Source: https://supreme.justia.com/cases/federal/us/358/133/
Timestamp: 2019-04-24 11:56:57+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 358 › American Trucking Assns. v. Frisco Co.
American Trucking Assns. v. Frisco Transportation Co.
"to such further limitations, restrictions, or modifications as the Commission may hereafter find necessary to impose in order to insure that the service shall be auxiliary or supplementary to the train service of the railroad. . . ."
Thereafter, without notice, hearing or other proceeding for the elimination of this reservation, the Commission issued to appellee certificates of public convenience and necessity which did not contain the reservation of power to impose restrictions. Still later, the Commission reopened the acquisition proceedings and found, after notice and hearing, that the omission of the reservation of such power from the certificates resulted from an inadvertent ministerial error of the Commission's staff, and it ordered that this error be corrected and that certain specified conditions consistent with the reservations be imposed. Appellee sued to have the order set aside.
Held: the Commission's order is sustained. Pp. 358 U. S. 134-146.
(1) On the record in this case, the Commission properly concluded that the omission from the certificates of the reservation of power to impose restrictions was not due to a conscious policy choice on the part of the Commission, but resulted from an inadvertent ministerial error on the part of the Commission's staff. Pp. 358 U. S. 140-144.
errors, and such action is not prohibited by § 212, which makes the issuance of a certificate the final step in the administrative process. Pp. 358 U. S. 144-146.
The issue here is whether the Interstate Commerce Commission has the power to modify certificates of public convenience and necessity containing inadvertent errors, and, if so, whether, in the circumstances of these cases, the Commission could modify certificates which had inadvertently authorized the performance of unrestricted motor carrier services by a wholly owned subsidiary of a railroad.
"will be consistent with the public interest and will enable such [rail] carrier to use service by motor vehicle to public advantage in its operations and will not unduly restrain competition. [Footnote 1]"
"to such further limitations, restrictions, or modifications as the Commission may hereafter find necessary to impose, in order to insure that the service shall be auxiliary or supplementary to the train service of the [parent] railroad, and shall not unduly restrain competition."
subject to the terms prescribed, and, within thirty days of the reports, it did consummate the transactions and commence operations.
Thereafter, in 1939, compliance orders issued to appellee in connection with the four routes in question. These informed appellee that certificates of convenience and necessity authorizing it to engage in interstate and foreign commerce as a common carrier according to specifications set forth in the orders would be issued as soon as appellee complied with applicable statutory requirements, including the filing of rate publications and evidence of security for the protection of the public. The specifications in the compliance orders did not include the condition adopted by Division 5 reserving the right to the Commission to take steps to insure that appellee's service would be "auxiliary or supplementary" to its parent's rail services.
The reopened proceedings commenced on motion of the Division in 1945. All parties to the proceeding were served with an examiner's proposed report based on the records of the Commission. This report stated that the Commission had approved appellee's acquisitions subject to the right to impose conditions to assure that appellee's operations would be auxiliary or supplementary to the rail service of its parent, but that such a reservation inadvertently had been omitted from the certificates issued to appellee. The report proposed specific conditions to effectuate the original purpose of the Commission -- i.e., to assure that appellee's services were solely "auxiliary or supplementary."
omitted relevant restrictions. The Division, in its report, reviewed the Commission's administrative procedures and practices and pointed out how the error probably had occurred. It showed that certificates are prepared by a staff section of the Commission which, after a prescribed lapse of time from the adoption of reports or orders by the Commission authorizing the issuance of certificates, inserts on mimeographed forms containing stock paragraphs the authority described in the findings of the report. It further stated that, under the Commission rules, this staff section has no discretion to alter anything contained in the reports, and is charged with the sole responsibility of transposing the Commission findings into certificate form. Different action, if any, which might be desired can only be taken by the Commission or a Division through a formal supplemental report. The certificates are reviewed by a supervisor, who is also without discretionary authority to make changes, and are then issued. The Division reasoned that, as no supplemental report had issued between the conclusion of the finance hearings and the issuance of the certificates, the staff section of certificates obviously had made an inadvertent error in transposing the relevant findings.
The full Commission, after oral argument, stressed another aspect of the matter in affirming the action of the Division. In its view, the findings of the finance proceedings which specifically authorized appellee's purchases, subject to the stated limitations, could not be changed to eliminate such limitations without a formal proceeding at which opponents of the unlimited application could be heard. Each opinion within the Commission thus found that the omission from the certificates of the stated reservations had been due to clerical inadvertence which should be corrected. These corrections were ordered, and, in addition, specified conditions were imposed consistent with the reservations.
