Pan-Atlantic Steamship Corporation v. Atlantic Coast Line Railroad Company

PETITIONER:Pan-Atlantic Steamship Corporation
RESPONDENT:Atlantic Coast Line Railroad Company
LOCATION:Congress

DOCKET NO.: 408
DECIDED BY: Warren Court (1957-1958)
LOWER COURT:

CITATION: 353 US 436 (1957)
ARGUED: Apr 23, 1957
DECIDED: Jun 03, 1957

Facts of the case

Question

  • Oral Argument – April 23, 1957 (Part 1)
  • Audio Transcription for Oral Argument – April 23, 1957 (Part 1) in Pan-Atlantic Steamship Corporation v. Atlantic Coast Line Railroad Company

    Audio Transcription for Oral Argument – April 23, 1957 (Part 2) in Pan-Atlantic Steamship Corporation v. Atlantic Coast Line Railroad Company

    Earl Warren:

    Mr. Macdonald, you may proceed.

    David G. Macdonald:

    Thank you, sir.

    As I said before the recess, this was a suit by the railroad appellees to set aside the order of October 28th, 1955, of the Interstate Commerce Commission, which either itself extended the previously granted temporary authority or recognized that the section 9 (b) in itself acted upon the previously granted temporary authority to extend it.

    The position of the railroads was not that the Commission abused this discretion in granting this order of October 28 but that it lacks statutory authority to do the Act.

    Earl Warren:

    Was this — was this an isolated act or did the Commission do this in other similar circumstances?

    David G. Macdonald:

    This is a practice which began, sir, in 1947, and has continued.

    Since that time, there had been, I believe brief show, probably a thousand similar orders entered.

    About three years ago, the — for the first time, an — an attack was made on the validity of that action by the Commission in a case which is appendix B of our brief Stone’s Express, Inc.versus U.S.

    That suit, the Stone’s Express suit also arose in the United States District Court from Massachusetts.

    As a consequence, when this case was presented to the same court, the lower court took the position that the matter was already decided and that it would not change its position but would be bound by its previous position in the Stone’s Express case.

    Felix Frankfurter:

    Was — who was — who sat in Stone’s Express besides Judge — Judge Hartigan.

    David G. Macdonald:

    Judge Ford.

    William O. Douglas:

    (Inaudible)

    David G. Macdonald:

    I’m not certain as to the third one.

    Hugo L. Black:

    (Inaudible)

    David G. Macdonald:

    In — in the — in our case, Judges Magruder, Wyzanski and Ford sat.

    In the Stone’s Express case, we had one of the three who would — I mean in our case, we had one of the three who would sat in the Stone’s Express case, that was Judge Ford.

    Felix Frankfurter:

    When Judge Ford now, the reason I ask is because Judge Ford expresses his independent judgment as if agreeing with Judge Wyzanski.

    David G. Macdonald:

    That’s correct.

    He —

    Felix Frankfurter:

    But he even dissented in the earlier case.

    David G. Macdonald:

    That is correct, indicating a change in — in his attitude towards the problem presented.

    Felix Frankfurter:

    (Inaudible)

    David G. Macdonald:

    Okay.

    Felix Frankfurter:

    — he had been asked to report.

    David G. Macdonald:

    That was the point I was going to make next that while we were the defendants below, because the Court indicated to is prior argument that if this was the same issue presented in the Stone’s Express case, we could expect the same result.

    We did get the same result.

    We lost the case below but two of the three judges in a concurring opinion indicated that were the matter presented for the first time to that court rather than being bound by Stone’s Express, they would have viewed it differently.

    As a consequence, we have no decision of — no independent decision of the lower court in this case to look to for the reasoning supporting the decision.

    We have to look to the earlier decision in the Stone’s Express case which in effect was adopted by the Court in this case.

    David G. Macdonald:

    The question — the holding in the — in the Stone’s Express case was at section 9 (b), the third sentence that we’re concerned with, did not authorize Interstate Commerce Commission to extend a temporary authority issued under section 210 (a) (b).

    That is a similar but slightly different provision than the one we’re dealing with.

    Section 210 (a) (b) is a portion of the Motor Carrier Act which authorizes the — the grant of temporary authority to one carrier to operate the properties of another to preserve those properties from eminent loss during the pendency of an acquisition proceeding.

    It’s one of the four sections in the Interstate Commerce Act which deal with temporary licenses and I believe it’s generally conceded that the decision of this Court will determine the status of all four of those sections rather than just section 311 (a), since they all contain a 180-day limitation.

    The reasoning in — of the Court in the Stone case was found in two different propositions.And they both have to do with the language of section 9 (b), which I referred you to at page 3 of our brief.

    The first point was that the Court found that for 9 (b) to be applicable, the person who was seeking to have a temporary license renewed, would have to have filed an application at the time that it was a licensee.

    This is a very technical point.

    In other words, they said that to get to this case that we have at bar, Pan-Atlantic file its application for temporary authority on or about May 8, 1955.

    That on the same day, it filed an application for permanent authority.

    The temporary authority application was granted on May 18th, 10 days later.

    Therefore, the application for permanent authority was pending before it became a licensee by reason of receiving the temporary authority.

    The Court in the Stone’s Express case where the similar situation was presented, said that 9 (b) doesn’t apply because you have to read it as of the time when the application for a new or renewal license was filed.

    I’ll come back to that point in a moment.

    The second reason of this Court in the Stone’s Express case is more fundamental.

    The Court held that section 9 (b) taken as a licensing authority grant to the Interstate Commerce Commission is in conflict with section 311 (a).

    And that repeal by implication is not favored.

    In other words, the Court said — 311 (a) says that you can grant these temporary licenses for a maximum of 180 days.

    You say under 9 (b) that you’ve extended this license beyond 180 days, and that 9 (b) gives you authority to do that.

    This is a conflict in terms between these two sections.

    The Administrative Procedure Act containing section 9 (b) was passed after section 311 (a).

    Therefore, we say we resolve the conflict in favor of the earlier statute.

    Our position on these points, and these were the only two points which were the underlying reasons why the Court in the Stone’s Express case held the way it did.

    Is it a license holder — the — as to the first point, that the license holder must be a license holder not when the application for renewal or a new license is filed, but in accordance with agency rules, it must be one before the expiration of the license.

    And our reasoning depends primarily just on the language of the section.

    I don’t understand that phrase.

    You have a temporary license?

    David G. Macdonald:

    Reading — reading the — yes.

    The temporary license that we had, we received on May 18th.

    We were an applicant for a permanent license to continue the same activity on May 8th.

    That is still pending.

    David G. Macdonald:

    It has not yet been determined.

    The — the section 9 (b), under which the temporary authority was extended, provides that in any — and I’m quoting, “In any case in which the licensee has, in accordance with agency rules, made timely and sufficient application for a renewal or a new license, no license with reference to any activity of a continuing nature shall expire until such application shall have been finally determined by the agency.”

    The Court in the Stone’s Express case, looking at that language said this, “The third sentence of section 9 (b), however, in using the words, “In any case in which the licensee has made timely and sufficient application for a renewal or a new license.”

    Indicates that the statute presupposes at the time of the filing of the application the existence of the license.”

    Hugo L. Black:

    That is the permanent license?

    David G. Macdonald:

    Yes, sir.

    It’s permanent.

    David G. Macdonald:

    The Court said in effect that Pan-Atlantic would have had to — who held the license, granted to it on May 18th on May 8th at the time when it filed its application for a permanent authority.

    It had to be a temporary licensee at the time it filed its application for a new or renewal license.

    Felix Frankfurter:

    I don’t — I don’t — I understood the time that in — that you sought to bring yourself within — or the Commission issued an order purporting to act under 9 (b) —

    David G. Macdonald:

    Yes.

    Felix Frankfurter:

    — at the time you had a temporary license.

    David G. Macdonald:

    That is, sir.

    And that is our position.

    Felix Frankfurter:

    Now, wasn’t that in existence when the time was extended?

    David G. Macdonald:

    I think the Court has automatically gone to the position that we take in this case.

    The statute reads, “As of the time when the temporary license is due to expire,” that’s the important feature.

    And we were a temporary licensed — licensee —

    Felix Frankfurter:

    Oh.

    David G. Macdonald:

    — at the time that the — that the Act 9 (b) acted to extend it.

    William J. Brennan, Jr.:

    (Inaudible) are you suggesting that what has the penalty that the licensee is limited to a holder of a permanent license and does not embrace as in your case the holding of a temporary license?

    David G. Macdonald:

    I don’t believe that’s exactly correct, sir.

    What the —

    Felix Frankfurter:

    Couldn’t be that because it says a new — renewal or a new license?

    David G. Macdonald:

    What the Court really had in mind was this.

    And I’ll illustrate it with the case that we have in bar — at bar.

    They said that Pan-Atlantic should have acquired its temporary license before it filed its application for a renewal or a new license, where it matters to —

    William O. Douglas:

    Since they already have it (Inaudible)

    David G. Macdonald:

    We had a temporary but we — and we filed for both simultaneously.

    We received the temporary license on May 18th, whereas yet have yet received the other one.

    David G. Macdonald:

    Consequently, at the time we filed for the permanent application, we were not yet a licensee.

    We were on the —

    Felix Frankfurter:

    What — didn’t you hold a temporary license at that time?

    David G. Macdonald:

    No, we didn’t get that until May 18th.

    Felix Frankfurter:

    Oh, at the moment when you filed?

    David G. Macdonald:

    That’s the point.

    That’s the Court —

    Felix Frankfurter:

    But at the time before the 180 days expired, you were the holder of a temporary license?

    David G. Macdonald:

    Oh, yes, sir.

    And that is the — I’ll say it’s a technical distinction —

    Felix Frankfurter:

    Yes.

    David G. Macdonald:

    — and it serves no purpose except to controvert the purpose of section 9 (b).

    Felix Frankfurter:

    Except this, Mr. — Mr. Macdonald.

    They’re going to Judge Hartigan’s opinion in — in Stone’s Express.

    He quote from the Senate Judiciary Committee which gave the explanation of that and they referred to the Ohio statute, and then he incorporates by reference as it were the Ohio statute which says, “The expiration of a license held by said licensee at the time said application was made.”

    David G. Macdonald:

    Yes, sir.

    Felix Frankfurter:

    Isn’t that what the case — the opinion turned on Stone?

    David G. Macdonald:

    Well, in — in — that was one of the reasons that the Court added to the rationale I’ve just given to adopt the — the interpretation that I’ve given.

    That was a — and I think that that is one point and I should — state this now.

    Very much an issue.

    And that is whether or not the Ohio statute was adopted by Congress.

    You’ll notice that the language quoted in the Stone’s Express case and for the guidance of the Court, that’s forth also in appendix B, within the context of the Stone’s Express case, at page 6A of the Appendix B.

    The Court there pointed out to or pointed to a Senate Judiciary Committee print, referring to see Administrative Procedure Act and in — after referring to the third sentence of section 9 (b) said, “A similar provision is contained in the Licensing Procedure Act for the State of Ohio.”

    Now, does that mean that Congress adopted the language?

    Recalling now that we’re not dealing with an essential element of 9 (b) but of a technical point whether or not the licensee had to be such at the time he filed for the new license.

    Felix Frankfurter:

    Never mind whether it’s adopted.

    We just go to the print.

    Did 9 (b) — did Congress use the language of the Ohio statute?

    David G. Macdonald:

    It did not sir.

    It specifically omitted that language because if it’s true that it considered the language of the Ohio Act, it’s clear that it didn’t adopt that language.

    Felix Frankfurter:

    And similar doesn’t mean identic?

    David G. Macdonald:

    That is exactly correct, sir.

    Harold Burton:

    And this is the argument here, this 9 (b) was written to relate to a identic situation and not to the strictly kind of a situation referred to licenses that were independent of — of each other and had renewals rather than a temporary and extension, and therefore the language natural for that but natural for this?

    David G. Macdonald:

    That is the contention raised by the appellees on their brief in this proceeding as I understand it.

    They’ve gone beyond the lower court’s decision.

