Southern Kansas Greyhound Lines v. United States

• Decision Date: 03 October 1955
• Docket Number: No. 9695.,9695.
• Parties: SOUTHERN KANSAS GREYHOUND LINES, Inc., and Missouri, Kansas & Oklahoma Coach Lines, Plaintiffs, v. UNITED STATES of America and The Interstate Commerce Commission, Defendants, and Kansas Trails, Inc., Intervening Defendant.
• Court: U.S. District Court — Western District of Missouri

134 F. Supp. 502

SOUTHERN KANSAS GREYHOUND LINES, Inc., and Missouri, Kansas & Oklahoma Coach Lines, Plaintiffs, v. UNITED STATES of America and The Interstate Commerce Commission, Defendants, and Kansas Trails, Inc., Intervening Defendant.

No. 9695.

United States District Court W. D. Missouri, W. D.

October 3, 1955.

James P. Aylward and Terence M. O'Brien, Kansas City, Mo., and Jack R. Turney, Jr., Washington, D. C., for plaintiffs.

Isaac K. Hay, Washington, D. C., for defendant Interstate Commerce Commission.

Stanley N. Barnes, Asst. Atty. Gen., and James E. Kilday and E. Riggs McConnell, Sp. Assts. to Atty. Gen., and Edward L. Scheufler, U. S. Dist. Atty., Kansas City, Mo., for defendant United States.

J. William Townsend, Topeka, Kan., and Oliver D. Rinehart, Paola, Kan., for intervening defendant Kansas Trails, Inc.

Before COLLET, Circuit Judge, and RIDGE and WHITTAKER, District Judges.

WHITTAKER, District Judge.

This is an action brought under Section 305(g) and (h), Title 49, U.S.C.A., and Sections 1336, 1398, 2284, 2321-2325, Title 28, U.S.C. and Section 1009, Title 5, U.S.C.A., to enjoin and to vacate an order of the Interstate Commerce Commission of November 23, 1954, granting a certificate of convenience and necessity to Kansas Trails, Inc., to extend its motor bus service from Osawatomie, Kansas, to Tulsa, Oklahoma, over U. S. Highway 169, serving all intermediate points, and an order of the Commission of March 21, 1955, denying protestants' (plaintiffs') petition for reconsideration.

The background facts, so far as essential to understanding of the questions presented, are that Kansas Trails, Inc., hereafter called "Trails", held Commission certificates authorizing it to conduct motor bus operations over U. S. Highway 169 from (1) Kansas City, Missouri to Osawatomie, Kansas (a distance of 55 miles), (2) from Iola to Chanute, Kansas (a distance of 18 miles), (3) from the north intersection with U. S. Highway 160, about 3 miles south of Moorhead, to the south intersection with U. S. Highway 160, 3 miles south of Cherryvale, Kansas (a distance of 9 miles), and (5) from Coffeyville, Kansas to Oolagah, Oklahoma, a distance of 45 miles (its present line running from Oolagah southeasterly over Oklahoma State Highway 58, a distance of 14 miles, to, and terminating at, Claremore, Oklahoma — thus not running into or out of Tulsa). This left "gaps" in Trails' bus service on U. S. Highway 169 extending between (1) Osawatomie and Iola, Kansas (a distance of 51 miles), (2) Chanute and the north intersection with U. S. Highway 160, 3 miles south of Moorhead, Kansas (a distance of 28 miles), (3) the point of the south intersection with U. S. Highway 160, 3 miles south of Cherryvale, and Coffeyville, Kansas (a distance of 13 miles), and (4) Oolagah and Tulsa, Oklahoma (a distance of approximately 32 miles).

For the purpose of closing these "gaps" in its bus service from Osawatomie, Kansas, southerly over U. S. Highway 169, and to enter and serve Tulsa, Oklahoma, as its southern terminal, so that it might operate direct, single-line, through, bus service between Kansas City, Missouri and Tulsa, Oklahoma, Trails filed its application with the Commission, under Section 207 of the Interstate Commerce Act, 49 U.S. C.A. § 307, asking a certificate of public convenience and necessity to operate as a common carrier by motor vehicle, of passengers, baggage and express, between Osawatomie, Kansas, and Tulsa, Oklahoma, over U. S. Highway 169, serving all intermediate points.

