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U.S. v. Rosenblum Truck Lines, 315 U.S. 50 (1942)

American Government Special Collections Reference Desk

American Government Trucking

U.S. v. Rosenblum Truck Lines, 315 U.S. 50 (1942)
United States Supreme Court

From the U.S. Government Printing Office via GPO Access
 
Case:   U.S. V. ROSENBLUM TRUCK LINES

Case #: 315US50


NO. 52.  ARGUED DECEMBER 16, 17, 1941.  - DECIDED JANUARY 19, 1942.  -
36 F.SUPP.  467, REVERSED. 


1.  A TRUCKMAN WHO, ON JULY 1, 1935, AND UNTIL FEBRUARY 1936, WAS
ENGAGED IN HAULING EXCLUSIVELY FOR COMMON CARRIERS UNDER AGREEMENTS
WITH THEM, HELPING THEM TO MOVE THEIR OVERFLOW FREIGHT, AND WHO WAS NOT
SERVING THE PUBLIC DIRECTLY BUT ONLY PERFORMING PART OF THE COMPLETE
COMMON CARRIER SERVICE WHICH THOSE COMMON CARRIERS OFFERED TO THE
PUBLIC, IS NOT ENTITLED TO A PERMIT AS A CONTRACT CARRIER UNDER THE
"GRANDFATHER" CLAUSE OF SEC. 209(A) OF THE MOTOR CARRIER ACT OF 1935. 
P. 54. 

2.  BY THE ACT, CONGRESS DID NOT INTEND TO GRANT MULTIPLE
"GRANDFATHER" RIGHTS ON THE BASIS OF A SINGLE TRANSPORTATION SERVICE. 
P. 54. 

3.  WHERE THE LITERAL MEANING OF WORDS IN A STATUTE PRODUCES AN
UNREASONABLE RESULT PLAINLY AT VARIANCE WITH THE POLICY OF THE
LEGISLATION, THE LEGISLATIVE PURPOSE WILL BE FOLLOWED.  P. 55. 

4.  THE FACT THAT "CARRIERS" WITHIN THE MEANING OF THE ACT NEED NOT
DEAL DIRECTLY WITH THE PUBLIC BUT MAY ACT THROUGH BROKERS, DOES NOT
AFFECT THE CONCLUSION IN THIS CASE.  P. 56. 

UNITED STATES ET AL. V. N.E. ROSENBLUM TRUCK LINES, INC.* 

*TOGETHER WITH NO. 53, UNITED STATES ET AL. V. MARGOLIES, DOING
BUSINESS AS MANHATTAN TRUCK LINES, ALSO ON APPEAL FROM THE DISTRICT
COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI. 

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN
DISTRICT OF MISSOURI. 

APPEALS FROM DECREES OF A DISTRICT COURT OF THREE JUDGES WHICH, IN
TWO CASES HEARD AND DECIDED TOGETHER, SET ASIDE ORDERS OF THE
INTERSTATE COMMERCE COMMISSION DENYING APPLICATIONS FOR PERMITS UNDER
THE MOTOR CARRIER ACT OF 1935. 

MR. JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT. 

THESE ARE DIRECT APPEALS BY THE UNITED STATES AND THE INTERSTATE
COMMERCE COMMISSION FROM FINAL DECREES OF A SPECIALLY CONSTITUTED THREE
JUDGE DISTRICT COURT,  FN1  WHICH SUSTAINED APPELLEES' SEPARATE
PETITIONS TO ANNUL, SET ASIDE AND ENJOIN AN ORDER OF THE COMMISSION
ENTERED JULY 1, 1940, DENYING APPELLEES' SEPARATE APPLICATIONS UNDER
THE SO-CALLED "GRANDFATHER CLAUSE" OF SEC. 209(A) OF THE MOTOR CARRIER
ACT OF 1935  FN2  (49 STAT. 543, 552, 49 U.S.C. SEC. 309(A)), FOR A
PERMIT AUTHORIZING OPERATIONS AS A CONTRACT CARRIER BY MOTOR VEHICLE. 

