Global Van Lines, Inc. v. I.C.C.
| Decision Date | 12 November 1986 |
| Docket Number | No. 83-1938,83-1938 |
| Citation | 804 F.2d 1293,256 U.S.App.D.C. 264 |
| Parties | GLOBAL VAN LINES, INC., and Wheaton Van Lines, Inc., Petitioners, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents Interstate Van Lines, Inc., Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Alan F. Wohlstetter, with whom Stanley I. Goldman, Washington, D.C., was on the brief, for petitioners.
Charles A. Stark, Atty., I.C.C., with whom J. Paul McGrath, Asst. Atty. Gen., Dept. of Justice, John Broadley, General Counsel, I.C.C., at the time the brief was filed, Henri F. Rush, Associate General Counsel, I.C.C., Robert B. Nicholson and Edward T. Hand, Attys., Dept. of Justice, were on the brief, for respondents. William J. Roberts, Atty., Dept. of Justice, Washington, D.C., also entered an appearance, for respondent U.S.
Marshall Kragen, Washington, D.C., for intervenor.
Before ROBINSON and BORK, Circuit Judges, and PALMIERI, * Senior District Judge.
Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.
For fully a half-century, federal legislation has exerted a profound influence on motor common and contract carriage, the two modes of transportation in which the interstate trucking industry principally engages. 1 The central inquiry ultimately necessitated by this petition for review is the degree of precision with which the Interstate Commerce Commission must frame the operating permit of a motor contract carrier of property, 2 when based upon a distinct need of shippers for a particularized transportation service, 3 to confine the service to shippers sharing that need. We hold that the Commission is statutorily empowered to issue such permits only in terms assuring that the provision of service will be so circumscribed.
At the heart of this litigation are the statutory concept of a motor contract carrier of property 4 and the role that concept has in extensions by interstate truckers of preferential services and rates to selected customers by means of individual agreements for the transportation of property. 5 Authority to favor customers in this fashion has waxed and waned over the years concomitantly with action by Congress, the Commission and the courts.
The Motor Carrier Act of 1935, 6 which initiated federal regulation of the trucking industry, defined a contract carrier simply in terms of one engaged in transportation for compensation under special and individual agreements with customers. 7 A common carrier, in contrast, was one undertaking transportation over regular or irregular routes for compensation for any member of the general public desiring it. 8 In 1956, the Supreme Court read the definition of motor contract carrier expansively in holding that a trucker securing 69 contracts for transportation of steel products retained its status as a contract carrier. 9 If specialization was an indispensable ingredient of contract carriage, the Court said, that requirement was satisfied by the fact that the carrier hauled only strictly limited types of steel products under individual and continuing agreements with a comparatively small number of shippers throughout a large area. 10 Active solicitation of customers did not support a finding that the carrier was holding itself out as a supplier of transportation to the general public, the Court continued, 11 because it was free to search aggressively for new business within the limits of its license. 12
In 1957, Congress amended the Motor Carrier Act to sharpen the distinction between common and contract carriage, and in the process effectively terminated the contract carrier practice which the Court had upheld. 13 Motor contract carriage was redefined as transportation for compensation
under continuing contracts with one person or a limited number of persons either (a) for the furnishing of transportation services through the assignment of motor vehicles for a continuing period of time to the exclusive use of each person served or (b) for the furnishing of transportation services designed to meet the distinct need of each individual customer. 14 Thus, contract carriage thereafter necessitated a continuing contract between the carrier and the shipper, and either a dedication of equipment or a transportation service adapted to a distinct shipper's need. A carrier seeking contract-carriage authority by resort to the latter alternative must show that the shipper has a " 'distinct need' for a different or a more select or a more specialized service," 15 and that the carrier's service is "specialized and tailored to" that need. 16
This definition of contract carriage remained substantively unchanged from 1957 to 1980. 17 During that era, contract-carriage applicants attempting to demonstrate distinct shipper needs frequently sought to provide a particular service to only one shipper. 18 On some occasions, however, the Commission approved permits for service to discrete classes of persons when a distinct need common to the shippers comprising the class could be shown. 19 The Motor Carrier Act of 1980 20 freed both common and contract carriers from a number of regulatory controls but left the distinction between common and contract carriage largely intact. The definition of motor contract carriage was amended in but one respect: continuing agreements, which previously could have been made only with "one person or a limited number of persons," 21 can now be made with "one or more persons" without numerical limit. 22 Such was the relevant statutory law when the instant controversy arose.
