Opinion ID: 406460
Heading Depth: 2
Heading Rank: 1

Heading: Was Herman fit, willing, and able to provide the authorized services?

Text: 9 Petitioners contend that the ICC erred in finding that Herman was able to perform the authorized services because Herman did not present sufficient evidence on this point. The Motor Carrier Act imposes upon the applicant the burden of producing prima facie evidence of its fitness, willingness, and ability to perform the services for which authority is requested. 49 U.S.C. § 10922(b)(1)(A). Once the applicant has made a prima facie showing, the Commission must grant the application unless those protesting the grant of authority present evidence proving that the grant will be inconsistent with the public convenience and necessity. 49 U.S.C. § 10922(b)(1). Diversion of traffic from the protestants, standing alone, is not a basis for finding that the proposed grant will be inconsistent with the public convenience and necessity. 49 U.S.C. § 10922(b)(2)(B). 10 In their protesting petitions before the ICC, petitioners did not produce any evidence tending to show that Herman was unable to perform the authorized services; rather, they made blanket assertions, without reasons or supporting facts, that Herman was incapable of performing. Because they did not introduce evidence contradicting Herman's offer of proof, the ICC was compelled to grant Herman's application if Herman's evidence established a prima facie case. We conclude that a prima facie case was made out by Herman. 11 Herman proved, through submission of its corporate records, that it was financially stable. Herman produced a traffic abstract reflecting its operations for the past year which showed that despite its limited fleet and terminal facilities, it managed to transport a wide variety of commodities virtually all over the United States. 6 Even though it operated only one terminal, Herman had arranged for its equipment to be maintained and repaired elsewhere when necessary. Further, as Herman points out, the authority granted was for irregular routes which generally require less equipment than service over regular routes. 12 In Steere Tank Lines, Inc. v. Interstate Commerce Commission, 675 F.2d 103 (5th Cir. 1982), we dealt with a similar situation. Steere challenged the ability of an applicant, VTS, to provide authorized services because VTS had only one terminal and a limited number of trucks. VTS produced evidence similar to that produced by Herman. It showed that it already had transported many of the commodities to many of the locations authorized by the challenged certificate. We upheld VTS's grant of authority stating that (a) common carrier is free to carve out as large or as small a niche as it feels appropriate.    (T)here is no requirement (in the Motor Carrier Act) that the carrier be able, quantitatively, to perform all or any substantial part of the transportation in all covered areas (of the certificate). 675 F.2d at 105. The same reasoning applies in the instant case. Herman need not prove its ability with respect to every commodity or location possibly covered by the certificate. The evidence produced demonstrates sufficient ability. 13 We find that Herman's evidence was sufficient to establish a prima facie case with respect to its fitness, willingness, and ability to provide the authorized services. If petitioners knew of evidence contradicting or disproving Herman's evidence, they should have produced it before the ICC. As the record stands, we are satisfied that the ICC did not act arbitrarily, capriciously, or without substantial evidence in determining that Herman was fit, willing, and able to provide the authorized services. 7 14 B. Did Herman prove that issuance of the certificate would serve a useful public purpose, responsive to a public demand or need? 15 Petitioners challenge the evidentiary sufficiency of the ICC's finding that the grant of authority to Herman will serve a useful public purpose. Specifically, petitioners argue that the lack of shipper support, while not fatal, is significant and that the affidavit of Mr. Herman, without more, is an insufficient basis for finding a public demand or need. Herman contends that it provided sufficient evidence to make a prima facie showing of public demand or need and that petitioners failed to produce evidence to show otherwise. We conclude that Herman's evidence was sufficient. 16 The burden of proof required of applicants with respect to public purpose was reduced substantially when Congress amended the Motor Carrier Act in 1980. Prior to the amendments, 49 U.S.C. § 10922(b)(1) imposed upon applicants the burden of showing that the proposed authority would be consistent with the public convenience and necessity. In an effort to ease entry restrictions, Congress amended that section of the Act so that it now requires the applicant to make a prima facie showing that the proposed services will serve a useful public purpose, responsive to a public demand or need. Once the applicant makes this lesser showing, the amended statute creates a rebuttable presumption that the grant of authority will be consistent with the public convenience and necessity. American Trucking, 659 F.2d at 469. This places the burden upon those opposing the certificate to prove that the grant will be inconsistent with the public convenience and necessity. 17 The only evidence produced by petitioners on this issue concerned the incursion upon their financial well being that they might suffer from the granting of Herman's application. The Act specifically states that evidence directed at financial disadvantage to competitors, standing alone, is an insufficient basis for denying a certificate. 