THE EVIDENTIARY FACTS ARE NOT SERIOUSLY DISPUTED.  PRIOR TO THE
CRITICAL DATE, JULY 1, 1935, AND UNTIL FEBRUARY 1936, APPELLEES AND
THEIR PREDECESSORS IN INTEREST  FN3  HAULED ONLY FOR COMMON CARRIERS BY
MOTOR VEHICLE, AND IN EACH CASE PRINCIPALLY FOR A SINGLE COMMON
CARRIER, BETWEEN ST. LOUIS AND CHICAGO, FOR WHICH THEY WERE PAID A LUMP
SUM ON DOCK TO DOCK MOVEMENTS.  APPELLEES PROTECTED THEIR EQUIPMENT BY
CARRYING FIRE, THEFT AND COLLISION INSURANCE IN THEIR OWN NAMES.  THEY
ALSO PAID THE OPERATING AND MAINTENANCE COSTS.  CARGO, PUBLIC
LIABILITY, PROPERTYDAMAGE, AND SIMILAR TYPES OF INSURANCE FOR THE
PROTECTION OF THE GENERAL AND THE SHIPPING PUBLIC, WERE TAKEN OUT BY
THE COMMON CARRIERS AND IN SOME INSTANCES CHARGED TO THE APPELLEES. 
THEY OCCASIONALLY PAID SMALL CARGO DAMAGE CLAIMS NOT COVERED BY
INSURANCE.  THE DRIVERS OF APPELLEES' TRUCKS WERE THEIR EMPLOYEES.  THE
SPECIFICITY WITH WHICH THE COMMON CARRIERS DIRECTED THE ROUTES TO BE
FOLLOWED IS IN SOME DOUBT, BUT THE DRIVERS WERE REQUESTED TO "SIGN IN"
AT CERTAIN REGISTRATION STATIONS EN ROUTE. 

THE GREATER PORTION OF THE TRAFFIC OF THE COMMON CARRIERS WHICH
APPELLEES SERVED WAS CARRIED IN THE CARRIERS' OWN VEHICLES.  APPELLEES'
EQUIPMENT WAS SECURED ON ORAL ARRANGEMENTS TO HANDLE OVERFLOW FREIGHT. 
THE FREIGHT SO HANDLED WAS ALWAYS SOLICITED BY THE COMMON CARRIER,
ACCUMULATED AT ITS TERMINAL, LOADED AND UNLOADED BY ITS EMPLOYEES, AND
MOVED FROM CONSIGNOR TO CONSIGNEE ON THAT CARRIER'S WAY BILLS.  THE
RECORD IS SILENT AS TO WHETHER APPELLEES' TRUCKS BORE THE NAME OF THE
COMMON CARRIER ON WHOSE BEHALF THEY WERE OPERATED. 

AFTER FEBRUARY 1936 APPELLEES CEASED HAULING FOR COMMON CARRIERS BY
MOTOR VEHICLE AND BEGAN HAULING FOR INDIVIDUAL SHIPPERS IN THEIR OWN
RIGHT. 

THE COMMISSION FOUND THAT APPELLEES' EQUIPMENT PRIOR TO FEBRUARY 1936
"WAS OPERATED SOLELY UNDER THE DIRECTION AND CONTROL OF THE COMMON
CARRIERS AND UNDER THE LATTER'S RESPONSIBILITY TO THE GENERAL PUBLIC
AND TO THE SHIPPERS" AND CONCLUDED THAT "AS TO SUCH OPERATIONS
APPLICANTS (APPELLEES) DO NOT QUALIFY AS CARRIERS BY MOTOR VEHICLE
WITHIN THE MEANING OF THE ACT AND ARE CONSEQUENTLY NOT ENTITLED TO A
CERTIFICATE OR A PERMIT UNDER THE 'GRANDFATHER' CLAUSE OF SECTION
206(A) OR 209(A) THEREOF."  FN4 

