Columbia Terminals Co. v. Lambert

• Decision Date: 23 October 1939
• Docket Number: No. 286.,286.
• Citation: 30 F. Supp. 28
• Parties: COLUMBIA TERMINALS CO. v. LAMBERT et al.
• Court: U.S. District Court — Eastern District of Missouri

30 F. Supp. 28

COLUMBIA TERMINALS CO. v. LAMBERT et al.

No. 286.

District Court, E. D. of the Missouri, E. D.

October 23, 1939.

Guy A. Thompson, Harold Lee Harvey, and Charles M. Spence, all of St. Louis, Mo. (Thompson, Mitchell, Thompson & Young, of St. Louis, Mo., of counsel), for plaintiff.

Edgar H. Wayman, City Counselor, and Harold C. Hanke, Associate City Counselor, both of St. Louis, Mo., for defendants A. B. Lambert et al.

James H. Linton, General Counsel, Public Service Commission, and Daniel C. Rogers, Asst. Counsel, Public Service Commission, both of Jefferson City, Mo., for defendant Public Service Commission of Missouri.

Before THOMAS, Circuit Judge, and MOORE and COLLET, District Judges.

PER CURIAM.

Plaintiff has a contract with a number of railroads, including the St. Louis Terminal Railroad Association, to transport in motor vehicles over the highways of Missouri and Illinois less-than-carload quantities of freight coming into St. Louis on railroads having their eastern termini there, across the Mississippi River to the railroads' termini which have their western termini at East St. Louis, Illinois. The freight is then carried on to its destination by the eastern roads. Plaintiff also picks up less-than-carload quantities of freight for both the eastern and western railroads, from the consignors and delivers it to the railroads; issuing bills of lading in plaintiff's name designated as agent for the railroads and also delivers freight for both eastern and western railroads to consignees on either side of the river. This service has been conducted for more than twenty-five years in substantially the same manner, formerly by wagons, now exclusively by means of trucks.

There is a statute in Missouri which makes it unlawful for anyone to operate a motor vehicle for hire as a common carrier without first obtaining a permit from the Missouri Public Service Commission and paying a fee for the maintenance and repair of the State highways.¹

Another Missouri statute defines the term "contract hauler" and makes it unlawful for anyone to operate motor vehicles on the highways of the State in the service of a contract hauler without obtaining a permit from the State Commission. No fee is charged for contract hauler operations but such operators are required to carry insurance and observe certain safety regulations.²

The Missouri statute gives the Public Service Commission authority to hold hearings for the purpose of determining the type of the applicant's operations and issue permits. Secs. 5273 and 5274, Laws Mo. 1931, pp. 313, 314, Mo.St.Ann. §§ 5273, 5274, pp. 6691, 6692.

Plaintiff has never applied to the Missouri Commission for authority to perform the operations described, either as a contract hauler or a common carrier. On February 12, 1936, it did apply to the Interstate Commerce Commission in the name of the St. Louis Transfer Company for a permit to operate as an interstate common carrier of baggage of railway passengers between St. Louis, Missouri, and adjacent territory and East St. Louis, Illinois, and adjacent territory. This application was filed under the "Grandfather" clause of the Motor Carrier Act of 1935, section 206(a), 49 U.S.C.A. § 306 (a), which required a representation that it was such an operator on June 1, 1935, and had continued to be thereafter. No action had been taken on this application prior to the submission of this cause. Subsequently the Commission has indicated that this operation is not subject to Federal regulation under that Act.

On the same date, February 12, 1936, plaintiff filed with the Interstate Commerce Commission another application in its own name requesting a permit to operate as a contract carrier of general commodities between St. Louis, Missouri, and surrounding territory and East St. Louis, Illinois, and surrounding territory. This application was also made under the so-called "Grandfather" clause. Since the submission of this cause the Interstate Commerce Commission has held that this service is not subject to Federal regulation under the Motor Carrier Act of 1935.

Plaintiff holds a contract carrier's permit from the Interstate Commerce Commission, applied for May 19, 1937, authorizing the transportation of liquid petroleum products for the Shell Petroleum Corporation. This service appears to be unrelated to the service involved in this action.

Plaintiff has for several years held a contract hauler's permit issued by the Missouri Commission for another service unrelated to the service here involved. The Missouri Commission has notified plaintiff to show cause why this permit should not be revoked on the ground that plaintiff is a common carrier.

