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Ziffrin, 318 U.S. 73 (1943)

American Government Special Collections Reference Desk

American Government Trucking

Ziffrin, 318 U.S. 73 (1943)
United States Supreme Court

From the U.S. Government Printing Office via GPO Access
 
Case:   ZIFFRIN

Case #: 318US73


NO. 245.  ARGUED DECEMBER 16, 1942.  - DECIDED FEBRUARY 1, 1943.  -
AFFIRMED. 


AT THE TIME OF THE FILING OF AN APPLICATION TO THE INTERSTATE COMMERCE
COMMISSION FOR A PERMIT UNDER THE "GRANDFATHER CLAUSE" OF SEC. 209(A)
OF THE INTERSTATE COMMERCE ACT TO CONTINUE DESIGNATED CONTRACT CARRIER
OPERATIONS, AND AT THE TIME OF THE HEARING BY THE COMMISSION ON THE
APPLICATION, SEC. 210 OF THE ACT PROVIDED THAT A CERTIFICATE AS A
COMMON CARRIER AND A PERMIT AS A CONTRACT CARRIER COULD NOT BE HELD BY
THE SAME CARRIER EXCEPT UPON A FINDING BY THE COMMISSION OF CONSISTENCY
WITH THE PUBLIC INTEREST.  PRIOR TO THE COMMISSION'S DECISION ON THE
APPLICATION, SEC. 210 WAS AMENDED TO PROVIDE THAT, WITHOUT A SIMILAR
FINDING, A CERTIFICATE AS A COMMON CARRIER AND A PERMIT AS A CONTRACT
CARRIER COULD NOT BE HELD BY CARRIERS WHICH ARE UNDER COMMON CONTROL. 
HELD: 

1.  THE COMMISSION WAS REQUIRED TO MAKE ITS DECISION ON THE
APPLICATION IN ACCORDANCE WITH THE ACT AS AMENDED.  P. 78. 

2.  THE CONTENTIONS THAT THE APPLICANT WAS NOT GIVEN PROPER NOTICE OF
THE HEARING, AND WAS DENIED AN OPPORTUNITY TO SHOW COMPLIANCE WITH THE
ACT AS AMENDED, ARE UNSUPPORTED.  P. 79. 

3.  THE COMMISSION'S ORDER DENYING THE APPLICATION ON THE GROUND THAT
THE APPLICANT WAS UNDER COMMON CONTROL WITH A CERTIFICATED COMMON
CARRIER, AND THAT THE APPLICATION COULD NOT BE GRANTED CONSISTENTLY
WITH THE PUBLIC INTEREST AND THE NATIONAL TRANSPORTATION POLICY, IS
SUPPORTED BY THE EVIDENCE.  P. 80. 

ZIFFRIN, INCORPORATED, V. UNITED STATES ET AL. 

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF INDIANA. 

APPEAL FROM A JUDGMENT OF A DISTRICT COURT OF THREE JUDGES REFUSING
TO SET ASIDE AN ORDER OF THE INTERSTATE COMMERCE COMMISSION. 

MR. JUSTICE REED DELIVERED THE OPINION OF THE COURT. 

THIS APPEAL BRINGS HERE FOR REVIEW A JUDGMENT OF A STATUTORY THREE
JUDGE COURT DENYING A PETITION FOR AN INTERLOCUTORY AND A FINAL
INJUNCTION SETTING ASIDE AND ANNULLING AN ORDER OF THE INTERSTATE
COMMERCE COMMISSION.  FN1  THE ORDER ATTACKED DENIED AN APPLICATION OF
APPELLANT, AN INDIANA CORPORATION, FILED FEBRUARY 4, 1936, FOR A PERMIT
TO CONTINUE DESIGNATED CONTRACT CARRIER OPERATIONS UNDER THE
GRANDFATHER CLAUSE OF SEC. 209(A) OF THE INTERSTATE COMMERCE ACT. 

THE DENIAL OF THE APPLICATION BY THE COMMISSION ON MAY 29, 1941, 28
M.C.C. 683, WAS ON THE GROUND THAT APPLICANT AND ZIFFRIN TRUCK LINES,
INC., A CERTIFICATED COMMON CARRIER BY MOTOR VEHICLE, WERE OWNED,
CONTROLLED AND MANAGED IN A COMMON INTEREST AND THAT UNDER SEC. 210 OF
THE INTERSTATE COMMERCE ACT, PART II, IT WOULD NOT BE CONSISTENT WITH
THE PUBLIC INTEREST AND THE NATIONAL TRANSPORTATION POLICY TO GRANT THE
APPLICATION. 

