United States District Court, Northern District of Illinois, E.D
March 31, 1970
CHICAGO AND NORTH WESTERN RAILWAY COMPANY, CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY, AND ILLINOIS CENTRAL RAILROAD COMPANY, PLAINTIFFS, AND RINGLE EXPRESS, INC. AND HOME TRANSPORTATION COMPANY, INC., PLAINTIFFS-INTERVENORS,
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, DEFENDANTS, AND WALTER POOLE TRUCK LINE, INC. AND WALTER POOLE, DOING BUSINESS AS POOLE TRUCK LINE, INTERVENING DEFENDANTS.
Before Swygert, Chief Circuit Judge, and Parsons and Marovitz,
The opinion of the court was delivered by: Swygert, Chief Judge.
Plaintiffs, Chicago and North Western Railway Company, Chicago,
Milwaukee, St. Paul and Pacific Railroad Company, Chicago, Rock
Island and Pacific Railroad Company and Illinois Central Railroad
Company bring this action to set aside an order of the Interstate
Commerce Commission. The Commission's order granted authority to
Walter Poole, doing business as Poole Truck Line of Evergreen,
Alabama, to operate as a common carrier over irregular routes
carrying traffic composed of tractors and related agricultural
machinery and implements from John Deere Company plant sites
located at Waterloo, Dubuque, and Des Moines, Iowa, Horicon,
Wisconsin, and Moline, Illinois, to points in Alabama and in
Georgia on and south of U.S. Highway 280. Motor carriers, Ringle
Express and Home Transportation Company, have intervened as
plaintiffs and Walter Poole has intervened as a defendant. We
hold that the ICC's action was correct and refuse to set aside
its order granting a certificate of public convenience and
necessity to Walter Poole to operate as a common carrier over the
routes in question.
Poole's application, filed on November 27, 1964, was designed
to permit Poole to institute a direct single-line operation to
replace the circuitous interline arrangement with Cooper Transfer
under which the involved traffic had previously been moving. At
the time the application was filed, Poole held authority to
transport Deere products from the Deere origin points to Mobile
and Monroe Counties, Alabama. Traffic interchanged at points in
these counties was transported under the authority of Cooper to
the points in Alabama and Georgia. Cooper, who no longer wished
to participate in this service, testified on behalf of Poole at
the application hearing. Poole's application was also supported
by twenty-three Deere dealers in Alabama and the areas of Georgia
covered by the application. John Deere Company did not support
Poole's application. Poole's application was opposed by various
railroads including plaintiff railroads and by the intervening
plaintiff motor carriers.
The examiner conducted a hearing in March and July of 1965 and,
thereafter, issued a recommended report and order granting the
application in its entirety. Protestants filed exceptions to this
report. Subsequently the Operating
Rights Review Board Number 2 refused to adopt the examiner's
recommendation and denied the application in its entirety. Poole
filed a petition for reconsideration which was denied by Division
1 of the Commission acting as an Appellate Division. Poole then
filed a petition to the full Commission seeking a determination
that the proceeding involved an issue of general transportation
importance. This petition was denied by order of the Commission
in November 1966. Thereafter, in January 1967, Poole instituted
an action in the District Court for the Southern District of
Alabama to set aside the Review Board's order denying his
application. On its own motion, the Commission, on May 2, 1967,
vacated the order of the Review Board and reopened the proceeding
for reconsideration on the existing record. The district court
stayed its own proceedings and on August 23, 1967 the Commission
issued its report on reconsideration, adopting the statement of
facts and conclusions of the examiner and granting Poole's
application.*fn1 Plaintiff railroads and motor carriers filed
petitions for reconsideration which were subsequently denied by
the Commission in May 1968. In June 1968 Poole was issued a
certificate of public convenience and necessity and in July 1968
the Alabama district court dismissed the action before it. The
instant proceeding was instituted in November 1968.
Three issues are presented for decision: whether the Commission
may reconsider and reverse a prior decision by an Appellate
Division which is administratively final; whether the Commission
erred as a matter of law in failing to explain why the prior
decision was incorrect and to disclose by adequate findings the
basis for its reversal; and whether the Commission's decision
granting the certificate is supported by substantial evidence.
The plaintiffs maintain that, since the order of Division 1
denying Poole's application is a final administrative
action,*fn2 the Commission is precluded from reopening Poole's
application and granting Poole a certificate. This argument
misconceives the scope of the Commission's power to remedy its
own errors. Section 17(7) of the Interstate Commerce Act gives
the Commission continuing jurisdiction over its orders and
empowers it to reconsider and to rescind or modify its orders at
any time for the purpose of correcting an error or
injustice.*fn3 Baldwin v. Scott County Milling Co.,
307 U.S. 478, 59 S.Ct. 943, 83 L.Ed. 1409 (1939); Sprague v. Woll,
122 F.2d 128 (7th Cir.), cert.
denied, 314 U.S. 669, 62 S.Ct. 131, 86 L.Ed. 535 (1941); Alamo
Express, Inc. v. United States, 239 F. Supp. 694 (W.D.Tex. 1965).
