Before Matthes, Circuit Judge, and Miller and Young, District
The opinion of the court was delivered by: Young, District Judge.
This is an action before a three-judge district court to
enjoin and set aside orders of the Interstate Commerce
Commission which denied plaintiff, Elvin L. Reddish, permanent
authority to operate as a contract carrier by motor vehicle in
interstate commerce. 28 U.S.C. § 1336, 1398, 2284 and 2321
through 2325 inclusive. By statute, the action is against the
United States, represented by the Attorney General, while the
Interstate Commerce Commission is made a party by right.
28 U.S.C. § 2323 (1958).
The Contract Carrier Conference of the American Trucking
Associations, Inc., intervened before the Commission, and in
this action on behalf of the plaintiff. The Commission is
supported, in turn, by six common motor carriers, 32 railroads,
and the Regular Common Carrier Conference of the American
Trucking Associations, Inc., all of whom intervened before the
Commission and in this action in opposition to the authority
sought by plaintiff.
The Interstate Commerce Commission, in its answer, denied
that its action in denying plaintiff the permit he requested
was unlawful, and stated that the action it had taken was fully
supported and justified by the record.
The trial examiner of the Commission found that the service
proposed by plaintiff would be consistent with the public
interest and the national transportation policy, and
recommended that the authority requested be granted. Division
I of the Commission, however, denied the authorization
requested, although the trial examiner's findings of fact were
adopted by the Commission as their own. The action of Division
1 was sustained by the full Commission, which held:
"(a) that the findings of Division 1 are in
accordance with evidence and the applicable law,
and (b) that no sufficient cause appears, for
reopening the proceeding for reconsideration or
for oral argument."
This action was brought by plaintiff for judicial review of
this denial by the Commission.
There is no material dispute as to the facts. They are as
Plaintiff requests permanent authority to operate as a
contract carrier for Steele Canning Company and Cain Canning
Company of Springdale, Arkansas, and for Keystone Packing
Company of Fort Smith, Arkansas. He proposes to handle
pool-truck shipments of less-than-truckload orders intended for
delivery in 33 states, and to handle certain canning supplies
on his return trips from 30 of these states. Steele Canning
Company is the major shipper of the three that plaintiff
proposes to serve. Steele normally purchases about 75% of the
production of Cain and Keystone, which Steele in turn resells
to the wholesale and retail market. Steele began transporting
its own small order loads in 1948. This operation increased as
Steele's small order business increased, until the fleet of
trucks operated by Steele numbered 29 in January of 1958.
Throughout this period Steel handled most of its truckload
shipments by common carrier, principally Jones Truck Line,
Inc., of Springdale, Arkansas, who supports the plaintiff's
application to handle the less-than-truckload orders.
Steele's less-than-truckload orders account for approximately
80% of its business, which it transported almost exclusively by
its own private carriage until June of 1958, when a labor
dispute interfered with such operations. Steele at that time
prompted plaintiff to apply for authority to handle this
operation as a contract carrier. In June 1958 the Commission
granted plaintiff temporary operating authority substantially
as requested by him. The service rendered by plaintiff under
such authority was found by the trial examiner to be
substantially similar to the private carrier operations
previously performed by Steele. The contract service rendered
by plaintiff to Cain and to Keystone largely involves their
sales to Steele, but both are interested in developing their
own less-than-truckload business, which plaintiff would handle.
The three canners insist that the only satisfactory
alternative to private carriage is contract carriage of the
type plaintiff proposes to offer and which he has performed for
them under temporary
operating authority. Their business is intensely competitive
and has a small margin of profit. Most small order accounts
operate on small inventories, making it critical that their
orders be filled promptly. Further, Steele has found that many
of its customers have special unloading times and requirements
which must be observed at risk of the loss of that business.
Because of these facts and because of the scattered location of
the small order customers throughout the 33 states named in
plaintiff's application, these three canners insist that they
would not be in a competitive position if forced to rely upon
common carriers for delivery of less-than-truckload orders.
Delays in "interlining" shipments, coupled with what the
canners regard as "prohibitive" common carrier
less-than-truckload rates, would, they say, place them at a
disadvantage as to their competitors, who maintain their own
fleets of trucks. The canners intend to abandon their private
carriage operations and, in effect, use plaintiff as though he
were their shipping department.
While the trial examiner found that some less-than-truckload
shipments which require delivery stops for a portion of the
freight at one or two points enroute to final destination had
been satisfactorily handled by common carrier, the traffic that
the three canning companies proposed giving plaintiff involves
from three to ten stops, with six stops being approximately the
average less-than-truckload pooled shipment. This business has
not in the past been handled by the protestant common carriers
and, say the three shippers, will continue to be handled by
private carriage if plaintiff's application is not granted,
though the protestant common carriers insist that their
experience indicates that they will receive some of this
traffic if it is not handled by a contract carrier.
The limits of permissible judicial review of the order of the
Interstate Commerce Commission here in question are determined
by Section 10(e) of the Administrative Procedure Act. 60 Stat.
243 (1946), 5 U.S.C.A. § 1009(e). The appeal is upon the record
made before the Commission and its order must be sustained if
it is supported by substantial evidence when viewed on the
record as a whole and if the action taken is within the scope
of its lawful authority. Universal Camera Corporation v.
National Labor Relations Board, 1951, 340 U.S. 474, 490, 71
S.Ct. 456, 95 L.Ed. 456. Plaintiff alleges that the order under
review lacks ...