United States v. Maher

• Decision Date: 17 April 1939
• Docket Number: No. 432,432
• Citation: 307 U.S. 148,83 L.Ed. 1162,59 S.Ct. 768
• Parties: UNITED STATES et al. v. MAHER
• Court: U.S. Supreme Court

307 U.S. 148

59 S.Ct. 768

83 L.Ed. 1162

UNITED STATES et al.

v MAHER.

No. 432.

Argued Feb. 6, 1939.

Decided April 17, 1939.

Rehearing Denied May 15, 1939.

See 307 U.S. —-, 59 S.Ct. 831, 83 L.Ed. —-.

Appeal from the District Court of the United States for the District of Oregon.

Messrs. Hugh B. Cox, of Washington, D.C., and Frank Murphy, Atty. Gen., for appellants.

Mr. William L. Harrison, of Portland, Or., for appellee.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

The case is here on appeal, under Section 238 of the Judicial Code as amended, 28 U.S.C. § 345, 28 U.S.C.A. § 345, to review a final decree, setting aside an order of the Interstate Commerce Commission, granted by a district court of three judges under the Motor Carrier Act, 1935, 49 U.S.C.Supp. § 305(h), 49 U.S.C.A. § 305(h), in connection with the Urgent Deficiencies Act of October 22, 1913, 28 U.S.C. § 45, 47a, 28 U.S.C.A. §§ 45, 47a.

The application to the special facts of this case of what is colloquially known as 'the grandfather clause' of the Motor Carrier Act is the substantive question at issue. There is a preliminary jurisdictional problem touching those phases of the relations of the Interstate Commerce Commission to the courts which are implied by the claim that the Commission had issued a 'negative order.'

Section 206 of the Motor Carrier Act, Act of August 9, 1935, 49 Stat. 543, 49 U.S.C.A. § 306, forbids common carriers by motor vehicle subject to its provisions from engaging in interstate operations without a certificate of public convenience and necessity to be issued by the Interstate Commerce Commission under Section 207 of the Act, 49 U.S.C.A. § 307. 'The grandfather clause' of section 206, however, provides that 'if any such carrier * * * was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time, * * * the Commission shall issue such certificate without requiring further proof that public convenience and necessity will be served by such operation.'

On January 24, 1936, the appellee, Maher, filed an application under the 'grandfather clause' for a certificate to engage in the transportation of passengers and baggage over U.S. Highway No. 99 between Portland and Seattle and intermediate points. After a hearing was had before a 'Joint Board' composed of members from the states involved (§§ 203(a)(4) and 205, 49 U.S.C.A. §§ 303(a)(4), 305) at which competing carriers and the Public Utilities Commission of Oregon appeared in opposition to the application, and after a report was filed by the Joint Board with the Inter state Commerce Commission recommending that the application be denied, the Interstate Commerce Commission, Division 5, on October 27, 1937, found the facts to be as follows: From 1931 until May 29, 1936, the appellee had engaged in bona fide 'anywhere-for-hire' operations in Oregon with occasional entries into Washington. There were rare trips to Seattle, no service at all to most of the intervening points, and no showing that passengers were transported on return trips to Portland. On May 29, 1936, the appellee began his regular-route service between Portland and Seattle which he conducted regularly since that time. But upon the institution of the regular-route service between Portland and Seattle the appellee discontinued the 'anywhere-for-hire' operations theretofore conducted. Upon this showing Division 5 found that the service conducted by the appellee since May 29, 1936, was a different service from that conducted by him prior to that time, and therefore concluded that he did not come within 'the grandfather clause.' And so, the Commission denied Maher's application and ordered him 'to cease and desist' from 'all operations' as a common carrier in interstate commerce. Thereupon the appellee filed the present suit in the District Court for the District of Oregon against the United States and the Interstate Commerce Commission, praying that the Commission's order be set aside and 'any construction thereunder' enjoined. The suit was disposed of on the pleadings, the answer of the Commission having incorporated its report and orders. A majority of the District Court entertained jurisdiction and held that the appellee was entitled to an 'anywhere-for-hire' permit under 'the grandfather clause' as well as the regular route permit under Section 207. 23 F.Supp. 810 Circuit Judge Haney found jurisdiction to review the cease and desist order, although not the order denying the certificate of convenience and necessity, but sustained the Commission's view of the Act.

The jurisdictional problem presents another instance of the Interstate Commerce Commission having been invested with power to free a complainant of restrictions placed upon his conduct by a statutory scheme and having definitively rejected the claim for dispensation. The applicant before the Commission then came into court to 'set aside' and 'annul' the 'order' of the Interstate Commerce Commission, claiming that the Commission's action was based on a wrong reading of the authority which the Act of Congress gave it. To the hearing of such a claim there is no jurisdictional barrier, as we have held today in Rochester Telephone Corp. v. United States, 307 U.S. 125, 59 S.Ct. 754, 83 L.Ed. —-.¹

On the merits the case brings into question the validity of the construction placed by the Interstate Commerce Commission upon Section 206(a) of the Motor Carrier Act relieving carriers operating on June 1, 1935, under the circumstances defined by the terms of Section 206(a) from the requirements of Section 207.² The latter section requires a find- ing by the Commission that the granting of such a certificate is demanded by public convenience and necessity. But under Section 206(a) the Commission must issue 'such certificate without requiring further proof that public convenience and necessity will be served' by an applicant who 'was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time'. By this legislation Congress responded to the felt need for regulating interstate motor transportation through familiar administrative devices, while at the same time it satisfied the dictates of fairness by affording sanction for enterprises theretofore established. Whether an applicant seeking ex- emption had in fact been in operation within the immunizing period of the statute was bound to raise controverted matters of fact. Their determination Congress entrusted to the Commission. The legal issues presented by this record are relatively simple once the somewhat confused operations of the appellee's business are clearly defined.

Invoking the 'grandfather clause' the appellee sought from the Commission a certificate authorizing continuance of his regular service between the fixed termini of Portland and Seattle on U.S. Highway 99. But the Commission found that the regular operation over this route had only been instituted on May 29, 1936. Theretofore, and including the crucial period prior to June 1, 1935, the appellee had been engaged in quite different services from those for which it asked a certificate, namely, 'an irregular, so-called anywhere-for-hire operation in Oregon with occasional trips to points in Washington' over any route adapted to a particular trip, but using at least for part of the distance U.S. Highway 99 on trips to Washington. These irregular operations were discontinued after the appellee's regular route was established. Applying these findings which are binding here, the Commission ruled that the appellee did not bring himself within the privilege of the 'grandfather...