transportation policy, as well as the competitive impact of a carrier combination. The statutory tests under section 5(2) can be initially applied only by the Commission in its exercise of primary jurisdiction. The statutory criteria are not affected by whether one of the combining carriers is presently operating under a temporary exemption or under a more conventional operating certificate or permit.
We believe the Commission's admitted reliance upon the case of IML Sea Transit Ltd. v. United States, 343 F. Supp. 32 (N.D.Cal.) aff'd. sub nom., Interstate Commerce Commission v. IML Sea Transit Ltd., 409 U.S. 1002, 93 S. Ct. 433, 34 L. Ed. 2d 295, reh. den. 409 U.S. 1118, 93 S. Ct. 895, 34 L. Ed. 2d 703 (1972) is erroneous.
We agree with the plaintiffs that the court in IML was construing a provision whose purpose was to result in the regulation of day-to-day transportation activities. Clearly, the Commission could subject IML to regulation as a freight forwarder at any time by removing the section 204(a)(4a) exemptions granted to the motor carriers it utilized. Stated another way, the activities sought to be regulated by the Commission were ongoing activities. The case sub judice, on the other hand, represents an issue of jurisdiction over a one-time merger or acquisition of assets.
Federal Maritime Commission v. Seatrain Lines, 411 U.S. 726, 93 S. Ct. 1773, 36 L. Ed. 2d 620 (1973) is cited by the plaintiffs as support for the validity of the distinction between jurisdiction over a one-time acquisition and jurisdiction over continuing business activities.
The Seatrain Lines' case involved the issue of whether the Federal Maritime Commission had the power to approve mergers or acquisitions of carriers, thereby immunizing such transactions from the operation of the anti-trust laws. The Shipping Act contains no express provision conferring such jurisdiction on the Federal Maritime Commission, compared to the specific provisions of the Interstate Commerce Act, the Federal Communications Act, and the Federal Aviation Act, but does contain a broad provision empowering the Federal Maritime Commission to approve carrier "agreements." In rejecting the Federal Maritime Commission's claim that the power to approve an "agreement" encompassed the power to authorize a carrier acquisition, the Supreme Court pointed to (1) the Congressional pattern in contemporaneous and related statutes of including specific, unambiguous grants of authority to approve mergers and acquisitions, when it intended the agency to exercise such power (411 U.S. at 742-43, 93 S. Ct. 1773); (2) the legislative history of the Shipping Act, which indicated that the term "agreement" was used as a term of art (411 U.S. at 736-742, 93 S. Ct. 1773); (3) the settled legal principle that exemptions from the anti-trust laws must be strictly construed (411 U.S. at 733, 93 S. Ct. 1773); and (4) the fact that virtually all the seven categories of agreements listed in the statutes "are limited to on-going arrangements in which both parties undertake continuing responsibilities," in contrast to a "one-time, discrete transaction" (411 U.S. at 734, 93 S. Ct. at 1779).
While the Federal Maritime Commission in Seatrain Lines did not have explicit Congressional authority to approve carrier mergers and acquisitions, such authority has been precisely delegated to Interstate Commerce Commission in section 5(2) of the Act. The United States Supreme Court in McLean Trucking Co. v. United States, 321 U.S. 67, 75, 64 S. Ct. 370, 375, 88 L. Ed. 544 (1943) pointed out that the Commission is "empowered to authorize and approve a consolidation either as applied for or as qualified by such terms and conditions as it deems 'just and reasonable,' if it finds that the merger 'will be consistent with the public interest.' Section 5(2)(b). In passing upon a proposed consolidation the Commission is required to 'give weight to . . . (1) The effect of the proposed transaction upon adequate transportation service to the public . . . .'" And more recently, the Supreme Court in Denver & R.G.W.R. Co. v. United States, 387 U.S. 485, 502, 87 S. Ct. 1754, 18 L. Ed. 2d 905 (1967) noted that a carrier (or one who controls a carrier) must initiate consolidations under section 5(2) of the Act. It was obviously not the Congressional intent in section 5 of the Act to permit the ICC to avoid its exclusive and plenary authority to assess carrier acquisitions by stretching the form and rationale of a temporary operating exemption. The considerations which the Commission is compelled to weigh and consider in granting a temporary exemption under section 309(e) are not of the same order as those which must be applied in assessing acquisitions under section 5(2).
In light of the statutory purpose, we conclude that Cenac is a "carrier" within the meaning of section 5(13) of the Interstate Commerce Act. It follows, therefore, that although Cenac's transportation operations may be temporarily exempted from regulations by the Commission, the proposed acquisition of Cenac by Katy Industries, Inc. is subject to the approval of the Commission.
An appropriate order will be entered.
And now, this 30th day of January, 1975:
It is ordered and decreed that:
The orders served July 17, 1973 and January 21, 1974 of the Interstate Commerce Commission, in which the Commission concluded that it did not have jurisdiction over the proposed acquisition by Katy Industries, Inc. of Cenac Towing Co., Inc., be and are hereby set aside; and
The Interstate Commerce Commission be and is hereby directed to proceed in accordance with this opinion.