Court Opinion

ID: 9470140
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:58:11.11141+00
Date Added: 2024-06-11T17:41:45.311671
License: Public Domain

ADAMS, Circuit Judge,
concurring in part and dissenting in part.
The Court today upholds an Interstate Commerce Commission (ICC) determination that an applicant for authority, Allied Bulk Carriers, Inc. (Allied), demonstrated both its “fitness” to perform, and the existence of a “public demand or need” for, its proposed service. Although the majority rightly sustains the ICC’s finding that Allied is fit, it is my view that the majority is incorrect in holding that the ICC adequately explained the basis of its decision that there was a public demand or need for the broad (i.e., non-radial as opposed to radial) authorization granted.
When the ICC grants operating authority under the governing statute, in addition to finding the carrier “fit, willing, and able” it must also find “that the service proposed will serve a useful public purpose, responsive to a public demand or need.” 49 U.S.C. § 10922(b)(1)(A) and (B). A court of appeals cannot uphold ICC determinations as to “public demand or need” if those determinations are “arbitrary” or “capricious” or are “unsupported by substantial evidence.” See 5 U.S.C. §§ 706(2)(A), 706(2)(E).
The Supreme Court made clear in Bowman Transportation, Inc., v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 441-42, 42 L.Ed.2d 447 (1974), that to pass the “arbitrary and capricious” test,
[t]he agency must articulate a “rational connection between the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U.S. 156, 168 [83 S.Ct. 239, 245, 9 L.Ed.2d 207] (1962). While we may not supply a reasoned basis for the agency’s action that the agency itself has not given, SEC v. Chenery Corp., 332 U.S. 194, 196 [67 S.Ct. 1575, 1577, 91 L.Ed. 1995] (1947), we will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned. Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 595 [65 S.Ct. 829, 836, 89 L.Ed. 1206] (1945).
In Port Norris Express Co., Inc. v. ICC, 687 F.2d 803, 810 (3d Cir.1982) (Port Norris v. ICC I), we called attention to the essential role that a clear articulation of the ICC’s findings and rationale occupies in the decisionmaking process.
Port Norris Express Co., Inc. (Port Norris), a competing carrier protesting the grant of authority to Allied, concedes that the initial determination of the ICC Review Board No. 2 was correct insofar as it found sufficient evidence of a public demand or need for limited or “radial” authority. “Radial” authority, also known as “facilities” authority, would have permitted Allied to haul bulk commodities, in a six-state area, to or from the facilities of the four shippers that supported Allied’s application; thus, only where a facility of a supporting shipper was an origination or destination point would Allied have been allowed to provide interstate service. In granting Allied’s administrative appeal from the restricted authority that the Review Board had awarded, the Appellate Division removed the “facilities” restrictions on Allied and awarded “non-radial” (also known as “irregular route”) authority to Allied. That is, Allied was authorized by the Appellate Division to haul traffic between any two points in the six-state area, whether or not *507the two points constituted originations or destinations of the four shippers.
I cannot agree, however, that the Appellate Division’s rationale for awarding the expansive “non-radial” rather than the more narrow “radial” authority “may reasonably be discerned,” as Bowman requires. The Review Board, after canvassing the evidence in considerable detail, provided a plausible explanation of its decision to grant only “radial” authority:
The supporting firms are all large concerns with commodities to tender for transportation. Unfortunately, we cannot identify the extent of the public need for such transportation because neither the applicant nor the supporting firms has listed any actual, future, or representative origins or destinations between which traffic will or may be transported, nor have they attempted to describe, even in general terms, the geographical movement of the traffic. They have not even given the locations of the supporting firms’ facilities or of any present or prospective customers. In these circumstances, we cannot conclude that the evidence submitted in support establishes a threshold case Tor the non-radial authority sought. Nevertheless, bearing in mind that the supporting firms do have traffic, we believe that some authorization is warranted and that the service described in the appendix [i.e., radial service] will serve a useful public purpose, responsive to a public demand or need. Cf., No. MC-119741 (Sub. No. 281) F, Green Field Transport Company, Inc., Extension—39 States (not printed), decided May 4, 1981. This is applicant’s initial application for operating authority and it has presented no other evidence directed to elements of the national transportation policy enunciated at 49 U.S.C. 10101(a)(7) from which we might conclude that the operation as proposed would promote competitive and efficient transportation service designed to meet one or more of the enunciated policies.
Appendix at 59.
In contradistinction, the Appellate Division, reversing the Review Board on this point, merely entered the following cryptic, as well as conclusory, statement:
Applicant ... argues that the review board erred by granting radial as opposed to the non-radial authority requested. Applicant points out that shippers are large firms which specifically stated all of their needs in a non-radial fashion. Applicant further asserts that any lack of information in its application is attributable to the Commission’s team, and the shipper statement form in effect at the time of the filing of this application.... We believe that the evidence considered in light of the pleadings requires a result somewhat different from that reached by the review board. Applicant correctly argues that the review board’s grant does not enable it to perform the entire service for which a public need has been demonstrated. ...

