Gold Kist, Inc. v. United States

• Decision Date: 31 December 1971
• Docket Number: Civ. A. No. 1415.
• Citation: 339 F. Supp. 1249
• Parties: GOLD KIST, INC., and the Pillsbury Company, Plaintiffs, The National Council of Farmer Cooperatives, Plaintiff-Intervenors, Clifford M. Hardin, Secretary of Agriculture of the United States, Intervening Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Refrigerated Transport Co., Inc., et al., Defendant-Intervenors.
• Court: U.S. District Court — Northern District of Georgia

339 F. Supp. 1249

GOLD KIST, INC., and the Pillsbury Company, Plaintiffs The National Council of Farmer Cooperatives, Plaintiff-Intervenors Clifford M. Hardin, Secretary of Agriculture of the United States, Intervening Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants Refrigerated Transport Co., Inc., et al., Defendant-Intervenors.

Civ. A. No. 1415.

United States District Court, N. D. Georgia, Gainesville Division.

December 31, 1971.

Joe K. Telford, Telford, Stewart & Stephens, Gainesville, Ga., for Gold Kist, Inc. and The Pillsbury Co.; John F. Donelan, John H. Caldwell, Donelan, Cleary & Caldwell, Washington, D. C., of counsel.

James S. Krzyminski, Washington, D. C., for The National Council of Farmer Cooperatives; William B. Spann, Jr., Alston, Miller & Gaines, Atlanta, Ga., of counsel.

Charles W. Bucy, Asst. Gen. Counsel, Kenneth H. Vail, Atty., Office of the Gen. Counsel, U. S. Dept. of Agriculture, Washington, D. C., for Clifford M. Hardin, U. S. Secretary of Agriculture.

Fritz Kahn and Charles White, Office of the Gen. Counsel, I. C. C., Washington, D. C., for the United States, and I. C. C.

Howard E. Shapiro, Atty., Dept. of Justice, Washington, D. C., John W. Stokes, Jr., U. S. Atty., Atlanta, Ga., John N. Mitchell, U. S. Atty. Gen., Dept. of Justice, Washington, D. C., Richard W. McLaren, Asst. Atty. Gen., Antitrust Div., for the United States.

Alan E. Serby, Watkins & Daniell, Atlanta, Ga., for Refrigerated Transport Co., Inc. Alan E. Serby, Watkins & Daniell, Atlanta, Ga., Peter T. Beardsley, Richard A. Mehley, Washington, D. C., for American Trucking Assn., Inc.

Paul M. Daniell, Alan E. Serby, Atlanta, Ga., for Frozen Food Express, Inc.; Watkins & Daniell, Atlanta, Ga., of counsel.

Alan E. Serby, Watkins, Daniell & Serby, Atlanta, Ga., James E. Wilson, Lawrence E. Lindeman, Wilson, Woods & Villalon, Washington, D. C., for Common Carrier Conference — Irregular Route of the American Trucking Assns., Inc.

Eugene D. Anderson, Washington, D. C., Watkins, Daniell, Davis & Serby, Atlanta, Ga., for Midwest Packers Traffic Assn.

Alan E. Serby, Atlanta, Ga., Ed White, Chicago, Ill., Thomas A. Phemister, Chicago, Ill., for The Atchison, Topeka and Santa Fe Railway Co., and others; Watkins & Daniell, Atlanta, Ga., of counsel.

Before MORGAN, Circuit Judge, SMITH and FREEMAN, District Judges.

PER CURIAM:

Under 28 U.S.C. § 1336, this court is asked to enjoin and set aside an order of the Interstate Commerce Commission¹ declaring that motor carriers carrying (1) cut-up, precooked or cooked frozen or refrigerated poultry, (2) cut-up, precooked or cooked breaded or battered, frozen or refrigerated poultry, and (3) cut-up, precooked or cooked, marinated, breaded and/or battered frozen or refrigerated poultry² in interstate or foreign commerce are not within the agricultural exemption provided by Section 203(b) (6) of the Interstate Commerce Act, 49 U.S.C. § 303(b) (6), and, therefore, are subject to economic regulation by the Commission.

Plaintiffs present two basic arguments: (1) that in light of the legislative history of Section 203(b) (6), the Commission erred in construing that section not to exempt cooked poultry, and (2) that the Commission erred in finding these cooked poultry items were manufactured products under the "continuing substantial identity" test developed by the Supreme Court in East Tex. Motor Freight Lines v. Frozen Food Exp., 351 U.S. 49, 76 S.Ct. 574, 100 L. Ed. 917 (1955).

