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

Supreme Court brief1974

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IN THE —

Supreme Court of the ~~ Statedn Us.

OCTOBER TERM, 1973 FILED

| NOV

Nos. 73-1055, 73-1069, ~ 15 1914

73-1070, 73-1071, and 73-107 2Zpsierne, coy 5 ude

Wien

BOWMAN TRANSPORTATION, INC., et al.,

Appellants,

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

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF ARKANSAS,

FORT SMITH DIVISION

REPLY BRIEF FOR APPELLANTS BOWMAN

TRANSPORTATION, INC., JOHNSON MOTOR

LINES, INC., RED BALL MOTOR FREIGHT,

INC., AND LORCH-WESTWAY

CORPORATION, ET AL.

MAURICE F, BISHOP BRYCE REA, JR.

601-09 Frank Nelson Building

Birmingham, Alabama 35203

Counsel for Bowman Trans-

portation, Inc.

SANDER W. SHAPIRO

JERRY C. PRESTRIDGE

Post Office Box 1148

Austin, Texas 78767

Counsel for Red Ball

Motor Freight, Inc.

DONALD E. CROSS

700 World Center Building

918 Sixteenth Street, N.W.

Washington, D.C. 20006

Counsel for Johnson Motor

Lines, Inc.

CHARLES S. RHYNE

COURTS OULAHAN

400 Hill Building

Washington. D.C. 20006

ROBERT L. JONES, JR.

412 Merchants National

Bank Building

Fort Smith, Arkansas 7290]

Counsel for Lorch-Westway

Corporation, et al.

Washington, 0.C. © CLB PUBLISHERS’ © LAW PRINTING CO. © (202) 393-0625

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TABLE OF CONTENTS

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

Evidence, And Impermissibly Substituted Its

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

2. The Commission Did Consider All Of Appellees’

NN og a

3. The Evidence Was Mistakenly Weighed By The

Court Below Under The Guise Of An Inappli-

ontee Diandard Ol Review, ow. se i as

4. The Court Should Remand With Directions To

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

APPENDIX A Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Determining Public Convenience

a UG vs oo vr es S

APPENDIX B Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The Bow-

Witt ROO. 8 ew a i is os

APPENDIX C Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The John-

O00 ADUECRUOR,. 2 ove ee Si ess

APPENDIX D Findings Of Substantial Evidence In

The Commission Order (114 M.C.C.

571) Supporting Grant Of The Red

eer PON... iw ce a —

APPENDIX E Report And Order Of ICC In Herrin

Appendix G-—Protestants Evidence:

Tree Fi A. oS aS ee ek

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ian oe

; (ii)

Page

TABLE OF AUTHORITIES

Cases:

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

Ashbacker Radio Corp. v. Federal Communications

«OE RT gS oa ee hk wk es a ew 13

Bradley v. Maryland Casualty Co., 382 F.2d 415

PED ee ee ee 6 ek es ee ous 5 2

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

Fe as ls TOPE ek ee es na he ee epee 2

ee Oc OE SG NOE ik ko ck ek cia pees oe 12

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

ee Oe PE ig hs oh ee es Saas 14

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

We i ee ke es 10, 11

Consolidated Edison Co. v. National Labor Rela-

eet Oe ee ee eae 12

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

Os kc 6 Ok i cs oe ee kk os 2,14

Federal Communications Commission v. NBC

SUA ee Ot A oo ee a ss ks 13.

Federal Maritime Commission v. Svenska Amerika

RO, SE so is a ee a as 14

Federal Trade Commission v: Cement Institute, 333 _ |

WO a a he se es ee i a 15

First Nationa! Bank of Fayetteville v. Smith, 365 F.

PAU Ce, PR IPI vk eh dvi kt. 12

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

PR OE ae es a sc ES 14

Interstate Commerce Commission v. Jersey City,

Pa Se hs vy os Pe eK ke es 13

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

SNE Oa es ei es a oe a 12

ETA Pa IID

(iii) ~

Page

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

O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S.504 ...... 15

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

PE is a oh a oe oe os a er a 2

Statutes:

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

PET TOMI oe ee ye a ee oe Ri 11,12

Administrative Procedure Act — Legislative History,

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

’

- emcee

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1973

Nos. 73-1055, 73-1069,

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

BOWMAN TRANSPORTATION, INC., et al.,

Appellants,

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

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF ARKANSAS,

FORT SMITH DIVISION

REPLY BRIEF FOR APPELLANTS BOWMAN

TRANSPORTATION, INC., JOHNSON MOTOR

LINES, INC., RED BALL MOTOR FREIGHT,

INC., AND LORCH-WESTWAY

CORPORATION, ET AL.

