Court Opinion

ID: 9750615
Source: CourtListenerOpinion
Date Created: 2023-08-28 15:11:44.429842+00
Date Added: 2024-06-11T07:26:14.402600
License: Public Domain

CALEB M. WRIGHT, Chief District Judge
(dissenting).
I respectfully dissent from the learned opinion of the majority of the Court on the narrow but nevertheless crucial issue of whether or not the Commission has considered and properly applied the National Transportation Policy.1
*880In this posture a reviewing couiT at the outset is faced with three basic legal problems involving the Congressional dictate :
(1) To what extent, if at all, the Commission must consider the transportation policy in interpretative proceedings as distinguished from the ordinary Section 207 applications for authority;
(2) how explicit the ICC must be in its consideration of the Congressional-objectives; and
(3) to what extent a court' should review the Commission’s holdings on policy issues.2
Generally solution rests in the language and holdings of the Supreme Court, and specifically in the Court’s mandate as expressed in Schaffer Transp. Co. v. United States.3
Before Schaffer, the importance of the Congressional policies in Commission decisions had been emphasized. For example, three years after the Act’s passage, the Supreme Court, in a case involving the legality of a proposed consolidation of truckers,4 said the National-Transportation Policy “is the Commission’s guide to ‘the public interest’ •>:• -» 5 ]y[r, Justice Rutledge, speaking for the Court, also noted that the ICC’s power to grant immunity under the anti-trust laws in “no sense relieves the Commission of its duty, as an administrative matter, to consider the effect of the merger on competitors and on the genei’al competitive situation in the industry in the light of the objectives of the national transportation policy.” 6 In a case involving the legality of rates,7 the Court said “it [the ICC] was charged not only with seeing that rates and services of each are l’easonable and not unduly discriminatory, but that they are coordinated in accordance with the national transportation policy * * 8 And, in several cases,9 the Commission was admonished to give careful consideration to that part of the National Transportation Policy that sought to preserve the inherent advantages of the different modes of transportation.
The issue before the Supreme Court in Schaffer was “whether the Interstate Commerce Commission adequately and correctly applied the standards of the National Transportation Policy in denying a motor carrier’s application to provide service between points now served exclusively by rail.” 10 The Court, speaking through Chief Justice Warren, held the ICC delict in that the latter failed to evaluate the critical factor of inherent advantages of the modes of transportation. The majority while conceding the Commission has wide discretion in deciding whether the public interest warrants a particular service, specifically pointed out “that discretion must be exercised in conformity with the declared policies of the
*881Congress.”11 The Court then pointed up the role of the reviewing court:
“To see whether those policies have been implemented we look to the Commission’s own summary of the evidence, and particularly to the findings, formal or otherwise, which the Commission has made. Just as we would overstep our duty by undertaking to evaluate the evidence according to our own notions of the public interest, we would shirk our duty were we summarily to approve the Commission’s evaluation of the record without determining that the agency’s evaluation had been made in accordance with the mandate of Congress.” 12
The Court then proceeded to specifically point out the defects in the Commission’s opinion and proceedings. The ICC had cast its first principal conclusion in terms of adequacy of service. While this conclusion was relevant, it was defective because “The record here does not disclose the factors the Commission compared in concluding that existing rail service is ‘reasonably adequate.’ ”13 Clearly, to reject the application on this ground alone would be to fatally disregard relevant portions of the Declaration of Policy, and this alone warrants reversal.14 The ICC’s second basic conclusion was that witnesses mainly supported the application to obtain reduced rates. Thus, their testimony was disregarded. The Court concluded that this approach runs counter to the National Transportation Policy; lower rates are “precisely the sort of ‘inherent advantage’ * * * ” that the Congress requires the Commission to recognize.15 In short, the Court reversed because the ICC failed to consider an inherent advantage (lower rates) of the applicant’s service and because the findings on adequacy were insufficient to allow the Court to measure the ICC’s opinion against the yardstick of the National Transportation Policy.16
The Supreme Court concluded with this admonition:
“We do not minimize the complexity of the task the Commission faces in evaluating and balancing the numerous considerations that collectively determine where the public interest lies in a particular situation. And we do not suggest that the National Transportation Policy is a set of self-executing principles that inevitably point the way to a clear result in each case. On the contrary, those principles overlap and may conflict, and, where this occurs, resolution is the task of the agency that is expert in the field. But there is here no indication in the Commission’s findings of a conflict of policies. Shippers and receivers now served exclusively by rail have testified to the advantages they would gain from a proposed motor carrier service. There is no finding that the authorization of the proposed service would impair the sound operation of the carriers already certificated. Nor has the Commission properly evaluated the advantages urged by the supporting witnesses to determine whether the standard *882of public convenience and necessity has been met.” 17
