Petition — United States v. Benmar Transport and Leasing Corp.

fr ope Pont, U.

LED

AFR 19 1979

oar)

28-1602

No. i

TE MOHAEE RED AK IR. CLERK

Iu the Supreme Cart uf the United States

OCTOBER TERM, 1978

UNITED STATES OF AMERICA, ET AL., PETITIONERS

Vv.

BENMAR TRANSPORT & LEASING CORP., ET AL.

PETITION FOR A WRIT CF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

WADE H. McCREE, JR.

Solicitor General

SARA SUN BEALE

Assistant to the Solicitor General

Department of Justice

Washington, D.C. 20530

MARK L. EVANS

Gene: al Counsel

HENRI F. RuSH

Associate General Counsel

Interstate Commerce Commission

Washington, D.C. 20423

Page »

EE SEE a nee 1

ee eS TS a 2

EEE EL 2

BIS oA SEES ESE REPS A Oe 2

Reasons for granting the petition —.................. 6

ic acwaeenees 12

ESI Sgn la

i cea pis idsancnoainacuaceceennss 4a

AG TSR OS OL 6a

ESI, SESE 8a

EIT i 10a

Appendix F * co, ont annaeeaaaee l6a

SSS a EE 20a

EEE TS 22a

EE ES TESS Pav 25a

SE EEE ee ee ES SRA 28a

CITATIONS

Cases:

American Farm Lines v. Black Ball

Freight Service, 397 U.S. 582 ........ 6, 7, 8,9, 11

Anchor Line Ltd. v. FMC, 299 F.2d 124.. 9,10

FPC vy. Transcontinental Gas Pipe Line

I, 12

Greater Boston Television Corp. v. FCC,

463 F.2d 268, cert. denied, 406 U.S.

REE IRTENEELS SLES 10, 11

I

Cases—Continued Page

Ralston Purina Co. v. Louisville & Nash-

oe See Be ae yin 12

South Prairie Construction Co. vy. Local

No. 627, International Union of Oper-

ating Engineers, 425 U.S. 800 _.......... 12

Union Pacifie Ry. v. Sheehan, No. 78-344

gE ag cart bins cqukietatteeeigernns. 12

Wrather-Alvarez Broadcast v. FCC, 248

a a at creak cuincgacsnn ancl 8

Statutes:

Interstate Commerce Act, 49 U.S.C. 1

et seq.:

Section 17(6), 49 U.S.C. 17(6)......7, 8, 28a

Section 17(7), 49 U.S.C. 17(7) ...7, 8, 28a

Section 203(a) (14), 49 U.S.C. 303

TS pe eee po MEd ee ve 2-3, 28a

Section 203(a) (15), 49 U.S.C. 308

Ei ede Lotsa. tiatecutastiecsas-<ctbes 2, 28a

Section 210, 49 U.S.C. 310-0000... 3, 28a

Pub. L. No. 95-478, 92 Stat. 1837 ............ 3

28 U.S.C. (1970 ed.) 23821-2325 .............. 8

Be ae OO socks snsipsecicsetsensenionecnsess 8

Iu the Supreme Court of the United States

OCTOBER TERM, 1978

No.

UNITED STATES OF AMERICA, ET AL., PETITIONERS

v.

BENMAR TRANSPORT & LEASING CORP., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

The Solicitor General, on behalf of the United

States and the Interstate Commerce Commission, pe-

titions for a writ of certiorari to review the judg-

ment of the United States Court of Appeals for the

Second Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra,

la-3a) is reported at 582 F.2d 246. The orders of

the Interstate Commerce Commission (Apps. E-l,

infra, 10a-27a) are not reported.

(1)

2

JURISDICTION

The judgment of the court of appeals (App. B,

infra, da-5a) was entered on August 16, 1978. The

Commission’s timely petition for rehearing was de-

nied on December 22, 1978 (App. C, infra, 6a-7a).

On March 13, 1979, Mr. Justice Marshall extended

the time for filing a petition for a writ of certiorari

to and including April 20, 1979. The jurisdiction

of this Court is invoked under 28 U.S.C. 1254(1) and

2350(a).

“

QUESTION PRESENTED

Whether the filing of a petition to review an Inter-

state Commerce Commission order deprives the Com-

mission of jurisdiction to reopen the proceeding on

its own motion in order to correct a defect in the

order.

STATUTES INVOLVED

Sections 17(6) and 17(7) of the Interstate Com-

merce Act, 49 U.S.C. (1976 ed.) 17(6) and 17(7),

now recodified as 49 U.S.C. (Supp. 1976) 10323 are

reprinted in App. J, infra.

STATEMENT

1. Respondent Consolidated Truck Service, Inc.,

applied to the Interstate Commerce Commission for

authority to operate as a contract carrier to serve

Jubilee Shops, Inc.‘ Respondent Benmar Transport

'A contract carrier provides transportation under continu-

ing agreements with one or a limited number of persens, and

either assigns trucks for the exclusive use of such persons or

furnishes service designed to meet their distinct needs. 49

U.S.C. (1976 ed.) 303(a) (15). Unlike a common carrier, a

contract carrier does not hold itself out to the general public

to provide transportation. See 49 U.S.C. (1976 ed.) 303(a)

3

& Leasing Corp., a contract carrier that already

served Jubilee, opposed the application on the ground

that it could provide the service for which Consoli-

dated sought authority and that a grant of authority

to Consolidated would divert some of Benmar’s busi-

ness (see App. E, infra, 10a-138a).

After a review board initially denied Consolidated’s

application (App. E, infra, 10a-15a), an appellate

division of the Commission granted it (App. F, infra,

16a-19a). The division found that Benmar’s au-

thority was not broad enough to take care of Jubilee’s

expanding needs and that Consolidated’s proposed

operation would be consistent with the public interest

(id. at 17a-18a). The division denied Benmar’s pe-

tition for reconsideration on December 27, 1977 (App.

