United States v. Texas Pacific Motor Transport Co Regular Common Carrier Conference of American Trucking Ass Ns, Inc v. Texas Pacific Motor Transport Co v. 8212 1950

• Decision Date: 26 February 1951
• Docket Number: Nos. 38,39,s. 38
• Citation: 95 L.Ed. 409,71 S.Ct. 422,340 U.S. 450
• Parties: UNITED STATES et al. v. TEXAS & PACIFIC MOTOR TRANSPORT CO. REGULAR COMMON CARRIER CONFERENCE OF AMERICAN TRUCKING ASS'NS, INC. v. TEXAS & PACIFIC MOTOR TRANSPORT CO. Argued Nov. 7—8, 1950
• Court: U.S. Supreme Court

340 U.S. 450

71 S.Ct. 422

95 L.Ed. 409

UNITED STATES et al.

v TEXAS & PACIFIC MOTOR TRANSPORT CO.

REGULAR COMMON CARRIER CONFERENCE OF AMERICAN

TRUCKING ASS'NS, INC.

v. TEXAS & PACIFIC MOTOR TRANSPORT CO.

Nos. 38, 39.

Argued Nov. 7—8, 1950.

Decided Feb. 26, 1951.

Rehearing Denied April 9, 1951.

See 341 U.S. 906, 71 S.Ct. 609.

Mr. Daniel W. Knowlton, Washington, D.C., for the United States and Interstate Commerce Commission.

Mr. Frank C. Brooks, Dallas, Tex., for Regular Common Carrier Conference of American Trucking Associations, Inc.

Mr. J. T. Suggs, Dallas, Tex., for the Texas & Pacific Motor Transport co.

Mr. Justice REED delivered the opinion of the Court.

These appeals, by the Interstate Commerce Commission, and by the intervenor, Regular Common Carrier Conference of American Trucking Associations, Inc., from the judgment of a three-judge federal district court setting aside two orders of the Interstate Commerce Commission, and entering a permanent injunction, raise questions similar to those discussed in No. 25, United States v. Rock Island Motor Transit Co., 340 U.S. 419, 71 S.Ct. 382. The questions relate to the power of the Commission to ban service practices theretofore permitted under certificates of public convenience and necessity previously issued to a common carrier by motor vehicle. The Commission acted under authority reserved in the certificate to impose additional restrictions to insure that the motor carrier's operations will be auxiliary to or supplemental of the operations of its parent common carrier by rail.

The Texas and Pacific Motor Transport Company is a wholly owned subsidiary of the Texas and Pacific Railway, operating a system of regular routes for the carriage of freight, from New Orleans to El Paso, Texas, and Lovington, New Mexico, roughly paralleling the lines of the railway and its subsidiaries. Transport was organized in 1929 to provide a local pick-up and delivery service in connection with rail transportation between points on the lines of the railway. Its first over-the-road common-carrier operation, between Monahans, Texas, and Lovington, New Mexico, was inaugurated just before the affective date of the Motor Carrier Act of 1935, 49 U.S.C.A. § 301 et seq. It extended its operations by obtaining certificates of convenience and necessity from the Commission, both under § 213 of the 1935 Act, now § 5 of the Interstate Commerce Act, providing for acquisition of established rights by purchase from other carriers ('grandfather' rights); and under § 207 of the Interstate Commerce Act, providing for new operations.

Between July 1939 and November 1942, the Commission issued sixteen certificates to Transport, covering various segments of its presently operating routes.¹ In all the certificates the Commission reserved the right to impose further restrictions in order to confine Transport's operation to service 'auxiliary, to or supplemental of, rail service.' This condition was expressed in either one of the two forms set out in the margin.² In addition, each certificate contained one or more, usually more, further conditions: (1) That the service to be performed was to be 'auxiliary to, or supplemental of' the rail service.³ (2) That only railway station points were to be served.⁴ (3) Either that (a) all shipments should be made on a through rail bill of lading, including a prior or subsequent rail movement; ⁵ or (b) that no shipments should be made between certain 'key points' on the rail line, or through more than one of them.⁶ And (4) that the contractual arrangements between Transport and Railway be subject to modification by the Commission.⁷

