Source: http://openjurist.org/340/us/419
Timestamp: 2014-11-23 01:28:01
Document Index: 744297987

Matched Legal Cases: ['§ 207', '§ 307', '§ 206', '§ 306', '§ 213', '§ 5', '§ 1336', '§ 1336', '§ 1253', '§ 1253', '§ 212', '§ 312', '§ 202', '§ 302', '§ 213', '§ 5', '§ 207', '§ 213', '§ 5', '§ 207', '§ 212', '§ 212', '§ 206', '§ 207', '§ 213', '§ 5', '§ 202', '§ 213', '§ 5', '§ 213', '§ 5']

340 US 419 United States v. Rock Island Motor Transit Co | OpenJurist
340 U.S. 419 - United States v. Rock Island Motor Transit Co	Home340 us 419 united states v. rock island motor transit co
340 US 419 United States v. Rock Island Motor Transit Co 340 U.S. 419
71 S.Ct. 382
95 L.Ed. 391
UNITED STATES et al.v.ROCK ISLAND MOTOR TRANSIT CO. et al.
See 341 U.S. 906, 71 S.Ct. 609.
[Syllabus from pages 419-421 intentionally omitted]
Mr. Daniel W. Knowlton, Washington, D.C., for appellants.
Mr. Harry E. Boe, Chicago, Ill., for appellee Rock Island Motor transit co.
Mr. Einar Viren, Omaha, Neb., for appellee Omaha Chamber of Commerce.
Messrs. Ernest Porter, Des Moines, Iowa, Bert F. Wisdom, Ida Grove, Iowa, for appellee Iowa State Commerce Comm'n.
Questions of the power of the Interstate Commerce Commission to tighten the restrictions on operations of a railroad's motor-carrier affiliate are raised by this appeal. In the Commission's view the operations must be modified in order to make them truly auxiliary to or supplemental of the rail service. They are conducted (1) under a certificate of convenience and necessity issued in 1941 under § 207 of the Interstate Commerce Act, 49 U.S.C.A. § 307, and (2) under an order of 1944 approving the acquisition of another motor carrier. The certificate contains the condition that the Commission might impose other terms to restrict the holder's operation to service which is auxiliary to or supplemental of rail service. The order contains neither this condition nor any other relating to the specific operating rights of the carrier.
The issues involve a basic power of the Commission to regulate the operations of motor carriers affiliated with railroads so as to assure that at all times the motor operations shall be consonant with the National Transportation Policy, 54 Stat. 899, 49 U.S.C.A. preceding section 301. The Commission has decided that that policy requires the motor operations of railroads and their affiliates to be auxiliary to and supplemental of train service. This raises questions as to how the planned auxiliary and supplemental service is to be achieved. Differences also exist as to what phases of motor-carrier operations are auxiliary to and supplemental of rail or train service.
The Rock Island Motor Transit Company, a wholly-owned corporate subsidiary of the Chicago, Rock Island and Pacific Railroad Company and its predecessors, is a common carrier by motor vehicle engaged in transporting property in interand intrastate commerce, exclusively, for all practical purposes, along the rail lines of its parent corporation in Arkansas, Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, Tennessee, Texas and Kansas. Many of Transit's operations alongside its parent are in different localities and under other I.C.C. authorities than the certificate and order here involved.
This appeal deals with additional operating restrictions placed subsequent to the Commission's formal approval of Transit's purchase and operation, upon two of Transit's acquisitions. The first is a segment of the so-called White Line Purchase. The Line was in process of perfecting its 'grandfather rights' under § 206(a), Motor Carrier Act, 49 U.S.C.A. § 306(a), at the time of appellees' agreement to purchase. The order directing issue of the certificate to Rock Island recognized this. This purchase was authorized under § 213, Motor Carrier Act of 1935, 49 Stat. 555, April 1, 1938, Docket No. MC—F—445; reported 5 M.C.C. 451, 15 M.C.C. 763. The segments of the White Line Purchase here involved are those between Des Moines, Iowa, and Omaha, Nebraska, and Des Moines, Iowa, and Silvis, Illinois, included in Transit's certificate of convenience and necessity issued in M.C. 29130, December 3, 1941.
That certificate had only the following provisions in any way applicable to this controversy:
'Service is authorized to and from the intermediate points on the above-specified routes which are also stations on the lines of The Chicago, Rock Island and Pacific Railway Company.
