Fordham Bus Corporation v. United States

• Decision Date: 23 October 1941
• Citation: 41 F. Supp. 712
• Parties: FORDHAM BUS CORPORATION v. UNITED STATES et al.
• Court: U.S. District Court — Southern District of New York

41 F. Supp. 712

FORDHAM BUS CORPORATION v. UNITED STATES et al.

District Court, S. D. New York.

October 23, 1941.

Charles E. Cotterill, of New York City, for plaintiff.

Smith R. Brittingham, Jr., Sp. Asst. to Atty. Gen., for the United States.

Daniel W. Knowlton, Chief Counsel, Interstate Commerce Commission, and E. M. Reidy, Asst. Chief Counsel, Interstate Commerce Commission, both of Washington, D. C., for the Interstate Commerce Commission.

Before FRANK, Circuit Judge, and HULBERT and CONGER, District Judges.

FRANK, Circuit Judge.

This is an action to set aside an order of Division 5 of the Interstate Commerce Commission, dated April 18, 1940, affirmed by the entire Commission on June 26, 1941, in Docket No. MC-74634, Fordham Bus Corporation, Common Carrier Application. The order under review granted plaintiff a certificate of public convenience and necessity authorizing it to operate as an interstate common carrier by motor vehicle of passengers and their baggage in round-trip charter operations over irregular routes from New York, New York, to all points in New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Maine, Maryland and the District of Columbia. Pursuant to 28 U.S.C.A. § 47, the case was heard by a three-judge court.

Plaintiff filed an application with the Commission under the so-called "grandfather" clauses of the Motor Carrier Act, 49 U.S.C.A. §§ 301, 306(a), 309(a), asking for the issuance of a common carrier certificate of public convenience and necessity, or in the alternative for a permit as a contract carrier.¹ Hearings were conducted and on March 12, 1940, the examiner served a recommended report and order finding applicant entitled to a certificate as a common carrier by motor vehicle covering the operations described above. Neither plaintiff nor any other party filed exceptions to the examiner's recommended report, and, after minor extensions of its effective date, the recommended report and order, as provided by statute, 49 U.S.C.A. § 305(a), became the April 18, 1940, order of Division 5 of the Commission. Pursuant to adjournment of this case for that purpose, plaintiff filed a petition for reconsideration before the entire Commission on June 14, 1941. In a written report the Commission denied plaintiff's petition on June 26, 1941.

The Commission's findings as to plaintiff's "grandfather" operations were as follows: "Applicant has engaged in operating passenger busses for hire since 1926, when the corporation was formed. At the time of the hearing, it owned and operated 22 busses, ranging in capacity from 20 to 37 passengers. Since prior to June 1, 1935, applicant has solicited special or charter parties at New York City for trips to points of interest in nearby States. Applicant's president testified that such transportation was performed only as the result of special arrangements with groups for a particular trip or tour, and return. The equipment was chartered by a representative of the group for the trip, who paid for the bus or busses chartered. There was no sale of individual tickets for such trips. All the charter parties transported originated in New York City and the passengers were carried back to that point. No pick-ups were made en route and only the party or group and their personal baggage were carried." Plaintiff does not contend that the Commission's findings lack evidentiary support; nor has plaintiff placed before the Court the record upon which those findings were made. Thus the Court is relieved of the burden of reviewing the evidence and may decide this case on the face of the Commission's reports. Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 54 S.Ct. 692, 78 L.Ed. 1260.

The ultimate question for decision is whether the Commission erred in holding that plaintiff is a common carrier, it being plaintiff's contention that the facts disclose an operation which, as a matter of law, constitutes contract carriage.

