Document: 419 U.S. 281 95 S.Ct. 438 42 L.Ed.2d 447 BOWMAN TRANSPORTATION, INC., Appellant,v.ARKANSAS-BEST FREIGHT SYSTEM, et al. JOHNSON MOTOR LINES, Appellant, v. ARKANSAS-BEST RED BALL FREIGHT, LORCH-WESTWAY CORPORATION al., Appellants, UNITED STATES and Interstate Commerce Commission, Nos. 73—1055, 73—1069 73—1070 to 73—1072. Argued Nov. 20, 1974. Decided Dec. 23, Rehearing Denied Feb. 24, 1975. See 420 956, 1340, 1341. Syllabus In 1969 hearing examiners for the Commission (ICC), following hearings in 1966 1967 subsequent filing of extensive briefs, rejected appellant motor carriers' applications certificates public convenience necessity transport general commodities between specified points Southwest Southeast. 1971 ICC, over opposition appellee competing carriers, authorized issuance certificates. Appellees then brought action District Court set aside ICC's order. The refused enforce order on ground that ICC had acted arbitrarily refusing credit certain evidence introduced by appellees. Held: 1. erred Pp. 284—294. (a) Under 'arbitrary capricious' standard scope review is a narrow one whereby reviewing court must 'consider whether decision was based consideration relevant factors there has been clear error judgment.' Citizens Preserve Overton Park Volpe, 401 402, 416, 91 814, 823, 28 136. 285—286. (b) observation appellees' exhibits as acceptability their existing service covered periods notice supported its refusal this evidence. entitled regard such nonrepresentative usual service, reason shortcomings were greater than showed, conclude would be improved granting applications. 286 289. (c) There rational basis attributing little significance showing appellants' transit times other routes. question routes at issue enhanced new entry and, this, performance prospective entrants limited relevance. not same qualification time exhibits, but finding 289—292. (d) conclusion consumer benefits outweighed any adverse impact upon carriers reflects kind judgment entrusted it, namely, power weigh interests arrive balance deemed 'the necessity.' 292—294. 2. lapse evidentiary ultimate agency case does justify court's requiring record reopened. 294—296. 3. take an approach, divergent from examiners, favoring added competition among carriers. 297—299. 4. Whether or certificate granted Bowman Transportation Co. conformed authority forth application, briefed argued Court, should considered remand. 299—300. 364 F.Supp. 1239, reversed remanded. William L. Patton, Jr., Little Rock, Ark, appellants No. Charles S. Rhyne, Washington, D.C., 73 1055, 73—1069, 73—1070, 73—1071. Phineas Stevens, Jackson, Miss., appellees all cases. Mr. Justice DOUGLAS delivered opinion Court. 1 This direct appeal final three-judge U.S.C. §§ 1253, 2101, invalidating Commission. Ten conduct operations Southeast consolidated proceeding. Three additional applicants allowed intervene. after hearings, each application. three Appellees, § 1336, suspend, enjoin, annul portion authorizes Red Ball, Bowman, Johnson. Commission's because findings conclusions arbitrary, capricious, without within meaning Administrative Procedure Act, 5 706, likewise remand believing no useful purpose served, 1264.1 2 Act 706 provides that: 3 'The shall . (2) hold unlawful action, findings, found be— 4 '(A) abuse discretion, otherwise accordance with law (or) '(E) unsupported substantial ..' 6 These two provisions 706(2) are part six which 'separate standards.' 413, 822, 136, 151 (1971). properly concluded that, though agency's may evidence, definition Universal Camera Corp. NLRB. 340 474, 71 456, L.Ed. 456 (1951),2 it nonetheless reflect arbitrary capricious action. seems, however, agreement remains whether, held, 'arbitrary, law' provided 706(2)(A). We disagree accordingly reverse cases reached 7 * Motor Carrier 49 Stat. 551, 307, empower grant application if finds (1) applicant 'fit, willing, able perform proposed'; proposed 'is will required present future made both relying applicants' support fitness, expressions customer dissatisfaction consistent necessity. presentations designed show satisfactory offer measurably superior performance. treatment protesting While acknowledged reasons not, Court's view, withstand scrutiny, making tantamount consider matters record. 8 one. A judgment. Although inquiry into facts searching careful, empowered substitute agency.' supra, 824. articulate 'rational connection choice made.' Burlington Truck Lines United States, 371 156, 168, 83 239, 246, 9 207 (1962). we supply reasoned itself given, SEC Chenery Corp., 332 194, 196, 67 1575, 1577, 1995 (1947), uphold less ideal clarity path reasonably discerned. Colorado Gas FPC, 324 581, 595, 65 829, 836, 89 1206 (1945). Having summarized appropriate review, proceed objections seriatim. A. Evidence Existing Service presented selected shipments consigned particular shippers during designated study period. As acknowledged, selection those occurring period eye toward demonstrating inadequacies.3 'worst case' studies figured issue. 