United States v. Drum

PETITIONER: United States
LOCATION: United States Court of Appeals District of Columbia Circuit

DECIDED BY: Warren Court (1958-1962)

CITATION: 368 US 370 (1962)
ARGUED: Oct 11, 1961 / Oct 12, 1961
DECIDED: Jan 15, 1962

Facts of the case


Media for United States v. Drum

Audio Transcription for Oral Argument - October 12, 1961 in United States v. Drum

Audio Transcription for Oral Argument - October 11, 1961 in United States v. Drum

Earl Warren:

Number 23, United States et al., Appellants, versus Henry E. Drum et al.

Mr. Ginnane.

Robert W. Ginnane:

Mr. Chief Justice, may it please the Court.

I'm sharing the argument with Mr. Rice who was counsel for the Regular Common Carrier Conference of the American Trucking Association.

We have endeavored to divide it in such a way as to minimize repetition.

This case is here on direct appeal on a three-judge court in the Western District of Oklahoma.

It involves a single question wether the Oklahoma Furniture Company is engaged in true private carriage in the transportation of its products and inbound raw materials or whether it is buying a for-hire contract carrier service on Drum and the individual -- other individual appellees.

After a hearing, the Commission had held that there was not involved bona fide private carriage by the shipper, Oklahoma, but rather that Oklahoma was buying transportation service in a form of contract carriage from the individual owner-operators of truck tractors.

The three-judge court set aside the Commission's order.

It held that the record compel the conclusion that Oklahoma was in fact engaging in bona fide private transportation.

In our jurisdictional statement, but we did not repeat it in our brief, we stated our reasons for believing that this case warranted consideration by this Court.

Because as we see it, it involves a great deal more than whether these 11 men -- 11 small businessmen were -- can transport merchandise for Oklahoma Furniture Company.

The public transportation industry is in serious trouble for a variety of causes such as overcapacity, taxation and other causes which are not involved in this case.

But this case does involve one of those causes, one of those underlying problems.

And that has been the record almost dramatic diversion of traffic available to regulated public carriers to unregulated or unlawful forms of transportation.

Now, a private carrier is one who transports his own goods.

In furtherance of some business enterprise is a -- a primary business enterprise other than transportation.

That distinguishes him from a motor common or a motor contract or a rail carrier who was transporting the property of other persons for compensation.

This trend has been of continuing concern now for several years to the Congress.

That concern has shown up in some amendments in 1957 and 1958 relating to private carriage which we'll refer to in our brief.

It's been articulated most effectively in committee reports, thus the Senate Committee stated in 1958 that the enormous growth of commercial private carriage of property by motor vehicles in recent years, resulting as it has in a continuing erosion of huge volumes of traffic that would otherwise be available for transportation by public carriers is a serious problem of the railroads and other common carriers.

That committee went on to point out that no one can quarrel with bona fide private carriers but it went on to point out that there exist a large amount of what is called pseudo private carriage, transportation for-hire, unauthorized by any regulatory agency and which is performed under the guise of private transportation.

This can't be measured statistically in the absence of anything like -- something like a transportation census, that every informed person connected with the transportation industry regards it as a significant cause of the erosion of the public carrier industry on which so many shippers depend.

The nearest thing to a real study on this was made in June 1960 by the Commission's Bureau of Transport Economics for the Senate Committee on Interstate Commerce.

A study entitled “Gray Area of Transportation Operations.”

This study found that various leasing devices, leases between the shippers and people who own vehicles, that various leasing devices constitute the most prevalent type of gray area operation at present.

And that a large part of the gray area operators' traffic is a direct diversion from existing public carriers.

Would you say then that legitimate contract operation is gray?

Robert W. Ginnane:

Oh, no indeed.

By public carriers, I mean authorized common and contract carriers.