The keystone of Appellees’ argument is that the

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

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

The Court fashioned a novel standard of judicial review,

. x

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ei:

without precedent in statute or decision. This standard

accommodated improper reweighing of the evidence and

rejection of the agency’s specialized knowledge and

expertise. The Court has reiterated these mistaken views

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

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

Appellees acknowledge that the Court's decision ‘is

almost a verbatim copy of Appellees’ proposed findings

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

Appellees misstate Appellants’ reasons for bringing this

matter to the attention of this Court. Appellants’

principal challenge is not to the copying itself, but to

_ the errors copied by the Court below from Appellees’

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

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

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

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

into errors which must be corrected if the proper

relationship between the judiciary and administrative

agencies is to be preserved. Consolo v. Federal Maritime

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

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

Evidence, And Impermissibly Substituted Its Judgment

For That Of The Agency.

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

sufficiency of the evidence will not suffice in a

proceeding, such as the one now before the Court,

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

1276-1319 with App. 697-738.

where the agency action is alleged to be arbitrary and

capricious and resulting from an abuse of discretion.”

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

then demonstrates by the very language it used that it

re-weighed the evidence stating, inter alia: :

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

report in light of the whole record compels us to

the conclusion that the Division based its ultimate:

conclusions upon subordinate findings that can be

supported only by a consideration gf portions

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

at 1259 (App. 1299).

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

refusal to give weight to the extensive transit-time

studies presented by protestants [Appellees].

*** The conclusion [by the Commission] that

these studies are entitled to little weight because

they ‘relate to short periods of time’ is completely

arbitrary. Many covered longer periods of time

than those presented by applicants and others

covered periods identical to the applicants’ [Appel-

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

1310) (emphasis added).

3. “Other evidence presented by applicants’ ship-

pers received similar treatment by the Division.

Findings of the Examiners, and findings embodied

in an appendix to the Division’s report, reflecting

unfavorably upon applicants received emphasis. by

the Examiners but no _ consideration: by the

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

(emphasis added).

Other examples of the District Court’s weighing

evidence and where its opinion proves this fact are:

(a) Transit-time evidence supporting Appellants

held to be “inferior” and evidence supporting

Appellees ‘“‘superior’. 364 F. Supp. at 1251 (App.

1294).

Doe Re Sa ek

5 PRAM Bern

(b) Appellants’ performance evidence held to be

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

- evidence of Appellees not properly recognized by

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

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

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

1295).

(e) Commission refused ‘to afford weight’ to

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

1296). |

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

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

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

Characterizations of the Commission’s ‘“‘treatment”’ of

the evidence as arbitrary and capricious do not prove it

so. A_ reading of its Report proves that the

Commission . carried out its statutory’ function of

weighing the evidence, comparing applicants, and

determining where lies the public convenience and

necessity. This was not arbitrary or capricious action

but a careful, thoughtful performance of statutory

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

fact that the Commission does not agree with Appellees

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

decision really comes down to the fact that it does not

agree with the Commission as to the weight of the

evidence.

Agency findings based upon substantial evidence, as

were the Commission’s findings here, cannot lack a

_ rational basis so as to be arbitrary and capricious. The

Commission’s Report demonstrates why the District

Court did not find that the Commission’s findings and

conclusions in this proceeding were not based upon

substantial’ evidence. This Appellees’ Brief concedes.

Brief at 14. Under these circumstances. the Com-

mission’s findings were not and could not be irrational

or arbitrary or capricious.

The Court below was led into grievous error by

Appellees who supplied language in which the Court

asserted that the Commission did not weigh the

evidence properly. The Court’s findings are thus

factually incorrect. Refusal to give “weight” or giving

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

weigh. The Commission’s Report carefully and reason-

ably weighed, evaluated and explained why it could not

treat Appellees’ evidence as more persuasive than

Appellants’. The Commission wrote a careful and

exhaustive Report consisting of 59 pages plus 196 pages

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

summary of the evidence regrouped geographically

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

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

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

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

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

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

319). A reading of those pages proves conclusively that

the Commission exhaustively considered all evidence

presented by Appellees and Appellants, in ‘what is

perhaps thé most extensive record ever developed in

connection with a singie group of motor carrier

applications”, with 1009 witnesses presenting 23,423

pages of testimony and 1987 exhibits in 147 days of —

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

ee wan W .

f 6

é As stated above, the Court below held that the

‘ Commission arbitrarily gave no “weight” to Appellees’

transit-time studies, which were “the most important

part of [Appellees’] evidence”, purportedly showing

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

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

“treatment” of this evidence by the Commission is fully

supported by reasoning set forth in its Report, and the

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

consideration as it is illustrative of the Commission’s

careful weighing of the evidence. After a concise

summary of these transit-time studies, based upon the

‘detailed summary prepared by the Examiners and set

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

319-356), the Commission noted that:

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

that in certain instances during the study periods

expeditious service was rendered by certain of the

protestants [Appellees], these studies must be

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

either relate to short periods of time or” cover

traffic handled for specified: shippers and (2) that’

they were made when protestants were confronted

with the possibility of grants of authority to

additional carriers. When viewed in this light, we

believe that protestants’ studies do not present as

vom on oo Va a -preture -as-—those’ introduced by those

witnesses supporting the applications here under

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

(App. 129).

