McLean Trucking Co. v. United States

• Decision Date: 08 December 1942
• Parties: McLEAN TRUCKING CO., Inc., v. UNITED STATES et al.
• Court: U.S. District Court — Southern District of New York

48 F. Supp. 933

McLEAN TRUCKING CO., Inc., v. UNITED STATES et al.

District Court, S. D. New York.

December 8, 1942.

Davies, Auerbach, Cornell & Hardy, of New York City (E. B. Ussery, of Washington, D. C., Orrin G. Judd, of New York City, and Charles V. Guthrie, of Washington, D. C., of counsel), for plaintiff.

Thurman Arnold, Asst. Atty. Gen., Arne C. Wiprud, William R. Kueffner, and Charles S. Collier, Sp. Assts. to the Atty. Gen., John H. D. Wigger and David L. Macdonald, Sp. Attys., both of Washington, D. C., and Mathias F. Correa, U. S. Atty., of New York City, for United States.

Daniel W. Knowlton, of Washington, D. C., for Interstate Commerce Commission.

Ralph F. Koebel, of Washington, D. C., for Secretary of Agriculture.

Kirkpatrick, Mathias & Meloy, of Chicago, Ill., for American Farm Bureau Federation.

Nordlinger, Riegelman, Cooper & Benetar, of New York City (Mortimer A. Sullivan, of Buffalo, N. Y., of counsel), for defendants.

Before CHASE, Circuit Judge, and WOOLSEY and MANDELBAUM, District Judges.

CHASE, Circuit Judge.

This action was brought by the plaintiff, a common carrier by motor vehicle within part of the territory in which the defendant motor carriers, or some of them, operate, against the United States of America and the Interstate Commerce Commission, Associated Transport, Inc., Arrow Carrier Corporation, Barnwell Brothers Incorporated, Consolidated Motor Lines Incorporated, Horton Motor Lines Incorporated, McCarthy Freight System, Inc., M. Moran Transportation Lines, Inc., Southeastern Motor Lines Incorporated, Transportation Incorporated, the Transport Company, Kuhn Loeb & Company, Barnwell Warehouse & Brokerage Company, Brown Equipment & Manufacturing Company, Conger Realty Company, and Southern New England Terminals, Inc., under the Urgent Deficiencies Act (38 Stat. 219, 220; 28 U.S.C.A. §§ 45 and 47a) to enjoin and set aside an order of the Interstate Commerce Commission which authorized the merger of the defendants who are carriers by motor vehicle and the issuance of securities in connection therewith. It was heard by a court of three judges pursuant to the statute. 28 U.S.C.A. § 47.

The principal issues are (1) whether the findings of the Commission are supported by the evidence and (2) if so, whether the Commission's order was erroneous because it resolved the questions presented by the standard of what it determined was adequate transportation facilities in the public interest under the criteria prescribed in the Interstate Commerce Act, 49 U.S. C.A. § 1 et seq., without deciding that its order would not result in a consolidation that would violate the provisions of either the Sherman, 15 U.S.C.A. §§ 1-7, 15 note, or the Clayton, Act, 38 Stat. 730, as those acts have been construed generally.

The proceedings before the Commission were instituted by Associated Transport, Inc., a Delaware corporation which was organized for the purpose of bringing about the proposed merger and which was not then engaged in the transportation business. The carriers by motor vehicle it was proposed to merge operated as common carriers on regular routes and one or more of them served communities in Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania, Ohio, New Jersey, Delaware, Maryland, the District of Columbia, Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Tennessee and Louisiana.

There were two petitions which were consolidated for hearing. The first was by Associated Transport, Inc., for authority under Sec. 5 of the Interstate Commerce Act, 49 U.S.C.A. § 5, (1) to obtain control through the purchase of their capital stock of the following eight common carriers by motor vehicle: Arrow Carrier Corporation, Paterson, N. J., Barnwell Brothers Incorporated, Burlington, N. C., Consolidated Motor Lines Incorporated, Hartford, Conn., Horton Motor Lines Incorporated, Charlotte, N. C., McCarthy Freight System, Inc., Taunton, Mass., M. Moran Transportation Lines, Inc., Buffalo, N. Y., Southeastern Motor Lines Incorporated, Bristol, Va., and Transportation Incorporated, Atlanta, Ga., and (2) to consolidate into a unit for operation by itself the properties and rights to operate of the named carriers within one year from the date it should acquire the control of them. The second application was for authority to issue preferred and common stock to obtain funds needed to acquire the control of the named carriers, and four associated noncarriers, viz., Barnwell Warehouse & Brokerage Company, Burlington, N. C., Brown Equipment & Manufacturing Company, Charlotte, N. C., Conger Realty Company, Charlotte, N. C., and Southern New England Terminals, Inc., Taunton, Mass.

The Antitrust Division of the Department of Justice, the Secretary of Agriculture, four fruit growers associations and Super Service Freight Company, a common carrier by motor vehicle, intervened and opposed the applications. There were other intervenors who, however, stood indifferent except the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America which at the close of the hearings supported the applications.

A previous application by another petitioner for authority to unify, by means of a holding company set-up, twenty-nine common carriers by motor vehicle which included the eight already named had been denied and these applications were the result of the desire of the petitioner and the eight operators involved to avoid the defects in the first application which had led to its denial largely on the ground that the then proposed unification was not economical in that it would permit two or more carriers under common control to engage in duplication of service over most of the routes in the greater part of the territory affected.

In the instant proceedings there were extensive hearings before an examiner at which a large amount of evidence was introduced. After his proposed report was duly served on the parties, the intervenors who opposed the applications filed objections which were argued before the Commission which after due consideration made the order now under attack.

The Commission made findings on what the record shows was adequate supporting evidence that the proposed consolidation would bring about economies and greater efficiency in operation; improvement in service; leave ample competitive motor vehicle carrier service in the territory affected; and be in the public interest within Sec. 5 of the Interstate Commerce Act.

After the suit was brought and the answer of the Commission was filed it was amended to allege, what is now undisputed, that because of the failure to carry through negotiations for the acquisition of the stock of the Arrow Carrier Corporation the applicant petitioned the Commission for a modification of its order to exclude that carrier from the merger...