Cochran, J.,
delivered the opinion of the court.
This is an appeal of right from two orders of the State Corporation Commission (Commission) entered June 24, 1968 against Agricultural Services Association, Inc. (ASA), of Bells, Tennessee, imposing penalties of f 150.00 each for violations of Virginia laws governing registration of motor carriers.
Two rules were issued by the Commission alleging that ASA was required by the Interstate Commerce Act to have appropriate Interstate Commerce Commission (ICC) authority to operate as a motor vehicle carrier in interstate commerce and that it was in violation of
Virginia law, Code § 56-304.12, since it had certified to the Commission that such authority was not required. The alleged violations occurred in Wythe County November 15 and 16, 1967 and in Rockingham County November 29, 1967.
Since ASA was operating vehicles in interstate commerce in Virginia it was not required to have Virginia license tags. However, it was required by § 56-304.1 of the Code to obtain from the Commission and display a registration card or stamp and identification marker for each vehicle. Under § 56-304.6:1 of the Code such card, stamp or marker will not be issued until the applicant has certified to the Commission that no authority is required by the ICC. ASA filed applications for registration in Virginia in 1966 and 1967 on forms furnished by the Commission in which it certified to its status by checking boxes marked “For Hire Carrier”, “Contract”, “Exempt”, “interstate”. The forms did not require or provide for the applicant to specify the type of ICC exemption which was claimed.
ASA also certified to the ICC that it was engaged in interstate commerce as an agricultural cooperative under § 203(b)(5) of the Interstate Commerce Act Part II (49 U.S.C.A. § 303 (b) (5)) and was therefore exempt from ICC regulation.
On November 15 and 16, 1967, an investigator for the Commission stopped two southbound trucks of ASA in Wythe County and found in them shipments of fabrics consigned by shippers in Pennsylvania, Connecticut and Rhode Island to consignees in Tennessee. In Rockingham County on November 29, 1967, another Commission investigator inspected a northbound ASA truck which contained three shipments of frozen vegetables consigned by a corporate member of the cooperative, in Bells, Tennessee, to New York and New Jersey consignees.
The commodities hauled in the three vehicles were nonexempt within the meaning of Interstate Commerce Act Part II, § 203 (b) (6) (49 U.S.C.A. § 303(b)(6)), which exempts agricultural products and specifies commodities which are nonexempt. At the consolidated hearing in the two proceedings before the Commission ASA contended that its exemption was claimed not under § 203(b)(6) but under § 203(b)(5) of the Interstate Commerce Act Part II (49 U.S.C.A. § 303(b)(5)) which in 1967 exempted:
“(5) motor vehicles controlled and operated by a cooperative association as defined in the Agricultural Marketing Act, approved
June 15, 1929, as amended, or by a federation of such cooperative associations, if such federation possesses no greater powers or purposes than cooperative associations so defined; . . .”
ASA further contended that it hauled the frozen vegetables north for one of its members, as it was permitted to do as an agricultural cooperative, and hauled the fabrics south for nonmembers, as it was also permitted to do if the transportation was necessary and incidental to its member business, provided its nonmember business did not exceed its member business.
Northwest Agricultural Cooperative Association, Inc.
v.
I.C.C.,
350 F. 2d 252 (9th Cir. 1965), cert. denied 382 U. S. 1011, 86 S. Ct. 620 (1966).
Only one witness, its Executive Vice-President, testified for ASA. He described in detail its complex structure, comprising nine corporate members, numerous divisions and thousands of small farmers organized, through cooperatives, to provide a complete “farm-to-the-table food system”. Of total ASA gross revenues for 1967 of seven million dollars only three per centum was derived from transportation for nonmembers.
The Commission found that ASA was not entitled to the agricultural cooperative exemption of Interstate Commerce Act § 203 (b) (5) and was therefore in violation of Virginia law. This conclusion was reached on the theory that a
prima facie
case was made against ASA when it was shown to be transporting nonexempt commodities under § 203(b)(6), and that ASA failed to go forward with sufficient evidence to prove exemption under § 203(b) (5).
We must decide whether the Commission had authority to determine ASA’s claim to exemption under § 203(b)(5) of the Interstate Commerce Act. If the Commission exceeded its authority in making this determination we need not consider its ruling on the evidence.
ASA is a Tennessee corporation. Its transportation activities which have been questioned are entirely in interstate commerce. On the face of it interpretation of the status of ASA under the Interstate Commerce Act would seem to be a matter for primary determination by the ICC. Interstate Commerce Act Part II, § 202, 49 U.S.C.A. § 302.
