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MOTOR HAULAGE CO. v. UNITED STATES

January 20, 1947

MOTOR HAULAGE CO., Inc.,
v.
UNITED STATES et al.



The opinion of the court was delivered by: KENNEDY

I. This is a suit to enjoin, set aside, annul, and suspend an order of the Interstate Commerce Commission, 28 U.S.C.A. §§ 41, 43-48. Plaintiff, prior to August 9, 1935, the date of the enactment of the Interstate Commerce Act, part II, dealing with motor carriers, 49 U.S.C.A. §§ 301-327, was engaged in certain operations with motor vehicles, which will be dealt with in detail later.

On February 4, 1936, plaintiff filed its application with the commission claiming rights under the 'grandfather clause' of the act, Interstate Commerce Act, part II, sec. 209(a), 49 U.S.C.A. § 309(a). Preliminary proceedings were had and formal hearings held before an examiner on October 27, 1938 and between November 10, and November 16, 1938. The examiner proposed a report dated July 12, 1939 to which plaintiff filed exceptions on July 31, 1939. On April 11, 1944 a report and order were filed by Division 5 of the commission, whereupon plaintiff filed a petition asking that the matter be reconsidered by the entire commission (43 M.C.C. 802). As a result of the last proceeding the order of Division 5 was set aside and on January 7, 1946 the commission filed its decision and made and entered the report and order which plaintiff now seeks to set aside (46 M.C.C. 107). On March 9, 1946 plaintiff petitioned the commission for amendment and modification of its second report, but the commission denied the application. The complaint in this action was filed on June 15, 1946.

 II. Plaintiff was organized under the laws of the State of New York in 1916 and ever since has been continuously engaged in motor carrier operations both in intrastate and interstate commerce. With certain exceptions, not important for this outline, plaintiff's business was conducted within a radius of 50 or 60 miles from Columbus Circle, New York. Its headquarters are in Brooklyn, New York.

 Plaintiff owned, at the time of the hearings before the commission, 8 types of motor trucks and semi-trailers which it describes as follows: (1) station wagons, rack platform, and van body trucks, and semi-trailers for general merchandise, (2) van body trucks equipped with armored cabs and alarms for handling valuables, (3) insulated van bodies for handling fresh meats, (4) insulated and heated bodies for handling wines and liquors in the winter time, (5) winch trucks for handling large and bulky pieces, (6) bodies equipped with special racks and scaffolding for handling metal car signs, (7) small delivery trucks for handling express shipments, (8) reach semi-trailers 48 feet long for handling airplanes.

 Both the commission and the plaintiff took the view that the latter's business could be divided into 5 categories, described in the plaintiff's brief thus:

 (1) Contracts of rental without responsibility. Here plaintiff leases trucks and equipment on a mileage basis or at agreed amounts per day, week or month. Plaintiff says that it does not undertake to transport the cargo under these contracts. It agrees to maintain the trucks in good order and repair, to carry personal injury and property damage insurance and to garage and fuel the trucks. When it supplies drivers, it pays their wages, compensation insurance, and social security taxes. For these amounts plaintiff bills the 'lessee' at cost plus a handling charge.

 (2) Contracts of rental with responsibility. Under this type of arrangement, differing from the above only in the matter of carrier's responsibility, plaintiff is liable for damages if the cargo is lost or injured. Compensation is on a mileage or time basis per truck.

 (3) Tonnage contracts. All parties agree that these are transportation contracts. Compensation is computed on a weight measurement or other unit basis in the same way as under contracts of rental with responsibility. Plaintiff, under its tonnage contracts, undertakes to provide services which will meet the peculiar transportation needs of the customer.

 (4) Special service contracts. These contracts really cover very peculiar trucking operations and services such as the hauling of new airplanes, the picking up of crashed planes, the distribution of telephone directories, and the transportation of large illuminated car signs and equipment specially designed for the purpose.

 (5) Miscellaneous trucking contracts. Under these contracts the plaintiff handles shipments in and around the New York metropolitan area under individual agreements, the arrangement usually being made by telephone and later confirmed in writing. Only about 5% of plaintiff's total buisness was in this category, and of that 5% unquestionably a very large amount was within the 'New York Commercial Zone'. *fn1"

 III. We now turn to the order of the commission, which plaintiff attacks. Authority was granted to the plaintiff to transport over irregular routes: (1) general commodities, with certain exceptions, and subject to certain limitations which must be noticed in greater detail at a later point; (2) malt beverages to certain points in New Jersey and in Connecticut; (3) telephone directories between New Jersey and points in Long Island, Rockland and Westchester Counties and Fairfield, Connecticut; (4) illuminated car signs from New York to Berwick, Pennsylvania; (5) damaged air-planes from points in 13 states and the District of Columbia within 250 miles of Columbus Circle, New York, New York, to points in Long Island and New York.

 Plaintiff's quarrel with the action of the commission concerns itself principally with the first division named above, although a point is made about the portion of the order which deals with malt beverages. Plaintiff also complains about other specific findings of the commission to be mentioned later. For present purposes, it is, however, sufficient to point to the fact that the last 4 paragraphs of the commission's order concern themselves with specific commodities, which plaintiff had been transporting prior to the effective date of the grandfather provision and we read this order to mean that plaintiff may carry these specific commodities without limitation other than the stated geographical limitations. But in the operation of the order dealing with the carriage of 'general commodities' the commission imposes not only geographical limitations but also restrictions concerning the character of the commodities and the conduct of the operation itself.

 IV. A. The order permits the plaintiff to carry general commodities, except live stock, commodities in bulk, dangerous explosives, and household goods. These exceptions were derived from one of the commission's own precedents (Practices of Motor Common Carriers of Household Goods, 17 M.C.C. 467). Plaintiff urges that the commission erred in applying to it restrictions which had been found appropriate for other contract carriers, because under its system of operation it merely rents the truck and is not concerned with how the 'lessee' uses it. It says that under its practice, certainly in contracts 'without responsibility', it does not and did not know anything about the contents of the they were conducted on the grandfather date.

 IV. B. The order, dealing with general commodities, provides further that general commodities shall be transported by plaintiff only between points in the New York Commercial Zone and those in New Jersey within 10 miles of Jersey City, New Jersey, or to points in Connecticut, New Jersey and New York within 40 miles of Columbus Circle. Concerning this, plaintiff contends that the 40-mile limit is too small; that on the grandfather date it was performing ...


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