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January 23, 1959


Before Finnegan, Circuit Judge, Platt, Chief Judge, and Juergens, District Judge.

The opinion of the court was delivered by: Platt, Chief Judge.

Plaintiff, an Illinois Corporation, with its principal place of business in St. Clair County, Illinois, and in the Eastern District of Illinois, presents its complaint to set aside the report and orders of the Interstate Commerce Commission decided May 10, 1957 and October 3, 1957 denying an application for certificate of public convenience and necessity in Commercial Transport, Inc., Extension Illinois-Missouri, Docket No. M.C. 13-104654 (Sub. No. 106). Plaintiff presents its complaint to this court under section 205(g) of the Interstate Commerce Act, 49 U.S.C.A. § 305(g), and section 10 of the Administrative Act, 5 U.S.C.A. § 1009. The court has jurisdiction of the subject matter and the parties. Judicial Code and Judiciary, Title 28 U.S.C.A. §§ 1336, 1398, 2284, 2321-2325.

Plaintiff filed an application on October 26, 1956 seeking a certificate of public convenience and necessity authorizing the operation in interstate commerce, as a common carrier by motor vehicle over irregular routes, of cement, in bulk, in hopper vehicles, between points in Missouri and Illinios. The application was assigned to and heard by a joint board on January 8, 1957. Five railroads who serve this territory and are intervening defendants in this suit, and the Lehigh Portland Cement Company appeared by petition in opposition to the application. The Alpha Portland Cement Company and the Missouri Portland Cement Company provided witnesses who testified against the application on behalf of the railroads. No motor carrier appeared.

On February 1, 1957, the joint board issued a report and an order recommending that applicant be granted authority to transport cement in bulk, in hopper vehicles, between points in Illinois and Missouri over irregular routes. On February 13, 1957 protestant cement company filed exceptions to this report and recommended order, and on March 4, 1957 intervening railroad defendants also filed their exceptions. On March 25, 1957 plaintiff filed a reply to those exceptions. May 24, 1957 the report and order of division 1 of the Interstate Commerce Commission dated May 10, 1957 denied plaintiff's application, thereby rejecting the recommendation of the joint board. July 1, 1957 plaintiff filed a petition for reconsideration with the Commission, and the intervening defendants and the cement producer filed a timely reply. On October 3, 1957 the full Commission upheld the decision of division 1 denying plaintiff's petition for reconsideration "for the reason that the findings of division 1 are in accordance with the evidence and the applicable law." The complaint in this court resulted.

The Interstate Commerce Commission, United States of America, and the intervening defendants who had been granted permission to intervene by this court answered. It is to be noted that all answers were in defense of the decision of the Commission except the answer of the United States of America which "admits only that the Interstate Commerce Commission * * * has failed to make proper findings as to the inherent advantages of plaintiff's proposed mode of transportation," and " * * * prays that the orders of the Commission * * be annulled and set aside and that the matter be remanded to the Commission to make proper findings in accordance with the National Transportation Policy."

Plaintiff contends:

1. The order complained of is the result of arbitrary and capricious action, and the findings upon which it is based are unsupported by substantial evidence, and

2. In denying plaintiff's application the Interstate Commerce Commission has not correctly applied the standards of the National Transportation Policy, and failed to make adequate findings in terms of that policy.

The transcript of evidence discloses the following facts:

A large highway building program was scheduled by the State of Illinois for 1957 and future years. Large quantities of bulk cement are necessary for such construction. At present railroad service is used to carry bulk cement in the area involved.

Plaintiff is engaged as a common carrier in the business of transporting bulk liquid, principally petroleum products, by motor vehicle in interstate commerce over irregular routes between points in Illinois and Missouri and other states pursuant to authority granted by the Interstate Commerce Commission. Plaintiff is now operating 51 tractors and 36 tank trailers, and maintains terminals at various points in Illinois and Missouri. Because it has extra tractors available during the spring, summer and early autumn seasons when demand for bulk cement is heaviest, plaintiff filed this application. The special hoppers necessary to carry bulk cement, and existing terminals in Illinois and Missouri will be available, and service will be on call but not on schedule. Motor carrier service is mechanically feasible and economically practical. Plaintiff is financially responsible and would be a fit carrier to conduct the business. Hefkin Company and the Association of General Contractors of Illinois supported the application.

Hefkin Company is engaged in building highways in Missouri and Illinois, and maintains a ready-mix plant at Belleville, Illinois, which is supplied with cement from Alpha Portland Cement Company and Missouri Portland Cement Company from their St. Louis plants, the Universal Atlas Company of Hannibal, Missouri, and the Marquette Cement Company of Cape Girardeau, Missouri. Hefkin Company had purchased cement on one job from Lehigh Portland Cement Company at Mitchell, Indiana, which also has a plant at Oglesby, Illinois.

Motor transportation of bulk cement has many advantages over transportation by rail. When shipments are made by rail, cement must be ordered prior to the day on which it is scheduled to be used. In the event of rain the number of carloads arriving at the point of destination accumulates. The result is that quantities of cement on hand exceed the space available for storage, thereby necessitating the payment of demurrage. If truck service were available, cement would be ordered when needed and the order cancelled in the event of rain. To utilize rail service a special switch or spur line costing the consignee from $1,500. to $4,000. must be built at every job site. Except in instances where sand and gravel are shipped by rail instead of by truck this expense would be eliminated by motor service which is "door-to-door." In every instance, the additional truck service from railhead to job site presently needed would be eliminated. On one job Hefkin Company was compelled to truck bulk cement 4 1/2 miles. Due to the volume of cement transported by rail and the sudden advent of winter weather large quantities of cement are usually left over at the completion of a job. Motor carriage permits small amounts of cement to be carried with greater flexibility and would eliminate the loss presently incurred when it is necessary to dispose of this surplus cement locally, since it would become economically feasible to move this surplus to new locations. Hefkin Company would utilize the truck service to supplement rail service.

The railroads at the present time have a sufficient number of hopper cars to transport bulk cement and anticipate loss of business if the certificate for motor truck service were to issue. No investigation was made as to whether Universal Atlas Company or Marquette Cement Company have present facilities for loading trucks, or if not, whether they intend to provide such equipment; the remaining three cement companies who now control the traffic for their bulk cement are not presently equipped for loading trucks, and because of the expense in establishing such facilities, have no immediate intention to build truck loading docks. If this application were ...

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