    I might say that their brief, and presents a new argument which was not considered by the court below at all and not presented to the court below at all, which is that the Ohio statute, if we assume that it was adopted, that its language we should suppose was adopted by Congress.

    Although, the section 9 (d) doesn’t contain it.

    Then we must take another part of that Ohio Act.

    And that is the contention that the words of the Ohio Act, that the license must be of the same type or class, should be incorporated in 9 (b) as well.

    That is the — an additional and different point than the one that the Court made as to this first point about the — where you had to be a licensee at the time that the application was filed.

    Felix Frankfurter:

    Are you going to deal with that argument on the merits?

    David G. Macdonald:

    I —

    Felix Frankfurter:

    The fact that it’s new doesn’t make it irrelevant.

    David G. Macdonald:

    We have dealt with that, sir, in our reply briefs.

    Our shortness of time will not make it possible for me to deal with that at length.

    But I think what I have to say as to these other issues and what we’ve already shown that the Congress didn’t adopt that language defeats that whole argument.

    It all rests on the premise that Congress adopted the language of the Ohio Act, which it clearly did not do.

    The second point —

    Earl Warren:

    Mr. Macdonald, may I ask you just one question.

    This practical question?

    Would the Board have been — would the Commission have been likely to have granted you this temporary license if it had not known that you were applying for a permanent license?

    David G. Macdonald:

    The fact that they knew we were applying for a permanent license would make the Commission more careful to see that they didn’t inadvertently grant one that shouldn’t be granted —

    Earl Warren:

    Yes.

    David G. Macdonald:

    — because they knew that it would be automatically extended until that the final decision in the application case, the permanent application case.

    That is one of the reasons that I wanted him before closing on that point, to point this out.

    The purpose of Section 9 (b) was to protect people who must get licenses in order to continue a continuing activity having to suspend that because of delays in administrative action.

    That’s set forth at — at length in the briefs, I think of all the parties.

    That the purpose of that, there’s no question about it, was do what just what it — the Commission used it for in this case.

    They had a proceeding.

    It’s going on now.

    David G. Macdonald:

    This is 1957.

    The — it is now pending before the Commission for decision, this permanent application case.

    It’s been almost two years.

    It’s physically impossible for the Commission to complete this class of proceeding in much less than that time.

    They — this statute, section 9 (b), they extended the authority and we say the Commission didn’t do it.

    The statute did it.

    It acts directly on the license, if you look at the wording of 9 (b).

    It acts directly on the license to extend it because it’s a protection to the license holder against the agency, against the dilatory action of the agency or failure of action.

    I don’t blame it on the agency because the Administrative Procedure Act is a viable to protect the — the vested rights of license holders.

    And that is the argument they make.

    They are certificate holders.

    They are entitled protection against unneeded transportation.

    We agree —

    William O. Douglas:

    (Inaudible) the agency they do affiliate that in the application for a renewable sufficiency in that the finding is sufficient automatically (Inaudible)

    David G. Macdonald:

    That’s correct, sir.

    The —

    William O. Douglas:

    But what’s sufficient?

    David G. Macdonald:

    The — the — that they must — that they must find that it’s activity of a continuing nature and if there has been an application filed for a new or renew a license within the scope of the agency rules.

    William O. Douglas:

    Is that governed by regulation?

    David G. Macdonald:

    Yes, sir.

    William O. Douglas:

    (Inaudible)

    David G. Macdonald:

    That is set forth in appendix D of our brief.

    William O. Douglas:

    There’s no question in this case that the application for renewal was sufficient at that time?

    David G. Macdonald:

    No question.

    Felix Frankfurter:

    Has the –I suppose and having looked at the brief.

    I suppose that the — in consideration to face the — the opportunity that affords to a known action to give a license, which eventually may be denied.

    David G. Macdonald:

    That is true, sir.

    We have two policies here and –and they’re — they’re fundamental to both the Interstate Commerce Act and the Administrative Procedure Act.

    One is, that there shouldn’t be an oversupply of transportation and therefore, certain procedures must be followed before new licenses of a permanent nature are created.

    We agree that is so.

    David G. Macdonald:

    On the other hand, we have the policy recognized in these four emergency sections.

    It says the public is also entitled to service.

    The National Transportation Policy also sets that forth.

    And there’s a reconciliation between those two policies which is set forth in section 9 (b) of the Administrative Procedure Act.

    The Administrative Procedure Act guarantees the licensed holders that there shall not be created unnecessary permanent licenses.

    Section —

    Harold Burton:

    (Inaudible) to wipeout the 180 days (Inaudible)

    David G. Macdonald:

    I beg your pardon?

    Harold Burton:

    On your interpretation, it does wipeout the 180-day limit.

    David G. Macdonald:

    Those — I wasn’t referring to section 9 (b) when the — in that comment, sir.

    Those provisions in — in the earlier parts of the section — of the Administrative Procedure Act guarantee that there must be a notice.

    There must hearing, and so on.

    Those are all procedural rights given to the — those persons who hold right to hold the certificates and are in effect the best of interest.

    The fact they have those rights, gives them the power to delay these proceedings for up to two and three years.

    Balancing the policy consideration, Congress in section 9 (b), in the third sentence, provided that where there is a — a temporary license, which as I pointed out is here created because of an urgent and immediate need with carrier service able to provide it.

    Where Congress says — or where the Commission has created such a — a license for a continuing activity, Congress provided in section 9 (b) that that license should stay in effect until the agency had completed the agency processing on the permanent application.

    That is a subtraction from the rights which the Administrative Procedure Act, otherwise, grants to the holders of certificates to prevent the needless creation of new certificates.

    The dual purpose of — of section 311 (a) has a bearing on that point.

    And that is the second point of the Court in the Stone’s Express case.

    They felt that there was a conflict between the statutes.

    As we pointed out, section 311 (a), the 180-day limitation is a limitation on the Commission.

    That’s a licensing grant — a power, a licensing authority granted to the Commission, 311 (a).

    Section 9 (b) is not a licensing authority granted to the Commission.

    If it were, instead of saying no license shall expire, they would have said, no license shall be permitted to expire.

    But it doesn’t say that.

    It says no license shall expire, that’s directly on the license.

    The Court in the Stone’s Express case failed to see that distinction and it was not urged upon the Court.

    When we urged it upon the Court in the present case, I believe that that was the point which was dispositive of the issue and found, prevailed upon two other judges to — who’dfeel that we were correct.

    But this isn’t in the conflict.

    There is no conflict actually when you compare the language of 311 (a) with 9 (b), because 9 (b) acts directly on the license.

    David G. Macdonald:

    Now, why is there any —

    In practical effect it’s — in practical effect if you read 9 (b) with the — with the 311 (a), it’s on effects, making the Act say the Commission may grant a temporary license to take effect (Inaudible) of pending application.

    David G. Macdonald:

    Yes, sir.

    But if you realize that section 311 (a) has a dual purpose, then you’ll find that our construction is consistent with affording some purpose to each of these acts.

    Section 311 (a) doesn’t authorize, it doesn’t merely cover the situation of an activity of a continuing nature such as ours.

    A grant of authority may be made for one boatload of lumber from Coos Bay, Oregon to Providence, Rhode Island.

    9 (b) has no relationship to that.

    That’s not an activity of a continuing nature.

    So that it’s only when there’s an activity of a continuing nature that section 9 (b) comes into effect.

    Consequently, the 180-day limitation has full effect in every instance, except where there’s an activity of a continuing nature.

    Supposing the Commissioner grants a 180-day license — Commission.

    Can it revoke it within that 180 days?

    David G. Macdonald:

    No, unless the — there’s reason which would be beyond the scope of the statute.

    Now, if there were — that point was raised on the — on the brief of the appellees and we’ve covered it in our reply brief at some length.

    They claimed that because the Commission used this language in these orders, I might say the Commission has always in the form of order their view is to extend these temporaries.

    Used the form which suggested that the Commission was doing this thing, that the statute wasn’t.

    We differ with the Commission on that point.

    We did in the lower court and we do here.

    We say the statute — and I think the Commissioner agrees with us that the statute acts to extend the temporary authority rather than the Commission.

    (Inaudible) my point, I was — if the — forgetting 9 (b) for a moment.

    You have a temporary license for 180 days.

    Could the Commission decide it was going to revoke that?

    And then revoke it within 180 days?

    David G. Macdonald:

    No, sir.

    Not — not without cause.

    In other words, if there was a —

    What would — would it cause, it could?

    David G. Macdonald:

    Well, now, it would have to be one of the causes that — it couldn’t do it, unless there had been some cause that section 9 (b) comprehended as a — as a reason for the Commission to do so.

    In other words, if the carrier had suspended the activity and it — it was no longer an activity of a continuing nature, then the Commission could revoke or in other words, get out an order which is a public declaration that there was no longer authority to continue that activity in a —

    Felix Frankfurter:

    You mean — you mean that if the Commission gives a temporary license and fixes it for 100 days (Inaudible)

    David G. Macdonald:

    I understand.

    Felix Frankfurter:

    — say there’s sufficient ground and they cannot, I suppose, they cannot even on notice say, “We’ve looked over these papers again and we think the chances of granting a permanent license is so slim that we don’t want this temporary license to be outstanding even for 100 days.”

    David G. Macdonald:

    No, sir.

    You —

    Felix Frankfurter:

    (Voice Overlap) —

    David G. Macdonald:

    — see the — the statute has no — there’s no relationship between the permanent authority statute and the temporary authority.

    Temporary authority is granted for one set of statutory purposes and the permanent for —

    Felix Frankfurter:

    Yes, but it could have denied it ab initio, I’m assuming.

    David G. Macdonald:

    The Commission —

    Felix Frankfurter:

    (Inaudible)

    David G. Macdonald:

    — could have denied it but not because there was any likelihood that the permanent authority application would be denied.

    That would have been an improper consideration.

    The Commission acts on a temporary, only in relation —

    Felix Frankfurter:

    Public interest is involved, isn’t it?

    David G. Macdonald:

    The — the public need for service —

    Felix Frankfurter:

    Yes.

    Well, suppose they — they said there’s public need and on reconsideration some other matter has come up and we now mean that this would be redundant.

    And we don’t want to deal with this temporary license which got a —

    David G. Macdonald:

    The Commission —

    Felix Frankfurter:

    Can they do that?

    David G. Macdonald:

    The only way the Commission could that would be to act immediately upon the permanent authority application.

    Felix Frankfurter:

    I see.

    And deny that out right and put an end to the matter.

    David G. Macdonald:

    That’s right.

    Felix Frankfurter:

    I see.

    David G. Macdonald:

    I would like to reserve my last five minutes for rebuttal.

    Earl Warren:

    You may.

    Mr. —

    Mr. Murray.

    James A. Murray:

    My name is James A. Murray.

    James A. Murray:

    I’m here for of the Interstate Commerce Commission in Number 424.

    I want to follow up on Mr. Macdonald’s statement of a slight difference of opinion between his position and our position.

    That is, with respect to the meaning of section 9 (b).

    He regards the section as operating directly upon the license.

    We regard it as being mandatory upon the Commission to take the action when the facts stated in the have found to exist.

    And that is the only difference in that —

    Felix Frankfurter:

    Mandatory meaning if they didn’t do it they could be mandamus?

    James A. Murray:

    Yes.

    Felix Frankfurter:

    Automatic, otherwise?

    James A. Murray:

    Yes.

    Felix Frankfurter:

    Practically, there’s no —

    James A. Murray:

    Well, it would — the Commission refuse or refused that won’t be reviewable in — in the same manner.

    Although, the Commission’s decisions are reviewable.

    Felix Frankfurter:

    Oh, I don’t — I don’t understand mandatory to mean that.

    James A. Murray:

    Well, I — I was withdrawing a mandatory —

    Felix Frankfurter:

    All right.

    James A. Murray:

    — approval to that extent.

    Felix Frankfurter:

    Now, I do understand.

    William J. Brennan, Jr.:

    Well, on then that — that means no more than that before the Commissioner’s the sufficiency of the application or that one goes in the sufficiency and if sufficient, the order must issue?

