TSC Motor Freight Lines, Inc. v. United States

• Decision Date: 01 August 1960
• Docket Number: Civ. A. No. 12620.
• Citation: 186 F. Supp. 777
• Parties: T.S.C. MOTOR FREIGHT LINES, INC., and Herrin Transportation Co., Inc., Plaintiffs, and Central Freight Lines, Inc., and East Texas Motor Freight Lines, Inc., Intervening Plaintiffs, v. UNITED STATES of America, Interstate Commerce Commission, Southern-Plaza Express, Inc., and Strickland Transportation Co., Inc., Defendants.
• Court: U.S. District Court — Southern District of Texas

186 F. Supp. 777

T.S.C. MOTOR FREIGHT LINES, INC., and Herrin Transportation Co., Inc., Plaintiffs, and Central Freight Lines, Inc., and East Texas Motor Freight Lines, Inc., Intervening Plaintiffs, v. UNITED STATES of America, Interstate Commerce Commission, Southern-Plaza Express, Inc., and Strickland Transportation Co., Inc., Defendants.

Civ. A. No. 12620.

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

August 1, 1960.

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COPYRIGHT MATERIAL OMITTED

Reagan Sayers, Jerry C. Prestridge, Lloyd Scurlock, Rawlings, Sayers, Scurlock & Eidson, Fort Worth, Tex., Leroy Hallman, Phinney & Hallman, Dallas, Tex., Jack Binion, Butler, Binion, Rice & Cook, Houston, Tex., for plaintiffs.

A. J. Watkins, Baker, Botts, Andrews & Shepherd, Houston, Tex., Phillip Robinson, Smith, Robinson & Starnes, Austin, Tex., for intervening plaintiffs.

Roger A. Clark, Washington, D. C., Robert A. Bicks, Acting Asst. Atty. Gen., William B. Butler, U. S. Atty., S. D., Texas, Houston, Tex., for defendant, United States.

Robert W. Ginnane, Gen. Counsel, James Y. Piper, Asst. Gen. Counsel, I. C. C., Washington, D. C., for defendant Interstate Commerce Commission.

Ewell H. Muse, Jr., Austin, Tex., W. N. Arnold, Jr., Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., for defendant Strickland Transp. Co.

Clarence D. Todd, Todd, Dillon & Singer, Washington, D. C., Dwight H. Austin, Liddell, Austin, Dawson & Huggins, Houston, Tex., Charles F. Riddle, Todd, Dillon & Singer, Washington, D. C., for defendant Southern-Plaza Express, Inc.

Before BROWN, Circuit Judge, and CONNALLY and INGRAHAM, District Judges.

JOHN R. BROWN, Circuit Judge.

This is an action by four motor carriers (TSC, Herrin, Central and East Texas)¹ to set aside certificates of public convenience and necessity, issued under § 207(a) of the ICC Act, 49 U.S.C.A. § 307(a), authorizing two additional motor carriers (Southern-Plaza and Strickland)² to operate between Houston and New Orleans.³ We uphold the awards, but with some modification, against a succession of attacks.

In 1954 Strickland applied for a certificate of public convenience and necessity for motor carriage of general commodities between Houston and New Orleans,⁴ and in 1955 Southern-Plaza applied for a similar authority.⁵ This followed on the heels of a recent major but unsuccessful attempt of these carriers to secure authority to operate between Houston and New Orleans.⁶ Strickland's application sought Houston-New Orleans authority over two routes, the one via Beaumont, Texas, and Lafayette, Louisiana, called the "southern" route, and the other via Beaumont and Baton Rouge, Louisiana, called the "northern" route. The Southern-Plaza application sought authority over the southern route only.

Both of the applicants, Strickland and Southern-Plaza, are large trucking concerns with operations extending into several states. Both serve a number of major cities in Texas, such as, Dallas, Fort Worth, San Antonio, and Houston and operate between those points (among others) and such centers as St. Louis and Chicago. Strickland now holds authority to operate from Houston to Beaumont, over the route involved here, but not in the reverse direction.

After extensive hearings before Hearing Examiner Boss, the Examiner in a single report served in October 1957 recommended orders denying both applications. Exceptions and replies to the Examiner's report were filed, and the proceedings in the usual course were referred to Division 1 of the Commission "for action thereon." Thereafter, without any public report by Division 1 the matter was referred to the entire Commission. By a final report⁷ issued October 14, 1958, the full Commission, while substantially adopting the Examiner's detailed statement of the facts, rejected the Examiner's recommendation and granted both applications. Strickland was awarded the so-called "northern" route⁸ between Houston and New Orleans and Southern-Plaza, the "southern" route.⁹

Petitions for reconsideration and further hearing filed by the protesting carriers were denied in April 1959 "for the reason that the findings of the Commission are in accordance with the evidence and the applicable law." The Commission made no other basic findings or conclusions in connection with its order denying reconsideration.

