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And PAST:
T. I. McCormack Trucking Co. v. U.S.
251 F.Supp. 526 (D.N.J. 1966)
COOLAHAN, District Judge:
I.
Plaintiff,
T. I. McCormack Trucking Co., Inc., (McCormack) brings this action to
suspend, set aside and annul an Order of the defendant Interstate
Commerce Commission, entered March 26, 1962 in Docket MC-C 2998, T. I.
McCormack Trucking Co., Inc., Investigation and Revocation of
Certificate, 89 M.C.C. 5. That order required plaintiff to cease and
desist certain operations conducted under its certificate of public
convenience and necessity known as the ‘Sub 70 Authority.’ The
Commission charged these operations exceeded the territorial authority
allowed by the certificate.
II.
The
nub of this dispute is the interpretive question raised by the
Commission's construction of the following portion of the Sub 70
Certificate, which permits transportation of certain commodities:
‘Between points in Connecticut, Pennsylvania, New Jersey and New York within 100 miles of Columbus Circle,
New York N.Y., on the one hand, and on the other, points and places in
Connecticut, Delaware, Maryland, Massachusetts, Pennsylvania, New
Jersey, New York and Rhode Island.’
The specific question at issue is whether the underlined phrase ‘within 100 miles of Columbus Circle, etc.,’ modifies only the State of New York, as urged by McCormack, or all of the States in the preceding series, as concluded by the Commission.
Plaintiff,
a New York Corporation having its main office in New Jersey, has
operated since 1949 as a common carrier by motor vehicle of liquid
commodities in bulk pursuant to various certificates of the Commission,
and today operates in approximately 26 states. The Sub 70 Certificate
was issued in 1948 in Docket No. MC-52458 to the T. I. McCormack
Trucking Co., Inc., and obtained along with the corporate stock by the
present owner who has continuously operated the corporation ever since.
The authority granted in the certificate was not disputed until 1952. Then, in four proceedings during the next seven years in which McCormack protested pending awards to its competitors, various
Divisions of the Commission indicated that McCormack's base territory
did not include any points in Pennsylvania, New Jersey, New York or
Connecticut, which were situated in excess of 100 miles from Columbus Circle.
The
Commission decision and Order which plaintiff now challenges resulted
from three further proceedings that were consolidated and heard together
on May 23, 1960, 89 M.C.C. 5. Two proceedings dealt with applications
by McCormack itself for new certificates.The third was an investigatory proceeding instituted by the Commission
under Sections 204(a) and 212(a) of the Interstate Commerce Act, (the
Act) after McCormack's ‘fitness' had been challenged in the application
proceedings. It had been alleged that McCormack was engaging in forhire
transportation in Interstate Commerce in violation of Sec. 206(a) of
the Act.
Following
the consolidated hearing, the examiner held McCormack to be in
violation of Sec. 206 supra, and recommended that it be ordered to cease
using as base points any places in Pennsylvania, New Jersey, New York
or Connecticut which were more than 100 miles from Columbus Circle. For reasons discussed below, the Commission agreed with his interpretation and entered such an order.
From
that decision, plaintiff appeals, contending it is so unreasonable,
arbitrary, and lacking support in the record evidence and applicable law
that this Court should set it aside. Plaintiff further contends that
the Commission's erroneous interpretation operates to rescind part of
his certificated authority, thereby depriving him of a property right
contrary to Section 212 of the Act, 49 U.S.C. § 312. Plaintiff asks us
to reverse the decision below and to declare his operations to be within
the territorial prescription of the Sub 70 Certificate. In the
alternative, plaintiff asks us to remand this matter to the Commission
for further consideration in accordance with our opinion.
III.
The ultimate question before the Court is a simple one: Namely, to how many States does the restriction, ‘within 100 miles of Columbus Circle’
refer? However, that question is complicated by a threshold dispute
over the Commission's procedure. The Commission resorted to matters outside
the four corners of the certificate to aid its interpretation.
McCormack contends that this resort contravened the Commission's own
well-established rule for construing permits and certificates.
[1]
The rule in question arose from the need to protect legitimate
expectations based on Commission actions. In order to afford the
certainty and continuity essential for both carriers and the shipping
public in such an extensively regulated industry, reliance on the
language of an operating certificate must not go unrequited.
Accordingly, absent a patent ambiguity on the face of the document, the
Commission will not permit reference to extraneous matters to show that
the service apparently permitted by the terms of the certificate in fact
exceeds the authority actually granted. Andrew G. Nelson, Inc. v. United States, et al, 355 U.S. 554, 558, 78 S.Ct. 496, 2 L.Ed.2d 484 (1958).
The Commission delineates the extent of this rule in its Report, 89 M.C.C. at 9.
