Appellants Reply Brief — Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc.

IN THE

Supreme Court of the Unites Senyeg> 34

OCTOBER TERM, 1973

Nos. 73-1055, 73-1069,

73-1070, 73-1071, and 73-1072

BOWMAN TRANSPORTATION, INC., e7 al.

v

Appellants,

ARKANSAS-BEST FREIGHT SYSTEM, INC., e7 ai.

Appellees

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF ARKANSAS.

FORT SMITH DIVISION

REPLY BRIEF FOR APPELLANTS BOWMAN

TRANSPORTATION, INC., JOHNSON MOTOR

LINES, INC.. RED BALL MOTOR FREIGHT,

INC., AND LORCH-WESTWAY

CORPORATION, FT AL.

MAURICE F. BISHOP

601-09 Frank Nelson Building

Birmingham, Alabama 35203

Counsel for Bowman Trans-

portation, Inc.

SANDER W. SHAPIRO

JERRY C. PRESTRIDGE

Post Office Box 1148

Austin, Texas 78767

Counsel for Red Ball

Motor Freight, Inc.

BRYCE REA, JR.

DONALD E. CROSS

700 World Center Building

918 Sixteenth Street, N.W.

Washington, D.C. 20006

Counsel for Johnson Motor

Lines, Inc.

CHARLES S. RHYNE

COURTS OULAHAN

400 Hill Building

Washington, D.C. 20006

ROBERT L. JONES, JR.

412 Merchants National

Bank Building

Fort Smith, Arkansas 72901

Counsel for Lorch- Westway

Corporation, et al.

Wasrington.O.C « CLO PUBLISHERS « LAW PRINTING CO « (202) 393 06275

} MICMAF! <O0AK, JR cLens

(i)

TABLE OF CONTENTS

1. The Three-Judge District Court Re-Weighed The

Evidence, And Impermissibly Substituted Its

Judgment For That Of The Agency. ............

2. The Commission Did Consider All Of Appellees’

tn ans e UGU eke ebb bade On 66868666 o8 9

3. The Evidence Was Mistakenly Weighed By The

Court Below Under The Guise Of An Inappli-

GS chao caceccdecswoceds 10

4. The Court Should Remand With Directions To

Affirm The Commission’s Order. .................. 13

APPENDIX A Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Determining Public Convenience

Dt cccocbctaecacebhesac's la

APPENDIX B Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The Bow-

I Shs 0 cb ce SeSs cevcccss Ib

APPENDIX C Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The John-

CO a Ic

APPENDIX D Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The Red

IN 65 bb Wawa ban wente ed Id

APPENDIX E Report And Order Of ICC In Herrin

Appendix G-—Protestants Evidence: ;

PPG. nun 00604640060 0642 le

(ii)

Page

TABLE OF AUTHORITIES

Cases:

American Farm Lines v. Black Ball, 397 US. 532 ........ 13

Ashbacker Radio Corp. v. Federal Communications

I SE as eee an ean 13

Bradley v. Maryland Casualty Co., 282 F.2d 415

Sorry rrr Ter tt 2

Bredehoeft Produce Co. v. United States, 376 F.

Bae. TOGA Gah, BORED lw. nc nc cccewwesncescsacs 2

Camp wv. Plete, 421 US. 198 2. nce cesscccsccccccens 12

Chicago & N.W. Ry. v. Atchison, Topeka & Santa Fe

i «906 0ns S406 n8 55 600600656408 14

Citizens to Preserve Overton Park, Inc. v. Volpe.

ee ae ee ak a el ee 10, 11

Consolidated Edison Co. v. National Labor Rela-

ie aus eneans 12

Consolo v. Fedural Maritime Commission, 383 U.S.

PS ee a: ee ee 2,14

Federal Communications Commission v. NBC

SS , & Fe a re 13

Federal Maritime Commission v. Svenska Amerika

I, a eens 14

Federal Trade Commission v. Cement Institute, 333

ee ee ee ee 15

First National Bank of Fayetteville v. Smith, 365 F.

Se EL OE, SOU 6 Oc wEhb bed Se cccseccses 12

Illinois Central R.R. v. Norfolk and Western Ry.,

DET ud ek bse Gass oe CSE dees 6 oka ek O8 14

Interstate Commerce Commission v. Jersey City,

I a i i ee oe el 13

Minn. & St. Louis Ry. v. United States, 361 U.S. 173,

CE Oe we rad 6s i isk oy pew ates chown

(iii)

Page

Morgan v. United States, 298 US. 468 ............... 13

O'Leary v. Brown-Pacific-Maxon, Inc., 340 US. 504 ...... 15

United States v. El Paso Natural Gas Co., 376 US.

et atk 6 bke md Cahedn bese ds 6 cu. GO ues bod <a 2

Statutes:

Administrative Procedure Act, 5 US.C. §§556,

ry od oe 11,12

Administrative Procedure Act — Legislative History,

S. Doc. 248, 79th Cong., 2d Sess. (1947) ............ 12

————

Oe ee ee

IN THE

Supreme Court of the United States

OCTOBER TERM, 1973

Nos. 73-1055, 73-1069,

73-1070, 73-1071, and 73-1072

BOWMAN TRANSPORTATION, INC., ef al,

Appellants,

ARKANSAS-BEST FREIGHT SYSTEM, INC., ef al,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF ARKANSAS,

FORT SMITH DIVISION

REPLY BRIEF FOR APPELLANTS BOWMAN

TRANSPORTATION, INC., JOHNSON MOTOR

LINES, INC., RED BALL MOTOR FREIGHT,

INC., AND LORCH-WESTWAY

CORPORATION, ET AL.

The keystone of Appellees’ argument is that the

Three-Judge Court did not weigh the evidence. Brief at

9, 44. That Court’s opinion refutes that contention.

The Court fashioned a novel standard of judicial review,

2

without precedent in statute or decision. This standard

accommodated improper reweighing of the evidence and

rejection of the agency's specialized knowledge and

expertise. The Court has reiterated these mistaken views

in Bredehoeft Produce Co. v. United States, 376 F.