Interstate Van Lines, Inc., applied to the Commission for authority to truck household goods 23 under continuing contracts with "commercial shippers." 24 In a statement accompanying its application, Interstate discussed what it deemed the distinct needs of "national account shippers," who apparently are synonymous with "commercial shippers," 25 and who generate movements of household goods in high volume. Global Van Lines, Inc., and Wheaton Van Lines, Inc., jointly protested Interstate's application, 26 arguing that "commercial shippers" did not constitute a class appropriate for service under a contract-carrier permit resting solely upon the distinct-needs clause. 27
The Commission's Review Board No. 3 agreed with the protestants and denied Interstate's application. 28 On Interstate's administrative appeal, 29 however, Division 1 of the Commission vacated the Review Board's decision, and not only granted the application but also widened Interstate's authority beyond its request. 30 Interstate was authorized
[t]o operate as a contract carrier, by motor vehicle, in interstate or foreign commerce, over irregular routes, transporting household goods, between points in the United States (except Alaska and Hawaii), under continuing contract(s) with persons (except individuals) as defined at 1 U.S.C. Sec. 1. 31
Global and Wheaton petitioned this court for review of the order, and filed with the Commission a request for a stay. The Commission refused to grant a stay, but reopened the proceeding, sua sponte, with a view to clarification of the Division's decision. 32 Similarly, this court denied a motion for a stay pending review. 33
Petitioners contend that the Motor Carrier Act does not allow the Commission to utilize the distinct-needs clause as the predicate for a contract-carrier permit conferring authority so great as to produce uncertainty as to whether the service to be furnished to each shipper will fit within the statutory definition of contract carriage. 34 As a threshold defense, the Commission argues that a separate statutory procedure provides the only method of challenging any such overbreadth. 35 Alternatively, the Commission and Interstate assert that the permit as written is guaranty enough that service in conformity with its terms will qualify as contract carriage within the meaning of the Act. 36
We conclude that petitioners were free to mount their overbreadth attack on the permit at the licensing stage. Additionally, after consideration of the statutory language, its legislative history, and explications of the distinct-needs requirement by the Commission and the courts, we hold that the Commission, in granting the permit, abdicated its responsibility to ensure that the transportation service it authorizes will harmonize with the Act's concept of contract carriage.
The Commission insists that the question whether shippers have distinct needs within the meaning of the statutory definition of motor contract carriage is not one to be addressed during the process of formulating the operating authority that a permit is to confer. 37 The Commission analogizes a determination on distinct needs to one on whether particular property falls within the scope of a contract carrier's hauling authority, a matter which is not explored when the application for contract-carrier authority is under consideration. 38 The Commission also notes that the Motor Carrier Act of 1980 established an administrative procedure enabling a motor common carrier 39 to complain that a motor contract carrier is providing common-carrier service, 40 and asserts that this furnishes petitioners' sole remedy for impugning a carrier's provision of service on the ground that it is inconsistent with the statutory concept of motor contract carriage. 41
We reject this effort to defer consideration of petitioners' challenge, for it fails to take into account an affirmative duty imposed statutorily upon the Commission. Congress has decreed that "[t]he permit for a motor contract carrier shall specify necessary conditions, including each person or class of persons ... for which the carrier may provide transportation[,] ... to ensure that the carrier provides transportation...
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