Interstate Commerce Commission v. J-T Transport Company, Inc.

PETITIONER:Interstate Commerce Commission
RESPONDENT:J-T Transport Company, Inc.
LOCATION:United States Court of Appeals District of Columbia Circuit

DOCKET NO.: 17
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 368 US 81 (1961)
ARGUED: Oct 17, 1961 / Oct 18, 1961
DECIDED: Dec 04, 1961

Facts of the case

Question

  • Oral Argument – October 18, 1961 (Part 2)
  • Oral Argument – October 17, 1961
  • Audio Transcription for Oral Argument – October 18, 1961 (Part 2) in Interstate Commerce Commission v. J-T Transport Company, Inc.
    Audio Transcription for Oral Argument – October 17, 1961 in Interstate Commerce Commission v. J-T Transport Company, Inc.

    Audio Transcription for Oral Argument – October 18, 1961 (Part 1) in Interstate Commerce Commission v. J-T Transport Company, Inc.

    Earl Warren:

    The Interstate Commerce Commission appellant versus J-T Transport Company Incorporated et al.

    And number 18 U.S.A.C. Transport Incorporated versus J-T Transport Company Incorporated.

    Mr. Taylor, you may continue your argument.

    Felix Frankfurter:

    Mr. Taylor, before you begin so I shouldn’t be breaking in on you.

    B. Franklin Taylor, Jr.:

    Yes sir.

    Felix Frankfurter:

    Did I understand you to say that the practice or the orders of the Commission, or whatever the basis for your statement, that it has been said in the law prior the 1957 amendment, taking into account what the District Court here said couldn’t be taken into account?

    B. Franklin Taylor, Jr.:

    I said that it has been the general practice of the Commission actually since virtually the inception of the Motor Carrier Regulation in 1935, to give due consideration to the adequacy of service that could be rendered by protesting existing carriers.

    Felix Frankfurter:

    That’s what this is about, isn’t it?

    B. Franklin Taylor, Jr.:

    Yes, Your Honor.

    In part, it’s whether they may consider that and then (Voice Overlap).

    Felix Frankfurter:

    Are you — am I right to infer that if this decision stands, there would be a break in that practice or a denial of something that has been enforced by the Commission from 1935 to 1957?

    B. Franklin Taylor, Jr.:

    Well, we would certainly say —

    Felix Frankfurter:

    And I’m not (Voice Overlap) and I just want to know what the —

    B. Franklin Taylor, Jr.:

    Yes.

    Felix Frankfurter:

    — what the material showed?

    B. Franklin Taylor, Jr.:

    If the extreme position of appellees here and what the court below may have found —

    Felix Frankfurter:

    Well now, certainly —

    B. Franklin Taylor, Jr.:

    — it should be the law that the Commission may not consider this sort of showing at all.

    Felix Frankfurter:

    But now the Government doesn’t stand on that, does it?

    B. Franklin Taylor, Jr.:

    United States, no.

    Felix Frankfurter:

    Alright.

    B. Franklin Taylor, Jr.:

    They agree with the (Voice Overlap).

    Felix Frankfurter:

    Well, now assume — assume the decision below is not to be read to the extreme extent, to which some of the appellees at all had been would put it, assume that they say that on the record here while it may take into account what happens to the common carriers addressed on that almost exclusively or with insufficient basis either in facts or in finding —

    B. Franklin Taylor, Jr.:

    Well that — that is —

    Felix Frankfurter:

    — with that point of view.

    B. Franklin Taylor, Jr.:

    — that is really the second phase, which would be embraced by the second and third questions whether —

    Felix Frankfurter:

    What I want to know is whether there was a — whether — what was decided in this case, forget the talk, what was decided in your view, the Commission’s view is the departure from what had been the Commission’s practice under to the Motor Carrier Act for 20 years?

    B. Franklin Taylor, Jr.:

    We are afraid that that is — that is the case and it might be a rather abrupt and extreme departure.

    For example, the appellees have argued in their brief, as I understand their ultimate position, that if a contract carrier meets the definition of contract carriage in terms of the number of shippers and the nature of the service proposed, that it virtually follows that the certificate or that the permit should issue.

    As I read their briefs, there are a number of statements, which it seems to me, definitely lead to that conclusion.

    Felix Frankfurter:

    Well, we are here not reviewing their brief, but the decision below.

    B. Franklin Taylor, Jr.:

    Well, they — frankly, we would hope at the very least to secure from this Court an opinion, which would be much more clear to both the industry and to the Commission itself with respect to what the Commission may or may not do under these amendments —

    Felix Frankfurter:

    Well now, I suppose —

    B. Franklin Taylor, Jr.:

    — and we find the opinion below.

    Felix Frankfurter:

    Suppose — suppose I have read the opinion as wholly, not that the Commission is precluded, but that in this case on the record, the evidence before the Commission and the requisite findings to be made thereon.

    One, there was an insufficient, that there was a want of evidence, or two, or and two, that there weren’t findings such as a court is entitled to have from the Commission in order to know what it is that it is reviewing, suppose I — we’ll get the — the opinion below that way and therefore, the decision to carry out that kind of an opinion, what do you say then about the decision below?

    B. Franklin Taylor, Jr.:

    We say that decision below is still in error and as I will argue to Your Honors, the Commission’s findings are adequate and what it did is supported by the record and is within the ambit of its discretion and judgment as the expert agency in this field.

    The United States will agree — will agree with me I think on one of the points, that is, what the Commission did with respect to the record and its findings concerning the adequacy of the existing service, the effect on the supporting shipper.

    Felix Frankfurter:

    Alright, right, right.

    B. Franklin Taylor, Jr.:

    The United States will disagree with us on what — and a ship — the Commission’s treatment of the criterion of the effect of a grant on the protesting existing common carriers.

    John M. Harlan II:

    As I — as I read your brief, I understood your ultimate point would be that however you’ll read the District Court’s opinion, that what the District Court did here exceeded its proper function as the reviewing court of the administrative agency.

    B. Franklin Taylor, Jr.:

    We think it clearly —

    John M. Harlan II:

    And that the findings that it — so far as findings were concerned, you say the findings are adequate.

    B. Franklin Taylor, Jr.:

    That (Voice Overlap) Justice Harlan —

    John M. Harlan II:

    Isn’t that the (Voice Overlap)?

    B. Franklin Taylor, Jr.:

    — and I think — especially apparent, at least it is to us, in the District Court’s criticism of what the Commission did with respect to this effect on the supporting shipper.

    Felix Frankfurter:

    May I suggest, instead of worrying about what the United States argued and what the appellees, the other appellees argued, and bothering about my questions, you address yourself to what is involved in Justice Harlan’s question what you had said before you intervene, namely that taking not the extreme interpretation that may be placed upon the District Court, but taking the view that it does not disallow the Commission from taking into account the effect or consequence to the uncommon carriers, (a) there is basis in the record for the fact — for the conclusion that it did not unduly give weight to that factor, and (b), that there are findings carrying out that sufficiency of evidence.

    I think then, one will be a little clearer rather than having to consider all of these cross kinds of differences.

    B. Franklin Taylor, Jr.:

    Yes.

    Well, that would bring me actually to my argument at first on what the District Court said about the Commission’s findings and conclusions with respect to the effect on the supporting shipper of the denial and what the Commission in fact did.

    The District Court said, as we read this opinion, that the Commission had ignored the affirmative evidence of the supporting shipper, Boeing, specific needs that no consideration were given to special services, which the District Court said in fact could not be supplied by the common carriers here.

    And that the Commission had not made adequate findings respecting the distinct transportation needs of the shipper.

    I think from the rather full statement of facts I gave yesterday and others facts from the record and which the Commission has found and we set them out rather fully in our brief, that it’s just not true that the Commission did not consider the evidence of the shipper, Boeing’s needs, and that it did not consider the ability of the protesting common carrier to meet those special needs.

    It summarized the needs in great detail and it found specifically that the protesting common carrier could provide exactly the same sort of service as was proposed by J-T, the appellant, and it recited in detail the things that the protesting common carrier was accustomed to do and would do in this case.

    And as a result, the Commission concluded that the protesting common carrier was fully able to meet the needs of Boeing.

    So, I think it’s just patent from the Commission’s report, in any fair reading of it, that it is just not the case that the Commission ignored affirmative evidence of Boeing’s needs and that it made findings that didn’t reflect or touch those needs, that — that the report is the full answer to that.

    The court also —

    John M. Harlan II:

    Can you —

    B. Franklin Taylor, Jr.:

    — suggests —

    John M. Harlan II:

    Can you pinpoint the particular passages in the report?

    John M. Harlan II:

    If you can do it quickly.

    B. Franklin Taylor, Jr.:

    Yes sir.

    In the Commission’s brief, pages 46 to 52, we address ourselves to this point, to recite initially what the court said about the Commission’s treatment of this and then we point out what the Commission itself said.

    John M. Harlan II:

    47?

    B. Franklin Taylor, Jr.:

    On page 50, for example, we set out from the Commission report what it said about the needs of Boeing and what the applicant is proposing to do for Boeing, what it’s been doing under its temporary authority.

    It goes on to set out what U.S.A.C. can do and is offering to do here and then at — to go back to page 47, it again summarizes in some detail what U.S.A.C. is in a position to do and is offering to do.

    And I think it’s apparent from this sort of treatment in the report that it has fully considered what the shippers has testified what its needs are and has fully considered what U.S.A.C. has affirmatively shown that it could and would do, and has concluded that — and I’m quoting, “U.S.A.C. is fully able to meet the shippers’ needs.”

    And that, “In view of the adequacy of existing common carrier service, the supporting shipper would not be materially affected by denial of the applications.”

    I think that’s all the Commission needs to find on this, especially after this rather full discussion.

    So, we’re satisfied to rely on these few pages in our brief and the — and the court’s reading of the Commission report to —

    Earl Warren:

    Might there not be a difference between the Commission saying that U.S.A.C. can supply all of the needs of the shipper from saying that it can do all of the things for the shipper that the private or the contract carrier could do?

    B. Franklin Taylor, Jr.:

    Well —

    Earl Warren:

    Isn’t there a difference?

    Are they not there deciding what they think the shipper needs rather than to say that they can do just as much for him as the contract carrier?

    B. Franklin Taylor, Jr.:

    I think the answer to your question Mr. Chief Justice is no.

    The Commission has not said here.

    The shipper says it needs this, but we really don’t think it needs that that the common carrier can do something else, which is close enough.

    They’re not substituting their judgment for the shipper here with respect to its needs.

    Although, I don’t want to be understood as conceding that the Commission has got to accept uncritically, everything a shipper says about its needs.

    But in this case, on this record, that the Commission recites the testimony of Boeing as to what it needs and what has been done for it on the temporary authority by J-T.

    And then the Commission points out that the U.S.A.C. can do the same things.

    It’s a specialized carrier.

    It’s a common carrier but specializes, and that’s what 85% of his business in serving the aircraft industry.

    It’s accustomed to modifying equipment, dedicating special equipment, meeting production schedules, all these things, Boeing says it needs.

