BURLINGTON TRUCK LINES v. U.S.

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Argument of David Axelrod

Chief Justice Earl Warren: Number 27, Burlington Truck Lines, Incorporated, et al., Appellants, versus United States et al.

Mr. Axelrod, you might wait just a moment until the parties are seated.

Now Mr. Axelrod, you may proceed.

Mr. David Axelrod: Mr. Chief Justice, may it please the Court.

I represent the twin Truck Line appellants in this proceeding.

Mr. Weinberg represents the union appellant.

This is an appeal from the judgment of the United States District Court for the Southern District of Illinois which dismissed a complaint to set aside an order of the Interstate Commerce Commission which granted a certificate authorizing the performance of permanent motor carrier operations in interstate commerce by the appellee, Nebraska Short Line Carriers.

The appellant truck lines are certificated interstate carriers authorized to serve Omaha, Nebraska on the one hand, Chicago, Kansas City, and Saint Louis on the other, the points between which the Commission granted the certificate to the Nebraska Short Line Carriers.

The Nebraska Short Line Carriers which was the applicant before the Interstate Commerce Commission for the certificate is a Nebraska corporation organized and owned by 12 motor carriers, nine union carriers, operating wholly within the State of Nebraska in interstate commerce.

These carriers use the point of Omaha, Nebraska as an interchanged point for the purpose of interchanging traffic with the appellant truck lines.

About 1954, the union undertook to organize the employees of the nonunion carriers in Nebraska.

Their organizational activities were unsuccessful and the result was that the labor pressure was brought to bear which had the effect of restricting the activities of the appellant, certificated truck lines, who had been interchanging traffic at Omaha with the nonunion carriers.

This pressure came about as a result of the fact, that the appellant, certificated lines, have "hot cargo" clauses, which was customary at the time with the union under which it was provided that a carrier wouldn't discharge or discipline any employee who refused to cross a picket line or refused to handle freight tendered by anyone who was engaged in a labor dispute.

As a result of the union invoking its labor pressures, about May 1956, the local nonunion Nebraska carriers experienced certain interchange difficulties with some, but not all of the other carriers with whom they had been interchanging at Omaha, Nebraska.

The result of which was the filing by this cooperative Nebraska Short Line Carriers Inc. of two applications before the Interstate Commerce Commission.

Both of these were designed to substitute for the appellant truck lines and to provide an outlet for them in connection with the movement of their freight, moving to and from points in Nebraska.

In addition to the two permanent applications, the Nebraska Short Lines also filed, at the height of the problem, a temporary authority application.

This temporary authority application was granted by the Commission in the year January, 1957.

The difficulties had been encountered immediately prior to 1957 and for a period of time which could establish a date of approximately the latter part of 1956.

Nebraska Short Lines, though it was granted its temporary authority in January of 1957, did not commence its operations until March of 1957.

And so here at the very beginning and at the outset of the problem, Nebraska Short Lines, the fighting ship of the 12 nonunion carriers who had organized it, did not set sail until several months after it had obtained its right to start a service from the Commission.

Both examiners who heard the two applications for permanent authority recommended denials of both applications.

Both examiners found that there was no need for the service.

Examiner Sutherland in the first instance found that two carriers, two of the appellants, Burlington and Santa Fe Trail, have always continued to interchange with the Nebraska carriers.

Examiner Driscoll in the second case found that after a period of time and approximately at the time of the second hearing which was in April of 1957, that in addition to Burlington and Santa Fe Trail, three other carriers began to resume the interchange of their traffic, namely, Watson, (Inaudible), and Independent Truckers.

The findings of facts of both examiners were confirmed by the Commission, adopted by the Commission, and beyond that, the findings of facts of both examiners were also acknowledged by the District Court which for the case subsequently.

Important as I see it are some specific findings of fact of the two examiners.

May I direct your attention please to the record at page 54 at which Examiner Sutherland, the first examiner indicated, “The evidence shows that Burlington has continued to interchange with applicant stockholders at Omaha and Lincoln on interstate traffic originated at or delivered to various points in Nebraska.”

Again at page 55, referring to Santa Fe Trail, the finding specifically is, in 1955 and 1956 at Omaha, Santa Fe Trail interchanged interstate traffic moving to and from Nebraska points with Abler, Wilbur, Clark, Peters, Lyon, McCay, Pony, and so forth.

In most instances Santa Fe Trail delivered considerably more traffic to these carriers than it received.

These are the carriers who represented the Nebraska Short Line Cooperative.

I want to direct your attention if I may please further to a very specific finding of the second examiner who heard the second application and who denied it, and I refer if I may please to page 87 of the record which indicates a finding by Examiner Driscoll at page 87 of the record at finding Number 23 of Examiner Driscoll, there's this to be found.

When the evidence of these 12-carrier representatives is carefully and fairly examined, it must be said that not one of them complained of interchange conditions or of connecting line services in existence prior to the rise of union pressure in early 1956.

In other words, not one of them showed or even alleged that when conditions were normal, they then had a need for a new or additional connecting line at Omaha.

All their complaints are in fact bottomed on the rise of union pressure.

I'd like to direct the Court's attention please if I may to a further specific finding by the same examiner.

At page 95 of the record, where the examiner first in connection with finding Number 32 details very specifically the evidence submitted in opposition to the application in which about 29 motor carriers submitted evidence on opposition to the application, and the indication by the examiner that all of them declared that except for conditions not due to their own initiative or desire, they have been ready, able, and willing to provide service for all traffic offered by shippers or connecting carriers.

And lastly, to the finding of Examiner Driscoll at page 95, in finding Number 34, which is the next to the last sentence of his finding which keys the issue in this proceeding.

Were it not for the effects of union pressure upon these carriers, there would have been no material problem to complain of, and there would be no problem here to consider, no matter how this problem is viewed, it has but one origin, labor pressure.

If the labor effects were removed from this problem, no problem of any appreciable substance would remain.

In that situation, the question is, whether a grant of authority should be made, to meet, and overcome the effects of labor difficulties.

As we see it, this is the issue in the case.

And the question that we present to the Court is whether a temporary service interruption which involves the interchange of freight between nonunion carriers and some, but not all, union carriers which arises out of a labor dispute, may consistently with the standards set forth in the Interstate Commerce Act, and the National Transportation Policy, we made the basis for the grant of a certificate of public convenience and necessity.

Justice Arthur J. Goldberg: Mr. Axelrod, may I ask you if all of the union carriers had -- have collective bargaining agreement with that hot cargo provision in there?

Mr. David Axelrod: They did, Mr. Justice Goldberg.

Justice Arthur J. Goldberg: And at the time of this particular proceeding?

Mr. David Axelrod: They did.

Justice Arthur J. Goldberg: Were they renewed?

Do you know?

Mr. David Axelrod: My understanding is that they have been renewed and that they are in effect today slightly changed.

But in essence, the same, and that all of the carriers in fact today, this is not a part of the record however, are operating under what may still be termed a "hot cargo" clause contract.

Justice Arthur J. Goldberg: Renewed their contract provisions as they have agreed upon with the union?

Mr. David Axelrod: Yes, sir, yes, sir.

As a corollary to the question that we present to the Court, we also argue -- in our brief and we point out to the Court today that one of the questions supplemental to the basic question is whether or not the Commission in this proceeding erroneously used the grant of a certificate, a permanent certificate, where the appropriate remedy, if any, was a complaint proceeding under Section 204 (c) and 212 of the Act to compel these particular carriers, to comply with their obligations under certificates.