The principle that interpretation of ICC certificates of motor carriers should first be made by the ICC and not by our Commission has been established by
Service Storage & Transfer Co.
v.
Commonwealth
of Va.,
359 U. S. 171, 79 S. Ct. 714, 3 L. ed. 2d 717 (1959). There, a motor carrier operating under certificates issued by the ICC was fined by the Commission for using the interstate rights as a “subterfuge” for hauling various intrastate shipments. This court affirmed the criminal penalties imposed for all but three of the alleged violations, asserting jurisdiction because the facts showed that the shipments in controversy involved intrastate commerce.
Service Storage & Transfer Co.
v.
Commonwealth of Va.,
199 Va. 797, 102 S. E. 2d 339 (1958). The United States Supreme Court, in reversing, held that interpretation of the carrier’s interstate commerce certificate should first be made by the ICC so that “the possibility of a multitude of interpretations of the same federal certificate by several States will be avoided and a uniform administration of the Act achieved.” 359 U. S. 171, at 179, 79 S. Ct. 714, at 719, 3 L. ed. 2d 717, at 722. It was pointed out in the opinion that to uphold the fines imposed by the Commission would be tantamount to a partial suspension of the carrier’s federally granted interstate operating certificate. In refusing to permit this the court suggested that the Commonwealth was not powerless to act as it could file a complaint with the ICC under § 204(c) of the Act that the carrier had abused its certificate.
The cases have established a pattern in determining the primary jurdisdiction of the ICC before relief may be afforded by the courts.
Free access — add to your briefcase to read the full text and ask questions with AI
Cochran, J.,
delivered the opinion of the court.
This is an appeal of right from two orders of the State Corporation Commission (Commission) entered June 24, 1968 against Agricultural Services Association, Inc. (ASA), of Bells, Tennessee, imposing penalties of f 150.00 each for violations of Virginia laws governing registration of motor carriers.
Two rules were issued by the Commission alleging that ASA was required by the Interstate Commerce Act to have appropriate Interstate Commerce Commission (ICC) authority to operate as a motor vehicle carrier in interstate commerce and that it was in violation of
Virginia law, Code § 56-304.12, since it had certified to the Commission that such authority was not required. The alleged violations occurred in Wythe County November 15 and 16, 1967 and in Rockingham County November 29, 1967.
Since ASA was operating vehicles in interstate commerce in Virginia it was not required to have Virginia license tags. However, it was required by § 56-304.1 of the Code to obtain from the Commission and display a registration card or stamp and identification marker for each vehicle. Under § 56-304.6:1 of the Code such card, stamp or marker will not be issued until the applicant has certified to the Commission that no authority is required by the ICC. ASA filed applications for registration in Virginia in 1966 and 1967 on forms furnished by the Commission in which it certified to its status by checking boxes marked “For Hire Carrier”, “Contract”, “Exempt”, “interstate”. The forms did not require or provide for the applicant to specify the type of ICC exemption which was claimed.
ASA also certified to the ICC that it was engaged in interstate commerce as an agricultural cooperative under § 203(b)(5) of the Interstate Commerce Act Part II (49 U.S.C.A. § 303 (b) (5)) and was therefore exempt from ICC regulation.
On November 15 and 16, 1967, an investigator for the Commission stopped two southbound trucks of ASA in Wythe County and found in them shipments of fabrics consigned by shippers in Pennsylvania, Connecticut and Rhode Island to consignees in Tennessee. In Rockingham County on November 29, 1967, another Commission investigator inspected a northbound ASA truck which contained three shipments of frozen vegetables consigned by a corporate member of the cooperative, in Bells, Tennessee, to New York and New Jersey consignees.
The commodities hauled in the three vehicles were nonexempt within the meaning of Interstate Commerce Act Part II, § 203 (b) (6) (49 U.S.C.A. § 303(b)(6)), which exempts agricultural products and specifies commodities which are nonexempt. At the consolidated hearing in the two proceedings before the Commission ASA contended that its exemption was claimed not under § 203(b)(6) but under § 203(b)(5) of the Interstate Commerce Act Part II (49 U.S.C.A. § 303(b)(5)) which in 1967 exempted:
“(5) motor vehicles controlled and operated by a cooperative association as defined in the Agricultural Marketing Act, approved
June 15, 1929, as amended, or by a federation of such cooperative associations, if such federation possesses no greater powers or purposes than cooperative associations so defined; . . .”