    It has —

    Earl Warren:

    Was there —

    B. Franklin Taylor, Jr.:

    — the terminal right at the origin point of the shipment so it can pick them up on a phone call.

    Charles E. Whittaker:

    But do they have one at the point of destination?

    B. Franklin Taylor, Jr.:

    No sir.

    Charles E. Whittaker:

    That the other on is (Inaudible)

    B. Franklin Taylor, Jr.:

    The J-T has the terminal in Wichita, which is where Boeing is.

    It does not have a terminal in Indianapolis.

    The reverse is true of U.S.A.C.

    Charles E. Whittaker:

    Do you contend that the service rendered — supposedly rendered by J-T would be precisely that which has been rendered by the other company?

    B. Franklin Taylor, Jr.:

    Mr. Justice Whittaker, I think it’s fair to say from this record that the protesting common carrier U.S.A.C has indicated, has shown, that it can provide service, which would be as close to being precisely what J-T is now rendering as you could get it.

    Felix Frankfurter:

    But, if it’s merely a question of whether it is — where it would be rendering the same service from the point of view of the shipper, considerations of convenience, time, cost, everything — you say cost is out of this case.

    B. Franklin Taylor, Jr.:

    That’s right.

    Felix Frankfurter:

    Where all of the other considerations had make a difference to the shipper, it says a contest on the ingredient of factors that add up to satisfy or meeting the shippers’ need, if there’s a difference of opinion and there’s a basis for taking one view rather than another, it’s not a business of a court to say, “We think we disagree with the Commission.”

    B. Franklin Taylor, Jr.:

    Well, the Commissioners — the Commission is the finding of the fact.

    I don’t have to tell this Court that.

    Felix Frankfurter:

    Well, I know.

    But that’s a loose phrase “a finding of fact” and I’m trying to penetrate in finding out what — what is the finding of fact in the sense that if there is a conflict, the Commission’s resolution of the conflict is determinative, rather than what are the standards by which the so-called fact to judge.

    Those are two very different things.

    B. Franklin Taylor, Jr.:

    Well —

    Felix Frankfurter:

    Then, we better agree on what are the standards that may be taken into account once you assume the common carriers’ interest as viewed from the shipper’s need is a relevant factor for the ultimate determination.

    B. Franklin Taylor, Jr.:

    I would say that the Commission’s report reflects that it fully set forth and considered the shippers’ needs, that it fully set forth and considered the service that is proposed to be provided and could be provided by the protesting common carrier, and that it made completely adequate findings that the service proposed is fully able to meet the shippers’ needs.

    I’ll go further to say that those findings are overwhelmingly supported by this record and that certainly, when this Court gets into the record, it could not conclude that such findings, which I submit are adequate, are arbitrary and without support in the record.

    I think that they’re more than substantially supported.

    I think it’s fair to say that they’re rather overwhelmingly supported in this record.

    I don’t see that this phase of the Commission decision is a problem frankly.

    I — again, maybe I’m deferring too much to our friends in the United States, but the point at which they are in disagreement with the Commission’s decision is the most troublesome point.

    And if it meets the pleasure of the Court, since my time is rapidly running out, I’d like to —

    Earl Warren:

    Right.

    B. Franklin Taylor, Jr.:

    — address myself to that final point.

    Earl Warren:

    Go ahead.

    B. Franklin Taylor, Jr.:

    Now, as we read the District Court’s opinion, it’s its view that the Commission based this determination of the effect of granting the permit on the services of the protesting carriers, on the basis of: one, an improper presumption; and two, its conclusion with respect to this affect was without record support.

    That is the District Court seemed to feel that, for example, if the protesting common carrier were presently enjoying the track, such that a grant of the permit would result in the traffic being withdrawn from the protesting common carrier, that then it might be the sort of a diversion of traffic which could constitute a sufficient adverse effect that the Commission could consider.

    But that something short of that, it just wouldn’t satisfy the criterion and that the Commission on something short of that would probably not be justified in finding an adverse effect.

    Well, the protesting common carrier is not enjoying that track so we do not have a case where the grant of the permit is going to withdraw on the protesting common carrier, traffic, which is now transported.

    I think the United States generally agrees with the District Court.

    B. Franklin Taylor, Jr.:

    It too feels that the Commission has based its finding in this area on an unsupported presumption.

    Now, the basis —

    Hugo L. Black:

    Would you mind stating again the sentence — what the presumption is?

    B. Franklin Taylor, Jr.:

    Yes sir.

    Hugo L. Black:

    As you understand it.

    B. Franklin Taylor, Jr.:

    Yes.

    Hugo L. Black:

    On an unsupported presumption, you say.

    B. Franklin Taylor, Jr.:

    I will read you the language in the Commission’s report in which what is presumption lang — at this presumption word is used.

    Hugo L. Black:

    What page?

    B. Franklin Taylor, Jr.:

    In our brief, it’s a language quoted from the Commission’s report at pages 57 to 58 of our brief.

    In the record, it’s page 42.

    The Commission has been discussing generally the background and what it has done in the past and towards the bottom of this quotation on page 57 of our brief, we find the language, “However, we believe that our past holdings that existing carriers are entitled to transport all the traffic which they can economically and efficiently handle before additional authority is granted are equally valid today as they were prior to the 1957 amendments to the Act.

    There is, in effect, 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.”

    Now, that is a sole place in the Commission’s report where it uses this presumption language and the court will note, they said, “There is, in effect, a presumption,” in effect in setting — to set off the commerce.

    Now, what the Commission is saying, and I think when this report is carefully read at two or three — it becomes almost redundant on this point.

    At a couple of places, they’ve discussed the National Transportation Policy and relate this sort of thinking to it.

    And what the Commission is saying, it seems to me, is that generally speaking, authorizing a service for which there is no need, that is that the existing carriers can meet, but authorize a new unneeded competitive service.

    Generally speaking, it is viewed as adversely effecting the existing carriers because it takes out of circulation, potential traffic, which might become available to them and that this sort of thing if it were to occur as a regular matter authorizing an unneeded competitive service would be inconsistent with preserving sound economic conditions in the motor transportation industry.

    And I think that sort of thinking is entirely consistent with — if we go back to 1935, when motor carriers are put on to regulation, with the — the reasons that they were put under regulations as set forth so succinctly by this Court in the A.T.A. case at 345 U.S., where they pointed out it was the over competition, the instability in the industry which it caused to be put on the regulation.

    Hugo L. Black:

    May I ask you —

    B. Franklin Taylor, Jr.:

    So the Commission in general is of the belief, that it is — will not advance the preservation of sound economic conditions in the motor carrier industry to authorize a new service to compete with carriers already in the field where the new service is not meeting a need that the existing carriers cannot adequately take care of.

    Hugo L. Black:

    May I ask you to go (Inaudible), I’ve had a rather — it’s rather (Inaudible) for me to get precisely the issue.

    Does that meet the court’s reference to meeting the distinct or specific need of the deporting supporting shipper or is that statement, based on the ideas, it meets the needs of shippers in general (Inaudible)

    B. Franklin Taylor, Jr.:

    As I try to indicate a few moments ago, in this case, the Commission has found, I think completely ample evidence that the existing common carriers here, who were protesting this application can meet the distinct needs of these shippers.

    Hugo L. Black:

    For services to Boeing?

    B. Franklin Taylor, Jr.:

    Well, the existence of a terminal in Wichita has nothing to do with whether you can deliver to Boeing’s plant.

    Frankly, and I may be challenged (Voice Overlap).

    Hugo L. Black:

    I asked that because — I asked that because of Justice Whittaker.

    B. Franklin Taylor, Jr.:

    Yes.

    I think this terminal at Wichita thing, in a transportation sense, is kind of a phony, because the delivery is to the plant of Boeing, it’s not to a carrier’s terminal in Wichita — it’s still a plant of Boeing.

    B. Franklin Taylor, Jr.:

    The only convenience to a shipper and the carrier having a terminal in the same town where his industry is would be that he could walk over there and talk things over, but you’ve got a telephone for that.

    Hugo L. Black:

    But your argument is based on the assumption, and as I understand it what I’m trying to say on my mind, that the service would be adequate, must be the kind of service that the Commission can find on evidence, meets the distinct needs of this particular shipper who has supported the application of the other route.

    B. Franklin Taylor, Jr.:

    I’d say in this case that there is no issue as there may be in Reddish, on whether the Commission has found that it’s the reasonable needs that are met, but not the distinct needs, because here the Commission has said, as I read a few moments ago, the protesting carrier is fully able to meet the needs and it has recited the needs and recited what the carrier can do.

    I don’t think there’s any question on this record that the distinct precise special needs can’t be met the protesting carrier.

    Hugo L. Black:

    (Voice Overlap) something that is hard back to the railroad days, trailer and trucking business where the trucking business began to meet the special needs of the carriers of the goods right to the warehouse.

    Now, that would be — now, that would be something I would think of as in the nature of a distinctive service that that shipper needed.

    In your statement, you are arguing on the assumption that this case has fully met, the commission has fully met its burden, or not its burden but a duty to decide this on the basis of the actual services rendered by each one and that it shown as decided on evidence, that the distinctive needs of this shipper can be met.

    B. Franklin Taylor, Jr.:

    Mr. Justice Black, yes, that’s our position and we’re entirely content to leave the Commission’s report to speak for itself in the record.

    We think that the findings are there on the records supported.

    Earl Warren:

    Does this Act contemplate competition between public carriers and private carriers in this field?

    B. Franklin Taylor, Jr.:

    Well, private carriers —

    Earl Warren:

    Well I’m — I’m speaking with contractors, or is it just between rail and water and trucks or does it break it down farther and does it contemplate the competition in this field between public truckers and contractors?

    B. Franklin Taylor, Jr.:

    Well, I think, Mr. Chief Justice, at first, the Act contemplates limited competition in the first place, because we are dealing with a regulated industry and regulated rates.

    I would like to think it more in terms of service.

    I think the function of a contract carrier is to provide some specialized and tailored service to a shipper, which is akin to what it might provide for itself, where that service is not otherwise available.

    It’s an alternative to going into private carriage.

    And today, other contract carriers might be under the scene, providing the same service, and that might be a barrier to a new one being authorized or specialized common carriers may be fully able to provide it.

    I’d like to save a few minutes for rebuttal, and on the other hand, I would like to say something, and I’m afraid I’ve cut my friend Mr. Rice out completely here.

    Felix Frankfurter:

    But before you go beyond the immediate discussion, let me rather conclude, forgive me.

    209 (b) sets forth five factors in determining whether he can affirm and be consistent to the public interest et cetera, the Commission shall consider the five factors, which you enumerated just — I want to know this.

    I want to know the Commission’s specific attitude on this question.

    Must the Commission take all five factors into account?

    B. Franklin Taylor, Jr.:

    Mr. Justice Frankfurter, I would say that they must take all of the factors into account that are relevant and pertinent to a particular set of facts.

    For example, the fifth factor, the changing character of the shippers’ requirements.

    The Commission pointed out was not pertinent here.

    Felix Frankfurter:

    Was it then —

    B. Franklin Taylor, Jr.:

    It took it into account.