The irregular incidence of these conditions in the certificates may be accounted for by the segmentary fashion in which Transport built up its system of routes, over a period of several years. They were not reconsidered as a group by the Commission until 1943, when, in response to a petition by Transport, to determine what modification should be made in its certificate No. MC—50544 (Sub-No. 11), particularly in regard to service for freight between El Paso and Sierra Blanca, Texas, for the Texas and New Orleans Railroad Company, it reopened nine of the certificate proceedings to consider whether Transport could join with other motor carriers in rates, some of which provided for substituting rail service for motor service. The Commission held that 'Since petitioner's certificates limit the service to be performed to that which is auxiliary to or supplemental of the rail service of the railway (in some the limitation was by reservation), it is without authority to engage in operations unconnected with the rail service and, accordingly, may not properly be a party to tariffs containing all-motor or joint rates, nor participate in a directory providing for the substitution of train service for motor-vehicle service at its option. To the extent petitioner is performing or participating in all-motor movements on the bills of lading of a motor carrier and at all-motor rates, it is performing a motor service in competition with the rail service and the service of existing motor carriers; and, to the extent it is substituting rail service for motor-vehicle service, the rail service is auxiliary to or supplemental of the motor-vehicle service rather than the motor-vehicle service being auxiliary to or supplemental of rail service.'⁸ The Commission did not issue any affirmative order, but directed Transport to modify its service in accordance with the findings, within a reasonable time.

Transport and Railway then petitioned jointly for reconsideration, or for further hearings, including hearings on certain other certificates; and, although the two petitioners later attempted to withdraw their petition on the ground that permission to file a joint tariff had been granted, the Commission nevertheless ordered that the proceedings be reopened in all sixteen certificates, and three Temporary Authorities, 'solely to determine what, if any, changes or modifications should be made in the conditions contained in the outstanding certificates of public convenience and necessity * * *.'

After a hearing at which Transport and Railway appeared, but refused to introduce any evidence, and after oral argument on the examiner's report, the Commission on January 22, 1948, ordered that all sixteen certificates be modified to include uniformly the substance of the five conditions set out above, specifically as follows:

'1. The service to be performed by applicant shall be limited to service which is auxiliary to, or supplemental of, the train service of The Texas and Pacific Railway Company, The Weatherford, Min- eral Wells and Northwestern Railway Company, or Texas-New Mexico Railway Company, and, between El Paso and Sierra Blanca, Tex., the train service of Texas and New Orleans Railroad Company, hereinafter called the railways.

'2. Applicant shall not render any service to or from any point not a station on a rail line of the railways.

'3. No shipments shall be transported by applicant between any of the following points, or through, or to, or from, more than one of said points: New Orleans, Alexandria, and Shreveport, La., Texarkana, Tex.-Ark., Fort Worth-Dallas (considered as one), Abilene, Monahans, and El Paso, Tex.

'4. All contractual arrangements between applicant and the railways shall be reported to us and shall be subject to revision if and as we find it to be necessary, in order that such arrangements shall be fair and equitable to the parties.

'5. Such further specific conditions as in the future we may find necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, the train service of the railways.'⁹

The effect on appellee was to bar it from issuing its own bills of lading or performing all-motor service under all-motor local rates or all-motor joint rates with connecting motor carriers, or substituting rail service for motor service, and it could not be a party to such tariffs.¹⁰ Prior to these proceedings the appellee had issued its own bills of lading and participated in motor-carrier tariffs. The District Court found the value of the certificates, $65,000, would be destroyed and $240,000 annual revenue lost.

A petition for reconsideration of this order, and for oral argument before the entire Commission, was denied on May 9, 1949. Transport thereupon brought this suit in the Federal District Court, seeking to set aside the Commission's orders of January 22, 1948, and May 9, 1949, and to enjoin their enforcement. In the District Court proceedings the Regular Common Carrier Conference of American Trucking Associations intervened on behalf of the Commission. After hearing, the District Court made findings of fact and conclusions of law, and entered a judgment setting aside the Commission's orders, and permanently enjoining it from imposing any condition on Transport's certificates 'in such manner as will prohibit petitioner from:

'a. Filing, publishing and maintaining common carrier motor rates as provided by statute in the case of common carrier motor carriers generally;

'b. Interchanging traffic with other common carrier motor carriers on joint motor rates;

'c. Issuing its own bills of lading and tendering its service to the public generally on its own contracts of shipment;

'd. Transporting traffic to, through, from or between any so-called 'key points' on that part of its route covered by interstate certificates of public convenience and necessity, to which no 'key point' restriction attached on issuance of such certificates, or in such manner as will restrict petitioner to ship on rail rates or on railroad bills of lading.'

From this judgment the Commission and the intervenor, Common Carrier Conference, appeal here.

The District Court, 87 F.Supp. 107, 112, reasoned that the operations of Transport were at all times and in all ways auxiliary to and supplemental of the rail...