Wheaton Van Lines, Inc. v. I. C. C.
| Decision Date | 15 January 1982 |
| Docket Number | No. 79-1716,79-1716 |
| Citation | 671 F.2d 520 |
| Parties | WHEATON VAN LINES, INC. and Global Van Lines, Inc., Petitioners, Allied Van Lines, Inc., Intervenor, v. INTERSTATE COMMERCE COMMISSION and The United States of America, Respondents, Barrieau Express, Inc. and Trans World Van Lines, Inc., Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petitions for Review of an Order of the Interstate Commerce commission.
Stanley I. Goldman, Washington, D. C., was on the brief for petitioners and intervening petitioner.
Dennis J. Starks, Atty., I. C. C., with whom Sanford M. Litvack, Asst. Atty. Gen., Dept. of Justice, Richard A. Allen, General Counsel, Frederick W. Read, III, Associate Gen. Counsel, I. C. C., Robert B. Nicholson, Asst. Chief, Appellate Section and Susan J. Atkinson, Atty., Dept. of Justice, Washington, D. C., were on the brief for respondents and for intervening respondents.
Before EDWARDS and GINSBURG, Circuit Judges and JOYCE HENS GREEN *, United States District Judge for the District of Columbia.
Opinion for the court filed by District Judge JOYCE HENS GREEN.
This appeal by nationwide motor common carriers of household goods seeks to set aside orders of the Interstate Commerce Commission (Commission) granting the application of Barrieau Express, Inc. (Barrieau) to purchase dormant operating rights of a former small carrier 1 and, in conjunction therewith, authorizing a gateway elimination to allow Barrieau to provide direct service between the authority which it holds and that which it was purchasing. 2 Because the Commission has not provided a reasoned explanation for departing from its own past policy and practices in granting this broad authorization, we vacate the Commission's orders and remand for further proceedings.
Barrieau competes with the petitioners as a smaller regional motor carrier, its present authority allowing limited operations radiating primarily from and to the Northeast. Its application to purchase for $25,000 the certificate of Trans World Van Lines, Inc. (Trans World), a former small Chicago-based carrier, was approved by the Commission, authorizing the transportation of household goods between Chicago and points within 50 miles thereof, on the one hand, and on the other, points in 33 states. Shortly after the filing of the purchase application, Barrieau proposed, by its extension application, to eliminate the need for observing the Chicago area gateway in joining its rights with those sought to be obtained from Trans World.
In order to acquire the operating authority of another carrier, the applicant must satisfy the requirement that the acquisition is "consistent with the public interest", pursuant to section 5(2) of the ICA. For gateway elimination, however, the stricter standard of section 207 applies, and the carrier must show that the service is required by public convenience and necessity.
The acquisition and gateway elimination issues will be addressed seriatim.
The Commission predicated its conclusion that the transfer of operating authority would be consistent with the public interest upon the tripartite test established in Central Transport, Inc.-Purchase (Portion)-Piedmont Petroleum, 127 M.C.C. 1 (1977). First, the applicants must show that the public would benefit from the reactivation of dormant rights. If this showing is made, the protesting carriers then have the burden of demonstrating a probability of significant harm by the proposed transfer. If protestants carry this burden, then the applicants must show a shipper need for the service which will offset the harm to the protestants.
The Commission found that the involved rights were clearly dormant and, relying on Jones Truck Lines, Inc.-Purchase-Deaton, Inc., 127 M.C.C. 428 (1978), that transfer of these rights would result in the creation of a new competitive service which could be judged by the same tripartite reasoning established in Central.
Unable to find a public benefit, the Administrative Law Judge (ALJ), recommended denial of the application. His determination included a finding that the operation would promote substantial deadheading (empty backhauls), involving inefficient operations and waste of fuel. Additionally, the Commission's Policy Statement on Operational Feasibility, 38 Fed.Reg. 32856 (1973), requires applicants to demonstrate avoidance of deadheading. Nevertheless, the Commission, failing to explain its departure from policy, merely agreed that some empty backhauls might be created by Barrieau's acquisition of the sought authority and dismissed this problem as "inherent in a household goods operation," 127 M.C.C. at 464.