‘One
cardinal rule is that the certificate must speak for itself. In the
absence of patent ambiguity the Commission refuses to consider
extraneous matters, including the record which gave birth to the
certificate in question. And this rule is followed regardless of
whether the practical result is to confer upon the carrier more or less
authority than may have been intended to be granted originally.
(Citations omitted) * * * Moreover, the Commission has consistently held
that a validly issued certificate may authorize transportation * * *
not contemplated at the time (it was granted) Jones, Interpretation of
Certificate, 64 M.C.C. 527, and service within a larger territory than
intended * * * Wright v. Central Freight, 66 M.C.C. 396. As pointed out
by the Commission in Manhattan Coach Lines, Inc. v. Adirondack Transit
Lines, Inc., 42 M.C.C. 123, 126. Any other rule would contribute an
intolerable uncertainty to the finality of any right granted.’
(Emphasis added).
Our starting
point, then, is the propriety of the Commission looking behind this
certificate rather than relying solely on its language. The
Commission's grounds for adopting the disputed procedure and not
following the aforementioned rule were based on its decision that the
certificate was ambiguous as set forth in its Report, 89 M.C.C. at pp.
8-16.
The Commission weighed
three possible conclusions: (1) that the certificate is clear and
unambiguous in applying the 100 mile limitation to New York State alone.
(McCormack's position throughout this litigation); (2) that the
certificate is clear and unambiguous in applying the 100 mile limitation
to all the named states (the position of the Examiner); and (3) that
the certificate is ambiguous since the limitation can reasonably be
construed to apply either to New York State alone or to all the named
States. 89 M.C.C. at 8.
The
Commission rejected both position (1) and (2) and, choosing alternative
(3), found the certificate sufficiently ambiguous to warrant consulting
antecedent records.
McCormack had offered three reasons for finding the certificate unambiguous.
First,
McCormack argued that the Commission should not contradict Commission
statements by examiners in earlier litigation to the effect that the Sub
70 Certificate was free from any ambiguity.The Commission dismissed this argument on the grounds that the scope
of the Sub 70 Certificate was only a collateral issue in those cases and
that since it was not fully litigated then, their holdings were not
controlling.
Second,
McCormack offered expert witnesses including a linguist and several
lawyers with long experience before the Commission who argued in support
of its
interpretation. The Commission conceded the competency of their
testimony and even spent some time defending it against criticism by the
Board of Inquiry. But the Commission still found the certificate
ambiguous.
McCormack's main
argument was that proper application of the rules of grammar normally
used by the Commission clearly compelled upholding McCormack's
interpretation of the certificate and thereby precluded a finding of
ambiguity.
McCormack relied
primarily on a grammatical principle of statutory construction known as
the ‘Doctrine of the Last Antecedent’. As the Commission explained it
at 89 M.C.C. 13:FN5
FN5. The Commission's footnotes as numbered in the quoted passage are:‘According to the doctrine of the last antecedent, relative words, phrases, and clauses are applied to the words and phrases immediately preceding 4 and should not be construed as extending to more remote words or phrases unless such extension is clearly required by the context of the language in question. 50 Am.Jur. Statutes, Sec. 269 (1944). Where a comma separates a modifying clause from the word or clause immediately preceding, the presence of the comma is an indication that the modifying clause was intended to modify all the preceding clauses and not merely the last antecedent clause. * * * No such comma separates ‘within 100 miles of Columbus Circle, N.Y.’ from the last antecedent, ‘New York’ in McCormack's Sub 70 Certificate.'‘(3) Within 100 miles of Columbus Circle, N.Y.(4) New York(5) Connecticut, Pennsylvania, New Jersey.'
The
Commission admitted the general applicability of the doctrine to
language of the type before it. However, the Commission refrained from
using the doctrine in this instance because it concluded from the case
law that the doctrine should be employed only after language had already
been found ambiguous on the basis of more direct evidence. ‘The
ambiguity of the language in question is at least impliedly recognized
by resort to legislative history, the probable purpose of the
legislature, considerations of public policy, or judicial notions of
common sense.’ 89 M.C.C. at 15.
The
Commission further noted that the doctrine seldom was decisive in
construing a statute, and was rebuttable by a very slight indication of
contrary intent. Ibid. Therefore, the Commission resorted to the prior
record after finding the certificate ambiguous. The Commission admitted
that the propriety of thus looking behind the certificate hinged on the
soundness of its conclusions about the Doctrine of the Last Antecedent.
It then reasoned that if the certificate was ambiguous enough to allow
use of the doctrine of the last antecedent, it was also ambiguous
enough to warrant resort to the document's ‘legislative history.’ Id.
at 16.