We also urge in the brief filed with this Court that the Commission's findings, that the Commission's conclusion is diametrically opposed to its own findings of fact, in turn, the findings of fact of the examiners, Judge Mercer in his dissenting opinion which is part of the record where specifically meets that issue.

We take the position in this proceeding that in granting the certificate, the Commission erred and that it exceeded its jurisdiction in utilizing the certificate section, in fact, as a penalty and having exceeded its jurisdiction, it has lost its role as an expert.

The Commission in granting the certificate in which it failed to agree with its examiners, indicates to this Court in a very self-serving and albeit biased declaration that it was not attempting to adjudicate a labor dispute.

It took the position that it was vitally concerned not with the labor problem but with the relationship of the carriers in respect to their obligations to serve the public and notwithstanding the fact that there were some carriers who had continued uninterruptedly to serve the public.

The Commission took the position that the responsibility for the service deficiencies which existed at the time would be laid or should be laid at the hands of the unionized carriers.

It's interesting that the appellee, Nebraska Short Lines Inc. came to the Commission and made the specific statement that it would never, under any circumstance, sign a "hot cargo" clause contract and even indicated to the Commission that it wouldn't want a certificate based upon its having to sign a "hot cargo" clause contract.

As a matter of fact, before the District Court counsel for Nebraska Short Line Carriers emphasized to the Court that he would even be willing to have its certificate granted by the Commission to it, limited and conditioned upon it being and remaining a nonunion carrier and it has so indicated before the Commission and to the District Court.

In this proceeding, we take the position that the problem involved was a temporary service interruption, that it terminated on the basis of the examiner's findings in approximately April of 1957.

And that even before its termination, there were carriers available with which to conduct the interchange of service at Omaha.

And that the grant by the Commission of a permanent authority under these circumstances was illegal and beyond the intention and purpose of the certificate section of the Act.

We take the position that the purpose of Section 207 (a) which is the certificate section, is to assure the public of adequate service.

It is not to resolve a labor dispute.

It is not to punish a union carrier who in good faith collectively bargains with its employees.

And it is not to reward a nonunion carrier for carrying on a fight with the union.

We take the position that Section 207 (a) has as its purpose, the achievement of a long term balance between supply and demand of transportation service, this on a normal basis and not on a temporary or an abnormal basis.

We argue before this Court that in using Section 207 (a) as the Commission did which contemplated permanent certification of motor carrier services, that the Commission had misapplied the Act, that it has created a permanent carrier only to meet a temporary situation.

Justice John M. Harlan: What's the limit of the -- by which the temporary certificate?

Mr. David Axelrod: Temporary authority by statute is authorized for a period of 180 days but is permissible and it may be continued and has in fact been continued by the Commission, and is in existence today.

So that from the standpoint of the question, there is no limitation upon the duration of a temporary authority.

This appellee, Nebraska Short Lines received this temporary authority January, didn't commence its operations until March of 1957, and is today operating under the temporary authority because the permanent certificate granted to it by the Commission under this order is the subject of this proceeding.

We take the position in connection --

Justice Potter Stewart: Of course that a temporary certificate, you say, it's the -- originally it's good for 180 days?

Mr. David Axelrod: Under the law.

Justice Potter Stewart: And thereafter can be extended by the Commission, what?

For definite periods or at the willable -- and until further order or what?

Mr. David Axelrod: Until further order of the Commission and the Commission's practice has been to extend it so long as there is pending some permanent application to which the temporary authority can attach.

If the permanent application would be denied, the temporary authority would cancel on its own expiration.

Justice Potter Stewart: Do you suggest in your brief and you have implicitly already suggested in your argument as I gather the -- that the Commission's answer to this temporary problem might more appropriately have been the issuance of a temporary certificate.

But, doesn't this involve a -- what we're talking about, involved a good deal of capital expenditure and planning and all of that, that a person, the carrier, just wouldn't make based on a temporary certificate?

Mr. David Axelrod: Not necessarily Mr. Justice Stewart, for the reason that Nebraska Short Line Carriers, the appellee here, began its business as the record indicates with some leased equipment, with some small beginning terminal facilities and is in fact that they're operating as such with a substantial amount or at least most of its equipment on a leased basis.

But even answering the question, yes, I submit with all due respect that it wouldn't be a criteria from the standpoint of the problem involved here because if there was a temporary authority need, the Commission is satisfied that need by the grant of a temporary authority.

And we follow that further with the proposition in argument that under the Section 204 and 212 which is the compliance section that the remedy here -- the remedy here should have been first used that is to compel the carriers who were not serving and not penalize the carriers who were serving.

And that until such time as that remedy had been tried and found to be ineffective.

There was no need for the grant of a permanent certificate.

Mind you, the temporary certificate could continue and would continue pending the testing of the effectiveness of that remedy under the compliance rather than the certificate section and this is the number of our position with this Court.

Justice Arthur J. Goldberg: Mr. Axelrod, who would have then the (Inaudible) of the Commission to order those carriers who were not carrying, to have them negotiate the “hot cargo provision?

Mr. David Axelrod: I don't think the Commission would have the right to, Mr. Justice Goldberg, because -- and Mr. Weinberg will argue the point of the so-called conflict or the conflict between the Interstate Commerce Act and the Labor Act.

And we say in this case that the Commission in fact attempted to do that because it indicates to the carriers by its order here that it cannot bargain on the subject of "hot cargo" clause, because it declares that kind of a clause as such an unbargainable position and we say it's part of our argument in those proceeding and Mr. Weinberg will elaborate that.

But the Commission has in fact now sitting in on a bargaining table, participating at the bargaining table, and indicating that no such "hot cargo" clause can be entered into.

Justice Arthur J. Goldberg: What would be the appropriate relief rather than the Commission could grant otherwise on what they did?

Mr. David Axelrod: The Commission -- the Commission's appropriate relief was as it did here to grant a temporary authority.

And pending -- and while the temporary authority was in existence and while the service was instituted so that there was no question about any temporary gap, test the effectiveness of the complaint procedure, test the effectiveness of that, and if that failed, then it would be found that there was no service.

But in this case, the Commission find -- did not find that there was no service.

There is not a finding of an adequacy in this record.

The only finding is that there was a temporary interruption of service and it is this which we complained about.

And we say that a temporary interruption of service should not be the basis for certificating a permanent carrier.

Justice Arthur J. Goldberg: Is this the labor dispute or the temporary carrier where the labor dispute is its key on this issue?

Let me give you a case to it.

Suppose it were a labor dispute like (Inaudible) which lasted for 11 years.

Suppose you're -- you'd be under those circumstances and with the Commission's authority, would it grant a temporary, one to 11 years, or grant a permanent one, for it?

Mr. David Axelrod: In the case of Cotter (ph), we don't have a question of public service as we do in the case here.

Justice Arthur J. Goldberg: But I think -- suppose that (Voice Overlap) --

Mr. David Axelrod: I don't -- I don't -- I don't think Mr. -- Mr. Justice Goldberg, I don't think that time element is the criteria because following your question may I be so bold as to suggest that in the case of a Northwestern Railroad which recently was on strike for some period of time.

Would it be then appropriate on that instance because of that situation to have granted a new railroad, a certificate as a permanent carrier because it was out of business for approximately 45 or 50 or 55 days?

Justice Arthur J. Goldberg: Mr. Axelrod --

Mr. David Axelrod: In this case --

Justice Arthur J. Goldberg: Here there was 11 months, as I understood that you said, is that correct?

Mr. David Axelrod: Not particularly 11 months.

