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ATCHISON, TOPEKA AND SANTA FE RY. v. UNITED STATES

July 3, 1962

THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, ET AL., PLAINTIFFS,
v.
UNITED STATES OF AMERICA ET AL., DEFENDANTS.



Before Castle, Circuit Judge, and Perry and Robson, District Judges.

The opinion of the court was delivered by: Per Curiam.

This action to set aside an order of the Interstate Commerce Commission came on for hearing before this statutory three-judge United States District Court upon plaintiffs' complaint and defendants' answers thereto, and the court having reviewed and considered the record consisting of a certified transcript of the documents and proceedings before the Interstate Commerce Commission (which copy was offered and received in evidence); having heard oral arguments of counsel; and having considered the briefs submitted by counsel, finds the facts and states the conclusions of law as follows:

FINDINGS OF FACT

1. Plaintiffs are railroad companies. By leave of court the Contract Carrier Conference of American Trucking Associations, Inc., and certain motor common carriers were permitted to intervene on the side of plaintiffs.

2. Defendants named in the complaint are United States of America and the Interstate Commerce Commission. By leave of court, Swift & Company, National Food Stores, Inc., and the Secretary of Agriculture of the United States intervened as defendants.

3. This is an action before a statutory three-judge United States District Court brought under 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325 to set aside an order of the Interstate Commerce Commission entered February 16, 1959, (five Commissioners dissenting) in Ex Parte No. MC-43, Lease and Interchange of Vehicles by Motor Carriers.

4. The Commission's first order in Ex Parte No. MC-43, May 8, 1951, 52 M.C.C. 675, forbade the practice known in the transportation industry as "trip-leasing." A large proportion of the motor vehicle owners engaged in the interstate transportation of property are not subject to the provisions of the Interstate Commerce Act which require the securing of certificates or permits to operate. These may be private carriers who carry their own property in their own vehicles or carriers for hire of exempt agricultural commodities. While the private and exempt carriers may go anywhere, they have often faced the prospect of empty return trips because of inability to obtain loads they may lawfully carry. To avoid empty movements these carriers developed the practice of leasing their vehicle with a driver to a fully regulated motor common or contract carrier for one trip in the direction they wished to go. Transportation under the lease was performed in the eyes of the law by the regulated carrier under the authority of his certificate or permit, but the physical movement of the property transported took place in the vehicle owned by the private or exempt carrier and operated by his driver. The regulated carrier paid the owner of the vehicle a portion of freight charges paid by the shipper. American Trucking Associations v. United States, (1953) 344 U.S. 298, 302, 303, 73 S.Ct. 307, 97 L.Ed. 337.

5. Trip-leasing, while not illegal in itself, was productive of violations of the Interstate Commerce Act and of demoralizing economic effects upon the regulated transportation industry. 344 U.S. pp. 303-306, 73 S.Ct. 307. For these reasons, after a long investigation, the Commission forbade trip-leasing by an order requiring that a lease of a vehicle with a driver to a regulated carrier must be in writing and for a period of not less than 30 days during which exclusive possession and control must remain with the lessee. 344 U.S. pp. 306-308, 73 S.Ct. 307; 52 M.C.C. 675, 744. This order was sustained in American Trucking Associations, Inc. v. United States, supra, 344 U.S. 298, 73 S.Ct. 307, 97 L.Ed. 337.

6. Thereafter various groups favorable to trip-leasing sought legislation by Congress that would deprive the Commission of the power to prohibit the practice. 102 Cong.Rec. 5733. This advocacy brought about enactment on August 3, 1956, of the statute in issue here which goes only so far as to exempt certain motor vehicle operations from the trip-leasing ban. 70 Stat. 983, 49 U.S.C.A. § 304(e, f), 102 Cong.Rec. 12741-2.

7. Insofar as it is material here, section 304(f) forbids the Commission to regulate the duration of a lease of a motor vehicle, with a driver, to a regulated carrier, if the motor vehicle is owned by a private carrier and is used regularly by the private carrier in the transportation of

  "perishable products manufactured from perishable
  property of a character embraced within section
  303(b)(6) of this title * * *."

Section 303(b)(6) embraces in part the following:

    "* * * `property consisting of ordinary
  livestock, fish (including shell fish), or
  agricultural (including horticultural)
  commodities (not including manufactured products
  thereof)' * * *."

The issue in this case is whether "ordinary livestock", included in section 303(b)(6), are "perishable property" within the meaning of section 304(f).

8. Swift & Company, an intervening defendant, carries fresh meat in its own trucks in interstate trips outbound from its packing plants to distributors, and is a private carrier in such operations. During 1957, with the purpose of obtaining inbound return loads, Swift sought arrangements to trip-lease its meat trucks with drivers to a regulated carrier. The Bureau of Motor Carriers of the Commission, by a letter signed by W.Y. Blanning, Director of the Bureau, dated October 3, 1957, advised the regulated carrier that the proposed trip-leasing was not exempted by section 304(f), stating in part:

    "`Perishable' is construed to mean `inherently
  subject to rapid deterioration, decomposition, or
  decay.' Thus fresh meat fails to qualify under
  the excepted provision for the reason that the
  animals from which such meats are produced are
  not in their natural form considered perishable."

9. On December 20, 1957, Swift & Company filed a petition requesting that the Commission issue a declaratory order, under section 5(d) of the Administrative Procedure Act, 5 U.S.C.A. § 1004(d), that fresh meat and other perishable meat products are "perishable products manufactured from perishable property of a character embraced within section 203(b)(6)" of the Interstate Commerce Act within the meaning of section 204(f)(1) of the Act.

10. The said petition of Swift & Company alleged that it had been hindered and prevented from trip-leasing its equipment by the existence of Ruling No. 103, Ex Parte MC-43, issued January 24, 1957, by the Bureau of Motor Carriers which ruling, ...


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