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PITTSBURGH & NEW ENGLAND TRUCKING CO. v. UNITED ST

June 21, 1972

Pittsburgh & New England Trucking Company and Ace Doran Hauling & Rigging Company, et al., Plaintiffs,
v.
The United States of America and The Interstate Commerce Commission, Defendants



The opinion of the court was delivered by: DUMBAULD

This is a suit (under 28 U.S.C. §§ 1336 and 2325) *fn1" before a three-judge court to set aside an order of the Interstate Commerce Commission. *fn2" The basic question at issue is whether the Commission acted validly when it interpreted a "heavy hauler's" certificate (which limits the holder's operating authority to transportation of "commodities which by reason of size or weight require the use of special equipment") as not permitting the transportation of articles which do not require special equipment by reason of their inherent or intrinsic characteristics or properties, but which (chiefly for reasons of convenience and economy) are tendered to the carrier by some shippers in aggregated packages or bundles which are too large or heavy for manual loading and are loaded by means of special equipment.

This is a very difficult, delicate, and doubtful question. At the one extreme it is clear, and admitted by plaintiff, that the mere fact that a large or heavy package of items which in their natural state obviously can be and customarily have been handled without the use of any special equipment (pencils and paper have been cited as examples) is tendered to a carrier should not have the effect of enlarging its operating authority. For such an extension of the carrier's certificated authority would have no limits; there is practically no commodity which (if enough effort were made) could not be packed in bulky and heavy packages requiring mechanical handling. As the Commission states, such an approach would amount to "an obliteration of any meaningful distinction" between heavy haulers and general commodities haulers. (108 M.C.C. at 733).

 At the other extreme, "the purely theoretical possibility that a commodity can be handled through physical labor" by employing "robust individuals in sufficient number" does not suffice to withdraw from the scope of a heavy hauler's authority such a commodity when such primitive handling procedures are so irrational, inefficient and uneconomic as to "place them outside the realm of practical reality." (108 M.C.C. at 734). *fn3"

 In the case at bar it is of particular importance to note and heed scrupulously the time-honored precepts (ordinarily regarded as platitudes) delineating the limited scope of a court's power when reviewing an order of the Commission. The classical formulation in I.C.C. v. Union Pacific Railroad Co., 222 U.S. 541, 547, 32 S. Ct. 108, 56 L. Ed. 308 (1912), has been followed in a long and unbroken line of cases, which may be summarized by saying that the Commission's determination must be upheld if it is based upon substantial evidence and is not arbitrary nor erroneous as a matter of law. *fn5" "The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body." Rochester Telephone Corp. v. U.S., 307 U.S. 125, 146, 83 L. Ed. 1147, 59 S. Ct. 754 (1939); Pittsburgh & L.E.R.R. Co. v. U.S., 294 F. Supp. 86, 91 (W.D. Pa. 1968). "The judicial task is to determine whether the Commission has proceeded in accordance with law and whether its findings and conclusions accord with the statutory standards and are supported by substantial evidence." Penn-Central Merger and N. & W. Inclusion Cases, 389 U.S. 486, 499, 19 L. Ed. 2d 723, 88 S. Ct. 602 (1968).

 It is clear that the Court is not free to substitute its own judgment for that of the Commission:

 
The function of the reviewing court is . . . limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done. Unless in some specific respect there has been prejudicial departure from requirements of the law or abuse of the Commission's discretion, the reviewing court is without authority to intervene. It cannot substitute its own view concerning what should be done, whether with reference to competitive considerations or others, for the Commission's judgment upon matters committed to its determination, if that has support in the record and the applicable law. United States v. Pierce Auto Freight Lines, Inc., 327 U.S. 515, 536, 66 S. Ct. 687, 90 L. Ed. 821 (1946).

 The reason why these established rules are not mere platitudes in the case at bar, but constitute revitalized guidelines requiring most conscientious application, is that all members of the Court, if our personal philosophies and views of wise policy were to be given play, would feel sympathy for the position of plaintiffs.

