ICC v. AAA Con Drivers Exchange, Inc.

• Decision Date: 20 January 1965
• Docket Number: Docket 29266.,No. 267,267
• Citation: 340 F.2d 820
• Parties: INTERSTATE COMMERCE COMMISSION, Plaintiff-Appellant, v. AAA CON DRIVERS EXCHANGE, INC., Irving Zola and Helen Zola, and AAA Con Drivers Exchange-L. A., Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

340 F.2d 820 (1965)

INTERSTATE COMMERCE COMMISSION, Plaintiff-Appellant, v. AAA CON DRIVERS EXCHANGE, INC., Irving Zola and Helen Zola, and AAA Con Drivers Exchange-L. A., Inc., Defendants-Appellees.

No. 267, Docket 29266.

United States Court of Appeals Second Circuit.

Argued December 18, 1964.

Decided January 20, 1965.

Seymour Glanzer, New York City (Bernard A. Gould, Washington, D. C.; Arthur L. Tepper, New York City), for plaintiff-appellant.

Harold Harper, New York City (Harper & Matthews, New York City, Vincent P. Uihlein, New York City, of counsel), for defendants-appellees.

Before FRIENDLY, HAYS and MARSHALL, Circuit Judges.

FRIENDLY, Circuit Judge:

AAA Con Drivers Exchange, Inc. operates what it asserts to be an employment agency bringing together the owners of automobiles who want them driven from one part of the country to another and persons who want to drive them in order to get a cheap trip. The Interstate Commerce Commission considers the operation to be a common carrier transportation service, unlawful because not certificated under the Motor Carrier Act. Judge Bryan, in the District Court for the Southern District of New York, agreed with AAA Con and dismissed the Commission's complaint for an injunction under 49 U.S.C. § 322(b). The Commission appeals.¹ Recognizing the case to be close to the line, we think it fell on the forbidden side.

The Commission has little quarrel with the findings of fact made in Judge Bryan's usual thorough fashion. We shall present a condensed version:

AAA Con obtains inquiries from automobile owners primarily as a result of listings and advertisements in the newspapers and in the classified section of the telephone directory. A sample, from the Manhattan directory, contains a box, under the heading "Automobile & Truck Transporting," with a larger advertisement making substantially the same representations. These include statements that "Certified & Bonded Drivers" are "Available to Drive Your Car to and from Anywhere in the U. S. A." with "Low Rates," "Bonded Drivers," "Door to Door Service" and "Branch Offices." Another form of the advertisement said that service was "Guaranteed and Assured."

On making an inquiry, the owner indicates the destination of his car. AAA Con tells him it will attempt to obtain a driver and gives an estimate of what he will have to pay the driver. Either with or without discussion the amount is then fixed, whereupon AAA Con sends the owner a form letter offering to provide him "with a BONDED, LICENSED, and REGISTERED DRIVER who will follow your instructions and deliver your car to any point in the United States." The letter states the destination and the amount agreed, which is inclusive of gasoline, oil and other driver's expenses en route. Part is to be paid directly to the driver at the beginning of the trip and the balance at destination. AAA Con disclaims any responsibility for the transportation or delivery of the automobile. Enclosed with the letter is an "Automobile Ownership Authorization Order" with blank spaces for the name, address and telephone number of the owner, the destination, a description of the automobile, the date when the driver is to be available, and the amount to be paid him at the starting point and at destination. It authorizes AAA Con to process a driver to drive the car "as per * * * owner's instructions" and guarantees that the vehicle is fully insured. The owner acknowledges his understanding that the driver is not an agent of AAA Con, and that the latter's sole function and responsibility are the screening of drivers and not the transportation or delivery of the automobile. The owner fills in this form, signs it and mails one copy to AAA Con.

AAA Con also receives inquiries from persons able to drive cars who are looking for an inexpensive means of getting about. Assuming that a car to the desired destination and at an appropriate date is available, AAA Con, if satisfied with the prospective driver's general appearance, will indicate what the owner will pay him and what he must pay AAA Con. If this is satisfactory, the driver fills out a "Driver's Application for Casual and Reciprocal Transportation," which has blanks for the date, his name, his temporary and permanent address and telephone number, the date he is willing to leave, his driver's license and social security number, and much other data. It is agreed that if his application is accepted, the driver will pay AAA Con its fee, and that AAA Con will send him to an owner who wants a car driven to the desired place at the desired time. The driver undertakes to pick up the car and drive it to the destination without carrying any paying passengers. He certifies that he is a bona fide traveller seeking casual and reciprocal transportation and not an agent or employee of AAA Con, whose only function is stated to be "to bring * * * him, a driver, and a car owner together." He then swears to the application and signs it, and his photograph and thumb prints are affixed.

