North American Van Lines, Inc. v. ICC

• Citation: 386 F. Supp. 665
• Decision Date: 05 December 1974
• Docket Number: No. F 74-13.,F 74-13.
• Parties: NORTH AMERICAN VAN LINES, INC., Plaintiff, v. INTERSTATE COMMERCE COMMISSION et al., Defendants,
• Court: U.S. District Court — Northern District of Indiana

386 F. Supp. 665

NORTH AMERICAN VAN LINES, INC., Plaintiff, v. INTERSTATE COMMERCE COMMISSION et al., Defendants,

No. F 74-13.

United States District Court, N. D. Indiana, Fort Wayne Division.

December 5, 1974.

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Donald C. Lewis and Michael L. Harvey, Fort Wayne, Ind., Virgil L. Beeler, Theodore R. Boehm, Michael J. Huston, Indianapolis, Ind., for plaintiff.

John Wilks, U. S. Atty., Fort Wayne, Ind., Theodore Knappen and Fritz R. Kahn, ICC, Washington, D. C., Clyde W. Carver, Atlanta, Ga., Thomas M. Shoaff, Fort Wayne Ind., John R. Sims, Jr., Washington, D. C., Robert E. Joyner, Memphis Tenn., for defendants.

MEMORANDUM OF DECISION AND ORDER

ESCHBACH, Chief Judge.

This is an action by plaintiff North American Van Lines seeking mandamus relief pursuant to Title 28 U.S.C.A. § 1361. The mandate requested would order the defendant Interstate Commerce Commission to perform what plaintiff contends is a clear and plain duty owed it by the Commission; that is, to proceed forthwith and rule on plaintiff's pending applications for motor carrier certificates of public convenience and necessity. Plaintiff claims the Commission is acting in excess of its statutory authority by delaying decision in certain of the application cases and by refusing to issue the certificate in other application cases in which the Commission has entered an order granting the requested operating authority. Plaintiff further contends that the Commission's delay in these application cases is motivated by an improper and illegal factor. It alleges that the delay has as its purpose to economically pressure plaintiff into foregoing its right to legally contest ICC regulations which plaintiff claims are invalid. Jurisdiction of this cause is claimed by plaintiff to rest upon 28 U. S.C.A. § 1361, 28 U.S.C.A. §§ 1331 and 1337, and Section 10 of the Administrative Procedure Act, 5 U.S.C.A. §§ 701-706.

Defendant Commission and intervening defendants counter that this action must be dismissed because plaintiff has failed to exhaust its available and adequate administrative remedies and because a mandamus order by this court would be inappropriate since its issuance would affect the exercise of discretion. Further, defendants argue, the Commission does have the statutory authority to postpone consideration of new certificate applications and the exercise of this authority by the Commission under the circumstances in this case cannot be found to be arbitrary and capricious or an abuse of discretion.

This cause is now before the court on the following motions:

1. Motion to dismiss the complaint as to applications Sub.-Nos. 179, 190, 191, 192, 193, and 145 filed by intervening defendant Watkins Motor Lines (hereinafter "Watkins") on March 13, 1974.

2. Motion to dismiss the complaint filed by defendant Interstate Commerce Commission, et al. (hereinafter "ICC" or "Commission") on March 27, 1974.

3. Motion to intervene as parties defendant of Byrd Motor Line, et al. (hereinafter "Byrd") filed on April 8, 1974.

4. Motion to dismiss the complaint filed by intervening defendant Byrd on April 8, 1974.

5. Motion for summary judgment, or, in the alternative, for preliminary relief filed by plaintiff North American Van Lines, Inc. (hereinafter "North American") on April 15, 1974.

6. Motion for summary judgment filed by defendant ICC on June 20, 1974.

A hearing on all the above motions was held by this court on July 8, 1974, with all parties represented by counsel. The motion of Bryd to intervene will be granted. For reasons set forth below, the Watkins motion to dismiss will be granted, the ICC motion for summary judgment will be denied, and the remaining motions will be granted in part and denied in part.

