Jurisdictional Statement — Thompson Van Lines, Inc. v. United States

Supreme Court, U. S,

- FiLED

SEA 15 1975

MICHAEL RODAK, JR., CLERK

Supreme Court of the United States

Ocroser Term, 1975

>

THompson Van Lungs, Lvc., e¢ al.,

Appellants,

—V.—-

THe Unitep States or America and

InTERSTATE COMMERCE COMMISSION,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

JURISDICTIONAL STATEMENT

Hersert BurstTErn

Counsel for Appellants

One World Trade Center

Suite 2373

New York, New York 10048

(212) 432-0940

—_— ne

TABLE OF CONTENTS

PAGE

Opinion Below .............--.----:-s-c-s-cssecesessssnsnssnssnssesnsnsnenssnenenes 1

Beem neces sewn encsnecccneseenissssccnnsannenemmnencnnienmnnmmaianenatie 2

Question Presented .......--.-..---.-c-secscsseceseeseesecenseseeesenenences 2

itty Tel ccceccsetcncccenicsncnsscenecensestnsstnnnormnetnimmnantannntte 3

TR TT 3

The Question Is Substantial -........... at +

APPENDICES:

Appendix A—Opinion of District Court for the

District of Columbia ......................---- la

Appendix B—Judgment of District Court for the

District of Columbia ....................-- 15a

Appendix C—Notice of Appeal to the Supreme

Court of the United States ................ 17a

Appendix D—Order Extending Time to Docket

Appeal to September 15, 1975 .......... 19a

Appendix E—Statutes Involved ............---.-----------+++ 20a

Appendix F—Order and Rules of Interstate Com-

merce Commission .... sivabeninnineanei 24a

ii

PAGE

Cases CITED

American Airlines, Inc. vy. Civil Aeronautics Board,

359 F. 2d 624 (1966), cert. den. 385 U.S. 843 (1966) ..

American Trucking Associations, Inc. vy. Friseo Trans-

portation Company, 358 U.S. 133 (1958)...

Civil Aeronautics Board vy. Delta Airlines, Inc., 367

I i eh

Commercial Oil Transport Extension, 76 M.C.C. 773

UMD <usedpiasbecpsiiiebicetdsttdilcaimiabihieincinidimeceladticniiaininsa aes ices

Eldon Miller, Ine., Extension—Utica, Ill., 74 M.C.C.

SP TTD cicsncastiansidesestitteeraiaadataniiadie data la tel

Fleetlines, Inc. v. Arrowhead Freight Lines, Ltd., 54

SN III ttn. Shoe ee ee

Fox-Smythe Transportation Co.—Extension—Okla-

homa, 106 M.C.C. 1 (1967) 2.......e..cc.s.cceccececsecnecccececeee

Garrett Freightlines, Inc—Control and Merger—In-

land Motor Freight and Pacific Highway Transport,

mg Te Te SE CD cecccteessseceicesvennteussnintcnensiniosasentee

Hennepin Transportation Co., Inc.—Purchase—Olig-

ney Motor Express Co., 80 M.C.C. 655 (1959) ........

Hf. N. Dahlstein-Fertilizer, 1968 Fed. Car. Cas. (CCH)

SURTITIIIT secssiinsnoshannsuibnibicectabnciendsciibbincibiaateesueiet catia liectcea titan

Home Transportation—Ball Bros., 116 M.C.C. 18

TRS ETERS pre ruc en cal ac eNO

Howard Hall Company v. U. S8., 332 F. Supp. 1076

PE IS MIEN sceiiesdiichasinhctalsonscianacanaiaaie deat,

9

iil

PAGE

Liquid Transporters, Inc., xtension—Columbia Park,

Ohio, 76 M.C.C. 685 (1955) .... Me i)

Motor Common Carriers of Property Routes and Ser-

vice, 88 M.C.C. 415 (1961) 8

National Petroleum Refiners Association v. F.T.C., 482

i ee Cire, ID seen cirnsesicdevscninntieriimnnnenmeninnnnnnnsiine 9-10

Rawlings, George C.—Extension—Emporia, 78 M.C.C.

Sn CIIIITI ccs sdesicsdoiicobeenbintnainbieensdineninocnebiiehieieonniiceen 9

Regular Common Carrier Conference yv. United States,

307 F. Supp. 941 (D.D.C. 19GB) nn -aeoanenccesiccecno conn oreee 10

Rochester Telephone Corporation v. United States of

America, 307 U.S. 125 (1939) .... ie 2

Texas & Pacific Motor Transport Co. v. United States,

et al., 87 F. Supp. 107 (D.C. Tex. 1949) rev’s’d on

other grounds 340 U.S. 450 (1951), re’h’g. den. 341

8 Ef) | en 6-7

Thompson Van Lines, Ine. v. United States, 381 F.

Ef ) 1

United States v. Capital Transit Company, 325 U.S.

en 2

United States v. Pierce Auto Freight Lines, 327 U.S.

eee 2

United States v. Rock Island Motor Transit Co., 340

is 2 oF) | sseneeeninnpnemnenanenamnpeaumenaneeniits 8

United States v. Seatrain Lines, Inc., 329 U.S. 424

|, j eee 8

iv

PAGE

Watson Bros. Transportation Co. v. United States,

132 F. Supp. 905 (N.D. Neb. 1955) aff’d 350 U.S.

| NE NL 8

Zirbel, Donald B—Investigation of Operations, 53

Fete 6; | ee IID 8

Statutes Crrep

Administrative Procedure Act

Section 558(¢) .................. sonesidtesinnsomietistinsiienadiaaeeinae 3, 6, 22a

Interstate Commerce Act:

Section 207(a) ................-....- sioensniniatinieaiiidaliaialanaae 3, 6, 20a

|) 3, 6, 20a

iE | NSS 3, 6, 21a

28 U.S.C.:

TS 2

| 2

| | | 2

OTHER AUTHORITIES

Rules of Interstate Commerce Commission:

oo 26a

Davis, The Doctrine of Precedent as Applied to Ad-

ministrative Decisions, 50 W. Va. L. Rev. 111 (1957) 5

Verkuil, Judicial Review of Informal Rulemaking, 60

OS OF fT , | 5

IN THE

Supreme Court of the United States

Octoser Term, 1975

— >

Tuompson Van Lives, Inc., et al.,

Appellants,

—vV.—

Tue Unitep Srates or AMERICA and

INTERSTATE CoMMERCE COMMISSION,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

<p>

JURISDICTIONAL STATEMENT

Appellants appeal from the judgment of United States

District Court for the District of Columbia dismissing

appellants’ complaint which sought to set aside an Order

of the Interstate Commerce Commission, and submit this

Statement to show that the Supreme Court of the United

States has jurisdiction of the appeal and that a substantial

question is presented.

Opinion Below

The Memorandum Opinion of the United States District

Court for the District of Columbia is not officially reported ;

but a copy is appended hereto as Appendix “A”. A motion

for a temporary restraining order was denied by the Dis-

trict Court [Thompson Van Lines, Inc. v. United States,

381 F. Supp. 184 (1974)]. The Report of the Interstate

2

Commerce Commission (“Commission”) which incorporated

the challenged Order and Rules of the Commission is re-

ported in 119 M.C.C. 530 (1974). A copy of the Order and

the Rules prescribed by the Order are appended hereto as

Appendix F.