    He —

    Felix Frankfurter:

    Well, I knew you must —

    B. Franklin Taylor, Jr.:

    — was aware of it.

    Felix Frankfurter:

    — must in determining whether a delicate issue canvassed those five considerations.

    I’m not now asking whether the considerations have any relevance in a particular case, and therefore, they do take them into account, namely zero.

    I’m not asking the weight to be attached, I’m asking, must they in their conclusion give evidence that they have considered the five ingredients which determines the ultimate conclusion of rejection or grant?

    B. Franklin Taylor, Jr.:

    Oh, the statute says, “In determining whether a grant would be consistent with the public interest and national transportation policy, the Commission shall consider.”

    Now, I would say that that’s pretty mandatory upon the Commission —

    Felix Frankfurter:

    Alright.

    B. Franklin Taylor, Jr.:

    — to consider those things.

    Now, what weight they attach —

    Felix Frankfurter:

    They are not —

    B. Franklin Taylor, Jr.:

    — to these is not spelled out.

    Felix Frankfurter:

    That would be my question.

    I answer those — I put a very specific question with very specific purposes in mind, with very specific decisions of this Court in mind.

    Namely, when any administrative agency, whether the Commission or the Secretary of Agriculture in the Sugar case we had, is told to act on the basis of the following consideration, he cannot delete from the statutorily enumerated consideration anyone and say, “Well, I don’t — I’m not going to pay attention to this.”

    He may find that there’s no part in the equation.

    It has no weight.

    It has no value.

    It has the irrelevance.

    But there must be some evidence that the Commission wasn’t unmindful of the limitation of its mandate.

    Do you agree with that?

    B. Franklin Taylor, Jr.:

    I would have to agree with that —

    Felix Frankfurter:

    Now.

    B. Franklin Taylor, Jr.:

    — Mr. Frankfurter, yes.

    Felix Frankfurter:

    Then you can you — can this — the report of the Commission, from the point of view of the Commission arguing before this Court, that the report of the Commission indicate explicitly that it did something about each one of those five?

    B. Franklin Taylor, Jr.:

    It certainly does.

    I would like to save whatever time we have left for rebuttal.

    Earl Warren:

    You may Mr. Taylor.

    Roland Rice:

    May it please the court.

    Earl Warren:

    (Inaudible)

    Roland Rice:

    Let me say that it is the view of the specialty common carrier, which I represent in the two groups of common carriers holding general commodities, which I represent that the Commission is required to consider all of the elements enumerated by Congress in Section 209 (b).

    Let me also emphasize that this specialty common carrier which I represent hauled a limited group of commodities, namely U.S.A.C. Transport Company.

    Roland Rice:

    These are commodities, airplane parts, engines and so on, and we are obligated to offer our services to all people who ship and who wished to receive those commodities.

    Now, with respect to the general commodity carriers which I represent, the two groups, the two conferences of American Trucking Associations, we hold out our services to all the public insofar as we are capable of doing so and in many, many cases, we are actually serving thousands and thousands of shippers and we haul many thousands of individual commodities.

    Now, at the same time, there are common carriers that transport a very few commodities and U.S.A.C. Transport is one of those.

    J-T Transport, a contract carrier also hauls a very few commodities, certainly as compared with the general commodity carriers.

    And as a matter of fact, those two are competitive because J-T is now seeking and has been granted temporary authority by this Commission to do something, which very clearly, U.S.A.C. Transport has the right to do and the Commission found that U.S.A.C. Transport could perform this service.

    Not only that, there are automobile carriers who handled nothing but automobiles and who are common carriers and who served whatever portion of the public is available to them and there aren’t many automobile manufacturers in this country.

    At the same time, there are contract carriers of automobiles holding permits granted by this Commission, which perform service which is almost identical, if not physically identical, with that served by the common carriers.

    In addition, there are many other types of common carriers of — specialty commodities.

    For example, you have the household goods carriers who haul for anybody but they don’t haul general commodities.

    They haul that group of commodities falling in the area of the household goods service.

    You should find the same thing with tank truck carriers.

    You have common carriers by tank truck and you have contract carriers by tank trunk and they will be both be hauling the same or a limited number of commodities, and these carriers therefore, in a very real sense are competitive the one with the other.

    The question was asked here a bit earlier, whether or not if what the lower court does should become law, there will have been established a sharp departure from practice in the past with respect to what this Commission has done in considering cases when a new application is before it.

    It’s my view and very emphatically so that this would amount to a sharp departure in practice, going all the way back to the beginning of regulation in 1935 and continuing to cases that are being decided week after week and month after month by this Commission in which it shows that it does consider the adequacy of service of existing carriers.

    That is something which in my opinion is specifically brought out by the amendments of — in 209 (b) in 1957, and furthermore, that language, the word “adequate” itself appears in the National Transportation Policy, the concluding sentence of which imposes upon the Commission the obligation to administer all the sections of Act with due regard to the total policy expressed by Congress there, which includes adequacy and which includes sound economic conditions.

    We think the Commission was fully within its rights and bound by law as a matter of fact to give consideration to every element that it did and to come to the conclusion that it reached in this case.

    And furthermore, if anyone wants to know what adverse effect there might be upon U.S.A.C. Transport, the common carrier of limited commodities, which I here represent along with the others, let me say, just look at the 219 empty vehicles which we moved in a two and half month period, and this in the record from Indianapolis out and on which we had no break and with which by modification which we offer to do have record, we could have used, for transporting the commodities, that are here before the Commission and before this Court.

    Felix Frankfurter:

    Well, the Commission doesn’t have to take your — the Commission doesn’t have to determine the demand for a permit, either by your willingness to do, that it isn’t foreclosed to say, despite that fact, we think some of these other factors outweigh any more than it has to give the shipper a free choice, neither the shippers’ wish nor the common carriers’ readiness and determinative as I read the statute and as I read its history.

    Roland Rice:

    I agree with you, Your Honor.

    And I think that this Court said so in 364 U.S.1, the Pacific Motor Trucking case.

    Thank you.

    Earl Warren:

    Mr. Solomon.

    Richard A. Solomon:

    Mr. Chief Justice, members of the Court.

    In a very brief period that I have in this argument, I don’t think I’ll have time to do more than outline our position.

    But the issues presented in this case are also presented in the Reddish case is to follow and I may be able to elaborate there.

    Now, with due respect to my friends on the appellee side, I’m not going to take any time here to argue the question of whether the Commission can’t consider adequacy of service or consider the service that the common carriers and other protesters here provide.

    I think the lower court’s decision in both this case and the Reddish case are very ambiguous on this point.

    And I agree strongly with the Commission that they should be clarified in this Court’s opinion.

    But I don’t really think that there’s any serious problem.

    If the court was saying, if they can’t consider, it was clearly wrong, they have to consider the existing services.

    Richard A. Solomon:

    You can’t make a determination that makes any sense without knowing what you’re starting.

    The problem we have is not whether you consider existing services, but how you consider existing services in evaluating the two primary questions which normally are going to be decisive in this type of case.

    Now, as Justice Frankfurter said, there are five factors which the Commission is required to consider and there are additional factors because I agree with the Commission that these are not exclusive factors.

    There may be other factors, which the record will require them to consider.

    But in most cases, in most cases, the problem really comes down to whether the interest of the shipper in securing new service are more important to the National Transportation Policy or less important to the National Transportation Policy than the interest of the existing carriers in protecting their services, the choice is between the effect, in other words, if I may cite, use statutory language between the effect of a denial of the application upon the shippers for whom it is being put forward because contract carrier applications are always put forward by a proposed contract shipper, a transporter for specific shippers.

    The shipper’s interest as contrasted with the interest of the existing carriers.

    Now, as we see it, and as the court below saw it too, in passing upon these two basic factors, there are three problems which have risen over the years and which are exemplified in both the J-T and the Reddish cases, which are very important.

    The first of which, to which I’ll only advert very briefly here is burden of proof.

    The Commission has used very loose language in the past.

    It uses very loose language here with respect to whether the shipper or the applicant must show that the protesting carriers are unwilling and unable to do what they intend to do.

    And to the extent that the Commission puts the burden upon the shipper and the applicant to show what somebody else can do, not only is that illogical but it’s clearly contrary to the legislative history of 1957 amendments because the Commission at that time tried to put through an amendment which would’ve put the burden on the applicants and that was expressly rejected.

    Felix Frankfurter:

    But that isn’t quite — unless you have a different legislative history in mind than I have, what the Commission tried to originally propose is that that such — such a permit can be granted only if the existing common carriers are unwilling or unable to provide.

    Richard A. Solomon:

    Showing that they’re unwilling or unable to provide.

    Felix Frankfurter:

    But it has nothing to do with burden of proof.

    Richard A. Solomon:

    I think it does, sir.

    Felix Frankfurter:

    Well, Mr. Solomon, please tell me why the Commission — why the Commission, having been authorized to take into account five factors cannot say as a result of a great deal of experience over more than two decades, our experience lead us to conclude that in evaluating these five factors, it seems to us desirable from a point of view or proof to start off in saying that in most instances, the factors have been shown to be such that we can now formulate a general rule that on the hold, this one (Inaudible) the burden of proof.

    So long as they don’t make it conclusive, please tell me why that may not be drawn from their experience.

    Richard A. Solomon:

    Well, I think a lot of things can be drawn from their experience and I think even they can — from their experience say, generally speaking we are going to look with great disfavor upon contract carrier applications unless there is a real unmeetable need, because we know generally speaking that this will effect the existing common carriers.

    But the problems as Your Honor pointed out, the 1957 Act, in part because that contract carriers’ complaint that they were doing this too generally and not looking at the specific facts, it requires them to look at the specific facts and apply their general test to the specific facts of the case.

    Now, as putting —

    Felix Frankfurter:

    And on putting that completely, that means that they cannot make their generalization or conclusion.

    Richard A. Solomon:

    Right.

    Felix Frankfurter:

    But it doesn’t mean that they can draw on a generalization as one of the elements in reaching a conclusion?

    Richard A. Solomon:

    I think that’s right.

    I think the real problem here is whether they do make their generalizations conclusive.

    Felix Frankfurter:

    Alright.

    Richard A. Solomon:

    And the generalizations are perfectly well tools to help you in reaching in a decision but they are not a substitute for a decision.

    Felix Frankfurter:

    I agree with you, but a great deal of leeway will be given as to the different weight they attach and I’m rather surprised that — surprised to look at the brief, neither side have cited a case in which we dealt with this problem rather extensively, namely Secretary of Agriculture against Central Roig Company in 338 U.S.

    Richard A. Solomon:

    Well, from my point, I must confess completed wherein — that’s why we didn’t decide that.

    Felix Frankfurter:

    Because that case dealt with a similar problem relating to the functions of Secretary of Agriculture and gave him the broadest leeway as to how you weigh the different factors.

    Richard A. Solomon:

    Mr. Justice Frankfurter, the United States, despite what it may seem like because we sometimes do come up here opposing the Commission does not like to and —

    Felix Frankfurter:

    Do we have a separate statutory standing or duty —

    Richard A. Solomon:

    We —

    Felix Frankfurter:

    — as an independent position?

