Robert W. Ginnane: May it please the Court. (Inaudible) of civil rules does apply in appropriate circumstances to the amendment of a complaint seeking review of an administrative order. We submit that there was no abuse of discretion on the part of the three-judge court in this case in denying the appellant's motion to amend because again, this was not a routine motion to amend filed at an early stage in the proceedings, rather it came so late that it amounted to a deliberate attempt to split up to what would normally be a single review proceeding, a single day in court into a piecemeal review of an administrative order because the appellant stated candidly to the three-judge court that they would seek to amend their complaint. If the one question under Section 5, which they had raised in their original complaint, if that question was resolved against them, then they would like to amend to -- to litigate some further questions. And raising -- raising the question on amendment that late is essentially the same, we submit, in terms of the wasting of judicial time and the harassment of parties, as if they had actually waited until the three-judge court had rendered its decision and judgment upon the one point raised in the complaint. Now, such repetitive review, such piecemeal review of Commission orders, we submit, is repugnant to the whole pattern of arrangements which Congress has provided and indeed which this Court has impart provided for the review of administrative orders. Some years ago in the United States v. Griffin, this Court had occasioned to analyze the review provisions provided for the review of Interstate Commerce Commission orders. And the Court specifically adverted to the fact that Congress sought to avert the delays incident to litigation. And in many recent regulatory statutes, almost typically, Congress has specified a period within which proceedings for judicial review of particular types of administrative orders must be brought, such periods are typically 30 or 60 days. But this whole pattern of congressional purpose and the purpose of this Court were reasonably expeditious review of orders for a single day in the Court for those that want to challenge regulatory orders is thwarted. If this new theory of a piecemeal ruling review of orders and the guides of amendments to complaints is accepted, if this -- in many respects, we view this aspect of the case as more important than the subsequent law aspect because in these rate cases in particular, and I emphasize I -- this is no reflection on the parties to this case, I'm just speaking generally, in these rate cases, delay is typically worth a great deal to one side or the other. Delay is precious to the carrier if it has rate -- if it has rates in effect. Delay is precious to the protesters if the carrier can't get rate -- can't get rates into effect. And if, by a theory of amendments to complaints, orders of the Interstate Commerce Commission and other orders of federal regulatory agencies can be subjected to this kind of piecemeal review, then they'll -- then it -- that there will have been created a unique procedure for dilatory tactics.
Hugo L. Black: Why do you say this would have delayed the carrier? I can understand your argument that you will not be allowed (Inaudible)
Robert W. Ginnane: Well, may I review the posture of the case? A complaint filed --
Hugo L. Black: I understand that.
Robert W. Ginnane: -- responsive pleadings, briefs, briefs on the merits of the one question under Section 5, which the appellant raised in their original complaint, counsel for the parties, assemblance San Francisco before the three-judge court, argument is held on the merits of the one question raised in the original complaint. And in the course of that argument for the first time, the Court has told, the defendants are told by the appellants that if this one question raised by them in their complaint is resolved against them by the three-judge court, then they'd like to amend their complaint to litigate some further questions. And we submit that that sort of --
Hugo L. Black: (Voice Overlap) delay in this particular case?
Robert W. Ginnane: It would have been --
Hugo L. Black: What delay would have been brought about? When was the case -- when did they ask him and when did the case decided?
Robert W. Ginnane: Well, the case was argued in -- on February 23. On February 28, they filed this motion for leave to amend. Now, in this -- in this particular case --
Hugo L. Black: Beginning what year?
Robert W. Ginnane: 1956.
Hugo L. Black: When was it decided?
Robert W. Ginnane: Three-judge court handed down its decision in April of 1957.
Hugo L. Black: 14 months.
Robert W. Ginnane: 14 months.
Hugo L. Black: Well, why would it delay the judge to let them do that if they claim that they had just placed for the witness to testify the one thing they had discovered that he testified quite another (Inaudible)
Robert W. Ginnane: Well, may I say this without intending the slightness reflection or criticism of the three-judge court. At the time this idea of amending the complaint was raised, their argument before the Court in February of 1956, none of the parties had any idea when the three-judge court would come down to its decision. For all we knew, they -- they might have handed down a decision four or five weeks later. In --
Hugo L. Black: We know now when it --
Robert W. Ginnane: We know now.
Hugo L. Black: It was 14 months.
Robert W. Ginnane: What I -- what I do --
Hugo L. Black: Is it your judgment that -- that they could have decided it necessarily later beyond that 14 months to let them (Inaudible) again?
Robert W. Ginnane: Of course not, sir. But -- but I am saying that in the -- that in the ordinary three-judge case, nothing like 14 months elapses between argument and decision. And that -- and that in the average case to permit this sort of rewriting of the complaint at or following a hearing on the merits, perhaps once, perhaps twice for the limit that that -- that will delay the completion of these proceedings, it will -- it will prevent giving to these orders of administrative agencies the finality within a reasonable time, which Congress clearly has indicated that they should have.
Hugo L. Black: (Inaudible) general in flexible rule taking this out, idea that (Inaudible) as a matter of fact, it came to a court of justice, two judges and that people should be allowed to amend at anytime if they have some relevant reasons that will not do an injury to that case.
Robert W. Ginnane: I submit, sir, that Congress and this Court have defined justice in the review of administrative orders as containing some other -- some other factors too. Everybody should have their day in court, determines an I.C.C. order. What I'm suggesting is that this amendment business should be so restricted that people have one full day in court, not two or three.