Plaintiff asserts that a statute should not be so construed as to make it, or tend to make it, unconstitutional. With that we agree. Plaintiff asserts that we must, if possible, so construe the statute before us here as not to bring it within the statutory definition of a common carrier, for, in that event, the statute would be invalid, since, plaintiff argues, it is, by the nature of its operations, within the established category of private carriers and not within the established category of common carriers, i. e., those affected with a public interest. A private carrier cannot, says the plaintiff, be converted, by legislative fiat, into a common carrier and thereby be subjected to regulations which are valid solely with respect thereto. In support of its contention, plaintiff cites such cases as Michigan Public Utilities Commission v. Duke, 266 U.S. 570, 45 S.Ct. 191, 69 L.Ed. 445, 36 A.L.R. 1105, and Frost Trucking Co. v. Railroad Commission, 271 U.S. 583, 46 S.Ct. 605, 70 L.Ed. 1101, 47 A.L.R. 457; cf. Smith v. Cahoon, 283 U.S. 553, 51 S.Ct. 582, 75 L.Ed. 1264. But the basic postulate of those decisions was destroyed by the later decision in Nebbia v. New York, 291 U.S. 502, 536, 537, 54 S.Ct. 505, 506, 78 L.Ed. 940, 89 A.L.R. 1469, which held that "there is no closed class or category of * * * businesses affected with a public interest." The court there said: "And it is equally clear that if the legislative policy be to curb unrestrained and harmful competition by measures which are not arbitrary or discriminatory it does not lie with the courts to determine that the rule is unwise." See also Olsen v. Nebraska, 313 U.S. 236, 61 S. Ct. 862, 85 L.Ed. 1305, 133 A.L.R. 1500. It is significant that the earlier cases cited by plaintiff were also cited in the dissenting opinion in the Nebbia case to show that the majority opinion was inconsistent with the prior precedents; see 291 U.S. at 555, 54 S.Ct. at 523, 78 L.Ed. 940, 89 A.L.R. 1469. That the earlier doctrine of "affectation with a public interest" was historically unfounded, see Adler, Business Jurisprudence, 28 Harv.L.Rev.(1914) 135; cf. Hamilton, Affectation with Public Interest, 39 Yale L. J.(1929) 1089.

Even in those earlier cases, it was acknowledged that private carriers might be regulated in ways appropriate to their character. It is not entirely clear whether the type of regulation, which was there deemed to be forbidden, was solely an attempt to require the vehicles to serve the entire public equally, or also included rate supervision. We need not decide that question here. Stephenson v. Binford, 287 U. S. 251, 53 S.Ct. 181, 77 L.Ed. 288, 87 A.L.R. 721, upheld regulation of the rates of private carriers as an exercise of the state's power to conserve the highways, leaving open the questions of (a) whether use of the public highways impressed the trucking business with a public interest and (b) whether regulation of private carriers was valid as a means of preventing impairment of the public service of common carriers. We think those questions were answered in the affirmative by the subsequent Nebbia case, supra. Plaintiff's operations will apparently be regulated in the same manner as the charter operations of any common carrier which admittedly comes within Section 203(a) (14); and the regulation of both, so far as appears, comes well within the doctrine of the Nebbia case. A different problem would arise if the statute necessarily required — or if the Commission were requesting — that plaintiff establish joint through routes or undertake to serve all comers in respect of its charter operations. Its solution would depend, however, not on any magic in plaintiff's denomination of itself as a "contract carrier," but on the more prosaic issue of whether petitioner could constitutionally be required to alter so radically its type of operations. As to that, we pass no judgment, since the question has not been presented. Cf. Heald v. District of Columbia, 259 U.S. 114, 123, 42 S.Ct. 434, 66 L.Ed. 852; Tyler v. Judges, 179 U.S. 405, 21 S.Ct. 206, 45 L.Ed. 252; Ashwander v. T.V.A., 297 U.S. 288, 324, and 346, 347, 56 S.Ct. 466, 80 L.Ed. 688; Coleman v. Miller, 307 U.S. 433, 460-467, 59 S. Ct. 972, 83 L.Ed. 1385, 122 A.L.R. 695.

Plaintiff has not suggested, and the court has sought in vain to find, any threatened or likely action by the Commission, or duty laid upon plaintiff by the Act, which will impose upon it a burden beyond the power of Congress to impose. It appears only that plaintiff will be required to charge reasonable rates, to file its charges, to maintain safe standards, etc. The Nebbia case removes any doubt we might have as to the validity of such regulation, if indeed we could have any doubt after the Shreveport case, Houston, E. & W. Texas Ry. v. United States, 234 U.S. 342, 355, 34 S.Ct. 833, 838, 58 L.Ed. 1341, which boldly upheld the "control of Congress over the interstate carrier in all matters having such a close and substantial relation to interstate commerce that it is necessary or appropriate to exercise the control for the effective government of that commerce."

In Terminal Taxicab Co. v. Kutz, 241 U. S. 252, 256, 36 S.Ct. 583, 584, 60 L.Ed. 984, Ann.Cas.1916D, 765, upon which plaintiff places much reliance, the court held that the business of "furnishing automobiles from its central garage on orders" was not common carriage, because "* * * an invitation to the public to buy does not necessarily entail an obligation to sell." But, since in that case "the main question" was whether such operations made the plaintiff a common carrier "under the definition in the act" establishing the Public Utilities Commission of the District of Columbia, it is of no weight on the constitutional issue. Moreover, the Kutz case was decided in pre-Nebbia days. Bell v. Harlan, 57 App. D.C. 255, 20 F.2d 271, is equally inapplicable.

Finding no merit in plaintiff's constitutional argument, we turn to its assertions that, quite apart from any...