Jurisdiction

This suit was instituted under 28 U.S.C. §1336 to set

aside the Order of the Commission. The judgment of the

District Court was entered on April 28, 1975 and notice

of appeal was filed in that Court on June 17, 1975. The

time to docket the appeal was extended by this Court to

September 15, 1975. The jurisdiction of the Supreme Court

to review the judgment by direct appeal is conferred by

Title 28 United States Code Sections 1253 and 2101(b).

The following decisions sustain the jurisdiction of the

Supreme Court to review the judgment of the District

Court on direct appeal in this case: United States v. Pierce

Auto Freight Lines, 327 U.S. 515 (1946): United States v.

Capital Transit Company, 325 U.S. 357 (1945); Rochester

Telephone Corporation v. United States of America, 307

U.S. 125 (1939).

Question Presented

May the Commission, by rules adopted in a general rule-

making proceeding, prohibit a motor carrier from combin-

ing its operating authorities where such combination has

been exercised, under Certificates of Public Convenience

and Necessity (“Certificates”) issued by the Commission,

with the knowledge, consent and approval of the Commis-

sion and may the Commission do so without observing

the limitations and restrictions prescribed by the Inter-

3

state Commerce Act and the Administrative Procedure Act

relating to the revocation, modification or suspension

of a Certificate and does such prohibition constitute an

impermissible revocation, suspension or modification of

the Certificates?

Statutes Involved

Sections 207(a), 208(a) and 212(a) [49 U.S.C. $§307(a),

308(a) and 312(a)] of the Interstate Commerce Act, as

amended (‘‘Act”) and Section 558(c) of the Administrative

Procedure Act, as amended [5 U.S.C. $558 (Appendix

“B”)], are set forth in Appendix “E” hereto.

Statement

The appellants are motor common carriers engaged in

the transportation of household goods in interstate com-

merce pursuant to Certificates of Public Convenience and

Necessity issued by the Commission under Section 207 of

the Act [49 U.S.C. §307]. The Certificates granted to the

appellants authorized them to “tack” two separate seg-

ments of their respective operating authorities. To illus-

trate: appellants’ Certificates authorized service from

point “A” to point “B” and service from point “B” to point

“OC”, By “tacking” at the common service point or gateway

“B”, the appellants could transport used household goods

from point “A” to point “C”. Appellants and other car-

riers have been “tacking” for many years with restriction

or objection by the Commission.

On or about November 23, 1975, the Commission insti-

tuted a proposed rulemaking proceeding sparked, osten-

sibly, by the need for fuel conservation. After receipt

of statements by those who favored and those who

4

opposed the Commission’s proposal to restrict or prohibit

tacking, the Commission adopted a series of Rules which

provide, in effect, that if the circuitous mileage occasioned

by observance of a gateway exceeds 300, tacking will be

prohibited (27a). Petitions for reconsideration filed by

various parties to the proceedings were denied by the Com-

mission. The Commission, and the Court below, deter-

mined that the Commission could resort to rulemaking

instead of case-by-case adjudication and, by a blanket

rule, emasulate existing licenses.

The Question Is Substantial

The seminal issue involved in this appeal is whether the

Commission, or any other administrative agency, under

the guise, pretense or charade of general rulemaking may

impair and destroy property rights. This issue is of im-

portance not only to carriers who are subject to the Act

but to all segments of our private enterprise system bound

by the rules and regulations of the “headless fourth”

branches of government whose participation in the free

enterprise economy is more that of master than partner.

More significantly, this appeal ought to be the occasion for

declaring anew that ours is a government of laws and not

of administrators acting without legislative or judicial sane-

tion. If the Congress of the United States cannot confiscate

property rights, may administrative agencies, by hermetic

techniques, evade Constitutional inhibitions? If adminis-

trative agencies are no longer required to conform to

statutory standards and are free to legislate, rather than

articulate the law by filling in the interstices of legislation,

then this Court, and not the agencies, must formulate this

new and radical sempiternal principle. The polestar of

5

jurisprudence is finality, but finality is unattainable if

agencies operating ubiquitously in all areas of economic

and political activity, fashion, distort or reconstruct the

law to satisfy their perceptions of what the law ought to

be. What the Commission has done in this case, and other

agencies will attempt to do, is to rewrite statutes (or im-

pose their notions of what the law ought to say) and re-

ject decisional precedents upon which our society relies

for its sense of security of expectations.

The issue in this appeal, which this Court has never

resolved, is whether an administrative agency may employ

“rulemaking to amend some—but not all—of the outstand-

ing certificates authorizing a particular kind of service so

as to deprive the licensees of a significant part of their

license authority”. [American Airlines, Inc. v. Civil Aero-

nautics Board, 359 F. 2d 624, 635 (1966), cert. den. 385

U.S. 843 (1966) dissenting opinion. ]

In short, this appeal invites this Court to reexamine the

role of administrative agencies and to reconcile the dicho-

tomy of rulemaking and adjudication. [Verkuil, Judicial

Review of Informal Rulemaking, 60 Va. L. Rev. 185 (1974) ;

Davis, The Doctrine of Precedent as Applied to Adminis-

trative Decisions, 50 W. Va. L. Rev. 111 (1957).]

Appellants conceded that if the Commission had authority

to enact the challenged Rules then the substantial evidence

of record supported their adoption. But this begs the ques-

tion. Appellants suggest that the Commission had no au-

thority to adopt the Rules and apply these, ex cathedra,

to licensed cariers. Simply stated, this is not a case of im-

proper exercise of power but rather the unlawful assump-

tion of power and authority by the Commission and, as

appellants contend, a clear violation of the Act.

6

Contrary to the statements by the District Court (Ap-

pendix A) appellants did not admit that the gateway elimi-

nation rule was “in the public convenience” (Sa), nor that

the policy changes “are rational examples” of the Com-

mission’s power (9a) nor that tacking is justified only

if the Commission authorized it (9a). Appellants never

Stated that the past authorization of tacking was meaning-

less (10a).

1. Under Section 207 of the Act [49 U.S.C. §307], the

Commissicn is authorized to issue to a qualified motor car-

rier a certificate permitting the transportation of prop-

erty in interstate and/or foreign commerce.

Section 208(a) of the Act [49 U.S.C. §308] reserves to

the Commission a precisely defined right to attach “such

reasonable terms, conditions and limitations as the public

convenience and necessity may from time to time require

...”’ But this is not a sanction for a total or partial revo-

cation of a license. The reach and ambit of Section

208(a) must be read co-jointly with Section 212(a) of the

Act [49 U.S.C. §312(a)]. Section 212(a) provides that the

Commission may suspend, change or revoke a certifieate in

whole or in part “for willful failure to comply” with the

Act but only after notice and a hearing and an oppor-

tunity by the carrier to comply “with a lawful order” the

Commission “commanding obedience” to the Act or to a

rule or regulation issued by the Commission. Moreover

revocation or suspension must meet the criteria enacted

in Section 558 of the Administrative Procedure Act [5

U.S.C. §558(a)]. That Section 208(a) of the Act and Sec-

tion 212(a) are coherent, independent and reconcilable

statutory provisions was made clear in Texas & Pacific

Motor Transport Co. v. United States, et al. [87 F. Supp.

