Neptune World Wide Moving, Inc. v. United States

284 F. Supp. 135, 1968 U.S. Dist. LEXIS 10081
CourtDistrict Court, S.D. New York
DecidedMay 9, 1968
Docket67 Civ. 2884
StatusPublished
Cited by2 cases

This text of 284 F. Supp. 135 (Neptune World Wide Moving, Inc. v. United States) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neptune World Wide Moving, Inc. v. United States, 284 F. Supp. 135, 1968 U.S. Dist. LEXIS 10081 (S.D.N.Y. 1968).

Opinion

FEINBERG, Circuit Judge:

Neptune World Wide Moving, Inc.,, brings this action to set aside and annul an order of the Interstate Commerce Commission denying its application for a certificate of public convenience and necessity. Neptune is a motor common carrier with authority to transport “household goods” between various eastern states and other localities throughout the United States, with the exception of thirteen western states.1 It is also .authorized to carry various types of machines 2 over more extensive routes including the western states. In this proceeding, Neptune applied to the Commission for household goods authority in the western states; its application was opposed before the Commission by six carriers, five of whom have also appeared before us.3 The hearing examiner granted the application, but the Commission reversed on the grounds that Neptune had not shown that the existing services were inadequate or that the extension of authority was necessary to maintain Neptune’s competitive position. A petition for reconsideration having been denied, Neptune instituted this action. A three-judge district court was duly convened, 28 U.S.C. §§ 2821-2825, and a hearing was held on April 8, 1968. For reasons set forth below, we sustain the Commission.

At present, Neptune has no authority to transport household goods to or from the western states. However, by means of an “interline” agreement with Lyon Van Lines, Inc., a carrier authorized to serve these states and one of the interveners here, Neptune is able to handle traffic originating or ending in the western states. The interline operations are carried on by leasing Neptune trucks and drivers to Lyon for the portions of each trip that take place beyond Neptune’s area of authority. Thus, on east-west traffic, Neptune trucks and drivers pick up freight and carry it over Neptune routes to a location which both Neptune and Lyon are authorized to serve; at the same time, Neptune sends Lyon a notice indicating that goods are being carried from the point of origin to the destination pursuant to the carriers’ interline agreement; under that agreement, apparently, the Neptune trucks and drivers are technically leased to Lyon at the location common to both carriers; when they leave that location, they operate under lease to Lyon, and can therefore enter the western states and make deliveries under Lyon’s authority from the Commission. A similar [137]*137arrangement is used for west-east traffic.

Testimony before the Commission established that in this manner Neptune was providing a useful service to the shipping public and that Neptune customers desired that the service continue. However, Neptune was dissatisfied with these arrangements. It claimed that the agreement with Lyon is constantly in jeopardy because it can be terminated on ninety days notice. Moreover, since Lyon is authorized to provide on a single-line basis the same services that Neptune can offer only by interlining with Lyon, Lyon actually competes with Neptune. As a result, Neptune claimed, it has been harmed in one aspect of its western states business (civilian household goods) and has had another terminated completely (military household goods). In addition, according to Neptune, the existing arrangement was inefficient and wasteful. Because of these problems, Neptune sought single-line authority in its own name to replace its interline agreement. Its basic claim before us is that under prior Commission decisions, single-line authority is available to a carrier providing needed interline services if those services are threatened with termination because the interline arrangements are deteriorating. Neptune argues that the Neptune-Lyon agreement is deteriorating, and that the Commission acted arbitrarily when it denied Neptune’s application for single-line authority.

Neptune’s main argument requires an analysis of the decision on which it primarily relies, Burnham Van Service, Inc., Household Goods From and To Thirteen States, 98 M.C.C. 58 (1965), aff’d sub nom. United Van Lines, Inc. v. United States, 266 F.Supp. 586 (E.D.Mo.1967) (three-judge court). Burn-ham had operating authority to carry household goods in the eastern and central portions of the country, and sought to expand into thirteen western states, just as Neptune does. Burnham also had an interline agreement with Lyon. Moreover, as in the Instant case, Lyon had obtained its own household goods operating authority to the east, and was establishing its own offices there. But in Burnham, the Commission stated, 98 M.C.C. at 63:

For the past 20 years interlining carriers have terminated their interline agreements with Burnham when they obtain authority and establish their own agents in the East. Applicant contends, and it appears reasonably certain, that it will be unable to conclude other satisfactory interline arrangements which inability will jeopardize its continued participation in this valuable traffic.

The Commission also made the additional crucial finding, id. at 64, that:

the present interline arrangements are unsatisfactory and threatened with termination * * *.

Thus, Burnham was unable to continue its existing service without interlining, and its interline arrangements were “unsatisfactory and threatened with termination.” Since there was a public need for the service, the Commission granted Burnham’s application for single-line authority.

Other Commission decisions have similarly focused on deterioration and impending termination of interline arrangements as factors, not challenged by Neptune, to be used in deciding whether to grant single-line authority. See Leonard Bros. Transfer, Inc., Extension — California-Texas, 103 M.C.C. 263, 267 (1966) (denying extension) (“Neither applicant has established on the record that denial of its application will effectively preclude future participation in joint-line movements”); T.E.K. Van Lines, Inc., Common Carrier Application, 86 M.C.C. 139 (1961), aff’d per curiam sub nom. Aero-Mayflower Transit Co. v. United States, 208 F.Supp. 303 (S.D.Cal.1962) (three-judge court) (granting extension); cf. King Van Lines, Inc., Extension — Seven States, 98 M.C.C. 19 (1965), aff’d sub nom. United Van Lines, Inc. v. United States, 266 [138]*138F.Supp. 586 (E.D.Mo.1967) (three-judge court) (granting extension).

In contrast to the Burnham case, and applying the broad standard used in these decisions, the Commission in this case denied Neptune’s application because it found that the services Neptune offered would continue to be available under an adequate interline agreement between Neptune and Lyon, 103 M.C.C. 533, 538-39:

Applicant [Neptune] here, in 1963, voluntarily abrogated its interline arrangements then in effect with other carriers, for the purpose of enhancing its competitive position by interlining exclusively with Lyon. The arrangement seems to have served applicant well, at least until March 1965, when it became disenchanted with the arrangement. Applicant contends that Lyon’s refusal to file tenders with it for joint participation in the movement of military household goods traffic is evidence of a deterioration of applicant’s interline operations with Lyon.

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Bluebook (online)
284 F. Supp. 135, 1968 U.S. Dist. LEXIS 10081, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neptune-world-wide-moving-inc-v-united-states-nysd-1968.