Historically, the agricultural exemption, as part of the Motor Carrier Act of 1935, was intended to aid farmers in getting low cost transportation to market for their commodities by relieving them of the burdens of economic regulation. By a continuing process beginning about 1948, the exemption was extended, primarily by judicial interpretation, to reach the transportation of commodities that had received varying degrees of commercial processing. See, e. g., Interstate Commerce Comm'n v. Love, 77 F. Supp. 63 (E.D.La.1948), aff'd mem. 172 F.2d 224 (5th Cir. 1949); Frozen Food Exp. v. United States, D.C., 148 F. Supp. 399, aff'd mem., sub nom. Akron, Canton & Youngstown R. R. Co. v. Frozen Food Express, 355 U.S. 6, 78 S.Ct. 38, 2 L.Ed.2d 22 (1957). This increase in the number of commodities that could be carried by unregulated carriers had a detrimental impact on regular regulated motor carriers. During the early fifties, Congress twice failed to enact legislation which would have narrowed the scope of the agricultural exemption. Interstate Commerce Comm'n v. Allen E. Kroblin, Inc., 113 F.Supp. 599, 630 (N. D.Iowa 1953). However, in 1958 Congress did pass as part of the 1958 Transportation Act an amendment to Section 203(b) (6) designed to help regulated carriers by restricting the class of commodities due exempt status.³

The narrowing of the exemption was accomplished by incorporating, with modifications, Administrative Ruling No. 107 of the Commission's Bureau of Motor Carriers into section 203(b) (6). This ruling consists mainly of a list of commodities each of which is shown as exempt or nonexempt. See 49 C.F.R. § 1047.25. The effect of this amendment of the agricultural exemption was described by congressional committees as freezing and slightly rolling back the exemption's scope. The freeze was accomplished by the legislative incorporation of the Administrative Ruling into the statutory exemption thereby precluding judicial review of the Commission's classification of many items as nonexempt. The roll-back was accomplished by stating in section 203(b) (6) that some products previously considered exempt were not exempt. Although the general purpose of the 1958 Transportation Act's amendment to section 203(b) (6) was to narrow the exemption, the exemption was expressly expanded to include "cooked ... (including breaded) fish" which the Commission had earlier ruled nonexempt. The cooked poultry items involved here are not specifically mentioned in Administrative Ruling No. 107 or Section 203(b) (6).

Plaintiffs contend that Congress intended that frozen cooked poultry be exempt, although it was not specifically mentioned in the 1958 amendment to section 203(b) (6).

Nothing in the committee reports preceding the amendment states that cooked poultry is or is not an exempt commodity. But, these reports are supplemented in this respect by explanatory floor remarks of Sen. Smathers, member of the Committee on Interstate and Foreign Commerce, chairman of that committee's sub-committee on Surface Transportation which studied the proposed legislation to narrow the agricultural exemption, and manager of the bill amending the exemption when it was under consideration by the Senate. During the Senate's consideration of the bill, Sen. Williams of Delaware, one of the major poultry producing states, asked if cooked poultry would be an exempt commodity without the necessity of amendment; Sen. Smathers plainly answered in the affirmative, explaining that the matter had been discussed by both the subcommittee and full committee responsible for the bill.⁴ This was the final and only word on the subject of the exempt status of cooked poultry in the bill's legislative history. It was uttered plainly and in such circumstances that it would not be unreasonable to conclude that had Sen. Smathers' answer been otherwise, the bill amending the agricultural exemption would have been subjected to change and likely would not have been passed by the Senate in the exact form it was. Because the Senate and House bills were not identical, a conference committee produced the final bill which became law. The agricultural exemption in the conference committee bill differed slightly from the Senate bill, but these differences did not affect cooked poultry. Significantly, the Conference Committee's report in no way repudiated Sen. Smathers' explanation of cooked poultry's status as an exempt commodity. See 1958 U.S.Code Cong. & Ad. News 3488.

In its order, the Commission in a few words discounted the colloquy between Sen. Williams and Sen. Smathers as merely the discussion of two senators' views, insufficient to establish Congress' intent. The court disagrees. In Duplex Printing Press Co. v. Deering, 254 U.S. 443, 474-475, 41 S.Ct. 172, 65 L.Ed. 349 (1921) it was held that although debates in Congress expressive of the views and motives of individual members are not a safe guide to legislative intent, explanatory statements in the nature of a supplemental report made by the committee member in charge of the bill in the course of its passage may be regarded as an exposition of the legislative intent.

In an attempt to diminish the significance of Sen. Smathers' remarks, it is contended that Sen. Smathers was mistaken in saying cooked poultry would be exempt without an amendment, because it would be illogical for Congress to amend expressly the exemption to exempt cooked fish but consider cooked poultry exempt without a similar amendment. The court finds no obvious validity to this position, because, unlike cooked poultry, cooked fish had earlier been ruled nonexempt and appeared as nonexempt in Ruling No. 107. Therefore, in order to overrule that administrative classification Congress needed express language. Since cooked poultry had never been ruled nonexempt there was no compelling reason to say specifically it was exempt. In virtually every instance in which Congress expressly stated in the 1958 amendment itself that an item was or was not exempt, the item had earlier been held to be in the opposite category and appeared in Administrative Ruling No. 107. Defendants also argue that there is no evidence from the published committee hearings preceding the 1958 amendments to the exemption that the status of cooked chicken was actually discussed by the Senate committee and subcommittee as Sen. Smathers said. The court sees no reason to doubt Sen. Smathers' veracity in this matter. Actually only...