Administrative finality does not terminate this continuing
jurisdiction but merely determines the ripeness of Commission
action for judicial review. In contrast to certain other
regulatory statutes,*fn4 the Interstate Commerce Act provides no
definite cutoff after which the Commission is precluded from
reconsidering its orders.*fn5 In re National Labor Relations
Board, 304 U.S. 486, 58 S.Ct. 1001, 82 L.Ed. 1482 (1938).
Plaintiffs attempt to distinguish the instant case by arguing
that previous cases have permitted the Commission's jurisdiction
to continue only where the Commission has decided to grant
authority and where jurisdiction is retained "to shape the form
and content of the certificate in light of the applicable
statutory directions." In such cases the affirmative step of
delivery of the certificate to the applicant estops the
Commission from reconsidering its action. Watson Bros.
Transportation Co. v. United States, 132 F. Supp. 905 (D.C.Neb.),
aff'd per curiam, 350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810
(1955). Plaintiffs argue by analogy that the decision to deny an
application should be treated in the same way as the affirmative
act of delivery of the certificate to the applicant.
Plaintiffs' position in unsupported by case law or by sound
policy. In Resort Bus Lines, Inc. v. ICC, 264 F. Supp. 742
(S.D.N.Y. 1967), the examiner recommended the grant of a
certificate, the Review Board reversed the examiner and denied
the application and this denial was affirmed on petition for
reconsideration [appeal] by an Appellate Division. On petition
for reconsideration by the applicant the Appellate Division
reopened on the existing record and granted the application. In
the Resort case, which, in all relevant respects, is identical to
the instant case, the court held that the power of the Appellate
Division to reconsider its own action extends "at least prior to
the time that an actual certificate of convenience and necessity
has been issued." The rationale for its decision, which is
equally applicable here, was stated by the court as follows:
Moreover, it is in the best interests of judicial
economy and agency responsibility to allow the
Appellate Division to reconsider its orders, rather
than to compel the losing party to seek immediate
review in the courts. Resort Bus Lines, Inc. v. ICC,
264 F. Supp. 742, 745 (1967).
The position of the court in the Resort case has also been
followed by the Commission in Eazor Express, Inc.-Purchase-Fleet
Highway Freight Lines, Inc., 101 M.C.C. 719 (1967).
The plaintiffs, relying upon Transamerican Freight Lines, Inc.
v. United States, 258 F. Supp. 910 (D.C.Del. 1966), argue that,
regardless of the continuing jurisdiction theory, the Commission
is without statutory authority to reconsider the action of one of
its Appellate Divisions. Reliance upon the Transamerican case is
misplaced. The interpretation of the provisions of the Interstate
Commerce Act offered by the court in Transamerican was expressed
sua sponte and was totally unnecessary to the holding of the
case. The Commission has rejected the court's obiter dictum,
stating that, although the statute and rules limit the right of
a party to seek reconsideration by the Commission, they in no way
limit the power of the Commission to reconsider on its own
motion. Eazor Express, Inc.-Purchase-Fleet Highway Freight Lines,
Inc., 101 M.C.C. 719
(1967). The Commission explained its reasoning as follows:
The right of an administrative body to reconsider
at any time is inherent in the power to decide and is
a necessary procedure in order to permit an
administrative agency to carry out properly its
functions under the enabling statutes. If we were
precluded from correcting the error that * * * we
find was promulgated in the prior report, justice
would be thwarted and would only result in imposing a
totally unnecessary burden on a reviewing court to
remand the proceeding to us for reconsideration.
Eazor Express, Inc.-Purchase-Fleet Highway Freight
Lines, Inc., 101 M.C.C. 719, 720 (1967).
The Eazor case was cited with apparent approval in Resort Bus
Lines, Inc. v. ICC, 264 F. Supp. 742 (1967).