It is abundantly clear under Schaffer that not only must the Commission consider the National Transportation Policy in its proceedings,18 but more than that, it cannot ignore any part of the policy which is operative by reason of the factual pattern of the particular case.19 The Commission must make findings, formal or otherwise, that will allow a reviewing court to see that the ICC decision comports with the Congressional objectives.20 “Deference to expertise” still exists as to most issues,21 but when the National Transportation Policy is involved deference is contracted—scope of review expanded. The Courts must not only see that the ICC has performed its duties but may also substitute its judgment with a slightly freer hand when the broad, judicially definable, standards of the Preamble are in play.22
The ICC was under a duty to consider and apply the National Transportation Policy in this type of interpretative proceeding—i. e., the Commission had this affirmative duty in Western Express. The cases under review involve two opposing segments of a highly competitive although regulated industry. Commodities formerly manufactured so as to be transported only in containers of one kind or another are now shipped in bulk. Many fungible, flowable commodities heretofore movable only in tank trucks or tank cars can now be transported in conventional flat-bed trucks through the use of sealed tanks or similar collapsible containers. The economic impact of these new technological developments may seriously affect vital elements of our transportation system. Another result may well be reduction in transportation costs of many and varied commodities heretofore easily categorized as transportable only by common carriers on conventional truck beds or by special carriers in tank trucks.
The economic importance of this case makes it clear that the mere reading of the words in the certificate of the parties is not enough. To do so would be contrary to the spirit of the Congressional mandate that “All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.”23 Added emphasis, if needed, is supplied by reference to the numerous Supreme Court decisions stressing the applicability of the National Transportation Policy in many diverse proceedings.24
*883The operative facts as gleaned from the evidence in Best Way and Western Express call into play several elements of the National Transportation Policy. Unrestricted use of the C & S containers by the general commodity carriers will divert business from the tanktruckers;25 here, the clause — “foster sound economic conditions in transportation” — is relevant. These words have been interpreted as protecting established carriers against ruinous competition and indeed, this is what Congress had in mind.26 Intertwined with the evidence that amply established public need were facts that at distances of 400 miles or more the rate structure of the general freight carrier results in lower costs to the shipper.27 The tank carrier rate structure reflects a high incidence of empty return mileage. Under the Supreme Court decision in I. C. C. v. J-T Transport Co.,28 the relative rate structures are a factor to be considered under the “economical * * * service portion of the National Transportation Policy.29 C & S containers only can be used efficiently on flat-bed trucks.30 The tanktruckers will have to buy flat-bed trucks to supply the service.31 This would still leave them in the anomalous position of being at a dead-haul disadvantage. Their certificates would only allow them use of flat-bed trucks (it should be noted that these vehicles will represent a substantial investment) for a very limited purpose. These facts are in the record. They call into operation the “economical and efficient service” element of the policy.32 Some of these considerations lead to one result in Western Express', some to another.
In seeking to determine whether the Commission has considered and evaluated all portions of the policy by reason of the facts, I find little comfort in the ICC’s discussions and findings. These were the ICC’s basic conclusions:33 1) *884there is a distinct public need for shipment by C & S containers; 2) by reason of its decisions general commodity carriers will have an opportunity to generate a substantial amount of traffic; 3) tank-truckers, who aver they are ready, willing and able to supply the service, should get the first chance lest a serious impairment of their capital structure occur; and 4) apart from their concern over the deadhaul factor, shippers express no material dissatisfaction over the present service.
At worst, the ICC has ignored certain relevant portions of the National Transportation Policy. It is reasonable to conclude that the Commission has failed to evaluate the rate factor and others under the “economical and efficient service” heading. At best, though conflict is apparent and decision may be contrary to the public interest, it is extremely difficult, if not impossible, to follow the ICC’s reasoning. Both alternatives justify reversal.
It is my view that in a case of this importance it must be clear, perhaps to the point of explicitness, that the ICC has considered, weighed, resolved and reasoned to a result consistent with the National Transportation Policy. The majority would rely to a great extent on what they believe to be implicit in the opinion to find the requisite consideration; their rule is a concomitant of the “deference to expertise” notion. It is my considered judgment that a reviewing court should be able to confidently ascertain that, in the words of Mr. Justice Rutledge,34 the “guide to the public interest” was reasonably followed.
I would remand to the ICC to allow it to reconsider its interpretations of the certificate exceptions “commodities in bulk” and “requiring special equipment” and to allow it to reconsider and articulate its reasoning relative to the National Transportation Policy.35

