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B.D.C. CORPORATION v. UNITED STATES

March 18, 1968

B.D.C. CORPORATION, PLAINTIFF,
v.
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, DEFENDANTS. AMERICAN COURIER CORPORATION, INTERVENING DEFENDANT.



Before Schnackenberg, Circuit Judge, and Robson and Will, District Judges.

The opinion of the court was delivered by: Robson, District Judge:

MEMORANDUM AND ORDER

Plaintiff, B.D.C. Corporation, seeks the vacation and annulment of an order of the Interstate Commerce Commission, and an injunction against its enforcement. It invokes this three-judge court pursuant to 28 U.S.C. § 2325. For the reasons set out below, the court concludes that the order of the Interstate Commerce Commission should be affirmed.

The major issue in this case is whether the Interstate Commerce Commission's order was based on substantial evidence. Plaintiff argues that the ruling was arbitrary and without sufficient evidentiary foundation. Defendants contend that the order is within the broad discretion and expertise of the Commission and is based on substantial evidence on the record as a whole.

By application filed March 8, 1963, American Courier Corporation (formerly the Armored Carrier Corporation) of Bayside, New York, sought a permit authorizing operations in interstate or foreign commerce as a commercial carrier by motor vehicle, over irregular routes, of (1) described commercial papers and documents ("cash letters"), and (2) audit and accounting media, and business papers and records between Chicago, Illinois, and points in Indiana and Michigan. Plaintiff, an Illinois corporation, was the only carrier opposing the application.

Hearings were held before Joint Board No. 73 in 1963 in Chicago. This board in its report and recommended order found that no need existed for the proposed services. (Exhibit B, Complaint.) On December 16, 1966, the I.C.C. (Operating Rights Review Board No. 2) affirmed the joint board's recommended denial of part 1 ("cash letters") of the application, but found that the public convenience and necessity required the services proposed under part 2 (audit media) of the application. The latter order was affirmed by the Commission, Division 1, Acting as an Appellate Division, on July 14, 1967. The intervening defendant (applicant below), the American Courier Corporation, did not appeal from the denial of its application for authority to carry "cash letters," but the plaintiff herein did appeal and is here attacking the Commission's order with respect to its grant of authority to American Courier to carry audit media.

In the course of its opinion, the I.C.C. admitted that plaintiff's services were not shown to be inadequate and that plaintiff would stand to lose traffic if the requested authority were granted to the American Courier Corporation. American Courier Corporation Extension — Northern Indiana Points, 103 M.C.C. 298 (1966) (Exhibit A, Complaint). The Commission further assumed there was a need for the services in the geographical area requested. Normally, said the Commission, the plaintiff would "be entitled to protection against additional competition." "However," it continued, "this policy is not absolute."

The I.C.C. said that in this case, an "unusual" situation was presented "of a protestant [the plaintiff] commonly controlled through management with a competitor [Banker's Dispatch Corporation] of one of the supporting shippers [Statistical Tabulating Corporation — S.T.C.]." The president of plaintiff, one Jerry Stergios, was at the time of the hearing also the president of Banker's Data Center, a data-processing company in competition with Statistical Tabulating Corporation, one of American Courier's supporting shippers. Mr. Stergios also owned about 70% of a holding company which owned or controlled about 18,000 shares of Banker's Data Center (the competitor of S.T.C.) and 100% of B.D.C. (the carrier-plaintiff herein). The Commission noted that

    "[S.T.C.] is unwilling to tender traffic [to
  B.D.C.] for fear that information concerning the
  identity and location of customers necessarily
  revealed to this carrier would be used to its
  disadvantage [as a competitor of Banker's Data
  Center]. As protestant [B.D.C.] is the only motor
  carrier offering a feasible audit media service, the
  shipper's only alternatives are private carriage or
  less desirable forms of transportation." (Id., at
  303)

The Commission then stated that it has long been watchful lest situations arise which have a potential for discrimination, and that it had denied applications by carriers "controlled or closely related to the supporting shippers." The I.C.C. emphasized that the opportunities for discrimination had to be more than "insubstantial."

The opinion went on to apply these principles to this case:

    "The situation before us differs from the cited
  decisions in that the controlled carrier [plaintiff
  B.D.C.] is a protestant attempting to protect its
  position rather than an applicant seeking authority.
  * * * The possibilities for discrimination and
  favoritism are not only the same as in the cited
  decisions. They are enhanced by the fact that
  [plaintiff B.D.C.] is the only carrier offering the
  type of service proposed, and even though there is
  no evidence that B.D.C. has, or would, abuse its
  position, it is conceivable

  that at some future time, the pressure to favoritism
  and discriminatory practices might become
  irresistible." (Emphasis added.) Id., at 304.

Even though the Commission was overruling the opinion of a lower board, it was not disputing the facts found by that lower board. It is clear that the Commission was giving added weight to this admitted factor, and in so doing was using its "expertise" in the transportation industry.

Generally, an order of the I.C.C., or any other administrative body, will be upheld if it is based upon appropriate findings supported by substantial evidence on the record as a whole, even though the reviewing court might disagree with the Commission's conclusions or consider them contrary to the weight of the evidence. E.g., Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); Interstate Commerce Commission v. Union Pacific R.R. Co., 222 U.S. 541, 32 S.Ct. 108, 56 L.Ed. 308 (1912); United States v. Pierce Auto Freight Lines, Inc., 327 U.S. 515, 66 S.Ct. 687, ...


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