We hold, therefore, that the Commission was empowered to
reconsider and set aside the Appellate Division's order denying
Poole's application. Although the apparently unlimited power
given to the Commission to reconsider its orders may be limited
in cases where the objecting party demonstrates detrimental
reliance or the passage of a long period of time, cf. Upjohn
Company v. Pennsylvania R.R., 381 F.2d 4 (6th Cir. 1967);
Atchison, Topeka & Santa Fe Ry. Co. v. United States, 231 F. Supp. 422
(N.D.Ill. 1964); Watson Bros. Transportation Co. v. United
States, 132 F. Supp. 905 (D.C.Neb.), aff'd per curiam,
350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810 (1955), there is nothing in the
record to indicate that the plaintiffs in the instant case were
prejudiced by the Commission's reopening of Poole's
The plaintiffs argue that the Commission is required to give
reasons for reconsidering and reversing the Appellate Division's
order denying Poole's application. Reliance is placed upon
section 8(b) of the Administrative Procedure Act which provides
that decisions shall include "findings and conclusions, as well
as the reasons or basis therefor, upon all material issues of
fact, law or discretion presented on the record." We have found
no case holding that the Commission is required to give an
apologia for its previous error in addition to making the
required findings and conclusions along with accompanying
reasons. The question is not why the Commission changed its mind
but whether its decision is supported by adequate findings and
In its opinion of August 27, 1967, reported in 105 M.C.C. 511,
the Commission made sufficient findings for compliance with 8(b)
and the Interstate Commerce Act. Contrary to the assertion of
plaintiffs, the Commission found that existing services were
inadequate. We think the entire thrust of the Commission's
decision supports such a finding and hold that a finding of
inadequacy of existing services need not be set out in the
precise verbal formula proposed by plaintiffs. Although the
Commission's discussion of some matters is brief, its adoption of
the statement of facts and conclusions of law prepared by
the examiner sufficiently informs the parties of the basis of its
action and fully complies with the requirements of Section 8(b).
Key v. United States, 263 F. Supp. 544, 549 (S.D.Ind. 1966).
We hold that the Commission's decision granting Poole's
application is supported by substantial evidence and refuse to
set aside its decision to grant a certificate of public
convenience and necessity. In reviewing that decision we
recognize the great deference afforded to Commission
determinations of public convenience and necessity. In Midwest
Emery Freight System, Inc. v. United States, 293 F. Supp. 403, 405
(1968), this court explained its limited function in this respect
Our scope of review of that 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. We are mindful that the criteria by
which the Commission makes its determination of
public convenience and necessity are not subject to
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
With this standard in mind we proceed to examine the plaintiffs'
specific allegations of insufficiency of the evidence supporting
the Commission's findings.
The plaintiffs argue that the Commission makes two conclusions
which are necessary to a finding of public convenience and
necessity and which are completely unsupported by the evidence.
These conclusions are: (1) "that there is a need for continuation
of the service proposed, since discontinuance of the Poole-Cooper
interchange would leave shippers without adequate motor carrier
service;" and (2) "that the existing carriers will not be
affected adversely." We hold that substantial evidence supported
both of these conclusions.
The conclusion that existing services were inadequate and that
authority for Poole to operate as a common carrier is clearly
supported by the record. Contrary to the assertion of plaintiffs,
the Commission could reasonably find that Deere dealers could not
maintain sufficient inventory of Deere machinery and implements.
To satisfy their customers, these dealers needed expedited
service in some situations. Although the Commission may have
overestimated the actual delivery time by rail (ten days), it is,
nevertheless, reasonable to conclude that rail service was
inadequate to provide the fast, dependable service required.
Moreover, railroads were unable to serve some of the involved
dealers because unloading facilities were not located near the
dealer's place of business. Thus motor carriage was needed and
rail service was inadequate. Home could not provide this service
because it lacked authority from the Commission to carry much of
the traffic. Ringle possessed adequate authority but many dealers
were unfamiliar with Ringle's service. Some dealers who had
experience with Ringle's service characterized it as slow and not
as satisfactory as that provided by Poole. Although the
inadequacy of Ringle's service was not as clearly demonstrated as
in the case of the other plaintiffs, we think substantial
evidence supports the Commission's finding.
The Commission's conclusion that existing carriers would not be
adversely affected by the proposed service is also supported by
the record. Since Poole and Cooper had previously been operating
over most of the area in question under an interline arrangement,
it is unlikely that significant traffic would be diverted from
existing carriers. The Commission could reasonably determine
that the greater efficiency of Poole's single line operation
would not affect this conclusion. Moreover, the Commission could
reasonably conclude that any traffic which was diverted would not
significantly affect plaintiff carriers. This is particularly
true with respect to Ringle since only one percent of Ringle's
total revenue was derived from the delivery of Deere machinery
and equipment in Georgia and Alabama.
For these reasons we hold that the Commission properly granted
a certificate of public convenience to Poole to operate over the
routes in question. Plaintiffs' petition to set aside the order
of the Commission is denied.