7

107 (D.C. Tex. 1949), rev’s’d on other grounds 340 U.S.

450 (1951), re’h’g den. 341 U.S. 706 (1951) ] where the Court

held:

“Nor can revocation be accomplished in any way except

under See. 212. It cannot be brought about by the im-

po: tion of terms and conditions, or, limitations. The

Commission, itself, said in Quaker City Bus Co. v.

Black Hawk Lines, Inc. that ‘The existence of a cer-

tificate creates a vested motor carrier status which

stays in force and effect * * * until that certificate is

revoked in accordance with the procedure prescribed in

See. 212 (a).’

“If we give the Commission power to revoke by terms,

limitations and conditions, by an attempted stretch of

Sec. 208(a), then we make Sec. 212(a) utterly useless.

Each Section has its purpose. Each Section expresses

the intent of the Congress. Such intent must govern”

(pp. 112-113).

2. Appellants contend that the Commission has partially

revoked their Certificates, not only in violation of the Act

but by an Orwellian obliteration of a long line of decisional

precedents upon which appellants and other motor carriers

relied in making investments and in devoting their energies

and talents. Appellants’ claim to the right to tack is sup-

ported by principles repeatedly enunciated and reaffirmed

by the Commission. Thus, in Fleetlines, Inc. v. Arrowhead

Freight Lines, Ltd. [54 M.C.C. 279, 285 (1952)], the Com-

mission stated:

“The right of a motor common carrier to tack separate

grants of authorities is well settled, regardless of

whether the authorities involve regular routes .. .”

(emphasis supplied)

8

In Motor Common Carriers of Property Routes and Ser-

vice, [S88 M.C.C. 415, 417 (1961) ], which involved a similar

rulemaking proceeding, the Commission concluded that:

“A certificate authorizing operations over two or more

routes having one or more service points in common

confers the right to operate over all combinations of

such routes and between all the designated points there-

on, unless the service is specifically restricted in the

certificate. (citing cases)” (emphasis supplied.) (pp.

419-420)

3. In United States vy. Rock Island Motor Transit Co.,

[340 U.S. 419 (1951)] and in United States v. Seatrain

Lines, Inc., (829 U.S. 424 (1947) ], this Court made clear that

the Commission cannot impose limitations on either the

freight to be handled or service to be performed under an

existing certificate. In this case, we are not dealing with the

right to modify authority “issued due to inadvertence”

[American Trucking Associations, Inc. v. Frisco Transpor-

tation Company, 358 U.S. 133, 144 (1958) ], but rather the use

of rulemaking “as a guise for changing previous decisions”

under the pretext of correction. (Cf. Watson Bros. Trans-

portation Co. v. United States, [132 F. Supp. 905 (N.D. Neb.

1955) aff'd 350 U.S. 927 (1956) ] ; Civil Aeronautics Board v.

Delta Airlines, Inc., [867 U.S. 316 (1961)]; Donald B.

Zirbel—Investigation of , Operations, [53 M.C.C. 684

(2951)]; Fox-Smythe Transportation Co—Extension—

Oklahoma, [106 M.C.C. 1 1967)].

4. The plain fact is that the Commission did not have

the option of proceeding by way of rulemaking or by case-

by-case adjudication. The elimination of gateways reverses

ewe

9

a long-standing policy dictated by, and consistent with, the

Act, and impairs vested rights. [Garrett Freightlines, Inc.

—Control and Merger—Inland Motor Freight and Pacific

Highway Transport, Inc., 87 M.C.C. 23 (1960); Hennepin

Transportation Co., Inc—Purchase—Oligney Motor Ex-

press Co., 80 M.C.C. 655 (1959) ; George C. Rawlings—Ex-

tension—Emporia, 78 M.C.C. 636 (1959) J.

5. The right to tack two separate grants of authority at

a common point reflects a coherent and unchallenged Com-

mission policy, mandated by the Act; and this right has been

withdrawn by the Commission only upon proof by opposing

carriers that no service was performed in the territory

covered by the authority sought to be tacked, coupled with a

persuasive demonstration that their interests or operations

will be adversely affected. [H.N. Dahlsten-Fertilizer, 1968

Fed. Car. Cas. (CCH) 136,245; Liquid Transporters, Inc.,

Extension—Columbia Park, Ohio, 76 M.C.C. 685 (1955) ;

Commercial Oil Transport Extension, 76 M.C.C. 773, 777

(1958) ; Eldon Miller, Inc., Extension—Utica, Ill., 74 M.C.C.

609, 610 (1958); Home Transportation—Ball Bros., 116

M.C.C. 18 (1972).]

In Howard Hall Company v. U. S., [332 F. Supp.

1076, 1082 (N.D. Ala., 1971)], the Commission’s rejection

of tacking restrictions was sustained by the Court:

“ _. the tacking of two separate unrestricted irregular-

route authorities is permissible as a basic right inet-

dental to the holding of such authorities ...” (em-

phasis supplied)

6. This case does not involve a prospective rule or a

complainant who holds no license [National Petroleum Re-

10

finers Association v. F.T.C., 482 F. 2d 672 (C.A.D.C. 1973) ]

nor is an instance of removing restrictions imposed on

a whole class of carriers identically situated [Regular

Common Carrier Confereace vy. United States, 307 F.

Supp. 941 (D.D.C. 1969) ]. This is simply a case of adminis-

trative action which, at best, is misguided and, at worst, is

an arrogant assumption of power and authority which Con-

gress never intended be exercised by the Commission.

Appellants submit that the District Court misread the

Act and thereby vested the Commission with power to

rewrite the Act. We believe that the question presented

by this appeal is substantial and implicates issues which

have transcendent political, economic and legal conse-

quences for our society.

Respectfully submitted,

Hersert Burstein

Counsel for Appellants

One World Trade Center

Suite 2373

New York, New York 10048

(212) 432-0940

are

——

i a J oe

Cc E §

la

APPENDIX A

Opinion of District Court for the

District of Columbia

UNITED STATES DISTRICT COURT

For tHe District or CoLUMBIA

Civil Action No. 74-860

—>

Tompson Van Lines, Inc., and ALEXANDER B. PoLLocg,

d/b/a Jirry Vans,

Plaintiffs,

—V.—

Unitep States or America and the

INTERSTATE COMMERCE COMMISSION,

Defendants.

<j

MEMORANDUM OPINION

Appearances:

Counsel for the Plaintiffs:

JosePpH Rotwetn, Esquire

1500 Massachusetts Avenue, N. W.

Washington, D. C. 20005

Hersert Burstein, Esquire

Zetspy & Burstein

160 Broadway

New York, New York 10038

2a

Counsel for the Defendants:

Joun H. D. Wiccer, Esquire

Attorney, Department of Justice

Anti-trust Division

U.S. Department of Justice

9th & Pennsylvania Ave., N. W.

