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ACME CARTAGE CO. v. UNITED STATES

October 4, 1968

Acme Cartage Co.; Ashbury Transportation Co.; Best Way Motor Freight, Inc.; Black Ball Freight Service; Edmonds-Alderwood Auto Freight Company; Garrett Freightlines, Inc.; Hogland Transfer Company; Inland Transportation Co., Inc.; Intercity Auto Freight, Inc.; James J. Williams, Inc.; Los Angeles-Seattle Motor Express, Inc.; National Transfer Inc.; Gus Vanderpol and Henry Vanderpol d.b.a. Oak Harbor Freight Lines; Oregon-Nevada-California Fast Freight, Inc.; Peninsula Truck Lines, Inc.; Ralph Pozzi, Carl A. Pozzi, Clinton D. Pozzi, and Wayne Pozzi d.b.a. Pozzi Bros. Transportation Company; Renton-Issaquah Auto Freight, Inc.; Silver Eagle Company; Tacoma Moving & Storage Co.; Valley Motor Lines, Inc.; Wallace-Colville Motor Freight, Inc.; and United-Buckingham Freight Lines
v.
United States of America, Interstate Commerce Commission, D. W. Ramsay Motor Freight, Inc., Federal Transfer Co., Inc., Snider Trucking Service, Inc., and Western Cartage, Inc.



The opinion of the court was delivered by: BOLDT

Plaintiff motor freight carriers operating in the State of Washington brought this action to set aside and annul orders of the Temporary Authorities Board of the Interstate Commerce Commission (hereafter ICC), granting temporary authorities under Section 210a(a) ICC Act, 49 U.S.C. § 310a(a), to seven non-certified motor freight carriers operating within the State of Washington. *fn1" "Grandfather" certificates of registration granted to the seven carriers by ICC were held invalid in Black Ball Freight Service v. United States, 266 F. Supp. 287 (1967). Pursuant to that decision, ICC cancelled the certificates. Thereafter the seven carriers filed applications for temporary authority to continue the service previously provided under the cancelled certificates. Notice of the temporary authority applications appeared in the Federal Register and protests were duly filed by plaintiffs. The ICC Board found there was urgent and immediate need for the services for which authority was sought by the applicants and temporary authority to provide the service was granted by orders dated between July 20, 1967 and October 16, 1967.

As authorized by the ICC Act, after extending consideration the ICC adopted Temporary Authority Rules, effective July 5, 1965, specifying procedures for the submission and determination of temporary authority applications under Section 210a(a) ICC Act. Ex Parte No. MC 67, 49 CFR 1131. The rules specifically provide in mandatory terms that each filed temporary authority application must be accompanied by one or more supporting statements and each such statement must contain at least the information specified in eleven categories. *fn2" Two of those are:

 
"(8) Whether efforts have been made to obtain the service from existing motor, rail or water carriers, and the dates and results of such efforts.
 
"(9) Names and addresses of existing carriers who have either failed or refused to provide the service, and the reasons given for any such failure or refusal."

 Plaintiffs assert that not a single one of the supporting letters accompanying the temporary authority applications of the seven carrier applicants provided the information required by either of the two above quoted rule provisions. Plaintiffs contend that granting of the temporary authorities in question without a showing of the required information was arbitrary, capricious and erroneous in law. At argument, counsel for defendants conceded that the required information was not contained in any of the supporting letters. Intervenors (four of the seven applicants) contended otherwise and, with leave, after argument filed a memorandum in support of their contention which the court has fully considered. The defendants and Intervenors contend the Temporary Authority Rules are merely "guidelines" for ICC action and not to be construed as limiting the broad discretion of ICC in granting temporary authorities pursuant to Section 210a(a) of the ICC Act. Also, they urge that any failure of the ICC to enforce its rules in the particulars above referred to does not show the action taken upon the temporary authorities in question was arbitrary, capricious or unlawful.

 Contrary to the suggestion of defendants and Intervenors, we find and hold it unmistakably clear that neither the term "carrier service" in section 210a(a) of the ICC Act nor the term "existing carrier", as used in § (8) and § (9) of 1131.2(c) above quoted, refers to services by applicants for temporary authority to provide the needed services in question. Therefore, the requirement of information pertaining to "existing carriers" in the above quoted regulations is not satisfied by supporting statements concerning service by the applicant "grandfather" carriers.

 From our examination of the supporting letters attached to each of the applications in question, we find none of them approaches compliance with, or provides the information required by, either § (8) and § (9) above quoted. We do not find the information specified in those sub-sections otherwise shown or referred to of record in the present case.

 Under sub-section 1131.3(a)(2) of the Temporary Authority Rules, any interested carrier who can and will provide all or any part of the proposed service for which temporary authority is sought may protest against temporary authority applications to provide such service. *fn3" Any such protest must state the specific service the protestant can and will offer to shippers needing the service. There is no indication ICC questioned the sufficiency of plaintiffs' protests and they are not challenged in this case. If any shipper, whether or not it submitted a letter in support of any temporary authority application in question, made reasonable inquiry as to the identity of carriers certified to provide the needed service within the territory in question, or specifically requested any plaintiff carrier to provide the needed service at any time and particularly during the period between the cancellation of the licenses of applicants and the filing of their applications for the temporary authorities in question, there is no evidence or indication thereof in the record before this court. At most, the supporting letters state a preference of the letter writers for continuance of service by the applicants. It is clear to us the mere preference of shippers to use non-certified carriers for needed service does not indicate and certainly does not establish that carriers certified by ICC to operate within the territory in question are not capable of providing the needed service.

 By its terms, 49 U.S.C. § 310a(a) vests discretion in ICC to grant temporary authority for motor carrier services only when both of the two conditions specified in the statute are shown, i.e. (1) "an immediate and urgent need for service" (2) "within a territory having no carrier service capable of meeting such need". When both conditions exist, the statute provides for wide latitude in the exercise of the discretion ICC may exercise in granting temporary authority applications. However, before ICC can exercise that discretion it is clear from the language of the statute that concurrent existence of both conditions (1) and (2) is mandatory and absent either one of the conditions ICC has neither power nor discretion to grant temporary authority applications.

 Having adopted Rules emphatically requiring temporary authority applicants to provide the essential information specified in § (8) and § (9), we find it capricious and arbitrary for ICC, without good cause shown, to ignore or waive compliance with these critically important rule provisions. At a minimum, we find it so when the essential information § (8) and § (9) require to be provided does not appear elsewhere in the record.

 For the reasons stated, it appears as a matter of law that the temporary authorities in question were erroneously granted and that each of them ...


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