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Union National Bank of Pittsburgh v. United States

argued: October 20, 1977.

THE UNION NATIONAL BANK OF PITTSBURGH, PITTSBURGH, PENNSYLVANIA, PETITIONER
v.
INTERSTATE COMMERCE COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, JACK RILEY ON BEHALF OF HIMSELF AND SIMILARLY SITUATED AGENTS, FLEET OWNERS AND OWNER-OPERATORS, INTERVENORS (ICC NO. MC-F-13105)



ON PETITION FOR REVIEW OF AN ORDER OF THE INTERSTATE COMMERCE COMMISSION.

Adams and Garth, Circuit Judges, and Lacey,*fn* District Judge.

Author: Garth

Opinion OF THE COURT

GARTH, Circuit Judge,

In this proceeding, Union National Bank of Pittsburgh (Bank) challenges certain action taken by the Interstate Commerce Commission (ICC). Specifically, the Bank contests the failure of the ICC to approve temporary operating authority under 49 U.S.C. § 310a(b)*fn1 in connection with the transfer of certain carrier certificates. Because it appears that the ICC exceeded its statutory authority, we remand that issue to the ICC for further consideration.

I.

In July, 1975, the Bank authorized the issuance of a letter of credit in the amount of $550,000 on behalf of Harry and Adele Schreiber. The Schreibers used the letter in partial payment for the acquisition of stock of Sullivan Lines, Inc., a trucking carrier line. The Bank in turn secured its letter of credit and all future advances made to the Schreibers or to Sullivan Lines by perfecting a security interest in the certificates of public convenience and necessity issued by the ICC (the Sullivan certificates), and by filing a notice of its interest with the ICC.

Later that year, the Bank learned of a contemplated government investigation into Sullivan Lines, Inc. To date, however, despite certain ICC orders which indicate an ongoing investigation, the Bank has yet to be apprised of any formal proceedings initiated against Sullivan Lines.*fn2

From October through December of 1976, the Bank was made aware that the Schreibers had defaulted on certain of their outstanding debts. During the week of January 3, 1977, it became further apparent that, due to a cash shortage, the operations of Sullivan Lines could not continue. Operations ceased soon thereafter, and have not been resumed to date.

By the time that the operations of Sullivan Lines were discontinued, the Bank had advanced an additional $2.1 million to Sullivan Lines beyond the initial letter of credit. To protect its financial investment in Sullivan Lines, the Bank entered into a January 12th agreement of sale and purchase, whereby the Bank, Sullivan Lines, and others, as sellers, would transfer the Sullivan operating rights to purchaser Alltrans Express U.S.A., Inc. (Alltrans). In light of this agreement, and in lieu of judicial foreclosure of the Sullivan certificates, the Bank accepted an "Unconditional and Irrevocable Bill of Sale" from Sullivan Lines, whereby that company "unconditionally . . . [conveyed] to the Union National Bank of Pittsburgh all of their right, title and interest in and to that certain Certificate of Public Convenience and Necessity." App. 214a.

On January 26, 1977, the Bank and Alltrans filed applications with the ICC for approval of (1) permanent transfer of the Sullivan certificates to Alltrans and (2) temporary operating authority rights by Alltrans under 49 U.S.C. § 310a(b).*fn3 On February 16th, the ICC by order denied the application for temporary operating authority. App. 234a-38a.

While the February 16th Order concededly recites the statutory standard to be satisfied for a grant of temporary operating authority, see note 3 supra, a reading of that order indicates that in fact the mandated standard was disregarded. Rather, the thrust of the order focused on Schreiber's purported misconduct and the ICC's fear that if temporary authority were granted, it would "as a practical matter . . . render revocation [as against Schreiber's successor] unavailable" to remedy Schreiber's alleged misconduct. App. 238a. The Bank and Alltrans immediately filed petitions for reconsideration of the February 16th Order.