'The operations authorized on the abovespecified routes are subject to such further limitations, restrictions, or modifications as we may find it necessary to impose or make in order to insure that the service shall be auxiliary or supplementary to the train service of The Chicago, Rock Island and Pacific Railway Company and shall not unduly restrain competition.'
The second acquisition is the so-called Frederickson Purchase, authorized November 28, 1944, Docket No. MC—F—2327, under § 5, Interstate Commerce Act, 54 Stat. 905, by which Transit acquired, from the holders of a certificate of convenience and necessity, a route between Atlantic, Iowa, and Omaha, Nebraska. Neither the report nor the order contained provisions alike or akin to these just quoted from the White Line certificate. No order for a certificate has yet been entered and no certificate has been issued.
The routes here involved are a major part of the Rock Island's truck route between Chicago and Omaha. The eastern end of that route from Silvis, Illinois, to Chicago is operated under other I.C.C. authority.
Transit has been operating the above routes since their respective dates. Under those authorities, Transit states it has engaged in trucking service as follows: '(a) a coordinated rail-service, at rail rates auxiliary to the existing service of appellee's affiliated railroad; (b) a motor service in substitution of rail service, at rail rates; and (c) a motor common carrier service at rates and tariffs observed and applied by appellee's predecessors, as modified from time to time.' On February 5, 1945, the Commission directed reopening of the dockets to give reconsideration to the above certificate and order, 'solely to determine (a) the conditions or restrictions, if any appear necessary, which should be imposed to insure that the motor carrier service performed by The Rock Island Motor Transit Company is limited to that which is auxiliary to, or supplemental of, rail service, and (b) the condition, if any appears necessary, which should be imposed so as to make the authority granted to The Rock Island Motor Transit Company subject to such further conditons or restrictions as the Commission may find necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, rail service.'
'1. The service to be performed by The Rock Island Motor Transit Company shall be limited to service which is auxiliary to, or supplemental of, train service of The Chicago, Rock Island and Pacific Railroad Company, hereinafter called the Railroad.
'2. The Rock Island Motor Transit Company shall not render any service to or from any point not a station on a rail line of the Railroad.
'3. No shipments shall be transported by The Rock Island Motor Transit Company between any of the following points, or through, or to, or from, more than one of said points: Omaha, Nebr., Des Moines, Iowa, and collectively Davenport and Bettendorf, Iowa, and Rock Island, Moline, and East Moline, Ill.
'4. All contractual arrangements between The Rock Island Motor Transit Company and the Railroad shall be reported to us and shall be subject to revision, if and as we find it to be necessary, in order that such arrangements shall be fair and equitable to the parties.
'5. Such further specific conditions as we, in the future, find it necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, train service.' Rock Island Motor Transit Co., 55 M.C.C. 567, 597—598, affirming 40 M.C.C. 457.
It is from those modifications that Transit sought relief through §§ 1336 and 2325 of 28 U.S.C., 28 U.S.C.A. §§ 1336, 2325 from a three-judge district court. The relief was granted and the orders were annulled and their enforcement enjoined. 90 F.Supp. 516. The United States and the Interstate Commerce Commission appealed under 28 U.S.C. § 1253, 28 U.S.C.A. § 1253. We noted probable jurisdiction.
Transit's objection to the order modifying the provisions under which it operates these routes may be generalized as a contention that the Commission's order changes or revokes a part of Transit's operating authority, previously granted by the Commission, without any failure by Transit to comply with any term, condition or limitation of the Commission authority under which Transit functions. Changes or revocations may only be made under § 212(a) of the Interstate Commerce Act, 49 U.S.C.A. § 312(a), for such failures.1
The Commission, on the other hand, takes the position that there is no change in or revocation of its authorization to operate as a motor common carrier. It looks upon the certificate for the White Line route and the order for the Frederickson Purchase as being controlled by the Interstate Commerce Act and Transit's applications for purchase approval. The Commission understands the Declaration of Policy, § 202(a) of the Motor Carrier Act, enacted at the inception of federal regulation of motor carriers in 1935, 49 Stat. 543, 49 U.S.C.A. § 302, as directing it to preserve the inherent advantages of such transportation in the public interest. It finds support for this view in the National Transportation Policy set out in the 1940 amendments to the Interstate Commerce Act, 54 Stat. 899, declaring that the Act should be administered so as to recognize and preserve the inherent advantages of rail, motor and water transportation.2 It treats § 213 of the Motor Carrier Act of 1935 and present § 5 of the Interstate Commerce Act as authorizing mergers, consolidations and acquisitions between rail and motor carriers only within the Transportation Policy.3 Although § 207, providing for the issuance of certificates of convenience and necessity, has no clause requiring special justification for railroads to receive motor-carrier operating rights, such as appears in the proviso in former § 213 and present § 5, the Commission applies the rules of the National Transportation Policy so as to read the proviso into § 207 in order to preserve the inherent advantages of motor-carrier service.4
The trial court accepted Transit's argument. 90 F.Supp. at page 519. The court found the undisputed fact to be that the Commission, in this modification proceeding, was not acting under § 212 of the Interstate Commerce Act authorizing changes or revocations in operating authority, but under claimed power subsequently to impose conditions to insure that the operations would be auxiliary to, or supplemental of, rail service; that Transit's operations were at all times auxiliary and supplemental to rail service within the Commission's definition of that service when the acquisitions were approved, and could not be changed or revoked except under § 212; that such restrictions as were proposed would interfere with the full motor common-carrier rights of Transit's predecessors guaranteed to them by the 'grandfather clause,' § 206, and transferred to Transit by a purchase approved by the Interstate Commerce Commission.
