MR. JUSTICE DOUGLAS delivered the opinion of the Court.
These are appeals from judgments of three-judge district courts, 28 U. S. C. § 1253, which set aside orders of the Interstate Commerce Commission denying applications for permits as contract carriers. 185 F.Supp. 838; 188 F.Supp. 160.
Appellee J-T Transport Company asked to extend its present operations as an irregular-route contract carrier of airplane parts to include carriage of aircraft landing gear bulkheads for Boeing Airplane Co. Boeing supported the application. Common carriers opposed the application, as did another carrier, U. S. A. C. Transport, Inc., appellant in No. 18. Boeing indicated it preferred
Appellee Reddish made application to carry canned goods as a contract carrier from three points in Arkansas and one in Oklahoma to various points in thirty-three States and to carry other goods on return. His application was supported by his prospective shippers and opposed by motor common carriers, appellants in No. 54. and by rail common carriers, appellants in No. 49.
Reddish showed that he delivered to customers who ordered goods in less-than-truckload amounts. These
The cases turn on the meaning of language added to the Act in 1957.
Our decision in United States v. Contract Steel Carriers, 350 U.S. 409, held that a contract carrier, rendering a specialized service in the sense that it hauled only a limited group of commodities over irregular routes, did not become a common carrier because it reached for
These amendments were vigorously opposed in some quarters.
The Commission bowed to these objections;
"In determining whether issuance of a permit will be consistent with the public interest and the national transportation
It seems clear from these provisions that the adequacy of existing services is a criterion to be considered by the Commission, as it is instructed to consider "the effect which granting the permit would have upon the services of the protesting carriers," as well as the effect of a denial upon the shippers. Or to put the matter otherwise, the question of the need of the shipping public for the proposed service necessarily includes the question whether the extent, nature, character, and suitability of existing, available service makes the proposed service out of line with the requirements of the national transportation policy. But the adequacy of existing facilities or the willingness or ability of existing carriers to render the new service is not determinative. The "effect which denying the permit would have upon the applicant and/or its shipper and the changing character of that shipper's requirements" have additional relevance. This is a phase of the problem reflected in the broadened definition of a "contract carrier by motor vehicle"—one who furnishes transportation services "designed to meet the distinct need of each individual customer." § 203 (a) (15). It means, we think, that the "distinct need" of shippers for the new contract carrier service must be weighed against the adequacy of existing services. The Commission indulged in "a presumption that the services of existing carriers will be adversely affected by a loss of `potential' traffic, even if they may not have handled it before." 79 M. C. C. 695, 705. The effect of the presumption is
We cannot assume that Congress, in amending the statute. intended to adopt the administrative construction which prevailed prior to the amendment.
By adding the five criteria which it directed the Commission to consider, Congress expressed its will that the Commission should not manifest special solicitude for that criterion which directs attention to the situation of protesting carriers, at the expense of that which directs attention to the situation of supporting shippers, when those criteria have contrary implications. Such a situation doubtless exists in these cases, for granting the permits might well have produced some consequences adverse to the protesting carriers, while denying them may just as certainly prove burdensome to the supporting shippers. Had the Commission, having drawn out and crystallized these competing interests, attempted to judge them with as much delicacy as the prospective nature of the inquiry permits, we should have been cautious about disturbing its conclusion.
But while such a determination is primarily a responsibility of the Commission, we are under no compulsion to accept its reading where, as here, we are convinced that it
It is argued that the Commission, in holding that U. S. A. C. is willing and able to render the service, did not rely on the presumption. We are, however, not convinced. The Commission seems to have placed the burden of proving inadequacy of existing services on the applicant, for it said that the applicant had not shown that the service of U. S. A. C. was "inadequate." 79 M. C. C. 695, 709. Such a burden is improperly placed on the applicant, as the rejection of the proposed amendment to § 209 (b) suggests. The capabilities of protesting carriers are matters peculiarly within their knowledge. In the Reddish case the Commission made the same error, as is evident from its statement that the "shippers have failed to show that they have been unable to obtain reasonably adequate service upon request." 81 M. C. C. 35, 42.
The proper procedure, we conclude, is for the applicant first to demonstrate that the undertaking it proposes is specialized and tailored to a shipper's distinct need. The protestants then may present evidence to show they have the ability as well as the willingness to meet that specialized need. If that is done, then the burden shifts to the applicant to demonstrate that it is better equipped to meet the distinct needs of the shipper than the protestants.
