The opinion of the court was delivered by: FOLLMER
This Court was convened to hear and determine the merits of plaintiffs' claim that three Orders of the Interstate Commerce Commission (hereinafter called 'Commission') should be enjoined, set aside and annulled. The first of the Orders was dated October 5, 1960, and granted a certificate of public convenience and necessity to Capitol Bus Company (hereinafter called 'Capitol') authorizing it to operate, in interstate or foreign commerce, as a common carrier by motor vehicle, over regular routes, of passengers and their baggage, and of express and newspapers in the same vehicles with passengers, between Wilkes-Barre, Pennsylvania, and Elmira, New York, over certain specified highways, serving all intermediate points; the second Order was dated March 3, 1961, and denied the joint petition of Edwards Motor Transit Company (hereinafter called 'Edwards') and The Greyhound Corporation (hereinafter called 'Greyhound') for reconsideration; the third was the certificate of public convenience and necessity issued to Capitol on March 20, 1961, pursuant to Order No. 1, supra, dated October 5, 1960.
On February 24, 1959, Capitol filed with the Commission an application, which was assigned Docket No. MC-109736 (Sub-No. 12), in which Capitol sought to obtain a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle of passengers and their baggage, and express, mail, and newspapers in the same vehicle with passengers, (1) between Wilkes-Barre and Towanda, Pennsylvania, over U.S. Highway 309 and (2) between Waverly and Elmira, New York, over New York Highway 17, with service at all intervening points on both of the above-described routes. Edwards and Greyhound opposed the application.
The application was referred to an examiner for hearing and the recommendation of an appropriate order thereon together with the reasons therefor. Hearings were held at Wilkes-Barre on May 19, 20, 21, and 22, 1959, and at Washington, D.C., on June 29, July 1, 2, 8 and 9, 1959. On March 21, 1960, the examiner recommended that a certificate be issued upon compliance by Capitol with certain conditions. Greyhound and Edwards filed exceptions to the examiner's report and order, and Greyhound filed a petition for a further hearing.
On October 5, 1960, the Commission, Division 1, issued its report in which it found that the present and future public convenience and necessity required the proposed operation; that Capitol is fit, willing and able to perform such service and to conform to the requirements of the Act and the Commission's rules and regulations thereunder; and that a certificate authorizing such operations
should be granted, provided Capitol should first request in writing the concurrent cancellation of its certificate No. MC-109736 (Sub No. 9), which authorized operation between Waverly, New York, and Towanda, Pennsylvania, over U.S. Highway 309. An Order implementing the findings of fact and conclusions thereon was accordingly entered on October 5, 1960. Edwards and Greyhound filed their joint petition for reconsideration on November 30, 1960. On March 3, 1961, the entire Commission entered an Order denying the petition.
On March 20, 1961, the Commission issued to Capitol a certificate of public convenience and necessity authorizing the operation approved in its Report and Order of October 5, 1960. The certificate carried a paragraph revoking certificate No. MC-109736 (Sub No. 9).
In their complaint plaintiffs protested Capitol's application upon the following grounds: that the service they were then giving was more than reasonably adequate; that the issuance of applied for authority would permit applicant and other members of Trailways System to divert, to protestants' detriment, a substantial volume of present passenger traffic; that the facts of the case were not sufficient to justify Commission's application of close-the-gap doctrine; that the volume of traffic was not sufficient to justify competitive service. Plaintiffs also contended that as recently as January 5, 1959, or less than two months prior to the filing of the instant application, the Commission had denied a substantially identical application by the same applicant, Capitol, involving the same parties, same issues, and virtually the same evidence. Plaintiffs also aver that the principle, if not the doctrine, of res judicata was clearly applicable unless the Commission found a substantial change in facts and circumstances which would justify and support the findings and conclusions in the present application.
