BIGGS, Circuit Judge.
The suit at bar presents vexatious problems. The plaintiff is Seatrain Lines, Inc. whose operations have been the subject of discussion and decisions by the courts
In May 1940, Seatrain inaugurated substantially similar service between the port of New York and Texas City, Texas.
On May 28, 1941 Seatrain filed two applications with the Interstate Commerce
The certificate was ordered to take effect from and after August 10, 1942. Seatrain asserts and has proved, as will hereinafter appear, that acting upon the authority granted by the certificate it has made substantial expenditures and important commitments for the future.
On December 18, 1943, however, Division 4 ordered reconsideration of Seatrain's applications and of the applications for certificates of the Foss Launch & Tug Co. See 260 I.C.C. 103. The division thereafter amended the certificate first issued to the Foss Company on August 26, 1942. The certificate originally issued by the Commission to the Foss Company authorized it to transport commodities generally. The amended certificate issued to the Foss Company eliminated the company's authority to "transport freight cars, loaded or empty, in the performance of a freight-car-ferry service." The course pursued by Division 4, and hence by the Commission, in respect to the Foss company had repercussions on the Seatrain certificate. See also the decision of the Commission in Newtex S. S. Corporation Common Carrier Application, 260 I.C.C. 418. On February 6, 1945, having granted Seatrain an opportunity for the presentation of evidence of which Seatrain did not avail itself and after certain intermediate steps which need not be recited here, the full Commission, one member only being absent, over the protests of Seatrain in respect to the Commission's jurisdiction, ordered Seatrain's original certificate cancelled and a new certificate issued in lieu thereof.
The new certificate limited Seatrain to the service of "a common carrier by self-propelled vessels * * * in the transportation of liquid cargoes in bulk; of empty railroad cars; and of property loaded in freight cars received from and delivered to rail carriers and transported without transfer from railroad cars between the Ports" of New York and New Orleans on the one hand and New York and Texas City on the other.
Seatrain has petitioned this court
The Commission was not unanimous in the views expressed in its opinion of February 6, 1945.
The principal issue which we must decide is the authority of the Commission to alter drastically its original certificate. The original certificate permitted the petitioner, as we have stated, to engage in the transportation of commodities generally as a common carrier by water. The amended certificate limiting transportation to property loaded in freight cars received from and delivered to rail carriers without transfer, in effect reduces Seatrain to the status of a car-ferry. It may not initiate or terminate traffic; it may not deliver freight to a truck or any receiver other than a railroad. Such a change in status scarcely can be considered to lie within the permissible rights reserved in the former certificate to change "terms, conditions and limitations * * attached to the exercise" of the authority. This clause is based on the provisions of Section 309(d) of the Act, 49 U.S.C.A. § 909(d), but the "terms, conditions, and limitations" contemplated by Congress were of the kind that were before the Supreme Court in Crescent Express Lines, Inc., v. United States, 320 U.S. 401, 64 S.Ct. 167, 88 L.Ed. 127, and in Noble v. United States, 319 U.S. 88, 63 S.Ct. 950, 87 L.Ed. 1277. The terms or conditions or limitations which may be imposed by the Commission under the authority of the section cited cannot sanction the radical step which the Commission has taken of transmuting a common carrier by water of commodities generally into a car-ferry.
There is no statutory authority for the revocation or alteration of a certificate. The Commission relies on Sections 17(7) and 315(c) of the Act, 49 U.S.C.A. §§ 17(7) and 915(c). The first subsection referred to is from Part I of the Act relating by reference to common carriers by water. That subsection makes determinations by the Commission subject to rehearing and reconsideration and provides that the Commission or a division of the Commission may change or modify any decision, order or requirement made by a division. Subsection (c) of Section 315 provides that "The Commission may suspend, modify, or set aside its orders under this part upon such notice and in such manner as it shall deem proper." The provision last quoted is intended to apply to regulatory orders of the Commission and not to permit the cancellation of orders authorizing the issuance of certificates of public convenience and necessity. It is our opinion that these statutory provisions do not aid the standing of the Commission's order of February 6, 1945.