    James A. Murray:

    That’s correct, sir.

    William J. Brennan, Jr.:

    Well, I don’t —

    James A. Murray:

    The Commission must —

    William J. Brennan, Jr.:

    It makes a difference to the position.

    James A. Murray:

    Well, it — the — the net result is the same in — but it — our theory keeps the Commission in control and keeps a record of who is authorized to be in operation or —

    William J. Brennan, Jr.:

    It issues a paper —

    James A. Murray:

    — and follows a regular process.

    William J. Brennan, Jr.:

    It issues a paper which —

    James A. Murray:

    Oh, yes.

    Yes.

    William J. Brennan, Jr.:

    Well, now, suppose it doesn’t issue the paper, are you supposed to —

    James A. Murray:

    Well, I think that the person should have to bring an action to compel the Commission to do it in order to get some action.

    Felix Frankfurter:

    Mr. Murray, to — to know exactly what it is citing, in this case in fact, the Commission extended, acting as it concedes its jurisdiction under 9 (b), is that right?

    James A. Murray:

    Yes, Your Honor.

    It —

    Felix Frankfurter:

    So that there is before us an order which the Commission is defending for the extended period and in this case we would not have to decide whether that has to issue automatically or under discretionary judgment of the Commission.

    James A. Murray:

    That — that’s correct, sir.

    The very action is to set aside this order of the Commission, which authorized Pan-Atlantic to continue beyond 180 days —

    Felix Frankfurter:

    But the question of automatic or mandatoriness would arise only if the Commission refused to extend a mandamus to apply.

    James A. Murray:

    That — that’s correct, sir.

    Felix Frankfurter:

    All right.

    James A. Murray:

    Now, the Commission in regards — does not regard that there is any conflict between section 9 (a) and section 311.

    We think that the 180-day limitation in section 311 is a — merely a limitation upon the licensing power granted to the Commission by that subsection.

    That section 9 (b) then grants additional authority and power, and requires the extension when the particular circumstances are found to exist.

    For that reason, we believe there’s no conflict between 311 and 9 (b).

    But if there is any conflict, if there is any over lapping, its regarded that way by the Court.

    We think that provisions of section 10 of the Administrative Procedure Act clearly supercede and repeal the provisions of 9 — of 311 to the extent necessary to permit section 9 (b) to operate.

    Felix Frankfurter:

    Is 311 (a), does that date from 1940, from the transportation?

    James A. Murray:

    1940, yes, sir.

    Felix Frankfurter:

    And the Administrative Procedure Act (Inaudible)

    James A. Murray:

    Was passed in 1946.

    Felix Frankfurter:

    1946.

    James A. Murray:

    Now, in between there I might — I’m going to that since you raised your question.

    In 1942, the 180-day limitation in 311 was suspended by the Second War Powers Act.

    Now, that Act was renewed from year to year.

    The last extension was on June 29, 1946.

    Now, on June 11, 1946, the Administrative Procedure Act had been passed.

    Our friend suggests that if 9 (b) was intended to apply there’d be no point in the extension.

    But that is not correct because the Administrative Procedure Act wouldn’t — did not become effective until September 11, 1946.

    Felix Frankfurter:

    Is the — was the exercise of the war power to suspend 311 (a) an action taken by the executive, by the — formerly by the President at the request of the Interstate Commerce Commission?

    James A. Murray:

    I don’t remember.

    Felix Frankfurter:

    Where the request to be (Inaudible)

    James A. Murray:

    I think it was probably originated in a request to the Commission.

    It was probably cooperative undertaking.

    Felix Frankfurter:

    Well —

    James A. Murray:

    But the suspension merely suspended the 180-day limitation.

    Felix Frankfurter:

    I understand that.

    James A. Murray:

    Yes.

    Felix Frankfurter:

    But that line of inquiry seems to be important because while, of course, those were the war years —

    James A. Murray:

    Yes.

    Felix Frankfurter:

    — that the Commission gave reasons why this is generally to hamper a restriction upon the administrative process and the statute comes in (Inaudible) to writing a general law when the Administrative Procedure Act came into being.

    James A. Murray:

    Yes, it —

    Felix Frankfurter:

    Have we any record that the Interstate Commerce Commission make any representation or make a submission to the judiciary committee while the Administrative Procedure Act was going through the legislative mill?

    James A. Murray:

    There is no discussion of this question.

    Felix Frankfurter:

    At all?

    James A. Murray:

    I’ve — I have not found any.

    Now, the Commissioner, Commissioner Aitchison testified before the committee and he opposed many a provisions and asked that the Commission would be except.

    But I don’t find — I didn’t find any discussion of this particular provision —

    Felix Frankfurter:

    Did this — did this provision 9 (b) emanate like a — preside in the original bill which went before the Congress?

    James A. Murray:

    The original 9 (b) provision here that became law was first put out in the Senate Committee print of 1945.

    Now, that incidentally, it is relied upon greatly by our opponents.

    That print was a waking paper.

    It was a paper put out in four parallel columns, in which there was the — in the first column there was a draft of the statute, the second was a draft for the amendments of the committee, and third was comment, and explanation, and forth was a comment on — on various proposals that had been made.

    And its purpose was to elicit comment and criticisms so as to better improve the Bill.

    When the Senate Committee reported to the Senate, they made no mention of this Ohio statute that has caused so much confusion.

    And neither did the House Committee mention it.

    And neither was it mentioned on the floor of the House or the Senate.

    It was just a casual reference in a waking paper, you might it call it.

    Felix Frankfurter:

    Now, may I ask one more question.

    The Administrative Procedure Act that caused flow to ground or to run back through in it’s origin to the report of the accessing committee versus administrative committee.

    James A. Murray:

    The Attorney general conference?

    Felix Frankfurter:

    Yes.

    James A. Murray:

    Yes.

    Felix Frankfurter:

    Was there — was there any discussion of this question?

    Because this is a general provision.

    It applies it to all the —

    James A. Murray:

    That’s right, sir.

    Felix Frankfurter:

    Was there any discussion in the particular report on the Interstate Commerce Commission, or the Federal Power Commission, or any of them?

    James A. Murray:

    I don’t recall any —

    Felix Frankfurter:

    That they should be more flexibility?

    James A. Murray:

    I don’t know of any comment on that at all.

    So far as I know in the Senate Committee, someone thought it up or they came across this Ohio statute and they thought it’d be excellent to put that in the bill.

    So far as I can see that’s — that’s what happened.

    Now, I — I think they gathered from the Ohio statute owning the idea of protecting licensees from having their license expired.

    I don’t think that they intended any technical requirement of restricting its privileges to those who technically had a license at the time they filed application for renewal.

    That was seen to be utterly foreign to their purpose.

    I can’t imagine that they would regard that as so important.

    Felix Frankfurter:

    I suppose you, and you, of course will come to the practice of the Commission or Commissions, the administrative practice.

    James A. Murray:

    In nourishing this?

    Felix Frankfurter:

    Since — yes, since 1946.

    James A. Murray:

    Yes —

    Felix Frankfurter:

    Not only of your Commission but of the others.

    Have we got any light on that?

    James A. Murray:

    The FCC, Federal Communication Commission has renewable licenses and they follow the practice.

    I don’t know — so far as I know they do not function under the Administrative Procedure Act.

    They did the same thing before then.

    Now, the Civil Aeronautics Board has put out a set of regulations.

    They’re published in the Federal Register and they’re cited in our brief, which make use of this statute in connection with this temporary exemptions.

    An exemption is a license within the definition of the Administrative Procedure Act, the same as a grant of authority.

    And the CAB in its regulation indicates that it follows a 9 (b) and regards it is binding on the agency.

    Felix Frankfurter:

    Would you mind telling us what the order of volume of — of certificates that would come within the sweep of this provision, of 9 (b)?

    James A. Murray:

    In our brief, we show that the Commission during the last five years has extended under authority of section 9 (b), an average of 412 —

    Felix Frankfurter:

    412?

    James A. Murray:

    412 per year.

    Now, over a 10-year period, that would amount to something like 4000.

    Felix Frankfurter:

    And you also give figures to indicate how long after the extension, after the expiration of 180 days disposition was made on the merits of the permanent — of the application for the permanent license?

    James A. Murray:

    The brief of the railroads has some figures on that.

    And incidentally that on page 49 of the railroad brief, they show that they made a digest of the purchase applications.

    That is, the cases under section 5, the unification provision in which the extensions were made under section 210 (a) (b) and they found that 1030 permanent orders.

    Now, and in these — among these were 194 temporary acquisition orders.

    Now, of those 194 temporary acquisition orders, that 101 were extended beyond 180 days.

    So that’s roughly 50%.

    Now, they have figures in the back of their brief which shows that these extensions run all the way from 23 days to three years and eight months.

    That — that’s the only figures that we have covering the matter.

    I might mention that the Commission’s annual report show it had almost between 2500 and 3000 applications for certificates and permits per year.

    And that the 412 extensions average per year during the past five years, amounts to about one out of six, or one out of seven or eight.

    Felix Frankfurter:

    May I — there’s one more thing that I’m not clear about that may make a difference between you and Mr. Macdonald.

    In this — in this extension as I (Inaudible) these claims to be allowed under 9 (b), does the Commission fix the period of the extension?

    James A. Murray:

    No, sir.

    They issued the order —

    Felix Frankfurter:

    Until?

    Until.

    James A. Murray:

    Until it follow — until the —

    Felix Frankfurter:

    But these figures that you’ve just given us are — are what the periods amounted to in fact, is that right?

    This railroad.

    James A. Murray:

    Yes.

    Yes, that’s true —

    Felix Frankfurter:

    (Voice Overlap) —

    James A. Murray:

    — in certain types of cases.

    Felix Frankfurter:

    — but there is no — the Commission doesn’t say 180 days have expired.

    We’ll let this license run for three more months.

    James A. Murray:

    That’s correct.

    Felix Frankfurter:

    All right.

    James A. Murray:

    The — the order authorizes a continuance until the further order of the Commission but not longer than the final determination of the application case.

    Now, in the legislative history of the section 9 (b), the — every person who mentioned it, the representative Walter in the House, Senator McCarran in the Senate, and the committee reports, were all very clear as to what they meant.

    There seemed to be no doubt about it.

    They wanted to protect these licensees and the House Committee referring to the proposal which would amend all acts inconsistent with Administrative Procedure Act, stated any inconsistent agency action or statute is in effect repealed.

    I would like to explain a little bit on how these temporary authorities are issued.

    The Commission has — has — has arrangements under which it can grant temporary authority for one shift or a short period of time, even though the telephone has emergency.

    But in that case they are limited to used it — to something like 10 days or not more than 30 days.

    And if it seems that it would last longer they require him to file a new application and go through the normal procedure.

    The normal procedure is for the Commission to receive the application, notify all carriers who might be interested in the matter and afford them an opportunity to submit written comments and statements of facts and criticism and arguments.

    The Commission then considers that and acts, and they have — the parties have the right to appeal to a higher agency authority if they desire and they do often.

    These records on which the Commission acts are in the public files of the Commission and available for anyone to examine.

    The Commission does not, as had been suggested, act on secret evidence and undisposed evidence, and there isn’t — there’s no record — without a record.

    There is a record and this — these cases have been reviewed in courts on the records are weighed.

    In the particular case, of course, the railroads had full information about the proceedings and filed on numerous representations.

    When the Commission — when the Second War Powers Act expired, the Commission was left within a large accumulation of temporary authorities which it extended under Administrative Procedure Act in September 1947.

    It, the same year, reported to Congress what it had done.

    And in the — early in the following year it prescribed and issued the regulations.

    And each year, for many years thereafter, and perhaps still show in their report to Congress the exact number of temporary authorities which have been extended on this provision.

    Harold Burton:

    Mr. Murray, what is your answer to the argument that this provision in 311 is the specific provision relating to water carriers and the 180 days as compared to a general provision in — in 9 (b) that has general effects in answer to the argument this is a specific control over the Government ?