G, infra, 20a-21a).

On January 13, 1978, Benmar filed a petition to

review the Commission’s orders in the United States

Court of Appeals for the Second Circuit. Shortly

thereafter, Benmar’s attorney notified the Commis-

sion’s counsel that the agency’s orders were patently

defective because they failed to include a finding,

required by 49 U.S.C. (1976 ed.) 310, that there was

good cause for permitting Consolidated to operate

in the same territory as both a common carrier and

a contract carrier.

(14). (On October 17, 1978, President Carter signed into law

the Revision of Title 49, United States Code, ‘‘Transporta-

tion,” Pub. L. No. 95-478, 92 Stat. 1337, which recodifies the

Interstate Commerce Act. For purposes of clarity, we refer

to the statutes by their former designations. Appendix J,

infra, sets forth a table with the recodified section numbers

for the provisions of the Act referred to in this petition.)

4

On January 27, 1978—before the record was filed

in the court of appeals—the Commission reopened the

administrative proceeding on its own motion to cor-

rect this omission (App. H, injra, 22a-24a). The

Commission found that there was no realistic oppor-

tunity for Consolidated to engage in discriminatory

rate practices, and accordingly that there was good

cause to allow the proposed “dual operations” (id.

at 28a).

Anticipating that Benmar would seek further ad-

ministrative review under the Commission’s rules,

the parties to the pending case in the court of ap-

peals (including Benmar) jointly moved the court

to extend the time for filing the record and briefs.

The motion’s purpose, as revealed in the supporting

memorandum, was to ensure that the court would

have before it for review a final administrative order

free of the technical defect concerning the omitted

“dual operations” finding.’ The court granted the

motion, extending the time for filing the record until

March 8, 1978."

Benmar filed its petition for administrative review

on February 27, 1978. It quickly became apparent

that the Commisison might not be able to act on the

petition by March 8, the extended date when the

2? The Joint Motion and the Memorandum in Support of the

Joint Motion were reproduced as Appendix A to the Commis-

sion’s petition for rehearing in the court of appeals. We have

lodged a copy of this petition with the Clerk of this Court.

® The order modifying the schedule for filing the briefs and

the record was reproduced as Appendix B to the petition for

rehearing.

5

record was due to be filed in court. Accordingly,

on March 7, 1978, the Commission and the United

States filed a motion, concurred in by counsel for all

other parties, to hold further judicial proceedings

in abeyance pending the Commission’s disposition of

Benmar’s administrative petition.'

On April 18, 1978, the Commission denied Ben-

mar’s petition (App. I, infra, 25a-27a). The effect

of that denial, which became the Commission’s ad-

ministratively final order in the proceeding, was to

reaffirm the earlier decision to grant Consolidated’s

application for a contract carrier permit.

Benmar then filed with the court of appeals an

amended petition for review, attaching the January

27 and April 18 orders, and the court established

a revised schedule for filing the record and the briefs.

All parties briefed a single question: whether the

Commission’s final order was supported by the

evidence.

‘The motion and accompanying papers were reproduced as

Appendices C and D in the petition for rehearing. The court

never acted on this motion. Several days after the motion

was filed, the Second Circuit clerk’s office informed the Com-

mission’s counsel that, as an alternative to asking the court

to hold the proceeding in abeyance, Benmar’s counsel intended

to withdraw its petition for review, subject to reinstatement

within 30 days of the Commission’s final order disposing of

the petition for administrative review. Counsel for Benmar

thereafter sent Commission counsel a proposed stipulation

to that effect. See Appendices E and F to the Commission’s

petition for rehearing. The Commission’s counsel signed the

stipulation and returned it to Benmar’s attorney, but the

Commission issued its final order before the stipulation was

filed.

6

2. The court of appeals held that the only order

properly before it for review was the Commission’s

orig’ «al order, which was defective because it did

not contain a finding that there was good cause to

authorize dual operations (App. A, infra, la-3a).

Despite the fact that a'l parties had concurred in the

Commission’s reopening of the proceedings to make

the required “dual operations” finding, and that no

party had presented a question concerning the validity

of that procedure, the court refused to consider the

January 27 and April 18 corrective orders on the

ground that the Commission had failed to seek ex-

press permission from the court to issue those orders

(id. at 2a-3a).

Because the original order concededly was defec-

tive, the court vacated it and remanded the case for

further proceedings (id. at 3a).°

REASONS FOR GRANTING THE PETITION

1. The court’s decision is bottomed on the theory,

which this Court rejected more than eight years ago

in American Farm Lines v. Black Ball Freight Serv-

ice, 397 U.S. 582 (1970), that the filing of a pe-

tition for review vests the court of appeals with

exclusive jurisdiction and thereby bars the Commis-

sion from taking any further action in the proceed-

ing except with the court’s express approval (see

App. A, infra, 2a-3a). In American Farm Lines

*The Commission’s petition for rehearing and suggestion

of rehearing en banc were denied (Apps. C and D, infra, 6a-

9a).

7

several parties to a proceeding before the Commis-

sion filed an action for judicial review of an order,

while others filed petitions for administrative re-

consideration. After the district court temporarily

had restrained the operation of the Commission’s or-

der, the Commission—acting without court approval

—reopened the record, received additional evidence,

and modified its earlier findings. The district court,

like the court of appeals here, held that ‘the pen-

dency of the review proceedings deprived the Com-

mission of jurisdiction to reopen the administrative

record” and to issue a new order. 397 U.S. at 540.

This Court reversed. It held that the Commission’s

“broad powers” to reopen and reconsider an order

under Sections 17(6) and 17(7) of the Interstate

Commerce Act, 49 U.S.C. (1976 ed.) 17(6) and (7),

“are plainly adequate to add to the findings or firm

them up as the Commission deems desirable, absent

any collision or interference with the District Court.”

