Opposition Brief — Interstate Commerce Commission v. Texas
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No. 87-1938
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In The Supreme Court of the United States
October Term, 1987
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INTERSTATE COMMERCE COMMISSION, Petitioner,
STATE OF TEXAS, ET AL., Respondents.
v.
OPPOSITION TO PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
(CORRECTED)
JIM MATTOX
Attorney General of Texas
MARY F, KELLER
First Assistant Attorney
General
ANNE E. SWENSON
Assistant Attorney General
ROBERT OZER*
Chief, Class Action Section
Enforcement Division
P. O. Box 12548
Austin, Texas 78711-2548
(512) 463-2080
* Counsel of Record
July, 1988
WILLIAM PAUL, RODGERS, JR.
General Counsel
CHARLES D.: GRAY |
Assistant General Counsel
National Association of Regulatory
Utility Commissioners
1102 ICC Building
P. O. Box 684
Washington, D.C.
(202) 898-2200
20044-0684
P. MICHAEL COLE
BYRD R. LATHAM
Special Assistant Attorneys General
Alabama Public Service Commission
P, O. Box 470
Athens, Alabama
(205) 232-2010
35611-0470
a GA FR RE Bsc cntintccpecnaivitscensencssidenesaviesoacninssitie
Pe ROI SIF BRIE NPRM cskesensssazsrcconsaniaravacnacisrnionsntacnsnncions
A. Statutory Framework for Federal and State
I sisi ith a ialicliinsincceinntiliciilabsiatdiipiiniinhiansesnsasees
B. Interplay of Proceedings Before The
is
TABLE OF CONTENTS
PRESEN UG MIMS REWRD CRUE ED icnsicissccsssscscnsssscicnsisenscnsesinese
I.
II.
This Court Lacks Jurisdiction To Review
TO FRR GORPCUIT SE ECIBIOU ccc cisvcccnecicscscetccesecectess.
A. This Court Lacks Jurisdiction Absent
Proper Representative of the
RI siiiiinsdheripaensseniccnicdinnninesaincencddsnasnnimnncens
This Court Lacks Jurisdiction To Decide
Merits Before Judgment In the Fifth
I pail scariest el aids atnasnamndeesencrnincactonces
This Court And Fifth Circuit Lack
Jurisdiction To Order Injunctive Relief
SA SHE Piedad ceicsnnsiensonerncenidtcvcinns
ICC Lacked Jurisdiction To Issue The
Orders Sought To Be Enforced,
Consequently This Court Has No
Authority To Enforce Them...
For Prudential Reasons This Court Should
SE a a istiteibaicicsacaniitatclinncneinerkebintapsanbipeisicnasen
A. To Grant Certiorari Here Would Be An
Uneconomical Use Of Judicial Resources
Because It Is Unlikely This Court Could
Decide Whether An Injunction Should
Interstate Commerce Commission and Judicial
be RIE REESE SUS Rs Rp en
Proceedings Before The Fifth Circuit................
ll
PAGE
Issue Before The Fifth Circuit Rules On 3
CR UIIS ecscinsisnniesssnpninhskdasiecaiacembadatipiactiniannbinitins 13
B. Circuit Courts Should Have the
Opportunity To Interpret Service
EOE RBG ceissncsrsssarsscntuaniassnstiiemedesiateindemnaninnabaamdante 13
C The Issue of Whether An Injunction
Should Issue Is Case Specific And Not
Worthy Of This Court's Review.................. 15
III. ICC Cannot Prevail On The Merits Of The
Armstrong Petition For Review..................::ss00+ 16
A. ICC Lacked Jurisdiction To Issue The
Armstrong Declaratory Orders................... 16
B. Service Storage Does Not Apply Where
Commerce Is Facially Intrastate............... 20
C Even Assuming The ICC Had Jurisdiction,
Under Younger-Burford Analysis The ICC
Or This Court Should Decline To Exercise
BO, SITING a toassancsnehecnennssnneniiiibanssitniliciaeamiitindilliskiaaamaaaanstall 23
APPENDIX A (two letters between counsel for
Armstrong and the General Counsel for the
APPENDIX B (document index obtained from
A> ORME BO TT TEI aici ass sinsahtinnseiaiiannlaanancenanmienaitoaaiinn 9a
APPENDIX C (affidavit of ICC's Freedom of
Information/Privacy Officer)..............ccccccssssseececeeesesees lla
APPENDIX D (Court of Appeals Order,
POOURRNIOE BF, FIT) .xccosnisscscstiepaeenteeiteainances 22a
APPENDIX E (E&B letter requesting jury trial
Mk WRNRD GIRUECE GOMOD. iciicictsicacimiminccetioenins 24a
ili
INDEX OF AUTHORITIES
Cases PAGE
Beers v. North American Van Lines Inc., 836 F.2d
5 ER eae none mare eEeD 18
Burford v. Sun Oil Co., 319 U.S. 315 (1943)... .. 23
Califano v. Sanders, 430 U.S. 99 (1977) ......... ee ceeeeeee 17
Castle v. Hayes Freight Lines, 348 U.S. 61
acct tndtasstnesiinnoonensenacdonenine 21
Chick Kam Choo v. Exxon Corp., ____ U.S.
108 S. Ct. 1684, _- L.Ed.2d _
i sd andsbiscdbicsiabonsbons 23
City of Miami v. ICC, 669 F.2d 219 (Sth Cir. |
as saenaetnssonsenasshans 25
_ Civil Aeronautics Board v. American Air
NE BEE COUR conciccccssccncssnnsssccsccscsseccoceses 10
Coleman v. PACCAR, Inc., 424 U.S. 1301 (1976) ....... 9
Coopers & Lybrand v. Livesay, 437 U.S. 463
ia es catcasitannsamsennddenebscbeesoensateonesecenes 8
District of Columbia Court of Appeal v. Feldman,
I os seat asisdincnstisnehsnnnebmnacnsonsonanees 19
E & B v. Mattox, No. A-86-CA-466 (W.D. Tex. Aus.
SEES ARATE OCT eo
Franchise Tax Board v. Construction Laborers
WE BEMIEE, SOS U.S. 1 C1DGS) nccceccccccsccccecescccsessecees 18
Funbus Systems, Inc. v. State of California Public
Utilities Commission, 801 F.2d 1120 (9th Cir.
iis etnncateenetnenspinnnenteneneseuresesenensccencosesse 16
Greenfield & Montague Transportation Area v.
Donovan, 758 F.2d 22 (1st Cir. 1985)... eee 19
Gulfstream Aerospace Corporation v. Mayacamas
Corporation, 2.2. 2» oe & Ct. 11393, 99
i ssc daadatichaceshonenisoneenenahenadanacceshenssenoseeee 8
Illinois Terminal Railroad v. ICC, 671 F.2d 1214
Nee a i cicsateniieneinenmmenncaninbetopenentestenennenenbaians 17
iv
INDEX OF AUTHORITIES, continued
PAGE
Jones Motor Co. v. Pennsylvania Public Utility
Copmenmiaie, SEE UB. DICT iiccaciecaiccncnscsnccsssssssccccseeee 21
Louisiana Public Service Commission v. F.C.C.,
A Se Sr iiicacihnitnilinigiddicnnntnineidiianbtetebintntaeenennn 16, 23
Merrell Dow Pharmaceuticals Inc. v. Thompson,
EPID iinciterintenitctnenicecintateetninitnninnasiininennmmenes 18
Missouri Pacific Railroad Company v. Railroad
Commission of Texas, 617 F. Supp. 653
(W.D. Tex.), modified on appeal, 833 F.2d 570
oe ME _. SRRIR aOR NT ORE ot Ee 16
New Orleans Public Service, Inc. v. City of New
Orleans, 798 F.2d 858 (Sth Cir. 1986), cert.
one; Us. .... 17 SA. 19, FS
SE SPE OIE csctemncnctineuncsadbidinstnmeincininieniaianctananeaatecesn 23
Pennsylvania Bureau of Corrections v. United States
Marshalls Service, 474 U.S. 43 (1985)................4 10, 11
Pennzoil v. Texaco, ___ U.S. ____, 107 S. Ct.
Re Se ea 6 0 OEE Pidedisiesdicticancliiestacnbsttedeonnianaenseneceses 23
Port of Boston Marine Terminal Association v.
Rederiaktiebolajet Transatlantic, 400 U.S. 62
ore oseninecacsitiarsiletiidlceiacnilpaiinlbclciahietaitensiniditadatitbinasocnenion 25
Public Service Commission of Utah v. Wycoff Co.,
Oe Re MER UIIMED stickinicinsitesnsdimnieelaaiiceianiniaitaaiaeenimnnemminen 17
Railroad Commission of Texas v. Pullman Co., 312
ee ts seceicehnisin Mlls-cunssenstinienshiniatilacichtaibisiiipmianecedsmeniaennase 23
Rooker v. Fidelity Trust Co., 263 U.S. 4136
EI ashdasisdicnididieseninaneletachahdsiacleabiiasedincibaslehdednieseh Ahdisbsimosnieennecnenn 19
Schenck Transportation, Inc. Inter-County
Motor Coach, Inc., 350 F.Supp. 306 (1972)............... 22
' Service Storage & Transfer Co. v. Virginia,
es ee ee eiiiihccctaniiinadicidatbndienstnihalsnidneitéaiaianinicn passim
INDEX OF AUTHORITIES, continued
PAGE
Skelly Oil Co. v. Phillips Petroleum, 339 U.S. 667
Sei sbecieiltshcnsienidhecaicsnahsiclacenslieetiiaciieiadabiaaiccihaasaienealleihbadasdatieiditiris 18
Texas v. United States, 837 F.2d 184
ee I echinacea sthcanithiiticesiinnininitiiniciinidets 6, 8, 12, 22
United States v. Idaho, 298 U.S. 105 (1936)... 17
United States v. Los Angeles and S.L.R., 273 U.S.
aD ksi cicihcll Rebacadiaatabces ac lisiinkceetesanaiabannateindesteltianice a3
United States v. Providence Journal Co., ___s—«zUS..