THE COURT BELOW SET ASIDE THE COMMISSION'S ORDER, CONCLUDING THAT
APPELLEES WERE IN "BONA FIDE OPERATION AS (A) CONTRACT (CARRIERS) IN
INTERSTATE COMMERCE ON JULY 1, 1935" AND "IN SO OPERATING ASSUMED
CONTROL, MANAGEMENT AND RESPONSIBILITY FOR THE HAULING OF CARGO" AND
THAT "THERE IS NO SUBSTANTIAL EVIDENCE IN THE RECORD TO SUPPORT THE
ORDER ENTERED."  FN5 

THE POINT OF DIVERGENCE BETWEEN THE COMMISSION AND THE COURT BELOW
SEEMS TO HAVE BEEN WHETHER THE EVIDENTIARY FACTS SUPPORTED THE
COMMISSION'S ULTIMATE CONCLUSION THAT APPELLEES OPERATED SOLELY UNDER
THE CONTROL OF THE COMMON CARRIERS.  BECAUSE OF OUR VIEWS AS TO THE
PROPER CONSTRUCTION OF THE ACT, WE NEED NOT DETERMINE WHETHER
SUBSTANTIAL EVIDENCE SUPPORTS THAT CONCLUSION OF THE COMMISSION.  IN
ANY EVENT THE EVIDENCE CLEARLY SHOWS THAT ON THE CRITICAL DATE, AND
FROM THEN UNTIL FEBRUARY 1936, APPELLEES HELPED THE COMMON CARRIERS
MOVE THEIR OVERFLOW FREIGHT AND, AS TO EACH JOB, WERE AN INTEGRAL PART
OF A SINGLE COMMON CARRIER SERVICE OFFERED TO THE PUBLIC BY THE COMMON
CARRIER FOR WHOM THEY HAULED. 

THE QUESTION HERE, AS IN ANY PROBLEM OF STATUTORY CONSTRUCTION, IS
THE INTENTION OF THE ENACTING BODY.  CONGRESS HAS SET THAT FORTH FOR US
BROADLY IN THE DECLARATION OF POLICY  FN6  - IN ESSENCE IT IS THE
REGULATION OF TRANSPORTATION BY MOTOR CARRIERS IN THE PUBLIC INTEREST
SO AS TO ACHIEVE ADEQUATE, EFFICIENT AND ECONOMICAL SERVICE.  TO
IMPLEMENT THAT POLICY CONGRESS FORBADE COMMON CARRIERS BY MOTOR VEHICLE
TO OPERATE IN INTERSTATE COMMERCE WITHOUT SECURING A CERTIFICATE OF
PUBLIC CONVENIENCE AND NECESSITY FROM THE COMMISSION,  FN7  AND
REQUIRED CONTRACT CARRIERS TO SECURE A PERMIT FROM THAT BODY.  FN8
THOSE CARRIERS ENGAGED IN EITHER OF SUCH OPERATIONS ON THE RESPECTIVE
CRITICAL DATES AND CONTINUOUSLY THEREAFTER WERE TO BE GIVEN THE
REQUISITE CERTIFICATE OR PERMIT AS OF RIGHT UNDER THE "GRANDFATHER"
PROVISOS OF SECS. 206(A) AND 209(A).  WE THINK IT CLEAR THAT CONGRESS
DID NOT INTEND TO GRANT MULTIPLE "GRANDFATHER" RIGHTS ON THE BASIS OF A
SINGLE TRANSPORTATION SERVICE.  PRESUMABLY THE COMMON CARRIERS WHICH
APPELLEES SERVED WERE ENTITLED TO COMMON CARRIER "GRANDFATHER" RIGHTS
OVER THE ENTIRE LINE.  IT WAS THE COMMON CARRIERS WHO OFFERED THE
COMPLETE TRANSPORTATION SERVICE TO THE GENERAL PUBLIC AND THE SHIPPER. 
TO HOLD THAT APPELLEES, WHO PERFORMED PART OF THAT COMPLETE
TRANSPORTATION SERVICE FOR THOSE COMMON CARRIERS UNDER AGREEMENTS WITH
THEM, ACQUIRED CONTRACT CARRIER "GRANDFATHER" RIGHTS OVER THE SAME LINE
ENTITLING THEM ALSO TO SERVE THE PUBLIC IS TO ASCRIBE TO CONGRESS AN
INTENT INCOMPATIBLE WITH ITS PURPOSE OF REGULATION.  THE RESULT WOULD
BE TO CREATE IN THIS CASE TWO SERVICES OFFERING TRANSPORTATION TO THE
PUBLIC WHEN THERE HAD BEEN ONLY ONE ON THE "GRANDFATHER" DATE, WITHOUT
ALLOWING THE COMMISSION TO DETERMINE IF THE ADDITIONAL SERVICE WAS IN
THE PUBLIC INTEREST.  AND, INSTANCES CAN READILY BE IMAGINED WHERE A
SINGLE COMMON CARRIER MIGHT UTILIZE THE SERVICES OF SEVERAL OPERATORS
SUCH AS APPELLEES.  AUTOMATICALLY TO GRANT CONTRACT CARRIER RIGHTS TO
SUCH OPERATORS MIGHT RESULT IN SUCH A WHOLESALE DISTRIBUTION OF PERMITS
AS WOULD DEFEAT THE VERY PURPOSE OF FEDERAL REGULATION. 