Hugo L. Black: Even though -- even though it works a gross injustice in a particular case would not delay it at all, but you are saying, we shouldn't apply it, the general civil rule which was entered to achieve the ends of justice rather than the question.
Robert W. Ginnane: Well, Your Honor refers to a gross injustice, but this was the appellant's choice, some tactical choice of theirs.
Hugo L. Black: I don't know about the technical choice. All I know is that we've had a rule which we could use to consider very liberally. The rule says it can -- complains can be amended in a regular lawsuit even after the -- after the case has been argued and the charge has been made. That's the general idea of justice referred and you say that we should depart from it in connection with the challenges against the (Inaudible)
Robert W. Ginnane: Under the circumstance of this case, I certainly do, sir. And -- and whether it's the orders of the Interstate Commerce Commission or those of any federal agency. Congress has intended and this -- and this Court has recognized that intention and applied it, that -- that this regulatory orders many of which involved matters of great moment, the whole regions of the country. It shall -- it shall be final. It shall come to rest within a reasonable period of time, but then the reasonable period of time, which allows those who want to challenge it one day in court, not two days or three days.
Speaker: Did the --
Robert W. Ginnane: And your -- and this Court has never departed from that principle, happily or haven't been asked to before.
Hugo L. Black: That one day -- that one day is the revenue concept, I think.
Robert W. Ginnane: Well, it's almost --
Hugo L. Black: I don't think that -- if you mean by that that while a case is in progress [Laughs], it goes on for two years. You got to stick to the original pleadings as the word. You will never go back on it because in some other case, it might delay a -- it might delay judgment.
Speaker: Did the District Court here deny this as a pure matter of discretion or did they go on even if they had no power to rule the amendment? Amending rule didn't have any application to I.C.C. (Voice Overlap) --
Hugo L. Black: As a matter of discretion. They did not take the position --
Speaker: We got any basis in this record for reaching a judgment as to whether the amendment or whether there was an -- whether a substantial attack could have been made on the findings of the Commission. We have no -- no way of judging that, have we?
Robert W. Ginnane: The -- the record is not before you. For example, one of the issues they wanted to raise was that -- was that the Commission's findings were not supported by substantial evidence.
Speaker: That's what I understood.
Robert W. Ginnane: That -- that evidence is not before you. The plaintiffs did not choose to file the evidentiary record with the District Court and therefore, it was --
Speaker: And the District Court --
Robert W. Ginnane: -- not certified to the Court.
Speaker: -- the District Court didn't have that before it either?
Robert W. Ginnane: No. The District Court had before it only the pleadings before the Commission and the Commission's report and the rest of this were in the record consist of the various court pleadings. None of the evidence is here.
Hugo L. Black: What language did the Court use in declining to permit the amendment? Did it use anything like the language of the rule or anything that was its equivalent?
Robert W. Ginnane: It's on page 118 of the record and the gist -- the gist of the court ruling appears to be as follows. It is sufficient to say that the power of the Court to permit amendment should not be used to completely change the theory of the case after the case has been submitted to the Court on another theory without some showing of lack of knowledge, mistake or inadvertence on the part of the parties seeking amendment or some change of conditions of which the party had no knowledge or control.
Hugo L. Black: Now, that, as I recall it, is the language that was used in connection of those things many years. But state and the federal court before the (Inaudible) rules of amendment were adopted and that, as I recall it, is the language that's used frequently in reference to setting aside judgment by the power.
Robert W. Ginnane: That's right.
Hugo L. Black: So that he did (Inaudible) as far as his language is concerned. He used the language, which indicated his adherence to the idea that you had to satisfy the criteria for a judgment -- judgment by the Court set aside rather than make an amendment.
Robert W. Ginnane: But in -- but in fairness to the three-judge court, I assume they were saying that in the context of the -- of the chronology of facts in this case.
Hugo L. Black: Did you argue there or did the Commission argued there that that the rule shouldn't apply? Rule 15?
Robert W. Ginnane: No, we -- we argued essentially on the facts. As I recall, we assumed that it applied to permit amendments under appropriate circumstances. I think we are -- I think our -- our whole argument was under the circumstances of this case, under the chronology of -- on this case.
Hugo L. Black: I -- I --
Robert W. Ginnane: That then --
Hugo L. Black: -- understand that argument. I think that's clear and valid agreement if -- if the fact is supported.
Robert W. Ginnane: If the fact is supported, we think they do. As I say, this has been tried so seldom if at all that we do -- that we don't have much by way of precedent to point to. But Your Honors did have a somewhat similar question back in 281 U.S. in Grubb v. Public Utilities Commission of Ohio. And you dealt with it in language which we think fits here like a hat. And you said, “He was not at liberty to prosecute that right by piecemeal as by presenting a part only of the available grounds and reserving others for another suit if failing in that.” Now, that case involved --
Earl Warren: That -- that we're saying is this, he isn't asking to have another suit. He merely asked to -- to amend his pleadings here so he can have it all determined in one suit.