Supp. 70, 79 (W.D. Ark. 1974).

Appellees acknowledge that the Court's decision is

almost a verbatim copy of Appellees’ proposed findings

of fact and conclusions of law. Brief at 62, 63.'

Appellees misstate Appellants’ reasons for bringing this

matter to the attention of this Court. Appellants’

principal challenge is not to the copying itself, but to

the errors copied by the Court below from Appellees’

proposals. United States v. El Paso Natural Gas Co.,

376 U.S. 651, 656; Bradley v. Maryland Casualty Co.,

382 F.2d 415, 423 (8th Cir. 1967) (opinion per

Blackmun, J.). Appellees thereby led the Court below

into errors which must be corrected if the proper

relationship between the judiciary and administrative

agencies is to be preserved. Consolo v. Federal Maritime

Commission, 383 U.S. 607, 620-621.

1. The Three-Judge District Court Reweighed The

Evidence, And Impermissibly Substituted Its Judgment

For That Of The Agency.

The Court stated that “...a mere review of the

sufficiency of the evidence will not suffice in a

proceeding, such as the one now before the Court,

'The copying is 40 out of 43 pages. Compare App.

1276-1319 with App. 697-738.

3

where the agency action is alleged to be arbitrary and

capricious and resulting from an abuse of discretion.”

364 F. Supp. at 1258 (App. 726, 1307). The Court

then demonstrates by the very language it used that it

re-weighed the evidence stating, inter alia:

1. “Our review of the Division’s [Commission’s]

report in light of the whole record compels us to

the conclusion that the Division based its ultimate

conclusions upon subordinate findings that can be

supported only by a consideration of portions

rather than the entire record.* * *”” 364 F. Supp.

at 1259 (App. 1309).

2. “There is no rational basis for the Division's

refusal to give weight to the extensive transit-time

studies presented by protestants [Appellees].

***The conclusion [by the Commission] that

these studies are entitled to little weight because

they ‘relate to short periods of time’ is completely

arbitrary. Many covered longer periods of time

than those presented by applicants and others

covered periods identical to the applicants’ [ Appel-

lants’}.* * *” 364 F. Supp. at 1259-60 (App.

1310) (emphasis added).

3. “Other evidence presented by applicants’ ship-

pers received similar treatment by the Division.

Findings of the Examiners, and findings embodied

in an appendix to the Division’s report, reflecting

unfavorably upon applicants received emphasis by

the Examiners but no _ consideration by the

Division.” 364 F. Supp. at 1261 (App. 1311)

(emphasis added).

Other examples of the District Court's weighing

evidence and where its opinion proves this fact are:

(a) Transit-time evidence supporting Appellants

held to be “inferior” and evidence supporting

Appellees “superior”. 364 F. Supp. at 1251 (App.

1294).

4

(b) Appellants’ performance evidence held to be

“inferior”. 364 F. Supp. at 1251 (App. 1295).

(c) “Probative value” of similar or “identical”

evidence of Appellees not properly recognized by

Commission. 364 F. Supp. at 1251 (App. 1295).

(d) Appellees’ transit-time studies given too “little

weight” by Commission. 364 F. Supp. at 1251 (App.

1295).

(e) Commission refused “to afford weight” to

Appellees’ service exhibits. 364 F. Supp. at 1252 (App.

1296).

(f) Commission did not give “weight” to Appel-

lees’ “‘most important” evidence on transit-times. 364

F. Supp. at 1252 (App. 1310).

Characterizations of the Commission's “treatment” of

the evidence as arbitrary and capricious do not prove it

so. A_ reading of its Report proves that the

Commission carried out its statutory function of

weighing the evidence, comparing applicants, and

determining where lies the public convenience and

necessity. This was not arbitrary or capricious action

but a careful, thoughtful performance of statutory

duty. Appellees’ claims of error really come down to the

fact that the Commission does not agree with Appellees

as to the weight of the evidence. The Court's

decision really comes down to the fact that it does not

agree with the Commission as to the weight of the

evidence.

Agency findings based upon substantial evidence, as

were the Commission’s findings here, cannot lack a

rational basis so as to be arbitrary and capricious. The

Commission’s Report demonstrates why the District

Court did not find that the Commission's findings and

|

5

conclusions in this proceeding were not based upon

substantial evidence. This Appellees’ Brief concedes.

Brief at 14. Under these circumstances, the Com-

mission’s findings were not and could not be irrational

or arbitrary or capricious.

The Court below was led into grievous error by

Appellees who supplied language in which the Court

asserted that the Commission did not weigh the

evidence properly. The Court's findings are thus

factually incorrect. Refusal to give “weight” or giving

“little weight” (App. 715) does not mean failure to

weigh. The Commission’s Report carefully and reason-

ably weighed, evaluated and explained why it could not

treat Appellees’ evidence as more persuasive than

Appellants’. The Commission wrote a careful and

exhaustive Report consisting of 59 pages plus 196 pages

of Appendix (App. 101-367). Along with its own

summary of the evidence regrouped geographically

(App. 182-318), the Commission set forth a summary

of all applications (App. 161-170), all pleadings and

exceptions (App. 170-181), the Examiners’ summary of

Appellees’ evidence (App. 316-356), a description of

regular routes authorized (App. 356-358), and a listing

of the increased population to be served (App. 123.

319). A reading of those pages proves conclusively that

the Commission exhaustively considered all evidence

presented by Appellees and Appellants, in “what is

perhaps the most extensive record ever developed in

connection with a single group of motor carrier

applications”, with 1009 witnesses presenting 23,423

pages of testimony and 1987 exhibits in 147 days of

oral hearings. 114 M.C.C. at 573 (App. 103). °

6

As stated above, the Court below held that the

Commission arbitrarily gave no “weight” to Appellees’

transit-time studies, which were “the most important

part of [Appellees’] evidence”, purportedly showing

“reasonably adequate protestant service’. 364 F. Supp.

at 1259, 1261 (App. 1310, 1313). In fact, the

“treatment” of this evidence by the Commission is fully

supported by reasoning set forth in its Report, and the

Commission's “‘treatment” is worthy of more detailed

consideration as it is illustrative of the Commission's

careful weighing of th evidence. After a _ concise

summary of these transit-time studies, based upon the

detailed summary prepared by the Examiners and set

forth in full in Appendix G of the agency decision (App.

