Interstate Commerce Commission v. Parker United States v. Same

• Decision Date: 18 June 1945
• Docket Number: 508,Nos. 507,s. 507
• Parties: INTERSTATE COMMERCE COMMISSION et al. v. PARKER et al. UNITED STATES v. SAME
• Court: U.S. Supreme Court

326 U.S. 60

65 S.Ct. 1490

89 L.Ed. 2051

INTERSTATE COMMERCE COMMISSION et al.

v PARKER et al.

UNITED STATES

v. SAME.

Nos. 507, 508.

Argued March 28, 1945.

Decided June 18, 1945.

Rehearing Denied Oct. 8, 1945.

See 66 S.Ct. 8.

Appeals from the District Court of the United States for the Southern District of Indiana.

Mr. Daniel H. Kunkel, for appellant Interstate Commerce Commission.

Mr. John Dickinson, for appellants Willett Co., of Indiana and Pennsylvania R. Co.

Mr. Kit F. Clardy, of Lansing, Mich., for appellees Harry A. Parker et al.

Mr. Fred I. King, of Indianapolis, Ind., for appellee

[Argument of Counsel from page 61 intentionally omitted] Norwalk Truck line co.

Mr. Justice REED delivered the opinion of the Court.

There appeals bring here for review a final judgment of the Special District Court which enjoined the enforcement of an order of the Interstate Commerce Commission. The proceedings below and the appeals here were brought under 28 U.S.C. § 41(28), §§ 43—48 and § 345, 28 U.S.C.A. §§ 41(28), 43—48, 345. The report of the Commission appears under the title Willett Co. of Ind., Inc., Extension—Fort Wayne-Mackinaw City, 42 M.C.C. 721. The district court did not file an opinion.

The applicant, the Willett Company, is a wholly owned, common carrier by motor, sunsidiary of the Pennsylvania Railroad Company. Previous to this application it held motor carrier operating rights for some twenty-five routes which paralleled lines of the Pennsylvania Railroad at other points than these covered by this application. Fort Wayne was included. Willett sought to secure from the Commission in this case certificates of convenience and necessity for seven additional routes extending along the lines of the Pennsylvania Railroad between Fort Wayne, Indiana, and Mackinaw City, Michigan.

The applications were granted after findings that Willett would r nder service auxiliary to and supplemental of the Pennsylvania's service in the transportation of less-than-carload freight. The service is to be rendered on railroad billings and is to employ railroad fixed and clerical facilities. The Commission found that Willett's service would be coordinated with the rail service and under railroad supervision. 42 M.C.C. 725; 21 M.C.C. at 407. It also found that the present and future public convenience and necessity required those motor carrier operations.

In accordance with the policy of the Commission in granting certificates to railroad motor carrier affiliates to improve the service of the railroad, the Commission limited the carrier to service which is auxiliary to or supplemental of the rail service of the Pennsylvania. It forbade service to 'any point not a station on a rail line of the railroad,' and took steps to keep the Commission informed of the contractual arrangements between Willett and the Pennsylvania.

While the routes paralleled the lines of the Pennsylvania in northern Indiana and the southern peninsula of Michigan, the authorization to Willett forbade the transportation by applicant as a common carrier of any shipments from Fort Wayne, Indiana, to Grand Rapids, Michigan, or through or to or from more than one of said points. The purpose of this limitation was to restrict Willett to transportation truly supplemental or auxiliary to the rail traffic. The two cities are break-bulk or key points. Less-than-carload freight comes to or leaves them in carload lots. When a mixed carload reaches one of these key points, the contents are distributed to the smaller, intermediate points of destination as way-freight by 'peddler' cars. The Willett Company seeks to take over this 'peddler' work and not to do over-the-road trucking. Such motor-rail coordination has proven successful in improving service and reducing carrier costs.

As a further assurance that Willett might not inadvertently have received privileges beyond the Commission's intention to grant, a right was reserved by the Commission to impose such further specific conditions as it might find necessary in the future to restrict Willett's operation 'to service which is auxiliary to, or supplemental of, the rail service.'

The operation of the order of the Commission was enjoined by the district court because there was no substantial evidence to support the order of the Commission that public convenience and necessity required the issuance of a certificate to Willett. The district court said in the find- ings of fact that there was no proof that the present highway, common motor carrier transportation service by certificated carriers was or would be inadequate to serve the public need. The appellants, of course, contest here the soundness of the district court judgment.

