Curtis, Inc. v. I.C.C., No. 80-1485

CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)
Writing for the CourtBefore BARRETT, DOYLE and SEYMOUR; WILLIAM E. DOYLE
Citation662 F.2d 680
Decision Date02 November 1981
Docket NumberNo. 80-1485
PartiesCURTIS, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Story, Inc., Intervening Respondent.

Page 680

662 F.2d 680
CURTIS, INC., Petitioner,
v.
INTERSTATE COMMERCE COMMISSION and United States of America,
Respondents,
and
Story, Inc., Intervening Respondent.
No. 80-1485.
United States Court of Appeals,
Tenth Circuit.
Submitted Sept. 28, 1981.
Decided Nov. 2, 1981.

Page 682

Lavern R. Holdeman, Peterson, Bowman & Johanns, Lincoln, Neb., for petitioner.

Richard A. Allen, Gen. Counsel, Frederick W. Read, III, Associate Gen. Counsel, and Robert J. Grady, Washington, D. C., for respondent I.C.C.

Sanford M. Litvack, Asst. Gen. Counsel, and Robert B. Nicholson and Daniel J. Conway, Attys., Dept. of Justice, Washington, D. C., for respondent United States.

George M. Boles, Carlton, Boles, Clark, Vann, Stichweh & Caddis, Birmingham, Ala., for intervening respondent Story, Inc.

Before BARRETT, DOYLE and SEYMOUR, Circuit Judges.

Page 683

WILLIAM E. DOYLE, Circuit Judge.

Curtis, Inc. here seeks review of an order of the Interstate Commerce Commission which granted operating authority to respondent Story, Inc. Curtis is challenging the Commission's determination pursuant to 49 U.S.C. § 10922(a), that Story was fit to provide the authorized transportation services. Curtis seeks a reversal of the Commission's decision.

I.

PRELIMINARY DISCUSSION

Story, Inc. is almost wholly owned by and is entirely operated under the aegis of Harold David Story, who has done business in the trucking owning and leasing industry since 1970. By an application filed July 7, 1978, Story sought his first interstate motor common carrier permanent operating authority. He proposed that the company be allowed to transport carpeting from certain points in Georgia to points in California, Oregon, Washington, Idaho, Wyoming, Montana, Utah and Arizona. The statute provides that the Commission issues certificates to authorized persons to provide transportation as a motor common carrier if the Commission finds (1) that such persons are fit, willing and able (a) to provide the transportation to be authorized by the certificate, and (b) to comply with applicable statutory provisions and regulations of the Commission; and (2) that transportation to be provided under the certificate is or will be required by the present or future public convenience and necessity.

There is little question about the public need for the proposed service. It is the evidence that has to do with Story's fitness to receive the operating authority that is in dispute before us. The fitness inquiry addresses itself to the personal and financial integrity of Story, the applicant's present and principal shareholder. The evidence shows that he was 35 years of age at that time, and had been in the transportation business since 1960. He was drafted during this period to serve in the Vietnam war, and he bagan anew two years later. At the time of the application, Story owned sixty-seven sleeper-cab trailers and one hundred forty-five foot refrigerated trailers, 20% of them outright and the balance financed.

The data which he offered at the hearing were somewhat sketchy and unaudited, and were attended with a good many reservations and explanations from the accountants. The data consisted of Story's balance sheet and income statements and also those of Story, Inc. for the year ending December 31, 1977, more than 14 months before the hearing. Mr. Story indicated that the company's cash situation was not accurately reflected by the data, and admitted, regarding his own liabilities, that he now owed more than $100,000 to the Bank of Rainsville, rather than the $41,000 figure shown on the balance sheet. The figure cited as Mr. Story's net worth, $1,219,000 as of December 31, 1977, admittedly was contingent upon the receipt of $1,000,000 allegedly owed him by an agricultural cooperative with which he had engaged in many transactions, some of which were questionable.

