Falwell v. United States, Civ. No. 168.

• Decision Date: 31 March 1947
• Docket Number: Civ. No. 168.
• Citation: 330 US 807,69 F.Supp. 71
• Parties: FALWELL et al. v. UNITED STATES et al.
• Court: U.S. District Court — Western District of Virginia

69 F.Supp. 71

330 US 807

FALWELL et al. v. UNITED STATES et al.

Civ. No. 168.

District Court, W. D. Virginia, at Lynchburg.

December 21, 1946.

Judgment Affirmed March 31, 1947.

W. G. Burnette and John D. Easley, both of Lynchburg, Va., for plaintiffs.

Wendell Berge, Asst. Atty. Gen., and Edward Dumbauld, Sp. Asst., to the Atty. Gen., for the United States.

Daniel W. Knowlton, Chief Counsel, and Nelson Thomas, Atty., both of Washington, D. C., for the Interstate Commerce Commission.

J. Ninian Beall, of Washington, D. C., for Brooks Transportation Co., and Lucian H. Cocke, Jr., of Roanoke, Va., for N. & W. Ry. Co. et al., intervenors.

Before DOBIE, Circuit Judge, and PAUL and BARKSDALE, District Judges.

Judgment Affirmed March 31, 1947. See 67 S.Ct. 1087.

PAUL, District Judge.

The plaintiffs in this suit are Falwell Fast Freight, Inc., a Virginia corporation engaged in business as a common carrier of property in interstate commerce by motor vehicle, with its headquarters at Lynchburg, Va., and C. W. Falwell, Jr., owner of a controlling interest in the corporation. The controversy arises out of the desire and attempt of the plaintiffs to purchase certain operating rights of two other carriers engaged in similar businesses, these being Evans Line, Inc., of Roanoke, Va. (hereinafter referred to as Evans) and W. B. Draper, doing business as Draper Motor Service, also of Roanoke. The object of the present suit is to set aside and enjoin the enforcement of an order entered by the Interstate Commerce Commission under date of January 14, 1946, in so far as that order denied to plaintiffs authority to acquire certain of the operating rights of Draper.

The background of facts upon which resort is had to this court is as follows:

Prior to July 31, 1944, Evans was the owner of operating rights over regular routes extending from Roanoke west to Bluefield, West Virginia, and thence north to Charleston and Point Pleasant in that state, including various intermediate points.

Draper was owner of a certificate authorizing operations over irregular routes between Roanoke on the one hand and, on the other, Lynchburg, Norfolk, Richmond and other points in Virginia as well as to various points in other states, north and south.

Falwell, the plaintiff here, held a certificate authorizing operations over a regular route between Lynchburg and New York, via Washington, Baltimore and Philadelphia and serving intermediate points; and over irregular routes to specified points and areas in Virginia and various other states. As usual, the certificates held by all of these parties contained limitations or exceptions as to the nature of the commodities to be hauled.

In this situation an agreement was entered into on July 19, 1944, between Falwell and Evans (which was in financial difficulties) whereby Falwell agreed to purchase all of the operating rights of Evans. Falwell also made an agreement with Draper, the date of which does not appear, to purchase from Draper that portion of the latter's rights which authorized operations over irregular routes between Roanoke and Lynchburg. Having made these agreements, the carrying out of which was subject to the approval of the Interstate Commerce Commission, Falwell, Draper and Evans, on July 31, 1944, filed their joint application before the Commission seeking authority under Sect. 5 of the Interstate Commerce Act, 49 U.S.C.A. § 5, to consummate the transfer to Falwell of the rights described.

Shortly after this application was filed the Commission, on August 26, 1944, under authority of Sect. 210a (b) of the Interstate Commerce Act, 49 U.S.C.A. § 310a (b), granted approval for temporary leases by Falwell of the rights sought to be acquired, these leases to expire February 21, 1945. Thereafter, and after notice given, a hearing upon the application for approval of the purchases was held before an examiner of the Commission at Roanoke, Va., on January 25, 1945. The notice for this hearing specifically stated that, since the application contained no request for issuance of operating authority greater than the sum of the existing operating rights of the parties, no request for issuance of any enlarged operating authority would be entertained at the hearing. At this hearing Brooks Transportation Company, a motor vehicle carrier operating within the territory covered by the rights involved in the application, appeared as a protestant. Certain railroad carriers also appeared in opposition to the application. At this hearing evidence, both oral and documentary, was received, including that offered by the plaintiffs. Thereafter, on February 22, 1945, Division 4 of the Commission entered a report and order in which it granted the application in full, with one of the commissioners dissenting.