319-356), the Commission noted that:

“*** | [While [these studies] . . . demonstrate

that in certain instances during the study periods

expeditious service was rendered by certain of the

protestants [Appellees], these studies must be

considered in the light of the facts (1) that most

either relate to short periods of time or cover

traffic handled for specified shippers and (2) that

they were made when protestants were confronted

with the possibility of grants of authority to

additional carriers. When viewed in this light, we

believe that protestants’ studies do not present as

valid a picture as those introduced by _ those

witnesses supporting the applications here under

consideration [Shippers].”” 114 M.C.C. at 599

(App. 129).

The Court below erroneously stated that:

“* * * The length of time covered by the studies

or the dates embraced therein were not considered

significant by the parties or the Examiners. Indeed,

these facts were not deemed sufficiently important

ee —_— Ee ———

5

by the Division itself to be mentioned in its own

findings relative to evidence presented’ by certain

protestants. * * *”” 364 F. Supp. at .1259 (App.

1310).

To set the record straight, both the Examiners and the

Commission did find these factors important. The

detailed summary of Appellees’ evidence prepared by

the Examiners does set forth the length of time covered

or the dates of the studies, e.g., 114 M.C.C. at 782, 791

(App. 344, 353) (See App. E).? The Commission

not only presented a concise suinmary of this evidence.

It also incorporated into its Report the full summary

prepared by the Examiners. The accuracy of the

Commission’s summary is not challenged by the Court,

which disagreed only with the conclusions drawn

therefrom. Surely, no inference of arbitrary conduct by

the Commission can be drawn from its action in not

restating in full in the body of its Report the details of

evidence set forth in an appendix *o its Report.

The District Court, in re-weighing the evidence,

consistently credited the conclusions of the Examiners

over those of the Commission, even though it is beyond

question that the ultimate responsibility in such expert

2Of the approximately 200 shippers submitting transit time

studies, about 185 covered traffic handled during a period of over

one month. Of these approximately 45 covered traffic handled

during a period of from | to 3 months, about 35 covered traffic

handled during a period of from 3 to 6 months, about 75 covered

traffic handled during a period of from 6 months to | year, and

approximately 30 covered traffic handled during the period of |

year or more.

While only two of the 14 protestants which submitted transit

time studies introduced evidence regarding traffic handled in 1965,

about 78 of the studies of the supporting shippers covered traffic

handled in 1965 (some in addition to that handled in 1966 and

some solely for 1965), and at least 5 covered traffic handled in

1964. (See App. E).

8

matters lies with the Commission. The Court confuses

the Examiners’ summary of the evidence, with which

there is no quarrel, with their conclusions, with which

the Commission disagreed. For example, the Examiners

referred to the “anomaly” of certain carriers (ie.,

Appellant Bowman) having the dual role of applicant

and protestant. (App. 753); 364 F. Supp. at 1247 (App.

1287).

This characterization demonstrates the failure of the

Examiners to grasp the significance of this proceeding.

The Commission sought to meet the expanding

transportation needs of the Southeast and Southwest by

a consolidation of multiple applications to provide

service in these areas, rather than by atomized

consideration of these needs on a certificate-by-

certificate basis. The Court was induced by the

Appellees to fall into the same error. It was for the

Commission — not the Examiners or the Court — to

exercise its statutory duty in making this expert

judgment, which also was carried out in regrouping the

deficiencies and needs of the shippers on a geographical,

rather than a commodity, basis (App. 182-318). This

geographical regrouping clearly established the basis for

the Commission’s decision that the public convenience

and necessity required the additional service demanded

by the outpouring of 933 shipper witnesses as well as

the basis for the choice of the three Appellant carriers

to meet these demonstrated needs. When the evidence is

analyzed geographically, clearly these carriers must be

selected as best able to supply the need which the

public interest demands.

The Court’s erroneous interpretation of the Com-

mission’s “treatment” of “the most important part of

{Appellees’] evidence” reveals the serious distortion of

the process of judicial review which occurred below.

ee

9

The Court’s conclusion is a prime example of its use of

an improper standard of review. The Commission's

consideration of such evidence as transit-time studies is

a matter of fact finding properly to be reviewed

pursuant to the substantial evidence test. The reviewing

Court cannot substitute its judgment for that of the

agency by re-weighing the evidence under the guise of

the arbitrary and capricious standard. The Court was

wrong both in fact and in law.’

The ‘ourt below simply substituted its own

judgment in determining where lies the public con-

venience and necessity, and refused to recognize the

expertise of the Commission. This was the statutory

duty of the agency.

‘

2. The Commission Did Consider All Of Appellees’

Evidence.

The Court, as proposed by Appellees, stated in its

opinion that the Commission did not base its

conclusions upon the entire record, or did not

“consider” Appellees’ evidence. 364 F. Supp. at 1251,

1259 (App. 728, 1294, 1310); Appellees’ Proposed

Conclusion 10 (App. 777, 1309).* Appellees repeat this

7As a matter of fact, the District Court repeatedly

mischaracterized transit-time studies as those of “applicants”,

when in fact they were presented by supporting shippers. 364 F.

Supp. at 1259-60 (App. 1310-13), 364 F. Supp. at 1261 (App.

1313-14).

