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GARFORD TRUCKING, INC. v. UNITED STATES

March 2, 1946

GARFORD TRUCKING, Inc.,
v.
UNITED STATES et al.



The opinion of the court was delivered by: FORMAN

The plaintiff, Garford Trucking, Incorporated, is a motor carrier. On October 1, 1938, the Interstate Commerce Commission on its 'grandfather' application (Docket Mc-1091) pursuant to 49 U.S.C.A. § 306(a), granted it a certificate of public convenience and necessity authorizing the transportation of general commodities, with certain exceptions, over irregular routes (9 M.C.C. 672).

On March 23, 1939, the Commission, upon the petition of certain protestants, set aside its order of October 1, 1938 and reopened the whole matter for oral argument and reconsideration. On April 8, 1940, Division 5 of the Commission filed its report and order (22 M.C.C. 569). Thereafter the plaintiff made application to the Commission to stay the effective date of said order and to allow it a further hearing. This application was granted by Division 5 on June 20, 1942. Exceptions were filed thereto by plaintiff and protestants. After consideration of the exceptions, Division 5, on November 26, 1943 rendered a decision and entered a third order on this 'grandfather' application, which modified the second order, dated April 8, 1940, and authorized plaintiff to transport general commodities, with certain exceptions, over irregular routes. The decision and order are unreported.

 The first, considered as 'base territory', included all points in the New York commercial Zone, Hudson, Essex and Union Counties, N.J., on and east of U.S. Highway 202, and points in Middlesex County, N.J., on and north of New Jersey Highway S-28. Plaintiff's home terminal, South River, N.J., is located centrally in this zone.

 The second zone included irregular routes between any and all points in the 'base territory' on the one hand, and on the other, Providence, R.I., points in specified territories in Massachusetts (including the Boston commercial Zone), and Connecticut and in Orange, Rockland and Westchester Counties, N.Y. This area was generally north of the 'base territory.' The second zone also included irregular routes between points in the 'base territory' and points to the south in specified territories in New Jersey, outside of the 'base territory'. Delaware, Eastern Pennsylvania (including Philadelphia), Baltimore, Md., and Washington, D.C. The authority granted plaintiff to operate in this zone was in the nature of irregular-route radial-service. (See Classification of Motor Carriers of Property, 2 M.C.C. 709.)

 The third zone included routes between Trenton, N.J., on the one hand, and on the other, Scranton, Pa., Baltimore, Md., Washington, D.C., and points in Westchester County, N.Y., outside of the New York commercial Zone.

 No language of the order of the Commission granted the plaintiff the right to cross-haul freight between points in the northerly area of the radial territory and points in the southerly radial area through any point in the 'base territory'.

 Plaintiff was aggrieved by this order and again petitioned the Commission to reopen and reconsider the matter. In its petition, dated January 12, 1944, it alleged: 'Applicant does not question the territorial limitations as found by Division 5, and accepts them in order that this litigation might come to a close from a territorial or area standpoint. However, it questions the inference, created by the decision of Division 5, to the effect that it cannot continue to render through transportation service between points in the 'trunk-line' area which it is authorized to serve to and from the 'base' territory and points in 'New England' territory which it is authorized to serve to and from the same identical 'base' territory. If it was the intent of Division 5 to prohibit such transportation service, then it is the position of applicant that the Division erred as a matter of fact and of law. In order to protect its future operations, applicant must, for the purposes of this petition, assume that it was the intention of Division 5 to order the discontinuance of the described through transportation service.'

 On October 9, 1944 the Commission denied plaintiff's petition for reconsideration with stating its reason for such action.

 On November 27, 1944, the plaintiff filed its complaint in this court, pursuant to the provisions of 28 U.S.C.A. §§ 41(28), 43-48 and 49 U.S.C.A. §§ 17(9) and 305(g), wherein it prays, among other things: '(4( That the Court make its order setting aside the said order of November 26, 1943, above described and set forth in Exhibit C. hereof, and remanding the application of the plaintiff for a certificate to operate as a common carrier to which said order of November 26, 1943, relates, to the Interstate Commerce Commission for further proceedings in conformity with the decision and judgment of the Court in the within proceeding;'

 As a basis for this relief it alleges in Paragraph VII of its complaint that the Commission denied to it the right to commodity traffic between points in New England territory on the one hand, and on the other, points situate in the states of New Jersey, Pennsylvania, Delaware and Maryland, via plaintiff's home terminal, situate at South River, N.J., even though the plaintiff had performed said transportation service prior to June 1, 1935.

 In paragraphs VII and IX it alleged:

 'That the Commission, in its first and second decisions of February 1, 1938, and April 8, 1940, respectively, clearly recognized the fact that applicant rendered a through transportation service between points in New England on the one hand, and points in trunk line territory, on the other hand, through the territory described as 'base' territory in the decision dated November 26, 1943; that the Commission also clearly applied the principles announced by the Commission in Powell Bros. Truck Line, Inc., case, decided February 8, 1943, a copy of which is attached hereto as Appendix F, and made a part hereof, for it granted authority to continue the through transportation service between points in trunk line territory, on the other hand; that at the time plaintiff filed its petition, dated January 12, 1944, there was pending before the Commission, petition of G & M Motor Transfer Co., irregular route carrier, praying interpretation of the certificate which had theretofore been issued it by the Commission; that said Commission postponed action on plaintiff's petition, dated January 12, 1944, until decision was rendered on the G & M Motor Transfer Co. case on July 10, 1944; that a copy of the same is attached hereto as Appendix G and made a part hereof; that the said Commission subsequently on October 9, 1944, denied plaintiff's petition dated January 12, 1944, with statement of reasons; that the Commission applied the principles announced in the G & M Motor Transfer Co. case in denying plaintiff's petition of January 12, 1944; that the facts in the said G & M Motor Transfer Co. case differ materially from the facts in plaintiff's case; that the principle applied in the said G & M Motor Transfer Co. case, in interpreting certificates of irregular route carriers, is directly opposed to that applied in interpreting certificates of regular route carriers (See Powell Bros. Truck Lines case); that the facts in the said G & M Motor Transfer Co. case differ materially from the facts in the instant case; and that none of the facts in this instant case have been or could have been, taken into consideration in the decision announced in the G & M Motor Transfer case.