Robert W. Ginnane: We think, as a practical matter, it's the same thing. He waited until he saw how his arguments on the first point, how they went with the three-judge court, then he said, "Let's -- if we lose on that, we want to amend our complaint." That just isn't the way orders have been reviewed, administrative orders for the last 75 years under the rules laid down by Congress and this Court. I would like to turn now to the issue decided by the -- considered and decided by the court below as to whether this type of transaction is subject to the Commission's jurisdiction under Section 5 of the Interstate Commerce Act. Now, the provision, which we think is pertinent and controlling, is that portion of Section 5 (a) (2) which provides that, “It shall be lawful, with the approval of the Commission, for any carrier to acquire control of another through ownership of its stock or by otherwise.” Now, here, the Commission exercised jurisdiction over a double transaction but to be consummated simultaneously, transaction by which Golden Gate would acquire certain carrier franchises and properties from Pacific Greyhound, thus making Golden -- Golden Gate a carrier, and at the same time, Pacific would still remain the carrier by reason of -- of the franchises and operations which would continue to operate. Pacific would acquire control of Golden Gate by taking all of its capital stock. In brief, what the Commission did was to determine what was happening, what had happened at the point when the transaction was consummated. Now, the appellant's argument briefly is that Section 5 (2) doesn't apply to what they refer to as split-ups of carriers as distinguished from consolidations or unifications. And as a parallel argument, they -- they contend that Section 5 doesn't apply unless using the names of this case, unless Golden Gate was a carrier prior to the beginning of these transactions. And they contend that the legislative history shows that Congress was not -- was not concerned to reach with Section 5, split-ups of carrier operation as distinguished from carrier unifications or consolidations. Well, now, to begin with, we think that as a matter of literal statutory language, just looking only at the language in a very literal way, this transaction was subject to Section 5 because by the -- by the time the transaction is completed, one carrier has acquired control of another. But more importantly, I think from the beginning, this Court has not interpreted Section 5 strictly or in any dictionary sense. Were you going to ask me a question, sir?
Earl Warren: Well, I -- I was just going to -- to ask if the language didn't import the fact that -- that the Commission could give approval to a carrier not to make a carrier and then give it approval but to -- to give it to a carrier and if you can be a little more specific, I'd like to -- I like to know how you -- you -- why you claim that this company that never had anything to do with transportation before can be a carrier until the judgment becomes final.
Robert W. Ginnane: It can't become a carrier as you suggested. It can't become a carrier except upon the consummation of the transaction. For example, at the -- at the present time, Golden Gate is an empty corporate shell.Pending this litigation, the transaction has not been consummated. But if -- but when the transactions are authorized, if they are authorized, consummated is authorized by the Commission's order. And as they are completed, Golden Gate will be in the carrier business, admittedly carrying on carrier operations and it will be controlled by another carrier, Pacific Greyhound.
Earl Warren: But if Congress meant that, why wouldn't they say for any corporation authorized by the Commission to become a carrier to acquire control of another if it meant just that -- just what you said it means.
Robert W. Ginnane: Well, I would answer -- I would answer that in two ways. First, as this Court has recognized, Section 5 applies to such a variety of transactions, but this Court has never insisted that every transaction covered by Section 5 be spelled out in -- in quite that detail. And secondly, I would like -- I would like to show that the purposes, which Congress intended to be served by this control under Section 5 require that the Commission exercise control over this type of carrier split-up. Because in a -- in a number of cases under the Transportation Act of 1920, cases dealing with Section 5 and related provisions of the Act such of those of Section 20 (a), concerned with security issues that this Court has given a broad remedial sweep to these provisions. Thus, in the Schwabacher case, you summarized your prior decisions as confirming the power and duty of the Interstate Commerce Commission regardless of state law to control rate and capital structures, physical make up and relations between carriers, in the light of the public interest and an efficient -- in an efficient national transportation system. Now, turning to what we think is the leading case in the interpretation of Section 5, the New York Central Securities Corporation case in 287 U.S. Now, that case involved Section 5 as it read in the Transportation Act of 1920. And at that time, so far as here pertinent, Section 5 then -- then authorized a carrier with the prior approval of the Commission to acquire control of another carrier by lease or by purchase of stock. And in that case, the Commission had authorized a carrier to list the properties of two carriers, which it already controlled through stock ownership. And this Court held that the lease, despite the prior stock control, that the lease involved in acquisition of control, which require the Commission's approval under Section 5. And we think the gist of this Court's decision in that case appears in one short paragraph, which Your Honors quoted last term with approval in the Alleghany case, and I quote briefly, “The public interest is served by economy and efficiency in operation that the expected advantages are inadequately secured by stock ownership and will be better secured by lease. The statute affords no basis for the contention that the latter maybe authorized, although the former exist.” Then on the Alleghany case, this Court recognized what was not really an issue in that case. This Court recognized that approval under Section 5 is required for the merger of a wholly owned carrier corporation and to its carrier parent. But -- and in the Alleghany case, this Court said in determining, the test to determine, the test to apply in determining what transactions are subject to Section 5 is the crux of each inquiry to determine whether there has been an acquisition of control, is the nature of the change in relations between the companies, whose proposed transactions is before the Commission for approval. And the dissenting opinion on that case recognized that Section 5 applies to many intra-system transactions by carriers. So, we think the rationale of those two leading decisions under Section 5, both before and after the 1940 amendment, is that if a transaction results in a significant change in the control of relationship between carriers, then it's subject to Section 5.
Hugo L. Black: You said carriers. Did either one of them or did the Alleghany case will support your judgments to hold that the Section 5 applied where one was a carrier and one was not?
Robert W. Ginnane: Well, admittedly, Alleghany was dealing with an entirely different set of facts. I'm drawing on that only for --
Hugo L. Black: I -- I just wondered if the -- if the (Inaudible) Has this Court ever approved application of Section 5, acquisition of one carrier over a non-carrier?
Robert W. Ginnane: I don't think so. Certainly -- certainly, the immediate issue in this case has never been before this Court or indeed before any federal court. And we think that such a -- such a --
Earl Warren: Do you --
Robert W. Ginnane: I beg your pardon, sir.
