Towne Services House. Goods Transp. Co. v. United States

Citation329 F. Supp. 815
Decision Date14 July 1971
Docket NumberCiv. A. No. A-70-CA-114.
PartiesTOWNE SERVICES HOUSEHOLD GOODS TRANSPORTATION CO., Inc. v. UNITED STATES of America and the Interstate Commerce Commission.
CourtUnited States District Courts. 5th Circuit. Western District of Texas

Herbert Burstein, New York City, James K. Presnal, Austin, Tex., for plaintiff.

Richard W. McClaren, Asst. Atty. Gen., John H. D. Wigger, Atty., U. S. Dept. of Justice, Washington, D. C., Seagal V. Wheatley, U. S. Atty., San Antonio, Tex., for the United States.

Fritz R. Kahn, Gen. Counsel, Betty Jo Christian, Atty., I.C.C., Washington, D. C., for the I.C.C.

Alan F. Wohlstetter, Denning & Wohlstetter, Washington, D. C., Philip Robinson, Austin, Tex., for Wheaton Van Lines, Inc.

G. M. Rebman, Rebman & Aschemeyer, St. Louis, Mo., Ewell H. Muse, Jr., Austin, Tex., for United Van Lines, Inc.

James W. Tallant, Gen. Counsel, Chicago, Ill., Philip Robinson, Austin, Tex., for Allied Van Lines, Inc.

James L. Beatty, Indianapolis, Ind., Philip Robinson, Austin, Tex., for Mayflower Transit, Inc.

Before THORNBERRY, Circuit Judge, and ROBERTS and WOOD, District Judges.

OPINION

JOHN H. WOOD, Jr., District Judge:

This is an action by plaintiff to annul, vacate, void, enjoin and set aside an Order of The Interstate Commerce Commission (Commission) required to be heard by a three-Judge Court under 28 U.S.C., Sec. 2325. Plaintiff Towne, a motor common carrier of household goods, filed an application with the Commission for a Certificate of Public Convenience and Necessity, authorizing the transportation of household goods as a motor common carrier in interstate commerce between (1) points in Texas; and (2) between points in Texas, on the one hand, and, on the other, points in five southeastern states. The application was opposed by the intervening defendants ("intervenors"). Hearings were held on Towne's application in October, 1968 and in April, 1969. The Hearing Examiner recommended approval of the application to the extent that authority was sought between points within the State of Texas, but recommended denial of the application insofar as it sought authority between Texas and the five southeastern States. Exceptions to the Examiner's Recommended Report and Order were filed by intervenors, and the Commission (Review Board Number 2, "Board") by order dated July 22, 1969, adopted the Examiner's Statement of Facts, Conclusions and Findings as its own.

Petitions for reconsideration were then filed by intervenors and in January, 1970, the Commission reopened the proceedings for reconsideration. On February 24, 1970, Division 1, acting as an Appellate Division, approved the application for authority between points in the State of Texas subject to what is known as a "Kingpak" type restriction which will be explained, infra.

Thereupon, Towne filed a Petition for Reconsideration which was denied by an Order of the Commission, Division 1, acting as an Appellate Division, entered September 10, 1970. Plaintiff then instituted this proceeding to vacate and set aside that portion of the Commission's Order approving the application subject to such restriction.

The plaintiff filed this suit alleging that the restriction imposed by the Commission "was and is contrary to law, erroneous, arbitrary, capricious and not supported by a reliable, probative and substantial evidence of record". The plaintiff further contends that the Commission failed to properly weigh and consider the Recommended Order of the Hearing Examiner and the Decision and Order of the Board which approved the application for service between points in the State of Texas without any such "Kingpak" restriction.

By way of background, it is undisputed that traditionally the transportation of household goods has been handled by the so-called household goods carriers, operating under licenses issued by the Commission. Under this method of shipment, the goods are loaded onto a van at the point of origin, transported by highway, and unloaded at destination. Recently, however, a competing method of handling household goods movements has arisen, primarily in connection with overseas shipments. This method, arranged primarily by freight forwarders exempt from Commission regulation, involves the packing and crating of the goods in a large container at or near the point of origin, transportation of the container by regulated motor, rail and ocean carrier, and unpacking of the container at the final destination.

The freight forwarders who arrange the containerized movements are exempt from Commission regulation. For a number of years it was assumed that the motor carriers who performed the terminal operations on behalf of the freight forwarder (i. e., the pickup and delivery service and the packing, crating, and containerization at the origin or the unpacking, uncrating and decontainerization at the destinations) were also exempt. However, in Kingpak, Inc., Investigation of Operation, 103 M.C.C. 318, the Commission held that motor carriers performing such services are subject to the certificate requirements of the Interstate Commerce Act. The Kingpak decision was sustained in Household Goods Carriers Bureau v. United States, 288 F.Supp. 641 (N.D.Calif.1968), affirmed per curiam 393 U.S. 265, 89 S.Ct. 477, 21 L.Ed.2d 426. As a result of the Kingpak decision, the Commission has issued a number of certificates, based upon findings of public convenience and necessity, authorizing the performance of the type of service described above. In order to insure that such carriers "are authorized to perform services capable of meeting fully the transportation needs of the shipping public, without, at the same time, also enabling the performance of services for which no need has been shown and which are available from other sources" (Central Forwarding, Inc., Extension—Household Goods, 107 M.C.C. 706, 716 (1968), the Commission framed a commodity description tailored to the type of service described above. It is this type of certificate—generally known as a "Kingpak-type"—that was granted to the plaintiff in this case, and to which restricted certificate Towne objects.

