SUBURBAN TRANSIT CORPORATION v. United States, Civ. A. No. 794-62.

• Decision Date: 05 March 1963
• Docket Number: Civ. A. No. 794-62.
• Citation: 215 F. Supp. 717
• Parties: SUBURBAN TRANSIT CORPORATION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Somerset Bus Co., Inc., Intervening Defendant.
• Court: U.S. District Court — District of New Jersey

215 F. Supp. 717

SUBURBAN TRANSIT CORPORATION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Somerset Bus Co., Inc., Intervening Defendant.

Civ. A. No. 794-62.

United States District Court D. New Jersey.

March 5, 1963.

James F. X. O'Brien, Newark, N. J., for plaintiff.

David M. Satz, Jr., U. S. Atty., Lee Loevinger, Asst. Atty. Gen., John H. D. Wigger, Department of Justice for the United States.

Robert W. Ginnane, Gen. Counsel, Francis A. Silver, Associate Gen. Counsel, for Interstate Commerce Commission.

Joseph S. Lindabury, Elizabeth, N. J., Wilmer A. Hill, Washington, D. C., for Somerset Bus Co., Inc., Intervening defendant. Lindabury, McCormick & Estabrook, Elizabeth, N. J., Ames, Hill & Ames, Washigton, D. C., of counsel.

Before FORMAN, Circuit Judge, and AUGELLI and SHAW, District Judges.

FORMAN, Circuit Judge.

Plaintiff, Suburban Transit Corp. (Suburban), sought authority from the Interstate Commerce Commission (Commission) to extend its operations between points in the vicinity of Metuchen, New Jersey to New York City, more particularly hereinafter described, for the purpose of transporting passengers by motor bus. Public Service Coordinated Transport (PSCT) similarly sought to extend its routes between the same area in New Jersey and New York City. Somerset Bus Company, Inc. (Somerset) sought like authority. The applications ran a checkered course in the Commission. First, Joint Board No. 119 recommended that the petition of Suburban be granted. Then this action was reconsidered before Division One and it agreed that authority should be granted to PSCT. Finally, on April 10, 1962, the entire Commission reviewed the several petitions and granted the authority requested by Somerset.

Suburban and PSCT then petitioned the Commission to reopen the record and accord them a rehearing. These petitions were denied by the Commission on September 5, 1962.

Thereupon Suburban brought this action in which it seeks to annul and suspend the order of the Commission dated April 10, 1962, in which its applications and that of PSCT were denied and the application of Somerset was granted. Suburban also seeks to set aside the order of the Commission of September 5, 1962, denying the application of Suburban and PSCT to reopen the record and for further hearings. It alleged that the orders of the Commission were "arbitrary and capricious in that they denied opportunity for hearings and granted the Somerset application without affording plaintiff a current day in court."¹

The main question in this action, however, is raised by the contentions of Suburban as to the illegality of the Commission's order of September 5, 1962 in which it declined to reopen the record and grant further hearings.

A chronology of the significant events leading to this suit is:

December 29, 1958—Applications filed by Suburban for route extensions as a common carrier by motor vehicle of passengers and their baggage and of express and newspapers in the same vehicle with passengers between Metuchen and South Plainfield (hereinafter called the Spur Route); between South Plainfield and Carteret (hereinafter called the Oak Tree Route) and for another route between South Plainfield and Carteret (hereinafter called the Inman Avenue Route), all being extensions of Suburban's existing New York operation.²

January 29, 1959—Application filed by PSCT for like type extensions over the Inman Avenue Route and the Oak Tree Route.

February 4, 1959—Application filed by Somerset for the same routes as PSCT with slight extensions.

September 22-25, 29-30, 1959—All applications were consolidated for hearing and were heard by Joint Board No. 119.

May 9, 1960—Joint Board No. 119 filed its report and found that only the Oak Tree Route and the Spur Route were necessary; that only one carrier was needed to serve those routes and that of the three applicants, Suburban was the best choice and recommended the filing of an order to that effect.

August 1, 1960—Exceptions were filed to the report and recommended order by Somerset, PSCT and the Pennsylvania Railroad Company.³

February 10, 1961—The Temporary Authority Board of the Commission granted Suburban temporary authority to operate over the routes recommended by Joint Board No. 119.

June 2, 1961—Division One of the Commission filed a report and order in which it found necessity for the Oak Tree and Inman Avenue Routes, but not for the Spur Route that had been granted Suburban by Joint Board No. 119. It also found that only one carrier was essential and that PSCT was best suited.