Earl Warren: Do you use the word "carriers" in all of these subdivisions in exactly the same way? Do you think wherever the word "carrier" appears in 1, 2, 3, 4 or 5 that it should be interpreted the way you have interpreted it for us here in -- in this particular subdivision?
Robert W. Ginnane: I haven't thought all of that through frankly. I think the same definition would apply if what was being done here was not an acquisition of stock control, but if it were being done by lease or purchase of properties. As to whether that would be the same, it would always be the same, have the same meaning under the tremendous variety of -- of transactions which can arise under Section 5. I'm reluctant to be dogmatic.
Earl Warren: Well, would you say that you conclude from that when -- that whenever Congress does use the word "carrier", you'll know it might be designedly that the -- the Interstate Commerce Commission has a right to determine when and -- and where it will consider that they must be carriers before -- before the proceeding or -- or whether they can wait until it's all over and -- and the Commission decides whether they want them to be carriers?
Robert W. Ginnane: Well, ultimately, the scope of it is -- is determined by the courts. The Commission has not had occasion to deal with -- that I can think of with any other situation in which it had to -- in which it looked at the consummation of a transaction to determine who was a carrier. This type of situation, and we cite four or five identical situations in other cases before the Commission, is the only thing in that area that I'm aware of, in other words, a split-up of -- of different types of carrier operations into separate carrier entities. It's the only thing I know of that we had to deal with (Inaudible)
Speaker: From the point of view of the Commission, what are the practical consequences of withholding that there is no jurisdiction in a case like this?
Robert W. Ginnane: Historically, I would have to say that this has not been a -- a major thing in the Commission's work. There is this case and the four or five prior cases cited and -- and cited in our brief. Some of them referred to by the appellants. There have been five or six cases at the most since 1940.
Speaker: Forecasting, what difficulties do you see holding that you have got jurisdiction?
Robert W. Ginnane: This is a -- is a dangerous time in history for prediction in the field of transportation. As Your Honors probably know, we're in the middle of a transportation revolution, reassessment of the respective roles of different -- different types of carriers, new -- new ratemaking techniques, new types of equipment. Whether the -- whether the -- this type of situation would arise more frequently or less frequently in the future, I can't give you an honest opinion, one that's worth anything.
William J. Brennan, Jr.: (Inaudible) you have jurisdiction to (Inaudible) commuter services for example are unprofitable.
Robert W. Ginnane: I have speculated about the same thing frankly. It hasn't been out so far.
William J. Brennan, Jr.: I suppose if this is (Inaudible) in this case, it might (Inaudible) some analysis (Inaudible)
Robert W. Ginnane: I can -- I can only guess, sir. I -- I have speculated.
Hugo L. Black: Mr. Ginnane, do you have to depend for -- to charge of the Commission on the purchase, words of (Inaudible) should be lawful with approval and authorization of the Commission as provided in subdivision (b) for two or more carriers to consolidate or merge?
Robert W. Ginnane: No, sir. We -- we rely on the clause a bit later for any carrier or two or more carriers jointly to acquire control of another through ownership of its stock or otherwise.
Hugo L. Black: There's another carrier?
Robert W. Ginnane: Yes.
Hugo L. Black: Well, that thing [Laughs] is disturbed in our case unless both of these were carriers. What adequate information you get through this?
Robert W. Ginnane: Because at the end of the transaction, both are admittedly carriers.
Hugo L. Black: But when they saw it, they're not.
Robert W. Ginnane: That's correct.
Hugo L. Black: I presume this meant that -- I -- I presume it meant but it sounds like it meant that somebody could at least two carriers could initiate it or one could initiate it, the action to get control of the other.
Robert W. Ginnane: And certainly, that has been the typical case. Now, what the Commission did here in substance was to authorize Pacific Greyhound to segregate into separate corporate carrier entities, its short-haul commuter operations on the one hand, and at long haul, intercity operations on the other. And on the series of prior decisions beginning in 1940, the Commission has done exactly that same sort of thing to authorize carriers, to segregate substantially different types of carrier operations. Now, they are summarized in our brief at pages 15 and 20, but I can just pinpoint each of them now. In the Columbia Motor Service case, there was involved a separation of contract carrier from common carrier operations. In Consolidated Freightways, it was a separation of the transportation of automobiles with special equipment from the transportation of general commodities in the -- in the ordinary equipment. The Takin case involves the segregation of interstate transportation of general commodities from intrastate transportation of household goods. And the Gehlhaus case involved a segregation of motor carrier operations from water carrier operations. And all those cases, the Commission recognized that the different management and operating problems of the distinctly different types of transportation warranted their segregation into separate operations -- into separate corporations. At the same time, the Commission feels and I submit that such a division of a carrier's operations and no matter how useful, no matter how helpful it may be in terms of more efficient transportation, there's something that cannot be done without control, without regulation because the resulting division of assets, how that's done is crucial to the ability of each of the -- of the succeeding corporations to -- to serve the public. It relates to -- well, it can affect their credit standing and other matters with which Congress intended the Commission to concern itself in exercising its powers under Section 5. So we think that what the Commission did in this case and the type of thing the Commission did here in authorizing a division of carrier operations, as it did on these other -- in these prior cases is consistent, not only with the letter of Section 5 to which we don't attach so much weight but to the broad purposes of Section 5, which this Court has recognized again and again. In brief, that it's in the interest of economic transportation that carriers would be able to do this depending upon the circumstances to -- to divide clearly different types of transportation operations in a -- in a separate corporate entities.
