Texas Mexican Railway Company v. United States

• Decision Date: 10 February 1966
• Docket Number: Civ. A. No. 65-B-48.
• Parties: The TEXAS MEXICAN RAILWAY COMPANY et al. v. The UNITED STATES of America et al.
• Court: U.S. District Court — Southern District of Texas

250 F. Supp. 946

The TEXAS MEXICAN RAILWAY COMPANY et al. v. The UNITED STATES of America et al.

Civ. A. No. 65-B-48.

United States District Court S. D. Texas, Brownsville Division.

February 10, 1966.

Phillip Robinson, James, Robinson & Starnes and Ewell H. Muse, Jr., Austin, Tex., Reagan Sayers and Rawlings, Sayers, Scurlock & Eidson, Fort Worth, Tex., for the carriers.

Manny H. Smith, Interstate Commerce Commission, Washington, D. C., Donald F. Turner, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Woodrow B. Seals, U. S. Atty., Houston, Tex., John H. D. Wigger, Dept. of Justice, Washington, D. C., Robert W. Ginnane, Gen. Counsel, Interstate Commerce Commission, Washington, D. C., Paul Coyle, Washington, D. C., Homero M. Lopez, Asst. U. S. Atty., Brownsville, Tex., for Interstate Commerce Commission.

Leroy Hallman, Jr., Dallas, Tex., for defendant.

Beverly S. Simms, Washington, D. C., for the United States (Interstate Commerce Commission).

Elmore H. Borchers, Laredo, Tex., and Charles L. Ford, Austin, Tex., for Texas Mexican Railway Co.

Rollo E. Kidwell, Dallas, Tex., for East Texas Motor Freight Line.

Before THORNBERRY, Circuit Judge, and GARZA and NOEL, District Judges.

GARZA, District Judge.

This is an action before a three judge court under 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325; 49 U.S.C. §§ 17(9), 305 (g), (h); and 5 U.S.C. § 1009, to set aside a decision and order of the Interstate Commerce Commission, Division 1, of March 29, 1965, granting a certificate of public convenience and necessity to the applicant, Transportes Azteca, issued under § 207(a) of the Interstate Commerce Act, 49 U.S.C. § 307(a). This order granted a certificate authorizing operation by applicant as a motor freight carrier in foreign commerce over irregular routes of general commodities with certain exceptions between Newark, New Jersey, and Brownsville, Texas.

On November 30, 1961, applicant, a New Jersey corporation, applied for a certificate, and oral hearings were conducted by Hearing Examiner Francis A. Welch on September 13, 1962, at Newark, on February 4 and 5, 1963, at New York City, and on March 2 and 3, 1964, at San Antonio, Texas. Some twenty-nine rail and motor carriers opposed the application, four of which withdrew their opposition after it was amended.

By decision and order of March 29, 1965, Division 1 of the Commission unanimously affirmed and adopted the report and recommended order of the examiner, and conditioned the issuance of an appropriate certificate upon compliance by applicant with the requirements of §§ 215, 217 and 221(c) of the ICC Act within ninety days after the date of service or within such additional time as may be authorized by the Commission. This order was served on April 7, 1965, and the ninety days expired on July 6, 1965. The Commission denied petitions by certain protestants asking it to find that the case involved an issue of general transportation importance and, therefore, should be reviewed by the Commission en banc.

Nine protesting rail and motor carriers filed this action on July 9, 1965, on which date this Court granted a temporary restraining order suspending the enforcement and execution of the decision and order of the Commission, Division 1. Applicant was granted leave to intervene as a defendant and its motion to dissolve the temporary restraining order was denied, after hearing.

The applicant's proposed operation originally involved the handling of traffic moving from the Northeast United States to points in Mexico by through movement in sealed trailers, in bond, with Customs clearance being obtained at interior Mexican points. Not having obtained permission from the Mexican government for the in-bond movement of trailers through the port of entry at Brownsville, however, applicant proposed to effect trailer interchange at Brownsville with a connecting Mexican motor carrier with Customs clearance being obtained at the Border. Applicant will assist shippers in the preparation of the required documents and the obtaining of necessary permits and certifications to eliminate delays in the clearance of southbound shipments. Thus on southbound traffic applicant would furnish through-trailer service from Newark to points in Mexico with interlining of the trailers and clearing of Mexican Customs at the Border. Northbound trailers would be interlined at the Border, but the examiner found no apparent obstacle to in-bond service from Mexico to Newark.

The president of the applicant corporation, Bernard F. Flynn, Jr., has been engaged as an operator of a bus line, as a transportation consultant, and as an attorney practicing before the Interstate Commerce Commission. He is chairman of the Transportation Committee of the Mexican Chamber of Commerce of the United States, Inc., of Newark, and was found to be informed about transportation conditions, requirements and operations in Mexico, as well as the handling of traffic between Mexico and the United States through Customs. Although the corporation is presently a "shell" which must obtain a franchise before actually going into business, applicant contended that its stockholders, including Mr. Flynn, are able to advance additional moneys as needed.

Nine supporting shipper witnesses testified on behalf of the application as to the commodities now shipped to and from Mexico and methods of transportation utilized. Their support was primarily based on the expectation of obtaining faster service, reduction or elimination of delays in clearing Customs at the Border, stricter control over the movement of their traffic, with resulting convenience in tracing shipments and fixing responsibility for loss or damage, avoidance of interchange and reduction in the number of handlings to which their traffic is presently subjected.

After a detailed analysis of the applicant, the proposed operation, the testimony of the witnesses for all parties and the contentions, the examiner in his report and order discussed fully and made findings on the issues of whether the proposed operation is responsive to a public need which cannot be met adequately by existing transportation facilities, whether applicant can perform such operation without adversely affecting the operations of existing carriers contrary to the public interest, and whether applicant is fit, willing and able properly to perform the proposed service and to conform to the requirements of the Act and the Commission's rules and regulations thereunder.

Briefly stated, the examiner concluded that a striking difference existed between the proposed service and that afforded by the existing carriers, since applicant would be the only carrier providing through-trailer service for southbound traffic to Mexico with interlining of the trailers and clearing of Mexican Customs at the Border, and through-trailer in-bond service on northbound traffic from Mexico to Newark. He also found distinctive the assistance to be afforded shippers in the preparation of documents and obtaining of permits and certifications to expedite southbound shipments, reduce much of the considerable rehandling of freight at the Border, and eliminate the need for a Customs broker. There presently is no through-trailer motor carrier service available between the Newark area and points in Mexico, nor is there single line motor service between Newark and any point on the Texas-Mexican Border, including Brownsville. Present traffic involves at least one interchange between existing carriers.

"As a result of the foregoing review of the proposed service and existing motor service, it is readily apparent that the former not only would be a substantial improvement over the latter, principally by speeding up the through movement of traffic between the United States and Mexico, but would constitute, in effect, a new and unique service not presently available to the shipping public, viz., a specialized through-trailer motor service dedicated exclusively to the movement of traffic in foreign commerce to and from Mexico."—Report and Order of Examiner, Plaintiffs' Exhibit 4, p. 30.

Noting that applicant had not produced numerous supporting shippers in these proceedings, the examiner nevertheless determined that their testimony constituted a representative showing, and repetitive and cumulative evidence was both unnecessary and undesirable. The preference of these shippers at the present time is for freight forwarder service which generally utilizes the rails but that also uses water carrier, rail, motor, air freight, railway express, and parcel post service.

"Thus it is the examiner's conclusion that the evidence of the supporting shippers is sufficiently representative of the shipping public's

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