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American Trucking Associations, 355 U.S. 141 (1957)

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American Trucking Associations, 355 U.S. 141 (1957)
United States Supreme Court

From the U.S. Government Printing Office via GPO Access
 
Case:   AMERICAN TRUCKING ASSOCIATIONS

Case #: 355US141


NO. 6.  ARGUED OCTOBER 23, 1957 - DECIDED DECEMBER 9, 1957* - 144 F.
SUPP. 365, AFFIRMED. 

*TOGETHER WITH NO. 8, RAILWAY LABOR EXECUTIVES' ASSOCIATION ET AL. V.
UNITED STATES ET AL., ALSO ON APPEAL FROM THE SAME COURT. 


1.  IN THIS PROCEEDING UNDER SEC. 207(A) OF THE INTERSTATE COMMERCE
ACT, WHEREIN A MOTOR CARRIER SUBSIDIARY OF A RAILROAD SOUGHT A
CERTIFICATE PERMITTING IT TO PROVIDE ORDINARY MOTOR CARRIER SERVICE AT
OR NEAR THE PARENT RAILROAD'S LINE, THE INTERSTATE COMMERCE COMMISSION
WAS NOT REQUIRED BY SEC. 5(2)(B) AND THE NATIONAL TRANSPORTATION POLICY
TO RESTRICT SUCH MOTOR CARRIER SERVICE TO THAT WHICH IS AUXILIARY TO,
OR SUPPLEMENTAL OF, THE PARENT RAILROAD'S SERVICES.  PP. 143-144, 147
152. 

(A)  SECTION 207 MAKES NO REFERENCE TO THE PHRASE "SERVICE  ..  INN
ITS OPERATIONS" USED IN SEC. 5(2)(B), NOR IS THERE ANY LANGUAGE EVEN
SUGGESTING A MANDATORY LIMITATION TO SERVICE WHICH IS AUXILIARY OR
SUPPLEMENTARY.  P. 149. 

(B)  THE LEGISLATIVE HISTORY OF THE MOTOR CARRIER ACT OF 1935 GIVES
NO INDICATION THAT SEC. 213(A)(1), THE PREDECESSOR OF SEC. 5(2)(B) OF
THE PRESENT ACT, WAS TO BE CONSIDERED AS A LIMITATION ON APPLICATIONS
UNDER SEC. 207.  P. 149. 

(C)  IN INTERPRETING SEC. 207, THE COMMISSION HAS ACCEPTED THE POLICY
OF SEC. 5(2)(B) AS A GUIDING LIGHT, NOT AS A RIGID LIMITATION.  PP. 149
150. 

(D)  CONGRESS DID NOT INTEND THE RIGID REQUIREMENT OF SEC. 5(2)(B) TO
BE CONSIDERED AS A LIMITATION ON CERTIFICATES ISSUED UNDER SEC. 207. 
P. 150. 

(E)  THIS HOLDING IS NOT CONTRARY TO UNITED STATES V. ROCK ISLAND
MOTOR TRANSIT CO., 340 U.S. 419, OR UNITED STATES V. TEXAS & PACIFIC
MOTOR TRANSPORT CO., 340 U.S. 450.  P. 151. 

(F)  THE UNDERLYING POLICY OF SEC. 5(2)(B) MUST NOT BE DIVORCED FROM
PROCEEDINGS FOR NEW CERTIFICATES UNDER SEC. 207, AND THE COMMISSION
MUST TAKE "COGNIZANCE" OF THE NATIONAL TRANSPORTATION POLICY AND APPLY
THE ACT "AS A WHOLE"; BUT THE COMMISSION DOES NOT ACT BEYOND ITS
STATUTORY AUTHORITY WHEN IN THE PUBLIC INTEREST IT OCCASIONALLY DEPARTS
FROM THE AUXILIARY AND SUPPLEMENTARY LIMITATIONS IN A SEC. 207
PROCEEDING.  PP. 151-152. 

2.  IN THIS CASE, THE COMMISSION HAS NOT PERMITTED THE SEC. 207
PROCEEDINGS TO BE USED AS A DEVICE TO EVADE THE RESTRICTIONS PREVIOUSLY
IMPOSED IN THE ACQUISITION PROCEEDINGS UNDER SEC. 5(2)(B).  P. 152. 

3.  IN THIS CASE, THE EVIDENCE WAS SUFFICIENT TO SUPPORT THE
COMMISSION'S FINDING OF PUBLIC CONVENIENCE AND NECESSITY AND ITS
ISSUANCE OF THE CERTIFICATE.  PP. 152-154. 

(A)  PUBLIC NEED FOR THE MOTOR CARRIER'S OPERATION IN TRUCKLOAD
TRAFFIC IN THIS CASE CAN BE GROUNDED TO SOME EXTENT ON THE NEED FOR ITS
OPERATION IN "PEDDLE TRAFFIC," SINCE ECONOMIC JUSTIFICATION FOR
CARRYING ON A COSTLY PEDDLE OPERATION DEPENDS ON COMBINING IT WITH A
MORE LUCRATIVE TRUCKLOAD OPERATION.  PP. 153-154. 

(B)  WHILE RAILROADS ARE NOT ALLOWED TO ENTER THE MOTOR TRUCKING
INDUSTRY PRIMARILY TO BUILD AN INDEPENDENTLY PROFITABLE TRUCKING
OPERATION, THERE IS NO FOUNDATION IN THE ACT FOR SO CONSTRUING SEC. 207
AS TO REQUIRE THAT ANY RAILROAD OPERATION IN THE MOTOR TRUCKING FIELD
BE UNPROFITABLE.  P. 154. 