397 U.S. at 541. The Court found that the Commis-

sion’s actions neither collided nor interfered with the

district court’s jurisdiction (897 U.S. at 542):

What the Commission did came before the court

was ready to hear arguments on the merits and

before the record was filed with it. * * * Since

by Act the Commission never lost jurisdiction

to pass on petitions for rehearing, and since the

stay order did not forbid it from acting on those

pending petitions, it was not necessary for the

Commission to seek permission of the court to

make those rulings.

8

The Commission reopened the record merely

to remedy a deficiency in it before any judicial

review of the merits had commenced and fully

honored the stay order of the District Court. It

therefore acted in full harmony with the court’s

jurisdiction.

The Court specifically rejected the notion that un-

derlies the court of appeals’ decision in this case. It

stated: “The concept ‘of an indivisible jurisdiction

which must be all in one tribunal or all in the other

may fit’ some statutory schemes, but it does not fit

this one.” 397 U.S. at 541 (citations omitted).°

The principles of American Farm Lines are fully

applicable to this case. Although ICC orders at that

time were reviewable by three-judge district courts

under the former provisions of 28 U.S.C. 2321-2325,

and are now reviewable by the courts of appeals under

28 U.S.C. 2341-2350, the Commission’s reopening

powers with respect to motor carrier proceedings are

unchanged. See 49 U.S.C. (1976 ed.) 17(6) and (7).

What the Court said in 1970 therefore controls here

as well.

The critical question under American Farm Lines

is not whether a review proceeding has-been filed, or

whether the Commission has sought the reviewing

court’s permission to reopen the proceedings, but

® See also Wrather-Alvarez Broadcast v. FCC, 248 F.2d 646,

648 (D.C. Cir. 1957): “[O]ur conclusion that we have juris-

diction of an appeal taken from a Commission order before

any petition for rehearing has been filed does not preclude

the Commission from having jurisdiction over subsequently

filed timely petitions for rehearing.”

9

whether the Commission’s action would Jefeat or

hamper the reviewing court’s proceedings, or cause

prejudice to a party entitled to judicial review. In

this case there was no hindrance and no prejudice.

As in American Farm Lines, the Commission acted

“before the record was filed with it.” 397 U.S. at

542. The reopening was intended “merely to remedy

a deficiency” in an order (ibid.) to facilitate judicial

review on the merits.’ Although the Commission here

acted initially on its own motion rather than in re-

sponse to petitions for administrative reconsideration,

it “acted in full harmony with the court’s jurisdic-

tion” (ibid.). In these circumstances, “it was not

necessary for the Commission to seek permission of

the court” before making its ‘additional findings”

(897 U.S. at 542, 541).°

* Indeed, the reopening of the proceeding in American Farm

Lines involved the receipt of additional evidence and a modifi-

cation of the Commission’s prior findings. Here, the purpose

of the reopening was merely to supply an inadvertently-

omitted finding that in no way changed the agency’s findings

in its previous decision.

® Neither of the opinions cited by the court below (App. A,

infra, 3a) supports its decision. In Anchor Line Ltd. v. FMC,

299 F.2d 124 (D.C. Cir. 1962), the Federal Maritime Com-

mission, after a petition for judicial review had been filed,

reopened a proceeding and issued a new order reaching a

result opposite from that of the first order. Although the

court did state an agency that wishes to reconsider its action

should move the reviewing court to remand or to hold the

case in abeyance, the decision predates American Farm Lines.

Moreover, the Anchor court did not view the filing of such a

motion as “jurisdictional,” because it declined to disturb the

FMC’s action, finding that the agency’s failure to file such a

10

2. The court of appeals’ decision frustrated the

Commission’s attempt to expedite and simplify the

judicial review of the merits of its order. No party

objected to the way the Commission proceeded, and

indeed the court of appeals accommodated the pro-

cedure by adjusting its applicable filing dates. Never-

theless, the court of appeals concluded that the Com-

mission’s action must be duplicated on remand be-

cause the Commission failed to obtain the court’s

explicit advance approval. That is a pointless hold-

ing. Here the holding requires the Commission to

reissue its corrective orders. In all likelihood, the

court eventually will have before it for review orders

identical to those the Commission issued earlier, ex-

cept that the new orders will bear later dates. In

future cases the holding requires additional delay

while the parties seek judicial approval of administra-

motion “was not prejudicial in the circumstances.” 299 F.2d

at 125. The Commission’s action here, as in Anchor, “was

not prejudicial” to any party. The procedure followed was

concurred in by all parties: it served not only their interests

but also the interests of both the Commission and the court

by promoting expeditious review of the merits of the Com-

mission’s decision without the complication of a patent tech-

nical deficiency. Greater Boston Television Corp. v. FCC, 463

F.2d 268 (D.C. Cir. 1971), cert. denied, 406 U.S. 950 (1972),

also is inapposite. The issue there was whether the court, on

the FCC’s request, should recall its mandate affirming an FCC

order and remand the case to permit the agency to consider

information that had come to light after the court’s decision.

It was in this unusual context that the court stated that the

FCC must obtain court approval if it wishes “to conduct fur-

ther proceedings” after “a petition for review has been filed.”

468 F.2d at 283.

ll

tive action.’ Either way, the holding will delay need-

lessly the day of decision and inconvenience the parties

as well as the court.

The question presented here is both important and

recurring. Agencies need to know the boundaries of

their authority to modify orders that are the sub-

ject of judicial review. The question arises fre-

quently, sometimes (as in American Farm Lines)

because petitions for rehearing are filed with the

agency, and sometimes (as in this case) because the

agency itself sees a problem that should be corrected.

The question could arise in any case of a petition to

review an administrative order.