The Court below erroneously stated that: :

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

or tlie dates embraced therein were not considered

significant by the parties or the, Examiners. Indeed,

these facts were not deemed sufficiently important

by the Division itself to be mentioned in its own

findings relative to evidence presented by certain

protestants. * * *” 364 F. Supp. at 1259 SAPP.

1310).

To set the record straight, both the Examiners and the

Commission did find these factors important. The

detailed summary of Appellees’ evidence prepared by

the Examiners does set forth the length of time covered

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

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

not only agresented a concise summary of this evidence.

It also incorporated into its Report the full summary

prepared by the Examiners. The accuracy of the

Commission’s summary is not challenged by the Court.

which disagreed only with the conclusions drawn

therefrom. Surely, no inference of arbitrary conduct by

the Commission can be drawn from its action in not

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

evidence set forth in an appendix to its Report.

The District Court, in re-weighing the evidence.

consistently credited the conclusions of the Examiners

over those of the Commission, even though it is beyond

question that the ultimate responsibility in such expert

2Of the approximately 200 shippers submitting transit time

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

one month. Of these approximately 45 covered traffic handled

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

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

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

approximately 30 covered traffic handied during the period of |

~~ or more.

pe two of the 14 protestants which submitted transit

time studies introduced evidence regarding traffic haffdled in 1965,

about 78 of the studies of the supporting shippers covered traffic

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

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

1964. (See App. E).

he,

matters lies with the Commission. The Court confuses

the Examiners’ summary of the evidence, with which

there is no quarrel, with their conclusions, with which

the Commission disagreed. For example. the Examiners

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

Appellant Bowman) having the dual role of applicant

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

1287).

[his characterization demorfstrates the failure of the

Examiners to grasp the significance of this proceeding.

The Commission sought to meet the expanding

transportation needs of the Southeast and Southwest by

a consolidation of multiple applications to provide

service in these areas, rather than by atomized

consideration of these needs on a _ certificate-by-

certificate basis. The Court was induced by the

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

Commission - not the Examiners or the Court — to

exercise its statutory. duty in ma<ing this expert

judgment, which also was carried out in regrouping the

deficiencies and needs of the shippers on a geograpliical.,

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

geographical regrouping clearly established the basis for

the Commission’s decision that the public convenience ~

and necessity required the additional service demanded

by the outpouring of 933 shipper witnesses as well as

the basis for the choice of the three Appellant carriers

to meet these demonstrated needs. When the evidence is-

analyzed geographically, clearly these carriers must be

selected as best able to supply the need which the

public interest demands. .

The Court’s erroneous interpretation of the Com-

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

|Appellees’] evidence” reveals. the serious distortion of

the process of judicial review which occurred below.

5 a

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

an improper standard of review. The Commission’s

consideration of such evidence as transit-time studies is

a matter of fact finding properly to be reviewed

- pursuant to the substantial evidence test. The reviewing

Court carfinot substitute its judgment for that of the

agency by re-weighing the evidence under the guise of

the arbitrary and capricious standard. The Court was

wrong both in fact and in law.*

The Court below simply substituted its own

judgment in. determining where lies the public con-

venience and necessity. and refused to recognize the

expertise of the Commission. this. was the statutory

duty of the agency. ,

2.The Commission Did Consider All Of Appellees

Evidence. :

The Court, as proposed by Appellees. stated in its

opinion that the Commission did not base its

conclusions upon the entire record. or did not

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

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

Conclusion 10 (App. 777. 1309).4 Appellees repeat this

7As a matter of fact, the District Court repeatedly

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

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

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

1313-14).

* Appellees, at page SO of their brief, argv that “[a] though

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

official notice of the same edition of the same publication which

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

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

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

Commission relied on the Fall 1971 edition of the American Motor

Carrier Directory. The evidence concerning the closing of Red

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

directly refutes this erroneous conclusion, e.g. :

“The evidence considered in its entirety is

convincing that. the additional service so to be

authorized will serve,a useful purpose, responsive

to a public demand and need and that available

transportation services between the points and to

the extent authority is granted are not reasonably

adequate to meet the* derfonstrated needs of the

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

(Ann. 129) (emphasis added).

And:

“Considered as a whole, the record demonstrates

that many of the supporting witnesses are not

receiving reasonably adequate service.” /d at

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

The Commission also twice referred to its considera-

tion of all the evidence of the Appellees.

