Petition for Writ of Certiorari — Interstate Commerce Commission v. Allen E. Kroblin, Inc.

Supreme Court brief1954

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eR MO ahs ra Gk aiecneebra le We >, wa hs ie AN CRG we 1

Se rere ee anes eer are eee ne 2

TO GS SIAIREES SSR Ra ina are ee neti ay par oer A gy iwc 2, 28-34

RR CUE EUS CMO Seo ius Sy causa bre 5 Salah Sys eta s Bw ARTA ie 2-4

Reasons for granting the Writ .........6 00. reas 4

1. The Interstate Commerce Act, being remedial legislation,

must be liberally construed to effect its evident purpose;

and Section 203(b) (6), providing an exemption from the

general provisions of the Act, must be strictly construed. . 5

2. The Commission having consistently construed Section

203(b)(6) as not exempting motor vehicles used to trans-

port dressed poultry, its decisions to that effect are entitled

to great weight and should not be overturned unless arbi-

Cee GP NN SOU. 8 6.5 i Ce eke geev ews ts 6-9

3. The Commission’s interpretation of Section 203(b)(6) as

applied to dressed poultry is in accord with decisions of

NU ies oso eres k eSNG ae oe anal eo SOND Wha RR aera hs 9-11

4. The Commission’s interpretation is in accord with the legis-

NG, EO aes Pe es doe See EAN ae 12-22

LINE Areas wits 3) Curvy alto ne eh ORS vat ea ke Weenies aa 22

Appendix A:

(Opinion and Judgment of Court of Appeals, Eighth Circuit) 23-28

Appendix B:

(Pertinent provisions of the Statute)...................... 29-34

CITATIONS

Battaglia Common Carrier Application, 18 M.C.C. 167............ 6

Commissioner of Internal Revenue v. Hopkinson, 126 F. 2d 406... . 14

Commissioner of Internal Revenue v. Strong Manufacturing Co.,

ns WE Fics sn gure aie 4 tunis <4 3 threes oh Rees E> 14

Determination of Exempt Agricultural Commodities, 52 M.C.C. 511,

8, 9, 14, 18, 21

Fleishman Construction Co. v. United States, 270 U.S. 347........ 13

Frank Battaglia Common Carrier Application, 18 M.C.C. 167..... 6

Fruit Growers, Inc. v. Brogdex Co., 283 U.S.1.................. 21

i er i Ci CR MD yo ww ichasnwhew sess cee pas 14

as Os Se OO ee WP ee aw ee uaa eas 5, 6, 9, 11

McLean Trucking Co. v. United States, 321 U.S. 67...............

Monark Egg Corporation Contract Carrier Application, 26 M.C.C.

eau dork way oc aya a EES eLVLE NUN Une t ANS CRT RRS GES 7,9

Piedmont ¢ Northern R. Co. v. 1.C.C., 286 U.S. 299.............. 5

Texas Co. v. Carmichael, 13 F. Supp. 242....................... 14

United States v. American Trucking Associations, 310 U.S. 534.... 12

Walling v. Bay State Dredging Co., 149 F. 2d 346................ 5

NE is AAs GU WG oooh yy hs deh vee dn ees cevesabedee 11, 20

_—

Yuthe Supreme Court of the Wnited States

OctToBER TERM, 1954

No. —

INTERSTATE COMMERCE COMMISSION, PETITIONER

Vv.

ALLEN E. KRosBLIn, INC., RESPONDENT

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Petitioner, Interstate Commerce Commission, prays

that a writ of certiorari issue to review a judgment of

the United States Court of Appeals for the Eighth Cir-

cuit entered on May 11, 1954 (R-87), affirming a judg-

ment of the United States District Court for the North-

ern District of Iowa entered on June 30, 1953 (R-76).

OPINIONS BELOW

The opinion of the Court of Appeals (R-81) is re-

ported in 212 F. (2d) 555, The opinion of that Court

is attached hereto as appendix A, pp. 23 to 28, hereof.

U. S. C. 1254(1) and Rule 19, Subsection (1)(b) and

Rule 23(g), (h) of the Revised Rules of the Supreme

Court of the United States.

JURISDICTION TO REVIEW

The jurisdiction of this Court is invoked under 28

U. S. C. 1254(1) and Rule 19, Subsection (1) (b) and

Rule 23(g), (h) of the Revised Rules of the Supreme

Court of the United States.

(1)

QUESTION PRESENTED

Whether New York dressed and eviscerated poultry

constitute ‘‘manufactured’’ products of an agricultural

commodity and do not fall within the exemption in Sec-

tion 203(b) (6) of the Interstate Commerce Act (Title

49, U. S. Code 303(b)(6)), which exempts from the

provisions of the Interstate Commerce Act (except the

provisions of Section 204 thereof relating to safety

of operation of motor vehicles) ‘‘motor vehicles used in

carrying property consisting of ordinary livestock, fish

(ineluding shellfish), or agricultural (including horti-

cultural)’ commodities (not including manufactured

products thereof), if such motor vehicles are not used

in carrying any other property, or passengers, for com-

pensation.”’

STATUTES INVOLVED

These pertinent provisions of the Interstate Com-

merce Act are set forth in appendix B, pp. 28 to 34

hereof, consisting of the National Transportation Pol-

icy, Sections 203(a)(14), 203(a)(15), 203(a)(16),

203(b) (6), 206(a), 209(a), and 222(b).

STATEMENT OF THE CASE

The petitioner, Interstate Commerce Commission, is

an agency of the United States Government having been

established by an Act of Congress (49 U. 8S. Code 11)

and is vested with the duty to regulate commerce pur-

suant to the provisions of the Interstate Commerce Act

(49 U.S. Code, Chapters 1, 8, 12, 13). ”

On October 17, 1952, the Commission filed a complaint

against respondent in the United States District Court

for the Northern District of Iowa (amended January

1“Tncluding horticultural” was added by Act approved July 9,

1952 (66 Stat. L. 479).

7, 1953), alleging that it was unlawfully transporting

New York dressed and eviscerated poultry in interstate

commerce for compensation as a motor carrier without

a certificate of public convenience and necessity, a per-

mit, or any authority whatsoever, issued by the Com-

mission, in violation of Sections 206(a) and 209(a) of

said Act (49 U. S. Code 306(a), 309(a)). The relief

sought therein was to restrain and enjoin further op-

erations until such time as proper authority is obtained

from the Commission (R-3). The action was instituted

by the Commission under authority of Sections 204(a)

(6) and 222(b) of the Interstate Commerce Act (49 U.

S. Code, 304(a) (6) and 322(b) ).

Respondent’s answers (R-5 and R-7) admitted that it

was so engaged in the transportation of both New York

dressed and eviscerated poultry but denied that the

transportation was unlawful on the ground that the

commodity fell within the exemption found in Section

203(b) (6) of the Interstate Commerce Act as to ‘‘ag-

ricvitural commodities (not including manufactured

products thereof)’’ and for that reason no authority

from the Interstate Commerce Commission was re-

quired for such transportation.

After filing the suit, a pre-trial stipulation was made

and entered which set forth these agreed facts (R-8 to

11). Respondent’s shippers, who operate plants at

various places in Iowa, purchase poultry from farms

and kill and dress the poultry at their plants before

shipping it to dealers. Each plant is equipped with a

production chain upon which the fowls are placed and

killed. They are then moved on the chain through

various stages of processing which consist of removing

the feathers, singeing, rubbing and storing in a refrig-

erated room for pre-cooling to a specific temperature

—

prior to shipment. New York dressed poultry is poul-

try with the head and feathers removed. Eviscerated

poultry has the head, feet, feathers and entrails re-

moved and the liver, heart and gizzard cleaned,

wrapped and replaced in the carcass. Poultry raising is

an important segment of agriculture in the State of

Iowa and dressed poultry is a major farm product of the

state. The shipping of dressed poultry is seasonal in

nature and, with very few exceptions, all dressed poul-

try is hauled between September 1st and December 31st.

The growth of the poultry dressing plants in Iowa in

recent years has been the result of increased public de-

mands for fresh poultry as an item of food.

The suit came on for trial on January 7, 1953, at

which time the stipulation of agreed facts was pre-

sented to the Court. Briefs were filed and the hearing

of oral argument was had before the United States Dis-

trict Court on May 6, 1953, which rendered its judg-

ment for respondent (R-76) on June 30, 1953.

The matter was then appealed to the Court of Appeals

for the Eighth Circuit. Briefs were duly filed and oral

argument had on December 7, 1953.

On May 11, 1954, the Court of Appeals filed its

opinion affirming the judgment of the District Court.

The Mandate in accordance with this opinion has been

entered.