“Appellees, at page 50 of their brief, argue that “{a}lthough

requested to do so by protestants, the Division refused to take

official notice of the same edition of the same publication which

showed that Red Ball had closed 35 of its 92 terminals.” (Emphasis

added). This statement is incorrect. In noting that Cole-Dixie had

closed one of its terminals since the close of the hearing, the

Commission relied on the Fall 1971 edition of the American Motor

Carrier Directory. The evidence concerning the closing of Red

10

error. Brief at 55, 58-60. The Commission's Report

directly refutes this erroneous conclusion, e.g. :

“The evidence considered in its entirety is

convincing that the additional service so to be

authorized will serve a useful purpose, responsive

to a public demand and need and that available

transportation services between the points and to

the extent authority is granted are not reasonably

adequate to meet the demonstrated needs of the

shipping and receiving public.” 114 M.C.C. at 599

(App. 129) (emphasis added).

And:

“Considered as a whole, the record demonstrates

that many of the supporting witnesses are not

receiving reasonably adequate service.” /d at

599-600 (App. 129-130) (emphasis added).

The Commission also twice referred to its considera-

tion of all the evidence of the Appellees.

“The evidence, the recommendations of the

hearing examiners and the pleadings have been

considered. inasmuch as no exception is taken to

the examiners’ summary of the evidence presented

by the protestants as to their authorities, equip-

ment, and operations, this portion of the ex-

aminers’ report is hereby adopted and is set forth

in appendix G to this report.”” (App. 105, 319-356)

(emphasis added).

“The evidence of the opposing carriers, as

summarized by the examiners, is set forth in

appendix G of this report.” (App. 128, 319-356)

(emphasis added).

Ball’s terminals subsequent to the hearing was published in the

1972 edition of the American Motor Carrier Directory which was

released after the Commission's :eport which is dated December

30, 1971. In any case, this matter, along with Red Ball’s

explanation, was considered at the reconsideration stage.

3. The Evidence Was Mistakenly Weighed By The Court

Below Under The Guise Of An Inapplicable Standard

Of Review.

Appellees claim that Appellants “take the position

that this Court over-spoke itself in’ Citizens to Preserve

Overton Park, Inc. v. Volpe, 401 U.S. 402. Brief at 23.

Appellees misstate Appellants’ position. Appellants’

position is that Overton Park does not authorize the

application of an additional and more rigorous Court

weighing of the evidence test to adjudicatory fact

findings “in a case subject to sections 556 and 557” of

the Administrative Procedure Act. 5 U.S.C. §706(2)\(E).

The arbitrary and capricious standard cannot be used as

a guise under which a reviewing Court in a case based

on a formal record may arbitrarily substitute its

judgment for that of the agency where, as here, the

agency findings and conclusions based thereon are

supported by substantial evidence.‘

The judicial review provisions of the Administrative

Procedure Act require that agency action should be set

aside if it violates the Constitution or a statute. 5

U.S.C. §706(2)B)(C). The same is true where there is

no observance of procedure required by law. /bid.

§706(2)(D). Trial de novo by the reviewing Court, in

effect resorted to by the Court below, is only

applicable for adjudication not subject to Sections 556

‘For a summary of this substantial evidence, see Apps. A-D,

which outline that evidence with respect to the overall public

convenience and necessity (App. A) and to the basis upon which

the Commission granted a certificate to each of the Appellant

carriers (Apps. B, C, and D). Appellees did not allege in their

complaint and have never argued that the agency order was not

supported by substantial evidence. Their confused position is

illustrated by their statement that the Three-Judge Court “did

not find the actions and conclusions of the agency to be

supported by substantial evidence, nor did the Court find that

the agency made erroneous findings of fact.” Brief at 9.

12

and 557. Administrative Procedure Act — Legislative

History, S. Doc. 248, 79th Cong., 2d Sess. 214 (1947).

Ibid. §706(2F). Cf First National Bank of Fayette-

ville v. Smith, 365 F. Supp. 898, 910-911 (W.D. Ark.

1973) (opinion per Miller, J.) (appeal pending).

This leaves the substantial evidence rule and the

standard used by the Court below. Appellees claim that

“both standards are applicable”. Brief at 9. The

substantial evidence rule is only applicable to formal

hearings on the record and is embodied in the decisional

provisions of the Administrative Procedure Act. 5

U.S.C. §556(d) requires that an order issued by formal

adjudication must be “supported by and in accordance

with the reliable, probative and substantial evidence’.

This section codifies the rule developed by this Court in

Consolidated Edison Co. v. National Labor Relations

Board, 305 U.S. 197, 229, with respect to findings of

fact. Under this rule, the Commission is not required

specifically to consider and rule upon every item of

evidence in the record or every contention made by

all parties. Minn. & St. Louis Ry. v. United States, 361

U.S. 173, 193-194,

Congress intended the Administrative Procedure Act

to be read and applied as a whole. Administrative

Procedure Act — Legislative History, S. Doc. No. 248,

79th Cong., 2d Sess. 194, 216 (1946). Congress could

not have intended to make Section 556(d) redundant

by the disjunctive provisions of Section 706(2). Indeed,

the arbitrary, and capricious standard of Section

706(2\A) applies to matters “not in accordance with

law” (emphasis added). The substantial evidence rule,

enacted in Section 556(d), on the other hand, applies

to findings of fact. Camp y. Pitts, 411 U.S. 138,

141-142.

Appellants never have contended that a concept

similar to the arbitrary and capricious standard has no

13

application to a formal adjudicatory proceeding under

the Administrative Procedure Act. American Farm Lines

v. Black Ball, 397 U.S. 532, 538-539: Interstate

Commerce Commission v. Jersey City, 322 U.S. 503,

514-519. Examples occur where the deciding officer

fails to personally consider and appraise the record in

accordance with Morgan v. United States, 298 U.S. 468.

477-482; where an administrative agency refuses to

consolidate mutually exclusive application hearings,

Ashbacker Radio Corp. v. Federal Communications

Commission, 326 U.S. 327, 333; or where an agency

refuses to allow a party to formally intervene while

permitting them to file briefs and present evidence and

oral argument, Federal Communications Commission vy.

