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Port Norris Express Co. v. United States

September 8, 1982

PORT NORRIS EXPRESS CO., INC., PETITIONER
v.
INTERSTATE COMMERCE COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS DENNIS TRUCKING COMPANY, INC., INTERVENOR



ON PETITION FOR REVIEW OF AN ORDER OF THE INTERESTATE COMMERCE COMMISSION

Author: Adams

Before: ADAMS and HIGGINBOTHAM, Circuit Judges, and TEITELBAUM, District Judge.*fn*

Opinion OF THE COURT

ADAMS, Circuit Judge.

This case is one of several brought in this Court by Port Norris Express Company, Inc. (Port Norris), challenging what it claims to be excessively broad authorizations granted to competing carriers by the Interstate Commerce Commission (ICC). In three previous cases, No. 81-2589, No. 81-2640, and No. 81-2641, all entitled Port Norris Express Co., Inc. v. Interstate Commerce Commission, the ICC did not defend its grants of authority but instead asked this Court to remand in light of American Trucking Associations, Inc. v. ICC, 659 F.2d 452 (5th Cir. 1981) (ATA I). ATA I, discussed infra pp. 8-10, was a general challenge by trade associations, a union, and several trucking firms to ICC rules and policies implementing the Motor Carrier Act of 1980. These rules and policies, in effect when the various applications challenged by trade associations, a union, and several trucking firms to ICC rules and policies implementing the Motor Carrier Act of 1980. These rules and policies, in effect when the various applications challenged by Port Norris were made, were in large part invalidated by Ata I because they required applicants to request and receive wider authority than could be justified under the statute.*fn1 Although in the present case the ICC has chosen to defend its grant of authority we conclude that this grant -- like those involved in the previous Port Norris cases -- requires reconsideration in light of ATA 1.*fn2

I

On February 7, 1982, Dennis Trucking Company, Inc. (Dennis) filed an application with the ICC pursuant to 49 U.S.C. § 10922(b).*fn3 The application sought to expand the authorization that the company previously held, so that it would be able to transport "general commodities" (except for Class A and B explosives) in a region fully encompassing twelve states and the District of Columbia. Authority to transport "general commodities" includes among other things the right to transport both "bulk" and "household goods" unless these two highly specialized types of service are specifically excepted or placed in the vehicle without regard to order and without packaging. See Steere Tank Lines, Inc. v. ICC, 666 F.2d 255, 257 n.3 (5th Cir. 1982). Dennis had not previously carried either household goods or bulk commodities, and its territorial range had been much narrower than that sought in the application. Dennis' application was supported by statements of thirty-five shippers. While some of these shippers do ship commodities susceptible of being transported in bulk (see Addendum to Respondents' Brief at 27-29), none specifically stated that it needed Dennis to transport any commodities in bulk.

Port Norris, a carrier specializing in bulk transportation, filed a timely protest to Dennis' application, urging that there was insufficient evidence of public need to justify including bulk commodities in Dennis' authorization. A protest by a group of household goods carriers challenged the sufficiency of the evidence to support a finding either that Dennis was fit, willing, and able to transport household goods, or that Dennis had shown public need for its services as a household goods carrier.

On June 26, 1981, ICC Review Board No. 2 granted the entire authority for which Dennis had applied. Port Norris and the group of household goods carriers filed an administrative appeal. ICC Appellate Division No. 1, consisting of three Commissioners (one of whom did not participate in this case), affirmed the Review Board on September 10, 1981, without issuing an opinion. The ICC issued a certificate to Dennis on October 21, 1981.

Port Norris petitioned this Court on November 16, 1981 to review and set aside the decision of the ICC with respect to Dennis' bulk authority. Although there is some ambiguity in Port Norris' briefs, counsel made clear at oral argument that Port Norris does not challenge Dennis' authorization to transport household goods. Since the household goods carriers did not seek review of the Appellate Division's decision, we do not consider the propriety of the grant of household goods authority to Dennis. Dennis has filed a brief as an intervenor in support of the ICC. Respondent United States of America has declined to oppose or support the ICC's decision in the present case.