The jurisdiction conferred upon three-judge statutory district courts to review orders of the Commission is very definitely circumscribed. If an order of the Commission lies within the scope of a statute which the Commission is authorized to administer and enforce, and if the order is based upon adequate findings, which in turn are supported by substantial evidence, the order may not be set aside by a court on review even though the court might disagree with the Commission's conclusions or might consider them contrary to the weight of the evidence. In Motor Freight Express v. United States et al., D.C.M.D.Pa., 1954, 119 F.Supp. 298, 303, the Court said:
'It is understood, of course, that we do not sit de novo in cases dealing with orders of the commission. On the contrary, the scope of review is limited by the doctrine of administrative finality. 'Only questions affecting constitutional power, statutory authority and the basic prerequisites of proof can be raised. If these legal tests are satisfied, the Commission's order becomes incontestable.' Rochester Telephone Corp. v. United States, 1939, 307 U.S. 125, 140, 59 S. Ct. 754, 762, 83 L. Ed. 1147; Mississippi Valley Barge Line Co. v. United States, supra (292 U.S. 282, 54 S. Ct. 692, 78 L. Ed. 1260).'
It is understood, of course, that we do not sit be novo in cases dealing with orders of the Commission. On the contrary, Congress has delegated exclusively to the Commission a wide latitude of discretion in determining public convenience and necessity. In Interstate Commerce Commission et al. v. Parker, 1945, 326 U.S. 60, 65 S. Ct. 1490, 1492, 89 L. Ed. 2051, the Court said:
'Public convenience and necessity is not defined by the statute. * * * The purpose of Congress was to leave to the Commission authoritatively to decide whether additional motor service would serve public convenience and necessity. Cf. Powell v. United States, 300 U.S. 276, 287, 57 S. Ct. 470, 476, 81 L. Ed. 643. This, of course, gives administrative discretion to the Commission, cf. McLean Trucking Co. v. United States, 321 U.S. 67, 87, 88, 64 S. Ct. 370, 380, 381, 88 L. Ed. 544, to draw its conclusion from the infinite variety of circumstances which may occur in specific instances. * * *'
The hearings lasted for nine days and produced 1586 pages of testimony and 110 exhibits. There can be no question that the findings of the Commission were supported by substantial evidence.
The basic facts here involved are that on February 24, 1959, Capitol filed an application with the Commission seeking a certificate of convenience and necessity to operate as a motor common carrier over regular routes transporting passengers and their baggage, and express, mail and newspapers, in the same vehicle with passengers (1) between Wilkes-Barre, Pennsylvania, and Towanda, Pennsylvania, over U.S. Highway 309, and (2) between Waverly, New York and Elmira, New York, over New York Highway 17, serving all intermediate points on these routes. At the time of the application, Capitol possessed authority to transport passengers and their baggage, and newspapers in the same vehicle with passengers between Waverly, New York, and Towanda, Pennsylvania, serving all points, and has been engaged in providing such service for some time.
Subsequent to the filing of the involved application, on December 7, 1959, Capitol consummated, with the approval of the Commission, a purchase transaction whereby it obtained authority to transport passengers and their baggage, but not express and newspapers, in interstate commerce, between Waverly, New York, and Binghampton, New York; between Binghampton, New York, and Ithaca, New York; and between Elmira, New York, and Waverly, New York. This authority authorized operations over New York State Highway 17 westbound from Waverly to within seven miles of Elmira where the route leaves Highway 17 and travels over State Highway 427 through Wellsburg into Elmira. Additionally, on March 14, 1960, Capitol was authorized by the Pennsylvania Public Utilities Commission to perform intrastate operations over the routes here involved between Wilkes-Barre, Pennsylvania, and points on the proposed routes to the Pennsylvania-New York State line. The total distance between the principal termini of Wilkes-Barre and Elmira is 103 miles. Of that distance only the 41 miles segment between Tunkhannock and Towanda represents the route which Capitol did not then have such interstate authority to serve which would duplicate the operating rights of Greyhound. Edwards does not serve any portion of the route involved in this proceeding.
Capitol has been engaged in the motor carrier business since 1936, and has been an active member of National Trailways Bus System since 1947. Trailways' broad aims are to enable member companies to compete more ...