Yellow Forwarding Company v. ICC

• Decision Date: 15 November 1973
• Docket Number: Civ. A. No. KC-3708.
• Citation: 369 F. Supp. 1040
• Court: U.S. District Court — District of Kansas
• Parties: YELLOW FORWARDING COMPANY et al., Plaintiffs, v. INTERSTATE COMMERCE COMMISSION et al., Defendants.

369 F. Supp. 1040

YELLOW FORWARDING COMPANY et al., Plaintiffs, v. INTERSTATE COMMERCE COMMISSION et al., Defendants.

Civ. A. No. KC-3708.

United States District Court, D. Kansas.

November 15, 1973.

COPYRIGHT MATERIAL OMITTED

John E. Jandera, Jandera & Christey, Topeka, Kan., William J. Lippman, Washington, D. C., for plaintiffs.

Hanford O'Hara, Atty., Fritz R. Kahn, Gen. Counsel, Interstate Commerce Commission, Washington, D. C., for Interstate Commerce Commission.

Robert J. Roth, U. S. Atty., Kansas City, Kan., John H. D. Wigger, Atty., Thomas E. Kauper, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., for United States of America.

Harold E. Mesirow, Washington, D. C., Wash H. Brown, Kansas City, Kan., for Alltransport Inc.

Before HILL, Circuit Judge, and TEMPLAR and O'CONNOR, District Judges.

O'CONNOR, District Judge.

This action was instituted to enjoin, set aside and annul orders of the Interstate Commerce Commission granting domestic freight forwarder authority to Alltransport Incorporated, pursuant to Section 410 of the Interstate Commerce Act 49 U.S.C. § 1010. Jurisdiction of this court to review the Commission's orders is predicated on 28 U.S.C. § 1336(a), § 1398(a), § 2284 and §§ 2321 to 2325, 49 U.S.C. § 17(9) and 5 U.S.C. § 702.

By application filed January 27, 1971, as subsequently amended, Alltransport sought a permit under Section 410 of the Act to operate as a freight forwarder through the use of rail and motor common carriers in the transportation of general commodities (with certain exceptions), from points in Illinois, Indiana, Ohio, Wisconsin, Minnesota and Michigan, to Montreal, Quebec, Canada and Halifax, Nova Scotia, Canada, restricted to export traffic moving in containers and having a subsequent movement by water. The application was jointly protested by plaintiffs, who are domestic freight forwarders, on the grounds, inter alia, that the authority sought conflicted with their existing authority to forward export freight from the territory Alltransport sought to serve, and also conflicted with their existing operations conducted pursuant to such authority. Over plaintiffs' objection the application was assigned for handling under the commission's modified procedure. Verified statements were filed by the respective parties and on April 3, 1972, the Commission, acting through its Employee Review Board No. 3, issued a report and order granting Alltransport's application, except that the origin territory of six states initially requested was reduced to two—Illinois and Wisconsin.

Subsequently, plaintiffs sought reconsideration of the decision, urging that the proceedings be reopened and further hearings be held. The Federal Maritime Commission also petitioned for leave to intervene alleging that the decision "fails to consider the effect upon United States, Great Lakes and Atlantic Coast ports of the routing of cargo through Atlantic Coast Canadian ports, which . . . is a matter of concern to the F. M.C." The petition to intervene was granted and was accepted as a petition for reconsideration. Both petitions for reconsideration were denied by Division 1 of the Commission acting as an appellate division. Among other things the appellate division determined (1) that the findings of the Review Board were in accordance with the evidence and applicable law; and (2) that the issuance of the permit (a) will not by itself mean that prevailing traffic patterns will be naturally altered, that United States, Great Lakes and Atlantic Coast ports will be affected to any significant degree, or that material quantities of traffic will be diverted from American to Canadian ports, and (b) will be consistent with the public interest and the National Transportation Policy. Thereupon, plaintiffs sought review of the proceedings by the entire Commission by filing a "Petition Seeking a Finding of General Transportation Importance," which was denied in an order issued March 20, 1973.

The present action was filed in this court on March 27, 1973, and plaintiffs' motion for a temporary restraining order was denied.

In attacking the Commission's decision, plaintiffs advance three basic arguments:

1. The key findings of the Commission are not supported by reliable, substantial evidence and the decision is contrary to the Commission's own standards.

2. The Commission's conclusion that the proposed service is consistent with the National Transportation Policy is not supported by subsidiary findings, is arbitrary, capricious and an abuse of discretion, and lacks a rational foundation.