Washington, D. C. 20530

Peter A. Fitzpatrick, Esquire

Cuartes H. Wuire, Jr., Esquire

Interstate Commerce Commission

Office of General Counsel

12th & Constitution Ave., N. W.

Washington, D. C. 20423

Before:

McGowan, Circuit Judge, and

FLannery and Wappy, District Judges.

Fuannery, District Judge:

This matter came before the court for hearing on the

merits after briefing by the parties.’ Previously, plaintiffs

sought but were denied a temporary restraining order. See

381 F. Supp. 184 (D.D.C. 1974). Many of the relevant

facts are set forth in the denial of the temporary restrain-

ing order and will not be repeated here. The court has

jurisdiction under 28 U.S.C. § 1336 to hear this appeal

from the Interstate Commerce Commission [ICC] pro-

ceeding. Pursuant to 28 U.S.C. §§ 2325, 2284, a three-judge

court was convened.

* Since no factual issues were in dispute, the court set up a

briefing schedule so that the legal issues could be resolved. Al-

though no motions for summary judgment were filed, the case is

before the court as if on cross-motions for summary judgment.

3a

The plaintiffs, irregular-route motor common carriers

engaged in interstate transportation of household goods,

seek to enjoin the ICC order issued in Motor Common Car-

riers of Property, Routes and Service, Fx Parte No. 55,

Feb. 25, 1974, otherwise known as Petition for the Elimina-

tion of Gateways by Rulemaking. Upon petition from

motor carriers the ICC, after initial investigation, com-

menced a rule making proceeding for the purpose of alter-

ing long-standing Commission policy regarding tacking at

gateways. For many years the ICC permitted, but did not

compel irregular motor carriers holding two separate cer-

tificates of public convenience and necessity to tack or com-

bine the two routes if the routes had at least one point in

common. In 1961, in Motor Common Carriers of Property

—Rouies and Service, 88 M.C.C. 415, 423-44 (1961) the

Commission stated:

Irregular-route carriers are permitted to tack their

separate grants of authority in order that they may

more efficiently utilize their equipment and facilities,

but they are not, nor can they be, compelled to do so.

The general requirement that motor common carriers

provide adequate service (this requirement is found

in section 216(b) of the act and is specifically included

in every certificate issued to a common carrier) does

not extend to service which may be provided through a

combination of authorities.

And the Commission later clarified the basis for the car-

riers’ right to tack:

The right of a motor common carrier to provide a

through service by combining two separate unrestricted

irregular-route authorities at a point common to both

4a

was firmly established in Transport Corp. of Virginia

Extension—Maryland, 43 M.C.C. 716, 719. This right

does not accrue because a need for a through service is

established. Rather, it exists because of the fact that

if two separate operating authorities were held by dif-

ferent carriers both could participate in an interline

movement; hence, if the separate unrestricted author-

ities are held by the same carrier it may render the

same through service as the two carriers could perform

by interline.

Warren Transport, Inc., Extension—Dubuque to North

Dakota, 98 M.C.C. 761, 763 (1965). The Commission, while

permitting tacking of certificates has held to the belief that

in appropriate circumstances, it may, pursuant to 49 U.S.C.

§ 308, {impose restrictions against tacking. } E.g., Warren

Transport, Inc., Extension—Dubuque to North Dakota,

supra at 763. Indeed, in Transport Corp. of Virginia Ex-

tension—Maryland, 43 M.C.C. 716, 719 (1944), the Com-

mission, while permitting tacking in that case, stated that

such decision

should not be understood . . . as precluding the imposi-

tion by us in certificates of reasonable conditions

against the rendition of through service in cases in

which such conditions may be warranted by the evi-

dence presented. Such power is specifically granted

in section 208(a) [49 U.S.C. 4 308] of the act, which

authorizes us to impose in certificates such reasonable

terms, conditions, and limitations as the public con-

venience and necessity may from time to time require,

including terms, conditions, and limitations as to the

extension of the route or routes of the carrier.

da

After years of permitting tacking, the ICC in 1973, in

light of present-day problems of economy, environment, and

the energy emergency, began to scrutinize the problem of

permitting tacking in cases which resulted in undue circuity.

The ICC tentatively decided that where the route via the

gateway was considerably longer than the direct route

motor carriers should be required to carry by the direct

route, hopefully conserving much fuel in the process. The

ICC was faced, however, with the problem of how to imple-

ment a change in its tacking policy and how to gain more

information to determine finally that a change was in- the

public convenience and necessity. Relying upon its author-

ity under 49 U.S.C. § 308(a), the ICC determined that:

[T]he most, and perhaps only, feasible manner in

which to accomplish the requisite authorization of such

necessary services is by means of a general rule of

construction applicable to the carriers’ outstanding

certificates, based upon a finding of public convenience

and necessity on a national scale and containing appro-

priate safeguards against the conduct of operations

which result, or which are reasonably certain to result,

in destructive competition.

The Commission was relying in large part upon the decision

in Removal of Truckload Lot Restrictions, 106 M.C.C. 455

(1968), aff'd, Regular Common Carrier Conference v.

United States, 307 F. Supp. 941 (D.D.C. 1969), for its au-

thority to proceed under 49 U.S.C. § 308(a). The Commis-

sion there had stated:

[T]he power to attach terms, conditions, and limita-

tions to certificates conferred by section 208(a) is a

broad one; the standards are only that they must be

6a

reasonable, and that they must be either required by

the public convenience and necessity or necessary to

implement any requirements established under section

204(a)(1) and (6).

In affirming the decision the District Court stated:

Contrary to plaintiffs’ argument no congressional

mandate in the Interstate Commerce Act explicitly re-

quires adjudication where a large number of certifi-

cates are affected at one stroke. Indeed, as the Com-

mission noted ..., Congress recognized that the Com-

mission should be able to impose “such reasonable

terms, conditions, and limitations” on certificates as

the public convenience and necessity may from time to

time require and expressly provided for such eventu-

ality. 49 U.S.C. § 308(a) (1964)... . The Commission

should not be precluded from a periodic review on a

national scale of certificates it has issued or from a

determination whether the public interest requires a

removal of certain limitations in the light of the public

policy underlying the statute.

307 F. Supp. at 944-45 (emphasis in original).

The gateway elimination rule applies to all irregular-

route motor common carriers whose certificates neither ex-

pressly permit nor prohibit tacking and provides in perti-

nent part that where circuity via gateways is too great,

the carrier must observe the most direct routg_) This new

policy is moderated somewhat under an ICC procedure that

allows individual carriers to apply for permission to con-

tinue to carry via gateways. The plaintiffs in this action

are irregular-route motor common carriers who have car-

ried goods via gateways, depending upon the Commission’s

7a

long-standing policy of permitting tacking at gateways.

Under the new rule, however, plaintiffs will be unable to

carry via gateways unless they obtain special permission.

The plaintiffs admit that there exists a rational basis for

the rule and that there is substantial evidence in the record

supporting the rule. Further, plaintiffs admit that the rule

making proceeding carried out under 5 U.S.C. $553 was

completely fair. However, plaintiffs assert that the gateway

elimination rule operates to amend or to revoke a part of

their certificates since they now are unable to tack at gate-

ways. Plaintiffs assert that any amendment or revocation

of certificates must be via an adjudicatory hearing follow-

ing the procedures of 49 U.S.C. § 312. Since the adjudica-

tory procedures of section 312 admittedly were not followed,

plaintiffs argue that the rule is invalid and must be set

aside.

