Source: https://supreme.justia.com/cases/federal/us/315/15/
Timestamp: 2019-04-22 18:23:20+00:00

Document:
1. Section 205(h) of the Motor Carrier Act of 1935 incorporates by reference the "party in interest" provision of § 1(20) of the Interstate Commerce Act. P. 315 U. S. 19.
2. A railroad company which is in competition with an individual engaged in the transportation of motor vehicles by the drive-away or caravaning method, is a "party in interest" entitled, under § 205(h), to sue to set aside an order of the Interstate Commerce Commission granting to such individual a certificate of public convenience and necessity. P. 315 U. S. 19.
3. Operations authorized under the "grandfather clause" of § 206(a) of the Motor carrier Act of 1935, in the territory to be served, need not be restricted to specified routes or between fixed termini. P. 315 U. S. 20.
4. In the case of a transporter of motor vehicles by the drive-away or caravaning method, the Interstate Commerce Commission, under the "grandfather clause," may, considering the characteristics of the particular transportation service, authorize operation to all points within a State, although but a few points had previously been served. Such authorization in this case was not inappropriate, and must be sustained. P. 315 U. S. 22.
5. There was evidence in this case that a transporter of motor vehicles by the drive-away or caravaning method was in bona fide operation in certain States on and since June 1, 1935, and the Commission's determination that he was, and that he was entitled in those States to rights under the "grandfather clause," may not be set aside. P. 315 U. S. 23.
6. That a carrier's status under the law of a State is that of a contract carrier does not necessarily bar his obtaining common carrier rights there under the "grandfather clause." P. 315 U. S. 23.
7. Whether a carrier's operation in a particular State was bona fide within the meaning of the "grandfather clause" is a question of fact for the Commission to determine. P. 315 U. S. 24.
8. Violation of state law by a carrier, though relevant to establishing an absence of "bona fide operation," does not necessarily bar rights under the "grandfather clause." P. 315 U. S. 24.
9. There is evidence in this case to sustain the Commission's finding that the carrier's operation in a particular State was bona fide, notwithstanding violation of the state law, and the finding is sustained. P. 315 U. S. 24.
10. Where the carrier's last shipment to a particular State was on May 12, 1935, and more than a year elapsed between June 1, 1935, and the time of the hearing on the application, held that a grant of "grandfather" rights under § 206(a) -- which requires that the carrier shall have been in bona fide operation on June 1, 1935, and "since that time" -- was properly set aside. P. 315 U. S. 24.
Appeal and cross-appeal from a decree of a District Court of three judges in a suit brought to set aside an order of the Interstate Commerce Commission, 8 M.C.C. 469.
as amended (28 U.S.C. § 345) to review a final decree of a district court of three judges (28 U.S.C. § 47) which modified in part and sustained as modified (D.C. 36 F.Supp. 898) an order of the Interstate Commerce Commission (8 M.C.C. 469) granting appellee Fleming a certificate of public convenience and necessity as a common carrier by motor vehicle under the so-called "grandfather clause" (§ 206(a)) of the Motor Carrier Act of 1935. [Footnote 1] 49 Stat. 543, 551, 49 U.S.C. § 306.
1936, the time of the hearing. Shipments consisted of from one to sixteen vehicles, shipments of two and four being the most common. Fleming's service was confined to deliveries at very few points in several states due to the fact that he was furnishing a highly specialized transportation service from manufacturers to dealers and distributors. Shipments to most of the states named were numerous. Shipments to other states were fewer in number. Thus, the three shipments to Arkansas aggregated twenty-five vehicles, the four shipments each to Texas and Oregon aggregated fourteen vehicles and twenty-four vehicles, respectively, and the five shipments to Washington aggregated twenty-eight vehicles. Operations in those four states started just prior to June 1, 1935; but they were sufficient in scope to establish that Fleming was in bona fide operation in them on the statutory date. Fleming held his services out to the public generally as a common carrier and operated as such, and he held himself out to transport by the drive-away method between any points in the states for which application was made.
Though his transportation of shipments was restricted to a few points in each of the enumerated states, the Commission held that he was entitled to transport to all points in all of the states served, with the exception of New York and Pennsylvania, as respects which the application was denied. The District Court sustained the order of the Commission in all respects except the operation in Arkansas. As to that, it held that his service had been abandoned.