. “It is hereby declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate, economical, and efficient service and foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices; to cooperate with the several States and the duly authorized oflieials thereof; and to encourage fair wages and equitable working conditions; — all to the end of developing, coordinating and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense. All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.” 54 Stat. 899 (1940), 49 Ü.S. O.A. note preceding § 301.
The declaration as it appeared was identical to the declaration in the Motor Carrier Act of 1935. The latter was primarily directed towards the prevention, as was the case with so much other New *880Deal legislation, of ruinous competition. See W. K. Jones, Antitrust and Economic Regulation: An Introduction to Comparative Analysis, 19 A.B.A. Antitrust Section, 261, 279-99. However, a reading of the National Transportation Policy would seem to indicate that Congress had other important goals beside the prevention of cutthroat competition in mind and the Supreme Court has so hold. See infra.

. The scope of Court review and the duties of the Commission are, of course, intertwined concepts. They stand in direct relation — i. e., the broader tile duty the broader the scope.

. 355 U.S. 83, 78 S.Ct. 173, 2 L.Ed.2d 117 (1957).

. McLean Trucking Co. v. United States, 321 U.S. 67, 64 S.Ct. 370, 88 L.Ed. 544 (1944).

. 321 U.S. at 82, 64 S.Ct. at 378.

. 321 U.S. at 87, 64 S.Ct. at 380.

. Eastern-Central Motor Carriers Assoc. v. United States, 321 U.S. 194, 64 S.Ct. 499; 88 L.Ed. 668 (1944).

. 321 U.S. at 206, 64 S.Ct. at 505.

. Dixie Carriers, Inc. v. United States, 351 U.S. 56, 76 S.Ct. 578, 100 L.Ed. 934 (1956); ICC v. Mechling, 330 U.S. 567, 67 S.Ct. 894, 91 L.Ed. 1102 (1947).

. 355 U.S. at 84-85, 78 S.Ct. at 175.

. 355 U.S. at 88, 78 S.Ct. at 176.

. 355 U.S. at 88, 78 S.Ct. at 176.

. 355 U.S. at 90, 78 S.Ct. at 177. At this point, the Court continued, saying:
“For example, the Commission has not determined whether there are benefits that motor service would provide which are not now being provided by the rail carriers, whether certification of a motor carrier would be ‘unduly prejudicial’ to the existing carriers, and whether on balance the public interest would be better served by additional competitive service.”
The majority treats this language as the “standard” of Schaffer. This seems to me to be only an exemplification of a broader principle, i. e., that the ICO must make findings, formal or otherwise, which allow the courts to see that the Commission’s opinion comports with the National Transportation Policy.