___, 108 S. Ct. 1502, 99 L.Ed.2d 785 (1988)....,..... 8
United States v. Rice, 327 U.S. 742 (1946)........00000.. 10
Wheeler Lumbers Bridge and Supply Co. v.
COMO SUNN, BN TE. DES Cha ekccnccnnsisaninscsseccsccccess 10
Younger v. Harris, 401 U.S. 37 (1971).....................sccc00 22
Statutes
Ty TET ETE <snscunpndninienicinnaaanaciinsiainsiemsianmmiamianieialain ae
Fe TIT... csn-snnanessiibssinnnssiieesiinenehenbdenmannnamaniaiaile aa
sc siscescnaeniasseinopeiibiniinentiendananiinteaiabanbilaniiels 9
ST sina. iscichatssgieedeinicshehiieiibidbbenenunasendoaaadiiine 12
Fe i inisicnitisccssntinsnsinssnssncnnibassbiinasatentanaaaiinaes 11
5 2 lh See RA CC ROE aN me eR MPa cN nro 6, 10, 11
TT is niin isccslaissasedeialdipbicoeetmebiaieiasiinbaedsianaiousianaa 11
iiss athivicnisaitanetcsinvniashasieansiadsbennenieiboaaniiieinaaisahals 8
ai cca eth le wanna 8
A a ais viiasivsiccesscnninnstiiusleineslidncdaaasinnbadinniasio 21
ae ee ID i casncinnshccicinniantdindasionnenadsienabenen l
a es te I Niiinis cision ssiiniincenvaxansnasaebaonsenandianiios 1
A as Oe I isis icdnanisninsipadestiacininsonenten 2, 16, 21, Z2
TEX. RIV, CAV. BEAT. FAIUE, GR. DD icccccnsccccscessscccsscccsssens y
vi
INDEX OF AUTHORITIES, continued
PAGE
Regulations
SITTIN 1 TDL cncesssencsecenseesacsnesscsstasssopsunssonsessseiasenphocassantieles 7
Miscellaneous
Stern and Gressman, Supreme Court Practice
CGH 0d. TFB)... ccccccccccccscccscessccccscscscssocsevconsssesesososssneseassseses 9
STATEMENT OF THE CASE
This is purportedly an interlocutory appeal, taken
by a federal agency without the authorization of the
Solicitor General, from the denial of a preliminary
injunction. The Fifth Circuit has already set oral
argument on the very issues raised by this appeal for
the week of September 5, 1988. In all likelihood,
that court will have begun to write a decision on the
merits before this Court rules on the instant petition.
Under these circumstances alone, this petition should
be denied.
However, assuming the Court wishes to further
consider this matter, the State of Texas (hereinafter
"Texas") submits the following statement of the case.
This is done because this case presents an involved
procedural history, and because Texas is extremely
dissatisfied with the Interstate Commerce
Commission's (hereinafter "ICC") statement of the
case.
A. Statutory Framework for Federal and State
Jurisdiction
Although for jurisdictional and prudential reasons
this Court should not reach the merits, it is important
to note at the outset the statutory framework
establishing federal and state jurisdiction over motor
carrier transportation. Once this framework is
understood it is readily apparent that the ICC's
reliance on Service Storage & Transfer Co. v. Virginia,
359 U.S. 171 (1959), is misplaced.
Congress has very clearly delineated the scope of
the ICC's jurisdiction over transportation by a motor
carrier. Under 49 U.S.C. § 10521(a)(1)(A) and (B), the
2
ICC has jurisdiction over motor carrier transportation
that is:
(1) between a place in -
(A) A state and a place in another state;
(B) A state and another place in the
same state through another state;[']
In contrast, when the commerce is on its face
intrastate, Congress has, pursuant to 49 U.S.C. §
10521(b)(1), explicitly and emphatically left such
regulation to the states:
(b) This subtitle does not
(1) .. . affect the power of a state to
regulate intrastate transportation
provided by a motor carrier.
The disputed commerce in this case takes place
solely within the State of Texas and is therefore
governed by 49 U.S.C. § 10521(b)(1).
B. Interplay of Proceedings Before The _ Interstate
Commerce Commission and Judicial Trial Forums
In early 1985 the Texas Department of Public
Safety initiated a motor carrier investigation of
Reeves Transportation Company of Georgia
(hereinafter "Reeves") pursuant to TEX. REV. CIV.
1 Service Storage involved moves out of and then back into
Virginia, which implicated the ICC's primary jurisdiction
pursuant to this provision. See Infra at 20-22.
STAT. ANN. art. 911b (Vernon 1964 and Supp. 1988).
This investigation concerned certain facially
intrastate movements from the Dallas-Fort Worth
area to other points in Texas. On March 25, 1985,
prompted by the ongoing state investigation and in
anticipation of a state court enforcement action, the
shipper, Armstrong World’ Industries, Inc.
(hereinafter "“Armstrong"), filed a "Petition for
Declaratory Order Seeking Determination of the
Interstate Nature of Transportation Activities Within
the State of Texas" before the ICC. The Petition
sought a declaratory order, pursuant to 5 U.S.C. §
554(e), that certain commerce within the State of
Texas was interstate in nature. The State of Texas
intervened in the proceeding. No oral hearing was
granted? and a procedure was established to allow
written comments to be filed with the ICC within
thirty days of the notice of the proceeding.
Thereafter, on October 3, 1985, Texas filed an
enforcement action in state court pursuant to TEX.
REV. CIV. STAT. ANN. art. 911b (Vernon 1964 and
Supp. 1988). This action was styled State of Texas v.
E & B Carpet Mills, A Division of Armstrong World
Industries, Inc. and Reeves Transportation Company
of Georgia, Cause No. 386,524 in the 353rd Judicial
District Court of Travis County, Texas. Then, in light
of the proceeding in state court, Texas, on or about
October 4, 1985, requested in its comments filed in
the ICC proceeding that the ICC defer jurisdiction to
the state court action in the interest of comity.
2 One of the issues still pending before the Fifth Circuit in
Texas v. United States, No. 87-4725 (hereinafter "Armstrong
Petition for Review"), is whether (assuming the ICC had
jurisdiction to issue the Declaratory Orders under review) an
oral hearing should have been granted.
Instead, Armstrong and the ICC engaged in secret,
ex parte correspondence concerning ways to get the
case out of the state court and into a federal court.3
In that correspondence, the ICC's General Counsel
suggested to Armstrong that the ICC would
intervene against Texas in a proceeding in federal
court achieved by removal or by an independent
action. Armstrong subsequently sought to obtain
removal to federal court but was unsuccessful.
Thereafter, the ICC decision in No. MC-C-10963,
Armstrong World Industries, Inc. - Transportation
Within Texas - Petition for Declaratory Order was
served on April 23, 1986 (hereinafter "Armstrong
I"). Armstrong then attempted to use Armstrong I
to obtain dismissal in the state court action before
discovery could proceed and otherwise to thwart
fact finding in that forum. However, the state
district court judge allowed discovery to proceed.
3 Texas has obtained copies of two letters between counsel
for Armstrong and the General Counsel for the ICC.
Appendix A. Further evidence of these as well as other ex
parte contacts has been obtained through a document index,
(Appendix B), received pursuant to a Freedom of
Information Act (hereinafter "FOIA") request, as well as in
an affidavit submitted in a FOIA lawsuit in the Western
District of Texas styled Texas v. ICC, Cause No. A-87-CA-016
(W.D. Tex. Austin Div.). Appendix C. In the FOIA action the
lower court ordered the ICC to disclose six of the cleven
documents Texas requested. That case is also pending in the
Fifth Circuit on cross appeals by Texas and the ICC. Texas v.
Interstate Commerce Commission, U.S.C.A. Sth Cir., No. 88-
1223. A motion to consolidate that case with the appeal
pending on the Armstrong Petition for Review has _ been
denied. Oral argument in the Armstong Petition for Review
has been scheduled for the week of September 5, 1988.
That discovery formed the basis of a
Supplemental Petition to Reopen before the ICC.