We contend that under the facts of record here the controversy or at least the service -- the temporary service efficiency expired or it was removed in April of 1957, that the pressure began approximately May of 1956, that period of time.

But, mind you during all that period of time, our point is that there was always some service, there was always a service by Burlington, there was always a service by Santa Fe Trail, and there were other services which the examiners have detailed in this finding.

So, that it wasn't the case of all service having been abandoned, all service having been interrupted.

It was the case of some carrier service having been interrupted.

This is the distinction which we tried to find out.

We take the position in this case that since the difficulty involved had a single origin and that is labor pressure, that what the Commission has done in this case has, in fact, substituted a philosophy of nonunionism for the subtle standards of public convenience and necessity.

And we submit that there is no such standard in the Commission's act.

At the same time we take the position that the effect of the grant of the certificate instead of resorting to the compliance procedure was to penalize those carriers who had been performing a service.

The Commission concerned itself in its brief, the position I'm sure, where the fact that it has a duty to perform and that that duty to sus -- is to supply the service when an applicant seeks to perform it.

In this case, I submit that the Commission has performed that duty.

It did its very outset when it grant the temporary authority.

It needed no more from that standpoint until resort had been affected to the compliance procedure under Section 204 and Section 212.

We take another position in this case and I'll briefly indicate it only by preference to --

Justice John M. Harlan: May I put a question to you?

Suppose the Commission had adverted to these and other possible solutions it might suggest themselves and it made findings that each one of them was impracticable to meet the public convenience and necessity and that temporary certificate would not have mattered either.

What would you say then as to the power of the Commission?

Mr. David Axelrod: Well, it would -- the Commission would have -- had to be more than clairvoyant, Mr. Justice Harlan, to have made such a finding or such a con -- drawn such conclusions.

Justice John M. Harlan: Well, it might have -- maybe so and maybe not, they didn't advert to.

They didn't' approach the case in that way.

They approached this as an ordinary certificate case, isn't it?

Mr. David Axelrod: But our point is that this is not an ordinary certificate case.

This is --

Justice John M. Harlan: I realized that.

Mr. David Axelrod: This is an unusual one.

It's the first that has happened in the (Voice Overlap) --

Justice John M. Harlan: I understand that but you take, you go -- you go -- you jump from that to the premise that the Commission has no authority to grant us a permanent certificate in these -- in this situation, none.

Mr. David Axelrod: We don't say it that way.

Justice John M. Harlan: I'm suggesting that it may have authority if it can give reasons or -- for showing that there are special reasons why that authority has to be exerted.

Mr. David Axelrod: We don't say that the Commission has no authority to grant a certificate.

The Commission has authority to grant any certificate but we say that the Commission misapplied its certificate on this case and exceeded its jurisdiction because of the fact that to grant a certificate here to meet a temporary situation and not a permanent situation, and that the Act is designed to achieve a national transportation system which covers a normal and a permanent operation and not a temporary.

We admit that there is jurisdiction to issue a certificate.

But our point is that the Commission misapplied the section in granting a certificate in this case based upon these facts.

Justice John M. Harlan: Well -- that I understand to mean that -- you say that where there is simply a temporary insufficiency of service, temporary that that could never give authority to the Commission to grant a permanent certificate.

Mr. David Axelrod: That's our position because --

Justice John M. Harlan: That's your position.

Mr. David Axelrod: -- because of the fact that there is in this instance the temporary authority which was issued, which supplied the service and there is further in this instance the pattern of framework of the Interstate Commerce Act which allowed for the remedy of complaint in addition to the remedy of temporary authority.

Judge Mercer in this instance in the dissenting opinion, points out the problem that were confronted here by indicating and if I may refer to his dissenting opinion at page 266 of the record.

And he says, I quote, “I think the evil of the order lies in a simple but very significant fact which both the Commission and the majority of this Court overlooked, namely that the basic findings of the Commission's report and the evidence introduced before the hearing examiner are geared to the complaint procedures established by Section 212 of the Act, and not to the procedure contemplated by the express provisions of Section 207.”

We take the position on this case that the Commission as a matter fact has created a new penalty, a penalty in the sense that a certificate section for the grant of a certificate was never intended to penalize those carriers who had continued a service.

The Commission on this case was without authority to dispose of the merits of this case because it was a labor dispute.

And in this case particularly, the Commission has indicated that it did so because of the fact that a breach of duty had been perpetrated by those carriers who had signed these hot cargo agreements.

As a matter of fact, the Commission's decision turns upon the fact that those carriers who signed hot cargo agreements had subrogated, in effect, their duty or right to serve the public in respect to their having signed the hot cargo agreements.

In this case, our position is that if this decision is allowed to stand who we come a very dangerous kind of precedent.

It will grant onto the Interstate Commerce Act a new standard of public convenience and necessity which is we say without authority of the Commission and which we say is outside of the Act.

This is the first time in the annals of the Commission, and I'm sure that Mr. Ginnane will correct me if I'm wrong, that the Commission has authorized the institution of a new kind of motor carrier service or a new motor carrier operating right because of temporary and partial deficiencies due to labor difficulties.

In this case, we take the position that having exceeded its jurisdiction.

The Commission's role as an expert has been lost.

I know the Commission will argue that it is the expert in the field, that the question of granting a certificate is, wide, broad, and discretionary within.

It is our position that having step outside of its field to resolve a labor dispute.

The Commission has not concerned itself with transportation but has concerned itself with the labor problem which underlies the difficulty involved.

And on that basis we take the position that the Commission has lost its expertise and it cannot be claimed for it.

The Commission's decision in this case has been misused and we take the position that it would be unrealistic on this record to say that the certification process which the Commission employed in this proceeding would not in fact be punishment against those carriers who have continued to serve.

In this case, the Commission had not settled a problem by the grant of a new certificate.

All the Commission did was to grant a permanent certificate in this case which was not limited to the peculiar circumstances based upon which it was issued.

This certificate authorizes a service by the appellee, Nebraska Short Line Carriers between Chicago and Omaha, Kansas City, and St. Louis.

It has restricted the traffic moving to and from Nebraska points.

But it is otherwise none restrictive in any sense of the word.

The Nebraska Short Line Carriers can perform any kind and type of service under this certificate.

The only difference is in this case that Nebraska Short Line Carriers is a nonunion carrier.

And so the only thing which the Commission has established new in this proceeding is to give a certificate to a nonunion carrier and not to give a certificate where there is basis for -- on a need for permanent service.

Mr. Weinberg will follow with respect to Union's position.

Justice Arthur J. Goldberg: Mr. Axelrod, before you sit down, may I ask you one more question?

In your brief on page 21, it said here that they brought here the (Inaudible) which has been a claim procedure under Section 204 (c) and in that proceeding, the Commission could've had an order on the carrier, the carrier to this merchandise, those who are going to do so, notwithstanding the union, picketing pressure, etcetera, was there (Inaudible) an order setting aside, or perhaps (Inaudible) agreement that the carrier made?

And subservient, would then could the Commission not be entering into labor matters on collective bargaining?

Mr. David Axelrod: This is our position, Mr. Justice Goldberg that the Commission certainly in the case of issuing the certificate here, has entered into the subject of the labor field, has impinged upon and conflicts with the Labor Act which guarantees to the employees the right to collective bargaining.

Justice Arthur J. Goldberg: Won't that be true under 204 (c)?

Mr. David Axelrod: It could be true under 204 (c) as well.

At the same time --

Justice Arthur J. Goldberg: (Inaudible) the Commission held a right to choose which interference it wants to do to carry out the purposes of the statute.