Arising under 28 U.S.C. § 1396, 2284, 2321, 2325, this is an
action to set aside a report and order of the Interstate Commerce
Commission (Commission) on reconsideration (Report) in Walter
Poole Extension — Tractors to Alabama, No. MC-115162 (Sub.-No.
105), wherein the Commission found that the public convenience
and necessity required certain operations by applicant Walter
Poole, doing business as Poole Truck Lines (Poole). The case,
which is found at 105 M.C.C. 511 (1967), was decided on August 9,
1967, and served on August 23, 1967.
This original application in this matter was filed on November
27, 1964. It was amended to its present form at the oral hearing
before the Interstate Commerce Commission conducted by Examiner
Allen W. Hagerty at Montgomery, Alabama, on March 25 and 26,
1965, and at Atlanta, Georgia, on July 20, 21 and 22, 1965.
By the amended application, Poole sought a certificate of
public convenience and necessity authorizing operation in
interstate or foreign commerce as a common carrier by motor
vehicle, over irregular routes, of tractors and other related
agricultural machinery and implements from the plant sites of
John Deere Company at Waterloo, Dubuque, and Des Moines, Iowa,
Horicon, Wisconsin, and Moline, Illinois, to points in Alabama
and those in Georgia on and south of U.S. Highway 280. 105 M.C.C.
at 511. The application was filed to permit Poole to institute a
direct single-line operation to replace the circuitous interline
arrangement with Cooper Transfer, Inc. (Cooper) under which the
involved traffic had been moving, as Cooper no longer wished to
participate in this service. 105 M.C.C. at 512-13, 515-16.
A hearing was held before an examiner of the Commission on
March 25 and 26 and July 20, 21, and 22, 1965.
Motor carriers opposed to the granting of the application were:
Diamond Transportation System, Inc.; Home Transportation Co.
Inc.; Jenkins Truck Line, Inc.; and Ringle Express, Inc.
(Diamond, Home, Jenkins, and Ringle). Rail carriers opposed were:
the Chicago Burlington and Quincy Railroad Company; Chicago Great
Western Railway Company; Chicago, Milwaukee, St. Paul and Pacific
Railroad Company; Chicago North Western Railway Company; Chicago
Rock Island and Pacific Railroad Company; Illinois Central
Railroad Company; Norfolk and Western Railway Company; and
Waterloo Railroad Company. (North Western, Burlington, C.G.W.,
Milwaukee, Rock Island, I.C., Waterloo, and N. & W.) After the
application was amended, Diamond and Jenkins withdrew their
By order served February 14, 1966, Examiner Hagerty found that
Poole was not a new competitor for the subject traffic and there
was a need for the continuance of its service. Exceptions and
replies were filed. Thereafter, on June 22, 1966, Operating
Rights Review Board Number 2 reversed the Order of Examiner
Hagerty and ordered that the application be denied. 103 M.C.C.
906 (1966). Poole filed a Petition for Reconsideration of the
Order of the Review Board. By Order served October 11, 1966,
Division 1, acting as an Appellate Division, denied Poole's
petition for reconsideration.
On October 24, 1966, Poole filed a petition seeking a
determination that the proceeding involved an issue of general
transportation importance. This petition was denied by the
Interstate Commerce Commission on November 8, 1966.
Around January 24, 1967, Poole filed an action, in the United
States District Court for the Southern District of Alabama
entitled Walter Poole, an individual d/b/a Poole Truck Line,
Evergreen, Alabama v. United States of America and Interstate
Commerce Commission, Civil Action No. 4423-67-P, in order to set
aside the June 22, 1966, order of the Operating Rights Review
Board. By order of May 2, 1967, the Interstate Commerce
Commission, on its own motion, vacated the order of the Review
Board and reopened the proceeding for reconsideration on the
present record. Six days later, the Alabama federal case was
stayed on motion of the defendants, pending further
On August 9, 1967, the Commission, with three Commissioners
dissenting, adopted the statement of facts and conclusions of the
examiner as its own and granted the amended application. 105
M.C.C. 511 (1967).
Petitions for reconsideration, to which Poole relied, were
filed by Home, Ringle, and the railroads. By order served May 13,
1968, the Commission amplifying its report, denied the petitions.
A certificate of public convenience and necessity under which
Poole has been operating, was issued on June 14, 1968. Poole's
motion to dismiss his action before the District Court in Alabama
was granted on July 23, 1968.
The instant action was filed by the North Western, Milwaukee,
Rock Island and I.C. as plaintiffs. Home and Ringle became
intervening plaintiffs. Poole joined the United States and the
Interstate Commerce Commission as an Intervening Defendant. On
May 18, 1969, the assets of Walter Poole d/b/a Poole Truck Line,
including this Subject Certificate (Sub. 105) were transferred to
Poole Truck Line, Inc. with the approval of the Interstate
Commerce Commission in Docket No. M.C.F.C. 71243.