Mr. Story's involvement with this cooperative, the Sand Mountain Farmers' Cooperative, is really the stumbling block in this inquiry. It was organized in 1975 by Story, and he invested some $380,000 in it and became the salaried president and general manager. Sand Mountain was an unregulated agricultural cooperative. It was required by a former statute, 49 U.S.C. § 10526(a)(5)(A) (ii), to transport commodities at least 85% of which were exempt from regulation under the Interstate Commerce Act. In addition, Sand Mountain could lawfully transport no more than 50% of its gross traffic for non-members of the cooperative, under former § 10526(a)(5)(B). Testimony at the hearing indicated, however, that in the words of the Administrative Law Judge, "Mr. Story found it difficult to meet carpet shipper equipment demands while at the same time meeting the legal criteria pertaining to the amount of regulated traffic an agricultural cooperative may legitimately handle."

Sand Mountain was audited at least twice in three years by the I.C.C. Although no

Page 684

citations were issued, both the I.C.C.'s accountants and the cooperative's attorney advised Story to abandon his "different" interpretation of the § 10526(a)(5) rules and adopt theirs. Story admitted at the hearing that his interpretation of § 10526(a)(5) was "my version of it." He maintained that he was still not sure as to the legal requirements of the statute.

These indications that regulated and exempt freight may have been transported in violation of applicable regulations were not the only evidence of disregard of the law. Other evidence established that the cooperative had been mismanaged. Mr. Story and members of his family were the directors of the cooperative from its inception. The participation of members of the cooperative was minimal. They contributed an initial fee of $5.00 to $10.00 which was often waived. The cooperative never operated at a profit for its members. The profits were realized by Mr. Story. At the time of the hearing the cooperative owed him about $1,000,000 worth in delayed payments on equipment leases; about $600,000 was actually collectible at the time of the hearing.

The evidence established that Story, Inc. and the Sand Mountain Cooperative were treated by Story as a single entity. Trailers owned by Mr. Story were used as offices by the cooperative free of charge. While Story, Inc. was operating under temporary emergency authority, its equipment was juggled between the two entities so as to handle both regulated loads and exempt loads brokered by the cooperative. In some instances the name "Story, Inc." had been typed over the name "Sand Mountain" on bills of lading. Story testified that if his application was granted the equipment belonging to him would be pulled from the cooperative and transferred to Story, Inc. He also stated that most of the independent owner-operators who were driving for the cooperative would transfer their leases to Story, Inc.

A. The Decision of the Administrative Law Judge

The Administrative Law Judge recommended that limited-term operating authority should be granted to Story, Inc. The Administrative Law Judge pointed to the substantial evidence of public need for the proposed services. He also confesses, however, that he had considerable doubt as to the applicant's fitness. The Judge noted in particular that: "* * * (the evidence regarding) applicant's willingness to abide by the law * * * must cause one to hesitate." Story, Inc.'s financial data "were almost insultingly meagre (sic) and of doubtful quality, * * *." In addition, the Administrative Law Judge continued, "there was not the slightest sign of contrition by Mr. Story for his past illegality in setting up a sham agricultural cooperative * * *." Furthermore, the Administrative Law Judge stated, Mr. Story's adherence to self-serving, twisted interpretations of the law * * * can only be described as brazen." 1 Nevertheless, he concluded, "Mr. Story's youth, his background in the jungle of exempt hauling and his performance of duty to his country * * * at a time when others better placed than he scoffed at duty, leads (sic) one to hope." The Judge's decision to grant a conditional three-year certificate stemmed from his concern about the applicant's fitness. He said, "Any interim disobedience of the law, however slight, should be viewed as a resumption of lawlessness in the applicant. * * *."

B. Affirmance by the Commission

Division 2 of the Interstate Commerce Commission rejected part of the Administrative Law Judge's reasoning but affirmed his decision. The three Commissioners found the factors of Mr. Story's youth and background, and his Vietnam War record to be irrelevant to determining fitness. They concluded, nevertheless, that the grant of a limited-term certificate was proper. Neither

Page 685

Mr. Story nor the Sand Mountain Cooperative had actually been cited for any violations of law, and any doubts raised by the inconclusive evidence adduced at the hearing should, they felt, be resolved in the applicant's favor. Finally, the Commissioners noted, the imposition of a three-year limitation on the certificate would ensure that Story's conduct and financial status would remain subject to close scrutiny.