NBC (KOA), 319 U.S. 239, 247. Such considerations of

agency policy and procedure clearly are not at issue in

the instant case.

4. This Court Should Remand With Directions To Affirm

The Commission's Order.

Appellees argue, with respect to the Three-Judge

Court’s failure to remand, that:

“The judgment did no more than enjoin the

issuance of the specific certificates authorized in

such order.

* * *

“The Commission remains free to consider the

substantive issues of public convenience and

necessity at any time and therefore its delegated

powers have in no way been usurped.” (Brief at

64).

Such statements are consistent with Appellees’ failure

to acknowledge the cost, in both dollars and time,

which each delay in this proceeding has brought upon

14

the Shippers, to whom Appellees refer as “private

Appellants”. This dilatory strategy by Appellees cul-

minated in the Three-Judge Court’s permanent injunc-

tion against, rather than remand of, the Commission’s

order. Now, after significant but necessary delay in

seeking to correct that Court’s errors, “private Appel-

lants”’ are faced with the prospect of a hollow victory if

this Court finds for Appellants, but remands to either

the Court below or to the Commission, via that Court,

for further action. Appellees have nothing to lose by

15

O'Leary v. Brown-Pacific-Maxon, Inc. 340 U.S. 504,

508; Federal Trade Commission v. Cement Institute,

333 U.S. 683, 730.

The record here presented is similar in all relevant

aspects to these precedents. This case requires a similar

resolution. Truly, here, justice delayed would be justice

denied.

Respectfully submitted,

waiting. Appellants have nothing to gain. The real losers MAURICE F. BISHOP BRYCE REA, JR.

are the Shippers, whose needs the Commission sought to

meet. Appellants therefore pray that this Court remand

601-09 Frank Nelson Building

Birmingham, Alabama 35203

DONALD E. CROSS

700 World Center Building

918 Sixteenth Street, N.W.

with directions t6 affirm the Commission's decision. Counsel for Bowman

Such a procedure was employed by this Court in Transportation, Inc. Washington, D.C. 20006

Federal Maritime Commission v. Svenska Amerika t SANDER W. SHAPIRO Counsel for Johnson Motor

Tinien, 390 U.S. 238. There, as here, the proceedings JERRY C. PRESTRIDGE Lines, Inc.

had been in progress for more than eight years. The Post Office Box 1148 CHARLES S. RHYNE

reviewing Court there, as here, had taken “the Austin, Texas 78767 COURTS OULAHAN

extraordinary course” of failing to remand to the Counsel for Red Ball 400 Hill Building

agency for further action. This Court there stated: Motor Freight, Inc. Washington, D.C. 20006

“Since we have found that the Commission's ROBERT L. JONES, JR.

findings and order are supported by substantial ‘ 412 Merchants National

evidence and, since there are no other meritorious Bank Buildi

contentions raised by respondents, we think it is ng

time for a final disposition of the proceedings. The 7 Fort Smith, Arkansas 72901

judgment of the Court of Appeals is reversed; and Counsel for Lorch-Westway

the cases are remanded with directions to affirm

the order of the Commission.” 390 U.S. at 252,

253 (emphasis added).

Numerous cases have been disposed of by this Court

in like manner. Chicago & N.W. Ry. v. Atchison Topeka

& Santa Fe Ry., 387 U.S. 326; Illinois Central R.R. vy.

Norfolk and Western Ry., 385 U.S. 57, 75; Consolo y.

Federal Maritime Commission, 383 U.S. 607, 621;

Corporation, et al.

APPENDIX A

Findings of Substantial Evidence in

the Commission Order (114 M.C.C. 571)

Determining Public Convenience and

Necessity.

1. Locations of Facilities of Supporting Public

Witnesses.

“Thus, the 8 remaining applicants are

supported by 482 shippers with facilities located in

the Southwest” specified in the following footnote

as “specifically, 84 shippers have facilities in

Arkansas, 6 in Cciuradc, 84 in Louisiana, | in

New Mexico. 52 in Oklahoma, and 275 in Texas”;

“40 shippers in the Southeast” specified

in the following footnote as “Eighty-four shippers

have facilities in Alabama, 15 in Florida, 114 in

Georgia, | in Kentucky, 54 in Mississippi, 25 in

North Carolina, 25 in South Carolina, 17 in

Tennessee, and 5 in Virginia”;

“44, collectively, in the Middle Atlantic

and New England States” specified in the

following footnote as “‘Four shippers have facilities

in Connecticut, | in Delaware, 3 in Maryland, 8 in

Massachusetts, | in New Hampshire, 9 in New

Jersey, 5 in New York, 9 in Pennsylvania, and 4 in

Rhode Island”’;

“and 42 in the Midwest’’ specified in the

following footnote as “Fifteen shippers have

facilities in Kansas and 27 have facilities in

Missouri.””

114 MCC. $92

(App. 122)

2a

Il. Range of Commodities Shipped by Supporting

Shippers.

“(The traffic] consists of an extremely wide

variety of commodities (the examiners categorized

the shipper evidence according to approximately

45 different commodity descriptions) including

clothing, pharmaceuticals, metal articles, leather

goors, machinery, toys, grocery and department

store items, commodities requiring refrigeration, 114 M.C.C. 592

anc furniture.” (App. 122)

Ill. Shipper Dissatisfaction with Existing Service.

A. “Approximately 650 shippers have com-

plained about inconsistent and excessive transit 114 M.C.C. 596

times.” (App. 126)

B. “{O]ver 200 introduced transit time studies

demonstrating the undependable service they 114 M.C.c. 596

currently receive.” (App. 126)

C. “About 70 of the shippers located at

points in a total of 16 States complain

collectively about certain carriers’ service

restrictions and embargoes as well as about the

outright refusals of authorized carriers to 114 M.C.C. 5%

handle traffic.” (App. 126)

D. “Pickup and delivery complaints were

voiced by about 150 shippers located through- 114 m.c.c. 597

out 18 States.” F (App. 127)

3a

E. “Approximately 110 shippers complain

about interline difficulties and about 200

shippers collectively complain about loss,

damage, tracing difficulties, and misrowiing, 1:4 M.c.c. 597

much of which occurred in interchange ‘pp. 127)

service.”

