Interstate Commerce Commission v. Piggy Back Shippers Association of Florida, Inc.

Eleventh Circuit

Interstate Commerce Commission v. Piggy Back Shippers Association of Florida, Inc.

704 F.2d 533, 1983 U.S. App. LEXIS 28377

CourtCourt of Appeals for the Eleventh Circuit

DecidedMay 2, 1983

Docket82-5213

StatusPublished

Cited by4 cases

This text of 704 F.2d 533 (Interstate Commerce Commission v. Piggy Back Shippers Association of Florida, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Interstate Commerce Commission v. Piggy Back Shippers Association of Florida, Inc., 704 F.2d 533, 1983 U.S. App. LEXIS 28377 (11th Cir. 1983).

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PER CURIAM:

The Interstate Commerce Commission (ICC) filed a complaint for an injunction against Piggy Back Shippers Association of Florida, Inc. (Piggy Back), seeking enforcement of the ICC’s administrative subpoena duces tecum for the production of Piggy Back’s records. We have jurisdiction under 49 U.S.C.A. §§ 10321, 10561, and 11702(a)(6) and rules relating to suits in equity existing under the Constitution and laws of the United States. After discovery activities were completed, both parties moved for summary judgment. The district court granted Piggy Back’s motion for summary judgment and entered judgment dismissing the ICC’s complaint. We affirm.

The facts are not in dispute. Piggy Back is exempt under 49 U.S.C.A. § 10562(3) which provides exemption from regulation for bona fide shippers associations.¹ Shippers organizations are organized for the benefit of its members and seek to obtain the best freight rates for its members. The association is allowed to operate unlicensed and unregulated so long as it does not hold itself out to the public as a freight forwarder and performs services only for its dues paying members on a nonprofit basis. On the other hand, freight forwarders serve the public for profit and specialize in giving fast freight forwarding service to the public in less than carload capacity, and offer pickup and delivery services. Because Piggy Back is exempt from ICC regulation, it contends that its books and records are outside the scope of ICC subpoena power in the absence of notice of commencement of an investigation. The ICC contends that it has the right to determine whether Piggy Back is a bona fide shipper association rather than a freight forwarder, and in doing so may use its subpoena power.

We must determine whether the ICC has authority to use its administrative subpoena powers to determine whether entities which claim to be bona fide shippers associations in fact qualify for such status under applicable statutes.

Title 49 U.S.C.A. § 10321(c)(1) provides:

The Commission, an individual Commissioner, an employee board, and an employee delegated to act under Section [535]*53510305 of this title may subpoena witnesses and records related to a proceeding of the commission from any place in the United States, to the designated place of the proceeding. [Emphasis added.]

“Proceeding” is defined in 49 C.F.R. 1100.5(b) (1980) as follows:

The term “proceeding” shall include: (1) An “informal complaint” filed under Rule 22 or 23 or a “formal complaint” alleging violation of any provision of the act or of any regulation or requirement made pursuant to a power granted by such act, including petitions on the special docket; (2) an “application” for (i) the granting of any right, privilege, authority, or relief under or from any provision of the act or of any regulation or requirement made pursuant to a power granted by such act, or (ii) the consideration of any submission required by law to be made to the Commission; (3) an “investigation” instituted by the Commission; (4) a “rulemaking” proposal instituted by the Commission.

By statute, 49 U.S.C.A. § 11144, the ICC has broad investigatory powers, which allow ICC employees to inspect records and facilities of regulated entities.² Because this visitorial power applies only to regulated entities, and because Piggy Back is exempt from regulation as a shippers association, ICC seeks enforcement of its administrative subpoena in this case.

As a general proposition, if information is relevant to a proper investigation, the information must be furnished although the entity is not a party to the investigation and not subject to ICC regulation. Ellis v. Interstate Commerce Commission, 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036 (1915); Comet Electronics, Inc. v. United States, 381 F.Supp. 1233 (W.D.Mo.1974), aff’d 420 U.S. 999, 95 S.Ct. 1439, 43 L.Ed.2d 758 (1975). We agree with the trial court that under the definition of a “proceeding” as defined in 49 C.F.R. 1100.5(b) (1980), only one of the four enumerated options is relevant to this case: (3) “an investigation instituted by the Commission.”