    James A. Murray:

    Well, I — I think 9 (b) is the more specific.

    Harold Burton:

    More specific than the 311?

    James A. Murray:

    Yes, of course, 9 (b) —

    Harold Burton:

    (Voice Overlap) —

    James A. Murray:

    — has a sweep in — in general over the — throughout the agency but in — is limited in its application.

    If you take them — water carrier or motor carrier provision, 311 applies to all of them.

    But 9 (b) applies only to certain particular ones of those 311 cases.

    I think in that way it’s more specific and certainly whether it’s more specific or not, it is, I think, you would regard it as the latest enactment, since 311 had been in the law since 1940, even though it was suspended during portions of the time that limitation was suspended.

    Then the Administrative Procedure Act was passed.

    James A. Murray:

    But even aside from that, the provision under the Administrative Procedure Act show that is was intended to amend and change the existing statutes.

    That specifically set out in section 10, where the Administrative Procedure Act says that every agency is granted all authority necessary to comply with the requirements of this Act, to the issuance of rules or otherwise.

    And the House in reporting on that provision said any inconsistent agency action or statute is in effect repealed.

    And it’s well-known that the Administrative Procedure Act you know was intended to set up a new code of justice, of fairness, and it was then to cut across statutes, and change procedures whatever it might be necessary to do justice.

    Now, Congress undoubtedly thought that they were doing justice in protecting these licensees from having their license expire, where they had — did all they could to get a determination of the renewal and through some fault of the agency or the inability of the agency, their determination had not been made.

    Felix Frankfurter:

    You started to tell us about the reports by the Commission from year to year and its annual report to Congress of the extensions it has purported to make under 9 (b).

    James A. Murray:

    Yes.

    Felix Frankfurter:

    What inference do you draw from there?

    James A. Murray:

    Well, at the moment —

    Felix Frankfurter:

    That — that Congress was surprised to what it was doing —

    James A. Murray:

    Yes.

    Felix Frankfurter:

    — but that’s all.

    This isn’t the case —

    James A. Murray:

    That — that’s all.

    Felix Frankfurter:

    That’s all?

    James A. Murray:

    That’s all.

    The Commission and, incidentally, the railroad in their briefs suggest that the Commission was uncertain of its position because in 1946 and 1947 annual reports, it recommended legislation on this subject.

    Now, they have misunderstood the Commission’s recommendations.

    The recommendations, which they quote in their brief are recommendations that the Commission’s war powers over motor transport facilities and water transport facilities, are equivalent to that that the Commission has over railroad car service under section 110 to 117 be continued as an emergency provision.

    Now, this recommendation that the railroad, misconceived, relate to those provisions.

    They had nothing whatever to do with this 180-day limitation.

    The Commission first recommended legislation on this 180-day limitation in 1955.

    And that was brought about by a decision in the Stone’s Express case.

    And incidentally, that I believe, Mr. Macdonald’s — I believe he didn’t get around to mentioning that that case was appealed to this Court and before a decision was reached, the Commission had decided the application case and it became moot.

    So, there’s some question, has arisen has been brought up, at least, they’re concerning the relation between the scope of the license held by the applicant and the scope of the application for a new certificate.

    It has been suggested that because section 9 (b) doesn’t set on our specific standards that the — it’s impracticable and unrightful.

    Now, the Commission hasn’t had a particle of trouble with that.

    It’s very simple.

    When a carrier asks for authority to transport coal between points one, two and three, and then if it files a — by a certificate to transport coal between one — points one, two and three, and also lumber in between points — other points and additional commodities, the extension relates only to the minimum amount which is common to the two applications.

    And the unit is the authority to transport a commodity from one point to another point.

    James A. Murray:

    It is simple and there’s no confusion and there’s no reason for having any trouble about that.

    William J. Brennan, Jr.:

    Who — whom does the Commission consider a licensee?

    James A. Murray:

    Well, it considers a holder of a temporary authority a licensee and a holder of a certificate —

    William J. Brennan, Jr.:

    Well in this instance, I gather, on the 8th who was the application for the temporary license, is that it?

    Or rather for the permanent license.

    On the 18th, the —

    James A. Murray:

    Oh, Pan-Atlantic filed an application that that act of the filing was not the same day, I think.

    While a temporary authority to establish immediate service and a permanent authority application for a certificate.

    William J. Brennan, Jr.:

    Well, now, at the time that it applied for the temporary license, was it a licensee of any kind?

    James A. Murray:

    No, it was not.

    William J. Brennan, Jr.:

    Well, I gather that the Mr. Macdonald told us that that was deemed significant in this case?

    James A. Murray:

    It’s argued by our friends that it’s significant.

    William J. Brennan, Jr.:

    Well, what the —

    James A. Murray:

    And the Court —

    William J. Brennan, Jr.:

    Well, what I’m trying to get at, apparently, the Commission in this instance did consider Pan-American a licensee, although actually, it held no license at the time it filed the application, is that right?

    James A. Murray:

    What we’re now — now, I think — I think there’s some confusion there.

    Pan-Atlantic filed an application for a certificate and an application for a temporary authority at the same time.

    It wanted — it knew it would take it a year or more to get a certificate and there was clamors for at least it appeared to them, justification for issuing temporary authority, so he filed for that.

    Now, the Commission issued a temporary authority application.

    William J. Brennan, Jr.:

    Yes.

    Well, now, at the time the application was issued, was Pan-American the holder of any license?

    James A. Murray:

    It was not.

    William J. Brennan, Jr.:

    Well, yet the Commission considered that for the purposes of 9 (b) it was a licensee?

    James A. Murray:

    Well — well, that — that doesn’t come into operation.

    That comes into operation only upon the expiration of the temporary authority you see.

    William J. Brennan, Jr.:

    I see.

    James A. Murray:

    That there’s no — there’s no question about the Commission granting temporary authority (Voice Overlap) —

    William J. Brennan, Jr.:

    At the time the renewal application was —

    James A. Murray:

    That’s right.

    William J. Brennan, Jr.:

    — filed.

    William J. Brennan, Jr.:

    It certainly was a licensee.

    James A. Murray:

    That — that’s where the question comes or arises.

    Now, some — some arguments have been made that unless Pan-Atlantic obtained this temporary authority and then the next day filed its application for a permanent authority, it wouldn’t be entitled to 9 (b).

    Whereas, if it had filed this permanent authority the day before they obtained the – the temporary authority it would have been outlawed, or not within the statute.

    William J. Brennan, Jr.:

    Well, now, we do — do we have to decide that issue here?

    James A. Murray:

    I think you will.

    I think the — the argument is made on that.

    But we can’t conceive from the legislative history and the purpose of the statute why there would ever be any reason to make that distinction.

    Because a person filed his permanent authority application that day and he got his temporary authority tomorrow, he loses out.

    But if he got his temporary authority today and filed his permanent application the next day, he would be protected.

    It doesn’t make sense to us.

    I would like to reserve the three minutes left.

    Earl Warren:

    Very well.

    Mr. Weston.

    Charles H. Weston:

    May it please the Court.

    The United States supports the judgment of the District Court because it believes that section 9 (b) of the Administrative Procedure Act does not supersede or repeal the time limit which is incorporated in Section 311 (a) of the Interstate Commerce Act.

    Now, 311 (a) is a part of the Water Carrier Act.

    And its relation to the regulatory scheme of that Act is of some importance.

    The Act makes it unlawful to operate as a common carrier by water unless the carrier has a certificate of public convenience in necessity issued by the Interstate Commerce Commission.

    As to operations which are — were being carried on before the Act was passed, the Commission is directed to issue a certificate.

    But as to any certificate other than one covering these so-called grandfather rights, certain steps have to be taken.

    It’s necessary to file a sworn application and give notice to interested parties.

    There was then a hearing at which opponents may be heard, and present evidence, and argument.

    Finally, the Commission may issue a certificate only if it finds on the text developed at the hearing that the proposed service is or will be required by public convenience or necessity.

    The certificate specifies that we had a routes to be operated and once the certificate is issued this is permanent.

    The Commission has not power to revoke it.

    That was held in the Seatrain case.

    Now, the statute, therefore, provides for exercise of control over entry into the business of coastal or inland water carrier operations.

    This is a provision which safeguards against slicing the traffic quite too thin in particular areas of types of operation.

    It also gives the Commission power to select the best qualified where there are several applicants.

    Charles H. Weston:

    Now, the one circumstance in which a certificate is not required is where there is a grant of temporary operating authority.

    And this is to be granted where service should be provided to meet an urgent and immediate need.

    The Commission may grant this authority, if it meets the words of the section in its discretion and without hearings or other proceedings.

    And the grant shall be valid for not more than 180 days.

    Now, these temporary grants are breached in the scheme for control over entry into the business.

    They do not have to meet the broad test of public convenience and necessity determined after hearings.

    They essentially provide for some reaction on an ex parte showing.

    Now, it’s true that the Commission gives notice to some carriers who may think are affected and they are permitted to file written statements.

    But the action is essentially summary.

    Congress gave this open hand to the Commission in granting these authorities, but at the same time as the counterbalance, it fixed a definite time limit on their duration.

    And legislative history shows that this was not an over sight.

    That it was designed and purposeful.

    It has been mentioned that 311 (a) is derived from section 210 (a), which was added to the Motor Carrier Act in 1938.

    In fact, the two sections are verbatim.

    The Commission recommended adoption of 210 (a) and alerted Congress.

    It took notice of the fact in this letter that the absolute discretion, which was being given to the Commission, would mean that care would have to used to protect the legitimate interest of other carriers and that power of this kind, it said, could be abused.

    It then says, “but in event the grant would be strictly limited in time”, after suggesting that the Commission was not likely to use this power inappropriately.

    So, the strict time limitation was put before Congress as a factor which might mitigate against abuses possibly developing in administration of power which was entirely discretionary.

    Hugo L. Black:

    How — how would it result in abuse?

    Charles H. Weston:

    Well, in the first place, there may be a very inadequate showing of one side of presentation.

    There’s no — no opportunity to test it.

    Merely letters or communications submitted or –or an application which the Commission more or less takes on its face and that then, under the interpretation that’s been given to 9 (b), that may freeze the situation for two, three, or even four years.

    Felix Frankfurter:

    As a matter of fact, Mr. Weston, how many applications for the temporary licenses are made and of those how many are granted?

    Roughly, what are the figures?

    Charles H. Weston:

    I don’t know how many are made.

    The Commission gives figures on how many are granted, and something like 2000 — averaging 2000 a year.

    Felix Frankfurter:

    But the — you don’t know what the basis?

    Charles H. Weston:

    No, I do not.

    Now, the Commission interprets the last section of 9 (b) as nullifying this time limit, where the grant give temporary authority as applied for a certificate of permanent authority and it’s not yet been acted upon.

    Where the licensing statute permits license renewal or successive periodic licenses, 9 (b) operates fairly and equitably and it produces results which are very reasonable.

    Felix Frankfurter:

    I missed what you said, where —

    Charles H. Weston:

    Where the —

    Felix Frankfurter:

    These were the a renewal or what?

    Charles H. Weston:

    Where the licensing statute permits.

    Felix Frankfurter:

    Yes.

    Charles H. Weston:

    License renewal or successive periodic licenses such as under the Communications Act, where you get a broadcasting license for three years and it can be successively renewed.

    In that case, the law itself authorizes and contemplates license continuity and 9 (b) prevents a break in that continuity which may be due to administrative delay or inadvertence.

    Felix Frankfurter:

    But the considerations of policy that you advance seem to be equally operating.

    If the license is given for three years, it’s a matter of public interest.

    And you have to get permission to have it renewed.

    Let it run before passing on the application for renewal maybe just as much of an inroad, or a handout, or whatever you call it of a public interest which is found subsequently against the license.

    Charles H. Weston:

    I — I do not think that situation is the same, where the licensing statute permits successive licenses.

    There it — the natural situation would be that the holder of a license and it’s been patently true in the case of radio broadcasting licenses that they are renewed at the end of the period.

