Global Van Lines, Inc. v. I.C.C.
| Decision Date | 19 September 1983 |
| Docket Number | No. 82-4284,82-4284 |
| Citation | 714 F.2d 1290 |
| Parties | GLOBAL VAN LINES, INC., Wheaton Van Lines, Inc., and Freight Forwarders Institute, Petitioners, v. INTERSTATE COMMERCE COMMISSION and The United States of America, Respondents. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Alan F. Wohlstetter, Washington, D.C., for Global Intern. U.S.A., Inc., Furniture Forwarding, Inc. & American Movers Conference.
John J. Powers, III, Kenneth P. Kolson, Dept. of Justice, Laurence H. Schecker, L. Carol Brooks, Washington, D.C., for respondents.
Petition for Review of an Order of the Interstate Commerce Commission.
Before BROWN, REAVLEY and RANDALL, Circuit Judges.
We have twice recently had occasion to examine the Interstate Commerce Commission's newly promulgated restriction removal rules. 1 Today we examine those rules for the third time, and decide that the Commission may not extend them to cover freight forwarders solely on the authority of its general rulemaking powers. 49 U.S.C.A. § 10321(a) (West Supp.1983). Because we refuse to consider whether the Commission also could have relied upon its conditioning powers, 49 U.S.C.A. § 10923(d)(1), we need not and do not decide whether the regulations, had they been properly promulgated, could be considered arbitrary or capricious. Freight Forwarder Restrictions (Ex Parte No. MC-142 (Sub-No. 2)), 132 M.C.C. 832 (1982), is therefore reversed.
The Motor Carrier Act of 1980 substantially deregulated the American trucking industry. See Motor Carrier Act of 1980, Pub.L. No. 96-296, 94 Stat. 793 (). The essential question the parties have asked us to resolve is what this means for freight forwarders.
The relationship between freight forwarders and motor carriers is close. A "freight forwarder," according to the statutory definition, does not use its own equipment, but rather "assembles and consolidates ... shipments and performs or provides for break-bulk and distribution operations of the shipments" in equipment operated by other licensed carriers. 2 Forwarders specialize in the transportation of small shipments, "and derive their income from the difference, or spread, between the carload, truckload, or volume transportation charges they pay to the underlying common carrier and the higher rates paid to them by shippers for the transportation of their individual shipments." Investigation into the Status of Freight Forwarders (Ex Parte No. 266), 339 I.C.C. 711, 713 (1971). Though in a sense merely administrative, forwarders' duties are actually quite far-reaching. A forwarder operates according to published tariffs, issues its own bills of lading, and bears the ultimate responsibility for loading and unloading and for the payment of claims to dissatisfied customers. 339 I.C.C. at 713-14. The Commission has concluded that "[t]he principal characteristic distinguishing freight forwarders from other common carriers is that they themselves may not perform the actual line-haul movement of the goods." 339 I.C.C. at 714. The respective responsibilities of freight forwarders and motor carriers are otherwise very similar. See also Astron Forwarding Co. v. ICC, 711 F.2d 391, 392 (D.C.Cir.1983).
Like the much larger trucking industry, the freight forwarding industry has long been forced to operate under a far-reaching and restrictive statutory scheme. The Motor Carrier Act of 1980 altered, but did not remove that scheme. 3 Freight forwarders are still required to obtain permits for every service they offer to the public, 49 U.S.C.A. § 10923(b), and the service actually rendered then may not exceed the commodity, geographic, or other restrictions set out in the permit, 49 U.S.C.A. § 10923(c)(3), (d)(1). Under the regulatory climate generally prevailing after 1957 but before the 1980 improvements, these licensing restrictions often led to inefficient, gerrymandered service and to higher transportation costs for consumers. See Freight Forwarder Restrictions, supra, 132 M.C.C. at 839-42 (describing inefficiencies); Status of Freight Forwarders, supra, 339 I.C.C. at 726-27, 798-99 (describing 1957 amendments). The trucking industry was in even worse shape. Licensing requirements for motor carriers were considerably stiffer than they were for freight forwarders, see 339 I.C.C. at 799, and the permits issued were correspondingly narrower. See Steere Tank Lines, Inc. v. ICC, 694 F.2d 413 (5th Cir.1982). One of the four principal improvements wrought by the 1980 Act, the enactment of the restriction removal provisions set out in section 6, was designed to remedy this situation, but referred only to motor carriers, not freight forwarders. See MCA § 6, 49 U.S.C.A. § 10922(i). Under section 6 and the accompanying rules, 49 C.F.R. § 1165 (1982), a motor carrier may petition to have commodity, geographic, and similar restrictions removed from certificates it already holds without going through the new licensing procedures specified in section 5 of the Act, 49 U.S.C.A. § 10922(b). See Steere Tank Lines, supra, 694 F.2d at 415-18 & n. 7. There is no corresponding restriction removal provision for freight forwarders.
