American Trucking Associations, Inc. v. Interstate Commerce Commission and United States of America

722 F.2d 1243, 1984 U.S. App. LEXIS 26227
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 20, 1984
Docket81-4389, 83-4039
StatusPublished
Cited by12 cases

This text of 722 F.2d 1243 (American Trucking Associations, Inc. v. Interstate Commerce Commission and United States of America) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Trucking Associations, Inc. v. Interstate Commerce Commission and United States of America, 722 F.2d 1243, 1984 U.S. App. LEXIS 26227 (5th Cir. 1984).

Opinion

PATRICK E. HIGGINBOTHAM, Circuit Judge:

I

In these two consolidated cases, we consider whether the Interstate Commerce Act, as revised by the Motor Carrier Act of 1980 and the Staggers Rail Act of 1980, requires the Interstate Commerce Commission to adhere to its longstanding policy in motor carrier licensing proceedings of generally restricting rail-affiliated motor carriers to operations “auxiliary to or supplemental of” the rail operations of the company, unless the particular rail-affiliated trucking company can demonstrate “special circumstances” that justify an exception to the general rule. We conclude that the revised I.C.A. does not require this singling-out of rail-affiliated motor carriers for especially restrictive treatment in licensing proceedings. We deny the petition to review the Commission’s decision to abrogate the old “auxiliary to or supplemental of” general rule and its “special circumstances” exception in licensing proceedings under 49 U.S.C. § 10322. See Ex Parte No. MC-156, Applications for Motor Carrier Operating Authority by Railroads and Rail Affiliates, 132 M.C.C. 978 (1982) (C.I. 22). It follows that we deny the petition to review the Commission’s granting of unrestricted motor carrier operating authority to Pacific Motor Trucking Company, a rail-affiliated motor carrier, without a finding of “special circumstances.” See MC-78786 (Sub-No. 281)F, Pacific Motor Trucking Company Extension — Nationwide General Commodities (unpublished).

PMT, a wholly-owned subsidiary of Southern Pacific Transportation Company, a rail carrier, applied for nationwide operating authority for its trucking business. An I.C.C. Review Board granted PMT’s application and the Commission confirmed without a finding of special circumstances that would justify the broad grant of operating authority beyond auxiliary-to-rail service. One of the petitions before us to review and set aside the Commission’s order followed. During the pendency of our review, the Commission began to reexamine the validity of the special circumstances doctrine in light of the 1980 amendments to the I.C.A. A panel of this court heard PMT’s petition, but, citing the doctrine of primary jurisdiction, stayed proceedings until the Commission ruled. American Trucking Associations, Inc., v. I.C.C., 682 F.2d 487 (5th Cir.1982). The Commission decided that a rail-affiliated trucking company no longer needs to prove special circumstances to justify an unrestricted grant of authority, and the other petition before us followed. ATA accepts that we ought to uphold PMT’s grant if we uphold the Commission’s decision to no longer apply the special circumstances doctrine in licensing proceedings. Therefore the only issue before us is whether the I.C.A. requires application of the special circumstances doctrine in all licensing proceedings.

II

Before the Motor Carrier Act of 1935, the trucking

industry was unstable economically, dominated by ease of competitive entry and a fluid rate picture. And as a result, it became overcrowded with small economic units which proved unable to satisfy even *1245 the most minimal standards of safety dr financial responsibility. So Congress felt compelled to require authorization for all interstate operations to preserve the motor transportation system from over-competition ....

American Trucking Ass’ns v. United States, 344 U.S. 298, 73 S.Ct. 307, 97 L.Ed. 337 (1953). Congress responded by raising barriers to expansion or entry in the trucking industry. The 1935 Act authorized the Commission to issue a certificate of public convenience and necessity to a qualified carrier

if it is found that the applicant is fit, willing and able properly to perform the service proposed and to conform to the provisions of this part and the requirements, rules and regulations of the Commission thereunder, and that the proposed service ... will be required by the present or future public convenience and necessity.

Pub.L. No. 74-255, § 207(a), 49 Stat. 551-52 (1935). In Pan-American Bus Lines the I.C.C. developed the measures for granting a certificate:

whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; whether this purpose can and will be served as well by existing lines or carriers; and whether it can be served by applicant with a new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest.

1 M.C.C. 190, 203 (1936). Under the traditional approach, burdens of proof of eligibility for a certificate fell on the applicant. See, e.g., John Novak Contract Carrier Application, 103 M.C.C. 555 (1967). A certificate became a grant of a franchise protecting motor carriers from threatening comper tition. See Anderson, Jerman & Constantin, Railroad versus Motor Carrier Viewpoints on Regulatory Issues, 45 I.C.C.Prac.J. 294, 302-03 (1978). Inadequacy of existing service was the fundamental inquiry in deciding public convenience and necessity, see, e.g., Southern Kan. Greyhound Lines, Inc. v. United States, 134 F.Supp. 502, 509-10 (W.D.Mo.1955); Hudson Transit Lines v. United States, 82 F.Supp. 153, 157 (S.D.N.Y.1948); an application proposing no transportation services not already available over the lines of existing carriers was ordinarily denied. See, e.g., Worthen Extension— Cranberries, 117 M.C.C. 470, 477-78 (1972); Walter C. Benson Co., Inc., Extension— N.Y., N.J. & Pa., 61 M.C.C. 128, 130 (1952). Furthermore, the Commission generally held that a lowering of rates could not be considered in determining whether a proposed service was in the public interest. Roadway Express, Inc., Extension —Eastern Md. Counties, 120 M.C.C. 578, 584 (1974); Southland Produce Co. Contract Carrier Application, 81 M.C.C. 625, 628 (1959).

Protecting truckers from other truckers was only one part of the regulatory scheme. Protecting motor carriers from railroads rounded out the picture. The Commission stated the anti-railroad rationale in the original decision establishing the general policy in licensing proceedings of imposing auxiliary-to-rail restrictions on rail-affiliated trucking companies:

[RJailroad controlled motor carriers might ultimately be able to prevail over independent competitors, not because of any superiority in service or operation, but through their ability to draw upon the financial and other resources of their parent companies, and ... the motor-carrier industry is more likely to develop in inherent strength and efficiency if it continues, as in the past, to remain largely in independent hands.

Kansas City S. Transport Co., Inc., Com. Car. Application, 10 M.C.C. 221, 237 (1938).

The statutory footing of the restrictions on rail-affiliated trucking companies was what are now 49 U.S.C.

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722 F.2d 1243, 1984 U.S. App. LEXIS 26227, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-trucking-associations-inc-v-interstate-commerce-commission-and-ca5-1984.