    Felix Frankfurter:

    You surprise me because as I read the opinion, particularly of the Court of Appeals of this district, that’s — your problem comes up again and again.

    Charles H. Weston:

    Well, it usually, I think, comes up but —

    Felix Frankfurter:

    I know but it’s contested and people —

    Charles H. Weston:

    Well —

    Felix Frankfurter:

    — particularly in the field where there’s a change, inconsiderable change.

    Charles H. Weston:

    I’m speaking broadly.

    But, of course, there are instances where there are attacks but that is the usual situation.

    Here, we have a grant which is limited in time and final.

    That’s, once the 180 days under the — under the original law, that’s all that can be given.

    Felix Frankfurter:

    I understand that.

    But I — it seems that in a way, to allow a license that has been enjoyed for three years, run on until you — the Commission gets around to decide it is replete with — with potential dangers to the public interest.

    That a greater way you haven’t got a license, you haven’t got — you really have a temporary thing before you decide why you should have anything.

    If you’re going to argue apart from the language of and the relationship of the two statutes.

    Charles H. Weston:

    I’m — I’m afraid I don’t quite follow that thought that —

    I’m just saying that if you — if a man gets a license, if a station —

    Yes.

    Felix Frankfurter:

    — get a license for three years —

    Charles H. Weston:

    Yes.

    Felix Frankfurter:

    — and then it can go on.

    Charles H. Weston:

    It has to apply for a renewal —

    Felix Frankfurter:

    I understand that.

    Charles H. Weston:

    — and — and speaks by the agency rule.

    Felix Frankfurter:

    And — and the renewal isn’t automatic but as to satisfy —

    Charles H. Weston:

    Yes.

    Felix Frankfurter:

    — certain standards.

    You’ve had three years of enjoyment, then to let it run on, when eventually it may be denied, is taking more away from the public interest as it were, than it concededly starts out with being an emergency and you haven’t got anything to start with.

    Charles H. Weston:

    I — I think I would — would disagree with that.

    Felix Frankfurter:

    All right.

    Charles H. Weston:

    To get the original license it was necessary to satisfy the statutory standards for getting that license.

    Felix Frankfurter:

    That’s right.

    Charles H. Weston:

    And this —

    Felix Frankfurter:

    The very important condition was that it should terminate at the end of three years.

    Charles H. Weston:

    Yes, and — and also the law provided that you could get it again for another three years —

    Felix Frankfurter:

    You may get it.

    Charles H. Weston:

    — it provided the means.

    Felix Frankfurter:

    You may get it.

    Charles H. Weston:

    And until that determination is made, this section 9 (b) would keep that alive.

    Here, the — to the holder of the grant — grantee of operating authority is met — not met any of the really substantive tests of the law.

    He’s come in on a summary, showing emergency need.

    Felix Frankfurter:

    I wonder — I’m just — just curious to know whether your — your more informed knowledge or my guess is more correct, namely, that these licenses become almost automatically renewed.

    That is not my impression or I maybe all wrong as to any question.

    Charles H. Weston:

    I — I may say that I may be wrong.

    That my impression is the —

    Felix Frankfurter:

    All right.

    Charles H. Weston:

    — is the other.

    Now, the Administrative Procedure Act is not directed to and does not change substantive rights.

    It deals solely with procedure in administrating federal administrative proceedings.

    Charles H. Weston:

    It’s purposes to regularize that procedure.

    Under the Commission’s interpretation, the effect of the section is to change the substantive law.

    Felix Frankfurter:

    Oh, Mr. Weston, the drastic changes of the Administrative Procedure Act made in the Immigration law so that Congress had to change it means to me to be a rather minimizing way to speak of it as you just have.

    Charles H. Weston:

    They — they relate to procedure.

    Felix Frankfurter:

    Well, what — what are these for procedures?

    Charles H. Weston:

    I think that where there’s a — a definite time limit fixed on temporary operating authorities to say that that time limit is somehow going out the window because of a procedural statute, is a change in substantive law.

    If you look at this section in relation to the other provisions of the Act, section 309 prohibits operating without a certificate, except as provided in 311.

    311 says, you may — may have an — a temporary authority which shall be valid for not more than 180 days.

    Now — now 9 (b) comes along and says this authority which under prior law shall not be valid for more than 180 days, is valid for more than 180 days.

    9 (b) validates what Section 311 made invalid.

    Harold Burton:

    You may get a permanent certificate by summary procedure that last forever?

    Charles H. Weston:

    Yes, but you have to go all — through all the procedure to get that.

    Felix Frankfurter:

    Only the — to answer yes to that question presupposes that the Interstate Commerce Commission is going to be derelict of the public duty and under the guise of not having completed an application for a license just defeats the purpose of the statute by — by letting it run on forever.

    That’s what the answer implies.

    Charles H. Weston:

    No, I don’t think so.

    Felix Frankfurter:

    Well, otherwise it can’t run on forever.

    And this —

    Charles H. Weston:

    Oh, not forever, of course.

    Felix Frankfurter:

    Or for years.

    Charles H. Weston:

    I — I understood Mr. Justice Burton to ask about the permanent certificate.

    Felix Frankfurter:

    That’s right.

    Charles H. Weston:

    Yes, the permanent certificate but you have first to establish that issuing it is in the public convenience and necessity —

    Felix Frankfurter:

    Yes.

    Charles H. Weston:

    — with its relation to other carrier, you part in the whole scheme of carrier operations.

    Felix Frankfurter:

    But this is an interim thing.

    I mean if — if the Commission really, I quite agree that the mere fact that one previously, conscientious discharge of duty to an agency, isn’t the answer.

    It doesn’t tell you how to construe it.

    It’s part of the way of considering.

    But you must take it into account.

    But I don’t think you can assume that thereby they let an application run for — on forever under an emergency application.

    Charles H. Weston:

    In connection (Voice Overlap) —

    Felix Frankfurter:

    (Inaudible) is to construe —

    Charles H. Weston:

    It — it can run only until the permanent authority application —

    Felix Frankfurter:

    Certainly.

    Charles H. Weston:

    — is finally determined.

    But Commission under the construction that’s been given 9 (b), exercises no choice about the temporary authority being continued if there has been the application —

    Felix Frankfurter:

    That’s right.

    Charles H. Weston:

    — for the permanent authority.

    In other words, the urgent, and pubic, and immediate need for service may have entirely passed by the end of 180 days.

    But there’s a pending application for a permanent authority, the matter runs.

    Hugo L. Black:

    Well, as a matter of practical consequences, what are the evils that you foresee in connection with the — with the — I recall that in Seatrain case that we had, which you referred, was one in which we held — we held the Commission pretty close to its right to revoke in order to preserve the rights of licensee.

    I thought that was the issue there.

    Charles H. Weston:

    Yes.

    I’ll just mentioned that in passing as — as indicating that where the permanent certificate has been issued, then that is in fact permanent.

    Hugo L. Black:

    What would happen if — if the 180 days expired and a new application was filed by the same company or some other company for a temporary application to do the service?

    Charles H. Weston:

    I think that the provision that a temporary authority shall be valid for not more than 180 days would prevent issuing a second temporary authority to the same person, because if you can do that the 180-day limit becomes meaningless.

    Hugo L. Black:

    It would have to be implied.

    Is there any such provision — is that in the Act that they cannot issue another temporary certificate?

    Charles H. Weston:

    No.

    Hugo L. Black:

    That it can go through the former application and proof?

    Charles H. Weston:

    Well, the proof is, just briefly, urgent and immediate need of service and as we — as I said before, the Commission may act without hearings or other proceedings.

    So that there is very little test.

    Now, maybe it seems a little odd to me that we should be — should have been an average of over 2000 emergency situations per year if there has been really “scrutiny” of what constitutes emergency needs.

    But be that as it may —

    Felix Frankfurter:

    This is an emergency.

    Charles H. Weston:

    — there is no real opportunity.

    Felix Frankfurter:

    This is an emergency.

    Charles H. Weston:

    What?

    Felix Frankfurter:

    Immediate and urgent.

    Charles H. Weston:

    Yes, that’s the sole —

    Felix Frankfurter:

    Yes.

    Hugo L. Black:

    But your argument appears to me to be based on the premise that this is pretty bad or something, and here the evil is that some wrong that you seem to foresee, that might occur to the public or to the — some of the other carriers.

    But am I wrong in that?

    There’s —

    Charles H. Weston:

    Well, in that sense, it deprives other carriers of the right to make their voices heard in a way that will be effective before there is a change in the transportation system.

    For example —

    Hugo L. Black:

    Before you have more competition?

    Charles H. Weston:

    Yes, it — or who — who is the best person to — to come in.

    It well has been just the first one who happens to get to the Commission.

    Felix Frankfurter:

    Well, that — I don’t quite (Inaudible)

    The — the controversy is really about the gap of time between 180 days and whatever time it is that the Commission gets around disposing of the application for a permanent license.

    Charles H. Weston:

    That’s right.

    And which — which figures in the brief of the railroad appellee show that may be two or three years beyond the 180 days.

    Felix Frankfurter:

    (Inaudible) whatever it is.

    I thought the figures we had indicated quantitatively which is where one is likely is going to get access a very different story.

    You may just have made, the fact that you have two or three years, I should think we would call for a must — must have a very special situation, must represent a very special situation.

    Charles H. Weston:

    Oh, of course that’s (Voice Overlap) —

    Felix Frankfurter:

    That’s the norm, is it?

    Charles H. Weston:

    That’s not the norm, no.

    If Congress — and there is a bill pending now, as there has been some bills in the last few years to change this provision, it might set up adequate safeguards.

    I am not contending that there’s anything inherently evil in permitting temporary operating authorities.

    But that where Congress deliberately fixed this limit of time, then if for this to change that, it should have opportunity to tighten up the procedure.

    Hugo L. Black:

    That gives to me a question of, duly from your stand point of the interpretation of language doesn’t —

    Charles H. Weston:

    It is — it is this mainly based on — and yes.

    That this — this is in effect, we think, very definitely are repealed by implication.

    Hugo L. Black:

    I never — I’m asking you the question because you’ve given some of the legislative history.

    You’ve not yet given anything in the legislative history that I’ve heard that indicates there was some reason why Congress would want to be extraordinaire — extraordinary solicitors about repeating the bill, the bill as a whole, seems to be in the direction of protecting rights that have been granted and which might not to be carried on to the interest of the public.

    Charles H. Weston:

    Well, it’s a question whether you can regard a grant given in this very summary fashion as deserving of a particular protection.

    Now, as the letter from the Commission pointed out, there was danger that in the quick — if you want to call it hasty action that the Commission was expected to take in what we refer to in the Commission’s letter as — as emergency situations.

    That there would not be a sufficient canvassing of all the applicant’s considerations and therefore, that it was desirable to place a time limit on these grants given in this summary fashion.

    Hugo L. Black:

    Well, now that my interest is, they’re just wrong with that.

    What I see is the situation where they provide for licenses which you might permit, whatever you want to call them, which might be considered of a temporary nature —

    Charles H. Weston:

    They —

    Hugo L. Black:

    — there’s pending in that time an application for a permanent permit.

    Now, I — I assume that it might be impossible for the Commission always to be able to get through 180 days.

    And there is a — a pretty big problem they have of — of interrupting a carriage that might be — it results in tremendous loss to the person who later on might be able to get a permanent license.

    Charles H. Weston:

    That — that is — that might sometimes occur.Of course, it is not like a thing out of a new railroad line as there’s trucks or buses can move in one area and then in another.

    Boats — boats also can —

    Felix Frankfurter:

    But there’s also — but there’s also the interest of the shippers (Inaudible)

    Charles H. Weston:

    Yes.

    In other words —

    Felix Frankfurter:

    Who relied on that since.

    Charles H. Weston:

    If this particular carrier has to stop its operations, then there’s no reason why a new carrier may not come in and be given temporary authority.

    And then the Commission will try —

    Hugo L. Black:

    Well that — that doesn’t really permit the claims wouldn’t it?

    If you’re going to say there, that new carrier would — haven’t got a temporary authority.

