Court Opinion

ID: 9471860
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:42:49.22014+00
Date Added: 2024-06-11T17:42:36.841975
License: Public Domain

HEANEY, Circuit Judge,
dissenting.
In granting motor carrier operating authority to Stewco, Inc., the ICC failed to follow the requirements of the Motor Carrier Act in two essential respects. It failed to find sufficiently that Stewco is “fit, willing, and able” to provide the service applied for, and it failed to provide sufficiently specific findings to support its decision. I therefore dissent.
To justify the issuance of a certificate authorizing a person as a motor common carrier of property, the ICC must find “that the person is fit, willing, and able to provide the transportation to be authorized by the certificate and to comply with this subtitle and regulations of the Commission.” 49 U.S.C. § 10922(b)(1)(A) (Supp. V 1981). The ICC was able to make this finding here because, in 1980, it abandoned the requirement that applicants prove their fitness in *1067financial terms. Rules Governing Applications for Operating Authority, Ex Parte No. 55 (Sub-No. 43), 364 I.C.C. 539 (1980).
Notwithstanding the 1980 abandonment, both the Tenth and Fifth Circuits have since left the financial requirement intact, defining “fitness” under the statute as: (a) the applicant’s financial fitness or ability to perform the service it seeks to provide; (b) its willingness to comply with the Interstate Commerce Act and regulations promulgated thereunder; and (c) its ability to perform the proposed service in a proper and safe manner for the protection of the public. C & H Transportation Co. v. ICC, 704 F.2d 834, 843 (5th Cir.1983); C & H Transportation Co. v. ICC, 704 F.2d 850, 854 (5th Cir.1983); Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th Cir.1981).1 At least one court has reversed the ICC’s grant of an operating certificate due to a lack of substantial evidence of financial fitness. Greyhound Lines, Inc. v. United States, 600 F.2d 999, 1001 (D.C.Cir.1979).
As with any agency’s interpretation of a statute, a court should defer to the ICC’s interpretation of “fitness” so long as it is consistent with the mandate and policy Congress intended. Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32, 102 S.Ct. 38, 42, 70 L.Ed.2d 23 (1981); Nebraska v. Federal Labor Relations Authority, 705 F.2d 945, 947-948 (8th Cir.1983). Abandoning the financial fitness requirement contradicts the intention of Congress in passing the Motor Carrier Act of 1980. To be sure, Congress did intend “increased opportunities for new carriers to get into the trucking business and for existing carriers to expand their services.” H.R.Rep. No. 1069, 96th Cong., 2d Sess. 3, reprinted in 1980 U.S.Code Cong. & Ad.News 2283, 2285. Congress chose to make it easier for carriers to acquire an operating certificate by modifying the traditional “public convenience and necessity” test. See 49 U.S.C.§ 10922(b); H.R.Rep. No. 1069, supra, at 13-14, 1980 U.S.Code Cong. & Ad.News at 2295-2296. In essence, under the new law, public convenience and necessity is to be determined less by the ICC, and more by the marketplace. Id. at 14-15, 1980 U.S.Code Cong. & Ad.News at 2296-2297.
Congress made it clear, however, that it wanted fitness to be determined by the ICC, as in the past.2 The House Report specifies that while modifying the public convenience and necessity test, and in some instances removing it entirely, Congress intended to keep the fitness requirement intact. H.R.Rep. No. 1069, supra, at 13-16, 1980 U.S.Code Cong. & Ad.News at 2295-2298. Thus, it appears to be Congress’s view that competition is promoted by entry of healthy, fit competitors.
It should be noted that the ICC had proposed to eliminate individual consideration of applications altogether, and instead adopt a “master certification approach.” Ex Parte No. MC-135, Master Certificates and Permits. Congress refused, however, to allow the ICC such expansive discretion:
[I]t is incumbent on the Congress to provide the Commission with guidance regarding motor carrier entry policy. A liberalized entry policy will have a significant impact on the motor carrier industry. For example, relaxed entry standards and increased competition for traffic will have a direct effect on employment in the industry and on the industry itself. Broad policy decisions of this type should be made by the Congress and *1068should not be left to the discretion of the Commission.
H.R.Rep. No. 1069, supra, at 13, 1980 U.S. Code Cong. & Ad.News at 2295.
We have no right to do what Congress refused to do.
The ICC has adopted its own entry policy in which individual consideration of applications is no longer a meaningful process. In the instant case, the ICC’s entire evaluation of Stewco’s fitness was as follows:
Applicant has been serving shipper in intrastate commerce, shipper is satisfied with its service, and applicant appears able to provide it an interstate service which should be of some value. If applicant is unable to provide service comparable to that of protestants, then protestants need have no fear of its competition.
Stewco, Inc., Extension — Two Arkansas Counties, No. MC-127253 (Sub-No. 56), slip op. at 4-5 (Sept. 7, 1982).
The ICC’s final decision on appeal simply stated:
The Commission no longer examines a carrier’s financial position, and only in rare circumstances does it attach significant weight to operational concerns. We see nothing here to suggest that applicant is unable to provide the shipping and receiving public a service that is shown to be needed.
