1. In this proceeding under § 209(b) of the Interstate Commerce
Act, the Commission exceeded its statutory authority by granting to
a motor carrier subsidiary of a railroad permits to act as a
contract carrier for a single shipper from points on the railroad's
line in California to points on its line in certain other States,
since the Commission neither (1) imposed conditions upon the
permits sufficient to assure that the service to be rendered would
be truly auxiliary to, and supplemental of, the rail service, nor
(2) made findings sufficient to establish the existence of "special
circumstances" justifying the waiver of such restrictions. Pp.
364 U. S.
3-15.
(a) The general policy under § 5(2)(b) and the National
Transportation Policy of restricting the services of motor carrier
subsidiaries of railroads to those which are auxiliary to, or
supplemental of, the parent railroad's services is applicable to
permits under § 209(b). Pp.
364 U. S. 6-7.
(b) If a trucking service can fairly be characterized as
auxiliary to, or supplemental of, train service, there is
compliance with the mandate of § 5(2)(b) that the railroad should
be able to "use service by motor vehicle to public advantage in its
operations"; but, if the motor transportation is essentially
unrelated to the rail service, the parent railroad is invading the
field of trucking, and,
Page 364 U. S. 2
under normal circumstances, the National Transportation Policy
is thereby offended. Pp.
364 U. S. 7-9.
(c) When there are "special circumstances" sufficient to justify
such action in the public interest, however, the Commission may
sometimes refrain from imposing the condition that the trucking
service be auxiliary to, or supplemental of, the rail service.
American Trucking Associations v. United States,
355 U. S. 141. Pp.
364 U. S.
10-11.
(d) The conditions imposed upon the permits in this case were
not sufficient to restrict the motor carrier to operations truly
auxiliary to, or supplemental of, the rail service. Pp.
364 U. S.
11-13.
(e) The Commission's findings in this case were not sufficient
to establish the existence of "special circumstances" justifying
the waiver of such restrictions. Pp.
364 U. S.
13-15.
2. Insofar as it pertains to the permits to serve points on the
railroad's lines, the judgment of the District Court denying relief
is reversed, and the case is remanded to the Commission for such
further proceedings, not inconsistent with this opinion, as may be
appropriate. Pp.
364 U. S.
15-17.
3. The reversal and remand, however, do not apply to the
Commission's grant of authority to provide contract carrier service
to three nonrail points in Nevada. P.
364 U. S. 17.
4. Appellants, six motor carriers and three associations of
motor carriers, had standing to maintain their action to set aside
the Commission's order, under the "party in interest" criterion of
§ 205(g) of the Interstate Commerce Act and under the "person
suffering legal wrong . . . or adversely affected or aggrieved"
criterion of §10(a) of the Administrative Procedure Act. Pp.
364 U. S.
17-18
170 F.
Supp. 38, reversed.
Page 364 U. S. 3
MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
The principal question presented on this appeal is whether the
appellee Interstate Commerce Commission properly declined to impose
certain restrictions upon motor carrier permits it issued to a
trucking company which is a subsidiary of a railroad.
The permits in question are designed to allow appellee Pacific
Motor Trucking Company, a wholly owned subsidiary of Southern
Pacific Company, to perform a particular type of transportation
service for appellee General Motors Corporation. Prior to issuance
of these permits, Pacific Motor already had been authorized to
conduct certain trucking activities in a number of States into
which Southern Pacific's extensive railway system penetrates.
Without adverting to immaterial details, that authority may be
described as follows: Pacific Motor held common carrier
certificates from the Commission for the transportation of
commodities, by way of service auxiliary to and supplemental of
Southern Pacific rail service, over routes paralleling Southern
Pacific lines in Oregon, California, Nevada, Arizona, New Mexico,
and Texas. It also held contract carrier authority from the State
of California for intrastate transportation of trucks and
automobiles. Finally, it had been granted contract carrier permits
by the Commission for the transportation of automobiles, trucks,
and buses from certain points in California to three nonrail points
in Nevada, to two points on the Mexican border, to certain points
in Los Angeles
Page 364 U. S. 4
Harbor, and to points in Nevada located on the Southern Pacific
line. These latter contract carrier permits did not contain
restrictions designed to make the service auxiliary to and
supplemental of Southern Pacific rail service, Pacific Motor's only
contract carrier shipper has been General Motors.
