M. & M. TRANSPORTATION COMPANY v. United States
Opinion of the Court
This action was brought by two motor common carriers pursuant to 28 U.S.C. §§ 1336, 2321-2325 to set aside and enjoin enforcement of orders of the Interstate Commerce Commission authorizing the acquisition by St. Johnsbury Trucking Company, Inc., of St. Johns-bury, Vermont, of a portion of the operating rights of Hinsch Transportation Co., Inc., of New York, N. Y., and further authorizing acquisition of control of these operating rights by certain individuals, shareholders of St. Johns-bury.
Briefly, prior to the acquisition St. Johnsbury was authorized by certificate No. MC-108473 to transport general commodities, with certain exceptions, over regular routes between Boston and Springfield, Mass., and a variety of points in Massachusetts, Vermont, New Hampshire, and Maine, and over irregular routes between points in Vermont and points in Rhode Island, Massachusetts, Connecticut, and New York. Under its certificate, No. MC-55888, Hinsch was authorized to operate as a motor common carrier of general commodities, with certain exceptions, over regular routes between the New York metropolitan area and Boston and Springfield, Mass., serving a variety of intermediate points.
On November 27, 1951, St. Johns-bury and Hinsch jointly applied for the Commission’s approval of the acquisition of Hinsch’s rights by St. Johnsbury for $75,000. The statutory provisions relevant to this acquisition are § 5(2) (a), (b), (c) and (e) of the Interstate Commerce Act, 49 U.S.C.A. § 5(2) (a), (b) , (c) and (e).
On December 18, 1951, the Commission granted St. Johnsbury temporary authority under 49 U.S.C.A. § 310a(b) to operate under the Hinsch rights for a period of 180 days. This temporary authority was later extended, and in a proceeding before this court the extension was held to have been without authority and was enjoined. Stone’s Express, Inc., v. United States, D. C., 1954, 122 F.Supp. 955. This injunction has been stayed pending appeal by the-Commission to the Supreme Court. St. Johnsbury is presently serving Hinsch
An extended hearing on the application for permanent acquisition was held before a trial examiner at which many competing carriers throughout the New York to Maine area appeared to protest the proposed acquisition. The examiner recommended that approval not be given to acquisition of the major portion of the Hinsch rights, under which he found Hinsch had conducted almost no operations and which, if granted, would permit St. Johnsbury to perform a new and entirely different service in a territory now adequately served by existing carriers. The examiner recommended approval of acquisition of Hinsch rights between the New York metropolitan area and points in Maine, via Boston. As to this service, the examiner found that it would serve the needs of shippers, that it had not been sufficiently established by the protestante that St. Johns-bury’s entry into this area would substantially impair the financial position of existing carriers, and that Hinsch had interchanged some shipments with other carriers for delivery to points in Maine.
Upon review by Division 4 of the Commission, at which both the applicant and the protestant carriers filed exceptions to the examiner’s proposed report, it was held that the acquisition of any of the Hinsch rights by St. Johnsbury would not be consistent with the public interest and therefore should be denied. The Division accepted the examiner’s conclusions as to the major portion of the rights, but found that, as to the limited New York to Maine authority, the evidence of shipper convenience did not establish a need for such service, the service would bear little resemblance to that which Hinsch formerly rendered alone or by interchange, the purchase price would have little justification based on Hinsch’s past operations, it did not appear that the limited operation would be economically practicable, and entry of St. Johnsbury might jeopardize existing carriers, many of which already suffered high operating ratios (i. e., ratios of current expense to current income) .
Upon reconsideration by the full Commission, the decision by Division 4 was reversed and the acquisition found to be authorized by the Act. Certain relatively minor exclusions were made in the rights to be acquired. By a later order, the Commission excluded operations by St. Johnsbury between northern New England and certain intermediate Hinsch points in Connecticut and Rhode Island, finding that Hinsch had rendered little or no service to these points.
Petitioners have in their complaint assailed the order of the Commission on a number of grounds, but principally petitioners argue that the Commissioner’s “basic” findings underlying the “ultimate” statutory findings are inadequate to support the ultimate findings and that such basic findings as the Commission did make are not supported by substantial evidence on the whole record.
The courts have continually asserted that the discretion of the Commission in a § 5 proceeding is sweeping, Congress intending that the Commission exercise its expert knowledge in assuring consistency with the public interest, and the exercise of this discretion will not be disturbed if the Commission’s findings are adequate in view of the statutory requirements. See, e. g., McLean Trucking Co. v. United States, 1944, 321 U.S. 67, 86-88, 64 S.Ct. 370, 88 L.Ed. 544; Herrin Transp. Co. v. United States, D.C.E.D.La.1952, 108 F.Supp. 89, 93-95, affirmed Per Curiam 1953, 344 U.S. 925, 73 S.Ct. 497, 97 L.Ed. 712; cf. United States v. Pierce Auto Freight Lines, Inc., 1946, 327 U.S. 515, 530-533, 535-536, 66 S.Ct. 687, 90 L.Ed. 821. But it is not enough that the Commission find, as it did find, the ultimate facts required by § 5 (i. e., that “the
The nature of the required basic findings is in part stated, in part suggested, by the statute. Section 5(2) (c) prescribes that the Commission should give weight to, among other considerations, “(1) The effect of the proposed transaction upon adequate transportation service to the public; * * * (3) the total fixed charges resulting from the proposed transaction; and (4) the interest of the carrier employees affected.” And by requiring ultimate findings of “public advantage” or “public convenience and necessity” to support similar transactions, Congress by implication has indicated that these findings need not be made in an acquisition proceeding involving only motor carriers.
