Eichholz v. Hargus

• Decision Date: 24 March 1938
• Docket Number: No. 660.,660.
• Citation: 23 F. Supp. 587
• Parties: EICHHOLZ v. HARGUS et al., Public Service Commissioners.
• Court: U.S. District Court — Western District of Missouri

23 F. Supp. 587

EICHHOLZ v. HARGUS et al., Public Service Commissioners.

No. 660.

District Court, W. D. Missouri, Central Division.

March 24, 1938.

D. D. McDonald, of Jefferson City, Mo., for plaintiff.

Daniel C. Rogers, of Jefferson City, Mo., for defendants.

Before STONE, Circuit Judge, and REEVES and OTIS, District Judges.

REEVES, District Judge.

This is a suit to enjoin the cancellation or revocation of a permit granted to plaintiff as an interstate motor carrier, and bearing date November 23, 1934. The order of revocation was made effective December 30, 1936. A temporary injunction was granted January 23, 1937, and the case was tried and submitted on final hearing February 2, 1938.

An order of a state administrative board being challenged, a three-judge court was constituted in conformity with Section 380, Title 28 U.S.C.A.

Section 5268(b), Laws Missouri 1931, Mo.St.Ann. § 5268(b), p. 6685, relating to Motor Vehicles, provides for the granting of permits by the Public Service Commission of the State of Missouri to motor carriers desiring "to use any of the public highways of this state for the transportation of persons or property, or both, in interstate commerce * * *."

In accepting such permits the carriers become obligated to pay certain license fees at times and in accordance with schedules prescribed by law.

By section 5269, Laws Missouri, 1931, supra, Mo.St.Ann. § 5269, p. 6686, "The commission may at any time, for good cause, suspend, and upon at least ten days notice to the grantee of any certificate, and an opportunity to be heard, revoke, alter or amend any certificate issued under the provisions of the act."

The permit granted to the plaintiff by the Public Service Commission of Missouri authorized him to "operate interstate as a freight carrying motor carrier over an irregular route as follows: From all points in Missouri to points beyond the state and from points beyond Missouri to all points within the state, exclusively in interstate commerce."

At the time this permit was granted there was in effect a rule (having the force of law) promulgated by the Public Service Commission of Missouri as authorized by Statute, and known as Rule No. 44. By this rule the holders of interstate permits were forbidden to transport within the state property accepted in the state and "known to be destined to a point within the state of Missouri." It was further provided that "if such interstate carrier accepts within Missouri property destined to a point beyond the limits of the state of Missouri such property shall not be terminated within the state of Missouri."

The reason for the attempted cancellation of plaintiff's interstate permit was, as it was charged, that he was operating in violation of said permit. Such violation consisted in carrying property from one point in Missouri to another point in Missouri as an intrastate carrier whereas he did not have a license as such.

Although the plaintiff made no complaint of the license fees exacted under the laws of Missouri, nevertheless, he has not paid the usual fees since the granting of the temporary restraining order on December 31, 1936. He has been carrying on his regular business as a carrier under the protection of this court's restraining order. As a result, a supplemental answer has been filed asking this court to grant a hearing in the nature of an accounting of fees to the State of Missouri from the plaintiff on account of his operations since the protective restraining order was granted.

The temporary injunction heretofore granted by this court was predicated upon the record of evidence before the Public Service Commission, ex parte affidavits, and some additional oral testimony. At that time it was made to appear that a small percentage of the property carried by plaintiff was between points in Missouri, and that such transportation was effected by carriage from St. Louis, Missouri, to a terminal station in Kansas City, Kansas, and, that, because of a zone within which a pickup service was authorized, a small amount of property was picked up in Kansas City, Missouri, assembled at the terminal in Kansas City, Kansas, and then transported to St. Louis, Missouri, for delivery.

The facts as then presented warranted the court in issuing a temporary injunction, as a matter of judicial "convenience" until final hearing on the merits. Plaintiff has regular line hauls and fixed terminal depots. Its chief line hauls are between its terminals or depots at St. Louis, Missouri, Kansas City, Kansas, Wichita, Kansas, Des Moines, Iowa, and Burlington, Iowa. Between these points admittedly it hauls a large volume of freight. From its depot or terminal point at Kansas City, Kansas, it has a pickup zone with a radius of twenty-five miles. Its terminal in Kansas City, Kansas, is within one-half mile of the Missouri State Line and a very few blocks from the trafficway connecting Kansas City, Kansas, with Kansas City, Missouri.