REASONS FOR GRANTING THE WRIT

Questions presented are gravely important to main-

tenance of national transportation system by motor ve-

hicles, efficient and adequate for needs of commerce,

postal service, and national defense. Congress some

twenty years ago placed motor carrier service under

regulations embodied in part II of the Interstate Com-

merce Act. It was not intended to extend the exemption

provision to transportation of favored commodities, to

the point that would effectively destroy regulation of

the motor carrier industry. The interpretation of the

exempt provisions by the court below, in effect overrules

Commission interpretation and application of those pro-

visions, which have been accepted by industry, carriers,

and courts for some 15 years, with many uncontested

prosecutions and injunctions, under Section 222(a)

and (b), (49 U. S. C. 322(a)(b)), against motor car-

riers operating contrary to the Commission interpreta-

tion and application. The interpretation of the court

below is in conflict with decisions of other circuit courts

of appeals, and, if allowed to become the final judicial

decision upon the subject, would result in restoring a

vast amount of traffic to the unregulated class, resulting

in abuses and chaos which led Congress to adopt the

original motor carrier act.

The decision of the Court of Appeals is one concern-

ing an important question of federal law which has not

been, but should be, settled by this Court (Rule 19(b),

Revised Rules of the Supreme Court). We believe

that the decision is erroneous for the following reasons.

1. The Interstate Commerce Act, being remedial legislation,

must be liberally construed to effect its evident purpose;

and Section 203(b) (6), providing an exemption from the

general provisions of the Act, must be strictly construed

This proposition is so well established as to be beyond

challenge. I. C. C. v. Weldon, 90 F. Supp. 873, 875, aff.

188 F. 2d 367, cert. den. 342 U. 8. 827; Walling v. Bay

State Dredging Co., 149 F. 2d 346; Piedmont & North-

ern R. Co. v. I. C. C., 286 U.S. 299, 311-12.

2. The Commission having consistently construed Section 203

(b) (6) as not exempting motor vehicles used to transport

dressed poultry, its decisions to that effect are entitled to

great weight and should not be overturned unless arbitrary

or clearly erroneous

This well-known rule of statutory construction was

recognized by the Court in the Weldon case, supra, and

was stated in the following language (90 F. ‘Supp. 877) :

The contemporaneous constructions placed upon

the provisions of the Interstate Commerce Act by

the Commission which possesses special compe-

tence in this field, are entitled to great weight and

respect and will not be overturned unless they are

arbitrary or plainly erroneous. New York, N. H.

& Hartford RR. Co. v. Interstate Commerce Com-

mission, 200 U. S. 361, 402; Brewster v. Gage, Col-

lector of Int. Revenue, 280 U.S. 327, 336.

In applying the above principle, the Court should

take into consideration in evaluating the agency de-

cision the following questions: (1) has the agency been

uniform in its interpretation; (2) is the interpreta-

tion new or has it been in effect for a long period and

has it been accepted by the public as being proper con-

struction; (3) is the agency decision one which was

carefully considered and is there substantial merit

to the position which the agency took; and (4) is the

decision by the agency arbitrary and capricious?

The position of the Commission that dressed poultry

is not an exempt agricultural commodity is of long

standing. The first reported decision of the Com-

mission on dressed poultry is the case of Frank Battag-

lia Common Carrier Application, reported in 18 M.C.C.

167, decided by the Commisison in May, 1939. A joint

_ eee

board consisting of officials from the States of Cali-

fornia, Washington and Oregon heard the evidence

and served upon parties to the proceeding a copy of its

proposed report and decision which was duly considered

by the Commission and adopted. The application sought

a certificate to haul butter, cheese, eggs and dressed

poultry. The joint board pointed out that if no com-

modities were involved other than unmanufactured

agricultural commodities the applicant needed no au-

thority. Although denying the application, the joint

board concluded that butter, cheese, and dressed poul-

try were manufactured commodities for which au-

thority was necessary. The position taken by the Com-

mission in that that proceeding with respect to dressed

poultry has remained unchanged for 14 years.

The next reported decision with respect to dressed

poultry was Monark Egg Corporation Contract Car-

rier Application, 26 M.C.C. 619, decided November 7,

1940, in which the Commission held that the trans-

portation of dressed poultry required authority. Fol-

lowing that decision petitions were filed with the

Commission by various persons interested in the com-

modity, including the Department of Agriculture,

asking reconsideration. The case was re-opened and

set for further hearing. On October 2, 1944, the Com-

mission, Division 5, issued a report, again holding that

dressed poultry was not an unmanufactured agricul-

tural commodity (44 M.C.C. 15).

After discussing the applicability of the exemption

to certain other commodities, the report (at pp. 19-20)

stated with respect to dressed poultry:

We found in the prior report that the term ‘‘or-

dinary livestock”’ embraced poultry as well as

eattle, horses, sheep, et cetera, but that dressed

poultry, picked but not drawn, ‘‘does not come

within the term livestock.’’ In view of the defi-

nition of ordinary livestock set forth in Section

20(11), which the legislative history above-dis-

cussed indicates should be applied also to the term

as used in Section 203(b) (6), it is apparent that

poultry in any condition is not ‘‘ordinary live-

stock’’. However, they are raised on the farm, and

clearly are included within the broader descrip-

tion ‘‘agricultural commodities.’’ It therefore be-

comes necessary to determine whether poultry

which have been killed and picked but not drawn

are unmanufactured agricultural commodities

within the meaning of the present exemption.

As in the case of shelled pecans and walnuts,

there is a complete absence of any showing of the

customs and practices obtaining in the marketing

of poultry, but certain facts in this connection are

so well known that we may take cognizance of

them for the purpose of the present determination.

It is common knowledge that, generally, farmers

do not kill and pick poultry in marketing it. Prob-

ably without exception, or at most, with rare ex-

ceptions, the commercial killing and dressing of

poultry is done by meat-packing companies or by

special poultry packers. Its subsequent transporta-

tion is under refrigeration. As such it can no longer

be considered an unmanufactared agricultural

commodity. (Emphasis added)

Later, extensive hearings were held in a proceeding

instituted by the Commission known as Determination

of Exempt Agricultural Commodities, 52 M.C.C. 511,

at which representatives of the Department of Agricul-

=_=_"

ture, a large number of states, agricultural marketing

associations, farmer associations, shippers, growers,

carriers, and other interested parties appeared and

submitted evidence. The proceeding was finally con-

cluded by a decision of the entire Commission in which

the Commission again held that dressed poultry was

not an exempt agricultural commodity.

The Commission’s interpretation has been accepted

and numerous operating authorities have been obtained

to transport dressed poultry. Carriers engaging in the

transportation of the commodity without authority

have been criminally prosecuted ‘and convicted. It is

submitted that the Commission’s interpretation meets

all of the tests recited. The Commission has been uni-

form in its interpretation ; the interpretation is of long

standing and has been accepted by the public as being

a proper construction; the decision is one arrived at

after careful consideration, and it is certainly in no

sense arbitrary or capricious. The interpretation,

therefore, should be accorded great weight.

3. The Commission’s interpretation of Section 203 (b) (6) as

applied to dressed poultry is in accord with decisions of the

courts

The views of the Commission as expressed in the two

Monark decisions, supra, were concurred in by the

United States District Court for the Western District

of Tennessee in the case of J. C. C. v. Weldon, 90 F.

Supp. 873, supra, decided in 1950, prior to the Com-

mission’s decision in the Determination proceeding,

but in substantial accord therewith. The question be-

fore the Court in the Weldon case, closely similar to the

one here considered, was whether the agricultural ex-

emption was applicable to the transportation of raw

—

shelled peanuts. The following is quoted from the

Court’s opinion (p. 875, 876) :

The provision of Section 203(b) (6) under con-

sideration is an exemption from the general terms

of the statute and as such must be strictly con-

strued. Piedmont & Northern R. Co. v. Interstate

Commerce Commission, 286 U. S. 299, 52 S. Ct.

541, 76 L. Ed. 1115.

Of course, it is a primary rule of construction

of statutes to ascertain and declare the intention

of the legislative body. United States v. Cooper

Corp., 312 U. 8. 600, 606, 61 S. Ct. 742, 85 L. Ed.

1071.

The problem is not entirely free from difficulty,

but the Court finds that Congress clearly intended,

from the language, to exclude only ‘‘agricultural

commodities’’ in their natural state. This seems

the only reasonable construction of which the

phrase of the exemption in question is susceptible.

* * * (Emphasis supplied)

Under the facts here the producer, or farmer,

parts with all of his right, title and interest in

the peanuts produced by him on delivery and sale

to the shelling plant. There must be a time when

peanuts cease to be products of the farm and are

considered manufactured articles and it seems ap-

propriate in dealing with the question here involved

to say that peanuts are a manufactured product

from the time same are sold by the farmer and

shelled at the shelling plant.

* * * Raw materials may be subject to succes-

sive processes of manufacture, each of which is

complete in itself, but several of which may be

manana

required to make the finished product. (Emphasis

supplied)

* * * Since the parenthetical phrase ‘‘not in-

cluding manufactured products thereof’’ in the

exemption was undoubtedly inserted by Congress

to express the limited scope of the term ‘‘agricul-

tural commodities’’, it naturally follows in an in-

terpretation of Section 203(b) (6), that Congress

intended to exclude from regulation only vehicles

carrying agricultural products in their natural

state and not manufactured products. (Emphasis

supplied)

The Court had this to say with respect to the Com-

mission’s interpretation (p. 877):

The contemporaneous constructions placed upon

the provisions of the Interstate Commerce Act by

the Commision which possesses special competence

in this field, are entitled to great weight and re-

spect and will not be overturned unless they are

arbitrary or plainly erroneous. New York, N. H.

