Source: https://supreme.justia.com/cases/federal/us/320/401/
Timestamp: 2019-04-21 20:33:59+00:00

Document:
1. Upon an application for a certificate authorizing operation as a common carrier under the "grandfather clause" of the Motor Carrier Act, the Interstate Commerce Commission issued a certificate more limited than that indicted in its earlier "compliance order." Held, that the applicant was not deprived of any procedural right. P. 320 U. S. 404.
2. Under the "grandfather clause" of the Motor Carrier Act, the Interstate Commerce Commission issued a common carrier certificate limited to "special operations," "nonscheduled door-to-door service," "irregular routes," and "transportation of not more than six persons in any one vehicle." Held, authorized by the Act and supported by the evidence. P. 320 U. S. 405.
3. The limitation of the certificate to "transportation of not more than six persons in any one vehicle" is not inconsistent with the proviso of § 208 of the Motor Carrier Act forbidding restriction of the right of a carrier to add equipment. Pp. 320 U. S. 406, 320 U. S. 409.
4. It was the intent of Congress to limit applicants under the "grandfather clause" to the type of equipment and service previously offered. P. 320 U. S. 410.
Appeal from a decree of a District Court of three judges dismissing the complaint in a suit to set aside an order of the Interstate Commerce Commission.
This appeal brings here for review a judgment of a District Court [Footnote 1] upholding an order of the Interstate Commerce Commission, specifying limitations in a certificate proposed to be issued to appellant as a common carrier.
"The service to be rendered by applicant, as authorized by the order of which this is a part, in interstate or foreign commerce as a common carrier by motor vehicle of passengers and their baggage, in special operations, in nonscheduled door-to-door service, limited to the transportation of not more than six passengers in any one vehicle, but not including the driver thereof, and not including children under ten years of age who do not occupy a seat or seats, during the season extending from June 1 to October 1, inclusive, over irregular routes,"
between New York, N.Y. and points in Sullivan and Ulster Counties, New York.
Following the enactment of the Motor Carrier Act of 1935, 49 Stat. 543, 49 U.S.C. § 301 et seq., the appellant's predecessor, a partnership, made timely application for a certificate of public convenience and necessity under the grandfather clause of the Act, 49 U.S.C. § 306(a).
eligibility of applicants for certificates because of their former (grandfather) operation.
The partners advertised "7 Passengers Cars Leaving Daily to All Parts of the Mountains," "From Your Home to Your Hotel." An affidavit stated that the partners would "transport people to hotels located in all roads and by-roads." The owners of several resort hotels stated that the applicant had supplies cars for carrying guests between their hotels and New York City. Former passengers described the convenience of the service, and, from their descriptions of the trips, it appears that the routes followed were irregular and taken to fit the needs of each passenger. The firm owned no buses of any kind.
"as a common carrier by motor vehicle of passengers and their baggage, over the regular route, between fixed termini, and to and from intermediate and off-route points, during the season extending from the 1st of June to the 1st of October, inclusive,"
between New York City and named towns in Sullivan and Ulster Counties, New York, by way of New Jersey.
Protests were filed by several competing carriers, who considered the compliance order too broad. On September 14, 1938, the parties were notified that the objections had been deemed sufficient to warrant referring the case back to the field force for further investigation. An informal hearing, which the applicant did not attend, was held on December 1, 1938.
22 M.C.C. 275, reconsidered, 28 M.C.C. 91. In the meantime, the partners sold their business to the present appellant, which was substituted before the Commission by order of October 31, 1940. On September 2, 1941, the second order, providing for a more limited certificate, quoted at the beginning of this opinion, was issued.
under the control of the Commission. § 321(b). This application was treated in the foregoing manner.
Nothing inimical to the applicant on the protests of its competitors developed from the hearing of December 1, 1938. Applicant protested in writing the order of September 2, 1941, filed a brief in support of its protest, and, upon the refusal of Division 5 on March 17, 1942, to allow the protest, renewed it before the entire Commission, where it was again denied July 13, 1942. At no time has appellant offered to present additional evidence of operations prior to June 1, 1935. It seems plain to us that appellant has been afforded ample opportunity to present its application with all supporting data. In view of these facts, we do not find it necessary to resolve a question as to whether or not appellant had actual notice of the meeting of December 1, 1938.
(2) A further contention of appellant is that the record "does not support the Commission in restricting the appellant to door-to-door service over irregular routes in nonscheduled operations," which were described as special operations. As the District Court's interpretation of the order, that "door-to-door service" allowed the appellant to transport passengers from their office or station in the city, as well as from the passengers' residences to the mountains and vice versa, is not challenged, that provision requires no further examination. Evidently, from the advertisement quoted on page 2, both of these types of business were sought.
The objection of appellants to "irregular routes" appears to be that only special or charter operations entitle a motor carrier to a certificate for irregular routes. § 307. Therefore, if appellant's operations are scheduled operations between fixed termini, as appellant also contends, the order ought to require a regular route. However, we think the evidence is clear that, prior to the critical date, June 1, 1935, the operations of appellant were special and nonscheduled.