10 offered own. presentations, whereas emphasize inadequacies, included placed incidents cited perspective demonstrated generally acceptable. they inadequate rebuttal 'relate short cover traffic handled shippers'; represented hearing. Herrin Co., 114 M.C.C. 571, 599 ruled applied inconsistent standards parties, since exhibits. F.Supp., 1259—1260. 11 agree first assigned Commission—that only shippers—failed distinguish opponents. To counter chose identical expanded presentation consigned. Since protesters confined themselves selected, inference former chosen so make unrepresentative favor. 12 second reason, however—that hearing—provides assessment recognized might have spurred improve threat raised designation Therefore, normally offered, covering periods, read light possibility. But precluded protesters' period, incentive effect indentified have, anything, distorted 13 before met some absolute 'public necessity' served markets States Dixie Highway Express, 389 409, 411—412, 88 539, 540—541, 19 639 (1967). Even accepted face value, could still deficiencies sufficient admission Certainly possibly afforded,4 short-comings probably these 14 proposals comparable distances once again pointed out selective different substantially longer provide thus expected live up proposals. addition, restrictions practiced routes—refusal scheduled pickup merchandise, handle weight, goods destinations, like. 15 attributed rebuttal. With respect times, noted highway conditions totally incomparable. M.C.C., 611. held treating apparently relied transit-time (id., 586, 600) fitness. 1260—1261. Similarly, viewed failure mention cited, satisfactory. 600. 16 paragon clarity. Had responded more manner presented, greatly facilitated, further perhaps avoided entirely. can discern test require more. permitting entry, experience poor indication sought enter. More generally, might, market peculiar route (e.g., nature demand number carriers), inaccurate predicting what do admitted already there. carrier performing lethargically where sole provider transportation, example, ill afford continue practice situation competitive.5 17 features elsewhere shown explainable special occurred. It said unlikely prove dispositive, accordingly, absent compelling demonstration proponent 'performance elsewhere' important predictive disregard evidence.6 Of course, especially egregious exception; assumption force exceed pre-existing quality effort attract business yield whose many flagrant. here, none characterized. Indeed 'in main participating proceedings responsible disputed finding. find arbitrary. II 18 produce consumers proceeded cause least short-run losses exception carrier, 'seriously adversely affected.' Further, event, gains derived shipping far outweigh protestant experience.' thought unsupportable, view impacts granted. 1262—1263. Insofar comments express failed examiners' interests, shows otherwise. stated 'grants subject protestants' possibility diversion,' went 'serious impact.' 610—611. 20 moved contrary consisted testimony witnesses about volume compete enter market. maximum potential exposure, leaving considerable leeway likely Cf. Market Street R. Railroad Comm'n, 548, 770, 1171 emphasized magnitude harm; took optimistic view. see nothing posture. That carrier's entire hardly compels profit. entrant swallow latter efforts business. Moreover, gave exposure every granted.7 Thus, reporting diversions under never realized. pending applications, much matter regarded qualification, disregarded entirely.8 21 Pierce Auto Lines, 327 515, 535—536, 66 687, 697—698, 90 821 (1946). If 'drawn crystallized (and) attempted judge them delicacy permits,' J—T Transport 368 81, 89, 82 204, 209, 147 (1961), Here identified interests. cannot say struck law. III 22 expressed concern decision. 1261—1262. unclear independent setting order, deem advisable deal directly suggestion grown too stale 23 Hearings began 1967. Thereafter, parties prepared briefs who rendered November 1969. handed down December 30, 1971. material pertained dated five years 24 appreciate difficulties arise when long. Undoubtedly economic changes appellees, Nevertheless, always loath factfinding begin anew merely delay complexity. repeat Jersey City, 322 503, 514—515, 64 1129, 1134, 1420 (1944): 25 'Administrative evidence—particularly taken examiner, his report submitted exceptions it—always creates gap closed administrative promulgated. true issues difficult, intricate, deliberate careful. coming litigants rehearings circumstance arisen, trend observed, fact discovered, hope process ever consummated reopening. almost rule right, pleas discretion. And discretion invoked body body.' 26 Only Atchison, T. & F.R. 284 248, 52 146, 76 273 (1932), did reopening proceedings; reopen metamorphosis Great Depression led exceptional circumstances compelled disposition, lacking recent Northern Pacific 288 490, 53 406, 77 914 (1933); Illinois Comm'n 292 54 783, 78 1371 (1934); St. Joseph Stock Yards 298 38, 56 720, 80 1033 (1936); supra; Merger Cases, 396 491, 708, 700 (1970). relevance, compel inclusion believe meet heavy burden thrust our cases.9 27 protracted character resulted, bureaucratic inertia, complexity procedures extended insure fairness appearance well reality, opportunity comment stage. 