ALSO INDICATIVE OF THE CONGRESSIONAL INTENT NOT TO CONFER CONTRACT
CARRIER "GRANDFATHER" RIGHTS ON OPERATORS, SUCH AS APPELLEES, WHO, ON
THE CRITICAL DATE, WERE NOT SERVING THE PUBLIC DIRECTLY BUT WERE
INSTRUMENTS PERFORMING PART OF A COMMON CARRIER SERVICE, IS THE FACT
THAT THERE WOULD SEEM TO BE NO REASON TO APPLY TO THEM THE REGULATORY
PROVISIONS OF THE ACT GENERALLY APPLICABLE TO CONTRACT CARRIERS, SUCH
AS THE REQUIREMENT THAT THEY SHOULD SECURE A PERMIT ONLY AFTER A
SHOWING THAT THEIR OPERATIONS ARE "CONSISTENT WITH THE PUBLIC INTEREST"
(SEC. 209(B)), OR THAT THEY SHOULD FILE SCHEDULES OF THEIR MINIMUM
RATES (SEC. 218(A)), OR THAT THE COMMISSION SHOULD PRESCRIBE THE
MINIMUM RATES (SEC. 218(B)).  THE ACT CLEARLY CONTEMPLATES THAT
CONTRACT AND COMMON CARRIERS WILL OFFER COMPETING TYPES OF SERVICE, FOR
SEC. 210 PROHIBITS ANY PERSON FROM SIMULTANEOUSLY HOLDING A CERTIFICATE
AND A PERMIT FOR THE SAME ROUTE OR TERRITORY UNLESS THE COMMISSION
FINDS THAT SUCH IS IN THE PUBLIC INTEREST, AND SEC. 218(B) ENJOINS THE
COMMISSION, IN PRESCRIBING MINIMUM RATES FOR CONTRACT CARRIERS, TO
"GIVE NO ADVANTAGE OR PREFERENCE TO ANY SUCH CARRIER IN COMPETITION
WITH ANY COMMON CARRIER BY MOTOR VEHICLE SUBJECT TO THIS PART."  THE
DECLARATION OF POLICY IN SEC. 202(A) WHICH STRESSES THE AVOIDANCE OF
DESTRUCTIVE AND UNFAIR COMPETITION IS REFERRED TO IN THE SECTIONS
DEALING WITH CONTRACT CARRIERS.  FN9 