F. “Approximately 17C shippers located at

points in 20 of the involved States indicate

that they have received complaints from their 114 M.C.C. 597

customers with respect to the existing service.”” ‘App. 127)

G. “The above-described difficulties have re-

sulted in shippers losing customers, business,

and short-term discounts.” (Approximately 80 114 M.C.C. $98

shippers) (App. 128)

IV. Economic Study, Department of Transporta-

tion, University of Houston re areas served by

applicant Johnson.

“The study develops the theses that the areas

presently served by Johnson and the areas Johnson

yroposes to serve have grown significantly in

recent years; that there is substantial trade and

commerce between these two areas; and that

comparatively there is a paucity of single-line

motor carrier service available to meet the 114 M.CC. 592

demonstrated growth.” (App. 122)

V. Population Growth in States Where Supporting Appendix F

Shippers Located. 114 M.C.C. 757

(App. 319)

ee

ee

Aen ee ee

Ib

APPENDIX B

Findings of Substantial Evidence in

the Commission Order (114 M.C.C. 571)

Supporting Grant of the Bowman

Application.

1. “Bowman holds. . .authority...from, to, and

between points in a territory bounded by Chicago,

lll., and points within 35 miles of Columbus

Circle, N.Y. on the north; Miami and Pensacola,

Fla., and Mobile, Ala., on the south; Memphis and

Tuscaloosa, Ala., on the west, and points along the 114 M.C.C. 584

eastern seaboard.” (App. 114)

2. “Bowman maintains 25 terminals, most of

which are located in the Southeast. It proposes to

establish [21 terminals and 3 agency stations in

the points proposed to be served in Arkansas,

Kansas, Louisiana, Mississippi, Missouri, and

Texas]. Its fleet consists of 478 tractors, including 114 M.c.c. 58s

359 sleeper cabs, and 978 trailers.” (App. 115)

3. “It proposes to render | or 2 day service

generally between Chattanooga and Memphis,

Tenn., and Birmingham and Gadsden,...

Montgomery and Mobile, Ala., on the one hand,

and, on the other, points in the territory it seeks

to serve. Applicant introduced exhibits showing

that on the 546 shipments moving from

its Miami to its Atlanta terminals (744 operating

miles) during a specified l-week period in 1966,

the average transit time was 1.9 days; that on the

321 shipments moving from its Birmingham

2b

terminal during the same period and delivered or

interlined at Charlotte (408 operating miles), the

average transit time was 1.5 days; that on 206

shipments moving from its Richmond, Va., termi-

nal to its Memphis terminal (855 operating miles)

during the same period, the average transit time

was 2.5 days; and that on 26 shipments handled

from Birmingham to New York, N.Y. (1030

operating miles) during the Il-week period, the

average transit time was 2.8 days.”

4. “...Bowman has persuasively demonstrated a

need for its services between specified points in

Mississippi, Kansas, Missouri, Arkansas, Louisiana,

and Texas, on the one hand, and, on the other,

those points in the Southeast and East that it

presently serves.”

5. “Approximately 135 witnesses in 13 States

support that portion of Bowman’s application

secking authority to serve the 10 specified

Mississippi points. Over 100 of these have

experienced difficulties with inadequate, inconsis-

tent, and excessive transit times. The witnesses’

transit time studies show that between 3- and

4-day service is generally rendered on a substantial

amount of their traffic moving between Atlanta

and major Mississippi points, with transit times

ranging between | and 7 days. From other points

in the territory Bowman presently serves, transit

times to Mississippi range from 3 to 21 days.”

6. “Approximately 25 supporting witnesses have

complained of either refusals by authorized carriers

114 M.C.C. 585, 586

(App. 115, 116

114 M.C.C. 604

(App. 150)

114 M.C.C. 604-605

(App. 150-151)

3b

to handle their traffic, and of carrier embargoes or

restrictions; and about 50 have experienced pickup

and delivery problems.”

7. “Collectively, Deaton, Dixie, Campbell, Road-

way, and Ryder [Protestants] are cited for

refusing to handle a number of the supporting

shippers’ traffic to Mississippi from points in the

Southeast.”

8. “...two protestants to [the Bowman] applica-

tion (Campbell and Herrin) withdrew their oppo-

sition,” °

9. “Approximately 80 witnesses support the

Kansas-Missouri portion of Bowman’s application.

Over 60 of these complain about pickup and

delivery problems, loss, damage, shortage, tracing

difficulties, misrouting, interline problems, unsuit-

able or inadequate equipment, customer com-

plaints, and lost business and penalties.”

10, “{ Protestants} Roadway and Transcon have

declined to handle some of the supporting

witnesses’ traffic.”

11. “Additionally, Bowman has shown that the

present and future public convenience and neces-

sity require the extension of its operations to

points in the remaining States it proposes to

”

serve.

12.“*The evidence of the supporting witnesses

establishes a clear and convincing public need for

114 M.C.C. 605

(App. 151)

114 M.C.C. 605

(App. 151)

114 M.C.C. 605

(App. 151)

114 M.C.C. 606

(App. 152)

114 M.C.C. 606

(App. 152) °

114 M.C.C. 607

(App. 153)

4b

single-line motor carrier service between the broad

southeastern and eastern seaboard territory served

by Bowman, on the one hand, and, on the other,

the Arkansas points it proposes to serve. Approx-

imately 100 witnesses supported this portion of

Bowman’s proposal. Many expressed a need for

single-line service between the Arkansas points, on

the one hand, and, on the other, points in Florida,

Georgia, and the Carolinas (other than Birming-

ham, Atlanta, and Charlotte) for which no such

service is available. Existing carriers which hold

authority to operate between ti. Arkansas points

and points which Bowman presently serves are

limited territorily [sic] either with respect to the

Arkansas points they serve or as to the territory

Bowman already serves. As a consequence, none

can provide the comprehensive single-line service

that would be offered by Bowman between the

involved Arkansas points and the territory it now

serves, and none of the remaining applicants

propose such an extensive service.”