    Charles H. Weston:

    Well —

    Hugo L. Black:

    But the other man has working that out.

    (Inaudible)

    Charles H. Weston:

    It — if he was going to let the first comer have this field to himself then it means that the Commission’s action on the temporary authority becomes pretty much in substance, final action.

    There’s the fact that the —

    Hugo L. Black:

    Was anyone else supplied here?

    Charles H. Weston:

    I don’t know.

    I’m not familiar —

    Hugo L. Black:

    Is this according to you as between applicants?

    Charles H. Weston:

    I — I’m not familiar with the — that aspect to the case.

    Earl Warren:

    Mr. Weston, may I ask this question.

    Suppose in this case that the petitioner had — had not or had first gotten the temporary license.

    And then the next day after he received the temporary license, he asked for a permanent license.

    Charles H. Weston:

    Yes.

    Earl Warren:

    Would you be here?

    Charles H. Weston:

    Yes.

    I — I don’t — I — I don’t make — I’m not supporting the particular point made in the District Court’s decision in Stone’s Express that you have to receive your temporary license before you made your application for permanent authority.

    Earl Warren:

    You believe that’s — have been a consequence in this case?

    Charles H. Weston:

    It’s a possible point but it seems to me rather technical and doubtful one.

    Earl Warren:

    So you don’t believe that?

    Charles H. Weston:

    Yes.

    Earl Warren:

    Is that right?

    Charles H. Weston:

    That’s right.

    Tom C. Clark:

    What is statutory construction except technical?

    Charles H. Weston:

    The —

    William J. Brennan, Jr.:

    But — but Mr. Weston, you still do works on this I gather that 9 (b) doesn’t reach this kind of license at all.

    Charles H. Weston:

    Yes.

    William J. Brennan, Jr.:

    That 9 (b) reaches only those types of licenses with periodically must be renewed until —

    Charles H. Weston:

    Yes.

    I —

    William J. Brennan, Jr.:

    — a permanent license here is of indefinite direction —

    Charles H. Weston:

    Yes.

    William J. Brennan, Jr.:

    — and is not of that kind and a temporary license pending the issuance of that kind of permanent license is not within 9 (b).

    Is that your argument?

    Charles H. Weston:

    That’s — that’s —

    Felix Frankfurter:

    Or now, would you be good enough to point to any word that convey that complicated idea.

    Any words or called cases of words.

    After all we are construing something that’s before us as a commanding statute.

    Charles H. Weston:

    I think that the — well, the Ohio Statute, I do not regard as conclusive from the stand point of legislative history.

    It — at least is of some bearing that the Senate Judiciary Committee referred to this — that as a similar provision that expressly was limited to cases of application for a license of the same type per class.

    Now, I think that —

    Felix Frankfurter:

    Now, do we know —

    Charles H. Weston:

    If — if —

    Felix Frankfurter:

    Do we know what the Ohio — how the Ohio statute — I know in my own State of New York you can’t find out that the legislative history or piece of legislation is — it’s a secret you can’t get access to.

    Felix Frankfurter:

    What about, have we got legislative journals so we know what that Ohio statute — have we got decisions what that meant?

    Charles H. Weston:

    Let me read this first.

    Felix Frankfurter:

    (Inaudible) legislative history of another State —

    Charles H. Weston:

    No —

    Felix Frankfurter:

    — which is referred to obliquely in a report of Congress.

    This is certainly our inference.

    Charles H. Weston:

    The — the words — I don’t think you need legislative history here.

    The words are, “A new license of the same type or class, or renewal of an existing license.”

    That’s those words.

    But what weight do you think should be given to the fact that Commission has been going ahead, acting on the other premise?

    That those are not cases.

    This is the first time this proposition has come up.

    What weight is that entitled to?

    Charles H. Weston:

    Well in the Reis case, in 341 U.S., this Court unanimously rejected a — an interpretation of the Interstate Commerce Commission of the Administrative Procedure Act.

    Felix Frankfurter:

    Before the statute was placed.

    Charles H. Weston:

    Well —

    Felix Frankfurter:

    Is the statute still —

    Charles H. Weston:

    The question is —

    Felix Frankfurter:

    — claimed here?

    You have to go to the Ohio statute and I don’t know.

    For all I know the Ohio statute might have been construed to cover the same kind of service rather than the same kind of piece of paper.

    Charles H. Weston:

    I do not think that you — our case rests at all solely on the Ohio statute.

    I think that if you take the idea of it, you can — one application of — for a license, whether it’s the same or not keeps an existing license.

    So, I’m supposing I have a radio broadcasting license.

    I applied for a certificate to operate as a motor carrier.

    Is the pendency of that application to keep the other license alive?

    Now here, there is one point of similarity between the existing license, that of a temporary authority and the permanent.

    They involve particular water operations.

    But their statutory standards for the grant are different.

    They are wide apart in the procedure for obtaining them.

    Charles H. Weston:

    And the — are wide apart in what — in the right conferred.

    In one case 180-day authorization, in the other case permanent authorization.

    Harold Burton:

    Mr. Weston, did you complete your answer to Justice Harlan about the 10 years of administrative practice?

    Charles H. Weston:

    No, I didn’t.

    I think also it should be noted.

    That the Commission in its — when it first denounced this ruling, stated in announcing it that to which had great doubt as to its correctness.

    It stated that was a division of legal opinion as to whether it could do this.

    Where is that?

    Charles H. Weston:

    It appears in pages 33 and 34 of the brief of the railroad appellees.

    And you’ll find the language to which I am referring in the second — the first full paragraph in that page.

    I think that the Commission, it’s fair to say, made this ruling as a matter of expediency — legitimate expediency but that was the real basis.

    It’s very difficult to test this kind of thing because it matters — have to become mooted any moment just as it did in Stone’s Express.

    By the time you go through District Court proceeding and then get to this Court, that matter is — have to become moot.

    Now, we do also think that this is a case where the specific statute ought to prevail over the general one.

    Well, that has been mentioned earlier and I’m — my half hour has expired.

    I’m going to divide my time.

    Earl Warren:

    Well, Mr. Weston, before you sit down may I ask you just one question.

    What — what is the most important public interest that you see that causes you to be here on behalf of the Government in opposition to the position and the practice for 10 years of your own Interstate Commerce Commission?

    Charles H. Weston:

    Well, I — I think that in — in this particular instance, it’s our reading of the statute in the light of the — at the full statutory test.

    That we do not see a real justification for saying that this general statute applies so as to cut down a time limitation that Congress deliberately put in as to impose this to a particular kind of license.

    Earl Warren:

    Would you see any great danger that attaches to the practice of the Interstate Commerce Commission here, anything that means a danger that — that you should try to prevent?

    Charles H. Weston:

    No, I don’t think that its —

    Earl Warren:

    It’s truly an academic matter as to the construction of the statute.

    Charles H. Weston:

    Well, I suppose academic in the sense that construction of any statute is a matter of importance.

    And — and I think that there are conflicting interests.

    That there are other potential carriers who may be shut out because of the running of these temporary authorities that made the effects on competitors.

    Earl Warren:

    Was the Government representing one particular interest against another?

    Charles H. Weston:

    Oh, no.

    And of course not.

    It is not doing that, no.

    Earl Warren:

    All right, Mr. Weston.

    Is that Mr. Keenan?

    William Q. Keenan:

    Thank you, Mr. Chief Justice.

    Earl Warren:

    Is — is that Mr. Keenan?

    William Q. Keenan:

    That’s correct.

    Earl Warren:

    Mr. Keenan, you may proceed.

    William Q. Keenan:

    Thank you, Mr. Chief Justice.

    May it please the Court.

    My name is William Keenan and I represent the appellees here and the plaintiffs who as, Mr. Macdonald, points out were somewhat successful below.

    At the outset, in our discussion of this matter, I should like to make sure that the Court and I have in mind the same basic facts in the case.

    There were two material applications filed before the administrative agency involved here, the Interstate Commerce Commission.

    The first one was filed May 5th, 1955.

    It sought a so-called temporary authority from the Commission and was addressed to the Commission’s power to grant such relief under section 311 (a) of the Interstate Commerce Act.

    It is useful and I respectfully suggest important to bear in mind the language of section 311 (a) of the Act.

    It empowers the Commission to grant such temporary authority without — without hearings or other proceedings, in the event that there is an urgent and immediate need for the service thus to be rendered.

    Approximately three days later, as Mr. Macdonald has advised the Court, although it is not a matter of record, I believe that it’s correct.

    Approximately three days later on May 8th, Pan-Atlantic, the applicant carrier before the Commission filed another application for Commission relief.

    This was for a so-called permanent intercoastal certificate.

    The same type of carriage sought to be authorized by the prior application for a temporary certificate.

    However, there was an important, a very important distinction between these two applications.

    The first one as I have said was addressed to the Commission’s power under section 311 (a) of the Interstate Commerce Act.

    The second one was addressed to the Commission’s power under section 309 of the Interstate Commerce Act.

    Those sections differed in respects that are important to the decision now before this Court.

    Section 309 empowered the Interstate Commerce Commission to issue a license or a certificate which is permanent.

    It’s permanent in the sense that this Court has held in the Seatrain case, Seatrain against the United States.

    That it is, at least, in some circumstances, any way beyond the power of the Commission to revoke that certificate.

    It is, I think, true without a doubt in the whole wide world that the Commission has every power in the world to revoke a temporary certificate which is issuable entirely within the Commission’s discretion under section 311 (a) of the Interstate Commerce Act.

    Therefore, the first important difference between these two applications and the two types of relief sought from the Commission to be noted is the permanent and the irrevocable nature of the second certificate sought on May 8th, 1955.

    And the temporary, and I contend, revocable nature of the certificate sought — the license sought and granted by the application of May 5th.

    Under your opponent’s construction of the Act, it would not be revocable after 180 days.

    William Q. Keenan:

    That — that is correct, if Your Honor please, and —

    But one day before?

    William Q. Keenan:

    That is correct, if Your — I — I understand my Brother to make that — to make that contention.

    I think I can best address myself to it if I may be given an opportunity to develop the argument a little further.

    It doesn’t bother me because I think it’s a point in your favor.

    I’m not criticizing.

    William J. Brennan, Jr.:

    Incidentally, may a 311 application be made independently of the 309 application?

    William Q. Keenan:

    Yes, Your Honor.

    It is my understanding that it is and I don’t see any reason why it would be otherwise.

    William J. Brennan, Jr.:

    Well, do you know what the practice has been?

    Have there been 311 applications except there’s those pending or shortly thereafter filed as 309?

    William Q. Keenan:

    I can’t advice Your Honor of my knowledge.

    I can only make the same guess that I think, Your Honor, will make that such has been the case.

    I’d feel substantially —

    William J. Brennan, Jr.:

    That has been the practice usually?

    William Q. Keenan:

    I’d feel substantially, too, that’s — a certain that that is true but I — I can’t say that I’ve researched the fact concerning the Commission’s habits of regulation.

    Now, the next event that occurred, which is of importance after the May 8th application for permanent certificate, was an order of the Interstate Commerce Commission granting the temporary certificate sought on — on May 18th, I believe.

    Some 13 days — some 13 days after the application for temporary authority had been filed.

    Now, that was a grant of authority until sometime in November.

    I believe November 14, 1955.

    It was a grant of intercoastal authority for the six-month period contemplated by section 311 (a) of the Act.

    It was a temporary license.

    It granted a temporary privilege.

    The only other event that is important or indeed even relevant to a decision of this case which thereafter occurred was sometime in October of 1955.

    I believe October 22nd, 1955, when the Interstate Commerce Commission for whatever reason, if the Court please, issued an order or you might call it indeed an editorial comment upon the law, reciting the fact that until the determination of this permanent authority proceeding, the applicant, Pan-Atlantic, would continue to have the Interstate Commerce Commission’s license and permission to carry intercoastally.

    Hugo L. Black:

    Is any way — would there be any way for you — for your clients who are interested in that to force a speedier action by the Commission in connection with the permanent application?

