North Alabama Exp., Inc. v. U.S.

• Decision Date: 08 December 1978
• Docket Number: No. 77-3252,77-3252
• Citation: 585 F.2d 783
• Parties: NORTH ALABAMA EXPRESS, INC., and Hiller Truck Lines, Inc., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Floyd & Beasley Transfer Company, Inc., Intervenor-Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 783

585 F.2d 783

NORTH ALABAMA EXPRESS, INC., and Hiller Truck Lines, Inc., Petitioners, v. UNITED STATES of America and Interstate Commerce Commission Respondents Floyd & Beasley Transfer Company, Inc., Intervenor-Respondent.

No. 77-3252.

United States Court of Appeals, Fifth Circuit.

Dec. 8, 1978.

George M. Boles, John P. Carlton, Birmingham, Ala., for petitioners.

Griffin B. Bell, Atty. Gen., Dept. of Justice, Mark Evans, Gen. Counsel, ICC, Wayne M. Senville, Atty., ICC, John P. Fonte, Atty., ICC, Peter L. de la Cruz, Atty., Dept. of Justice, John J. Powers, III, Washington, D. C., for respondents.

Charles Ephraim, James F. Flint, Washington, D. C., for Floyd & Beasley Transfer.

On petition for review of an order of the Interstate Commerce Commission.

Before COLEMAN, CLARK and RUBIN, Circuit Judges.

CHARLES CLARK, Circuit Judge:

This appeal is from an order of the Interstate Commerce Commission granting increased operating authority to the Floyd & Beasley Transfer Company, Inc. ("Floyd"), a motor common carrier. The grant of new authority to Floyd is challenged by two of Floyd's competitors, North Alabama Express, Inc. ("NAE") and Hiller Truck Lines, Inc. ("Hiller") on both substantive and procedural grounds. The appellants challenge the sufficiency of the evidence supporting the Commission's order, attack on policy grounds the grant's authorization for the use of private plantsites as joinder points for Floyd's operations, and allege that the notice of Floyd's application published in the Federal Register was incomplete and thus fatally defective. Finding that the published notice was inadequate to alert interested persons to the true nature of the application, we remand to the Commission on that ground for corrected republication and an opportunity for interested persons to be heard.

I.

Floyd is a trucking firm operating as an interstate common carrier in the four-state area of Alabama, Georgia, South Carolina and Tennessee. Floyd transports goods under both "regular route" and "irregular route" authorities. Regular route authority limits operations to predetermined routes between fixed points. Irregular route authority permits a carrier's operations to be conducted along any route joining authorized service areas. In an application filed on December 3, 1973, Floyd sought to enlarge its existing service by obtaining new regular route authority. The authority sought would have enhanced Floyd's operation by extending Floyd's service to certain specified points in Mississippi and by increasing the types of service it could perform within its existing four-state area. The expansion within Floyd's existing service area was to be accomplished in part through the "tacking," or joinder, of the new regular route authority sought with its already held regular and irregular route authorities. ¹

Floyd's application progressed through the normal stages outlined in the Commission's rules. See 49 C.F.R. § 1100.247. As required in 49 C.F.R. § 1100.247(c), notice of Floyd's application was published in the Federal Register on April 11, 1974. The application was amended on September 18, 1974, and notice of the application's amended form was published in the Federal Register on October 17, 1974. In both publications in the Federal Register, the notice consisted of a virtually verbatim duplication of the geographic description of the authority sought in Floyd's applications. The published notice was essentially a lengthy and complex geographic description, detailed in terms of highway route numbers and cities, explaining the exact route over which Floyd's trucks would travel if the application were granted. The notice also included an equally complicated list of detailed restrictions on the authority sought. Both publications of notice, however, failed to include the final sentence of the description of the authority sought as that description was printed in Floyd's application. The final omitted sentence stated that the authority sought in the application would be tacked with Floyd's existing authorities at Vincent and Rockford, Alabama.

Commission procedure requires that any person wishing to contest an application file a "protest" with the Commission within 30 days of the date of Federal Register publication. 49 C.F.R. § 247(e)(1). If the merits of the application are slated for oral hearing, protestants are normally allowed to present evidence and cross-examine witnesses as full parties. The failure to file a protest within 30 days of Federal Register publication, however, is regarded by the Commission "as a waiver of opposition and participation in the proceeding." 49 C.F.R. § 247(e)(2). The Commission's rules further provide that no person who fails to file a protest within the 30-day period "will be permitted to intervene in opposition in a proceeding except upon a showing of substantial reasons." 49 C.F.R. § 1100.248(i).