    Richard A. Solomon:

    — recognizing exactly what you were saying, we have, although we think there is some basis for the lower court’s opinion here, we have leaned over backwards to say that in our opinion, on the basis of the record of the J-T case, we don’t have to say this in Reddish, we’re in the basis of the J-T case, we do think that the Commission can be said to have found that J-T can fully and completely meet the distinct needs of the shipper here.

    Now, this is debatable, but we think that, as we look at the record here that this is a conclusion that they not only could’ve drawn, but that the language would seem to say they drew it outweighs the language, which seems to indicate they didn’t.

    This isn’t a clear problem even in the J-T case Your Honor, because not only does the Commission in its general discussion at pages 38 of the record, talk in terms of shipper needs being merely met by reasonably adequate service of the common carriers, exactly the type of showing, which this Court and the Schaffer found was no — not sufficient.

    But on page 49 of the record, it again talks in terms of, whereas here it appears that a motor common carrier is able to furnish a service substantially similar to that proposed by a motor carrier — by a motor common carrier applicant.

    So there is this problem in the J-T case as well as the Reddish case.

    But we agree with Mr. Taylor that when you look at this decision on the whole here, there is enough in here to find that the Commission filed that the existing carrier could fully meet the needs of the shipper and that they’re sufficient on the record so that in the very broad leeway that the Commission must necessarily have, this is supportive.

    Hugo L. Black:

    Do you mean by needs — distinctive needs again?

    Richard A. Solomon:

    I mean by distinctive needs, sir —

    Potter Stewart:

    Using the —

    Richard A. Solomon:

    The Commission seems to think it means that too because the Commission does use the words “distinctive needs” in the J-T case.

    Felix Frankfurter:

    Distinctive needs within the statute, is it?

    Richard A. Solomon:

    Yes sir, the 203 (a) (15), in defining common carrier uses —

    Potter Stewart:

    What?

    Richard A. Solomon:

    I mean contract carrier, uses the term distinct needs of the shipper and it is that — for that reason, that the lower courts picked up this term.

    Felix Frankfurter:

    I mean on 209, is there any difference between needs and distinctive need?

    I don’t —

    Richard A. Solomon:

    I think there’s a — all the difference in the word.

    Felix Frankfurter:

    There is.

    Richard A. Solomon:

    Yes.

    Felix Frankfurter:

    Could you tell me?

    Richard A. Solomon:

    The problem in all too many cases, the problem in the Reddish case is that in evaluating the needs of the shipper, one of the statutory things that they must evaluate all too often, the Commission says —

    Felix Frankfurter:

    Why is it they must evaluate?

    Richard A. Solomon:

    The needs of the shippers —

    Felix Frankfurter:

    In 209, there is no “distinctive needs.”

    Richard A. Solomon:

    No.

    But what 209 says is, “You must evaluate the effect of a denial upon the shipper.”

    Felix Frankfurter:

    Yes.

    Richard A. Solomon:

    Which means, I believe and I think must necessarily mean, that what will a shipper lose in the way of transportation if this application is denied, which necessarily means what does he need, because what if — you’ll now determine what he loses.

    Felix Frankfurter:

    Yes.

    Richard A. Solomon:

    Well now, all too often —

    Felix Frankfurter:

    An automobile shipper had different needs than a banana shipper.

    Richard A. Solomon:

    Yes, sure.

    But it’s not only that, it’s a question of what are the specific needs, because all too frequently Justice Frankfurter, what the Commission does is it looks at the common carriers and says, “They can perform the general type of service that is asked for here.”

    If it’s — well, they say here, these are both specialized carriers.

    They can both perform the same general type of service.

    Now, if they stop there, as we think they did in Reddish, we think that would be clearly wrong.

    It would be exactly what the Commission did in the Schaffer Transportation case, at 355, where they said the railroads can get these granite blocks from Vermont to the Midwest, they can provide a reasonably adequate service and they didn’t look to see that — a reasonably adequate service may not meet the full needs of the shippers.

    Felix Frankfurter:

    Therefore, from my —

    Richard A. Solomon:

    This is a very real problem —

    Felix Frankfurter:

    Therefore, from my point of view, it isn’t reasonably adequate.

    Richard A. Solomon:

    Well —

    Felix Frankfurter:

    This is “words.”

    Richard A. Solomon:

    This is “words.”

    Felix Frankfurter:

    “Words, words, words,” then, aren’t they?

    Richard A. Solomon:

    This is “words” —

    Hugo L. Black:

    Would you say this is —

    Richard A. Solomon:

    — but it’s more than that.

    Hugo L. Black:

    I gather, you are saying, I’m trying to get the distinction, reasonably adequate for this shipper.

    Richard A. Solomon:

    Yes, that’s what — that’s what —

    Hugo L. Black:

    That’s what you would say, reasonably adequate or distinct to meet his — you say, distinctive needs, isn’t it?

    Mr. Justice Frankfurter was simply, as I gather, say, for the shipper?

    Felix Frankfurter:

    That’s what I do mean with — because the statute talks not about an abstract platonic shipper, it means a fellow is engaged in business as some goods to ship from A to B and his needs must be satisfied.

    Richard A. Solomon:

    I don’t disagree.

    What I am saying is that all too frequently, the Commission has used this phrase “reasonably adequate,” as this Court found in the Schaffer case, has used this convenient term “reasonably adequate” to say that the protesting carriers are doing something equivalent generally to what the shipper needs and that’s good enough, and we won’t consider the shipper needs anymore.

    Felix Frankfurter:

    Many of the carriers who ships bulk goods, that isn’t good enough that the particular bulk requires a particular treatment, a particular acceptance and a particular delivery.

    Richard A. Solomon:

    Well, I’ll give you a more specific case because it’s the case I’m going to argue next.

    Richard A. Solomon:

    In the Reddish case, both the protestants and the applicant can provide multiple pickup and delivery service of small orders and that’s true.

    And to that extent, they are — the protestants can provide reasonably adequate service, but that’s not the issue.

    The issue in Reddish is whether the protestants can provide this type of service as fast and as efficiently, and that the Commission doesn’t pay any attention to.

    Felix Frankfurter:

    Once you spell it out, I don’t disagree with you at all, but I don’t get any (Inaudible) significance between specific needs and needs.

    Needs —

    Richard A. Solomon:

    Well —

    Felix Frankfurter:

    — that don’t satisfy the particular shipper on satisfaction of his needs.

    It’s as simple as that to me.

    Richard A. Solomon:

    Well, I think on the same wavelength.

    What I am saying is that the problem here and in all these Commission cases is that in all too many of them, they have used a formula rather than looking at the facts to see distinct needs.

    Felix Frankfurter:

    You know, they have loosened their language unlike what courts there were engaging.

    Richard A. Solomon:

    No, they have used lose language to avoid doing their job.

    Felix Frankfurter:

    Alright.

    If you can penetrate that in their result, they have left out irrelevant factors and I understand you thoroughly, if you’d go and looked at their words through a microscope, then I don’t think why — I don’t see any reason why they should be judged more harshly than you would judge me, I hope.

    Richard A. Solomon:

    I agree sir that we have to look at what is behind the words and not merely at the work.

    And that — let me turn in connection with to this problem.

    The Commission said that there is no evidence of distinct needs.Can you tell us (Inaudible)

    Richard A. Solomon:

    I have no doubt that the burden of showing the distinct needs of the shipper are upon the shipper or the applicant who wishes to serve it.

    The burden of showing whether they can be met by the protestant carriers is on the protesting carriers.

    Now, I would like to get, if I have any time at all, to the question of presumption, which is the place which in the specific facts of the J-T case, we part company with the Commission.

    Now, as I say in most cases and in the J-T case, the problem is evaluating shipper needs against the needs of the — against the interest of the existing carriers.

    And the statute, the 1957 amendment next express what we think was implied previously and that is that the Commission must consider the effect of a grant upon the services — upon the services of the existing protesting carriers.

    Our problem with the Commission is that it doesn’t make any effort in any case or at least in these two cases, maybe it makes some effort in some cases Mr. Todd may mention.

    But in these two cases, it makes no effort to look and see what the real effect of this grant is going to be upon the protesting shippers.

    It doesn’t look to the problems that Mr. Rice mentioned about the empty trucks of U.S.A.C.

    It doesn’t look to what U.S.A.C.’s financial position is.

    It doesn’t look to whether this grant would really affect U.S.A.C.’s ability to continue its services for its public just as efficiently as if it didn’t make the grant.

    All it does is apply this presumption.

    Now, Mr. Taylor read you the general language that the Commission had in its decision with respect to this presumption.

    I’m not going to reread it.

    Richard A. Solomon:

    But what I would like to read from the Commission’s decision is what it said in this case when reach the factor that it has to reach under 209 with respect to the impact upon the protesting carriers.

    And I am reading from the bottom of page 45 of the record and what it says is, “The requirement of Section 209 (b) that we consider the effect which are grant of authority would have upon the services of protesting carriers has we believe been adequately discussed,” where on page 42 the language that Mr. Taylor read you.

    It is sufficient at this point to say that in view of our finding herein, that U.S.A.C. is in a position to provide any service that is needed.

    We conclude that a grant of authority to the applicant would have an adverse affect upon the protestant.

    In other words, without any attempt to analyze what the real impact will be, they say, “It is sufficient that they can provide the service, therefore, if they don’t get it, it will have an adverse effect upon it.”

    Felix Frankfurter:

    Was there any evidence — what — your proceedings are before the Commission —

    Richard A. Solomon:

    Yes sir.

    Felix Frankfurter:

    Was there oral testimony or —

    Richard A. Solomon:

    Yes.

    Felix Frankfurter:

    Extensive?

    Richard A. Solomon:

    Not very extensive, this is the entire record.

    Felix Frankfurter:

    You mean, all the witnesses?

    Richard A. Solomon:

    All the witnesses.

    Felix Frankfurter:

    Well, is there nothing in the oral testimony bearing on this subject?

    Richard A. Solomon:

    Mr. Rice suggests that there was something bearing on the subject that wasn’t evaluated?

    Felix Frankfurter:

    But if this is the record — if this is the record, then you know the record, was there anything?

    Why do you have to refer to him?

    Richard A. Solomon:

    I think there was very little if anything which you can make an appropriate analysis on.

    But if the Commission were to disagree with me and say that we think that this and this in the record is sufficient, I might have more difficulty in arguing that the —

    Felix Frankfurter:

    Must they repeat in their order, in their report, the evidence that’s in the record.

    Richard A. Solomon:

    They must consider the problem in the light of the evidence and not consider in the light of a pure generalization.

    Felix Frankfurter:

    Well, I don’t understand this.

    Richard A. Solomon:

    Let me —

    Felix Frankfurter:

    Must be — I don’t follow.

    If in fact, the issue was canvassed.

    I can understand if you say the issue wasn’t canvassed, but if the issue was canvassed testimonially before the Commission, must they summarize the evidence?

    Again and again, courts don’t do that.

    Richard A. Solomon:

    Well, but Your Honor, it’s not a question of whether the issue was canvassed, it’s a question of what such evidence as there is in the record means and they must evaluate.