William J. Brennan, Jr.: Of course we don't have the right of the Commission before us. But is there findings (Inaudible) on its own list, as I understand it, large community service has the better chance of possibly in -- in the public interest of its own (Inaudible) and enacted with the -- the way now it is in the general operations?
Robert W. Ginnane: No, the Commission made -- the Commission did not make a finding in those terms.
William J. Brennan, Jr.: Well, I would suppose underlying all this is more economic transportation for the overall public benefit.
Robert W. Ginnane: That's right.
William J. Brennan, Jr.: (Voice Overlap) consideration which leads to the approving this kind of thing.
Robert W. Ginnane: And the Commission detailed at some length in its report --
William J. Brennan, Jr.: Well, necessarily, that might --
Robert W. Ginnane: -- the separate types of management problems involved between the long-haul transportation and the short-haul commuter operation.
William J. Brennan, Jr.: (Inaudible) some judgment though that at least this particular community service is not going to be impaired by this separation from the general operation?
Robert W. Ginnane: Well, the Commission discussed the matter at length in its report.
William J. Brennan, Jr.: Well, that's it but we don't have it now.
Robert W. Ginnane: Well, the -- the Commission's report is printed as a part of the record, but not -- but not on the underlying evidence is printed there. And we submit that in the present posture of the case, all it's before the Court is the -- is the general -- almost academic question of the Commission's power -- jurisdiction to -- to authorize this type of thing, this general type of thing, this -- what the appellants call a split-up under Section 5 of the underlying merits, which certainly could have been challenged by these appellants. They could have challenged it, the Commission's action as an abuse of discretion. All those things which could have been raised, haven't been raised, haven't been presented to the court below or to this Court.
Hugo L. Black: I don't understand why you say academic.
Robert W. Ginnane: Well, I -- I don't mean academic. But it's here just as a general question --
Hugo L. Black: Yes --
Robert W. Ginnane: -- whether we -- as to whether we can -- the --
Hugo L. Black: Will you have any power though?
Robert W. Ginnane: -- Commission can authorize this type of transaction.
Hugo L. Black: Will you have any power at all?
Robert W. Ginnane: Yes, that's what I meant to say, sir. Now, I have said that this precise issue hasn't been considered by the federal courts. There are two cases, which I find a little difficult to understand but which -- which at least deal with similar questions. They are cited in our brief, their decisions of the Court of Appeals for the Second Circuit and for the District of Columbia Circuit are dealing with the similar consolidation provisions of the -- of the Civil Aeronautics Act. Those decisions of those two Courts of Appeals at least stand for the proposition that in determining whether for the purpose of such statutory provisions, one carrier has acquired control of another carrier. The agency should look to see what the result is at the consummation of the transaction. The facts in those cases were somewhat different than this, so we cannot cite them as cases in point. We do -- we do refer Your Honors to the reasoning from those cases, which are set forth at some detail in our briefs.
Earl Warren: Do they have the same legislative history with the -- with the provisions of the CAB proposed in Congress for the same reasons that -- that this section was proposed for?
Robert W. Ginnane: I think we can say generally they were because they are practically forbidden, whole -- the whole paragraphs of the section are -- are verbatim -- verbatim list and the provisions of Section 5 of the Interstate Commerce Act.
Earl Warren: But wasn't -- wasn't the -- the provision in the Civil Aeronautics Act more for the purpose of -- of protecting against monopoly and on the other hand, these provisions more for the purpose of -- of relieving the railroads from some of the stringent antitrust regulations and making it easier for them to merge in order to take care of -- of the sick industry where the other was rebutting industry and they want to keep the lines straight so there would be ample competition?
Robert W. Ginnane: There is some element of such distinction. I wouldn't know how far to go in -- in making such a distinction. For example, there is a -- a declaration of policy in that Act which puts a much heavier emphasis on the value of competition in their transportation than anything which appears in the Interstate Commerce Act. I would like to refer only briefly to the appellant's contention that as a -- apparent contention that as a matter of law, the Commission should not so act under Section 5 as to affect intrastate operating rights which are subject to regulation by State Commissions. But Your Honors have passed upon that general type of question again and again in -- in questions in cases interpreting Paragraph 11 of Section 5. Now, Paragraph 11 says that upon approval of a transaction by the Commission, the participating carriers may carry it out without regard to the limitations of federal, state or municipal law and specifically that they may exercise any control or franchises acquired through such transaction. Your Honors have -- have considered that so many times and interpret it, so -- and applied it so broadly and literally that I think we do not need to labor it here. Thank you, Mr. Chief Justice.
Earl Warren: Mr. Avakian -- oh, pardon me.
Allan P. Matthew: Pardon me.
Earl Warren: Mr. Matthew.
Allan P. Matthew: Mr. Chief Justice, may it please the Court. The time remaining is quite brief and yet I do wish to say a few things on both of the two issues which are before the Court at this time. I must be brief. I realized that perhaps it can be little more than a summary but first dealing with this jurisdictional issue. May I say that I think I would respond to the question posed by the Chief Justice and other Justices as to what particular language of the section is that upon which we rely to validate this particular transaction. I would refer it by Section 5 (11), a text appearing upon page 5 -- 15 rather of our brief for the appellees, Golden Gate Transit Lines, et al, and now, I just briefly read, “The authority conferred by this section shall be exclusive and plenary, and any carrier or corporation participating in or resulting from any transaction approved by the Commission thereunder, shall have full power," and so forth.
William O. Douglas: But that's in the large 5 brief, isn't it?
