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June 20, 1939;


The opinion of the court was delivered by: BIGGS

BIGGS, Circuit Judge.

The plaintiffs, six in number, motor vehicle carriers for hire, variously engaged in the trucking business between New York City on the one hand and points in Newark, Elizabeth, Linden, Carteret and Perth Amboy, New Jersey, on the other, have filed a bill pursuant to the provisions of the Urgent Deficiencies Act, Act of October 22, 1913, U.S.Code, Title 28, § 41 (27) and (28) and sections 43-48, 28 U.S.C.A. §§ 41 (27, 28), 43-48, seeking to have this statutory court enjoin the enforcement of an order made by the Interstate Commerce Commission, Division 5, under the Motor Carrier Act, 1935, 49 U.S.C.A. § 301 et seq.The bill includes also a prayer for a declaratory judgment.

 The Motor Carrier Act, 1935, provides for the regulation of motor carriers engaged in interstate commerce by the Interstate Commerce Commission. Section 203 (b) (8), 49 U.S.C.A. § 303(b) (8), thereof grants a partial exemption from the operation of the Act. The pertinent portion of that section reads:

 "(b) Nothing in this part [chapter], except the provisions of section 204 [304] relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include

 * * *

 nor, unless and to the extent that the Commission shall from time to time find that such application is necessary to carry out the policy of Congress enunciated in Section 202 [302 of this chapter], shall the provisions of this part [chapter], except the provisions of section 204 [304 of this chapter] relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment apply to: (8) The transportation of passengers or property in interstate or foreign commerce wholly within a municipality or between contiguous municipalities or within a zone adjacent to and commercially a part of any such municipality or municipalities, except when such transportation is under a common control, management, or arrangement for a continuous carriage or shipment to or from a point without such municipality, municipalities, or zone, and provided that the motor carrier engaged in such transportation of passengers over regular or irregular route or routes in interstate commerce is also lawfully engaged in the intrastate transportation of passengers over the entire length of such interstate route or routes in accordance with the laws of each State having jurisdiction; * * *".

 We will refer more specifically to Section 202 of the Act, 49 U.S.C.A. § 302, at an appropriate point.

 The Interstate Commerce Commission entered an order on February 1, 1936, upon its own motion and gave notice of a hearing to be had before an examiner in New York City to determine for the proper administration of the Motor Carrier Act, the area and extent of the municipality of New York and of any municipalities contiguous thereto and of adjacent zones commercially a part of such municipalities.The nature and extent of this notice is referred to more specifically at a later point in this opinion. It was further ordered that all common and contract carriers known by the Commission to be operating within the general territory affected by the order were to be notified of the hearing and that copies of the order were to be posted with the Secretary of the Commission in Washington, D.C., in the office of the New York Transit Commission at New York, New York, in the office of the New York Public Service Commission at Albany, New York, and in the office of the New Jersey Board of Public Utility Commissioners at Trenton, New Jersey.

 The hearings before the examiner commenced upon March 9, 1936, and continued for four successive days. Four different zones were advocated by various proponents as the area which should be partially exempted from the regulation of the Motor Carrier Act within the meaning of Section 203 (b) (8) of that Act. The New York commercial zone favored by most was that defined in 1927 by the Merchants' Association of New York as the New York Metropolitan District. Comprising some 3,768 square miles and extending forty miles in all directions from the City Hall of New York, this district includes Rockland, Westchester and Nassau Counties, New York, part of Suffolk County, New York, part of Fairfield County, Connecticut, and Passaic, Bergen, Morris, Essex, Hudson, Somerset, Union, Middlesex and Monmouth Counties, New Jersey. According to its advocates, the economic and social life of this area is influenced predominantly by New York City. In support of the reasonableness of this zone, it was shown that in 1932 the Merchants' Association and the Publishers' Association of New York City determined the territory which could be profitably reached by the city's retail merchants and manufacturers as an area of 10,233 square miles, including five New York counties and five New Jersey counties not included in the Merchants' Association zone.

 Although not opposed to the adopting of the larger area included in the Merchants' Association zone, the Port of New York Authority contended that all of the territory subject to its jurisdiction was included within the New York commercial zone. The jurisdiction of the Port of New York Authority extends over an area of about 1,200 square miles, roughly encompassing a circle with a radius of about 25 miles from the City Hall of New York City. New York City, parts of Westchester, Nassau, and Rockland Counties in New York, all of Hudson County and parts of Bergen, Passaic, Essex, Middlesex, Monmouth, Morris and Somerset Counties in New Jersey are included in this zone. The States of New York and New Jersey, with the consent of Congress, created the Port of New York Authority by statutes of their respective legislatures in 1921. The consent of Congress was embodied in Public Resolution No. 17 of the Sixty-Seventh Congress (42 Stat. 174). That Resolution, after stating that "* * * the commerce of the port of New York has greatly developed and increased and the territory in and around the port has become commercially one center or district * * *", provided that the Port Authority should have jurisdiction over transportation and other facilities of commerce and the making of plans for the development of the Port, and that the transportation facilities referred to in the Resolution should include motor trucks or other street or highway vehicles. The Port Authority has constructed four large bridges between New York and New Jersey, the George Washington Bridge connecting Fort Lee with 179th Street, New York, the Bayonne Bridge connecting Staten Island with Bayonne, New Jersey, the Goethals Bridge connecting Elizabeth, New Jersey, with Staten Island, and the Outerbridge Crossing connecting Perth Amboy with Staten Island. In addition the Port Authority operates the Holland and Lincoln Tunnels.