The Supplemental Petition to Reopen alleged
Substantial inconsistencies between Armstrong's
affidavits before the ICC and an Armstrong witness
who was deposed pursuant to discovery in state
court. In the meantime, while Texas was preparing
this Supplemental Petition to Reopen, Armstrong
and the ICC were secretly exchanging drafts of a
lawsuit which Armstrong later filed in federal court
in the Western District of Texas. This 42 U.S.C. §
1983 and antitrust lawsuit, styled E & B v. Mattox,
No. A-86-CA-466 (W.D. Tex. Aus. Div.), sought
money damages and an injunction against state
officials for pursuing the state court action. The ICC
sought to intervene in that lawsuit one day after it
was filed.
After filing the Supplemental Petition to Reopen
and learning of the federal court action, Texas
moved to dismiss before the ICC on _ both
jurisdictional grounds and grounds of bias.4 The ICC
decided the Petition to Reopen Armstrong I against
Texas in Armstrong Il (served August 25, 1987)
even though it was aligned with Armstrong as a
party in Armstrong's suit for money damages and
had sued Texas pursuant to Armstrong I in federal
district court. Not surprisingly, the ICC found in
favor of Armstrong.
4 Both of these issues are currently pending before the
Fifth Circuit in the Armstrong Petition for Review.
ll
C “Proceedings Before The Fifth Circuit
Texas filed its Petition for Review on or about
October 15, 1987. Simultaneously, Texas filed a
Motion to Summarily Reverse and Vacate or, in the
Alternative, to Summarily Dismiss. In that motion
Texas contended that Service Storage and Transfer
Co., Inc. v. Virginia, 359 U.S. 171 (1959), did not
apply and that the ICC lacked primary jurisdiction to
even issue the declaratory orders under review, let
alone obtain the injunction the ICC seeks from this
Court. See infra at 16-25. This motion was denied
by order dated November 19, 1987. Appendix D.
However, the Fifth Circuit made no ruling on the
questions presented by the motion, but rather
ordered full briefing and oral argument on _ the
jurisdictional issues raised in the motion. Oral
argument is scheduled on these issues the week of
September 5, 1988.
On or about November 17, 1987, the ICC moved
for an injunction before the Fifth Circuit pursuant to
the All Writs Act, 28 U.S.C. § 1651. In denying the
injunction, the Fifth Circuit noted that the Texas
appeal was basically jurisdictional with the
controversy swirling around the “proper
interpretation of Service Storage & Transfer Co., Inc.
v. Virginia ... ." Texas v. United States, 837 F.2d 184,
185 (Sth Cir. 1988). Still the court deferred ruling
on the merits.
Obviously, we intimate no opinion as to the
merits of the administrative appeal or the
state's likelihood of success.
Id. at 185 n.1.
By this Petition for Certiorari based on Service
Storage, both the ICC and Armstrong seek to have
this Court summarily resolve (ICC Petition at 10-11)
the very issues for which both the ICC and
Armstrong have requested and_ received oral
argument from the Fifth Circuit. See ICC Brief,
Armstrong Petition for Review at i, Armstrong Brief
at vii. In response, this court should summarily deny
the ICC's Petition for Certiorari.
REASONS FOR DENYING WRIT
I. This Court Lacks Jurisdiction To Review The Fifth
Circuit's Decision
A. This Court Lacks Jurisdiction Absent Proper
Representative of the Government
The ICC has confessed in a footnote in its Petition
for Certiorari that the Solicitor General has not
authorized the filing of the Petition. ICC Petition for
Certiorari at 1-2 n.l. Pursuant to 28 U.S.C. § 518(a),
"the Attorney General and the Solicitor General shall
conduct and argue suits in the Supreme Court .. . in
which the United States is interested." See also 28
C.F.R. § 0.20 (1982) (delegating to Solicitor General
authority as to "“[cjJonducting, or assigning and
supervising, all Supreme Court cases, including
appeals, petitions for and in opposition to certiorari,
brief and arguments, and .. . settlement thereof.")
"Absent a proper representative of the Government
as a petitioner . . . jurisdiction is lacking and the writ
of certiorari" must be denied. United States v.
Providence Journal Co., USS. : , 108 S.
Ct. 1502, 1511, 99 L.Ed.2d 785, 801 (1988).5
B. This Court Lacks Jurisdiction To Decide Merits
Before Judgment In the Fifth Circuit
The ICC has contended that -interlocutory review is
appropriate here because denial of the preliminary
injunction is collateral to the proceeding still pending
in the Fifth Circuit. ICC Petition at 9. For an order to
be collateral "the order must ‘resolve an important
issue completely separate from the merits of the
action.’” Gulfstream Aerospace Corporation vy.
Mayacamas Corporation, ___ US. : , 108 S.
Ct. 1133, 1137, 99 L.Ed.2d 296, 305 (1988), citing
Coopers & Lybrand v. Livesay, 437 U.S. 463, 468
(1978). This proceeding, however, does not seek to
"resolve an important issue completely separate from
the merits of the action." Rather this proceeding
seeks by interlocutory review to resolve the proper
interpretation of Service Storage. The Fifth Circuit
explicitly expressed "no opinion as to the merits" of
the administrative appeal and expressly left open the
proper interpretation of Service Storage. Texas v.
United States, 837 F.2d at 185.
5 Although the ICC may have some independent authority
to litigate under 28 U.S.C. §§ 2323 and 2348, such authority
does not extend to suit in this Court. See 28 U.S.C. § 518(a).
Moreover the denial of the preliminary injunction by the
Fifth Circuit had no effect on the "validity" of the ICC order
within the meaning of 28 U.S.C. § 2323. Only after judgment
on the merits of the validity of the order is the Armstrong
Petition for Review subject to review by this Court.
Moreover, neither the Attorney General nor the Solicitor
General has, "dispose[d] of or discontinue[d]" the Petition for
Review within the meaning of 28 U.S.C. § 2348.
SA Ss Gee CLE
Moreover, this Petition concerns an application for
a preliminary injunction. In such an application, this
Court must consider the probability of success on the
merits in determining whether to issue an injunction.
Accordingly, this court must consider not only the
jurisdictional issues surrounding the _ proper
interpretation of Service Storage, but also all other
issues currently pending before the Fifth Circuit.
Before the Fifth Circuit, Texas has briefed and argued
(1) that the ICC was biased; (2) that assuming the ICC
has jurisdiction, it erred in not allowing an oral
hearing or allowing discovery, particularly in light of
factual inconsistencies and the allegations of bias;
and, (3) that the ICC decision holding disputed
commerce is interstate is contrary to law and
precedent.© In effect this Court must review the
entire case pending before the Fifth Circuit before a
final judgment by that Court.
Although Congress expressly provided in 28 U.S.C.
§ 1254(1) that the Supreme Court may utilize its
certiorari jurisdiction either "before or after
rendition of judgment" by a court of appeals,
certiorari before judgment is “an extremely rare
occurrence." Coleman v. PACCAR, Inc., 424 U.S. 1301,
1304 n.* (1976). Moreover, in cases involving
appeals to circuit courts from an administrative
agency, exercise of this Court's jurisdiction before a
judgment by the court of appeals may be tantamount
to an exercise of this Court's original jurisdiction.
Stern and Gressman, Supreme Court Practice 43-44
(6th ed. 1986). Review by this Court that "embraces
6 Tangentially Texas has also argued there was not
substantial evidence to support the ICC's administrative
decision and that it failed to place the burden on Armstrong
to show that the commerce was interstate.
10
the whole case" as opposed to "definite and distinct
questions of law" in advance of any judicial action on
the merits “would be an exercise of original
jurisdiction by this Court contrary to the
constitutional provision which prescribes that its
jurisdiction shall be appellate in all cases other than
those affecting ambassadors, other public ministers
and consuls, and those in which a State shall be a
party." Wheeler Lumbers Bridge and Supply Co. v.
United States, 281 U.S. 572, 576 (1930); see also Civil
Aeronautics Board v. American Air Transport, 344
U.S. 4, 5 (1952) ("This Court does not normally
review orders of administrative agencies in the first
instance ... ."); United States v. Rice, 327 U.S. 742, 747
(1946).
Here, by granting the ICC Petition for Certiorari,
this Court would not only be stripping the circuit
court of its proper jurisdiction to decide the merits of
this controversy, but arguably exercising original
jurisdiction without its proper’ invocation.
Accordingly, the Petition should be denied.
C This Court And Fifth Circuit Lack Jurisdiction To
Order Injunctive Relief Under All Writs Act
The ICC brought an original action for an
injunction to enforce the Armstrong declaratory
order pursuant to 28 U.S.C. § 1651, the Ail Writs Act.
"The All Writs Act is a residual source of authority to
issue writs which are not otherwise covered by
statute." Pennsylvania Bureau of Corrections Vv.
United States Marshalls Service, 474 U.S. 34, 43
(1985). However, when a _ statute specifically
addresses a particular situation, it controls rather
than the All Writs Act. See id.
11
In this situtation, 28 U.S.C. § 1336(a) expressly
provides that "the district courts shall have
jurisdiction of any civil action to enforce in whole or
in part, any order of the Interstate Commerce
Commission ... ." (Emphasis added). See also 28 U.S.C.
§ 2321(b) ("The procedure in the district courts in
actions to enforce in whole or in part any order of
the Interstate Commerce Commission other than for
payment of money or the collection of fines, penalties
and forfeitures, shall be as provided in this chapter.")
(emphasis added).