& Hartford R.R. Co. v. Interstate Commerce Com-

mission, 200 U. 8. 361, 402, 26 S. Ct. 272, 50 L. Ed.

ae” >".

The decision of the District Court in the Weldon case

to the effect that vehicles used to transport shelled raw

peanuts were not within the exemption, was appealed

to the United States Court of Appeals for the Sixth

Circuit where the judgment was ‘‘affirmed upon the

grounds and for the reasons set forth in the memoran-

dum opinion of the District Court.”’ Weldon v. I.C.C.,

188 F. 2d 367. Weldon’s petition for certiorari was

denied by the Supreme Court, 342 U. 8. 827.

4. The Commission’s interpretation is in accord with the legis-

lative intent

It is the respondent’s position that the method of

processing whereby live poultry becomes dressed poul-

try does not constitute a ‘‘manufacture’’. Rigid defini-

tions of words isolated from the context of a statute

are of little if any value and may not be resorted to

where by so doing the purpose of the law would be de-

feated. The Supreme Court has made clear its attitude

toward depending upon mere definitions of words in

construing the mandates of Congress where such defi-

nitions, irrespective of their lexicographical correct-

ness, would defeat the purpose of the law itself. In the

case of United States v. American Trucking Associa-

tions, 310 U. S. 534, in which the Court had under con-

sideration the meaning of another provision of this

same Act, it said (pp. 542-544) :

In the interpretation of statutes, the function

of the courts is easily stated. It is to construe the

language so as to give effect to the intent of Con-

gress. There is no invariable rule for the discovery

of that intention. To take a few words from their

context and with them thus isolated to attempt to

determine their meaning, certainly would not con-

tribute greatly to the discovery of the purpose of

the draftsmen of a statute, particularly in a law

drawn to meet many needs of a major occupation.

There is, of course, no more persuasive evidence

of the purpose of a statute than the words by which

the legislature undertook to give expression to its

wishes. Often these words are sufficient in and of

themselves to determine the purpose of the legisla-

tion. In such cases we have followed their plain

meaning. When that meaning has led to absurd or

futile results, however, this Court has looked be-

yond the words to the purpose of the act. Fre-

quently, however, even when the plain meaning did

not produce absurd results but merely an unreason-

able one “plainly at variance with the policy of the

legislation as a whole”’ this Court has followed that

purpose, rather than the literal words. When aid

to construction of the meaning of words, as used

in the statute, is available, there certainly can be

no “rule of law’? which forbids its use, however

clear the words may appear on ‘superficial exami-

nation’. (Emphasis supplied)

There the Supreme Court emphasized that it will

look to the spirit of the law and the purpose and policy

of the legislation rather than be satisfied with mere

definitions of particular words. That this is the func-

tion of the court is made clear by the language, “even

when the plain meaning did not produce absurd results

but merely an unreasonable one ‘plainly at variance

with the policy of the legislation as a whole’ this Court

has followed that purpose, rather than the literal

words.’’? The purpose of the statute and the intent of

Congress in enacting it are controlling over the literal

meaning of the language used. This principle was

stated by the Supreme Court in Fleishman Construc-

tion Co. v. United States, 270 U. 8. 347, 360:

The strict letter of an act must, however, yield to

its evident spirit and purposes, when this is neces-

sary to give effect to the intent of Congress. Holy

Trinity Church v. United States, 143 U.S. 457, 459;

Ozawa v. United States, 260 U. 8. 178, 194.

Stated otherwise, a statute will not be held strictly to

its letter if that will defeat its intended purpose. This

principle is supported by a host of authorities, examples

of which are Commissioner of Internal Revenue v. Hop-

kinson, 126 F. 2d 406; Commissioner of Internal Reve-

nue v. Strong Manufacturing Co., 124 F. 2d 360. And

it has been held that a Court will look beyond mere

phraseology of statutes to get the substance and effect.

Texas Co. v. Carmichael, 13 F. Supp. 242; affirmed in

Graves v. Texas Co., 298 U. 8S. 393.

What, then, was the purpose of the lawmakers in

writing Section 203(b)(6) into Part II of the Inter-

state Commerce Act? An examination of the legislative

history shows beyond question, as the Commission found

in the Determination case, supra, that the ‘‘object [of

the exemption] was to help the farmer and keep him

out of any regulation whatsoever insofar as handling

unprocessed agricultural products or livestock on the

farm.”’ (52 M.C.C. 516; Cong. Record, Vol. 79, Part

II, p. 12213)

Further on this question, the Commission’s report

in the Determination case recites (52 M.C.C. 516) :

The meaning of the term ‘‘unprocessed agricul-

tural products’’ was the subject of considerable

debate on the floor of the House and was explained

in part by several members of the House Commit-

tee on Interstate and Foreign Commerce. For in-

stance, one committee member stated that the term

embraced ‘‘anything that has not been canned or

manufactured or processed’’, and that it would in-

clude cream and milk. He further agreed that the

term ‘‘includes all farm commodities produced

upon any farm in the raw state ready for market”’,

—

and stated that ‘‘on the whole, that is the way the

Commission will interpret it and undoubtedly, the

courts will give the same interpretation to it.’’

In order to meet the views of many members of

the House, the chairman of the subcommittee in

charge of the legislation moved to strike the phrase

‘“unprocessed agricultural products’’ and in lieu

thereof to substitute the words ‘‘agricultural com-

modities (not including manufactured products

thereof)’’. He explained the purpose of the pro-

posed amendment as follows:

Mr. Chairman, we have heard a good deal of

| discussion this afternoon as to what is a processed

agricultural product, whether that would include

pasteurized milk or ginned cotton. It was not

the intent of the Committee that it should include

those products. Therefore, to meet the views of

many Members we thought we would strike out

the word ‘‘unprocessed’’ and make it apply only

to manufactured products.

The sponsor of this amendment further ex-

plained that cotton in bales and cotton seed trans-

ported from gins to market or to a public ware-

house would come under the partial exemption

whereas they might not otherwise come within the

exemption ‘‘since ginning is sometimes considered

as processing.’’ The amendment was thereupon

adopted. The bill was further amended in certain

other respects not material to the matter immedi-

ately under discussion. Upon the return of the bill

to the Senate, the Chairman of the Senate Commit-

tee on Interstate Commerce explained the House

amendments generally as liberalizing the provisions

of the measure, and stated that they improved the

bill and met with his approval. The House amend-

ments were thereupon concurred in by the Senate.

The history of the legislation is not wholly clear

as to the intent of Congress, except that the partial

exemption was to aid the farmer. * * * (Empha-

sis supplied)

The legislative purpose is more completely shown by

the following quotations from the debate on the bill

when it was before the House (page 12205 of Volume

79, Part II, of the Congressional Record) :

Mr. Andresen: What is the definition of the Com-

mittee with reference to ‘‘other unprocessed farm

commodities?’’ What does that include?

Mr. Sadowski: Anything that has not been

canned or manufactured or processed ... Every-

thing that is not processed.

Mr. Andresen: This is a very important propo-

sition the gentleman is on right now. It is clear,

then, that it includes all farm commodities, pro-

duced upon any farm in the raw state ready for

market.

Mr. Sadowski: On the whole, that is the way the

Commission will interpret it. Undoubtedly, the

courts will give the same interpretation to it. (Em-

phasis supplied )

Here the intention of Congress was crystallized. There

is not a word of disagreement on this point in the de-

bates and discussion in the House, and there was subse-

quent concurrence in the Senate. The agricultural

commodities to be exempted, in the words of the man

who had charge of the bill in the House and who was a

member of the committee which had added the exemp-

tion to the Senate bill, were, ‘‘anything that has not been

canned or manufactured or processed .. . Everything

that is not processed.’’ And he stated the Commission

would interpret it and that the Courts undoubtedly

would interpret it as including ‘‘all farm commodities

produced upon any farm in the raw state ready for

market.’’ As already shown, the Commission and at

least one Federal District Court have interpreted ‘‘ag-

ricultural eommodities’’ in accordance with the state-

ments just quoted.

Before the House there ensued a lengthy discussion

of the term ‘“‘unprocessed agricultural products’, all

showing the unmistakable purpose to provide exemp-

tion for the benefit of the farmer, either when perform-

ing transportation of his products ‘‘in the raw state”

for himself or when his products are transported to

market for him by someone else. It is obvious from

the speeches made in the House that there was no in-

tention to extend such benefits to commercial truckers

or to others than farmers. This may be seen from the

following appearing at page 12213, Congressional Ree-

ord, Vol. 79, Part II:

Mr. Gillette: ... What was the object in provid-

ing an exemption for carriers of livestock exclu-

sively or farm products exclusively? Why not

regulate that? What was the object of the exemp-

tion ?

