Before Kiley, Circuit Judge, and Campbell and Austin, District
The opinion of the court was delivered by: Austin, District Judge:
Plaintiff, Greyhound Lines, Inc., seeks judicial review of an
Order of the Interstate Commerce Commission entered August 30,
1967 which granted to intervenor, Gray Line Scenic Tours, Inc., a
certificate of public convenience and necessity as a common
carrier over irregular routes in special and charter operations
of passengers and their baggage to the sites of six named
gambling casinos in Nevada from points in California. 103 M.C.C.
807. Greyhound provides common carrier service over regular
routes to passengers and their baggage over substantially the
same routes and since the early 1950's has, through special
operations, performed the same passenger service using the same
type of equipment as proposed by Gray Lines between certain
California points and gambling casinos in Nevada.
The record submitted to this court contains the history of the
proceedings from its inception on September 4, 1962 when
intervenor Gray Line filed an application alternatively for
contract carrier authority or common carrier authority.
On April 5, 1965 Joint Board No. 78 recommended in its report
that contract carrier authority be granted and common carrier
authority denied. That report was rejected on January 3, 1966 by
Operating Rights Review Board No. 2. It
agreed with the Joint Board that the service offered was that of
contract carriage, but held the evidence failed to satisfy all
the statutory factors for such carriage. 100 M.C.C. 294, 304-305.
By decision and order of April 14, 1967, the Interstate Commerce
Commission reversed the decision of the Operating Rights Review
Board, disagreed with the conclusion of the Joint Board that the
service was that of contract carriage, and determined that public
convenience and necessity required operation by Gray Line as a
common carrier by motor vehicle, that Gray Line was fit, willing
and able to properly perform the service, that the protesting
carriers, including Greyhound, had not provided reasonably
adequate service, and that a certificate of common carriage be
granted to Gray Line. 103 M.C.C. 807, 814, 816, 819. Petition for
rehearing was denied and the instant complaint was filed
September 26, 1967.
Greyhound alleges the Commission order is invalid because (a)
the operating authority granted Gray Line in terms of scope of
operation is broader than that sought or supported by the
evidence; (b) the grant permits Gray Line to conduct passenger
transportation in direct competition with regular route passenger
service of Greyhound without any evidence that such is required
by public convenience and necessity; (c) the reports and orders
of the Commission lack findings and conclusions which sustain an
award of common carrier authority; (d) none of the orders make a
finding of the effect of the proposed service on Greyhound as is
required by law; (e) the orders arbitrarily and capriciously
refuse to consider and dispose of material issues of fact and law
presented by Greyhound; and (f) the orders are arbitrarily and
capriciously inconsistent with prior Commission action taken
under similar circumstances.
Our scope of review of the Commission order is limited to
determining only whether the findings made by the Commission are
supported by substantial evidence on the entire record and
whether its conclusion as to public convenience and necessity has
a rational basis in the facts found. Administrative Procedure
Act, 5 U.S.C.A. § 1009.
The main thrust of Greyhound's argument is directed to a
claimed fatal and egregious absence of rider testimony in the
Commission record which it urges nullifies the grant of common
carrier authority. It contends that no grant of such authority
for a new competitive service can be premised solely on the
testimony of casino proprietors who are not "riders" or direct
"users" of the service and the effect of the instant order is to
subvert public convenience and necessity to special interests of
business enterprises thereby introducing a new and erroneous
standard of law. Further, it claims that this absence of direct
user testimony, the lack of any probative value in the testimony
of the casino operators, and the insufficiency of that testimony
to establish service deficiencies by Greyhound permeates the
entire record making the Commission's finding of inadequacy
incorrect and unsupported by competent evidence.
Greyhound cites Commission disapproval of the type of testimony
presented in this case. Greyhound Corp., Extension, 99 M.C.C.
299, 301 (1965) and 96 M.C.C. 630, 639 (1964); Shores and Brown,
Common Carrier Application, 26 M.C.C. 343 (1940); Greenville Bus
Co., 79 M.C.C. 387 (1959); and distinguishes cases cited by
defendants and intervenor Gray Line, Capitol Bus Co., Extension,
69 M.C.C. 447 (1959); Grand Island Transit Corp., Extension, 78
M.C.C. 786 (1959); Resort Bus Lines, Inc. v. I.C.C., 264 F. Supp. 742
(D.C.N.Y. 1967), on the ground that none involved
applications for new services, and that Hudson Bus Lines,
Extension, 66 M.C.C. 473 (1956) and Campus Travel, Inc. v. United
States, 224 F. Supp. 146 (D.C.N.Y. 1963) did contain record
testimony of actual riders; that in the instant case, unlike
those cases involving carriage of merchandise where practical
prevent direct user testimony, potential rider witnesses were
available since passengers using Greyhound service could have
been solicited as witnesses; that the testimony heard was hearsay
testimony and no showing was made "that such witnesses have
attempted to use the existing service available or have found
such service to be inadequate in some material respect". Peerless
Stages, Inc., Extension, 86 M.C.C. 109, aff'd 371 U.S. 22, 83
S.Ct. 119, 9 L.Ed.2d 95 (1962).
