Zuzich Truck Line, Inc. v. United States

• Citation: 224 F. Supp. 457
• Decision Date: 11 October 1963
• Docket Number: Civ. A. No. KC-1640.
• Parties: ZUZICH TRUCK LINE, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. Crouch Brothers, Inc., and Navajo Freight Lines, Inc., Intervening Defendants.
• Court: U.S. District Court — District of Kansas

224 F. Supp. 457

ZUZICH TRUCK LINE, INC., Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

Crouch Brothers, Inc., and Navajo Freight Lines, Inc., Intervening Defendants.

Civ. A. No. KC-1640.

United States District Court D. Kansas.

October 11, 1963.

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Clarence D. Todd, of Todd & Dillon, Washington, D. C., Charles W. Singer, Chicago, Ill., Lowell L. Knipmeyer, of Knipmeyer, McCann & Millett, Kansas City, Mo., for plaintiff.

Lee Loevenger, Asst. Atty. Gen., John H. D. Wigger, Attorney, Dept. of Justice, Newell A. George, U. S. Atty., Robert W. Ginnane, Gen. Counsel, and Fritz R. Kahn, Asst. Gen. Counsel, for defendants.

Joseph Cohen, Kansas City, Kan., Louis Kranitz, St. Joseph, Mo., John C. Bradley and Rice, Carpenter & Carraway, Washington, D. C., for intervening defendant, Crouch Brothers, Inc.

James F. Miller, Kansas City, Mo., for intervening defendant, Navajo Freight Lines, Inc.

Before HILL, Circuit Judge, and STANLEY and DAUGHERTY, District Judges.

HILL, Circuit Judge.

This is an action under 28 U.S.C. §§ 1336, 1398, 2284, 2321-2325 and 5 U.S.C. § 1009, to enjoin, annul and set aside the report and orders of the defendant, Interstate Commerce Commission, entered in Docket No. MC-C-2156, Zuzich Truck Line, Inc., Investigation and Revocation of Permit, 83 M.C.C. 625 (the investigation proceeding). That report also embraces the action taken by the Commission in Docket No. MC-69752, Zuzich Truck Line, Inc., Modification of Permit (the grandfather proceeding); Docket No. MC-69752 (Sub. No. 17), Zuzich Truck Line, Inc., Extension-Various Commodities (the extension proceeding); and Docket No. MC-69752 (Sub. No. 16), Zuzich Truck Line, Inc., Conversion Proceeding (the conversion proceeding).

At the time the above proceedings were commenced, the plaintiff, Zuzich Truck Line, Inc. (Zuzich), was the holder of a contract carrier permit authorizing it, insofar as pertinent here, to transport in interstate commerce "Packinghouse products, and supplies, restricted to items incidental to and directly connected with the business of the slaughtering of animals and the preservation and sale of meats but not including dairy products" and "canned goods" as set forth in paragraphs 1 and 4(A), respectively, of such permit, between points and places therein designated. This permit in its entirety is attached as Appendix A to the Commission's report, supra, 83 M.C.C. at pages 639-641, and was originally issued to George Zuzich, an individual, under the so-called "grandfather" provisions of Section 209(a) of the Interstate Commerce Act, 49 U.S.C. § 309(a). The four proceedings were referred to a Commission Examiner. The investigation, grandfather and extension proceedings were heard upon a consolidated record and the conversion proceeding was heard on a separate record; but, all of them were the subject of a single report by the Examiner as well as the Commission. For purposes of clarity we will, insofar as possible, discuss them separately.

The Investigation Proceeding

By order dated October 24, 1957, Division 1 of the Interstate Commerce Commission (Commission) instituted an investigation under the authority of Sections 204(c) and 212(a) of the Act, 49 U.S.C. §§ 304(c) and 312(a), into and concerning the contract carrier operations of Zuzich. The purpose of the investigation was to determine whether Zuzich, as a contract carrier by motor vehicle, in interstate commerce, of packinghouse products and canned goods, had engaged in the transportation of commodities not within the scope of its permit, in violation of Section 209(a) of the Act, 49 U.S.C. § 309(a).

The operations in question consisted of the alleged transportation in interstate commerce of such commodities as the following: Washing compounds (liquid and granules); hydrogenated cotton-seed oil; vegetable-oil shortening; soap; glycerine, in drums; advertising material; sporting goods; jelly, in drums; frozen fruit juice; macaroni products; lemon concentrate; frozen chop suey and egg rolls; spaghetti and spaghetti products; garlic, in bags; canned meats; peanut butter; noodles; oleomargarine; salad oils; edible flour; powdered spice; fresh frozen vegetables; citrus and prune juices; food curing compounds; pickles, in barrels and kegs; tea; frozen citrus juices; and candy. At the hearing, the Commission's Bureau of Inquiry and Compliance (Bureau) as illustrative of the alleged unlawful operations, produced evidence showing that Zuzich had, in fact, transported approximately 51 shipments containing quantities of the above mentioned commodities, in interstate commerce, during the period from December 31, 1956, to September 10, 1957.