(C)  IF THE UNRESTRICTED OPERATIONS PERMITTED IN THIS CASE ARE
DESTRUCTIVE OF COMPETITION OR OTHERWISE DETRIMENTAL TO THE PUBLIC
SERVICE, THE SITUATION WOULD NOT BE WITHOUT REMEDY, SINCE THE
COMMISSION HAS RESERVED CONTINUING JURISDICTION WHICH WILL ENABLE IT TO
MAKE CERTAIN THAT THE UNLIMITED CERTIFICATE ISSUED HERE DOES NOT
OPERATE TO DEFEAT THE NATIONAL TRANSPORTATION POLICY.  P. 154. 

4.  IN THIS CASE, RAILWAY LABOR ORGANIZATIONS REPRESENTING EMPLOYEES
OF THE PARENT RAILROAD HAD STANDING UNDER SECS. 17(11) AND 205(H) OF
THE ACT TO SUE TO SET ASIDE THE COMMISSION'S ORDER.  P. 144. 

AMERICAN TRUCKING ASSOCIATIONS, INC., ET AL. V. UNITED STATES ET AL. 

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
COLUMBIA. 

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT. 

THESE APPEALS INVOLVE, AMONG SUBSIDIARY ISSUES, THE BASIC QUESTION OF
WHETHER THE INTERSTATE COMMERCE COMMISSION IN A PROCEEDING UNDER SEC.
207(A) (FN1) OF THE INTERSTATE COMMERCE ACT, WHEREIN A RAILROAD
SUBSIDIARY SEEKS A CERTIFICATE PERMITTING IT TO PROVIDE ORDINARY MOTOR
CARRIER SERVICE AT OR NEAR THE PARENT RAILROAD'S LINE, IS REQUIRED BY
SEC. 5(2)(B) (FN2) OF THE ACT AND THE NATIONAL TRANSPORTATION POLICY TO
RESTRICT SUCH MOTOR CARRIER SERVICE TO THAT WHICH IS AUXILIARY TO, OR
SUPPLEMENTAL OF, THE PARENT RAILROAD'S SERVICES.  A THREE-JUDGE
DISTRICT COURT SITTING IN THE DISTRICT OF COLUMBIA UPHELD THE ACTION OF
THE COMMISSION IN ISSUING A CERTIFICATE WITHOUT SUCH RESTRICTIONS.  144
F. SUPP. 365.  WE AGREE WITH THE CONCLUSION OF THE DISTRICT COURT THAT
UNDER THE CIRCUMSTANCES OF THIS CASE THE ACTION OF THE COMMISSION WAS
WELL FOUNDED. 

AT THE TIME WE NOTED PROBABLE JURISDICTION OF THE APPEALS, 352 U.S.
816 (1956), COUNSEL IN NO. 8 WERE INVITED TO DISCUSS THE ISSUE OF
APPELLANTS' STANDING TO SUE.  NONE OF THE PARTIES NOW QUESTION THAT
STANDING, AND OUR EXAMINATION OF SEC. 17(11) (FN3) AND SEC. 205(H)
(FN4) OF THE ACT LEADS US TO CONCLUDE THAT APPELLANTS MAY PROPERLY
BRING THIS ACTION.  SEE BROTHERHOOD OF RAILROAD TRAINMEN V. BALTIMORE &
O.R. CO., 331 U.S. 519 (1947). 

IN 1938 THE COMMISSION AUTHORIZED ROCK ISLAND MOTOR TRANSIT, A WHOLLY
OWNED SUBSIDIARY OF THE CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD, TO
PURCHASE THE PROPERTY AND OPERATING RIGHTS OF THE WHITE LINE MOTOR
FREIGHT COMPANY, BETWEEN SILVIS, ILLINOIS, AND OMAHA, NEBRASKA.  5
M.C.C. 451.  THE OPERATING CERTIFICATE, ISSUED IN 1941, RESTRICTED
MOTOR TRANSIT TO SERVICE TO OR FROM POINTS ON THE ROCK ISLAND RAILROAD,
SUBJECT TO ANY FURTHER RESTRICTIONS THE COMMISSION MIGHT IMPOSE "TO
INSURE THAT THE SERVICE SHALL BE AUXILIARY OR SUPPLEMENTARY TO THE
TRAIN SERVICE  ..  .""  NO. MC-29130.  THREE YEARS LATER THE COMMISSION
ALLOWED MOTOR TRANSIT TO PURCHASE PROPERTY AND OPERATING RIGHTS OF THE
FREDERICKSON LINES, COVERING ROUTES BETWEEN ATLANTIC, IOWA, AND OMAHA. 
39 M.C.C. 824.  PRIOR TO ISSUING AN OPERATING CERTIFICATE FOR THE
FREDERICKSON ROUTES, HOWEVER, THE COMMISSION REOPENED BOTH PROCEEDINGS
AND IMPOSED FIVE CONDITIONS ON MOTOR TRANSIT'S OPERATION OVER THE
COMBINED ROUTES.  (FN5) 

ALTHOUGH MOTOR TRANSIT SUCCEEDED IN ITS EFFORTS TO HAVE THIS ORDER
SET ASIDE BY A THREE-JUDGE DISTRICT COURT, 90 F. SUPP. 516, WE UPHELD
ON APPEAL THE POWER OF THE COMMISSION TO IMPOSE THE CONDITIONS, AND
REVERSED THE ORDER OF THE DISTRICT COURT.  UNITED STATES V. ROCK ISLAND
MOTOR TRANSIT CO., 340 U.S. 419 (1951).  PURSUANT TO OUR HOLDING, A
CERTIFICATE WAS ISSUED IN SEPTEMBER 1951, CONTAINING THE RESTRICTIONS
AS ORIGINALLY ORDERED.  (FN6) 