The court of appeals’ resuscitation of the dis-

credited doctrine of indivisible jurisdiction, if per-

mitted to stand, is likely to generate confusion about

the limits of agency authority that will place a strain

on the “collaborative partnership between agency and

court” (Greater Boston Television Corp. v. FCC, 463

F.2d 268, 281 (D.C. Cir. 1971), cert. denied, 406

U.S. 950 (1972)) and cause unnecessary delay and

inconvenience to the parties, agencies, and courts.

Although the practical effect of the court’s decision

may seem minor in any single case, the cumulative

burden—on both agency and court resources—of fil-

ing and disposing of needless motions for leave to

® The delay would be particularly great where, as here, mo-

tions are filed and never dealt with by the court (see note 4,

supra).

12

take administrative action, and of redoing the process

if counsel neglect to file such a motion, would be

substantial.

In our view, the court of appeals’ error is so clear

that it would be appropriate for the Court summarily

w reverse the judgment, as it has done in other recent

cases involving the relationship between agencies and

reviewing courts. See, e.g., Union Pacific Ry. v.

Sheehan, No. 78-344 (Dec. 4, 1978); Ralston Purina

Co. v. Louisville & Nashville R.R., 426 U.S. 476

(1976) ; South Prairie Construction Co. v. Local No.

627, International Union of Operating Engineers,

425 U.S. 800 (1976); FPC v. Transcontinental Gas

Pipe Line Co., 423 U.S. 326 (1976).

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

WADE H. McCREE, JR.

Solicitor General

SARA SUN BEALE

Assistant to the Solicitor General

MARK L. EVANS

General Counsel

HENRI F. RuSH

Associate General Counsel

Interstate Commerce Commission

APRIL 1979

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 1142—September Term, 1977

(Argued July 17, 1978 Decided August 16, 1978)

Docket No. 78-4005

BENMAR TRANSPORT & LEASING CORP., PETITIONER

Vv,

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA, RESPONDENTS

and

CONSOLIDATED TRUCK SERVICE, INC.,

INTERVENOR-RESPONDENT

Before:

MESKILL, Crrcuit Judge, and

DUMBAULD * and Port,** District Judges.

PER CURIAM:

* Hon. Edward Dumbauld, Senior District Judge of the

Western District of Pennsylvania, sitting by designation.

** Hon. Edmund Port, Senior District Judge of the

Northern District of New York, sitting by designation.

2a

Benmar Transport & Leasing Corp., petitions this

Court to set aside an order of the Interstate Com-

merce Commission authorizing Consolidated Truck

Service, Inc., to begin contract carrier service in com-

petition with Benmar. This Court has jurisdiction

under 28 U.S.C. §§ 2821 and 2324 and venue under

28 U.S.C. § 2348.

Review Board No. 1 of the I.C.C. denied Con-

solidated Truck’s application on May 12, 1977. Di-

vision 1 of the I.C.C. reversed that decision on Oc-

tober 5, 1977. Benmar filed and served its petition

for review by this Court on January 13, 1978. On

its own motion, Division 1 reopened the proceedings

in a decision dated January 25, 1978, and served on

January 27. The express purpose of this reopening

was to consider the issue of Consolidated’s dual op-

erations (common carrier and contract carrier) un-

der § 210 of the Interstate Commerce Act, 49 U.S.C.

§ 310. As a result of this reopening and considera-

tion, the Commission approved dual operations for

Consolidated, as it was required to do in order for

the grant of contract carrier authority to Consoli-

dated to become effective. This happened prior to

the time the agency filed the record with this Court.

Section 2349 of Title 28, the statute governing pe-

titions to review federal agency orders, provides that

“(t]he court of appeals has jurisdiction of the pro-

ceeding on the filing and service of a petition to re-

view.” 28 U.S.C. § 2349. The United States Court

of Appeals for the District of Columbia Circuit has

determined that “[o]nce a petition to review has

8a

been filed in court, the [administrative agency] has

no authority to conduct further proceedings without

the court’s approval. The reviewing court must order

a remand if there is to be provision for further ad-

ministrative consideration.” Greater Boston Tele-

vision Corp. v. F.C.C., 463 F.2d 268, 283 (D.C. Cir.

1971), cert. denied, 406 U.S. 950 (1972). In an

earlier case, that same Court determined that “the

pendency of a review petition does not automatically

bar reopening of an administrative proceeding. .. .

It is true that when an agency seeks to reconsider

its action, it should move the court to remand or to

hold the case in abeyance pending reconsideration by

the agency. We do not condone the failure to follow

that procedure.” Anchor Line Ltd. v. Federal Mari-

time Commission, 299 F.2d 124, 125 (D.C. Cir.),

cert. denied, 370 U.S. 922 (1962) (citations and

footnote omitted). No such application was made

here. Thus, the only order properly before us for

review is the October 5th order, which lacked the

statutorily-required finding that it was consistent

“with the public interest and with the national trans-

portation policy,” as declared in the Interstate Com-

merce Act, for Consolidated to be granted authority

for dual operation. 49 U.S.C. § 310.

Accordingly, we grant the petition, vacate the Oc-

tober 5, 1977, order of Division 1 of the I.C.C., and

remand for further proceedings.

4a

APPENDIX B

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

[Filed August 16, 1978]

At a Stated Term of the United States Court of

Appeals, in and for the Second Circuit, held at the

United States Court Heuse, in the City of New York,

on the sixteenth day of August, one thousand nine

hundred and seventy-eight.

Present:

HON. THOMAS J. MESKILL

Circuit Judge

HON. EDWARD DUMBAULD

HON. EDMUND PORT

District Judges

78-4005

BENMAR TRANSPORT & LEASING CORP., PETITIONER

Vv.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA, RESPONDENTS

CONSOLIDATED TRUCK SERVICE, INC.,

a New Jersey corporation, INTERVENOR-RESPONDENT

Petition for review of an order of the Interstate

Commerce Commission.

5a

This cause came to be heard upon a certified list

of items constituting the record filed, and was argued

by counsel.

