Watson Bros. Transp. Co. v. United States

• Decision Date: 24 March 1945
• Docket Number: Civil Action No. 563.
• Citation: 59 F. Supp. 762
• Parties: WATSON BROS. TRANSP. CO., Inc., v. UNITED STATES et al.
• Court: U.S. District Court — District of Nebraska

59 F. Supp. 762

WATSON BROS. TRANSP. CO., Inc., v. UNITED STATES et al.

Civil Action No. 563.

District Court, D. Nebraska, Omaha Division.

March 24, 1945.

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Lawrence W. Moore, of Omaha, Neb., for plaintiff.

Wendell Berge, Asst. Atty. Gen., Edward Dumbauld, Sp. Asst. to Atty. Gen., and Joseph T. Votava, U. S. Atty., of Omaha, Neb., for defendant United States.

Daniel W. Knowlton, Chief Counsel, and Nelson Thomas, Atty., both of Washington, D. C., for defendant Interstate Commerce Commission.

Before JOHNSEN, Circuit Judge, and DONOHOE and DELEHANT, District Judges.

DELEHANT, District Judge.

The plaintiff, a Nebraska corporation, seeks in this action, brought under the jurisdictional provisions of 28 U.S.C.A. § 41(28), utilized in 49 U.S.C.A. §§ 17(9) and 305(g), to enjoin an order of the Interstate Commerce Commission, through its division 5, made and given on November 18, 1943, in MC-70451, only to the extent that it denies to the plaintiff the authority to render service as a common carrier by motor vehicle of general commodities (with certain exceptions not requiring enumeration) to and from Rock Island, Moline, East Moline, Silvis, and Carbon Cliff, in Illinois, and Davenport and Bettendorf in Iowa (all included within the general designation of the "tri-cities" area) and Grinnell and Iowa City in Iowa, as intermediate and off-route points on a regular route between Omaha, Nebraska, and Chicago, llinois, following, at all material points, United States highway 6, on which the challenged order recognized in the petitioner authority under 49 U.S.C.A. § 306(a) to render service between termini, theretofore allowed by a previous order of the Commission's Division 5 in the same proceeding.

Demand having been made in the complaint, and not withdrawn, for a preliminary injunction, this court was assembled and convened. 28 U.S.C.A. § 47. To obviate the necessity for a separate hearing upon the prayer for preliminary injunction, the Commission by successive supplemental orders, has postponed the effective date of the challenged order. Hearing has now been had upon the merits of the case, both respecting the preliminary injunction and touching permanent relief.

To avoid unnecessary repetition, the several grounds upon which the plaintiff criticises the portion in issue of the Commission's order will be noted in the course of their discussion herein. Essentially, the answer of the defendants denies the plaintiff's allegations of irregularity in the proceedings and report and order of the Commission and affirmatively asserts their regularity and conformity to law.

The Motor Carrier Act of 1935 was approved on August 9, 1935. One of its provisions, being in its present form 49 U.S. C.A., § 306(a), is commonly referred to as "The Grandfather Clause", and, so far as it is material here, is copied in a footnote.¹

MC-70451 was seasonably instituted (within the extended time allowed by the Commission under the authority of 49 U.S. C.A. § 327) on February 10, 1936, by the plaintiff's filing with the Commission of its application for a certificate of public convenience and necessity (based entirely upon alleged operations as of June 1, 1935 and continuously thereafter), granting to, and confirming in, the plaintiff, authority (1) to operate as a common carrier by motor vehicle of general commodities (with exceptions) over a large number of regular routes, located, among other places, between Kansas City, Missouri and Sioux City, Iowa, through Council Bluffs, Iowa, and Omaha, Nebraska, on both sides of the Missouri river; in northeastern Kansas; eastern Nebraska; northwestern Missouri; and southwestern Iowa; from Kansas City, Missouri, to DesMoines, Iowa; and between Omaha, Nebraska, and Chicago, Illinois, over two principal routes, one traversing Iowa on U. S. highway 34, and the other, being the route presently involved, following U. S. highway 6 through Des Moines and Davenport, Iowa, and the Illinois units of the tri-cities area, including in each instance service to all intermediate and off-route points; and (2) to continue certain alleged irregular route operations radiating generally from Omaha, Nebraska, into some twenty-two states, including (a) the carriage of shipments on "call and demand" between various points without regard to route and usually in truckload lots or in lesser quantities for a minimum charge and by special and individual arrangement, and (b) the transportation of large quantities of meats and other packing house products under written contracts with several major packing companies. By amendment, authority was later sought for regular route operations between Omaha, Nebraska, and Denver, Colorado.