SOON THEREAFTER MOTOR TRANSIT FILED WITH THE COMMISSION THE PRESENT
APPLICATION FOR A CERTIFICATION OF UNRESTRICTED OPERATIONS.  AUTHORITY
WAS REQUESTED TO SERVE THE POINTS ALONG THE WHITE LINE AND FREDERICKSON
ROUTES AS WELL AS CERTAIN OFF-LINE POINTS, ALL OF WHICH PARALLEL
GENERALLY THE LINES OF THE PARENT RAILROAD BETWEEN CHICAGO AND OMAHA. 
THE APPLICATION WAS SUBSTANTIALLY GRANTED IN NOVEMBER 1954.  (FN7)  63
M.C.C. 91.  OPERATIONS WERE AUTHORIZED, FREE OF THE PRIOR CONDITIONS,
BETWEEN SILVIS, ILLINOIS, AND OMAHA.  THE APPLICATION WAS DENIED
INSOFAR AS IT SOUGHT AUTHORITY BETWEEN SILVIS AND CHICAGO; THE
COMMISSION POINTED OUT THAT MOTOR TRANSIT ALREADY POSSESSED SUCH
AUTHORITY. 

THE ORDER WAS ATTACKED IN THE DISTRICT COURT BY AMERICAN TRUCKING
ASSOCIATIONS, INC., ITS REGULAR COMMON CARRIER CONFERENCE, AND NINE
MOTOR CARRIERS - ALL APPELLANTS IN NO. 6.  THE RAILWAY LABOR
EXECUTIVES' ASSOCIATION AND TWO ORGANIZATIONS WHICH SINCE HAVE BECOME
MEMBERS THEREOF - ALL OF WHOM ARE APPELLANTS IN NO. 8 - INTERVENED IN
OPPOSITION TO THE ORDER.  ANSWERS WERE FILED BY THE UNITED STATES AND
THE COMMISSION.  INTERVENORS IN SUPPORT OF THE ORDER INCLUDED MOTOR
TRANSIT, A COMMITTEE OF ITS EMPLOYEES, THE IOWA STATE COMMERCE
COMMISSION, AND NUMEROUS CHAMBERS OF COMMERCE AND SHIPPER
ORGANIZATIONS.  THESE APPEALS WERE TAKEN FROM THE ORDER OF THE DISTRICT
COURT UPHOLDING THE CERTIFICATE AS GRANTED. 

APPELLANTS ADVANCE THREE REASONS WHY THE ORDER SHOULD BE STRICKEN. 
THEY SAY, IN GENERAL, THAT THE COMMISSION IS REQUIRED NOT ONLY IN
ACQUISITION PROCEEDINGS UNDER SEC. 5(2)(B) BUT ALSO IN CERTIFICATION
PROCEEDINGS UNDER SEC. 207 TO LIMIT SERVICE BY A RAIL-OWNED MOTOR
CARRIER TO THAT WHICH IS AUXILIARY TO OR SUPPLEMENTAL OF THE RAIL
SERVICE OF ITS PARENT; THAT THE COMMISSION IS WITHOUT POWER TO VOID
RESTRICTIONS PREVIOUSLY IMPOSED IN ACQUISITION PROCEEDINGS ON THE
SUBTERFUGE OF A SUBSEQUENT SEC. 207 APPLICATION; AND, EVEN IF SUCH
CONTENTIONS HAVE NO VALIDITY, THAT THE EVIDENCE WAS INSUFFICIENT AND
THE FINDINGS INADEQUATE TO SUPPORT THE CERTIFICATION ORDER OF THE
COMMISSION. 

                                        I. 

BY SEC. 5(2)(B), WHICH WAS FORMERLY SEC. 213(A)(1) OF THE MOTOR
CARRIER ACT OF 1935, 49 STAT. 555, THE CONGRESS AUTHORIZED
CONSOLIDATION, MERGER, ACQUISITION, OR LEASE OF CARRIERS IF FOUND BY
THE COMMISSION TO BE "CONSISTENT WITH THE PUBLIC INTEREST."  HOWEVER,
IN TRANSACTIONS INVOLVING A MOTOR CARRIER WHERE A RAILROAD OR ITS
AFFILIATE IS AN APPLICANT, THE CONGRESS DIRECTED THE COMMISSION "NOT TO
ENTER SUCH AN ORDER UNLESS IT FINDS THAT THE TRANSACTION PROPOSED" NOT
ONLY IS IN THE PUBLIC INTEREST BUT "WILL ENABLE SUCH RAILROAD CARRIER
TO USE SERVICE BY MOTOR VEHICLE TO PUBLIC ADVANTAGE IN ITS OPERATIONS
AND WILL NOT UNDULY RESTRAIN COMPETITION."  THE COMMISSION HAS
INTERPRETED THIS MANDATE OF THE CONGRESS TO CONFINE ACQUISITION OF A
MOTOR CARRIER BY A RAILROAD OR ITS AFFILIATE TO "OPERATIONS  ..  WHHICH
ARE AUXILIARY OR SUPPLEMENTARY TO TRAIN SERVICE."  (FN8)  WE
SPECIFICALLY APPROVED THIS LONG ADMINISTRATIVE PRACTICE IN UNITED
STATES V. ROCK ISLAND MOTOR TRANSIT CO., SUPRA.  IT WILL BE REMEMBERED
THAT THE ACQUISITIONS OF THE WHITE LINE AND FREDERICKSON ROUTES BY
MOTOR TRANSIT, WHEREIN "AUXILIARY OR SUPPLEMENTAL" RESTRICTIONS WERE
IMPOSED, WERE PURSUANT TO THIS SECTION OF THE ACT. 