The first question presented by the plaintiffs is whether the
Commission properly reopened the proceeding for reconsideration
on the present record. The question raises two issues: whether
the Commission, on its own motion, could reopen the proceeding at
all and assuming that a reopening is permissible, whether
additional notice and hearing was required before the Commission
announced its decision.
Our inability to join the majority opinion stems from our
belief that neither 49 U.S.C. § 17(7) nor the cited cases nor any
other rationale clearly compels a conclusion that the Commission
has continuing jurisdiction at any time to alter an Appellate
Division's order. In its entirety, Section 17(7) reads as
(7) If after rehearing, reargument, or
reconsideration of a decision, order, or requirement
of a division, an individual Commissioner, or board
it shall appear that the original decision, order, or
requirement is in any respect unjust or unwarranted,
the Commission or appellate division may reverse,
change, or modify the same accordingly. Any decision,
order, or requirement made after rehearing,
reargument, or reconsideration, reversing, changing,
or modifying the original determination shall be
subject to the same provisions with respect to
rehearing, reargument, or reconsideration as an
The fullest analysis of this section may be found in
Transamerican Freight Lines, Inc. v. United States, 258 F. Supp. 910,
913-919 (D.Del. 1966). In that case, a three-judge Delaware
panel dissected 49 U.S.C. § 17 and concluded that the statute
distinguished between a "division" and an "appellate division."
It found that while a decision of an individual Commissioner, a
board, or a division could be reconsidered by an appellate
division or the Commission, and a
decision of the Commission could be reconsidered by the
Commission, no provision was found for reconsideration by the
Commission of a decision of an appellate division. Thus, the
Court decided that the Commission lacked the power to review a
decision of one of its appellate divisions.
The majority has dismissed Transamerican's interpretation as
dicta. However, whether or not Transamerican's position lacks the
force of precedent in no way affects the vitality of its logic.
We may think it anomolous that an appellate division should not
be considered the functional equivalent of a Commission, see
Resort Bus Lines, Inc. v. ICC, 264 F. Supp. 742 (S.D.N.Y. 1967),
and that the Commission could review an order of itself and every
subsidiary body but not review that of an appellate division.
Nevertheless, that is the way that the statute is written and
that is apparently consistent with the Congressional intent.
Transamerican Freight Lines, Inc. v. United States, 258 F. Supp. 910,
916-919 (D.Del. 1966).
Not surprisingly, the Commission has rejected the reasoning of
the Transamerican case. See Eazor Express, Inc.,-Purchase-Fleet
Highway Freight Lines, Inc., 101 M.C.C. 719, 720-21 (1967). This,
in itself, is not controlling, for it is the role of the
judiciary and not of self-serving administrative bodies to
construe the law.
In the report which gave rise to the instant action, the
"This Commission has continuing jurisdiction over its
orders which enables it to reconsider, modify, or
rescind the orders on its own motion at any time
prior to the issuance of a certificate of public
convenience and necessity. See Eazor Exp.,
Inc.-Purchase-Fleet Highway Freight, 101 M.C.C. 719,
and Resort Bus Lines, Inc. v. Interstate Commerce
Commission, 264 F. Supp. 742 [(S.D.N.Y.)]." 105 M.C.C.
Defendants and the majority opinion rely on Resort, 264 F. Supp. 742
(S.D.N.Y. 1967), and Eazor, 101 M.C.C. 719 (1966), as well.
In the Eazor matter, applicant filed a petition for
authorization to purchase certain operating rights, which
application was approved by the hearing examiner. Division 3
reversed that order and imposed restrictions on the desired
authority. The same division then denied applicant's petition for
reconsideration. While the Commission subsequently denied
applicant's petition for a finding that the proceeding involved
an issue of general transportation importance, on its own motion,
it reopened the proceedings on the existing record. It said:
"This Commission believes that the limitation in the
statute and the rules issued pursuant thereto is a
limitation upon the right of a party to seek
reconsideration but in no way runs to the power of
the Commission to reconsider. The right of an
administrative body to reconsider at any time is
inherent in the power to decide and is a necessary
procedure in order to permit an administrative agency
to carry out properly its functions under the
enabling statutes. If we were precluded from
correcting the error that, as is hereinafter shown,
we find was promulgated in the prior report, justice
would be thwarted and would only result in imposing a
totally unnecessary burden on a reviewing court to
remand the proceeding to us for reconsideration.
Despite the desirability of finality, the public
interest demands that the right result be reached.