Mr. Holmes: The object was to help the farmer,

and keep him out of any regulation whatsoever

insofar as handling unprocessed agricultural prod-

ucts or livestock on the farm ... The purpose cf

this exemption is that a man who may take a baz

of beans or a bushel of potatoes or any other un-

processed agricultural commodity and put it on

his truck cannot get exemption from regulation

and then go into the general trucking business in

competition with his neighbor who has a legitimate

permit to operate as a contract carrier. (Emphasis

supplied )

In the Determination case, supra, at page 546, the

Commission pointed out that the words ‘‘ Agricultural

Commodities (not including manufactured products

thereof)’’ do not include ordinary livestock which is

separately mentioned in Section 203(b)(6). After

the amendment of Section 203(b) (6) in 1940 by adding

the word ‘‘ordinary”’ before the word ‘‘livestock’’, the

Commission followed the definition of ordinary live-

stock found in Section 20(11) of the Act reading:

The term ‘‘ordinary livestock’’ shall include all

cattle, swine, sheep, goats, horses, and mules, ex-

cept such as are chiefly valuable for breeding, rac-

ing, show purposes, or other special uses.

The Commission went on to say in the Determination

case that poultry are included in the broader descrip-

tion ‘‘agricultural comodities’’, and on page 547 we find

this conclusion :

* * * But slaughtered animals are not em-

braced in the definition of ordinary livestock and

we are impelled to conclude that the products

thereof, such as fresh meat and meat products, do

not fall within the description ‘‘agricultural com-

modities’’ as used in Section 203(b) (6). It logically

follows that neither killed poultry nor any products

thereof come within the term under consideration.

We conclude that poultry other than alive is not an

agricultural commodity within the meaning of Sec-

tion 203(b)(6). * * * (Emphasis supplied.)

It is clear that the definition of ordinary livestock in

Section 20(11) of the Act excludes poultry. Poultry

is not ordinary livestock, and since it was not specifically

exempted in the Act by name, the only language under

which it might be included within the exemption was

the term ‘‘agricultural commodities.’’ The Commis-

sion has so interpreted its status, which it could very

logically do on the theory that if Congress intended live

farm animals to be exempt it intended live poultry to

be exempt. If Congress had intended slaughtered farm

animals to be exempt, it would not have stopped by

exempting ordinary livestock but would have exempted

the meat products thereof. Obviously, therefore, Con-

gress did not intend to exempt the meat products of

ordinary livestock. By the same token, if Congress did

not intend to exempt slaughtered animals and meat

products, it logically follows that it did not intend to

exempt killed and dressed poultry. Surely Congress

did not intend to give the poultry packers advantages

which it had not given meat packers.

The Commission, recognizing and accepting the Con-

gressional intent to aid the farmer, by interpretation

placed live poultry within the exemption as being an

‘agricultural commodity”’’. It submits that the exemp-

tion of dressed poultry would be an unwarranted exten-

sion of the Commission’s interpretation and at variance

with the Congressional intent. If the Court’s interpre-

tation as to dressed poultry stands, what is to prevent

the extension of the exemption to embrace all meat

products and bring the gigantic packing industry within

the exemption, destroying the value of hundreds of

certificates and permits as well as bringing chaos and

instability to the packing industry? At least so far it

has not been contended that a beef carcass or the meat

products of slaughtered farm animals are within the

exemption, or that they are agricultural commodities

simply because the animals were raised on the farm.

Yet cattle and hogs are products of the farm just as is

poultry. The principal difference between the two is

the size of the animals and perhaps the degree of

processing occasioned by the size of the animals. As the

Court said in the Weldon case, supra, under which it

held raw shelled peanuts to be a manufactured product:

There must be a time when peanuts cease to be

products of the farm and are considered manufac- —

tured articles and it seems appropriate in dealing

with the question here involved to say that peanuts

are a manufactured product from the time same are

sold by the farmer and shelled at the shelling plant.

There would seem to be no good reason to con-

clude that some later treatment, or process, such as

the making of peanut butter or confections should

be the criterion in determining when a product of

the soil is transformed into a manufactured item.

By the same token, there must be a logical point at

which the very important benefits of regulation come

into play with respect to the poultry packing industry

and the Commission submits that there is no more

logical point than the point at which the farmer’s inter-

est in the commodity stops and the interests of the meat

packer and the commercial trucker begin.

As has been pointed out herein, the Commission’s

interpretation that dressed poultry is not exempted

under the terms of Section 203(b)(6) has stood for

fourteen years. Despite the Commission’s position,

Congress has not changed the Act to upset that position,

although the exemption has been amended three times

since the Commission’s original decision on dressed

poultry. The latest amendment was in 1952 at which

time ‘‘horticultural’’ commodities were included. That

change was made after the Commission had held in the

Determination case that nursery stock, flowers, and

bulbs were not agricultural commodities. The fact that

Congress has not taken corresponding action to over-

come the Commission’s position on dressed poultry

would seem to indicate that the Commission’s interpre-

tation has met with Congressional approval.

The Commission submits that its interpretation that

dressed poultry is a manufactured product is logical

and sound and is in accord with the standards enunci-

ated by the Supreme Court in the case of Fruit Growers,

Inc. v. Brogdex Co., 283 U. 8. 1, cited in the District

Court’s opinion (R. 25). Applying those standards, the

act of converting a live chicken to a dressed product

must be considered as one of manufacturing. Such a

conversion includes many pronounced changes in the

form, qualities and properties of the chicken; particu-

larly is this evident when one envisions the change from

a commodity transported in coops in open trucks to a

highly perishable product requiring the use of refrig-

eration for its transportation.

The Commission also submits that an interpretation

contrary to the one made by it would exempt large com-

mercial truckers of dressed poultry from the regulatory

—

provisions of the statute as to operating authority (49

U.S. Code 306, 309), rates (49 U.S. Code 317, 318), and

insurance (49 U.S. Code 316), would be contrary to the

legislative intent in enacting the exemption provisions,

and would serve to defeat the National Transportation

Policy.

The National Transportation Policy, the Supreme

Court has said, is ‘‘the Commission’s guide to the public

interest.’’ McLean Trucking Co. v. United States, 321

U.S. 67, 82. The Commission and the Courts are re-

quired to administer the Interstate Commerce Act in

accordance with that policy. When it is so admin-

istered, and Section 203(b) (6) is given the interpreta-

tion that the Commission submits Congress intended,

the Commission believes the conclusion must be that

respondent’s transportation of dressed poultry was not

and is not within the partial exemption provided by the

said Section.

CONCLUSION

For the reasons stated herein, it is respectfully sub-

mitted that this petition for the writ of certiorari should

be granted.

Epwarp M. Rerpy,

General Counsel,

Interstate Commerce Commission.

ALLEN CRENSHAW,

Associate General Counsel.

APPENDIX A

The opinion of the Court of Appeals dated May 11,

1954, from which this writ is sought reads as follows:

Unirep States Court or APPEALS FOR THE EIGHTH

CIRcUIT

No. 14,921

INTERSTATE COMMERCE COMMISSION, APPELLANT

vs.

ALLEN E. KRoBiiIn, INCORPORATED, APPELLEE

Appeal from the United States District Court for the

Northern District of Iowa

[May 11, 1954]

Asa J. Merrill, Attorney, Interstate Commerce Com-

mission (James A. Murray and Donald R. Partney on

the brief), for Appellant.

David Axelrod for Amicus Curiae, David Axelrod

and Car1S. Steiner, in support of the position of Appel-

lant.

Craig H. Mosier (Mosier & Mosier on the brief), for

Appellee.

Donald A. Campbell, Attorney, Department of Agri-

culture (Neil Brooks, Associate Solicitor, on the brief),

for Amicus Curiae, the Secretary of Agriculture of the

United States, in support of the position of Appellee.

Before SANBORN, WooprovuGH and JOHNSEN, Circuit

Judges

JOHNSEN, Circuit Judge:

The Interstate Commerce Commission sought to en-

join Allen E. Kroblin, Inc., an Iowa trucking corpora-

; a

tion, from hauling dressed poultry * in interstate com-

merce, because it had no certificate of convenience and

necessity from the Commission, 49 U.S. C. A. §§ 306 and

309. The District Court denied the injunction and

dismissed the suit, and the Commission has appealed.

The basis of the trial court’s action was its considered

view that the hauling of dressed poultry was a hauling

of an agricultural commodity, and that the operation

therefore was exempt from the certificating require-

ments of Part II of the Interstate Commerce Act, 49

U. S. C. A. §§ 301 et seq., under the provision of

§ 303(b) (6) that ‘‘ Nothing in this chapter, except the

provisions of section 304 of this title relative to qualifica-

tions and maximum hours of service of employees and

safety of operation or standards of equipment shall be

construed to include * * * (6) motor vehicles used

in carrying property consisting of ordinary livestock,

fish (including shell fish), or agricultural (including

horticultural) commodities (not including manufac-

tured products thereof), if such motor vehicles are not

used in carrying any other property, or passengers, for

compensation.”’

