Hilt Truck Line, Inc. v. U.S.

• Decision Date: 31 March 1976
• Docket Number: No. 75-1269,75-1269
• Citation: 532 F.2d 1199
• Parties: HILT TRUCK LINE, INC., a corporation, Petitioner, Midwest Coast Transport, Inc., et al., Intervenor-Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Schneider Transport, Inc., Intervenor-Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1199

532 F.2d 1199

HILT TRUCK LINE, INC., a corporation, Petitioner, Midwest Coast Transport, Inc., et al., Intervenor-Petitioners, v. UNITED STATES of America and Interstate Commerce Commission,

Respondents,

Schneider Transport, Inc., Intervenor-Respondent.

No. 75-1269.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 11, 1975.

Decided March 31, 1976.

A. J. Swanson, Lincoln, Neb., for petitioner. Stern, Harris, Feldman, Becker & Thompson, Omaha, Neb., and Peterson, Bowman, Coffman & Larsen, Lincoln, Neb., on brief for petitioner Hilt Truck Lines, Inc. and intervenors Midwest Coast Transport, Inc., Kodiak Refrigerated Lines, Inc., and Curtis, Inc.

Lawrence Frier, Atty., I. C. C., Washington, D. C., for appellees, I. C. C. and United States; Thomas E. Kauper, Asst. Atty. Gen., and John H. D. Wigger, Atty., Dept. of Justice, Fritz Kahn, Gen. Counsel, I. C. C., Washington, D. C., on brief.

Charles W. Singer, Fort Lauderdale, Fla., for intervenor-respondent Schneider Transport, Inc.; Singer, Sullivan & Smyth, P. C., Chicago, Ill., Gregory A. Stayart, Fort Lauderdale, Fla., on brief.

Before HEANEY, WEBSTER and HENLEY, Circuit Judges.

WEBSTER, Circuit Judge.

Hilt Truck Line, Inc. brings this petition for review of a final order of the Interstate Commerce Commission granting the application of Schneider Transport, Inc. for a certificate of public convenience and necessity for operating authority as a common carrier over irregular routes transporting (1) canned goods and animal feed from three states in the far west to a twenty-six state area in the midwest, mideast, and east; and (2) unfrozen dinners from certain California sites to the same designated area. See 28 U.S.C. §§ 2321 and 2342.

Schneider Transport filed its application on April 5, 1971, pursuant to 49 U.S.C. § 307. The Interstate Commerce Commission referred the proceedings to an Administrative Law Judge, and hearings were held December 6-7, 1971, and continued on December 18-19, 1972. Eight motor carriers filed an appearance in opposition to the application. ¹ The application was supported by five shippers: Topco Associates, Inc.; Hunt-Wesson Foods, Inc.; Kal Kan Foods, Inc.; North Pacific Canners & Packers, Inc.; and National Can Corporation.

In a report and recommended order filed May 1, 1973, the Administrative Law Judge found that public convenience and necessity required operation by Schneider Transport within the scope of the application and recommended that a certificate be granted. Exceptions were filed by several protestants and replied to by Schneider Transport. In a decision and order filed July 15, 1974, the Commission found that there was insufficient evidence to warrant the finding that the rates of regular route carriers were so expensive as to constitute an embargo against the movement of shipper traffic, but that the recommended grant of authority was otherwise warranted by the record evidence. The Commission thus affirmed and adopted as modified the findings and conclusions of the Administrative Law Judge.

Petitions for reconsideration were denied by the Commission on March 6, 1975, and a certificate of public convenience and necessity was issued to Schneider Transport on April 30, 1975. Thereafter, Hilt Truck Line initiated this petition for review, contending that the order of the Commission was based on findings of fact which were inadequate and unsupported by evidence in the record, and that the Commission thus erred in finding (1) that the need for the proposed service was adequately demonstrated by the supporting shippers, (2) that the existing service of the regular and irregular route carriers was inadequate to fulfill the needs of the supporting shippers, and (3) that no impairment of the operation of existing carriers contrary to the public interest would result from the grant of authority. ² We disagree and therefore affirm the decision of the Interstate Commerce Commission.