A reading of these cases, and others, indicates the Commission
has at times received the testimony of institutional witnesses
and accorded it evidentiary weight whereas in others it has
either refused it or has accorded it no weight at all. However,
the court is not concerned with the consistency or inconsistency
of the Commission's decision because Commission judgment is to be
exercised in the light of the facts of each individual case.
Virginian R. Co. v. United States, 272 U.S. 658, 663, 47 S.Ct.
222, 71 L.Ed. 463 (1926); Western Paper Maker's Chem. Co. v.
United States, 271 U.S. 268, 46 S.Ct. 500, 70 L.Ed. 941 (1926).
Questions of admissibility of evidence, probative weight, and
credibility of evidence are not within the purview of our
statutory review function. The Commission is not required to
adhere to strict rules of evidence and the admission of evidence
which would be deemed incompetent by the courts does not
invalidate its orders as long as the findings made are sustained
by competent substantial evidence in the entire record. Western
Paper Maker's Chem. Co. v. United States, supra, p. 271, 46 S.
Ct. 500. We conclude that the absence of rider testimony does not
render the order erroneous as a matter of law.
The criteria by which the Commission chose to make
determinations of public convenience and necessity are also not
subject to court review. No delineation of factors to support
such a determination has been expressed in the statute.
49 U.S.C.A. § 307. Congress has entrusted the Commission with a
"wide range of discretional authority" to draw that conclusion
from "the infinite variety of circumstances which may occur in
specific instances." United States v. Detroit & Cleveland
Navigation Co., 326 U.S. 236, 241, 66 S.Ct. 75, 90 L.Ed. 38
(1951); Interstate Commerce Commission v. Parker, 326 U.S. 60,
65, 65 S.Ct. 1490, 1493, 89 L.Ed. 2051 (1945).
We turn to Greyhound's claim that the Commission's finding of
inadequacy of its service is unsupported by substantial evidence
and that the Commission failed to make a finding that the
existing service would not be injuriously affected by the grant
of the certificate to Gray Line. It has been held that the fact
that there is no finding of inadequacy of existing service, which
is not true in this case, or that existing service would not be
injuriously affected, does not invalidate an order of the
Commission. Lang Transportation Corp. v. United States,
75 F. Supp. 915 (D.C.Cal. 1948); Southern Kansas Greyhound Lines,
Inc. v. United States, 134 F. Supp. 502, 506-507 (D.C.Mo. 1955)
aff'd 351 U.S. 921, 76 S.Ct. 779, 100 L.Ed. 1453; Convoy Co. v.
United States, 200 F. Supp. 10, 13 (D.C.Ore. 1961) aff'd
382 U.S. 371, 86 S.Ct. 553, 15 L.Ed.2d 426. The necessity of a finding of
inadequacy of present service has been most recently discussed by
the Supreme Court of the United States in United States v. Dixie
Express, 389 U.S. 409, 411, 88 S.Ct. 539, 540, 19 L.Ed.2d 639
(1967) which stated that a specific finding of that nature is not
a prerequisite although "the Commission should consider the
public interest in sustaining the health and stability of
existing carriers". In the instant case, the record shows that
deficiencies in Greyhound's service did exist and that the grant
to Gray Line was limited "to preclude any undue encroachment upon
the services normally provided by passenger carriers at the
affected Nevada points." 103 M.C.C., pp. 814, 818.
A further point must be considered. During oral argument
counsel for Greyhound expanded on an issue only formally alleged
in its complaint as a basis for invalidity of the order — that
is, that the certificate granted Gray Line is broader than that
which was sought and which the evidence supports. Greyhound is
concerned with anticipatory problems of interpretation of that
certificate and intervenor's operation thereunder in the light of
the scope of authority intended. It argues that the certificate
is so ambiguous and so indefinite as to authorize an unrestricted
operation by Gray Line contrary to the evidence presented and the
intended grant of authority as appears from the Commission
decision. In particular, it is stated the certificate is
unrestricted as to the passengers to be transported, indefinite
as to the description of sites to be served, and indefinite as to
scheduled times of operation.
This issue on the construction and interpretation to be given
the grant had not been raised before the Commission, nor was it
discussed in the briefs submitted to this court. Greyhound's
difficulty in determining the scope of the certificate should
properly be presented to the authority which issued it and upon
whom Congress has placed the responsibility of action. The
question of interpretation should first be litigated before the
Commission. 49 U.S.C.A. §§ 304(d), 312; see Service Storage &
Transfer Co. v. Com. of Virginia, 359 U.S. ...