 The metropolitan district of New York City as defined by the United States Census Bureau was proposed by some as the area which should be deemed to be partially exempt within the provisions of Section 203 (b) (8) of the Act. This district is almost coterminus with what we have described as the Port Authority zone. The factor governing the establishment of this district was density of population. The Census Bureau, as it does in determining metropolitan districts throughout the country, included, in addition to the central city, all adjacent and contiguous civil divisions having a density of not less than 150 inhabitants per square mile, and also, generally, those civil divisions of less density which are directly contiguous to the central city or are entirely surrounded by minor civil divisions of the required density.

 The shippers who favored either the Merchants' Association zone or the Census Bureau District deliver their products in those areas in their own trucks or in those of hired carriers but without additional charges to the shippers' customers. Testimony given on behalf of these shippers indicated that if the regulations required by the Act were put into effect in these localities, the cost of transportation would be increased to such an extent that these arrangements would become impossible.

 Those motor carriers supporting the three suggested zones heretofore referred to contended that their operations within the areas designated were of the local cartage type essentially different in character from over-the-road trucking. They further contended that their operations were not of such a character as to cause them to compete with railroads or over-the-road motor carriers. They also took the position that the tariffs inaugurated by over-the-road carriers were not adaptable to their services.

 The United Parcel Service for its part urged that the area served by it in making deliveries for New York and Newark department stores be adopted as the New York commercial zone. Such deliveries are made without charge to customers purchasing goods at the stores. This, the fourth zone proposed, is larger than the Merchants' Association zone. It was supported by the department store of R.H. Macy & Co. which makes deliveries in its own trucks in substantially the same area.

 Some of the factors alleged in support of these four zones as the New York commercial district by their respective proponents were in the percentage of the populations of the New Jersey municipalities commuting to New York for work, the free deliveries of retail purchases from New York to the New Jersey communities, the substantial character of those purchases, the establishment of industries in New Jersey because of the proximity of the vast New York market, the equal water-transportation rates from outside ports to both the ports of the New Jersey cities and the port of New York, the density of populations, deliveries of New York newspapers to the New Jersey area, and the volume of local truck traffic between the points in New Jersey and New York.

 The New Jersey Motor Truck Association, except its Hudson County branch, and also various associations of furniture warehouses and movers of household goods located in New York and New Jersey contended that no transportation of goods by motor carrier between New York and New Jersey should be exempt. This contention was not based upon an allegation that part of New Jersey are not within the New York commercial district, but upon the allegation that the chaotic condition of truck transportation between those points demanded regulation within the terms of the Motor Carrier Act.

 After hearing the testimony and considering briefs filed by the parties, the examiner submitted a proposed report in which he found that the area which should be deemed to be exempt from the provisions of the Act was almost coterminus with the area within the jurisdiction of the Port of New York Authority. The cities of Newark, Elizabeth, Linden, Carteret and Perth Amboy were embraced within the proposed zone of the exemption. The examiner made no recommendation as to the removal of any exemption.

 Exceptions to the examiner's proposed report, which need not be detailed here, were filed with the Commission and oral argument was had before it. On April 5, 1937, the Commission handed down a report, No. MC-C-2, 1 M.C.C. 665, setting out the contentions of the parties about as we have outlined them above and held that that area which should be deemed to be exempt from the provisions of the Act pursuant to Section 203 (b) (8) as the New York commercial zone comprised "* * * New York, Yonkers, Mount Vernon, North Pelham, Pelham, Pelham Manor, Great Neck Estates, Floral Park, and Valley Stream, N.Y.; Englewood, N.J.; Alpine, Tenafly, Englewood Cliffs, Leonia, Fort Lee, Edgewater, Cliffside Park, Fairview, Palisades Park, and Ridgefield Boroughs, Bergen County, N.J.; and that part of Hudson County, N.J., east of the Hackensack River and Newark Bay." The cities of Newark, Elizabeth, Linden, Carteret and Perth Amboy were not included in this area. The Commission recognized that some of the New Jersey cities which were not exempted were contiguous to New York, but, as to them said at page 671:

 "Among the cities and towns which would be excluded from the commercial zone would be some, such as Elizabeth and Perth Amboy, for example, which are separated from Staten Island by Staten Island Sound or Arthur Kill only, and are therefore contiguous, in a sense, to the city of New York. Except for the relatively small amount of traffic, however, which moves between Staten Island and these points on the western shore of the Sound, the logical route for movement by motor vehicle from the remainder of the city of New York is through Newark, a point which we do not propose to include in the commercial zone, and is interterminal in character. In our opinion, therefore, these points along the western shore of the Sound are ...

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