In its resolution of whether dressed poultry repre-

sented an agricultural commodity or constituted ‘‘manu-

factured products thereof’’, the court considered the

question on the basis of the legal, the legislative, and the

industrial realities involved, taking into account the

general concept and the decisional definition existing

1 There was a stipulation that the poultry being hauled consisted

of New York dressed poultry and eviscerated poultry. New York

dressed poultry, according to the definition of the industry, is

poultry from. which the head and feathers have been removed and

sometimes #lso the feet. Eviscerated poultry is poultry from which

the head, feet, feathers and entrails have been removed, and the

liver, heart and gizzard of which have been cleaned, wrapped and

replaced in the carcass.

as to the term ‘‘manufacture’’, the indicated purpose

of § 303(b) (6) reflected in its legislative history and

given confirmation in the consistent treatment by Con-

gress of the attempts made from time to time to get the

language of the section changed, and the industrial fact

that the exemption was not a matter of favor to truck

operators but of policy toward farmers, in the friendly

concern of Congress for agriculture and its inherent

problems.

All of this was exhaustively covered in a 30-page

printed opinion prepared by the court and published in

113 F. Supp. 599. That opinion is so complete—in its

searching-out of the legislative history, its compiling of

the relevant decisions, and its detailing of the attempts,

thwartings and shiftings that have occurred in the Com-

mission’s treatment of the exemption from the aspect

of motor-carrier significance and not of agricultural

object *—that any discussion by us would only involve

a repetition of this assembled material and a duplication

of substantial publication expense. We agree fully

with the views of the District Court and, in the situation

thus existing, we affirm the judgment upon the basis of

the court’s opinion, 113 F. Supp. 599.

If we were to undertake to add a word, it would be

simply to emphasize the inescapable fact that, when

Congress, in its enactment of § 303(b), chose to change

the language of the exemption here involved, as it had

2 Section 303(b) contains other special exemptions for the benefit

of agriculture, as to which the Commission similarly has attempted

to make a narrow, rigid construction. Thus, in Interstate Commerce

Commission v. Jamestown Farmers, U. F. Co-op. T. A., 8 Cir., 151

F.2d 403, we rejected the Commission’s construction of the exemp-

tion as to motor vehicles controlled and operated by a farmers’ co-

operative association, under § 303(b) (5), as not being in accord with

the legislative intent.

been originally drafted and recommended by Charles F.

[Joseph B.] Eastman, then Federal Coordinator of

Transportation and long a member of the Interstate

Commerce Commission, from one for motor vehicles

used ‘‘exclusively in carrying * * * unprocessed agricul-

tural products’’, to one for motor vehicles used ‘‘in car-

rying * * * agricultural commodities (not including man-

ufactured products thereof), if such motor vehicles are

not used in carrying any other property, or passengers,

for compensation,’’ the result necessarily was to put

processed agricultural commodities, not rising to the

state of a manufactured product, in the same class with

unprocessed agricultural commodities, for purposes

of the exemption.

Also, the statements made from the legislative floor,

on which the amending action was predicated, that it

was desired to make certain that pasteurized milk and

ginned cotton would be left outside the certificating

requirements of the Act, necessarily implied a recogni-

tion that, in the realities of agricultural marketing and

distribution, certain processing incidents were inherent

in or commercially attendant upon the existence of an

outlet for the farmer, at a local or relatively local level,

for various of his commodities, as a step in the chan-

nelizing of them into their natural-commodity market,

and that the degree of freedom and flexibility allowed

in the further transportation of such processed com-

modities, not reaching a manufactured state, was as

much and as directly linked with the ability of the

farmer to sell these commodities conveniently or to

receive an advantageous price for them as in the case of

unprocessed agricultural commodities. In other words,

Congress obviously intended that, as a matter of rela-

| cncrr

tionship to the agricultural economy, the accomplishing

of a distribution of processed agricultural commodities,

not constituting manufactured products, should, within

the necessities or practicalities of a marketing of them

as such, be made to have no more transportational im-

pact upon the farmer than the marketing of his un-

processed commodities.

And, within the realities of marketing and distribut-

ing poultry, the dressing thereof at the local market

level would seem to be no more of a step in the dispos-

ing of it as poultry than would the pasteurizing of milk

or the ginning of cotton in disposing of them as milk and

cotton. Certainly, no less could hardly be done to make

practicable the hauling of poultry as such, for natural

food purposes, than a removing of the head and feath-

ers thereof. Nor is it claimed here that there is any

difference between New York dressed poultry and

eviscerated poultry in relation to the question of manu-

factured products. The position of the Commission in

its naked effect—though not thus baldly phrased—is

simply that, as a matter of giving motor-carrier regula-

tion as full a scope as possible, a chicken should be re-

garded as being converted into a manufactured product

whenever its head has been cut off.* Neither the lan-

guage nor the spirit of the agricultural exemption war-

rants us in adopting any such artificial concept and

curb in the realities of marketing agricultural com-

modities.

* The statistics of the Department of Agriculture show that poul-

try is the third highest source of gross income to farmers in the field

of agriculture. Poultry and Egg Statistics (October, 1953), U. S.

Department of Agriculture, Production and Marketing Administra-

tion, Poultry Branch, pp. 17-18.

—

It may incidently be noted that the Secretary of Agri-

culture takes the position that the Commission’s con-

struction and application of the agricultural exemption

are untenable, and that both in the trial court and here

he has appeared as amicus curiae, in opposition to the

Commission’s views. Representatives of various cer-

tificated trucking interests have of course also appeared,

as amicus curiae in support of the Commission’s

position.

Affirmed.

JUDGMENT

This cause came on to be heard on the record from

the United States District Court for the Northern Dis-

trict of Iowa, and was argued by counsel.

On Consideration Whereof, it is now here ordered

and adjudged by this Court, that the judgment of the

said District Court, in this cause, be, and the same is

hereby, affirmed.

May 11, 1954.

Clerk, U. S. Court of Appeals, Eighth Circuit.

APPENDIX B

PERTINENT PROVISIONS OF THE STATUTE

Declaration of policy:

[Added September 18, 1940.] [U. S. Code, title

49, notes preceding secs. 1, 301, and 901.] It is

hereby declared to be the national transportation

policy of the Congress to provide for fair and im-

partial regulation of all modes of transportation

subject to the provisions of this Act, so adminis-

tered as to recognize and preserve the inherent ad-

vantages of each; to promote safe, adequate, eco-

nomical, and efficient service and foster sound

economic conditions in transportation and among

the several carriers ; to encourage the establishment

and maintenance of reasonable charges for trans-

portation services, without unjust discriminations,

undue preferences or advantages, or unfair or de-

structive competitive practices; to cooperate with

the several States and the duly authorized officials

thereof ; and to encourage fair wages and equitable

working conditions ;—all to the end of developing,

coordinating, and preserving a national transpor-

tation system by water, highway, and rail, as well

as other means, adequate to meet the needs of the

commerce of the United States, of the Postal Serv-

ice, and of the national defense. All of the provi-

sions of this Act shall be administered and enforced

with a view to carrying out the above declaration of

policy.

Section 203(a) (14) of the Interstate Commerce

Act provides:

The term ‘‘common carrier by motor vehicle”’

means any person which holds itself out to the gen-

eral public to engage in the transportation by motor

vehicle in interstate or foreign commerce of pas-

sengers or property or any class or classes thereof

for compensation, whether over regular or irreg-

ular routes, except transportation by motor vehicle

by an express company to the extent that such

transportation has heretofore been subject to part

I, to which extent such transportation shall con-

tinue to be considered to be and shall be regulated

as transportation subject to part I.

See. 203 (15) The term ‘‘contract carrier by

motor vehicle’? means any person which, under

individual contracts or agreements, engages in the

transportation (other than transportation referred

to in paragraph (14) and the exception therein) by

motor vehicle of passengers or property in inter-

state or foreign commerce for compensation.

Section 203 (16) The term ‘‘motor carrier’’ in-

cludes both a common carrier by motor vehicle and

a contract carrier by motor vehicle.

Section 203(b)(6) Nothing in this part, except

the provisions of section 204 relative to qualifica-

tions and maximum hours of service of employees

and safety of operation or standards of equipment

shall be construed to include * * * (6) motor

vehicles used in carrying property consisting of

ordinary livestock, fish (including shell fish), or

agricultural (including horticultural)* commodi-

ties (not including manufactured products there-

of), if such motor vehicles are not used in carrying

any other property, or passengers, for compensa-

Sie: FF

Sec. 206 (a) (1) Except as otherwise provided

in this section and in section 210a, no common ear-

rier by motor vehicle subject to the provisions of

this part shall engage in any interstate or foreign

operation on any public highway, or within any

reservation under the exclusive jurisdiction of the

United States, unless there is in force with respect

to such carrier a certificate of public convenience

and necessity issued by the Commission authorizing

such operations: Provided, however, That, subject

*“Tneluding horticultural” was added by Act approved July 9,

1952 (66 Stat. L. 479).

to section 210, if any such carrier or predecessor

in interest was in bona fide operation as a common

carrier by motor vehicle on June 1, 1935, over the

route or routes or within the territory for which

application is made and has so operated since that

time, or if engaged in furnishing seasonal service

only, was in bona fide operation on June 1, 1935,

during the season ordinarily covered by its opera-

tion and has so operated since that time, except in

either instance as to interruptions of service over

which the applicant or its predecessor in interest

had no control, the Commission shall issue such

certificate without requiring further proof that

public convenience and necessity will be served by

such operation, and without further proceedings,

if application for such certificate is made to the

Commission as provided in paragraph (b) of this

section and within one hundred and twenty days

after this section shall take effect, and if such car-

rier was registered on June 1, 1935, under any code

of fair competition requiring registration, the fact

of registration shall be evidence of bona fide opera-

tion to be considered in connection with the issuance

of such certificate. Otherwise the application for

such certificate shall be decided in accordance with

the procedure provided for in section 207 (a) of this

part and such certificate shall be issued or denied

accordingly. Pending the determination of any

such application the continuance of such operation

shall be lawful: And provided further, That this

paragraph shall not be so construed as to require

any such carrier lawfully engaged in operation

solely within any State to obtain from the Commis-

—

sion a certificate authorizing the transportation by

such carrier of passengers or property in interstate

or foreign commerce between places within such

State if there be a board in such State having au-

thority to grant or approve such certificates and if

such carrier has obtained such certificate from such

board. Such transportation shall, however, be

otherwise subject to the jurisdiction of the Com-

mission under this part.

