Frozen Foods Express, Inc. v. United States

• Decision Date: 28 June 1972
• Docket Number: No. SA-71-CA-337.,SA-71-CA-337.
• Citation: 346 F. Supp. 254
• Parties: FROZEN FOODS EXPRESS, INC. and Zero Refrigerated Lines, Inc. v. The UNITED STATES of America and the Interstate Commerce Commission et al.
• Court: U.S. District Court — Western District of Texas

346 F. Supp. 254

FROZEN FOODS EXPRESS, INC. and Zero Refrigerated Lines, Inc. v. The UNITED STATES of America and the Interstate Commerce Commission et al.

No. SA-71-CA-337.

United States District Court, W. D. Texas, San Antonio Division.

June 28, 1972.

Ralph Pulley, Jr., Dallas, Tex., for plaintiffs.

C. J. Calnan, Asst. U. S. Atty., San Antonio, Tex., for the United States.

Richard Streeter, Washington, D. C., for Interstate Commerce Comm.

Eugene Anderson, Washington, D. C., for Missouri Beef Packers, Inc.

Ferd Meyer, Jr., San Antonio, Tex., for Missouri Beef Packers, Inc., Watkins Motor Lines, Inc., and Refrigerated Transport Co.

Alan E. Serby, Atlanta, Ga., for Watkins Motor Lines, Inc. and Refrigerated Transport Co.

Robert R. Digby, Whitten, Digby & Steiger, Phoenix, Ariz., and Mert Starnes, Austin, Tex., for W. J. Digby, Inc.

M. Ward Bailey, Fort Worth, Tex., and Mert Starnes, Austin, Tex., for Querner Truck Lines, Inc. and Lone Star Carriers, Inc.

Edward T. Lyons, Jr., Denver, Colo., for Bray Lines, Inc. and Denver-Albuquerque Motor Transp. Co. E. Stephen Heisley, Washington, D. C., for Colonial Refrigerated Transport, Inc.

Emerson Banack, Jr., San Antonio, Tex., for W. E. Haynes, d/b/a Haynes Transportation Co.

Before THORNBERRY, Circuit Judge, and SUTTLE and WOOD, District Judges.

MEMORANDUM OPINION

SUTTLE, District Judge.

Plaintiffs, Frozen Food Express, Inc. and Zero Refrigerated Lines, Inc. filed this action to suspend, annul, enjoin and set aside two decisions of the Interstate Commerce Commission (Commission).¹ This three-judge Court, convened pursuant to 28 U.S.C. § 2325, has jurisdiction of this action under 49 U.S. C. §§ 17(9), 305(g), 305(h) and 28 U.S. C. §§ 1336, 1398. The decisions of the Commission which are the subject of this action granted motor carrier authority to 16 applicants to transport meats and packinghouse products over irregular routes from the plant site of Missouri Beef Packers at Plainview, Hale County, Texas to points throughout the United States. Plaintiffs, who already had authority to serve the Plainview area, are competitors of the applicants and opposed to the applications.

For purposes of clarity in this Opinion, the discussion of the proceedings before the Commission will be divided into two sections—The Querner Docket and the Haynes Docket. Since the legal issues with regard to each are identical, thereafter no separate discussion is necessary.

The Querner Docket

During 1971, Missouri Beef Packers prepared to open a new packing plant at Plainview, Texas. Between May 7, 1970 and September 23, 1970, twenty-one applications were filed with the Commission by motor carriers seeking authorization to transport meat and meat by-products from Missouri Beef's new plant at Plainview to points throughout the United States. The Commission, after making a preliminary examination of the various applications, ordered the proceedings to be handled under the Commission's "Modified Procedure," 49 C.F. R. § 1100.45 et seq. (1971), wherein verified affidavits were filed in support of the respective applications.

The applicants and Missouri Beef filed the verified affidavits and requested that the cases be consolidated under the Querner Docket. This request was granted. Plaintiffs filed countervailing affidavits in opposition to 16 of the 21 applications and requested oral hearings for the purpose of cross-examination of the witnesses offered on behalf of the applicants. See 49 C.F.R. § 1100.53 (1971).

On March 24, 1971, Commission Review Board No. 3 issued its order finding that public convenience and necessity required the issuance of certificates to 17 of the applicants.² The Board also denied the requests for oral cross-examination. On July 30, 1971, Division 1, acting as a Commission appellate division, affirmed Review Board 3 and denied plaintiffs' motions for reconsideration. By its Order, the Commission gave final approval of the issuance of fifteen certificates.³ The Commission refused to impose an "originating at" restriction upon the certificates. Such a restriction would have restricted the operating authority of the applicants to traffic originating at the plant site of Missouri Beef.