ANALYSIS OF EVIDENCE OF SUPPORTING CARRIERS

The evidence adduced by the plaintiff before the Examiner and considered by the Commission can be divided into three broad categories which will be discussed briefly as follows:

(1) Freight forwarders. Three of these testified that they desired plaintiff's proposed service because of delays in pickup and interchanges, inadequate equipment, and otherwise undependable service experienced with the general commodity carriers they had been using. The plaintiff readily admits that the testimony of the three Freight Forwarders and Yellow Freight System (carrier of general commodities) was limited to the need of each for a service in the handling of containerized household goods and the "Kingpack" certificate which was granted in this case and which would satisfy the needs of each.
(2) National account shippers. Three shippers testified that they desired plaintiff's proposed interstate service because of delays experienced with other carriers and with plaintiff because of the Jefferson-Orange County gateway1 plaintiff had to use under the certificate it then possessed. The testimony of the three National Account Shippers was limited solely to that part of the application seeking authority between Texas and one or more of the Southeastern States, the denial of which certificate was not appealed, and is thus not relevant to this suit. In essence, these witnesses admitted that they were merely "trying to help out" plaintiff with no genuine need for this service which could not be readily met by existing carriers.
(3) Household goods carriers. All five of these supported plaintiff's application for unrestricted household goods authority between points in Texas, but their testimony was in the main limited to the desirability and convenience of the proposed service to them for the accumulation and distribution of small shipments between interline points in Texas and other points in Texas. One of these witnesses, Washburn Storage Company, did testify that it knew of no other company presently offering this type of service. The support of the five Household Carriers who are authorized to render complete service between all points in Texas is based upon a desire to avoid handling traffic they consider "undesirable".
In effect, these carriers would use the applicant to avoid their common carrier obligations under section 216(b) of the Act, 49 U.S.C. 316(b), which requires them to render continuous and adequate service to the shipping public under their certificates. See V. O. Lawson—Revocation, 105 M.C.C. 880 (1967).
This falls far short of establishing a public convenience and necessity for the additional service sought by Towne.2
As far as a public convenience and necessity is concerned, plaintiff's own supporting witnesses concede that the additional handling of the furniture contemplated by Towne would increase the likelihood of damage to the furniture and other goods being moved and also add to the probability that more of the shipper's goods would be lost or misrouted to the distinct inconvenience of the shipper.

After Plaintiff's Petition for Reconsideration was denied, this suit was filed.

STATUTE INVOLVED

Section 207(a) of the Interstate Commerce Act, 49 U.S.C. Sec. 307(a), provides in pertinent part:

"* * * a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operations covered by the application, if it is found that the applicant is fit, willing, and able properly to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, to the extent to be authorized by the certificate, is or will be required by the present or future public convenience and necessity;
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4 cases
  • Frozen Foods Express, Inc. v. United States
    • United States
    • U.S. District Court — Western District of Texas
    • 28 Junio 1972
    ...the scope of judicial review of the Commission's Orders is strictly limited. 5 U.S.C. § 706; Towne Services Household Goods Transp. Co. v. United States, 329 F.Supp. 815, 819 (W.D.Tex.1971); Braswell Motor Freight Lines, Inc. v. United States, 271 F.Supp. 906, 911-912 (W.D.Tex. 1967); aff'd......
  • Engel Van Lines, Inc. v. United States
    • United States
    • U.S. District Court — District of New Jersey
    • 21 Febrero 1974
    ...Ry. v. United States, 272 U.S. 658, 665-666, 47 S.Ct. 222, 225, 71 L.Ed. 463 (1926). Also see Towne Services Household Goods Transp. Co. v. United States, 329 F.Supp. 815, 820 (W.D.Tex. 1971); Akers Motor Lines, Inc. v. United States, 352 F.Supp. 606, 609 (W.D. N.C.1973).6 It is clear that ......
  • Cartwright Van Lines, Inc. v. United States, 72 CV 122 W-4.
    • United States
    • U.S. District Court — Western District of Missouri
    • 4 Agosto 1975
    ...favorable conclusion that was accorded the applications in the Fernstrom and King cases." And in Towne Services Household Goods Transportation v. United States, 329 F.Supp. 815 (W.D.Tex., 1971) a similar contention was made. At page 820, the district court responded, "A basic premise of pla......
  • Greenstein Trucking Company v. United States
    • United States
    • U.S. District Court — Northern District of Georgia
    • 5 Junio 1972
    ...courts have consistently applied these standards in reviewing orders of the Commission. E. g., Towne Services Household Goods Transportation Co. v. United States, 329 F. Supp. 815 (W.D.Tex.1971); Mitchell Bros. Truck Lines v. United States, 327 F.Supp. 796 (D.Ore.1971); Superior Trucking Co......

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