Moreover, as we read the Act, as amended in 1957, the standard is not whether existing services are "reasonably adequate." It is whether a shipper has a "distinct need"
In the Reddish case the Commission ruled that the desire for lower rates offered by the applicant was irrelevant to a shipper's needs, that if the rates of existing carriers were too high, shippers should seek relief for their reduction. 81 M. C. C. 35, 42-43. We think the matter of rates is one factor to be weighed in determining the need for the new service. In a contest between carriers by motor vehicles and carriers by rail, we held in Schaffer Transportation Co. v. United States, 355 U.S. 83, that the ability of a particular mode of transportation to operate with a lower rate is one of the "inherent advantages" that one type may have over another within the meaning of the Act. 54 Stat. 899. By analogy, contract carriage may be more "economical" than common carriage by motor or rail within the framework of the national transportation policy, as it is defined in the Act
We agree with the court in the J-T Transport Co. case that, while the 1957 amendments changed the result of our decision in United States v. Contract Steel Carriers, supra, by giving the Commission power to limit the number of contracts which a contract carrier can maintain, the amendments in other respects put the contract carrier on a firmer footing. That court said, "Under the statute a shipper is entitled to have his distinct needs met." 185 F.Supp. 838, 849. We agree. We also agree that though common carrier service is reasonably adequate and though another carrier is willing and able to furnish the service, a permit to a contract carrier to furnish this particular service still might be wholly consistent with the national transportation policy defined in the Act. For it is "the distinct need of each individual customer" that the contract carrier is designed to fill. § 203 (a) (15). And "the changing character" of the shipper's "requirements" is a factor to be weighed before denying the application. § 209 (b). Hence the adequacy of existing services for normal needs and the willingness and ability of an existing carrier to render the service are not the end of the matter. The "distinct need" of the shipper may nonetheless not be served by existing
We intimate no opinion on the merits, for it is the Commission, not the courts, that brings an expertise to bear on the problem, that makes the findings, and that grants or denies the applications. Yet that expertise is not sufficient by itself. Findings supported by substantial evidence are required. Public Service Comm'n v. United States, 356 U.S. 421, 427; United States v. United States Smelting Co., 339 U.S. 186, 193.
Since the standards and criteria employed by the Commission were not the proper ones, the causes must be remanded for further consideration and for new findings. American Trucking Assns. v. United States, 364 U.S. 1, 15-17. Accordingly the judgments below are
Affirmed.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN and MR. JUSTICE STEWART join, dissenting.
These are related appeals from a decree of a District Court setting aside an order of the Interstate Commerce Commission denying an application for a contract-carrier permit under the 1957 amendments to §§ 203 (a) (15) and
Disposition of these conclusions turns first on a construction of the 1957 amendments in the context of the Motor Carrier Act of 1935, apart from which they are unintelligible; next upon due consideration of what the Commission has here undertaken to do, as disclosed in a fair reading of its final report denying the application; and, most importantly, on appropriate regard for the limits on judicial review of such Commission action as is now before us.
I.
The Motor Carrier Act, this Court has noted, was passed at a time when "the industry was unstable economically, dominated by ease of competitive entry and a fluid rate picture. And as a result, it became overcrowded with small economic units which proved unable to satisfy even the most minimal standards of safety
These were indeed the conditions that prompted legislative recommendations by the greatly esteemed Federal Coordinator of Transportation, Joseph B. Eastman. See S. Doc. No. 152, 73d Cong., 2d Sess. (1934). One of the prime purposes of the measure he proposed was to control the number and scope of contract-carrier operations in order to preserve and protect common-carrier service:
Coordinator Eastman's proposal was enacted by Congress into the Motor Carrier Act of 1935 (now Interstate Commerce Act, Part II). See H. R. Rep. No. 1645, 74th Cong., 1st Sess. 5 (1935); S. Rep. No. 482, 74th Cong., 1st Sess. 2 (1935). As enacted, it laid far more stringent controls upon common carriers than on contract carriers.
As originally enacted, 49 Stat. 543, 544 (1935), § 203 (a) (15) provided:
Section 209 (b), as enacted by 49 Stat. 543, 553 (1935), authorized the Commission to issue permits to contract carriers when it appeared, inter alia,
The design of these sections was explicated by the Commission shortly after their passage, in Contracts of Contract Carriers, 1 M. C. C. 628 (1937). This was a rule-making proceeding under § 209 (b) to attach limitations to contract-carrier permits in order to forestall transgression upon common carriage. The reasons given for promulgation of the rule afford persuasive evidence of the contemporaneous understanding of the Act:
After reciting the relative freedom from regulation enjoyed by contract carriers, the Commission concluded, in terms peculiarly appropriate to the present controversy:
II.
In acting upon applications for contract-carrier permits, the Commission has from the beginning regarded the adequacy of existing common-carrier facilities to be of crucial importance in determining consistency with the public interest as defined by the history and purposes of the Act. In C. & D. Oil Co. Contract Carrier Application, 1 M. C. C. 329, 332 (1936), it early stated a guiding principle that has been reaffirmed many times since:
A review of Commission action from 1935 to 1957 discloses that this principle has been unwaveringly applied in circumstances identical or nearly so to those in the present case, and that its application has produced consistent rulings exactly akin to those now challenged here.
Having anticipated explicit congressional purpose in this manner, the Commission continued to adhere to its earlier rulings as consistent with that purpose.
This mode of adjusting conflicting interests whose accommodation was later explicitly committed to the Commission by Congress furnishes strong evidence of the way in which those factors are appropriately evaluated. Subsequent rulings afford impressive proof of this uniform administrative practice.
III.
The law and practice governing contract-carrier applications, as it emerged from the language, history, and purposes of the Motor Carrier Act and from consistent administrative construction between 1935 and 1957, may be summarized as follows. Strictly regulated common carriage
It is this body of precedent, conscientiously developed over a period of years to effectuate the policies formulated in the Motor Carrier Act for Commission enforcement, that we are told was overturned by congressional amendment in 1957. And so we must turn to the terms, origin, and purpose of those amendments.