OF THE APPLICATION AND THE ENTRY OF THE ORDER DENYING IT.  THE TWO
FORMS OF SEC. 210 APPEAR IN THE NOTE BELOW.  FN2 

IT IS APPELLANT'S CONTENTION THAT WHATEVER MAY HAVE BEEN THE EFFECT
OF THE EARLIER FORM, WITH THE PASSAGE OF THE AMENDMENT AFTER THE
HEARING THE APPLICANT SHOULD NOW HAVE AN OPPORTUNITY TO SHOW THE
ABSENCE OF COMMON CONTROL OF IT AND ZIFFRIN TRUCK LINES, INCORPORATED. 
AS SEC. 210 STOOD WHEN APPELLANT REQUESTED ITS PERMIT AND AT THE
HEARING, A CERTIFICATE AS A COMMON CARRIER AND A PERMIT AS A CONTRACT
CARRIER WERE NOT TO BE HELD BY THE SAME PERSON WITHOUT SPECIAL FINDING
OF CONSISTENCY WITH THE PUBLIC INTEREST BY THE COMMISSION.  THE
AMENDMENT PROVIDED THAT WITHOUT A SIMILAR SPECIAL FINDING NO PERSON
SHOULD HOLD A CONTRACT CARRIER PERMIT WHO WAS UNDER COMMON CONTROL WITH
A PERSON HOLDING A COMMON CARRIER CERTIFICATE.  PERSON, OF COURSE,
INCLUDED A CORPORATION.  49 U.S.C. 303(A)(1). 

OBVIOUSLY THE FEAR OF POSSIBLE EVASION LED TO THE CHANGE IN
LANGUAGE.  INDEED, THE COMMISSION HAD DISREGARDED THE CORPORATE FICTION
AND INTERPRETED THE EARLIER FORM AS COVERING PERSONS UNDER COMMON
CONTROL.  FN3  THIS WAS CALLED TO APPLICANT'S ATTENTION BY AN ORDER OF
JUNE 23, 1938, SETTING THE DATE FOR HEARING THE APPLICATION.  FN4  THE
INTERPRETATION WAS DISCUSSED IN THE EXAMINER'S REPORT, IN THE
COMMISSION'S REPORT, AND APPLIED, ADVERSELY TO APPELLANT, BY THE
FINDINGS.  28 M.C.C. 683, 692-99. 

WHEN THE TRANSPORTATION ACT OF 1940 WAS BEFORE THE SENATE, THE
DRAFTSMEN ADDED A SENTENCE TO THE EARLIER FORM OF SEC. 210, READING AS
FOLLOWS:  "THIS SECTION SHALL APPLY TO DUAL OPERATIONS BY AFFILIATED
CARRIERS."  WHEN THE BILL, S. 2009, IN THE TWO FORMS IN WHICH IT WAS
ENACTED IN THE SENATE AND THE HOUSE OF REPRESENTATIVES, WAS EXAMINED BY
THE INTERSTATE COMMERCE COMMISSION, THE CHAIRMAN OF ITS LEGISLATIVE
COMMITTEE TRANSMITTED A REPORT ON THE PROVISIONS OF THE BILL TO THE
CHAIRMAN OF THE SENATE INTERSTATE COMMERCE COMMITTEE AND THE CHAIRMAN
OF THE HOUSE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE N5.  IN THE
REPORT (AT PAGE 62) THIS COMMENT WAS MADE AS TO THE PRESENT SEC. 210: 

"DESIRABLE.   - (A) AFTER THE NEW SECTION 22 WHICH WE HAVE PROPOSED
ABOVE, ADD A NEW SECTION 23(WITH APPROPRIATE RENUMBERING OF SUBSEQUENT

'SEC. 23.  SECTION 210 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, IS
AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING NEW SENTENCE:  "THIS

THIS SENTENCE HAS BEEN INTRODUCED AT THE END OF SECTION 45 OF THE
SENATE BILL, AND IT HAS OUR APPROVAL.  THE COMMISSION HAS CONSTRUED
TO REMOVE ALL DOUBT ON THE POINT." 