On July 20, 1939, the Metropolitan police of the City of St. Louis arrested the drivers of several of plaintiff's trucks operating between St. Louis, Missouri, and East St. Louis, Illinois, which were transporting freight under plaintiff's contracts with the railroads. The next day more arrests were made and plaintiff informed that those arrests would continue until plaintiff had secured permits from the Missouri Commission authorizing the operations. This action followed. A preliminary restraining order was issued, a statutory three-judge court convened, and the application for an interlocutory injunction presented to that court upon the verified complaint and affidavits offered by the parties.

Jurisdiction of a Federal Court is based upon diversity of citizenship and the amount in controversy. Plaintiff is a Delaware corporation. Defendants are citizens of Missouri. The amount of state taxes involved, should plaintiff be classified a common carrier, is from $50,000 to $225,000 and the annual volume of plaintiff's business which plaintiff alleges will be destroyed, absent relief, is approximately $770,000.

Jurisdiction of a statutory three-judge court is predicated upon the charge that (1) the state statute which makes it unlawful for plaintiff to operate its vehicles for hire as a contract hauler or common carrier is now unconstitutional and void under the commerce clause (U.S.C.A.Const. art. 1, § 8, cl. 3) because of the enactment of the Motor Carrier Act of 1935, 49 U.S. C.A. § 301 et seq., and (2) if Section 5271 (a) supra, applies to interstate contract haulers it is unconstitutional for the foregoing reason and for the further reason that it requires a showing of public benefit by the applicant in violation of the commerce clause, and, that, (3) the acts of the defendant state officers unless restrained will deprive plaintiff of its property without due process of law.

The first ground assigned as a basis for the claim of unconstitutionality of the state statutes is without merit. That state regulatory laws relating to the operation of motor vehicles in interstate commerce were not superseded upon the enactment of the Motor Carrier Act of 1935 has now been definitely determined, Eichholz v. Public Service Commission of Missouri, 306 U.S. 268, 622, 59 S.Ct. 532, 83 L.Ed. 641; H. P. Welch Co. v. New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500; South Carolina Hwy. Dept. v. Barnwell Bros., 303 U.S. 177, 58 S.Ct. 510, 82 L.Ed. 734.

In the Eichholz case the State Commission had revoked an interstate permit for certain infractions and was prosecuting or threatening to prosecute suits against the carrier for using the highways of the state. The carrier contended that the Motor Carrier Act of 1935 was supreme and exclusive and that he was not subject to supervision by state authorities. Eichholz v. Hargus, D.C., 23 F.Supp. 587, loc. cit. 589. On appeal the Supreme Court said 306 U.S. 268, 622, 59 S.Ct. 534, 83 L.Ed. 641:

"When the Commission revoked the permit, the Interstate Commerce Commission had not acted upon appellant's application under the Federal Motor Carrier Act and meanwhile the authority of the state body to take appropriate action under the state law to enforce reasonable regulations of traffic upon the state highways had not been superseded." Citing Welch Co. v. New Hampshire, supra.

Since the Interstate Commerce Commission has not assumed authority to regulate plaintiff's operations here involved the authority of the state to regulate those operations has not been superseded. It may be true that even should the Interstate Commerce Commission assume such authority and thereby enter the field, the State may still have the right to classify interstate carriers for the purpose of proper taxation as distinguished from regulation, but since it is unnecessary to determine that question we do not do so.

Secondly, it is asserted that relief is justified upon the ground that Sec. 5271 (a), Laws Mo.1931, p. 310, supra, Mo.St. Ann. § 5271 (a), p. 6687, in providing that: "If the commission shall find from the evidence that the public will be benefited by the creation of the proposed service, or any part thereof, as the commission shall determine, a contract hauler's permit therefor shall be issued. In determining whether or not a permit should be issued, the commission shall give reasonable consideration to the transportation service being furnished by any railroad, street railroad, motor carrier, or contract hauler, and the effect which such proposed transportation service may have upon other transportation service being rendered." — gives the State Commission the power to impede or prevent interstate transportation upon the ground of lack of public benefit — a power not incident to proper taxing power or police regulation, and hence an unconstitutional interference with interstate commerce.

Since this Statute applies to interstate as well as intrastate contract haulers, if the complaint alleged or the evidence disclosed such action on the part of the State Commission, plaintiff would be entitled to relief from such action on the part of the state officials. Absent action under the federal statute, the power of the State to regulate or burden interstate commerce extends...