900 testified original consumed 150 days. At seven months prepare. until nearly later. doubtful current judicial alone; while required, entertain affidavit form. Yet assurance reopening, digest material, become 'stale.' Accordingly, sound adhering declining record, except most extraordinary circumstances. IV addressing voiced 29 'indicates predilection followed strained attempt marshal conclusion.' 1264. 30 insofar remarks charge prejudging deciding giving think approach adopted differ significant respects identify. 31 against backdrop assumptions relationship needs responsibilities. ruled, 'single-line service' shippers' attributable, part, lack diligence. put 32 '(n)ormally adequately efficiently territory serve operations.' 33 extent inadequacies demonstrated, complaints compliance preferred mode relief. 34 hand, congenial resulting competition. prerogative carrying mandate 'safe, adequate, economical, efficient service,' National Policy, preceding adopt examiners. competitive out-weigh discomforts certificated feel result entry.10 Our decisions dispelled notion primary obligation protection firms holding disapproved proposition grievances through complaint improvement permitted. U.S., 91, 204. (1967), 'a property right' amends Id., 411, 539. 35 policy favor embodied laws variety affairs. Congress Government regulation device protecting interest, facilitating structure consideration. McLean Trucking 321 67, S.Ct., 370, 544 (1944); FMC Svenska Amerika Linien, 390 238, 1005, 1071 (1968); Gulf Utilities 411 747, 93 1870, 36 635 (1973); Denver R.G.W.R. 387 485, 87 1754, 905 preservation given overridden Drum, 374—375, 408, 410, 360 (1962), where, concludes 'aids attainment objectives national transportation policy,' 85—86, 380, disturbing accommodation. V disposes Johnson Ball.11 remains. exceeded Bowman's 'excess' granted, condition precedent publication Federal Register request excess authority. Various filed augmented overruled. challenged procedure grounds, indicated disapproval merits approval 37 occasion decided residual interest expeditious litigation, Consolo FMC, 383 607, 621, 86 1018, 1027, 131 (1966), conformity owning limitations noting probable jurisdiction. spoke regard, construe ruling, unnecessary disposition case. open 38 hasten add, depriving conferred 39 Reversed lasted months; transcript covers 23,423 pages; 1,989 exhibits; total 950 behalf applicants; rail entered appearances applications; 48 protestants 62 numerous substantiality account whatever fairly detracts weight.' 488, 464. K. Davis, Law Treatise 29.03, p. 129 (1958); Jaffe, Judicial Control Action 601 (1965). stated: 'Many shipper's pertinent include listed received traffic.' 596 also representative, denied fair judged. 1260. disagree. party entitled, know turn apprised factual relies he rebut it. Indeed, Due Process Clause forbids use way forecloses presentation. Ohio Bell Telephone Public 301 292, 57 724, 81 1093 (1937); Abilene S.R. 265 274, 44 565, 68 1016 (1924). salutary principles preclude factfinder observing strengths weaknesses identified. qualifications later inter posed, suggesting unfairness. American Assns. Frisco 358 133, 144, 79 170, 176, 172 (1958). altered parted company credibility witnesses, examiner advantage, rigidly barred taking position. NLRB, (1951). perceive binding viewpoint interpretation position claim unfair surprise. rationale interpreting just began. Braswell Freight 100 482, 493—494 (1966). knowing interpose qualifications. B. Applicants' Fitness firm possession franchise offers high degree seeks renewal. Office Communication Church Christ FCC, 123 U.S.App.D.C. 328, 341, 359 F.2d 994, 1007 (1966) ('history programming misconduct renewal license interest'). Fairness rationality, command evenhanded rule. Compare id., undisputed 'substantial responsible,' adequate remaining anticipated included, improvements quality. removed following: 'restrictions embargoes outright refusals traffic'; 'pickup delivery problems; interline relating loss, damage, tracing, shortages, misrouting Each possible diversion opposing cases, ultimately See, e.g., Examiners' Decision, App.D., 6, 13, 14, 19, 25, 34, 35, (reproduced App. 864, 1191). small communities affected fears Much made, terminal closings Ball occurred concluded. 1261. terminals—reduced intervening events—only rather service. 603. doubt prejudice update information. commenting perceived diligence seeking inform services personal solicitation.' free promotional competition, economically facilitate matching needs. oral argument counsel disposed evidence' conceding 'we allege evidence.' Tr. Oral Arg. 25.

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