Red Ball Motor Freight, Inc. v. Shannon
Dissenting Opinion
dissenting.
I agree with the Court “that § 203 (c) merely codifies the primary business test,” ante, at 318, enunciated by the Commission in the Brooks case.
This is all that we need and should decide. The Court errs, in my view, in deciding the purely factual question of “whether, applying the standards developed under the primary business test, appellees’ backhauling of sugar
The primary responsibility for granting or denying enforcement of Commission orders is in the District Courts and not in this Court. 28 U. S. C. § 1336; cf. Labor Board v. Pittsburgh Steamship Co., 340 U. S. 498, 502. The District Court in enjoining enforcement of the Commission’s order in this case did not refer explicitly or implicitly to § 203 (c) of the Act. It did not cite any cases enunciating the “primary business test” as a basis for its decision. Moreover, the District Court did not discuss the facts upon which the Commission based its determination that appellees’ backhaul transportation of sugar was not within the scope and in furtherance of a primary business enterprise other than transportation. See 219 F. Supp. 781; compare United States v. Drum, 368 U. S. 370, 385.
Having determined, as the Court does, that § 203 (c) codifies the primary business test, I would remand the case to the District Court for that court to decide the issue of unsubstantiality of the evidence under the proper test. Under this disposition of the case, the District Court would have to be mindful that this is the kind of case which “belongs to the usual administrative routine” of the agency, Gray v. Powell, 314 U. S. 402, 411, and that the Commission’s application of the statutory test to the specific facts of this case “is to be accepted if it has ‘warrant in the record’ and a reasonable basis in law.” Labor Board v. Hearst Publications, Inc., 322 U. S. 111, 131; United States v. Drum, supra, at 386.
Lenoir Chair Co., 51 M. C. C. 65, aff’d, sub nom. Brooks Transportation Co., Inc.., v. United States, 93 F. Supp. 517, aff’d, 340 U. S. 925.
Dissenting Opinion
dissenting.
I join the dissenting opinion of my Brother Goldberg. I add that the Court has failed to demonstrate how appel-lees’ sugar business qualifies as a “primary” business when it clears only 35 cents per 100 pounds of sugar over
Opinion of the Court
delivered the opinion of the Court.
The Interstate Commerce Act provides that it is unlawful for any person engaged in a business other than transportation to “transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person.” §203 (c), 49 U. S. C. § 303 (c).
Section 203 (c) was designed explicitly to authorize the ICC to eliminate transportation which, though carried on in the guise of private carriage, was in effect for-hire carriage, and thus might lawfully be carried on only by an authorized common or contract carrier. Before the enactment of § 203 (c) the ICC was able to reach such abuses by interpreting § 203 (a) (17), 49 U. S. C. § 303 (a) (17), so as to exclude such “pseudo-private” carriage from its definition of a “private carrier of property by motor vehicle” as a person, not a “common” or “contract” carrier, who transports property of which he “is the owner, lessee, or bailee, when such transportation is for the purpose of sale, lease, rent, or bailment, or in furtherance of any commercial enterprise.” Many of the cases involved nonauthorized carriers in the transportation business who resorted to transparent “buy-and-sell” devices to evade ICC regulation. A typical buy-and-sell arrangement is one under which the carrier “buys” property at a shipping point, transports it to a delivery point and there “sells” it to the real purchaser, the “profit” to the carrier amounting to the price of the transportation between the
In the course of discriminating between this pseudo-private carriage and that transportation which was in fact in furtherance of a noncarrier business, the ICC developed the so-called “primary business” test. This test was first enunciated by the full Commission in Lenoir Chair Co., 51 M. C. C. 65, ail’d, sub nom. Brooks Transportation Co. v. United States, 93 F. Supp. 517, aff’d, 340 U. S. 925. A chair manufacturer delivered some of its products in its own trucks. Whenever possible, it also used the vehicles to backhaul manufacturing materials for use and processing in its own plant. The ICC concluded, 51 M. C. C., at 76, that the delivery of goods and the backhaul were lawful private carriage because undertaken “as a bona fide incident to and in furtherance of
“If the facts establish that the primary business of an operator is the supplying of transportation for compensation then the carrier’s status is established though the operator may be the owner, at the time, of the goods transported and may be transporting them for the purpose of sale. ... If, on the other hand, the primary business of an operator is found to be manufacturing or some other noncarrier commercial enterprise, then it must be determined whether the motor operations are in bona fide furtherance of the primary business or whether they are conducted as a related or secondary enterprise with the purpose of profiting from the transportation performed. In our opinion, they cannot be both.”
The ICC believed, however, that § 203 (a) (17) was not sufficiently explicit, particularly since decisions of some lower courts after Brooks raised doubts whether a truck operator could be found to be an unauthorized “for-hire” carrier in the absence of some affirmative showing that his operations brought him within the definitions of common or contract carriage.
The 1958 amendment appears on its face to codify the primary business test as the standard for determining whether a particular carrier is engaged in a private or for-hire operation. The appellants argue, however, that the amendment was intended to impose a broader limitation in the case of backhaul operations of the kind engaged in by appellees. The United States urges in its brief that Congress in 1958 was particularly concerned with the diversion of traffic from regulated carriers by backhauling operations, and that one object of the 1958 amendment was “to make plain that the purchase and sale of goods solely to take advantage of available backhaul capacity cannot qualify as a 'primary business enterprise (other than transportation).’ ” We understand this argument to be that Congress in effect enacted a per se test outlawing trucking operations limited to backhaul capacity without inquiry into whether that operation was undertaken pursuant to a bona fide noncarrier business enterprise. We find no support in either the words of the amendment or its legislative history for putting that gloss upon the amendment. On the contrary, we are persuaded that
The legislative history fully supports this view. The ICC Chairman, speaking in support of the TAA amendment, expressly stated that, in his view, its effect would be to “incorporate the primary business test into the statute.”