As now amended by 71 Stat. 411 (1957), § 203 (a) (15), 49 U. S. C. § 303 (a) (15) reads as follows:
71 Stat. 411 (1957) added to § 209 (b), 49 U. S. C. § 309 (b), the following provision:
From the italicized changes it is said to follow that the Commission may no longer assign due weight, in its judgment, to the ability of existing common carriers to furnish substantially the transportation service proposed. This is so, it is argued, because factors [3] and [4] are placed in conjunctive equipoise, demanding a balance on untilted scales. And the fulcrum, to complete the metaphor, is located by this argument precisely at the "distinct need" of the shipper referred to in amended § 203 (a) (15).
The starting point for determining legislative purpose is plainly an appreciation of the "mischief" that Congress was seeking to alleviate. In this instance, fortunately, it is not hard to find, for the Court itself exposed it in United States v. Contract Steel Carriers, 350 U.S. 409. The Commission had there determined that a contract carrier had, through active solicitation of some 69 transportation contracts, so expanded its business as to become indistinguishable in operation from a common carrier, and ordered it to cease and desist. This Court affirmed reversal of that order, relying on § 209 (b) as it was then written
The latitude thus authoritatively recognized in contract carriers to engage essentially in common carriage without at the same time subjecting themselves to regulation as common carriers, was the mischief that prompted the Commission to seek a restrictive rewriting of §§ 203 (a) (15) and 209 (b). 70 I. C. C. Ann. Rep. 162 (1956). Chairman Clarke of the Commission testified in the Senate hearings on the Commission's proposed bill that, as matters then stood, contract-carrier expansion could impair the ability of common carriers to offer service to the general public, particularly to the small shipper who could not afford the services of a contract carrier. The Commission feared that the inherent advantages of contract carriers would permit them to "encroach upon the operations of the common carriers and skim off the cream of the traffic upon which they depend to support their overall service to the public."
This clearly was the apprehended evil that prompted a favorable report of the amendments. S. Rep. No. 703, 85th Cong., 1st Sess. 1, 3, 7 (1957). As phrased in the House Report, the freedom accorded contract carriers in the Contract Steel decision "obliterates the distinction which Congress intended to make between common and contract carriers, and opens the door to unjust discrimination among shippers." H. R. Rep. No. 970, 85th Cong., 1st Sess. 3 (1957). In presenting the bill that was
The "more precise definition of contract carriage" in the resulting § 203 (a) (15) was plainly intended to restrict the opportunities of contract carriers, not to enhance them.
To be sure, the addition of the five criteria for Commission consideration in the amendment to § 209 (b) was not explicitly responsive to the Contract Steel decision. Neither the House nor the Senate Report makes any mention of the meaning or purpose of the addition. The criteria were not contained in the bills, S. 1384 and H. R. 5123, 85th Cong., 1st Sess. (1957), as initially proposed by the Commission. They emanated instead from a suggestion by the Contract Carrier Conference, an appellee in this case; and there is language in the testimony of its General Counsel, Clarence D. Todd, before the Senate Subcommittee, from which support is now drawn for the appellees' position:
These observations, it will be noted, did not address themselves to the effect of a denial on the shipper, which is at issue here. Consideration of the shipper's needs was not adverted to in the recommendations made by the Contract Carrier Conference, see Senate Hearings 305; it was added by the Subcommittee. In any event, the "balance" to be struck was not defined, nor the process by which it was to be determined. As a matter of fact, the contract carriers appear to have accepted the existing Commission practice; they neither asked for nor anticipated relaxation of it:
That this was Congress' understanding of the addition is evidenced by Senator Smathers' explanation in recommending its adoption: "In this, the Committee is proposing to give the Commission more helpful standards than are contained in the present law." 103 Cong. Rec. 14036 (1957). Like evidence is contained in a letter from Chairman Clarke to the House Committee, stating the Commission's belief "that H. R. 8825 [the bill amended by
These particularized indications are confirmed and reinforced by the legislative history as a whole for precluding the view, underlying the District Court's decision, that the 1957 amendments introduced a radical departure in regulatory policy. As we have seen, the Commission had, in advance of the amendments, developed and applied the criteria at issue in this case, and had struck the same balance there as here. B & F Bus Service, Inc., Contract Carrier Application, supra. Neither this leading Commission disposition, nor any other to the same effect, was criticized or even mentioned to the subcommittee that drafted the amended bill. Had the Commission, which maintained a representative throughout the Senate hearings, suspected that its practice in this regard was being overturned, it would scarcely have given the unqualified approval that it did to the final bill. See H. R. Rep. No. 970, 85th Cong., 1st Sess. 2 (1957); S. Rep. No. 703, 85th Cong., 1st Sess. 6 (1957); 103 Cong. Rec. 14035 (1957) (remarks of Sen. Smathers). On the contrary, it had good reason for assuming that its practice was being approved. The report that issued from the hearings contained the following endorsement:
Furthermore, the very same session of Congress that passed the amendments here in issue also amended § 218 (a), by 71 Stat. 343 (1957), 49 U. S. C. § 318 (a), to require contract carriers to file actual rather than minimum rates or charges. This legislation was requested by the Commission, 70 I. C. C. Ann. Rep. 168-169 (1956), and recommended by Senator Smathers' Subcommittee, S. Rep. No. 335, 85th Cong., 1st Sess. 2 (1957), to eliminate a competitive advantage held by contract carriers. It should be construed in pari materia with the amendments to §§ 203 (a) (15) and 209 (b). That the 1957 Congress shared the original understanding of the Motor Carrier Act's purpose is manifested in the Senate Report, at 2:
IV.