AT THE CONFERENCE OF THE COMMITTEE FOR THE TWO HOUSES OF CONGRESS,
THE FORM OF SEC. 210 WAS CHANGED TO THE PRESENT READING.  THE REPORT
CONTAINS THIS EXPLANATION:  FN6 

"SECTION 21(A).  DUAL OPERATIONS UNDER CERTIFICATES AND PERMITS,
MOTOR CARRIERS. 

"THE CONFERENCE SUBSTITUTE IN SECTION 21(A) AMENDS SECTION 210 OF THE
INTERSTATE COMMERCE ACT WHICH PROHIBITS A PERSON FROM HOLDING AT THE
SAME TIME BOTH A CERTIFICATE AS A COMMON CARRIER OF PROPERTY BY MOTOR
VEHICLE AND A PERMIT AS A CONTRACT CARRIER OF PROPERTY BY MOTOR VEHICLE
OVER THE SAME ROUTE OR WITHIN THE SAME TERRITORY, UNLESS FOR GOOD CAUSE
SHOWN THE COMMISSION SHALL FIND THAT BOTH FORMS OF OPERATING AUTHORITY
MAY BE HELD CONSISTENT WITH THE PUBLIC INTEREST AND WITH THE POLICY
DECLARED IN PART II, SO THAT THE SECTION WILL APPLY NOT ONLY TO A
PARTICULAR MOTOR CARRIER BUT ALSO TO ANY PERSON CONTROLLING, CONTROLLED
BY, OR UNDER COMMON CONTROL WITH, SUCH PERSON." 

IT IS UNNECESSARY, HOWEVER, TO DECIDE WHETHER THE COMMISSION
CORRECTLY APPLIED SEC. 210 AS ORIGINALLY ENACTED TO SUCH COMMON CONTROL
AS THE COMMISSION FOUND IN APPELLANT AND ZIFFRIN TRUCK LINES, INC. WE
ARE CONVINCED THAT THE COMMISSION WAS REQUIRED TO ACT UNDER THE LAW AS
IT EXISTED WHEN ITS ORDER OF MAY 29, 1941, WAS ENTERED.  THE PERMIT WAS
EFFECTIVE FOR THE FUTURE AND THE AMENDMENT FORBADE PERSONS UNDER COMMON
CONTROL HOLDING BOTH A PERMIT AND A CERTIFICATE.  PREVIOUSLY APPELLANT
HAD BEEN OPERATING UNDER AN EX PARTE PERMIT.  PROTESTS TO THE GRANT HAD
BEEN MADE ON ACCOUNT OF THE DUAL OPERATION, THE FORMAL HEARING WAS HELD
AND THE QUESTION RAISED BY THESE PROTESTS WAS HEARD AT LENGTH.  A
CHANGE IN THE LAW BETWEEN A NISI PRIUS AND AN APPELLATE DECISION
REQUIRES THE APPELLATE COURT TO APPLY THE CHANGED LAW.  VANDENBARK V.
OWENS-ILLINOIS GLASS CO., 311 U.S. 538, AND CASES CITED.  CF. DUPLEX
PRINTING PRESS CO. V. DEERING, 254 U.S. 443, 464.  A FORTIORI, A CHANGE
OF LAW PENDING AN ADMINISTRATIVE HEARING MUST BE FOLLOWED IN RELATION
TO PERMITS FOR FUTURE ACTS.  OTHERWISE THE ADMINISTRATIVE BODY WOULD
ISSUE ORDERS CONTRARY TO THE EXISTING LEGISLATION. 

WE FIND NO BASIS FOR APPELLANT'S CONTENTION THAT IT WAS GIVEN
IMPROPER NOTICE OF THE HEARING AND DENIED AN OPPORTUNITY TO SHOW
COMPLIANCE WITH THE AMENDED SECTION.  THE STEPS OF NOTICE AND HEARING
DETAILED ABOVE DEMONSTRATE THE ERROR OF THE FORMER CONTENTION.  AS TO
THE LATTER, IT IS MET COMPLETELY BY THE REPORT AND ORDER OF THE
COMMISSION, MADE WHILE THIS SUIT WAS PENDING IN THE DISTRICT COURT, AND
DENYING APPELLANT'S MOTION FOR RECONSIDERATION OF THE ORDER OF MAY 29,
1941.  ZIFFRIN, INCORPORATED, CONTRACT CARRIER APPLICATION, 33 M.C.C.
155.  THIS OPINION WAS CALLED TO OUR ATTENTION BY THE GOVERNMENT IN
BRIEF AND ARGUMENT.  IN THE CIRCUMSTANCES, WE WILL NOT DISREGARD IT.
THE COMMISSION THERE SAID, P. 156: 