We therefore conclude that § 203 (c) merely codifies the primary business test, and embodies no outright prohibition of backhauling practices. The statutory scheme recognizes that mere availability and use of backhaul capacity may in particular cases be completely consistent with the bona fide conduct of a noncarrier business. Thus the question in this case is a narrow one: whether, applying the standards developed under the primary business test, appellees’ backhauling of sugar was within the scope, and in furtherance, of a primary, noncarrier business.
In developing and applying the primary business standard, the ICC has elaborated criteria characteristic of the spurious buy-and-sell device. Among these are
We are not persuaded from our examination of the record that there is sufficient evidence to support the ICC’s conclusion that the appellees’ sugar operation was for-hire transportation and not transportation within the scope, and in furtherance, of appellees’ noncarrier business enterprise. The ICC found that appellees “have long been buying and selling certain commodities and in connection therewith transporting them to purchasers, in bona fide furtherance of their primary business, as a dealer in those commodities.” 81 M. C. C., at 345. The ICC found further that “The more usual arrangement under which [appellees] operate . . . appears to be one in which the [appellees] have no preexisting sugar order, but buy with the intention of selling later either en route or after the transportation is accomplished. This procedure is ordinarily coordinated with a backhaul, and the
Affirmed.
Section 203 (c), as added in 1957, 71 Stat. 411, provided in pertinent part:
. .no person shall engage in any for-hire transportation business by motor vehicle, in interstate or foreign commerce . . . unless there is in force with.respect to such person a certificate or a permit issued by the Commission authorizing such transportation.”
In 1958, 72 Stat. 574, the section was amended to add the provision here involved providing,
“nor shall any person engaged in any other business enterprise transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person.”
The 1957 version of § 203 (c) was enacted after the examiner submitted his report but as amended in 1958 was part of the Interstate Commerce Act when Division 1 of the Commission served its report.
Appellees’ action was brought pursuant to 28 U. S. C. §§ 1336, 1398. The statutory three-judge court was convened under 28 U. S. C. § 2325.
See, e. g., Lyle H. Carpenter, 2 M. C. C. 85; B. E. Farnsworth, 4 M. C. C. 164; Thomas Stanley Redding, 7 M. C. C. 608; ICC v. Tank Car Oil Corp., 151 F. 2d 834 (C. A. 5th Cir.).
See, e. g., T. J. McBroom, 1 M. C. C. 425; Triangle Motor Co., 2 M. C. C. 485. Cf. Congoleum-Naim, Inc., 2 M. C. C. 237.
See, e. g., ICC v. Woodall Food Prods. Co., 207 F. 2d 517 (C. A. 5th Cir.); Taylor v. ICC, 209 F. 2d 353 (C. A. 9th Cir.). See the discussion of Taylor in the Commission’s Sixty-eighth Annual Report (1954), p. 82.
The Commission pressed for amendments in its Annual Reports from 1953 through 1957: 1953 Report, p. 55; 1954 Report, p. 5; 1955 Report, p. 99; 1956 Report, p. 2; 1957 Report, pp. 137-138.
In amending §203 (c) rather than the definitional sections, the TAA proposal also met the protests of private carriers who opposed ICC’s proposal on the ground that it might be construed to throw doubt on the Brooks test, and unduly restrict the scope of private carriage. See Remarks of Frazor T. Edmondson, Private Truck Council of America, Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 1384, 85th Cong., 1st Sess., 163 (1957); Remarks of R. J. Van Liew, Private Carrier Conference, American Trucking Associations, id., at 275.
See Remarks of Chairman Clarke, Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 1384, 85th Cong., 1st Sess., 13, 19 (1957).
See Statement of Mr. Baker, President, Transportation Association of America, id., at 244, 246.
S. Rep. No. 1647, 85th Cong., 2d Sess., 5 (1958).
In its 1953 Annual Report the Commission said (p. 55):
“Merchandising by motortruck, whether actual or pretended, over long distances is increasing to such an extent that it is becoming a major factor in the transportation of freight between distant points. Manufacturers and mercantile establishments, which deliver in their own trucks articles which they manufacture or sell, are increasingly purchasing merchandise at or near their point of delivery and transporting such articles to their own terminal for sale to others. Such transportation is performed for the purpose of receiving compensation for the otherwise empty return of their trucks. Sometimes the
See id., at 19.
See 104 Cong. Rec. 12535-12536 (1958) (House); 104 Cong. Rec. 10818 (1958) (Senate).
See Virgil P. Stutzman, 81 M. C. C. 223, 226; Joseph V. Hofer, 84 M. C. C. 527, 540.
See Lyle H. Carpenter, 2 M. C. C. 85, 86; Thomas Stanley Redding, 7 M. C. C. 608, 609; Jay Cee Transport Co., 68 M. C. C. 758, 759; Church Point Wholesale Beverage Co., 82 M. C. C. 457, 459, aff'd, sub nom. Church Point Wholesale Beverage Co. v. United States, 200 F. Supp. 508 (D. C. W. D. La.).
See L. A. Woitishek, 42 M. C. C. 193; Jay Cee Transport Co., supra; William Stewart, 89 M. C. C. 281, 286.
See Subler Transfer, Inc., 79 M. C. C. 561, 565; Riggs Dairy Express, Inc., 78 M. C. C. 574, 575-576; Donald L. Wilson, 82 M. C. C. 651, 661.
See Riggs Dairy Express, Inc., supra.
Reference
- Full Case Name
- RED BALL MOTOR FREIGHT, INC., Et Al. v. SHANNON Et Al., Doing Business as E. & R. SHANNON
- Cited By
- 32 cases
- Status
- Published