Under the "grandfather clause" of § 209(a) of the Motor Carrier
Act of 1935, the Interstate Commerce Commission granted contract
carrier permits to appellant and its predecessor. Subsequently,
after a hearing, the Commission interpreted "stock in trade of drug
stores," a commodity description in appellant's permit, to
authorize carriage of only those goods which at time of movement
are, or are intended to become, part of the stock in trade of a
drugstore. On the basis of this interpretation, the Commission
issued an appropriate cease and desist order prohibiting carriage
of unauthorized goods.
Held: the Commission's order is sustained. Pp.
355 U. S.
555-562
(a) There being no patent ambiguity or specialized trade usage
involved, the ordinary meaning of the words used in the commodity
description is controlling. Pp.
355 U. S.
557-558.
(b) The Commission's intent in issuing the permit is not to be
ascertained from evidence unknown to the Commission at the time of
its issuance. P. 557,
n 3.
(c) The Commission's interpretation of "stock in trade of drug
stores" is not clearly erroneous, and therefore it must be
sustained. Pp.
355 U. S.
558-560.
(d) Since the Commission's interpretation accords with the plain
meaning of the commodity description, it is immaterial whether the
Commission had ever applied the intended use restriction prior to
issuance of this permit. Retroactive application here, if any, of
such restrictions could not prejudice appellant. Pp.
355 U. S.
560-561.
(e) If the permit, as thus construed, is not as broad as the
operations carried on by appellant's predecessor prior to the Act,
appellant's remedy is to petition the Commission to reopen the
grandfather proceedings; the permit cannot be attacked collaterally
in a proceeding for its violation. Pp.
355 U. S.
561-562.
(f) Appellant's arguments based on noncompliance with the
Administrative Procedure Act have no merit. P.
355 U. S.
562.
150 F.
Supp. 181, affirmed.
Page 355 U. S. 555
MR. JUSTICE CLARK delivered the opinion of the Court.
This appeal concerns the scope of a contract carrier permit
granted appellant by the Interstate Commerce Commission under the
"grandfather clause" of the Motor Carrier Act of 1935. [
Footnote 1] The Commission interpreted
"stock in trade of drug stores," a commodity description in
appellant's permit, to authorize carriage of only those goods
which, at time of movement, are, or are intended to become, part of
the stock in trade of a drugstore. On the basis of that
interpretation, an appropriate cease and desist order prohibiting
carriage of unauthorized goods was entered. 63 M.C.C. 407. After a
three-judge District Court refused to enjoin enforcement of the
order,
150 F.
Supp. 181, direct appeal was taken to this Court, and we noted
probable jurisdiction. 352 U.S. 905 (1956). For reasons hereinafter
stated we affirm the judgment of the District Court.
Page 355 U. S. 556
Appellant's predecessor, Andrew G. Nelson, having operated as a
contract carrier before enactment of the Motor Carrier Act, applied
for a permit to continue his operation subsequent to passage of the
Act, as contemplated by § 209(a) thereof. The application described
Nelson's complete operation as
"transportation . . . of store fixtures and miscellaneous
merchandise, and household goods of employes, for Walgreen Co., in
connection with the opening, closing and remodeling of stores."
In a supporting affidavit, Nelson stated that he was
"an interstate contract carrier of property for the Walgreen
Company, and for it alone . . . , to and from Walgreen Retail
Stores . . . , the commodities so transported [being] usually store
fixtures and equipment and merchandise for the opening stock."
Filed with the affidavit were 17 delivery receipts showing
contract carriage for Walgreen in 1934-1935.
On March 13, 1942, the Commission issued the permit in
controversy without a hearing, relying on the application and
supporting papers filed by Nelson. The permit authorized contract
carriage of "[n]ew and used store fixtures, new and used household
goods, and stock in trade of drug stores" [
Footnote 2] over irregular routes in 10 States. Upon
Nelson's incorporation in 1951, the Commission issued an identical
permit to the corporation, the appellant here. In 1954, an
investigation by the Commission to determine if appellant was
operating beyond the bounds of its permit authority revealed that
appellant was carrying a wide range of commodities for many kinds
of shippers, including groceries for grocery stores, beer and wine
to liquor distributors, dry glue to manufacturers of gummed
products, and automobile batteries to department stores. The
Commission held that such carriage, all of which
Page 355 U. S. 557
appellant attempted to justify under the description "stock in
trade of drug stores," violated § 209 of the Act, which prohibits
contract carriage without a permit authorizing the business in
question.
Appellant contends that the critical language of the permit,
"stock in trade of drug stores," is a generic description of
commodities by reference to place of sale, entitling it to
transport goods like those stocked by present-day drugstores to any
consignee within the authorized operating territory. The
Commission, however, regards these words as a description of
commodities by reference to intended use, authorizing a more
limited carriage: goods moving to a drugstore for sale therein, or,
if moving elsewhere, then with the intention at the time of
movement that they ultimately will become part of the goods stocked
by a drugstore. Appellant argues that the intended use of the goods
is of no consequence here, because (1) intended use restrictions
are never applied to commodity descriptions by reference to place
of sale, and (2) intended use restrictions were developed by the
Commission long after issuance of Nelson's permit, and cannot now
be applied retroactively. Finally, having offered evidence of a
much more extensive grandfather operation than was set out in
Nelson's application and affidavits, appellant contends that the
Commission erred in excluding such evidence.