Southern Kansas Greyhound Lines, Inc., hereafter called "Southern", holding and using, among others, Commission certificates authorizing bus service from Kansas City, Missouri, over U. S. Highways 40 and 24, to Lawrence, Kansas, and thence south, over U. S. Highway 59, to its junction with U. S. Highway 169 at Garnett, Kansas, and thence south, over U. S. Highways 59 and 169, to Chanute, thence south over U. S. Highway 169 to Coffeyville, Kansas, and thence west, over U. S. Highway 166 to its intersection with U. S. Highway 75, and thence south, thereover, to Tulsa; and, Missouri, Kansas & Oklahoma Coach Lines, hereafter called "MK&O", holding and using, among others, Commission certificates authorizing bus service from Coffeyville, Kansas, over U. S. Highway 169, to Tulsa, Oklahoma, each protested Trails' application, contending, among other things, that the proposed new service would duplicate Southern's service from Garnett, Kansas, over U. S. Highway 169, to Coffeyville, Kansas, and would duplicate MK&O's service from Coffeyville, Kansas, over U. S. Highway 169, to Tulsa, which service was adequate, and that, to succeed, Trails' proposed new service would have to divert a substantial amount of their traffic between these duplicative points, and, particularly, between the termini of Tulsa and Kansas City, and that their operations between these points were, and for some years had been, unprofitable, and that any such diversion of traffic would unduly prejudice them and threaten impairment of their existing, adequate but unprofitable, service between these points, and that, therefore, the proposed new service was unneeded, and would not serve public convenience and necessity; and that Trails was not "fit" or "able" to perform the proposed new service.

Extensive hearings were held upon the application before a joint board, constituted pursuant to Section 305(a), Title 49, U.S.C.A., in October and December, 1953, producing a record of 1,073 pages and numerous exhibits. After consideration, on June 7, 1954, the joint board served its recommended report and order, finding a "definite need" for "direct, single-line service" over Highway 169, between Kansas City, Missouri and Tulsa, Oklahoma, serving all intermediate points, and that "the present and future public convenience and necessity require operation by applicant as a common carrier * * * of passengers and their baggage, and of express in the same vehicle with passengers, between Osawatomie, Kansas, and Tulsa, Oklahoma, over U. S. Highway 169 * * * serving all intermediate points" and "that applicant is fit, willing and able properly to perform such service * * *."

Plaintiffs, and others, filed exceptions with the Commission to the joint board's recommended report and order, and Trails filed a reply thereto.

Thereafter, on November 23, 1954, Division 5 of the Commission issued its report and order granting Trails' application. That report (a) recited the background facts, and the antecedent steps taken in the proceeding, (b) stated the objective of the application (for direct, single-line, through bus service on highway 169 from Kansas City to Tulsa, and the reverse, serving all intermediate points), and pointed to and discussed the evidence adduced by Trails to show the need for this service,¹ (c) discussed the evidence as to financial condition, fitness and ability of Trails to render the proposed service,² and (d) pointed out that plaintiffs "opposed the application of Trails because they believe that the points involved are now being furnished with all of the service that available traffic will support; that this service is being maintained on a high standard; that it is being operated on a close margin and cannot stand a diversion of revenue without deterioration in the standards of service; and that the placing in operation of another carrier between Tulsa and Kansas City will result in a competitive situation destructive to them, to the ultimate disadvantage of both the existing carriers and the public," and that there are presently 22 bus schedules and 4 railroad schedules between Kansas City and Tulsa, and (e) pointed out that plaintiffs contended "that the joint board erred in finding (1) that the service recommended is required by the public convenience and necessity, and (2) in finding that Trails is fit and able to render the service recommended", and, in addition, that Southern contended "that the joint board erred in failing to find that existing service is satisfactory", and (f) the Commission then found "that persons residing in many communities along U. S. Highway 169 between Tulsa and Kansas City are not now receiving adequate service", and that the territory involved "is much too populous to be adequately accommodated by two and three line service", and that the granting of Trails' application "would result in direct, single-line service between all points on U. S. Highway 169 between Tulsa and Kansas City", and that Trails had "met the burden" of establishing that public convenience and necessity require its proposed service. The Commission then found that Trails' "weakened financial condition" had been brought about by its present disconnected "uneconomical and impractical operation", and that the granting of its application would "undoubtedly strengthen its financial position". The Commission concluded with the ultimate finding "that the present and future public convenience and necessity require operation by applicant as a common carrier by motor vehicle, in interstate or foreign commerce, of passengers and their baggage and of express in the same vehicle with passengers, between Osawatomie, Kansas, and Tulsa, Oklahoma, over U. S. Highway 169, through Garnett, Iola, Chanute, Cherryvale, and Coffeyville, Kansas, and South Coffeyville, Delaware, Colagahm, and Owasse, Oklahoma, serving all intermediate points; that applicant is fit, willing, and able properly to perform such service and to conform to the requirements of the Interstate Commerce Act and the rules and regulations thereunder; and that a certificate authorizing such operation should be granted." Order accordingly was entered November 23, 1954.

Plaintiffs timely filed, on January 24, 1955, a petition for reconsideration by the whole Commission, and, thereafter, on March 21, 1955, the Commission denied that petition for the stated reasons "that (1) the evidence adequately supports the findings of ...