13. “Similarly, the protestants are unable to

provide the full scope of the single-line services

proposed by this applicant between the Louisiana

points. . .it propose; to serve and the territory it

currently serves. Over 150 witnesses support this

portion of Bowman's proposal, and they too have

demonstrated material inadequacies in the trans-

portation services they now receive.”

14.““With respect to New Orleans, the approxi-

mately 30 shippers supporting this aspect of

114 M.C.C. 607-608

(App. 153-154)

114 MCC. 608

(App. 154)

Sb

Bowman’s application have shown that the service

they are receiving between specified points in

Alabama and Tennessee, on the one hand, and, on 114 M.c.c. 608

the other, New Orleans, is not adequate.”

15. “Regarding Texas, it is noted that more

witnesses from the Dallas-Fort Worth area testified

in support of Bowman’s application than any of

the other applicants. Also, witnesses from num-

erous points throughout Bowman’s authorized

territory testified in support of this portion of its

application. Many of these shippers do not

presently have single-line service to this important

area, and none of the other applicants proposes to

(App. 154)

render the extensive single-line services to be 114 M.C.C. 608

proffered by Bowman.”

16. “Many shippers. . .demonstrated. . .that they re-

quire the singleline service here authorized to be

(App. 154)

provided by Bowman, and that the lack of such 114 M.C.C. 608

service has been harmful to them.”

(App. 154)

Ic

APPENDIX C

Findings of Substantial Evidence in

the Commission Order (114 M.C.C. 571)

Supporting Grant of the Johnson

Application.

1. “Johnson holds regular- and irregular-route

authority to transport principally general

commodities, with the usual exceptions. Its regular

routes extend between points in a territory

bounded by Boston and Worcester, Mass., and

Niagara Falls, Oswego, and Glen Falls, N.Y., on

the north, and Pensacola, Mobile, Pascagoula and

Gulfport, Miss., and New Orleans, on the south, .

... Applicant’s irregular-route general-commodity

authority extends generally to points in New York,

New Jersey, Pennsylvania, Maryland, Virginia,

North and South Carolina, Georgia, and Florida.”

2. “Johnson proposes to operate over two

service routes, which it describes as the proposed

northern route and the proposed southern route.

The former involves general-commodity,

regular-route operations between Atlanta and

Dallas-Fort Worth, with service at the intermediate

points of Jackson, Monroe, and Shreveport,

restricted to traffic moving to, from, or through

Atlanta. The southern route involves the same type

of operations between New Orleans and Houston,

with service at the intermediate points of Baton

Rouge, Orange, and Beaumont, and service at

Texas City, Tex., as an off-route point, restricted

114 M.C.C, 586

(App. 116)

2c

to traffic moving to, from, or through Gulfport,

Miss. In other words, no service is proposed

between New Orleans and points on the southern 114 M.c.c. 587

route.” (App. 117)

3. “The stated purpose of the ... proposal is 114 M.C.C. 609

to permit service of an ‘over-head’ nature between ‘App. 155)

points on Johnson’s present system, on the one

hand, and, on the other, points on the proposed 114 M.C.c. 587

routes.” (App. 117)

4. “Applicant maintains about 35 terminals at

principal points on its routes and in its irregular

route territory. Proposed terminal points

include Baton Rouge, Beaumont, Dallas, Houston, 114 M.C.c. 586-587

Jackson, Monroe, and Shreveport.” (App. 116-117)

5. “Johnson operates approximately 500 trac-

tors and 1,000 trailers ... and it will add 50

tractors and 100 trailers to its fleet if its 114 M.C.c. 587

application is granted.” (App. 117)

6. “Presently, traffic moving to and from Texas,

Louisiana, and Mississippi and points beyond is

interlined by [Johnson] mostly at New Orleans

and Mobile, with some being interlined at Atlanta.

Under the proposal, applicant’s traffic lane pat-

terns would be revised and all traffic moving to

and from the proposed service area ... will break

bulk at Charlotte, and move by two-man teams on

a direct nonstop basis between Charlotte and the

seven proposed terminal points. Traffic originating

or terminating at points in Georgia, and in the

3c

Montgomery and Opelika terminal areas, and in

South Carolina (except Wallace, S.C.) will break

bulk at Atlanta, and will move by a two-man team

on a direct, nonstop dispatch between Atlanta and

the seven proposed terminal points.”

7. “Additionally, Johnson has revised its

operations and effective March 13, 1966, it

commenced using two-man teams which would be

utilized on a direct nonstop basis between

Charlotte and the seven proposed terminal points

here under consideration.”

8. “[A]pplicant generally proposes to render

between I- and 3-day LTL service between its

authorized territory and the seven terminal points

it seeks to serve.... At 33.3 miles per hour, the

816 miles between these terminals [Boston and

Charlotte] would be traversed in 24.5 hours....

The 1,110 miles between Charlotte and Houston

would be traversed in 28 hours at a speed of 39.6

miles per hour.”

9. “Its application is supported by 236

witnesses located throughout the area it serves or

proposes to serve.”

10. “Their [the supporting witnesses’] testi-

mony establishes that the existing service on small

shipments traffic between the involved territories is

generally inadequate. Many of the supporting

witnesses validly complain with respect to lengthy

and undependable transit times; and their studies,

114 M.C.C, 587-588

(App. 117-118)

114 M.C.C, 611

(App. 151)

114 M.C.C. 589

(App. 119)

114 M.C.C, 609

(App.155)

4c

considered on the whole, demonstrate that incom

sistent and excessive transit times have been

experienced on a _ substantial portion of the

involved traffic. Complaints also were voiced by

many of the shippers with respect to poor pickup

and delivery service, tracing problems, and exces-

sive loss and damage.”