A glance at the proposed restrictions, supra, 340 U.S. 425 426, 71 S.Ct. 386, 387, shows the practical disadvantages to Transit. It cannot carry on a general all-motor operation on its own billings or under motor rates, joint or local.5 It cannot haul through motor traffic at rail tariffs between the 'key points,' Omaha, Des Moines and the Bettendorf-Rock Island-Moline center. Furthermore, Transit rests under the threat of possible future restrictions as need may be shown for their application to hold its operations, under changing conditions, to those then reasonably determined by the Commission to be needed to keep Transit's motor service auxiliary and supplemental to its parent's rail service. Transit alleges that the restrictions would bar it from participation in traffic on the affected routes that now produce a gross revenue of more than a million dollars a year. As damage to Transit, if the Commission order is enforced, was admitted, proof of the amount was dispensed with.
With the situation as above stated in mind, we take up the question of the validity of the Commission's action in this case.
Statutory Authority.—The Commission has power at the time of its approval of an application to limit the authority to be granted by certificates of convenience and necessity for the operation of motor carriers, whether the certificate is issued on an original application under § 207 or after acquisition under § 213 of the Motor Carrier Act, § 5(2), Interstate Commerce Act. Section 206 requires a certificate. Section 207 gives discretion to the Commission according to the statutory standards of convenience and necessity to authorize a part or all of the requested operations. The service must be performed according to the 'requirements, rules, and regulations of the Commission'.
The practice of the Commission from the beginning of motor-carrier regulation has been to restrict motor-carrier operations both geographically6 and functionally.7 The same was true of railroad motor-carrier affiliates. We think that at the time of issuance of the certificate, if the Commission reasonably deems the restriction useful in protecting competition, or for other statutory purposes, the Commission may require the railroad-affiliated motor carrier to perform only those services that are auxiliary and supplemental to the rail service. That the railroads made use of motor carriage primarily in such fashion was known to the Congress before the enactment of any regulatory legislation in the field.8 Such a restriction is a logical method to insure the maximum development of the two transportation agencies—rails and motors—as coordinate transportation services in accordance with the Declaration of Policy, § 202(a) of the Motor Carrier Act of 1935, 49 Stat. 543, later incorporated into the National Transportation Policy, prefixed to the Interstate Commerce Act of 1940, 54 Stat. 899. Specific statutory authority is found in the requirements of the proviso in § 213(a) of the Motor Carrier Act of 1935 and § 5 of the Interstate Commerce Act as amended in 1940, quoted in note 3, supra. Railroad operations as motor carriers are forbidden by that acquisition section except to enable a railroad 'to use service by motor vehicle to public advantage in its operations'.9
A spate of cases can be cited to support the practice, some of which were specifically called to Congress' attention prior to the enactment of the 1940 Act.10 With this knowledge that the Commission was granting certificates when it deemed the proposed railroad motor-carrier affiliates would operate as auxiliary to and supplemental of railroad service, Congress reenacted § 213 of the Motor Carrier Act in § 5(2) of the Transportation Act of 1940. Such limitation was in furtherance of the National Transportation Policy, for otherwise the resources of railroads might soon make over-the-road truck competition impossible, as unregulated truck transport, it was feared, might have crippled some railroads. Motor transportation then would be an adjunct to rail transportation, and hoped-for advancements in land transportation from supervised competition between motors and rails would not materialize. The control of the bulk of rail and motor transportation would be concentrated in one ty