THE PRESENT PROCEEDINGS, HOWEVER, WERE INSTITUTED UNDER SEC. 206 ET
SEQ. OF THE ACT, WHICH INVOLVE APPLICATIONS FOR CERTIFICATES OF PUBLIC
CONVENIENCE AND NECESSITY.  MOTOR TRANSIT HAD BEEN CARRYING ON
SCHEDULED PEDDLE OPERATIONS OVER THE ENTIRE WHITE LINE AND FREDERICKSON
ROUTES REGARDLESS OF THE VOLUME OF TRAFFIC AVAILABLE.  BY THIS
APPLICATION IT SOUGHT TO SECURE A CERTIFICATE COVERING THE SAME GENERAL
ROUTES WITHOUT THE RESTRICTIONS IMPOSED IN THE SEC. 5(2)(B)
PROCEEDINGS.  SUCH A CERTIFICATE WOULD ENABLE IT TO HAUL, INTER ALIA,
THE MORE PROFITABLE TRUCKLOAD TRAFFIC, THUS SUPPLEMENTING THE EXPENSIVE
PEDDLE SERVICE.  (FN9) 

CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY IS PREDICATED, MAKES NO
REFERENCE TO THE PHRASE "SERVICE  ..  INN ITS OPERATIONS" USED IN SEC.
5(2)(B), NOR IS THERE ANY LANGUAGE EVEN SUGGESTING A MANDATORY
LIMITATION TO SERVICE WHICH IS AUXILIARY OR SUPPLEMENTARY. 

THE LEGISLATIVE HISTORY OF THE MOTOR CARRIER ACT OF 1935 GIVES NO
INDICATION THAT SEC. 213(A)(1), THE PREDECESSOR OF SEC. 5(2)(B), WAS TO
BE CONSIDERED A LIMITATION ON APPLICATIONS UNDER SEC. 207. 
CONGRESSIONAL DEBATE WAS LARGELY CONFINED TO THE SUBJECT OF
ACQUISITIONS, AND NO REFERENCE TO RAILROAD OPERATION OF MOTOR CARRIERS
APPEARS IN EITHER OF THE COMMITTEE REPORTS.  S. REP. NO. 482, H.R. REP.
NO. 1645, 74TH CONG., 1ST SESS.  CERTAIN AMENDMENTS WERE PROPOSED IN
1938, INCLUDING ONE BY SENATOR SHIPSTEAD WHICH WOULD HAVE ADDED TO SEC.
207 THE SAME LANGUAGE WHICH IN SEC. 213(A) OF THE MOTOR CARRIER ACT AND
SEC. 5(2)(B) OF THE INTERSTATE COMMERCE ACT HAD BEEN CONSTRUED AS A
LIMITATION TO AUXILIARY OR SUPPLEMENTARY SERVICE.  THE SENATOR WITHDREW
HIS AMENDMENT AFTER COMMISSIONER EASTMAN OF THE INTERSTATE COMMERCE
COMMISSION EXPRESSED THE VIEW THAT "IN INTERPRETING AND APPLYING THE
PROVISIONS OF SECTION 207(A) ..  THHE COMMISSION SHOULD READ THE ACT AS
A WHOLE AND TAKE COGNIZANCE OF THIS POLICY" OF RESTRICTING CERTIFICATES
TO AUXILIARY OR SUPPLEMENTARY SERVICE.  SEE HEARINGS BEFORE SENATE
COMMITTEE ON INTERSTATE COMMERCE ON S. 3606, 75TH CONG., 3D SESS., PP.
26-30, 141-142. 

IN INTERPRETING SEC. 207, THE COMMISSION HAS ACCEPTED THE POLICY OF
SEC. 5(2)(B) AS A GUIDING LIGHT, NOT AS A RIGID LIMITATION.  WHILE IT
HAS APPLIED AUXILIARY AND SUPPLEMENTARY RESTRICTIONS IN MANY SEC. 207
PROCEEDINGS, THE COMMISSION HAS OCCASIONALLY ISSUED CERTIFICATES TO
RAILROAD SUBSIDIARIES WITHOUT THE RESTRICTIONS WHERE "SPECAL
CIRCUMSTANCES" PREVAIL, NAMELY, WHERE UNRESTRICTED OPERATIONS BY THE
RAIL-OWNED CARRIER ARE FOUND ON SPECIFIC FACTS AND CIRCUMSTANCES TO BE
IN THE PUBLIC INTEREST.  (FN10)  AT LEAST THREE OF THESE CASES HAD BEEN
DECIDED WHEN THE CONGRESS EXTENSIVELY REVISED THE INTERSTATE COMMERCE
ACT BY ENACTMENT OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, IN
WHICH SEC. 213 OF THE MOTOR CARRIER ACT WAS SUBSTANTIALLY RE-ENACTED
INTO SEC. 5(2)(B) OF THE INTERSTATE COMMERCE ACT, WHILE SEC.  207(A)
WAS LEFT UNCHANGED. 

WE CONCLUDE, THEREFORE, THAT THE CONGRESS DID NOT INTEND THE RIGID
REQUIREMENT OF SEC.  5(2)(B) TO BE CONSIDERED AS A LIMITATION ON
CERTIFICATES ISSUED UNDER SEC. 207. 

