Case Name: YELLOW TRANSIT FREIGHT LINES, INC., East Texas Motor Freight Lines, Inc., and Red Ball Motor Freight, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission Defendants, and Herrin Transportation Co., and Central Freight Lines, Inc., Intervening Defendants
Court: United States District Court for the Northern District of Texas
Jurisdiction: United States
Decision Date: 1963-07-15
Citations: 221 F. Supp. 465
Docket Number: Civ. No. 9247
Parties: YELLOW TRANSIT FREIGHT LINES, INC., East Texas Motor Freight Lines, Inc., and Red Ball Motor Freight, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission. Defendants, and Herrin Transportation Co., and Central Freight Lines, Inc., Intervening Defendants.
Judges: 
Reporter: Federal Supplement
Volume: 221
Pages: 465–478

Head Matter:
YELLOW TRANSIT FREIGHT LINES, INC., East Texas Motor Freight Lines, Inc., and Red Ball Motor Freight, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission. Defendants, and Herrin Transportation Co., and Central Freight Lines, Inc., Intervening Defendants.
Civ. No. 9247.
United States District Court N. D. Texas, Dallas Division.
July 15, 1963.
Hughes, J., dissented.
Swanson, Midgley, Jones, Blackmar & Eager, Kansas City, Mo., Rice, Carpenter & Carraway, Washington, D. C., Callaway, Reed, Kidwell & Brooks, by Rollo E. Kidwell, Charles D. Mathews, Dallas, Tex., for plaintiffs.
Phillip Robinson, of James, Robinson & Starnes, Austin, Tex., and Ralph W. Pulley, Jr., of Phinney, Hallman & Pulley, Dallas, Tex., for defendants Herrin Transportation & Central Freight Lines.
John H. D. Wigger, Justice Dept., Lee Loevinger, Asst. Atty. Gen., Washington, D. C., and Barefoot Sanders, U. S. Atty., Dallas, Tex., for defendants United States and I. C. C.
Walter Caven and Charles L. Ford, Jr., Austin, Tex., for intervenors Missouri Pacific R. R. & Southern Pacific Co.
Before BROWN, Circuit Judge, and DAVIDSON and HUGHES, District Judges.

Opinion:
PER CURIAM.
For reasons separately stated, Judges Brown and Davidson join in an order setting aside the order of the Interstate Commerce Commission and remanding the case for further and not inconsistent proceedings. Judge Hughes for reasons set forth in her dissenting opinion would uphold the order and dismiss the complaint. The Court is in full agreement, however, that since a remand is ordered, the Court does not undertake to impose any restrictions on the nature or kind of proceedings to be conducted by the Commission. Within the sound discretion of the Commission, that is a matter for its initial determination.
DAVIDSON, District Judge.
The cities of Beaumont and Orange, Texas, are located in the southeastern comer of the State and within about 16 miles of each other.
This suit arises by virtue of a ruling of the Interstate Commerce Commission against the action of the complainant shippers serving Beaumont, Texas. The intervenors are shippers who were entitled to operate out of Orange, Texas.
The conflict of interest and the controversy before us grows out of an action on the part of the City of Orange in annexing apparently a large area of the territory between itself and Beaumont. The ordinance of annexation describes and encircles a large acreage of land of many square miles as part of the city and by the peculiar wording of the ordinance it doesn't annex all the land in that area. The land actually annexed might be called a roadway or fence, as it were, encircling the land enclosed next to the City of Orange without annexing the land itself by the annexation of a strip or roadway being only comparatively a few feet in width. The ordinance of annexation, however, declares that the annexing the strip in question subjects the same to all purposes as a part of the City of Orange.
This circular strip reaches within five miles of the City of Beaumont. Now the City of Beaumont has over 100,000 population and under the previous regulations made by the Interstate Commerce Commission a city of 100,000 population automatically takes jurisdiction for transportation purposes of a belt line reaching five miles outside its corporate limits. This five-mile limit of Beaumont is overlapped by the circular strip annexed by Orange. Thus, a part of Orange comes within the service of the trucking companies operating out of Beaumont and it is insisted, and seemingly not to be questioned, gives the Beaumont shippers right to serve all of the Orange territory, including the various parts of the city.
A more detailed statement of the controversy will be found in the dissenting opinion of Judge Sarah Hughes.
The ruling of the Interstate Commerce Commission in effect says that the ordinance of the municipality doesn't accomplish all that it says and the ruling of the Commission undertakes to limit the effect of the ordinance which has the effect of raising a question. Does the Interstate Commerce Commission as such have the power to determine the meaning of a legislative body of a State or municipality when such municipality itself undertakes to define the meaning and extent of the powers of such ordinance?
By its own regulations, 49 CFR § 170.15, the Interstate Commerce Commission has defined municipality as:
" any city, town, village or borough which has been created by special legislative act or which has been otherwise individually incorporated or chartered pursuant to general state laws, or which is recognized as such under the constitution or by the laws of the state in which located and which has a local government. It does not include a town or township of the New England type."
The Orange ordinance of annexation as above stated declares that the annexation is made for all purposes. The ruling of the Interstate Commerce Commission challenges the effect of such declaration.
The pertinent part of the annexation ordinance of Orange reads as follows:
"AN ORDINANCE OF THE CITY OF ORANGE, TEXAS, A MUNICIPAL CORPORATION, ANNEXING CERTAIN TERRITORY
•***
"WHEREAS, the City of Orange and the area surrounding and adjacent to the City of Orange is growing in population and residential, commercial and industrial development very rapidly and
"WHEREAS, the waterways of' Orange County are extensively used for boating and other recreational purposes, and such uses should be subjected to control by a responsible governmental unit with the police power and facilities to control violations of existing laws and regulations
" now therefore,
"BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF' ORANGE, TEXAS:
"That the land, area, territory and waterways hereinafter described in Exhibit "A", attached hereto and made a part hereof for all purposes, be, and the same are hereby annexed to and made a part of the City of Orange for all municipal purposes, and the same shall, after the passage of this ordinance on final reading, be a part of the City of Orange and be included within the boundaries thereof. (Emphasis supplied)