    Felix Frankfurter:

    But they evaluate it by (Voice Overlap).

    Richard A. Solomon:

    No sir.

    Richard A. Solomon:

    They did not evaluate.

    They simply said, “We don’t have to discuss this matter because we’ve already said that we are applying a general presumption.”

    Felix Frankfurter:

    But they go on to the next sentence.

    Maybe they were — they were repeating however than indeed (Inaudible) could go on.

    Richard A. Solomon:

    There is one statement — no, that’s just general again.

    Felix Frankfurter:

    Well, I know generally, but that’s why I asked you whether there’s an underlying basis for it in the testimony.

    If you say, “No,” that would be an end of the matter.

    But you don’t say, “No,” you said there was some.

    Richard A. Solomon:

    I say that —

    Felix Frankfurter:

    Can I ask you?

    Must they repeat it in the body of their report?

    Richard A. Solomon:

    I would think the answer to your question would be no.

    But if the Commission were to disagree with me and pick on some bit of evidence and say, “This is sufficient,” I am not in a position now to say that I would say that that was unreasonable, so unreasonable that it would have to be removed

    Felix Frankfurter:

    And I think you must be in that position, if you say they didn’t adequately, take into account a requirement of the statute.

    Richard A. Solomon:

    I don’t think so, Your Honor.

    I think that it’s up to the Commission to come to this Court having evaluated the evidence and not to say to this Court, “We didn’t evaluate the evidence.

    We just played on a general presumption but you look at the record and see whether there’s sufficient evidence to support this generalization.”

    I think that’s a fairly shocking point of view, not a one that this Court would normally want to hear to.

    I think it’s up to the Commission as the body here that’s got the statutory responsibility to evaluate the evidence.

    And your job is to review whether that’s a reasonable evaluation.

    Hugo L. Black:

    May I ask you if there’s any concrete challenge in the record to the sufficiency of evidence to show that the needs would not be met in a concrete way with reference to this particular company.

    Richard A. Solomon:

    Yes, sir.

    It’s a challenge.

    This is a debatable question —

    Hugo L. Black:

    Why?

    What is concretely — what is the distinction?

    What is the argument that there is some reason why the services here —

    Richard A. Solomon:

    Are inadequate?

    Hugo L. Black:

    — are inadequate to meet the needs of this particular shipper?

    Richard A. Solomon:

    The argument is one, they had previous experience with the protesting carrier and it was found to be unsatisfactory.

    Richard A. Solomon:

    Two —

    Hugo L. Black:

    You mean, protesting common carrier?

    Richard A. Solomon:

    Yes.

    Hugo L. Black:

    Unsatisfactory in what way and for what reason?

    Richard A. Solomon:

    The record is very weak on this because when they started to testify on this unsatisfactory past history, the examiner cut them off and said that’s 1952.

    That’s too —

    Hugo L. Black:

    Was that —

    Richard A. Solomon:

    — long ago.

    Hugo L. Black:

    Is that — where is that in the record?

    Did they cut them off from showing that they had tried them before and the service is unsatisfactory for particular reasons?

    Richard A. Solomon:

    It’s — I can’t give you the exact page.

    It’s in the testimony of a namesake of mine, but no relative by the name of Ernest Solomon which appears in the record roughly between pages 83 and 109, but I am sure his counsel will know better than I do.

    Hugo L. Black:

    What other challenges, concrete challenges?

    Richard A. Solomon:

    It was argued —

    Hugo L. Black:

    — (Voice Overlap) the adequacy of the service —

    Richard A. Solomon:

    It was —

    Hugo L. Black:

    — of that particular carrier?

    Richard A. Solomon:

    It was argued that the common carrier protested, had a provision in his tariff which gave him permission to keep control at all times of the vehicles and that this would make it more difficult for him to dedicate vehicles to the particular shipper.

    Potter Stewart:

    This was another argument?

    Richard A. Solomon:

    These were all discussed by the Commission and reject —

    Hugo L. Black:

    Was there any evidence on that?

    Richard A. Solomon:

    Yes, there are some evidence on that.

    Earl Warren:

    To support either way or both ways?

    Richard A. Solomon:

    There is very little evidence in this record to support anything but there is some evidence on this.

    It’s mostly opinion evidence.

    Felix Frankfurter:

    But there was — if you can look at the examination, direct and cross-examination, wasn’t it, on these points?

    Richard A. Solomon:

    There is not very much evide —

    Felix Frankfurter:

    Well, I didn’t ask you whether very much.

    There were some.

    Richard A. Solomon:

    Some.

    Felix Frankfurter:

    Alright.

    Richard A. Solomon:

    Yes.

    Felix Frankfurter:

    You don’t say it’s barring your testimony, do you?

    Richard A. Solomon:

    We are supporting the Commission on this point, Your Honor.

    I am just answering Justice Black’s question, sir.

    We think that these —

    Hugo L. Black:

    In both cases?

    Richard A. Solomon:

    No, sir.

    Hugo L. Black:

    (Voice Overlap)

    Richard A. Solomon:

    I’m talking about the J-T case.

    I will talk about the Reddish case later, it’s at — no.

    But in the —

    Hugo L. Black:

    Well, if the — if the record shows in the case, while you’re supporting the Commission, there were concrete challenges.

    Richard A. Solomon:

    Which the Commission considered and evaluated.

    Hugo L. Black:

    Considered, evaluated and resolved.

    Richard A. Solomon:

    We think so.

    Hugo L. Black:

    Why wouldn’t that settle it without regard to what language they used as to that general rule in connection with that consideration —

    Richard A. Solomon:

    Well —

    Hugo L. Black:

    — in that particular case?

    Richard A. Solomon:

    Yes, I —

    Hugo L. Black:

    Why would you not then be in support of the Commission?

    Maybe my question —

    Richard A. Solomon:

    No, no, your question is the heart —

    Hugo L. Black:

    I just don’t quite understand you.

    Richard A. Solomon:

    No, no, no, your question is the heart of the problem.

    What Your Honor is asking me is if the protesting carriers can arguendo, provide fully and completely for the shippers, why do you have to go beyond that?

    Why doesn’t that end the case?

    Hugo L. Black:

    This particular shipper and the Commission have decided on the evidence that both sides present it —

    Richard A. Solomon:

    Why doesn’t that end the case?

    Hugo L. Black:

    — which is satisfactory, why wouldn’t it end there, in that case?

    Richard A. Solomon:

    Yes.

    This so, I think, gets into the basic problem of the relationship between common carriers and contract carriers and the basic difference in standards for passing upon the two.

    Unfortunately, our brief does not contain the standards for common carrier applications but I’ve handed it up to you, 207 of the Act provides that common carriers are to be passed, common carrier applications are to be passed upon in the normal way that a utility application is to be passed upon, i.e. a common carrier must show that the service he wishes to provide is or will be required by present or future public interest and necessity, and that is the standard language for applicant for common carrier facilities and railroads, telephones, telegraph, public utilities.

    Contract carriages are different animal.

    The standard of Section 209 does not require him to show that there is a public need for the service.

    Instead, the provisions of Section 209 are that the Commission shall grant a contract carrier application if it is consistent with the public interest and the national transportation policy.

    Now, this distinction which the lower courts mentioned reflects I think a real distinction that Congress was making.

    We agree completely with the Commission that the basic reason for regulating contract carriage was to ensure that contract carriers didn’t skim the cream off the market and hurt the common carriers upon which the small people in the country necessarily depend.

    But the Commission felt, I mean the Congress felt that that was the primary reason for regulating contract carriers and unless there was a demonstrable effect upon the common carriers, there wasn’t any need to prevent the small man from buying a truck and going into business providing for the special services of a shipper.

    And therefore, they had this distinction in the standards.

    Now, prior to 1957 —

    Felix Frankfurter:

    In the standards for issuing contract carriers as against common carriers certificate?

    Richard A. Solomon:

    Yes sir.

    Felix Frankfurter:

    But 209 isn’t that, 209 —

    Richard A. Solomon:

    I’m getting to 209.

    Felix Frankfurter:

    — gets the relationship.

    Richard A. Solomon:

    I’m getting to 209, sir, because 209 gets to the relationship as a result of the 1957 amendments.

    Now, prior to 1957, despite the statutory scheme, the Commission had a very real problem and that was — I am really taking much too much time, but let me try at least answer it.

    The problem they have was that prior to 1957, when they were passing upon an application for a contract carrier applicant, they didn’t know what they were passing on and the reason for that was that prior to 1957, a contract carrier application was a hunting license.

    Hugo L. Black:

    Was a what?

    Richard A. Solomon:

    A hunting license.

    It was a — maybe a limited hunting license but it didn’t limit the person when he got his permit to serving the particular shippers whose needs he had applied to serve.

    He could go out and get additional shippers and in this Court’s decision in the Contract Steel case, which Mr. Taylor mentioned yesterday, the Court made that perfectly clear.

    It said, “As long as he keeps within the general specialization field that he had been licensed for, he is perfectly able and willing to go out and get as many new contracts as he wants.”

    Now, that meant — that meant that despite this difference in standard, the Commission had a real problem because it never could really tell when it made a grant for a contract carrier what its impact was going to be.

    It could not say, “This fellow is going to serve shipper A and B and we can tell what the impact of his serving shipper A and B is because as soon as it got the permit, he could turn around and serve shippers D, E, F and G as well.

    And therefore, the Commission over the years did evolve a policy of changing the Act and turning around completely.

    And applying to contract carrier applications the same public interest, convenience, and necessity showing standard that the Act provided for common carriers and it thought that was necessary because of this problem I mentioned.

    But this problem has been resolved.

    The 1957 amendments do for the first time give the Commission the authority when J-T comes here and says, I want to serve Boeing.

    Richard A. Solomon:

    They say, “Okay.

    We will give you a grant to serve Boeing and if you want to serve some other air companies, you come in and amend your certificate before you do it.

    There are certain minor exceptions to this.

    This isn’t may be quite as definite as I might be implying.

    There are certain substitution rights but barring that, the Commission now has control, it can determine.

    It can go back to where it should have been in the first place.

    I’m very belated in coming to answer your question Justice Black.

    It can now allow a man to go into the contract carrier field even though there isn’t any showing of unmeetable need if that man can go in without demonstrable harm to the existing carrier.

    Felix Frankfurter:

    You’re not suggesting —

    Richard A. Solomon:

    And let me — let me backtrack on demonstrable.

    Felix Frankfurter:

    You’re not suggesting that the 1957 Act was an enlargement of opportunities to what you call a little carrier, that contract carrier.

    It was a contraction.

    Richard A. Solomon:

    I am suggesting that the 1957 amendments were both an enlargement and a contraction, yes, sir.

    Felix Frankfurter:

    So the origin of the statute was precisely to cut down the freedom that theretofore existed.

    Richard A. Solomon:

    That is correct.

    The origin of the statute was a proposal by the Interstate Commerce Commission to cut down on contract carriers.

    But like many other things, what starts out as one thing ends up as another, and the contract carrier people, the legislative history makes perfectly clear, got their quid pro quo in this compromised legislation.