ASA further contended that it hauled the frozen vegetables north for one of its members, as it was permitted to do as an agricultural cooperative, and hauled the fabrics south for nonmembers, as it was also permitted to do if the transportation was necessary and incidental to its member business, provided its nonmember business did not exceed its member business.
Northwest Agricultural Cooperative Association, Inc.
v.
I.C.C.,
350 F. 2d 252 (9th Cir. 1965), cert. denied 382 U. S. 1011, 86 S. Ct. 620 (1966).
Only one witness, its Executive Vice-President, testified for ASA. He described in detail its complex structure, comprising nine corporate members, numerous divisions and thousands of small farmers organized, through cooperatives, to provide a complete “farm-to-the-table food system”. Of total ASA gross revenues for 1967 of seven million dollars only three per centum was derived from transportation for nonmembers.
The Commission found that ASA was not entitled to the agricultural cooperative exemption of Interstate Commerce Act § 203 (b) (5) and was therefore in violation of Virginia law. This conclusion was reached on the theory that a
prima facie
case was made against ASA when it was shown to be transporting nonexempt commodities under § 203(b)(6), and that ASA failed to go forward with sufficient evidence to prove exemption under § 203(b) (5).
We must decide whether the Commission had authority to determine ASA’s claim to exemption under § 203(b)(5) of the Interstate Commerce Act. If the Commission exceeded its authority in making this determination we need not consider its ruling on the evidence.
ASA is a Tennessee corporation. Its transportation activities which have been questioned are entirely in interstate commerce. On the face of it interpretation of the status of ASA under the Interstate Commerce Act would seem to be a matter for primary determination by the ICC. Interstate Commerce Act Part II, § 202, 49 U.S.C.A. § 302.
The principle that interpretation of ICC certificates of motor carriers should first be made by the ICC and not by our Commission has been established by
Service Storage & Transfer Co.
v.
Commonwealth
of Va.,
359 U. S. 171, 79 S. Ct. 714, 3 L. ed. 2d 717 (1959). There, a motor carrier operating under certificates issued by the ICC was fined by the Commission for using the interstate rights as a “subterfuge” for hauling various intrastate shipments. This court affirmed the criminal penalties imposed for all but three of the alleged violations, asserting jurisdiction because the facts showed that the shipments in controversy involved intrastate commerce.
Service Storage & Transfer Co.
v.
Commonwealth of Va.,
199 Va. 797, 102 S. E. 2d 339 (1958). The United States Supreme Court, in reversing, held that interpretation of the carrier’s interstate commerce certificate should first be made by the ICC so that “the possibility of a multitude of interpretations of the same federal certificate by several States will be avoided and a uniform administration of the Act achieved.” 359 U. S. 171, at 179, 79 S. Ct. 714, at 719, 3 L. ed. 2d 717, at 722. It was pointed out in the opinion that to uphold the fines imposed by the Commission would be tantamount to a partial suspension of the carrier’s federally granted interstate operating certificate. In refusing to permit this the court suggested that the Commonwealth was not powerless to act as it could file a complaint with the ICC under § 204(c) of the Act that the carrier had abused its certificate.
The cases have established a pattern in determining the primary jurdisdiction of the ICC before relief may be afforded by the courts. Preliminary resort to the ICC is required where the inquiry is essentially one of fact and of discretion in technical matters and when uniformity can only be secured if determination is made by the ICC.
Great Northern Ry. Co.
v.
Merchants’ Elevator Co.,
259 U. S. 285, 291, 42 S. Ct. 477, 479, 66 L. ed. 943, 946 (1922);
Hewitt
v.
New York, N. H. & H. R. Co.,
284 N. Y. 117, 29 N. E. 2d 641 (1940). See also
Penna. R. R. Co.
v.
Puritan Coal Co.,
237 U. S. 121, 131, 35 S. Ct. 484, 487-488, 59 L. ed. 869, 873 (1915).
It seems to be conceded by the Commission that prior to 1967 there was little doubt that a state regulatory body or court could not interpret and apply the exemption here claimed. This is a matter involving complex technical questions and problems of uniformity clearly calling into play the “primary jurisdiction” doctrine.
Agricultural Transportation Association of Texas
v.
