Court Opinion

ID: 9630790
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:20:37.153449+00
Date Added: 2024-06-11T11:41:01.909600
License: Public Domain

PAUL, District Judge
(dissenting).
I am unable to agree with the conclusions reached by my colleagues in this case. I am of opinion that the contentions of the protestant motor truck operators, in which they are joined by the United .States, are well founded in the following respects:
1. That by the refusal of the Commission to hear and consider evidence which the plaintiffs offered and which was pertinent to the questions before the Commission, a full and fair hearing was denied and to that extent the action of the Commission was unreasonable and arbitrary.
2. That the action of the Commission was based upon a mistake as to, or a failure to apply, the proper statutory standards in its determination of “public necessity and convenience.”
I. On the first of these questions, the procedure taken in the case is significant. I understand it to have been substantially as follows:
The applications made by the railroad were some fourteen in number each relating to a segment of its existing rail line. No one of the routes applied for extended into more than two states. But many of these segments adjoined and in the aggregate the applications paralleled a large portion of the rail line. References of the several applications were made to joint boards, each of which considered only the route named in the particular application before it and all of which refused to hear evidence touching the effect of the operations made possible through the aggregated applications.
Upon the reports of the joint boards, the Commission granted the applications, subject to the condition (Condition 3) that shipments transported by the applicant’s truck operations should be limited to those moving on a through bill of lading covering a prior or subsequent movement by rail. Upon petition of the railroad the Commission eliminated the condition requiring prior or subsequent rail haul and replaced it with a restriction whereby the motor transportation was limited by certain “key-points” on the railroad line. The railroad then petitioned for certain changes in the key-points as originally prescribed by the Commission. On a hearing on this latter petition all of the applications were consolidated, but the hearing was limited solely to the question of the modification of condition 3. At this hearing the Department of Justice sought to present evidence as to the effect of the railroad’s motor truck operations with particular regard to conditions of competition. It later sought to have the case reopened and reheard for the same purpose. Both efforts were in*402effectual. It appears that at an earlier stage of the proceedings the protesting motor carriers had sought to have all of the applications consolidated in order that the issue of public convenience and necessity might be considered from the standpoint of the unified route created by the aggregate of the several applications, on which the protestants desired to present testimony. This request for consolidation was refused. The Commission evidently approved each of the different applications on the strength of the hearings and reports by the joint boards, where, in each instance the joint board had limited its consideration to the terms of the particular application before it and had refused to receive evidence touching the effect of the combined applications.
Whatever purpose the railroad had in putting its plans in the form of fourteen separate applications need not be considered. The fact is that when the various applications were filed, practically simultaneously, it was evident to the Commission that the pLn contemplated various motor routes which operating together would cover a continuous route paralleling a large part of , the railroad. By the removal of condition 3, the motor service was opened to traffic having no prior or subsequent rail haul and it w.as made possible to transport shipments entirely by truck from a point of origin in one route to a destination on the line of a contiguous route. The result, so it seems to me, was to establish a service in direct competition with existing truck routes. The Commission, however, proceeded on a theory that each abbreviated route applied for stood alone and refused to consider evidence showing the relationship between them and the effect of their combined operation. It acted solely upon a theory and ignored the actual facts before it.
It would seem, therefore, that at no stage of this proceeding were the protesting motor carriers permitted to present the testimony which they deemed pertinent and essential on the issue of public convenience and necessity. This testimony bore upon the relationship among the various truncated routes for which the railroad had applied and upon the practical effect of the assembled operation. The Department of Justice was similarly denied an opportunity to present evidence as to the effect of these combined operations in unduly restraining'competition. The effect of this latter denial is emphasized by the fact that the effect upon competitive conditions could not possibly be determined except by consideration of the operations as a whole and by the further fact that under the statute, Act of Sept. 18, 1940, 54 Stat. 906, 49 U.S.C.A. § 5(2)(b) the Commission is required to find that granting of the application will be to the public advantage and will not unduly restrain competition.