    As the Congress made perfectly clear in its report, everybody was happy with this at the end.

    John M. Harlan II:

    Was the statute eventually enacted — enacted over the protest to the Commission?

    Richard A. Solomon:

    The statute as it eventually enacted was enacted with the hosannas of everybody.

    It was a compromised legislation and everybody was satisfied.

    The Commission was satisfied.

    The contract carrier people were satisfied.

    The common carrier people were satisfied.

    Everybody was satisfied as the reports make clear this was compromised legislation.

    The main thing the common carriers and the main thing the Commission were worried about as the legislative history makes clear and as the common carrier people said when they withdrew their objections to certain other changes, the main thing they were afraid of was this Court’s decision in the contract dealings, the hunting license problem to which I referred previously.

    To get that plug, they were willing to add these five factors to Section 209.

    Felix Frankfurter:

    Well, they were in, in the original proposal.

    Richard A. Solomon:

    They were not in, in the original pro —

    Felix Frankfurter:

    They were —

    Richard A. Solomon:

    No, sir.

    Felix Frankfurter:

    There were some an — another one in there, which would have been more restrictive.

    But the Commission was — didn’t ask for a free charter to deny a grant without more, were they?

    Richard A. Solomon:

    The original Commission proposal to Section 209 (b) did not contain any of this language of evaluating these five factors.

    That was suggested originally by my friend Mr. Todd representing the contract carrier group.

    The Commission’s original suggestion for 209 (b), on the contrary, would have put the burden upon the contract carriers to show that the common carriers were unwilling and unable to provide —

    Felix Frankfurter:

    Not only —

    Richard A. Solomon:

    — adequacy.

    Felix Frankfurter:

    — burden, it would have been an absolute prohibitory provision.

    Richard A. Solomon:

    In effect, yes.

    Charles E. Whittaker:

    Now, is not that the very basis upon which the Commission had acted prior to those amendments?

    What is the basis that they had to these showing of unwillingness or inability on the part of the common carriers upon the service, before a contract carrier (Inaudible)

    Richard A. Solomon:

    I think in a lot of cases, that was the basis upon which the Commission was acting that had never been approved by the courts and I suggest, to Your Honor, that that’s why they originally attempted in 1957 to get language into the Act to nail down the policy which they had been applying.

    But they weren’t successful.

    Charles E. Whittaker:

    Well, they could not get it done, but they finally withdrew it, didn’t they?

    Richard A. Solomon:

    They withdrew it.

    Charles E. Whittaker:

    Yes.

    Richard A. Solomon:

    No.

    Earl Warren:

    Or was it — excuse me —

    Charles E. Whittaker:

    One more thing.

    Isn’t that the same policy which Judge Smith found, they view in this case, despite that change in amendments?

    I’ll refer you to page 176 of the record, where it says, “We conclude that if these decisions turning solely on the adequacy, willingness, and ability to pass, it cannot be justified and were clearly erroneous.

    Richard A. Solomon:

    I think you’re — I think so, yes, sir.

    Charles E. Whittaker:

    Now, he said, now here comes the crux of the matter, there can be no doubt that this case was decided by the Commission on that basis.

    That’s the fact of — crux of his holding, isn’t it?

    Richard A. Solomon:

    I think the answer to your question is yes, because I read this language to be really getting at this problem of saying that you have to show a need or you don’t get your grant irrespective of what the real impact is on common carriers.

    Felix Frankfurter:

    But Mr. Solomon, if — your answer to Justice Whittaker’s question in the position of the Government, the case is a very simple one, namely, that Congress has laid down five requirements to be considered by the Commission and as I understand the question to which you responded, your answer means the Commission disregarded four out of the five and paid attention only to one.

    Is that the position of the Government?

    Richard A. Solomon:

    No, sir.

    That is not the position of the Government.

    Felix Frankfurter:

    Alright, if that is what — that is what Justice Whittaker read from the judge below.

    Richard A. Solomon:

    I don’t — with all due respect to both myself and Justice Whittaker, I do not think we quite meant that.

    Felix Frankfurter:

    But I — but the portion of what he just read from Judge Smith’s opinion says that that, the Commission paid exclusive attention, getting the exact words, to one factor, not in fact so that we do not have to have pre-arguments.

    Richard A. Solomon:

    That’s why I — that’s why I hedged my answer to Judge —

    Felix Frankfurter:

    Well, I know, but hedging means that it isn’t so, or hedging means nothing.

    What do you mean you hedged?

    You mean you didn’t agree with it.

    Richard A. Solomon:

    Well, I think I’ve made my position clear.

    If I misstated in my answer to Justice Whittaker, I really think that it is better that I let my colleagues make their position clear than trying to resolve.

    If I misstated myself Justice Frankfurter, I am sorry.

    Felix Frankfurter:

    Well, I am trying to understand this case and if Judge Smith is right, it is a very simple matter, namely, the Commission is on the duty to consider five factors in reaching the conclusion.

    It considered only one and therefore, there is no need of long arguments or long opinions or long anything.

    It disregarded an Act of Congress.

    Richard A. Solomon:

    I wouldn’t have put it the way Judge Smith did it because he implies that they were considering only a six-factor?

    Now, I don’t think that is what he meant.

    Felix Frankfurter:

    How do I know what he meant unless by what he said?

    Richard A. Solomon:

    Well, Your Honor, and I suggest that the decision can be — go on not on what Judge Smith said, but what the law is.

    Earl Warren:

    Mr. Wrape.

    James W. Wrape:

    Chief Justice, and the Court pleases.

    There’s is one preliminary matter that I’d like to take up with the Court.

    On October the 9th, the Interstate Commerce Commission, in docket MC 108, 453 Sub 22, the application of G & A Truck Lines served an order, this was only a week or so ago and after the briefs were printed.

    In that order, we believe that the Court correctly stated the law and applied the principles of Section 209 as we believe they should be applied.

    We furnished copies of that report to all parties.

    We furnished copies to the clerk and we asked leave to have it distributed to the Court as this report is one of the many that are not printed in the permanent found reports of the Commission and we believe that it will be very helpful to you in the disposition of this case.

    Hugo L. Black:

    Your report, did you say?

    Late report, did you say?

    James W. Wrape:

    Yes, just — October the 9th.

    Hugo L. Black:

    On the same point.

    James W. Wrape:

    On the same point and it applies the five criteria in Section 209 as we believe and say they should have been applied in this case.

    If the Court pleases, I represent J-T Transport Company and have represented them throughout this proceeding along with Mr. Todd who represents the Contract Carrier Conference, we’ll attempt to divide our time and we have attempted to divide our argument.

    James W. Wrape:

    I intend to address myself to the record as made in the case, the reports of the Commission, the decision of the fine court in Kansas City.

    Mr. Todd will be happy to discuss and to answer any questions with respect to the legislative history out of which the 1957 amendments evolved.

    In the first place, I should state and I want to state it as shortly as I can.

    We can’t quite figure the position of the attorney general in this case.

    He was our foremost antagonist in the lower court below.

    He did not appeal.

    He comes here and I believe he now confesses error on the part of the Commission and to some extent, he supports us.

    Into some extent, he supports the Commission.

    But in the end, he asked that the matter be remanded and the case decided by the Commission in the light of his brief.

    Felix Frankfurter:

    You’re generously —

    James W. Wrape:

    As I say, I believe he is an appellee only because he is not an appellant.

    Felix Frankfurter:

    He’s generously suggesting you’ll clear up all the difficulties.

    James W. Wrape:

    I’ll be very happy to, sir.

    Now, with respect to the argument and the briefs advanced and filed by the Commission, I have a more quarrel — more of a quarrel with Mr. Taylor in what he didn’t say than in what he did say.

    This — the J-T Transport Company is a contract carrier who has devoted its 20 years of existence to the transportation exclusively of aircraft components.

    We don’t talk about aircraft parts.

    These are great, big components or assemblies that are subcontracted and manufactured at a place apart from the place of final assembly.

    And then, they have to be transported to the production line and they are put into the big air freight.

    The particular aircraft assemblies, or components as we sometime call them, that are here involved are parts of the B-52 which is the — it is a big jet transport fighter plane.

    It’s one of the type that met with the disastrous accident this past weekend.

    It has been manufactured since 1952 and is it — it is still a part of the Air Force’s production of fighter planes.

    The particular commodity here is called the landing gear bulkhead.

    That is a great, big 12-foot by 16-foot component that fits up into the airframe from which the wheels, the landing gears are suspended.

    It is made of magnesium, titanium, and aluminum.

    Yet, the core, the aft bulkhead is 122 x 181 x 24 inches.

    That is 11 x 15 x 2 feet wide.

    The other one is slightly smaller.

    They weigh practically nothing considering their bulk, their weight in each instance is under 1400 pounds.

    They are very expensive.

    Each one way cost about $25,000.

    James W. Wrape:

    Now, in order to transport a component of this size over the highway, in a vehicle within the legal limits, is a problem and it is not like the Commission would have you think that it is something you throw on the back end of a flatbed truck and take across the country because you can.

    It —

    (Inaudible)

    James W. Wrape:

    Sir?

    William J. Brennan, Jr.:

    That’s the picture of it?

    James W. Wrape:

    Yes sir.

    There are some fine pictures of the components in the record, pages 144 to 140 — or pages 141 to 144 in (Inaudible).

    The picture at page 144 is the component in a shipping fixture.

    The shipping fixture goes into the trailer and the component is shipped within those big frames.

    Now, the — as I say, the job of moving this over the highway is a tremendous one, the J-T Transport Company in their long experience designed a trailer which was a highly specialized trailer.

    It had to be because one of these components which was 11 feet high had to be carried upright because of strain or stress.

    So we had to get a component that is 11 feet high into a trailer that is only 12.5 feet at its highest point from the roadway.

    So they developed what they called an underslung trailer.

    That means one part of the trailer drops down to about eight inches off the highway and the floor, the rest of the trailer is higher.

    In order to load the components in the shipping fixture, into the trailer, they push them in on tracks.

    When they would get this component over the underslung portion which the floor which had been raised, they had an electric elevator that they installed in each one of these trailers.

    And that elevator would move the roof and the — and the floor up at the same time so that the sunken floor was leveled with the rest of the floor so that the component could be pushed in.

    Once it got there, the elevator lowers the top and the floor down to the point where this big component could ride safely over the highway.

    Now, in addition to the trailer that they have, they also designed and they owned and they furnished these shipping fixtures, copies of which you can see in the record beginning at pages 141 and 144.

    These fixtures were designed so that the components were attached to them in a way to simulate the attachment of these same components when they go into the airframe, so that you avoid strains and stresses in transit.

    These components are highly susceptible to damage because of strain or stress.

    If they are jarred, or if they are dropped or if anything lose them, so as to cause the strain.

    Hugo L. Black:

    What material?

    James W. Wrape:

    Sir?

    Hugo L. Black:

    Of what material are they composed?

    James W. Wrape:

    These were composed of a light — a very light metal.

    Now, my time is short.

    I could tell you some more about the highly specialized nature of the tractor — I mean, of the trailer and of the shipping fixtures, but I believe that along with the pictures will demonstrate what I mean.