Mr. David Axelrod: We take the position the Commission had no right to interfere with the Labor Act as it did in this case by granting the certificate here.

But if the complaint procedure had been used, it would have squarely focused the question upon the labor controversy.

That complaint procedure could have been followed and directed against those carriers who were temporarily out of service, not against those who had continued to serve.

In addition to that, the Commission could have compelled those carriers to serve.

Had they not serve then after such an order compelling?

They stood the risk of their certificates begin revoked against them.

But at least until that happens, there was no warrant in the law, for the skipping of that procedure, for the skimping of its responsibility under the Act, and jumping to the certificate section.

Unknown Speaker: (Inaudible)

Mr. David Axelrod: Your Honor, thank you.

Chief Justice Earl Warren: Mr. Weinberg.

Argument of David D. Weinberg

Mr. David D. Weinberg: May it please the Court.

I represent General Drivers and Helpers Union, Local Number 554 in case Number 28.

The Interstate Commerce Commission does not have the power to determine labor disputes even those involving common carriers.

It has the power of granting motor carrier certificates for convenience and necessity and determining complaint cases involving refusal of motor carriers to serve shippers and to prevent discrimination with regard to shippers.

Now the power of the ICC, the Interstate Commerce Commission to grant certificates of convenience and necessity cannot be exercised on the basis of a temporary stoppage of service resulting from a labor dispute.

Whether the stoppage of service is forced upon the carrier by strike action or directed against him because of his voluntary compliance with a lawful contract.

And in answer to your question Mr. Justice Goldberg, in order to properly orient this matter with regard to the "hot cargo" clauses, there is a cut-off date by virtue with the passage of the Landrum-Griffin Act.

I think this Court can take judicial notice of the fact that one of the reasons given in the legislative history for 8 (e) under the Landrum-Griffin Act are the very facts that are contained in this case.

So when we consider the temporary or permanent nature of this particular matter, we must consider pre-1959 periods.

Justice Arthur J. Goldberg: Do you take the position Mr. Weinberg --

Mr. David D. Weinberg: Yes, sir.

Justice Arthur J. Goldberg: -- that under the amendments of the Landrum-Griffin Act, that its carriers no longer voluntarily enter into a "hot cargo" clause?

Mr. David D. Weinberg: I do not go that far.

I think some "hot cargo" clause can be structured within the framework of Section 8 (e) that would make them legal.

I don't think Section 8 (e) banned all "hot cargo" clauses.

Justice William J. Brennan: But it banned the (Inaudible)

Mr. David D. Weinberg: Now, I would say that it did and the record doesn't show this, Mr. Justice, but the Teamsters Union redid their "hot cargo" clause after Section 8 (e) and I don't know whether you can take judicial notice of that.

Justice William J. Brennan: For what its worth, is that it?

Mr. David D. Weinberg: For what its worth --

Justice William J. Brennan: (Inaudible)

Mr. David D. Weinberg: -- there is a change, yes, sir.

Justice William J. Brennan: Whether they had a --

Mr. David D. Weinberg: Yes.

Justice William J. Brennan: It's not (Voice Overlap) --

Mr. David D. Weinberg: But I do not want this Court to get the idea that there -- that Section 8 (e) banned all "hot cargo" clauses because I do not think it did.

There are some exceptions for example in the apparel industry.

There are some exceptions in the construction industry.

And most assuredly I think in my opinion there are exceptions in the trucking industry.

Justice William J. Brennan: You wouldn't have any problem --

Mr. David D. Weinberg: You do not have that problem.

But it does have some effect to show and to negate the argument of the Government that this was not a temporary matter.

When in fact Congress, who should consider this in the first instance and not the courts or the Interstate Commerce Commission --

Justice Byron R. White: But Mr. Weinberg, are you arguing this whole -- the "hot cargo" clauses which were invoked in this situation.

Mr. David D. Weinberg: That's all that was invoked.

Justice Byron R. White: Are you sure that (Inaudible) that this record sustained the fact that it was the particular kind of a "hot cargo" clause, that you have here that was invoked?

Mr. David D. Weinberg: Yes.

Article IX --

Justice Byron R. White: Was that all the employer was found to do, was not to fire somebody.

Mr. David D. Weinberg: He could not be discharged --

Justice Byron R. White: That's all (Voice Overlap) --

Mr. David D. Weinberg: -- for fan -- for handling unfair goods.

Justice Byron R. White: It's not -- (Inaudible) of the "hot cargo" clause --

Mr. David D. Weinberg: Yes.

Justice Byron R. White: -- wasn't it?

Mr. David D. Weinberg: Yes.

But that's the very "hot cargo" clause, Mr. Justice that was presented to Congress in the 8 (e) legislative history.

Justice Byron R. White: I know but that isn't the -- that isn't the -- that wasn't the operative -- the operative tax period, here in this case, was it?

Mr. David D. Weinberg: Yes, it was.

Justice Byron R. White: I thought -- how was that the interruptions took place?

Mr. David D. Weinberg: The interruptions took place by virtue of the Teamsters Union invoking Article IX --

Justice Byron R. White: How did they do that?

Mr. David D. Weinberg: By sending notice to the carriers --

Justice Byron R. White: Yes.

Mr. David D. Weinberg: -- that under that Article, they could not handle unfair freight.

Justice Byron R. White: Well, I know but that isn't what the "hot cargo" clause found the carrier to do.

It just said, “We won't acknowledge (Voice Overlap) --

Mr. David D. Weinberg: That particular clause did, Mr. Justice.

There are some refinements to this clause in some of those agreements.

But that particular clause did and it's in the record here I'm sure, Article IX, that's urged when --

Justice Byron R. White: You're saying that these "hot cargo" clause involved here found the carrier not to handle it?

Mr. David D. Weinberg: That's right.

Justice Byron R. White: Whether or not --

Mr. David D. Weinberg: Upon notice.

Justice Byron R. White: Awhile ago you said -- I thought that, all it found them to do was not to fire somebody.

Mr. David D. Weinberg: It had that too in there.

The first paragraph in the clause had, "It shall not be a cause for discharge for an individual employee to refuse to handle unfair goods."

But then it went further and stated that the employer would have to act upon proper notice from the union.

I think that clause is in the record here and I think Mr. Axelrod will help me find it so that you can read it.

But the main gist of this situation is this, that the ICC is in conflict with the National Labor policy in this particular case.

If the ICC could act in this case, this would constitute a method of regulating labor disputes in the transportation industry.

The award of a certificate to a rival carrier is at least as forceful, a method of regulation as an award of damages for failure to serve the public which would fall under the Garmon decision of this Court.

It is irrelevant in examining this situation for the Commission not to look to the merits of a labor dispute and to say that it is not attempting to resolve that labor dispute.

The question is entirely one of the effect and this Court had the opportunity to consider that in Local 24 versus Oliver, Revel versus Oliver, 358 U.S. 283, where this Court held that Ohio could not outlaw owner operator clauses which were authorized by National Labor laws even though the state policy was designed only to adjust relationships in the world of commerce and completely disregarded labor relations implications.

So here in this case, it is indisputable that National Labor policy authorizes voluntary compliance with "hot cargo" clauses voluntarily entered into prior to 1959.

Congress not only failed but refused to distinguish application of that policy in the field of transportation from its application in other fields.

This Court decided that very fact in a very famous case, Amalgamated versus Wisconsin Employment Relations Board.

And in that case, if I may quote just one paragraph from your decision, “No distinction between public utilities and national manufacturing organizations has been drawn in the administration of a Federal Act, referring to the National Labor Relations Act.”

