MR. JUSTICE RUTLEDGE delivered the opinion of the Court.
The validity of an order of the Interstate Commerce Commission is in question. The order granted to appellants, Consolidated Freightways, Inc., and Oregon-Nevada-California Fast Freight, Inc., certificates of public convenience and necessity authorizing extensions of their operations as motor carriers. Appellees, competing carriers, some of whom are railway affiliates, were protestants in the proceedings before the Commission. They successfully attacked the order in a specially constituted District Court, on grounds questioning the sufficiency of the findings and the evidence, as well as the propriety and fairness of the Commission's procedure. The District Court's decree, 57 F.Supp. 192, "suspended" the order and remanded the cause to the Commission for rehearing although a stay pending appeal was denied.
The shortened statement of the major thing in controversy is whether the appellants, Consolidated and O.N.C., properly were allowed by the Commission to substitute wholly independent and competing through services between Portland, Oregon, and San Francisco, California, for the service which they jointly rendered between those cities, prior to the filing of these applications, by interchanging freight at intermediate points. The protesting appellees were carriers competing with the joint service of Consolidated and O.N.C. and will be competitors of each, as those companies will be with each other, if the Commission's order is sustained. This fact is the source of the controversy and is important to bear in mind for full understanding of the detailed facts and issues as well as of what is ultimately at stake. Although each appellant
At the time of Consolidated's application in December, 1939, it operated various routes in the Northwest, some extending eastward from the Portland and Seattle areas, in addition to the joint service by interchange with O.N.C. southward from Portland to San Francisco.
Thus, in effect, Consolidated and O.N.C. each sought to conduct operations independently throughout the entire distance between Portland and San Francisco.
The applications were heard separately, as the statute requires, before different joint boards.
As neither joint board could agree upon the recommendations to be made, both matters were referred to an examiner.
The findings of fact and the court's opinion, 57 F.Supp. 192, disclose that it held the Commission's order invalid on several grounds. One was that "the Commission considered the separate records as though the case was a consolidated one. Evidence which appeared only in one record was used by the Commission to support general findings in the Report concerning both Consolidated and O.N.C. In each proceeding embraced within the Report and the Commission's order, evidence not offered or received in such proceeding and not a part of the record therein was drawn upon and considered by the Commission." The court also found that there was no evidence in either record to support the Commission's finding that "the present and future public convenience and necessity require both the operations" by Consolidated and those by O.N.C. (Emphasis added.) And it further found that at no time in the proceeding had there been notice to the parties, the witnesses, or the general public that both
For all these supposed errors the District Court suspended the Commission's order and remanded the cause "for rehearing." In doing so it said: "This action will be taken in order that all parties may be placed on notice as to what type hearing will be held, whether joint or several, and in order that appropriate findings be made as to the public convenience and necessity which requires the authorization of two new through-lines in competition with each other and in competition with the other facilities, and also as to the ability of Consolidated to initiate and maintain one of such lines in view of present conditions." (Emphasis added.) 57 F. Supp. at 198.
We are not informed, of course, whether the court would have reached the same result if the Commission had written separate reports in each case, arriving at the same conclusions, although it seems suggested that any of the other possible results would have been impeccable, whether stated in separate reports or a single one. Obviously it was no sufficient ground for suspending the Commission's order that it chose to write one report rather than two, especially in matters as closely related as these, if the single report together with the findings and the evidence was sufficient to sustain the action taken in each case. It is not uncommon judicial practice to follow this course.
Nor, with those conditions satisfied, could the mere fact that the Commission concluded to grant rather than to deny both applications, or to grant one and deny the other, invalidate its judgment. For each application when it was filed sought to conduct the extended operation which it specified;
The District Court, however, regarded the Commission's failure to write separate reports as indicating that it did not consider each case separately and exclusively on its own record, but looked to the evidence in both in forming its judgment. This "approach" the court thought wrong, not only as showing that the Commission considered evidence in each case which it had no right to take into account, but also as injecting a new and important issue in both proceedings not previously regarded by the parties as comprehended within the applications and the hearings. The "new issue" thought to be thus injected was the possibility that both applications might be granted. From this
The case has taken longer to state than the merits should require for its disposition. Appellees plant themselves here squarely on the District Court's objections to the Commission's "approach" and procedure. Two principal questions thus are presented: (1) Was evidence improperly considered by the Commission, so as to require reversal of its order; and (2) were new issues injected by its action in disposing of the cases with a single report? Other issues more or less related may be shortly disposed of.
We put to one side, in the first place, the idea that the Commission, by the manner in which it disposed of the causes, injected as a "new issue" the question whether both applications might be granted and with it the correlative notions that the appellees had no notice that this issue would be involved and no opportunity to make appropriate protests or to present evidence upon it. In a strict view neither the appellees nor the court were entitled to raise these questions. For it was not at any time suggested to the Commission, as it might have been upon petition for rehearing, that the proceedings had been conducted on the theory that both applications would not be granted. Appellees stated in their petition for rehearing only that "Division 5 has erroneously and improperly assumed that in granting one of the applications it is by force of necessity required to grant the other. . . ." This is very different from suggesting that the Commission was not entitled at all to consider granting both applications. It is highly questionable therefore whether the appellees have not waived this question. But the District Court,
The Commission did not, by the manner in which it disposed of the cause, inject as a "new issue" the question whether both applications might be granted. If the appellees actually assumed in the beginning that both applications could not be granted, their assumption was in the teeth of the applications and the permissible outcomes presented for the Commission's decision.
