Virginia Stage Lines v. United States, 82.

• Decision Date: 21 December 1942
• Docket Number: No. 82.,82.
• Citation: 48 F. Supp. 79
• Parties: VIRGINIA STAGE LINES, Inc., v. UNITED STATES et al.
• Court: U.S. District Court — Western District of Virginia

48 F. Supp. 79

VIRGINIA STAGE LINES, Inc., v. UNITED STATES et al.

No. 82.

District Court, W. D. Virginia.

December 21, 1942.

John S. Battle and Perkins, Battle & Minor, all of Charlottesville, Va., and Edgar Turlington and Roberts & McInnis, all of Washington, D. C., for plaintiff.

Thurman Arnold, Asst. Atty. Gen., Edward Dumbauld, Sp. Asst. to Atty. Gen., Robert L. Pierce, Sp. Asst. to Atty. Gen., and Frank S. Tavenner, Jr., U. S. Atty., of Woodstock, Va., for United States.

Allen Crenshaw, of Washington, D. C. (Daniel W. Knowlton, of Washington, D. C., of counsel), for Interstate Commerce Commission.

Robert E. Quirk, of Washington, D. C., for Carolina Coach Co., Inc.

Before DOBIE, Circuit Judge, and PAUL and POLLARD, District Judges.

DOBIE, Circuit Judge.

Plaintiff, Virginia Stage Lines, Incorporated (hereinafter referred to as Virginia Stage), instituted a civil action seeking relief from allegedly arbitrary and capricious action of the Interstate Commerce Commission (hereinafter referred to as the Commission) in denying the application of Virginia Stage for the purchase of certain operating route rights in the State of Virginia. The asserted claim arises under Section 5 of the Interstate Commerce Act, as amended, 49 U.S.C.A. § 5, and the jurisdiction of this Court is invoked under the provisions of 28 U.S.C.A. § 41(28) and §§ 43-48, as applied and extended by Section 205(g) of the Interstate Commerce Act, as amended, 49 U.S.C.A. § 305(g).

Virginia Stage is a corporation organized under the laws of the State of Virginia with its principal place of business at Charlottesville, Virginia. It operates as a common carrier by motor vehicle of passengers and their baggage, and of mail, newspapers and express, in the States of Virginia and North Carolina, and in the District of Columbia. Richmond-Greyhound Lines, Inc. (hereinafter referred to as Greyhound), Carolina Coach Company of Virginia (hereinafter referred to as Carolina Coach), and Peninsula Transit Company (hereinafter referred to as Peninsula), are also motor carrier companies operating, or formerly operating, in the State of Virginia.

Peninsula had extensive operating rights in the southeastern area of Virginia, including two routes between Richmond and Norfolk. One of these was over route 60 north of the James River. The other was south of the James River on route 1 from Richmond to Petersburg; thence on route 36 and 10 by way of Hopewell to Benns Church; thence to Bartlett and over route 17 to Norfolk through Portsmouth. Peninsula also operated from Benns Church to Suffolk. Greyhound had operating rights from Richmond to Norfolk over a route which traversed highway 1 to Petersburg; thence over highway 460, through Suffolk, into Norfolk.

For several years Greyhound had sought to purchase the operating rights of Peninsula, but the Commission refused to sanction such action on the ground that consolidation of these companies would give Greyhound a monopoly of bus transportation to and from Norfolk. See 5 M.C.C. 394; 35 M.C.C. 555. Virginia Stage and Carolina Coach both appeared as protestants to this consolidation and succeeded in preventing its approval. While this hearing was pending, Greyhound, in an effort to eliminate the objections urged offered to sell to Carolina Coach, or such companies as might join with the latter, one of the two routes south of the James River from Petersburg to Suffolk. Such a transfer to Carolina Coach would have given it a route from Richmond to Norfolk by connection with its existing operating rights between Richmond and Petersburg and between Suffolk and Norfolk. This offer was rejected by Carolina Coach and by plaintiff at that time and the application for consolidation of Greyhound and Peninsula was denied. Later a petition for reconsideration by the full Commission was filed by Greyhound and upon reconsideration by the entire Commission the application of Greyhound to acquire control of Peninsula was approved June 9, 1941, upon the condition however that Greyhound "within 60 days from the date hereof shall renew its offer with respect to transfer to a protesting carrier of one of the routes between Richmond and Norfolk". 36 M. C.C. 747, 752.

Carolina Coach and Virginia Stage, being unable to agree upon any joint action, each sought to acquire the rights which Greyhound had been ordered to dispose of. Greyhound renewed to Carolina Coach its former offer to transfer Peninsula's former rights between Petersburg and Suffolk and on July 7, 1941, Carolina accepted the offer. On July 3, 1941, Virginia Stage offered to acquire from Greyhound operating rights for the entire distance between Richmond and Norfolk over the old Peninsula route between these cities. This offer was accepted by Greyhound on July 23, 1941, upon condition that the Commission and the State of Virginia would approve a "split" of its operating authority between Richmond and Petersburg and between Benns Church and Norfolk. This condition was imposed by Greyhound to insure preservation of its rights to continue operating over these segments.

It will be noted that the Commission's order of June 9, 1941, speaks with approval of the offer previously made by Greyhound to transfer to Carolina Coach the rights between Petersburg and Suffolk but concludes with the requirement that Greyhound "shall renew" its offer to dispose of one of the routes "between Richmond and Norfolk". Point is made by petitioner here that its offer alone complies literally with the last quoted language and that Carolina's offer is for only a portion of the route between Richmond and Norfolk. We find no merit in this distinction of wording. That the Commission ordered Greyhound to "renew" its previous offer indicates that the offer previously made to Carolina, if accepted by the latter, would meet the Commission's requirement. What the Commission insisted on was competition for Greyhound between Richmond and Norfolk and either offer would accomplish this; in the case of Virginia Stage, by new rights for the entire distance between these cities; in the case of Carolina, by junction of the new rights acquired with segments over which it already had rights.

The Interstate Commerce Act provides that the Commission must approve the sale of franchise rights and Greyhound, desiring to remain neutral as between the applicants and apparently believing that either offer complied with the conditions imposed on it, seemingly left it to the Commission to decide which offer should be approved. The respective applications of Carolina Coach and Virginia Stage were consolidated by the Commission and a single report and order were issued on April 24, 1942, wherein the Commission (a) approved and authorized the purchase by Carolina Coach, for the sum of $10,000.00, of the operating rights previously held by Peninsula between Petersburg and Suffolk, and between Benns Church and a point on U. S. Highway 17 near Bartlett, Virginia, and (b) denied the joint application of Greyhound and Virginia Stage for the approval and authorization of the purchase by Virginia Stage, for $10,000.00, of the same operating rights and, in addition thereto, the operating rights previously held by Peninsula between Richmond and Petersburg, and between Norfolk and the above mentioned point on U. S. Highway 17. See 38 M.C. C. 347.

The Commission concluded that this transfer of the operating rights to Carolina Coach alone was consistent with the public interest and the terms thereof were just and reasonable, and that it complied fully with the condition previously imposed by the Commission.

A petition for reconsideration was denied by the Commission on September 8, 1942. Virginia Stage then filed a complaint in this Court, alleging that the Commission, in its order of April 24, 1942, acted in a manner so arbitrary and capricious as to...