    This was no simple kind of an operation.

    It was a highly complex operation.

    James W. Wrape:

    Now, according to the record here, the shipment moved from the empty trailer or the trailer with the shipping fixtures in it, moved from Wichita to Indianapolis overnight, from Indianapolis after it was loaded back to Wichita overnight as against a rail movement of some three or seven — up to seven days transit time.

    Now, the trailer after it was designed and built, the fixtures after they were designed were submitted to the engineering department of Boeing, who under our contract had the absolute right to reject either the trailer or of the shipping fixtures if they believe that any damage would accrue or if they didn’t believe that they were entirely proper.

    In other words, we simply acted as the agent and we did for Boeing what Boeing would have done by — for itself if it had engaged in private carriage.

    Now —

    Earl Warren:

    Did the testing carrier have comparable equipment?

    James W. Wrape:

    No, sir.

    This equipment had to be built.

    Earl Warren:

    Yes.

    James W. Wrape:

    The existing carrier offered to build one.

    Now —

    Hugo L. Black:

    It offered to build one, was one had been enough?

    James W. Wrape:

    Yes, sir.

    There are four ships a month in each direction and with overnight service it would just about to make it.

    Now sir, the pictures which began in the record at page 141 show the trailer empty with the electric elevator in the front of the trailer.

    You’ll notice a hole, or a well up in the front, that is the underslung portion, the floor which is raised by the elevator.

    Now, on page 142, you see the fixtures loaded with the components and in the trailer.

    That is the way that it moved from Indianapolis to Wichita.

    Now, at page 143, you see one component loaded in a fixture and one empty fixture.

    And of course anyone — anyone can see that the return trip with the empty fixtures is not what we ordinarily call deadhead.

    That is the movement of an empty unit over the highway.

    And for the Commission to insinuate or to suggest that U.S.A.C. could have eliminated deadhead miles, in this operation, it is impossible because it requires the absolute use of the trailer in each direction one with the empty fixtures, one with the loaded fixtures in the other direction.

    It is a two-way movement, although the components are only handled in one way, in one direction.

    Hugo L. Black:

    Why?

    James W. Wrape:

    Sir?

    Hugo L. Black:

    Why?

    James W. Wrape:

    Well, if you’ll look at page 143 sir, you will see —

    Hugo L. Black:

    I just flipped there — I just flipped there.

    James W. Wrape:

    Alright, so you’ll see that the fixture, the empty fixture, completely fills up one half of the trailer.

    The other fixture has a component in and if you took the component out, the fixture would likewise occupy the other half.

    In other words, coming back with the empty fixtures, you’ll require a full trailer.

    Felix Frankfurter:

    You make those fixtures (Inaudible)

    James W. Wrape:

    Yes sir.

    That is right, sir.

    Felix Frankfurter:

    (Inaudible)

    James W. Wrape:

    No, sir.

    That is right, sir.

    These are — these are prominent fixtures and the record shows there were two sets where there were — there were four trailers, four fixtures owned by J-T Transport Co. and furnished for transportation and Boeing had four more units for their own use or storage in their plan.

    William J. Brennan, Jr.:

    (Inaudible)

    James W. Wrape:

    Yes sir.

    It — I will touch on that in a few minutes, Mr. Justice Brennan.

    Now, in light of that point, I might bring it out here.

    The record shows that each of these B-52’s is an individual airplane.

    It has a serial number and every component bears that particular serial number.

    Each component is manufactured for a particular airframe.

    So, when the production line begins to move, these components move in to Wichita on a schedule so that at the proper time when the landing gear bulkheads are to be inserted into the airframe, they must be there at that time.

    If for any reason they are not there, then you have either to stop the production line and wait for them or you take that airframe completely out of the line and then put an out of sequence installation into the airplane when the component finally arrives.

    You have a tremendous delay in production and you will have the tremendous expense of taking that big airframe, that big plane, a big Jet 52 out of the line and over — and set it aside until the component gets there.

    Felix Frankfurter:

    I take it that all these details were developed before the Commission?

    James W. Wrape:

    Yes sir.

    That’s — it’s all in the record sir.

    The record, and a practitioner before the Commission is a very complete one.

    It isn’t very long.

    There were two witnesses for the applicant and two or three carrier witnesses for the protesters.

    Felix Frankfurter:

    These (Inaudible) were all written?

    James W. Wrape:

    Yes sir, it is fully developed there.

    John M. Harlan II:

    Are you arguing the sufficiency of the evidence?

    James W. Wrape:

    Yes sir, I will get to that, yes.

    John M. Harlan II:

    I mean, that’s where all this is directed to.

    James W. Wrape:

    That sir and with respect to the distinct need of the shipper as we part as the statute mentions, and particularly because the Commission, in their argument, just overlooked it.

    I’m going to stop right here on the account of my time, sir.

    James W. Wrape:

    Now, with respect to the record, the traffic director for Boeing testified, Mr. Solomon.

    And I think it would be quicker for me to read to you two or three excerpt from his testimony, and to even summarize it.

    At Page 89 in the record, the question was asked, “Did that mean anything to you in determining to bring about the filing of the application and your support of the application?”

    That is whether it’s a contract carrier or not.

    His answer was, “Yes, it did, because we recognized that the contact carrier can dedicate equipment to our service.

    The type of equipment that we want and we feel that on this type of transportation, it is the best thing to have the equipment solely dedicated to our use.”

    On Page 90, in response to the question, “Do you have contact with them –” that’s J-T, “–daily with respect to their operations?”

    “Yes.”

    “Does the maintenance of a terminal by J-T at Wichita mean anything to you?”

    Mr. Solomon’s answer, “It means very much to us, in as much as the type of operation that they conduct in hauling these various components for us.

    We find the daily cooperation that we’re able to have with J-T employees at Wichita is very helpful to us and is I would say necessary to the successful operation of this type of service.”

    In response to the question — is this time of transit ability important to you?”

    He said, “Normally, in manufacturing airplane parts, there are many, many engineering change that must go into each unit.

    As these engineering changes are incorporated, they have to lock them out so far down the line, and if you have a longer transit time, it takes you that much longer to get to these changes in the picture.

    In other words, these changes mean an improvement in the airplane and if we have a longer transit time, it takes us that much longer to get these changes into our aircraft that we are rolling off the production line.”

    And in response to the question, “How do you regard the J-T Transport Company in your scheme of operations?”

    His answer, “Well, we feel they are just merely a part of our production line in that we can schedule the parts right from our manufacturer and the shipments are moved right into our receiving area and through the inspection and right on into our production.

    So they are actually just an extension of our production line.”

    And in response to the question, “Will you tell the examiner whether or not Boeing believes that it needs the surface here proposed in order to successfully complete its contract?”

    His answer, “We feel we definitely need this type of service to furnish or build the best type of aircraft that we can for the United States Air Force.

    John M. Harlan II:

    Could I ask you a question, but, I don’t want to interrupt you too much.Did the Commission exclude the evidence that you thought was relevant to the issues in this case?

    James W. Wrape:

    No sir.

    I think it was sufficiently stated, it’s only with respect to their past unsatisfactory service and I believe that Mr. Solomon stated his position, he would intend to go into other remedy.

    John M. Harlan II:

    You have got before the Commission everything that you thought was germane.

    James W. Wrape:

    Oh, certainly sir.

    As I stated, I believe we have a full and complete record here from a practitioner standpoint.

    Now —

    Earl Warren:

    Is there any evidence to counteract what you have just read to us?

    James W. Wrape:

    Oh, no sir.

    No, there couldn’t be sir.

    Earl Warren:

    It stands uncontradicted?

    James W. Wrape:

    That is uncontradicted.

    The only thing that the protestants put in, they were carrier witnesses, was their availability and their willingness and their declarations of adequate — adequacy in their service.

    That’s the only — that’s the only other side of the case.

    Hugo L. Black:

    Their willingness to do what?

    James W. Wrape:

    The only thing that the protestants put into the record was their willingness, their ability, and the establishment of their service.

    Hugo L. Black:

    You mean their willingness to establish a kind of service that you were giving and to spend the money necessary to do it, is that what you mean?

    James W. Wrape:

    Well, their willingness to handle the traffic.

    I was going to get to that Mr. Justice, and it might be a good place here.

    Hugo L. Black:

    But I — I didn’t mean to interrupt, but I didn’t understand the “willingness” that (Voice Overlap).

    James W. Wrape:

    Well, they are willing — able and the willingness, ability and willingness of course was the old test that was —

    Hugo L. Black:

    Service, in general —

    James W. Wrape:

    Yes.

    Hugo L. Black:

    — but I’m talking about this special (Inaudible)

    James W. Wrape:

    They are talking about service, in general, yes sir.

    William J. Brennan, Jr.:

    They could — they — it was on the evidence that they could dedicate equipment to this —

    James W. Wrape:

    I have challenged the Commission in each step of this proceeding to point out one fact of record upon which they based their conclusion that U.S.A.C. said they would dedicate equipment to the use of Boeing.

    William J. Brennan, Jr.:

    Well, could they — that the common carrier —

    James W. Wrape:

    The Commission says yes.

    If they will dedicate equipment to every other shipper in the United States who also asks for it, they could do it.

    I have no quarrel with that.

    I do not think it is important to a settlement of this case.

    But as I say, I challenge that statement of the Commission and there is no basis in the record, there is no testimony except Mr. Decker’s on behalf of U.S.A.C and the only thing he says in response to — he has an affirmative answer in response to a question of counsel, “Would you station a modified trailer in Indianapolis?”

    And he said, “Yes.”

    He does not say, “I will dedicate this to the exclusion of some six or seven other shippers” he bragged about having in Indianapolis and saying he was serving in order to prove his ability to perform this kind of service.

    He never does say in this record that, “I will dedicate a piece of equipment to the use of Boeing,” in the same way that J-T says, “Here it is.

    You use it.

    You dispatch it.

    You operate it.

    You just tell us what to do and we’ll do it for you as the same as you do it yourself.

    James W. Wrape:

    And that is what it amounts to.

    Now —

    Felix Frankfurter:

    (Voice Overlap)

    James W. Wrape:

    — counsel for the Commission — sir?

    Felix Frankfurter:

    Refresh my recollection, did the District Court sustain you in saying that there was —

    James W. Wrape:

    Yes, sir.

    Felix Frankfurter:

    That there was no evidence that the protestants could perform this very service —

    James W. Wrape:

    Yes, sir.

    Felix Frankfurter:

    That was bringing to be facilities to give the service —

    James W. Wrape:

    That’s the only interest that you can take from — I don’t think they setup networks.

    They set the data and didn’t agree to dedicate.

    They caught it the same as we did because we argued it before the court.

    Felix Frankfurter:

    In other words, the word “dedicate” is any kind of final label that gets (Inaudible).

    The District Court say, there was no theory that the protestant common carriers could furnish, willing, and able to furnish the very service which the shippers needed.

    James W. Wrape:

    When you say service, I heartily agree with you, sir.

    Felix Frankfurter:

    Pardon me?

    James W. Wrape:

    When you say service, I heartily agree with you.