Inasmuch as plaintiffs have laid stress upon certain terms of the order of February 22, 1945, it seems well to quote those provisions which they have so emphasized and upon which they, in large part, rest their present contentions. Omitting the heading, preliminary recitations and portions of the order not pertinent to this controversy, this order reads:

"It is ordered, That purchase by Falwell Fast Freight, Incorporated, of Lynchburg, Va., of certain operating rights of W. B. Draper, doing business as Draper Motor Service, of Roanoke, Va., and of operating rights of Evans Line, Inc., also of Roanoke, and acquisition of control of said operating rights by C. W. Falwell, Jr., also of Lynchburg, through said purchase be, and they are hereby, approved and authorized, subject to the terms and conditions set out in the findings in said report.

"It is further ordered, That petition of Falwell Fast Freight, Incorporated, requesting extension of its present lease authority beyond February 21, 1945, be, and it is hereby, denied.

"It is further ordered, That, if the parties to the transactions herein authorized desire to consummate same, they shall (1) notify this Commission, in writing, of the intended consummation date, (2) promptly take such steps as will insure compliance with sections 215 and 217 of the Interstate Commerce Act, and with rules, regulations, and requirements prescribed thereunder, and (3) confirm in writing to the Commission, immediately after consummation, the date on which consummation has actually taken place.

"It is further ordered, That unless the authority herein granted is exercised within 30 days from the date hereof, this order shall be of no further force and effect, with respect to the authority not exercised."

On the same day (Feb. 22, 1945) that the above order was issued, counsel for Falwell was notified by a telegram from the Commission's office of the favorable action of Division 4; and later on the same day received another telegram (apparently sent in response to one from him) repeating the information contained in the first, with the additional information that the Commission had been advised by the protestant that a petition for reconsideration would be filed.

On March 9, 1945, the protestant, Brooks Transportation Company, filed a petition for reconsideration of the report and order of Division 4 and after consideration of this petition the full Commission, by an order of May 7, 1945, ordered that the report and order entered by Division 4 on February 22, 1945, be reopened for reconsideration. In the meanwhile, by letter dated March 15, 1945, which was after the petition for reconsideration had been filed but before it had been acted on, Falwell informed the Commission that his purchase of the Draper and Evans rights had been consummated on February 22, 1945. This was apparently in compliance with that provision of the order of February 22, 1945, which directed that the Commission be notified of the date when the sale was consummated. However, Falwell's letter recognized the existence of the petition for reconsideration filed by Brooks Transportation Company by stating that final payment to Evans had been deferred until a decision by the Commission on the petition for reconsideration.

Following its order of May 7, 1945, granting reconsideration the matter was considered by the full Commission until January 14, 1946. During this time, (on July 31, 1945) the plaintiffs asked leave to enlarge their application so as to pray for authorization for regular-route operations between Roanoke and Lynchburg but this motion was promptly denied. (August 11, 1946.) As a result of the reconsideration by the full Commission it entered a report and order on January 14, 1946, in which it ordered that so much of the order of February 22, 1945 (the order of Division 4) as related to the purchase by Falwell of the Evans rights should remain in full force and effect, but that the application by Falwell to purchase the Draper rights was denied. In other words, the action of the full Commission was to approve the purchase by Falwell of the Evans rights but to disapprove the purchase of the Draper rights. Upon entry of this order of January 14, 1946, the Commission directed that the Draper rights, which plaintiffs had been operating under the temporary lease and under the order of Division 4, be returned to Draper as soon as possible. Later, upon application of the plaintiffs, the Commission refused a rehearing but did by several successive orders grant extensions of the time when the order of January 14, 1946, should become effective. While the last of these extensions was effective the plaintiffs instituted this suit.

The purpose of the suit is to set aside and annul the Commission's order of January 14, 1946, and the sole matter in controversy relates to the refusal of the Commission to permit Falwell to acquire that portion of the rights owned by Draper which authorize operations over irregular routes between Roanoke and Lynchburg.

Discussion

In support of their prayer that the order complained of be set aside and its enforcement enjoined the plaintiffs urge three principal...