NOR IS THIS CONTRARY TO OUR HOLDING IN UNITED STATES V. ROCK ISLAND
MOTOR TRANSIT CO., SUPRA, AN ACQUISITION CASE IN WHICH THE COURT ALSO
DISCUSSED COMMISSION POLICY UNDER SEC. 207.  WE POINTED OUT THAT "RAIL
AFFILIATES HAVE BEEN PERMITTED TO LEAVE THE LINE OF THE RAILROAD TO
SERVE COMMUNITIES WITHOUT OTHER TRANSPORTATION SERVICE.  THOSE
DIVERGENCES, HOWEVER, ARE AN EXERCISE OF THE DISCRETIONARY AND
SUPERVISORY POWER WITH WHICH CONGRESS HAS ENDOWED THE COMMISSION."  340
U.S., AT 442.  WE FOUND THAT THE COMMISSION'S PURPOSE WAS TO APPLY THE
NATIONAL TRANSPORTATION POLICY SO AS "TO PRESERVE THE INHERENT
ADVANTAGES OF MOTOR-CARRIER SERVICE."  IN DISCUSSING THIS PRACTICE WE
QUOTED AT PAGE 428 FROM THE OPINION OF THE COMMISSION IN THAT CASE,
WHICH STATED THE TEST IN THIS LANGUAGE: 

"IN OTHER WORDS, A RAILROAD APPLICANT FOR AUTHORITY TO OPERATE AS A
COMMON CARRIER BY MOTOR VEHICLE, THOUGH REQUIRED TO DO NO MORE THAN
PROVE, AS ANY OTHER APPLICANT, THAT ITS SERVICE IS REQUIRED BY PUBLIC
CONVENIENCE AND NECESSITY, HAS A SPECIAL BURDEN  ..  BYY REASON OF THE
VERY CIRCUMSTANCE THAT IT IS A RAILROAD.  WHERE IT FAILS TO SHOW
SPECIAL CIRCUMSTANCES NEGATIVING ANY DISADVANTAGE TO THE PUBLIC FROM
THIS FACT, A GRANT OF AUTHORITY TO SUPPLY MOTOR SERVICE OTHER THAN
SERVICE AUXILIARY TO AND SUPPLEMENTAL OF TRAIN SERVICE IS NOT
JUSTIFIED."  40 M.C.C. 457, 474. 

IN UNITED STATES V. TEXAS & PACIFIC MOTOR TRANSPORT CO., 340 U.S. 450
(1951), DECIDED ON THE SAME DAY AS ROCK ISLAND, WE UPHELD THE
COMMISSION'S IMPOSITION OF RESTRICTIONS IN A SEC. 207 CASE.  IN TEXAS &
PACIFIC, HOWEVER, THE PROCEEDING INVOLVED THE POWER OF THE COMMISSION
TO IMPOSE THE RESTRICTIONS, A QUESTION NOT BEFORE US HERE. 

WE REPEAT, AS WAS SAID IN THOSE CASES, THAT THE UNDERLYING POLICY OF
SEC. 5(2)(B) MUST NOT BE DIVORCED FROM PROCEEDINGS FOR NEW CERTIFICATES
UNDER SEC. 207.  INDEED, THE COMMISSION MUST TAKE "COGNIZANCE" OF THE
NATIONAL TRANSPORTATION POLICY AND APPLY THE ACT "AS A WHOLE."  BUT,
FOR REASONS WE HAVE STATED, 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 SEC. 207 PROCEEDING. 

                       II. 

WE FIND NO INDICATIONS THAT THE COMMISSION HAS PERMITTED THE SEC. 207
PROCEEDINGS IN THIS CASE TO BE USED AS A DEVICE TO EVADE SEC. 5(2)(B)
RESTRICTIONS.  CERTIFICATE PROCEEDINGS UNDER SEC. 207 ARE SEPARATE AND
DISTINCT FROM ACQUISITION PROCEEDINGS, ALTHOUGH THE SAME GENERAL POLICY
GOVERNS BOTH.  IF THE PUBLIC INTEREST REQUIRES THAT A SEC. 207
CERTIFICATE BE ISSUED TO A RAIL-OWNED CARRIER WITHOUT RESTRICTION, WE
FIND NO AUTHORITY FOR DENYING THE COMMISSION POWER TO GRANT THE SAME
SIMPLY BECAUSE THE CARRIER JUST EMERGED FROM A SEC. 5(2)(B)
PROCEEDING.  MOREOVER, THE APPROVAL HERE WAS EXPRESSLY SUBJECT TO THE
COMMISSION'S CONTINUING EXAMINATION OF THE ACTIVITY OF MOTOR TRANSIT
WITH A VIEW OF PLACING LIMITATIONS ON ITS OPERATIONS IF FOUND NECESSARY
IN THE PUBLIC INTEREST.  A FURTHER CONDITION MAKES ALL CONTRACTUAL
ARRANGEMENTS BETWEEN MOTOR TRANSIT AND ITS PARENT SUBJECT TO REVISION
BY THE COMMISSION. 

FINALLY, IF UNDER OUR INTERPRETATION A "LOOPHOLE" EXISTS IN THE ACT,
THE COMMISSION HAS SHOWN NO INCLINATION TO PERMIT ITS USE AS SUCH. 
SHOULD THE COMMISSION PROVE TO BE LESS STRINGENT IN THE FUTURE,
APPELLANTS NOT ONLY HAVE RECOURSE TO THE CONGRESS, BUT ALSO TO THE
COURTS FOR REVIEW OF THE COMMISSION'S FINDING THAT "SPECIAL
CIRCUMSTANCES" EXIST. 