II

It is undisputed that the Motor Carrier Act of 1980, Pub. L. No. 96-296, 94 Stat. 793 (1980), which is the source of 49 U.S.C.§ 10922(b), was designed to ease carrier entry into the trucking industry. See Gamble v. ICC, 636 F.2d 1101, 1103 (5th Cir. 1981): "The principal goals of the legislation . . . are to promote greater competition by allowing easier carrier entry, to simplify and expedite the certification process, and to lessen restrictions on motor carrier operations." Indeed, the Act itself states that it is "part of the continuing effort by Congress to reduce unnecessary regulation by the Federal Government," and that "historically the existing regulatory structure has tended in certain circumstances to inhibit market entry, carrier growth, maximum utilization of equipment and energy resources, and opportunities for minorities and others to enter the trucking industry." Motor Carrier Act of 1980, §§ 2 & 3, 94 Stat. at 793 (1980).

The Act, however, plainly did not deregulate motor carrier entry completely. If the ICC is to grant authority to a party such as Dennis, then under section 10922(b) (1) (A) it must find that Dennis is "fit, willing, and able" to perform the authorized service; further, under section 10922(b) (1) (B), it must find that there is a "public demand or need" for the service. The legislative history of these provisions helps to clarify the balance Congress was attempting to strike between easing entry on the one hand and retaining regulation on the other:

Paragraph (1) of the new section 10922(b) sets forth the entry standards to be used by the Commission in determining whether to issue a certicate authorizing operation as a motion common carrier of property. It retains the traditional test that all applicants must be fit, willing, and able. However, it revises the public convenience and necessity requirement. Sepcifically, it reduces the burden of proof on persons supporting the application. Persons supporting the application will be required to come forward with some evidence of a public need or demand for the service. Under this standard, proponents of the application must show that the service they propose would serve a useful public purpose, responsive to a public demand or need. For example, this demonstration could be made by public officials, shippers, receivers, trade associations, civic associations, consumers, and employee groups, as well as by the applicant itself. The normal way to establish this has been for applicants to submit evidence of some of those who would use the service proposed. The Committee thinks that this is still the most effective evidence, for it provides the Commission with the information it needs to frame a grant of authority and provides a factual framework for dealing with the application and the interests of the parties on both sides. However, the Committee does not intend to restrict the Commission in which factors it can consider in determining whether the proposed service is responsive to a public demand or need. These factors include the following: a need or demand for new services, innovative quality or price options, increased competition, greater fuel efficiency, improved service for small communities, improved opportunities for minorities, and any other benefits that would serve a useful public purpose. This is consistent with the Commission's consideration of the National Transportation Policy, including any of the applicable factors listed in section 10101(a) (7) (A) through (H). Where an application is uncontested, the Commission will be concerned with the fitness of an applicant and whether the applicant has met his prima facie showing of public need.

H.R. Rep. No. 96-1069, 96th Cong., 2d Sess. 14-15 reprinted in 1980 U.S. Code Cong. & Ad. News 2283, 2296-97.

Port Norris argues that despite the statement in the House Report that "[p]ersons supporting the application will be required to come forward with some evidence of a public need or demand for the service," the Act requires that " substantial evidence " be proferred.Reply Brief at 16-18. Since we find that there is not even "some evidence," we see no need here to resolve the issue.*fn4 With respect to the "fit, willing, and able" criterion, the ICC seems not to dispute that there must be "substantial evidence" of Dennis' qualifications to provide transportation in bulk. And it appears to concede that the standard of review this Court must utilize is that the agency's decision must be set aside if "unsupported by substantial evidence," 5 U.S.C. § 706(2) (E). Respondent's Brief at 13.

Substantial evidence has been defined as:

Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 95 L. Ed. 456, 71 S. Ct. 456 (1951). See also, e.g., Consolo v. Federal Maritime Commission, 383 U.S. 607, 620, 16 L. Ed. 2d 131, 86 S. Ct. 1018 (1966).

Under ICC "guidelines" in effect when Dennis made its application (the so-called "New Certificate Statement," Ex Parte No. 55 (Sub-No. 43A), 45 Fed. Reg. 86,798 (1980), Dennis had little choice but to apply for bulk authority whether or not it was "fit, willing, and able" to transport in bulk and whether or not there was a "public demand or need" for its services as a bulk carrier. And under these same guidelines the ICC is likely to have granted such authority regardless of whether the two statutory requirements had been met. ATA I, supra, found that these "guidelines" insofar as they pertain here, contravened the statute. According to ATA I, the so-called guidelines were in fact mandatory rules enforced by threats of delay and of expensive litigation.*fn5 The Court concluded:

In short, in its announcement in the New Certificates Statement, the Commission has prescribed the use of its list of certain commodity descriptions, "discouraged" the use of any deviations from the list, and required justification for proposing a deviation from the prescribed list.*fn99 The Commission states that carriers may seek to justify departure from its standards. This imposes the same in terrorem constraint that the ...


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