On the basis of the
record in the original certification proceeding, the Commission found
that the plaintiff's predecessor-in-interest neither applied for, nor
produced evidence for, nor expected, nor believed it received at that
time the authority plaintiff now claims. Ibid.
However,
the Commission added that ‘If such an examination (of the certification
proceeding) did not clearly reveal the actual intent of the Commission,
we would be obliged to find the doctrine of the last antecedent
controlling, there being no other relevant guide to interpretation.’
(Emphasis added) Ibid.
On the
basis of its findings, the Commission concluded that the 100 mile
limitation in the certificate does modify all the named States and that
operations thereunder must be so limited.
IV.
[2] [3] The appropriate dimensions of this Court's scrutiny in reviewing Commission Orders is well established. The *532
Court will not
set aside or modify such orders if they are taken within the scope of
the Commission's statutory authority, are not completely unreasonable,
and are based on adequate findings supported by substantial evidence
from the record. United States v. Pierce Auto Freight Lines, 327 U.S. 515, 535-536, 66 S.Ct. 687, 90 L.Ed. 821 (1946).
Moreover, if there is warrant in the law and the facts for the
agency's action, we must be careful not to set it aside ‘simply because
we might have reached a different conclusion on the same record. We
must give due credit to the expertness of the Commission in the field
Congress has confided to it.’ National Bus Traffic Association v. United States, D.C., 143 F.Supp. 689, 695-696 (1956) (3 Judge Court, Third Cir., per Chief Judge Biggs), aff'd. 325 U.S. 1020, 77 S.Ct. 589, 1 L.Ed.2d 595.
The
defendant seeks to extend this familiar restriction on our scope of
review. view. They urge that particular solicitude should be given to
the Commission's interpretation of its own certificates. Several cases
are cited wherein courts explicitly refrained from voiding Commission
orders for reasons of ‘semantic preference and composition,’
(Defendant's Brief p. 11 and cases cited therein). See infra, note 11.
However, we think those holdings can be more fully understood as bearing
on the substantive questions of interpretation to which we now turn.
McCormack's first two arguments to the Commission in regard to the Certificate's ambiguity may be dealt with briefly.
[4]
We accept the Commission's conclusion that earlier Commission reports
stating the certificate was ‘unambiguous' are not controlling since they
discussed the issue only collaterally. There is an even more
conspicuous difficulty with the plaintiff's attempt to use those earlier
cases. The examiners therein only found the certificate unambiguous
after finding that it clearly meant the exact opposite of the
interpretation plaintiff now advances. That is to say the examiners had
construed the Sub 70 authority to clearly restrict McCormack's
operations in precisely the same measure as the Order plaintiff has
challenged. Plaintiff, in effect, is asking the Commission to
contradict the real thrust of these decisions in the guise of requesting
they be followed on the question of ambiguity; the request was properly
denied.
[5]
Second, in regard to the plaintiff's expert witnesses, the Commission
was bound to consider such evidence where competent. But the Commission
is also clearly free to ‘disbelieve or disregard any evidence as it
seems unconvincing; it may give as much or as little weight to the
evidence as it seems proper.’ (Citing Cases). Loving v. United States, 32 F.Supp. 464, 467 (W.D.Okla.1940) aff'd. 310 U.S. 609, 60 S.Ct. 898, 84 L.Ed. 1387.
In this instance, the Commission far from disregarding the testimony,
considered it meritorious, though not conclusive. Therefore, we must
defer to the Commission's evaluation and use of that evidence unless we
find the Commission's other bases for its conclusion insufficient.
We
turn to McCormack's main contention, namely, that the Commission erred
in finding sufficient ambiguity to consult the prior record. McCormack
argues that the Commission: (1) misapplied the Doctrine of the Last
Antecedent; and (2) ignored the more fundamental rules of grammar and
punctuation applicable to such language.
The
Government's reply is also twofold. First, they contend that the
Doctrine was properly subordinated to the legislative history of the
certification record. Second, it is argued that even if other rules of
punctuation and grammar should have been given more weight, the courts
consistently refuse to overturn a Commission's interpretation of its own
certificate on such grounds.
[6]
Both parties continue to discuss the Doctrine and the rules of
punctuation and grammar separately. This has produced considerable
confusion as to whether we are dealing with only one *533
or with several
different rules of construction. Fortunately, the confusion is
unnecessary. At bottom, the Doctrine of the Last Antecedent and those
‘additional rules of punctuation and grammar’ urged by McCormack are one
and the same.FN6
The fact that these grammatical aids have been gradually ensconced as a
canon of statutory construction should not obscure the identity between
the two forms. In either case we simply have the long standing rule
that a modifying phrase refers only to the last antecedent phrase or
word which it can reasonably modify. The rule of punctuation is merely a
supplementary guide which tells us that if the modifier is intended to
relate to more than the ‘last antecedent’, a comma is used to set off
the modifier from the entire series. Therefore, the following
discussion applies equally to the Doctrine and to the rules of grammar
and puncuation per se.