Stewco, Inc., Extension — Two Arkansas Counties, No. MC-127253 (Sub-No. 56), slip op. at 1 (Nov. 18, 1982).
The problem is that Stewco’s application provided very little if any information to show that it was fit, financially or otherwise. The ICC’s decision is written as though Stewco does not bear the burden of showing fitness, although the statute clearly places that burden on the applicant. The only evidence offered by Stewco in support of its application centered on its existing interstate authority to transport other commodities, and the intrastate service it performs for the shipper. If the ICC is granting certificates to anyone who states that they have a truck in their possession and has not violated safety regulations, then the fitness test is meaningless and judicial review is absurd.
In fact, counsel for the ICC reported to the Court that no applications since at least September 1, 1981, have been denied by the ICC due to financial fitness concerns. Only seven applications were denied in whole or in part on any kind of fitness consideration; these were due to the carrier’s bad safety record and/or demonstrated misconduct. Thus, the ICC’s policy and practice are contrary to congressional intent both to retain the fitness requirement in full, and to keep the burden of proving fitness on the applicant.
The Commission’s action has direct and significant consequences. Failing to screen out unfit carriers has not promoted a healthy and competitive trucking industry. Instead, large numbers of established carriers have failed financially and many truck drivers have lost their jobs.3 It was concern over these very problems which led Congress to limit the ICC’s discretion over entry policy through the fitness requirement. The ICC has not respected Congress’s directive. Accordingly, I would hold that the ICC failed to find that Stewco was a fit carrier as required by statute.
In addition to finding fitness, the ICC is required by section 10922(b)(2) to consider and, to the extent applicable, make findings on the transportation policy factors spelled out in 49 U.S.C. § 10101(a), quoted supra, at 1065-66 n. 10. While courts have made clear that the ICC need not discuss each of the policy factors listed in the statute in detail, see, e.g., J.H. Rose Truck Line, Inc. v. ICC, 683 F.2d 943, 951 (5th Cir.1982), it must provide the reviewing court with discernible reasons and essential basic find*1069ings, Central Transport, Inc. v. United States, 694 F.2d 968, 971-72 (4th Cir.1982); Star Delivery & Transfer v. United States, 659 F.2d 81, 83 (7th Cir.1981); International Detective Service, Inc. v. ICC, 613 F.2d 1067, 1077 (D.C.Cir.1979); Argo-Collier Truck Lines Corp. v. United States, 611 F.2d 149, 153 (6th Cir.1979). The ICC has failed in this case to provide in its discretion sufficient basic findings to allow meaningful judicial review. This is not the first time the ICC has faced such a criticism. As the Fourth Circuit recently observed, “[t]he cases are legion in which the Commission has been criticized for making perfunctory, conclusory findings couched in the statutory language and for omitting its reasoning and findings on all but those ultimate facts.” Central Transport, Inc. v. United States, supra, 694 F.2d at 972 (citations omitted).
The certificate application process is useless unless the Commission relates the basic facts of the case to the transportation policy articulated in the statute. For example, the ICC’s failure to require an adequate showing of fitness seriously impairs the Commission’s ability to consider the transportation policy factors of section 10101(a). Without financial information, the ICC is in no position to consider how Stewco’s entry will affect economic conditions of the relevant sector of the industry, the possibilities of unfair or destructive competitive practices, or opportunities for adequate profits and fair wages and working conditions — explicit policy concerns articulated in the statute — and we certainly are in no position to review its decision. If Congress intends that anyone should be permitted to enter the trucking business, it should say so and eliminate the ICC permitting function and judicial reviewing function. Until it does so, I for one will continue to refuse to rubber-stamp agency actions based on theory rather than fact.
DECISION AFFIRMED.

. The definition of fitness utilized in the cited cases appears to have been based on prior ICC decisions, see, e.g., Consolidated Carrier, Inc., Common Carrier Application, 131 M.C.C. 104, 108 (1978); Eagle Motor Lines, Inc., Investigation and Revocation of Certificates, 117 M.C.C. 30, 35 (1972).
A different Fifth Circuit panel than that which decided the C & H Transportation cases recently approved the ICC's move to abandon the financial fitness requirement, based on deference to its expertise, in American Transfer & Storage Co. v. ICC, 719 F.2d 1283, 1303-1305 (5th Cir.1983); see also Steere Tank Lines, Inc. v. ICC, 703 F.2d 927, 930 & n. 10-931 (5th Cir.1983).

. A determination of public convenience and necessity is an entirely independent inquiry from fitness, Curtis, Inc. v. ICC, 662 F.2d 680, 685 (10th Cir.1981).

. At least seventy-two trucking firms that were in business in 1978 went out of business in just one year, 1982; these firms represented sixteen percent of the industry’s revenue. Another group of firms accounting for about twenty-eight percent of the industry could be considered close to failure. As many as 85,000 to 107,000 workers were consequently laid off as of April, 1983. N.Y. Times, Dec. 13, 1983, at p. 1.