“The evidence, the recommendations of the

hearing examiners and the pleadings fave been

considered. Inasmuch as no exception is taken to

the examiners’ summary of the evidence presented

by the protestants as to their authorities, equip-

ment, and operations, this portion of the ex-

aminers’ report is hereby adopted and is set forth

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

(emphasis added).

“The evidence of the opposing carriers, as

summarized by the examiners, is set forth in

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

(emphasis added).

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

1972 edition of the American Motor Carrier Directory which was

released after the Commission’s report which is dated December

30.

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

explanation, was considered at the reconsideration stage.

3. The Evidence Was Mistakenly Weighed By The Court

Below Under The Guise Of An Inapplicable Standard

Of Review.

Appellees claim that Appellants “take the position

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

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

Appellees misstate Appellants’ position. Appellants’

position is that Overton Park does not authorize the

application of an additional and more rigorous Court

weighing of the evidence test to adjudicatory tact

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

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

The arbitrary and capricious standard cannot be used as

a guise under which a reviewing Court in a case based

on a formal record may arbitrarily substitute its

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

agency findings and conclusions based thereon are

supported by substantial evidence.‘

The judicial review provisions of the Administrative

Procedure Act require that agency action should be set

aside if it violates the Constitution or a statute. 5

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

no observance of procedure required by law. /bid.

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

‘effect resorted to by the Court below, is only

applicable for adjudication not subject to Sections 556

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

which outline that evidence with respect to the overall public

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

the Commission granted a certificate to each of the Appellant

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

complaint and have never argued that the agency order was not

supported by substantial evidence. Their confused’ position is

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

not find the actions and conclusions of the agency to be

supported by substantial evidence, nor did the Court find that

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

and 557. Administrative Procedure Act — Legislative

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

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

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

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

This leaves the substantial evidence rule and the

standard used by the Court below. Appellees claim that

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

substantial evidence rule is only applicable to formal

hearings on the record and is embodied in the decisional

provisions of the Administrative Procedure Act. 5

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

adjudication must be “‘supported by and in accordance

with the reliable, probative and substantial evidence’’.

This section codifies the rule developed by this Court in

Consolidated Edison Co. v. National Labor Relations

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

fact. Under this rule, the Commission is not required

specifically to consider and rule upon every item of

evidence in the record or every contention made by

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

U.S. 173, 193-194.

Congress intended the Administrative Procedurs Act

to be read and applied as a whole. Administrative

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

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

not have intended to make Section 556(d) redundant

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

the arbitrary, and capricious standard of Section

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

law’’ (emphasis added). The substantial evidence rule.

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

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

141-142.

Appellants never have contended that a concept

similar to the arbitrary and capricious standard has no

application to a formal adjudicatory proceeding under

the Administrative Procedure Act. American Farm Lines

v. Black Ball, 397 U.S. §32, 538-539; IJnterstate

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

514-519. Examples occur where the deciding officer

fails to personally consider and appraise the record in

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

477-482: where an administrative agency refuses to

consolidate mutually exclusive application hearings,

Ashbacker Radio Corp. v.’ Federal Communications

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

refuses to allow a party to formally intervene while

permitting them to file briefs and present evidence and

oral argument, Federal Communications Commission vy.

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

agency policy and procedure clearly are not at issue in

the instant case.

4. This Court Should Remand With Directions To Affirm

The Commision’s Order.

Appellees argue, with respect to the Three-Judge

Court’s failure to remand, that:

“The judgment did no more than enjoin the

issuance of the specific certificates authorized in

such order.

* * *

‘‘The Commission remains free to consider the

substantive issues of public convenience and

necessity at any time and therefore its delegated

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

64).

Such statements are consistent with Appellees’ failure

to acknowledge the cost. in both dollars and time.

which each delay in this proceeding has brought upon

—___——""" pate ery

5 14

the Shippers, to whom Appellees refer as “private

Appellants’. This dilatory strategy by Appellees cul-

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

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

order. Now, after significant but necessary delay in

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

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

this Court finds for Appellants, but remands to either

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

for further action. Appellees have nothing to lose by

waiting. Appellants have nothing to gain. The real losers

are the Shippers, whose needs the Commission sought to

meet. Appellants therefore pray that this Court remand

with directions to affirm the Commission’s decision.

Such a procedure was employed by this Court in

Federal Maritizne Commission v. Svenska Amerika

Tinien, 390 U.S. 238. There, as here, the proceedings

had been in progress for more than eight years. The

reviewing Court there, as here, had taken “the

extraordinary course” of failing to remand to the

agency for further action. This Court there stated:

“Since we have found that the Commission’s

findings and order are. supported by substantial

evidence and, since there are no other meritorious

contentions raised by respondents, we think it is

time for a final disposition of the proceedings. The

judgment of the Court of Appeals is reversed; and

the cases are rem .nded with directions to affirm

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

253 (emphasis added).