Sec. 209(a) (1) . Except as otherwise provided in

this section and in section 210a, no person shall

engage in the business of a contract carrier by

motor vehicle in interstate or foreign commerce on

any public highway or within any reservation

under the exclusive jurisdiction of the United

States unless there is in force with respect to such

carrier a permit issued by the Commission, au-

thorizing such person to engage in such business;

Provided, That, subject to section 210, if any such

carrier or a predecessor in interest was in bona

fide operation as a contract carrier by motor vehicle

on July 1, 1935, over the route or routes or within

the territory for which application is made and has

so operated since that time, or if engaged in fur-

nishing seasonal service, only, was in bona fide

operation on July 1, 1935, during the season ordi-

narily covered by its operations, except in either

instance as to interruptions of service over which

the applicant or its predecessor in interest had no

control, the Commission shall issue such permit,

without further proceedings, if application for such

permit is made to the Commission as provided in

paragraph (b) of this section and within one hun-

dred and twenty days after this section shall take

effect and if such carrier was registered on July 1,

1935, under any code of fair competition requiring

registration, the fact of registration shall be evi-

dence of bona fide operation to be considered in

connection with the issuance of such permit. Other-

wise the application for such permit shall be de-

cided in accordance with the procedure provided

for in paragraph (b) of this section and such per-

mit shall be issued or denied accordingly. Pend-

ing determination of any such application the con-

tinuance of such operation shall be lawful. Any

person, not included within the foregoing pro-

visions of this paragraph, who or which is engaged

in transportation as a contract carrier by motor

vehicle when this section takes effect, may continue

such operation for a period of one hundred and

twenty days thereafter without a permit and, if

application for such permit is made within such

period, the carrier may, under such regulations as

the Commission shall prescribe, continue such

operation until otherwise ordered by the Commis-

sion: Provided further, That nothing in this part

shall be construed to repeal, amend, or otherwise

modify any Act or Acts relating to national parks

and national monuments under the administrative

jurisdiction of the Secretary of the Interior, or

to withdraw such authority or control as may by

law be held by the Secretary of the Interior with

respect to the admission and operation of motor

vehicles in any national park or national monu-

ment of the United States.

ee AT llee ac

Section 222 (b) If any motor carrier or broker

operates in violation of any provision of this part

(except as to the reasonableness of rates, fares, or

charges and the discriminatory character thereof),

or any rule, regulation, requirement, or order there j

under, or of any term or condition of any certificate

or permit, the Commission or its duly authorized

agent may apply to the district court of the United

States for any district where such motor carrier 0 ;

broker operates, for the enforcement of such pro--

vision of this part, or of such rule, regulation, re-

quirement, order, term, or condition ; and such cou :

shall have jurisdiction to enforce obedience thereto

by a writ of injunction or by other process, manda-

tory or otherwise, restraining such carrier of

broker, his or its officers, agents, employees, and |

representatives from further violation of such pro 4

vision of this part or of such rule, regulation, re-

quirement, order, term, or condition and enjoin-

ing upon it or them obedience thereto. ;

YU. S. GOVERNMENT PRINTING OFFICE: 1954 3086731

INDEX

Page

Opinions below

Jurisdiction 1

Question Presented 1

Statute Involved s ‘ 2

Statement 2

Argument 3

Appearance 12

1. The legistlative history of the exemption for agricultural

commodities manifests the Congressional purpose to

exempt from commission regulation dressed poultry _.... 4

2. The decision by the Court of Appeals in this case is con-

sistent with the prior Court decisions 8

8. There is no persuasive administrative construction by the

commission of the act which should influence the Court in

determining the meaning of the agricultural exemption

in the act. 10

CITATIONS

Cases Page

Anheuser-Busch Ass’n. v. United States, 207 U. S. 556 ................ 8, 9

Carey v. Donohue, 240 U.S. 430, 437 7

Davies Warehouse Company v, Bowles, 321 U.S. 144, 156 ............ 11

Determination of Exempt Agricultural Commodities, 52 M.C.C.

511, 523-524 5, 7, 10

Florida Gladiolus Grower’s Ass’n. v. United States and Interstate

Commerce Commission (S.D. Fla.), No. T-2095 9

Frazee v. Moffit, 18 Fed. 584 (C.A. 2) ....... 8

Fruit Growers, Inc, v. Brodex Co., 283 U.S. 1, 11- 13 a trap aie erate 8

Hartranft v. Wiegmann, 121 U.S. 609, 615

Interstate Commerce Commission v. Dunn, 166 F. 2d 166 (C.A. 5)..

Interstate Commerce Commission v. Love, 77 F. Supp. 63 (E.D.,

La.) affirmed, 172 F, 2d 224 (C.A. 5) gy

Interstate Commerce Commission v. Service Trucking Co., Inc.

186 F. 2d 400, 402 (C.A. 3) 9, 11

Interstate Commerce Commission v. Weldon, 90 F. Supp. 873,

‘ 875 (W.D. Tenn.) 10

Interstate Commerce Commission«v, Yeary Transfer Co., Inc

202 F. 2d 151 9, 10

Louisville & N.R. Co. v. United States, 282 U.S. 740, 759. ........ 11

Monark Egg Cases, 26 M.C.C. 615, 44 M.C.C. 15 10, 11

Neuberger v. Commissioner, 311 U.S. 83, 88-89 11

Norwegian Nitrogen Co. v. United States, 288 U.S. 294, 326 ........ 11

Social Security Board v. Nierotko, 327 U.S. 358, 369-870 ............ 11

United States v. Dudley, 174 U.S. 670 8

United States v. Idaho, 298 U.S. 105 11

“Weldon v. Interstate Commerce Commission, No. 11,247 (C.A. 6)... 10

(I) e

Others

H. Rep. No. 1645, 74th Cong., 1st Sess. ........

79 Cong. Rec. 12196, 12197, 12218, 12205 occ eee eeeeeeeeeee

Ee UN: NII SUMMED ic csc apae bce hb eed dacolspauiasitns Cob dedkebeoen snicasaoupiccaansboouniedl

Judkins, Principles of Darying, p. 159, 167 ~.......000.0.........

Larson, Agricultural Marketing, p. 241, 283-287

Marketing Margins and Costs for Dairy Products, Bulletin No.

986 -(Nov. 1946), p. 9-10 ...

Marketing of Cotton in Producers’ Local Markets, Cotton Branch

(Sept. 1949), p. 1, 8, 9, 24, 25, 26, 33, 34

Marketing Practices in Producers’ Local Cotton Markets, (May

1938) p. 6, 9, 12, 14-16, 28. 002...

Omnibus Transportation Legislation, ...................... :

76th Cong., 3rd Sess.; S. 2357, 82nd Cong., 2d Sess.; S.

Rep. No. 1615, 82nd Cong., 2d Sess.; H. Rep. No. 2175,

82nd Cong., 2d Sess.

—

In the Supreme Court of the Hnited States

OCTOBER TERM, 1954

NO. 264

INTERSTATE COMMERCE COMMISSION, Petitioner

ALLEN E. KROBLIN, INC.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Eighth Circuit (R.81) is reported in 212 F. 2d 555. The

opinion of the United States District Court for the North-

ern District of Iowa (R. 13-71) is reported in 113 F. Supp.

599.

JURISDICTION

The judgement of the United States Court of Appeals

for the Eighth Circuit was entered on May 11, 1954 (R. 81).

The petition for a writ of certiorari was filed August 6, 1954.

The jurisdiction of this Court is invoked under 28 U. S. C.

Sec. 1254(1).

QUESTION PRESENTED

Whether the statutory exemption in Sec. 203(b) (6) of

the Interstate Commerce Act (49 U.S.C. 303(b) (6) — for

motor vehicles used in carrying agricultural commodities

(not including manufactured products thereof) — is applic-

(1)

—

(2)

able to motor vehicles carrying New York dressed and evis-

cerated poultry.

STATUTE INVOLVED

The pertinent statutory provision is Sec. 208(b) (6) of

the Interstate Commerce Act (52 Stat. 1237, 54 Stat. 921,

66 Stat. 479; 49 U.S.C. Sec. 303(b) (6)):

“Nothing in this part, except the provisions of section

204 relative to qualifications and maximum hours of

service of employees and safety of operation or standards

of equipment shall be construed to include * * * (6)

motor vehicles used in carrying property consisting of

ordinary livestock, fish (including shell fish), are agri-

cultural (including horticultural) commodities (not in-

cluding manufactured products thereof), if such motor

vehicles are not used in carrying any other property, or

passengers, for compensation * * * .”