The foregoing distillation of statutory purpose from the legislative history of the amendments is not affected by the deletion from the bill of language initially submitted by the Commission. In its original form, S. 1384 would have amended the definition of a contract carrier in § 203 (a) (15) to make it one engaging in transportation under contracts for the furnishing of special and individual services required by the customer "and not provided by common carriers." The Commission bill would have also amended § 209 (b) to require a showing by a
In truth, the Commission's language was deleted because it was thought to place an impossible burden of proof on an applicant, of demonstrating a state of mind ("unwilling"), or of facilities ("unable"), entirely within the knowledge of the protestant. Thus, very early in the Senate hearings, before any other witness had been heard from, Chairman Clarke withdrew the "unwilling" language from the suggested amendment to § 209 (b) "because of the very difficult burden of proof that would be imposed on applicants . . . ." Senate Hearings 22. Later on, the representative of the Contract Carrier Conference asked for deletion of the "not provided" language, supra, from the amendment to § 203 (a) (15) because it presented the very same burden of proof problem. Senate Hearings 294-295. The Commission subsequently recommended this deletion because the language was "not necessary to carry out the purpose of the bill . . . ." Senate Hearings 43-44. See also S. Rep. No. 703, 85th Cong., 1st Sess. 5 (1957).
V.
An amendment is not to be read in isolation but as an organic part of the statute it affects. An amendment is not a repeal. Even when plain words are suggestive of a change in policy, they are not to be construed as such if there has been a history of consistent contrary legislative policy. Boston Sand Co. v. United States, 278 U.S. 41; Guessefeldt v. McGrath, 342 U.S. 308, 313-315.
The Interstate Commerce Committees that considered these amendments were addressing themselves to a limited problem laid bare by the Contract Steel decision. It would be heedless of the practicalities of legislative procedure to assume that these experienced committees chose to use the occasion to overturn a consistent pattern of statutory regulation without inviting the views of the
VI.
What has been said disposes of the contention that the Commission erroneously imported a "sixth criterion" of the adequacy of existing common-carrier services into its consideration of this application. It did not. That criterion is implicit in the third factor enunciated in amended § 209 (b): "the effect which granting the permit would have upon the services of the protesting carriers." This has always been a crucial consideration in contract-carrier proceedings, and nothing in the amendments intimates a change. The fundamental difficulty with the District Court's judgment in this case is that it rests upon a mistaken apprehension that the 1957 amendments had eliminated preference for existing common-carrier service as a permissible determinant of Commission action. Thus it characterized the criteria in § 209 (b) as designed "to insure that their [applicant's and shipper's] interests would receive the same consideration and be weighed in the same balance as those of opposing carriers." 185 F.Supp. 838, 848 (W. D. Mo. 1960). This was a destructive error.
There remain three further grounds on which the District Court invalidated the Commission's order.
(1) The court held that the Commission had imposed on the applicant the precise burden of proof proposed in the rejected language of its bill, that existing carriers were unable or unwilling to provide the transportation service applied for. Had the Commission done this it would have been in clear error. It did not do so.
The court seems to have feared that the Commission was in fact placing a fuller and impermissible burden on applicants, and turned to later Commission dispositions to confirm its suspicions. In Roy D. Yiengst Common Carrier Application, 79 M. C. C. 265, 268 (1959), it found a statement that there had been no "showing that the existing carriers are unwilling or unable" to provide the service. But a possibly careless phrase is not conclusive of what the phraser is deciding. If it were, our own opinions might at times be used to bind our hands in later decisions. Had the District Court looked behind
We should judge a challenged order of the Commission by "the report, read as a whole," United States v. Louisiana, 290 U.S. 70, 80, and by the record as a whole out of which the report arose. When that is done in this case, it becomes apparent that the Commission did not assign a statutorily impermissible burden of proof to the applicant.
The Commission's final report found from the whole record that the protesting carrier was in fact able and willing to perform the proposed transportation service in the following respects, each of which is set forth explicitly in the report. (1) U. S. A. C., the protestant, is a specialized common carrier in the aircraft field, with approximately 60 percent of its present traffic consisting of fragile parts, like the landing-gear bulkheads whose transportation is needed for Boeing Airplane Company, the shipper. (2) U. S. A. C. is accustomed to modifying its equipment to meet specific needs, and can fashion its services to meet the shipper's production schedules. (3) Specifically, as concerns this traffic, 79 M. C. C., at 708,
It is difficult to conceive of more explicit findings, or to quarrel with the Commission's conclusion from them that "U. S. A. C. is in a position to provide any service that is needed . . . ." 79 M. C. C., at 707. The findings, moreover, find ample support in the extensive and detailed testimony of Mr. Decker, in charge of fleet control and operations for U. S. A. C. After the burden of production was placed on the protestant to show in what respects it was capable of handling the disputed traffic, the Commission surely exceeded no statutory prohibition in shifting to the applicant the burden of persuasion of its substantial superiority.
(2) The District Court was persuaded, however, that the Commission had imposed too lenient a burden of production on the protestant, to show merely that "available common-carrier service was reasonably adequate to meet the transportation needs involved." 79 M. C. C., at 701. It concluded that the proper standard was the one enunciated by Congress in amended § 203 (a) (15), of meeting the "distinct need" of each shipper. And it determined that the Commission had not employed that standard: "No consideration was given to the special services which in fact could not be supplied by a common carrier." 185 F. Supp., at 850. A review of the report and the record, judged by the statute's requirements, does not sustain this holding.