Having determined that the public would receive a benefit from reactivation of dormant authority, the Commission next held that protestants had not met their burden under Central to show, by detailed evidence, a probability of significant harm. It concluded that they neither produced evidence of losses nor showed how Barrieau's relatively small operations could "reasonably impair any specific portions of the (protestants') operations." Id.
The Commission rejected as unpersuasive the argument of petitioners that the paucity of Barrieau's business-85 shipments over 15 months under the temporary authority-curtailed their ability to collate the necessary evidence. It is not mere loss of business which constitutes the harm but sufficient loss to endanger the particular segment of protestants' operations, or its overall nature.
Noting, without elaboration, that increased competition, as here, with the "giants of the household goods industry", often fosters significantly better public service, the Commission concluded the proposed services would "mesh well" with Barrieau's existing operations and would promote "increased efficiency and economies of operation" by substituting direct for interline services. Id.
By unexplained departure from long-standing policy and by unexplained conclusions, the Commission approved sale of the dormant operating rights, apparently in anticipation of gateway elimination.
Whatever the rationale, it is evident that the Commission's terse decision suggests no probative basis for these bold conclusions and cannot be sustained on this record. Upon remand, as to those determinations relevant to acquisition of Trans World's operating authority, the Commission should not only provide a clear statement of the evidence it finds supportive of its reasoned conclusions but should also address whether those conclusions require a forecast that gateway elimination will occur.
While section 5(2) for an acquisition case is satisfied by a showing of "public interest" only, the gateway elimination action under section 207 of the ICA requires a demonstration of public convenience and necessity, a higher standard than that of public interest. C & H Transportation Co., Inc., et al. v. Interstate Commerce Commission, et al., 589 F.2d 565, 576 (D.C.Cir.1978), cert. denied, 440 U.S. 911, 99 S.Ct. 1222, 59 L.Ed.2d 459 (1979).
Prior to 1974, the Commission permitted motor carriers holding two or more grants of authority having a common point, or "gateway", to join ("tack") those separate authorities and provide through service. The gateway had to be crossed. Restrictive tacking and gateway elimination rules were subsequently promulgated by the Commission, 49 C.F.R. § 1065 (1977), in response to the inefficient use of fuel resources exacerbated by the resulting circuitous routes. The gateway will be eliminated only if the applicant proves, in accordance with the standards of section 207, that public convenience and necessity requires through service. C & H, 589 F.2d at 569.
Public convenience and necessity may be proved by the traditional means of testimony of supporting shippers that the proposed authority will fulfill a public need not presently satisfied by existing service, and also, will not affect operations of others in a manner contrary to the public interest. Absent such conventional evidence, the applicant may prove that special gateway criteria-the Childress criteria (see pp. 424-425 infra )-have been met.
To support its grant of the applications, both as to acquisition and gateway elimination, the Commission alluded to the public testimony:
The likelihood of improved, competitive transportation service in this case is buttressed by the eight supporting shippers which strongly praised the service available from Barrieau. Supporting shippers found this service excellent (under the temporary lease) and supported its continuance.
Eight shippers with large, national household goods moving needs strongly supported the proposed service and indicated that little traffic would be diverted from protestants.
The ALJ's discussion makes clear that the scope of the shippers' testimony was broad and general for the most part and gave scant indication of their past or prospective use of Barrieau's services. J.A. at 28-31. Two illustrations will suffice. The Aetna Life and Casualty Company has used Barrieau's services under its own authority or as an agent for a larger carrier, J.A. at 28.
Connecticut General Life Insurance Company "has used the service provided by Barrieau as an agent ... It supports the proposed extension of Barrieau's operation because of the excellent service provided by it ...," J.A. at 29.
In short, without expressing specific detail, the shippers found Barrieau's service excellent, and would continue to use this as well as other carriers'...
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