We find:

Performance by applicant of the service described in the appendix will serve a useful public purpose, responsive to a public demand or need.
Appendix at 86-7. This quoted statement, plus an omitted summary of Port Norris’ argument, represents all that the Appellate Division had to say regarding the evidence of a public demand or need for granting non-radial authority to Allied. Missing was even a cursory description of the supporting shippers’ statements.
Because of reluctance to overturn an order of the ICC, I have sedulously scrutinized both the Appellate Division’s opinion and the record in an effort to ascertain what the Appellate Division might have meant to communicate. Reading that opinion sympathetically, perhaps one could infer that the Appellate Division agrees with the arguments of Allied that it summarizes. These arguments reduce to two simple propositions: first, that the supporting shippers are “large firms which specifically stated all of their needs in a non-radial fashion”; and, second, that the paucity of evidence about public need is the fault of the ICC, not of Allied. But neither of these *508contentions fills the void in Allied’s proof; indeed, the second point concedes the void.
It is not possible to say what Allied could have been referring to when it alleged that the shippers “specifically” expressed “all” their needs in non-radial terms. There simply are no specific expressions in the record of non-radial needs. In response to item six on the ICC’s form, which called for “Representative origins and destinations of supporting shippers’ traffic ...,” three shippers merely recited: “Between points in [the six states]” (Appendix at 17, 26, 30); and the remaining shipper wrote: “Between points in Pennsylvania and points in [the five other states]” (Appendix at 22). These statements, which are totally ambiguous as to which points in the six states require service, cannot be declared, without more, to be specific statements of non-radial needs. That a mere reference to the territory covered is ambiguous is confirmed by Allied’s own statement, in its application, of “Authority Requested.” Allied thought it important to spell out that it sought “to transport, by motor vehicle, over irregular routes, those commodities in the pertinent territory ...” Appendix at 6, émphasis added. More significantly, if it were so clear as to require no explanation that the supporting firms made non-radial statements of need then the Review Board could not have written an opinion explaining its view to the contrary.1
We do not know whether these were indeed the “specific” expressions of need for non-radial authority that Allied or the ICC had in mind. But if they were not, it is perplexing to perceive what else might have been meant. Nothing in the statements of AMETEK (Appendix at 21-4) or Union Chemicals (Appendix at 25-8) appears to answer to the description of an expression of need for non-radial service. Stauffer, enumerating the services it now employs, listed “common carriers, irregular route carriers, contract carriers, rail and barges,” Appendix at 17, emphasis added. What Stauffer found most unsatisfactory about the existing services were “the occasional shipping/receiving delays due to lack of available equipment when required,” id. at 17. Stauffer supported Allied’s application because Allied had “evidenced the overall ability to meet [Stauffer’s] transportation needs,” id. at 18. One might therefore attempt to make the following inference: because Stauffer claims to have occasional delays with its current carriers, and because those carriers include irregular route carriers, perhaps Stauffer was seeking to say that it experiences delay with its irregular route carriers. And given that Stauffer believes Allied has the “overall” capability to meet Stauffer’s requirements, one might reason that Stauffer is indirectly communicating the message that it needs Allied to transport its commodities over irregular routes. On the other hand, along with “irregular route carriers,” Stauffer named “rail and barges” among the current services it uses, and it is obvious that Stauffer could not have meant that Allied had the ability to supply rail and barge services. Thus Stauffer’s reference to Allied’s “overall” competence could not have been intended to encompass all the types of service Stauffer currently employs, and it therefore seems impossible to ascertain whether Stauffer meant this reference to include irregular route services. Moreover, in outlining the scope of the traffic that it would tender to Allied, Stauffer mentions that it “ship[s] and receive[s] product at each of our 80 facilities across the United States ...” (Appendix at 17)—a statement suggestive of radial needs.2
*509Whether or not the ICC could have reasoned that Stauffer, AMETEK, and Union Chemical expressed a need for non-radial service from Allied, the stark fact is that it did not so set forth in its opinion, even by a sentence or a clause or phrase. Of the four shippers, Exxon comes closest to a direct indication of non-radial needs; it notes that its “traffic moves from a manufacturing facility directly to customers by truck or rail, or is moved by motor or rail to a bulk terminal and then moved to final destination by motor carrier.” Appendix at 29. Exxon also asserted that “expanded services are required to meet our future needs and provide service to any point we require." Appendix at 30, emphasis added. Yet even Exxon has not stated its needs specifically in terms of non-radial service.
