Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc.

419 U.S. 281, 95 S. Ct. 438, 42 L. Ed. 2d 447, 1974 U.S. LEXIS 51
Supreme Court of the United States·Decided February 24, 1975·No. 73-1055·Published·Cited by 2,834 cases

Opinion

Mr. Justice Douglas

delivered the opinion of the Court.

This is a direct appeal from a final judgment of a three-judge District Court, 28 U. S. C. §§ 1253, 2101, invalidating an order of the Interstate Commerce Commission. Ten applications of motor carriers to conduct general commodities operations between points in the Southwest and Southeast were consolidated in one proceeding. Three additional applicants were allowed to intervene. The hearing examiners, after extensive hearings, rejected each application. The Commission granted three of the applications of appellant carriers. Appel-lees, competing carriers, brought an action in the District Court, 28 U. S. C. § 1336, to suspend, enjoin, and annul that portion of the order of the Commission that authorizes issuance of certificates of public convenience and necessity to Red Ball, Bowman, and Johnson. The District Court refused to enforce the Commission’s order because its findings and conclusions were arbitrary, capricious, and without rational basis within the meaning of the Administrative Procedure Act, 5 U. S. C. § 706, and likewise refused to remand the case believing that no useful purpose would be served, 364 F. Supp. 1239, 1264. 1

*284 The Administrative Procedure Act in 5 U. S. C. § 706 provides that:

“The reviewing court shall... (2) hold unlawful and set aside agency action, findings, and conclusions found to be—
“(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law [or] ...
“(E) unsupported by substantial evidence . . . .”

These two provisions of 5 U. S. C. § 706 (2) are part of six which are “separate standards.” See Citizens to Preserve Overton Park v. Volpe, 401 U. S. 402, 413 (1971). The District Court properly concluded that, though an agency’s finding may be supported by substantial evidence, based on the definition in Universal Camera Corp. v. NLRB, 340 U. S. 474 (1951), 2 it may nonetheless reflect arbitrary and capricious action. There seems, however, to be agreement that the findings and conclusions of the Commission are supported by substantial evidence. The question remains whether, as the District Court held, the Commission’s action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” as provided in 5 U. S. C. § 706 (2) (A). We disagree, with the District Court and accordingly reverse its judgment and remand the cases for consideration of one issue not reached by the District Court or by this Court.

I

The Motor Carrier provisions of the Interstate Commerce Act, 49 Stat. 551, 49 U. S. C. § 307, empower the *285 Commission to grant an application for a certificate if it finds (1) that the applicant is “fit, willing, and able properly to perform the service proposed”; and (2) that the service proposed “is or will be required by the present or future public convenience and necessity.” The Commission made both findings, relying upon the applicants’ general service record in support of a finding of fitness, and upon expressions of customer dissatisfaction with the existing service in support of its conclusion that the service proposed was consistent with the public convenience and necessity. The competing appellee carriers made presentations designed to show that their existing service was satisfactory and that the applicants would not offer measurably superior performance. The District Court concluded that the Commission had acted arbitrarily in its treatment of the presentations made by the protesting carriers. While the Commission had acknowledged the appellees’ evidence, its reasons for refusing to credit it would not, in the District Court’s view, withstand scrutiny, making its action tantamount to an arbitrary refusal to consider matters in the record.

Under the “arbitrary and capricious” standard the scope of review is a narrow one. A reviewing court must “consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.” Citizens to Preserve Overton Park v. Volpe, supra, at 416. The agency must articulate a “rational connection between the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U. S. 156, 168 (1962). While we may not supply a reasoned basis for the agency’s action that the *286 agency itself has not given, SEC v. Chenery Corp., 332 U. S. 194, 196 (1947), we will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned. Colorado Interstate Gas Co. v. FPC, 324 U. S. 581, 595 (1945). Having summarized the appropriate scope of review, we proceed to consider the District Court’s objections seriatim.

A. Evidence as to Existing Service

The applicant carriers presented exhibits showing the time in transit of selected shipments that had been consigned to appellee carriers by particular shippers during a designated study period. As the Commission acknowledged, the selection of particular shipménts from those occurring during the study period had been made with an eye toward demonstrating service inadequacies. 3 These “worst case” studies figured in the Commission’s finding that service would be improved by the entry of new carriers to the routes at issue.

The appellee carriers offered studies of their own. These covered the same period and the same shippers as the applicants’ presentations, but whereas the applicants had selected particular shipments to emphasize inadequacies, the appellee carriers included in their presentations all of the shipments consigned during the study period.

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Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 95 S. Ct. 438, 42 L. Ed. 2d 447, 1974 U.S. LEXIS 51 (1975).

419 U.S. 281 (Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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