Appellee, dissatisfied with the Commission's final order, commenced an action before a specially convened three-judge District Court to have the order set aside. 28 U.S.C. § 2321 et seq. Appellee argued, and a majority of the court concluded, over a dissent of one of its members, that, under United States v. Watson Bros. Transportation Co., 350 U.S. 927, the Commission was without power to order modification of the unconditional certificates issued to appellee. Further, the court held that the record lacked substantial evidence to support the Commission finding that the relevant restrictions were omitted from the certificates due to inadvertency. 153 F.Supp. 572. We disagree with both of these conclusions.
It is well settled that the Commission has the power to reserve in certificates issued to a rail-affiliated motor carrier the right to impose specific conditions to assure that the carrier's operations will be "auxiliary or supplementary" to the rail services of its affiliate. United States v. Rock Island Motor Transit Co., 340 U. S. 419. [Footnote 5] In that case, a certificate, which contained a reservation similar to the one at question here, was issued in 1941.
The reason for the reservation is obvious. Congress, in § 5(2)(b) of the Interstate Commerce Act, 49 U.S.C.
5(2)(b), [Footnote 6] has limited the acquisition of motor carrier franchises by rail carriers or their affiliates to situations where the acquisition will enable the rail carrier to use service by motor carrier to public advantage. The Commission has long interpreted this mandate to confine such acquisitions to "operations which are auxiliary or supplementary to train service," at least in the absence of special circumstances which might justify less restricted operations. American Trucking Assns. v. United States, 355 U. S. 141, 355 U. S. 148, note 8. To accomplish this congressional purpose, the Commission can either state in the certificate the conditions necessary to provide the limitation or reserve the right to impose conditions should the necessity arise. United States v. Rock Island Motor Transit Co., supra.
Here, as the record shows, appellee sought the right to carry on unrestricted operations over all the routes which it was acquiring. In some instances, the Commission approved unconditioned operations for reasons which do not appear in the record. In others, however, including the four routes here at issue, approval of only conditional service was granted. Such approval was consistent with appellee's representations that acquisition of the routes would enable it to give service which supplemented the operations of its rail carrier parent. In fact, the limited approval did not appear inconsistent with appellee's plans, for it took no appeal from the Division report adopting the order of the Commission examiner which clearly stated that the Commission reserved the right to impose future conditions. And appellee consummated the proposed purchases within thirty days of the Division report. Undoubtedly, therefore, at the time of the finance proceedings, the Commission authorized limited operations on the routes in question, to which appellee acceded.
Between two and four years later, the Commission issued certificates to appellee which did not contain the reservation. The question arises, therefore, whether the omission of the restrictions from the certificates was due to a conscious policy choice on the part of the Commission, or, as found by it, to error in the administrative process of fashioning the certificates. Certainly a conclusion must be based on one or the other of these alternatives, because, as is obvious from the findings of Division 5, as well as the full Commission, the staff section of the Commission which prepared the certificates could not exercise discretion in changing the findings, orders, and authorizations contained in the Commission reports.
The majority below concluded that the omissions resulted from a policy change, and that the subsequent reopening of the proceedings and conditioning of the certificates was an attempt to restrict appellee's operation on the basis of newly developed policies. The record does not support this conclusion. The District Court believed it significant that Division 5 only adopted the recommendations of a hearing examiner, rather than authoring approval orders of its own. Additionally, the court found special meaning in the fact that one of the certificates issued to appellee contained the relevant reservation, while the ones in issue did not. [Footnote 7] Further, the court viewed the issuance of unrestricted certificates after the commencement of the related carrier proceedings in 1941 as especially important. Viewing these facts, the court refused to accept the majority conclusion of inadvertence.
omitted. 153 F.Supp. 572, 578-579. Under all these circumstances, the conclusion of the Commission was compelled by the record.
Appellee complains that the Commission, or at least Division 5, improperly took official notice of the internal administrative practices and procedures of the Commission. The first full exposition of these procedures appeared in the report of Division 5 in the reopened proceedings, although certain of them had been mentioned in the hearing examiners' reports. Appellee claims that the Commission had to disclose these procedures at the hearing so that it would have a chance to rebut unfavorable inferences which might be drawn from them. But we fail to see what prejudice could have accrued from taking official notice of the practices, for appellee had adequate opportunity to rebut inferences drawn from them on its argument to the full Commission. United States v. Pierce Auto Freight Lines, 327 U. S. 515. Particularly is this true where there is no showing that the procedures were misstated to appellee's prejudice. This is not a case like Ohio Bell Telephone Co. v. Public Utilities Comm'n, 301 U. S. 292, or United States v. Abilene & Southern R. Co., 265 U. S. 274, where the "facts" officially noticed were in doubt or controverted or were discussed for the first time in the final decision of the Commission.
hearing. United States v. Watson Bros. Transportation Co., 350 U.S. 927.