And when separate treatment for public utilities were urged on Congress in 1947, the suggested differentiation was expressly rejected by Congress.

And in a footnote in the Amalgamated case, you quote that situation.

You bring out in your opinion Senator Taft's remarks about voluntarism in collective bargaining.

So in other words, Congress did not put public utilities under our national labor policy in a different position.

The non-public utilities didn't put common carriers in a different position than non-common carriers.

And under the Oliver case, when it applied the antitrust laws, under the Valentine Act of Ohio, this was no different than what the ICC was doing in this case.

The effect of it was to interfere with and conflict with your national labor policy.

So here, to allow the Commission to grant certificates because of temporary stoppages would impair the freedom of unions and employers in the transportation industry to bargain collectively and voluntarily to perform their valid labor contracts.

Congress refused to impose different restrictions upon public utility unions and employers than on others because of their greater impact on the public of service stoppages resulting from public utility strikes.

Therefore, we -- this Court couldn't allow a state public utility commission to do the very thing the ICC did because there would be conflict with federal policy with regard to labor relations.

In the same breadth, you couldn't allow one agency of the Government, the Interstate Commerce Commission, to interfere with, overlap, conflict with another congressional policy as set out in the National Labor Relations Act.

This is for Congress to determine not the ICC, not any agency of the Federal Government.

Here, you have a clash of perhaps two congressional policies.

But rather than that type of a clash, you got a clash of an agency meeting head on with the congressional policy that cannot be reconciled.

And therein, lies the danger in this type of decision, therein lies the danger in the Interstate Commerce Commission in entering into this field.

Now, to sustain the Commission's decision in this respect, it would be necessary to hold that Congress by imposing upon common carriers, duties and responsibilities to the public, but have to curtail the freedom to enter into involuntarily performed, collective bargaining agreements that this Court sustained in the Sand Door case.

You sustained as legal under Taft-Hartley 319 39, "hot cargo" clauses very similar to the one involved in this case.

Justice Hugo L. Black: We'll recess now.

Mr. David D. Weinberg: Pardon.

Justice Hugo L. Black: We'll recess.

Mr. David D. Weinberg: Thank you.

Print this transcript Transcript: 

Argument of David D. Weinberg

Chief Justice Earl Warren: Burlington Truck Lines Incorporated, Appellants, versus United States.

Mr. Harding.

Mr. David D. Weinberg: Mr. Weinberg.

Chief Justice Earl Warren: Oh, Mr. Weinberg, yes.

Mr. David D. Weinberg: Mr. Chief Justice and may it please the Court.

This case is one of an employer voluntarily complying as distinguished from being forced by strike action on the part of his employees to comply with a Hot Cargo Clause which at that time pre-1959 was unquestionably legal and so decided by this very Court in Sand Door.

This Court squarely held in Sand Door that National Labor Policy leaves all employers, including employers in the trucking industry, public utility employers, free voluntarily to perform such agreements.

The question here then is whether the Interstate Commerce Commission can make that conduct which National Labor Policy allows the occasion for retribution whether in the form of withdrawal of a carrier certificate or licensing a competing and rival carriers happened in this case.

Now, the Interstate Commerce Commission says, “It is not punishing the carrier for voluntary compliance.

It's merely assuring service to the public” and they so argued in their brief.

But the short answer to that is another case decided by this very Court, Southern Steamship versus NLRB and this Court admonished the National Labor Relations Board.

In that case, not to take a single minded attitude, and in the words of this Court, where the case is not like that in Southern Steamship Company versus Labor Board where the Board was admonished not to apply the policies of its statute, that’s the National Labor Relations Act, so single mindedly as to ignore other equally important congressional objectives and that’s the exact situation we have here.

The ICC is ignoring, negating if you please, the National Labor Policy that supports collective bargaining.

The ICC in effect is interfering with the freedom of contract for a lawful clause, voluntarily entered into by the parties and this is an exact case with Southern Steamship.

Now, the Interstate Commerce Commission can no more be allowed in this case to pursue its objective of providing transportation service to the public without regard to the effect of what it is doing on Congress’ Labor Policy.

Then the National Labor Relations Board in Southern Steamship could be allowed to pursue its policy of reinstating strikers without regard to the effect of what it was doing upon Congress’ mutiny laws.

If you remember in Southern Steamship, the Board ordered reinstatement of strikers on a ship. At the same time, there was a question of whether -- by engaging in a strike on a ship, they engaged in mutiny.

Justice John M. Harlan: What is there to show Mr. Weinberg that the Board didn't -- the ICC didn't take into account the labor policy?

Mr. David D. Weinberg: They didn't take the -- well --

Justice John M. Harlan: What is there to show that they didn't -- they weren't cognizant of the fact, of that area --

Mr. David D. Weinberg: They weren't cognize -- their whole case, their whole decision rests upon the labor dispute.

Justice John M. Harlan: Southern Steamship doesn't suggest that in such circumstances, ICC doesn't have any jurisdiction.

Mr. David D. Weinberg: No, but they must be mindful of the Congressional policies in our statutes.

Justice John M. Harlan: My question is what is there to show that they weren't mindful?

Mr. David D. Weinberg: Well, I think the very decision shows that they weren't mindful when the very basis of this decision was the labor dispute despite their protestation to the opposite.

I think that's very aptly set out in the examiner's opinion, one of the trial examiner's opinion, that was approved by the ICC and was considered by it.

This is from the record, page 96.

Its examiner Priscal's finding and if I may, I'd like to read it to the Court.

I think it's the epitome of this situation.

The truck line carriers have union contracts.

The Eastern Nebraska carriers are for the most parts small or relatively small businessmen.

Most of them are obviously opposed to unionization of their business.

This Commission has no authority, nor means of solving that problem.

If as some Eastern Nebraska carriers imply, the National Labor Relations Board does not offer a solution to that problem then it obviously is a problem for the legislative branch of the Federal Government that only the Federal Government could solve.

Certainly, this Commission is in no position to solve it and that's exactly what they were doing in this case.

It is one thing for the Commission to say and by self-serving declaration we are not considering a labor dispute, but as the dissenting judge in lower court said, they spent countless paragraphs after paragraph detailing the labor dispute.

Judge Mercer characterized this case in this respect.

He said, “The hardcore of this case is the labor dispute.”

Absent the labor dispute, we wouldn't be up here today.

And that's where they impinge upon another congressional policy.

The Commission has been somewhat cautious in other cases with regard to this.

It's significant to note Mr. Justice that they haven't granted any certificates to any other carrier where there have been labor disputes.

They didn't do it in Galveston and their answer in their brief and in that case was that that labor dispute was temporary.

It was settled in two months, but it doesn't really make any difference from the principle standpoint whether it's two months or eleven months?

Should that be a standard to be adopted by the Interstate Commerce Commission?

Chief Justice Earl Warren: Mr. Weinberg.

Mr. David D. Weinberg: Yes sir.

Chief Justice Earl Warren: This is an interplay between two governmental policies, labor policy and the transportation policy and the ICC is charged with the responsibility of enforcing the transportation policy, must it abdicate whenever there is any conflict of any kind with the -- with the labor policy?

Mr. David D. Weinberg: We recognize that in some instances, they can act independently of each other.

Each has a separate policy to perform and to carry out, but in this case, you've got an overlapping.

In this case, you've got an impingement, an injection of the Commission into a labor dispute which is outside of their congressional policy.

Chief Justice Earl Warren: I thought what you just read indicated that they recognized that they had no jurisdiction in the labor matter and that they were merely deciding the transportation matter.