 'That the said Interstate Commerce Commission in issuing its order of November 26, 1943, denying in part the said application dated December 31, 1935, as amended, to the extent stated in paragraph VII above, ignored material evidence and acted in an arbitrary, capricious and unreasonable manner; that the said Commission incorrectly applied to the facts which it found, the statutory provisions and Congressional intentions relating to 'grandfather' rights of common carriers by motor vehicle; that the Commission applied the principle of interpretation in connection with certificates of so-called irregular route carriers directly opposed to that applied in connection with regular route carriers; that the Commission applied the principle of interpretation, arrived at in another case, where the facts were materially different, to the instant case; and that the Commission in so doing erred as a matter of law.'

 The case was submitted to the court upon the argument of counsel and the record and evidence taken in the proceedings before the Commission.

 The character of the proof necessary to establish a historic basis for the grant of the privilege under the 'grandfather' clause is thus described in United States v. Carolina Carriers Corp., 315 U.S. 475, at pages 480, 481, 62 S. Ct. 722, 726, 86 L. Ed. 971: 'The Action provides the test of 'bona fide operation.' That standard carries the connotation of substantiality. It also makes clear that a holding out to serve a specified area is not alone sufficient. It is 'actual rather then potential or simulated service' which is required. McDonald v. Thompson, 305 U.S. 263, 266, 59 S. Ct. 176, 178, 83 L. Ed. 164. Substantial, as distinguished from incidental, sporadic, or infrequent, service is required.'

 In Peninsula Corporation v. United States, D.C., 60 F.Supp. 174, at page 180, the court said: 'The 'grandfather' clause, so-called, requires that the Commission in specifying in a certificate the service to be rendered shall endeavor to preserve 'substantial parity between future operations and prior bona fide operations.' Alton R. Co. et al. v. United States et al., 315 U.S. 15, 22, 62 S. Ct. 432, 437, 86 L. Ed. 586; United States et al. v. Carolina Freight Carriers Corporation, 315 U.S. 475, 481, 62 S. Ct. 722, 86 L. Ed. 971; Crescent Express Lines v. United States et al., 320 U.S. 401, 409, 64 S. Ct. 167, 88 L. Ed. 127.'

 In Howard Hall Co. v. United States, 315 U.S. 495, at page 498, 62 S. Ct. 732, 734, 86 L. Ed. 986, the court stated: 'Prior operations to several points in a region may or may not justify the Commission in authorizing service throughout the whole region. The precise geographical pattern for future operations is the product of an expert judgment based on the substantiality of the evidence as to prior operations, the characteristics of the particular type of carrier, the capacity or ability of the applicant to render the service, and the like. Alton R. Co. v. United States, 315 U.S. 15, 62 S. Ct. 432, 86 L. Ed. 586; United States v. Carolina Freight Carriers Corp., supra.'

 The plaintiff in its original application for a certificate under the 'grandfather' clause, filed with the Commission on December 31, 1935 (Docket MC-1091), sets forth that among the routes and territory which it regularly served on June 1, 1935, were operations between Rosslyn, Va., Washington, D.C., and Boston, Pittsfield, Mass., Utica and Schenectady, N.Y. Examination of Appendix A, offered by plaintiff, showed that from the period commencing January 9, 1934 to September 16, 1935, inclusive, it carried a total of 32 shipments from its base or terminal area, or from Philadelphia, to points in Connecticut and Massachusetts. No disclosure is made as to the weight of the shipments so as to reflect this factor in the substantiality thereof and there is no indication as to whether plaintiff interchanged any of the freight. It also fails to list a single through shipment arising either in New England territory or in Baltimore and Washington that it carried between any of these points.

 Plaintiff offered in evidence as an exhibit a tariff which it filed with the Commission effective on April 1, 1936, pursuant to the Motor Carrier Act of 1935 Secs. 201, 217, 49 Stat. 543, 560, 49 U.S.C.A. 301, 317. It contended before the Commission that this exhibit 'was not offered for the purpose of proving the actual transportation of any given commodity, between any given points; it was offered for the purpose of showing the bona fide holding-out of applicant to the general public and the extent of the bona fide holding out'.

 The tariff cover is entitled 'Class and Commodity Rates and Rules and Regulations Governing Same Between Baltimore, Md., Washington, D.C., Rosslyn, Va., and Boston, Mass., Albany, N.Y., and Intermediate Points in Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and District of Columbia.' The majority of the rates listed are for the transportation of class or commodity freight moving in a northerly direction from points in the Camden-Philadelphia area, Trenton area, metropolitan New York area and North Jersey points to points in the states of Connecticut, Rhode Island, and Massachusetts or from the same points in a southerly direction to points in the states of Pennsylvania, Delaware, Maryland, Virginia and the District of Columbia. The tariff fails to fortify plaintiff's contention of a bona fide holding out as it does not list any ...


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