STATEMENT

The Interstate Commerce Commission initiated this case

on October 17, 1952, in the United States District Court for

the Northern District of Iowa, Eastern Division, under the

provisions of Secs. 204(a) (6) and 222(b) of Part II of the

Interstate Commerce Act (49 U.S.C. Secs. 304(a)(6) and

322(b)), to enjoin the defendant from transporting, for

compensation on public highways, dressed poultry in inter-

state commerce by motor vehicles until it procures a certifi-

cate of public convenience and necessity from the Commission

(R. 1-4). The answer by the defendant, Kroblin, alleged,

inter alia, that its motor vehicles carrying-dressed poultry

are exempt from regulation under Sec. 203(b) (6) of sii II

of the Interstate Commerce Act (R. 5-6).

The parties stipulated as to all of the facts (R. 8-11), and

the relevant facts are as follows:

The poultry transported by Kroblin consists of New

_York dressed poultry, i.e., poultry with the head and feathers

(3)

removed and in some instances with the feet also removed,

and eviscerated poultry, i.e., poultry with the head, feet

feathers, and entrails removed and with the liver, heart, and

gizzard cleaned, wrapped, and replaced in the carcass (R. 8-9).

The poultry is killed and dressed at various plants in the

state of Iowa. Each plant is equipped with a production

chain upon which the fowls are placed and killed. They are

then moved on the chain through the various stages of “pro-

cessing” (R. 8), which consists of “removing the feathers,

singeing, rubbing, and storing in a refrigerator room for

precooling to a specific temperature prior to shipment”

(R. 8-9).

The defendant, Kroblin, would, “if trial were had, pro-

duce a marketing specialist of the United States Department

’ of Agriculture who would qualify as a specialist in the field

of poultry husbandry,” and who would testify that New York

dressed and eviscerated poultry are “agricultural commod-

ities” and not “manufactured products” (R. 9-11).

The District Court, in an exhaustive 30-page printed

opinion, reviewed the legislative history and the relevant

decisions and held that dressed poultry is an agricultural

commodity and not a manufactured product within the mean-

ing of Sec. 203(b)(6) of the Interstate Commerce Act (R.

18-71). The Court of Appeals affirmed “upon the basis” of

the lower courtt’s opinion (212 F. 2d at p. 556) and, in addition,

the Court set forth additional views which compelled the

conclusion that dressed poultry is an agricultural commodity.

| The Secretary of Agriculture of the United States par-

; ticipated in the proceedings in the District Court and in the

Court of Appeals, amicus curiae, in support of the position

that dressed poultry is an agricultural commodity.

ARGUMENT:

The decision below affirming the findings of fact, con-

clusions of law, and opinion by the District Court is clearly

(4)

correct. The petition for a writ of certiorari presents no

question warranting review by this Court.

1. The legislative history of the exemption for agricul-

tural commodities unequivocally manifests the Congressional

purpose to exempt from Commission regulation as to rates,.

routes, and territories motor vehicles carrying processed agri-

cultural commodities, such as dressed poultry. The statu-

tory term “agricultural commodities (not including manu-

factured products thereof)”! in Sec. 203 (b)(6) of the

Interstate Commerce Act was carefully selected by the Con-

gress. The original bill (S. 1629, 74th Cong., Ist Sess.) con-

tained no specific exemption for motor vehicles used in carry-

ing agricultural commodities. After lengthy hearings, the

House Committee on Interstate and Foreign Commerce in-

serted an exemption for motor vehicles used “exclusively in

carrying ljvestock or unprocessed agricultural products”

(emphasis supplied; H. Rep. No. 1645, 74th Cong., 1st Sess.,

p. 1).. Some Congressmen expressed the view in debate on

the bill that the purpose of the amendment in this form was

to benefit the farmer and the small private trucker who

carried unprocessed agricultural products exclusively in the

raw state ready for market (79 Cong. Rec. 12196, 12197,

12213, 12205). The Commission, in its petition for a writ of

certiorari, pp. 14-18, has quoted profusely from the debate in

Congress with respect to this earlier proposal for “unprocessed

agricultural products.” But that narrow, restricted exemp-

tion was not enacted. In further debate on the bill, other

members of the House stated that the marketing of agricul-

tural products even though subjected to processing should

be free from regulation; and in order to avoid any doubt

with respect to the intendment for a general and broad cover-

age of the exemption, an amendment was proposed and adopted

so as to make ithe exemption applicable with respect to “agri-

1 The phrase “including horticultural” was added following the

term “agricultural” by the Act of July 9, 1952 (66 Stat. 479).

(5)

cultural commodities (not including manufactured products

thereof).”? The author of the amendment explained:

* * * we have heard a good deal of discussion this after-

noon as to what is a processed agricultural product,

whether that would include pasteurized milk or ginned

cotton. It was not the intent of the committee that

it should include those products. Therefore, to meet the

views of many Members we thought we would strike out

the word “unprocessed” and make it apply only to manu-

factured products.*

' The author of the amendment further explained that

the term “manufactured products” does not include “cotton

in bales or cottonseed transported from the ginneries to the

market.”* The action of Congress in substituting the broad

phrase “agricultural commodities (not including manufactured

products thereof)”® for the narrow phrase “unprocessed

agricultural commodities”® unequivocally reveals the Congress-

ional purpose to exempt motor trucks carrying processed

agricultural commodities. The Commission, in its decision

in 1951 in the Determination of Exempt Agricultural Com-

modities, 52M. C. C. 511, 523-524, expressly recognized that

the exemption was broadened to include processed agricultural

commodities, stating:

* * * Although the object of the partial exemption as

originally framed was to aid the farmer in marketing

his products, the substitution of the present language

for the words “unprocessed agricultural products” clear-

ly resulted in a broadening of the exemption. That this

is so was made plain by the chairman of the subcom-

mittee sponsoring the amendment when he stated that

pasteurized milk and ginned cotton were intended to come

within the partial exemption.

——

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We think the commodities mentioned (ginned cotton

and pasteurized milk) were intended to be illustrative

of the types of processing permissible under the partial

exemption as now phrased.

The two examples used on the floor of the House to ex-

plain the purpose of this liberalizing amendment — ginned

cotton and pasteurized milk — refute any contention that the

exemption is applicable only to agricultural commodities in

their natural state as produced on farms and as have been

subjected to such processing or treatment as is customarily

performed on farms. Ginning cotton and pasteurizing milk

‘are not operations customarily performed on farms.

In addition, the explanatory examples given on the floor

of the House show that the exemption is applicable to the

transportation of processed agricultural commodities even

though the farmer no longer owns the processed commodity.

For example, pasteurized milk is one of the agricultural com-

modities which is to be included within the exemption, and

except for a small percentage of pasteurized milk which is

handled by producer-distributors, the farmer sells his milk

before it is pasteurized.“ Also, in the case of ginned cotton,

in some areas the farmer sells the cotton prior to ginning,’

in which case the farmer never owns or transports the ginned

’ gotton. And when the farmer retains ownership of the cot-

ton until after it is ginned, it is a general or universal prac-

tice for the farmer to sell his ginned cotton to a local buyer.

* Marketing Margins and Costs for Dairy Products, U. S. Depart-

ment of Agriculture, Bureau of Agricultural Economics, Technical

Bulletin No. 936 (Nov. 1946), pp. 9-10; Larson, Agricultural Marketing

(1951), pp. 283-287; Judkins, Principles of Dairying (1924), pp 159-167;

Determination of ‘Exempted Agricultural Commodities, 52 M. C. C. 511,

528-524.

7 Larson, Agricultural Marketing (1951), p. 241,

(7)

e. g., the ginner,® and therefore the ginned cotton is trans-

ported by middlemen and not by farmers. In the light of

this compelling legislative history, the Commission has re-

jected its prior view — that the agricultural exemption is

applicable only to agricultural commodities in their natural

state as produced on farms and as have been subjected to

such processing or treatment as is customarily performed on

farms (generally referred to as the “channel of commerce”

principle) — and the Commission now concedes that the

agricultural exemption applies to agricultural commodities

processed on or off of the farm and either before or after

the farmer has sold the agricultural commodity. Determin-

ation of Exempted Agricultural Commodities, 52 M. C. C.

511, 522,525.

The legislative history clearly reveals the Congressional

purpose to establish a broad and general exemption for motor

vehicles transporting agricultural commodities both in their

raw, natural state and after they have been processed for

marketing. The action of Congress was a deliberate refusal to

enact the narrow and constringent exemption originally pro-

posed. A statute should not be construed to achieve a result

which Congress has refused to approve. Carey v. Donohue,

240 U. S. 430, 437.

Events since the passage of the original statute under-

score the legislative history at the time of the enactment of

the Act. Subsequent to the enactment of the argicultural

exemption, Congress has considered several proposals to re-

strict the scope of the exemption.® But Congress has con-

8 Marketing of Cotton Producers’ Local Markets, U. 8S. Department

of Agriculture, Production and Marketing Administration, Cotton

Branch (Sept. 1949), pp. 1, 8, 9, 24, 25, 26, 33, 34; Marketing Practices in

Producers’ Local Cotton Markets, U. S. Department of Agriculture,

Bureau of Agricultural Economics (May 1938, pp. 6, 9, 12, 14-16, 28.

