MUNITIONS CARRIERS CONF., INC. v. American Farm Lines

• Decision Date: 25 May 1971
• Docket Number: No. 629-69 and 72-70.,629-69 and 72-70.
• Parties: MUNITIONS CARRIERS CONFERENCE, INC., Consolidated Freightways, Pacific Intermountain Express, Riss & Company, Inc., Tri-State Motor Transit Company, Illinois California Express, Inc., Ringsby Truck Lines, Inc., and IML Freight, Inc., Plaintiffs-Appellees, v. AMERICAN FARM LINES, a Cooperative Marketing Association, Howard McCormack and E. E. Strohfield, Defendants-Appellants, Interstate Commerce Commission, Intervenor-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

440 F.2d 944 (1971)

MUNITIONS CARRIERS CONFERENCE, INC., Consolidated Freightways, Pacific Intermountain Express, Riss & Company, Inc., Tri-State Motor Transit Company, Illinois California Express, Inc., Ringsby Truck Lines, Inc., and IML Freight, Inc., Plaintiffs-Appellees, v. AMERICAN FARM LINES, a Cooperative Marketing Association, Howard McCormack and E. E. Strohfield, Defendants-Appellants, Interstate Commerce Commission, Intervenor-Appellee.

Nos. 629-69 and 72-70.

United States Court of Appeals, Tenth Circuit.

March 30, 1971.

Rehearing Denied May 25, 1971.

James M. Robinson, Oklahoma City, Okl., for appellants.

Grey W. Satterfield, Oklahoma City, Okl., for appellees.

Harry F. Horak, Kansas City, Mo., for intervenor.

Before HILL and SETH, Circuit Judges, and DOYLE, District Judge.

HILL, Circuit Judge.

The appeal is from an order finding appellants to be in contemptuous violation of a permanent injunction.¹ We will not attempt to reiterate the facts as stated in our decision affirming the order granting the permanent injunction, but it is necessary for a proper understanding of the case to set out in some detail the procedural events that are important to a decision here.

After the issuance of the permanent injunction on May 20, 1968, by the United States District Court in the Western District of Oklahoma,² the appellees here, through their counsel, conducted an inspection of the books and records of American Farm Lines covering the months of September, October, November and December of 1968. The results of this inspection form the factual basis leading to the issuance of the contempt order. These facts will be set out in some detail later in this opinion.

The original injunction order contained, among other provisions, the following: "Said injunction shall remain in full force and effect until such time, if at all, as there is in force with respect to said defendants, appropriate authority from the Interstate Commerce Commission authorizing them to engage in such operations."

On September 3, 1968, pursuant to an application by American Farm Lines, the Interstate Commerce Commission issued a grant of authority to American Farm Lines concerning the operations that had been enjoined. This grant of authority continued until October 3, 1968, when Judge Boldt of the Western District of Washington stayed the same pending the outcome of a case filed in the Washington district entitled Blackball Freight Service et al. v. United States et al., reported in 298 F.Supp. 1006. On December 19, 1968, the Interstate Commerce Commission, apparently in an attempt to correct procedural deficiencies alleged to have been contained in the September 3 grant of authority, issued a second grant of authority to American Farm Lines covering the same subject matter as covered by the September 3 grant. This grant of authority remained in effect until January 6, 1969 when Judge Boldt, in the case set out above, stayed the second order of the I.C.C. pending final disposition of that case by a three-judge court. On March 26, 1969, the three-judge court entered a final judgment in the case holding both the September 3 and December 19 grants of authority to be null and void. That case was appealed to the Supreme Court, and on April 20, 1970, that Court, in American Farm Lines v. Blackball Freight Service, 397 U.S. 532, 90 S.Ct. 1288, 25 L.Ed.2d 547, reversed the decision of the three-judge court.

The appellants now urge three points: One, the trial court lacked jurisdiction to hear or decide any issue of contempt based upon the injunctive order of May 28, 1968, because that order was dissolved by its own terms by the I. C.C. grant of authority on September 3, 1968; two, the trial court erred in concluding that the activities of A.F.L. constituted willful and intentional violation of the May 28 injunctive order; and, three, the trial court erred in awarding damages in the contempt proceeding absent evidence of the causal relationship between the alleged contemptuous acts and the injury alleged, and the award is grossly inequitable in light of subsequent developments.

Appellees urge us not to consider point one because it was not raised in the trial court, but was raised for the first time in this court. Appellants contend, however, that the question goes to the jurisdiction of the court and may be raised at any stage of the case. That is a correct statement of the law provided we are talking about jurisdiction over the subject matter of the case. Without question, the trial court had jurisdiction over the subject matter, that is, the jurisdiction to determine whether appellants were in contempt of its order. Actually the point raises only an affirmative defense to the Order to Show Cause. It should have been specifically pleaded in the Answer to the Show Cause Order or raised in the trial court by some other appropriate means. It was not so raised and we refrain from considering the issue.

The appellees, by their evidence adduced during the contempt hearing, attempted to prove six types of violations, and, under the findings of fact by the trial judge, three types of violations were found. First, the so-called "long layover" moves. These movements were of government freight from the east to the west coast; in most instances the unloading was at Bangor, Washington, and then followed by "deadhead" (empty) movements of approximately 850 miles to the San Francisco Bay area. In all of these instances, there were layovers of from 60 to 265 hours in the Bay area before the trucks in question obtained eastbound member loads. The second type of moves found by the trial court to violate the injunction were the "sandwich" moves and each comprised a movement with the same tractor and trailer of a load of government freight from the central portion of the United States to some military installation in Utah. After the unloading of the government freight, the vehicle would then deadhead a short distance and pick up grain from the A.F.L. member in central Utah, and then deliver the same to a point in southern California. The tractor-trailer unit would then deadhead to another government installation in California to load more government freight and return eastward to the central part of the United States.

The court found, with respect to the "long layover" movements "that defendants were in contemptuous violation of its injunction because the government loads were not coordinated with a member's order for transportation and because in most instances after the delivery of the government freight the vehicles in question were still 750 to 1,000 miles away from the member they were to serve." As to the "sandwich" moves, the court found them to be "a subterfuge in an attempt to camouflage contemptuous hauling for United States Government. The grain moves which defendants travel great distances to handle produced less than $150 per load — less than one-half their cost of transportation. There can be no rational economic justification for such conduct except to support prohibited government hauling. This is confirmed by the conduct of defendants in hauling government freight in an easterly direction from the west coast after delivery of the grain."

The third category of freight movement found by the trial court to constitute contempt was the so-called "eastbound...