    Felix Frankfurter:

    Just because that they couldn’t furnish the service.

    James W. Wrape:

    The service, yes sir.

    Felix Frankfurter:

    And that there is no evidence in the record that they could put themselves in the situation to give the service that Boeing needed.

    James W. Wrape:

    They said that — the court said that the record didn’t support a statement that U.S.A.C could meet the distinct needs of Boeing or the needs of Boeing or as disclosed by the record.

    I think you’ll find that sir at page 177 in the record which contains the court’s decision.

    It is right — about the first five lines, sir.

    Let me get back sir to my argument.

    I do not have very much time.

    The — there’s only one protestant here and that’s U.S.A.C.

    I’m figuring we have the railroads and we had three or four heavy haulers who wanted to give a multiple line service.

    After the recommended report which recommended the granting of the application, these so-called heavy haulers were satisfied with it, realized they couldn’t meet the needs and filed no exemptions.

    The railroad objected to the recommended report because they said the commodity description was too great, it was for airplane parts, and they wanted — restricted the landing gear bulkheads to which we agreed, and from that point on, we only have one protestant and that is U.S.A.C. Transport Company.

    Now, the U.S.A.C. Transport Company were fortunate enough to secure an early certificate from the Commission.

    James W. Wrape:

    They can transport aircraft parts, untraded and traded, between all points in the United States east to the Mississippi River, and between all points in that vast area on the one hand, and all points west of the river on the other.

    So if their mere existence is to be taken as a basis for a denial of a contract carrier application, you can see it is impossible that there ever would be any extension of any contract carrier aircraft service.

    Now, I think I have touched and I think I hope I have demonstrated that we have no question here about deadheading of equipment.

    That is, if U.S.A.C. was able to get this business, they could utilize some empty miles because they can’t.

    You have to have the same number of miles in the use of the unit in each direction because one way, you haul a complete trailer load of fixtures and the other, you’ll haul the fixtures with the components in it.

    Now, Mr. Solomon in his testimony said that there were two reasons why he didn’t go to U.S.A.C. One was this general dissatisfaction with prior service and he specifically gauged specific instances.

    And the second was a tariff provision.

    That tariff provision reads and I quote, “The determination of the equipment to be used to transport any shipment efficiently and safely shall rest exclusively with the carrier.”

    In a most unusual statement, the Commission says, “That does not mean anything.”

    The representative at the hearing says, “We will provide a piece of equipment and dedicate them.

    Well, of course, the record does not show that he said they dedicate it.

    And anyway, no matter what he says at the hearing, as this Court has always held and as the Commission has maintained, it’s the rules in the tariff that count, that’s the contract of the common carrier with his customer, and he can’t bury that by anytime of an oral agreement under oath in a hearing or otherwise.

    Now —

    Potter Stewart:

    Wasn’t there a third reason advanced by the shipper for not wanting to utilize as they see and that — that was the lack of a terminal —

    James W. Wrape:

    Location for the terminal, yes, sir.

    Potter Stewart:

    And those were the three regions (Voice Overlap).

    James W. Wrape:

    Yes sir.

    Now as I stated, the examiner, immediately after the hearing, served his recommended report, recommending the granting of the application.

    Before the report, before that report came out, in fact, before the hearing, the Commission had granted to the applicant a temporary authority to engage in the very operation that’s here involved.

    That authority was granted under Section 210 (a) which required a proof of an urgent and immediate need and a showing that there was no carrier service capable of meeting that need.

    The Commission granted that temporary authority over the violent objection of U.S.A.C.

    It’s still effective by reason of the Administrative Procedure Act.

    Now, here is something that you haven’t heard and something that I believe is most important in this case.

    In the first Commission report which was served on January 31, 1958, the Commission, the record shows that the Commission took six printed pages in which to adopt the recommended report of the examiner to restate the facts and then to proceed to deny the application stating and I read the one paragraph, “Here is the basis for the denial of this application in the first report.”

    Hugo L. Black:

    What page?

    On page, what?

    James W. Wrape:

    Page 26, sir.

    And this is the real reason why the application was denied in the second report.

    The Commission says, “The burden is upon the applicant seeking contract carrier authority as well as one seeking common carrier authority to establish among other things that there is a need for the service proposed which existing carriers cannot or will not need.

    A service not needed, cannot be found consistent with the public interest, or the National Transportation Policy.”

    James W. Wrape:

    Now, following that decision, we filed a petition for reconsideration on what the full Commission was denied.

    Then we went to Court.

    We filed a suit in the same District Court at Kansas City where there was a final adjudication.

    That was on August of 1959.

    After we got the suit filed and before the answer date, the Commission came up with a decision in the so-called Leary case that is cited at Mr. Todd’s brief.

    They there applied somewhat the criteria in Section 209 as we thought it should be and we thought perhaps they had finally agreed that there had been an amendment.

    And incidentally in the first report, there is not one mention of the amendments of 1957, although they have been effective for three months when that order issued.

    They simply ignored and decided it on the same basis that they always have.

    Well, after the Leary case came out and then — it appeared that perhaps they were going to apply these standards setup in 209, we filed a successive petition.

    That is one that is not ordinarily allowed under the rules and we filed it while the case was still in Court, much to our surprise and we were very happy.

    The Commission promptly issued an order setting aside and reopening the — or issued an order reopening the proceedings for further disposition on the same record.

    So, we by agreement with the Interstate Commerce Commission and the other parties, we took a nonsuit without prejudice in the District Court.

    Then along came the second order which is the one that has been discussed here.

    We found out of course that when we filed that successive petition, we made our first mistake, because it gave the Interstate Commerce Commission its opportunity in the second order to prepare and file its first brief in this litigation.

    We say that the second order is simply — well, first, in the second order, in the head note, which the Commission prepares, it starts out and it says, “We affirm our decision in the first order.”

    In the second order, they specifically provide in the order itself that the first order is still valid.

    Now, in the second order, they are trying to explain what was so clear and cogently stated on — in the first order that the reason why the application was denied was because there was an existing carrier.

    Now —

    Felix Frankfurter:

    That was the whole Commission on the reconsideration, wasn’t it?

    James W. Wrape:

    Yes, sir.

    Now sir, you say the whole Commission, it wasn’t —

    Felix Frankfurter:

    I agree, I remember what he said but it was before the Commission as an entirety.

    James W. Wrape:

    Yes, sir.

    Well, the first one that’s done before the Commission entirely, do they denied our petition for reconsideration.

    Felix Frankfurter:

    I thought it was before Division 1.

    James W. Wrape:

    The — Division 1 wrote the order but the full Commission denied our petition to reconsider that order, so it was their order.

    Now, the second order is only the order of four Commissioners.

    The other 11 Commissioners either didn’t participate or they concurred with — separating —

    Felix Frankfurter:

    We didn’t sit, Commissioner MacPherson dissented, Commissioner Webb concurred, Commissioner Freas concurred and result Commissioner (Inaudible)

    James W. Wrape:

    (Inaudible) Freas and Commissioners —

    Felix Frankfurter:

    There were eight — three didn’t participate, so I suppose there were eight left, aren’t there?

    James W. Wrape:

    There were seven, sir.

    Felix Frankfurter:

    Seven.

    James W. Wrape:

    And four of the seven, it is their report and not the report of the others.

    Now sir, I do not think that, in view of the time, that it would do anything for me to discuss the findings of the Division.

    It’s there before you.

    I think, as the Court said, it’s apparent that they were simply giving reasons in lawyer’s language, not administrative language as to why their first decision was valid.

    Now, we filed a second suit and we presented it to Circuit Judges Johnson and Mathes and District Judge Smith.

    And their decision is like, what is the decision that is now before you?

    That decision — I have no apologies to make for.

    I believe it is a fine decision and it stands on its own feet and needs no defense from me.

    Felix Frankfurter:

    Well, there is a difference between saying the Court rule because there was a lack of evidence and saying thereby the wrong standards, isn’t it?

    James W. Wrape:

    Yes, sir.

    And the —

    Felix Frankfurter:

    Now what — what does the Court decide in your rule?

    James W. Wrape:

    The Court says, “With respect to the Commission’s findings on criteria 4 that they applied the improper standard.

    Now, the gist of that Court decision, I think I can state very briefly, I’ve been living with it for a long time.

    It does not hold that the Commission cannot or shall not consider the existing — the existence of protesting carriers, the willingness and ability of protesting carriers or the adequacy of the service of the protesting carriers but it simply says that those factors cannot be considered in lieu or instead of the five additional standards prescribed by 209 (b).

    Now, I can well understand that the Commission in beginning to consider criteria three, that is the effect of the granting of the application upon the services and that’s an important word, of protesting carrier.

    They first have to determine that there was a carrier.

    Then that that carrier was willing and able to perform a reasonably adequate service.

    All right, now having found that, they proceed to the real question.

    What is the — what rule granting of the effect?

    What effect will a granting of the application have on the services in view of the fact that the first three factors were answered in the affirmative.

    It does not — if it’s not adverse, we stop right there.

    If it is adverse, then they weigh that along with the other four.

    John M. Harlan II:

    Do you say they don’t — you say they stop and didn’t consider 4 as well as 3?

    James W. Wrape:

    No sir, no, they’ve got the 4.

    But when, they’ve got to 4, they answered four by saying that the service of U.S.A.C was adequate.

    But that’s not — that’s not the question.

    John M. Harlan II:

    Or it’s just one side of the coin, isn’t it?

    James W. Wrape:

    No sir, no, it is the effect — a denial would have on the shipper.

    Now, this case that we gave you today is a perfect example of what is meant by criteria 4.

    In the G & A case, the shipper had three plants.

    They were all served by common carriers.

    The applicant served two and he wanted to serve the third because they wanted to mix the loads and have split loads, split pickups, and split deliveries.

    So, and the reason why the shipper wanted that was because of economic reasons and his distribution reasons.

    So a denial of that application would have severely and adversely affected the shipper because he would not be able to practice the most economical operation are the best distribution plans.

    I have taken up way more than my time.

    Felix Frankfurter:

    Mr. Wrape, if you are right that the protesting carrier couldn’t have furnished, didn’t make either case showing his ability to furnish the service that Boeing needs, then we don’t get to the question of standards at all, do we?

    James W. Wrape:

    Oh, but let’s still get to the question of —

    Felix Frankfurter:

    Well, I —

    James W. Wrape:

    — standards, and let’s settle it.

    Felix Frankfurter:

    I know.

    James W. Wrape:

    I think certainly, if it’s a — it is a very simple case to —

    Felix Frankfurter:

    But if —

    James W. Wrape:

    — decide by the application of those standards.

    Felix Frankfurter:

    But you say there is no evidence that the — that the protestants could do what the contract carrier did in what they needed, if that is so, it doesn’t answer the case.

    James W. Wrape:

    No, Mr. Justice.

    I know that they could take one of these components and lay it in their truck and haul it from one place to another.

    But that’s not the dis — that will meet the distinct need.

    Felix Frankfurter:

    Alright, therefore, if they don’t meet the distinct needs, that’s the end of the case.

    Earl Warren:

    We’ll recess now.