As has been said, the two applications were separately instituted and heard. In the natural course of events each joint board was to decide whether to grant or to deny the particular application before it. The possibilities therefore were that both applications might be denied, that one might be granted and the other denied, or that both might be granted. Moreover, the record contains evidence showing that the possibility of granting both applications was in the minds of counsel and witnesses.
The issue concerning whether both applications should be granted was injected, not by the Commission's report or any other action taken by it, but by the filing of the applications in the first place. If appellees misconceived the nature of the proceedings in this respect, as we do not think was the case, they were not misled into doing so by any action of the Commission or the other appellants.
We turn therefore to the objections made on the score of the Commission's findings and its treatment of the evidence. In our opinion they are equally untenable. The
But no showing of this sort has been made. It is to be recalled that all of the appellees, as well as both of the applicants, were parties to both proceedings; were represented at all of the hearings, which were conducted at substantially the same times and places; and were given full opportunity to present all evidence they considered pertinent, to cross-examine witnesses and otherwise to protect their interests. Moreover, large portions of the evidence applied as much to one application as to another. This was true, for example, of the proofs relating to traffic conditions, shipper demands, the need for faster service and mechanical refrigeration, and other items. In these circumstances it is difficult to see how appellees could have sustained substantial prejudice from the Commission's consideration of the evidence upon matters as closely related as those in issue in these two proceedings.
Nor indeed do they succeed in showing such prejudice. As we understand them, the most that they assert is that the Commission's report so commingles the two cases that it is impossible to determine which statements are supported by which record. But neither in the briefs, nor upon specific inquiry at the argument, were they able to point to any particular instance of prejudice. Nor in fact does the opinion of the District Court, although it asserts that the report is filled with numerous instances of this
In the absence of any showing of specific prejudice, the claim comes down to the highly technical objection that the Commission, in the final stage of forming its judgment, could not in either case take account of what had been done in the other, notwithstanding the closely related character and objects of the applications and the prior proceedings. The contention in its farthest reach amounts to a legal version of the scriptural injunction against letting one's right hand know what one's left hand may be doing.
Obviously it would be consistent neither with good sense nor, we think, with the type of hearing assured by the statute to force the Commission to put on such complete blinders. Whatever may be the limits outside which it cannot go in looking beyond the record in the particular proceeding at the stage of formulating its judgment, none certainly would go so far. And, given that the report contains all the essential findings required, cf. Florida v. United States, 282 U.S. 194, the Commission is not compelled to annotate to each finding the evidence supporting it.
It is true that ordinarily an administrative agency will act appropriately, in a proceeding of this sort, upon the
The remaining objections are directed more appropriately to the findings and their support in the evidence. Appellees say that the order granting both applications is defective in that it is not founded upon an express finding or indeed upon any finding that there was a need for two through-line operations which would be in competition with one another. They urge that it was not sufficient for the Commission to find, as it did on adequate evidence, that the existing service between Portland and San Francisco was inadequate; and to conclude, as the report expressly stated, that in view of this fact, among others, "public convenience and necessity require the operations
Apart from the fact that this was all that the statute required, cf. United States v. Detroit & Cleveland Navigation
Appellees further say that, even if the Commission was correct in granting a certificate of public convenience and necessity to O.N.C., it improperly granted such a certificate to Consolidated. Section 207 (a) requires that the Commission find "that the applicant is fit, willing, and able properly to perform the service proposed" and the District Court made a finding of fact that "the Commission failed to find, and there is no evidence in either record to support such a finding, that Consolidated is adequately equipped . . . under any conditions."
We do not agree, however, that there was no such basic finding. The paragraph of the Commission's report set out in the margin
That case, as has been indicated more than once, was "promptly restricted . . . to its special facts, United States v. Northern Pacific Ry. Co., 288 U.S. 490, and it
We think the court misconceived not only the effects of the Commission's action in these cases but also its own function. It is not true, as the opinion stated, that ". . . the courts must in a litigated case, be the arbiters of the paramount public interest."
The judgment is
MR. JUSTICE DOUGLAS dissents.
MR. JUSTICE JACKSON took no part in the consideration or decision of this case.
"From your experience in watching the development of this joint service, what do you expect the effect to be of the granting of this application upon the existing carriers between San Francisco and Medford, and San Francisco and Klamath Falls?" He replied:
"Treating them separately, south of Medford, we have in our operation the Oregon-Nevada-California Fast Freight and the Pacific Truck Express and the Pierce Auto Lines.
"The California Fast Freight are concurrently applying for the right to extend their services north of Medford to Portland. The net result of the granting of their application and our application would be the splitting of the traffic between the two companies. We would each take part of the present business we are now jointly handling, and operate our equipment straight through.
"In my opinion, this will result in both of us operating about the same number of vehicles, about the same number of miles; and if our divisions of revenues of the past have been properly arranged, we continue to gross about the same amount of revenue. It should result in our both having a more profitable operation, as it will eliminate the present waste of checking, weighing, and transferring freight at an intermediate point.
"The service would be improved and no doubt it would attract more volume. That is a conjecture. At the present time, both companies are maintaining terminal facilities in San Francisco so on our part it would mean very little increase in our terminal costs.
"It will mean an increase in terminal costs for the Oregon-Nevada-California Fast Freight, but the cost of it would be offset, in my opinion, by eliminating the cost of transferring the through freight at Medford."
In its report, the Commission stated, "For reasons which are obvious [see note 14], authority should be either granted or denied to both applicants to operate over the Valley Route." (Emphasis added.)
On this and other evidence we cannot say that the Commission's finding as to the financial ability of Consolidated to undertake the new service lacked support in the record. For us or the District Court to do so would be to invade the Commission's proper function.