It is true that the Commission made a finding of public convenience and necessity, but such a finding is in any case a conclusion supposedly based upon consideration of existing facts. I am not unmindful of the weight to be given to the findings of the Commission, but this presumes that such findings are the result of a full and fair hearing and consideration of all pertinent evidence offered bearing upon the issue before the Commission; a hearing at which both sides have an opportunity to be heard. The statement in the majority opinion that the excluded evidence, even if admitted, would probably not have influenced the decision of the Commission, does not satisfy the situation. The protesting parties were entitled to be heard. I am not saying that the Commission reached an erroneous conclusion, nor that if the excluded testimony had been heard a different conclusion would have been reached. Perhaps the finding would have been the same. But in such case it would have been the result of the full and fair hearing which the law contemplates and which, in my opinion, the protestants have never yet had.
II. I am further of opinion that in finding that the public 'convenience and necessity would be served by approval of these applications, the Commission failed to apply the proper criteria for determination of that question.
Without discussing it in detail it appears to me that the record discloses that consideration of these applications was from the standpoint only of whether the Seaboard would thereby be able to handle its freight traffic in a manner more economical and convenient to it. The applications were made by the railroad in the belief that by the use of a motor truck service it could handle certain classes of traffic with greater convenience and economy and it. was upon this basis that the certificates were granted. I do not take it that this *403satisfies the requirement that it is the public convenience and necessity which must be served.
Congress undoubtedly has recognized the existence of the various modes of transportation and sought to preserve the integrity and the advantages of each, without discriminations, preferences or advantages among them. A railroad has no authority, merely by the fact that it is a common carrier, to modify its method of carriage to that of a carrier by motor truck. When it seeks to do so no reason is seen why it is not subject to the same requirements as any other applicant for such privilege. In such case the test is not whether the railroad can carry on its existing business with greater economy and efficiency by the changed method of operation, but whether there is a public need for the creation of the new service. It is argued by the applicant that the term “public convenience and necessity” is generic, leaving to the Commission the widest latitude for its definition in the unlimited variety of circumstances which it may face. Without disputing this general statement it is evident that the phrase comprehends, not the needs of the applicant, but the needs of the community, the public by whom and to whom freight is shipped, and which presumably is indifferent to the method of transportation so long as it has some method which is as adequate and convenient as any other.
That the Commission did not apply these standards is in effect admitted by it in its brief, where it is argued:
“The fundamental error into which plaintiffs fall is the assumption that the service proposed by the railroad is a like and competitive service to that presently rendered by the truck operators along the route sought by the railroad, and consequently the application should have been governed by the same criteria as obtain where a new motor carrier seeks to invade a territory already occupied by existing motor carriers. In the latter instance questions of adequacy of existing service, the competitive effect of a new service, estimated traffic, and the ability of the communities served to support the new enterprise are pertinent issues upon which the evidence to be introduced by the plaintiffs might have had bearing. But these applications did not seek to establish a new and like transportation service; they sought merely authority to establish new methods of operation to provide a service equivalent to that which the railroad was already under a duty to render.”
This is also an admission that the Commission did not consider the adequacy of existing service or the competitive effect of the new service in reaching its conclusions. It seems to me that this is exactly what the Commission should have considered in determining the question of public convenience and necessity.
It is evident that the two matters in which the Commission was in error are interrelated. It failed to apply the proper standards for determining the question of public convenience and necessity and, therefore, refused to hear testimony bearing upon the standard which it had rejected. These errors were not in findings of fact, which we might properly refrain from reviewing. They were errors in the application of the law which, as I see it, require that the prayer of the complaint be granted. It is possible that upon a hearing applying the proper standards by which these applications should be judged and at which all pertinent evidence is considered the Commission would still be of opinion to approve them. But until this is done the orders granting the certificates should not be allowed to stand.