Cf. Erie R. Co. vs. United States, 64 F. Supp. 162,
1963 (1945); Shein vs. United States, 102 F. Supp. 320,
323, affirmed 343 U.S. 944 [72 S.Ct. 1043, 96
L.Ed. 1349]." 101 M.C.C. at 720.
The Commission suggested that there is a difference between
administrative finality for the purpose of judicial review and
with respect to the jurisdiction of the Commission over its own
"In amending section 17(6), Congress has provided a
procedure to permit
more expeditious handling of cases by the Commission.
Simply because the Commission sought to achieve
expedition by prescribing rules limiting the right of
parties to apply for reconsideration, thus permitting
compliance with the requirement that all
administrative remedies be exhausted before judicial
review could be obtained does not mean that the
Commission is foreclosed from taking further
administrative action. The provisions of the
Interstate Commerce Act pertinent here, section
16(6), 17(6), 17(7), 205(h), and 221(b), give this
Commission a continuing jurisdiction over its orders
and empowers it to reconsider and rescind, change or
modify them on its own motion at any time. Alamo
Express, Inc. v. United States, 239 F. Supp. 694,
697-98 (1965); affirmed 382 U.S. 19 [86 S.Ct. 83, 15
L.Ed.2d 14] (1965); Sprague v. Woll, [7 Cir.,]
122 F.2d 128, 130-31 (1951); certiorari denied
314 U.S. 669 [62 S.Ct. 131, 86 L.Ed. 535]; Baldwin v. [Scott
County] Milling Co., 307 U.S. 478, 484, [59 S.Ct.
943, 83 L.Ed. 1409] (1939); and Froeber-Norfleet v.
Southern Ry. Co., 9 F. Supp. 409, 410-11 (1934).
Congress was well aware of these provisions of the
act when section 17(6) was amended and never sought
to amend them in any fashion. Had Congress intended
to limit reconsideration by the entire Commission, it
would have so provided in explicit language. Since
there can be no repeal of express powers by
implication, our continuing jurisdiction over orders
and our power to reach a proper result remains
unimpaired. [New York] New Haven [& Hartford] R.R. v.
Interstate Commerce Commission, 200 U.S. 361, 401 [,
26 S.Ct. 272, 50 L.Ed. 515]; United States v. Amer.
Trucking Ass'ns, 310 U.S. 534, 549, [60 S.Ct. 1059,
84 L.Ed. 1345]. Moreover, it is to be noted that a
certificate has not been issued in this proceeding
and that this Commission not only has the right but
sometimes the duty to reopen a pending proceeding at
any time prior to the issuance of a certificate.
United States vs. Rock Island [Motor Transit] Co.,
340 U.S. 419, 445, 447-48 [, 71 S.Ct. 382, 95 L.Ed.
101 M.C.C. at 720-21.
In Resort, a Review Board reversed an examiner's recommendation
of a grant and denied the application, which denial was affirmed
on petition for reconsideration by Appellate Division 1.
Following another petition for reconsideration by the applicant,
Appellate Division 1 reopened the proceeding on the existing
record, reversed itself and granted the application. See Mountain
View Coach Lines, Inc., Extension — Poughkeepsie, 100 M.C.C. 24,
25 (1965). In federal court, plaintiff Resort contended that the
Appellate Division lacked jurisdiction to reconsider and reverse
its original decision and order. The court said:
"* * * While it is true, as Resort contends, that no
section of the Interstate Commerce Act (Act) states,
in haec verba, that an Appellate Division may
reconsider its own actions, we believe that it has
the power to do so, at least prior to the time that
an actual certificate of convenience and necessity
has been issued."
264 F. Supp. at 744-745.
After briefly reviewing 49 U.S.C. § 16(6), 17(1), 17(6), and
321(b), it continued with:
"These provisions have been interpreted as giving the
Commission continuing jurisdiction to suspend,
reconsider or modify its orders, see e.g., Alamo
Express, Inc. v. United States, 239 F. Supp. 694
(W.D.Tex.), aff'd per curiam, 382 U.S. 19, 86 S.Ct.
83, 15 L.Ed.2d 14 (1965); United States v. Interstate
Commerce Commission, 221 F. Supp. 584 (D.D.C. 1963),
even in the absence of a petition for
reconsideration, see Sprague v. Woll, 122 F.2d 128
(7th Cir. 1941), cert. denied, 314 U.S. 669, 62 S.Ct.
131, 86 L.Ed. 535 (1942). And the Supreme Court has
stated that `the certificate is the final act or
order that validates the operation. Until its form
and content are fixed by delivery to the applicant,
the power to frame it in accordance with statutory
directions persists.' United States v. Rock Island
Motor Transit Co., 340 U.S. 419, 448, 71 S.Ct. 382,
398, 95 L.Ed. 391 (1951)."