Protests contesting Floyd's application were seasonably filed by 22 motor carriers, including appellant Hiller. Floyd's application was slated for hearings before a Joint Board at Montgomery, Alabama, and the hearings commenced in September of 1976, with the protestant opposing carriers as participants.

The appellant NAE, however, did not file a protest within the 30-day time period. On August 14, 1975, five weeks prior to the opening of the Joint Board's proceedings in Montgomery, NAE filed a petition for leave to intervene. NAE's petition set forth NAE's interest in the proceeding, claimed that its intervention would not unduly lengthen the proceeding or enlarge the issues involved, and asserted that it had failed to comply with the 30-day requirement "inadvertently," citing the length and complexity of Floyd's application. NAE claimed that it sought intervention immediately upon discovering that Floyd's application involved operating authority duplicative of NAE's service.

The Joint Board denied NAE's petition to intervene, stating that it had not justified its failure to file a protest within 30 days of Federal Register publication with "substantial reasons." Proceeding to the merits, the Joint Board ultimately refused to grant the aspect of Floyd's application that would have extended its operations into Mississippi, but did grant the new authority sought within Alabama, thus allowing Floyd to expand its operations in its existing four-state area. The Joint Board's actions were affirmed by the Commission on October 25, 1977.

On appeal, NAE asserts that its adverse interest in Floyd's application exists only by virtue of Floyd's intent to tack the regular route authority sought in its application with its existing regular and irregular route authorities in Alabama. Because notice of Floyd's intent to tack was not included in the published version of Floyd's application, NAE asserts that it and other potentially interested parties were not apprised of the true nature of the application, and were thus improperly denied an opportunity to be heard. The appellants also challenge the practice of allowing tacking to occur at private plantsites, and generally attack the sufficiency of the evidence.

II.

Reasonable notice to interested persons that their legally protected interests may be adversely affected by administrative action is a requirement of due process, the Interstate Commerce Act, the Administrative Procedure Act, and the Commission's own rules. Failure to provide adequate notice is a jurisdictional defect that invalidates administrative action until the defect is cured. Finding the published notice in this case inadequate to inform members of the public of the full scope of Floyd's application, we remand for republication in the Federal Register and an opportunity for interested parties to be heard.

The due process clause requires that notice be reasonably calculated to inform parties of proceedings which may directly and adversely affect their legally protected interests. Walker v. City of Hutchinson, 352 U.S. 112, 115, 77 S.Ct. 200, 202, 1 L.Ed.2d 178 (1956); Covey v. Town of Somers, 351 U.S. 141, 146, 76 S.Ct. 724, 727, 1 L.Ed.2d 1432 (1956). In the administrative context, due process requires that interested parties be given a reasonable opportunity to know the claims of adverse parties and an opportunity to meet them. Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 143, 60 S.Ct. 437, 442, 84 L.Ed. 656 (1940); Morgan v. United States, 304 U.S. 1, 18, 58 S.Ct. 773, 776, 82 L.Ed. 1129 (1938); Intercontinental Industries, Inc. v. American Stock Exchange, 452 F.2d 935, 941 (5th Cir. 1971). Sections 205(e) and 206(b) of the Interstate Commerce Act, 49 U.S.C.A. §§ 305(e), 306(b), explicitly embody this reasonable notice requirement. See Buckner Trucking, Inc. v. United States,354 F.Supp. 1210, 1219 (S.D.Tex.1973) (three-judge court); Pinkett v. United States, 105 F.Supp. 67, 71 (D.Md.1952) (three-judge court). The I.C.C. is also bound by the requirements of reasonable notice prescribed in the Administrative Procedure Act, 5 U.S.C. § 554(b). Buckner Trucking, supra at 1219; Refrigerated Transport Co. v. United States, 313 F.Supp. 880, 888 (N.D.Ga.1970) (three-judge court); Florida Citrus Commission v. United States, 144 F.Supp. 517, 521 (N.D.Fla.1956) (three-judge court). Finally, the Commission's own rules provide that:

Notice of the filing of applications to competitors and other interested persons will be given by the publication of a summary of the authority sought in the FEDERAL REGISTER. Such summaries will be prepared by the Commission, and it shall be the responsibility of the applicant promptly to advise the Commission if the summary does not properly describe the authority sought.

49 C.F.R. § 1100.247(c). ² We must evaluate the adequacy of notice with "due regard for the practicalities and peculiarities of the case." Mullane v. Central Hanover Bank and Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950)...