 On a humbler scale, this Court, in deciding whether the Interstate Commerce Commission has exceeded its lawful powers in making the order under review, is confronted with the same soul-searching predicament as the Supreme Court in deciding whether the Congress has exceeded its constitutional powers in enacting a statute. We must be equally alert to avoid substituting our own personal predilections or policy judgments for the commands of the law.

 Perhaps no one has perceived this predicament more clearly, or expressed it more poignantly, than Mr. Justice Frankfurter. *fn6"

 Dissenting in W. Va. State Bd. of Education v. Barnette, 319 U.S. 624, 646-47, 63 S. Ct. 1178, 87 L. Ed. 1628 (1943), which held the compulsory flag-salute in schools unconstitutional for Jehovah Witness children, he exclaimed:

 
One who belongs to the most vilified and persecuted minority in history is not likely to be insensible to the freedoms guaranteed by our Constitution. Were my purely personal attitude relevant I should wholeheartedly associate myself with the general libertarian views in the Court's opinion, representing as they do the thought and action of a lifetime. But as judges we are neither Jew nor Gentile, neither Catholic nor agnostic. We owe equal attachment to the Constitution and are equally bound by our judicial obligations whether we derive our citizenship from the earliest or the latest immigrants to these shores. As a member of this Court I am not justified in writing my private notions of policy into the Constitution, no matter how deeply I may cherish them or how mischievous I may deem their disregard . . . It can never be emphasized too much that one's own opinion about the wisdom or evil of a law should be excluded altogether when one is doing one's duty on the bench. *fn7"

 It can not be denied that the assertions of the Department of Justice, on behalf of the statutory defendant the United States, which has confessed error in the case at bar, *fn8" are well-founded: the effect of the Commission's decision under review is plainly anti-competitive. It will eliminate competition for certain traffic between heavy haulers and general commodities haulers. To an antitrust alumnus, favoring preservation of competition to the greatest possible extent even in regulated industries, *fn9" this argument has undoubted appeal.

 But the conclusive answer is equally undeniable: under the regulatory statutes in force it is for the Commission, not the courts, to determine how much competition is desirable in the public interest.

 Chesapeake & O. Ry. Co. v. U.S., 283 U.S. 35, 41-42, 51 S. Ct. 337, 75 L. Ed. 824 (1931), long ago held that the Commission might authorize new service for the very purpose of promoting competition to the extent found by the Commission to be convenient or necessary in the public interest. To the same effect, with regard to motor carriers, see authorities cited in Lang Transportation Corp. v. U.S., 75 F. Supp. 915, 927-28, 931 (S.D. Cal. Central Div. 1948), particularly I.C.C. v. Parker, 326 U.S. 60, 65, 89 L. Ed. 2051, 65 S. Ct. 1490 (1945). *fn10" In unification or merger cases the Commission is expressly empowered to grant exemption from the Antitrust Laws. McLean Trucking Co. v. U.S., 321 U.S. 67, 83-87, 88 L. Ed. 544, 64 S. Ct. 370 (1944); Pittsburgh & L. E. R. R. Co. v. U.S., 294 F. Supp. 86, 97 (W.D. Pa. 1968). In determining the amount and character of competition which will be most beneficial to the public interest the Commission must "bring to bear upon the problem an expert judgment and . . . determine from its analysis of the total situation on which side of the controversy the public interest lies." U.S. v. Detroit & Cleveland Navigation Co., 326 U.S. 236, 241, 90 L. Ed. 38, 66 S. Ct. 75 (1945).

 Moreover, it must be conceded, in all candor, that the Interstate Commerce Act, in its present form, *fn11" is itself inherently an anti-competitive instrumentality.