"PASSED, APPROVED AND ADOPTED ON FINAL READING on this the 9th day of August, A. D. 1960."
For the convenience and understanding as well as the benefit of shippers carrying a permit of convenience and necessity of service the Interstate Commerce Commission has heretofore outlined certain rules. In outlining these rules it acted in a quasi-legislative capacity and shippers coming under that rule have a right to expect that that rule will be observed, and if in the particular case it is not observed, the later ruling becomes retroactive in its nature.
The pertinent part of the ruling of the Interstate Commerce Commission in Ex Parte No. MC-37 Commercial Zones and Terminal Areas, 46 M.C.C. 665, is as follows:
"The commercial zone of each municipality in the United States, (except those individually determined) consists of all other municipalities within the United States and all unincorporated .areas within the United States which are adjacent to the base municipality as follows: (a) When the base municipality has a population less than 2.500, all unincorporated areas within 2 miles of its corporate limits and all of any other municipality any part of which is within 2 miles of the corporate limits of the base municipality; (b) when the base municipality has a population of 2.500, but less than 25,000, all unincorporated areas within 3 miles of its corporate limits and all of any other municipality any part of which is within 3 miles of the corporate limits of the base municipality; (c) when the base municipality has a population of 25,000, but less than 100,000, all unincorporated areas within 4 miles of the corporate limits of the base municipality; and (d) when the base municipality has a population of 100,000 or more, all unincorporated areas within 5 miles of its corporate limits "
We think that the Interstate Commerce Commission is without power to set aside an ordinance of a municipality by saying that it doesn't mean what the ordinance itself declares itself to be.
It should not in this individual instance set aside its former rulings, because such takes on the nature of a retroactive proceeding which may work a hardship on those affected. We feel that the ruling o-f the Interstate Commerce Commission should not be sustained. It may be true that the City of Orange has equities present and potential, but we feel that it has within its own power and grasp a means of solving the problem before it to its satisfaction and to the satisfaction of its own shippers by amending its ordinance so it will not reach into the five-mile boundaries of Beaumont and neighboring cities.
We adopt and attach hereto Exhibit C used by the Interstate Commerce Commission.
It may be insisted that the City of Orange in establishing its far-flung circuit involved in this annexation was acting in an oppressive, capricious manner and that the ordinance is void for that reason, but the question immediately arises, can any authority other than a duly constituted court so rule or hold. Is it in the purview of the jurisdiction of the Interstate Commerce Commission to hold as a matter of law or to establish a precedent to the effect that it may by its decisions alter the boundaries of a city which it deems to have been established by an unwise, capricious act?
Allowing our thought to stray as it were from the record before us, in the light of the Roadway Express case involving an ordinance of the City of Houston, a narrow strip of land was held to be properly annexed as a part of the city.
And passing outside of the record it is a matter of common knowledge that the City of Fort Worth has annexed a strip some 15 miles in length in order to police Amon Carter Airport. Everybody is willing to see it policed and if Fort Worth is willing to do it nobody up to now has attacked the protection of Fort Worth as being capricious or otherwise. Dallas and Fort Worth have had disagreements about that field. The Civil Aeronautics Board has again and again passed upon the situation at the Amon Carter Field. Conflicts have arisen between parties affecting such and the service rendered by such, but up to now no attack has been made on Fort Worth's protection over the long strip connecting the field with the City of Fort Worth.
To concur in or affirm the Interstate Commerce Commission in the current case would be apparently overruling the decision heretofore made in the Houston case and laying a predicate for questioning of Fort Worth's jurisdiction over the strip up there.
If the Interstate Commerce Commission can determine the correct boundaries of Orange, she must do it as a court or hold that they are arbitrary and capricious and when she takes upon herself the judicial power of exercising such, in our judgment, she extends that power beyond any that has been heretofore conferred upon her by Congress.
Incidentally, while the law recognizes a direct attack on a capricious annexation ordinance, no collateral attack such as is present in this case would be sustained.
We think the ruling of the Interstate Commerce Commission should be set aside without prejudice to any future action to be had within the law.