Mr. David D. Weinberg: That's what they're trying to say, but --

Chief Justice Earl Warren: But what is their contrary to that in their --

Mr. David D. Weinberg: Well --

Chief Justice Earl Warren: -- in their findings?

Mr. David D. Weinberg: Their having -- they rely upon the findings of the trial examiners and I just read what this trial examiner said, and the other one said the same thing practically.

Chief Justice Earl Warren: Well, he said -- he said specifically, did he not, that they had no jurisdiction at all?

Mr. David D. Weinberg: They had no jurisdiction in this particular case Your Honor.

Chief Justice Earl Warren: Yes.

Mr. David D. Weinberg: And we agree with him.

Chief Justice Earl Warren: Yes.

Mr. David D. Weinberg: We say they have no jurisdiction in this particular case because it arose of a -- out of a labor matter.

Chief Justice Earl Warren: But what findings of his do you object to?

Mr. David D. Weinberg: We don't -- we do not object to the trial examiner's findings.

We're here objecting to the majority opinion of the lower court and the Interstate Commerce Commission in taking those findings, adopting them and then deciding that they're not considering a labor dispute.

We think the hardcore of this matter is the labor dispute.

The Government in its brief has admitted that the --

Chief Justice Earl Warren: Oh, I think everyone must admit that the labor dispute is what caused it, but the question I ask is, have they gone into the labor field when they're --

Mr. David D. Weinberg: We say they have.

Chief Justice Earl Warren: -- enforcing the transportation policy.

Mr. David D. Weinberg: Yes, we say they have.

And they negated certain rights of the parties, the right of the employer of freedom of contract, the right of the employees to bargain collectively.

What they are in effect taking away from both the employer and the employee are rights guaranteed to the employees and the employer by the National Labor Policy.

That's what they're doing in effect by this decision.

That's what we object to.

Justice Arthur J. Goldberg: Mr. Weinberg.

Mr. David D. Weinberg: Yes sir.

Justice Arthur J. Goldberg: Do you have to carry that argument that far after you -- didn't you agree that – didn't you earlier say that considering the fact that there was a labor dispute, the Federal Government [Inaudible] for the Commission to exercise its own authority would be considered in respect to 212 of the [Inaudible]

Mr. David D. Weinberg: Yes.

Justice Arthur J. Goldberg: As a matter of fact it was not 207?

Mr. David D. Weinberg: That is correct.

Justice Arthur J. Goldberg: 207 was an inappropriate way to deal with the problem at hand.

Mr. David D. Weinberg: That's one of the arguments and that's the Montgomery Ward case Mr. Justice Goldberg.

That's what they did in the Montgomery Ward case, but in the Galveston case -- the Montgomery Ward case, they turned down the parties because of a labor dispute.

This Court has admonished the ICC to be cautious in considering these problems.

We say that the ICC perhaps acted without caution in this case.

Chief Justice Earl Warren: Suppose there were two competing claimants for a permit?

One of them had to strike on and the other one didn't and the ICC took the one that didn't have a strike on carrier and gave it the permit.

Would -- would you think it was interfering there then with the labor --

Mr. David D. Weinberg: I think that would be a different situation --

Chief Justice Earl Warren: Well, this would be different, yes.

Mr. David D. Weinberg: -- Mr. Chief Justice.

Chief Justice Earl Warren: I know it would be different.

Mr. David D. Weinberg: I don't -- that that would be analogous of the situation.

Here, they are granting a new certificate because of a labor dispute.

Chief Justice Earl Warren: Well, I thought they were granting it because there wasn't any -- there wasn't any transportation employee.

Mr. David D. Weinberg: Well, the record doesn't bear that out entirely as Mr. Axelrod argued yesterday.

Chief Justice Earl Warren: Yes, I -- I recall what he said but because there was a lack of adequate transportation facilities.

Mr. David D. Weinberg: Yes, but the examiners in their findings didn't find that completely.

One of the examiners found that it wasn't so inadequate but my argument doesn't go to that particular portion of this case.

My argument is this that the ICC has embarked upon a dangerous precedent, a novel situation in granting rights to a carrier, to a new carrier in setting up rival competing carriers because of a labor dispute, because of activity on the part of other carriers that is a protected and guaranteed activity under the National Labor Policy.

And I think the ICC was very careful in the Galveston case which this Court spoke about in the Sand Door situation.

The ICC was very cautious and they said the strike had been settled.

The labor dispute had been settled before the hearing.

Well, in this case, you didn't have the labor dispute settled before the hearing and we must recognize that every labor dispute is temporary.

They're not a permanent situation, but what the ICC has embarked upon is a permanent situation.

For example, suppose they transfer -- the Nebraska Short Line Carriers should transfer these rights their transferable subject to ICC approval and the very basis is taken away.

Justice John M. Harlan: Does the record show what the present status of the labor dispute is?

Mr. David D. Weinberg: No, it doesn't Mr. Justice.

Justice John M. Harlan: Were there any objections that you're telling us what it is?

Mr. David D. Weinberg: Well --

Justice John M. Harlan: This is 57 we're dealing with now, isn't it?

Mr. David D. Weinberg: Yes.

I would say that it has been terminated and in that respect, I'd like to bring up one other fact in this situation.

One of the stockholder carriers of Nebraska Short Line carriers had a strike over wage rates, hours and conditions of employment.

Some of the carrier stockholders had no labor dispute at all and some were involved in the hot cargo situation.

So in this situation, you've got a strike for wages, you've got a hot cargo situation, and you've got some of the people who are getting these rights who didn't have any labor dispute at all, who didn't have any interruption of service to speak of.

The labor dispute, Mr. Justice Harlan, I think, has been terminated.

Justice William J. Brennan: [Inaudible]

Mr. David D. Weinberg: No, they are not, Mr. Justice Brennan that I know of, but they are subject to be an organized buying.

Now what happens if they get organized and they sign a contract similar to what the other carriers have signed?

Justice William O. Douglas: If there'd been a -- a complaint filed under complaint section, what power would the ICC have?

Mr. David D. Weinberg: The power of the ICC would be revocation.

Justice William O. Douglas: Revocation of what?

Mr. David D. Weinberg: Of the certificate of the carrier that had refused to render service.

Justice William O. Douglas: So they could have --

Mr. David D. Weinberg: What -- and they would compel in to serve first and in the event of failure to serve, then their certificate would be subject to revocation.

Justice Byron R. White: Would you concede they could compel them serve in a [Inaudible]

Mr. David D. Weinberg: Mr. Justice White --

Justice Byron R. White: [Inaudible]

Mr. David D. Weinberg: -- may I answer that question this way.

I take a different position than Mr. Axelrod on this.

I say it doesn't make any difference whether they grant him temporary rights, whether they use the complaint procedure, or whether they grant him permanent rights, the ICC is resolving a labor dispute by any act.

Justice Byron R. White: So that -- so your answer is they could not do so.

Mr. David D. Weinberg: I say that they could file the complaint and the ICC should consider it.

Justice William O. Douglas: But if the ICC acted under the complaint provision, you would be here arguing the same you are -- as you are today.

Mr. David D. Weinberg: I think so, yes sir.

Justice William O. Douglas: It had no business interfering with --

Mr. David D. Weinberg: Because the principle is the same in my opinion.

Mr. Axelrod does not agree with me on this and that --

Justice William O. Douglas: Yes.

Mr. David D. Weinberg: -- therein lies our difference or one of them.

Justice William O. Douglas: That -- you answered the question I was going to ask you next.