At that point, according to the testimony, it is in very close proximity to several heavy shippers, including meat packers. There is an inference from the testimony that it hauls considerable property for these shippers. During its operations it has carried a great deal of merchandise from shippers or consignors at St. Louis, Missouri, to consignees in Kansas City, Missouri. In many instances such shipments were made in truckload lots so that the plaintiff continued the line haul from his terminal in St. Louis to the depot or terminal in Kansas City, Kansas, and a new driver, and probably a new tractor, made the delivery by transporting the same merchandise or property back into Missouri over the identical trafficways used in going to the terminal in Kansas City, Kansas.

Plaintiff testified that its transportation of property or merchandise between points in Missouri aggregated 10 per cent. of his traffic. One witness for the defendant testified that the percentage aggregated 40 per cent. of the entire business across the state. Another witness testified that the intrastate traffic would aggregate 25 per cent. of the total volume. In many instances it was the habit of shippers in Missouri to consign their merchandise to themselves or some person at the terminals in Kansas City, Kansas, and then reconsign the same merchandise to a Missouri point.

Other facts will be stated as they become pertinent in the course of this memorandum opinion.

1. At the outset, it is contended by the plaintiff that, having engaged in interstate commerce, the acts of Congress would be supreme and exclusive, and that he is not subject to supervision by state authorities.

Such was the holding in Missouri Pacific Railroad Co. v. Stroud, 267 U.S. 404, loc. cit. 408, 45 S.Ct. 243, 69 L.Ed. 683. The court said (page 245): "It is elementary and well settled that there can be no divided authority over interstate commerce, and that the acts of Congress on that subject are supreme and exclusive."

An examination of the national Motor Carrier Act, 49 U.S.C.A. § 301 et seq., however, does not reveal an intention of the Congress to occupy the entire field and to exclude the authority of the states. Section 302, Title 49 U.S.C.A., contains a "Declaration of policy and delegation of jurisdiction to Interstate Commerce Commission." By subdivision (a) of said Section it is the expressed purpose of the Congress to "cooperate with the several States and the duly authorized officials thereof * * * in the administration and enforcement of this chapter." And then, by subdivision (c): "Nothing in this chapter shall be construed to affect the powers of taxation of the several States or to authorize a motor carrier to do an intrastate business on the highways of any state, or to interfere with the exclusive exercise by each State of the power of regulation of intrastate commerce by motor carriers on the highways thereof."

It will be seen from the foregoing that it was the intention of the Congress to leave with each state the exclusive right to regulate and control intrastate commerce by motor carriers on the highways of such states. This exclusive right could not be exercised properly if the state were compelled to await a determination and a conclusion of the interstate commerce commission in every case as to whether traffic belonged to interstate commerce or to intrastate commerce. It must be obvious that in case the Interstate Commerce Commission should determine that a particular haul or carriage was interstate commerce, a ruling to the contrary by the state authorities would be unavailing, but in the absence of conflict, the decision of the State authorities would prevail.

Again, it appears from the evidence that the Interstate Commerce Commission, because of a congestion of applications from motor carriers, has been unable to exercise prompt supervision over interstate motor carriers.

In the case of Sproles v. Binford, 286 U.S. 374, loc. cit. 390, 52 S.Ct. 581, loc. cit. 585, 76 L.Ed. 1167, the court said:

"`In the absence of national legislation especially covering the subject of interstate commerce, the state may rightly prescribe uniform regulations adapted to promote safety upon its highways and the conservation of their use, applicable alike to vehicles moving in interstate commerce and those of its own citizens.'"

This principle was taken and approved from the case of Morris v. Duby, 274 U. S. 135, 47 S.Ct. 548, 71 L.Ed. 966.

The rule announced in the Minnesota Rate Cases, Simpson v. Shepard, 230 U.S. 352, 33 S.Ct. 729, 57 L.Ed. 1511, 48 L.R.A., N.S., 1151, Ann.Cas.1916A, 18, was to the effect that the states may act within their respective jurisdictions until Congress sees fit to act. In this case, while the Congress has acted, it has not only left with the states a large measure of authority in determining what is and what is not intrastate commerce, but it has not as yet been able to make its legislation effective. Until that has been done, the ...