Dunkley Refrigerated Transport, Inc. v. US
| Decision Date | 21 April 1976 |
| Docket Number | No. C 75-81.,C 75-81. |
| Citation | 416 F. Supp. 814 |
| Parties | DUNKLEY REFRIGERATED TRANSPORT, INC., a Utah Corporation, Plaintiff, v. UNITED STATES of America and the Interstate Commerce Commission, Defendants, and Garrett Freightlines, Inc., Intervenor. |
| Court | U.S. District Court — District of Utah |
COPYRIGHT MATERIAL OMITTED
Lon Rodney Kump, Salt Lake City, Utah, for plaintiff.
Ramon M. Child, U. S. Atty., Salt Lake City, Utah, D. Utah, for the U. S.
Maurice H. Greene, Pocatello, Idaho, and Stuart L. Poelman, Salt Lake City, Utah, for intervening defendant Garrett Freightlines, Inc.
Before LEWIS, Chief Circuit Judge, RITTER, Chief District Judge, and ANDERSON, District Judge.
This is an action instituted by the plaintiff, Dunkley Refrigerated Transport, to obtain judicial review of two orders of the Interstate Commerce Commission I.C.C.. The plaintiff filed an application with the I.C.C. on November 10, 1972, seeking a Certificate of Public Convenience and Necessity which would allow the plaintiff to operate as a common carrier over irregular routes transporting foodstuffs in refrigerated vehicles from points in Cache and Salt Lake Counties in Utah to points in Oregon, Washington, and Idaho with the right to tack this authority with existing authority from California to Utah. The I.C.C. handled the application under their modified procedure which calls for evidence to be submitted by shippers supporting the application and protesting carriers in the form of verified statements and does not normally require a hearing. I.C.C. Review Board Number 3 issued an order dated January 24, 1974, in which the plaintiff's application was denied. On February 22, 1974, the plaintiff filed a Petition for Reconsideration and a restrictive amendment to the original petition with the I.C.C. The proposed amendment was designed to restrict the plaintiff from transporting foodstuffs from points in California to points in Oregon and Washington. The intervening defendant, one of the protesting carriers, Garrett Freightlines, Inc., Garrett filed a reply to the Petition for Reconsideration on March 15, 1974. On March 26, 1974, the plaintiff filed a motion with the I.C.C. asking that a portion of Garrett's reply be stricken. I.C.C. Division 1, acting as an appellate division, issued an order under the date of July 1, 1974, in which the plaintiff's Petition for Reconsideration was denied, the proposed restrictive amendment was rejected, and the motion to strike was denied. The plaintiff maintains that the I.C.C. "orders are contrary to the evidence in this proceeding, deny plaintiff due process of law, are contrary to law, are based upon misinterpretations both of law and evidence, and are arbitrary and capricious constituting an abuse of administrative discretion." Complaint at 3.
The court is satisfied that the plaintiff has exhausted its administrative remedies before the I.C.C. and that review by this court of the I.C.C. orders is appropriate. The parties agreed to a review of this matter by the three-judge district court on the modified record. Oral arguments were heard on January 20, 1976, and the court has carefully considered the large volume of filed materials.
The plaintiff's basic argument is that LTL (less than truckload) service is not provided to small shippers by other carriers on the proposed route. The purpose of the plaintiff's proposed restrictive amendment to its application was to eliminate the interests of protestants who were concerned with overhead traffic moving from California to Oregon and Washington. With that amendment the plaintiff feels that Garrett is the only protestant who would have any cause to protest the issuance of the Certificate of Public Convenience and Necessity. The plaintiff feels that the key issue in this case revolves around the lack of LTL service required by the supporting shippers and contends that the I.C.C. never considered that issue. The plaintiff maintains that there is not so much as a "scintilla" of evidence in the record to show that Garrett provides the required LTL service. As such, the plaintiff contends that there is no evidence to support the Commission's denial of the application. Furthermore, the plaintiff claims that the Commission's alleged omission of the LTL issue from either of its orders constitutes a failure to form a rational conclusion supported by adequate findings as is required by the Administrative Procedure Act. 5 U.S.C.A. § 557(c) (1967). The plaintiff maintains that the I.C.C. orders contain no findings and merely consist of conclusionary statements.
The plaintiff argues that the Commission's denial of the application was caused by an erroneous interpretation of the legal standards used in determining that the proposed service was not required by "public convenience and necessity." 49 U.S.C.A. § 307 (1963). The plaintiff contends that the Commission's failure to consider the LTL issue shows that an improper legal standard was applied. The plaintiff seems to feel that the I.C.C. was primarily concerned with protecting firms holding existing certificates and did not adequately consider the public interest in having a competitive market structure and improved performance. See Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974).