Before considering these contentions, we first note that the
plain meaning of words in a commodity description is controlling in
the absence of ambiguity or specialized usage in the trade. Neither
of the parties believes the description here patently ambiguous,
[
Footnote 3] nor do we
consider
Page 355 U. S. 558
it to be such. Moreover, appellant is unwilling to say that the
instant description is a term of art, while the Commission
specifically asserts that it is not. Consequently, the ordinary
meaning of the words used in the permit is determinative. In
ascertaining that meaning, we are not given
carte blanche;
just as "[t]he precise delineation of an enterprise which seeks the
protection of the "grandfather" clause has been reserved for the
Commission,"
Noble v. United States, 319 U. S.
88,
319 U. S. 93
(1943), subsequent construction of the grandfather permit by the
Commission is controlling on the courts unless clearly erroneous.
Dart Transit Co. v. Interstate Commerce
Comm'n, 110 F.
Supp. 876,
aff'd, 345 U.S. 980 (1953). [
Footnote 4]
Page 355 U. S. 559
In construing "stock in trade of drug stores," the Commission
found the controverted words to be a commodity description by
reference to intended use; it held them equivalent to "drug stores'
stock," and analogized the latter to such descriptions as
"contractors' equipment" [
Footnote
5] or "packing house supplies." [
Footnote 6] On that basis, it required that the goods
transported be intended for use by a drugstore as part of its stock
in trade.
The Commission rejected appellant's contention that the words of
this permit are a description by reference to place of sale.
[
Footnote 7] In making that
contention, appellant equates the permit's language with "goods
such as are sold in drug stores." It is obvious to us that such a
reading enlarges the ordinary meaning of the words. As pointed out
by the examiner, 63 M.C.C. at 414, the description used in the
permit connotes possession, and therefore lends itself more readily
to "drug stores' stock" than it does to "goods such as are sold in
drug stores." [
Footnote 8]
Page 355 U. S. 560
Moreover, an examination of the Commission's decisions indicates
use of a definite and distinctive linguistic pattern whenever
descriptions are made by reference to place of sale: if the
Commission's purpose has been to authorize transportation of goods
like those named in the permit, that purpose consistently has been
revealed by use of the phrase "such as," or a close variation
thereof. [
Footnote 9] Yet there
is no such phrase in the present permit. These considerations are
bulwarked by the record Nelson put before the Commission in 1942,
clearly showing that he was hauling Walgreen's drugstore stock, and
not goods such as might be stocked for sale by Walgreen. On
balance, therefore, we are compelled to think the Commission right;
certainly it is not clearly wrong.
Appellant contends that the permit language cannot embody an
intended use restriction, because such restrictions were not
formulated by the Commission until after issuance of Nelson's
permit, and cannot be retroactively applied as a limitation on the
same. The Commission challenges the assertion that the intended use
restriction was never applied prior to issuance of the permit. It
is
Page 355 U. S. 561
unnecessary for us to resolve that question, however. Assuming
that the intended use test first appeared as a commodity
description technique after appellant's predecessor obtained his
permit, we think the Commission still free to interpret the permit
as it has done. Its determination accords with the common, ordinary
meaning of the words used, and in no way strains or artificializes
that meaning. [
Footnote 10]
If the controverted words fairly lend themselves now to the
construction made here, they always have done so. Consequently, any
retroactive application of the intended use test could work no
prejudice to appellant; once it is determined that the ordinary
meaning of the description is neither more nor less than the
Commission's interpretation, the manner in which the Commission
arrived at its conclusion is not controlling. [
Footnote 11]
Finally, appellant contends that the Commission's interpretation
limits the actual -- though previously unasserted -- scope of
grandfather operations carried on by appellant's predecessor, thus
subverting the substantial parity which a grandfather permit should
establish between pre-Act and post-Act operations.
Alton R. Co.
v. United States, 315 U. S. 15
(1942). If this be so, the remedy lies elsewhere: in the event the
grandfather permit does not correctly reflect the scope of the
grandfather operation, the carrier's recourse is to petition the
Commissions for reopen the grandfather proceedings for
consideration of the evidence not previously brought to the
Page 355 U. S. 562
Commission's attention. Such a contention is no answer to the
present charge of permit violation, since the permit cannot be
collaterally attacked.
Callanan Road Improvement Co. v. United
States, 345 U. S. 507
(1953);
Interstate Commerce Comm'n v. Consolidated Freightways,
Inc., 41 F. Supp.
651. To hold otherwise would render meaningless the
congressional requirement of a permit to continue grandfather
operations subsequent to the Act.
Appellant's arguments based on noncompliance with the
Administrative Procedure Act, 60 Stat. 237, 5 U.S.C. §§ 1001-1011,
have no merit.
Affirmed.
