Twin City Freight, Inc. v. United States, 4-71 Civ. 619.

• Decision Date: 05 December 1972
• Docket Number: No. 4-71 Civ. 619.,4-71 Civ. 619.
• Parties: TWIN CITY FREIGHT, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, and Alfred Moen and Earl Moen, dba Moen Truck Line, Intervenors.
• Court: U.S. District Court — District of Minnesota

360 F. Supp. 709

TWIN CITY FREIGHT, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants and Alfred Moen and Earl Moen, dba Moen Truck Line, Intervenors.

No. 4-71 Civ. 619.

United States District Court, D. Minnesota, Fourth Division.

December 5, 1972.

James L. Nelson, St. Paul, Minn., for plaintiff.

Robt. G. Renner, U. S. Atty. by Peter J. Thompson, Asst. U. S. Atty., Minneapolis, Minn., for defendant United States.

Fritz R. Kahn, Gen. Counsel by Theodore C. Knappen, Interstate Commerce Comm., Washington, D. C., for defendant Interstate Commerce Comm.

Donald A. Morken and Robert D. Gisvold, Minneapolis, Minn., for intervenors.

Before HEANY, Circuit Judge, DEVITT, Chief Judge, and LORD, District Judge.

MEMORANDUM AND ORDER

MILES W. LORD, District Judge.

This is an action to set aside, vacate, and annul an order of the Interstate Commerce Commission granting the Intervening defendants, Alfred Moen and Earl Moen, d. b. a. Moen Truck Line, a certificate of public convenience and necessity to transport general commodities, (except classes A and B explosives, articles of unusual value, household goods as defined by the Commission, commodities in bulk, and those requiring special equipment), between Fargo, North Dakota and other points in North Dakota. This suit is brought pursuant to Section 205(g) of the Interstate Commerce Act, 49 U.S.C. §§ 305(g), (h), and 17; Section 10 of the Administrative Procedure Act, 5 U.S.C. § 1009; and 28 U.S.C. §§ 1336, 1398, 2321, 2322, 2323, 2324. A three judge court was convened pursuant to 28 U.S.C. §§ 2284, 2325.

On August 12, 1970, Alfred Moen and his son, Earl Moen, doing business as Moen Truck Line, filed an application with the Interstate Commerce Commission seeking authority to operate as a motor common carrier of general commodities over irregular routes between Fargo, North Dakota and other points in Cavalier, Walsh, and Ramsey Counties, North Dakota. At the time of the application, Moen held intrastate, but no interstate, authority from the ICC.

On November 10, 1970, the Commission entered an order directing that the application be handled under the modified procedure. 49 C.F.R. 1100.45-54, and the matter was assigned to a Review Board for consideration. A verified statement in support of the application was duly filed by applicant Alfred Moen on behalf of the partnership to which were attached verified statements of 14 shippers and 4 interstate motor carriers, all with limited authority to operate in North Dakota. A verified statement in opposition to the application was filed by plaintiff, Twin City Freight, Inc., which consisted of an affidavit submitted by Robert W. Elsholtz, Vice-President of Twin City Freight. It was Twin City's position, as represented in the verified statement, that they held interstate authority in the same area sought to be served by Moen, that their service adequately served the needs in this area, and that there was no public necessity for granting Moen's application. Moen responded with verified statements of six shippers supporting his claim that there was inadequate service in the area.

Based on the written statements, the Commission's Review Board No. 2, comprised of three Commission employees, determined that the application should be granted. The Commission specifically found that the "Applicants have shown a need for a service, that protestant has not fulfilled."¹ Emphasizing the fact that "existing service is inadequate," the Board concluded that Moen's proposed service was required by the public convenience and necessity.²

Thereafter, plaintiff filed a petition for reconsideration, which was denied by Division 1 of the Commission, acting as an appeal board. At no time in the proceeding did plaintiff, in any manner, object to or challenge the right of the Review Board, as opposed to a Joint Board, to decide the case initially.