    William Q. Keenan:

    To force the Commission, if Your Honor please?

    Hugo L. Black:

    Yes.

    Suppose — I — I’m assuming they wouldn’t do it.

    But suppose they decided to hold it off (Inaudible) idea.

    Hugo L. Black:

    Would there be any way that you could counteract that by any kind of pursuit?

    William Q. Keenan:

    None that occurs to me right at this moment, Your Honor.

    Possibly if some such remedy is available, I don’t know of one.

    Earl Warren:

    Mr. Keenan, would it made any difference in your position here if the application for a permanent license had not been made until after this temporary one was granted?

    William Q. Keenan:

    It’s a fact.

    Earl Warren:

    I understood Mr. Macdonald to say that your position was that —

    William Q. Keenan:

    I — I understand Your Honor’s question.

    I said that (Voice Overlap) just to repeat it.

    Earl Warren:

    (Voice Overlap)

    — yes.

    Yes.

    William Q. Keenan:

    Your Honor, no.

    It would make no difference in the position I would adopt concerning the merits of this case.

    I think it would make my position a little weaker.

    In other words —

    William J. Brennan, Jr.:

    (Voice Overlap)

    William Q. Keenan:

    I don’t enjoy — what — excuse me?

    William J. Brennan, Jr.:

    (Inaudible)

    William Q. Keenan:

    In other words, I — I don’t entirely join my colleague and I don’t subscribe to the view.

    Well, perhaps, I misunderstand him I think Mr. Justice Frankfurter suggested that if this is a matter of technicality as to which came first —

    Felix Frankfurter:

    I suggest to the opposite that all questions of statutory construction are technicalities.

    William Q. Keenan:

    I was glad to hear Your Honor say that afterwards.

    And I understood it and remember it.

    Thank you.

    William J. Brennan, Jr.:

    Now, I gather there is of the application for the permanent certificate was for permission to provide the identical service which was permitted by the temporary certificate (Voice Overlap) —

    William Q. Keenan:

    No, Your Honor.

    That is not entirely correct.

    The application for the permanent certificate was to carry between some 30 or 35 ports on the two coasts of the United States.

    And the application for temporary certificate was to carry between some seven or eight ports on the two coasts of the United States.

    It is however, true, the record notwithstanding, to the contrary, that the application for the permanent certificate included service to and from every port sought to be served by the application for the temporary certificate.

    William J. Brennan, Jr.:

    And in fact served under the temporary certificate?

    William Q. Keenan:

    Now, the record does not reflect what service was rendered by the applicant as the result of receiving the temporary license.

    It only indicates that sufficient service was rendered as to create damage and competitive harm to the plaintiffs below and the appellees here.

    William J. Brennan, Jr.:

    Now, I gather when the judgment below came down that — that the Pan-Am stopped that service, whatever it was.

    William Q. Keenan:

    No, Your Honor, that would not be correct.

    The defendants — the intervening defendants and I believe indeed the Interstate Commerce Commission, which, of course, was also an intervening defendant, requested a stay of judgment and plaintiffs decided to that stay in view of the fact that a similar such stay had been granted in the Stone’s Express case which was a precedent for this litigation.

    I had been stating that the next important event which occurred, which was important or — or which is relevant to this litigation was the granting by the — or — or rather by the — at issuance of a statement, or order as you may choose to call it, by the Interstate Commerce Commission, advising Pan-Atlantic and the public that intercoastal carriage might continue during the pendency of the permanent authority application.

    What I should like to urge strongly is that there has never been filed with the Interstate Commerce Commission and a fortiori.

    There has never issued from the Interstate Commerce Commission an application for a subsequent section 311 (a) temporary authority.

    The Court has inquired whether it would be within the power of the Interstate Commerce Commission to grant such a subsequent 180-day temporary license.

    I doubt it, but I don’t think it’s material to this case because no such license has ever been issued.

    Felix Frankfurter:

    Well, I wonder if I missed your argument.

    But nobody would dream of asking further issue again if there’s in view of the Commission’s view that 9 (b) takes care of that.

    William Q. Keenan:

    I believe Your Honor is correct.

    But what I should like to urge when we attempt to evaluate and understand the effect of section 9 (b)’s third sentence on section 311 (a) that there has been issued no renewal license or indeed there has been applied for no renewal license under section 311 (a) of the Interstate Commerce Act.

    I don’t think I should take the time during the argument now to go into the matter in detail.

    But my — my Brother for the Interstate Commerce Commission has advised the Court that the Civil Aeronautics Board interprets section 9 (b) of the Act consistently with the interpretation given it by the Interstate Commerce Commission.

    If the Court in reviewing this matter will be so good as to refer to the section of the Code of Federal Regulations cited by the Interstate Commerce Commission in its brief for that proposition, namely Title 14, Code of Federal Regulations, Part 290 and the applicable or the pertinent section is section 290.1 (d).

    The Court will note that the Civil Aeronautics Board thinks of a renewal application to which section 9 (b) of the Administrative Procedure Act is applicable to be an application for a subsequent exemption license under section 416 (b), I believe it is, of the Civil Aeronautics Act and does not think of the so-called renewal application as being an application for a permanent certificate under the Civil Aeronautics Act.

    No more in the case at bar should section 9 (b) be, be thought of as relevant to an application for a permanent certificate.

    And it should not be considered as preserving from expiration the temporary privilege to carry intercoastally during the pendency of an application for a permanent certificate.

    If at all, it has applicability to section 311 (a) of the Interstate Commerce Act, it would have such applicability only during the pendency of a subsequent application for another section 311 (a) license.

    In other words, another license limited — and limited in time to a duration of 180 days.

    Felix Frankfurter:

    Mr. Keenan, may I trouble you to tell me what in your view, what situation is contemplated or is referred to by the last of the third sentence, “in any case in which the licensee had in accordance with agency rules, made timely and sufficient applications for a — that we skip — a new license”?

    William Q. Keenan:

    Yes, Your Honor.

    Felix Frankfurter:

    “No license or reference to any activity of a continuing nature shall expire”, what does that refer to?

    What’s the relation of the new license to what is outstanding?

    What is outstanding?

    William Q. Keenan:

    The — in my view and the position of the plaintiff-appellees here is that such a new license is one that bears a relationship to the — to the license which exists and gives the licensee his status as licensee.

    Felix Frankfurter:

    But it’s in evidently something different from a renewal of the existing license?

    William Q. Keenan:

    I think I’m inclined to agree with Your Honor.

    Felix Frankfurter:

    It must be that.

    It says a renewal or a new one.

    William Q. Keenan:

    Or — or a new license.

    Felix Frankfurter:

    Now, what I want to know is, what the connection is between an outstanding license which is different from something that it’d ask and it denominated a new license.

    William Q. Keenan:

    What the connection should be under the statute is probably interpreted.

    Felix Frankfurter:

    What — what scope you give to it —

    William Q. Keenan:

    Yes.

    Felix Frankfurter:

    — if it doesn’t relate to an outstanding emergency or a temporary license?

    William Q. Keenan:

    Yes.

    The scope that we urge, that the Court give to it is that the new license be required to be one of the same type or class of the existing license.

    We do not urge that on the basis that on — on the ground that the Congress of the United States in some sort of a way adopted or incorporated by reference in section 9 (b) of the Interstate Commerce Act, the language of an Ohio Administrative Procedure Act.

    We do urge it because that is the only construction of Section 9 (b) which makes sense in the light of the practical realities of the situation concerning which the Chief Justice questioned counsel just now.

    If I may be permitted to do so, I should like to discuss those practical realities.

    The underlying statutory purpose which is involved here, it expressed not in section 9 (b) of the Administrative Procedure Act or indeed in section 311 (a) of the Interstate Commerce Act.

    I suggest that it is to be found in section 309 of the Interstate Commerce Act, which includes the words, “No carrier shall engage in transportation subject to this part.”

    Those are the words which are customarily used in beginning a licensing enabling statute.

    In other words, the legislature creates an area of prohibition and then empowers an agency to lift that prohibition by granting a privilege to a licensee to act within that area.

    Now, often the standards which are required of licensees in these licensing enabling situations are simply standards of fitness.

    You don’t like an optometrist, or a doctor, or a dentist operating in your town if you — if he isn’t reasonably confident.

    That’s not the sole standard required of a licensee under the Interstate Commerce Act.

    In order to understand this, at least let me tell the Court that in order for me to understand this, it was helpful for me to remember that the Interstate Commerce Act requires the transportation industry to depart from the principles, and functions, and effects at least partially, of the free market.

    The function of a free market with regard to any nterprise is to keep inefficient enterprises from entering into the market.

    And to some extent to winnow out enterprises when they become inefficient.

    And finally to discourage anybody, inefficient or efficient, from entering into an overcrowded market.

    And this is, of course, a very good thing because it is wasteful of national income, should anybody enter into an overcrowded market.

    By an overcrowded market I mean, of course, a market where there are already more than — than enough people to take care of all the business available.

    We have in this country with regard to the transportation industry, at least the rail motor carrier and water carrier transportation industry, departed from the regulatory function of that free market and we have assigned that regulatory function to the Interstate Commerce Commission.

    Section 309 posits another requirement besides fitness for a licensee to get a license, and that is, that the service sought to be provided be required by the public convenience and necessity.

    A clue to what is meant by public convenience and necessity can be found in a statement of the National Transportation Policy, which begins the Interstate Commerce Act.

    William Q. Keenan:

    And if we were to take the time which is not, unfortunately, available to be anymore today to compare what I have just suggested are the functions of the free market and to compare the criteria set up for the Interstate Commerce Commission in exercising its licensing function, we would find a very, in my view anyway, happy coincidence between the two.

    The Interstate Commerce Commission in short has the function of regulating the transportation industry market so that inefficient industries don’t enter it.

    So that inefficient industries, to some extent, anyway, are discouraged from remaining in it and so that those who are in it already and who are operating efficiently will not be rendered inefficient by unnecessary inclusions on the market when it is already over served.

    If the Interstate Commerce Commission is to perform this guiding function i lieu of the free market, it must obtain information concerning what the conditions are in the industry which it regulates.

    It must find out what the current technology of the industry is.

    It must find out what the technology of the users of transportation is.

    It must find out what the cost of capital is at a given time.

    It must find out how readily people already in the transportation market can expand their enterprises to meet new and growing needs.

    Therefore, when someone comes to the Interstate Commerce Commission and asks permission to violate the prohibition in section 309, namely, that no one shall engage in transportation subject to this part ask, therefore, privilege to enter into the market.

    The Commission must find out what the conditions are in the market in order to make sure that its entry there will not create a great deal of damage.

    A major and reasonable source of information to the Interstate Commerce Commission when it enters upon this endeavor is the people already in the — in the market involved.

    In other words, the competitors of the applicant are forced, however, they have interest hostile to the applicant.

    Therefore, in the customary way by which tribunals in the — in the United States get information from people who’s interests conflict and who are hostile to each other, there are provisions for adversary proceedings, which in the view of this Court, at least insofar as the profession has — has understood this Court’s position in Reis against the United States in proceedings which must meet some elements of due process.

    Due process is — is, of course, nothing but a — a way by which a tribunal can — can be assisted in reaching the truth when it’s relying on adversary procedures to — to obtain information.

    Now —

    Felix Frankfurter:

    Am I right in recalling that the Reiss case partly involved a dislocation of practice of what was there before the practice of the Commission on the basis of the Administrative Procedure Act.

    Is that right?

    William Q. Keenan:

    I’m advised by my colleague that Your Honor is right and I must confess that I’m not sure.

    Felix Frankfurter:

    All right.

    But it did.

    William Q. Keenan:

    I — I certainly take —

    Felix Frankfurter:

    This very Act — this very Act cut into what was deemed to be and argued before us has a very specific mode of going — of doing business before the Commission and we said no.

    The Administrative Procedure Act applies to situations there just as we made no drastic changes in regard to the Immigration Service and in both cases — well, I don’t know whether in the case of the Interstate Commerce Commission would change.