Numerous cases have been disposed of by this Court

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

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

Norfolk and Western Ry., 385 U.S. 57, 75: Consolo vy.

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

O’Leary yv. Brown-Pacific-Maxon, Inc. 340 U.S. 504,

508; Federal Trade Commission v. Cement Institute,

333 U.S. 683, 730.

The record here presented is similar in all relevant

aspects to these precedents. This case requires a similar

resolution. Truly, here, justice delayed would be justice

denied.

‘Respectfully submitted,

MAURICE F. BISHOP BRYCE REA, JR.

601-09 Frank Nelson Building DONALD E. CROSS

Birmingham, Alabama 35203 700 World Center Building

918 Sixteenth Street, N.W.

Counsel for Bowman

Washington, D.C. 20006

Transportation, Inc.

SANDER W. SHAPIRO Counsel for Johnson Motor

JERRY C. PRESTRIDGE Lines, Inc.

Post Office Box 1148 CHARLES S. RHYNE

Austin, Texas 78767 COURTS OULAHAN

Counsel for Red Ball 400 Hill Building

Motor Freight, Inc. Washington, D.C. 20006

ROBERT L. JONES, JR.

412 Merchants National

Bank Building

Fort Smith, Arkansas 72901

Counsel for Lorch-Westway

Corporation, et al.

APPENDIX A

Findings of Substantial Evidence in

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

Determining Public Convenience and

Necessity.

I. Locations of Facilities of Supporting Public

Witnesses.

“Thus, the 8 remaining applicants are

supported by 482 shippers with facilities located in

the Southwest’”’ specified in the following footiote

as “‘specificaliy, 84 shippers have facilities in

Arkansas, 6 in Colorado, 84 in Louisiana, 1 in

New Mexico, 32 in Oklahoma, and 275 in Texas’;

**340 shippers in the Southeast’ specified

in the following footnote as ‘“‘Eighty-four shippers

have facilities in Alabama, 15 in Florida, 114 in

Georgia, 1 in Kentucky, 54 in Mississippi, 25 in

North Carolina, 25 in South Carolina, 17 in

Tennessee, and 5 in Virginia’;

“44, collectively, in the Middle Atlantic

and New England States” specified in _ the

following footnote as “‘Four shippers have facilities |

in Connecticut, 1 in Delaware, 3 in Maryland, 8 in

Massachusetts, 1 in New Hampshire, 9 in New

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

Rhode Island’’;

‘‘and 42 in the Midwest’ specified in the

following footnote as “Fifteen shippers have

facilities in Kansas and 27 have facilities in

_ Missouri.”

114.M.C.C. 592

(App. 122)

II. Range of Commodities Shipped by Supporting

Shippers.

“(The traffic] consists of an extremely wide

variety of commodities (the examiners categorized

the shipper evidence according to approximately

45 different commodity descriptions) including

clothing, pharmaceuticals, metal articles, leather

goods, machinery, toys, grocery and department

store items, commodities requiring refrigeration,

and furniture.”

III. Shipper Dissatisfaction with Existing Service.

A. ‘‘Approximately 650 shippers have com-

plained about inconsistent and excessive transit

times.”

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

demonstrating the undependable service they

currently receive.”

C. “About 70 of the shippers located at

points in a total of 16 States complain

collectively about certain carriers’ service

restrictions and embargoes as well as about the

outright refusals of authorized carriers to

handle traffic.”

D. “Pickup and delivery compiaints were

voiced by about 150 shippers located through-

out 18 States.”

114 M.C.C. 592

(App. 122)

114 M.C.C. 596

(App. 126)

114 M.C.C. 596

(App. 126)

114 M.C.C. 596

(App. 126)

114 M.C.C. 597

(App. 127)

peppremn rte nere to

E. “Approximately 110 shippers complain

about interline difficulties and about 200

2. shippers collectively complain about loss,

damage, tracing difficulties, and misrouting, 114 M.c.c. 597

much of which occurred in interchange (App. 127)

service.”

F. “Approximately 170 shippers located at

points in 20 of the involved States indicate

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

customers with respect to the existing service.’ (App. 127)

G. “The above-described difficulties have re-

sulted in shippers losing customers, business,

and_ short-term discounts.’’ (Approximately 80 114 M.C.C. 598

shippers) (App. 128)

IV. Economic Study, Department of Transporta-

tion, University of Houston re areas served by

applicant Johnson.

“The study develops the theses that the areas

presently served by Johnson and the areas Johnson

droposes to serve have grown significantly in

recent years; that there is substantial trade and

‘commerce between these two areas; and that

comparatively there isa paucity of single-line

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

- demonstrated growth.” (App. 122)

_V. Population Growth in States Where Supporting ‘Appe:dix F

Shippers Located. 114 M.C.C. 757

(App. 319)

APPENDIX B

Findings of Substantial Evidence in

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

Supporting Grant of the Bowman

Application.

