Dance Freight Lines v. United States

• Decision Date: 09 March 1957
• Docket Number: No. 139.,139.
• Citation: 149 F. Supp. 367
• Parties: DANCE FREIGHT LINES, Inc., McDuffee Motor Freight, Inc., and Central Motor Express, Inc., Plaintiffs, v. UNITED STATES of America, Interstate Commerce Commission, and Eagle Express Company, a corporation, Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

149 F. Supp. 367

DANCE FREIGHT LINES, Inc., McDuffee Motor Freight, Inc., and Central Motor Express, Inc., Plaintiffs, v. UNITED STATES of America, Interstate Commerce Commission, and Eagle Express Company, a corporation, Defendants.

No. 139.

United States District Court E. D. Kentucky.

March 9, 1957.

COPYRIGHT MATERIAL OMITTED

Robert M. Pearce, Harry V. McChesney, Jr., McChesney, McChesney, Kinker & Pearce, Frankfort, Ky., for plaintiffs.

Victor R. Hansen, Asst. Atty. Gen., Antitrust Division, James E. Kilday, Charles R. Esherick, Attys., Dept. of Justice, Washington, D. C., Henry J. Cook, U. S. Atty., Lexington, Ky., for United States.

Robert W. Ginnane, Gen. Counsel, James Y. Piper, Asst. Gen. Counsel, Interstate Commerce Commission, Washington, D. C., for Interstate Commerce Commission.

Fritz Krueger, Somerset, Ky., for Eagle Exp. Co.

Before MILLER, Circuit Judge, and FORD and SWINFORD, District Judges.

FORD, District Judge.

Plaintiffs have properly invoked the jurisdiction of this district court of three judges to hear and determine their claim that the action of the Interstate Commerce Commission of February 23, 1956, granting to the defendant Eagle Express Company, Inc., a certificate of public convenience and necessity to expand its existing operation as a common carrier by motor vehicle to include a thirty mile route between Russell Springs and Campbellsville, Ky., was and is illegal and should be annulled or set aside. 28 U.S.C. §§ 2284, 2321 and 2325.

Hearings on the application of the defendant for this extension of its route, filed on January 30, 1953, as amended, identified in the record as "Sub 5 Application", were held before the Joint Board at Knoxville, Tenn., on June 16, 1953, and adjourned to and completed at Louisville, Ky., on June 24, 1953. The plaintiffs appeared at the hearings in opposition to the application. Each of the plaintiffs was a holder of a certificate authorizing operation as a motor vehicle carrier in the same general area of the extension herein sought. They asserted that their operations were adequate to meet the demands of public convenience and necessity in that area. At these hearings eleven witnesses testified in support of the application and two witnesses testified in opposition to it.

On March 16, 1954, the Joint Board served and filed its report recommending that the Commission grant the defendant Eagle's application, as amended (with an exception not here material), to which plaintiffs Dance Freight Lines and McDuffee Motor Freight seasonably filed exceptions.

On September 23, 1955, Division 1 of the Commission reported its findings in regard to the Sub 5 Application and ordered that it be granted, subject to the limitation, however, that operation over the extended route be only for transportation of textiles, textile products and materials, supplies and equipment used in the manufacture thereof, together with the provision that no intermediate points be served. These limitations were in accord with the application, as amended.

Plaintiffs' petition thereafter filed seeking further hearing and reconsideration of the order was denied.

The plaintiffs challenge the validity of the Commission's action upon the grounds, (1) there is no substantial evidence to support the Commission's conclusion that public convenience and necessity warrant the granting of this additional authority to Eagle; (2) the order of the Commission cannot stand because there was no finding that the present service is inadequate; (3) the Commission was not authorized to go outside the record to find the applicant financially fit; and (4) the Commission abused its discretion in failing to grant plaintiffs' petition for further hearing.

Obviously, the extension of Eagle's existing route to include the thirty mile route between Russell Springs and Campbellsville had the effect of establishing direct one carrier service between Campbellsville, Ky., and Knoxville, Tenn., for inbound and outbound transportation of textile manufacturing supplies and textile manufactured products, thus reducing the distance from Campbellsville to Knoxville to 189 miles by this direct route as against the circuitous joint line service available by other carriers between Campbellsville and Knoxville with interchange at Lexington covering a distance of 281 miles, and 363 miles if the traffic moved through Louisville.

In respect to the need for this improved motor transportation in order to better serve a textile industry located at Campbellsville, the Commission made the following findings:

"* * * The manufacturer at the time of the hearing was shipping approximately 140,000 pounds a week, which volume represented about one-fourth of the anticipated productive capacity of the plant. Shipments move predominantly in less-truckload lots and 75 percent of the output moves to points in the eastern part of the United States. Only five percent is transported by motor carriers from the plant site and the balance is moved in company-owned vehicles to affiliated factories at Bowling Green and Frankfort, Ky., for subsequent movement to destination by for-hire carriers. The movement by existing carriers to eastern points with interchange generally at Cincinnati is unsatisfactory, particularly because of the time in transit which ranges from 8 to 12 days, and the frequency of occasions when the originating carrier is unable to obtain a connecting carrier willing to accept the traffic at Cincinnati. The plant is not on a rail siding and rail service is utilized only infrequently because it does not satisfactorily meet the shipper's needs in respect of time in transit. Shipper asserts a need for applicant's proposed service to enable it to utilize the Knoxville gateway in the movement of its traffic both outbound and inbound. It anticipates interchange at Knoxville will provide second-to-fifth morning delivery at eastern destinations, depending upon the distance.

"inbound, approximately 45,000 pounds of raw materials were received weekly at the time of the hearing. When the plant achieves full production it was anticipated that such shipments would approximate 180,000 pounds weekly. The raw materials originate at points in Georgia, North Carolina and South Carolina and are transported through Knoxville, Louisville, and Nashville gateways. In many instances they involve a four-line haul and require as many as 14 days in transit. Certain raw materials lose a portion of their moisture because of the lengthy transit time, which renders them unusable until the proper moisture is restored. They are also susceptible to chafing from the friction caused by the movement of the vehicle and the shifting of the load, with resultant damage and waste. The availability of a single-line carrier service over a direct route from the Knoxville gateway to the plant would benefit the manufacturer by a savings in both time and mileage, and in the curtailment of loss from chafing and dehydration. * * *

"We are inclined to agree with the joint board that a need for the proposed service has been shown. Campbellsville has a population of approximately 3500. Judging from the volume of its production the garment knitting mill there is an industry important to the community which will be directly affected by any inadequacy in its transportation service. It is, however, unfavorably located in the sense that both inbound and outbound traffic must move in interline service generally through somewhat out-of-line gateways. Applicant proposes a service which will be more direct and should materially reduce the excessive time-in-transit which the mill has frequently encountered due apparently to the service to and from the

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