The Commission has nevertheless drawn the commonsense conclusion that "it would be an anomaly to allow motor carriers to broaden their authorities pursuant to the simplified procedures in [what is now] 49 C.F.R. § [1165], but not to allow freight forwarders, a major group of users of motor carrier service, similarly to broaden their respective authorities." 132 M.C.C. at 842. Implicit in this statement is the belief that Congress could not have intended to institute a much-needed reform for motor carriers without providing for the corresponding application of that reform to freight forwarders, or, in the Commission's words, "[i]nasmuch as Congress has declared the policy of granting narrowly drawn and restrictive authorities to be outmoded, we conclude that the benefits should accrue to all those carriers which were adversely affected by the now obsolete regulatory philosophy." 132 M.C.C. at 842. What would benefit motor carriers, reasoned the Commission, would surely benefit freight forwarders as well.
The Commission accordingly began the proceedings challenged in the present suit to determine the extent to which the restriction removal rules promulgated for motor carriers pursuant to the express authority granted in section 6 of the Act should (or could) be applied to freight forwarders. See 47 Fed.Reg. 8801 (1982) (). The Commission's proposed rule, like the one finally promulgated, did nothing more than add the words "and freight forwarders" to the introductory clause of the motor carrier rule. 132 M.C.C. at 844 (codified at 49 C.F.R. § 1165.1 (1982)). Various comment-makers--including the petitioners before us today--challenged both the Commission's authority to issue the regulations and their content. The Commission rejected both attacks in its Freight Forwarder Restrictions decision, and various representatives of the freight forwarder industry have duly perfected a petition for review under 28 U.S.C. §§ 2321, 2342 (1976 & Supp. V 1981).
We decide only the question of the Commission's authority. We consider first the Commission's rulemaking powers under the motor carrier restriction removal provision (49 U.S.C.A. § 10923(i)), under the national transportation policy section (49 U.S.C.A. § 10101), and under the general rulemaking section (49 U.S.C.A. § 10321(a)). We then consider counsel for the Commission's belated attempt to rely upon the conditioning powers in 49 U.S.C.A. § 10923(d)(1).
In both its notice of proposed rulemaking and its final decision, the Commission relied upon the national transportation policy, motor carrier restriction removal, and general rulemaking sections of the Interstate Commerce Act. We think that none of these sections provides the requisite authority for the extension of the restriction removal rules to freight forwarders.
The arguments based upon the motor carrier restriction removal provision, MCA § 6, 49 U.S.C.A. § 10922(i), and the additions to the national transportation policy section made by the Motor Carrier Act of 1980, MCA § 4, 49 U.S.C.A. § 10101(a)(2), are the most easily disposed of. We have already exhaustively examined the specific terms and legislative history of both sections, and have no trouble in concluding that they apply only to motor carriers, not freight forwarders. Section 6 is entitled "Removal of Certain Restrictions on Motor Carrier Operation" and amended the section of the codified Interstate Commerce Act entitled "Certificates of motor and water common carriers"; similarly, the addition to the Act made in section 4 begins with the words "with respect to transportation of property by motor carrier ...." See Steere Tank Lines, supra, 694 F.2d at 415-18. Both provisions evince a congressional concern for efficiency and an end to overly restrictive regulation, but neither says anything about why no analogous provision was enacted for freight forwarders. 4
The argument based upon the other provisions of the national transportation policy section and on the Commission's general rulemaking power requires a somewhat more extended discussion, particularly in light of the Commission's repeated reference to what has been called the "modern" view of administrative rules enabling provisions.
We begin, as we must, with the text of the Interstate Commerce Act, with its legislative history, and with our recent decision definitively interpreting it in a different, but closely related context. The modern and streamlined text of 49 U.S.C.A. § 10321(a) supersedes six different sections of the old arrangement of the Interstate Commerce Act, but is so elliptical as to be of virtually no direct assistance to us today:
The Interstate Commerce Commission shall carry out this subtitle. Enumeration of a power of the Commission in...
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