Upon consideration thereof, it is now hereby or-

dered, adjudged, and decreed that the petition for

review be and it hereby is granted and that the order

be vacated and the cause remanded for further pro-

ceedings in accordance with the opinion of this court,

with costs to be taxed against the respondent and

intervenor-respondent.

A. DANIEL FUSARO

Clerk

by Sara Piovia, Esq.

Deputy Clerk

[SEAL]

A true copy

/s/ A. Daniel Fusaro

Clerk

7a

6a

ann © Upon consideration thereof, it is

UNITED STATES COURT OF APPEALS ae that said petition be and it hereby is

SECOND CIRCUIT

At a Stated Term of the United States Court of i i Fusaro

Appeals, in and for the Second Circuit, held at the

United States Court House, in the City of New York,

on the twenty-second day of December, one thousand

nine hundred and seventy-eight.

Present:

HON. THOMAS J. MESKILL

Circuit Judge

HON. EDMUND PORT

HON. EDWARD DUMBAULD

District Judges

78-4005

BENMAR TRANSPORT & LEASING CORP., PETITIONER

Vv.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA, RESPONDENT

CONSOLIDATED TRUCK SERVICE, INC.,

a New Jersey Corporation, INTERVENOR

A petition for a rehearing having been filed herein

by counsel for the respondent, Interstate Commerce

Commission.

8a 9a

APPENDIX D © Ordered that said petition be and it hereby is

UNITED STATES COURT OF APPEALS DENIED.

SECOND CIRCUIT

Irving R. Kauf

At a stated term of the United States Court of /s/ Chit 3 orton man

Appeals, in and for the Second Circuit, held at the . IRVING R. KAUFMAN

United States Court House, in the City of New York, |

on the twenty-second day of December, one thousand

nine hundred and seventy-eight.

" 78-4005

BENMAR TRANSPORT & LEASING CoRP., PETITIONER

v.

INTERSTATE COMMERCE COMMISSION and

UNITED STATES OF AMERICA, RESPONDENT

CONSOLIDATED TRUCK SERVICE, INC.,

a New Jersey Corporation, INTERVENOR

A petition for rehearing containing a suggestion

that the action be reheard in banc having been filed

herein by counsel for the respondent, Interstate Com-

merce Commission, and no active judge or judge who

was a member of the panel having requested that a

vote be taken on said suggestion, |

Upon consideration thereof, it is ;

_ 10a

APPENDIX E

ORDER

[Service Date—May 17, 1977]

At a Session of the INTERSTATE COMMERCE

COMMISSION, Review Board Number 1, held at

its office in Washington, D.C., on the 12th day of

May, 1977.

No. MC-129950 (Sub-No. 2)

CONSOLIDATED TRUCK SERVICE, INC., EXTENSION—

POINTS IN 8 STATES

(South Kearny, N.J.)

It appearing, That by an appropriately filed ap-

plication, as amended, the above-named applicant

seeks a permit to operate as a contract carrier by

motor vehicle, performing the operations set forth

in the appendix hereto;

It further appearing, That the application has been

considered under the Commission’s modified proce-

dure; that applicant has filed verified statements in

support of the application containing evidence of its

fitness, willingness, and ability to provide the pro-

posed service, including appropriate feasibility, op-

erational, and financial data; that protestants Ben-

mar Transport & Leasing Corp., Gilbert Carrier

Corp., and Schneider Transport, Inc., have filed ver-

ified statements in opposition to the application; and

that applicant has filed a reply statement;

lla

It further appearing, That Jubilee Shops, Inc., sup-

porting shipper herein, operates department stores

under the trade name Belscot Stores, and additionally

leases departments from other discount department

stores; that it sets forth a representative list of stores

in the three States involved herein; that while it

currently operates only one store in Michigan, it in-

dicates that it intends to expand its operations in

that State; that it operates a warehouse in Secaucus,

N.J., from which it supplies its stores, and addi-

tionally requires deliveries direct from suppliers lo-

cated in the New York, N.Y., commercial zone; that

it ships a wide variety of commodities, including

garments which it ships on hangers; that with the

exception of shipments to stock its new stores, traffic

generally involves less-than-truckload (LTL) ship-

ments ranging from 500 to 2,000 pounds; that the

present volume to each store is approximately 2,000

to 8,000 pounds weekly; that it requires a coordi-

nated house-carrier type of operation capable of per-

forming a multi-State distribution service for which

it has given a representative example; that shipper

states that protestants Gilbert and Schneider hold

commodity and territorial authority which is too

limited to provide the required service; that it asserts

that protestant Benmar, which currently serves it as

a contract carrier, is limited to the transportation of

commodities dealt in by retail ready-to-wear stores;

and that it requires a carrier capable of handling its

entire line of commodities, including supplies for

which it has given representative examples;

12a

It further appearing, That protestant Benmar, a

contract carrier, holds authority to transport such

commodities as are dealt in by ready-to-wear ap-

parel stores, and supplies used in the conduct of such

business, between New York, N.Y., and Secaucus, on

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

Wisconsin, and Michigan, under a continuing con-

tract for the supporting shipper herein; that Jubilee

is the only shipper Benmar serves, and protestant

has served it since 1972; that it dedicates 14 tractors

and 14 trailers to Jubilee; that during November and

December of 1976, Benmar indicates that it grossed

approximately $44,000 for services rendered to Jubi-

lee; that it states that it currently performs the same

type of service which applicant proposes to perform;

that it states that its service for Jubilee has been

without complaint; that it asserts that the commodity

description contained in its existing permits autho-

rizes it to perform the transportation contemplated

herein; and that it contends that if the instant ap-

plication is granted, a substantial portion of its

traffic will be subject to diversion;

It further appearing, That protestant Gilbert holds

authority, as pertinent, to transport garments on

hangers from New York City to points in Illinois,

Michigan, and Wisconsin; that it operates a sub-

stantial fleet of equipment specifically designed for

the transportation of garments on hangers; and that

it has apparently not served the supporting shipper

in the past;

