Roberts v. Levine
| Decision Date | 26 December 1990 |
| Docket Number | No. 90-5023MN,90-5023MN |
| Parties | Bob ROBERTS, d/b/a Bob Roberts Trucking, Appellant, v. Leonard W. LEVINE, Commissioner of Transportation of the State of Minnesota, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Kelton Gage, Mankato, Minn., for appellant.
Gordon L. Moore III, St. Paul, Minn., for appellee.
Before WOLLMAN and MAGILL, Circuit Judges, and FLOYD R. GIBSON, Senior Circuit Judge.
Bob Roberts, d/b/a Bob Roberts Trucking, appeals the district court's order granting summary judgment for Leonard W. Levine, Minnesota's Commissioner of Transportation, in Roberts' declaratory action to determine whether he was engaged in interstate commerce when Minnesota cited him for transporting grain and urea, a nitrogen-based fertilizer, without a state permit. Roberts argues that his intrastate transport of the goods was one part of an interstate journey governed by the motor carrier provisions of the Interstate Commerce Act, 49 U.S.C. Secs. 10101-11914 (1988), which preempts state jurisdiction. We affirm in part and reverse in part.
Bob Roberts, d/b/a Bob Roberts Trucking, is engaged in the business of trucking grain, fertilizer, and other commodities. His principal place of business is Sleepy Eye, Minnesota. Roberts holds Interstate Commerce Certificate No. MC-163522 (Sub-No. 2), which provides him with irregular route authority to engage in interstate commerce. Roberts holds no certificate or permit from the State of Minnesota to operate a motor carrier for hire in intrastate commerce in the State of Minnesota.
Leonard W. Levine is the Commissioner of Transportation of the State of Minnesota with responsibility, among other things, to enforce the provisions of Minn.Stat.Ch. 221, including Minn.Stat. Secs. 221.021, .291(4) (1988). Those provisions make it a misdemeanor for any person to operate as a motor carrier for hire in intrastate commerce in the State of Minnesota without a certificate or permit from the State of Minnesota in full force and effect.
On August 22, 1986, Roberts transported a shipment of urea fertilizer from the Pine Bend warehouse of CF Industries in Inver Grove Heights, Minnesota, to the Sleepy Eye Elevator. Roberts' route from the Pine Bend warehouse to Sleepy Eye was entirely within the State of Minnesota. Roberts was hired and paid by the Sleepy Eye Elevator to perform that act of transportation.
On September 8, 1986, Roberts transported a shipment of soybeans from the Sleepy Eye Elevator to a soybean processing plant in Mankato, Minnesota, owned and operated by Archer Daniels Midland (ADM). Again, Roberts' route from Sleepy Eye to Mankato was entirely within the State of Minnesota and Roberts was hired and paid by the Sleepy Eye Elevator to perform that act of transportation.
On November 12 and 13, 1986, Roberts transported shipments of soybeans from the Sleepy Eye Elevator to a soybean processing plant in Mankato, Minnesota, owned and operated by Honeymead Products Company (Honeymead). This route was entirely within the State of Minnesota and Roberts was hired and paid by the Sleepy Eye Elevator to perform those acts of transportation.
At the instance of an authorized delegate of the Commissioner of Transportation, the State of Minnesota issued a criminal misdemeanor complaint against Roberts alleging that Roberts' transportation of urea fertilizer from the CF Industries Pine Bend warehouse to the Sleepy Eye Elevator and Roberts' transportation of soybeans from the Sleepy Eye Elevator to the ADM and Honeymead soybean processing plants in Mankato, Minnesota, each constituted unlawful operation as a motor carrier for hire without a permit or certificate in effect in violation of Minn.Stat. Secs. 221.021, .291(4) (1988).
CF Industries, Inc. (CF) is a corporation owned by fifteen Canadian and United States cooperatives, including Cenex/Land O'Lakes (Cenex). The various cooperatives which own CF are, in turn, composed of smaller member cooperatives. The Sleepy Eye Elevator is a member cooperative of Cenex. Cenex has other member cooperatives in Minnesota and in North and South Dakota, Montana, Iowa and Wisconsin.
CF manufactures and distributes phosphate fertilizer and nitrogen fertilizer (urea). CF sells these products only to its owner cooperatives such as Cenex. CF, together with various Canadian farm cooperatives, owns a plant for the production of urea at Medicine Hat, Alberta, Canada. CF also produces urea at a plant owned and operated by it in Donaldsonville, Louisiana.