As
noted previously, the Commission thought the applicability vel non of
the Doctrine was decisive in this proceeding but concluded that it could
only be used after the disputed language had already been deemed
ambiguous and more direct tools had failed. See p. 8 supra. The
Government argues McCormack is now hoist by its own petard; if there was
sufficient ambiguity to apply the Doctrine, then there also was
sufficient ambiguity to resort to the prior record without violating the
Commission's procedural rules. The final thrust of this argument is
that once that record was properly admitted, its indication of the
intended scope of authority superceded any contrary result suggested by
the Doctrine. ‘Such rules of grammar must yield to the intention of the
Commission which was found in the record of the certification
proceeding.’ Defendants' Joint Brief, p. 19.
[7] [8]
The Government repeatedly stresses this contrast between the inferior
position normally accorded rules of punctuation and grammar in statutory
construction and the paramount role accorded the statute's legislative
history. As a general rule, the whole context of a statute, including
the legislative history itself should be examined to determine the
drafter's intent. While the legislature is presumed familiar with the
ordinary conventions of wording, punctuation and grammar, it is clear
that many statutes are drafted with something short of perfection. The
legislative history, on the other hand, offers direct compelling
testimony of the intended meaning; where its use is appropriate, its
guide is paramount. Further, since the ordinary principles of statutory
construction apply to the interpretation of licensing certificates, the
‘legislative history’ of a certificate controls in most instances. 89
M.C.C. at 10.
However, in the
case sub judice, the authority offered by defendants for this
proposition, misses the point by ignoring the very source of the
controversy before us: the Commission's own rule strictly limiting use
of ‘legislative history.’
[9]
Canons of statutory construction have sometimes been developed to
promote objectives of our legal system which transcend the wishes of a
particular legislature; similarly, rules adopted by the Commission for
construing certificates are based on policies which may sometime
transcend the intent of a particular certification proceeding. The
Commission has said so itself in explaining the rule in question. See
p. 530, supra. This cardinal policy of refusing to consult prior
records cuts across the usual sequence of interpretive tools. That
sequence is not sacrosanct; in the face of a concrete overriding policy,
it should not be applied mechanically to constrain the interpreter.FN7
*534
In considering
the ambiguity of the Sub 70 Authority on its face, the prior record was
simply not available. And since no other guides were available, the
usually subordinate rules of grammar were perfectly proper and pertinent
aids in interpretation. In fact, the Commission recognized their
pertinency in its rejection of the Bureau of Inquiry's claim that the
certificate unambiguously contained a broader restriction. ‘Adoption of
the Bureau's position would be tantamount to a finding that the
Commission consistently flouts accepted rules of grammar in framing
grants of operating authority. Any such finding would be contrary to
fact.’ 89 M.C.C. at 11. Surely it is not contended that the ordinary
rules of grammar and punctuation entailed in the Doctrine of the Last
Antecedent are not logical tools to utilize in one's initial reading of
disputed language.
Moreover,
such indications of the normal reading to be given the certificate are
precisely what a layman shipper would rely on in his operations. It
must be remembered that the importance of vindicating such reliance is
the basis of the rule requiring patent ambiguity before admitting prior
proceedings.
The earlier
opinions which the Commission relied upon, to the effect that the
Doctrine of the Last Antecedent can only be used as a last resort on
language already judged ‘ambiguous', must be read in light of the above
analysis. Normally, there is no bar (as exists here) to immediately
consulting the legislative history. Since the history would control in
case of a conflict, these decisions held that the Doctrine need not be
utilized until more important tools fail and the language remains
ambiguous.FN8 Where the legislative history is inconclusive or otherwise unavailable, however, the Doctrine may indeed be dispositive. Kales v. City of Oak Park, 315 Mich. 266, 23 N.W.2d 658. In effect, this was the situation facing the Commission when it examined the certificate on its face.
[10]
Under such circumstances, we are of the opinion that a proper
understanding of the Doctrine of the Last Antecedent and the rules which
it comprehends required their application in the initial determination
of ambiguity.
The second half of
the Government's reply is based on the judicial self-restraint
traditionally exercised when the Commission's interpretation of a
certificate is challenged on grounds of grammar or punctuation.
Defendants'
brief cites many decisions in which the Courts refused to overturn the
Commission on such grounds. They argue these cases not only show the
slight weight to be given rules of composition, but also indicate that
even if the Commission gave them inadequate weight in the instant
matter, its conclusion should not be disturbed.