"Any final order made under this part shall be subject to the same right of relief in court by any party in interest as is now provided in respect to orders of the Commission made under part I. . . ."
the meaning of § 205(h) under the tests announced in Texas & Pacific Ry. Co. v. Gulf, C. & S.F. Ry. Co., 270 U. S. 266; Western Pacific California R. Co. v. Southern Pacific Co., 284 U. S. 47, and Claiborne-Annapolis Ferry Co. v. United States, supra.
"was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made, and has so operated since that time."
"shall specify the service to be rendered and the routes over which, the fixed termini, if any, between which, and the intermediate and off-route points, if any at which, and, in case of operations not over specified routes or between fixed termini, the territory within which, the motor carrier is authorized to operate."
The authority granted Fleming was to operate in the designated territory "over irregular routes" through specified states. It is plain from the statute that operations need not be restricted to specified routes or between fixed termini. But the question remains as to the power of the Commission to authorize operation in an entire state where only a few points in that state had been served.
be inadequate in the case of the latter. It would be an impractical solution to carve out oddly shaped areas for service based solely on the frequency of service; consideration must also be given to the general territory served under the holding-out, even if the business in some States may not equal that in other States in the territory."
for him. That judgment is for the administrative experts, not the courts.
Appellant railroad companies also urge that Fleming should not have been awarded any rights under the "grandfather clause" in Washington, Oregon, and California. Before June 1, 1935, Fleming had made five deliveries to three different points in Washington, four deliveries to three different points in Oregon, and at least two deliveries to two different points in California. After June 1, 1935, and prior to the hearing in July, 1936, two deliveries were made in Washington, two in Oregon, and apparently several in California. These shipments did not appear to be merely nominal. [Footnote 3] Thus, there was evidence that, on and since June 1, 1935, Fleming had been in bona fide operation in those states. The weighing of such evidence involves in part a judgment based on the characteristics of the highly specialized transportation service involved. Thus, as we have said, that function is peculiarly one for the Commission, not the courts.
Nebraska, he claimed to be the owner of the vehicles in order to reduce license fees. The expression "in bona fide operation" plainly "does not extend to one operating as a common carrier on public highways of a State in defiance of its laws." McDonald v. Thompson, supra, p. 305 U. S. 266. Congress has not, however, conditioned rights under the "grandfather clause" on compliance with state laws. Their violation is material only insofar as it may be relevant to establishing an absence of "bona fide operation." Infractions of state law, however, may be innocent or willful, minor or considerable. They may or may not concern the right to operate in the state. Furthermore, the status of a carrier under state law may or may not be identical with his status as a common or contract carrier under the Motor Carrier Act. The question whether his operation in a particular state was "bona fide" is a question of fact for the Commission to determine. Such operation might well be in good faith, though state laws were infracted. And the fact that an applicant may have to make his peace with state authorities does not necessarily mean that his rights under the "grandfather clause" should be denied or withheld. See Earl W. Slagle, 2 M.C.C. 127. Occasional noncompliance with state laws does not per se establish a course of conduct which is preponderantly one of evasion. Certainly no such course of conduct can be fairly implied in this case. Our task is ended if there is evidence to support the Commission's finding of bona fides. There is such evidence here.
1935. Though fourteen months expired between that date and the date of the hearing, there was no evidence that any shipments were made to any locality in Arkansas since June 1, 1935. No explanation of that long hiatus was proffered. But § 206(a) requires a finding of "bona fide operation . . . within the territory" not only "on June 1, 1935," but also "since that time." We cannot say that an unexplained failure to make any shipments to Arkansas for over a year "since that time" satisfies the statutory command, even though the nature of the highly specialized transportation service involved be given the greatest weight. Cf. United States v. Maher, supra. A mere holding out will not alone suffice to bridge the long gap extending through and beyond one entire automobile production year, since applicant carries the burden of establishing his right to the statutory grant.
We have considered the other points raised by appellant railroad companies, and find them without substance.
*Together with No. 267, United States et al. v. Alton Railroad Co. et al., also on appeal from the District Court of the United States for the Eastern District of Michigan.
The Motor Carrier Act of 1935 is now designated as Part II of the Interstate Commerce Act, 54 Stat. 919.
Now § 205(g) of Part II of the Interstate Commerce Act, 54 Stat. 922, 49 U.S.C. § 305(g).
As to California, the evidence was less specific than in the other states. Shipping bills showed three deliveries to California aggregating five vehicles, the latest being in December, 1935. In addition, there was testimony that, shortly prior to the hearing in 1936, deliveries of taxicabs and trucks had been made in that state.

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