In the first place, the Commission made the precise finding required by the court under § 203 (a) (15): "Plainly, there is no warrant on these records for a finding that the supporting shippers require a distinct type
The service proposed by J-T was specialized in the following particulars. It had designed a trailer exclusively for Boeing's landing-gear bulkheads at a cost of $3,360 within about two weeks. The trailer was underslung with an adjustable floor and roof in order to permit rear-end loading, a fully enclosed carrier, and the height clearance required by state law on the roads it traveled. The trailer was spotted at Boeing's Wichita plant, available at all times on short notice to leave for the supplier's plant in Indianapolis to pick up another load of bulkheads.
The Traffic Manager for Boeing's Wichita plant testified that the shipper had enjoyed particularly the close coordination with J-T made possible through its near-by Wichita terminal. The bulkheads had to be scheduled into the assembly operation at a predetermined time; constant engineering changes necessitated supply of particular bulkheads for particular planes, and a delay in transportation could prove very expensive. The shipper was disinclined to use U. S. A. C. because it had no Wichita terminal, because its tariffs gave it authority to decide on the type of equipment it would use, and because of an experience of carelessness in 1953, although it was uncertain whether this had been the fault of U. S. A. C. or of the shipper.
U. S. A. C. offered evidence that it maintained a terminal in Indianapolis and one in Topeka, Kansas, which could cover shipments from Wichita. U. S. A. C. would be willing to modify its canvas-topped trailer to install
From this evidence it was certainly open to the Commission to find, as it did, that U. S. A. C. could meet the "distinct need" of the shipper. The tariff power was no obstacle. An ambiguous and ancient complaint about service need not control. The absence of a Wichita terminal could be offset, if need be, by the presence of an Indianapolis terminal: The traffic had thus far been entirely one way, from Indianapolis to Wichita, and no reason was given why telephonic consultation with Indianapolis, reaching the supplier and the carrier in the same place, might not be as efficient or more so. Moreover, the shipper on three occasions gave evidence that its preference for J-T was in actuality based on a misunderstanding of common-carrier authority that the Commission was under no obligation to credit.
Beyond this parsing of § 203 (a) (15), moreover, there is reason in policy for the Commission to deny an application when the protestant is able to furnish "reasonably adequate" services. The Motor Carrier Act expresses a policy, as we have seen, of preserving existing common carriage against the inroads of contract carriage. One way of putting that policy into effect is to deny a contract-carrier application, as the Commission has always done, unless the applicant can demonstrate that its service will be substantially superior to that afforded by existing carriers. Another way of describing this practice, which the 1957 amendments have in no way affected, is that no permit will issue for traffic that can be handled with reasonable adequacy by a protestant.
(3) The District Court was most emphatic in its conclusion that the Commission had erred in its resolution of the third factor in § 209 (b)—"the effect which granting the permit would have upon the services of the protesting
How the District Court could be confident that the Commission was blindly applying what it itself called only "in effect" a presumption, in the face of detailed findings that the traffic was one that the protestant "can economically and efficiently handle," it did not explain. Doubtless if the Commission had erected a presumption of adverse effect from evidence simply that the protestant possessed authority in its certificate to carry that traffic, its action would have been inconsistent with congressional deletion of the words "not provided by common carriers" from the amendment to § 203 (a) (15). But, as we have seen, that is plainly not what the Commission did.
The court went further, however, and determined that evidence of the protestant's willingness and ability was by itself insufficient to support the requisite finding of an adverse effect. "Where . . . the protesting carrier is not participating in the traffic involved, there can be no diversion of traffic and hence ordinarily there would be no
But it is plainly an improper reading of the statute. The Commission has invariably held that the preference of a shipper for a particular carrier, even though based on sound business reasons, is not enough to warrant issuance of a permit. This practice is unaffected by the 1957 amendments. We have ourselves unanimously held, since those amendments went into effect, that legally cognizable injury might accrue to an existing carrier denied potential traffic.
If a protestant may be "adversely affected" despite shipper hostility for purposes of seeking judicial review, it seems consistent to permit the Commission to find it so for purposes of ruling upon an application under § 209 (b).
There is persuasive legislative history to the same effect. The amendments to S. 1384 proposed in the Senate hearings by the Contract Carrier Conference, which were substantially adopted as the criteria in § 209 (b), would have erected a presumption in favor of a contract-carrier applicant when the shipper had previously been using private carriage. Senate Hearings 305. This provision was supported on the ground that no adverse effect would normally be visited on a protestant when the shipper had so demonstrated its antipathy to common carriage. It was deleted by the Subcommittee. Thus, if we are to place emphasis on congressional rejections, we must take this deletion as significant that shippers' desires are not to be controlling.
