Court Opinion

ID: 8779372
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:12:45+00
Date Added: 2024-06-11T17:02:45.337661
License: Public Domain

MEMORANDUM OPINION
SWYGERT, Chief Judge.
Plaintiffs, Chicago and North Western Railway Company, Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Chicago, Rock Island and Pacific Railroad Company and Illinois Central Railroad Company bring this action to set aside an order of the Interstate Commerce Commission. The Commission’s order granted authority to Walter Poole, doing business as Poole Truck Line of Evergreen, Alabama, to operate as a common carrier over irregular routes carrying traffic composed of tractors and related agricultural machinery and implements from John Deere Company plant sites located at Waterloo, Dubuque, and Des Moines, Iowa, Horicon, Wisconsin, and Moline, Illinois, to points in Alabama and in Georgia on and south of U. S. Highway 280. Motor carriers, Ringle Express and Home Transportation Company, have intervened as plaintiffs and Walter Poole has intervened as a defendant. We hold that the ICC’s action was correct and refuse to set aside its order granting a certificate of public convenience and necessity to Walter Poole to operate as a common carrier over the routes in question.
Poole’s application, filed on November 27, 1964, was designed to permit Poole to institute a direct single-line operation to replace the circuitous interline arrangement with Cooper Transfer under which the involved traffic had previously been moving. At the time the application was filed, Poole held authority to transport Deere products from the Deere origin points to Mobile and Monroe Counties, Alabama. Traffic interchanged at points in these counties was transported under the authority of Cooper to the points in Alabama and Georgia. Cooper, who no longer wished to participate in this service, testified on behalf of Poole at the application hearing. Poole’s application was also supported by twenty-three Deere dealers in Alabama and the areas of Georgia covered by the application. John Deere Company did not support Poole’s application. Poole’s application was opposed by various railroads including plaintiff railroads and by the intervening plaintiff motor carriers.
The examiner conducted a hearing in March and July of 1965 and, thereafter, issued a recommended report and order granting the application in its entirety. Protestants filed exceptions to this report. Subsequently the Operating *862Rights Review Board Number 2 refused to adopt the examiner’s recommendation and denied the application in its entirety. Poole filed a petition for reconsideration which was denied by Division 1 of the Commission acting as an Appellate Division. Poole then filed a petition to the full Commission seeking a determination that the proceeding involved an issue of general transportation importance. This petition was denied by order of the Commission in November 1966. Thereafter, in January 1967, Poole instituted an action in the District Court for the Southern District of Alabama to set aside the Review Board’s order denying his application. On its own motion, the Commission, on May 2, 1967, vacated the order of the Review Board and reopened the proceeding for reconsideration on the existing record. The district court stayed its own proceedings and on August 23, 1967 the Commission issued its report on reconsideration, adopting the statement of facts and conclusions of the examiner and granting Poole’s application.1 Plaintiff railroads and motor carriers filed petitions for reconsideration which were subsequently denied by the Commission in May 1968. In June 1968 Poole was issued a certificate of public convenience and necessity and in July 1968 the Alabama district court dismissed the action before it. The instant proceeding was instituted in November 1968.
Three issues are presented for decision: whether the Commission may reconsider and reverse a prior decision by an Appellate Division which is administratively final; whether the Commission erred as a matter of law in failing to explain why the prior decision was incorrect and to disclose by adequate findings the basis for its reversal; and whether the Commission’s decision granting the certificate is supported by substantial evidence.
I
The plaintiffs maintain that, since the order of Division 1 denying Poole’s application is a final administrative action,2 the Commission is precluded from reopening Poole’s application and granting Poole a certificate. This argument misconceives the scope of the Commission’s power to remedy its own errors. Section 17(7) of the Interstate Commerce Act gives the Commission continuing jurisdiction over its orders and empowers it to reconsider and to rescind or modify its orders at any time for the purpose of correcting an error or injustice.3 Baldwin v. Scott County Milling Co., 307 U.S. 478, 59 S.Ct. 943, 83 L.Ed. 1409 (1939); Sprague v. Woll, 122 F.2d 128 (7th Cir.), cert. *863denied, 314 U.S. 669, 62 S.Ct. 131, 86 L.Ed. 535 (1941); Alamo Express, Inc. v. United States, 239 F.Supp. 694 (W.D.Tex.1965). Administrative finality does not terminate this continuing jurisdiction but merely determines the ripeness of Commission action for judicial review. In contrast to certain other regulatory statutes,4 the Interstate Commerce Act provides no definite cutoff after which the Commission is precluded from reconsidering its orders.5 In re National Labor Relations Board, 304 U.S. 486, 58 S.Ct. 1001, 82 L.Ed. 1482 (1938).
Plaintiffs attempt to distinguish the instant case by arguing that previous cases have permitted the Commission’s jurisdiction to continue only where the Commission has decided to grant authority and where jurisdiction is retained “to shape the form and content of the certificate in light of the applicable statutory directions.” In such cases the affirmative step of delivery of the certificate to the applicant estops the Commission from reconsidering its action. Watson Bros. Transportation Co. v. United States, 132 F.Supp. 905 (D.C.Neb.), aff’d per curiam, 350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810 (1955). Plaintiffs argue by analogy that the decision to deny an application should be treated in the same way as the affirmative act of delivery of the certificate to the applicant.
Plaintiffs’ position in unsupported by case law or by sound policy. In Resort Bus Lines, Inc. v. ICC, 264 F.Supp. 742 (S.D.N.Y.1967), the examiner recommended the grant of a certificate, the Review Board reversed the examiner and denied the application and this denial was affirmed on petition for reconsideration [appeal] by an Appellate Division. On petition for reconsideration by the applicant the Appellate Division reopened on the existing record and granted the application. In the Resort case, which, in all relevant respects, is identical to the instant case, the court held that the power of the Appellate Division to reconsider its own action extends “at least prior to the time that an actual certificate of convenience and necessity has been issued.” The rationale for its decision, which is equally applicable here, was stated by the court as follows :
Moreover, it is in the best interests of judicial economy and agency responsibility to allow the Appellate Division to reconsider its orders, rather than to compel the losing party to seek immmediate review in the courts. Resort Bus Lines, Inc. v. ICC, 264 F. Supp. 742, 745 (1967).
The position of the court in the Resort case has also been followed by the Commission in Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines, Inc., 101 M.C.C. 719 (1967).
