Strickland Transportation Co. v. United States

274 F. Supp. 921, 1967 U.S. Dist. LEXIS 9288

• Court: District Court, N.D. Texas
• Decided: August 7, 1967
• Docket: Civ. A. No. 3-1932
• Status: Published

Opinions

OPINION

GOLDBERG, Circuit Judge:

This case was brought by Strickland Transportation Company against the United States of America and the Interstate Commerce Commission to “revise, enjoin, set aside, annul and suspend in whole or in part, a decision and order” of the Commission, which Strickland alleges “revokes and diminishes in part the authority previously granted” by the Commission to Strickland.

Central Freight Lines, Inc., Herrin Transportation Company, Roadway Express, Inc., Missouri-Pacific Railroad Company, and Southern Pacific Company intervened, seeking to uphold the decision of the Commission.

In order to understand the issue in this case, it is necessary to review the various proceedings leading up to the order of the Commission involved herein.

In 1954, Strickland made application for a certificate of public convenience and necessity to transport general commodities between Houston, Texas, and New Orleans, Louisiana, over certain specified routes, serving all intermediate points. (Docket No. MC-59680 [Sub. No. 117]). After extended proceedings, the Commission on October 14, 1958, handed down its decision, finding in part

“that the present and future public convenience and necessity require operation by applicant (Strickland) * * * between Houston, Tex., and New Orleans, La., from Houston * * * to Kinder, La., * * * to Baton Rouge, La., * * * to New Orleans, and return over the same route, serving all intermediate points, but with service at Baton Rouge restricted to traffic moving to or from points west of the Louisiana-Texas State line.” (Emphasis added).

Pursuant to this order, Strickland was granted a certificate authorizing such unrestricted service at all intermediate points in Texas.

Action to set aside this certificate was instituted by several of the protesting carriers, including intervenors, in the United States District Court for the Southern District of Texas at Houston. On August 1, 1960, in T. S. C. Motor Freight Lines, Inc., et al. v. United States, et al., 186 F.Supp. 777, the statutory three-judge court affirmed the Commission’s order in part but, as significant here, found that “there was no showing of inadequate service from Orange and Beaumont, on the one hand, and Houston on the other,” Id. at 793, and set aside that part of the certificate authorizing new service between Beaumont-Orange and Houston, and points intermediate thereto. Footnote 42 at this point indicated with some specificity in which particulars, the service authorized by the Commission’s certificate should be prohibited:

“As the case has to be remanded to the Commission with respect to this phase, we do not undertake to set this forth in terms having the precision of a certificate. But under our holding, except for Strickland’s existing authority, the applicants will not be permitted to engage in the following transportation:

(1) service from or through Houston destined to Beaumont or any point between Houston and Beaumont, or in the reverse direction,

(2) service from or through Houston destined to Orange or any point between Houston and Orange, or in the reverse direction,

(3) service from points east of Orange-Beaumont destined to any intermediate point between Orange-Beaumont and Houston, or in the reverse direction. (This would not restrict, for example, a shipment from Baton Rouge to Orange or Beaumont, or the reverse.)” 186 F.Supp. at 794.

The Supreme Court affirmed per curiam in Herrin Transportation Co., et al. v. United States, et al., 1961, 366 U.S. 419, 81 S.Ct. 1356, 6 L.Ed.2d 387.

By its order dated March 15, 1961, the Commission concluded “that the findings in the prior report herein should be modified to conform to the decree of the court.” 84 M.C.C. 562, 563. Accordingly, the certificate previously issued to Strickland was modified so as to authorize Strickland to transport the commodities indicated, between the termini and over the routes specified in its present certificate, with service at intermediate points in Louisiana as specified, but with no service at intermediate points in Texas except as follows:

“Serving the intermediate points of Orange and Beaumont, Tex., restricted to traffic moving to or from points east of the Texas-Louisiana State line.” Ibid.