Here, these more specific sections control over the
residual All Writs Act provision invoked by the ICC.
See Pennsylvania Bureau of Corrections, 474 U.S. at
43. Accordingly, because Congress has expressly
indicated that enforcement of an ICC order must first
proceed in federal district court, this Court, like the
Fifth Circuit, lacks jurisdiction to consider the
injunctive relief sought. This is particularly true in
the present case where the ICC has previously moved
in a federal district court for the very relief
requested here. In an order dated October 7, 1986,
Judge Smith, in E&B Carpet Mills v. Jim Mattox, Civil
Action No. A-86-CA-446, after considering the four
requirements for a preliminary injunction, denied
the identical relief sought here, holding that:
The Court, after examining the entire
record, finds that the Plaintiff has failed
to establish irreparable harm at this time
and that the _ preliminary injunction
Should be denied. While the harm to
Plaintiff may be difficult to prove, the
Court finds that damages could be
determined.
12
ICC Petition, Appendix G at 48-50a (emphasis added).
This court lacks jurisdiction to entertain an action
seeking to attack Judge Smith's order collaterally,
particularly when "[{nJeither Armstrong nor the ICC
appealed the decision though entitled to by 28 U.S.C.
§ 1292(a).". Texas v. United States, 837 F.2d at 186.7
D. ICC Lacked Jurisdiction To Issue The Orders
Sought To Be Enforced, Consequently This Court
Has No Authority To Enforce Them
Aside from the above jurisdictional arguments,
which are specific to this proceeding, Texas has
contended in the Fifth Circuit that the ICC lacked
jurisdiction to even issue the orders in Armstrong I
and JJ, let alone obtain an injunction. Alternatively
Texas has argued that the ICC and federal courts
must abstain in deference to the ongoing action in
state court and that the declaratory orders issued in
Armstrong are advisory and not subject to review.
However, before presenting those arguments (see
infra at 16-25), which constitute the merits of the
-controversy in the Fifth Circuit, this Court should
consider several prudential reasons for denying the
writ.
7 The ICC has acknowledged that it has filed another
motion for an injunction before Judge Smith but that he has
not ruled on it. ICC Petition at 4 n.6. Rather than an original
action for an injunction in the Fifth Circuit, the ICC should
have sought to mandamus the district court to rule on the
motion.
FERNS EMER RIE ARS
13
II. For Prudential Reasons This Court Should Deny
The Writ
A. To Grant Certiorari Here Would Be An
Uneconomical Use Of Judicial Resources Because
It Is Unlikely This Court Could Decide Whether
An Injunction Should Issue Before The Fifth
Circuit Rules On the Merits
The Fifth Circuit has scheduled oral argument in
the Armstrong Petition for Review the week of
September 5, 1988. Given the time it will take to
decide this Petition, set up a briefing schedule,
calendar oral argument, and render an opinion, it is
very unlikely this Court can render a ruling before
the Fifth Circuit decides the merits of the Armstrong
Petition for Review. Accordingly, this Court could
better employ its resources than by granting
certiorari.
B. Circuit Courts Should Have the Opportunity To
Interpret Service Storage
Aside from the Armstrong proceeding, there are
at least six (6) other cases that have either been
decided by the ICC or are currently pending that
involve the same fact pattern as is present here.8
8 Matilack, Inc. -- Transportation Within Missouri --
Petition for Declaratory Order, ICC Docket No. MC-C-10999
(hereinafter "Matlack"); Quaker Oats Company --
Transportation Within Texas and California -- Petition for a
Declaratory Order, Docket No. MC-C-30006 (hereinafter
"Quaker Oats"); Victoria Terminal Enterprise, Inc. -
Transportation of Fertilizer Within Texas - Petition for
Declaratory Order, Docket No. MC-C-30002 (hereinafter
"Victoria Terminal"); James River Corporation of Virginia-
Transportation Through Woodland, California - Petition for
14
Three of these cases, like the Petition for Review
filed in Armstrong, have made their way to courts of
appeal in the various circuits.?
None of the cases filed in the circuit courts has
been decided, although all cases present the identical
jurisdictional argument that is present in this case.
See infra at 16-25. Rather than seizing jurisdiction
from the Fifth Circuit to decide these issues as the
ICC suggests, this Court should allow the issues to
percolate in the various circuits, then see if a conflict
arises.
Declaratory Order, Docket No. MC-C-30044; RAC Transport
Company Inc. - Transportation of Appliances Within
Colorado - Petition for Declaratory Order, Docket No. MC-C-
30052; Bigbee Transportation, Inc. - Transportation Within
Alabama, Mississippi and Georgia - Petition for Declaratory
Order, Docket No. MC-C-30065.
9 Matlack is filed in the Eighth Circuit under two docket
numbers: Middlewest Motor Freight Bureau v. Interstate
Commerce Commission, No. 87-2043 and Steere Tank Lines,
Inc. v. Interstate Commerce Commission, No. 87-2429. Quaker
Oats is pending in the Ninth Circuit also under two dockets:
California Trucking Association, Inc. v. United States of
America, No. 87-7439 and Steere Tank Lines, Inc. v.
Interstate Commerce Commission, No. 88-7041. Victoria
Terminal is pending in the Fifth Circuit: Steere Tank Lines,
Inc. v. United States of America, No. 88-4001. Copies of both
the initial decisions ("Matlack 1," “Quaker Oats 1,” and
"Victoria I") and the decisions on discretionary appeal
("Matlack Il,” “Quaker Oats Il,” “and “Victoria Il") have been
lodged with the Clerk of this court.
15
C The Issue of Whether An Injunction Should
Issue Is Case Specific And Not Worthy Of This
Court's Review
In determining the ICC's probability of success on
the merits, this Court would have to review the
factual allegations of bias surrounding the ICC's ex
parte communications with Armstrong. The Court
must also consider the ICC's alignment with
Armstrong in the federal lawsuit against Texas
officials seeking to enforce Armstrong I while
Armstrong Il was still pending. Under these
circumstances the ICC and Armstrong lack the clean
hands necessary for the equitable relief they seek.
Moreover, the ICC is silent in its Petition for
Certiorari as to likelihood of success on the merits
regarding whether a hearing before the ICC should
have been granted or whether precedent was
properly applied to the facts in the ICC's
determination that the disputed commerce was
interstate.!0
10 Similarly, the ICC's allegation of irreparable injury is
contradicted by Judge Smith's order, never appealed, which
found to the contrary. The ICC's attempts to psychoanalyze
that opinion (ICC Petition at 4 n.6) cannot stand in light of
the fact that the ICC was present at the hearing to advance
its interests and the Court ruled “after examining the entire
record.” Moreover, the ICC is not a party to the state court
proceeding and lacks standing to seck an injunction against
a proceeding in which it has no stake in the outcome.
Ironically, although Armstrong does have an economic
interest in the state court action, Armstrong set the action
for trial (Appendix E) and consequently should now be
estopped from seeking to enjoin the very proceeding it
sought to try.
VV
16
These facts, all of which this Court must consider,
belie the ICC's suggestion of a “clear cut" legal issue
concerning the proper application of Service Storage.
To the contrary, this particular case is adrift in
factual claims of bias, collusion, and governmental
misconduct. Should the Court desire to review
Service Storage or its application, the Court should
await a case in less troubled seas.
Ill. ICC Cannot Prevail On The Merits Of The
Armstrong Petition For Review
A. ICC Lacked Jurisdiction To Issue The Armstrong
Declaratory Orders
Congress has explicitly provided that the
Interstate Commerce Act does not "affect the power
of a state to regulate intrastate transportation
provided by a motor carrier." 49 U.S.C. §
10521(b)(1). Congress alone creates the jurisdiction
of federal agencies, not the agencies themselves: “An
agency may not confer upon itself power.” Louisiana
Public Service Commission v. F.C.C., 476 U.S. 355,
___, 106 S. Ct. 1890, 1901, 90 L.Ed.2d 369, 385
(1986). See also Funbus Systems, Inc. v. State of
California Public Utilities Commission, 801 F.2d 1120,
1129 (9th Cir. 1986) (ICC does not "have the power
to draw the boundaries of its own authority to
regulate"). A statute such as 49 U.S.C. § 10521(b)(1)
is a “bar to federal preemption of state regulation ...
"11 Louisiana Public Service Commission, 476 U.S. at
___, 106 S. Ct. at 1904, 90 L.Ed.2d at 388.
11 In support of its preemption argument the ICC has relied
on Missouri Pacific Railroad Company v. Railroad
Commission of Texas, 617 F. Supp. 653 (W.D. Tex. 1987). ICC
Petition at 5 n.11 That decision was substantially reversed at
833 F.2d 570 (Sth Cir. 1987).
i
17
The ICC cannot use an anticipatory proceeding
such as an action for declaratory relief pursuant to 5
U.S.C. § 554(e) of the Administrative Procedure Act
(hereinafter "APA") as a means to expand its
jurisdiction. See Califano v. Sanders, 430 U.S. 99, 107
(1977) (APA provides no implied grant of subject
matter jurisdiction); see also Illinois Terminal
Railroad Co. v. ICC, 671 F.2d 1214, 1216 (8th Cir.