Section 1100.41 of 49 C.F.R. provides, in pertinent part: “An order instituting an investigation will be served by the Commission upon the respondents The trial court found that no such order instituting an investigation had been served on Piggy Back. Therefore, the trial court concluded that the ICC had failed to follow its own regulations, and since Piggy Back is a shipper’s association, and exempt from regulation, the agency is held to strict com[536]*536pliance with its rules and general practice. The ICC alleges error by the trial court contending that the service of an order mandated by 49 C.F.R. 1100.41 (1980) applies only to formal investigations. It contends that the statutory authority to subpoena (49 U.S.C.A. 10321(c)(1)) authorizes subpoenas in both formal and informal investigations. According to the ICC, the subpoena issued here is for an informal investigation to determine the true status of Piggy Back and does not require the notice mandated for a formal proceeding.

The district court found that the visitorial investigatory power of the ICC under 49 U.S.C.A. § 11144 may only be used to review the books and records of a regulated entity which is required to keep certain books and records. The district court then considered the express language of the statute which requires that a subpoena be “related to a proceeding of the Commission” and the general rules of the Commission. It then concluded that no actual proceeding had been instituted against Piggy Back; therefore, the Commission could not use its administrative subpoena to obtain Piggy Back’s books and records. We find no authority, and the ICC points us to no authority, which authorizes the ICC to subpoena books and records of unregulated shippers associations in the absence of the commencement of a proceeding.

Accordingly, we affirm the decision of the district court.

AFFIRMED.

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PER CURIAM:

The Interstate Commerce Commission (ICC) filed a complaint for an injunction against Piggy Back Shippers Association of Florida, Inc. (Piggy Back), seeking enforcement of the ICC’s administrative subpoena duces tecum for the production of Piggy Back’s records. We have jurisdiction under 49 U.S.C.A. §§ 10321, 10561, and 11702(a)(6) and rules relating to suits in equity existing under the Constitution and laws of the United States. After discovery activities were completed, both parties moved for summary judgment. The district court granted Piggy Back’s motion for summary judgment and entered judgment dismissing the ICC’s complaint. We affirm.

The facts are not in dispute. Piggy Back is exempt under 49 U.S.C.A. § 10562(3) which provides exemption from regulation for bona fide shippers associations.¹ Shippers organizations are organized for the benefit of its members and seek to obtain the best freight rates for its members. The association is allowed to operate unlicensed and unregulated so long as it does not hold itself out to the public as a freight forwarder and performs services only for its dues paying members on a nonprofit basis. On the other hand, freight forwarders serve the public for profit and specialize in giving fast freight forwarding service to the public in less than carload capacity, and offer pickup and delivery services. Because Piggy Back is exempt from ICC regulation, it contends that its books and records are outside the scope of ICC subpoena power in the absence of notice of commencement of an investigation. The ICC contends that it has the right to determine whether Piggy Back is a bona fide shipper association rather than a freight forwarder, and in doing so may use its subpoena power.

We must determine whether the ICC has authority to use its administrative subpoena powers to determine whether entities which claim to be bona fide shippers associations in fact qualify for such status under applicable statutes.

Title 49 U.S.C.A. § 10321(c)(1) provides:

The Commission, an individual Commissioner, an employee board, and an employee delegated to act under Section [535]*53510305 of this title may subpoena witnesses and records related to a proceeding of the commission from any place in the United States, to the designated place of the proceeding. [Emphasis added.]

“Proceeding” is defined in 49 C.F.R. 1100.5(b) (1980) as follows:

The term “proceeding” shall include: (1) An “informal complaint” filed under Rule 22 or 23 or a “formal complaint” alleging violation of any provision of the act or of any regulation or requirement made pursuant to a power granted by such act, including petitions on the special docket; (2) an “application” for (i) the granting of any right, privilege, authority, or relief under or from any provision of the act or of any regulation or requirement made pursuant to a power granted by such act, or (ii) the consideration of any submission required by law to be made to the Commission; (3) an “investigation” instituted by the Commission; (4) a “rulemaking” proposal instituted by the Commission.