By the four applications which gave rise to the present
controversy, Pacific Motor sought to extend the scope of its
contract carrier service for General Motors. It requested
authorization from the Commission for the transportation of new
automotive equipment from plants of General Motors at Oakland,
Raymer, and South Gate, California, to various interstate
destinations not included within its prior permits. Generally
speaking, the first application, designated
Sub 34,
covered contract carrier service from the Oakland plants to points
on the Southern Pacific line in Oregon; the second,
Sub
35, covered similar service to three Nevada nonrail points;
the third,
Sub 36, covered transportation from the Raymer
plant to points in Arizona which are stations on the Southern
Pacific line; and the last -- and broadest -- application,
Sub
37, covered transportation from the Oakland, Raymer, and South
Gate plants to points in seven States, whether or not on the
Southern Pacific line. [
Footnote
1]
The Commission proceedings resulted in the grant of some, but
not all, of the requested authority. On May 8, 1957, the Commission
acted favorably on the
Sub 34 application. 71 M.C.C. 561.
However, the Commission thereafter consolidated the four
applications and heard oral argument. On September 9, 1958, the
Commission issued its final report, 77 M.C.C. 605, which may
Page 364 U. S. 5
be described specifically enough for our purposes as authorizing
transportation by Pacific Motor to the three additional Nevada
nonrail points and to points on the Southern Pacific line in
Nevada, Utah, Arizona, Oregon, and New Mexico. [
Footnote 2] Otherwise, the applications were
denied. There were certain other conditions imposed by the
Commission, which we will detail later, but the major restriction
was the limitation of points of destination to points on the
Southern Pacific line.
Appellants -- American Trucking Associations, Inc., its Contract
Carrier Conference, the National Automobile Transporters
Association, and six motor carriers -- brought suit in Federal
District Court to set aside the Commission's order.
See 28
U.S.C. § 1336. Appellees Pacific Motor and General Motors
intervened in support of the order. The United States was named a
party defendant, together with the Interstate Commerce Commission,
but did not either participate in or oppose the defense.
See 28 U.S.C. § 2323. A three-judge court, which was
convened pursuant to 28 U.S.C. §§ 2325 and 2284, denied relief.
170 F. Supp.
38. Our appellate jurisdiction was invoked under 28 U.S.C. §
1253, and we noted probable jurisdiction. 361 U.S. 806. In this
Court, the Commission opposes and the United States supports the
appellants.
There is a preliminary challenge by Pacific Motor and General
Motors to appellants' standing, a challenge which was sustained by
two members of the lower court. We disagree with this holding.
Since the basis for our view on the problem of standing will be
more readily appreciated after the merits of the case have been
fully treated, we postpone our discussion of this matter.
Page 364 U. S. 6
The critical issue raised by appellants is whether the
Commission exceeded its statutory authority by granting the permits
in question to a railroad subsidiary without imposing more
stringent limitations than it did. On this question, the lower
court unanimously ruled against appellants. This judgment must be
evaluated in the light of this Court's previous decisions, set
against the background of Commission practice.
Both the Commission and this Court have recognized that Congress
has expressed a strong general policy against railroad invasion of
the motor carrier field. This policy is evinced in a general way in
the preamble to the 1940 amendments to the Interstate Commerce Act
-- the National Transportation Policy, 54 Stat. 899 -- which
articulates the congressional purpose that the Act be "so
administered as to recognize and preserve the inherent advantages"
of "all modes of transportation." More particularly, Congress'
attitude is reflected by a proviso to § 5(2)(b) of the Act,
[
Footnote 3] which enjoins the
Commission to withhold approval of an acquisition by a railroad of
a motor carrier
"unless it finds that the transaction proposed will be
consistent with the public interest and will enable such carrier to
use service by motor vehicle to public advantage in its operations
and will not unduly restrain competition."
The Commission long ago concluded that the policy of the
transportation legislation requires that the standards of § 5(2)(b)
-- then § 213(a) of the Motor Carrier Act of 1935, 49 Stat. 555 --
be followed as a general rule in other situations, notably in
applications for common carrier certificates of convenience and
necessity under § 207. [
Footnote
4]
Kansas City Southern Transport Co., Common Carrier
Application, 10 M.C.C. 221 (1938). And this
Page 364 U. S. 7
Court has confirmed the correctness of the Commission's
conception of its responsibilities under both § 5(2)(b) and § 207.