1982) (APA provides no implied grant of subject
matter jurisdiction, so some other’ underlying
authority for issuance of declaratory order must
exist).
Historically, state courts, not the ICC, have had
primary jurisdiction to determine the issues at stake
here:
It is the state courts which have the first
and the last word as to the meaning of
State statutes and whether a particular
order is within the legislative terms of
reference so as to make it the action of
the State. We have’ disapproved
anticipatory declarations as to state
regulatory statutes, even where the case
Originated in and was entertained by
courts of the State affected.
Public Service Commission of Utah v. Wycoff Co., 344
U.S. 237, 247 (1952) (emphasis added); see also
United States v. Idaho, 298 U.S. 105, 109 (1936)
(question as to interstate nature of railroad track
should be decided by courts, not governmental
agencies).
‘ 18
Moreover, it has long been well established that
"[flederal courts will not seize litigation from state —
courts merely because one, normally a defendant,
goes to federal court to begin his federal law defense
before the state court begins the case under State
law." Public Service Commission v. Wycoff, 344 U.S.
at 248 (emphasis added); see also Merrell Dow
Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804,
___, 106 S. Ct. 3229, 3232, 92 L.Ed.2d 650, 658
(1986) ("A defense that raises a federal question is
inadequate to confer federal jurisdiction.")
(emphasis added); Franchise Tax Board vy.
Construction Laborers Vacation Trust, 463 U.S. 1, 14
(1983) ("since 1887 it has been settled law that a
case may not be removed to federal court on the
basis of a federal defense, including the defense of
preemption, even if the defense is anticipated in the
plaintiff's complaint, and even if both parties admit
that the defense is the only question truly at issue in
the case.");!2 Skelly Oil Co. v. Phillips Petroleum, 339
U.S. 667, 672 (1950); Beers v. North American Van
Lines Inc., 836 F.2d 910, 913 (Sth Cir. 1988) (Fifth
Circuit, sua sponte, dismissed appeal of an action
12 Here, Armstrong, contending that the commerce at
question was interstate, carried its defense directly to the ICC
rather than raising such defense in the context of a state
court enforcement action. In effect Armstrong sought
removal in two steps. First, file a Petition for Declaratory
Order before the ICC. Second, after an ICC decision, force
Texas to file for review. The fact that Armstrong secks
removal via a Petition for Declaratory Order pursuant to 5
U.S.C. § 554(e) and review of that order by a federal court
cannot establish federal question jurisdiction if it is
otherwise lacking. See Califano vy. Sanders, 430 U.S. at 107
(APA provides no implied grant of subject matter
jurisdiction).
a ee ee
19
which had been removed to federal court based on
preemption defense under Interstate Commerce Act);
Greenfield & Montague Transportation Area v
Donovan, 758 F.2d 22, 26 (ist Cir. 1985) (plaintiffs
may not use federal law to engage in preemptive
strike against state court jurisdiction).!3
These arguments are particularly compelling in
the instant case because, here, a state court has
already determined that the subject commerce is
intrastate and issued an order enjoining the disputed
movements. See ICC Petition, Appendix H, 51-53a.
It is a well settled principle that federal appellate
review of state court judgments can only occur in the
Supreme Court on appeal or by Writ of Certiorari.
District of Columbia Court of Appeal v. Feldman, 460
U.S. 462, 482 (1983); Rooker v. Fidelity Trust Co., 263
U.S. 413, 416 (1923). The Fifth Circuit already
recognized these principles in Texas v. United States,
837 F.2d 184, 186 (Sth Cir. 1988): "[T]he state court's
application of the ICC's order could be reviewed in
due course by the United States Supreme Court."
13 In another context the ICC has openly acknowledged
these important jurisdictional and federalism issues in
refusing to entertain a proceeding to establish rules as to
what constitutes interstate or intrastate commerce: "Insofar
as Petitioner urges us to take jurisdiction as a convenient
and expeditious means of defeating State efforts to assume
jurisdiction, we cannot do so." United States Department of
‘Transportation -- Petition for Rulemaking -- Single State
Transportation in Interstate or Foreign Commerce, Ex Parte
No. MC-182, slip op. at 6 (hereinafter "DOT") served on
January 28, 1987. That reasoning under the authority cited
above, applies as well to individual adjudications. A copy of
the DOT slip opinion has been lodged with the Clerk of this
Court.
Ls
i.
20
B. Service Storage Does Not Apply Where
Commerce Is Facially Intrastate
Nothing in Service Storage & Transfer Co. v.
Virginia, 359 U.S. 171 (1959) changes this analysis.
In Service Storage, the Virginia State Corporation
Commission brought an enforcement action against a
company which routed goods from Virginia through a
"gateway" terminal in West Virginia and back into
Virginia.: Virginia contended that those interstate
shipments were "a mere subterfuge to escape
intrastate regulation and evade its jurisdiction." /d.
at 175.
Prior to any decision by the Virginia State
Corporation Commission, Service Storage petitioned
the ICC for a declaratory order interpreting its
certificate. Thereafter, Virginia's Commission |
decided that Service Storage was operating intrastate .
and fined them for operating without intrastate
authority. Subsequently, the ICC issued its opinion
construing Service Storage's certificate as authorizing
the interstate routing.
A i
In a narrow opinion decided only “under the facts
here," this Court ruled that the "interpretation of
petitioner's interstate commerce certificate should
first be litigated before the Interstate Commerce
Commission ... .". /d. at 173. This Court further
circumscribed its ruling with a telling rationale
directed at the possibility of multiplicitous litigation:
Thus the possibility of a multitude of
interpretations of the same _ federal
certificate by several States will be
avoided and a uniform administration of
the Act achieved.
21
Id. at 179 (emphasis added).
Here the facts are very different from _ the
Situation in Service Storage. First and most
significant, the shipments in Armstrong are on their
face intrastate. This is unlike Service Storage where
Virginia never contested the fact that the shipments
moved interstate. Rather, Virginia maintained such
interstate movements were a subterfuge to evade its
jurisdiction.'4 Further, there is no concern here, as
was the case in Service Storage, of a possible
"multitude of interpretations of the same _ federal
certificate by several States"!5 since the subject
14 Necessarily, under § 10521(a)(1), when movements are
involved which are on their face interstate, the ICC has
jurisdiction to decide whether the routing between the states
is a subterfuge. Conversely, under §10521(b)(1), when the
subject commerce is facially intrastate, the state, not the ICC,
has jurisdiction to decide the nature of that commerce. Any
other interpretation of the concurrent jurisdictional
scheme over motor carriers set out in § 10521 would fail to
give effect to ali of its provisions.
15 The ICC has also relied on Jones Motor Co. v.
Pennsylvania Public Utility Commission, 361 U.S. 11 (1959)
and Castle v. Hayes Freight Lines, 348 U.S. 61 (1954). Jones
involved a situation, like Service Storage, where the
questioned traffic was across state lines and the state
commission, not the ICC, had erroneously declared this
traffic a subterfuge. See Jones Motor Company v.
Pennsylvania Public Utility Commission, 149 A.2d 491 (Pa.
Super. Ct. 1959). Similarly, Castle applied only to ICC
jurisdiction over interstate commerce across state lines
because the Court had earlier dismissed an appeal of Hayes'
suspension from intrastate operations for want of a
substantial federal question. See Castle, 348 U.S. at 63 n.5.
Here, unlike Jones, Castle, and Service Storage, the
subject commerce moves solely within Texas. Compare Jones
(subject commence interstate: Pennsylvania - New Jersey -
Pennsylvania) and Castle (subject commerce interstate:
—
sammie a aa ease
22
commerce is solely within Texas. Moreover, Texas
does not seek any interpretation of Reeves’ interstate
certificate. In fact, whether Reeves possesses an ICC
certificate is irrelevant to the state enforcement
action, which seeks only to enjoin intrastate
violations of a Texas statute.!©
C Even Assuming The ICC Had Jurisdiction, Under
Younger-Burford Analysis The ICC Or This
Court Should Decline To Exercise It
In refusing to enjoin the state court enforcement
action, the Fifth Circuit, citing Younger v. Harris, 401
U.S. 37, 44-45 (1971), reasoned "we are guided by
the overarching principle that fed. ral courts are to
be cautious about infringing on the legitimate
exercise of state judicial power." Texas v. United
States, 837 F.2d at 186. Given 49 U.S.C. §
10521(b)(1), the court noted that "the ICC points to
no authority indicating that Congress has tipped the
(Illinois - Seven other states - Illinois) and Service Storage
(subject commerce interstate: Virginia - West Virginia - :
Virginia) with Armstrong (subject commerce intrastate: :
Texas - Texas).
16 "The mere possession of an ICC certificate cannot convert
intrastate activities into violations of federal law."
Schenck Transportation, Inc. v. Inter-County Motor Coach,
Inc., 350 F.Supp. 306, 309 (E.D.N.Y. 1972). Nor can an ICC
certificate "provide a bootstrap for finding federal ... court
jurisdiction ... .". /d. The sole issue here is whether certain
motor carrier traffic within a single state is interstate or
intrastate and who has jurisdiction to decide. The ICC
specifically acknowledged this in Armstrong I: "All parties
agree that the issue presented here is whether the
movements of non-sidemarked carpet from Arlington to
other Texas points are interstate or intrastate in nature."