. See 355 U.S. at 91, 78 S.Ct. at 178.

. 355 U.S. at 91, 78 S.Ct. at 178.

. See 355 U.S. at 92, 78 S.Ct. at 178.

. 355 U.S. at 92. 78 S.Ct. at 178.

. This is also clear from the Court’s stress in. such proceedings as rate-making, certification, and consolidation and follows inexorably from the last sentence of the Preamble.

. See text accompanying notes 15 and 17.

. The federal courts should not substitute its wisdom for that of the Congress. Basically, it should apply principles neutrally. Of. Wechsler, Toward Neutral Principles of Constitutional Law, 73 Harv.L.Rev. 1 (1959). However, the importance of ensuring explicitness on the ICC’s part cannot be underestimated. In this way, the Congress and the public will clearly see the nature of the Interstate Commerce Act. And, if they wish, the Act could be repealed or affirmed. This, of course, would not or would be unlikely to occur if the policies were hidden by an ambivalent cloud.

. One wonders whether this time-worn concept is in need of critical reexamination. In a tentative draft for the Administrative Conference, entitled Licensing of Truck Operations by the Interstate Commerce Commission, Professor W. K. Jones of the Columbia Law School discusses the tremendous workload of the ICC. In 1960, 4,482 application cases were closed. The time for each case ranged from an average of 5.5 months (for dismissal prior to examiner’s action) to 31.7 months (for reopened cases). This Court cannot completely set out data on the efficiency of the ICC. But, the typo of information I have noted above should make the courts ponder the Commission’s expertise.

. This is the tenor of Chief Justice Warren’s opinion.

. This is the last sentence of the National Transportation Policy which is set out in footnote one of this opinion.

. The correctness of these conclusions is admitted by the Commission. See Joint Brief for the United States of *883America and the ICC, p. 39, Roadway Express, Inc. v. United States. It therein states that:
“Of course, the Commission must take cognizance of all the elements and factors embraced in. the National Transportation Policy, before rendering decisions of the importance of those involved in the Western Express and Best Way groups of cases. The last sentence of that Policy specifically provides for such administration by the Commission.”
To be sure, if the issue was whether peanut oil is a vegetable, a different problem would be presented.

. See e. g. 84 M.C.C. 595-597.

. See note 1, supra.

. See 84 M.C.C. 595; 86 M.C.C. 70, 71, 73.

. 368 U.S. 81, 82 S.Ct. 204, 7 L.Ed.2d 147 (1961).

. See 368 U.S. at 91-92, 82 S.Ct. at 210-211. The Court, talking in a slightly different context, said: “ * * * contract carriage may be more ‘economical’ than common carriage by motor or rail within the framework of the national transportation policy, as it is defined in the Act — -‘The Commission’s guide’ to the public interest.”

. 86 M.O.O. 73.

. 86 M.O.O. 73; 84 M.O.O. 596-597.

. While this portion of the National Transportation Policy has not been emphasized as much as others, it is clear that these facts fall within the literal intent of these words. Surely, no court should imply that Congress window-dresses; by using the above phrase it must have intended that these facts be considered.

. This member of the court will read both opinions — Best Way and Western Express — -together. I do this because the ICO “adopted” Western Express in Best Way and because the two are challenged together in the proceeding before this court. It should be noted, however, that the IOO’s basic conclusions with reference to the National Transportation Policy, appear in Best Way. The decision in Western Express may be summarized as no reason appears to justify “applying a different rule [for differentiating between the two types of service] or for establishing, arbitrarily, a new one * * 84 M.O.O. at 600. There are several justifications for reading the opinions separately. They were decided a month apart and there is no explicit indication that the ICO intended its reasoning in Best Way to *884apply to Western. If the cases were treated separately Western Express would be barren of any consideration of the policy.

. See note 5, supra.

. Both cases would be remanded in their entirety since a different interpretation of the certificates could render the Section 207 applications moot.