Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Chemical Leaman Tank Lines Inc. v. United States

decided: February 26, 1979.



Before Adams and Weis, Circuit Judges and Kunzig,*fn* Judge.

Author: Adams


This appeal is but another stage in an expensive and time consuming struggle that has lasted for over twelve years. Indeed, the roots of the litigation and the original clash between the predecessors in interest of the present petitioner and intervenor go back to 1958. Almost ten years ago, a three-judge court of the District of Delaware reversed and remanded an earlier determination of the Interstate Commerce Commission rejecting petitioner Chemical Leaman's effort to alter the common carriage certificate of intervenor Peerless Transport Corporation. In the course of its opinion, the three-judge court indicated that certain equitable defenses might be available to Peerless Transport but declined to rule on those defenses because of an inadequate record. On remand the Commission developed such a record and again refused to alter the certificate. Because we conclude that the Commission's conclusions were within its authority and amply supported by the record, we will affirm its order.


In 1957 Congress amended the Interstate Commerce Act by considerably narrowing the definition of contract carrier set forth in § 203(a)(15) of the Act.*fn1 Inevitably many of the then-existing contract carriers were no longer qualified as such under the new definition. Accordingly, Congress allowed these shippers to convert their old grants of authority into certificates of public convenience and necessity for common carriage. The certificates were to be issued under § 212(c) of the Act,*fn2 which permitted a former contract carrier to continue in operation as a common carrier, furnishing transportation "of the same commodities between the same points or within the same territory" as previously authorized.

This change of law soon produced a major controversy. Common carriers holding different grants of authority have traditionally been able to join, or "tack," their distinct permits so as to provide direct service between all points covered by their certificates. On the other hand, contract carriers have not been accorded this privilege; each of their grants of authority has been treated as separate and not properly connected with other permits held by the same shipper. At issue, therefore, was whether the converted contract carriers holding more than one grant of authority were now "common carriers" and thus able to "tack" their grants, or whether § 212(c) was intended to allow them only to continue their former shipping practices "between the same points or within the same territory," thus requiring the inclusion, in fact or constructively, of a "no-tacking" restriction in all new common carrier certificates.

One such converted carrier was Brown Brothers Express, predecessor in interest to intervenor Peerless Transport Corporation. Brown Brothers held two separate permits as a contract carrier. One grant permitted the carriage of certain named commodities between Curwensville, Pennsylvania and eight midwestern states. A second grant authorized the carriage of the same commodities between Curwensville and twelve eastern states. By tacking, of course, the company could have provided direct service between eastern and midwestern shipping points through Curwensville. As a contract carrier, however, Brown Brothers could not and did not tack these two permits. Nonetheless, the common carrier certificate issued to the company in 1960*fn3 under § 212(c) contained no express prohibition of such a combination.

In March of 1966, Brown Brothers underwent a change of ownership and, simultaneously, filed a new tariff tacking the originally separate authorizations and thereby providing direct shipping through the Curwensville "gateway." Chemical Leaman, petitioner here, and a major shipper of chemicals, one of the commodities included in the Brown Brothers certificate, filed a petition on July 5, 1967, challenging Brown Brothers' right to tack its previously separate permits. This was sixteen months after the new tariff was filed, and seven years after Brown Brothers had received the unencumbered common carriage certificate.

Chemical Leaman argued that the statute as amended required that a no-tacking provision be included in the common carriage certificates awarded to converted contract carriers, and that such restriction must apply notwithstanding the failure of the Commission specifically to include that provision in the certificate issued to Brown Brothers in 1960. The Commission rejected the effort to reopen the matter, and Chemical Leaman appealed to a three-judge district court.

That court, speaking through Judge Layton, concluded that the statute did require that the authority of converted contract carriers not be expanded, and that, therefore, tacking was prohibited.*fn4 In so holding, the three-judge court relied on the identical position taken by the Commission itself in a different case.*fn5 Thus the three-judge court allowed Chemical Leaman to charge that the Brown Brothers' certificate, which by that time was held by Peerless Transport Corp., had been issued contrary to law, "that is, Ultra vires the statute".*fn6

Nonetheless, the three-judge court did not terminate the controversy at that point because Peerless Transport and the Commission also suggested the existence of certain equitable defenses that might justify a refusal to forbid tacking in this particular instance. The three-judge court stated that, on the record before it, it was unable to determine the validity of these claims and, therefore, remanded the petition to the Commission:

Defendants' second and third contentions are respectively, (a) that Chemical Leaman is estopped from questioning the Peerless certificate because Peerless, an innocent, good-faith purchaser of the certificate properly relied on the certificate as issued by the Commission and (b) that Chemical Leaman is guilty of laches in waiting some seven years before questioning the omission of the tacking restriction. We are unable at this time to decide the merits or the effect of either of these so-called equitable defenses. The proceedings before the Commission in 1967 were particularly abbreviated. The record before the Commission consists, so far as we are aware, of the joint petitions of the plaintiff and five other motor carriers, the replies by the intervening defendant Brown Brothers and, of course, the orders of the Commission denying the respective petitions. Nowhere do we find record proof of the elements on which a finding of equitable estoppel or laches could be predicated. In these circumstances, where the parties have not had sufficient opportunity to make a record before the Commission, we do not decide whether the defenses are available in light of this opinion or the merits of the defenses. (T)he Commission is directed to permit the filing of the petition, and to take such further action as would be consistent with this opinion.*fn7

On remand, an administrative law judge took voluminous testimony in thirty-eight days of hearings, accepted extensive briefs from the parties, and concluded after proceedings lasting almost three years that the equitable defense of laches did in fact apply and that any alteration of the Peerless certificate would not comport with established concepts of equity and fundamental fairness. This determination was upheld by the Commission in 1976. Chemical Leaman thereupon returned to the three-judge court, complaining that the I.C.C. had disregarded the mandate of that court by once again allowing Peerless to tack its separate grants of authority. The three-judge court stated that the Commission had acted in accordance with its mandate. But ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.