Here the Commission made extensive basic findings which clearly meet the requirements established under the statute. With regard to the promotion of efficient operations by the acquisition, it found that although St. Johnsbury’s interchange with other carriers of full truckloads had, with some delays, been generally satisfactory, interchange of less than truckloads had not been satisfactory and attempts made by St. Johnsbury to remedy this situation had not succeeded; that Hinsch’s preponderance of north-bound traffic and St. Johnsbury’s preponderance of southbound traffic, if unified, were expected to afford a balanced operation and pro
Petitioners contend the findings are inadequate essentially because there is no finding (1) that a public need existed for the unified service, (2) that the existing service was inadequate, and (3) that a new service was not created by the acquisition. They claim that prior Commission decisions which they maintain require these findings (1) are entitled to weight in interpreting the ambiguous ultimate requirement of consistency with the public interest, and (2) must be adhered to by the Commission or specifically announced as abandoned. These contentions are without merit for several reasons: First, the Commission findings, although not made in the precise language urged, largely meet the petitioners’ objections. Second, it is not entirely manifest that the Commission in the instant case departed from carefully enunciated prior principles. Petitioners rely to a great extent on Pacific Intermountain Express Co.— Control and Purchase — Keeshin Freight Lines, Inc., 57 M.C.C. 341 (1950). There the proposed acquisition was opposed not only by competing motor carriers but by the transcontinental railroad systems and certain grain interests. The Commission found that aggressive competition by the applicant on a transcontinental basis might seriously impair the economic operation of the railroads and result in higher rates, not only with respect to carriage of commodities which
A judgment will be entered dismissing the complaint.
. Harry D. Zabarsky et al. — Control; St. Johnsbury Trucking Company, Inc.— Purchase — Hinsch Transportation Co., Inc., 60 M.C.C. 129 (1954), modifying 59 M.C.C. 747 (1954), reversing 59 M.C.C. 419 (1953).
. The precise statutory language is, “If the Commission finds that, subject to such terms and conditions and such modifications as it shall find to be just and reasonable * * * it shall enter an order approving and authorizing such transaction, upon the terms and conditions, and with the modifications, so found to be just and reasonable * *
. Section 5(2) (b) provides that if a railroad is an applicant for acquisition of a motor carrier, the Commission must find not only consistency with the public interest but also that the acquisition will enable the railroad “to use service by motor vehicle to public advantage in its operations and will not unduly restrain competition.” AVhere application is made for a new motor carrier certificate, the Commission must find the applicant “fit, willing, and able” and that the proposed service “is or will be required by the present or future public convenience and necessity * * Section 207, 49 U.S.C.A. § 307. ....
. The distinction between § 5’s “consistent with the public interest” and § 207’s “pub-die convenience and necessity” disposes of the contention as to a finding of public need. And even within § 5, it is evident that Congress intended a distinction be
. City of Yonkers v. United States, 1944, 320 U.S. 685, 694, 64 S.Ct. 327, 332, 88 L.Ed. 400.
Concurring Opinion
(concurring).
I am willing to concur, albeit reluctantly, that the complaint should be dismissed. This hesitation is due to the fact that I find it a little difficult to assume as readily as does the majority that there is “not the slightest reason to infer that without [one] finding,” which the court finds to be without substantial support, the Commission’s ultimate conclusion would have been any different. Basically the Commission made few findings of the sort required to support its order. The finding which I understand the majority concedes to be unwarranted in the relatively brief supportative part of the Commission’s opinion appears twice. It is with reluctance that I conclude that without it the ultimate decision would have been the same. Indeed, were it not for the heavy burden on the plaintiffs I would reach the opposite result.
What troubles me more seriously are certain observations in the majority opinion dealing with the meaning and interpretation of § 5’s “consistent with the public interest.”
The Transportation Act of 1920 was a relatively simple affair. The act has grown into its present comprehensive and complex condition sporadically. The almost inevitable result is that an entirely uniform meaning and purpose, if it still exists, is hard to discover. This seems particularly so with respect to the elusive phrase “consistent with the public interest.”
As I read its opinion, the majority is at least receptive to the idea that “consistent with the public interest” as used in § 5 is to be equated with the
Before the Commission under the Transportation Act of 1920 could approve joint ownership or control there had to be a finding that it “will be in the public interest,” or that the “public interest will be promoted.” Ch. 91, § 407, 41 Stat. 481. In the subsequent amplification and reenactment of these provisions these phrases were displaced with “will be consistent with the public interest,” “to public advantage,” “would not be contrary to public interest.” 49 U.S.C.A. § 5(2) (b) and (e). The extent that this introduced new meanings is the question. Although the wording was changed, I believe that fundamentally the same result was intended. Not that “consistent with the public interest” means “public convenience and necessity”, or even, as contended by plaintiffs here, “public need,” but that it at least means something positive. In other words, I think “consistent with” means “in the public interest,” and something more than the mere negative “not inconsistent.” The phrase used once, “public advantage,” which the majority distinguishes, I believe is a grammatical, and not a semantic difference.
No purpose will be served by my laboring this matter, except to note that all that is required for the Commission to approve a complete merger under § 5(2) is that it be consistent with the public interest, whereas mere joint agreements under § 5(1) require a showing of better service to the public, or of economy in operation, and that they will not unduly restrain competition. Consequently a neutral interpretation of § 5(2) would seem to make a complete merger more easily endorsable than a joint agreement. I would not care to uphold decisions under § 5(2) that have only neutral findings to support them.
Reference
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- M. & M. TRANSPORTATION COMPANY and Stone’s Express, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants
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- Published