See United States v. Rock Island Motor Transit Co.,
340 U. S. 419;
United States v. Texas & Pacific Motor Transport Co.,
340 U. S. 450;
Interstate Commerce Commission v. Parker, 326 U. S.
60. The Court has also taken cognizance of the
congressional confirmation of the Commission's policy by the 1940
reenactment in § 5(2)(b) of the provisions of § 213(a), after some
of the pertinent Commission decisions had been specifically called
to Congress' attention.
See United States v. Rock Island Motor
Transit Co., supra, at
340 U. S. 432.
And although the instant proceeding involves contract carrier
applications, and hence falls under § 209, [
Footnote 5] the Commission, in its opinion, recognized
that, for purposes of the relevance of the § 5(2)(b) standards,
there is no distinction between this type of case and proceedings
arising under § 207. 77 M.C.C. 621-622. Nor can we discern any
grounds for differentiation.
Thus, it is evident that the policy of opposition to railroad
incursions into the field of motor carrier service has become
firmly entrenched as a part of our transportation law. Moreover,
this general policy fortunately has not been implemented merely by
way of a more or less unguided suspicion of railroad subsidiaries,
but rather has evolved through a series of Commission decisions
from embryonic form into a set of reasonably firm, concrete
standards. [
Footnote 6] The
Commission's opinion in the case at bar describes these standards
as follows:
"The restrictions usually imposed in common carrier certificates
issued to rail carriers or their affiliates
Page 364 U. S. 8
in order to insure that the service rendered thereunder shall be
no more than that which is auxiliary to or supplemental of train
service are: (1) the service by motor vehicle to be performed by
rail carrier or by a rail-controlled motor subsidiary should be
limited to service which is auxiliary to or supplemental of rail
service, (2) applicant shall not serve any point not a station on
the railroad, (3) a key-point requirement or a requirement that
shipments transported by motor shall be limited to those which it
receives from or delivers to the railroad under a through bill of
lading at rail rates covering, in addition to the movement by
applicant, a prior or subsequent movement by rail, (4) all
contracts between the rail carrier and the motor carrier shall be
reported to the Commission and shall be subject to revision if and
as the Commission finds it to be necessary in
Page 364 U. S. 9
order that such arrangements shall be fair and equitable to the
parties, and (5) such further specific conditions as the
Commission, in the future, may find it necessary to impose in order
to insure that the service shall be auxiliary to, or supplemental
of, train service. . . ."
The key phrase in this summary is obviously "auxiliary to or
supplemental of train service." If a trucking service can fairly be
so characterized, it is clear enough that there is compliance with
the mandate of § 5(2)(b) that the carrier should be able "to use
service by motor vehicle to public advantage
in its
operations." But if, on the other hand, the motor
transportation is essentially unrelated to rail service, the
railroad parent is invading the field of trucking, and, under
normal circumstances, the National Transportation Policy is thereby
offended.
It is this "auxiliary to or supplemental of" verbalization of
the policy of § 5(2)(b), as applied to § 207, that has found favor
in this Court.
See American Trucking Assns. v. United
States, 355 U. S. 141;
United States v. Rock Island Motor Transit Co., supra; United
States v. Texas & Pacific Motor Transport Co., supra;
Interstate Commerce Commission v. Parker, supra. Moreover,
while the Court has not specified the more particularized
restrictions which it might regard as essential constituents of the
"auxiliary to or supplemental of" concept, it is significant that
the Court in
Rock Island apparently accepted the
Commission's view that the phrase implies a limitation of function,
i.e., type of trucking service, and not merely a
geographical limitation,
i.e., place where the service is
performed. [
Footnote 7] 340
U.S. at
340 U. S.
436-444.
Page 364 U. S. 10
But, while the judicial and administrative current has run
strongly in favor of auxiliary and supplemental restrictions on
motor carrier subsidiaries of railroads, the Commission has
determined, and this Court has agreed,
Page 364 U. S. 11
that the public interest may sometimes be promoted by not
imposing such limitations. A prime example is
American Trucking
Assns. v. United States, supra, where the trucking service was
not being performed adequately by independent motor concerns. We
there observed that the mandatory provisions of § 5(2)(b) do not
appear in § 207, and approved the Commission's policy of not
attaching auxiliary and supplemental restrictions where "special
circumstances" prevail. We concluded:
"We repeat . . . that the underlying policy of § 5(2)(b) must
not be divorced from proceedings for new certificates under § 207.