The
short answer to this is that the cited decisions fall within a category
from which the Commission itself has excluded the Sub 70 Authority
investigation. With one exception, these cases *535
dealt with
descriptions of the commodities which could be shipped, rather than with
the authorized territory of operations. The interpretation of such
‘commodity descriptions' is undeniably an area wherein the Commission's
great familiarity with customary trade usage and with industry-wide
understanding of prior Commission interpretations is critical. In the
cited cases, this expertise provided an independent basis of
interpretation apart from either the rules of grammar and punctuation,
on the one hand, or from express statements of the draftsman's intent,
on the other.
The
Commission's candid descriptions of the phrases here in dispute explain
why the normal reasons for deferring to its expertise in trade parlance
do not apply.
‘We realize that Dart and Pierce v. Converse, supra,
are not controlling precedents for the disposition of this proceeding
since strict adherence to the rules of grammar in those proceedings
would have been inconsistent with the Commission's settled practice of
using other terms in granting general commodities authority. As
previously indicated, there is no Commission policy with respect to
granting a larger or smaller origin territory under language similar to
that used in McCormack's certificate.) (Emphasis supplied).’ 89 M.C.C.
at 14.
Earlier, the Commission stated even more explicitly the ordinary nature of the disputed wording:
‘In addition to these general rules of construction, the Commission is *536
guided in its
interpretation * * * by the trade or other specialized usage of
particular words and phrases or by certain basic language in the
objectives of motor carrier regulation. The disputed language in
McCormack's certificate is nontechnical in nature. There is no apparent
reason for example, why a similar territorial description in a statute
or a contract should be given any different meaning, * * * no policy or
presumption favoring a liberal or strict construction for the purpose of
granting a larger or smaller quantum of operating authority. (Emphasis
supplied).’ 89 M.C.C. at 10.
Admittedly, the dispute in Burlington-Chicago Cartage v. United States and I.C.C., 178 F.Supp. 857 (S.D.Ill.1959)
also cited by the defendants, did not involve a commodities
description; it too dealt with a territorial description. The Court
felt that a decision to vacate the Commission's interpretation ‘must be
based on something more than preference in grammar and composition.’ 178 F.Supp. at 857.
But the Court in Burlington
was not faced with the question of a single sentence's punctuation.
Rather, the Commission had based its interpretation on the ordering and
relationship among several complex paragraphs describing technical
exceptions to the primary restrictions on Burlington's authority. The
Court found the decisions in Dart, and Converse, supra, controlling on the effect to be given the Commission's expertise in such matters.
In
summary, all of these cases presented questions of construction
peculiarly suited to the Commission's experience in drafting and
interpreting the language of the industry. No such problem is involved
herein; we must look elsewhere for some reasons supporting the
Commission in its avoidance of the normal grammatical reading of the
certificate.
IV.
[11]
In support of its view on the doctrine of the Last Antecedent and on
the overriding importance of legislative intent, the Commission advances
several further contentions. In weighing these contentions, however,
it must be remembered that a challenged Commission Order is under
review. Therefore, we must look first to the explanations of that Order
given in the Commission's own Report. The Government's attorneys, as
much as any other litigant, are entitled to justify that decision on its
appeal with whatever arguments they deem pertinent, but they will not
be heard to contradict the Commission's own explanation of its action,
nor to advance reasons which the Commission has expressly disavowed in
its Report. Viewed in that light, several of the grounds now advanced
to support the decision are untenable.
[12]
First, the Government argues ‘the fact that reasonable men differed
herein of the meaning of the limitation in plaintiff's certificate
indicates ambiguity sufficient to warrant consultation of the record in
plaintiff's application proceedings.’ Defendants' Joint Brief, p. 24.
The Government then attempts to distinguish several cases cited by
McCormack for the converse proposition that such disagreement is not a
sufficient indication of ambiguity. The Government's efforts are
misplaced. For the Commission itself made clear that it did not
consider such differences of opinion a basis for its finding that
ambiguity existed in a legal sense. 89 M.C.C. at 11.
Second,
the Government argues that although the Commission maintains it only
will look behind certificates which are patently ambiguous, ‘its
practice has been to make such reference in cases wherein the ambiguity
was perhaps less than patent.’ Defendants' Joint Brief, p. 12.
However, a moment's consideration of the policy underlying the
Commission's rule indicates why those cases are inapposite.
*537
In those instances,FN10
the Commission had initially decided on the basis of the Certificate
alone, that it was free from ambiguity and that it granted less
authority than the carrier claimed. Then, being particularly solicitous
of valid prescriptive rights, the Commission or the Courts still looked
to the underlying grandfather operations to see if the entire record
might offer the carrier more support. Thus, a rule designed to protect
relying carriers was momentarily sidestepped in order to afford them
even greater protection in cases where the carrier claimed more
authority than the certificate, on its face, seemed to give.
