United States v. Pierce Auto Freight Lines

• Decision Date: 11 March 1946
• Docket Number: No. 74,74
• Citation: 90 L.Ed. 821,66 S.Ct. 687,327 U.S. 515
• Parties: UNITED STATES et al. v. PIERCE AUTO FREIGHT LINES, Inc., et al
• Court: U.S. Supreme Court

327 U.S. 515

66 S.Ct. 687

90 L.Ed. 821

UNITED STATES et al.

v PIERCE AUTO FREIGHT LINES, Inc., et al.

No. 74.

Argued Jan. 28, 1946.

Decided March 11, 1946.

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

Mr.J. Stanley Payne, of Washington, D.C., for appellants, the United States and Interstate Commerce Commission.

Mr. Donald A. Schafer, of Portland, Or., for appellants, Consolidated Freightways, Inc., et al.

Mr.

[Argument of Counsel from page 516 intentionally omitted] William P. Ellis, of Portland, Or., for appellees.

Mr. Justice RUTLEDGE delivered the opinion of the Court.

The validity of an order of the Interstate Commerce Commission is in question. The order granted to appellants, Consolidated Freightways, Inc., and Oregon-Nevada-California Fast Freight, Inc., certificates of public convenience and necessity authorizing extensions of their operations as motor carriers. Appellees, competing carriers, some of whom are railway affiliated, were protestants in the proceedings before the Commission. They successfully attacked the order in a specially constituted District Court, on grounds questioning the sufficiency of the findings and the evidence, as well as the propriety and fairness of the Commission's procedure. The District Court's decree, 57 F.Supp. 192, 'suspended' the order and remanded the cause to the Commission for rehearing although a stay pending appeal was denied.

The shortened statement of the major thing in controversy is whether the appellants, Consolidated and O.N.C., properly were allowed by the Commission to substitute wholly independent and competing through services between Portland, Oregon, and San Francisco, California, for the service which they jointly rendered between those cities, prior to the filing of these applications, by interchanging freight at intermediate points. The protesting appellees were carriers competing with the joint service of Consolidated and O.N.C. and will be competitors of each, as those companies will be with each other, if the Commission's order is sustained. This fact is the source of the controversy and is important to bear in mind for full understanding of the detailed facts and issues as well as of what is ultimately at stake. Although each ap- pellant originally sought exclusive authority to conduct the proposed through operation in substitution for the former joint service, and thus opposed the other's application, both now seek to sustain the Commission's order, as of course does the Commission itself.

At the time of Consolidated's application in December, 1939, it operated various routes in the Northwest, some extending eastward from the Portland and Seattle areas, in addition to the joint service by in erchange with O.N.C. southward from Portland to San Francisco.¹ Two of these routes, comprising part of the latter service, extended from Portland southerly to Medford and Klamath Falls, both of which lie just north of the Oregon-California boundary and were points of interchange with O.N.C.² In so far as it is now pertinent, Consolidated's application sought permission to extend its operations from Medford and Klamath Falls southward to San Francisco,³ in other words, over the portion of the route previously used in the joint service for O.N.C.'s operations.

Conversely, at the time of O.N.C.'s application in January, 1940, it was operating from San Francisco to Medford and Klamath Falls.⁴ It sought to extend its operations from Medford to Portland and, as an alternative slightly longer route, from Klamath Falls to Portland through Goshen, Oregon.⁵

Thus, in effect, Consolidated and O.N.C. each sought to conduct operations independently throughout the entire distance between Portland and San Francisco.⁶ The occasion for the separate applications was O.N.C.'s refusal to join an association of connecting carriers which Consolidated was sponsoring.⁷

The applications were heard separately, as the statute requires, before different joint boards.⁸ However, because they were so closely related in their common features, the hearings were held at the same places and one application was heard immediately after the other. Each applicant intervened in the proceeding on the other's application, and various parties, including the appellees,⁹ appeared in opposition in both proceedings. The parties stipulated that much of the evidence presented in the O.N.C. hearing should be introduced by reference into the Consolidated record. This included all of the appellees' affirmative evidence in opposition to the two applications. The hearings thus were substantially coordinated, though not technically consolidated, for the common features of the applications.