Armstrong I, slip op. at 2; ICC Petition at Appendix E at 14a.
a3
balance in favor of federal interests." Jd. at 187.
Accord Louisiana Public Service Commission, 476 U.S.
at , 106 S. Ct. at 1901, 90 L.Ed.2d at 385
(provisions such as 49 U.S.C. § 10521(b)(1) constitute
an express congressional denial of power to agency);
see also New Orleans Public Service, Inc. v. City of
New Orleans, 798 F.2d 858, 860 (Sth Cir. 1986), cert.
denied, _... U.S. » 107 S. Ct. 1910, 95 L.Ed.2d
515 (1987) (where Congress creates a “bright line”
between federal and state jurisdiction, "federal court
intervention ... may constitute a disruption of a state
regulatory scheme" in an area of regulation which "is
clearly a field left to the state."); Burford v. Sun Oil
Co., 319 U.S. 315, 327 (1943).17
Moreover, abstention is especially appropriate
where the federal adjudication is advisory:
In some cases, the probability that any
federal adjudication would be effectively
advisory is so great that this concern
alone is sufficient to justify abstention,
even if there are no _ pending state
proceedings in which the question could
be raised.
Pennzoil v. Texaco, USS. , wey Be 2S,
1526 n.9, 95 L.Ed.2d 1, 16 n.9 (1987); see also
Railroad Commission of Texas v. Pullman Co., 312 U.S.
17 The injunction is also barred by the Anti-Injunction Act,
28 U.S.C. § 2283. See Chick Kam Choo v. Exxon Corp., __ U.S.
ccd alg SO oe ke eee, EO Ls... Coe foe
simply hold that respondents must present their pre-
emption argument to Texas state courts, which are presumed
competent to resolve’ federal issues.")
24
496 (1941). Here, even the ICC has emphatically
recognized the orders are advisory.
Most recently in a declaratory order proceeding
identical in type to the instant case the ICC noted, in
what has become almost boilerplate in these type
cases, that:
This is a declaratory order proceeding,
not an adversary proceeding. There is no
need of oral hearing in this case because
the purpose of a declaratory order is
cimply to remove uncertainty as to the
legal effect of the fact pattern presented
by the party requesting the declaration.
It is not a verification of those "facts," nor
does it apply to any different
circumstances (which may or may not
differ materially for purposes of the legal
analysis involved). This proceeding
involves neither an application nor a
complaint, and it makes no _ final
determination as to any specific rights of
any party. Our decision is simply our
interpretation of the applicable law as it
applies to a given set of facts.
Victoria II, slip op. at 1-2 (emphasis added); see also
Quaker Oats II, slip op. at 1;18 Matlack I, slip op. at 1
and Matlack Il, slip op. at 3-4. Moreover, although
not using identical language, the ICC in Armstrong I]
noted it was not deciding specific factual and legal
controversies as to “whether every’ individual
shipment has moved lawfully in _ Interstate
Commerce ... .". Armstrong II, slip op at 8; ICC
18 See also Ouaker Oats I, slip op. at 2, fn. 4.
25
Petition, Appendix F at 45-46a. Rather, the ICC
admitted its interpretation was purely abstract,
dealing with "the nature and concept of disputed
commerce as a whole... ." /d.
Given this persistent and consistent message from
the agency itself, it cannot be seriously disputed that
declaratory orders, such as those issued herein, are
nonfinal and not subject to review. Port of Boston
Marine Terminal Association v. Rederiaktiebolajet
Transatlantic, 400 U.S. 62, 71 (1970); United States v.
Los Angeles and S.L.R.,.273 U.S. 299, 310 (1927) (ICC
Order "does not determine any right or obligation"
and "is merely the formal record of conclusions
reached after a study of data... ."). See also Texas v.
United States, 837 F.2d at 186 (refusing to enforce
ICC orders at issue here and holding them subject to
state court "“interpretation"); City of Miami v. ICC, 669
F.2d 219, 221-222 (Sth Cir. 1982).
CONCLUSION
Wherefore, for the aforesaid reasons, Texas
requests the Petition for Certiorari be denied.
Respectfully submitted,
JIM MATTOX .
Attorney General of Texas
MARY F. KELLER
First Assistant Attorney
General
26
ANNE E. SWENSON
Assistant Attorney General
ROBERT OZER*
Chief, Class Action Section
Enforcement Division
P. O. Box 12548
Austin, Texas 78711-2548
(512) 463-2080
WILLIAM PAUL RODGERS, JR.
General Counsel
CHARLES D. GRAY
Assistant General Counsel
National Association of Regulatory
Utility Commissioners
1102 ICC Building
P. O. Box 684
Washington, D.C. 20044-0684
(202) 898-2200
P. MICHAEL COLE
BYRD R. LATHAM
Special Assistant Attorneys General
Alabama Public Service Commission
P. O. Box 470-
Athens, Alabama 35611-0470
(205) 232-2010
* Counsel of Record
July, 1988
la
APPENDIX A
October 25, 1985
Robert S. Burk, Esquire
General Counsel
Interstate Commerce Commission
12th & Constitution Ave., N.W.
Room 5211
Washington, DC 20423
Re: The State of Texas v. E&B Carpet Mills,
A Division of Armstrong World Industries,
Inc., and Reeves Transportation Company
of Georgia
Travis County, Texas, District Court
Case No. 386524
Dear Mr. Burk:
E&B Carpet Mills, a division of Armstrong World
Industries, Inc. (E&B), as_ here _ pertinent
manufactures carpet at or near Dalton, Ga., and ships
carpet from its mill and warehouse facilities at
Dalton, Ga., to its Arlington, Tex., service center.
From Arlington, shipments are made to customers in
Texas as well as to customers in other southwestern
States. It is E&B's fixed and persisting intent that the
shipments remain in interstate commerce until
delivery to the ultimate customers. The shipments
from the Arlington warehouse to points in Texas that
move by Reeves Transportation Company of Georgia
(Reeves) have freight charges prepaid by E&B. Other
carriers, secured by the consigne s, also pick up and
deliver shipments from Arlington to points in Texas.
Mr. Robert S. Burk
October 25, 1985
Page 2
A controversy has arisen concerning whether the
shipments form Arlington to points in Texas which
are transported by Reeves under the Armstrong
prepaid freight program are shipments in interstate
or intrastate commerce. In an attempt to resolve the
problem, and to obtain guidance for future
shipments, a petition for declaratory order was filed
by E&B in Docket No. MC-C-10963. A proceeding was
in fact instituted, and the deadline for filing of initial
comments was October 7, 1985. Numerous parties,
included the Texas Railroad Commission and the
Attorney General of Texas, as well as certain Texas
intrastate carriers, participated in the filing of
comments in those proceeding. However, on October
3, 1985, the Attorney General filed the referenced
court case in the District Court of Travis County,
Texas, seeking a preliminary and permanent
injunction, as well as money damages, in an attempt
to halt transportation by Reeves from the Arlington
service center to points in Texas. Reeves holds no
Texas intrastate authority. Reeves doe hold proper
authority from the Interstate Commerce Commission
in Docket No. MC-129537, Sub No. 68. A more
complete statement of the facts is contained in the
E&B comments filed on October 7, 1985, copy
_ attached.
An informal understanding had been reached with
an Assistant Attorney General of Texas that no action
Mr. Robert S. Burk
October 25, 1985
Page 3
would be taken in state court until the Interstate
Commerce Commission declaratory order proceeding
was concluded, if at all. However, it appears that the
Texas Railroad Commission has agitated for action by
the Attorney General, and that is what has given rise
to the suit.
On behalf of E&B, we are attempting to remove
the referenced case to federal district court in Austin,
Tex. However, because the complaint is worded so as
not directly to mention any federal issue, and
because the State of Texas is not a citizen for
purposes of diversity, it is not certain that our
removal effort will succeed, even though we have
found one similar case in which removal was
permitted and upheld on appeal. Blease, et al. v.
Safety Transit Co., 50 F.2d 852 (4th Circuit, 1931).
Should removal be successful, then we of course
expect to request the federal district court in Austin
to refer the matter to the Interstate Commerce
Commission on the issue of whether or not interstate
commerce is involved, and that the court will honor
the request.
Our apprehension, of course, is that under the
present procedural posture, the federal district court
may remand the case to the Texas District Court.
Should this occur, then we feel it would be highly
desirable for the Interstate Commerce Commission to
intervene in the Texas District Court, as a third party
siete en easier
4a
Mr. Robert S. Burk
October 25, 1985
Page 4
plaintiff in order to assert its right to regulate
interstate commerce involving movements’ within
Texas. Then, with a federal issue apparent on the
face of the commission's pleading, we could again
move for removal with some reasonable likelihood of
success.
The situation involved here is a very thorny one,
and one which I have encountered numerous times
during the last 20 years of practice in the area of
transportation law. Drawing a line between what
constitutes interstate commerce and _ intrastate
commerce is troublesome at best. It was in view of
this situation that E&B has, in its comments,
requested the Commission to establish a "safe
harbor" rule that would greatly assist in establishing
the dividing line. Unfortunately, action taken by the
State of Texas now may serve merely to obfuscate
matters, at least in the near term. Appropriate
action on your part, after instruction § and
authorization by the’ Interstate Commerce
Commission, would help to assure that this matter
will be concluded in an orderly fashion and with a
minimum amount of litigation.