On June 1, 1964, in Cause No. MC-C-4472, the intervening defendants and the Commission filed a joint complaint, embracing a petition to reopen and alternatively to reform the Sub. 117 Certificate, alleging that Strickland was engaged in providing an unlawful transportation service to and from Beaumont and Orange, Texas, and points in the commercial zones and terminal areas thereof on shipments to or through Houston, without moving such shipments physically across the Texas-Louisiana State line. An example of the traffic which Strickland admittedly transports under the restriction and which is at issue, would be a movement from St. Louis, Missouri, through Houston to Beaumont-Orange, or in the reverse. Intervenors, on the same date, filed a separate petition to reopen Docket íno. MC-59680 (Sub. No. 117) and reform the certificate. The gist of the complaint was that either the language used by the Commission in following the district court’s remand properly proscribed service through Houston, in which case Strickland was violating the certificate, or if such language did not explicitly proscribe such operations, it was ambiguous in view of the Commission’s duty to follow the order on remand, in which case the certificate should be further modified and made more specific so as to make it comply with the opinion, order, and mandate of the Court.

The proceeding was set for modified procedures by order of the Commission, dated June 10, 1965, and both intervenors and Strickland filed verified statements, together with exhibits. On February 16, 1965, the matter was referred to a Hearing Examiner for recommendation of an appropriate order. His report, filed March 17, 1965, found that Strickland’s Sub. No. 117 certificate proscribed the operations Strickland was conducting and recommended issuance of a cease and desist order. He interpreted the modified provision “only points east of the Texas-Louisiana State line” as limiting Strickland to the transportation of traffic originating at or destined to Orange and Beaumont, which moved to or from one of its authorized points of service in Louisiana only. He, therefore, concluded that the transportation by Strickland of commodities moving to or from points east of a northerly extension of the Texas-Louisiana State line (e. g., St. Louis, Memphis, Detroit, Milwaukee, and Chicago) but which did not move through an authorized point on the Louisiana route was in violation of the certificate authority.

The majority of the Commission, in its report of June 13, 1966, reversed the examiner, finding that the operations being performed by Strickland were not outside the scope of the amended certificate. It further found, however, that the certificated authority did not conform to the district court’s decree as had been intended and that “ * * * we are bound by the opinion of the court and any broader grant of authority made contrary thereto, however unintended, would fail to meet its mandate or statutory requirements.” 102 M.C.C. 291, 297. The Commission specifically found that its March 15, 1961, order was not consistent with the district court’s remand to restrict Strickland’s operations from or through Houston destined to Beaumont and Orange or in the reverse, a service for which the court found no need had been established. In correcting the error, the Commission concluded that it had no alternative but to issue a second amended certificate reflecting an appropriate modification in conformance with the court’s mandate, which it did. The second modification after remand provided for service

“between Houston, Tex., and New Orleans, La., serving the intermediate points in Texas of Orange and Beaumont, with service at points in the Orange, Beaumont, and Houston commercial zones restricted to the transportation of traffic moving to or from points on the below described route in Louisiana * * * ” 102 M.C.C. at 302.

Strickland’s petition for reconsideration was denied, and the instant action was filed on February 20, 1967.

The singular issue before this court is whether by its 1961 order the Commission acted, for whatever reason, in a manner inconsistent with the mandate of the district court so that it might later modify the previously issued certificate to conform to the terms of the district court remand without having to comply with the hearing provisions of Sec. 212(a) of the Interstate Commerce Act.¹ We believe the Commission was justified in so doing and would have been recreant had it done otherwise.

While it is true that the district court did not attempt to set forth its order “in terms having the precision of a certificate,” it could not have been more explicit than it was in footnote 42, quoted supra, that it intended to restrict Strickland’s service to and from Orange and Beaumont through Houston. The mandate of the district court was to deny Strickland any new authority to service Beaumont-Orange and points in between Beaumont-Orange and Houston (e. g., Liberty, Dayton, and Nome). On remand from the district court, the Commission announced that its findings “should be modified to conform to the decree of the court.” The amended certificate, however, permitted and proscribed operations between Orange, Beaumont and Houston; and when this was brought to the attention of the Commission in the present action, the order was properly amended again. The question, then, of whether an error was made by the Commission on remand must be answered in the affirmative. We are confident that the Commission expressly intended to follow the mandate of the court as expressed in footnote 42. The Commission did not conceive or foresee this misconstruction of its order and should not be powerless to correct Strickland’s legalistically imaginative but legally unwarranted construction.

