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Rogers Cartage Co. v. United States

decided: March 27, 1979.


On Petition for Review of Orders of the Interstate Commerce Commission.

Before Tone and Wood, Circuit Judges, and East, Senior District Judge.*fn*

Author: Wood

Petitioners seek review of orders of the Interstate Commerce Commission in dockets, MC-F-12207. Ruan Transport Corp. Purchase Harold Waggoner & Co., and MC-107496 (Sub. No. 951) Ruan Transport Corp. Common Carrier Application, consolidated proceedings. 122 M.C.C. 777 (1977); 127 M.C.C. 52 (1977). In the first docket the Commission allowed Ruan to purchase certain contract carrier permits of Waggoner and in the second granted Ruan's application to convert the purchased contract carrier operating permits to common carrier operating certificates pursuant to 49 U.S.C. ยงยง 5 and 307. We affirm the Commission.

As a contract carrier Waggoner holds authority to transport, with restrictions, various liquid chemicals in bulk over irregular routes from St. Louis, Missouri, and East St. Louis, Illinois, to points in a block of 30 states. Waggoner's authority was derived from three sources: (1) a base permit allowing service to 15 states and unrestricted as to the shippers that could be served, (2) a Sub-No. 5 permit authorizing service to 15 additional states but restricted to service under a contract with Monsanto Chemical Co., and (3) a Sub.-No. 6 permit authorizing the transportation of pentachlorophenol from St. Louis and East St. Louis to destinations in 20 states restricted to service under contracts with Wood Treating Chemicals Co. and Associated Sales and Supply Co. The Commission determined that this last permit was dormant and not transferable. That determination is not directly an issue in this appeal.

The Administrative Law Judge in 1976 granted both the purchase application and the conversion subject to a determination in a later proceeding as to Ruan's "fitness" as a common carrier.

Division 3 of the Commission approved Ruan's certification in 1977, but modified the authority granted by the Administrative Law Judge. Ruan Transport Corp. Purchase Harold Waggoner & Co., 122 M.C.C. 777 (1977). Waggoner's traffic abstract from January 2, 1973, to March 14, 1974, indicated that there were no shipments to two destination states in the base permit, no shipments to 10 destination states in the Sub.-No. 5 permit, and no shipments to any states in the Sub.-No. 6 permit. Saying a clear showing of public convenience and necessity was required for conversion from contract to common carrier authority, the Commission declared:

An applicant must demonstrate a need for the entire proposed service, not simply some portion of it. . . .

In the instant proceeding, the record does not support a grant of authority coextensive with the permits held by Waggoner. Waggoner, clearly, did not serve a significant number of its destination states . . . .

In our opinion, statements that a proposed service might be utilized, are insufficient to demonstrate a need.

122 M.C.C. at 781. The division then sliced off the 12 destination states in Waggoner's base and Sub.-No. 5 permits in which no shipments were made and the entire Sub.-No. 6 permit. The Commission also determined that Ruan's certification as modified should be granted Instanter.

After petitions for reconsideration were filed by the applicants and several competing carriers, Division 3 of the Commission, acting as an Appellate Division, determined that the prior decision was erroneous. Ruan Transport Corp. Purchase Harold Waggoner & Co., 127 M.C.C. 52 (1977). The Commission adopted a "liberal approach" and employed a two-step process to determine whether the transaction was in the public interest. Id. at 54. First, the Commission considered whether under Section 5(2) of the Interstate Commerce Act the transfer was Consistent with public interest. Second, after concluding what part, if any, of Waggoner's authority was transferable, the Commission determined whether there was a sufficient showing of Public convenience and necessity to warrant the conversion from contract to common carrier authority. In the second decision the Commission announced:

Upon consideration, we conclude (1) that Waggoner's operating rights . . . have been actively used and are, therefore, transferable in their entirety, and (2) that public convenience and necessity require operation by Ruan as a common carrier under such rights.

Petitioners, opposing carriers, thereafter sought review in this court of the final administrative order of the Commission.

Waggoner has been a contract carrier transporting a limited class of commodities at the call and demand of a limited number of shippers. Under such circumstances, we concur in the Commission's view that Waggoner's traffic abstract need not show service to every State within its authority during the test period, but only that the evidence reflect a representative showing of authorized service. During the period from January 2, 1973, to March 19, 1974. Waggoner handled 538 shipments of chemicals, in bulk, destined to 18 states, under its base and Sub.-No. 5 permits. In our opinion, based on the nature of the commodities transported and the type of service authorized, Waggoner has made the requisite representative showing that its authority under its base and Sub.-No. 5 permits was not dormant in whole or in part. A public interest determination includes consideration of whether or not the authority has been actively used. To determine dormancy the Commission in the exercise of its expertise applies a flexible ...

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