Indeed, the Commission must take 'cognizance' of the National
Transportation Policy and apply the Act 'as a whole.' But . . . we
do not believe that the Commission acts beyond its statutory
authority when, in the public interest, it occasionally departs
from the auxiliary and supplementary limitations in a § 207
proceeding."
355 U.S. at
355 U. S.
151-152.
These, then, are the guiding principles which have been
established by what has gone before and which mark the range of our
inquiry in this case. Since, as we have indicated, the Commission
believes, and we agree, that there is no relevant difference
between a § 207 proceeding and a § 209 proceeding so far as the
problem here involved is concerned, the decisive questions are: (1)
Did the Commission impose conditions upon the permits issued to
Pacific Motor under which the service to be rendered would be truly
auxiliary to and supplemental of Southern Pacific's rail service?
(2) If not, was the Commission's waiver of such restrictions
justified by "special circumstances"?
The first question need not detain us long. The principal
permits were qualified only by the following conditions: (1) the
service was to be restricted to points which
Page 364 U. S. 12
are stations on the Southern Pacific line; (2), "there may from
time to time in the future be attached to the permits . . . such
reasonable terms, conditions, and limitations as the public
interest and national transportation policy may require"; and (3),
Pacific Motor was to request the imposition of restrictions upon
its outstanding certificates with respect to the transportation of
automobiles and trucks.
The last restriction was designed to obviate any dual operation
problem under § 210, [
Footnote
8] and is not pertinent to the auxiliary and supplemental
standard.
See 77 M.C.C. at 624. The second condition
obviously is no restriction at all on present operations, and hence
can hardly be said to limit the trucking to an auxiliary or
supplemental service. We so recognized in
American Trucking
Associations, where the certificates contained a similar
restriction. 355 U.S. at
355 U. S. 154.
And the first limitation, upon which appellees principally rely, is
but a geographical, not a functional, restriction. As we have
noted,
Rock Island gives strong support to the view there
expressed by the Commission that the essence of auxiliary and
supplemental limitation is functional control. While it may be
true, as appellees argue, that such a geographical limitation is a
necessary ingredient of an auxiliary and supplemental restriction,
it does not by any means follow that this ingredient makes the
whole. Moreover, we have the strongest evidence that the Commission
did not believe that it did, since the Commission specifically
refrained from imposing the most general, but obviously the most
significant, restriction -- that "the service by motor vehicle . .
. should be limited to service which is auxiliary to or
supplemental of rail service." 77 M.C.C., 622, 623. The conclusion
seems inescapable that the conditions imposed upon the permits to
Pacific Motor,
Page 364 U. S. 13
though undoubtedly "restrictions" in a general sense, were not
limitations sufficient to hold Pacific Motor to a truly auxiliary
and supplemental service.
Appellees urge that nonetheless there were "special
circumstances" within the meaning of
American Trucking
Associations. Appellees point to various findings of fact by
the Commission, such as the need of General Motors for a service of
the type here involved, Pacific Motor's experience and
qualifications, and the unlikelihood that a significant amount of
traffic would be diverted from rail to motor transportation even if
the permits were granted. The difficulty with appellees' argument
is that the Commission did not find that considerations of this
nature constituted "special circumstances" under the
American
Trucking Associations rule, but rather viewed them simply as
supporting the basic determinations which it was required to make
under § 209(b) in order to issue a contract carrier permit to any
applicant. [
Footnote 9] And
naturally we
Page 364 U. S. 14
should not substitute our judgment for the Commission's on a
matter like this, for "[t]he grounds upon which an administrative
order must be judged are those upon which the record discloses that
its action was based."
Securities & Exchange Commission v.
Chenery Corp., 318 U. S. 80,
318 U. S.
87.
The Commission assigned but a single reason for not imposing the
normal restrictions upon the Pacific Motor permits: to do so would
compel Pacific Motor to conduct a common carrier service. Appellees
support this decision upon the ground that the Commission is
without authority under § 209(b) to impose such
character-destroying conditions upon a contract carrier permit.