King,
349 F. 2d 873 (5th Cir. 1965) (holding that the District Court should not decide whether ATA was qualified for § 203 fb) (5) exemption since this determination was primarily for the ICC). Nor can it be questioned that the doctrine applies to the states.
Service Storage & Transfer Co.
v.
Commonwealth,
supra;
see also
Great Northern Ry. Co.
v.
Merchants’ Elevator Co., supra;
3 Davis,
Administrative Law Treatise
(1958) § 19.08.
The Commission contends, however, that by a 1967 agreement it has been empowered to interpret and enforce the Interstate Commerce Act in Virginia. By virtue of this agreement the Commission concluded that it was free to determine ASA’s claim to exemption under § 205 (b) (5) of the Act. We do not agree.
True, the Act was amended in 1965 by Public Law 89-170 to promote greater cooperation between the ICC and state authorities and the ICC was “authorized to make cooperative agreements with the various States to enforce the economic and safety laws and regulations of the various States and the United States concerning highway transportation.” 49 U.S.C.A. § 305(f) (1968 Pam.).
The Commonwealth of Virginia entered into such a cooperative agreement in March, 1967.
The Commission contends that each
state which has accepted the terms of such an agreement is thereby authorized to make its own independent interpretation of the Interstate Commerce Act and to enforce the Act within its borders. But no such legislative intent is found in the enabling legislation, or in the legislative history of Public Law 89-170 (1965), U. S. Code Cong. & Adm. News, vol. 2, pp. 2923-2930 (1965), or in the cooperative agreement itself. Rather, evidence to the contrary is found in the amendment to § 202 of the Act, also embraced in Public Law 89-170, relating to uniform standards of registration of motor carriers in the states, which concludes with this language:
“Nothing in this paragraph shall be construed to deprive the [Interstate Commerce] Commission, when there is a reasonable question of interpretation or construction, of its jurisdiction to interpret or construe certificates of public convenience and necessity, permits, or rules and regulations issued by the Commission, nor to authorize promulgation of standards in conflict with any rule or regulation of the Commission.” Public Law 89-170, § 2, 79 Stat. 648, 49 U.S.C.A. § 302(b) (2) (1968 Pam.).
A motor carrier’s right to exemption from regulation under § 203 (b) (5) of the Act, no less than its right to operate under a certificate of authority from the ICC, is peculiarly a matter for determination by the ICC and not by a regulatory body in each state through which its interstate operations extend. Centralization of authority is not only justified but required to avoid a patchwork of conflicting interpretations and endless litigation.
By 1968 amendment § 203(b)(5) of the Act, under which ASA claims exemption as an agricultural cooperative, has been strengthened to limit exempt transportation for nonmembers of a cooperative to that “which is incidental to its primary transportation operation and necessary for its effective performance and shall in no event exceed 15 per centum of its total interstate transportation services in any fiscal year, measured in terms of tonnage”. 49 U.S.C.A. § 303 (b)
(5) (1968 Pam.). Notice to the ICC is also now required before transportation for nonmembers is commenced.
It was brought out in oral argument that ASA has filed its notice of intent to transport for nonmembers and that an ICC investigation is pending. While this does not render moot the present controversy it may result in a determination by the ICC of ASA’s present status under the Interstate Commerce Act.
The 1967 cooperative agreement is addressed to the reciprocal exchange of information between the ICC and state regulatory bodies. Before this enabling legislation was enacted into law information concerning violations of state laws and regulations coming to the attention of the ICC through official examinations or inspections could not be communicated to the states because of the prohibitions of § 222(d) of the Act (49 U.S.C.A. § 322(d)). Now such information may be communicated so that the states may be assisted in gathering evidence for use in enforcing their laws. Furthermore, provision is made for joint examination, inspection or investigation by the ICC and the state regulatory body “for the enforcement of the economic laws and regulations of the United States and the State concerning highway transportation.” Footnote 1,
supra,
§ 1022.6.
We conclude that the Commission had no authority under the cooperative agreement to determine ASA’s status under § 203(b)(5) of the Interstate Commerce Act (49 U.S.C.A. 303(b)(5)) and that it should have referred this inquiry to the ICC. This it could have done by filing a complaint under § 204(c) of the Act, by reporting the information concerning shipments of nonexempt commodities, or by requesting a joint investigation under the cooperative agreement. The judgments and orders are accordingly vacated and the proceedings herein remanded to the State Corporation Commission for such action as may be deemed proper not inconsistent with this opinion.
Reversed and remanded.