FN10. Andrew G. Nelson, Inc. v. United States, 355 U.S. 554, 78 S.Ct. 496; Sims Motor Transport Lines, Inc. v. United States, 183 F.Supp. 113 (N.D.Ill.1950), aff'd. 362 U.S. 637, 80 S.Ct. 1076, 4 L.Ed.2d 1019; Denver Chicago Transport Co. v. United States, 183 F.Supp. 785, aff'd. 364 U.S. 627, 81 S.Ct. 356, 5 L.Ed.2d 363.
In Andrew G. Nelson v. United States,
the Supreme Court concurred in the Commission's refusal to look behind
the certificate since it was not patently ambiguous. The Court then
added by way of dictum that ‘Even if such reference is made * * *,
however * * * that background in nowise supports appellant's (the
carrier) position.’ 78 S.Ct. at 499.
It was in reference to this passage from Nelson that the trial court in Sims Motor Transport
concluded ‘the Supreme Court does not appear to preclude the
possibility of going behind a certificate, even though it is not
considered patently ambiguous, which is exactly the case here.’ 183 F.Supp. at 117. In Sims,
the Commission had found the phrase ‘iron and steel products'
unambiguous, but it was similarly solicitous of the carrier's
‘grandfather operation’ claims:
‘Contrary
to the claims of respondent (Sims) there is nothing patently ambiguous
in the certificate which the appellant holds and for that reason there
was no necessity to go back to it in order to determine what was
intended. Nevertheless, we have done so, and * * * have found nothing
to suggest, even remotely any right to, or any intent to grant, any of
the commodities (at issue).’ 72 M.C.C. 355, 359 (1957).
Affirming,
the lower court emphasized that ‘the Commission's decision * * * is
reached independently by interpretation of the certificate face value,
while the treatment accorded the underlying background more or less
approximates the holding in the Nelson case.’ 183 F.Supp. at 118.FN11
FN11. It is also significant that the Sims case was cited in the Commission Report on McCormack for its decision that it could not look behind McCormack's certificate absent patent ambiguity, 89 M.C.C. at 9.
[13]
These circumventions of the Commission's own rule were largely
hypothetical and actually furthered the rule's policy of protecting the
carrier. They cannot fairly be used now as an authority for ignoring
the rule in the converse situation where it is the carrier who relies on
the certificate, and the prior proceedings are invoked to deny the
authority he claims.
The Government also cites Jones Truck Lines, Inc. v. United States 146 F.Supp. 697 (W.D.Ark.1956),
which in fact was a case of partial ambiguity. The Court there
sanctioned reference to award proceedings to interpret a territorial
restriction after finding that ‘Grammatically the questioned language
may not be ambiguous, but functionally it is.’ However, the Court had
first found that the disputed language ‘has no definite meaning until it
is compared with a map showing the location of these highways.’ 146 F.Supp. at 702.
(The Certificate allowed shipments from points ‘on and East of’ two
highways which crossed in the form of an X.) It would not seem, nor has
the Commission suggested, that the contested portion of the Sub 70
Certificate can be termed functionally ambiguous in this sense.
*538
Third, the
Government disputes the innocent purchaser status claimed by McCormack's
present owner. That claim is not decisive for the issues before us, but
it does bear on the weight to be given the Commission's rule limiting
resort to prior proceedings.
The
purpose of the rule is to facilitate reliance on the certificate. The
need of a bona fide purchaser to rely solely on the certificate without
having to peruse voluminous records is clearly greater than the
comparable need of an original applicant, who was party to the award
proceedings. See Jones & Jones, Interpretation of Certificate, 64
M.C.C. 527, 529. Of course, such a purchaser does not merit special
consideration if the certificate language presents such a glaring error
or inconsistency that he should be put on guard. But whatever its
ultimate interpretation, the Sub 70 Certificate is hardly of such a
nature.
In opposition to this
argument that the Order unfairly penalizes an innocent purchaser, the
Government charges bad faith on the part of McCormack's present owner.
It claims that his failure to seek a more favorable determination of his
authority despite the narrow construction given his certificate in the
aforementioned four earlier proceedings constitutes laches and, if
anything, makes him less entitled to the protective procedure in
question.
The best answer to
this charge of bad faith was given by the Commission in its Report.
Because the interpretations given in those earlier proceedings were
extremely conclusory, the Commission found that McCormack should not be
‘characterized as perfidious for refusing to accept what amounts to a
humpty-dumpty interpretation of its certificate.’ 89 M.C.C. at 12.