[
Footnote 10] We need not
determine whether the Commission possesses the power to attach such
limitations or, in the alternative, to award a common carrier
certificate, since we believe that, in any event, the Commission's
reason is insufficient justification for its action. Assuming that
the restrictions which would limit Pacific Motor's operations to an
auxiliary and supplemental service would also be incompatible with
a contract carrier operation, and that the Commission was
consequently powerless to impose those restrictions, this alone
does not, in our view, meet the "special circumstances" test. There
is, for example, no finding that independent contract carriers were
unable or
Page 364 U. S. 15
unwilling to perform the same type of service as Pacific Motor.
In such a situation, we do not believe that the policy of the Act
allows the Commission to authorize service by Pacific Motor,
limited only to points on the Southern Pacific line, simply because
General Motors wants a contract carrier operation. If that desire
of General Motors, in combination with the policy of the Act,
disables a railroad subsidiary from obtaining the business, that is
simply the result of the National Transportation Policy. [
Footnote 11] The consequence, we
believe, does not meet the compelling public interest standard
established by
American Trucking Associations. A contrary
conclusion would open the door to approval of over-the-road
contract trucking by railroad subsidiaries to most, if not
virtually all, major destinations, and hence would greatly
attenuate the safeguards which have been painstakingly erected to
prevent railroad domination of trucking. Appellees say that these
safeguards are no longer needed, because independent trucking is no
longer an "infant industry." This is an immaterial argument in this
forum. We do not condemn the wisdom of the Commission's action. We
simply say that the transportation legislation does, and that the
pardoning power in this case belongs to Congress.
Thus the decision of the District Court must be reversed,
because we conclude that the Commission fell into error of law. The
question then arises whether there should be a remand which permits
further proceedings. Appellants argue that there should not be,
because the Commission, according to appellants, found that
there
Page 364 U. S. 16
were no special circumstances aside from the alleged
impossibility of imposing the usual restrictions upon a contract
carrier. It is true that the Commission based the rail-point
restriction upon "the absence of any showing of unusual
conditions." 77 M.C.C. at 623. But we cannot be certain that the
Commission thereby intended to say that there were no special
circumstances within the meaning of the
American Trucking
Associations principle. As we have pointed out, the rail-point
restriction, standing alone, is different in kind from limitations
which impose an auxiliary and supplemental service. Consequently,
we cannot be sure that the Commission believes the same sort of
circumstances determine the applicability of both types of
restrictions. Moreover, the Commission's discussion of this point
is open to the interpretation that it was repeating some of its
conclusions with respect to the § 209(b) standards,
e.g.,
"the effect which granting the permit would have upon the services
of the protesting carriers."
See note 9 supra. [
Footnote 12] Under these circumstances, we would be
warranted in precluding further proceedings only if, by an
independent search of the record, we were able to conclude that, as
a matter of law, there are no factors present which the Commission
could have regarded as special circumstances. Although the findings
of the Commission which are reflected in its opinion do not seem to
us to comply with the
American Trucking Associations
standard, as the silence of the Commission seems to imply, we are
unwilling in a complicated proceeding of this nature to deal with
this problem
ab initio or to say that the Commission could
not have made additional findings on the basis of the evidence had
it been aware that the ground its decision rested upon was
insufficient.
Page 364 U. S. 17
Consequently, under the particular circumstances of this case,
we believe that it should be remanded to the Commission so that it
can apply what we hold to be the applicable principles in such
further proceedings as it may find to be consistent with this
opinion.
The reversal and remand, however, will not include one aspect of
the Commission's action -- the grant of authority to provide a
service to three nonrail points in Nevada -- which is not governed
by the rationale of our opinion. This small segment of the
controversy has been submerged in the dispute over the much broader
permit covering transportation to rail points in various States. It
is obvious, of course, that "special circumstances" would have to
be present to justify this Nevada award. Appellees maintain that
there was such justification, and appellants have not established
that it was lacking. Nor do we perceive any other reason to upset
this award. Consequently, we affirm with respect to this particular
permit.
There remains only the question of standing. Although the
three-judge court concluded that the Commission had not exceeded
its authority in this case, two members of the court also believed
that "there was no showing of actual or anticipated direct injury
such as would entitle [the appellants] to institute this action."
170 F. Supp.
at 48. In support of this conclusion, appellees rely
principally upon
Atchison, T. & S.F. R. Co. v. United
States, 130 F. Supp.
