Merchants Fast Motor Lines, Inc. v. Interstate Commerce Commission

5 F.3d 911
CourtCourt of Appeals for the Fifth Circuit
DecidedNovember 1, 1993
Docket92-4691A, 92-4691B and 92-4691C
StatusPublished
Cited by58 cases

This text of 5 F.3d 911 (Merchants Fast Motor Lines, Inc. v. Interstate Commerce Commission) 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
Merchants Fast Motor Lines, Inc. v. Interstate Commerce Commission, 5 F.3d 911 (5th Cir. 1993).

Opinion

W. EUGENE DAVIS, Circuit Judge:

I.

In this consolidated appeal, three sets of petitioners seek review of three separate actions of the Interstate Commerce Commission (ICC). In 92-4691A and 92-4691C, petitioners seek review of a declaratory order 1 and a policy statement. 2 In these two actions, petitioners, including several trucking associations 3 and the Railroad Commission. of Texas, challenge the ICC’s determination that a particular type of transportation is in interstate commerce and therefore subject to ICO, rather than state, regulation. The ICC takes the position in both the declaratory order and the policy statement that in certain circumstances when a shipper ships goods into Texas from another state, temporarily stores the goods at a warehouse in Texas, then later ships the goods to the shipper’s Texas customer, the entire shipment is interstate in nature. Petitioners argue that the second leg of the transportation — from Texas warehouse to ultimate Texas destination — is an intrastate movement subject to state regulation. Because' we do not find that the declaratory order is arbitrary or capricious, we deny the petitions to set aside this order. Because we find that the policy statement is not ripe, for our review, we dismiss the petition in 92-4691A.

In 92-4691B, petitioners 4 seek review of another ICC declaratory order, 5 challenging only that portion of the order finding that an interstate movement to a warehouse by private carriage does not prevent a later, single-state movement from being treated as interstate commerce. Because petitioners TMTA and NMFTA can not establish standing and venue, respectively, we dismiss TMTA’s petition for review and transfer NMFTA’s petition to the D.C. Circuit.

II. Warehousemen declaratory order (92-4691A)

A.

In August 1991 the Association of Texas Warehousemen (Association) wrote the Railroad Commission of Texas (RCT) posing two questions: (1) whether the RCT considered the Texas leg of the transportation described above (from the warehouse to the customer) interstate or intrastate in nature; and (2) if intrastate, whether the RCT would seek to impose penalties or sanctions on parties not complying with RCT rates, rules, and orders. The RCT responded by letter, stating that an out-of-state shipment loses its interstate identity when it is consigned to a point in Texas “without further instructions for delivery to another Texas location.” The RCT also stated that it could assess administrative penalties against carriers, shippers, and aiders and abettors, including warehousemen, for not complying with RCT rates, rules, and orders.

The Association then petitioned the ICC for a declaratory order declaring that the Texas leg of the transportation was interstate. By order served March 27, 1992, the *915 ICC found that the risk of imminent enforcement by the RCT presented a controversy sufficient tó warrant the institution of a § 554(e) declaratory proceeding. After the ICC requested and received numerous comments, it issued its declaratory order. The ICC concluded that, in light of its own precedents and the precedents of the federal courts, the transportation described in the Association’s petition was in interstate commerce.

The ICC’s declaratory order described the transportation, on which its order is'predicated, as follows:

... Merchandise moves by for-hire carriage from points outside Texas to warehouse or distribution centers located in Texas. The shippers temporarily store the merchandise in Texas warehouses, and then ship the merchandise to Texas destinations by carriers with interstate authority. The exact ultimate Texas destinations may or may not be known at the time the shipments leave the out-of-State origins _
[T]he shippers do not initially consign the shipment from an out-of-State origin to the ultimate Texas consignee, but rather to themselves in care of the Texas warehouses. The shipment is consigned to the ultimate consignee in the second leg of the transportation_ The two legs are separately billed....
... Shipments are not made on through bills of lading and few, if any, storage-in-transit provisions are involved.... The warehouses receive no beneficial ownership interest in the goods.
With increasingly sophisticated computer systems, little merchandise is being stored solely for inventory or stock. About 70% of the freight shipped to petitioners’ warehouses is based on historic consumption patterns within Texas. About 25% of the freight is in response to customer orders, and 5% is inventory for smaller customers. 6
Some repackaging and reconfiguration (secondary packaging) is performed. The warehouses do not process or otherwise modify the original products. In general, the goods are held in storage at the Texas warehouse less than 45 days. Less than 1% remains in storage more than 365 days.
Routing of the outbound shipment (the all-Texas portion) is usually handled by the warehouses, but the merchandise is always subject to the ultimate shipper’s control and direction. The manner in which the freight charges are handled varies to some extent dependent upon whether less-than-truekload, truckload, or consolidated truckload traffic is involved_ [I]n all instances where the warehouse pays the freight charges, those charges are billed back to the warehouseman’s customer [the shipper].
The out-of-State shippers are willing, if necessary, to certify that they intend for their out-of-State origin shipments to move beyond the Texas warehouse point in a continuous interstate move....
[T]he intrastate traffic is identifiable and traceable.... less than 1% of the traffic is commingled....

8 I.C.C.2d at 478-81 & 490. (footnotes omitted). After the ICC issued its order, this petition for review followed.

B.

Petitioners argue first that the ICC’s declaratory order is impermissibly broad. Quoting the dissenting opinion of Vice Chairman McDonald, petitioners point to the “generalized, global declaration of interstate jurisdiction” based on an “overly broad and vague record.” See 8 I.C.C.2d 492.. They argue that the order implicates an unknown multitude of shippers, carriers, products, and shipping patterns and that the breadth of the order therefore makes any determination of shipper intent impossible.

Congress commits to the sound discretion of the agency the decision whether to grant requested declaratory relief. 5 U.S.C. *916 § 554(e); 7 see also Intercity Transp. Co., No. 37476, J.A. at 4 (Aug. 30, 1983) (ICC has broad statutory discretion to grant or decline declaratory relief), aff'd, Intercity Transp. Co. v. United States,

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Bluebook (online)
5 F.3d 911, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merchants-fast-motor-lines-inc-v-interstate-commerce-commission-ca5-1993.