"[c]lerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders."
"The Commission shall conduct its proceedings under any provision of law in such manner as will best conduce to the proper dispatch of business and to the ends of justice."
Of course, the power to correct inadvertent ministerial errors may not be used as a guise for changing previous decisions because the wisdom of those decisions appears doubtful in the light of changing policies. Such was the case in United States v. Seatrain Lines, supra, where it was apparent that the Commission had not reopened prior proceedings to correct a mistake in the issuance of a certificate, but to execute a subsequently adopted policy. Cf. Watson Bros. Transportation Co. v. United States, 132 F.Supp. 905 (D.C.Neb.), aff'd, 350 U.S. 927. To allow the reopening of proceedings in such a case under the pretext of correction would undercut the obvious purpose of § 212 of the Interstate Commerce Act, 49 U.S.C. § 312, which makes the issuance of a certificate the final step in the administrative process. But nothing in that Section prohibits the correction of inadvertent errors. Here, as we have shown, the certificates issued to appellee mistakenly omitted an intended provision, and the Commission's subsequent action was not the execution of a newly adopted policy, but, as it found in a proceeding in which appellants participated after notice, merely the correction of the inadvertence.
MR. JUSTICE WHITTAKER, believing that the evidence does not support the Commission's finding that omission of restrictions from the four certificates of convenience and necessity involved was due to mere inadvertent clerical errors of the Commission's staff, would affirm the judgment of the District Court. 153 F.Supp. 572.
* Together with No. 16, Railway Labor Executives' Association et al. v. Frisco Transportation Co., and No. 19, Interstate Commerce Commission v. Frisco Transportation Co., also on appeals from the same Court.
"Provided, however, That, if a carrier other than a motor carrier is an applicant, or any person which is controlled by such a carrier other than a motor carrier or affiliated therewith within the meaning of section 5(8) of part I, the Commission shall not enter such an order unless it finds that the transaction proposed will promote the public interest by enabling such carrier other than a motor carrier to use service by motor vehicle to public advantage in its operations and will not unduly restrain competition."
The Commission has long interpreted the language of § 5(2)(b), quoted above, to confine acquisitions of motor carriers by railroads or their affiliates to operations which are auxiliary or supplementary to the train service of the railroad. See American Trucking Assns, v. United States, 355 U. S. 141, 355 U. S. 148.
Campbell Sixty-Six Express, Inc. v. Frisco Transportation Co., 43 M.C.C. 641.
Campbell Sixty-Six Express, Inc. v. Frisco Transportation Co., 46 M.C.C. 222.
The appellants in Nos. 15 and 16, American Trucking Associations, Inc., and Railway Labor Executives' Association, urge us to hold that the Commission was without power to issue unconditioned certificates to appellee because of the requirements of § 5(2)(b), and, therefore, the certificates issued to appellee were void. We have not had occasion to rule definitively whether that Section states rigid requirements that operations of rail-affiliated motor carriers be auxiliary or supplementary to train service. Cf. American Trucking Assns. v. United States, 355 U. S. 141. As resolution of the question is unnecessary for the present decision, we intimate no position with regard to it.
See Motor Carrier Act of 1935, § 213, 49 Stat. 556.
The reopened proceedings originally involved six routes. The certificate covering one of these contained a reservation of authority, and conditions imposed in connection with that route are not at issue here. On another route, the Commission's original approval was unconditional, as was the certificate issued in connection with it. The Commission has abandoned efforts to impose new conditions on this route.
See also Davis, Administrative Law (1951) 600. And the agencies have presumed the existence of such power. See Kenosha Auto Transport Corporation -- Interpretation of Certificate, 53 M.C.C. 85; Petroleum Carrier Corp. v. R. Q. Black, doing business as Superior Trucking Co., 51 M.C.C. 717; Greyhound Corporation Extension of Operations-Slidell, La., 47 M.C.C. 103; Santa Fe Trail Transportation Company Extension of Operations -- New Mexico Points, 46 M.C.C. 775; Pan American Airways, Inc., North Atlantic Route Amendments, 7 C.A.B. 849.

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