II.

STANDARD OF REVIEW

Interstate Commerce Commission decisions are presumptively valid. Midwestern Transportation, Inc. v. Interstate Commerce Commission, 635 F.2d 771, 774 (10th Cir. 1980) quoting Interstate Commerce Commission v. City of Jersey City, 322 U.S. 503, 512-513, 64 S.Ct. 1129, 1133-1134, 88 L.Ed. 1420 (1944). Judicial review is narrow in scope. This court's review is restricted to determining whether the Commission's decision is supported by substantial evidence, and to ensuring that the decision is not arbitrary, capricious or otherwise an abuse of discretion. Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284-285, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1975).

"Substantial evidence" constituting "more than a mere scintilla" has been defined as "such relevant evidence as a reasonable...

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27 practice notes
  • Mickeviciute v. I.N.S., No. 02-9516.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • April 28, 2003
    ...Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). See Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th In this case, the BIA denied Petitioner's motion to reopen her deportation proceedings on the ground that she "is not seeking a form of relie......
  • T-Mobile Central v. Unified Gov't of Wyandotte, No. 06-2313-DJW.
    • United States
    • United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas
    • September 28, 2007
    ...F.3d at 1133 (quoting Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 382 (10th Cir.1992)). 37. Id. (citing Curtis, Inc. v. I.C.C., 662 F.2d 680, 685 (10th 38. Kansas City, Kansas Code § 27-260. 39. Kansas City, Kansas Code §§ 27-279(f)(4)(b), 27-279(0(5). 40. The fourth numbered stat......
  • Guidance Endodontics Llc v. Dentsply Int'l Inc., No. CIV 08–1101 JB/RLP.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • May 9, 2011
    ...the jury awarded “nominal” damages of $25,000.00 against a municipality and $50.00 each against two individual police officers. See 662 F.2d at 680. “Following defense motions for a new trial or a judgment notwithstanding the verdict, the district court granted the motion for a new trial un......
  • Erickson Transport Corp. v. I.C.C., No. 83-1011
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • February 27, 1984
    ...Co. v. ICC, 704 F.2d 834, 843 (5th Cir.1983); C & H Transportation Co. v. ICC, 704 F.2d 850, 854 (5th Cir.1983); Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th Cir.1981). 1 At least one court has reversed the ICC's grant of an operating certificate due to a lack of substantial evidence of fin......
  • Request a trial to view additional results
27 cases
  • Mickeviciute v. I.N.S., No. 02-9516.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • April 28, 2003
    ...Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). See Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th In this case, the BIA denied Petitioner's motion to reopen her deportation proceedings on the ground that she "is not seeking a form of relie......
  • T-Mobile Central v. Unified Gov't of Wyandotte, No. 06-2313-DJW.
    • United States
    • United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas
    • September 28, 2007
    ...F.3d at 1133 (quoting Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 382 (10th Cir.1992)). 37. Id. (citing Curtis, Inc. v. I.C.C., 662 F.2d 680, 685 (10th 38. Kansas City, Kansas Code § 27-260. 39. Kansas City, Kansas Code §§ 27-279(f)(4)(b), 27-279(0(5). 40. The fourth numbered stat......
  • Guidance Endodontics Llc v. Dentsply Int'l Inc., No. CIV 08–1101 JB/RLP.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • May 9, 2011
    ...the jury awarded “nominal” damages of $25,000.00 against a municipality and $50.00 each against two individual police officers. See 662 F.2d at 680. “Following defense motions for a new trial or a judgment notwithstanding the verdict, the district court granted the motion for a new trial un......
  • Erickson Transport Corp. v. I.C.C., No. 83-1011
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • February 27, 1984
    ...Co. v. ICC, 704 F.2d 834, 843 (5th Cir.1983); C & H Transportation Co. v. ICC, 704 F.2d 850, 854 (5th Cir.1983); Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th Cir.1981). 1 At least one court has reversed the ICC's grant of an operating certificate due to a lack of substantial evidence of fin......
  • Request a trial to view additional results

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