76,
affirmed per curiam, 350 U.S. 892. That decision
held that certain railroads had no standing to challenge a
Commission order authorizing acquisition by one motor carrier of
others. Since the lower court in
Atchison stressed the
fact that the Commission there had not created any additional motor
carrier service, the decision clearly is not in point. In the
instant case, not only has the Commission created new operating
rights, but they are rights in which appellants have a stake.
And
Page 364 U. S. 18
surely the statement by General Motors that it would not in any
event give the the business to any appellant cannot deprive
appellants of standing. The interests of these independents cannot
be placed in the hands of a shipper to do with as it sees fit
through predictions as to whom its business will or will not go.
The decision we believe to be controlling is not
Atchison,
but rather
Alton R. Co. v. United States, 315 U. S.
15, where the Court confirmed the standing of a railroad
to contest the award of a certificate to a competing trucker. We
conclude, then, that appellants had standing to maintain their
action to set aside the Commission's order under the "party in
interest" criterion of § 205(g) of the Interstate Commerce Act, 49
Stat. 550, 49 U.S.C. § 305(g), and under the "person suffering
legal wrong . . . or adversely affected or aggrieved" criterion of
§ 10(a) of the Administrative Procedure Act, 60 Stat. 243, 5 U.S.C.
§ 1009(a).
Our disposition of the case makes it unnecessary to consider the
other issues raised by appellants.
We have no desire to hamper the Commission in the discharge of
its heavy responsibilities, and we have always recognized that the
Commission has been given a wide discretion by Congress. But that
discretion has limits; our decision in favor of the Commission in
American Trucking Associations established the limits relevant to
this case; and we conclude that those limits have been
transgressed. Of course, in remanding the case we do not intend to
circumscribe the Commission in determining whether appropriate
"special circumstances" do exist in this instance which would take
the case out of the otherwise conventional standards.
The judgment of the District Court is reversed and the case is
remanded to that court with directions to remand to the Commission
for such further proceedings, not inconsistent with this opinion,
as may be appropriate.
It is so ordered.
[
Footnote 1]
With respect to the transportation from Oakland and Raymer, the
States were Washington, Oregon, Idaho, Nevada, Utah, Arizona, and
New Mexico. The proposed transportation from South Gate was to be
to the same States, excluding New Mexico but adding Montana.
[
Footnote 2]
One Commissioner who concurred said that he would give broader
authority; three Commissioners dissented from the grant; and, of
the three Commissioners who did not participate, one said that he
would have joined the dissenters.
[
Footnote 3]
54 Stat. 906, as amended, 49 U.S.C. § 5(2)(b).
[
Footnote 4]
49 Stat. 551, 49 U.S.C. § 307.
[
Footnote 5]
49 Stat. 552, as amended, 49 U.S.C. § 309.
[
Footnote 6]
The first major Commission decision was rendered the year after
the enactment of Motor Carrier Act of 1935.
Pennsylvania Truck
Lines, Inc., Acquisition of control of Barker Motor Freight,
Inc., 1 M.C.C. 101. In refusing approval of an acquisition
unless certain conditions were met, a division of the Commission
stated:
". . . [W]e are not convinced that the way to maintain for the
future healthful competition between rail and truck service is to
give the railroads free opportunity to go into the kind of truck
service which is strictly competitive with, rather than auxiliary
to, their rail operations. The language of section 213 . . . is
evidence that Congress was not convinced that this should be done.
Truck service would not, in our judgment, have developed to the
extraordinary extent to which it has developed if it had been under
railroad control. Improvement in the particular service now
furnished by the partnership might flow from control by the
railroad, but the question involved is broader than that, and
concerns the future of truck service generally. The financial and
soliciting resources of the railroads could easily be so used in
this field that the development of independent service would be
greatly hampered and restricted, and with ultimate disadvantage to
the public."
Id. at 111-112.
The development of Commission policy is traced in detail in
Rock Island Motor Transit Co. -- Purchase -- White Line Motor
Freight Co., 40 M.C.C. 457.
See also the similar and
lengthy discussion in
United States v. Rock Island Co., supra,
passim.
[
Footnote 7]
"The Commission asserts that the meaning of 'auxiliary and
supplemental' . . . was not geographical. . . ."
"
* * * *"
"What was in the Commission's mind as to the meaning of
auxiliary and supplemental at the time it issued its certificate,
we cannot be sure. At present, a motor service is auxiliary and
supplemental to rail service, in the Commission's view, when the
railroad-affiliated motor carrier in a subordinate capacity aids
the railroad in its rail operations by enabling the railroad to
give better service or operate more cheaply, rather than
independently competing with other motor carriers. . . . The
Commission has continually evidenced . . . its intention to have
rail-owned motor carriers serve in auxiliary and supplemental
capacity to the railroads."