Evaluation of the present and future public convenience and necessity is a matter for the sound judgment and discretion of the Interstate Commerce Commission. See Interstate Commerce Commission v. Parker, 326 U.S. 60, 65, 65 S.Ct. 1490, 1492, 89 L.Ed. 2051, 2058 (1945); McLean Trucking Co. v. United States, 321 U.S. 67, 87-88, 64 S.Ct. 370, 380, 88 L.Ed. 544, 556 (1944). Accordingly, this Court has recognized that the recent amendment of28 U.S.C. § 2321 ³ does not alter the limited scope of review of Commission orders:

In this circuit a petition for review of a Commission's order will be denied on a summary basis when the order is based on the evidence and supported by a rational judgment of the Commission. This does not mean that this court will fail in its obligation to review thoroughly every record to ascertain that evidence as a whole supports the Commission's findings and that the proper legal standards have been applied.

Warren Transport, Inc. v. United States, 525 F.2d 148, 151 (8th Cir. 1975). Assessing the instant petition for review under this standard, we find little merit to the contentions of the petitioners.

The guidelines governing an application for a certificate of public convenience and necessity were promulgated by the Commission in Pan-American Bus Lines Operation, 1 M.C.C. 190, 203 (1936):

The question, in substance, is whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; whether this purpose can and will be served as well by existing lines or carriers; and whether it can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest.

See Warren Transport, Inc. v. United States, supra, 525 F.2d at 149; Artus Trucking Co. v. Interstate Commerce Commission, 377 F.Supp. 1224, 1228-29 (E.D.N.Y.1974); Engel Van Lines, Inc. v. United

States, 374 F.Supp. 1217, 1221-22 (D.N.J.1974). The burden of proof on these standards of public convenience and necessity is placed on the motor carrier seeking operating authority. Tri-State Motor Transit Co. v. United States, 369 F.Supp. 1242, 1244 (W.D.Mo.1973); Lester C. Newton Trucking Co. v. United States, 264 F.Supp. 869, 885 (D.Del.), aff'd mem., 389 U.S. 30, 88 S.Ct. 108, 19 L.Ed.2d 29 (1967). In an attempt to demonstrate that the Schneider Transport application was approved in an arbitrary and capricious manner, petitioners broadly contend that the Commission acted on the basis of insufficient evidence and without proper consideration of these guidelines.

Provision of a Useful Public Service

The Commission found that:

(T)he available traffic of the supporting shippers is of such a substantial nature that the service of an additional carrier is needed in order that satisfactory and responsive motor carrier service is available to shippers * * * .

The record shows that the supporting shippers were capable of generating substantial traffic and that a large portion of this traffic would be diverted from rail to motor carrier if certain shipping needs were met. The testimony of the shippers was that a prompt, dependable service with substantial flexibility of a type not provided by rail carriers was desired. Schneider Transport proposed to provide such service, and the shippers have offered to tender substantial traffic to Schneider Transport. ⁴ The inadequacy of existing service, discussed below, was also probative of the public service which the grant of authority to Schneider Transport would produce.

The finding that a useful public service would be provided by the operating authority was thus adequately supported by the record. ⁵

Inadequacy of Existing Service

The Commission further found that:

(T)he evidence is persuasive that present carriers alone have been unable to respond satisfactorily to shippers' reasonable transportation needs * * * .

A review of the record indicates that this determination was also supported by substantial evidence.

The Commission found that the Administrative Law Judge had erred in holding that the rates of regular route carriers constituted an embargo. The Commission recognized, however, that the rate differential was not the sole evidence of the inadequacy of existing regular route service. The record specifically indicated that regular route carriers lack the requisite flexibility for multiple delivery service, cause delays due to interchanges, and are unable to respond to specialized delivery requirements of the supporting shippers.

The record also demonstrates the inadequacy of the existing service of irregular route carriers. At the time of the initial hearing, substantial irregular route service to and from the geographic area involved was unavailable. Evidence at both the initial and continued hearings demonstrated that those of the protestants which could provide service to the area lacked the authority to transport animal foods or animal foods in mixed loads, as required by certain of the shippers, and had rendered service to the shippers which was less than satisfactory. Most important, however, was the evidence of National Can Corporation at the continued hearing. This shipper provided substantial evidence that its future transportation requirements (and, by inference, those of the other shippers) could not be satisfactorily fulfilled by the existing irregular route...