lines, Inc., Brown Exp., Inc.

Leroy Hallman, Phinney, Hallman, Pulley & Coke, Dallas, Tex., for Southwestern Motor Transport, Inc.

James M. Doherty, Austin, Tex., for Red Arrow Freight Lines, Inc.

Ewell H. Muse, Jr., Timothy Mashburn, Austin, Tex., for Basse Truck Line, Herder Truck Lines, Southwest Transport.

Mike Cotten, Clark, Thomas, Winters & Shapiro, Austin, Tex., for Merchants Fast Motor Lines, Inc.

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

Before THORNBERRY, REAVLEY and POLITZ, Circuit Judges.

THORNBERRY, Circuit Judge:

This is an action reviewing the decision of the Interstate Commerce Commission in lead docket No. MC-2202 (Sub-No. 568)F, Roadway Express, Inc., Extension-South Texas, ¹ in which the Commission granted the applications of eight motor carriers for long-haul single-line operating rights into and out of Texas. These applications were protested in the Commission-and are now challenged before this Court-by many of the motor carriers that operate short-haul joint-line services in Texas. For the reasons discussed below, we reject appellants' claims and affirm the Commission's decision.

I. The Facts

In 1978, nine interstate motor carriers filed applications with the Commission seeking authorization under the Motor Carrier Act of 1935, 49 Stat. 543 (1935), to extend their operating rights into the Texas market. Appellants filed appropriate pleadings protesting the applications under 49 C.F.R. § 1100.247 (1980). The Commission then ordered the applications set for oral hearing.

At two prehearing conferences held in April and October 1979, the parties discussed the hearing rules. The Administrative Law Judge (ALJ) announced that he would employ a hybrid procedure, allowing oral testimony and cross-examination for a certain percentage of the witnesses and then using the Commission's modified procedure for the remainder. ²

Oral hearings began in November 1979, and consumed five weeks during the winter of 1979-1980 for presentation of the applicants' cases-in-chief. After the applicants had presented 127 witnesses for oral testimony and cross-examination, the ALJ concluded that he had heard a representative sample of the public witness evidence and given the protestants sufficient opportunity for cross-examination. The remaining evidence-the testimony of approximately 1,600 other public witnesses-was considered in verified statement form under the modified procedure.

The applicants' public witnesses, representing a wide variety of businesses, testified that existing joint-line services were unresponsive to their needs; they therefore supported the applicants' supposedly more efficient single-line services. In addition, the applicants' expert witnesses testified that population and industry growth throughout Texas indicated a growing need for additional carrier service.

In July 1980, following the passage of the Motor Carrier Act of 1980, Pub.L.No.96-296, 94 Stat. 793 (1980), the protestants presented their cases-in-chief. The protestants attempted to show that existing services adequately met the public need and that additional service would create harmful competition.

The ALJ then ordered the submission of post-hearing briefs, advising the parties that the entry criteria of the Motor Carrier Act of 1980 applied and that the briefs should be drafted accordingly. On February 27, 1981, the ALJ served the Initial Decision. ³ This Decision granted all of the applications (except that of bankrupt Strickland Transportation Company). Specifically, the ALJ concluded that, especially in light of the overwhelming public witness support, the applicants' evidence "more than satisfies applicant's burden of showing that the service proposed will serve a useful public purpose, responsive to a public demand or need." Initial Decision at 92. ⁴ The ALJ also determined that the protestants had failed to show how the proposed service would be contrary to the public interest. Id. at 98. Finally, the ALJ found that the proposals were consistent with the goals of the new National Transportation Policy set out in 49 U.S.C. § 10101(a) (1981). Id. at 99-100.

The protestants then filed an administrative appeal with a three-member division of the Commission. The division denied the protestants' appeal and adopted the Initial Decision. The division did, however, correct "certain erroneous but harmless statements" in the Initial Decision concerning the application of the new statute and the acceptance of the verified statement evidence. Having exhausted their administrative remedies, the protestants filed this appeal.

II. The Hearing Procedure

Initially, appellants claim that the hearing procedure employed by the ALJ denied them due process. We disagree. ⁵

Appellants' argument assumes that due process requires cross-examination of all witnesses whose testimony was taken in the hearing. Due process, however, "is not a technical conception with a fixed content unrelated to time, place and circumstances." Mathews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 902, 47 L.Ed.2d 18 (1976). Instead, it only "calls for such procedural protections as the particular situation demands." Id. The Administrative Procedure Act similarly mandates only "such cross-examination as may be required for a full and true disclosure of the facts." 5 U.S.C. § 556(d) (1977). Cross-examination is thus not an absolute right in administrative cases.

The cross-examination allowed here was sufficient. Under Mathews v. Eldridge, the process that is due depends on three factors: first, the private interest affected by the official action; second, the risk of erroneous deprivation of such interest through the procedures used, and the probable value of additional procedures; and third, the government's interest, including the function involved and the fiscal and administrative burden that the additional procedures would entail. 424 U.S. at 335, 96 S.Ct. at 903, 47 L.Ed.2d 18 (1976). In this case, the private interest lies in the appellants' economic stake in business that may possibly be lost to competition from the applicants' proposed services. While this threatened loss is undoubtedly important to appellants, the hardship does not compare with the personal economic losses imposed without a full evidentiary hearing in other cases. See Mathews v. Eldridge, supra; Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974); Cafeteria & Restaurant Workers v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961). Further, the procedures employed here adequately protected the appellants' interests. The cross-examination of 127 public witnesses rendered minimal the risk of erroneously depriving the appellants' interests. Additional cross-examination would have made little difference. And the burden of cross-examining the remaining 1,600 witnesses would have been tremendous; in fact, it would have multiplied manifold a hearing that was already one of the longest service extension cases on record. Likewise, the administrative and fiscal cost of cross-examining 1,600 witnesses would have been great. Full cross-examination, in other words, would have imposed a burden not justified by any significant improvements in the protection of appellants' interests or in the accuracy of the hearing procedure.

More importantly, the cross-examination denied here did not harm appellants, because the written verified statement evidence was not necessary to the ALJ's decision. As both the ALJ and the Commission division found, the testimony of 127 public witnesses "who were subject to cross-examination more than satisfies applicant's burden of showing that the service proposed will serve a useful public purpose, responsive to a public demand or need." This oral testimony alone provides substantial evidence to support the decision under review. See part VII infra. And appellants make no showing that the uncross-examined evidence would cause any difference in the decision. Indeed, the ALJ found the cross-examined oral testimony to be representative of all of the evidence, and this Court's reading of the record corroborates his conclusion. The written verified statement evidence simply repeats the substance of the oral testimony. ⁶ Under these circumstances, the partial denial of cross-examination was harmless. See generally Ka Fung Chan v. Immigration & Naturalization Service, 634 F.2d 248, 258 (5th Cir. 1981) ("proof of a denial of due process in an administrative proceeding requires a showing of substantial prejudice").

III. Which Law Applies?

Because Congress enacted the Motor Carrier Act of 1980 in the midst of the proceedings below,...