In its present posture this case presents only two issues.

The first is whether the gateway elimination rule consti-

tutes an amendment or revocation of certificates requiring

an adjudicatory procedure or whether it is an example of

a reasonable term or limitation which the Commission can

from time to time impose as the public convenience and

necessity require. Second, if the) gateway elimination rule

does effect an amendment or revocation of certificates, may

the Commission nevertheless proceed by rule making under

American Airlines, Inc. v. CAB, 359 F.2d 624 (D.C. Cir.

1966). fla Y. Uy) clip iuhkmh. :

As plaintiffs admit their certificates do not expressly

confer the right to tack. Rather, plaintiffs have relied upon

ICC policy to allow tacking. As stated earlier, where tack-

ing has been permitted without express authorization in

the certificate, there has been no finding that the public

convenience or necessity required such service, and carriers

8a

need not provide such “tacked” service. Nevertheless,

plaintiffs argue that by permitting tacking for a long pe-

riod, tacking has become, in essence, a basic part of the

certificates of public convenience and necessity of those

who choose to tack ind that by now greatly restricting the

ability to tack, defendants have revoked or amended those

certificates without following the procedures of 49 U.S.C.

§ 312.

Under 49 U.S.C. § 308(a) the Commission, after issuance

of a certificate, may from “time to time thereafter” attach

“to the exercise of the privileges granted by the certificate

such reasonable terms, conditions, and limitations as the

public convenience and necessity may from time to time

require, including terms, conditions, and limitations as to

the extension of the route or routes of the carriers. ...”

It is admitted that the gateway elimination rule is in the

public convenience and necessity and that under 49 U.S.C.

§ 308(a) the Commission, upon proper findings, may at-

tach reasonable terms, conditions, and limitations to a

carrier’s certificate without complying with the procedures

in 49 U.S.C. § 312. Obviously, a line must be drawn between

those reasonable terms that the Commission may attach

under 49 U.S.C. § 308(a) and those changes which would

constitute an amendment or revocation under 49 U.S.C.

§ 312.

The court begins with the understanding that an agency’s

interpretation of its own rules or policies is entitled to great

deference. It has been the Commission’s interpretation

since as early as 1944 that under 49 U.S.C. § 308(a) prohibi-

tion of tacking was one of the reasonable terms, conditions,

and limitations that the Commission could impose where

the public convenience and necessity required it. See Trans-

port Corp. of Virginia Extension—Maryland, supra at 719.

9a

See also Warren Transport, Inc., Extension—Dubuque to

North Dakota, supra at 763. Plaintiffs apparently agree

that when a certificate of public convenience and necessity

initially is issued, the ICC can prohibit tacking. However,

once a carrier has exercised its right to tack, plaintiffs

argue that that right cannot be taken away. But 49 U.S.C.

§ 308(a) expressly states that even after a certificate is

issued, the Commission may make such reasonable changes

or limitations as the public convenience and necessity re-

quire. Here it is admitted that the policy changes «rdered

in this matter are rational exercises of the agency’s power

to supervise motor carriers and that there is substantial

evidence supporting the decision. As evidenced by the

ICC’s long-standing interpretation, this change of policy

constitutes the kind of reasonable change or limitation upon

the privilege of carrying goods which Congress instructed

the Commission to make. As the court in Regular Common

Carrier Conference v. United States, supra at 945, stated

“t]he Commission should not be precluded from a periodic

review on a national scale of certificates it has issued or

from a determination whether the public interest requires

a removal of certain limitations in the light of the public

policy underlying the statute.”

The court is not persuaded that the right to tack consti-

tutes a part of each carrier’s certificate. As pointed out

both in the Commission justification for the rule and at oral

hearing, there are instances where the Commission ex-

pressly has found that tacking was required by the public

convenience and necessity. Certainly in those cases tacking

is a part of the certificate. However, in those cases where

tacking merely has been permitted as a matter of general

ICC policy without express incorporation in the certificate

and without any finding that tacking is necessary for the

10a

public convenience or necessity, the court finds that tacking

stands on a different level. It constitutes a right of the

carriers to tack in this latter situation only so long as the

general Commission policy continues. When that Com-

mission policy changes, it revokes nothing contained in

the carrier’s certificate and nothing which the Commission

previously has found to be necessary for the public con-

venience or necessity. Plaintiffs argue that while the Com-

mission sometimes expressly authorizes tacking and other

times merely permits it, the two situations are for all pur-

poses identical. In essence, plaintiffs feel that when the

ICC has expressly authorized tacking in the past, it was

meaningless. The court is unconvinced. Where tacking is

not expressly authorized by certificate, the carrier is not

compelled to do so. Motor Common Carriers of Property—

Routes and Service, supra at 424. In contrast, where an

express tacking provision appears in the certificate, the

general requirement that the carrier provide adequate ser-

vice would extend to service provided through a combina-

tion of authorities. See id. Indeed, the Commission itself,

in the gateway elimination rules, acknowledged a difference

between express tacking authorization in certificates and

tacking permitted merely as a matter of ICC policy—the

former certificates were not affected by the gateway elimi-

nation rules, presumably because there previously had been

an express determination of need for that tacking in con-

trast to the tacking permitted merely on the basis of agency

policy.

In sum, the court finds that where carriers have tacked

their authorities in the past, absent express tacking au-

thorization in the certificates, such tacking does not con-

stitute such a part of their certificates that subsequent

lla

change of ICC policy constitutes an amendment or revoca-

tion of the carriers’ certificates. Rather, that change of

ICC policy, consistent with long-standing ICC interpreta-

tion, (constitutes the exercise of the ICC’s obligation under

49 U.S.C. § 308a to attach reasonable terms and conditions

to the privileges granted by the certificate) The court feels

that the ICC must retain flexibility to reevaluate its policy

and, where conditions require, to change that policy. In the

instant case the agency was fair and thorough in its re-

evaluation of its gateway policy and all parties agree that

the gateway elimination rule is supported by substantial

evidence in the record and has a rational basis. Clearly

the rule is in the public convenience and necessity. The

court will uphold its validity.

Even if the court concluded that tacking constituted such

a part of a carrier’s certificate that its curtailment effected

an amendment or revocation of certificates, the court still

would uphold the rule in question. In its denial of the

temporary restraining order, the court ruled that plaintiffs

failed to show likelihood of success on the merits because of

American Airlines v. CAB, supra, where the District of

Columbia Cireuit, en banc, ruled in similar circumstances

that the Civil Aeronautics Board could proceed by rule

making rather than adjudication. In denying the tem-

porary restraining order this court quoted extensively from

American Airlines and noted only the following reserva-

tion:

Whether the presen: case, because of greater affirma-

tive action required by plaintiffs, greater effect on

their certificates, or diversity of the class affected by

the regulation is sufficient to justify a departure

from American Airlines is better left for trial on the

merits. 381 F. Supp. at 186.