The Interstate Commerce Commission insists that its order authorizing the issuance to Willett of the certificates of convenience and necessity for the specified routes is valid. It bases its contention on the statutory provisions which authorize the Commission to act in regulation of motor carriers and asserts its compliance with them. Under the Interstate Commerce Act, part II, Sec. 206(a), 49 Stat. 551, 49 U.S.C.A. § 306(a), no motor vehicle subject to the act may operate on the highways without a certificate of public convenience and necessity. Section 207(a) provides for issuance of the certificate on application, if the proposed service 'is or will be required by the present or future public convenience and necessity.' No other provisions are here involved. The entire subsection appears below.¹ A finding of public convenience and necessity was made, 42 M.C.C. at 726, but that ultimate finding must have been based on the proper statutory criteria and must have had the necessary factual findings to support it.

Public convenience and necessity is not defined by the statute. The nouns in the phrase possess connotations which have evolved from the half-century experience of government in the regulation of transportation. When Congress in 1935 amended the Interstate Commerce Act by adding the Motor Carrier Act, it chose the same words to state the condition for new motor lines which had been employed for similar purposes for railroads in the same act since the Transportation Act of 1920, § 402(18) and (20), 41 Stat. 477, 49 U.S.C.A. § 1(18, 20). Such use indicated a continuation of the administrative and judicial interpretation of the language. Cf. Case v. Los Angeles Lumber Co., 308 U.S. 106, 115, 60 S.Ct. 1, 7, 84 L.Ed. 110. The Commission has assumed, as its duty under these earlier subsections, the finding of facts and the exercise of its judgment to determine public convenience and necessity. This Court approved this construction. Chesapeake & Ohio Ry. v. United States, 283 U.S. 35, 42, 51 S.Ct. 337, 339, 75 L.Ed. 824. Cf. Gray v. Powell, 314 U.S. 402, 411, 412, 62 S.Ct. 326, 332, 86 L.Ed. 301. The purpose of Congress was to leave to the Commission authoritatively to decide whether additional motor service would serve public convenience and necessity. Cf. Powell v. United States, 300 U.S. 276, 287, 57 S.Ct. 470, 476, 81 L.Ed. 643. This, of course, gives administrative discretion to the Commission, cf. McLean Trucking Co. v. United States, 321 U.S. 67, 87, 88, 64 S.Ct. 370, 380, 381, 88 L.Ed. 544, to draw its conclusion from the infinite variety of circumstances which may occur in specific instances. The disputants, here, do not clash over the power of the Commission to determine the need for the new service or that it will serve the public convenience and necessity. The evidence is ample and uncontradicted that delivery by motor of less-than-carload freight to way stations is a more adequate, efficient and economical method for railroads than by 'peddler' car. They join issue on the Commission's determination as to the carrier which will render that service. Shall it be by the railroad through the use of its trucking subsidiary or by the existing common carriers by motor?

The National Transportation Policy has recently been authoritatively summarized by Congress. That declaration requires administration so as to preserve the inherent advantages of each method of transportation and to promote 'safe, adequate, economical, and efficient service.'² Such broad generalizations, while well expressing the Congressional purpose, must frequently produce overlapping aims. In such situations, the solution lies in the balancing by the Commission of the public interests in the different types of carriers with due regard to the declared purposes of Congress. Cf. Interstate Commerce Comm. v. Inland Waterways Corp., 319 U.S. 671, 691, 63 S.Ct. 1296, 1307, 87 L.Ed. 1655; United States v. Pennsylvania R.R. Co., 323 U.S. 612, 65 S.Ct. 471.

When Congress directed that the act should be administered to preserve the inherent advantages of each mode of transportation, it is abundantly clear that it was not intended to bar railroads from the operation of off-the-rail motor vehicles. In 1938 when committee hearings were being held to consider amendments to the Motor Carrier Act, 1935, Mr. Eastman explained the difference in opin- ion as to whether or not railroads should acquire motor carriers.³ Section 213(a) of the 1935 act specifically regulated acquisition of motor carriers by railroads. Provision for such acquisitions appear now in Section 5 of the Interstate Commerce Act, 54 Stat. 905, 49 U.S.C.A. § 5. See McLean Trucking Co. v. United States, supra. Section 202(c)(1) of the 1940 Interstate Commerce Act, part II, as amended, withdraws railroad operation of motor carriers in terminal areas from the scope of motor carrier regulation and leaves such operations under part I.⁴ Railroads may, therefore in appropriate places operate trucks. However, since the preservation of the inherent advantages of motor carriers is of equal importance with efficiency under the national transportation policy, the Commission must weigh the needs of the railroad against disadvantages to the motor carriers to find the...