Containerfreight Corp. v. United States

752 F.2d 419
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 22, 1985
DocketNo. 83-7221
StatusPublished
Cited by12 cases

This text of 752 F.2d 419 (Containerfreight Corp. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Containerfreight Corp. v. United States, 752 F.2d 419 (9th Cir. 1985).

Opinion

CHOY, Circuit Judge:

Petitioners Containerfreight Corporation, et al., again petition this court for review of an order of the Interstate Commerce Commission granting to Manlowe United, Inc. (“Manlowe”) authority to transport between points in California, general commodities having a prior or subsequent movement by water or rail. We vacate the Commission’s order and remand for further proceedings.

I. BACKGROUND

Manlowe first filed its application with the Commission in December 1980. The Commission considered the application under its “modified procedure” with the parties submitting their evidence and arguments in written form. See 49 C.F.R. § 1100.43-52 (1981). Three shippers filed statements in support of the application; five motor carriers filed statements pro[422]*422testing it.1 A Commission review board granted the application for statewide authority in a decision served on April 16, 1981. Upon petition for review by the protestants, the Commission affirmed the decision on June 24, 1981, but limited Manlowe’s authorization to a two-year term because the protestants had raised “serious allegations of misconduct on the part of applicant’s president.”

The protestants sought judicial review before this court, which granted Manlowe leave to intervene. Our decision, entered August 26, 1982 in Containerfreight Corp. v. United States, 685 F.2d 329 (9th Cir.1982) (“Containerfreight I”), vacated the Commission’s grant of authority and remanded the matter for further proceedings. We found that the Commission’s order was not supported by substantial evidence as to the public need for Manlowe’s services, id. at 331-32, and that as to Manlowe’s fitness, the Commission had not truly weighed the evidence, id. at 332-33.

On October 21, 1982, the Commission reopened the application proceeding for receipt of additional evidence. The applicant and the petitioners submitted verified statements. The applicant submitted no additional supporting shipper statements, nor did it produce any marketing studies or traffic projections regarding the statewide public need for its services. In a decision served on February 24, 1983, the Commission again granted the full authority sought by applicant. The protestants petition anew for judicial review.

The Motor Carrier Act of 1980 (“the 1980 Act”) directs the Commission to grant requested operating certificates for motor common carriers of property if it finds:

(A) that the [applicant] is fit, willing, and able to provide the transportation to be authorized by the certificate and to comply with this subtitle and regulations of the Commission; and
(B) on the basis of evidence presented by persons supporting the issuance of the certificate, that the service proposed will serve a useful public purpose, responsive to a public demand or need____

49 U.S.C. § 10922(b)(1). The 1980 Act voices a policy “with respect to transportation of property by motor carrier, to promote competitive and efficient transportation services,” 49 U.S.C. § 10101(a)(2), thus easing entry for new carriers.

Congress did not see fit, however, to deregulate the trucking industry entirely.2 Notwithstanding the relaxation of entry standards under the 1980 Act, therefore, the Administrative Procedure Act (“APA”) still directs this court to set aside final orders of the Commission which are “arbitrary, capricious, [or]... unsupported by substantial evidence.” 5 U.S.C. § 706(2)(A), (E). “Although the substantial evidence standard of review is relatively deferential to the agency factfinder, our review still must be ‘searching and careful, subjecting the agency’s decision to close judicial scrutiny.’ ” Jackson v. Donovan, No. 82-7477, slip op. at 1259 (9th Cir. March 6, 1984) (quoting Memorial, Inc. v. Harris, 655 F.2d 905, 912 (9th Cir.1980)).

The APA also requires that the Commission’s decisions include “findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented on the record____” 5 U.S.C. § 557(c)(3)(A). Under the 1980 Act, therefore, it is still essential that the Commission, before granting an operating certificate, “consider and, to the extent applicable, make findings on” (1) the national transportation policy set forth in 49 U.S.C. § 10101(a)(l)-(2); and (2) “the effect of issuance of the certificate on existing carriers, ...” 49 U.S.C. § 10922(b)(2)(A), (B).

[423]*423II. DISCUSSION

A. Substantial Evidence in the Record

Petitioners press two chief sufficiency-of-evidence arguments. First, they argue that the Commission’s finding of public need for statewide authority lacks substantial evidence in the record to support it, and second, that the Commission’s finding of fitness is similarly unsupported. We accept the first argument but reject the second.

The applicant for common carrier authority bears the initial burden of making out a prima facie case that its service is needed and that it is fit to perform it. Containerfreight I, 685 F.2d at 331. Only after the applicant makes out a prima facie case does the burden shift to protestants to show that authorization would not be consistent with the public convenience and necessity. See Steere Tank Lines, Inc. v. I.C.C., 724 F.2d 472, 475 (5th Cir.1984). Because we hold that Manlowe never made out a threshold case of statewide need for its services, we need not reach the question whether petitioners in turn carried their heavier burden.

1. “Useful Public Purpose, Responsive to a Public Demand or Need”

Petitioners argue that the Commission erred in granting Manlowe California statewide operating authority where the record lacks substantial evidence of statewide public need. Under the 1980 Act, the Commission may infer from an unrebutted showing of representative need that the need extends beyond the localities for which evidence was given.3 Refrigerated Transport Co. v. I.C.C., 686 F.2d 881, 887 (11th Cir.1982). In reviewing the scope of authority granted, we ask whether an inference of similarity throughout the area embraced by the applicant’s certificate may rationally be drawn from the evidence presented. Id.

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Containerfreight Corporation v. United States
752 F.2d 419 (Ninth Circuit, 1985)

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752 F.2d 419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/containerfreight-corp-v-united-states-ca9-1985.