Allan P. Matthew: No, but I think it defined just what is in Section 5 and it does apply to resulting (Inaudible) and I have had no doubt and I examined the provision of the statute time and time again. And it seems to me that Congress was at particular pains to button up and complete this jurisdiction to the Commission, so that there'll be no means to escape from it. And we venture to say upon our brief here that we can't conceive any language as a more comprehensive and get so specific. Now, clearly, we do have a carrier which will result from the transaction which the Commission has approved. I think that's right within the expressed terms of the statute. Now, we carry forward just a bit. This is an intra-system transaction. These are words frequently used by this Court. The -- it is not to the course that these provisions of the statute deal only with mergers and consolidations. Granting of that was the main objective, objective as of the legislation as it has been developed here thus far. The statute does not restricted to that but covers all manual acquisitions and specifically some purely intra-system transactions. Now, the transaction, which was authorized by the Commission and approved by this Court in the New York Central Securities case, was nothing but an intra-system transaction and is observed by -- in the dissenting opinion of Mr. Justice Douglas in the Alleghany case, in commenting upon the decision in the New York Security -- Central Securities case. It is said that Section 5 (2) (a) requires many, many intra-system transactions to be subject to the approval of the Commission and that was too here. Now, Mr. Ginnane has referred to the language used by this Court in the Schwabacher case, which we think is very significant because we have there set forth in a single sentence what I may call the basic philosophy of these provisions alone. And I briefly read that one sentence again, “The tenure of all of this was to confirm the power and duty of the Interstate Commerce Commission, regardless of state law to control rate and capital structures, physical makeup and relation to tin carriers in the light of the public interest in an efficient national transportation system.” Neither can be no doubt that this immediate program which the Commission approved in our case, this transaction is within the precise times, as I read it, of this declaration of basic policy in the opinion of this Court in the Schwabacher case. I could continue beyond it but I think that's all that I need. I -- I want to act to this great equation as to the possible consequences of a ruling here that this transaction is enough to the jurisdiction of the Commission. There would be a very unfortunate jurisdictional void of these particular carriers, the Greyhound, if you please, or a real carrier could form a subsidiary corporation to be controlled by it and transfer to that carrier such properties as it might desire and could transfer to it stock in other corporations, thus seeking the approval of the Commission. Now, the Commission has brought that out in its brief here and said so in several decisions, there'll be a void if a transaction to this immediate character were not subject to the Commission's control. Now, there's much more that I would like to say on that jurisdictional question but I think I have enough time, but I do want to answer an inquiry that came from Mr. Justice Brennan, I believe, as to the findings of the Commission as to how the carriers would function under this transaction as authorized. The opinion of the Commission is here. Of course, the record before the Commission is not here. It was not before the lower court as has been stated. I am not free to discuss anything in that record. Those issues, many of them and not before this Court now, but we asked the Court in particular to review what the Commission says upon pages 17 to 18 of -- no, we passed that, pardon me, and I correct that, upon pages 27 to 28 in particular of its opinion. There starting with the -- well, I say the paragraph at the middle of that page 27, where the Commission addresses itself to the public interest in the national transportation policy and then where the paragraph commencing toward the bottom of that page, it deals with the whole problem which was here before the Commission in dealing with these local operations and briefly points out, and I'll just mentioned this, briefly refers in the third line of that last paragraph to the impractical retention in a single entity of how the similar operation it is on, then it deals with the services which will be left. All of this will be subdivided on page 28 then further on page -- I'll just briefly refer to this, 31. It makes these findings as to consistency to the public convenience and necessity. I can't comment beyond that and I again will point out, there's just one issue here we're dealing with in this branch of the case and that is the issue of jurisdiction. It was jurisdiction in the Commission to authorize this transaction. We submit that it was and that it be ghastly against the public interest if that jurisdiction we held not to exist there. Now, just a few words about the effort to amend this complaint, there would be no much understanding as to the circumstances there. We have not contend it and I'm not quite sure Mr. Ginnane has not given the Court the impression that under all conditions, a complaint attacking an order of the Interstate Commerce Commission and seeking its annulment should not be subject to amendment. In proper case, there might be, but the Congress has made it very clear and this is spelled out so carefully in the opinion of Mr. Justice Brandeis for the anonymous court in the Griffin case in 303 United States that I'm sure are not to be overlooked. It gives us the history of these rules for expedited procedure in dealing with complaints brought to in all orders, the Interstate Commerce Commission. It points out that they originated in 1903 with statutes to enforce the Antitrust Act or opposing it. And then in 1906 by the Hepburn Act, they were extended of the Interstate Commerce Commissioner. Then in 1910, when the Commerce Court is created, they were continued in effect. Some 20 years later when the Commerce Court was abolished, they were still continue to effect under the terms of the Urgent Deficiencies Act. And Mr. Justice Brandeis -- Brandeis makes it exceedingly here, so clear that surely we ought not to disregard them at all, and I'm quoting in, referring to these expedited procedures. He says, “These expedited procedures in suits by the United States -- pardon me just a moment. “These extradited procedures -- pardon me. I'm trying to go along too hasty I guess. The Court says and this is quoted upon page 41 of the Commission's brief here that -- and I'm quoting, “Upon both the trial court and the Supreme Court rest the obligation to give the case precedence over others.” And he says further and I again quote it, “In such cases, Congress sought to guard against ill-conceited action by a single judge and to avert delays ordinarily instant litigation.” So that Congress in this type of case has particularly undertook to guard against the very sorted length that our adversaries thought to impose upon us in this case. Now, just a few words about the chronology of this case if my time is not expired. That chronology has some importance. The Court will bear in mind that the order of the Commission was entered on July 6, 1955. It was already nearly three years old incidentally. On October 18, 1955, the complaint to annul the order was filed in the District Court in San Francisco. On February 17, 1956, appellant's motion for the judgment on the pleadings was filed, following motion for judgment in pleadings by the Government and motion to dismiss on our part. Now, on February 28, 1956, where the appellant's motion relieved to amend the complaint. That is only 11 days after he had pleaded for judgment on the pleadings. Now, let's turn to the transcript just a moment, if we have that much time. Page 17, we have -- I think it's page 17, the appellant's motion for leave to -- pardon me, motion for judgment on the pleadings filed February 17, 1956, commencing at the fifth line at the bottom. It is alleged, there is no question of fact involved in the case and the sole question presented is one of law, which should be determined in favor of the prejudice. Therefore, he was entitled to judgment on the pleadings. We turn over pages -- just to page 74. On pages 74 to 78 inclusive, we have his motion where leave to amend his complaint filed only 11 days after he filed his motion for judgment on the pleadings. I want to answer one further question that came from the Chief Justice. When appellant's counsel made the first suggestion to the Court at the opening of the hearing on February 23rd, it's the first time he suggested it that if the Court was going to rule against him on his jurisdictional issues, he want to leave to amend -- pardon me. Must I stop?