3. Plaintiffs were denied a fair hearing and procedural due process.

I

At the outset we should make clear that the scope of judicial review of the Commission's orders is extremely limited. As in the case of any action by an administrative agency, a presumption of validity attaches to an order of the Commission, and the burden of showing the invalidity of the order rests on the party attacking the order. King Van Lines, Inc. v. United States, 220 F.Supp. 551 (D.C.Kan.1963); Frozen Foods Express, Inc. v. United States, 346 F.Supp. 254 (W.D.Tex.1972), and cases cited therein. The task of weighing the evidence is for the Commission and not the Court. Manley Transfer Co., Inc. v. United States (not yet reported, KC-3515, op. May 15, 1973) 370 F.Supp. 1216; State Corporation Commission of Kansas v. United States, 216 F.Supp. 376 (D.C.Kan.1963), aff'd, 375 U.S. 15, 84 S.Ct. 60, 11 L.Ed.2d 39. The wisdom or "rightness" of the Commission's decision in matters committed to its expertise and determination is not an issue before the reviewing court. Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 62 S.Ct. 366, 86 L. Ed. 432 (1942); United States v. Pierce Auto Lines, 327 U.S. 515, 66 S.Ct. 687, 90 L.Ed. 821 (1946); State Corporation Com'n of Kansas v. United States, 184 F.Supp. 691 (D.C.Kan.1959). If the order to be reviewed is based upon adequate findings supported by substantial evidence, and the Commission has acted within the scope of its statutory authority, we must affirm. Land Air Delivery, Inc. v. United States, 327 F.Supp. 808 (D.C.Kan.1971); Associated Wholesale Grocers, Inc. v. United States, 272 F.Supp. 274 (D.C.Kan.1967).

II

Plaintiffs point to certain "key findings" of the Commission, which they contend are unsupported by and are contrary to the evidence. Specifically, they refer to:

(a) The finding that Alltransport's proposed service is materially different from the services now performed by existing forwarders. Plaintiffs contend they hold themselves out to perform and are performing a service whereby small export shipments are consolidated in steamship containers at inland points (Chicago or Milwaukee) and then shipped through to overseas destinations without rehandling at the port. Plaintiffs say they have performed this type of through-intermodal-container service on exports to Europe through East Coast United States ports for many years, the only difference being that Alltransport proposes to transport the containers through Canadian ports.

We believe there is evidence tending to establish significant differences in the proposed service from that being performed or offered by plaintiffs, thereby supporting the Commission's finding. The proposed service contemplates that shipments would be brought into consolidation points such as Chicago or Milwaukee for "stuffing" into twenty-foot marine containers, moved by container-on-flat-car service to Montreal or Halifax, and then off-loaded directly from the rail car to a marine terminal for ultimate shipment abroad. On the other hand, plaintiffs principally employ a break-bulk service which involves the loading of forty-foot trailers at a consolidation point and subsequent movement by trailer-on-flat-car service to an East Coast port. They also provide a container service from a consolidation point, but this too employs trailer-on-flat-car service. Usually forty-foot containers are used, which because of their size require a much longer time to be filled and made ready for shipment.

In addition to the differences in the method of consolidation and forwarding, there are problems which are found at East Coast ports that are not encountered at Halifax and Montreal. Because of the great volume of goods moving through United States East Coast ports, particularly New York, shipments are frequently subject to congestion, delays and added costs. At New York, for example, rail termination points are usually some distance from the piers; thus the shipments incur delays and costs because of local cartage from one place to another. Once at the pier, the large volume of traffic forces the local cartage operators to spend a considerable time waiting to deliver their containers. Such problems are compounded if it is necessary to transfer cargo from a trailer or container used for the inland portion of the movement to another container for the ocean portion. At Halifax and Montreal, containers arrive at the marine terminal and are transferred directly on board the ocean vessel. We can only conclude that the Commission's finding that the proposed service is materially different from the service of plaintiffs is fully supported by the evidence.

(b) The finding that there is no existing mechanism for using Canadian ports. Plaintiffs argue that the principal, if not the sole, justification for Alltransport's proposed service is the desire of the shippers to have an alternate routing via Canadian ports available when United States East Coast ports are closed by strikes. Plaintiffs contend that this is not a good reason for granting new permanent authority for the Canadian routing inasmuch as they have received limited authority to use Canadian ports in the past when strikes occurred.

Plaintiffs' argument completely misconstrues the true nature of the justification for Alltransport's proposed service. While the shippers expressed a desire to avoid the...