The plaintiff submitted, as part of its rebuttal statement, a verified statement of the Traffic Manager of the L.D. Schreiber Cheese Company which set forth specific carrier service failures. The plaintiff contends that the Commission acted in an arbitrary and capricious manner when it rejected the Schreiber statement but refused to strike an objectionable portion of Garrett's reply to the plaintiff's Petition for Reconsideration. The plaintiff maintains that part of Garrett's reply was an improper attempt to introduce unverified new evidence after the record was closed. The plaintiff does not seem to contend that its late filed evidence should have been considered but argues that the Commission acted arbitrarily in excluding the plaintiff's evidence and accepting that of Garrett. The plaintiff claims that the above action shows a lack of consistency and shows that the Commission improperly applied a different standard for similar situations. See HC&D Moving & Storage Co. v. United States, 298 F.Supp. 746, 751 (D.Haw.1969).
For convenience, the arguments of all three defendants will be considered together. The defendants' basic contention is that the plaintiff failed to make an adequate evidentiary showing of need to entitle it to the requested Certificate of Public Convenience and Necessity. As such, the defendants maintain that, looking at the record as a whole, including the evidence presented by all of the protesting carriers, there is "substantial evidence" to support the Commission's denial of the plaintiff's application. The defendants point out that seven competing carriers opposed the plaintiff's application basically on the grounds that they could meet the shippers' needs and that some of the carriers would suffer a diversion of overhead traffic if the application were approved. It is argued that the traffic diversion would occur because of the plaintiff's interline potential through the use of connecting carriers.
The defendants maintain that the evidence proffered by the plaintiff and the ten supporting shippers is so vague and indefinite that it does not conform to the requirements established by the Commission in John Novak Contract Carrier, 103 M.C.C. 555, 557 (1967). The government's memorandum points out that eight of the ten supporting shippers listed no specific destinations and five of ten failed to list the volume of traffic they would commit to the proposed service. Those evidentiary elements are required by Novak. The government concedes that the supporting shippers desire the proposed service but maintains that the plaintiff must show a need for the service, not just a preference for it. See Roadway Express, Inc. v. United States, 213 F.Supp. 868, 878 (D.Del.1963), aff'd, 375 U.S. 12, 84 S.Ct. 53, 11 L.Ed.2d 38 (1963).
The defendants point out that the evidence shows there are two irregular route carriers, Ida-Cal Freight Lines and Willis Shaw Frozen Express, Inc., with the authority to provide the LTL services desired by the supporting shippers. Since the shippers' statements do not indicate that they have ever attempted to use those services, the defendants argue that the plaintiff has failed to meet its burden of showing that the proposed service is one that existing carriers cannot or will not perform in a reasonably satisfactory manner. The defendants maintain that the Commission considered the issue and found the plaintiff's evidence to be insufficient to establish the need for the proposed LTL service.
Concerning the alleged arbitrary and capricious action of the Commission in ruling on evidentiary matters, the defendants argue that the Commission's rejection of the plaintiff's late filed shipper statement and the denial of the plaintiff's motion to strike were based on good cause and had a rational basis. The government concedes that the Schreiber statement met the Novak requirements but the defendants argue that the statement could not be considered by the Commission because it was new substantive evidence to which the protestants could not respond because it was filed after the record had closed. The defendants contend that the Commission had already been very lenient with the plaintiff in that the Commission had accepted three late filed supporting statements. The evidence was received because the Commission could see no prejudice to the protesting carriers because there was still time for them to file a response. The defendants argue that the I.C.C. acted properly in rejecting the eleventh shipper statement because it was within...
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Midwestern Transp., Inc. v. I. C. C., 79-1461
...thereto. Koppel, Inc. v. United States, 612 F.2d 1264 (10th Cir. 1979). We there favorably quoted from Dunkley Refrigerated Transport, Inc. v. United States, 416 F.Supp. 814 (D.Utah 1976) in part, as follows: A court will uphold the decision of an independent governmental agency, such as th......
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Koppel, Inc. v. U.S., C-G-FG
...we hold that the proper standard of review to be employed in cases of this nature is that set forth in Dunkley Refrigerated Transport, Inc. v. United States, 416 F.Supp. 814 (D.Utah 1976): A court will uphold the decision of an independent governmental agency, such as the I.C.C., if the dec......