                   III.    APPELLANTS' LAST CONTENTION RELATES TO
THE SUFFICIENCY OF THE EVIDENCE TO SUPPORT THE COMMISSION'S FINDING OF
PUBLIC CONVENIENCE AND NECESSITY.  APPELLANTS CONCEDE THAT PUBLIC NEED
MAY BE FOUND FOR PEDDLE TRAFFIC BETWEEN THE SMALLER POINTS ALONG THE
ROUTES, BUT CONTEST THE FINDINGS OF PUBLIC NEED FOR UNRESTRICTED
SERVICE BETWEEN SUCH MAJOR POINTS AS DAVENPORT, CEDAR RAPIDS, DES
MOINES, AND COUNCIL BLUFFS, IOWA, AND OMAHA, NEBRASKA. 

THE EVIDENCE BEFORE THE COMMISSION WAS SUCH THAT WE ARE NOT INCLINED
TO DISTURB THE FINDINGS.  APPROVAL OF THE APPLICATION WAS URGED BY THE
IOWA STATE COMMERCE COMMISSION, 149 SHIPPERS AND RECEIVERS, 8 MOTOR
CARRIERS WHO INTERLINE TRAFFIC WITH MOTOR TRANSIT (INCLUDING SOME
MEMBERS OF APPELLANT MOTOR TRUCKING ASSOCIATION), AND SEVERAL CHAMBERS
OF COMMERCE AND COMMERCIAL ORGANIZATIONS.  THERE WAS EVIDENCE OF A
SERIOUS NEED FOR LESS-THAN-TRUCKLOAD PEDDLE SERVICE:  OTHER CARRIERS
FREQUENTLY FAILED TO HANDLE SUCH TRAFFIC, AND GAVE SERVICE INFERIOR TO
THAT OF MOTOR TRANSIT WHEN THEY DID OPERATE.  THERE WAS TESTIMONY THAT
THE WEIGHT AND KEY-POINT LIMITATIONS OPERATED TO MAKE EVEN THE MOTOR
TRANSIT SERVICE LESS THAN ADEQUATE.  IT APPEARED THAT THE PEDDLE
TRAFFIC ALONE WAS NOT PROFITABLE, AND THAT IF CONFINED TO IT MOTOR
TRANSIT COULD NO LONGER RENDER THE CALIBER OF PEDDLE SERVICE IT HAD
MAINTAINED PRIOR TO THE IMPOSITION OF THE TEMPORARY RESTRICTIONS. 
FURTHER, THERE WAS EVIDENCE THAT 11 POINTS WOULD BE TOTALLY WITHOUT
PEDDLE SERVICE IF THE AUXILIARY AND SUPPLEMENTAL RESTRICTIONS WERE
APPLIED.  APART FROM THE EFFECT OF RESTRICTED OPERATIONS ON PEDDLE
SERVICE, THE RECORD INDICATES THAT OTHER CARRIERS SOMETIMES HAD BEEN
RELUCTANT TO ACCEPT EVEN TRUCKLOADS IN CERTAIN LOW-RATED COMMODITIES. 

THIS EVIDENCE LEAVES US UNWILLING TO SUGGEST THAT PUBLIC CONVENIENCE
AND NECESSITY COULD ONLY BE ADVANCED BY CONFINING MOTOR TRANSIT TO
SERVICE OF THE SMALLER COMMUNITIES, WHILE LEAVING THE MORE PROFITABLE
BUSINESS TO OTHERS.  PUBLIC NEED FOR MOTOR TRANSIT'S OPERATION IN
TRUCKLOAD TRAFFIC TO SOME EXTENT CAN BE GROUNDED ON THE NEED FOR ITS
OPERATION IN PEDDLE TRAFFIC, SINCE ECONOMIC JUSTIFICATION FOR CARRYING
ON A COSTLY PEDDLE OPERATION DEPENDS ON COMBINING IT WITH A MORE
LUCRATIVE TRUCKLOAD OPERATION.  WHILE IT IS TRUE THAT RAILROADS WERE
NOT ALLOWED TO ENTER THE MOTOR TRUCKING INDUSTRY PRIMARILY TO BUILD AN
INDEPENDENTLY PROFITABLE TRUCKING OPERATION, THERE IS NO FOUNDATION IN
THE INTERSTATE COMMERCE ACT FOR SO CONSTRUING SEC. 207 AS TO REQUIRE
THAT ANY RAILROAD OPERATION IN THE MOTOR TRUCKING FIELD BE
UNPROFITABLE.  OBSERVANCE OF ECONOMIC REALITIES IN ASCERTAINING PUBLIC
NEED IS NO LESS DUE A RAIL-OWNED MOTOR CARRIER THAN AN INDEPENDENT
MOTOR CARRIER. 

IF, AS APPELLANTS FEAR, THE UNRESTRICTED OPERATIONS ARE DESTRUCTIVE
OF COMPETITION OR OTHERWISE DETRIMENTAL TO THE PUBLIC INTEREST, WE
BELIEVE THE SITUATION WOULD NOT BE WITHOUT REMEDY.  THE COMMISSION HAS
RETAINED JURISDICTION "TO IMPOSE IN THE FUTURE WHATEVER RESTRICTIONS OR
CONDITIONS, IF ANY, APPEAR NECESSARY IN THE PUBLIC INTEREST BY REASON
OF MATERIAL CHANGES IN CONDITIONS OR CIRCUMSTANCES SURROUNDING
APPLICANT'S OPERATIONS IN RELATION TO THOSE OF COMPETING MOTOR
CARRIERS."  63 M.C.C., AT 108.  THIS RESERVATION GIVES IT CONTINUING
JURISDICTION TO MAKE CERTAIN THAT THE UNLIMITED CERTIFICATE ISSUED HERE
DOES NOT OPERATE TO DEFEAT THE NATIONAL TRANSPORTATION POLICY.  UNITED
STATES V. ROCK ISLAND MOTOR TRANSIT CO., SUPRA.  AFFIRMED. 

