National Ass'n of Food Chains, Inc. v. Interstate Commerce Commission

535 F.2d 1308, 175 U.S. App. D.C. 346
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 18, 1976
DocketNo. 75-1471
StatusPublished
Cited by39 cases

This text of 535 F.2d 1308 (National Ass'n of Food Chains, Inc. v. Interstate Commerce Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Ass'n of Food Chains, Inc. v. Interstate Commerce Commission, 535 F.2d 1308, 175 U.S. App. D.C. 346 (D.C. Cir. 1976).

Opinion

PER CURIAM:

I. BACKGROUND

This petition for review challenges a decision of the Interstate Commerce Commission which limited the scope of service which must be offered by the class of motor common carriers known as meat haulers. Petitioner National Association of Food Chains (“NAFC”) is a nonprofit organization of retail food chains; the other petitioner, the Eastern Meat Packers Association (“EMPA”), is a trade association of independent meat packers. The intervenors are motor common carriers that transport loose meat and carcass meat pursuant to authorization by the Commission.1

Prior to 1958, tariffs for the transportation of loose and carcass meats generally provided for unloading by the receiver (consignee) rather than by the carrier. In 1958 [348]*348a number of carriers eliminated the “consignee unloading” provisions in their tariffs and began providing unloading services, but did not increase line-haul rates to cover the cost of unloading. The carrier-unloading services were maintained until 1968, when thirty-two carriers filed tariffs which eliminated all carrier unloading, again without a change in line-haul rates.

On November 15, 1968, the Commission initiated an investigation into the lawfulness of the new tariffs,2 but did not suspend their effectiveness. Similar filings were consolidated for investigation, and most of the filings were then suspended, pending further order of the Commission, in compliance with temporary restraining orders issued by two federal district courts.3

On July 11, 1969, Review Board No. 4 of the Commission ordered cancellation of most of the consignee unloading provisions on the ground that the carriers had not shown the proposed limitation of service to be just and reasonable without a concomitant reduction in line-haul rates. Unloading Restrictions on Meats and Packinghouse Products, 335 I.C.C. 391 (July 11, 1969). The Commission found it impossible to state how much carrier unloading actually had taken place under the tariffs in effect from 1958 to 1968;4 it found, however, substantial evidence that consignees had abused the carrier-unloading rules:

“The evidence submitted by respondents deals mainly with the reasons which lead them to publish the proposed ‘no-unloading’ rules. As stated on brief for a group of respondents, ‘the crux of the issue involved herein was the unloading practices that the carriers have been subjected to when cargo of the type here involved was tendered for delivery to consignees in the East and in the South.’ According to respondents, such unloading practices (referred to sometimes as ‘abuses’) by or at the premises of consignees have included: refusal by a consignee to permit the truck driver to unload when ready, or at all; coercion of the driver into employment of a particular unloading crew, consisting in some cases of consignee personnel and sometimes of persons of obscure identity; imposition of an arbitrary unloading charge in the range of from $40 to $45 and sometimes more.”

335 I.C.C. at 396. The Commission agreed “in principle” that the carriers had adequate reason to publish rates which did not include unloading services; the tariffs were rejected because there had not been a cost showing that the line-haul rates would be just and reasonable for the diminished service.

The carriers sought judicial review of the Review Board’s decision, and the case was remanded to the Commission for further hearings in Refrigerated Transport Co. v. United States, 313 F.Supp. 880 (N.D.Ga. 1970). The court held that the ICC had given insufficient notice that it intended to investigate both the rules and the rates proposed in the 1968 tariffs, and ordered that the carriers be given an opportunity to present economic justification of their line-haul rates without unloading service.

One result of the orders issued by the court in Refrigerated Transport was that the proposed “no-unloading” tariffs were able to become effective by late 1969. The court’s temporary restraining order, issued November 28, 1969, and the decision on the merits had the effect of reopening the Commission’s investigation, thus limiting the Commission to a seven-month suspension of the tariffs before they became effective. 49 U.S.C. § 316(g).

[349]*349On remand, extensive hearings were conducted by Administrative Law Judge David H. Allard, who in 1972 (1) found the cost studies presented by the carriers to be insufficient to support the proposed tariffs, and (2) seeded the instant controversy by holding that carrier unloading had become sufficiently established as a trade practice to bar its cancellation by the carriers. Unloading Restrictions on Meats and Packinghouse Products, Docket No. 35054 (Jan. 17, 1972) (App. 13-44).

Judge Allard’s extensive criticism of the carrier’s cost data is not the subject of review in this proceeding. At issue is the threshold question whether the carriers operate under an unavoidable obligation to provide unloading service. Judge Allard founded his decision on the Commission’s requirement that a common carrier extend “complete service” under its authority,5 and held that requirement particularly applicable to specialized carriers such as meat haulers. He concluded that the operation of unloading services for ten years had created the obligation to continue, noting the hardship that had been caused to shippers who were unable to ship to their customers via a common carrier that provided unloading service:

“The fact that [unloading] service has been provided for many years has become the custom and trade practice. . . . Thus, even assuming, arguendo, that respondents initially did not have the obligation to unload, ordinary considerations of fairness in the Marketplace dictate that once an obligation, such as unloading, has been assumed by the carrier as part of its line-haul service and trade practices have developed in reliance thereon, that obligation becomes fixed upon the carriers.
“Even respondents acknowledge that at least since 1958, it has been the general custom and practice of the trade for them to unload loose and carcass meat. . [T]he fact that unloading has been provided for over 10 years is sufficient to establish it as a general custom and trade practice upon which shippers and consignees have come reasonably to rely. . . .
“Because of the inability of some consignees to unload loose and carcass meats, the record shows that at least some protestants have had difficult making sales, and have lost important customers . in the Southeastern Territory since the proposed rule became effective. Particularly hard-hit by the proposed rule have been shippers, such as Hormel, who cannot readily ship to the Southeast from plants in territories not affected by the proposed rule, as can many of its competitors. In addition, all Midwestern shippers have been competively injured by the proposed rule, vis-a-vis local meat-packers, who because of their proximity to the destination territory, do not have to rely upon common carriage to distribute their products, but can use private carriage instead.”

Slip op. at 29.

On appeal to the Commission, Judge Al-lard’s decision was affirmed substantially in [350]

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Bluebook (online)
535 F.2d 1308, 175 U.S. App. D.C. 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-assn-of-food-chains-inc-v-interstate-commerce-commission-cadc-1976.