APPELLEES' CONTENTION THAT THEIR ACTIVITIES ON THE CRITICAL DATE FALL
WITHIN THE LITERAL LANGUAGE OF THE DEFINITION OF "CONTRACT CARRIER" IN
FORCE ON THE DATE OF THE ORDER  FN10  AND THAT THEY ARE THEREFORE
ENTITLED TO CONTRACT CARRIER "GRANDFATHER" RIGHTS IS WITHOUT MERIT.  A
HOLDING THAT THE ACTIVITIES OF APPELLEES PRIOR TO FEBRUARY 1936 WERE
THOSE OF CONTRACT CARRIERS WOULD NOT ACCORD WITH THE INTENT OF
CONGRESS.  WHERE THE PLAIN MEANING OF WORDS USED IN A STATUTE PRODUCES
AN UNREASONABLE RESULT, "PLAINLY AT VARIANCE WITH THE POLICY OF THE
LEGISLATION AS A WHOLE," WE MAY FOLLOW THE PURPOSE OF THE STATUTE
RATHER THAN THE LITERAL WORDS.  UNITED STATES V. AMERICAN TRUCKING
ASSOCIATIONS, 310 U.S. 534, 543, AND CASES CITED.  WE CONCLUDE THAT THE
COMMISSION RIGHTLY DETERMINED THAT APPELLEES WERE NOT CONTRACT CARRIERS
WITHIN THE MEANING OF THE ACT PRIOR TO FEBRUARY 1936. 

APPELLEES MAKE NO CONTENTION THAT THEY WERE COMMON CARRIERS DURING
THE PERIOD IN QUESTION, AND WE ARE CLEAR THAT THEY WERE NOT, FOR THE
CONGRESSIONAL INTENT TO AVOID MULTIPLE "GRANDFATHER" RIGHTS ON THE
BASIS OF A SINGLE TRANSPORTATION SERVICE IS EQUALLY APPLICABLE TO
PREVENT APPELLEES FROM BEING CONSIDERED EITHER AS CONTRACT OR AS COMMON
CARRIERS WITHIN THE MEANING OF THE ACT.  THE REASONABLENESS OF THIS
INTERPRETATION OF THE ACT IS APPARENT.  SINCE APPELLEES' OPERATIONS,
NAMELY, SERVING THE COMMON CARRIERS, ON THE CRITICAL DATE DID NOT MAKE
THEM "CARRIERS" WITHIN THE MEANING OF THE ACT, AND THUS SUBJECT TO
REGULATION UNDER IT, IT FOLLOWS THAT THEY ARE FREE TO ENGAGE IN SUCH
OPERATIONS WITHOUT SECURING THE AUTHORIZATION OF THE COMMISSION.  FN11
BUT THOSE OPERATIONS CANNOT BE THE BASIS FOR APPELLEES' AUTOMATICALLY
SECURING PERMITS TO SERVE THE PUBLIC IN THEIR OWN RIGHT, A SERVICE
WHICH THEY WERE NOT PERFORMING ON THE "GRANDFATHER" DATE. 

THE FACT THAT CARRIERS WITHIN THE MEANING OF THE ACT NEED NOT DEAL
DIRECTLY WITH THE PUBLIC BUT MAY ACT THROUGH BROKERS  FN12  IN NO WISE
AFFECTS OUR CONCLUSION.  AS WE HAVE SEEN, CONGRESS DID NOT INTEND TO
CONFER MULTIPLE "GRANDFATHER" RIGHTS ON THE BASIS OF A SINGLE
TRANSPORTATION SERVICE TO THE PUBLIC.  THAT DIFFICULTY ARISES ONLY WHEN
AN OPERATOR UNDERTAKES TO SERVE A CARRIER WHO IS SERVING THE PUBLIC. 
IT IS NOT PRESENT WHEN A CARRIER DEALS THROUGH A BROKER.  REVERSED. 

