Chicago and North Western Railway Co. v. United States

Decision Date31 March 1970
Docket NumberCiv. A. No. 68C 2094.
Citation311 F. Supp. 860
PartiesCHICAGO AND NORTH WESTERN RAILWAY COMPANY, Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Chicago, Rock Island and Pacific Railroad Company, and Illinois Central Railroad Company, Plaintiffs, and Ringle Express, Inc. and Home Transportation Company, Inc., Plaintiffs-Intervenors, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Walter Poole Truck Line, Inc. and Walter Poole, doing business as Poole Truck Line, Intervening Defendants.
CourtU.S. District Court — Northern District of Illinois

J. D. Feeney and J. A. Billington, Chicago, Ill., for plaintiff railroads.

Robert E. Born, Marietta, Ga., Robert C. Smith, Indianapolis, Ind., and Eugene D. Anderson, Chicago, Ill., for the intervening plaintiffs.

John H. D. Wigger, Dept. of Justice, Washington, D. C., for the United States.

Manny H. Smith, Interstate Commerce Commission, Washington, D. C., for the I.C.C.

William J. Boyd, Boyd & Blanshan, Chicago, Ill., for the intervening defendants.

Before SWYGERT, Chief Circuit Judge, and PARSONS and MAROVITZ, District Judges.

MEMORANDUM OPINION

SWYGERT, Chief Judge.

Plaintiffs, Chicago and North Western Railway Company, Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Chicago, Rock Island and Pacific Railroad Company and Illinois Central Railroad Company bring this action to set aside an order of the Interstate Commerce Commission. The Commission's order granted authority to Walter Poole, doing business as Poole Truck Line of Evergreen, Alabama, to operate as a common carrier over irregular routes carrying traffic composed of tractors and related agricultural machinery and implements from John Deere Company plant sites located at Waterloo, Dubuque, and Des Moines, Iowa, Horicon, Wisconsin, and Moline, Illinois, to points in Alabama and in Georgia on and south of U. S. Highway 280. Motor carriers, Ringle Express and Home Transportation Company, have intervened as plaintiffs and Walter Poole has intervened as a defendant. We hold that the ICC's action was correct and refuse to set aside its order granting a certificate of public convenience and necessity to Walter Poole to operate as a common carrier over the routes in question.

Poole's application, filed on November 27, 1964, was designed to permit Poole to institute a direct single-line operation to replace the circuitous interline arrangement with Cooper Transfer under which the involved traffic had previously been moving. At the time the application was filed, Poole held authority to transport Deere products from the Deere origin points to Mobile and Monroe Counties, Alabama. Traffic interchanged at points in these counties was transported under the authority of Cooper to the points in Alabama and Georgia. Cooper, who no longer wished to participate in this service, testified on behalf of Poole at the application hearing. Poole's application was also supported by twenty-three Deere dealers in Alabama and the areas of Georgia covered by the application. John Deere Company did not support Poole's application. Poole's application was opposed by various railroads including plaintiff railroads and by the intervening plaintiff motor carriers.

The examiner conducted a hearing in March and July of 1965 and, thereafter, issued a recommended report and order granting the application in its entirety. Protestants filed exceptions to this report. Subsequently the Operating Rights Review Board Number 2 refused to adopt the examiner's recommendation and denied the application in its entirety. Poole filed a petition for reconsideration which was denied by Division 1 of the Commission acting as an Appellate Division. Poole then filed a petition to the full Commission seeking a determination that the proceeding involved an issue of general transportation importance. This petition was denied by order of the Commission in November 1966. Thereafter, in January 1967, Poole instituted an action in the District Court for the Southern District of Alabama to set aside the Review Board's order denying his application. On its own motion, the Commission, on May 2, 1967, vacated the order of the Review Board and reopened the proceeding for reconsideration on the existing record. The district court stayed its own proceedings and on August 23, 1967 the Commission issued its report on reconsideration, adopting the statement of facts and conclusions of the examiner and granting Poole's application.1 Plaintiff railroads and motor carriers filed petitions for reconsideration which were subsequently denied by the Commission in May 1968. In June 1968 Poole was issued a certificate of public convenience and necessity and in July 1968 the Alabama district court dismissed the action before it. The instant proceeding was instituted in November 1968.