49 U.S.C. § 10922(b)(2)(B). Thus, once again our inquiry concerns the sufficiency of Herman's evidence to establish a prima facie case of public purpose, demand or need. 18 To establish a prima facie case that the authority sought would serve a useful public purpose, responsive to a public demand or need, Herman produced the affidavit of its president, Mr. Herman, a traffic abstract, and copies of its existing fragmented certificates. These documents showed that Herman operated within or through 38 states and transported a wide range of commodities. Due to the territorial and commodity limitations in the various certificates, however, Herman was unable to make the most efficient use of its equipment. Frequently Herman's trucks ran empty or were leased out because Herman did not have the authority to provide particular services. In his affidavit, Mr. Herman testified that many of his company's present customers had needs beyond the extent of the company's authority and that the proposed certificate would enable Herman to better serve its customers. 19 Petitioners concede that there are no hard and fast rules governing the types of evidence which can be used to establish the public demand or need. The testimony of shippers, while helpful, is not required. Watkins Motor Lines, 641 F.2d at 1189-90 ns. 11-12. The fact that Herman's evidence was entirely self-produced-i.e. affidavit of its president; its own records and traffic abstract-does not mean that the evidence was insufficient to establish a prima facie case of public demand or need. The sufficiency of the evidence must turn on its content, quality, and quantity. The source of the evidence may reflect upon its quality or credibility, see e.g., Curtis, Inc. v. Interstate Commerce Commission, 662 F.2d 680 (10th Cir. 1981); however, the fact that the source of the evidence is the applicant itself does not render the evidence unacceptable. Thus, Herman's lack of outside support for its application is not fatal. 20 We conclude that the evidence produced by Herman was sufficient to prove a prima facie case of public demand or need. Herman showed that without a new certificate it would be unable to run at top efficiency and to serve its customers fully. Arguably, it would have been preferable for the customers themselves to testify; however, our duty as an appellate court is limited to insuring that the evidence meets a minimum, not an optimum, level of sufficiency. Based upon Herman's evidence, the ICC was justified in concluding that the proposed grant would serve a useful public purpose, responsive to a public demand or need. 8 C. Adequacy of the ICC's Findings 21 Finally, Petitioners argue that the ICC's decision violates the due process clause of the Fifth Amendment to the United States Constitution and the Administrative Procedure Act, 5 U.S.C. § 557(c), because the ICC failed to articulate in sufficient detail its reasons for granting Herman's application. Specifically, petitioners contend that the ICC disregarded the command of § 10922(b)(2)(A) to consider and make findings upon the transportation policy as expressed in 49 U.S.C. § 10101(a)(7) 9 and that it failed to explain its findings that Herman was fit, willing, and able and that the grant of authority would serve a useful public purpose. 22 (1) Transportation policy 23 Section 10922(b)(2)(A) requires only that the Commission consider and, to the extent applicable, make findings on ... the transportation policy of section 10101(a); it does not compel the ICC to discuss in detail each and every one of the eight policy factors listed in § 10101(a)(7). We conclude that the Commission fulfilled its obligation. 24 The ICC found that granting Herman's application would enhance Herman's competitive opportunities and would enable Herman to achieve more efficient use of its equipment. These are two of the factors listed in § 10101(a)(7) as considerations. 10 49 U.S.C. § 10101(a)(7)(C), (D). Petitioners argue that the ICC's unsupported assertion of these conclusions renders them infirm. We do not agree. As we explained in Alamo Express, Inc. v. Interstate Commerce Commission, 673 F.2d 852, 860 (5th Cir. 1982), the ICC need not explicitly discuss each factor enumerated in § 10101. All that is necessary is that the essential basis of the ICC's rationale be clear enough so that a court can satisfy itself that the ICC has performed its function. Here, it is apparent that the ICC believed that granting Herman expanded authority would enhance the company's ability to compete and its efficiency by eliminating the limitations which previously had caused Herman to forego business opportunities and maximum efficiency of operation. We conclude that the ICC's consideration of and findings concerning the transportation policy were sufficient. 25 (2) Other findings 26 Petitioners lastly claim that the ICC erred in failing to give explanations of its findings that the grant of authority to Herman will serve a useful public purpose and that Herman is fit, willing, and able to provide the authorized services. To sustain this challenge, the Commission's explanation need not be crystalline, as long as it enables the parties to understand the basis of the decision. Trailways, Inc. v. Interstate Commerce Commission, 681 F.2d 252 at 254 (5th Cir. 1982), Central Freight Lines, 669 F.2d at 1074. We conclude that the ICC's decision is clear enough. The Commission discussed the facts of Herman's existing authority and the relationship between that authority and the proposed certificate. It explained that Herman's past performance demonstrated the company's ability to fulfill its obligations under the new certificate. The finding of enhanced efficiency also was explained. A more detailed explanation may have been desirable, but it was not required by the Administrative Procedure Act or constitutional due process. 11