Earl Warren: Your time is up, Mr. Matthew.
Allan P. Matthew: Could I just complete that one sentence?
Earl Warren: Oh, yes, you may complete your sentence.
Allan P. Matthew: I'm sorry.
Earl Warren: Sure.
Allan P. Matthew: But I don't want to leave any misunderstanding, that's all. When the -- I'm sorry, but he made the suggestion that the Court might rule against him on the jurisdiction. He wants leave to amend his complaint. Certainly, Judge Healy is very improperly observed that the judgment could not be made in that form, his constant desire to amend to file his motion to amend. I'm sorry to (Inaudible) with my time. I'm sorry.
Earl Warren: It's all right. Mr. Avakian.
Spurgeon Avakian: May it please the Court. I'd like to refer once again to the circumstances under which the amendment to the complaint was offered. In the Interstate Commerce Commission report at page 21 of the record, there is this statement regarding one of the public interest reasons which impelled the Commission to authorize this transaction. Part of the overall management problem is that of labor management relations, which, although strongly disputed by the union, applicants contend with benefit from the proposed separation of the operations. The negotiation of employment contracts with the union in the past has been made especially difficult because the terms applicable to the two classes of drivers have been embraced in a single labor agreement even though the operating practices have been different. And then the report goes on to point to a strike situation which resulted because of conditions peculiar to one group but involving the entire system. Now, in the phase of that finding, Greyhound and Golden Gate on February 21, 1956 negotiated an agreement with the labor unions who, up to that point, were joint parties plaintiff with us. And that agreement provided that if this transaction went through, the employees of Golden Gate and Greyhound would be covered by a single labor agreement. Now, it was this strange circumstance on February 21, announced to the Court on February 23, that led the appellants immediately to reevaluate the question as to whether or not the public interest findings of the Commission should be challenged and appellants immediately made oral request for a permission to amend. And as Mr. Matthew has just stated, the Court gave permission to file a written motion with the proposed amendment in writing and that was done five days later, a weekend having intervened. Those were the circumstances that led to the motion to amend.
Tom C. Clark: How long was that, the date of the complaint?
Spurgeon Avakian: The complaint had been filed on October 18. The answer of the United States had been filed on December 15. The intervention of Greyhound and Golden Gate had come about in January of 1956. The --
Tom C. Clark: When was your -- your statement to the Court that you may want to amend on the -- when is that with reference to the complaint?
Spurgeon Avakian: Complaint was filed October 1855 and our oral request for permission to amend was February 23rd, immediately upon the announcement to the Court of the contract between the labor unions and --
Felix Frankfurter: Why do you think that was so relevant to this problem immediately after the labor union pulled out of the litigation? Why is that relevant and say you haven't urge that point?
Spurgeon Avakian: Well, the -- the relevance to me, Your Honor, is this. A -- a challenge to the public interest findings of the Interstate Commerce Commission raises a question which, from the appellant's point of view, is a very difficult one because the Court must be persuaded that there is no substantial basis in the record, none of the grounds set forth in -- in the Commission's findings are substantial and supported by the evidence. And if there is one substantial factor which would support the Commission's order, a challenge based on the -- on the adequacy of the findings will not succeed. And very frankly, the one factor which troubled me when I initially made the judgment decision not to challenge the findings was this question of the Interstate Commerce Commission's conclusion which recited a strike that the public interest would be served by having separate labor agreements. Now, this was rather dramatically exposed to me as a sham presentation which Greyhound and Golden Gate had made to the Interstate Commerce Commission and had successfully sold to the Interstate Commerce Commission.
Felix Frankfurter: I understand that but I don't see how the withdrawal by the union of their position in the litigation exposed the sham.
Spurgeon Avakian: It wasn't the withdrawal, it was the entering of the --
Felix Frankfurter: What do you suppose the sham?
Spurgeon Avakian: The contract, the -- the contract that was entered into between the unions and Greyhound is what exposed it because that showed that Greyhound and Golden Gate realistically were not concerned about having a single labor agreement with both passes of Congress.
Felix Frankfurter: But that agreement showed to me that the union made a kind of arrangement that was satisfactory to do them. That's all it shows.
Spurgeon Avakian: Well, of course, it was a satisfactory to them because as long as they could deal with -- on the single basis, that's all they were interested in.