I. FACTUAL BACKGROUND AND ISSUES

North American operates its business as a common carrier by motor vehicle and engages in the interstate transportation of household goods and in the transportation of specific commodities and new products. The household goods moving business of North American is conducted pursuant to three certificates of public convenience and necessity issued by the ICC. North American's new products business is conducted pursuant to many certificates of public convenience and necessity issued by the ICC, which certificates are limited both as to type of commodity and as to geographic points of origin and destination. Any growth of the new products business requires repeated applications for new operating authority.

As authorized by its statutory mandate, the ICC has classified motor carriers of property into classifications based upon the type of commodities carried by the carrier. North American is classified by the ICC as a "carrier of household goods as a commodity" (Group 2 in the classification) when engaged in the transportation of household goods and as a "carrier of specific commodities not subgrouped" (Group 17 in the classification) when engaged in the transportation of specific commodities or new products.

In 1970, the Commission prescribed new, revised regulations governing the transportation of household goods. These regulations are apparently applicable only to carriers of household goods as a commodity. The new regulations did not contain any standard of performance to measure the adequacy of the carrier's service or compliance with the regulations. Plaintiff contends that complete, 100% compliance is physically impossible.

During the summer of 1971, an ICC district supervisor conducted an audit of North American's activities as a household goods carrier in order to determine whether North American was complying with the new regulations. Although the supervisor indicated he had discovered violations of the new regulations, no formal investigation proceeding was instituted by the ICC as a result of the 1971 audit.

During the spring of 1972, the ICC supervisor again audited North American's activities as a carrier of household goods. The supervisor informed North American that the ICC was going to institute formal investigation proceedings against several carriers of household goods and that it intended to secure cease and desist orders against such carriers to enjoin them from violating the new household goods regulations. The supervisor later informed North American that he was not aware of any standard of compliance for the new household goods regulations and that it was the ICC's position that complete compliance was required.

The ICC, on September 28, 1972, instituted the threatened proceeding, "North American Van Lines, Inc., Investigation and Revocation of Certificates, No. MC-C-7901." This household goods fitness investigation dealt with issues of North American's compliance with the new household goods regulations and the adequacy of North American's service to the public in the transportation of household goods, including North American's observance of just and reasonable tariffs and regulations. It was later expanded to include issues of whether North American had been and was (1) subjecting certain of its agents and descriptions of traffic to unjust, undue and unreasonable discriminations, prejudice and disadvantage, (2) charging, demanding and collecting less compensation for transportation rendered than specified in its tariffs, (3) knowingly and willfully offering, granting and giving concessions and discriminations, (4) knowingly and willfully falsifying and altering records required to be made and kept by the ICC, and (5) failing to submit records, memoranda, correspondence and other documents for the inspection of duly authorized examiners of the ICC upon demand and display of proper credentials. Plaintiff claims that the ICC's statements of the matters of fact and law to be asserted by it in the household goods fitness investigation demonstrate that these charges involved issues confined to the household moving business or arose only from activities or methods of operations which occur in the household moving business. It is noted that these charges do not relate to highway safety.

After the audit of North American in the spring of 1972 and before the institution of the household goods investigation proceeding on September 28, 1972, the ICC commenced similar investigations against several other large household goods carriers, including Aero-Mayflower Transit Company and Allied Van Lines, Inc. The investigations against Mayflower and Allied were terminated, however, apparently when those carriers consented to the entry of orders which, in effect, ordered the carriers to cease and desist from violating the household goods regulations. The cease and desist orders entered into by Mayflower and Allied did not contain any lesser standard of compliance than those in the new regulations. Thus, any violation of the household goods regulations by Mayflower or Allied could be alleged to constitute a violation of the cease and desist orders.

Plaintiff reports, and the Commission has not denied, that North American was offered the opportunity to settle its household goods investigation proceeding if it would agree to enter into a consent cease and desist order similar to those accepted by Mayflower and Allied. However, North American refused to enter into such a cease and desist order. It is North American's contention that the requirement of complete compliance with the regulations is physically impossible. Consequently, North American claims the requirement exceeded the "adequate service" standard for motor carriers prescribed by Congress in the Interstate Commerce Act and therefore was in excess of the Commission's statutory authority to require by regulation.

North American had pending before the ICC several applications for additional certificates of public convenience and necessity for its new products operations when the household goods investigation proceeding was commenced. In six of these certificate...