13a

. It further appearing, That protestant Schneider

holds authority to transport such merchandise as is

dealt in by department stores (with certain excep-

tions) from points in various northeastern States, in-

cluding the origins involved herein, to the facilities

of named department stores located throughout the

3-State area involved herein; that it operates a sizable

fleet of suitable equipment; and that if [sic] fears a

diversion of traffic, for which it gives representative

examples, inasmuch as the supporting shipper indi-

cates that it leases space in other unnamed depart-

ment stores;

It further appearing, That the proposed service

qualifies as contract carriage within the meaning of

section 203(a)(15) of the Interstate Commerce Act

because applicant will continue to serve a limited num-

ber of shippers, i.e., two, and because the proposed

service meets the first alternative definition of that

section ;

And it further appearing, That our consideration

of the evidence under the criteria of section 209(b)

of the Act reveals: (1) that a grant of authority

would authorize applicant to serve two shippers, a

strong showing under the first criterion; (2) that

applicant would provide a house-carrier type of

service tailored to meet shipper’s needs, which service

will include the multi-State distribution of LTL ship-

ments; (8) that inasmuch as protestants Schneider

and Gilbert have not participated in the involved

traffic; we do not believe that they would be ad-

versely affected by a grant of authority herein; that

l4a

protestant Benmar, however, currently serves the

supporting shipper as a contract carrier; that Jubilee

is the only shipper which Benmar holds authority to

serve and a grant of authority would almost cer-

tainly divert traffic from it; (4) that a denial of the

application would have no adverse effect on applicant

since its has not served Jubilee in the past; that al-

though Jubilee asserts that Benmar does not hold

authority broad enough to transport all of the com-

modities for which it requires service, shipper has

failed to set forth examples of any traffic which Ben-

mar has been unable to handle; that further, Jubilee

has failed to set forth any deficiencies in Benmar’s

service, or any other existing service; and (5) that

although the supporting shipper indicates that the

nature of its stores is changing, the evidence in this

regard is not sufficient to conclude that the changing

nature of shipper’s requirements is a significant fac-

tor herein; and that weighing these five criteria in

balance, we believe that the application must be

denied;

Wherefore, and good cause appearing therefor:

We find, That applicant has failed to establish that

the proposed operation would be consistent with the

public interest and the national transportation pol-

icy; that this decision is not a major Federal action

significantly affecting the quality of the human envi-

ronment within the meaning of the National Environ-

mental Policy Act of 1969; and that the application

should be denied.

l5a

It is ordered, That said application, be, and it is

hereby, denied.

By the Commission, Review Board Number 1,

Members Carleton, Joyce, and Jones.

ROBERT L. OSWALD

Secretary

[SEAL]

APPENDIX

SERVICE SOUGHT:

To transport such commodities as are dealt in by

department stores, and supplies and equipment used

in the conduct of such busines (except commodities in

bulk and foodstuffs), between points in the New

York, N.Y., commercial zone, as defined by the Com-

mission, on the one hand, and, on the other, points

in Illinois, Michigan, and Wisconsin, under a con-

tinuing contract with Jubilee Shops, Inc., of Secau-

cus, N.J.

16a

APPENDIX F

INTERSTATE COMMERCE COMMISSION

ORDER ON RECONSIDERATION

No. MC-129950 (Sub-No. 2)

[Service Date—Oct. 14, 1977]

CONSOLIDATED TRUCK SERVICE, INC., EXTENSION—-

POINTS IN 3 STATES

(South Kearny, N.J.)

Applicant filed a petition on June 28, 1977, for re-

consideration of the order of Review Board Num-

ber 1, entered May 12, 1977 denying the authority

sought. Protestants Gilbert Carrier Corp. and Schnei-

der Transport, Ine. filed replies on July 8, 1977, and

July 14, 1977 respectively. Protestant Benmar Trans-

port & Leasing Corp. has filed a motion to strike

applicant’s petition for reconsideration, for failure

to comply with the General Rules of Practice. We

believe this proceeding should be reopened for re-

consideration on the present record. Further, we be-

lieve the motion to strike should be denied as appli-

cant’s petition is in substantial compliance with the

rules of practice and we see no prejudice befalling

any party if the petition is considered.

Applicant seeks to operate as a contract carrier

transporting such commodities as are dealt in by

department stores and related supplies, between the

New York Commercial Zone, on the one hand, and,

on the other, points in three States under contract

17a

with Jubilee Shops, Inc. Protestants Gilbert and

Schneider are motor common carriers, protestant

Benmar is a contract carrier now serving the sup-

porting shipper, with authority to transport “such

merchandise as is dealt in by ready-to-wear apparel

stores”. The Board denied this application on the

basis of the protest of Benmar. Our conclusions dif-

fer from those reached by the Board.

We conclude that the review board erred in eval-

uating the fourth and fifth criteria of section 209(b).

The board implied that a denial would have no ad-

verse affect on the supporting shipper. The board

also concluded that the changing character of ship-

per’s requirements was not a significant factor. These

two conclusions largely ignore the thrust of shipper’s

criticism of existing service. Shipper (a) asserts that

it is attempting to alter the nature of its business

by changing from ready-to-wear apparel stores to de-

partment stores, and (b) argues that the limited na-

ture of Benmar’s authority burdens product line

expansion. Considering shipper’s presentation, we find

a rather detailed listing of goods shipper wishes to

merchandise which are beyond the scope of Benmar’s

“ready-to-wear apparel” authority, such as infants’

furniture, lamps, sheets, sporting goods, and toys.

It is clear that the changing character of shipper’s

transportation needs is a significant factor and

equally clear that a denial of this application will

have a substantial adverse affect on shipper’s expan-

sion efforts. Weighing the evidence in light of five

criteria of section 209(b) we conclude that the appli-

18a

cation should be granted to the extent set forth in

the appendix to this order.