Consequently, the insertion of the privilege for irregular routes was correct.
In answer to the inquiry as to whether special or charter operations were conducted prior to June 1, 1935, appellant answered, "no special operations." [Footnote 5] However, the record shows a number of instances where passengers made individual arrangements for their transportation to and from the mountains. No schedule of arrival or departure appears in the record. Instead of publishing arrivals and departures, routes, stops, et cetera, the advertisements referred to daily trips and asked prospective customers to arrange for reservations. There was convincing evidence that applicant's service prior to June 1, 1935, was special and nonscheduled.
"Applicant obtains its traffic in the Boroughs of Manhattan and Bronx, New York, and transports said traffic to the Counties of Sullivan and Ulster, in the State of New York. On return trips, the applicant obtains its traffic in and about Woodbourne, New York, more specifically within a radius of twenty (20) miles from Woodbourne, New York, and transports such traffic to the five boroughs of New York City."
(3) Finally, appellant urges that it is beyond the power of the Commission to limit its operations to "transportation of not more than six passengers in any one vehicle."
The freedom is claimed to use buses or other multiple passenger type of conveyance.
"That no terms, conditions, or limitations shall restrict the right of the carrier to add to his or its equipment and facilities over the routes, between the termini or within the territory specified in the certificate, as the development of the business and the demands of the public shall require. [Footnote 6]"
We are of the view that the power of the Commission to limit the certificate as it proposes to do is in accord with the purposes of the Motor Carrier Act. When Congress provided for certificates to cover all carriers which were already in operation, it did not throw open the motor transportation system to more destructive competition than that already existing. The right to certificates was limited to those then in bona fide operation "over the route or routes or within the territory for which application is made." 49 U.S.C. § 306.
The statute, we have said, contemplated "substantial parity" between future and prior operations. Alton R. Co. v. United States, 315 U. S. 15, 315 U. S. 22.
"As the Act is remedial, and to be construed liberally, the proviso defining exemptions is to be read in harmony with the purpose of the measure, and held to extend only to carriers plainly within its terms."
McDonald v. Thompson, 305 U. S. 263, 305 U. S. 266; Gregg Cartage & Storage Co. v. United States, 316 U. S. 74, 316 U. S. 83. Consequently, we held in United States v. Maher, 307 U. S. 148, that operations over irregular routes did not provide the requisite continuity to support an application for regular service between fixed termini, even when the highway between the fixed termini had been occasionally used for part of the distance in the irregular route operations.
When the Commission requires the applicant under the grandfather clause to limit its future operations to the type of equipment and service previously offered, it acts within its power and in accord with the purpose of Congress to maintain motor transportation facilities appropriate to the needs of the public. S.Rep. No. 482, 74th Cong., 1st Sess. If there is a need for a different type of service for this transportation, applications may be filed under § 307.
28 U.S.C. §§ 47, 47a.
These preliminary orders are spoken of as compliance orders. Such a descriptive word is applicable because the orders direct the issue of a certificate in accordance with the terms of the compliance order, if no objection is filed and if the applicant complies with the statutory and regulatory requirements of security for protection of the public, rates, fares, charges and tariffs. 49 U.S.C. §§ 315-317.
51st Annual Report of the Interstate Commerce Commission, pp. 70-72.
51st Annual Report of the Interstate Commerce Commission, pp. 67, 68, 71; 55th Annual Report of the Interstate Commerce Commission, p. 110. See Gregg Cartage & Storage Co. v. United States, 316 U. S. 74, 316 U. S. 84.
The Commission construes "charter" to refer to one contractor taking over all the vehicle for a trip or trips and "special" to transportation services on weekend, holidays or other special occasions when the carrier assembles the passengers and sells individual tickets. Fordham Bus Corp. v. United States, 29 M.C.C. 293, 297; 41 F.Supp. 712.
"Section 208(a), page 26, as amended, permits the Commission to attach to all certificates, whether granted under the grandfather clause or otherwise, reasonable terms, conditions, and limitations. In order to meet criticisms that the effect of these provisions would be to check the natural growth of operations if every increase in facilities required authorization by the Commission, the committee has amended section 208(a). . . ."
The Noble case was a contract carrier application under 49 U.S.C. § 309. Under subsection (b), the Commission was required to specify in the permit the "business of the contract carrier covered thereby."
We held that it was proper to limit the permit so that only shippers who "operate food canneries or meat packing businesses" in particular localities might be served. This limitation corresponded to the type of trade previously enjoyed by the carrier. The carrier contended for a limitation only as to commodities. The proviso in § 309(b), applicable in the Noble case, covers substantially the same ground as the proviso in § 308 dealt with in the present opinion.
Numerous instances of limitation of type are given in the Nudelman opinion. The rule of the Nudelman case has been applied in Rubin and Greenfield Application, 33 M.C.C. 383, and Greenberg Application, 33 M.C.C. 725. See also Davidson Transfer and Storage Co. Application, 32 M.C.C. 777.

References: § 208
 § 301
 § 306
 § 321
 § 307
 § 306
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 § 307
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 § 309
 § 309
 § 308