[14]
It is not incumbent upon a carrier to fully relitigate every suggested
derogation of its authority in collateral proceedings not directly
challenging its operations. In cases of chronic controversy the time
and expense involved would be too burdensome. As the Commission put it,
‘It is the responsibility of the Bureau of Inquiry and Compliance to
enforce the decisions of the Commission.’ 89 M.C.C. at 12. And see Parkhill Truck Co. v. United States, 198 F.Supp. 362 (N.D.Okla.1961).
And when such enforcement is attempted, the carrier cannot be denied
his right to make every possible defense to a threatened curtailment of
his business.
Nor does it
particularly behoove the Government to charge laches on McCormack's part
when the Commission's Bureau of Inquiry and Compliance itself has
waited some ten years to institute proceedings limiting the plaintiff's
operations; and this, despite the fact that the very decisions now cited
by the Government clearly raised the possibility of an interpretive
dispute.
The case of Smith & Solomon Trucking v. United States, 120 F.Supp. 277, (D.N.J.1954)
also cited by the Government, wherein the plaintiff was found guilty of
laches, is easily distinguishable. That case involved the belated claim
of a carrier that because its initial application was improperly
processed, its certificate should be expressly amended and enlarged.
The Court felt such complaints about the award proceeding, made some
twelve years later, were unreasonably tardy. Here, McCormack seeks no
belated enlargement of an agreed upon authority. Rather, it challenges a
Government Order, made for the first time, to curtail the present scope
of its operations.
[15]
It is our conclusion that the plaintiff shipper cannot be considered
estopped from challenging the Commission's cease and desist order
because of his failure to institute on his own motion a plenary hearing
on the scope of the Sub 70 Authority.
[16]
Further, we agree with McCormack's contention that its present owner,
as a purchaser for value of the corporation, should be afforded even
fuller protection under the Commission's established procedures, than
might be afforded a participant in the original certification.
*539
Finally, the
defendants question the relevancy of McCormack's charge that the
Commission's procedures below were inconsistent with those used to make
similar interpretations in the past. Defendants not only deny that the
particular rulings cited are precedent, but also make the broad
assertion that any alleged inconsistency in the Commission's decision is
of no interest to this Court. Defendants' Joint Brief, p. 27.
This
assertion that inconsistency is beyond our purview must be qualified,
for it challenges the basic philosophy of judicial review for
administrative agencies. This philosophy seeks to allow the necessary
free play for the agencies' expertise and discretion, while still
preventing arbitrary decisions or chameleonic procedures from
undermining the guarantee of Due Process.
Numerous
cases are offered wherein the reviewing court approved variations in
the ultimate conclusions of the Commission. For example, Virginian Ry. v. United States, 272 U.S. 658, 47 S.Ct. 222, 71 L.Ed. 463 (1926) and Georgia Public Service Commission v. United States, 283 U.S. 765, 51 S.Ct. 619, 75 L.Ed. 1397 (1931), dealt with the Commission's determination that proposed rates were reasonable in light of all the factors involved. In ABC Freight Forwarding Corp. v. United States, 169 F.Supp. 403, (1959, S.D.N.Y.)
the Commission had merely asked a carrier to spell out the alleged
benefits of the proposed extension of his certificate in greater detail
than had been previously required. The District Court approved this
departure since the substantial amount of existing service warranted
closer scrutiny of proposed additions.
[17]
These and other cases teach that the consistency of stare decisis is
not required. This is understandable. The Commission must weigh
endless applications and rate proposals in the context of an evolving
transportation policy. That task requires that it be free from any
judicially imposed strait-jacket of rigid consistency in either its
judgments or the factors on which they are based. ‘It is not estopped
by its own precedents in the continuing regulation of a dynamic industry
* * *.’ ABC Freight, supra, at 405. This freedom is not unlimited, however; if it were, judicial review would become a nullity.
The
Court's task of upholding the rule of law is a delicate one. Great
deference must be given an agency's delegated power to make policy in
the course of adjudication. Precisely because of this deference, the
courts can only prevent discrimination by requiring some minimum of
consistency and rationality in the decision-making process. Indeed, the
well established requirement that an agency articulate the rationale of
each holding and the procedure by which it was reached stems from this
safeguard. The judiciary need such an articulation in order to insure
consistency. See SEC v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626 (1943).
In Assoc. Transports, Inc. v. United States, 169 F.Supp. 769 (Eastern Dist. of Mo. 1958)
cited by defendants, the Court dismissed a complaint of procedural
inconsistency by distinguishing earlier cases, not by denying the need
for consistency. Defendants also rely on Garford Trucking v. United States, 64 F.Supp. 780 (1940),
where this Court considered the Commission's contention that
consistency in its adjudication was not a legal requirement. Judge
Forman acknowledged that the Court would not second guess the overall
wisdom of the Commission's judgment. Defendants' Joint Brief, p. 27.