But we need not rely on this episode to prove the point. The whole scheme of statutory regulation points the same way. For we must remember that Congress has chosen in the Motor Carrier Act to regulate motor transportation not by the forces of competition but by impartial administration through an expert body. No doubt contract carriage is frequently preferred by shippers for the advantages, chiefly in flexibility of operations, that it may hold over available common carriage. But the national interest to be safeguarded under the National Transportation Policy is entrusted to the I. C. C. and not to the self-interest of shippers. So long as the Commission does not behave arbitrarily, does not reject the offer of relevant testimony or refuse to "consider" some factor that Congress has commanded to be taken into account, the
A careful reading of the report and record demonstrates the unwisdom of overturning the Commission's exercise of its regulatory functions upon merely apparent surface improprieties. For the Commission found as a fact that the protestant needed the proposed traffic; that U. S. A. C.'s
This is the content of the "presumption" that flows from a protestant's showing of its willingness and ability: a decidedly adverse effect from a loss of "potential" traffic. And the finding rested on a substantial array of record facts. U. S. A. C. had demonstrated its needs by actually soliciting Boeing for the traffic, far in advance of this proceeding. Its record of recent "deadheads," or empty trailers, leaving Indianapolis was impressive: in March of 1957, 92 deadheads as against 61 full loads; in April, 85 against 60. A similar empty-equipment problem existed in Wichita. Aircraft-parts transportation in general had recently decreased. The problem was one of aircraft obsolescence, making the business spotty, with recurrent highs and lows. U. S. A. C. had been engaged in the programs for the building of F-184's, B-47's, and B-36's. Each had ended.
Surely it would have been permissible for the Commission, charged as it is with preserving transportation for the national defense, to conclude that the national interest lay in seeking to keep U. S. A. C.'s excess capacity profitably
VII.
The appropriate relation between the Commission and the courts was delineated in our treatment of the closely parallel problem in Secretary of Agriculture v. Central Roig Ref. Co., 338 U.S. 604. The Sugar Act of 1948, § 205 (a), authorized the Secretary to allocate marketing quotas among particular refineries "in such amounts as to provide a fair, efficient, and equitable distribution" (compare "consistent with the public interest and the national transportation policy"), and directed him to do so "by taking into consideration" three factors— one related to processing of raw sugar from sugar cane, which the Secretary decided was inapplicable, and the other two past marketings and future marketing capacity. The Secretary applied these two by giving them equal weight and referring them to a pre-World War II base period selected as one unaffected by special wartime demands. The resulting allocation order was attacked as exceeding statutory authority and was set aside by the Court of Appeals. This Court reversed, holding that the Secretary had not exceeded the discretion necessarily vested in him by the sugar-quota scheme. We noted that a direction to "consider" certain factors did not control the Secretary's judgment as to what weight should be assigned to each or whether to give weight to all three in each situation. We concluded that so long as the Secretary was not arbitrary in his choice of means to reach an equitable distribution, his decision should stand.
Administrative agencies are not only vested with discretion in sifting evidence and in making findings but may also draw on their specialized competence for ascertaining the reach and meaning of statutory language. Compare Social Security Board v. Nierotko, 327 U.S. 358, 368-371, with Labor Board v. Hearst Publications, 322 U.S. 111, 128-131. The factors to be considered on judicial review of such an administrative determination include the precision of the statutory language, the technical complexity of the relevant issues, the need for certainty as against experimentation, and the likelihood that Congress foresaw the precise question at issue and desired to express a foreclosing judgment on it. In assessing these factors, we are guided primarily by an investigation
That investigation here reveals that Congress conferred the power on the Commission to decide as it has done in this case. None of the precedents is to the contrary; each points to this conclusion. See United States v. Pierce Auto Lines, 327 U.S. 515, 535-536 (not for courts to gauge public interest; so long as requisite findings are made and supported by evidence, the resolution of relevant factors is for the Commission); Bass v. United States, 163 F.Supp. 1, 4 (W. D. Va. 1958), aff'd per curiam, 358 U.S. 333 (same); cf. United States v. Detroit & Cleveland Nav. Co., 326 U.S. 236, 240-241. In Schaffer Transp. Co. v. United States, 355 U.S. 83, 86 n. 3, 90, the Court deliberately refrained from guiding the Commission's discretion in evaluating the relative advantages of competing carriers.
In the present case, no claim can be made that the Commission's findings are unsupported by substantial evidence. United States v. Pan American Corp., 304 U.S. 156, 158; cf. Universal Camera Corp. v. Labor Board, 340 U.S. 474; see Administrative Procedure Act, § 10 (e), 60 Stat. 237, 243 (1946), 5 U. S. C. § 1009 (e). The Commission's detailed report negatives this, as it would a claim that the Commission neglected to make requisite findings.
Of course the provisions of the National Transportation Policy must be applied by the Commission to each application, see Schaffer Transp. Co. v. United States, 355 U.S. 83, 88, but they "represent, at best, a compromise between stability and flexibility of industry conditions, each alleged to be in the national interest, and we can only look to see if the Commission has applied its familiarity with transportation problems to these conflicting considerations." American Trucking Assns. v. United States, 344 U.S. 298, 314; see Interstate Commerce Commission v. Parker, 326 U.S. 60, 66. The Commission's action here certainly does not fall short of that standard. See 79 M. C. C., at 705-706.
An order of the Commission cannot stand, it is true, if we cannot tell what has been decided or if it leaves unclear the basis for its conclusions. United States v. Chicago, M., St. P. & P. R. Co., 294 U.S. 499, 510-511. Findings are no doubt judicially more persuasive the more felicitously they are formulated and the less they require
It is not the Court's function to impose our standards of lucidity or elegance in exposition upon the Commission. And we should take due warning from the consequences of our decision in City of Yonkers v. United States, 320 U.S. 685, of what may follow from exacting overnice requirements of the I. C. C. There the Commission had made no explicit finding that an electric inter-urban railway was an integral part of a steam railroad system as it had to be before the Commission could allow it to suspend its operations. The facts were so clearly spread upon the record that the point was not argued until one of the parties raised it on appeal. This Court remanded the case for an express finding. The Commission took some more evidence and in due course it entered the inevitable finding. The order was attacked again in the District Court, affirmed again after another lengthy opinion, and eventually affirmed per curiam, 323 U.S. 675. That wasteful charade ought not to be repeated here.
