Milk Transport, Inc. v. ICC

• Decision Date: 19 December 1960
• Docket Number: No. 3-60-Civ.-82.,3-60-Civ.-82.
• Citation: 190 F. Supp. 350
• Parties: MILK TRANSPORT, INC., Plaintiff, v. INTERSTATE COMMERCE COMMISSION and United States of America, Defendants, and Alterman Transport Lines, Inc. and Refrigerated Transport Co., Inc., Intervening Defendants.
• Court: U.S. District Court — District of Minnesota

190 F. Supp. 350

MILK TRANSPORT, INC., Plaintiff, v. INTERSTATE COMMERCE COMMISSION and United States of America, Defendants, and Alterman Transport Lines, Inc. and Refrigerated Transport Co., Inc., Intervening Defendants.

No. 3-60-Civ.-82.

United States District Court D. Minnesota, Third Division.

December 19, 1960.

Clay R. Moore and Donald A. Morken, Minneapolis, Minn., for plaintiff.

Robert W. Ginnane, Gen. Counsel, and Fritz R. Kahn, Washington, D. C., for Interstate Commerce Commission.

Robert A. Bicks, Asst. Atty. Gen., John H. D. Wigger, Washington, D. C., and Fallon Kelly, U. S. Atty., St. Paul, Minn., for United States.

Frank B. Hand, Jr., and Daniel B. Johnson, Washington, D. C., for intervening defendants.

Before SANBORN, Circuit Judge, and NORDBYE and DEVITT, District Judges.

DEVITT, District Judge.

This is an appeal from an order of the Interstate Commerce Commission dismissing plaintiff's applications for certificates to transport citrus juices, in bulk, in tank vehicles, under the "grandfather" and "interim" clauses of the Transportation Act of 1958. Plaintiff asks this statutory three-Judge Court, 28 U.S.C. § 2325, to set aside the order and enjoin the Commission by mandatory injunction to hear and determine plaintiff's applications.

This controversy stems from plaintiff's submission of Section 7(c), 72 Stat. 573, "grandfather" and "interim" applications to the Interstate Commerce Commission seeking authority to transport citrus juices in tank vehicles from points in Florida and Texas to points in several northern states. The applications were dismissed by an order dated September 4, 1959, without a hearing. Plaintiff's petition for reconsideration was denied by the Commission on December 22, 1959.

The broad issue is whether an interstate commerce motor carrier in bona fide transportation of citrus juices prior to the 1958 Transportation Act has an absolute right, under the "grandfather" clause of that Act, to continue transporting citrus juices without obtaining a Certificate of Public Convenience and Necessity from the Commission.

A short explanation of the issue in the light of the undisputed facts may be helpful.

The Interstate Commerce Act provides in Part II, 49 U.S.C.A. §§ 301-327, for comprehensive regulation of motor carriers operating in interstate commerce. Basic to the Act is the prohibition contained in Sections 206 and 207 (49 U.S. C.A. §§ 306, 307), against motor carriers operating in interstate commerce without holding a Certificate of Public Convenience and Necessity. This certificate requirement is waived in the situations set forth in Section 203(b), (49 U.S.C.A. § 303(b) ). The exemption involved in this controversy relates to agricultural commodities and as pertinent reads as follows:

"Sec. 203

"(b) Nothing in this part, except the provisions of Section 204 relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include * * *

"(6) Motor vehicles used in carrying property consisting of * * agricultural (including horticultural) commodities (not including manufactured products thereof), * *"

Much litigation developed over the years as to whether certain products were agricultural commodities and hence "exempt" from the certificate requirement or were "manufactured products thereof" and thus "non exempt" from the requirement. The principal question involved the determination of how much processing could be done to an agricultural commodity before it changed to a "manufactured product thereof."

Section 7(a) of the 1958 Transportation Act amended Section 203(b) (6), (49 U.S.C.A. § 303(b) (6) ), and made more specific the provisions concerning the "exempt" or "non exempt" status of many commodities. The pertinent parts of the amended section are contained in the footnote.¹ Citrus juices are listed as "non exempt" in Commission Ruling 107 incorporated in the amended section. They have therefore been "non exempt" commodities since the 1958 Act became law. Consequently, a motor carrier operator who now desires to transport citrus juices in interstate commerce is required to have a Certificate of Public Convenience and Necessity from the Commission unless the carrier can prove that it was in bona fide transportation of citrus juices prior to the 1958 Act and that it has a right to continue transporting citrus juices by virtue of the "grandfather" clause enacted in Section 7(c) of the 1958 Transportation Act. The pertinent provisions of that section read as follows:

"* * * if any person * * * was in bona fide operation on May 1, 1958, * * * in the transportation of property for compensation by motor vehicle made subject to the provisions of Part II of that Act by paragraph (a) of this section, * * the Interstate Commerce Commission shall without further proceedings issue a certificate or permit * * *" Emphasis supplied.

