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LINCOLN TRANSIT CO. v. UNITED STATES

July 27, 1966

Lincoln Transit Co., Inc., Manhattan Transit Co., Tauck Tours, Inc., Allied Bus Corp. and Parker Tours, Inc.
v.
United States of America and Interstate Commerce Commission



The opinion of the court was delivered by: HERLANDS

HERLANDS, D. J.

Pursuant to the provisions of 28 U.S.C. § 2325 (1965), a district court of three judges has been convened to hear and determine plaintiffs' application for an order "enjoining, setting aside, annulling and suspending the order of the Interstate Commerce Commission dated November 30, 1965." Plaintiffs' application is denied for the reasons hereinafter set forth.

The primary issue for decision by this court is whether the procedure employed by the Interstate Commerce Commission (hereinafter "ICC") in approving the transfer of a license issued to a passenger broker under Section 211 of the Interstate Commerce Act *fn1" deprived plaintiffs of a hearing in violation of the due process provisions of the Constitution. We find that it did not.

 I.

 The underlying facts are as follows: Ferdinand Arrigoni, Inc. was the holder of a passenger broker's license. It entered into a contractual agreement with Harold and Thelma Berns whereby a corporate subsidiary of Ferdinand Arrigoni, Inc. was to be created - Heritage Tours, Inc. - and said broker's license transferred to that subsidiary. For a consideration of $50,000, Arrigoni was to transfer all the stock of Heritage Tours, Inc. to Harold and Thelma Berns. On June 10, 1965, as supplemented on June 28, 1965, Ferdinand Arrigoni, Inc. and Heritage Tours, Inc. (collectively "the applicants") filed with the ICC in Washington an application for approval of the transfer of Arrigoni's passenger broker's license to Heritage and of the simultaneous transfer of all of Heritage's stock to Harold and Thelma Berns. The application was filed under rules and regulations promulgated by the ICC pursuant to Section 204(a)(4) of the Interstate Commerce Act. *fn2" See 49 C.F.R. Part 169.1; 49 C.F.R. § 1.225(e). The application was referred to the ICC's Transfer Board. The Transfer Board approved the application in an order dated August 5, 1965 which was published in 30 Federal Register 10016 (1965) - the effective date of that order being September 7, 1965.

 Pursuant to Rule 1.225(e) of the ICC's Special Rules of Practice, *fn3" plaintiffs and another interested party filed timely petitions for reconsideration of the order approving the transfer and requests for an oral hearing. Basically, the petitions for reconsideration raised two points: they stressed the undisputed fact that Thelma and Harold Berns are the daughter and son-in-law of one Sidney Englehardt who has interests in several common carriers; and they alleged in cursory fashion certain facts which plaintiffs interpreted as indicating the dormancy and consequent nontransferability of Ferdinand Arrigoni, Inc.'s license.

 The filing of such petitions for reconsideration, by virtue of Section 17(8) of the Interstate Commerce Act, *fn4" had the effect of postponing the effective date of the Transfer Board's order pending disposition of the petitions.

 On December 2, 1965, the Commission, Division 3, acting as an appellate division, issued an order dated November 30, 1965 in which it denied the petitioners' requests on the grounds that:

 
"the petitions set forth no facts or arguments which were not previously considered or which would establish that the transfer was not properly approved under the Rules and Regulations Governing Transfers of Licenses under Section 211 Interstate Commerce Act (49 C.F.R. Part 169); and that a hearing is not necessary to a determination of the matter . . .."

 The Transfer Board's order approving the transfer was to become effective on December 17, 1965. On December 16, 1965, plaintiffs filed their complaint in the case at bar.

 II.

 The court's understanding of the Commission's procedure with regard to the transfer of brokers' licenses is that the transferor and transferee make an application to the Commission for its approval of the proposed transfer. In addition to considering the supporting documents submitted by the applicants, the Commission conducts an independent investigation. If the Commission approves the transfer, it gives public notice of its approval in the Federal Register. Opponents to the transfer then have a specified amount of time to file petitions for reconsideration. Timely filing of such petitions acts as a stay and postpones the effective date of the order approving the transfer until after the Commission has determined the merits of the petitions for reconsideration.

 It is the court's further understanding that petitioners are free to append affidavits and other documentary evidence to their petitions for reconsideration. However, the Commission's rules specifically provide that requests for an oral hearing must be accompanied by an explanation as to why the evidence sought to be presented cannot reasonably be submitted in affidavit form - a requirement plaintiffs failed to satisfy. See 49 C.F.R. § 1.225(e). Where the Commission finds that a decision cannot be rendered on documentary evidence alone, an oral hearing is afforded the petitioner. It is difficult to see how such a procedure can be found to deprive plaintiffs of due process of law.

 While plaintiffs allege that they were afforded no opportunity to introduce evidence in the proceedings before the ICC, they conceded at the oral argument of this matter that they never attempted to submit any documentary evidence for the Commission's consideration, nor did the Commission at any time indicate that it would reject such a submission. Plaintiffs' allegation of a lack of opportunity to introduce ...


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