12a

After considering this case in greater detail, the court con-

cludes that the rationale of American Airlines is appli-

cable to the instant case.

In American Airlines the plaintiffs, as in this case,

argred that the CAB action constituted an amendment to

their certificates which could be done only by adjudication.

Plaintiffs in the instant case argue that American Airlines

is distinguishable because plaintiffs’ argument in American

Airlines was “palpably without merit.” However, Judge,

now Chief Justice, Burger, joined by two other Judges,

each felt that the issue presented by the case was one of

amending certificates by rule making. And in National

Petroleum Refiners Association v. FTC, 482 F.2d 672, 679

(D.C. Cir. 1973), this Cireuit described American Airlines

as a case in which the CAB could “utilize substantive rules

affecting allocation of air cargo business among different

types of air carriers to modify existing certificates without

the full adjudicatory hearing contemplated by the agency’s

statute.” This court finds American Airlines’ rationale to

be indistinguishable from and applicable to the instant case.

In this case plaintiffs have not even attempted to show

how an adjudicatory hearing would have better protected

their alleged rights. Rather, it appears clear that here, as

in American Airlines, supra at 629-31, the agency was con-

cerned with policy rule making rather than focusing on

evidentiary facts relating to a particular party. Here, as

in American Airlines, the proposed rule was applicable to

an entire class of certificate holders. Plaintiffs have argued

that since some irregular-route motor carriers may con-

tinue to tack under the new rule and others may not de-

pending on the degree of circuity, that the rule does not

apply to an entire class and that adjudicatory safeguards

13a

should have been applied. However, the Supreme Court

recently in United States v. Florida East Coast Railway,

410 U.S. 224, 245-46 (1973), dealt with the question of when

an order or rule has general applicability.

Here the incentive payments proposed by the Com-

mission in its tentative order, and later adopted in its

final order, were applicable across the board to all of

the common carriers by railroad subject to the Inter-

state Commerce Act. No effort was made to single out

any particular railroad for special consideration based

on its own peculiar circumstances. Indeed, one of the

objections of appellee Florida East Coast was that it

and other terminating carriers should have been treated

differently from the generality of the railroads. But

the fact that the order may in its effects have been

thought more disadvantageous by some railroads than

by others does not change its generalized nature.

Similarly, in the instant case certain irregular-route motor

carriers feel more disadvantaged by the rule than others

but that does not change the fact that the gateway elimina-

tion rule applies equally to all carriers. As stated in Amer-

tcan Airlines, supra at 631, “each carrier is protected by

the fact that it cannot be disadvantaged except as the Board

takes action against an entire class.”

In the instant case it is indeed true that carriers, as a

result of the ICC rule, will now be forced to stop tacking

unless special permission is obtained. However, this is not

such a circumstance as would distinguish American Air-

lines. The American Airlines court, in explaining the ra-

tionale enunciated by the Supreme Court in United States

v. Storer Broadcasting Co., 351 U.S. 192 (1956), stated

l4a

[T]he Storer doctrine . . . rests on a fundamental

awareness that rule making is a vital part of the ad-

ministrative process, particularly adapted to and need-

ful for sound evolution of policy in guiding the future

development of industries subject to intensive admin-

istrative regulation in the public interest, and that

such rule making is not to be shackled, in the absence

of clear and specific Congressional requirement, by

importation of formalities developed for the adjudi-

catory process and basically unsuited for policy rule

making. 359 F.2d at 629.

The court finds that elimination of gateways by rule mak-

ing was an appropriate exercise of the ICC’s rule making

authority and the decision appealed from will be affirmed.

Cart McGowan

United States Circuit Judge

JosEPH Wappy

United States District Judge

Tomas A, FLANNERY

United States District Judge

April 28, 1975

15a

APPENDIX B

Judgment

(Filed April 28, 1975)

UNITED STATES DISTRICT COURT

For tHE District or CoLUMBIA

Civil Action No. 74-860

>

Txompson VAN Lings, INc., and

ALEXANDER B. Po.tiock, d/b/a Jirry Vans,

Plaintiffs,

—V,—=

Untrtep States or America and the

INTERSTATE COMMERCE COMMISSION,

Defendants.

<i

This matter having come before the court on complaint

and prayer for relief, and the court having considered the

record and memoranda submitted by counsel, and it appear-

ing for the reasons stated in the court’s memorandum opin-

ion filed herein today that the decision of the Interstate

Commerce Commission should be affirmed, it is by the court

this 28th day of April, 1975,

ORDERED AND ADJUDGED that plaintiffs’ complaint be, and

the same hereby is, dismissed; and it is further

l6a

ORDERED AND ADJUDGED that judgment be entered in favor

of defendants.

Cart McGowan

United States Circuit Judge

JosEPH Wappy

United States District Judge

Tuomas A. FLANNERY

United States District Judge

OAR se a OS

17a

APPENDIX C

Notice of Appeal to the Supreme Court of the

United States

(Filed June 17, 1975)

UNITED STATES DISTRICT COURT

For tHe District or CoLUMBIA

Civil Action No. 74-860

~—<—

THompson Van Lines, Inc., and

ALEXANDER B. Potiock, d/b/a Jirry Vans,

Plaintiff s,

—V.—

Unirep States or America and the

INTERSTATE COMMERCE COMMISSION,

Defendants.

—<—_>

Notice is hereby given that Thompson Van Lines, Ine.

and Alexander B. Pollock, d/b/a Jiffy Vans, the plaintiffs

above named, hereby appeal to \1e Supreme Court of the

United States from a final order and judgment of a three-

judge District Court dismissing the plaintiffs’ complaint,

entered in this action on April 28, 1975.

18a

This appeal is taken pursuant to 28 U.S.C. §1253.

Dated: June 11, 1975

Hersert Burstein

Attorney for Thompson Van Lines,

Inc. and Alexander B. Pollock

d/b/a Jiffy Vans

2373 One World Trade Center

New York, New York 10048

(212) 432-0940

19a

APPENDIX D

Order Extending Time to Docket Appeal to

September 15, 1975

(August 12, 1975)

SUPREME COURT

OF THE UNITED STATES

No. A-112

>

THompson Van Lungs, ef al.,

Appellants,

—V,—

Unitep States and

INTERSTATE COMMERCE COMMISSION.

<> ~—

Upon CONSIDERATION of the application of counsel for ap-

pellants,

IT 1s ORDERED that the time for docketing an appeal in the

above-entitled cause be, and the same is hereby, extended to

and including September 15, 1975.

Warren E. Burcer

Chief Justice of the United States

Dated this 12

day of August, 1975

20a

APPENDIX E

Statutes Involved

INTERSTATE CoMMERCE AcT

IssuANCE OF CERTIFICATE

Sec. 207. [August 9, 1935] [49 U. S. C. §307] (a) Subject

to section 210, a certificate shall be issued to any qualified

applicant therefor, authorizing the whole or any part of

the operations covered by the application, if it is found that

the applicant is fit, willing, and able properly to perform

the service proposed and to conform to the provisions of

this part and the requirements, rules, and regulations of the

Commission thereunder, and that the proposed service, to

the extent to be authorized by the certificate, is or will be

required by the present or future public convenience and

necessity; otherwise such application shall be denied: Pro-

vided, however, That no such certificate shall be issued to

any common carrier of passengers by motor vehicle for

operations over other than a regular route or routes, and

between fixed termini, except as such carriers may be au-

thorized to engage in special or charter operations.