FINDINGS ON RECONSIDERATION

Operation by applicant, in interstate or foreign

commerce, as a contract carrier by motor vehicle,

over irregular routes, performing the service de-

scribed in the appendix, is consistent with the public

interest and the national transportation policy. The

applicant is fit, willing, and able properly to perform

the proposed service and to conform to the require-

ments of the Interstate Commerce Act and the Com-

mission’s regulations. This decision is not a major

Federal action significantly affecting the quality of

the human environment within the meaning of the

National Environmental Policy Act of 1969. An ap-

propriate permit should be issued.

IT IS ORDERED

The motion to strike the petition for reconsidera-

tion is denied. The prior order entered on May 12,

1977 to the extent inconsistent with this order is

vacated. The petition and application except to the

extent granted, are denied. A permit will be issued

if applicant complies with Sections 215, 218, and

221(c). Applicant must comply within 90 days after

the date of service of this order. Failing timely

compliance, this grant of authority will be void.

Decided October 5, 1977.

19a

By the Commission, Division 1, Acting as an Ap-

pellate Division, Commissioners Stafford, Gresham

and Christian.

H. G. HOMME, JR.

Acting Secretary

[SEAL]

APPENDIX

SERVICE AUTHORIZED

To transport such commodities as are dealt in by

department stores, and supplies and equipment used

in the conduct of such business (except commodities

in bulk and foodstuffs), between New York, N.Y.

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

Michigan, and Wisconsin, under a continuing con-

tract or contracts with Jubilee Shops, Inc. of Secau-

cus, N.J.

20a

APPENDIX G

INTERSTATE COMMERCE COMMISSION

ORDER

No. MC-129950 (Sub-No. 2)

[Service Date—Dec. 27, 1977]

CONSOLIDATED TRUCK SERVICE, INC., EXTENSION—

POINTS IN 38 STATES

(South Kearny, N.J.)

Upon consideration of the record in this proceed-

ing, and of:

(1) Petition of Benmar Transport & Leasing Corp.,

protestant, filed November 14, 1977, for re-

consideration.

(2) Reply by applicant, filed December 5, 1977.

It is ordered:

The petition is denied because the findings of Ap-

pellate Division 1 are in accordance with the evidence

and the applicable law.

If applicant does not comply with Sections 215,

218, and 221(c) of the Interstate Commerce Act,

within 90 days after the date of service of this

order, the grant of authority will be void, and the

application will stand ‘denied.

This order will be effective 15 days from its date

of service.

2la

Decided December 16, 1977.

By the Commission, Division 1, Acting as an Ap-

pellate Division, Commissioners Stafford, Gresham,

and Christian.

H. G. HOMME, JR.

Acting Secretary

[SEAL]

NoTIcE: By this order, this proceeding is rendered

administratively final within the meaning

of 49 CFR 1101.2(f) of the Commission’s

regulations; and, in accordance with the

provisions of Section 558(¢c) of the Admin-

istrative Procedure Act, any corresponding

temporary authority expires and operations

thereunder must cease upon the effective

date of this order, except that to the extent

permanent authority is granted in this pro-

ceeding (and if partial, only to that extent)

the corresponding temporary authority or

portion thereof will continue in effect until

a certificate or permit is issued and _ be-

comes effective. The filing of any further

pleadings in this matter will not stay the

expiration of the temporary authority re-

lated to the denied portion of the sought

permanent authority.

22%

APPENDIX H

INTERSTATE COMMERCE COMMISSION

ORDER

No. MC-129950 (Sub-No, 2

[Service Date—Jan. 27, 1978]

CONSOLIDATED TRUCK SERVICE, INC., EXTENSION—

POINTS IN 3 STATES

(South Kearny, N.J.)

By order entered May 12, 1977, Review Board

Number 1 denied the application. Division 1 by order

entered October 5, 1977 reversed the decision of the

Review Board finding that the proposed service would

be consistent with the public interest and the na-

tional transportation policy. We now reopen. this

proceeding on our own motion for consideration of

the involved dual operations issue.

As a common carrier in No. MC-117685 Consoli-

dated is authorized to transport coffee beans, tea,

cocoa beans, and nuts from the Port of New York to

specified destinations. Contrasting applicant’s out-

standing common carrier authority with the service

for which a need has been found in this proceeding

we find some. potential territorial overlap, but, by

virtue of an exception against foodstuffs in the permit

authorized no commodity overlap.

Considering further that as a contract carrier ap-

plicant proposes to serve a department store chain

which does not indicate any intention to market food-

23a

stuffs, we see little likelihood that applicant will serve

the same party as both a common and contract car-

rier. Further, we observe that if any dual service

does result from approval of this application, it would

involve only service to overlapping consignees, which

is rarely a sufficient basis to withhold issuance of

operating authority, Wayne Daniel Truck, Ine..—Het.

—Candy, 128 M.C.C. 1 (1977). As the record does

not suggest that there exists a realistic opportunity

for engaging in discriminatory rate practices against

which section 210 of the Interstate Commerce Act is

aimed, these dual operations must be approved, Cargo

Contract Carrier Corp. Nat.—Bananas, 126 M.C.C.

874 (1977).

We find:

The holding by applicant of Certificate No. MC-

117685 and the permit authorized in this proceeding

will be consistent with the public interest and the

national transportation policy, subject to the right of

the Commission, which is expressly reserved, to im-

pose whatever terms, conditions, or limitations, in the

future, it may deem necessary to insure that appli-

cant’s operations are in conformance with Section

210 of the Interstate Commerce Act.

It is ordered:

A permit will be issued if applicant complies with

Sections 215, 218, and 221(c). Applicant must com-

ply within 90 days after the date of service of this

24a

order. Failing timely compliance, this grant of au-

thority will be void.

Decided January 25, 1978.

By the Commission, Division 1, Acting as an iy

pellate Division, Commissioners Stafford, Gresham,

and Christian.