"AT THE CONCLUSION OF THE TRIAL ON APPLICANT'S SUIT BEFORE THE THREE
JUDGE COURT, A CONFERENCE WAS HELD BETWEEN THE COUNSEL FOR ALL THE
PARTIES TO THE SUIT IN THE COURT'S CHAMBERS.  IT WAS THERE SUGGESTED BY
THE COURT THAT APPLICANT SUBMIT TO THIS COMMISSION SOME METHOD FOR
DIVORCING APPLICANT HEREIN FROM ZIFFRIN TRUCK LINES, INC., WHICH MIGHT
ELIMINATE THE CONFLICT WITH SECTION 210 OF THE ACT ON WHICH THE DENIAL
OF THE APPLICATION WAS GROUNDED.  PURSUANT TO THIS SUGGESTION,
APPLICANT HAS FILED A PETITION SEEKING REOPENING AND RECONSIDERATION OF
THE PROCEEDING, AND, AS A BASIS THEREFOR, PROPOSES A PLAN FOR
ELIMINATION OF THE COMMON CONTROL OF APPLICANT AND ZIFFRIN TRUCK LINES,
INC. THE PETITION IS OPPOSED BY AN ASSOCIATION OF MOTOR COMMON
CARRIERS.  IT IS UNDERSTOOD THAT THE FILING OF THIS PETITION AND ACTION
BY US THEREON DOES NOT TERMINATE THE COURT PROCEEDING.  PENDING OUR
ACTION ON THE PETITION, HOWEVER, THE ENTRY OF JUDGMENT BY THE COURT IS
BEING HELD IN ABEYANCE.  IN VIEW OF THE PENDENCY OF THE LITIGATION, WE
BELIEVE THAT A STATEMENT OF THE REASONS FOR OUR ACTION WITH RESPECT TO
THIS PETITION WILL BE HELPFUL."  THE COMMISSION THEN RESTATED THE
EVIDENCE SHOWING COMMON CONTROL OF THE TWO CORPORATIONS AND CONCLUDED
THAT THE PLAN PROPOSED WOULD NOT CHANGE THE SITUATION.  SEE 33 M.C.C.
155; 28 M.C.C. 683, 692 ET SEQ. THE EVIDENCE IS AMPLE TO SUPPORT THE
CONCLUSION OF THE COMMISSION ENTERED AT THE EARLIER HEARING.  THIS IS
SUFFICIENT TO SUPPORT THE ORDER UPON JUDICIAL REVIEW.  SHIELDS V. UTAH
IDAHO CENTRAL R. CO., 305 U.S. 177, 185; UNITED STATES V. MAHER, 307
U.S. 148, 155.  AFFIRMED. 

FN1  URGENT DEFICIENCIES ACT, 38 STAT. 208, 220, 28 U.S.C. SECS. 47,
47(A); JUDICIAL CODE SEC. 238, 43 STAT. 936, 938, 28 U.S.C. SEC. 345;
SEC. 205(H) INTERSTATE COMMERCE ACT, PART II; 49 STAT. 543, 550, 49
U.S.C. SEC. 305(H). 

FN2  SECTION 210(49 STAT. 554), AS ORIGINALLY ENACTED IN THE MOTOR
CARRIER ACT, 1935, PROVIDED: 

"NO PERSON, AFTER JANUARY 1, 1936, SHALL AT THE SAME TIME HOLD UNDER
THIS PART A CERTIFICATE AS A COMMON CARRIER AND A PERMIT AS A CONTRACT
CARRIER AUTHORIZING OPERATION FOR THE TRANSPORTATION OF PROPERTY BY
MOTOR VEHICLE OVER THE SAME ROUTE OR WITHIN THE SAME TERRITORY, UNLESS
FOR GOOD CAUSE SHOWN THE COMMISSION SHALL FIND THAT SUCH CERTIFICATE
AND PERMIT MAY BE HELD CONSISTENTLY WITH THE PUBLIC INTEREST AND WITH
THE POLICY DECLARED IN SECTION 202(A) OF THIS PART." 

