Denton Produce, Inc. v. United States

• Citation: 270 F. Supp. 402
• Decision Date: 14 June 1967
• Docket Number: Civ. No. 9694.
• Parties: DENTON PRODUCE, INC., an Oklahoma Corporation, Plaintiff, v. UNITED STATES of America, Defendant, and Interstate Commerce Commission, Intervening Defendant.
• Court: U.S. District Court — Western District of Oklahoma

270 F. Supp. 402

DENTON PRODUCE, INC., an Oklahoma Corporation, Plaintiff, v. UNITED STATES of America, Defendant, and Interstate Commerce Commission, Intervening Defendant.

Civ. No. 9694.

United States District Court W. D. Oklahoma.

June 14, 1967.

COPYRIGHT MATERIAL OMITTED

Frank Carter, of Otjen, Carter, Huddleston & Otjen, Enid, Okl., for plaintiff.

Donald F. Turner, Asst. Atty. Gen., John H. D. Wigger, Dept. of Justice, Washington, D. C., B. Andrew Potter, U. S. Atty., Oklahoma City, Okl., for the United States.

Robert W. Ginnane, General Counsel, Betty Jo Christian, Raymond M. Zimmet, Washington, D. C., for Interstate Commerce Commission.

Before HILL, Circuit Judge, and DAUGHERTY and EUBANKS, District Judges.

DAUGHERTY, District Judge.

This is a review of an Order of the Interstate Commerce Commission (Commission) entered with reference to the plaintiff's application for "grandfather" authority under the provisions of Section 7(c) of the Transportation Act of 1958 (P.L. 85-625, 72 Stat. 568) to transport bananas.

In 1958 the Transportation Act was amended to eliminate the exemption previously afforded bananas (and other commodities not involved herein) and the transportation of bananas was then brought under the regulatory power of the Commission. As a result a certificate of public convenience and necessity from the Commission was required. To protect carriers who were already engaged in the bona fide transportation of bananas a "grandfather" clause was enacted in the 1958 amendments under which certificates or permits were required to be issued without regard to public convenience and necessity to any person who could show that he had been engaged in bona fide operations in the transportation of bananas on May 1, 1958, and had continued in such operations since that time.¹

After extensive proceedings the Commission ordered that the plaintiff be granted the following authority to transport bananas:

"(1) from Galveston, Tex., to Denver, Colo., Wichita Falls, Tex., and points in Nebraska, Kansas, and Oklahoma; and (2) from New Orleans, La., to Norfolk and Grand Island, Nebr."

This order was decided on July 13, 1961 and served on July 21, 1961. The entire Commission denied the plaintiff's further petition for reconsideration and rehearing on February 19, 1962, and has denied other such petitions since such date.

The plaintiff complains herein as to that portion of the order of the Commission which denies to it the right to serve points in the State of Texas, Colorado and South Dakota and denies to it the right to deliver from all gulf ports. The plaintiff asserts that these denials are erroneous, unreasonable and are unsupported by the record.

The defendants herein by joint answer deny that the order of the Commission is erroneous, unreasonable or unsupported by the record and ask that the complaint be dismissed.

Orders of the Commission may not be set aside, modified or disturbed if they are within the scope of the Commission's statutory authority and are based upon adequate findings which are supported by substantial evidence upon the whole record. United States v. Pierce Auto Freight Lines, 327 U.S. 515, 535-536, 66 S.Ct. 687, 90 L.Ed. 821 (1946); Rochester Telephone Corp. v. United States, 307 U.S. 125, 138-140, 59 S.Ct. 754, 83 L.Ed. 1147 (1939). The weight of the evidence and the inferences to be drawn therefrom are matters for the Commission, not the Courts. United States v. Carolina Freight Carriers Corp., 315 U.S. 475, 489-490, 62 S.Ct. 722, 86 L.Ed. 971 (1942); United States v. Chicago Heights Trucking Co., 310 U. S. 344, 352-353, 60 S.Ct. 931, 84 L.Ed. 1243 (1940). The Commission's judgment is to be exercised in the light of each individual case. The Court on review is not concerned with the correctness of the Commission's reasoning or with the consistency or inconsistency of decisions rendered by it. Virginian Ry. Co. v. United States, 272 U.S. 658, 665-666, 47 S.Ct. 222, 71 L.Ed. 463 (1926); Western Paper Makers' Chemical Co. v. United States, 271 U.S. 268, 271, 46 S.Ct. 500, 70 L.Ed. 941 (1926).