Urea is sold to member cooperatives and shipped from the Pine Bend warehouse in the following manner. When a local cooperative elevator (here, the Sleepy Eye Elevator) decides to purchase urea, it contacts its parent cooperative (here, Cenex). After the Sleepy Eye Elevator's order is received by Cenex at its headquarters in Inver Grove Heights, Minnesota, Cenex transmits the order to CF's central distributing office in Long Grove, Illinois. The Long Grove, Illinois office notifies the Pine Bend warehouse that Cenex wishes to purchase a certain amount of urea on a certain date. This information is transmitted by a computer data link between the Long Grove, Illinois office and the Pine Bend warehouse. A bill of lading for the transportation of urea from the Pine Bend warehouse to Cenex is then generated by machine at Pine Bend. This bill of lading shows CF as the consignor and Cenex's Sleepy Eye Elevator as the consignee. All urea is shipped from Pine Bend, f/o/b Pine Bend. Sleepy Eye Elevator pays all of the shipping charges to transport the urea from Pine Bend to its own elevator, and hires the carrier, in this case, Roberts. After shipment of the product, the Pine Bend warehouse adjusts its inventory and transmits the shipping information by computer data link to Long Grove, which then automatically generates an invoice to Cenex. CF's central distributing office in Long Grove also uses this shipping information to keep track of the inventories at the various CF warehouses, including Pine Bend.
Urea is shipped by rail prepaid from Medicine Hat to the Pine Bend warehouse. Such shipments are intra-company transfers, even if made in response to the request of a member cooperative for more inventory. For each such shipment, Medicine Hat generates a bill of lading to Pine Bend, indicating, among other things, the tonnage being sent, and a copy of such bill of lading goes to the Long Grove, Illinois office. The bill of lading is used as an inventory control document both for Pine Bend and for the Long Grove, Illinois office, which has an on-line computer hookup to Pine Bend. The inventory is updated daily, and CF's distribution department at Long Grove is in communication with the Medicine Hat plant and with the warehouse at Pine Bend three or four times per day. The distribution center adjusts inventories by moving product to the warehouse when necessary.
CF has elected to create and maintain facilities for the storage of urea at various warehouses throughout the United States such as Pine Bend rather than at its plant in Medicine Hat. CF ships urea from Medicine Hat to Pine Bend for one of two purposes: to provide for more production room at the Medicine Hat plant or to refill the Pine Bend warehouse. Upon request of an owner coop, CF ships directly to member cooperatives that have facilities to unload rail cars. Otherwise, CF does not know where the urea it sends to Pine Bend will ultimately be shipped.
The Pine Bend warehouse has a capacity to store 40,000 tons of urea. In the course of a one-year period, CF sells approximately 100,000 tons of urea from the Pine Bend warehouse. Accordingly, the urea inventory of the Pine Bend warehouse turns over approximately 2 1/2 times per year.
Urea can be stored indefinitely. Urea shipped from Medicine Hat to the Pine Bend warehouse may remain at the Pine Bend warehouse for as long as six months. In other cases, a given shipment of urea from the Medicine Hat warehouse may remain at the Pine Bend warehouse for as little as one or two months.
Peak demand for urea from the Pine Bend warehouse and peak sales of urea from the Pine Bend warehouse occur in the spring of each year during planting season. There is a smaller peak in the late summer and fall when CF offers incentive prices to its member cooperatives to encourage them to buy urea, and owner cooperatives restore their own inventories for sales in the fall and the following spring.
In years when demand for urea is relatively low, CF, on its own or in conjunction with one or more of its member cooperatives, may have what is called a "fill program." This means that during relatively slow times, CF offers to its member cooperatives, and its member cooperatives may, in turn, offer to their own local members, a lower price on urea, if the buyer will buy a large quantity and store it for the coming year. This is a way of stocking up for the next year when demand is expected to be higher. It is also a way to empty the warehouse so that more product may be moved from the Medicine Hat plant.
Urea sold from Pine Bend is not allocated among the member cooperatives unless there is a shortage of fertilizer in a given year. For a short period in 1986, urea was allocated among member cooperatives, including Cenex.
The limitation of CF urea sales only to its own member cooperatives is subject to the following exception: CF has a small exchange program with other fertilizer companies to which it might sell in a typical year between five and six thousand tons of fertilizer from the Pine Bend warehouse out of an annual distribution of 100,000 tons of urea from the Pine Bend warehouse. Pursuant to this program, no money changes hands. Rather, fertilizer credits are simply exchanged.
Some urea is shipped directly from the Medicine Hat plant to member cooperatives that have rail facilities and sufficient...
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