Reddish v. United States

• Decision Date: 19 October 1960
• Docket Number: Civ. A. No. 1531.
• Citation: 188 F. Supp. 160
• Parties: Elvin L. REDDISH, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Contract Carrier Conference of American Trucking Associations, Inc., Intervening Plaintiff, L. A. Tucker Truck Lines, Inc., Orscheln Bros. Truck Lines, Inc., Arkansas-Best, Freight System, Inc., East Texas Motor Freight Lines, Inc., Gillette Motor Transport, Inc., Western Truck Lines, Ltd., Regular Common Carrier Conference of The American Trucking Associations, Inc., Atchison, Topeka & Santa Fe Railway Company, and 31 Other Class I Rail Carriers in Western Truck Line Territory, Intervening Defendants.
• Court: U.S. District Court — Western District of Arkansas

188 F. Supp. 160

Elvin L. REDDISH, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Contract Carrier Conference of American Trucking Associations, Inc., Intervening Plaintiff, L. A. Tucker Truck Lines, Inc., Orscheln Bros. Truck Lines, Inc., Arkansas-Best, Freight System, Inc., East Texas Motor Freight Lines, Inc., Gillette Motor Transport, Inc., Western Truck Lines, Ltd., Regular Common Carrier Conference of The American Trucking Associations, Inc., Atchison, Topeka & Santa Fe Railway Company, and 31 Other Class I Rail Carriers in Western Truck Line Territory, Intervening Defendants.

Civ. A. No. 1531.

United States District Court W. D. Arkansas, Fort Smith Division.

October 19, 1960.

John H. Joyce, Fayetteville, Ark., A. Alvis Layne, Washington, D. C., for plaintiff.

Todd, Dillon & Singer, Washington, D. C., for intervening plaintiff.

Richard H. Stern, Dept. of Justice, Washington, D. C., Chas. W. Atkinson, U. S. Atty., Fort Smith, Ark., for the United States.

Arthur J. Cerra, Asst. Gen. Counsel, Interstate Commerce Commission, Washington, D. C., Robert W. Ginnane, Gen. Counsel, Interstate Commerce Commission, Washington, D. C., for Interstate Commerce Commission.

LaTourette & Rebman, St. Louis, Mo., Harper, Harper, Young & Durden, Fort Smith, Ark., Rice, Carpenter & Carraway, Washington, D. C., Callaway, Reed, Kidwell & Brooks, Dallas, Tex., Warner, Warner & Ragon, Fort Smith, Ark., E. L. Ryan, Jr., Chicago, Rock Island & Pacific R. R. Co., Chicago, Ill., for intervening defendants.

Before MATTHES, Circuit Judge, and MILLER and YOUNG, District Judges.

YOUNG, District Judge.

This is an action before a three-judge district court to enjoin and set aside orders of the Interstate Commerce Commission which denied plaintiff, Elvin L. Reddish, permanent authority to operate as a contract carrier by motor vehicle in interstate commerce. 28 U.S.C. §§ 1336, 1398, 2284 and 2321 through 2325 inclusive. By statute, the action is against the United States, represented by the Attorney General, while the Interstate Commerce Commission is made a party by right. 28 U.S.C. § 2323 (1958).

The Contract Carrier Conference of the American Trucking Associations, Inc., intervened before the Commission, and in this action on behalf of the plaintiff. The Commission is supported, in turn, by six common motor carriers, 32 railroads, and the Regular Common Carrier Conference of the American Trucking Associations, Inc., all of whom intervened before the Commission and in this action in opposition to the authority sought by plaintiff.

In its answer, the United States admitted all of the allegations of the complaint.¹ The United States filed a brief in this Court in support of its position that the orders of the Commission should be set aside and the cause remanded for further proceedings. Counsel for the Government also appeared at the hearing and presented oral argument. In summary, the Government's position is that the Commission erred (1) in concluding that grant of the application would adversely affect the protesting carriers; (2) in concluding that denial of the application would not adversely affect the supporting shippers.²

The Interstate Commerce Commission, in its answer, denied that its action in denying plaintiff the permit he requested was unlawful, and stated that the action it had taken was fully supported and justified by the record.

The trial examiner of the Commission found that the service proposed by plaintiff would be consistent with the public interest and the national transportation policy, and recommended that the authority requested be granted. Division 1 of the Commission, however, denied the authorization requested, although the trial examiner's findings of fact were adopted by the Commission as their own. The action of Division 1 was sustained by the full Commission, which held:

"(a) that the findings of Division 1 are in accordance with evidence and the applicable law, and (b) that no sufficient cause appears, for reopening the proceeding for reconsideration or for oral argument."