This restricted scope of judicial review is applicable to "grandfather" proceedings. United States v. Carolina Freight Carriers Corp., supra; United States v. Maher, 307 U.S. 148, 153-154, 59 S.Ct. 768, 83 L.Ed. 1162 (1931), reh. denied 307 U.S. 649, 59 S.Ct. 831, 83 L.Ed. 1528; Motor Freight Express v. United States, 119 F.Supp. 298, 303 (M.D.Pa.-1954), affirmed 348 U.S. 891, 75 S.Ct. 215, 99 L.Ed. 700; Riss & Co. v. United States, 100 F.Supp. 468, 483 (D.Mo.-1951), affirmed 342 U.S. 937, 72 S.Ct. 559, 96 L.Ed. 697, reh. denied 343 U.S. 937, 72 S.Ct. 769, 96 L.Ed. 1344. The granting of areas or points of origin and destination in a given case has been entrusted by the Congress to the Commission whose judgment in each matter has been characterized as being "highly expert." It is only where the error is patent that the Courts may say the Commission has transgressed its authority. United States v. Carolina Freight Carriers Corp., supra.

Furthermore, it is well settled that the judicial review must be confined to the record made by the Commission. Evidence outside that record is inadmissible for any purpose and cannot be considered by the Court. United States v. Jones, 336 U.S. 641, 673, 69 S.Ct. 787, 93 L.Ed. 938 (1949); Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 443-445, 50 S.Ct. 220, 74 L.Ed. 524 (1930); Radio Corp. of America v. United States, 95 F.Supp. 660, 669 (N.D. Ill.-1950), affirmed 341 U.S. 412, 71 S. Ct. 806, 95 L.Ed. 1062.

The decisions concerning the "grandfather" clause in the Motor Carrier Act of 1935 are² applicable to cases arising under the 1958 "grandfather" clause with which we are here concerned. The leading decisions which establish the standards by which a "grandfather" clause is to be administered are United States v. Carolina Freight Carriers Corp., supra, and Alton R. Co. v. United States, 315 U.S. 15, 62 S.Ct. 432, 86 L. Ed. 586 (1942). The test or standard is the scope of bona fide operations on the statutory cutoff date and since that time.

In United States v. Carolina Freight Carriers Corp., supra, it is stated:

"The Act provides the test of `bona fide operations'. That standard carries the connotation of substantiality. It also makes clear that a holding out to serve a specified area is not alone sufficient. It is `actual rather than potential or simulated service' which is required. McDonald v. Thompson, 305 U.S. 263, 266 59 S.Ct. 176, 178, 83 L.Ed. 164. Substantial, as distinguished from incidental, sporadic, or infrequent, service is required."

It shoud be further noted that the statute provides "grandfather" rights only to the extent that a carrier was in bona fide operations on May 1, 1958 and has so operated since that time. This means that the maximum extent of "grandfather" rights to which a carrier may be entitled is fixed by the extent of his operations on the critical date — May 1, 1958. Operations subsequent to that date are relevant for the limited purpose of showing that such operations have not been abandoned; but no new "grandfather" rights can be acquired by such subsequent operations. Gregg Cartage & Storage Co. v. United States, 316 U.S. 74 at page 78, 62 S.Ct. 932, 86 L.Ed. 1283; Alton R. Co. v. United States, supra; North-South Freightways v. United States, 55 F.Supp. 696, 697 (D. N.Y.-1944); Watson Bros. Transp. Co. v. United States, 59 F.Supp. 762, 779 (D. Neb.-1945).

With reference to the Commission denying the plaintiff the right to serve the entire State of Texas as a destination point, the record reveals that the only shipments of the plaintiff terminating in the State of Texas originated in Galveston, Texas. None originated in New Orleans, Louisiana. These shipments were, therefore, intra state commerce for which no authority from the Commission is required. The record does not indicate a continuous or through movement of goods from a foreign port through Galveston directly to a point in Texas. Therefore, the grant of authority in the Commission order to the plaintiff to operate from Galveston to Wichita Falls, Texas, is superfluous and the complaint of the plaintiff on this point is without merit.

With reference to the Commission denying the plaintiff the right to serve points in the State of Colorado, the record indicates that Denver, Colorado, was the only point in Colorado to which the plaintiff transported bananas. Only a few shipments were made and all originated in Galveston, Texas. This operation of the plaintiff in the State of Colorado which was limited to Denver is not sufficient to justify the grant of area-wide authority to serve the entire State of Colorado. United States v. Carolina Freight Carriers Corp., supra; Alton R. Co. v. United States, supra. The authority granted the plaintiff by the Commission from Galveston, Texas, to Denver, Colorado, is not erroneous or unreasonable but is fully supported by the record. It is deemed to be the proper authority to be granted.

With reference to the Commission denying the plaintiff the right to serve any points in the State of South Dakota, the record indicates that the plaintiff had made only two shipments prior to May 1, 1958. These were...