If AAA Con's investigation satisfies it that the applicant is reliable, he then pays the agreed fee, is given a "Driver's Conditional Receipt," is informed of the name, address and telephone number of the owner, and is told to get in touch with the latter. He receives two copies of an "In Transit Permit," a sample of which had been sent the owner with AAA Con's initial communication. This has his photograph and thumb prints affixed.

When the driver meets the owner, the owner looks him over and he looks the car over. If both are satisfied, they complete the "In Transit Permit," one copy being retained by the driver and the other by the owner. This authorizes the driver to drive the car to the destination and to make any necessary repairs en route up to $10; any repairs over that amount are to be made only after notification to the owner and pursuant to his instructions. The Permit provides that in case of any accident or damage the owner may retain the unpaid portion of the driver's fee as liquidated damages. The driver agrees to comply with traffic regulations, to follow the owner's specific instructions, to notify the owner in case of accident or delay, to pay for all gasoline and oil, not to carry any passengers for hire or to use the car for towing or trucking, and not to carry liquor, narcotics or anything in violation of law. It provides also that the driver is not an agent of AAA Con but an independent contractor and a bona fide traveller seeking casual and reciprocal transportation. The driver assumes all responsibility for injury to himself or any other person riding in the automobile and for any traffic fines. Upon signature the owner pays the driver the first instalment of the agreed amount, the driver drives the automobile to destination, and is then paid the balance owed him by the owner or his representative. If an owner has inquired about insurance, AAA Con will furnish him with an application, supplied to it by an insurance company, for trip liability and property insurance; if the owner wishes such insurance, he signs the application and sends it with the premium to the insurance company.

Owners' payments to drivers and drivers' fees to AAA Con bear no fixed relation to one another, or to the distance to be traversed; depending on supply and demand, a driver may make a profit out of the trip, may break even or may have to spend some of his own money.

Because the Motor Carrier Act deals with contract carriers, who must have permits, as well as with common carriers, who must have certificates, its prohibitions against unlicensed operation are considerably more complex than those added to the Interstate Commerce Act as § 1(18)-(22) by Transportation Act, 1920, 41 Stat. 477. The general prohibition, contained in § 203(c), 49 U.S.C. § 303(c), is that:

"Except as provided in section 202 (c), section 203(b), in the exception in section 203(a) (14), and in the second proviso in section 206(a) (1), no person shall engage in any for-hire transportation business by motor vehicle, in interstate or foreign commerce, on any public highway or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such person a certificate or a permit issued by the Commission authorizing such transportation * * *."

The provision requiring certificates for common carriers is § 206(a) (1), 49 U.S.C. § 306(a) (1):

"Except as otherwise provided in this section and in section 210a, no common carrier by motor vehicle subject to the provisions of this part shall engage in any interstate or foreign operations on any public highway, or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such carrier a certificate of public convenience and necessity issued by the Commission authorizing such operations * * *."

The circle here relevant is completed by the definition in § 203(a) (14), 49 U.S. C. § 303(a) (14):

"The term `common carrier by motor vehicle\' means any person which holds itself out to the general public to engage in the transportation by motor vehicle in interstate or foreign commerce of passengers or property or any class or classes thereof for compensation, whether over regular or irregular routes * * *."

It is too late to argue, and AAA Con does not, that a transportation service is immunized from the prohibitions of §§ 203(c) and 206(a) (1) of the Motor Carrier Act by the mere fact that the only thing being transported is a motor vehicle which itself furnishes the motive power. The problem seems first to have arisen in connection with the delivery of new automobiles. The Commission early took the position that delivery of a single car under its own power was no less "transportation" than was the use of one car for towing or carrying others. See, e. g., Fleming Common Carrier Application, 8 M.C.C. 469, 470 (1938), modified, Alton R. R. v. United States, ...