I would reverse and allow the Commission's order to stand.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN and MR. JUSTICE STEWART join, concurring in part.
These are appeals from the judgment of a District Court setting aside an order of the Interstate Commerce Commission denying an application for a contract-carrier permit. The application sought authority to transport canned goods under continuing contracts with three
The trial examiner's recitation of facts, as adopted by the Commission, may be briefly summarized. Each of the supporting shippers does a substantial volume of business with small-lot purchasers. These customers maintain low inventories, necessitating a transportation service capable of effecting multiple pickups and deliveries on short notice. Each shipper has engaged in private carriage for this purpose, sending only single-lot full truckloads by common carrier. The Steele Canning Company's private equipment was furnished in part through a lease of the applicant's trucks. When a strike of its drivers occurred, it sought to contract with the applicant for its independent services. The other shippers, who before the strike sold much of their goods through Steele, now wish to expand their sales to individual customers and desire the same type of service from the applicant.
Under its temporary authority, the applicant has been offering several stops in transit at the truckload rate, and assessing no stop-in-transit charge, thus rendering in effect a less-than-truckload service at truckload rates.
Existing motor carriers possess the authority and equipment to provide service to a substantial number of the points involved, either directly or by joint-line operations. Although few have previously participated in this particular transportation, each displays a desire to obtain the traffic; so do the protesting railroads, which have recently experienced a sharp decline in canned-goods tonnage. The motor carriers are willing and able to provide multiple pickups and deliveries where authorized.
On the first point, the Commission concluded that the type of service required by the shippers was not substantially different from that offered by available motor common carriers. Its treatment of the third and fourth criteria in § 209 (b) of Part II of the Interstate Commerce Act, added by 71 Stat. 411 (1957), 49 U. S. C. § 309 (b), a treatment attacked and invalidated in the District Court, was animated by the same policy preference for preserving available common carriage that characterized its disposition of the J-T Transport application, reviewed here today, ante, p. 81. The pertinent portion of its report is as follows:
This conclusion was attacked and set aside in the District Court on much the same grounds as those leading to a similar result in the J-T Transport case, supra. Little need be added here to what I said there. Suffice it to say that the Commission made the findings required of it by § 209 (b) and that each was supported by substantial evidence. Although its evaluation of those findings and the conclusion that it drew from them
There is, however, an additional issue in this case that differentiates it from J-T Transport, supra. It is whether the Commission is required in an application proceeding to consider evidence that the rates of available common carriers are so high as to make transportation costs prohibitive for a supporting shipper.
Before reaching that issue, it is necessary to dispose of a contention that prevailed in the District Court and is pressed here, that the Commission must consider in every
In Schaffer Transp. Co. v. United States, 355 U.S. 83, 91-92, we recognized and impliedly approved the longstanding Commission practice of ignoring rate advantages offered by an applicant over available motor carriers. The Commission has consistently ruled that a shipper dissatisfied with existing common-carrier rates cannot on that ground alone successfully support an application for a contract-carrier permit, and that its remedy lies in attacking the rates under § 216 of the Act. See, e. g., Dixon & Koster Contract Carrier Application, 32 M. C. C. 1, 4 (1942); James F. Black Extension of Operations— Prefabricated Houses, 48 M. C. C. 695, 708-709 (1948); Joseph Pomprowitz Extension—Packing House Products, 51 M. C. C. 343, 350 (1950). That is what it ruled in this case, see 81 M. C. C., at 42-43.
This consistent Commission practice rests on relevant transportation policy considerations. If rate advantages resulting from inherent economies were made a determining factor, the Commission would have to permit protestants to challenge the cost justification of an applicant's proposed rates. This the Commission has never permitted, see Omaha & C. B. R. & Bridge Co. Common Carrier Application, 52 M. C. C. 207, 234-235 (1950), largely because at the application stage there is as yet no revealing record of profit or loss derived from the proposed transportation service,
In rate proceedings, however, the Commission has construed this section as not authorizing it to invalidate cost-justified rates of existing, previously authorized contract carriers even though they may draw away a large volume of traffic from common carriers. New England Motor Rate Bureau v. Lewers, 30 M. C. C. 651 (1941). Once granted a permit, therefore, a contract carrier may exploit its inherent cost advantages to the great detriment of existing common carriers. In determining to ignore those cost advantages in an application proceeding, the Commission acts well within its authority to effectuate the congressional policy of limiting entrance to contract carriage as a means of preserving the capacity of available common carriers to meet the Nation's transportation needs.
That policy is unaffected by the 1957 amendments to §§ 203 (a) (15) and 209 (b). There is not one reference to rates in the legislative history of those amendments. If anything, the action of the 1957 Congress looks the other way; § 218 (a) was amended, by 71 Stat. 343, 49 U. S. C. § 318 (a), to require the filing of actual rather
The right of the Commission to disregard rate advantages as such in application proceedings does not, however, dispose of this case. For the testimony and arguments presented to the Commission fairly raised the claim that the available common carrier rates, whether or not just and reasonable in relation to transportation costs, were prohibitive for the shippers. If this claim were sustained by the Commission, it is difficult to see how it could avoid the conclusion that a denial of the permit would hobble the shipper without benefiting protestants by potentially augmenting their traffic.