It is undisputed that plaintiff was a bona fide transporter of citrus juices prior to 1958. All parties agree that a basic requirement of the right to continue hauling a particular commodity under the "grandfather" clause is that the commodity must have been "exempt" prior to the 1958 Act and was made "non exempt" by the Act.

Plaintiff contends since there's no dispute that it was a bona fide hauler of citrus juices prior to 1958, the only issue for this court is whether citrus juices were "exempt" commodities prior to the 1958 Transportation Act amendment of Section 203(b) (6). If citrus juices were exempt, plaintiff claims the Commission must under the "grandfather" clause issue plaintiff a certificate without proof of public convenience and necessity. Plaintiff argues that even though the Commission had held citrus juices to be "non exempt" prior to 1958 in Watkins Motor Lines, Inc., Interpretation, 64 M.C.C. 455 (Div. 1, 1955), later U. S. Supreme Court and Federal District Court cases, see East Texas Motor Freight Lines v. Frozen Food Express, 1956, 351 U.S. 49, 76 S.Ct. 574, 100 L.Ed. 917; Frozen Food Express v. United States, D.C., 148 F.Supp. 399, affirmed Akron, C. & Y. R. Co. v. Frozen Food Exp., 1957, 355 U.S. 6, 78 S.Ct. 38, 2 L.Ed.2d 22; I.C.C. v. Allen E. Kroblin, Inc., D.C.1953, 113 F.Supp. 599, make it clear that citrus juices would have been declared "exempt" had an appropriate controversy reached the courts.

The defendants contend the issue of whether citrus juices were "exempt" prior to 1958 is not relevant to this proceeding. They argue that "grandfather" rights were conferred only on the eleven commodities² specifically listed in Section 7(a) as now being "non exempt." Defendants argue that the wording of Section 7(c) plus the Congressional intent as evidenced by committee reports indicates that only the eleven commodities listed were "made subject to" the certificate requirement of Part II of the Act, and consequently "grandfather" rights were given only to carriers of those specific commodities. Since citrus juices were not included in the commodities specifically listed in Section 7 (a), they submit the question of whether citrus juices were "exempt" prior to 1958 is irrelevant.

We agree with the defendants that the first issue to be met is whether citrus juices were covered by the "grandfather" clause. If citrus juices were not included, we need not determine whether they were "exempt" prior to 1958.

It is axiomatic that Congress could include or exclude any commodities from the benefit of the "grandfather" clause. Congress could have refused to include any "grandfather" benefits in the 1958 Act. Consequently, assuming that a particular commodity had been specifically held "exempt" prior to 1958 and then declared "non exempt" by the 1958 Act, Congress could have excluded this particular commodity from "grandfather" rights while giving the benefit to other commodities. We must therefore look to the statute to determine whether citrus juices were accorded "grandfather" rights.

The essential provisions of Sections 7(c) and 7(a) have been previously quoted in this memorandum. The primary question in resolving this dispute is the determination of what the words "made subject to" mean in the context of the statute. Plaintiff contends the phrase means that all commodities in Section 7(a), including those in Ruling 107 in the first proviso are subjected to the requirements of Part II of the Act. Defendants argue that the only items "made subject to" Part II are the eleven specified commodities in the second proviso. No determination as to the status of several of these commodities had ever been made, but Ruling 107 listed most of the eleven items as having been found "exempt" by the courts or the Commission, and defendants contend that these items were being brought back under regulation by Section 7(a). They argue that Congress gave "grandfather" rights only to carriers which had been legitimately hauling these eleven commodities.

We agree with the defendants' interpretation of Section 7(c). Congress did not have to make the items in Ruling 107 subject to the Act, with the exception of the eleven commodities which had either been declared "exempt" or on which no ruling had been made. It is perhaps true, as plaintiff argues, that Congress would have specifically afforded "grandfather" rights to citrus juices had they been declared "exempt" in any appropriate controversy which reached the courts. Remembering, however, that Congress could limit "grandfather" benefits as it chose, it matters only that Congress gave its approval to the Commission's characterization of citrus juices as "non exempt" commodities. Citrus juices had been held "non exempt" prior to 1958 by the Commission, Watkins Motor Lines, Inc., Interpretation, 64 M.C.C. 455 (Div. 1, 1955), and Congress was providing "grandfather" rights only for carriers of those eleven commodities which had been "exempt" and were being specifically made "non exempt."

Where the terms of a...