As neither joint board could agree upon the recommendations to be made, both matters were referred to an examiner.¹⁰ In separate reports he recommended the denial of both applications. Division 5, with one commissioner dissenting, dealt with both in a single report. It reversed the examiner in both cases and ordered that each application be granted.¹¹ Appellees' petition for rehearing was denied. They thereupon brought this suit in the District Court. ¹²

The findings of fact and the court's opinion, 57 F.Supp. 192, disclose that it held the Commission's order invalid on several grounds. One was that 'the Commission considered the separate records as though the case was a consolidated one. Evidence which appeared only in one record was used by the Commission to support general findings in the Report concerning both Consolidated and O.N.C. In each proceeding embraced within the Report and the Commission's order, evidence not offered or received in such proceeding and not a part of the record therein was drawn upon and considered by the Commission.' The court also found that there was no evidence in either record to support the Commission's finding that 'the present and future public convenience and necessity require both the operations' by Consolidated and those by O.N.C. (Emphasis added.) And it further found that at no time in the proceeding had there been notice to the parties, the witnesses, or t e general public that both applications might be granted; that indeed 'the whole basis of the original proceeding before the Joint Boards was the question of whether any through-line operation between San Francisco and Portland should be allowed and, if so, which one of the two separate applications'; and that 'no opportunity was given to plaintiffs to maintain their rights or to present appropriate protests and deferses to the institution of two competing through-line operations between San Francisco and Portland.' (Emphasis added.) Finally the court held that in granting both applications the Commission had not considered the public interest and suggested that its denial of the petition for rehearing was improper.¹³

For all these supposed errors the District Court suspended the Commission's order and remanded the cause 'for rehearing.' In doing so it said: 'This action will be taken in order that all parties may be placed on notice as to what type hearing will be held, whether joint or several, and in order that appropriate findings be made as to the public convenience and necessity which requires the authorization of two new through-lines in competition with each other and in competition with the other facilities, and also as to the ability of Consolidated to initiate and maintain one of such lines in view of present conditions.' (Emphasis added) 57 F.Supp. at page 198.

Obviously the court's objection was not to the manner in which the proceedings were conducted prior to the time when the hearings ended and the Commission took the cases under consideration. Up to this point no fault is found with what was done. The difficulty lay altogether, in the court's view, with the way in which it thought the Commission had considered the cases and reached its conclusions. And this arose entirely from the fact that the Commission disposed of them in a single report, rather than in separate ones for each case; and from the further fact that it concluded that both applications should be granted rather than that both should be denied or one denied and one granted.

We are not informed, of course, whether the court would have reached the same result if the Commission had written separate reports in each case, arriving at the same conclusions, although it seems suggested that any of the other possible results would have been impeccable, whether stated in separate reports or a single one. Obviously it was no sufficient ground for suspending the Commission's order that it chose to write one report rather than two, especially in matters as closely related as these, if the single report together with the findings and the evidence was sufficient to sustain the action taken in each case. It is not uncommon judicial practice to follow this course.

Nor, with those conditions satisfied, could the mere fact that the Commission concluded to grant rather than to deny both applications, or to grant one and deny the other, invalidate its judgment. For each application when it was filed sought to conduct the extended operation which it specified;¹⁴ nothing in either foreclosed the possibility that both might be granted, although for obvious reasons each applicant pposed the granting of the other's extension; and from the beginning it was as much a possible outcome that both applications would be granted as that both would be denied or one be granted and one denied. If therefore the Commission had written separate reports in each case, reaching the same result, it would have been squarely within the issues and within the outcomes comprehended from the beginning; and the only questions for judicial consideration, absent some procedural deviation not now presented, would have been the sufficiency of the findings and the evidence to sustain its action in each case. We think those are the upon questions...