August 18, 1961—Somerset filed its petition for reconsideration and oral argument.

August 21, 1961—Suburban filed similarly.

January 8, 1962—The Commission entered an order granting petitions for reconsideration filed by Somerset and Suburban, but limited to the record.

April 10, 1962—The Commission filed its report on reconsideration in which it agreed with Division One as to the necessary routes and that only one carrier was essential and found that Somerset was best qualified.⁴

May 18, 1962—Suburban and PSCT filed petitions for reopening the record and for further hearings.

September 5, 1962—The Commission entered an order denying the petitions for reopening the record and rehearings on the basis that its decision of April 10, 1962 was in accordance with the evidence and applicable law and that no sufficient cause appeared for reopening or rehearing.

Suburban then commenced this action against the United States of America and the Interstate Commerce Commission. Somerset was subsequently granted permission to intervene. PSCT is not a party to this suit.

Jurisdiction is properly alleged pursuant to 28 U.S.C.A. §§ 1336, 1398, 2284, 2321, 2322 and 2325; 49 U.S.C.A. § 17 (9) and 5 U.S.C.A. § 1009.

Suburban is not now complaining of the Commission's decision on the merits but charges, rather, that the Commission clearly abused its discretion and was arbitrary and capricious in denying to it a rehearing for the purpose of bringing the record up to date. Suburban contends that the Commission's decision of April 10, 1962 was made on a record almost thirty-one months old, that this record was stale at the time of the final decision and that material facts had arisen from the date of the original hearings which substantially affected the choice that the Commission had to make between the three carriers applying for the expanded routes.

Suburban concedes that the reversal of a decision by the Commission denying a rehearing requires a demonstration of clear abuse of discretion. In only one case has the Supreme Court sanctioned such a reversal. Atchison etc. Ry. Co. v. United States, 284 U.S. 248, 52 S.Ct. 146, 76 L.Ed. 273 (1932). In that case the great depression came between the closing of the record in a rate making case, and the final decision. Reviewing the district court's denial of an application for an interlocutory injunction to stay an order of the Commission prescribing maximum rates the Court, in reversing, said:

"* * * The second petition for rehearing, in this proceeding, * * * was of the nature of a supplemental bill. It presented a new situation, a radically different one, which had supervened since the record before the Commission had been closed in September, 1928. It asserted that whatever might be the view of the order when made, and upon that record, a changed economic condition demanded reopening and reconsideration.

* * * * * *

"There can be no question as to the change in conditions upon which the new hearing was asked. Of that change we may take judicial notice. It is the outstanding contemporary fact, dominating thought and action throughout the country.

* * * * * *

"It is plain that a record which was closed in September, 1928—relating to rates on a major description of the traffic of the carriers in a vast territory—cannot be regarded as representative of the conditions existing in 1931. That record pertains to a different economic era and furnishes no adequate criterion of present requirements." 284 U.S. at 260-261, 52 S.Ct. at 149-150.

In United States v. Pierce Auto Freight Lines, 327 U.S. 515, 534-535, 66 S.Ct. 687, 697, 90 L.Ed. 821 (1946), the Court's view of the Atchison case was summarized thus:

"That case, as has been indicated more than once, was `promptly restricted * * * to its special facts, United States v. Northern Pacific Ry. Co., 288 U.S. 490, 53 S.Ct. 406, 77 L.Ed. 914, and it stands virtually alone.' Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 515, 64 S.Ct. 1129, 88 L.Ed. 1420; see also Baltimore & Ohio R. Co. v. United States, 298 U.S. 349, 389 56 S.Ct. 797, 80 L.Ed. 1209. Except in the single instance, it has been held consistently that rehearings before administrative bodies are addressed to their own discretion."

In Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 64 S.Ct. 1129, 88 L.Ed. 1420 (1944) a decision of the Commission involving fares on the Hudson and Manhattan Railroad Company's line between Jersey City and New York City, was in issue. The Price Administrator, representing the Director of Economic Stabilization, petitioned the Commission for the modification of the reopening order which would permit the record to be brought up to date. As to this the Court commented:

"This raises an important but not a new question of administrative law. The Price Administrator's contention is that this record is `stale' and that a fresh record is important. One of the grounds of resistance to administrative orders throughout federal experience with the administrative process has been the claims of private litigants to be entitled to rehearings to bring the record up to date and meanwhile to stall the enforcement of the administrative order. Administrative consideration of evidence—particularly where the evidence is taken by an examiner, his report submitted to the parties, and a hearing held on their

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