Section 212(a), Part II of the Act, 49 U.S.C.A. § 312(a), dealing with Motor Carriers, provides a method whereby a certificate issued to a motor carrier may be suspended or terminated by the Commission. We think it must be conceded that insofar as the termination or revocation
Congress did not include in Part III any express power to change, amend or revoke a certificate held by a carrier by water. We agree with Commissioner Lee that the conclusion seems inescapable that Congress did not intend to confer upon the Commission power to revoke a certificate of public convenience and necessity issued to a common carrier by water. Whether the certificate when issued be called a "franchise" or not seems relatively unimportant.
It is clear that the Commission may not amend the certificate by changing its essential grant as in the case at bar. It is agreed that there was no fraud in the procurement of the certificate.
Although the Commission terms the issuance of the original certificate as an instance of inadvertent error, it appears to have resulted from the considered judgment of Division 4 and, therefore, of the Commission. While the petitioner's references to the Foss and the Newtex cases are helpful perhaps in forming a basis to conjecture the Commission's trend of policy, it is unnecessary and indeed improper to attempt to ascertain the mental processes of the Commissioners at the time of the issuance of the original order and certificate. The Supreme Court in the recent case of International Union of Mine, Mill & Smelter Workers v. Eagle-Picher Mining & Smelting Co., 325 U.S. 335, 65 S.Ct. 1166, addressed itself to the problem of the correction by an administrative body of its own error. In the cited case the National Labor Relations Board had applied to the Circuit Court of Appeals for the Eighth Circuit for the enforcement of a back pay order and had stated incorrectly the method for computation of the back pay, resulting in a drastic curtailment of pay admittedly owed the employees. The Circuit Court had adopted the Board's method of computation and had approved it in its decree. Eagle-Picher Mining & Smelting Co. v. N. L. R. B., 119 F.2d 903. The company was not prejudiced by this order. Nevertheless, the Supreme Court refused to permit the correction of the patent error. In discussing the question of inadvertence Mr. Justice Roberts speaking for the Court cogently declared, Id., 325 U.S. at page 341, 65 S.Ct. at page 1169, "Administrative flexibility and judicial certainty are not contradictory; there must be an end to disputes which arise between administrative bodies and those over whom they have jurisdiction. This does not mean that the Board could not frame an order which by its terms required modification should conditions change. But here the order was definite and complete; * * *. The conditions remained the same; what had changed was the Board's awareness of them." In the case at bar the Commission has not applied to the courts. However, we believe that the reasoning of the Supreme Court is applicable by analogy to final administrative orders including the order of the Commission granting the original certificate.
The testimony introduced by the petitioner showing its expenditure of funds and its large commitments in reliance upon the original certificate will not be stricken from the record. The petitioner has alleged that the Commission's order will deprive it "* * * of property and take its property for public use without just compensation and without due process of law in violation of the Fifth Amendment * * *." The evidence referred to is pertinent to the question, one of mixed law and fact, raised by the petitioner. The testimony objected to supports the conclusion that the petitioner will be deprived of property without compensation and without due process of law if the order of the Commission shall become effective. See Baltimore & O. R. Co. v. United States, 298 U.S. 349, 368, 369, 56 S.Ct. 797, 80 L.Ed. 1209, and United States v. Idaho, 298 U.S. 105, 108, 109, 56 S.Ct. 690, 80 L.Ed. 1070. See also Commissioner Porter's statement, note 5 supra.
The Commission has made the argument that the original certificate was too limited in that it did not give Seatrain the right to transport empty freight cars. Therefore, the second certificate, it reasons, is in reality broader than the first. We reject this contention. If the first certificate does not authorize Seatrain to transport empty freight cars, that question may be tested in some appropriate manner. The phraseology of the certificate cannot serve, of course, to impair Seatrain's rights under the grandfather clause in respect to the New York-Belle Chasse route. United States v. Maher, 307 U.S. 148, 59 S.Ct. 768, 83 L.Ed. 1162; Quaker City Bus Co., 38 M.C.C. 603.
The order of the Commission will be set aside.
Findings of fact and conclusions of law are filed with this opinion.
Seatrain's services were terminated by the War, its vessels being requisitioned by the United States. It has planned to recreate and extend its services as indicated.
The same document is cited in note 5 to the decision in Ziffrin, Inc., v. United States, 318 U.S. 73, 77, 63 S.Ct. 465, 87 L.Ed. 621.