When a reviewing court has set aside administrative action found not supported by the evidence and has remanded the matter for further consistent proceedings, the Commission is without power to act except in accord with the court s mandate. Inland Steel Co. v. United States, 1939, 306 U.S. 153, 59 S.Ct. 415, 83 L.Ed. 557. By inadvertently fashioning a certificate inconsistent with the court’s mandate, the Commission became bound to amend the certificate to conform to the mandate, whether it took two or two dozen later efforts to properly effectuate the court’s order. Courts are not procedural pawns whose opinions can be frustrated through administrative misadventure. The Commission so comprehends and we should not confuse that comprehension. Here the agency seeks to conform to a court’s opinion and all available accommodations should be summoned to fulfill optimum conformity.

It is not pride or arrogance that makes it important that echelons, tiers, and hierarchies of courts be more than tables of organization. Our judicial system is premised on tiered decisions. We are not dealing with the trivia of a pecking order but are concerned that the words of a higher court command the respect due them.

A tribunal has an inherent power to correct mistakes resulting from oversight or inadvertence. American Trucking Associations v. Frisco Transportation, 1958, 358 U.S. 133, 79 S.Ct. 170, 3 L.Ed.2d 172. In Frisco, the Supreme Court held that the Commission had the power to correct a certificate which originally contained certain limitations but, as a result of an inadvertent clerical error, was issued without such limitations. The Court emphasized, however, that this power extends only to reopening prior proceedings to correct a mistake and not to modifying a certificate to execute a policy change or newly developed policies. Chief Justice Warren, speaking for the court, pointed out that the Commission’s enabling act provides that:

“ ‘The Commission shall conduct its proceedings under any provision of law in such manner as will best conduce to the proper dispatch of business and to the ends of justice.’ This broad enabling statute, in our opinion, authorized the correction of inadvertent ministerial errors. To hold otherwise would be to say that once an error has occurred the Commission is powerless to take remedial steps. This would not, as Congress provided, ‘best conduce to the ends of justice.’ ” 358 U.S. at 145, 79 S.Ct. at 177, 3 L.Ed.2d at 181.

In the recent case of Willey v. United States, E.D.Ill., 1965, 245 F.Supp. 669, the Court was faced with a similar situation in that the Commission’s certificate granted broader authority than the evidence justified. Stating that the “case should be considered as one in which the Commission does have the power to revoke or modify a certificate,” id. at 677, the court held that although the certificate is the final step in the administrative process, the Commission has power to revoke wholly or partially, without resort to Sec. 212(a), certificates issued as a result of inadvertence or mistake. The distinction, as viewed by the Illinois court, is one between conscious policy choice and, as in Frisco, “error in the administrative process of fashioning [a] certificate [s].” Id. at 676. In the instant case, in view of the Commission’s express desire to conform to a clear mandate from the court and in view of its failure at first to effectively accomplish this, we hold that the Commission had the later power, upon learning of the error, to reform Strickland’s certificate.

This problem was linguistic or semantic: whether the Commission had properly transcribed footnote 42 as a matter of words. No new theories were in, voked, and no testimony or other evidence was required to confront the error. Further, Strickland and all other interested parties had full notice that the confrontation was to be undertaken by the Commission, and all parties appeared. They knew that the hearings would concern footnote 42 of the district court opinion, which was all they needed to know and all that the Commission dealt with. Section 212(a) should be summoned for a four-alarm fire, but not when one whiff from a fire extinguisher can quell the blaze.

The order of the Commission is hereby approved.

1 . Sec. 212(a), Interstate Commerce Act, 49 U.S.C. § 312(a) provides in pertinent part:

“(a) Certificates, permits, and licenses shall be effective from the date specified therein, and shall remain in effect until suspended or terminated as herein provided. Any such certificate, permit, or license may, upon application of the holder thereof, in the discretion of the Commission, be amended or revoked, in whole or in part, or may * * * after notice and hearing, be suspended, changed, or revoked, in whole or in part, for willful failure to comply with any provision of this chapter, or with any lawful order, rule, or regulation of the Commission promulgated thereunder, or with any term, condition, or limitation of such certificate, permit, or license: * * * ”