The Haynes Docket

By application filed July 20, 1970, W. E. Haynes d/b/a Haynes Transport Co. sought a certificate of public convenience and necessity authorizing operation to transport meat and meat by-products from points in Hale County, Texas to points in 18 states. The application was initially supported by the Jimmy Dean Meat Co., another packing plant located in Plainview, Hale County, Texas. Plaintiffs initially were opposed to the application but did not ask for an oral hearing. On February 10, 1971, under the Commission's Modified Procedure, Review Board 3 granted the application; the grant, however, contained an "originating at" restriction which restricted the operating authority of the applicant to traffic originating at the Jimmy Dean plant site. The Review Board's decision was premised on its finding that a grant of authority from points in Hale County to 18 states would subject protestants to possible diversion of traffic.

On April 8, 1971, Haynes requested the Commission to reopen the proceeding to allow into evidence Missouri Beef's Verified Affidavit supporting the grant of authority. On April 21, 1971, Frozen Food Express (FFE) filed a Motion to Strike, Reply and Request for Oral Hearing. Pursuant to Haynes' request, Division 1 reopened the proceeding and ordered that Missouri Beef's Verified Affidavit be received into evidence and made a part of the record. Frozen Food's Motion to Strike and Request for Oral Hearing were denied. Based upon the duel support of Jimmy Dean and Missouri Beef, Review Board 3 issued a revised order again granting applicant authority. The Board noted that it had not granted unrestricted authority earlier because of the potential threat of diversion, and because the application was supported solely by Jimmy Dean. The Board found that because Missouri Beef now supported the application and a need for additional service was shown, and because the evidence no longer demonstrated a potential threat of diversion from existing carriers, no "originating at" plant restriction would be imposed.

On August 23, 1971, plaintiffs filed petitions for reconsideration. Zero, whose pleading was adopted by FFE, requested that the Haynes application be consolidated with the proceedings under the Querner Docket. This request was denied by Division 1 when, on September 20, 1971, it issued its Order denying protestants' petitions for reconsideration and oral hearing. The Commission reasoned that the findings of Review Board 3 were in accordance with the evidence and the applicable law, and because no sufficient or proper cause appeared for granting any of the relief sought. This exhausted plaintiff's remedies before the Commission in this docket.

This action, challenging both the Haynes and Querner Docket Orders, was filed November 23, 1971. Plaintiffs' application for a temporary restraining order to enjoin the Commission from issuing permanent certificates of operating authority to the applicant carriers was denied by this Court's Order of November 30, 1971. The authorized certificates were thereupon issued to the various applicants by the Commission and operations have been conducted under those certificates since that time.

QUESTIONS PRESENTED

In our view, the following issues are presented by this case:

I. Whether the Commission's finding that the applicants' proposed service is required by public convenience and necessity was lawful and supported by substantial evidence;

II. Whether the Commission properly concluded that no material issues of fact requiring an oral hearing for cross-examination were presented; and

III. Whether the Commission acted within its discretion in concluding that no "originating at" restriction should be imposed upon the certificates granted to applicants.

HOLDING

It is our opinion that all relief sought by the plaintiffs should be denied. The law is well settled that the scope of judicial review of the Commission's Orders is strictly limited. 5 U.S.C. § 706; Towne Services Household Goods Transp. Co. v. United States, 329 F.Supp. 815, 819 (W.D.Tex.1971); Braswell Motor Freight Lines, Inc. v. United States, 271 F.Supp. 906, 911-912 (W.D.Tex. 1967); aff'd per curiam, 389 U.S. 569, 88 S.Ct. 692, 19 L.Ed.2d 779 (1968); Braswell Motor Freight Lines, Inc. v. United States, 275 F.Supp. 98, 102 (W.D.Tex. 1967); aff'd per curiam, 389 U.S. 569, 88 S.Ct. 692, 19 L.Ed.2d 779 (1968); Alamo Express, Inc. v. United States, 239 F.Supp. 694 (W.D.Tex.1965), aff'd per curiam, 382 U.S. 19, 86 S.Ct. 83, 15 L.Ed.2d 14 (1965) (and cases cited therein).

The function of the reviewing court . . . is limited to ascertaining whether there is warrant in law and the facts for what the Commission has done. Unless . . . there has been prejudicial departure from requirements of the law or abuse of the Commission's discretion, the reviewing court is without authority to intervene. It cannot substitute its own view concerning what should be done, whether with reference to competitive considerations or others, for the Commission's judgment upon matters committed to its determination, if that has support in the record and the applicable law.

United States v. Pierce Auto Freight Lines, Inc., 327 U.S. 515, 536, 66 S.Ct. 687, 698, 90 L.Ed. 821 (1946). The test is whether the action of the Commission has a rational basis and is supported by substantial evidence⁴ on the record viewed as a whole. Illinois Cent. R. R. v. Norfolk & W. R. R., 385 U.S. 57, 66, 87 S.Ct. 255, 17 L.Ed.2d 162 (1966); Gilbertville Trucking Co. v. United States, 371 U.S. 115, 126, 83 S.Ct. 217, 9 L.Ed.2d 177 (1962). The burden of showing the invalidity of the Commission Order rests on the Plaintiff suing to enjoin and set aside the Order. Atchison, T. & S. F. Ry. v....