"The Commission has expressed its policy . . . by the phrase,
perhaps too summary, auxiliary and supplemental. Though the phrase
is difficult to define precisely, its general content is set out in
Texas & Pacific Motor Transport Co. Application, 41
M.C.C. 721, 726 [establishing generally the same conditions set
forth in the text at pp.
364 U. S. 7-9]. . . . While the
practice of the Commission has varied in the conditions imposed,
the purpose to have rail-connected motor carriers act in
coordination with train service has not. . . ."
340 U.S. at
340 U. S. 439,
340 U. S.
442-443.
See the detailed discussion in
Rock Island Motor
Transit Co. -- Purchase -- White Line Motor Freight Co., 40
M.C.C. 457. ("[T]here . . . appears to have developed a tendency in
rail-motor acquisition proceedings to treat the
Barker
case restrictions as geographical or territorial only in their
intent, rather than as substantive limitations upon the character
of the service which might be rendered by a railroad or its
affiliate under any acquired right."
Id. at 470.)
See
also Texas & Pacific Motor Transport Co. Common Carrier,
Application, supra, at 726. ("Since petitioner's certificates
limit the service to be performed to that which is auxiliary to or
supplemental of the rail service of the railway, it is without
authority to engage in operations unconnected with the rail
service. . . . To the extent petitioner is performing or
participating in all-motor movements on the bills of lading of a
motor carrier and at all-motor rates, it is performing a motor
service in competition with the rail service and the service of
existing motor carriers; and, to the extent it is substituting rail
service for motor-vehicle service, the rail service is auxiliary to
or supplemental of the motor vehicle service rather than the motor
vehicle service being auxiliary to or supplemental of rail
service.")
[
Footnote 8]
49 Stat. 554, as amended, 49 U.S.C. § 310.
[
Footnote 9]
Section 209(b) provides in pertinent part:
"Subject to section 310 of this title, a permit shall be issued
to any qualified applicant therefor authorizing in whole or in part
the operations covered by the application if it appears from the
applications or from any hearing held thereon that the applicant is
fit, willing, and able properly to perform the service of a
contract carrier by motor vehicle and to conform to the provisions
of this chapter and the lawful requirements, rules, and regulations
of the Commission thereunder, and that the proposed operation, to
the extent authorized by the permit, will be consistent with the
public interest and the national transportation policy declared in
the Interstate Commerce Act; otherwise, such application shall be
denied.
In determining whether issuance of a permit will be
consistent with the public interest and the national transportation
policy declared in the Interstate Commerce Act, the Commission
shall consider the number of shippers to be served by the
applicant, the nature of the service proposed, the effect which
granting the permit would have upon the services of the protesting
carriers and the effect which denying the permit would have upon
the applicant and/or its shipper and the changing character of that
shipper's requirements. . . ."
(Emphasis added.)
The italicized portion was added by an amendment of August 22,
1957, 71 Stat. 411, well before the Commission's decision of
September 9, 1958. Consequently, the Commission was required to
apply the new standards.
Ziffrin, Inc. v. United States,
318 U. S. 73,
318 U. S.
78.
[
Footnote 10]
Section 209(b) provides in part that the Commission
"shall attach to [the permit] . . . such reasonable terms,
conditions, and limitations,
consistent with the character of
the holder as a contract carrier . . . as may be necessary to
assure that the business is that of a contract carrier and within
the scope of the permit, and to carry out . . . the requirements
established by the Commission under section 304(a)(2) and (6) of
this title. . . ."
[
Footnote 11]
"Such restrictions hamper railroad companies in the use of their
physical facilities -- stations, terminals, warehouses -- their
personnel, and their capital in the development of their
transportation enterprises to encompass all or as much of motor
transportation as the roads may desire. The announced
transportation policy of Congress did not permit such
development."
United States v. Rock Island Motor Transit Co., supra,
at
340 U. S.
443-444.
[
Footnote 12]
The rail-point limitation appears to have been designed
primarily to prevent encroachment upon the business of competing
rail carriers. Various railroads opposed the grant of authority
before the Commission, but did not join in the federal court
action.