(b) No certificate issued under this part shall confer

any proprietary or property rights in the use of the public

highways.

TerRMS AND CoNDITIONS OF CERTIFICATE

Sec. 208. [August 9, 1935, November 10, 1966.] [49

U.S.C. 308.) (a) Any certificate issued under section 206

and 207 shall specify the service to be rendered and the

routes over which, the fixed termini, if any, between which,

and the intermediate and off-route points, if any, at which,

2la

and in case of operations not over specified routes or

between fixed termini, the territory within which, the motor

carrier is authorized to operate; and there shall, at the time

of issuance and from time to time thereafter, be attached

to the exercise of the privileges granted by the certificate

such reasonable terms, conditions, and limitations as the

public convenience and necessity may from time to time re-

quire, including terms, conditions, and limitations as to the

extension of the route or routes of the carrier, and such

terms and conditions as are necessary to carry out, with

respect to the operations of the carrier, the requirements

esta’ ‘ished by the Commission under section 204 (a) (1)

and (6): Provided, however, That no terms, conditions, or

limitations shall restrict the right of the carrier to add to

his or its equipment and facilities over the routes, between

the termini, or within the territory specified in the certifi-

cate, as the development of the business and the demands

of the public shall require.

Suspension, CHANGE, REvocaTION, AND TRANSFER OF

CERTIFICATES, PERMiTs, AND LICENSES

Sec. 212. [August 9, 1935, amended June 29, 1938, Sep-

tember 18, 1940, August 22, 1957, October 15, 1966.] [49

U.S. C. §312.) (a) Certificates, permits, and licenses shall

be effective from the date specified therein, and shall remain

in effect until suspended or terminated as herein provided.

Any such certificate, permit, or license may, upon applica-

tion of the holder thereof, in the discretion of the Commis-

sion, be amended or revoked, in whole or in part, or may

upon complaint, or on the Commission’s own initiative, after

notice and hearing, be suspended, changed, or revoked, in

whole or in part, for willful failure to comply with any pro-

vision of this part, or with any lawful order, rule, or regula-

22a

tion promulgated thereunder, or with any term, condition,

or limitation of such certificate, permit, or license: Pro-

vided, however, That no such certificate, permit, or license

shall be revoked (except upon application of the holder)

unless the holder thereof willfully fails to comply, within a

reasonable time, not less than thirty days, to be fixed by the

Commission, with a lawful order made as provided in see-

tion 204 (c), commanding obedience to the provision of this

part, or to the rule or regulation thereunder, or to the term,

condition, or limitation of such certificate, permit, or license,

found by the Commission to have been violated by such

holder: And provided further, That the right to engage in

transportation in interstate or foreign commerce by virtue

of any certificate, permit, license, or any application filed

pursuant to the provisions of section 206, 209, or 211, or by

virtue of the second proviso of section 206 (a) or temporary

authority under section 210a, may be suspended by the

Commission, upon reasonable notice of not less than fifteen

days to the carrier or broker, but without hearing or other

proceedings, for failure to comply, and until compliance,

with the provisions of section 211 (c), 217 (a), or 218 (a) or

with any lawful order, rule, or regulation of the Commis-

sion promulgated thereunder.

ADMINISTRATIVE Procepure Act

Sec. 558. Imposition or Sanctions; DeTERMINATION oF AP-

PLICATIONS FOR LicENsES; SusPENsION, Revocation,

AND Expiration or Licenses [5 U. S.C. §558.]

(a) This section applies, according to the provisions

thereof, to the exercise of a power or authority.

(b) A sanction may not be imposed or a substantive rule

or order issued except within jurisdiction delegated to the

agency and as authorized by law.

aes cece

23a

(c) When application is made for a license required by

law, the agency, with due regard for the rights and privi-

leges of all the interested parties or adversely affected per-

sons and within a reasonable time, shall set and complete

proceedings required to be conducted in accordance with

sections 556 and 557 of this title or other proceedings re-

quired by law and shall make its decision. Except in cases

of willfulness or those in which public health, interest, or

safety requires otherwise, the withdrawal, suspension, rev-

ocation, or annulment of a license is lawful only if, before

the institution of agency proceedings therefor, the licensee

has been given—

(1) notice by the agency in writing of the facts or

conduct which may warrant the action; and

(2) opportunity to demonstrate or achieve com-

pliance with all lawful requirements.

When the licensee has made timely and sufficient applica-

tion for a renewal of a new license in accordance with

agency rules, a license with reference to an activity of a

continuing nature does not expire until the application has

been finally determined by the agency.

24a

APPENDIX F

Order

Title 49—TRaNSPOoRTATION

Chapter X—LyrerstaTteE CoMMERCE COMMISSION

Subchapter A—GenerAL Rutes anp ReGuLAtTIONS

Part 1065—GatTeways anp Tackinc—IrreGuLar Route

Moror Common Carriers OF PROPERTY

At a General Session of the [yTerstaTteE CoMMERCE ComMMIs-

sion, held at its office in Washington, D.C., on the 15th

day of February 1974.

Ex Parte No. 55 Sus-No. 8)

MOTOR COMMON CARRIERS OF PROPERTY,

ROUTES AND SERVICE

(PETITION FOR THE ELIMINATION OF GATEWAYS

BY RULEMAKING)

It appearing, That by joint petition filed March 21, 1973,

42 motor common carriers requested this Commission to

institute a rulemaking proceeding to investigate the pos-

sibility of promulgating regulations which would permit

all motor carriers to operate directly between any two

points they are authorized to serve, without the necessity

of observing any of their presently required gateways; and

that on November 23, 1973, this Commission issued a Notice

of Proposed Rulemaking and Order, 119 M.C.C. 170 (dated

November 15, 1973), in this proceeding which set forth cer-

tain provisional findings on the matters involved and which

invited comments on those tentative findings;

es RO ca RN Cie aa

25a

And it further appearing, That investigation of the mat-

ters and things involved in this proceeding has been made

and that the Commission has made and filed its report

herein containing its findings of facts and conclusions

thereon, which report is hereby referred to and made a

part hereof;

It is ordered, That Chapter X of Title 49 of the Code of

Federal Regulations be, and it is hereby, amended by add-

ing a new part 1065 reading as set forth in appendix B to

the said report.

It is further ordered, That this order shall become effec-

tive on April 5, 1974, and shall remain in effect until modi-

fied or revoked in whole or in part by further order of the

Commission.

And it is further ordered, That notice of this order shall

be given to the general public by depositing a copy thereof

in the Office of the Secretary of the Commission at Wash-

ington, D.C., and by filing a copy with the Director, Office

of the Federal Register. (49 U.S.C. 301, 302, 304, and 308,

5 U.S.C. 553 and 559.)

By the Commission.

Rosert L. Oswa.p,

Secretary.

