Frozen Food Express, Inc. v. United States, Civ. A. No. 3-4172-C.

• Decision Date: 03 June 1971
• Docket Number: Civ. A. No. 3-4172-C.
• Citation: 328 F. Supp. 666
• Parties: FROZEN FOOD EXPRESS, INC., a corporation v. UNITED STATES of America and Interstate Commerce Commission.
• Court: U.S. District Court — Northern District of Texas

328 F. Supp. 666

FROZEN FOOD EXPRESS, INC., a corporation v. UNITED STATES of America and Interstate Commerce Commission.

Civ. A. No. 3-4172-C.

United States District Court, N. D. Texas, Dallas Division.

June 3, 1971.

Phinney, Hallman, Pulley & Livingstone, by Jack L. Coke, Jr., Dallas, Tex., for plaintiff.

Brooks, Montgomery & Matthews, by Hugh T. Matthews, Jr., Dallas, Tex., for intervenor, Govan Express.

Eldon B. Mahon, U. S. Atty., Dallas, Tex., by Charles D. Cabaniss, Asst. U. S. Atty., John H. D. Wigger, Dept. of Justice, Washington, D. C., for United States.

Arthur M. Toback, Atty., Office of the Gen. Counsel, I. C. C., Washington, D. C., for I. C. C.

Before GOLDBERG, Circuit Judge, and HUGHES and TAYLOR, District Judges.

WILLIAM M. TAYLOR, Jr., District Judge.

On July 14, 1969, the Intervenor, Govan Express, filed an application with the Interstate Commerce Commission (ICC) seeking a certificate of public convenience and necessity, which would allow it to transport food and laundry products from Dallas and Fort Worth, Texas, to points in Texas, Oklahoma, and western Louisiana. This application was published on August 7, 1969 in 34 Federal Register No. 150, p. 12866.

On September 4, 1969, the plaintiff filed a protest to the Govan application. According to Govan, there were six other protestants in the case as of November 4, 1969. On September 18, 1969, the ICC ordered the Govan application to be handled under the modified procedure according to Rule 247(e) (3) (49 C.F.R. § 1100.247(e) (3)). The rule generally provides that the application be processed by verified pleadings without oral hearings.

On November 4, 1969, Govan requested that a restrictive amendment be made a part of its application so that only the following authority would be sought:

(1.) Foodstuffs and (2.) Laundry products, when moving in mixed shipments with foodstuffs, from the plant sites of and the storage facilities utilized by Beatrice Foods Company and its subsidiaries and divisions in Dallas and Fort Worth, Texas to points in Texas, Oklahoma and that portion of Louisiana west of the Mississippi River.

On December 12, 1969, the plaintiff withdrew its protest to the Govan application. The remainder of the protestants, save one, all withdrew their protests prior to March 30, 1970. On that date an employee Review Board of the Commission granted the Govan application without the proffered restrictive amendment because

"the supporting shipper has a large number of subsidiaries (some of which bear corporate designations) in the involved origin area and many more are expected to be located there in the future. It is obvious, therefore, that enforcement and interpretative problems will be present in the sense of readily identifying which origin facilities are those of shipper's subsidiaries."

The plaintiff then on May 5, 1970 petitioned the Commission for leave to intervene and for the reopening of the proceeding for the receipt of additional evidence and for reconsideration. The Appellate Division 1 of the Commission, on July 1, 1970, allowed the plaintiff to intervene but declined to reopen the proceedings on the grounds that the findings of the Review Board were in accordance with the evidence and the applicable law and that no sufficient or proper cause appears for the reopening of the proceeding. This order of Appellate Division 1 is an administratively final order. Plaintiff filed suit in federal district court requesting the court to enjoin, set aside, and annul the orders of the Review Board and Appellate Division 1 and remand the case to the Commission for further proceedings. A preliminary injunction was also requested and entered, enjoining Govan from operating in a manner greater than that set out in the restrictive amendment that the Commission refused to accept. The preliminary injunction is effective until the case can be decided on the merits.

Plaintiff argues that because the Commission encourages amendments under Rule 247(d) (5) in order to reduce the number of protestants to expedite applications and because the Commission was silent as to whether Govan's amendment would be acceptable, the plaintiff was entitled to rely upon the Commission's silence, presume that the amendment would be accepted, and withdraw its protest. Because plaintiff's request to reopen the proceedings and allow plaintiff to introduce evidence in opposition to the Govan application was denied, it contends that the procedures involved were patently unfair and resulted in a decision which has denied it due process.

Plaintiff also contends that on the merits, the Commission abused its discretion in granting the authority to Govan because the findings were arbitrary, capricious, and unsupported by any substantial evidence. This argument revolves around the Commission's decision not to accept the amendment because it provided that the points of origin would be the plant sites and storage facilities utilized by Beatrice Foods Company and its subsidiaries and divisions in the Dallas-Fort Worth area. The Commission found that there were many subsidiaries and divisions in this area so that the origin points cannot be readily identified and therefore pose enforcement and interpretive problems. The plaintiff says that there is evidence to show that Beatrice Foods and its subsidiaries intended to centralize its warehouse and shipping facilities to one or a very limited number of locations in the Dallas-Fort Worth area. This, it claims, negated any reason the Commission had for refusing the amendment.

For authority, plaintiff relies upon Fox-Smythe Transportation Co. Extension-Oklahoma, 106 M.C.C. 1 (1967) to support its position that it was entitled to rely upon the Commission's silence and withdraw its protest. In that case the Commission rejected the restrictive amendments offered to eliminate opposition. There, employees of the Commission had communicated to the parties prior to the hearing that the amendments were not acceptable. Plaintiff contends that it was entitled to the same advance notice.

It also argues that because a plant site restriction has been imposed in many other cases, it should not arbitrarily be rejected here.

Plaintiff makes an analogy to F.R. Civ.P. 60(b) where a case can be reopened because of mistake or inadvertence.

In conclusion, the plaintiff relies upon Refrigerated Transport Co. v. United States, 297 F.Supp. 5 (N.D.Ga.1969), for authority to remand. There the Commission had at the hearing refused a tendered amendment and substituted a restriction of its own. The Court remanded the case, not on the merits, but to allow the plaintiff to contest the substitution.

Govan states that the only issue in the case is whether...