MR. JUSTICE DOUGLAS dissents.
[
Footnote 1]
This Act became Part II of the Interstate Commerce Act. Section
209(a), 49 Stat. 552, as amended, 52 Stat. 1238, 64 Stat. 575, 49
U.S.C. § 309(a)(1), makes it unlawful to engage in interstate
contract carriage by motor vehicle without a permit from the
Interstate Commerce Commission; however, the first proviso thereto
provides that the Commission shall issue a permit as a matter of
course upon application by a carrier for authority to operate a
route over which the carrier or a predecessor in interest was in
bona fide operation on July 1, 1935. That proviso is
commonly called the "grandfather clause."
[
Footnote 2]
Since neither party attaches any significance to certain
underscoring of language in the permit, we do not italicize that
language.
[
Footnote 3]
Appellant does argue alternatively that, if the Commission's
interpretation is adopted, the description necessarily would be
ambiguous. This is a considerable twisting of appellant's earlier
position, consistently maintained throughout these proceedings,
that the permit's phraseology exhibits no ambiguity or
indefiniteness. In this regard, the Commission held,
"We agree with the contention of the parties and the examiner's
conclusion that there is no such patent ambiguity in the permit as
to warrant our going back of it and giving consideration to events
prior to its issuance."
63 M.C.C. at 409.
Absent patent ambiguity, it is well established that the
Commission will not refer to the underlying grandfather operation.
P. Saldutti & Son, Inc. -- Interpretation of Permit,
63 M.C.C. 593. Even if such reference is made here, however, the
Nelson application and all the documents filed with it describe an
operation solely for the Walgreen Drug Company; appellant admits
that all the record evidence before the Commission gives "the
impression that Nelson was hauling only for Walgreen." That
background in nowise supports appellant's position here, since it
shows Nelson to have been carrying goods actually destined to
become part of the stock of a drugstore, and not merely goods like
those stocked by such a store. Although appellant offers evidence
now of a grandfather operation more extensive than carriage merely
for Walgreen, it seems obvious that the Commission's intent in
issuing the present permit is not to be ascertained from evidence
unknown to the Commission at the time of issuance.
[
Footnote 4]
It is true, of course, that limitations on Commission power to
modify motor carrier permits, established in § 212(a) of the Act,
cannot be bypassed under a guise of interpretative action.
Commission interpretation of the meaning of a permit, being simply
a definitive declaration of what rights existed from the very
beginning under the permit, cannot be equated with modification,
however, unless found to be clearly erroneous.
[
Footnote 5]
See C. & H. Transportation Co. -- Interpretation of
Certificate, 62 M.C.C. 586, holding that "contractors'
equipment and supplies" authorized transportation of such goods
only when intended for use by a contractor; transportation of
similar goods for use by a branch of the armed services was held
unauthorized.
[
Footnote 6]
See Dart Transit Co. -- Modification of Permit, 49
M.C.C. 607, holding that "packing house supplies" means supplies
that in fact are intended to be used in a packing house, and not
supplies like those used in packing houses.
[
Footnote 7]
In contending, then, that the Commission erred in applying the
intended use test to a commodity description by reference to place
of sale, appellant clearly begs the question at issue.
[
Footnote 8]
Appellant argues that
McAteer Contract Carrier
Application, 42 M.C.C. 35, equates the phrases "goods such as
are sold in" and "stock in trade of." The opinion's single use of
the latter phrase, however, gives no support to such a
contention.
[
Footnote 9]
See, e.g., Interstate Commerce Comm'n v. Ratner, 6 CCH
Fed.Carriers Cases 80,415 ("such merchandise as is dealt in by
wholesale food business houses");
Anton Vidas Contract Carrier
Application, 62 M.C.C. 106 ("such commodities as are sold by
retail mail order houses");
National Trucking Co. Extension --
Electrical Appliances, 51 M.C.C. 638 ("such commodities as are
dealt in by wholesale and retail hardware stores");
Sanders
Extension of Operations, 47 M.C.C. 210 ("such general
merchandise as is dealt in by wholesale and retail grocery
stores");
McAteer Contract Carrier Application, 42 M.C.C.
35 ("such merchandise as is dealt in by wholesale, retail, and
chain grocery and food business houses");
Onondaga Freight
Corp. Common Carrier Application, 28 M.C.C. 53 ("such
merchandise as is dealt in by retail food stores");
Keystone
Transportation Co. Contract Carrier Application, 19 M.C.C. 475
("such merchandise as is dealt in by wholesale, retail, and chain
grocery and food business houses").
[
Footnote 10]
Contrast the Commission's interpretation here with those in
Bird Trucking Co. -- Modification of Certificate, 61
M.C.C. 311,
rev'd, 159 F.
Supp. 717;
Johnson Truck Service v. Salvino, 61 M.C.C.
329,
rev'd, Salvino v. United States, 119 F.
Supp. 277, on which appellant relies.
[
Footnote 11]
The intended use test, as applied by the Commission here, is
descriptive, rather than determinative: it describes the result
obtained by taking the language of the permit at face value, and in
no sense is a factor in arriving at that result.