The plaintiffs, relying upon Transamerican Freight Lines, Inc. v. United States, 258 F.Supp. 910 (D.C.Del.1966), argue that, regardless of the continuing jurisdiction theory, the Commission is without statutory authority to reconsider the action of one of its Appellate Divisions. Reliance upon the Transamerican ease is misplaced. The interpretation of the provisions of the Interstate Commerce Act offered by the court in Transamerican was expressed sua sponte and was totally unnecessary to the holding of the case. The Commission has rejected the court’s obiter dictum, stating that, although the statute and rules limit the right of a party to seek reconsideration by the Commission, they in no way limit the power of the Commission to reconsider on its own motion. Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines, Inc., 101 M.C.C. 719 *864(1967). The Commission explained its reasoning as follows:
The right of an administrative body to reconsider at any time is inherent in the power to decide and is a necessary procedure in order to permit an administrative agency to carry out properly its functions under the enabling statutes. If we were precluded from correcting the error that * * * we find was promulgated in the prior report, justice would be thwarted and would only result in imposing a totally unnecessary burden on a reviewing court to remand the proceeding to us for reconsideration. Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines, Inc., 101 M. C.C. 719,720 (1967).
The Eazor case was cited with apparent approval in Resort Bus Lines, Inc. v. ICC, 264 F.Supp. 742 (1967).
We hold, therefore, that the Commission was empowered to reconsider and set aside the Appellate Division’s order denying Poole’s application. Although the apparently unlimited power given to the Commission to reconsider its orders may be limited in eases where the objecting party demonstrates detrimental reliance or the passage of a long period of time, of. Upjohn Company v. Pennsylvania R. R., 381 F.2d 4 (6th Cir. 1967); Atchison, Topeka & Santa Fe Ry. Co. v. United States, 231 F.Supp. 422 (N.D.Ill.1964); Watson Bros. Transportation Co. v. United States, 132 F.Supp. 905 (D.C.Neb.), aff’d per curiam, 350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810 (1955), there is nothing in the record to indicate that the plaintiffs in the instant case were prejudiced by the Commission’s reopening of Poole’s application.6
II
The plaintiffs argue that the Commission is required to give reasons for reconsidering and reversing the Appellate Division’s order denying Poole’s application. Reliance is placed upon section 8(b) of the Administrative Procedure Act which provides that decisions shall include “findings and conclusions, as well as the reasons or basis therefor, upon all material issues of fact, law or discretion presented on the record.” We have found no case holding that the Commission is required to give an apologia for its previous error in addition to making the required findings and conclusions along with accompanying reasons. The question is not why the Commission changed its mind but whether its decision is supported by adequate findings and conclusions.
In its opinion of August 27, 1967, reported in 105 M.C.C. 511, the Commission made sufficient findings for compliance with 8(b) and the Interstate Commerce Act. Contrary to the assertion of plaintiffs, the Commission found that existing services were inadequate. We think the entire thrust of the Commission’s decision supports such a finding and hold that a finding of inadequacy of existing services need not be set out in the precise verbal formula proposed by plaintiffs. Although the Commission’s discussion of some matters is brief, its adoption of the statement of facts and conclusions of law prepared by *865the examiner sufficiently informs the parties of the basis of its action and fully complies with the requirements of Section 8(b). Key v. United States, 263 F.Supp. 544, 549 (S.D.Ind.l966).
Ill
We hold that the Commission’s decision granting Poole’s application is supported by substantial evidence and refuse to set aside its decision to grant a certificate of public convenience and necessity. In reviewing that decision we recognize the great deference afforded to Commission determinations of public convenience and necessity. In Midwest Emery Freight System, Inc. v. United States, 293 F.Supp. 403, 405 (1968), this court explained its limited function in this respect as follows:
Our scope of review of that order is limited to determining only whether the findings made by the Commission are supported by substantial evidence on the entire record and whether its conclusion as to public convenience and necessity has a rational basis in the facts found. Administrative Procedure Act, 5 U.S.C.A. § 1009. We are mindful that the criteria by which the Commission makes its determination of public convenience and necessity are not subject to review. No delineation of factors to support such a determination has been expressed in the statute. 49 U.S.C.A. § 307. Congress has entrusted the Commission with a “wide range of discretional authority” to draw that conclusion from “the infinite variety of circumstances which may occur in specific instances.”
With this standard in mind we proceed to examine the plaintiffs’ specific allegations of insufficiency of the evidence supporting the Commission’s findings.
The plaintiffs argue that the Commission makes two conclusions which are necessary to a finding of public convenience and necessity and which are completely unsupported by the evidence. These conclusions are: (1) “that there is a need for continuation of the service proposed, since discontinuance of the Poole-Cooper interchange would leave shippers without adequate motor carrier service;” and (2) “that the existing carriers will not be affected adversely.” We hold that substantial evidence supported both of these conclusions.
The conclusion that existing services were inadequate and that authority for Poole to operate as a common carrier is clearly supported by the record. Contrary to the assertion of plaintiffs, the Commission could reasonably find that Deere dealers could not maintain sufficient inventory of Deere machinery and implements. To satisfy their customers, these dealers needed expedited service in some situations. Although the Commission may have overestimated the actual delivery time by rail (ten days), it is, nevertheless, reasonable to conclude that rail service was inadequate to provide the fast, dependable service required. Moreover, railroads were unable to serve some of the involved dealers because unloading facilities were not located near the dealer’s place of business. Thus motor carriage was needed and rail service was inadequate. Home could not provide this service because it lacked authority from the Commission to carry much of the traffic. Ringle possessed adequate authority but many dealers were unfamiliar with Ringle’s service. Some dealers who had experience with Ringle’s service characterized it as slow and not as satisfactory as that provided by Poole. Although the inadequacy of Ringle’s service was not as clearly demonstrated as in the case of the other plaintiffs, we think substantial evidence supports the Commission’s finding.
The Commission’s conclusion that existing carriers would not be adversely affected by the proposed service is also supported by the record. Since Poole and Cooper had previously been operating over most of the area in question under an interline arrangement, it is unlikely that significant traffic would be diverted from existing carriers. The Commission could reasonably determine *866that the greater efficiency of Poole’s single line operation would not affect this conclusion. Moreover, the Commission could reasonably conclude that any traffic which was diverted would not significantly affect plaintiff carriers. This is particularly true with respect to Ringle since only one percent of Ringle’s total revenue was derived from the delivery of Deere machinery and equipment in Georgia and Alabama.
For these reasons we hold that the Commission properly granted a certificate of public convenience to Poole to operate over the routes in question. Plaintiffs’ petition to set aside the order of the Commission is denied.

