Mercury Motor Express, Inc. v. United States

648 F.2d 315
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 18, 1981
DocketNos. 79-1052, 79-1121
StatusPublished
Cited by7 cases

This text of 648 F.2d 315 (Mercury Motor Express, Inc. v. United States) 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
Mercury Motor Express, Inc. v. United States, 648 F.2d 315 (5th Cir. 1981).

Opinion

LYNNE, District Judge:

The genesis of this litigation, including the two consolidated petitions under submission, was the publication by the Interstate Commerce Commission (Commission) of a notice in the Federal Register.1 In response to such notice some thirty-nine comments were received from carriers,2 shippers, labor, and government parties.3 After discussing and evaluating such comments, the Commission served its order in Ex Parte No. MC-118 on November 20, 19784 By publication in the Federal Register on February 5, 1979 (44 Fed.Reg. 7030-31), the Commission established accounting and reporting requirements for private carriers granted operating authority pursuant to Ex Parte No. MC-118. On April 24, 1979, a petition to reopen proceedings in Ex Parte No. MC-118 was filed with the Commission and thereafter denied by its order of October 4, 1979.

Petitioners5 seek to review, enjoin, and set aside these orders. After a careful review of the record, the briefs and oral arguments of counsel, we deny the petitions for review.

[317]*317I. The Act

The Motor Carrier Act of 1935 6 created a regulatory framework contemplating three kinds of motor carrier operations: common, 49 U.S.C. § 10102(11); contract, 49 U.S.C. § 10102(12); • and private, 49 U.S.C. § 10102(13). Within the scope of its operating authority, evidenced by its certificate, a common carrier offers transportation services to the general public. In contrast, a contract carrier has no obligation to serve the general public, serves only a limited number of persons, and either dedicates equipment to the exclusive use of those persons or provides service which meets their particularized needs. Its rights and obligations are generally defined by the scope of its operating authorities, evidenced by its permits. The Commission is empowered to enforce the statutory requirements applicable to each. 49 U.S.C. §§ 10321, 11701.

On the other hand, a private carrier is exempt from the Commission’s regulation. It may perform any transportation service, so long as it hauls only its own goods in furtherance of its nontransportation business.

There is no explicit provision in the Act that these three categories of carriers are mutually exclusive nor is there any proscription of for-hire operations by private carriers.

The genius of the Act is its entrustment to a Commission, informed by many years of experience in the multifaceted transportation industry, the administration and enforcement of the national transportation policy declared in 49 U.S.C. § 10101.

II. From Geraci to Toto

More than forty years ago the Commission decided Geraci Contract Application, 7 M.C.C. 369 (1938), wherein it denied incidental contract carrier authority to a private carrier because it reasoned that such a grant would be contrary to the public interest and inconsistent with the national transportation policy.7 While it discussed practical problems which might be encountered were such incidental authority granted, it is apparent that its primary concern was its desire to protect the interests of regulated carriers in the fledgling transportation industry.

Since 1938, relying on Geraci, the Commission has normally denied private carrier applications for incidental for-hire authority.8 Notwithstanding its usual adherence to Geraci, the Commission has occasionally granted for-hire authority to private carriers, implicitly finding that such grants were not inconsistent with the Act. For example, it has granted private carriers for-hire authority when the applicant conducted its for-hire operations during the “grandfather” period prior to the enactment of the Motor Carrier Act,9 when the applicant was not seeking to fill a backhaul,10 when the [318]*318private carriers’ vehicles were used only during half the year,11 when the private carrier operations were incidental to the for-hire operations,12 and when it found that a grant would not create competition with for-hire carriers.13

In 1976, separate license applications were filed by two companies using their own trucks to move their own goods.14 Toto, a Nevada building materials wholesaler and retailer, used its own trucks to carry building materials from its suppliers in California to its warehouse in Nevada. As a private carrier, Toto had to run its flat-bed trucks empty from Nevada to California, because it had nothing of its own to move in that direction. In an effort to eliminate the wasteful empty movement to California, it found two shippers in Nevada desirous of moving freight to California who were unable to get enough flat-bed equipment from existing carriers. It applied for a common carrier certificate from the Commission.

Avon, the other company to file a license application, moved its products in private carriage from its Massachusetts facilities. Because it had no goods of its own to move back to Massachusetts, its trucks had to make the return trip empty. It found a shipper who needed traffic moved in the same direction as its empty backhaul and applied for a contract carrier permit to transport bulk crackers from Georgia to Massachusetts.

In separate decisions, employee review boards at the Commission denied both applications on the basis of Geraci. On administrative appeal, the entire Commission reexamined Geraci, overruled it, and granted the applications in Toto, 128 M.C.C. 873 (1978). From this decision the MC-118 policy statement proceeding developed.

Petitioner’s complaint that in both Toto and MC-118 the Commission merely regurgitated the dissenting opinion of then Commissioner O’Neal in Geraci is unappealing since it is a familiar phenomenon in our jurisprudence that the dissent of yesterday sometimes becomes the ratio decidendi of today. Rather, the focus of our review is upon their contentions that the new policy announced in MC-118, which evolved from its Toto decision, is both illegal and irrational.

III. Rule or Policy

Insofar as the notice-and-comment requirements of 5 U.S.C. § 553 are concerned, it is immaterial whether the pronouncement appearing in Note 1, supra, is characterized as a rule, on the one hand, or as a general statement of policy, on the other, since there was full compliance with the requirements of Sec. 553.15

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648 F.2d 315, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercury-motor-express-inc-v-united-states-ca5-1981.