264 F. Supp. at 745.
Both Eazor and Resort are factually distinguishable from the
instant case. While in Eazor and the instant case the Commission,
on its own motion, reopened the proceedings on the present
record, in Eazor a petition, albeit for another purpose, was
before the Commission, while here the Commission had apparently
completed its work six months prior to reopening the case. Unlike
Resort, this is not a situation where an Appellate Division
reconsidered one of its own orders upon receipt of a petition
from one of the parties. See 264 F. Supp. at 745 n. 5. Rather, the
full Commission, on its own motion, reviewed a decision of one of
its appellate divisions.
Both Resort and Eazor relied on Alamo Express, Inc. v. United
States, 239 F. Supp. 694 (W.D.Texas 1965), aff'd per curiam
382 U.S. 19, 86 S.Ct. 83, 15 L.Ed.2d 14 (1965). Here, again, the
Commission reversed a prior order and granted an application
which had first been denied.
"The Interstate Commerce Act itself gives the
Commission a continuing jurisdiction over its orders,
thereby allowing it to modify and even rescind a
great number of them at any time, Sections 17(6),
17(7) and 221(b) of the Interstate Commerce Act.
There appears to be no such cut-off date, after which
the Commission could not rescind or modify its
orders, as is found in the National Labor Relations
Act, 29 U.S.C. § 160(e) which prevents such
action by the agency after the filing of the
administrative transcript with the reviewing
court * * *."
239 F. Supp. at 697-698.
Yet, this case is also factually distinguishable for the
Commission had specifically delayed the effective dates of its
original orders and allowed for the filing of petitions for
reconsideration. Id. at 698. See Tri-B Corporation, Shelby, Iowa
v. ICC, 253 F. Supp. 715 (1966). Baldwin v. Scott County Milling
Co., 307 U.S. 478, 484, 59 S.Ct. 943, 83 L.Ed. 1409 (1939) and
Sprague v. Woll, 122 F.2d 128, 130-131 (7th Cir. 1941) can be
distinguished similarly as cases in which proceedings were
reopened on the petition of a party or on the basis of petitions
in similar proceedings.
In sum, we think the logic of Transamerican compels a decision
that the Commission has no power to review a decision of an
Appellate Division. Moreover, even if one accepts a judicial
amendment to Section 17(7) to allow such review or if one
construes the administrative action in this matter to be a
reversal of the Review Board, and not an appellate division, a
further problem remains. While a number of cases deal with the
nature of continuing administrative jurisdiction, we find no
previous case has squarely presented the question of whether the
Commission, on its own motion and without any related or similar
matter before it, may reopen a proceeding. The statutes and the
rules, we think, deal exclusively with the right of a party to
petition the Commission, and do not deal specifically with the
right or prerogative of the Commission to act on its own
Now, while the majority has held that the Commission, on its
own motion, may reconsider and set aside a decision of an
Appellate division, it has also recognized that the Commission's
powers are not unlimited. See, e.g., Upjohn Co. v. Pennsylvania
R.R. Co., 381 F.2d 4 (6th Cir. 1967) (Commission may not
retroactively apply new policy after a three year lapse); Black
Ball Freight Service v. United States, 298 F. Supp. 1006
(W.D.Wash. 1969) (Commission may not reopen proceeding after
Court has stayed Commission order). Aside from its all
too easy disregard of the Transamerican case, the real difficulty
with the majority opinion is that it raises more problems than it
solves. In failing to establish standards to guide administrative
agencies, the opinion almost invites administrative
reconsideration every time an order is or is about to be
contested in court.
To suggest, generally, that the Commission may reconsider any
order at any time on its own motion prior to the issuance of a
certificate of public convenience and necessity is unwarranted.
While this would set some definite time for administrative
finality in cases where such a certificate was issued, in
situations such as the one which gave rise to this action, where
the application for such a certificate was rejected, the case
would remain openable indefinitely. Such a result would possibly
subject the Commission to continued and increasing pressures over
a long period of time to reconsider a particular problem. Other
than to correct "purely inadvertent ministerial errors," Upjohn
Co. v. Pennsylvania R.R. Co., 381 F.2d 4, 5 (6th Cir. 1967), we
would be more consistent if we found that a negative order by the
Commission rejecting an application for the requisite certificate
constituted administrative finality and foreclosed further
Commission consideration of the matter. Cf. City of Chicago v.