FN1  CONVENED PURSUANT TO THE URGENT DEFICIENCIES ACT OF 1913(38
STAT. 220, 28 U.S.C. SECS. 47 AND 47(A)) AND SEC. 205(H) OF THE MOTOR
CARRIER ACT OF 1935, REARRANGED BY THE TRANSPORTATION ACT OF 1940, 54
STAT. 899, AS SEC. 205(G) OF PART II OF THE INTERSTATE COMMERCE ACT. 

FN2  THE MOTOR CARRIER ACT OF 1935 IS NOW DESIGNATED AS PART II OF
THE INTERSTATE COMMERCE ACT.  54 STAT. 919. 

FN3  IN BOTH OF THESE CASES IT WAS THE APPELLEE'S PREDECESSOR IN
INTEREST WHO WAS OPERATING ON JULY 1, 1935.  THE PREDECESSOR OF
APPELLEE IN NO. 52 WAS ROSENBLUM THE INDIVIDUAL, AND THE PREDECESSOR OF
APPELLEE IN NO. 53 WAS AN INDIVIDUAL, BAULOS. 

FN4  24 M.C.C. 121, 125-126. 

FN5  36 F.SUPP.  467. 

FN6  SEC. 202(A), 49 U.S.C. SEC. 302(A). 

FN7 SEC. 206(A), 49 U.S.C. SEC. 306(A). 

FN8  SEC. 209(A), 49 U.S.C. SEC. 309(A). 

FN9  SEC. 209(B), 49 U.S.C. SEC. 309(B).  SEC. 218(B), 49 U.S.C. SEC.
318(B). 

THE COMMISSION HAS TAKEN THE POSITION THAT WHILE THERE MAY BE
DESTRUCTIVE OR UNFAIR COMPETITION WITH COMMON CARRIERS WHEN TRUCK
OPERATORS CONTRACT TO DO WORK IN CONNECTION WITH TRANSPORTATION FOR
COMMON CARRIERS WHICH SERVE SHIPPERS DIRECTLY, "IT IS NOT THE TRUCK
OPERATOR WHO CARRIES IT ON.  RATHER IT IS THE CARRIER FOR WHICH HE
WORKS,  ..  "   SCOTT BROS. INC., 4 M.C.C. 551, 559. 

FN10  SEC. 203(A)(15).  THE TERM "CONTRACT CARRIER BY MOTOR VEHICLE"
MEANS ANY PERSON, NOT INCLUDED UNDER PARAGRAPH (14) OF THIS SECTION,
WHO OR WHICH, UNDER SPECIAL AND INDIVIDUAL CONTRACTS OR AGREEMENTS, AND
WHETHER DIRECTLY OR BY A LEASE OR ANY OTHER ARRANGEMENT, TRANSPORTS
PASSENGERS OR PROPERTY IN INTERSTATE OR FOREIGN COMMERCE BY MOTOR
VEHICLE FOR COMPENSATION.  (THE TRANSPORTATION ACT OF 1940, 54 STAT.
899, AMENDED THIS DEFINITION.) 

FN11  THE COMMISSION HAS SO HELD.  DIXON, 21 M.C.C. 617; SMYTHE, 22
M.C.C. 726. 

FN12  SECTION 203(18), 49 U.S.C. SEC. 303(18), DEFINES "BROKER"
SUBSTANTIALLY AS ONE WHO SELLS OR OFFERS FOR SALE ANY TRANSPORTATION. 
LICENSED AND THAT THE CARRIERS THEY EMPLOY HAVE EITHER A CERTIFICATE OR
A PERMIT ISSUED UNDER THE ACT. 

MR. JUSTICE ROBERTS TOOK NO PART IN THE CONSIDERATION OR DECISION OF
THESE CASES. 



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