FN1  "SEC.  207.  (A) SUBJECT TO SECTION 210, A CERTIFICATE SHALL BE
ISSUED TO ANY QUALIFIED APPLICANT THEREFOR, AUTHORIZING THE WHOLE OR
ANY PART OF THE OPERATIONS COVERED BY THE APPLICATION, IF IT IS FOUND
THAT THE APPLICANT IS FIT, WILLING, AND ABLE PROPERLY TO PERFORM THE
SERVICE PROPOSED AND TO CONFORM TO THE PROVISIONS OF THIS PART AND THE
REQUIREMENTS, RULES, AND REGULATIONS OF THE COMMISSION THEREUNDER, AND
THAT THE PROPOSED SERVICE, TO THE EXTENT TO BE AUTHORIZED BY THE
CERTIFICATE, IS OR WILL BE REQUIRED BY THE PRESENT OR FUTURE PUBLIC
CONVENIENCE AND NECESSITY; OTHERWISE SUCH APPLICATION SHALL BE DENIED
..  .""  49 STAT. 551, 49 U.S.C. SEC. 307(A). 

FN2  SEC. 5(2)(B)  "  ..  IFF THE COMMISSION FINDS THAT, SUBJECT TO
SUCH TERMS AND CONDITIONS AND SUCH MODIFICATIONS AS IT SHALL FIND TO BE
JUST AND REASONABLE, THE PROPOSED TRANSACTION IS WITHIN THE SCOPE OF
SUBPARAGRAPH (A) AND WILL BE CONSISTENT WITH THE PUBLIC INTEREST, IT
SHALL ENTER AN ORDER APPROVING AND AUTHORIZING SUCH TRANSACTION, UPON
THE TERMS AND CONDITIONS, AND WITH THE MODIFICATIONS, SO FOUND TO BE
JUST AND REASONABLE:  PROVIDED, THAT IF A CARRIER BY RAILROAD SUBJECT
TO THIS PART, OR ANY PERSON WHICH IS CONTROLLED BY SUCH A CARRIER, OR
AFFILIATED THEREWITH WITHIN THE MEANING OF PARAGRAPH (6), IS AN
APPLICANT IN THE CASE OF ANY SUCH PROPOSED TRANSACTION INVOLVING A
MOTOR CARRIER, THE COMMISSION SHALL NOT ENTER SUCH AN ORDER 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."  54 STAT. 906, 49 U.S.C. SEC. 5(2)(B). 

FN3  54 STAT. 916, 49 U.S.C. SEC. 17(11). 

FN4  49 STAT. 550, AS AMENDED, 54 STAT. 922, 49 U.S.C. SEC. 305(H). 

FN5  "1.  THE SERVICE TO BE PERFORMED BY THE ROCK ISLAND TRANSIT
COMPANY SHALL BE LIMITED TO SERVICE WHICH IS AUXILIARY TO, OR
SUPPLEMENTAL OF, TRAIN SERVICE OF THE CHICAGO, ROCK ISLAND AND PACIFIC
RAILWAY COMPANY, HEREINAFTER CALLED THE RAILWAY. 

"2.  THE ROCK ISLAND MOTOR TRANSIT COMPANY SHALL NOT RENDER ANY
SERVICE TO, OR FROM OR INTERCHANGE TRAFFIC AT ANY POINT NOT A STATION
ON A RAIL LINE OF THE RAILWAY. 

"3.  NO SHIPMENTS SHALL BE TRANSPORTED BY THE ROCK ISLAND MOTOR
TRANSIT COMPANY BETWEEN ANY OF THE FOLLOWING POINTS, OR THROUGH, OR TO,
OR FROM, MORE THAN ONE OF SAID POINTS:  OMAHA, NEBR., DES MOINES, IOWA,
AND COLLECTIVELY DAVENPORT AND BETTENDORF AND ROCK ISLAND, MOLINE, AND
EAST MOLINE, ILL. 

"4.  ALL CONTRACTUAL ARRANGEMENTS BETWEEN THE ROCK ISLAND MOTOR
TRANSIT COMPANY AND THE RAILWAY SHALL BE REPORTED TO USE AND SHALL BE
SUBJECT TO REVISION, IF AND AS WE FIND IT TO BE NECESSARY IN ORDER THAT
SUCH ARRANGEMENTS SHALL BE FAIR AND EQUITABLE TO THE PARTIES. 

"5.  SUCH FURTHER SPECIFIC CONDITIONS AS WE, 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."  40 M.C.C. 457, 477. 

FN6  PRIOR TO THIS DATE, TEMPORARY OPERATING AUTHORITY WAS GRANTED
MOTOR TRANSIT OVER THE WHITE LINE AND FREDERICKSON ROUTES WITH THREE
RESTRICTIONS: 

1.  NO SERVICE TO BE PERFORMED FOR SHIPMENTS ORIGINATING AT CHICAGO,
ILL., OR OMAHA, NEBR., AND DESTINED TO EITHER OF SAID POINTS. 

2.  NO SHIPMENT TO BE TRANSPORTED BETWEEN ANY OF THE FOLLOWING POINTS
OR THROUGH, OR TO, OR FROM MORE THAN ONE OF SAID POINTS:  OMAHA, AND
COLLECTIVELY DAVENPORT AND BETTENDORF, IOWA, ROCK ISLAND, MOLINE AND
EAST MOLINE, ILL. 