(Szau)

26a

Rules of Interstate Commerce Commission

The adopted rules

[49 CFR Cuapter X]

Section 1065. Gateways and tacking—irregular-route motor

common carriers of property.

(a) Where a common carrier by motor vehicle author-

ized to transport property in interstate or foreign com-

merce holds separate and unrestricted irregular-route cer-

tificated authorities issued by the Interstate Commerce

Commission, which authorities have a common point of

service (a “gateway”) to which a given shipment may be

transported under one authority and from which the same

shipment may be transported under the other, the carrier

is required, upon reasonable request therefor, to furnish

through service on the shipment under a combination of

the authorities and may do so without transporting the

shipment through the common service point or points; pro-

vided: (1) that the certificated authorities so utilized were

issued to the carrier pursuant to an application proceed-

ing pending before the Interstate Commerce Commission

on or before November 23, 1973, (2) that none of the au-

thorities is restricted against such joining, (3) that the

most direct highway distance between the points’ to be

‘In those cases where a carrier may serve a municipality or unin-

corporated community pursuant to this rule without the necessity

of observing a gateway specified in its certificated authorities, the

carrier shall serve all points within its terminal area at such

municipality or unincorporated community in accordance with 49

CFR 1049.

ee eee eee 6 ee

27a

served is not less than 80 percent of the highway distance

between such points over the carrier’s authorized routing

through the gateway, (4) that a lawful and appropriate

tariff covering the movement via the gateway was on file

with the Interstate Commerce Commission on November

23, 1973, or that the carrier had pending an application on

the aforementioned date which was subsequently granted,

and (5) the earrier follows the procedures prescribed in

paragraph (d)(1) below.

(b) Except where expressly allowed under paragraph

(a) above, or on movements of 300 miles or less, or where

its certificated authorities specifically authorize such tack-

ing or joinder, a common carrier by motor vehicle author-

ized to transport property, in interstate or foreign com-

merce, is prohibited from joining any of its irregular-route

certificated authorities on and after the effective date of

this regulation. Any common carrier by motor vehicle

providing such prohibited service on or before the date

this regulation takes effect shall cease such operations on

or before the 60th day following the said effective date,

unless it files an application for direct-service operating

authority pursuant to section 206 of the Interstate Com-

merce Act on or before the 60th day following the effective

date. Such an application may have the suport of the ship-

per or shippers currently served by the carrier applicant,

shall be filed and processed in accordance with the pro-

cedures prescribed in paragraph (d)(2) below, and shall

be determined in accordance with the requirements of sec-

tion 207 of the Interstate Commerce Act giving full effect

to the applicant’s past service and operations through the

gateway. Any such carrier filing such an application in

good faith may continue to provide such service by observ-

28a

ing its gateways or gateway until final disposition of its

application proceeding.

(c) The mileages utilized in determining whether the

most direct highway distance between the points to be

served is not less than 80 percent of the highway distance

between such points over the carrier’s authorized routing

through the gateway, shall be calculated from the point of

origin (i.e., the point on the ecarrier’s authorized route

where the shipment begins its journey) to the point of

destination (i.e., the point on the same carrier’s authorized

route where the shipment ends its journey) of the ship-

ment or shipments involved.

(d)(1) A earrier seeking to eliminate gateways pursuant

to paragraph (a) above shall be required to adhere to the

following procedures:

(i) file a letter and two copies thereof with this Com-

mission at its offices in Washington, D.C., and one copy

with this Commission’s field office having jurisdiction over

the point at which the carrier is domiciled, describing the

gateways to be eliminated (this should include origin, des-

tination, and gateway, applicable mileages, and a suitable

map), and attaching either (A) copies of appropriate tariff

provisions establshing that such through services were

offered by the carrier on November 23, 1973, or (B) a

verified statement establishing that the certificated author-

ity enabling operations through the gateway were issued

to the carrier pursuant to an application proceeding pend-

ing before the Interstate Commerce Commission on No-

vember 23, 1973.

(ii) allow 15 days from the date of publication in the

Federal Register of a notice of the ecarrier’s intention to

tee Bee et A ce hd ee oe

ee ee ae

Pe See Nee

29a

eliminate its gateways and for Commission review of the

letter submission. Protests to such notices must be received

at the Commission at Washington, D.C., within 10 days of

the date of that publication. If the carrier is not otherwise

informed by this Commission, operations may commence

at the termination of the said 15-day period. This Com-

mission reserves the right to require that a carrier termi-

nate these operations if it should later be discovered that

the carrier’s operations do not qualify for the benefits of

this rule.

(iii) Letter submissions under this rule will not be ac-

cepted after May 15, 1974, except in those cases in which

the certificated authority to be joined was issued pursuant

to an application proceeding pending before the Interstate

Commerce Commission on November 23, 1973. In such in-

stances, the carrier shall make such filing within 60 days

from the date of issuance of the authority in issue.

(2) A carrier that maintains gateway operations which

do not meet the criteria set forth in paragraph (a) above

may, if it desires to continue to provide such through

service to the public, file OP-OR-9 applications with this

Commission seeking direct-service authority. Such an ap-

plication shall include:

(i) in bold print in the upper right-hand corner of page 1,

the words Gateway [{LIMINATION.

(ii) (A) A earrier relying on certificated authorities is-

sued to it on or prior to November 23, 1973, shall submit

copies of appropriate tariff provisions establishing that

such through services were offered by the carrier on No-

vember 23, 1973.

30a

(B) A earrier relying on certificated authorities issued

to it after November 23, 1973, as a result of an application

pending on that date shall present verified statements

establishing either (1) that the service through the gate-

way point has been performed (as in the case of the car-

rier’s demonstrated participation in deteriorating interline

or interchange service) on November 23, 1973, or (2) that

a public need for such through service exists.

(iii) an initial verified statement in support of the ap-

plication. This should include all of the evidence applicant

plans to present in the proceeding, including (to the extent

pertinent) evidence of the applicant’s (or its established

predecessor-in-interest’s) past operations via the gateway

for the 2 year preceding November 23, 1975, and the rele-

vant matters and evidence set forth in subparagraph (ii)

above. Evidence of supporting shippers need not be pre-

sented except as set forth in (ii)(B) above, but will be

considered and accorded appropriate weight if submitted.

(iv) Such applications must be filed on or before the

60th day following the effective date of these regulations,

or within 60 days following the date of issuance of the cer-

tificated authorities so to be joined if such authorities are

issued to the carrier pursuant to an application proceeding

pending before the Interstate Commerce Commission on

November 23, 1973, whichever date last occurs. The ap-

plication will be processed in accordance with the normal

procedures of the Interstate Commerce Commission as

modified in the Federal Register publication of a notice

of the filing of such applications (which shall reflect the

procedure outlined in the Commission's report and order

in Gateway Elimination, 119 M.C.C, 530).

3la

(e) Any mot» carrier which has pending on the effec-

tive date of these regulations an application for the elim-

ination of a gateway and which desires to utilize the rules

set forth above, should notify the Director of the Office

of Proceedings of the Interstate Commerce Commission of

the pendency of such application and should include the

pertinent docket number. Duplicate applications should

not be filed.