However, while Judge Forman found no inconsistency on the part of the
Commission, he still felt it appropriate to note an earlier series of
decisions which taught that ‘Consistency in administrative rulings is
essential, for to adopt different standards for similar situations is to
act arbitrarily. * * * Republic Steel Corp. v. N.L.R.B., 311 U.S. 7, 61 S.Ct. 77, 85 L.Ed. 6, * * *.’ 64 F.Supp. at 786.
Union
Cartage Company, Petition for Modification, MC-95490 (1962, not
reported in full), is cited by McCormack to show the Commission's
previous recognition*540
of the
implication of punctuation like that in the challenged certificate.
Since that case, like many of the cases cited by defendants, dealt with
commodity descriptions in technical language, supra at 534, it may also
prove distinguishable.
[18]
Nonetheless, the minimum requirements of consistency still require the
Commission to clearly explain its use of the prior record. For without
such an explanation, that decision is only understandable as an
unreasonable departure from well established Commission procedure. The
Commission is not free to disregard or change those rules, and, using a
faulty finding of ‘ambiguity’, to resort to antecedent matters whenever
it sees fit.
V.
[19]
The primary responsibility for interpreting certificates rests with the
Commission. Had that body exercised this responsibility in a clear
manner and fully explained its intermediate conclusion that the
certificate was ‘patently ambiguous', this Court would not question the
ultimate interpretation of McCormack's authority.FN12
FN12. We need not pass here on the question of whether there was adequate evidence in the prior record to sustain that final construction once the certificate was deemed ambiguous.
[20]
In retrospect, however, the Commission's own Report so effectively
distinguishes precedents and so clearly disavows arguments which might
support its decision that we are confused as to why it did go behind the
certificate.
To review: the
Commission found merit in McCormack's reasoning. It even defended the
cogency of expert testimony by plaintiff's grammarian from Bureau
attack. The Commission stated that disagreement between the parties was
not necessarily proof of ambiguity in the legal sense, and further
charged that the Bureau's non-grammatical construction had been too
conclusory. It acknowledged that rules of grammar and punctuation are
part of the Commission's ordinary tools of construction in the
interpretation of certificates. More important, it admitted that the
Doctrine of the Last Antecedent which embodies those rules would be
controlling, in the absence of legislative intent, as the ‘only relevant
guide.’ Finally, the Commission distinguished earlier cases involving
commodity descriptions, or other complex uses of trade parlance and
terms of art requiring the Commission's expertise, on the grounds that
the language in question was simple English. It found no logical reason
for holding McCormack's interpretation inconsistent with Commission
policy or practice.
Despite all
these admissions, the Commission merely stated its Conclusion that the
certificate was patently ambiguous and resorted to the prior record.
The
Commission contends that the ‘canons of construction are not so
automatic in their application, nor rules of grammar so tyrannical in
their command that the Commission has no discretion in the matter of
interpreting certificates issued under its authority.’ 89 M.C.C. at 14.
We
agree. But the Commission has rebutted the more obvious reasons for
avoiding the normal reading of the certificate. It must be prepared to
tell us what reasoning or evidence was counterpoised against McCormack's
position before the language was found ambiguous in the legal sense
required.
A thorough search of
the defendants' brief for any such reasons proves fruitless. The
reasoning of the brief in that regard adds up to this: The Commission's
judgment must not be disturbed because of its accumulated experience in
this field.
This Court will
always give full leeway to the Commission's expertise where it is
relevant, and to its discretion when it is reasonably employed. In the
case at bar, we do not attempt to substitute our judgment for that of
the Commissioners, but merely to better understand the basis of their
decision. As Justice Frankfurter warned, ‘The administrative process
will best be vindicated by clarity in its exercise.’ *541
Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 197, 61 S.Ct. 845, 853, 85 L.Ed. 1271. Therefore, we find as follows:
(1)
There was no adequate explanation for the Commission's conclusion that
the territorial description of the Sub 70 Authority was ambiguous on its
face.
(2) Absent such an adequately supported finding, the resort to antecedent matters was impermissable.
(3)
To the extent that the Commission felt constrained to ignore the
Doctrine of the Last Antecedent until the disputed phrase had been found
ambiguous and the prior records had been admitted, the Doctrine was
misapplied. Since those records were precluded from initial
consideration by the Commission's own well founded procedures, the
Doctrine, as well as its component grammatical and punctuation rules,
was a factor to be fully considered in deciding whether there is patent
ambiguity.
(4) This matter is hereby remanded to the Interstate Commerce Commission for further proceedings consistent with this opinion.
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