In respect of routes embracing the shipping points here in controversy, the plaintiff claimed rights derived from two sources: (a) In consequence of its own alleged operations between Omaha, Nebraska, and Chicago, Illinois, along U. S. highway 6 through DesMoines, Newton, Grinnell and Iowa City, in Iowa, and the tri-cities area into Illinois and along U. S. highways 6 and 34 to Chicago, Illinois; and (b) by reason of operations between DesMoines, Iowa and Chicago, Illinois, through Pella, Oskaloosa, Muscatine and Davenport in Iowa, over Iowa state highways 163 and 92, and U. S. highway 61, and thence on U. S. highway 6 into Illinois, and through Princeton, Illinois,² to Chicago, Illinois, as one route; and on another and alternative route directly through Newton, Grinnell and Iowa City in Iowa, and through the tri-cities area into Illinois and on to Chicago, Illinois, allegedly initiated and carried on prior to and on June 1, 1935, and until January 31, 1936, by North American Freight Lines owned nominally by one John H. Buck of Chicago, Illinois, but said by him actually to have been a partnership operation, and continued subsequent to the date last mentioned by the plaintiff as purchaser from Buck.

Objections were presented by several interested parties and, among others, by the Board of Railway Commissioners of the State of Iowa.

The proper limitations of space forbid a detailed narration of the course of the proceeding before the Commission. But this mere index of developments in it, in chronological order, is set down. Hearings before an examiner were held in Lincoln, Nebraska, on April 29, 1937 (Record, pp. 1-171) and in Omaha, Nebraska, on May 4 and 5, 1937 (Record, pp. 172-553). That examiner presented a recommended report and order as of August 25, 1937; but, upon exceptions by sundry parties, including the applicant, it was not adopted; and, without making any final order, the Commission on November 26, 1937, reopened the proceeding for further hearing generally. The further hearing was had before a second examiner on January 27, 28 and 29 and February 7, 8, 9, 10, 11, 12 and 14 in 1938 at Omaha, Nebraska (Record, pp. 554-1813). The latter examiner presented his recommended report and order on January 7, 1939. On August 9, 1940, the Commission, through its Division 5, made its first Report and Order. Omitting their many other phases and dealing solely with the route and shipping points now involved, that report and order (1) granted to the plaintiff on the basis of its own operations, the right to operate between Omaha, Nebraska and Chicago, Illinois, over U. S. highway 6; (2) granted to the plaintiff, on the basis of the operations of Buck, continued by the plaintiff, the right to operate between DesMoines, Iowa, and Chicago, Illinois, over highways 163, 92, 61 and 6 with intermediate service to and from Pella and Oskaloosa, in Iowa; (3) denied the application, on the basis of Buck's operations, for authority to operate over highway 6, between DesMoines and Davenport, in Iowa, as an alternative route for its Des Moines-Chicago line; (4) granted to the plaintiff the right to continue irregular route service within certain described limits; and (5) denied the right to give intermediate and off-route service to or from the tri-cities, and Newton, Grinnell and Iowa City, in Iowa, or to any point on the Omaha-Chicago direct route except Council Bluffs, Iowa. The order also granted to the plaintiff on the basis of its own operations a right (not presently involved, but closely related to its Omaha-Chicago route) to operate between Omaha, Nebraska and DesMoines, Iowa, over U. S. highway 6 with intermediate service at Council Bluffs, Dexter, Redfield, Adel, Ortonville, and Waukee, Iowa. All of those grants of routes, and denials of routes and the bases thereof remain unopened and unchallenged, so far as service between termini is concerned. The plaintiff promptly sought, and later obtained, a reopening of the cause for further testimony and further consideration, with reference only to the right to serve many intermediate and off-route points on several routes, including Newton, Iowa, and the points involved in this case.³ Further testimony was taken before a third examiner at Omaha, Nebraska, on February 24, 25 and 26, 1941 (Record, pp. 1857-2234) and, pursuant to adjournment, before a fourth examiner at Omaha, Nebraska, on April 7, 8 and 9, 1941 (Record, pp. 2235-2738). In the course of the several hearings one hundred five exhibits were introduced, comprising many hundreds of pages of data and including numerous summaries or abstracts of shipments and original or duplicate shipping documents. The preparation of the ensuing recommended Report and Order devolved upon the third examiner⁴ who on January 1, 1943 served a suggested Report and Order. After submission on June 11, 1943, the Commission, again through its Division 5, on November 18, 1943, made its Report and Order essentially following the third examiner's recommendations; and therein, (1) granted the plaintiff's demand for authority to render intermediate and off-route service to and from certain points on lines not presently involved; (2) authorized general service to and...