The second argument for non-radial authority which the Appellate Division mentions is that the lacunae in the evidence should be attributed to the ICC and not to Allied. The majority does not refer to this argument, and presumably does not mean to rely upon it. The ICC cannot in general be permitted to compensate for an applicant’s statutorily inadequate evidence by accepting the blame for the inadequacy, and the majority quite properly declines to accept an argument that would enable the ICC to approve applications that fail to meet the statutory mandate.
When an agency rejects the findings of its initial factfinder, there may be a special need for it to reveal the basis of its decision. The Appellate Division’s decision here seems to border on being a summary reversal of factfinding. As a result, we are not only forced to comb the record in an attempt to fathom what the Appellate Division might have meant to say, but we must also try to deduce why the Appellate Division disagreed with the findings that were clearly articulated by the Review Board.3
While proper deference requires a refusal to substitute our own appraisal of the evidence for the agency’s reasonable alternative interpretation, the doctrine of deference surely does not sanction upholding a decision by interjecting reasoning that cannot fairly be adduced even from a sympathetic reading of the agency’s findings. See Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S.Ct. 239, 245-46, 9 L.Ed.2d 207 (1962).
No one can quarrel with the majority’s observations that administrative agencies are unduly burdened and that courts should not demand of such agencies “the more verbose styles found in some appellate opinions” or in lav/ journal articles. Such observations, however, are not relevant here. In this proceeding, the Review Board clearly articulated in the space of two or three sentences its reasons for denying non-radial authority to Allied. Had the Appellate Division affirmed, there would have been no need for it to add anything in order for a court to comprehend the rationale for its decision. But the Appellate Division reversed the Review Board in a crucial respect, without incorporating in its opinion so much as a single phrase that would enable a reviewing court to discern the reasoning involved. Where the Appellate Division has disapproved the findings expressed by the Review Board, but has failed in any way to account for this disagreement, reading the Appellate Division’s opinion in tandem with that of the Review Board makes the Appellate Division’s decision all the more enigmatic.
Both the Supreme Court and this Court have made it plain that an agency’s findings must be supported by substantial evidence, and must be reasonably articulated, and that these are separate requirements. *510Bowman supra, 419 U.S. at 284, 95 S.Ct. at 441; Port Norris I, supra, 809. We abdicate our responsibility when, faced with an inscrutable agency opinion, we uphold a decision solely on the grounds that it might possibly be supported by evidence in the administrative record.
In Port Norris I, this Court, after pointing out the inadequacy of the ICC’s explanation of its decision, went on to examine the sufficiency of the evidence. In the case at hand, I would not reach the question whether the evidence suffices. The deficiencies of the evidence in Port Norris I were patent and we faced no difficult problems of weighing. There was no showing even of a representative need for bulk service, nor any genuine indication of fitness or willingness. Here, there is evidence of fitness and willingness in the record as well as evidence of public need for some portion of the service requested. Where the basis of the agency’s decision is so obscure, and where creditable arguments can be proposed both for and against the sufficiency of the evidence of public need, it would not be practicable to decide on the adequacy of the evidence of need until the ICC has explained its decision in a manner that is amenable to judicial review.
What is more, it is quite possible that the result reached today is irreconcilable with Containerfreight Corp. v. United States, 685 F.2d 329, 332 (9th Cir.1982).4 An appellate court should be especially hesitant to conclude that evidence is sufficient, in the absence of an adequate agency articulation, where to do so might create a split among the circuits.
As in Burlington Truck Lines, supra, 371 U.S. at 167, 83 S.Ct. at 245,
[t]here are no findings and no analysis here to justify the choice made, no indication of the basis on which the Commission exercised its expert discretion. We are not prepared to and the Administrative Procedure Act will not permit us to accept such adjudicatory practice. See Siegel Co. v. Federal Trade Comm’n, 327 U.S. 608, 613-614 [66 S.Ct. 758, 760-61, 90 L.Ed. 888. Expert discretion is the lifeblood of the administrative process, but “unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion.” New York v. United States, 342 U.S. 882, 884 [72 S.Ct. 152, 153, 96 L.Ed. 662] (dissenting opinion).
Accordingly, I would vacate the order of the ICC insofar as it grants authority in excess of that approved by the Review Board, and would remand to enable the agency to choose whether to justify with more clarity the portion of the decision relating to the territorial scope of authority that was granted; to affirm the initial decision of the Review Board; to take and explain some other action consistent with the statute; or, if it believes it necessary, to ask for additional evidence.