3.  NO SINGLE SHIPMENT TO BE HANDLED ON MOTOR CARRIER BILLING
WEIGHING MORE THAN 2,000 POUNDS. 

FN7  TWO CONDITIONS WERE IMPOSED:  "(1) THAT THERE MAY BE ATTACHED
FROM TIME TO TIME TO THE PRIVILEGES GRANTED HEREIN SUCH REASONABLE
TERMS, CONDITIONS, AND LIMITATIONS AS THE PUBLIC CONVENIENCE AND
NECESSITY MAY REQUIRE, AND (2) THAT ALL CONTRACTUAL ARRANGEMENTS
BETWEEN MOTOR TRANSIT AND ROCK ISLAND SHALL BE REPORTED TO US AND SHALL
BE SUBJECT TO REVISION, IF AND AS WE FIND IT TO BE NECESSARY IN ORDER
THAT SUCH ARRANGEMENTS SHALL BE FAIR AND EQUITABLE TO THE PARTIES  ..
."   63 M.C.C., AT 109. 

FN8  PA. TRUCK LINES - CONTROL - BARKER, 1 M.C.C. 101, SUPPLEMENTED,
5 M.C.C. 9, 11; SEE, E.G., GULF TRANSPORT CO. - PURCHASE - CRANE, 35
M.C.C. 699; PACIFIC MOTOR TRUCKING CO. - PURCHASE - KEITHLY, 15 M.C.C.
427; TEXAS & P. MOTOR TRANSPORT CO. - PURCHASE - SOUTHERN TRANSP.  CO.,
5 M.C.C. 653. 

FN9  IN CONTRAST TO "TRUCKLOAD TRAFFIC," WHICH REFERS TO STARTING
WITH A FULL LOAD AND DELIVERING AT ONE DESTINATION, THE TERM "PEDDLE
TRAFFIC" REFERS TO STARTING WITH A FULL LOAD AND DELIVERING AT VARIOUS
DESTINATION POINTS, OR THE CONVERSE, PICKING UP PARTS OF A LOAD AT
VARIOUS POINTS AND DELIVERING AT A SINGLE DESTINATION.  BECAUSE MOTOR
TRANSIT IS EXCLUSIVELY LICENSED OVER THE ROUTES IN QUESTION BY THE IOWA
STATE COMMERCE COMMISSION, ALL INTRASTATE TRAFFIC WILL GO TO MOTOR
TRANSIT REGARDLESS OF THE OUTCOME OF THE PRESENT PROCEEDING.  IN
ADDITION, ALL RAIL-BILLED TRAFFIC WILL GO TO MOTOR TRANSIT AS A MATTER
OF COURSE.  THEREFORE, ONLY TWO KINDS OF TRAFFIC ARE ACTUALLY INVOLVED
IN THIS CASE, INTERSTATE TRUCKLOAD AND INTERSTATE PEDDLE TRAFFIC
PROCEEDING ON A MOTOR BILL OF LADING. 

FN10  FOR CASES WHERE RESTRICTIONS HAVE BEEN APPLIED IN SEC. 207
CASES, SEE, E.G., KANSAS CITY S. TRANSPORT CO., COM. CAR.  APPLICATION,
10 M.C.C. 221, 28 M.C.C. 5; CHICAGO, M., ST. P.&P.R. CO. EXTENSION -
MILWAUKEE DIVISION, 53 M.C.C. 341; FRISCO TRANSPORTATION CO. EXTENSION
SPRINGFIELD AIRPORT, 47 M.C.C. 63; GREAT NORTHERN R. CO. EXTENSION -
HOBSON - LEWISTOWN, 19 M.C.C. 745; TEXAS & P. MOTOR TRANSPORT CO.
EXTENSION - BIG SPRING - PECOS, TEX., 14 M.C.C. 649. 

FOR CASES WHERE CERTIFICATES WERE ISSUED UNDER SEC. 207 WITHOUT
RESTRICTIONS, SEE, E.G., BURLINGTON TRUCK LINES EXTENSION - IOWA, 48
M.C.C. 516; ROCK ISLAND MOTOR TRANSIT EXTENSION - WELLMAN, IOWA, 31
M.C.C. 643; BURLINGTON TRANSPORTATION CO. EXTENSION - COUNCIL BLUFFS -
WELDON - KANSAS CITY, 28 M.C.C. 783; SANTA FE TRAIL STAGES, INC., COM.
CAR.  APPLICATION, 21 M.C.C. 725; INTERSTATE TRANSIT LINES EXTENSION -
VERDON, NEB., 10 M.C.C. 665; ST. ANDREWS BAY TRANSPORTATION CO.
EXTENSION, 3 M.C.C. 711. 

IN THE INSTANT CASE THE COMMISSION SUMMARIZED ITS PRACTICE:  "THIS
POLICY OF IMPOSING AUXILIARY AND SUPPLEMENTARY RESTRICTIONS WAS AND IS
SOUND AND SHOULD BE RELAXED ONLY WHERE THE CIRCUMSTANCES CLEARLY
ESTABLISH (1) THAT THE GRANT OF AUTHORITY HAS NOT RESULTED AND PROBABLY
WILL NOT RESULT IN THE UNDUE RESTRAINT OF COMPETITION, AND (2) THAT THE
PUBLIC INTEREST REQUIRES THE PROPOSED OPERATION, WHICH THE AUTHORIZED
INDEPENDENT MOTOR CARRIERS HAVE NOT FURNISHED, EXCEPT WHERE IT SUITED
THEIR CONVENIENCE. 

     *    *         *         *         * 

"THE FINDINGS HEREINAFTER MADE  ..  DOO NOT ESTABLISH A PRECEDENT. 
EACH CASE OF THIS CHARACTER MUST BE DETERMINED UPON THE FACTS AND
CIRCUMSTANCES DISCLOSED BY THE EVIDENCE."  63 M.C.C. 91, 102, 108. 

MR. JUSTICE DOUGLAS DISSENTS.



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