H. G. HOMME, JR.

Acting Secretary

[SEAL]

25a

APPENDIX I

INTERSTATE COMMERCE COMMISSION

DECISION

[Service Date—Apr. 18, 1978]

No. MC-129950 (Sub-No. 2)

CONSOLIDATED TRUCK SERVICE, INC., EXTENSION—

POINTS IN 8 STATES

(South Kearny, N.J.)

Upon consideration of the record in this proceed-

ing, and of:

(1) Petition of Benmar Transport & Leasing Corp.,

protestant, filed February 27, 1978, for re-

opening for receipt of new evidence and for

reconsideration ;

(2) Reply by applicant filed March 16, 1978.

It is ordered:

The petition is denied because the findings of Ap-

pellate Division 1 are in accordance with the evidence

and the applicable law.

The additional evidence filed with the petition is

rejected.

If applicant does not comply with the appropri-

ate requirements set forth in the Code of Federal

Regulations (49 CFR 1048, 1044, 1053, and 1307) |

within 90 days after the date of service of this deci-

sion, the grant of authority will be void, and the ap-

plication will stand denied.

26a

This decision will be effective 15 days from its date

of service.

Decided April 8, 1978.

By the Commission, Division 1, Acting as an Ap-

pellate Division, Commissioners Stafford, Gresham,

and Christian, Commissioner Stafford concurring.

[| SEAL]

H. G. HOMME, JR.

Acting Secretary

COMMISSIONER STAFFORD, concurring:

While agreeing with the result reached here, I

believe some further clarification is warranted.

Despite numerous unresolved factual matters and

despite our reliance on incorrect assumptions about

shipper’s present and prospective operation, the im-

portant fact is that protestant’s authority simply is

not broad enough to meet the needs of the supporting

shipper. Whether shipper is changing its business or

has been selling the same basic items for years, the

fact is that Benmar’s limited authority prevents it

from providing a complete, responsive service. This is

the basis for the grant of authority.

Notice: This proceeding is now administratively

final within the meaning of 49 CFR 1101.2

(f) of the Commission’s regulations; and, in

accordance with the provisions of Section

558(c) of the Administrative Procedure

Act, any corresponding temporary authority

27a

expires and operations thereunder must

cease upon the effective date of this decision,

except that to the extent permanent author-

ity is granted in this proceeding (and if

partial, only to that extent) the correspond-

ing temporary authority or portion thereof

will continue in effect until a certificate or

permit is issued and becomes effective. The

filing of any further pleadings in this mat-

ter will not stay the expiration of the tem-

porary authority related to the denied por-

tion of the sought permanent authority.

28a

APPENDIX J

Pertinent Sections of the Corresponding Sections of

Interstate Commerce Act the Interstate Commerce

as set forth in 49 U.S.C. Act as recodified by Pub.

(1976 ed.) and as referred L. No. 95-473, 92 Stat. 1337

to in this brief (1978)

49 U.S.C. (1976 ed.)

49 U.S.C. (Supp. 1976)

4, ERR At soinana 10323

17(7) _.. sienna ~ ...... 10323

303(a)(14) _... 10102(11)

303 (a) (15) 10102(12)

310 se 10930 (a)

Sections 17(6) and 17(7) of the Interstate Com-

merce Act, 49 U.S.C. (1976 ed.) 17(6) and 17(7),

provide:

(6) Rehearing, reargument, or reconsideration

of decisions, orders, and requirements

After a decision, order, or requirement shall

have been made by the Commission, a division,

and individual Commissioner, or a board, or after

an order recommended by an individual Commis-

sioner or a board shall have become the order of

the Commission as provided in paragraph (5) of

this section, any party thereto may at any time,

subject to such limitations as may be established

by the Commission as hereinafter authorized,

make application for rehearing, reargument, or

reconsideration of the same, or of any matter

determined therein. Such applications shall be

governed by such general rules as the Commis-

sion may establish. Any such application, if the

decision, order, or requirement was made by the

Commission, shall be considered and acted upon

29a

by the Commission, If the decision, order, or

requirement was made by a division, an individ-

ual Commissioner, or a board, such application

shall be considered and acted upon by the Com-

mission or referred to an appropriate appellate

division for consideration and action. Rehearing,

reargument, or reconsideration may be granted

if sufficient reason therefor be made to appear;

but’ the Commission may, from time to time,

make or amend general rules or orders establish-

ing limitations upon the right to apply for re-

hearing, reargument, or reconsideration of a

decision, order, or requirement of the Commis-

sion or of a division so as to confine such right to

proceedings, or classes of proceedings, involve-

ing issues of general transportation importance.

Notwithstanding the foregoing provisions of this

paragraph, any application for rehearing, re-

argument, or reconsideration of a matter as-

signed or referred to an individual Commissioner

or a board, under the provisions of paragraph

(2) of this section, if such application shall have

been filed within twenty days after the recom-

mended order in the proceeding shall have be-

come the order of the Commission as provided in

paragraph (5) of this section, and if such matter

shall not have been reconsidered or reheard as

provided in said paragraph, shall be referred to

an appropriate appellate division of the Commis-

sion and such division shall reconsider the matter

either upon the same record or after a further

hearing.

80a

(7) Reversal or modification after rehearing,

ete.

If after rehearing, reargument, or reconsider-

ation of a decision, order, or requirement of a

division, an individual Commissioner, or board

it shall appear that the original decision, order,

or requirement is in any respect unjust or un-

warranted, the Commission or appellate division

may reverse, change, or modify the same accord-

ingly. Any decision, order, or requirement made

after rehearing, reargument, or reconsideration,

reversing, changing, or modifying the original

determination shall be subject. to the same pro-

visions with respect to rehearing, reargument, or

reconsideration as an original order.

wt VU. 8. GOVERNMENT PRINTING Office, 1970 291007 a7a