    It was changed (Inaudible)

    William Q. Keenan:

    Well —

    Felix Frankfurter:

    The Administrative Procedure Act wasn’t just a codification.

    It was the opposite of a codification of what had been prevailing as administrative fact.

    William Q. Keenan:

    I agree with Your Honor.

    In — in at least, insofar as the — as — as the gathering of information in the — in the manner I’ve — I’ve described, however, is concerned, I think — I — I don’t think that many people doubt that some elements of due process must be met at least for the Interstate Commerce Commission and, of course, the certification proceedings.

    If that is a proposition in question, why, people will be very interested to learn a bit.

    Felix Frankfurter:

    But you don’t merely think that there is any atmosphere of undue — of one of due process in construing 9 (b) the way that’s — by that field.

    William Q. Keenan:

    Oh, Your Honor —

    Felix Frankfurter:

    It’s between that.

    William Q. Keenan:

    I — I don’t suggest that for a moment.

    And Judge Wyzanski —

    Felix Frankfurter:

    (Voice Overlap)

    — an overflow of a — of a new answer, one of due process.

    William Q. Keenan:

    I know Judge Wyzanski —

    Felix Frankfurter:

    At least, my figures.

    William Q. Keenan:

    They’re very solicitous of — of a due process, of course.

    Now, what I — what I do need to suggest, if Your Honor please, is that the — that the Commission decided that the question concerning the temporary certificate below, not on the basis of evidence introduced through witnesses, not on the basis of documentary evidence, not that the — the privilege of adducing evidence before the Commission was not accompanied by the liability to cross examination, which is customary, not on a constitutional basis at all.

    (Voice Overlap) —

    Felix Frankfurter:

    And what do you say that ought to be cut close?

    It ought to be sharply restricted and not liberally extended.

    Only if you’re arguing.

    William Q. Keenan:

    Oh, if Your Honor — Your Honor, I’m suggesting that it is impossible for the Interstate Commerce Commission intelligently to — to determine who should get a permanent certificate to enter upon it the market.

    Unless the Commission has the benefit of advice which is given it under the safeguards of section 5 and 7 of the Administrative Procedure Act.

    And no such safeguards, of course, I think that everyone is in agreement.

    No such safeguards were attended upon the — the Commission’s receipt of advice from the applicant when it granted the temporary application in the case at bar.

    Now, a significant — that the — I don’t mean to say significant, a major portion of the appellee’s brief is devoted to really what was for the — the writer of painstaking this effort to — to discuss the damage which can be done by the improvident entry of an enterprise into a controlled market.

    And it’s — it’s devoted to showing how that damage can be done even if the enterprise is in the market only for a year or two years.

    In the case at bar, a water carrier of the size and with the capacity to carry, that Pan-Atlantic has, of course, it’s going to produce rather profound changes on the patterns of transcontinental and intercoastal transportation if it operates for one year or two years in point of fact, if the Court please, it has had its license for 22 months.

    Now —

    William J. Brennan, Jr.:

    Has there been any connection between the pendencing — pendecy of — pendency of this case and the action of the Interstate Commerce Commission on the permanent application?

    In other words, has the latter been deferred until this thing was decided?

    William Q. Keenan:

    Oh, what — I — I would suppose quite to the contrary, Your Honor.

    I would suppose, and although, I don’t know that the Interstate Commerce Commission has expedited the — the progressing of the — of the permanent —

    William J. Brennan, Jr.:

    And yet it’s how long, did you say two years?

    William Q. Keenan:

    Well, it’s about 22 months that Pan-Atlantic has had its intercoastal temporary authority.

    And I suppose that means that the permanent application has been pending that long.

    William Q. Keenan:

    Almost two years.

    And it’s a reasonable prospect in this particular intercoastal proceeding.

    I should eventually give the Court my opinion as an attorney associated with the litigation that it will continue for another year.

    Maybe another year and a half (Voice Overlap) —

    William J. Brennan, Jr.:

    Is the point thought of?

    Is that necessary?

    Just to take that one and do this thing?

    William Q. Keenan:

    Many times I believe it is, Your Honor.

    I wouldn’t suggest for a moment that the Interstate Commerce Commission can complete many of these licensing applications within the six months, that’s spoken of in section 311 (a) of the Act.

    William J. Brennan, Jr.:

    Well, perhaps not.

    But does it take them three years, three and a half years to complete them?

    William Q. Keenan:

    Well, it has in point of fact in the past.

    Now, whether —

    William J. Brennan, Jr.:

    Something wrong about a process.

    It seems to me if it takes that long.

    Felix Frankfurter:

    In the Stone case, which is rendered moot by the disposition of the permanent license.

    I would assume that the decision of the District Court but the case got here.

    It was far beyond appeal and then there was a suggestion of mootness to which we yielded and to which we accepted.

    Of course, in this case —

    William Q. Keenan:

    I think —

    Felix Frankfurter:

    — the Commission tomorrow, if it rendered this moot, by granting the permanent injunction of the permanent application.

    William Q. Keenan:

    For indeed, Your Honor.

    Felix Frankfurter:

    Or on your theory, after 180 days, the temporary license came to an end, some other applicant could come in.

    They could grant him a temporary license for 180 days.

    At the end of that period that would expire.

    You would have had two or three successive temporary licensees.

    Is that right?

    William Q. Keenan:

    It’s a possibility.

    But what I should like to have —

    Felix Frankfurter:

    And eventually — and eventually the first applicant would get the permanent license.

    Felix Frankfurter:

    Is that right?

    William Q. Keenan:

    That is a possibility.

    What I should like to emphasize in my closing moments, if the Court please, is that the two licenses involved issued by different procedures.

    And that that is a governing consideration.

    One issue’s not entirely by an ex parte procedure.

    Of course, we had a chance to be heard in the sense that we had a chance to file a paper.

    It did not issue as a result of the exhaustive type of examination which the Court, I’m sure, was familiar with.

    Felix Frankfurter:

    Have you got any to lie down to this statistic that I — in which I have some interest, the relation between temporary licenses granted and the total number of applications?

    William Q. Keenan:

    I can shed —

    Felix Frankfurter:

    And not just the (Inaudible) which probably supply it.

    William Q. Keenan:

    I can shed no light on that, if Your Honor please.

    I — I — it would probably be difficult.

    I doubt the Commission itself has kept count of the number of applications for — for temporary license.

    Felix Frankfurter:

    Will there be approximately, the 2000, that they granted as a matter of course, would you say?

    William Q. Keenan:

    I — I don’t think I should attempt to — to characterize the way the Interstate Commerce Commission grant — grants the —

    Felix Frankfurter:

    Well, did you know as a matter of — all right then.

    I thought you had (Inaudible)

    William Q. Keenan:

    No, I’m afraid I can’t, Your Honor.

    Well, as I say, the important difference between the two of them are addressed now to your question, Mr. Justice Frankfurter.

    The difference between these two licenses which is material to section 9 (b) is the procedure by which they issue in the first place.

    And the fact that one is an irrevocable — irrevocable under the Seatrain case that — relatively speaking anyway.

    And the other is a very, very temporary one.

    Therefore, they have quite different effects on the market.

    One is an emergency license.

    And the other one is — is issued, to me, an abiding permanent need.

    The pendency of an application for a license to meet an abiding permanent need is no reason, whatsoever, to preserve from expiration a license which was brought into existence only to meet a one spot emergency, at the end of which emergency, the ordinary mechanisms of the transportation market will take care of the public need.

    Felix Frankfurter:

    (Inaudible) as you suggest indicated because some other temporary licensee come in.

    William Q. Keenan:

    That’s also true, Your Honor.

    Felix Frankfurter:

    Yes.

    William Q. Keenan:

    May I thank the Court for its attention.

    Earl Warren:

    Mr. McDonald.

    David G. Macdonald:

    Thank you, sir.

    I’d like to answer a few of the questions that have been put by Members of the Court.First of all, Mr. Justice Black asked what are the practicalities of this situation?

    What is the effect of our decision one way or the other?

    I think it should be clear to the Court, now, that the real problem here or the real controversy is — is a controversy between the railroads, which desire to have a freedom from competition by a water carrier line and the — on the one hand, and on the other hand, the combined interests of the water carrier line and the public which it serves.

    I think it’s an interesting commentary on that controversy to realize that in connection with these permanent authorities issued under section 309, referred to by Mr. Keenan, that the railroad opposition is a meaningless factor.

    I should like to call the Court’s attention in the case of A.L.Mechling Barge Lines Inc., ext.Tampa, 285 I.C.C.743 and Weyerhaeusers Steamship Company, ext.Port Everglades, which is Doc.No.W417 sub.(1), dated November 15, 1956 not reported, which illustrate the principle that they are both from the Commission’s decision in the latter case.

    However, notwithstanding, a service by rail, we have repeatedly found that shippers in communities are entitled to adequate transportation service by water with its inherent benefits and advantages upon proof of a need, therefore, as well as by a rail.

    In other words, this is an interest on the part of the railroads to take advantage of a technicality to cause a water carrier service to be discontinued.

    Now, what was the basis upon which it was initiated?

    311 (a) permits the Commission to initiate that service only on a finding that there’s an urgent and immediate need and no other carrier services can meet them.

    And that includes rail service.

    It has to be another water carrier service before the Commission can deny that.

    Felix Frankfurter:

    There have been some suggestions that the Commission give excessive attention to the rail interest in the — in the entire transportation needs of the country.

    And this case, it leaned in favor of the water carrier, is that it?

    David G. Macdonald:

    I don’t think it leaned any way.

    Felix Frankfurter:

    (Inaudible) its the decision was in favor of the water carrier as an expression of the national need.

    David G. Macdonald:

    That’s correct, sir.

    Felix Frankfurter:

    Is that a correct statement?

    David G. Macdonald:

    Yes, sir.

    I think it’s in favor of the water carrier but more importantly the shipping public, because that’s the other side of the coin when we hear the argument that section 309 was designed to protect the existing certificate holders from unneeded new licenses.

    There’s also the National Transportation Policy which charges the Commission with making sure there is an adequate transportation system.

    There are these four provisions of the Act on which the Commission can grant temporary authorities, all designed to protect the public.

    Is this Act designed to protect only the rail carriers?

    Is the public to be lost of its interest to be forgotten completely?

    Is it to do without service from this time when a 180-day period runs out, until the time when at the sufferance of the rail carriers who as protestants, have a large degree of influence as to how long the proceeding takes, to present (Voice Overlap) —

    William J. Brennan, Jr.:

    (Voice Overlap)

    — any other reasons why this —

    David G. Macdonald:

    That is exactly the reason that we say that Congress in the Administrative Procedure Act included such section 9 (b) in the third sentence.

    William J. Brennan, Jr.:

    Well, are you suggesting that it’s the opposition of the carriers which drags these things on for so long?

    David G. Macdonald:

    Yes, sir.

    Not that it isn’t legitimate opposition.

    Congress provides in sections 5 and 7 of the Administrative Procedure Act the very complete procedure to protect all of those interests.

    The other — the necessary corollary of that was that there should be also protection for the public and the license holders.

    And that’s what confined in 9 (b).

    It’s a balanced legislative —

    William J. Brennan, Jr.:

    Well, the — do these proceedings go on in continuous hearings or are there —

    David G. Macdonald:

    No, sir.

    William J. Brennan, Jr.:

    — hiatuses?

    David G. Macdonald:

    An application is filed.

    Then there must be a period of notice.

    Then this separate hearing with adequate opportunity —

    William J. Brennan, Jr.:

    Well, now, once you start the hearings, do you go through them?

    Do you complete (Voice Overlap) —

    David G. Macdonald:

    The hearing is completed within a matter of days or weeks.

    Then an examiner has to prepare a report which takes anywhere from two to six months.

    And exception are filed, replies to exceptions, a division report, a petition for reconsideration to take it from a division of three commissioners to the entire Commission.

    This particular case is now pending before the division.

    William J. Brennan, Jr.:

    It’s hard for me to understand why all that should be necessary.

    Yes.

    William J. Brennan, Jr.:

    Three years time.