11.“Many of the shippers’ problems can be

attributed to the existing joint-line motor ser-

vice.... Major east coast motor common carriers

...+ failed to participate in this proceeding; and it

is therefore apparent that important segment ...

of the involved joint-line motor carrier system does

not oppose the Johnson appiication.”

12. “Of the single-line protestants which serve

between the points Johnson proposes to serve and

its present territory, Ryder does not hold

authority to serve the Dallas-Fort Worth area and

much of the Carolinas; Roadway holds authority

to perform the proposed ‘over-head’ service but its

service was the subject of many of the shippers’

complaints; and the authorities of T.I.M.E. and

Transcon are limited to such an extent that they

can provide only a portion of the service proposed

by Johnson.”

114 M.C.C. 609

(App. 155)

114 M.C.C, 609

(App. 155)

114 M.C.C. 609

(App. 155)

Id

APPENDIX D

Findings of Substantial Evidence in

the Commission Order (114 M.C.C. 571)

Supporting Grant of the Red Ball

Application.

1. “The Southwestern applicants. Whereas the

proposals of some of the southern applicants differ

somewhat in scope, those of the southwestern

carriers are basically similar.”

2. “With respect to this latter category of

applicants, it is our opinion that the evidence of

record including the traffic volumes shown to be

moving and all other relevant factors enumerated

in this report, justifies a grant of authority to only

one of them. In deciding which is to be granted

such authority, consideration must be given to the

criteria prescribed by this Commission and the

courts for the selection of an applicant where, as

here, it is not feasible to grant all applications

seeking essentially similar authority. Those criteria,

as summarized in Kroblin Refrigerated Xpress,

Inc., Ext. -Denison, Iowa, 96 M.C.C. 233, 237

(1964), is as follows: (1) an evaluation of the

existing authorities and operations of the com

sidered applicants, (2) the location of their

terminal facilities and the equipment operated by

them, (3) the relative date of filing the applica-

tions, and (4) the carrier which produced the

evidence supporting the finding of public need. Cf.

also H.C. Gabler, Inc., Ext. Cement from Md. and

114 M.C.C, 602

(App. 132)

2d

Pa. Counties, 86 M.C.C. 447, 469-470 (1961), and 114 M.c.c. 602

cases cited therein.” (App. 132

3. “Under these criteria, it is noted that Red Ball .

operates over a much more extensive system of

routes in the Southwest than does Herrin, 114 m.c.c. 602

Strickland, or Jones;” (App. 132)

4. “The number of Red Ball terminals (92

terminals located throughout Texas, Louisiana.

Arkansas, New Mexico, Colorado, and Oklahoma)

is about three times the collective number of

terminals operated by Herrin, Strickland, and 114 M.c.c. 602

Jones in the Southwest;” (App. 132)

5. “...with the equipment located at these

terming‘s Red Ball is in a much better position to

serve shippers and receivers located in the 114 M.C.C. 602

Southwest than Herrin, Strickland, or Jones;” (App. 132

6. “Red Ball would have to establish 3 additional

terminals in the Southeast and proposes to add

equipment as it becomes necessary, while (a) Her-

rin proposed 6 additional southeastern terminals,

the reestablishment of a terminal at Litile Rock,

and would add 41 tractors, 80 trailers, and 67

trucks to its fleet, (b) Strickland proposes to

establish 4 additional southeastern terminals, and

(c) Jones proposes to establish terminals at 2

southeastern points (Atlanta and Birmingham) and

at 2 southwestern points (El Dorado and Texar- 114 M.C.c. 602-603

kana);” (App. 132-149)

3d

7. “that Red Ball presented 13C supporting

witnesses and an additional 23 witnesses specifical-

ly supported its application, whereas (a) Herrin

presented 87 witnesses and an additional 11

supported its application, (b) Strickland presented

102 shipper witnesses, and an additional 24

supported its application, and (c) Jones presented

90 witnesses and an additional 117 supported its

application;”

8. “Clearly, of the southwestem applicants, Red

Ball has made the superior showing with respect to

each of the above-described criteria, and, therefore,

it is selected to receive the authority for which a

public need has been found in this report.”

9. “Moreover, none of the other three applicants

proposes and none of the protestants (even

considering the operations authorized since the

hearing herein) is able to provide the extensive

single-line service proposed by Red Ball between

Atlanta and Birmingham, on the one hand, and, on

the other the territory Red Ball now serves.”

114 M.C.C. 603

(App. 149)

114 M.C.C, 603

(App. 149)

114 Mx.c, 603

(Apo. 149)

10. “Clearly, Red Ball is in a better position than 114 '.C.c. 604

Herrin to render this service.”

(App. 150)

Breen

le

APPENDIX E

REPORT AND ORDER OF ICC IN HERRIN

APPENDIX G - PROTESTANTS EVIDENCE:

TRANSIT TIME STUDIES

Consolidated 114 M.C.C. 759 (App. 321)

Watson-Wilson Id. at 764765 (App.

326-327)

Gordons Id. at 768 (App. 330)

Mercury Freight Id. at 771 (App. 333)

West Id. at 773 (App. 335)

GFA Id. at 775 (App. 337)

*Campbell Sixty-Six Id. at 777 (App. 339)

Jack Cole-Dixie Id. at 778 (App. 340)

ETMF Id. at 780 (App. 342)

Transcon Id. at 782 (App. 344)

Roadway Id. at 783 (App. 345)

United Id. at 786 (App. 348)

Red Ball Id. at 787 (App. 349)

Ryder Id. at 788-791

(App. 350-353)

Appendix G_ sets forth the evidence of

opposing carriers, as summarized by the Exam-

iners. The further summary and evaluation of this

evidence by the Commission appears at i114 M.C.C.

599 (App. 129).

* Reference to data for “certain test periods” - dates and

duration unspecified.