The Commission has in fact recognized what it styles an "embargo" exception to its usual practice of disregarding the level of rates charged by existing carriers. See H. L. & F. McBride Extension—Ohio, 62 M. C. C. 779, 790 (1954). In Herman R. Ewell Extension—Philadelphia, 72 M. C. C. 645, 648 (1957), the Commission treated a shipper's claim similar to the present one in a manner relevant to our problem.
In the Ewell proceeding, there was evidence that the existing rates were two to three times as high as those proposed by the applicant, that the shipper would have to "absorb" about $200 on each 30,000-pound shipment and that it had asked existing carriers to adjust their rates without result. Similar evidence was presented in the present proceeding. The representative of the Steele Canning Company testified that, in numerous discussions with protestant carriers, it had learned that their less-than-truckload rates were two and three times as high as the truckload rates proposed by the applicant, and that these rates would drive its canned goods out of the competitive market. Whether this testimony was specific and persuasive enough to establish that the traffic would not move at existing rates we do not know, for the Commission made no finding on this issue. Compare Schirmer Transp. Co., Inc., Extension—Molasses, 77 M. C. C. 240,
I would vacate the judgment of the District Court and remand the case to the Commission for a considered determination whether the rates of protestant motor carriers are prohibitive. The scope of inquiry should be strictly limited. The Commission need not engage in a full-dress rate proceeding to determine whether present motor-carrier rates are unjust or unreasonable. It need only find, from the evidence of record or additional evidence that it deems necessary, whether those rates impose an embargo on the shippers' goods.
FootNotes
"The term `contract carrier by motor vehicle' means any person which engages in transportation by motor vehicle of passengers or property in interstate or foreign commerce, for compensation (other than transportation referred to in paragraph (14) and the exception therein), under continuing contracts with one person or a limited number of persons either (a) for the furnishing of transportation services through the assignment of motor vehicles for a continuing period of time to the exclusive use of each person served or (b) for the furnishing of transportation services designed to meet the distinct need of each individual customer."
"It is hereby declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate, economical, 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 transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive 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 transportation 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 Service, and of the national defense. All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy." 54 Stat. 899.
"Section 203, paragraphs (14) and (15), have been rewritten for the sole purpose of eliminating carriers performing pick-up, delivery, and transfer service. This change was suggested by the Chairman of the Interstate Commerce Commission.
"The conferees wish to make it plain that it is not their intention, by changing the language of paragraphs (14) and (15) of section 203 to change the legislative intent of the Congress one iota with respect to definition of common and contract carriers other than those performing pick-up, delivery, and transfer service. It is intended that all over-the-road truckers shall whenever possible fall within the description of common carriers.
"It is intended by the definition of contract carriers to limit that group . . . ." 86 Cong. Rec. 11546 (1940).
"Senator SCHOEPPEL. I would like to ask a question right there: Supposing you had a common carrier serving certain territory but wasn't furnishing adequate service. There was common carrier service there, but of a very limited nature, and with the mode and extent of doing business nowadays would you draw the line there that the common carrier had to furnish reasonably adequate and prompt service?"
"Mr. ROTHSCHILD [from the Department of Commerce, deferred specific answer and then replied]. They should not be able to deny the application of a common [sic] carrier simply because someone claims that there is common carrier service there." Senate Hearings 200-201, 203.
What weight, if any, should be accorded this exploratory speculation between a single subcommittee member and a representative of a government department having no intimate familiarity with prior administrative practice, is problematical. Even giving it the fullest significance it can bear, however, the most that emerges is this: When a contract carrier applies for a permit, it is not enough for a protestant to show that it has authority to transport the proposed traffic. It must show also that it has the capacity and willingness to do so, and the Commission must be satisfied from all the evidence that, in Senator Schoeppel's words, the service it can perform is "reasonably adequate" to meet the shipper's needs. But this, it will be seen, is precisely the procedure that the Commission had invariably followed from 1935 to 1957.
It did not choose a common carrier "because the common carrier cannot dedicate his equipment exclusively to our service as a contract carrier can." (R. 97.)
Again: "It is my understanding that a common carrier cannot dedicate equipment to a particular shipper, that he holds himself out to furnish that equipment to any shipper that wants it." (R. 103.)
This was of course an erroneous understanding, as Commission precedents demonstrate. A common carrier must hold itself out through its tariffs to serve any shipper who desires the same class of traffic, but it may specialize as much as a contract carrier does and may dedicate equipment to the use of any one such shipper. When U. S. A. C. offered to do so, it was a reasonable conclusion that the shipper's particular needs had been met.
"To reject a motor carrier's application on the bare conclusion that existing rail service can move the available traffic, without regard to the inherent advantages of the proposed service, would give one mode of transportation unwarranted protection from competition from others." 355 U. S., at 90-91.
On 91-92, the Court recognized that these considerations did not necessarily pertain to applications opposed by other motor carriers. The Commission has held in these proceedings that motor common and contract carriers are not different "modes" of transportation, 79 M. C. C., at 710, and its expert conclusion is entitled to great weight. Indeed, the whole history of motor carrier regulation negates any suggestion that Congress has been interested in preserving competition between the different classes of motor carriers.
Comment
User Comments