Service of the plaintiff's original petition, a copy of
which is attached, occurred on October 17, 1985. It
is my understanding, although I am not a member of
the Texas Bar, that E&B has 20 days within which to
answer. Therefore, time is of the essence in
Sa
Mr. Robert S. Burk
October 25, 1985
Page 5
obtaining Interstate Commerce Commission action.
Your early response would be appreciated.
With kindest personal regards, I remain,
Very truly yours,
/s/ W. P. Jackson, Jr.
William P. Jackson, Jr.
WPJ/smw
Enclosures
cc: Jerome C. Finefrock, Esquire
6a
October 31, 1985
Mr. William P. Jackson, Jr.
Jackson & Jessup
P.O. Box 1240
Arlington, VA 22210
Re: State of Texas v. E&B Carpet Mills, et al.,
Trans [sic] County (Tex.) Judicial District
Court,
No. 386524
Docket No. MC-C-10963, Armstrong World
Industries, Inc. - Transportation Within
Texas - Petition for Declaratory Order
Dear Mr. Jackson:
In your letter of October 25, 1985, you
requested our views on the possibility of ICC
intervention in the above-referenced state court
proceeding. The state court action arises out of a
complaint by the Texas Attorney General seeking to
enjoin a motor carrier from providing what is alleged
to be intrastate transportation without holding state-
issued operating authority. The carrier contends,
however, that the movements are interstate in
nature and are therefore authorized by its ICC-issued
certificate. (Whether the ICC certificate actually
authorizes the operations is now before’ the
Commission in the above-referenced declaratory
order proceeding.)
In general, the Commission has taken a firm
position in support of its exclusive jurisdiction to
-
ahs i mit ge BN LE ONS vet x mv Slipaeg AE tN
i ae
a
7a
make the initial interpretation of a federal motor-
carrier certificate, as established in Service Storage &
Transfer Co. v. Virginia, 359 U.S. 171 (1959) and
Jones Motor Co. v. Penn. PUC, 361 U.S. 11 (1959). For
example, my staff has already provided you with
copies of our briefs in the recent Funbus litigation,
where the California PUC has attempted to enjoin a
federally certificated carrier's operation in a state
administrative proceeding. The ICC intervened there
once the ICC-certificated carrier had succeeded (at
least temporarily) in having the case presented in a
federal rather than state forum.
In the present case, although the ICC's
interpretive jurisdiction seems equally clear and has
been invoked via the declaratory order proceeding,
we are reluctant to recommend that the Commission
should become involved in a controversy that is still
in a state forum. If the case were already presented
in a federal court either via removal or a_ separate
federal complaint for injunctive relief, as in Funbus,
the situation would be quite different. As it is, we
believe it to be in the Commission's interest to fight
this battle, if at all, in a federal forum. Accordingly,
we do not plan to make any recommendation
regarding ICC intervention in the state court
proceeding. We hope, however, that you will keep us
apprised of any further developments. If the case
8a
reaches a federal court, we will be glad to discuss the
Commission's interest in possible direct participation
at that point.
Sincerely,
/s/ Robert S. Burk
Robert S. Burk
General Counsel
9a
APPENDIX B
DOCUMENT INDEX
Documents Withheld:
General Counsel Memorandum 11/25/85, To
Chairman Taylor, No. 85-287, Re: Docket No.
MC-C-10963.
Letter from General Counsel to William P.
Jackson 11/25/85, Re: Commission vote for ICC
appearance in non-enforcement judicial
proceedings.
Letter from William P. Jackson to General
Counsel 11/12/85, Re: Request for ICC
appearance in Texas v. E&B Carpet Mills.
Memorandum to Director Mackall from General
Counsel 3/14/86, No. 86-52, Re: Modification to
prior G.C. Memorandum No. 85-287.
Draft Decision for No. MC-C-10963, 2/ /86.
Draft Decision for No. MC-C-10963, 3/20/86.
Draft Memorandum of Law 9/5/86, re: E&B
Carpet Mills and ICC v. Jim Mattox, et al.
General Counsel Memorandum 8/1/86, Re: 5th
Circuit granting motion to dismiss petition as
premature.
Letter from R. James George to Glenn Scammel
8/8/86, and attached draft of complaint.
10a
10. Letter from R. James George to Glenn Scammel
8/13/86, and attached draft of complaint.
11. Draft of Complaint from W.P. Jackson.
lla
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
STATE OF TEXAS,
Plaintiff,
INTERSTATE COMMERCE
COMMISSION
Defendant.
)
v. ) Civil Action No. A-87-CA-016
)
)
)
)
AFFIDAVIT OF INTERSTATE COMMERCE
COMMISSION
FREEDOM OF INFORMATION/PRIVACY
OFFICER S. ARNOLD SMITH
I, S. Arnold Smith, being duly sworn, depose
and state:
I am an attorney employed by the Interstate
Commerce Commission as_ its Freedom of
Information/Privacy Officer. I have served in this
position since February 1, 1979. Pursuant to
Commission regulation (49 C.F.R. 1001.4), I am
responsible for initially deciding whether documents
requested under the Freedom of Information Act will
be made available. The statements made in _ this
affidavit are based on my person knowledge and
upon information available to me in my official
a
12a
capacity, and are true and accurate to the best of my
knowledge and belief.
By letter dated October 13, 1986 (Plaintiffs Ex.
A), Mr. Robert Ozer, a Texas Assistant Attorney
General, Energy Division, requested, inter alia, certain
documents relating to an ongoing Commission
proceeding, Docket No. MC-C-10963, Armstrong
World Industries, Inc. - Transportation Within Texas
- Petition for Declaratory Order (Armstrong), and
federal court litigation in E&B Carpet Mills v. Mattox,
No. A-86-CA-446 (W.D. Tex.) (E&B Carpet Mills).
After a search of the agency's records, I responded to
Mr. Ozer's request by releasing some documents, but
withholding 11 others pursuant to 5 U.S.C. 552(b)(5)
(the executive and attorney work-product privileges
incorporated under that section).
In order to understand the basis for may [sic]
determinations a short discussion of the Armstrong
and E&B Carpet Mills proceedings is in order. The
Armstrong proceeding was initiated before the
Interstate Commerce Commission by Armstrong
World Industries, Inc. (which has a division, E&B
Carpet Mills, that manufactures carpet) and Reeves
Transportation Company of Georgia, a_ federally
licensed interstate common carrier, to determine
whether Reeves' movements of “non-sidemarked"
carpet from Arlington to other Texas points were
interstate or intrastate in nature. The State of Texas
filed comments in the _ proceeding. By decision
served April 23, 1986, the Commission found that
13a
the incidents surrounding the involved
transportation established that the movements of
non-sidemarked carpet within Texas by Reeves were
interstate in nature, lawfully performed under a
storage-in-transit provision contained in = an
appropriate tariff. The State of Texas filed a petition
to reopen that decision that is presently pending
before the agency.
E&B Carpet Mills is a proceeding presently
pending in the United States District Court for the
Western District of Texas, Austin Division. There, the
plaintiffs, Reeves and E&B, seek injunctive relief
from the federal court to prevent the state
defendants from pursuing litigation in state court
against Reeves and E&B for activities conducted
under color of Reeves’ federal motor carrier
certificate. ! The Interstate Commerce Commission
has moved to intervene in support of E&B and
Reeves' motion. The Commission seeks to participate
to assert its interest in, and preserve its exclusive
original jurisdiction over, the interpretation of the
scope of Reeves' federal interstate operating
authority and the related tariffs reflecting Reeves’
1 The state defendants are the Attomey General of the State
of Texas and certain members of his staff. In October 1985,
while the Armstrong proceeding was pending before the
Commission, these defendants filed on behalf of the State of
Texas a suit against Reeves (and its principal shipper, E&B)
for injunctive relief and penalties under state law for
allegedly “unauthorized” Reeves operations in Texas. State
of Texas v. E&B Carpet Mills, et al, 353d Judicial District Court,
Travis County, Texas, No. 386,524.
14a
interstate service. By order signed October 7, 1986,
United States District Judge Walter S. Smith, Jr.
denied E&B's motion for a preliminary injunction
because there was no showing of irreparable harm.
E&B subsequently filed a renewed motion for
preliminary injunction that is presently pending
before the Court.
The documents withheld and the reasons why
they were withheld are connected with the
proceedings described above. I will now describe
with particularity the documents and exemptions
claimed.
,. Description: This is a six-page memorandum
dated November 25, 1985, from ICC General
Counsel Burk to ICC Chairman Taylor. It
provided the Chairman with legal analysis of
the Commission's primary jurisdiction to
interpret the bounds of certificates that it
issues. It further discussed the impact of state
court action by Texas on that jurisdiction and
possible intervention in a federal action to
protect the agency's primary jurisdiction to
interpret Reeves' federal motor. carrier
certificates in the pending’ declaratory
proceedings (Armstrong).