. The relevant passage from Allied’s Administrative Appeal which the Appellate Division refers to in summarizing Allied’s arguments reads: “Contrary to the beliefs of the [Review] Board the supporting firms did specifically state all their needs in a non-radial fashion.” Appendix at 67. The Appellate Division, without explanation, appears simply to have adopted Allied’s factual claims and rejected the Review Board’s. Allied’s administrative appeal creates the impression that each of the supporting shippers, in naming the six states, said in so many words that it required non-radial service in those states. See especially Appendix at 68. This impression is incorrect.

. This impression is buttressed by Stauffer’s specification that
*509[mjultiple pick-up and delivery service without encumbering limitations, expedited services, and readily available equipment are most essential in the overall distribution and transportation of our products from, to and between our facilities.
Appendix at 18, emphasis added.

. The ICC does not argue that this Court should restrict its attention to the Appellate Division’s decision. Indeed, it seems to advert to the Review Board’s extensive summary of the evidence in order to excuse the Division’s almost complete failure to discuss the evidence. Respondent’s Brief at 31.

. According to Containerfreight,
Applications have been denied to the extent that they exceed the demonstrated need for the proposed services. Refrigerated Transport Co., Inc. v. ICC, 663 F.2d 528, 531 (5th Cir.1981); Green Field Transportation Co., Inc., Extension-General Commodities, 132 M.C.C. 485, 492 (1981), aff'd sub nom. Refrigerated Transport Co., Inc. v. ICC, 673 F.2d 1196 (11th Cir.1982). In American Trucking Associations, Inc. v. ICC, 659 F.2d 452, 475 (5th Cir.1981) the court stated, “a grant of statewide authority has never needed support from all, or even most, municipalities in the state” but must have “support from a representative number of municipalities in the state.” Manlowe’s showing of need in a portion of Northern California is not “representative” of a need throughout the state. The statements of the supporting shippers on their face demonstrate a need only for services in the San Francisco Bay Area and at most to points between Sacramento in the North and Fresno in the South.
See also Refrigerated Transport Co., Inc. v. ICC, 686 F.2d 881, 888-89 (11th Cir.1982).