1. ‘‘Bowman holds. . cauthority...from, to, and

between points in a territory bounded by Chicago,

Ill., and points within 35 miles of Columbus

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

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

Tuscaloosa, Ala., on the west, and points along the

eastern seaboard.”

2. “Bowman maintains 25 terminals, most of

which are located in the Southeast. It proposes to

establish [21 terminals and 3 agency stations in

the points proposed to be served in Arkansas,

Kansas, Louisiana, Mississippi, Missouri, and

Texas]. Its fleet consists of 478 tractors, including

359 sleeper cabs, and 978 trailers.” ;

3. “It proposes to render 1 or 2 day service

generally between Chattanooga ‘and Memphis,

Tenn., and Birmingham and Gadsden,...

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

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

to serve. Applicant introduced exhibits Ahowing

that on the 546 shipments moving from

its Miami to its Atlanta terminals (744 operating

miles) during a specified 1-week period in 1966,

the average transit time was 1.9 days; that on the

321 shipments moving from its Birmingham

114 M.C.C. 584

(App. 114)

114 M.C.C. 585

(App. 115)

terminal during the same period and delivered or

interlined at Charlotte (408 operating miles), the

average transit time was 1.5 days; that on 206

shipments moving from its Richmond, Va., termi-

nal to its Memphis terminal (855 operating miles)

during the same period, the average transit time

was 2.5 days; and that on 26 shipments handled

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

operating miles) during the 1l-week period, the

average transit time was 2.8 days.”

4. “...Bowmart has persuasively demonstrated a

need for its services between specified points in

Mississippi, Kansas, Missouri, Arkansas, Louisiana,

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

those points in the Southeast and East that it

presently serves.”

5. ‘Approximately 135 witnesses in 13 States

support that portion of Bowman’s application

seeking authority to serve the 10° specified

Mississippi points. Over 100 of these’ have

experienced difficulties with inadequate, inconsis-

tent. and excessive transit times. The witnesses’

transit time studies show. that between 3- and

4-day service is generally rendered on a substantial

amountgof their traffic moving between Atlanta

and major Mississippi points, with transit times

ranging between | and 7 days. From other points

in the territory Bowman presently serves, transit

times to Mississippi range from 3 to 21 days.”

6. “Approximately 25 supporting witnesses have

complained of either refusals by authorized carriers

—~

114 M.C.C. 585, 586

(App. 115, 116

114 M.C.€. 604

(App. 150)

114 M.C.C. 604-605

(App. 150-151)

to handle their traffic, and of carrier embargoes or

restrictions; and about 50 have experienced pickup

and delivery problems.”

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

way, and Ryder [Protestants] are cited for

refusing to handle a number of the supporting

shippers’ traffic to Mississippi from points in the

Southeast.”

8. ‘*...two protestants to [the Bowman] applica-

tion (Campbell and Herrin) withdrew their oppo-

sition.” ©

9. ‘Approximately 80 witnesses support the

Kansas-Misscuri portion of Bowman’s application.

Over 60 of these complain about pickup and

delivery problems, loss, damage, shortage, tracing

difficulties, misrouting, interline problems, unsuit-

able or inadequate equipment, customer com-

plaints, and lost business and penalties.”

10. {Protestants} Roadway and Transcon have

declined to handle some of the supporting

witnesses’ traffic.”

11. “Additionally, Bowman has shown that the

present and future public convenience and neces-

sity require the extension of its operations to

points in the remaining States it proposes to

serve.”

12.‘‘The evidence of the supporting witnesses

establishes a clear and convincing public need for

114 M.C.C. 605

(App. 151)

114 M.C.C. 605

(App. 151)

114 M.C.C. 605

(App. 151)

114 M.C.C. 606

(App. 152)

114 M.C.C. 606

(App. 152)

114 M.C.C. 607

(App. 153)

single-line motor carrier service between the broad

southeastern and eastern seaboard territory served

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

the Arkansas points it proposes to serve. Approx- :

imately 100 witnesses supported this portion of

Bowman’s proposal. Many expressed a need for

single-line service between the Arkansas points, on

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

Georgia, and the Carolinas (other than Birming-.

ham, Atlanta, and Charlotte) for which no such

service is available. Existing carners which hold

authority to operate between the Arkansas points

and points which Bowman presently serves are

limited territorily [sic] either with respect to the

-Arkansas points they serve or as to the territory

Bowman already serves. As a consequence, none

can provide the comprehensive single-line service

that would be offered by Bowman between the

involved Arkansas points and the territory it now

serves, and none of the remaining applicants

propose such an extensive service.”

