Red Ball Motor Freight, Inc. v. Shannon

PETITIONER: Red Ball Motor Freight, Inc.
RESPONDENT: Shannon
LOCATION: New York Times Office

DOCKET NO.: 406
DECIDED BY: Warren Court (1962-1965)
LOWER COURT:

CITATION: 377 US 311 (1964)
ARGUED: Apr 28, 1964
DECIDED: Jun 01, 1964

Facts of the case

Question

Media for Red Ball Motor Freight, Inc. v. Shannon

Audio Transcription for Oral Argument - April 28, 1964 in Red Ball Motor Freight, Inc. v. Shannon

Earl Warren:

Number 406 and 421, Red Ball Motor Freight, Incorporated, et al., Appellants, versus Emma Shannon et al., and the United States and Interstate Commerce Commission, Appellants, versus Emma Shannon et al.

Mr. Mathews.

Oh, Mr. Ginnane, you're going to (Voice Overlap) --

Robert W. Ginnane:

(Voice Overlap) --

Earl Warren:

Yes.

Robert W. Ginnane:

(Voice Overlap) with the court.

Thank you sir.

Earl Warren:

Oh, yes.

Yes.

Robert W. Ginnane:

May it please the Court.

I am sharing the appellant's time with Mr. Amos Mathews, counsel for the appellant, Motor Carriers and Rail Carriers in Number 421.

These two consolidated appeals are from the judgment of a three-judge District Court which set aside an order issued by the Interstate Commerce Commission.

Commission's order directed the appellee Shannon to cease and desist from engaging in for-hire transportation of sugar in interstate commerce without appropriate operating authority from the Commission.

This case presents a question of importance for the entire transportation industry.

That is how to draw a practical line between for-hire motor transportation whether common or contract and bona fide private carriage on the other hand.

By way of background, this question is one aspect about an important aspect of what Congress, the Commission and the transportation industry had been referring to as gray area of transportation for some years.

Gray area of transportation is a shorthand phrase which covers a variety of devices by which what is in substance for-hire transportation is carried on by motor carriers without a common carrier certificate and/or without a contract carrier from it, thereby eroding the traffic available to the regulated public carriers.

Two years ago, we presented one important aspect of the gray area problem to this Court, In United States v. Drum in 368 U.S.

In Drum, this Court upheld the Commission's view that where a shipment leased -- that where a shipper leased the services and the equipment of owner operators of trucks without assuming the real financial risks of engaging in a transportation service.

Then, though the Court held with this, a shipper was not engaged in bona fide private carriage and the owner operators were engaged in for-hire transportation as contract carriers because on that record, in the Drum case, they were assuming the real risks.

Now, in this case, we are dealing with a frequent type of situation and -- and for the Commission a number of times, in a number of times from the past and currently in the lower federal courts.

When a person who is engaged and admittedly bona fide a private transportation in the outbound transportation of his goods, from his place of business, seeks to obtain some kind of freight for the other -- other -- for the otherwise empty return trip or backhaul movement of his trucks.

Now, what do we mean by private carriage?

Now, briefly, Section 203 (c) of Interstate Commerce Act, which appears at page 36 of our brief, says in effect that a private carrier is a person who has transportation of his own property is within the scope and in furtherance of a primary business enterprise other than transportation of such person.

And the typical example of admittedly bona fide private transportation and this happened all over the country without a question, is for a manufacturer or distributor uses his own trucks to transport his finished product, to distributing or retail outlets.

And on his return trip or backhaul, he brings back raw materials or supplies to be used in his business.

Now, the basic fact of life for all carriers, either for-hire carriers or private carriers, is that empty return trip movements increase the cost of moving a given unit of freight.

In its extreme form that this means that any kind of carrier, public or private, figures that it is better off, if it can obtain some freight for the return trip, if it only covers the fuel cost or part of the fuel cost.

And so it is that private carriers are naturally tempted to try to get some kind of paying cargo on their otherwise empty return trip or backhaul movements.

Now, turning to the facts of this case, Shannon has a partnership in San Antonio, Texas and since 1934, it engaged in buying and selling livestock.