Felix Frankfurter: But that was the situation throughout this litigation from the time you filed your complaint in October. I'm not saying you are wrong but I don't see that -- that your justification doesn't seem to hitch with the conclusion.
Spurgeon Avakian: Well, the -- I hope I can make myself clear that the thing that brought about the reevaluation in my mind of whether or not I should challenge the public interest finding and which led to the request for the amendment was that, in my judgment as a lawyer, I thought I could now possibly urge to the Court that there was no substantial basis for the public interest findings of the Commission.
Felix Frankfurter: But you were subject to such a private agreement between the union and the two corporations all through this theory.
Spurgeon Avakian: Well, no, because the Commission's finding was that the separation would result in their being separate labor agreements and that would be --
Felix Frankfurter: Yes, but what --
Spurgeon Avakian: -- the public interest factor.
Felix Frankfurter: -- intervening event had nothing to do with the Commission's action. It had to do with the pursuit of self-interest by the labor union.
Spurgeon Avakian: Well, that's -- that's certainly true, Your Honor. But the -- this brought about a completely different context in which to appraise the question of what challenge should be made to the Commission's findings. Now, this amendment came when the Court was first assembled to consider these motions for summary judgment. The argument on those motions for summary judgment is not waste of time if this amendment is granted because the amendment did not eliminate the statutory question from the case. The Court would still have had to concern itself with the question of whether Section 5 applied. So, there was no imposition on the time of the Court. The intervening --
Felix Frankfurter: (Voice Overlap) imposition on the time of the Court but to take to that to go back, wasn't it?
Spurgeon Avakian: The Court --
Felix Frankfurter: (Voice Overlap) --
Spurgeon Avakian: -- the Court might have concluded as one possible outcome under our amendment to remand the case to the Commission for further consideration. That's a possibility. In view of the time which elapsed before the Court even ruled on our motion, 14 months after it was filed, I don't think it can be contended nor did the District Court state this is the ground, that delay was a reason for denial rather as it's already been brought out. The reason for the denial was that the applicable criteria were inadvertence mistake, excusable neglect and so on, the criteria for a relief from a default judgment rather than the standards which Rule 15 (a) requires. And I am rather shocked, I will say, to have heard Mr. Ginnane say here, and this is not set in their brief, to say here that Rule 15 (a) does not apply to proceedings for the review of Interstate Commerce Commission orders. If that -- the novel argument, I've never heard it suggested before. If Rule 15 (a) doesn't apply, then I don't know what rule does govern these proceedings. The important consideration that I would like to leave with the Court on this point is that just a month ago in the Spevack case, where the proposal to amend was made in the appellate court after the appellate court had decided the case, after the plaintiff had lost in two courts. The plaintiff then asked in the appellate court for leave to amend and was refused and this Court remanded that case back to the Court of Appeals to permit the amendment. With respect to the application of Section 5, I think it has been made clear that this transaction does not involve any change in the beneficial ownership of the carrier properties involved in this proceeding. This is not a situation where operating rights or carrier properties belonging to one carrier entity are being transferred to another carrier entity. This is not that type of situation. The beneficial ownership remains exactly the same. This is not even a case where there is a rearrangement within a single beneficial ownership of the -- the legal ownership, so as to -- to increase the degree of control, so that it could be argued that there is an acquisition of control in the sense of increase. This is not even that kind of a case. This is the kind of a case where we start with a single carrier and subdivide it into two. There is no clause of the statutory language which does not involve two carriers at the start. Now, the question was raised as to whether or not -- as what to the effect would be either as to the holding that Section 5 (2) applies or as to a holding that Section 5 (2) that does not apply. If this Court holds that Section 5 (2) applies to this kind of a split-up, then I venture to say that it will not take long for the transportation lawyers in the country to figure out that the same technique then can be used to sever from a single carrier operation a segment which is considered unprofitable and to do that with a complete bypassing of the State Commission which has jurisdiction over that segment. This Court has frequently held that a --
Speaker: (Inaudible)
Spurgeon Avakian: No, if the Section does not apply, then what is the problem?
Speaker: (Inaudible)
Spurgeon Avakian: Then the --
Speaker: (Inaudible)
Spurgeon Avakian: Then -- then in this situation, the intrastate operating rights could not be transferred without the approval of the State Commission. The I.C.C. under Section 212 could authorize the transfer only of the interstate operating rights involved and that where it comes then to the other facet of the question. Would a holding that Section 5 (2) is inapplicable to create any problems? Counsel for appellees talked about a jurisdictional void. There is no jurisdictional void because Section 212 (b) of the Interstate Commerce Act applying to motor carriers, which is set forth at page 6 of our main brief, says, “Except as provided in Section 5, any certificate or permit may be transferred pursuant to such rules and regulations as the Commission may prescribe." So that automatically, if Section 5 does not apply, the Commission still has jurisdiction as to the interstate rights under Section 212 (b), so there is no void in jurisdiction. There is no area of non-regulation.
Speaker: (Inaudible)
Spurgeon Avakian: Yes, about -- not quite 6% of the traffic is interstate.
Speaker: (Inaudible)
Spurgeon Avakian: Yes, that's right. So that we don't have this problem of creating a void in regulation. The general counsel for the Interstate Commerce Commission will presumably is in a better position than any of the rest of us to advise the Court as to what problems might arise, was powerless to set forth any problem which might be created. And it's clear that there can be done because there will still not be any possibility of manipulations without obtaining the authority of some commission, whatever commission has the jurisdiction.