13. ‘Similarly, the protestants are unable to

provide the full scope of the single-line services

proposed by this applicant between the Louisiana

points. ..it proposes to serve and the territory it

currently serves. Over 150 witnesses support this

portion of Bowman’s proposal, and they too have

‘demonstrated material inadequacies in the trans-

portation services they now receive.”

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

mately 3U shippers supporting this aspect of

114 M.C.C. 607-608

(App. 153-154)

114 M.C.C. 608

(App. 154)

-Bowman’s application have shown that the service

they are receiving between specified points in

Alabama and Tennessee, on the one hand, and, on

the other, New Orleans, is not adequate.”

15. “Regarding Texas, it is noted that more

witnesses from the Dallas-Fort Worth area testified

in support of Bowman’s application than any of

the other applicants. Also, witnesses from num-

erous points throughout Bowman’s authorized

territory testified in support of this portion of its

application. Many of these shippers do not

presently have single-line service to this important

area, and none of the other applicants proposes to

render the extensive single-line services to be

proffered by Bowman.”

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

quire the single-line service here authorized to be

provided by Bowman, and that the -lack of such

service has been harmful to them.”

114 M.C.C. 608

(App. 154)

114 M.C.C. 608

(App. 154)

114 M.C.C. 608

(App. 154)

APPENDIX C

Findings of Substantial Evidence in

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

Supporting Grant of the Johnson

Application.

1. ‘Johnson holds regular- and irregular-route

authority to transport principally general

commodities, with the usual exceptions. Its regular

routes extend between points in a_ territory

bounded by Boston and Worcester, Mass., and

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

the north, and Pensacola, Mobile, Pascagoula and

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

. Applicant’s irregular-route general-commodity

authority extends generally to points in New York,

New Jersey. Pennsylvania, Maryland, Virginia,

North and South Carolina, Georgia, and Florida.”

2. “Johnson proposes to operate over two

service routes, which it describes as the proposed

northern route and the proposed southern route.

The former involves _— general-commodity,

regular-route operations between Atlanta and

Dallas-Fort Worth, with service at the intermediate

points of Jackson, Monroe, and Shreveport,

restricted to traffic moving to, from, or through

Atlanta. The southern route involves the same type

of operations between New Orleans and Houston,

with service at the intermediate points of Baton

Rouge, Orange. and Beaumont, and service at

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

114 M.C.C. 586

(App. 116)

pis

to traffic moving to, from, or through Gulfport,

Miss. In other words, no service is proposed

between New Orleans and points on the southern

coute.””

3. “The stated purpose of the ... proposal is

to permit service of an ‘over-head’ nature between

points on Johnson’s present system, on the one

hand, and, on the other, points on the proposed

routes.”

4. ‘‘Applicant maintains about 35 terminals at

principal points on its routes and in its irregular

route territory. ... Proposed terminal points

include Baton Rouge, Beaumont, Dallas, Houston,

Jackson, Monroe, and Shreveport.”

114 M.C.C. 587

(App. 117)

114 M.C.C. 609

(App. i55)

114 M.C.C, 587

(App. 117)

114 M.C.C. 586-587

(App. 116-117)

5. ‘Johnson operates approximately 500 trac- -

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

tractors and 100 trailers to its fleet if its

application is granted.”

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

Louisiana, and Mississippi and points beyond is

interlined by [Johnson] mostly at New Orleans

and Mobile, with some being interlined at,Atlanta.

Under the proposal, applicant’s traffic lane pat-

terns would be revised and all traffic moving to

and from the proposed service area ... will break

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

a direct nonstop basis between Charlotte and the

seven proposed terminal points. Traffic originating

or terminating at points in Georgia, and in the

114 M.C.C. 587

(App. 117)

E77 ARR

i oyichaiieaia

Montgomery and Opelika terminal areas, and in

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

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

on a direct, nonstop dispatch between Atlanta and

the seven proposed terminal points.”

7. “Additionally, Johnson has _ revised its

operations and effective March 13, 1966, it

commenced using two-man teams which would be

utilized on a direct nonstop basis between

Charlotte and the seven proposed terminal points

here under consideration.”

8. “‘{[A]pplicant generally proposes to render

between l- and 3-day LTL service between its

authorized territory and the seven terminal points

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

816 miles between these terminals {Boston and

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

The 1,110 miles between Charlotte and Houston

would be traversed in 28 hours at a speed of 39.6

miles per hour.”

9. “Its application is supported by 236

witnesses located throughout the area it serves or

proposes to serve.”

10. ‘Their [the supporting witnesses’] _ testi-

mony establishes that the existing service on small

shipments traffic between the involved territories is

generally inadequate. Many of the supporting

witnesses validly complain with respect to lengthy

and undependable transit times; and their studies,

114 M.C.C. 587-588 *

(App. 117-118)

114 M.C.C, 611

(App. 151)

114 M.C.C. 589

(App. 119)

114 M.C.C. 609

(App.155)

considered on the whole, demonstrate that incon

sistent and excessive transit times have been

experienced on a_ substantial portion of the

involved traffic. Complaints also were voiced by

many of the shippers with respect to poor pickup

and delivery service, tracing problems, and exces-

sive loss and damage.”