This action was brought by plaintiff for judicial review of this denial by the Commission.

There is no material dispute as to the facts. They are as follows:

Plaintiff requests permanent authority to operate as a contract carrier for Steele Canning Company and Cain Canning Company of Springdale, Arkansas, and for Keystone Packing Company of Fort Smith, Arkansas. He proposes to handle pool-truck shipments of less-than-truckload orders intended for delivery in 33 states, and to handle certain canning supplies on his return trips from 30 of these states. Steele Canning Company is the major shipper of the three that plaintiff proposes to serve. Steele normally purchases about 75% of the production of Cain and Keystone, which Steele in turn resells to the wholesale and retail market. Steele began transporting its own small order loads in 1948. This operation increased as Steele's small order business increased, until the fleet of trucks operated by Steele numbered 29 in January of 1958. Throughout this period Steel handled most of its truckload shipments by common carrier, principally Jones Truck Line, Inc., of Springdale, Arkansas, who supports the plaintiff's application to handle the less-than-truckload orders.

Steele's less-than-truckload orders account for approximately 80% of its business, which it transported almost exclusively by its own private carriage until June of 1958, when a labor dispute interfered with such operations. Steele at that time prompted plaintiff to apply for authority to handle this operation as a contract carrier. In June 1958 the Commission granted plaintiff temporary operating authority substantially as requested by him. The service rendered by plaintiff under such authority was found by the trial examiner to be substantially similar to the private carrier operations previously performed by Steele. The contract service rendered by plaintiff to Cain and to Keystone largely involves their sales to Steele, but both are interested in developing their own less-than-truckload business, which plaintiff would handle.

The three canners insist that the only satisfactory alternative to private carriage is contract carriage of the type plaintiff proposes to offer and which he has performed for them under temporary operating authority. Their business is intensely competitive and has a small margin of profit. Most small order accounts operate on small inventories, making it critical that their orders be filled promptly. Further, Steele has found that many of its customers have special unloading times and requirements which must be observed at risk of the loss of that business. Because of these facts and because of the scattered location of the small order customers throughout the 33 states named in plaintiff's application, these three canners insist that they would not be in a competitive position if forced to rely upon common carriers for delivery of less-than-truckload orders. Delays in "interlining" shipments, coupled with what the canners regard as "prohibitive" common carrier less-than-truckload rates, would, they say, place them at a disadvantage as to their competitors, who maintain their own fleets of trucks. The canners intend to abandon their private carriage operations and, in effect, use plaintiff as though he were their shipping department.

While the trial examiner found that some less-than-truckload shipments which require delivery stops for a portion of the freight at one or two points enroute to final destination had been satisfactorily handled by common carrier, the traffic that the three canning companies proposed giving plaintiff involves from three to ten stops, with six stops being approximately the average less-than-truckload pooled shipment. This business has not in the past been handled by the protestant common carriers and, say the three shippers, will continue to be handled by private carriage if plaintiff's application is not granted, though the protestant common carriers insist that their experience indicates that they will receive some of this traffic if it is not handled by a contract carrier.

I

The limits of permissible judicial review of the order of the Interstate Commerce Commission here in question are determined by Section 10(e) of the Administrative Procedure Act. 60 Stat. 243 (1946), 5 U.S.C.A. § 1009(e). The appeal is upon the record made before the Commission and its order must be sustained if it is supported by substantial evidence when viewed on the record as a whole and if the action taken is within the scope of its lawful authority. Universal Camera Corporation v. National Labor Relations Board, 1951, 340 U.S. 474, 490, 71 S.Ct. 456, 95 L.Ed. 456. Plaintiff alleges that the order under review lacks substantive support for several findings and conclusions expressed by Division 1 in its report, and further alleges that the report applies a test not permitted by statute.

Our review of the record has convinced us that the plaintiff is correct in these contentions.

II

In declaring the national transportation policy, Congress included the following goals:

"* * * to promote safe, adequate, economical, and efficient service and foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices * * *." 54 Stat. 899 (1940), 49 U.S.C.A. preceding section 1.

We need not decide whether contract motor carriers are a separate "mode" of transportation from common motor carriers to hold, as we do, that the goal of the national transportation policy encompasses all modes and all carriers subject to regulation.

A contract carrier by motor vehicle is defined by statute as:

"* * * any person which engages in

...