Three issues are presented for decision: whether the Commission may reconsider and reverse a prior decision by an Appellate Division which is administratively final; whether the Commission erred as a matter of law in failing to explain why the prior decision was incorrect and to disclose by adequate findings the basis for its reversal; and whether the Commission's decision granting the certificate is supported by substantial evidence.

I

The plaintiffs maintain that, since the order of Division 1 denying Poole's application is a final administrative action,2 the Commission is precluded from reopening Poole's application and granting Poole a certificate. This argument misconceives the scope of the Commission's power to remedy its own errors. Section 17(7) of the Interstate Commerce Act gives the Commission continuing jurisdiction over its orders and empowers it to reconsider and to rescind or modify its orders at any time for the purpose of correcting an error or injustice.3 Baldwin v. Scott County Milling Co., 307 U.S. 478, 59 S. Ct. 943, 83 L.Ed. 1409 (1939); Sprague v. Woll, 122 F.2d 128 (7th Cir.), cert. denied, 314 U.S. 669, 62 S.Ct. 131, 86 L. Ed. 535 (1941); Alamo Express, Inc. v. United States, 239 F.Supp. 694 (W.D. Tex.1965). Administrative finality does not terminate this continuing jurisdiction but merely determines the ripeness of Commission action for judicial review. In contrast to certain other regulatory statutes,4 the Interstate Commerce Act provides no definite cutoff after which the Commission is precluded from reconsidering its orders.5 In re National Labor Relations Board, 304 U.S. 486, 58 S.Ct. 1001, 82 L.Ed. 1482 (1938).

Plaintiffs attempt to distinguish the instant case by arguing that previous cases have permitted the Commission's jurisdiction to continue only where the Commission has decided to grant authority and where jurisdiction is retained "to shape the form and content of the certificate in light of the applicable statutory directions." In such cases the affirmative step of delivery of the certificate to the applicant estops the Commission from reconsidering its action. Watson Bros. Transportation Co. v. United States, 132 F.Supp. 905 (D.C. Neb.), aff'd per curiam, 350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810 (1955). Plaintiffs argue by analogy that the decision to deny an application should be treated in the same way as the affirmative act of delivery of the certificate to the applicant.

Plaintiffs' position in unsupported by case law or by sound policy. In Resort Bus Lines, Inc. v. ICC, 264 F.Supp. 742 (S.D.N.Y.1967), the examiner recommended the grant of a certificate, the Review Board reversed the examiner and denied the application and this denial was affirmed on petition for reconsideration appeal by an Appellate Division. On petition for reconsideration by the applicant the Appellate Division reopened on the existing record and granted the application. In the Resort case, which, in all relevant respects, is identical to the instant case, the court held that the power of the Appellate Division to reconsider its own action extends "at least prior to the time that an actual certificate of convenience and necessity has been issued." The rationale for its decision, which is equally applicable here, was stated by the court as follows:

Moreover, it is in the best interests of judicial economy and agency responsibility to allow the Appellate Division to reconsider its orders, rather than to compel the losing party to seek immmediate review in the courts. Resort Bus Lines, Inc. v. ICC, 264 F. Supp. 742, 745 (1967).

The position of the court in the Resort case has also been followed by the Commission in Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines, Inc., 101 M.C.C. 719 (1967).

The plaintiffs, relying upon Transamerican Freight Lines, Inc. v. United States, 258 F.Supp. 910 (D.C.Del.1966), argue that, regardless of the continuing jurisdiction theory, the Commission is without statutory authority to reconsider the action of one of its Appellate Divisions. Reliance upon the Transamerican case is misplaced. The interpretation of the provisions of the Interstate Commerce Act offered by the court in Transamerican was expressed sua sponte and was totally unnecessary to the holding of the case. The Commission has rejected the court's obiter dictum, stating that, although the statute and rules limit the right of a party to seek reconsideration by the Commission, they in no way limit the power of the Commission to reconsider on its own motion. Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines, Inc., 101 M.C.C. 719 (1967). The Commission explained its reasoning as follows:

The right of an administrative body to reconsider at any time is inherent in the power to decide and is a necessary procedure in order to permit an administrative agency to carry out properly its functions under the enabling statutes. If we were precluded from correcting the error that * * * we find was promulgated in the prior report, justice would be thwarted and would only result in imposing a totally unnecessary burden on a reviewing c
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