Mr. David D. Weinberg: Yes there is a difference.

Although I have set out in my brief that they should have followed the complaint procedure, in my opinion, if they followed the complaint procedure, the question of the labor dispute would have been squarely presented to the ICC, like it was in Montgomery Ward.

Justice William O. Douglas: But it would be a futile road to follow by your argument.

Mr. David D. Weinberg: Yes.

Justice Arthur J. Goldberg: [Inaudible]

Mr. David D. Weinberg: I will say this.

I am really not changing.

I am attempting to be consistent in my argument on the power of the Interstate Commerce Commission.

Justice Arthur J. Goldberg: Is this your argument that [Inaudible]?

Mr. David D. Weinberg: Well, I think that there is a consistency to this argument as far as I'm concerned because I'm arguing the power to resolve the labor dispute whether it'd be by any of these procedures, Mr. Justice Goldberg.

Chief Justice Earl Warren: But Mr. Weinberg, if --

Mr. David D. Weinberg: Yes sir.

Chief Justice Earl Warren: If in your opinion, the ICC has no jurisdiction to proceed by way of complaint, what can it do to enforce the National Transportation Policy in this situation?

Mr. David D. Weinberg: I think this is a question that Congress has to answer Mr. Chief Justice.

Chief Justice Earl Warren: No, that isn't --

Mr. David D. Weinberg: But I -- what would be --

Chief Justice Earl Warren: Did you mean there's a vacuum now that they must be frustrated in doing anything?

Mr. David D. Weinberg: I'd say that they have all the rights in the world to regulate and to see that the National Transportation Policy is performed, but in the field of labor disputes there is a great question.

This came up in the Montgomery Ward case and they denied relief to carriers who weren't served.

Suppose, Mr. Chief Justice, just for our discussion that you had a situation -- that you had a situation where you had a wage dispute and no service could be given in any area just like the telegrapher's strike against the Chicago Northwestern Railroad.

Suppose it was impracticable for a carrier to perform because of a strike, a lawful legal strike in which its employees was engaged, that is the area that we are talking about in this case.

Chief Justice Earl Warren: But we're not talking about the railroad, we're talking about the power of the Interstate Commerce Commission here --

Mr. David D. Weinberg: Yes, that's right.

Chief Justice Earl Warren: -- and is --

Mr. David D. Weinberg: But --

Chief Justice Earl Warren: -- is it frustrated in either case?

Mr. David D. Weinberg: I don't think it's frustrated.

I think it has to recognize this problem.

I think that it cannot impinge upon another congressional objective and policy.

The ICC has no jurisdiction to protect the public against inconvenience arising out of labor disputes.

To the extent that Congress wanted the public protected against such an inconvenience, it gave the job to the Federal Mediation and Conciliation Service and the National Labor Relations Board, not the ICC.

For example, there's the 80-day cooling off period for national strikes that affect a wide area.

There's the service of the Federal Mediation and Conciliation Service to settle these matters.

Chief Justice Earl Warren: Very well.

Mr. David D. Weinberg: Thank you very much.

Chief Justice Earl Warren: You're welcome.

Mr. Ginnane.

Argument of Robert W. Ginnane

Mr. Robert W. Ginnane: Mr. Chief Justice, may it please the Court.

I would like to summarize first briefly some of the elements of proof of public convenience and necessity on which the Commission acted in this case.

Under our theory of the case, if the Commission's findings as to public convenience and necessity were not supported by conventional elements of proof then the Court does not get to the other question which had been discussed at such length.

As you've been told, the stockholders of Short Lines, to whom the Commission issued a certificate, are small carriers in Central and Eastern Nebraska.

And much of their business is transporting freight from points in Central and Eastern Nebraska, to and from Omaha where it is interlined with the larger interstate carriers for transportation to and from the larger distribution centers such as Chicago.

These stockholder carriers serve a number of towns in Central and Eastern Nebraska which are not served in regular service by any other carriers.

For example, Clark, one of the 12 stockholder carriers alone serves 12 communities which are solely dependent upon him for regular motor common carrier service.

In 1954, the Teamsters Union sought to organize the employees of the 12 stockholder carriers.

And without going into details of that, by the beginning of May in 1956, as the Commission found as result of the interstate carriers' compliance with their Hot Cargo Clauses and the collective bargaining agreements.

As the Commission found in early May, 1956, certain of the stockholder carriers began to experience difficulty in affecting normal interchange arrangements with a larger line haul carriers with whom they have been doing business.

This difficulty was experienced primarily at Omaha.

And consistent of the refusal of many of the larger carriers to accept outbound shipments, their refusal to turnover to the stockholder carriers' inbound shipments which were either routed by shippers over the stockholder carriers or which normally would have been turned over to them for delivery to the interior Nebraska points which they regularly served.

The Commission while finding that the stockholder carriers at no time experienced a complete shut off in interchange service at Omaha.

And while further finding that Burlington Truck Lines and Santa Fe Truck Line attempted to maintain service which I'd like to discuss later, characterized the situation as far as transportation service was concerned as follows in the record at page 116.

The breakdown in interchange arrangements at Omaha between the unionized carriers and the stockholder carriers, and the refusal of the unionized carrier to provide pick up and delivery service at establishments where picket lines had been established, has resulted in a substantial disruption in motor service to a large portion of the Nebraska shipping public.

The nature of the impact upon shippers was described by the Commission as follows at page 107.

As a result of the breakdown of interchange arrangements at Omaha, shippers at interior Nebraska points had experienced delays in the movement of their outbound shipments to destination and consignees at such points have experienced delays, inconveniences, and unforeseen expense distributable to the failure of the originating carriers to -- in effect to maintain adequate interchange service at Omaha.

There was really no dispute about what happened in terms of service to shippers.

At page 3 of the reply brief, the appellant carriers admit, and I'll -- frankly, I'm taking a bit out of their context, but they admit that many shippers in the area suffered aggravating delays in the delivery of their shipments.

Now, the Commission further found that these difficulties which began in May, 1956, were continuing to be experienced up to and including the date of the hearing, and by that, the Commission was referring to the hearing on the second application which began on April 4, 1957.

In other words, by that time, the deterioration in the interchange at Omaha had persistent for 11 months.

Again, the Commission did not find that there was a complete cessation of interchange, a complete breakdown of service.

In candor, I must point out that the record shows that shipments did eventually move somehow.

Now, to rebut this finding of deficiencies, in the service to shippers, the appellant carriers do primarily two things.

First, they refer to the Commission's finding and I quote, “That at no time has the boycott against the stockholder carriers been completely effective in that at no time has interchanged with a larger unionized carriers then completely shut off.”

For example, Burlington Truck Lines and Santa Fe which are rail subsidiaries, a period of accepted interline traffic from the stockholder carriers more or less regularly and to have generally maintained a normal interline relationships to them.

And then from this, the appellant say, there's nothing in the record to suggest that the available physical capacity of Burlington and Santa Fe could not have taken care of all of all of the traffic involved.

Now, we don't think the record quite shows that.

To begin with, I want to make it clear, nobody in this whole proceeding of this litigation has disputed the adequacy of the physical capacity, physical transportation capacity of the large interstate carrier serving Omaha.

The question has been whether it was sufficiently made available to shippers but the physical capacity is there.

However, the Commission also adapted the finding of examiner discovery about the Santa Fe and Burlington service.

He said, there's no doubt that some carriers like Burlington and Santa Fe accepted traffic but even those carriers did not maintain the same free and open interchange service in effect before May 1956.