Exemption: This memorandum was withheld
under the executive process and attorney
work-product privileges. The memorandum is
a deliberative and confidential intra-agency
Leite iste s3 dae inps cma 6
15a
memorandum containing legal analysis and
recommendations from the agency's General
Counsel to the Chairman. The document is also
attorney work-product because it was
prepared by agency attorneys in anticipation of
the litigation in E&B Carpet Mills.
Description: This is a letter, dated November
25, 1985, from ICC General Counsel Burk to
William F. Jackson, Jr., counsel for E&B and
Reeves, regarding a Commission vote for ICC
appearance in non-enforcement judicial
proceedings.
Exemption: This letter was withheld pursuant
to the attorney work-product privilege. It was
prepared by Commission’ counsel in
contemplation of the litigation in E&B Carpet
Mills and discusses strategy related to the
litigation.
Description: This is a letter, dated November
12, 1985, from William P. Jackson, Jr., counsel
for E&B and Reeves, to ICC General Counsel
Burk, requesting Commission participation in
litigation to assert the agency's primary
jurisdiction.
Exemption: This letter was withheld pursuant
to the attorney work-product privilege.
l6a
Although it was prepared by counsel not
employed by the agency, the Commission
intervened in the subsequent federal court
action supporting E&B and Reeves’ claim that
the Commission has primary jurisdiction to
determine the matter. This and other shared
communications regarding trial strategy
between co-counsel on the same side of the
primary jurisdiction’ litigation remain
privileged. .
Description: This is a two-page memorandum,
dated March 14, 1986, from ICC General
Counsel Burk to Director Mackall containing
commentary on the legal defensibility of the
draft decision in Armstrong.
Exemption: This memorandum was withheld
under the executive and attorney work-
product privileges. The document is an intra-
agency memorandum between agency staff
with respect to a draft decision in Armstrong.
The memorandum is _ further protected as
attorney work-product because it was
prepared in anticipation of litigation when the
Commission's decision is reviewed on appeal.
Indeed, an attempt has already been made to
obtain judicial review of the agency's April 23,
1986 Armstrong decision. Texas v. United
States, No. 86-4430 (Sth Cir. July 25, 1986)
17a
(dismissing as premature the Texas petition for
review of Armstrong without prejudice to
refiling after the Commission has acted on
pending motions for reconsideration).
Description: This is a 13-page draft decision in
Armstrong circulated between Commission
staff in February, 1986.
Exemption: This document was withheld
pursuant to the executive privilege. It is a
predecisional working draft decision in the
Armstrong case.
Description: This is a 13-page draft decision in
Armstrong and one-page memorandum to the
Commission, dated March 20, 1986.
Exemption: As with document 5 above, this
document was withheld pursuant to. the
executive privilege. The document is a
predecisional working draft decision in the
Armstrong case circulated between agency
staff.
Description: This is a 17-page draft
memorandum of law dated 9/5/86 prepared
by counsel for E&B for the E&B Carpet Mills
litigation.
18a
Exemption: This document was withheld
pursuant to the attorney work-product
privilege. It was prepared by counsel for E&B
and contains their strategy and theories in the
E&B case. It was shared with Commission
counsel because they intervened to support
E&B's request for an injunction (on the basis ot
[sic] the Commission's primary and exclusive
jurisdiction to interpret the scope of interstate
motor carrier certificates it issues).
Description: This is a one page memorandum
dated August 1, 1986, from Acting ICC General
Counsel Rush to the Commission discussing the
decision in State of Texas v. United States, No.
86-4430 (5th Cir. July 25, 2986 [sic}).
Exemption: This document was withheld under
the executive and the attorney work-product
privileges. It is protected under the former
privilege because it is on _ intra-agency
memorandum, discussing the impact of this
decision on the pending agency proceedings
(Armstrong). It is attorney work product
because it contains counsel's analysis and was
prepared in connection with litigation in the
Fifth Circuit that the agency anticipates may
continue.
10.
19a
Description: This is a letter dated August 6,
1986, from R. James George, Jr., counsel for
E&B, to Glenn Scammel, at the time an attorney
in the ICC General Counsel's Office, regarding a
proposed complaint in E&B Carpet Mills.
Attached to it is a nine-page draft complaint
for the E&B litigation.
Exemption: This document was withheld
pursuant to the attorney work-product
privilege. The document contains counsel's
litigation strategy and_ theories. It was
prepared by E&B's attorneys in anticipation of
the E&B litigation and was shared with
Commission counsel who have filed in support
of E&B's complaint in United States District
Court (in order to protect the agency's
jurisdiction to decide the merits of the
Armstrong declaratory order proceeding before
the Commission).
Description: This is a letter dated August 13,
1986, from R. James George, Jr., counsel for
E&B, to Glenn Scammel, at the time an attorney
in the ICC General Counsel's Office, regarding a
proposed complaint in E&B Carpet Mills.
Attached to it is an 11--page draft complaint
for the E&B litigation.
Exemption: Same as Number 9, above.
20a
11. Description: This is a 12-page draft complaint
from William P. Jackson, Jr., counsel for E&B,
for the E&B case.
Exemption: Same as Number 9, above.
The above-described documents were withheld
pursuant to the (b)(5) exemption, which incorporates
the executive and/or attorney work-product
privileges. Release of documents 1, 2, 3, 4, 7, 8, 9, 10,
and 11 would result in the disclosure of attorneys’
mental impressions, conclusions, legal theories, or
strategies regarding specific litigation. Documents 2,
3, 7, 9, 10 and 11 are communications with counsel
who are on the same side in the E&B litigation where
the Commission has intervened on E&B's side. These
documents relate exclusively to the efforts of the
parties to protect (through litigation) the agency's
primary jurisdiction to decide the merits of. the
Armstrong case, and are not addressed to the
substantive issue in Armstrong of whether the
underlying transportation should have been found to
be interstate (as opposed to intrastate) in nature.
Documents 1, 4, 5, 6 and 8 are _ intra-agency
memoranda, release of which would interfere with
future open intra-agency discussion and could cause
potential confusion.
In sum, I believe that release of the documents
in question would have been inappropriate at the
21a
time, and continues to be so now in light of pending
administrative and judicial proceedings.
Respectfully submitted,
/s/ S. Arnold Smith
S. ARNOLD SMITH
FOI/Privacy Officer
Interstate Commerce
Commission
NOTARY
Subscribed and sworn before me this 20th day of
February, 1987.
Ls/
22a
APPENDIX D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
87-4725
STATE OF TEXAS,
Petitioner,
versus
UNITED STATES OF AMERICA,
and INTERSTATE COMMERCE COMMISSION,
Respondents.
Petition for Review of an Order of the
Interstate Commerce Commission
Before POLITZ, JOHNSON and HIGGINBOTHAM, Circuit
Judges.
BY THE COURT:
IT IS ORDERED that the motion of the Quaker
Oats Company, et al., intervenors in cause number
87-4702 for leave to late file their reply to the
motion of the State of Texas to consolidate
proceedings in cause number 87-4702 for leave to
late file their reply to the motion of the State of
23a
Texas to consolidate proceedings in cause number
87-4725 is GRANTED.
IT IS FURTHER ORDERED that petitioner's
motion to consolidate the reference cause with cause
number 87-4702 Steere Tank Lines, Inc. v. ICC &
U.S.A., is DENIED. ,
IT IS FURTHER ORDERED that the motion of
Central Freight Lines Inc., for leave to intervene in
support of petitioner is GRANTED.
IT IS FURTHER ORDERED that the motions of
petitioner and intervenor Central Freight Lines Inc.,
to summarily reverse and vacate the Agency's
decision are DENIED. However, the court makes no
ruling on the questions presented by the motion.
Rather, the court is persuaded that it will benefit
from full briefing and oral argument of the case.
IT IS FURTHER ORDERED that the alternative
motion of petitioner and intervenor for summary
dismissal is DENIED.
24a
APPENDIX E
GRAVES, DOUGHERTY, HEARON & MOODY
2300 INTERFIRST TOWER
POST OFFICE BOX 98
AUSTIN, TEXAS 78767
TELEPHONE: (512) 480-5600
(PORTIONS OF LETTERHEAD OMITTED)
May 21, 1987 ~
Mr. John Dickson
District Clerk
Travis County Courthouse
Austin, Texas 78701
Re: No. 386,524 - The State of Texas v.
E & B Carpet Mills, a Division of
Armstrong World Industries, Inc.,
et al
Dear John:
Enclosed you will find our check for $5.00 for
the jury fee provided by Rule 216, Texas Rules of
Civil Procedure. By this letter, we are requesting
that the above-styled and numbered cause be set for
jury trial on Monday, December 7, 1987, at 9:00 a.m.
Yours sincerely,
GRAVES, DOUGHERTY, HEARON &
MOODY
BY/s/ R. James George, Jr.
R. James George, Jr.
RJGjr/th
Enclosure
Cc:
25a
Mr. Robert Patterson
Court Coordinator
Mr. Norberto Flores
Mr. James M. Doherty
Mr. Timothy J. Herman
Mr. Mert Starnes
Mr. Jerry Prestridge
Mr. William P. Jackson, Jr.
Mr. Jerome C. Finefrock
(w/o encl.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.