By statute, 49 U.S.C.A. § 11144, the ICC has broad investigatory powers, which allow ICC employees to inspect records and facilities of regulated entities.² Because this visitorial power applies only to regulated entities, and because Piggy Back is exempt from regulation as a shippers association, ICC seeks enforcement of its administrative subpoena in this case.

As a general proposition, if information is relevant to a proper investigation, the information must be furnished although the entity is not a party to the investigation and not subject to ICC regulation. Ellis v. Interstate Commerce Commission, 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036 (1915); Comet Electronics, Inc. v. United States, 381 F.Supp. 1233 (W.D.Mo.1974), aff’d 420 U.S. 999, 95 S.Ct. 1439, 43 L.Ed.2d 758 (1975). We agree with the trial court that under the definition of a “proceeding” as defined in 49 C.F.R. 1100.5(b) (1980), only one of the four enumerated options is relevant to this case: (3) “an investigation instituted by the Commission.”

Section 1100.41 of 49 C.F.R. provides, in pertinent part: “An order instituting an investigation will be served by the Commission upon the respondents The trial court found that no such order instituting an investigation had been served on Piggy Back. Therefore, the trial court concluded that the ICC had failed to follow its own regulations, and since Piggy Back is a shipper’s association, and exempt from regulation, the agency is held to strict com[536]*536pliance with its rules and general practice. The ICC alleges error by the trial court contending that the service of an order mandated by 49 C.F.R. 1100.41 (1980) applies only to formal investigations. It contends that the statutory authority to subpoena (49 U.S.C.A. 10321(c)(1)) authorizes subpoenas in both formal and informal investigations. According to the ICC, the subpoena issued here is for an informal investigation to determine the true status of Piggy Back and does not require the notice mandated for a formal proceeding.

The district court found that the visitorial investigatory power of the ICC under 49 U.S.C.A. § 11144 may only be used to review the books and records of a regulated entity which is required to keep certain books and records. The district court then considered the express language of the statute which requires that a subpoena be “related to a proceeding of the Commission” and the general rules of the Commission. It then concluded that no actual proceeding had been instituted against Piggy Back; therefore, the Commission could not use its administrative subpoena to obtain Piggy Back’s books and records. We find no authority, and the ICC points us to no authority, which authorizes the ICC to subpoena books and records of unregulated shippers associations in the absence of the commencement of a proceeding.

Accordingly, we affirm the decision of the district court.

AFFIRMED.

²

. 49 U.S.C.A. § 11144 provides:

§ 11144. Records: form; inspection; preservation

(a) The Interstate Commerce Commission may prescribe the form of records required to be prepared or compiled under this subchapter—

(1) by carriers, brokers, and lessors, including records related to movement of traffic and receipts and expenditures of money; and

(2) by persons furnishing cars or protective service against heat or cold to or for a rail or express carrier providing transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title to the extent related to those cars or that service.

(b) The Commission, or an employee designated by the Commission, may on demand and display of proper credentials—

(1) inspect and examine the lands, buildings, and equipment of a carrier, broker, or lessor; and

(2) inspect and copy any record of—

(A) a carrier, broker, lessor, or association;

(B) a person controlling, controlled by, or under common control with a carrier if the Commission considers inspection relevant to that person’s relation to, or transaction with, the carrier; and

(C) a person furnishing cars or protective service against heat or cold to or for a rail or express carrier if the Commission prescribed the form of that record.

(c) The Commission, or an employee designated by the Commission, may, during normal business hours, inspect and copy any record related to motor vehicle transportation of a cooperative association or federation of cooperative associations required to notify the Commission under section 10526(a)(5) of this title. However,, the Commission may not prescribe the form of records to be maintained by a cooperative association or federation of cooperative associations.

(d) The Commission may prescribe the time period during which operating, accounting, and financial records must be preserved by carriers, brokers, lessors, and persons furnishing cars or protective services.

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