Skip-By-Truck Co. v. United States

208 F. Supp. 847, 1962 U.S. Dist. LEXIS 4807
CourtDistrict Court, D. Kansas
DecidedSeptember 6, 1962
DocketNo. KC-1584
StatusPublished
Cited by2 cases

This text of 208 F. Supp. 847 (Skip-By-Truck Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skip-By-Truck Co. v. United States, 208 F. Supp. 847, 1962 U.S. Dist. LEXIS 4807 (D. Kan. 1962).

Opinion

HILL, Circuit Judge.

This is a civil action brought under the provisions of Sections 1336, 1398, 2321-2325 of Title 28 U.S.C., to set aside and annul orders of the Interstate Commerce Commission (Commission) entered in Docket No. MC-FC-63432, Stevens Express, Inc., Transferee, and S. & C.. Transport Co., Inc., Transferor, and Docket No. MC-FC-63698, Stevens Express, Inc., Transferee, and Spencer Bros., Inc., Transferor. The effect of these orders was to grant approval, under Section 212(b) of the Interstate Commerce Act (49 U.S.C.A. § 312(b),1 to a proposed sale and transfer by S. & C. Transport Co., Inc., (S. & C.) to Stevens Express, Inc., (Stevens) of a portion of the former’s operating rights and by Spencer Bros., Inc., (Spencer) to Stevens of all of Spencer’s operating rights.

The facts may be summarized as follows: Separate proceedings were in[849]*849stituted at different times and, by separate orders, the Commission approved the acquisition by Stevens of a portion of the operations and a portion of the certificate of S. & C. and the business and certificate of Spencer. The separate orders were based on the transfer rules prescribed under Section 212(b). The plaintiffs contend that the two transactions should have been regarded as one transaction involving the acquisition by a person of control of two or more carriers within Section 5(2) of the Act (49 U.S.C.A. § 5 (2)) 2 and the Commission should have determined the transactions under Section 5(2).

On July 11, 1960, Stevens, a newly formed non-carrier corporation, holding no certificate of public convenience and necessity, and S. & C., a motor common carrier, filed a joint application with the Commission seeking authority under Section 212(b) for Stevens to purchase a portion of the operating rights of S. & C. The application was docketed and on September 30, 1960, the Transfer Board of the Commission issued an order denying the application, holding that the rights to be sold were not clearly distinguishable and severable from the remaining operating rights S. & C. would retain. Shortly thereafter the applicants jointly petitioned for reconsideration and for approval of the application subject to an agreed condition revoking that portion of the retained operating rights of the transferor, S. & C., upon consummation of the transaction, which duplicated those being transferred. On December 7, 1960, Division 4 of the Commission acting as an Appellate Division, granted applicants’ petition for reconsideration, vacated and set aside the prior order of denial entered by the Transfer Board, and approved the transfer subject to a condition revoking that portion of the irregular route operating rights of the transferor, upon consummation of the transaction, which duplicated the regular route authority transferred. This order was duly published in the Federal Register on December 14, 1960, at page 12,851 and notification was given to the Commission that the transaction was consummated on February 1, 1961.

On October 19,1960, Stevens and Spencer filed a joint application seeking authority under Section 212(b) of the Act, for Stevens to purchase all of the operating rights of Spencer. This application, docketed as No. MC-FC-63698, listed Stevens as a non-carrier and Spencer as a motor carrier owning two units of highway equipment. The Transfer Board approved the sale and transfer by Spencer to Stevens on February 24, 1961. Both applicants were found to be carriers owning less than 20 vehicles. This order was duly published in the Federal Register on March 3, 1961, at page 1890.

The plaintiffs filed petitions for waiver of Rule 1.101(e), (which required petitions for rehearing, etc., to be filed within 30 days from date of service of the order in question) and to vacate and set aside the orders authorizing the above transfers from S. & C. to Stevens and Spencer to Stevens, on the grounds that the rights transferred were dormant.

Stevens answered generally stating, (1) no waiver of the time requirement to file a petition for reconsideration was [850]*850warranted, (2) that the transactions were already consummated, and (3) that the regular routes of S. & C. transferred were not dormant.

On March 21, 1961, a motion was filed to set aside the S. & C. and Spencer orders on the jurisdictional grounds that the two applications must be considered together under Section 5, because a non-carrier is attempting to purchase two motor carriers and the total number of vehicles involved exceed twenty.

Division 3 of the Commission, acting as an Appellate Division, on May 23, 1961, issued two separate orders, one in each case granting waiver of Rule 1.101(e), accepting the petitions and motions for filing, denying the petitions and overruling the motions to set aside the orders on jurisdictional grounds.

The present action was commenced and the court issued a temporary restraining order enjoining the defendants from issuing certificates of public convenience and necessity to Stevens.

The sole issue before the court is whether the Commission acted within the scope of its jurisdiction in approving the purchases under the Transfer Rules issued pursuant to Section 212(b) of the Act.

The plaintiffs contend that the proposed purchase by the non-carrier Stevens of a portion of the operating authority of S. & C. and thereafter, by a subsequently filed application, the proposed purchase by carrier Stevens of the operating authority of Spencer, both operating less than 20 vehicles, constitutes a single transaction requiring approval under - Section 5 for the reason that any unification of S. & C. and Spencer would require approval under Section 5. Therefore, they argue, public policy requires that non-carrier Stevens’ attempted purchase of the operating rights of these two carriers in separate transactions be found to constitute a subterfuge to avoid jurisdiction under Section 5.

Plaintiffs point out that the Commission approved the S. & C. transaction on December 7, 1960, with the consummation occurring on February 1, 1961, and the application to purchase Spencer was filed on October 19, 1960. Therefore, they maintain Stevens was a non-carrier purchasing Spencer, a carrier, and the status of the parties in both applications was the same from October 19,1960, until February 1, 1961. They then conclude that a non-carrier corporation was attempting to purchase the operating authority of two motor carriers with both applications pending concurrently and this situation falls squarely within the statutory language of § 5(2).

The defendants, on the other hand, maintain the status of the parties as of the date of actual consummation is controlling in determining whether the provisions of § 5 are applicable. The Commission has so held, Davis-Purehase-Lambrecht, 66 M.C.C. 779; Baggett Transp. Co. Purchase-North Alabama M. Exp., Inc., 57 M.C.C. 690.

In determining whether the Commission acted within its authority in permitting the sales and transfers to Stevens, under § 212(b), rather than requiring its approval under § 5, we must examine the transactions in the light of the statutory language and the Congressional purpose. That purpose in the enactment of Section 5 was to facilitate mergers and consolidations in the national transportation system. The language of the statute expresses the clear desire of Congress that the transportation industry proceed toward an integrated system through substantial corporate simplification. County of Marin v.

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Bluebook (online)
208 F. Supp. 847, 1962 U.S. Dist. LEXIS 4807, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skip-by-truck-co-v-united-states-ksd-1962.