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SHEIN v. UNITED STATES

December 17, 1951

SHEIN et al.
v.
UNITED STATES et al.



The opinion of the court was delivered by: MADDEN

This is an action to enjoin, set aside and annul two orders of the Interstate Commerce Commission, hereinafter called Commission, brought under Section 1336, 2284 and 2321-2315, Title 28 U.S.C.A., wherein the Commission, in one order dated July 24, 1950, denied an application of plaintiff, Shein's Express, hereinafter referred to as Shein, a partnership operating as a common carrier by motor vehicle in interstate commerce, to purchase under Section 5(2) of the Interstate Commerce Act *fn1" certain operating rights of plaintiff, Wesley Stillwell, another partnership hereinafter called Stillwell, operating as a common carrier by motor vehicle and in the other order dated April 2, 1951 denied plaintiffs' petition for reconsideration, by the entire Commission.

 The United States has been made a party defendant as required by Section 2322, Title 28 U.S.C.A., and the Interstate Common Carrier Council of Maryland, Inc. *fn2" has intervened.

 Shein brothers, holding equal interests in the partnership, operate in interstate or foreign commerce, pursuant to a certificate in No. MC-80504, as a motor common carrier of general commodities, with exceptions, over regular routes, between New York City and Wilmington, Delaware, principally via Newark and Trenton, New Jersey, and Philadelphia, serving all intermediate and certain off-route points.

 Stillwell operates in interstate or foreign commerce, pursuant to certificates in Nos. MC-93789, MC-93789(Sub-No. 2), and MC-93789(Sub-No. 3), as a motor common carrier (1) of general commodities, excepting, among others, household goods as defined in Practices of Motor Common Carriers of Household Goods, 17 M.C.C. 467, over irregular routes, between points in Aston and Middletown Townships, Delaware County, Pennsylvania, on the one hand, and, on the other, points in New Jersey, Delaware, Maryland, the District of Columbia, and those in the New York commercial zone as defined in New York, N.Y. Commercial Zone, 1 M.C.C. 665, (2) of general commodities, with exceptions, over a regular route, between Fernwood and Wawa, Pennsylvania, over U.S. Highway 1, serving all intermediate points and eight off-route points, restricted to service which is auxiliary to, or supplemental of, railway service, and (3) of household goods, as previously defined, over irregular routs, between Media, Pennsylvania and points within 15 miles thereof, on the one hand, and, on the other, points in Massachusetts, Rhode Island, North Carolina, Virginia, Maryland, New Jersey, Delaware, the District of Columbia, and those in a defined area in New York.

 Shein proposed to purchase that portion of Stillwell's operating rights under the certificate in No. MC-93789(Sub-No. 2) which authorizes the transportation of general commodities between points in Aston and Middletown Townships, Pennsylvania, on the one hand, and, on the other, points in Delaware, Maryland, and the District of Columbia.

 It will be well to keep in mind that the present service performed by Stillwell and sought to be transferred to Shein, as granted by the Commission under MC-93789(Sub-No. 2), is an irregular route service.

 It might be well also to point out that an application, likewise under Section 5(2), wherein authority was sought by Stillwell to sell its rights in MC-93789(Sub-No. 2) covering the transportation of general commodities between points in Aston and Middletown Townships, on the one hand, and, on the other, points in New Jersey and those in the New York commercial zone to the Houff Transfer, Inc. was denied by the Commission. *fn3" It, however, is not a part of this record and does not constitute a part of this proceeding.

 A hearing was conducted upon the application by an examiner of the Interstate Commerce Commission, at which time plaintiffs and interveners appeared through counsel. Plaintiffs produced two witnesses who testified concerning the proposed transfer, to wit, Wesley C. Stillwell, representing the vendor partnership, and Phillip Shein, representing the vendee. A third witness, a certified public accountant, testified solely about the accounting practices and capital structure of Shein.

 The examiner submitted a report and recommended an approval of the transfer, conditioned upon certain financial arrangements which are of no moment here.

 Exceptions, with a request for oral argument, were filed by the interveners to the report. Oral argument was denied and on March 6, 1950 the Commission, through Division 4, made a report which in substance adopted the recommendations of the examiner, with a few minor changes, approving the transfer therein sought.

 On April 6, 1950 the intervener sought a reconsideration of the matter and a denial of the application. Plaintiffs thereupon replied.

 On July 24, 1950, the Commission, through the same division, namely Division 4, and the same Commissioners 'Reopened the proceedings for reconsideration on the record as made' and reversed itself, denying the application.

 Plaintiffs attack the action of the Commission as being arbitrary and capricious and not founded upon any substantial evidence and also upon a mistaken theory of the law that the burden was upon the applicant-plaintiffs to prove the need of such transfer in the public interest.

 In these matters, where this statutory court sits in effect as a reviewing court, we cannot substitute our judgment for that of the Commission but must follow the rule universally laid down, as follows: 'The function of the reviewing court is much more restricted. It is limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done.' United States v. Pierce Auto Freight Lines, Inc., 327 U.S. 515-535, 66 S. Ct. 687, 90 L. Ed. 821; Interstate Commerce Commission v. Mechling, 330 0u.s. ...


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