United States, 396 U.S. 162, 90 S.Ct. 309, 311-312, 24 L.Ed.2d
340 (1969). That is, a firm decision regarding the certificate,
whether positive or negative, would both permit redress in the
courts and preclude further administrative consideration, whether
initiated by the parties or by the Commission. If one does not
choose such a clearly defined point of finality then one is faced
with a dilemma which has been phrased as follows:
"Re-examination and reconsideration are among the
normal processes of intelligent living. Admittedly no
warranty of correctness or fitness attaches to a
decision or an action simply because it is a thing of
the past. Every-day experience teaches the contrary:
while the choice first made may well remain the
course ultimately followed, often enough it is found
on further considereration to require revision. On
the other hand, constant re-examination and endless
vacillation may become ludicrous, self-defeating, and
ever oppressive. Whether for better or for worse so
far as the merits of the chosen course are concerned,
a point may be reached at which the die needs to be
cast with some `finality.' An opposition may thus
develop between the right result and the final one."
Weiss, Administrative Reconsideration: Some Recent Developments
in New York, 28 N.Y.U.L.Rev. 1262 (1953). See also, Civil
Aeronautics Board v. Delta Airlines, 367 U.S. 316, 81 S.Ct. 1611,
6 L.Ed.2d 869 (1961).
Some years ago, a recognized authority in the field of
administrative law, Professor Kenneth C. Davis, summarized the
questions to be resolved by an agency or the courts when faced
with this dilemma:
"When statutes are silent and legislative intent
unclear, agencies and reviewing courts must work out
the practices and the limits on reopening. The
consideration affecting reopening to take account of
new developments or of new evidence of old
developments often differ from those affecting the
correction of mistakes or shifts in judgment about
law or policy. Usually the search for a basic
principle to guide reopening is futile; the results
usually must reflect the needs that are unique to
each administrative task. Factors to be weighed are
the advantages of repose, the desire for stability,
the importance of administrative freedom to
reformulate policy, the extent of party reliance upon
the first decision, the degree of care or haste in
making the earlier decision, the general equities of
2 Davis, Administrative Law Treatise Ch. 18, §
18.09, at 607 (1958).
Even if one accepts the distinction between administrative
finality for the purpose of pursuing judicial remedies and
administrative finality for the purposes of further internal
administrative action, we think it clear that repose and
stability are to be accorded the greatest weight in this system
of administrative law. The majority opinion encourages neither.
Nor is it clear that judicial economy is achieved by permitting
reconsideration on the Commission's own motion. As is amply
demonstrated by this case, if reconsideration is allowed, the
federal courts will undoubtedly be asked to decide whether such
reconsideration is appropriate in each factual situation. Indeed,
allowing reconsideration would be doubly oppressive on the courts
for a judicial decision would have to be made on the issue of
reconsideration as well as on the merits of the Commission's
Conversely, in the typical situation, restricting
administrative "self-correction" will not result in any
uncorrectable injustice. If the Commission's error is serious,
that is, not based on substantial evidence, then the aggrieved
party may gain relief in court. If the matter before the
Commission is closely contested and different results may be
reasonably said to be based on substantial evidence, allowing the
Commission to change its mind achieves little in regard to
administrative justice or better interstate commerce, though it
obviously has a serious effect on the immediate parties. In sum,
once an administrative decision is final enough to be judicially
cognizable, then major administrative errors can be corrected
under the substantial evidence doctrine and minor errors or
changes of evaluation are not sufficiently important to require
or permit renewed administrative consideration.
We would agree with the majority that in this case there is no
real indication that any party relied to its detriment on the
original order. However, the absence of a clear harm does not
outweigh the disadvantages to the system which we see in
permitting the Commission, on its own motion, to reopen a matter
which has been closed for six months.
In this particular case, moreover, there is no indication that
the earlier decision was not based on a careful study of the
situation. While the Commission may never have been required to
apologize for correcting an error, in contrast to the majority
viewpoint, we think that the Commission should state why its
previous decision was incorrect and what prompted the
reevaluation. Openness, not secrecy, should be the rule.
Otherwise, such reconsiderations, if they continue, will only
foster justified skepticism concerning the integrity of the
administrative decisional process.
Were we to reach the merits of this action, we would agree that
the Commission's latest decision is supported by substantial
evidence. Had the original decision been before us, in view of
the limited review powers which a court possesses, City of
Chicago v. United States, 300 F. Supp. 115, 118 (N.D.Ill. 1969),
we might have found that the opposite decision also was supported
by substantial evidence. All of this reinforces our belief that
the Commission's reconsideration produced an inordinate amount of
waste of administrative and judicial time and money with little
effect on the smooth operations of interstate commerce. Whether
one adopts Transamerican or weighs the factors set forth by Prof.
Davis, such a result is not justified.
MAROVITZ, District Justice (dissenting):