TRANSPORTATION ACT OF 1940 PROVIDES: 

"UNLESS, FOR GOOD CAUSE SHOWN, THE COMMISSION SHALL FIND, OR SHALL
HAVE FOUND, THAT BOTH A CERTIFICATE AND A PERMIT MAY BE SO HELD
CONSISTENTLY WITH THE PUBLIC INTEREST AND WITH THE NATIONAL
TRANSPORTATION POLICY DECLARED IN THIS ACT - 

"(1)  NO PERSON, OR ANY PERSON CONTROLLING, CONTROLLED BY, OR UNDER
COMMON CONTROL WITH SUCH PERSON, SHALL HOLD A CERTIFICATE AS A COMMON
CARRIER AUTHORIZING OPERATION FOR THE TRANSPORTATION OF PROPERTY BY
MOTOR VEHICLE OVER A ROUTE OR WITHIN A TERRITORY, IF SUCH PERSON, OR
ANY SUCH CONTROLLING PERSON, CONTROLLED PERSON, OR PERSON UNDER COMMON
CONTROL, HOLDS A PERMIT AS A CONTRACT CARRIER AUTHORIZING OPERATION FOR
THE TRANSPORTATION OF PROPERTY BY MOTOR VEHICLE OVER THE SAME ROUTE OR
WITHIN THE SAME TERRITORY; AND 

"(2)  NO PERSON, OR ANY PERSON CONTROLLING, CONTROLLED BY, OR UNDER
COMMON CONTROL WITH SUCH PERSON, SHALL HOLD A PERMIT AS A CONTRACT
CARRIER AUTHORIZING OPERATION FOR THE TRANSPORTATION OF PROPERTY BY
MOTOR VEHICLE OVER A ROUTE OR WITHIN A TERRITORY, IF SUCH PERSON, OR
ANY SUCH CONTROLLING PERSON, CONTROLLED PERSON, OR PERSON UNDER COMMON
CONTROL, HOLDS A CERTIFICATE AS A COMMON CARRIER AUTHORIZING OPERATION
FOR THE TRANSPORTATION OF PROPERTY BY MOTOR VEHICLE OVER THE SAME ROUTE
OR WITHIN THE SAME TERRITORY." 

FN3  IN RE NEW YORK & NEW BRUNSWICK AUTO EXP.  CO., INC., COMMON
CARRIER APPLICATION, 23 M.C.C. 663, 671.  CF. IN RE BIGLEY BROTHERS,
INC., CONTRACT CARRIER APPLICATION, 4 M.C.C. 711; UNIVERSAL SERVICE,
INC.,  - PURCHASE - W.R. ARTHUR & CO., INC., 15 M.C.C. 247. 

FN4  THE ORDER READ IN PART AS FOLLOWS: 

"NOTICE IS HEREBY GIVEN THAT ALTHOUGH APPLICATION HEREIN IS FOR A
CERTIFICATE OR PERMIT ON FORM BMC 1, THE APPLICANT MUST ESTABLISH ALSO
THE CORPORATE RELATIONSHIP EXISTING BETWEEN THE APPLICANT HEREIN
MENTIONED AND THE ZIFFRIN TRUCK LINES, INC., (NO. MC 2510) AND IF SAID
APPLICANT AND THE ZIFFRIN TRUCK LINES, INC., ARE FOUND TO BE AFFILIATED
WITHIN THE MEANING OF SECTION 5(6) OF PART I, APPLICANT MUST ALSO
ESTABLISH THAT A PERMIT MAY BE HELD BY APPLICANT CONSISTENTLY WITH THE
PUBLIC INTEREST AND WITH THE POLICY DECLARED IN SECTION 202(A) OF THE
MOTOR CARRIER ACT, 1935, WITHIN THE MEANING AND CONTEMPLATION OF

FN5  OMNIBUS TRANSPORTATION LEGISLATION, HOUSE COMMITTEE PRINT, 76TH
CONG., 2D SESS. 

FN6  H. REP. NO. 2832, 76TH CONG., 3D SESS., P. 78. 



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