Plaintiff subsequently filed its original complaint with this Court on December 3, 1971 seeking to enjoin the Commission's order on the single ground that the Commission's finding that public convenience and necessity requires the granting of Moen's application, is not supported by substantial evidence. Plaintiff's subsequent request for a temporary restraining order was denied. Plaintiff then filed an amended complaint with the Court, dated March 24, 1972, seeking relief on the additional ground that the Commission erred and was without jurisdiction under 49 U.S.C. § 305³ (a) and (b) in referring the case initially to a Review Board rather than to a Joint Board.

The scope of review of orders of the Interstate Commerce Commission is well defined and narrowly limited. As stated in United States v. Pierce Auto Freight Lines, 327 U.S. 515, 536, 66 S. Ct. 687, 698, 90 L.Ed. 821 (1946) the function of a reviewing court:

. . . is limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done. Unless in some specific respect there has been prejudicial departure from requirements of the law or abuse of the Commission's discretion, the reviewing court is without authority to intervene. It cannot substitute its own view concerning what should be done, whether with reference to competitive considerations or others, for the Commission's judgment upon matters committed to its determination, if that has support in the record and the applicable law. (footnote omitted)

This Court cannot substitute its judgment for the judgment of the Commission. See also, Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 286-287, 54 S.Ct. 692, 78 L.Ed. 1260 (1934); Quickie Transport Co. v. United States, 169 F.Supp. 826, 828 (D. Minn.1959). Hence, inquiry in the instant case must be limited to whether the Commission reached a rational conclusion, based on substantial evidence. Illinois Central R. R. v. Norfolk & Western Ry., 385 U.S. 57, 66, 87 S.Ct. 255, 17 L.Ed.2d 162 (1966); Consolo v. Federal Communications Commission, 383 U.S. 607, 619-621, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

Section 207(a) of the Interstate Commerce Act confers authority upon the Commission to issue a certificate of public convenience and necessity to a motor carrier. The relevant part of the statute reads as follows:

. . . 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 part 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; otherwise such application shall be denied.

Based on the record before the Commission, there was ample, if not overwhelming, evidence from which the Commission could draw the conclusion that the application should be granted. The question of the fitness of Moen cannot seriously be disputed. As evidence of public necessity, there were verified statements of over fourteen shippers, all supporting the claim that present service in the area was inadequate. Four interstate motor carriers who interlined freight with other truckers at Fargo because of service restrictions in their own certificates, corroborated the need for improved service. The Commission's determination that public necessity required that Moen's application be granted, was based on substantial evidence.

Plaintiff asserts that the evidence submitted was not only insufficient but also failed to comply with the evidentiary guidelines as set forth in John Novak Contract Carrier Application, 103 M.C.C. 555, 557 (1967) in which the Commission held that shippers supporting an application must show the commodities shipped or received, the points within which that traffic moved, the volume of freight to be tendered to the applicant, the present transportation services used, and the deficiencies in existing service. As explained in Ashworth Transfer Inc. Extension —Explosives, 111 M.C.C. 652, 661 (1970), the purpose of the evidentiary guidelines is to provide the Commission with enough information to determine what, if any, the transportation needs of the shippers really are. The guidelines are not to serve as procedural hurdles in the decision making process of the Commission. In American Farm Lines v. Black Ball Freight Service, 397 U.S. 532, 90 S.Ct. 1288, 25 L.Ed.2d 547 (1970) the Supreme Court upheld a Commission grant of temporary motor authority even though the applicant had not strictly complied with evidentiary rules and guidelines that the agency had promulgated. The Court explained at 538, 539, 90 S.Ct. at 1292:

We agree with the Commission that the rules were promulgated for the purpose of providing the "necessary information" for the Commission "to reach an informed and equitable decision" on temporary authority applications. ICC Policy Release of January 23, 1968. The Commission stated that requests for temporary authority would be turned down "if the applications do not adequately comply with . . . rules." Ibid. The rules were not intended primarily to confer important procedural benefits upon individuals in the face of otherwise unfettered discretion as in Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012; nor is this a case in which an agency required by rule to exercise independent discretion has failed to do so. United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681; Yellin v. United States, 374 U.S. 109, 83 S.Ct. 1828, 10 L.Ed.2d 778. Thus there is no reason to exempt this case from the general principle that "it is always within the discretion of a court or an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a

...