The plaintiffs then filed this proceeding attacking the merits of the grants to Strickland and Southern-Plaza and also much of the procedure of the Commission in its handling of these applications. Specifically, the plaintiffs here complain of the procedure by which the Commission (1) issued its report without first having had Division 1 issue a report on the applications, (2) issued its report as the result of "constructive" sessions at which the members were not physically present, (3) allegedly had certain of its Attorney-Advisers, who were not Hearing Examiners, review the proceedings and make recommendations to the Commissioner, and (4) failed to make any additional findings on the petition for reconsideration and further hearing.

I. Procedure in Handling the Applications

A. Action by Division 1

After the Hearing Examiner issued his report recommending denial of both applications, the matters (including exceptions to the report and replies) were submitted to Division 1 of the Commission "for action thereon." This is the normal procedure under the Commission's organizational rules¹⁰ which delegate § 207 proceedings to Division 1. Normally the division renders a decision and issues a dispositive report and order subject to the right of the parties to petition for reconsideration by the entire Commission.¹¹ Departing from the usual course here, however, Division 1 did not make an official formal report. The proceedings were rather submitted directly to the entire Commission. Plaintiffs contend that the matters were not properly before the full Commission and that the Commission violated its organizational rules.

The Commission's organizational rules allow a division to "call upon the whole Commission for advice and counsel, or for consideration of any case or question by * * * additional Commissioners * * *." By the same token, "the Commission may recall and bring before it as such any case, matter or question" pending before any division.¹² The Commission never did enter an official order of recall. It seems to be generally assumed that the impetus for Commission action came from Division 1 who purported to certify the whole case to the full Commission.¹³

Plaintiffs have several objections to the purported certification by Division 1. First they claim that there is no authority for such a certification of the entire case. That can only be accomplished by an order of recall by the entire Commission. Second, even assuming that the Division could certify the whole case, the effort was ineffective here since the decision to certify was not properly recorded. Giving substance to their objections, plaintiffs argue that they had proceeded on the basis of Division action. Thus, briefs and other matters were prepared with Division 1, not the entire Commission, in mind. Had they known that it was to be the full Commission who would decide the case, the approach may have been quite different. Also, they contend that due to the abdication of Division 1, the protestants were deprived of a favorable¹⁴ report by the Division or an opportunity, if the report were unfavorable,¹⁵ to file a petition for reconsideration by the entire Commission together with additional briefs pointing out the errors of the Division report.

The certification of the cases to the Commission by Division 1 complies in all substantial respects with the Commission's organizational rules. This is so whether viewed as either a request by Division 1 for "advice and counsel" or as the assignment of additional Commissioners to consider the case. In either event, when the Commission accepted the certification and undertook to resolve the issues presented, its action in effect amounted to a recall of that matter from the Division. The rule—whose purpose was to announce the orderly internal procedure of the Commission—provided its own exception: namely, consideration by the entire Commission whenever they deemed it expedient. Whether the initiating force for such a consideration by the entire Commission came from the Division or the Commission seems unimportant.

The vote to request consideration by the entire Commission was recorded in a memorandum prepared by the clearance clerk for Division 1, note 13, supra. There is no minute entry reflecting the action and the clerk's memorandum was not publicly recorded or served on the parties. Plaintiffs argue the action was a nullity in violation of § 17(3) of the ICC Act which provides that "Every vote and official act of the Commission, or any division * * * shall be entered of record, and such record shall be made public upon the request of any party interested." The purpose of this provision is to insure that parties have an opportunity to know of any action which may affect their rights. It is especially necessary in cases in which an order of the division may become final within 20 days if no exceptions are filed by the parties.¹⁶ It is difficult to see how the plaintiffs could have been prejudiced by the failure to record the action of Division 1 since it resulted in a consideration by the entire Commission of the proceedings. What the whole Commission has delegated, it obviously could recall and consider as a body.¹⁷ Moreover, the protestants could not have challenged the right of the Commission to take the whole case. They lost no right to complain nor to complain by a certain time. In the absence of prejudice, the action of the Commission must stand. See § 10(e), 5 U.S. C.A. § 1009(e); ABC Freight Forwarding Corp. v. United States, D.C.S.D.N.Y. 1959, 169 F.Supp. 403, 406, citing Market Street Railway Co. v. Railroad Commission, 1945...