9 See Omnibus Transportation Legislation, House Committee Print,

76th Cong., 8rd Sess.; S. 2357, 82nd Cong., 2nd Sess,; S, Rep. No. 1615,

82nd Cong., 2d Sess.; H. Rep. No. 2175, 82nd Cong., 2d Sess.

(8)

sistently refused to enact such narrow, constringent meas-

ures. One bill (H. R. 7547, 81st Cong., 2d Sess.) would have

specifically limited the argicultural exemption, in the case

of poultry, to “live poultry,” but, after extensive hearings

were held, no action was taken on this bill.

In order to give effect to the literal terms of the Act and

to the legislative history the broad exemption for “agricul-

tural commodities (not imcluding manufactured products

thereof)” must be held applicable to dressed poultry.

2. The decision by the Court of Appeals in this case ‘is

consistent with the prior court decisions. It is well settled

that the application of labor on a commodity — without con-

verting it into a new and different article — does not change

the commodity into a manufactured article. Hartranft v. .

Wiegmann, 121 U. S. 609; United States v. Dudley, 174 U. S.

670; Anheuser-Busch Assn. v. United States, 207 U. S. 556;

Fruit Growers, Inc v. Brogdex Co., 283 U. S. 1; and Frazee v.

Moffit, 18 Fed. 584 (C. A. 2).

An orange which has been emersed in a solution to im-

. pregnate the rind with borax, thereby rendering it resistant

to decay, is not a manufactured article since the orange “re-

mains a fresh orange fit only for the same beneficial uses

as theretofore.” Fruit Growers, Inc. v. Brodex Co., 283 U. S.

1, 11-13. Dressed lumber, i. e., lumber which has been planed,

grooved, and tongued or beaded, is not a manufactured article.

United States v. Dudley, 174 U. S. 670. Sea shells which had

been subjected to processing whereby two or three layers of

each shell were removed, the inner shell was polished on an

emery wheel, and mottos were etched on the polished inner

shell were not manufactured articles (Hartranft v. Wiegmann,

121 U. S. 609, 615) inasmuch as they “had not been manu-

factured into a new and different article, having a distinctive

name, charaeter or use from that of a shell.” Corks which

had been placed in a machine where blasts of air removed the

dust, meal, bugs, and worms, and which were thoroughly

(9)

cleansed by washing and steaming to remove the tannin and

germs to make the cork soft and elastic, were then placed in

a drying machine, and finally were bathed in glycerine and

alcohol to close the seams and to give the corks a coating

were not manufactured articles. Anheuser Bush Assn. v.

United States, 207 U. S. 556, 562. The Court held, in the

Anheuser-Busch case that manufacture “implies a change,

but every change is not manufacture, and yet every change

in an article is the result of treatment, labor, and manipula-

tion. But something more is necessary * * *. There must be

transformation; a new and different article must emerge,

‘having a distinctive name, charater or use.’” Ibid.

The United States Court of Appeals for the Sixth

Circuit held, in Interstate Commerce Commission v. Yeary

Transfer Co., Inc., 202 F. 2d 151, that redried tobacco is an

agricultural commodity and not a manufactured product with-

in the meaning of Sec. 203(b) (6) of the Interstate Commerce

Act. The Court rejected the Commission’s contention that

the processing of tobacco, which occured off of the farm and

after the farmer had sold the tobacco, in machinery costing

from $35,000 to $75,000, for the purpose of removing the

moisture from the leaf and standardizing the moisture con-

tent, converted the leaf tobacco into a manufactured pro-

duct. The Commission’s narrow interpretation of the agri-

cultural exemption has also been rejected by the courts in

Interstate Commerce Commission v. Service Trucking Co.,

Inc., 186 F. 2d 400, 402 (C. A. 3); Interstate Commerce Com-

mission v. Dunn, 166 F. 2d 166 (C. A. 5); Interstate Com-

merce Commission v. Love, 77 F. Supp. 63 (E. D. La.),

affirmed, 172 F. 2d 224 (C. A. 5); and Florida Gladiolus

Grower’s Ass’n v. United States and Interstate Commerce

Commission (S.D. Fla.), No. T-2095, decided July 23, 1952.

The Commission relies, Pet. pp. 9-11, on Interstate Com-

merce Commission v. Weldon, 90 F. Supp. 873, 875 (W.D.

Tenn.) in which case the Court accepted the view previously

(10)

advanced by the Commission in the Monark Egg Cases, 26

M. C. C. 615; 44 M. C. 15, that “Congress clearly intended,

from the language, to exclude only ‘agricultural commodities’

in their natural state,” and, therefore, that raw shelled pea-

nuts were manufactured products — not agricultural com-

modities. But the District Court’s opinion in the Weldon case

was rendered prior to the decision of the Commission in the

Determination of Exempted Agricultural Commodities, 52

M. C. C. 511, 522-525, in which the Commission expressly

repudiated the theory previously advanced by the Commission

in the Monark Egg Cases. On appeal to the United States

Court of Appeals for the Sixth Circuit, the “appellant motor

carrier (Weldon) conceded that raw shelled peanuts were

manufactured products of agricultural commodities within

the meaning of Sec. 203(b) (6) of the Interstate Commerce

Act” and therefore the issue was “no longer” before that

Court (Reply of Appellee (Interstate Commerce Commission)

to Motion of Secretary of Agriculture for Permission to File

Petition for Rehearing in Weldon v. Interstate Commerce

Commission, No. 11,247 (C. A. 6)). The issue as to the mean-

ing of the term “agricultural commodities” was not raised in

Weldon’s petition for a writ of certiorari. Following the Com-

mission’s complete change of position as to the scope of agri-

cultural exemption (Determination of Exempted Agricultural

Commodities, 52 M. C. C. 511, 522-525), the Court of Appeals

for the Sixth Circuit held, in Interstate Commerce Commis-

sion v. Yeary Transfer Co., Inc., 202 F. 2d 151, that processed

agricultural commodities — in that case redried tobacco —

come within the exemption of Sec. 203(b) (6) of the Interstate

Commerce Act. Hence the decision in the*ease at bar is con-

sistent with the decision of the Sixth Circuit in the Yeary

case, and, also, is consistent with the prior decisions of this

Court. The petition for a writ of certiorari presents no legal

_issue warranting review by this Court.

3. There is no persuasive administrative construction by

eee

~ (11)

the Commission of Sec. 203(b)(6) of the Act which should

influence the Court in determining the meaning of the agri-,

cultural exemption in the Act. In its report in 1951, in the

Determination of Exempted Agricultural Commodities, 52

M. C. C. 511, 522-525, the Commission expressly repudiated

the entire basis for its prior holding, in 1940 in the Monark

Egg Case, 26 M. C. C. 615; that dressed poultry is a manu-

factured product. The Commission reached the same con-

clusion as to dressed poultry in the Determination case that

it had previously reached in the Monark Egg Cases, but the

Commission’s decision in the Determination case contains

no persuasive reasoning and manifests no administrative

expertise as to the meaning of “agricultural commodities.”

Hence the Commission’s conclusion in 1951 is not persuasive

here. The issue in this case relates to the meaning of “agri-

cultural commodities” as used by Congress, and the Com-

mission is without power to fix definitely the meaning of

those terms and to finally decide the limit of its own juris-

diction. Nerwegian Nitrogen Co. v. United States, 288 U. S.

294, 325; United States v. Idaho, 298 U. S. 105; Davies Ware-

house Company v. Bowles, 321 U. S. 144, 156. The admini-

strative practice or construction in this case cannot prevail

"over the clear and explicit terms in the Act. Neuberger v.

Commissioner, 311 U. S. 83, 88-89; Louisville & N. R. Co. v.

United States, 282 U. S. 740, 759. An-agency cannot by ad-

ministrative practice finally decide the limits of its statu-

tory power (Social Security Board v. Nierotko, 327 U. S.

358, 369-370,) and “where the question is one not wholly

dependent upon matters within the expert, technical or sta-

tistical field in which the regulatory body is preeminently

qualified to judge, but which primarily involves jurisdiction,

the force of the administrative ruling is less than it would

otherwise be.” Interstate Commerce Commission v. Service

: _. Trucking Company, Inc., 186 F. 2d 400, 402 (C. A. 38).

(12)

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

MOSIER AND MOSIER

Attorney At Law

$01 First National Building

Waterloo, Iowa.

CRAIG H. MOSIER,

Of Counsel.

HARRY M. REED

Black Building

Waterloo, Iowa.

September, 1954

APPEARANCE

I, Harry M. Reed, a member of the Bar of the Supreme

Court of the United States, do hereby enter my appearance

as associate counsel for Allen E. Kroblin, Inc., Respondent.

HARRY M. REED

Black Building

Waterloo, Iowa.

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.