. Of the eleven-member Commission, three commissioners dissented and two did not participate in the decision.

. Administrative finality is determined by Rule 101(a) (2), 49 C.F.R. 1.101(a) (2), which reads:
(2) Administrative finality of division and employee board decisions. All decisions, orders, or requirements of a division of the Commission in any proceeding shall be considered administratively final, except those involving issues of general transportation importance, those wherein the division reverses, changes, or modifies a prior decision by a hearing officer, and those wherein the initial decision is made by a division: Provided, however, That this subparagraph shall not preclude the seasonable filing of a petition for relief under paragraphs (b) and (c) of this section, to be considered and disposed of by the division or appellate division which made the decision, order, or requirements as to which relief is sought. Decisions of an employee board, whether original or on review, are not administratively final. Such employee board decisions shall be subject to review by an appropriate appellate division of the Commission upon the filing of a timely petition in accordance with these rules of practice.

. Section 17(7), 49 U.S.C. § 17(7), reads in pertinent part:
If after rehearing, reargument, or reconsideration of [an] * * * order * * * of a division * * * it shall appear that the original * * * order * * * is in any respect unjust or unwarranted, the Commission or appellate division may reverse, change, or modify the same accordingly.

. Compare Section 10(e) of the National Labor Relations Act, 29 U.S.C. § 160 (e), and Section 19 of the Natural Gas Act, 15 U.S.C. § 717r, which permit reopening any time prior to filing of the administrative record in the reviewing court.

. The Commission cites thirty cases since 1964 in which it has reopened proceedings while judicial review actions were pending.

. Subsequent to the oral argument, by leave of this court, the railroad plaintiffs submitted portions of the record intended to demonstrate prejudice to them resulting from the Commission’s decision to reconsider Poole’s application. The material presented merely demonstrates that specially equipped flat cars, Brandon Tie-Down Cars, are required to carry heavy agricultural equipment and that Rock Island Railroad made substantial purchases of these cars in 1965 and 1966. The record contains no evidence on purchases which are directly attributable to the Appellate Division’s decision to deny Poole’s application. The railroads maintain that this information could not be provided since the record tvas closed. This is an insufficient answer, however, since they have failed to show that they attempted to present evidence either to the Commission, after its decision to reconsider Poole’s application on May 2, 1967 or before the Alabama District Court in an effort to defeat dismissal of that action.