The Bureau's position was that the transportation of these commodities by Zuzich was not within the scope of its permit authorizing it to haul "packinghouse products" and "canned goods". Zuzich readily admitted that it had transported such commodities but contended, with one exception, that it was authorized to do so under the above authority as set forth in paragraphs 1 and 4(A) of the permit. The single exception was the advertising material which Zuzich claimed the right to transport, not on the basis of any asserted authority, but because it and its predecessor purportedly had transported this material since prior to July 1, 1935.

During the course of the hearing, and in particular the examination of the Commission's employee and witness, Schrier, Zuzich made two requests for the production of Commission documents which it claimed were material to both the investigation and grandfather proceedings. The first request was for a report made by Schrier to his superior at the conclusion of his field investigation into Zuzich's operations, which ultimately resulted in the commencement of the instant proceeding. The second request was for reports and other material contained in the Commission's files which allegedly relate to the interpretation and issuance of Zuzich's "grandfather" permit. Both requests were denied by the Examiner and his rulings were sustained by the Commission. Zuzich assigns this as error.

The Examiner found that Zuzich had engaged in operations beyond the scope of its authority in transporting the commodities in question in interstate commerce; but, recommended that no cease and desist order should be entered in view of his recommended findings in the reopened grandfather proceeding. The Commission agreed with the Examiner's findings as to the unlawful operations by Zuzich; but, disagreed with his conclusion and ordered Zuzich to cease and desist from continuing such transportation.

The record discloses that the report and files were requested, not for use upon cross-examination of any witness, but, to determine if the formal investigation had been commenced as a result of Schrier's field investigation or as a result of a complaint by another carrier and to ascertain the interpretation placed upon Zuzich's permit by the Commission's employees while in the process of handling the grandfather application. It is admitted by Zuzich's counsel that the material he desired from the files would probably be confidential material.

We, of course, agree with Zuzich that it was entitled to a full, fair and open hearing as a prerequisite to the validity of the Commission's orders. Morgan v. United States, 304 U.S. 1, 58 S.Ct. 999, 82 L.Ed. 1129. But this does not mean that the Commission was required to furnish internal reports or open up its confidential files to Zuzich to be used for the stated purposes. We think the case of Jencks v. United States, 353 U.S. 657, 77 S.Ct. 1007, 1 L.Ed.2d 1103, is wholly inapplicable here. And, the Jencks Act, 18 U.S.C. § 3500, is not helpful to Zuzich as it applies only to discovery in a criminal prosecution. Campbell v. Eastland, 5 Cir., 307 F.2d 478, 486, cert. denied, 371 U.S. 955, 83 S.Ct. 502, 9 L.Ed.2d 502.

Zuzich further argues that the Commission's files should at least have been turned over to the trier of facts for an in camera inspection of the documents so as to determine which of them were not confidential and clearly relevant to the issues before him. The simple answer to this argument, even if it is assumed that such a procedure was proper, is that no request for such an inspection was made by Zuzich.

The primary issue raised in this proceeding was whether Zuzich, by transporting the commodities in question, engaged in operations not within the scope of its permit in violation of 49 U.S.C. § 309(a). That section, in pertinent part, provides that "* * * no person shall engage in the business of a contract carrier by motor vehicle in interstate or foreign commerce on any public highway * * * unless there is in force with respect to such carrier a permit issued by the Commission, authorizing such person to engage in such business: * * *."

The term or description "packinghouse products" as used in Zuzich's permit has long had a peculiar meaning of its own in the transportation industry. A long list of the commodities that may be transported under the description was first promulgated by the Commission in Modification of Permits — Packing House Products, 46 M.C.C. 23, 33-34 (1945), and later modified in 48 M.C.C. 628, 636 (1948). This list was republished with minor changes in Descriptions in Motor Carrier Certificates, 61 M.C.C. 209, 272-273. It would serve no useful purpose and would only unduly extend this opinion to set forth that list of commodities herein. Suffice it to say that the list does include many, if not all, of the commodities in question. However, it is well settled, by both Court and Commission decisions, that carriers possessing permits or certificates of public convenience and necessity authorizing them to transport "packinghouse products" are limited to the transportation of such commodities as come within the meaning of that term and, then, only when they are...