On April 15, while still awaiting the ICC's reconsideration rulings, the Bank petitioned this Court under 28 U.S.C. § 2342*fn4 for review of the February 16th Order. Seven days later, the ICC denied the Bank's and Alltrans's petitions for reconsideration (April 22nd Order), again implying that the Bank's interest was subject to revocation proceedings. The ICC at this time also furnished supplemental reasons for its denial of temporary operating authority to Alltrans: absence of evidence of "adequate and continuous [carrier] service" to the public by Sullivan or the Bank, and failure of the Bank to notify the ICC that it intended to continue Sullivan's operations under 49 C.F.R. § 1132.6 (temporary operations by a fiduciary). With its attempted conduct of temporary operations twice thwarted, Alltrans exercised its right to terminate its contract to purchase Sullivan Lines.*fn5

Undaunted, the Bank filed with this Court, on May 12, 1977, a motion captioned "Motion for Declaratory Judgment and Request for Expedited Disposition of all Issues." That motion sought a judgment declaring that:

(a) Upon appropriate notice to the Commission and observance thereafter of compliance procedures of the type contemplated by 49 CFR § 1132.6(b), the Bank has sufficient proprietary interest in the subject certificate to entitle it to conduct operations thereunder as "successor in interest to Sullivan Lines, Inc.", and

(b) the Bank's interest in the certificates may not be destroyed by prospective revocation of the certificate under a proceeding instituted subsequent to January 12, 1977 pursuant to section 212(a) of the Interstate Commerce Act, 49 U.S.C. § 312(a) and predicated on past acts or conduct of any person other than The Union National Bank of Pittsburgh or its employees or agents, and

(c) that Bank has such incidents of ownership of the subject certificate that Bank is and shall be a necessary and proper party to any contract or agreement to lease or sell the subject certificate.

The ICC responded that these issues did not present a concrete controversy and hence were not justiciable, contending in support that no ruling had issued, nor any other action taken, which adversely affected the Bank's interests. This Court, by order, expedited the Bank's appeal and granted the Bank's petition for review of the April 22nd Order.*fn6

II.

The court of appeals has exclusive jurisdiction to review only "rules, regulations or final orders of the Interstate Commerce Commission." 28 U.S.C. § 2342(5). If an order or other agency action is not final - and if it is not a rule or regulation - it is not reviewable in the courts of appeals in the first instance. Citizens for a Safe Environment v. Atomic Energy Commission, 489 F.2d 1018, 1020 (3d Cir. 1973). It may of course be reviewable in the district courts pursuant to other jurisdictional statutes.*fn7 Id. With this principle in mind, we turn to the Bank's claims for relief.

Although the Bank has apparently sought alternative forms of relief (review of the ICC Orders of February 16th and April 22nd, on the one hand, and, by its motion of May 12th, issuance of a "declaratory judgment" on the other), we are foreclosed by our jurisdictional limitations from considering the subject of the May 12th motion.*fn8 In contrast, the petition to review the February 16th Order and the Bank's subsequent motion to include for our consideration the April 22nd Order are, by statute, reviewable by us. Thus appellate jurisdiction to entertain the Bank's petition is properly invoked. Accordingly we have before us only the propriety of the ICC's rulings which denied temporary operating rights.*fn9 Neither order, as we read them, seeks to adjudicate either the Bank's proprietary interest under 49 C.F.R. § 1132.6*fn10 or its status as a party to the transfer of the certificates, as presented by the Bank's May 12th motion. Hence we find it unnecessary to consider the May 12th motion as a predicate for our jurisdiction, inasmuch as the February 16th and April 22nd Orders permit our review under § 2342(5).

III.

The ICC nonetheless argues that this proceeding stemming from its Orders of February 16th and April 22nd should be dismissed, because Alltrans has withdrawn from its contract of purchase, thereby mooting the controversy created by the denial of temporary operating rights. We do not agree. Not only is the ICC's action "capable of repetition yet evading review," Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 122, 40 L. Ed. 2d 1, 94 S. Ct. 1694 (1974), quoting Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 55 L. Ed. 310, 31 S. ...


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