11.‘“Many of the shippers’ problems can be

attributed to the existing joint-line motor ser-

vice... . Major east coast motor common carmiers

114 M.C.C. 609

(App. 155)

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

is therefore apparent that important segment ...

of the involved joint-line motor carrier system does

not oppose the Johnson application.”

12. “Of the single-line protestants which serve

between the points Johnson proposes to serve and

its present territory, Ryder does not hold

authority to serve the Dallas-Fort Worth area and

much of the Carolinas; Roadway holds authority

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

service was the subject of many of the shippers’

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

Transcon are limited to such an extent that they

’ can provide only a portion of the service proposed

by Johnson.”

114 M.C.C. 609

(App. 155)

114 M.C.C. 609

(App. 155)

APPENDIX D

Findings of Substantial Evidence in

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

Supporting Grant of the Red Bail

Application.

1. “The Southwestern applicants. Whereas the

proposals of some of the southern applicants differ

somewhat in scope, those of the southwestern

carriers are basically similar.”

2. “With respect to this latter category of

applicants, it is our opinion that the evidence of

record including the traffic volumes shown to be

moving and all other relevant factors enumerated

in this report, justifies a grant of authority to only

one of them. In deciding which is to be granted

such authority, consideration must be given to the

criteria prescribed by this Commission and the

courts for the selection of an applicant where, as

114 M.C.C. 602

(App. 132)

here, it is not feasible to grant all applications .

seeking essentially similar authority. Those criteria,

as summarized in Kroblin Refrigerated Xpress,

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

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

existing authorities and operations of the con-

sidered applicants, (2) the location of their

terminal facilities and the equipment operated by

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

tions, and (4) the carrier which produced the

evidence supporting the finding of public need. Cf.

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

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

cases cited fe (App. 132

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

operates over a much more extensive system of

routes in the Southwest than does Herrin, 114 M.C.C. 602

Strickland, or Jones;” (App. 132)

4. “The number of Red Ball terminals (92

terminals located throughout Texas, Louisiana,

Arkansas, New Mexico, Colorado, and Oklahoma)

is about three times the collective number of

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

Jones in the Southwest;” (App. 132)

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

terminals Red Ball is in a much better position to

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

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

6. ‘Red Ball would have to establish’3 additional

terminals in the Southeast and proposes to add

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

rin proposed 6 additional southeastern terminals,

the reestablishment of a terminal at Little Rock,

and would add 41 tractors, 80 trailers, and 67

trucks to its fleet, (b) Strickland proposes to

establish 4 additional southeastern terminals, and

southeastern points (Atlanta and Birmingham) and

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

kana);” (App. 132-149)

DIP rt

7. “that Red Ball presented 130 supporting

witnesses and an additional 23 witnesses specifical-

ly supported its application, whereas (a) Herrin

presented 87 witnesses and an additional 11

supported its application, (b) Strickland presented

102 shipper witnesses, and an additional 24

supported its application, and (c) Jones presented

90 witnesses and an additional 117 supported its

application;”

114 M.C.C. 603

(App. 149)

8. “Clearly, of the southwestern applicants, Red |

Ball has made the superior showing with respect to

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

it is selected to receive the authority for which a

public need has been found in this report.”

9. “Moreover, none of the other three applicants

proposes and none of the protestants (even

considering the operations authorized since the

hearing herein) is able to provide the extensive

single-line service proposed by Red Ball between

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

the other the territory Red Ball now serves.”

114 M.C.C. 603

(App. 149)

114 M.C.C. 603

(App. 149)

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

Herrin to render this service.”

(App. 150)

APPENDIX E

REPORT AND ORDER OF ICC IN HERRIN

APPENDIX G - PROTESTANTS EVIDENCE:

TRANSIT TIME STUDIES

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

Watson-Wilson Id. at 764-765 (App.

326-327)

Gordons Id. at 768 (App. 330)

Mercury Freight Id. at 771 (App. 333)

West Id. at 773 (App. 335)

GFA Id. at 775 (App. 337)

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

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

ETMF Id. at 780 (App. 342)

Transcon Id. at 782 (App. 344)

Roadway Id. at 783 (App. 345)

United Id. at 786 (App. 348)

Red Ball Id. at 787 (App. 349)

Ryder | Id. at 788-791

(App. 350-353)

Appendix G_ sets forth the evidence of

opposing carriers, as summarized by the Exam-

iners. The further summary and evaluation of this

evidence by the Commission appears at 114 M.C.C.

599 (App. 129).

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

duration unspecified.

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