 The legislative history of the Motor Carrier Act of 1935 (now part II of the Interstate Commerce Act as amended) shows that Congress feared "destructive" or "cut-throat" competition, and meant to impose on motor carriers many restrictions which in unregulated commerce would fall afoul of the Antitrust Laws. For example, the certification requirements of the Act (secs. 206 and 207, 49 U.S.C. §§ 306(a) and 307) certainly establish "barriers to entry" in the motor carrier industry. And barriers to entry are one of the significant criteria of restraint of trade in the Antitrust field. Federal Trade Commission v. Procter & Gamble Co., 386 U.S. 568, 578-79, 18 L. Ed. 2d 303, 87 S. Ct. 1224 (1967). Likewise, allocation of territory is a per se violation of the Antitrust Laws, akin to price-fixing. Addyston Pipe & Steel Co. v. U.S., 175 U.S. 211, 241, 20 S. Ct. 96, 44 L. Ed. 136 (1899). But it is of the essence of the regulatory scheme, and expressly provided in Section 208 (49 U.S.C. § 308), that the territory or routes of a certificated carrier shall be specified in the certificate. In similar vein is the authority conferred upon the Commission by Section 204(b), 49 U.S.C. § 304(b), to establish classifications of carriers. This power has the intent and effect of confining carriers to a specific type of operations. Price-fixing itself is a consequence of the Commission's minimum-rate power and suspension power under Sections 216(e) and 216(g) of the Act, 49 U.S.C. §§ 316(e) and 316(g), which has often been used as an "umbrella" to protect high-cost carriers. *fn12" The unification provisions of Section 5, permitting acquisitions and mergers with exemption from the Antitrust Laws, have already been mentioned. *fn13"

 Similarly, the Janus-faced language of the National Transportation Policy gives feeble support to the Department of Justice's position in the case at bar. As the Supreme Court has recognized, the "overlapping aims" of that declaration necessitate "the balancing by the Commission of the public interests" in the various conflicting legislative objectives. *fn14" Of the National Transportation Policy it may be said in the words of Goethe:

 
Wer vieles bringt, wird manchem etwas bringen; Und jeder geht zufrieden aus dem Haus. *fn15"

 From the foregoing review of the statutory scheme, it seems clear that the adherent of Antitrust principles and economic policies favorable to competition will find only half a loaf in the pattern of regulation of the transportation industry embodied in the Interstate Commerce Act. We could not faithfully perform our judicial task of giving complete effect to the will of Congress if we interpreted the Act and the scope of the Commission's powers thereunder simply in the light of our own wish to encourage competitive enterprise.

 A second aspect of the Commission's order in the case at bar likewise puts its critics' case in a favorable light. The order is not only anti-competitive, but it is anti-progressive. It tends to discourage the advancement of science and the widespread use of modern methods and up-to-date technology. It plays down the important factors of efficiency and convenience in transportation.

 Here again, one whose personal convictions regarding public policy are largely derived from the teachings of Thomas Jefferson can not fail to find plaintiffs' position appealing when he remembers the familiar words of the sage of Monticello:

 
"And I am for encouraging the progress of science in all its branches; and not for . . . awing the human mind . . . to go backward instead of forward to look for improvement; to believe that government, religion, morality, and every other science were in the highest perfection in ages of the darkest ignorance, and that nothing can ever be devised more perfect than what was established by our forefathers." *fn16"

 Yet here, too, it must be remembered that the task of exercising expert judgment with regard to questions of transportation (including its growth and development) belongs to the Commission rather than the courts. *fn17"

 Furthermore, closer analysis reveals that the Commission's order under review in the case at bar does not really have the reactionary consequences which at first blush it seems to radiate.

 In actual fact, nothing in the Commission's order really limits or forbids the use of modern machinery or improved methods of packaging or handling commodities when they are being loaded onto trucks at a shipper's dock. The only restriction or prohibition imposed by the Commission's order is with respect to whose trucks the goods shall be loaded into.

 The case at bar ultimately boils down to an economic conflict between two groups of carriers competing for ...


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