In many or most instances, the interchange traffic had to be handled at the terminal by a supervisory personnel because the employees normally are handling such traffic wouldn't touch it.

Now we submit that the Commission was not required to consider the physical capacity of Burlington and Santa Fe where the availability of that capacity, the shippers was measured by the cargo handling capacity of supervisory personnel.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Robert W. Ginnane: There is scattered evidence to the effect, not a great deal.

Justice Arthur J. Goldberg: They're not material.

And why would that be [Inaudible] was this in the delay of the traffic?

Mr. Robert W. Ginnane: The overall result of the service being rendered, including that of Burlington and Santa Fe was that there were significant delays in delivering.

Justice Arthur J. Goldberg: [Inaudible] -- were there significant delays as far as they [Inaudible]?

Mr. Robert W. Ginnane: I know of only one or two specific instances in the record indicating that there were delays.

For example on one occasion the traffic result if the Burlington and at that point, they declined it, later in the day they called back and said, “Bring it over.”

Now, that's not very massive evidence.

I'll admit.

Justice Byron R. White: Mr. Ginanne, could you help me out on this?

I thought yesterday that Mr. Weinberg indicated that the carrier in this Hot Cargo Clause, it undertake it not to handle [Inaudible].

And I gather that if the carrier wanted to handle [Inaudible] to provide some personnel, he was -- coming in to do so under this Hot Cargo Clause --

Mr. Robert W. Ginnane: Well, certainly Burlington and Santa Fe to give him credit, attempted to provide service through utilizing the supervisory personnel.

Justice Byron R. White: But they weren't legally bound for the Hot Cargo Clause and not attempted to do it.

It's just that they couldn't fire employees who reviewed the handling or [Inaudible] or they might take that to the strike?

Mr. Robert W. Ginnane: That is my understanding of it sir.

And so far as I know, Burlington and Santa Fe did not run into a strike because they utilized their supervisory personnel for this.

And in support of their contention, the appellee carriers' contention that the interruption of interchange were so transitory as to preclude the authorization of the new service, they state both in their brief and in their oral argument yesterday that about April 3, 1957, Watson Truck, and independent, some of the larger carriers resumed service.

Now, that statement is inaccurate.

It's based upon the finding of examiner Gresco in the record at page 94 and 95.

And he said and I quote, “For business reasons, some of the principal Omaha carriers like Watson Brothers and so on, declared that a new policy have been adopted about April 3, 1957.

That management policy is to the effect that serious and persistent attempts will be made to interchange freely and normally at Omaha.”

It was explained that where picket lines exist, there might still be difficulties in interchanging traffic in normal fashion.

And the examiner concluded, this was his opinion, not binding upon the Commission, all fair indications are that under the leadership of these large and progressive carriers, other Omaha truck line carriers will strive to restore normal interchange.

We think that -- we submit that the Commission was not required to assume that this new policy of attempts would be a decisive factor in eliminating service deficiencies which had already been continuing (Voice Overlap) --

Justice William J. Brennan: [Inaudible] what?

Mr. Robert W. Ginnane: Of this announced new policy of attempts would not be a decisive factor in restoring service deficiencies which had been continuing for 11 months.

We -- I would also emphasize that this new policy is formulated about April 3.

Now, that's on the eve of the hearing in the second application which was to begin and did begin on April 4.

Now, the court below pointed out that the Interstate Commerce Commission in acting upon applications for new service, often finds that coincident with the filing of the application existing motor carriers start to provide or offer to provide better service to more shippers.

And then that is common place in the Commission's work.

As the court below said, “The Commission is not required to be at decisive length to such a related zeal to serve the public.”

Briefly, it's undisputed that during an 11-month period preceding the second hearing, there was a sufficient interruption in interchange at Omaha to, in the words of the appellant carriers in their reply brief, to subject many shippers to aggravating delays in the deliveries.

Now, under the standards applied by the Commission in hundreds of cases, sustained by this Court, the Commission was warranted in these facts to find that the present and future public convenience and necessity by conventional standards warranted the establishment to the authorization of a new service tailored to the needs of the situation.

Here, the Commission granted only a fraction of the authority requested by Short Lines.

Short Lines in effect asked for the world on a platter.

One of their applications was to serve between Omaha on the one hand and points in 32 states in the other hand.

They didn't get it.

On an analysis of shipper needs and service deficiencies, they got only the authority to serve Omaha on the list and the distribution centers of Chicago, Kansas City and St. Louis on the East, limited in both directions to shipments originating in or destined to Alaska -- toward Nebraska.

Justice John M. Harlan: What's your answer to Mr. Axelrod's point, the public convenience and necessity could have been met by the Commission granting a temporary certificate and then extending it into a strike situations resolve themselves.

Mr. Robert W. Ginnane: Under Section 210 (a) of the Interstate Commerce Act, the Commission may authorize temporary operations for not more than 180 days.

It may under Section 9 (b) of the Administrative Procedure Act and under this Court's decision of the Pan-Atlantic Steamship Company case, it may extend that temporary authority for more than 180 days during the pendency of an application for permanent operating authority.

The suggestion was made yesterday as I recall it that the Commission could have issued a temporary authority during the pendency of an investigation under Section 204 (c) to determine whether a cease-and-desist order should issue.

That statement is not accurate.

However, the Commission has no authority to issue a temporary authority beyond the 180-day period merely because the pendency of an investigation under Section 204 (c).

And of course under his contention, we would have no more business to issue a temporary authority than we would have to issue a permanent authority or a temporary -- or a cease-and-desist order.

Under the position that all the consequences flowing out of these facts are within the exclusive jurisdiction of the National Relations Board, as Mr. Weinberg contends, then that would mean, it must mean that the Commission would be totally precluded from using any of the tools available under the Interstate Commerce Act to issue a service to charge.

Justice William J. Brennan: [Inaudible] would it also be unavailable?

Mr. Robert W. Ginnane: Well, by the complaint procedure, they may mean one or both of two things.

Section 212 of the Interstate Commerce Act provides a very difficult, almost never used procedure for the revocation of motor carrier certificates.

It's available only if, first, the Commission after a hearing proceeding under Section 204 (c), issues an order to the carrier to perform its duty, to a particular duty whether under the statute or under a Commission regulation.

Justice William J. Brennan: Well, would the -- would --

Mr. Robert W. Ginnane: Secondly --

Justice William J. Brennan: Well, would not in that -- in that context the very point made that this is out of bounds for the Commission because it belonged exclusively to the National Labor Relations Board, would not also be involved in the complaint procedure?

Mr. Robert W. Ginnane: Mr. Justice, one could argue at some logic that would be even more directly involved, because if the Commission perceive as to it, to issue a cease-and-desist order against these carriers, telling them effect not to honor the Hot Cargo Clause.

They're arguing the conflict is much more direct than the alleged conflict here.

What is the -- what did the Commission do here?

It didn't tell --

Justice Arthur J. Goldberg: [Inaudible] -- excuse me, Mr. Justice White has pointed out [Inaudible] there is nothing in the order [Inaudible] -- is that what you said?

Mr. Robert W. Ginnane: Technically, Mr. Justice Goldberg, that is true, but I would have to admit that as a practical matter, that if a com -- that if a carrier were going to comply with such an order in effective commercially realistic sense, it would have to force its employees to handle cargo.

I mean, --

Unknown Speaker: [Inaudible]

Mr. Robert W. Ginnane: Effective -- it would have to force its employees to handle the shipments.

Effective practical transportation --

Unknown Speaker: [Inaudible]

Mr. Robert W. Ginnane: -- of the type which provides adequate service to shippers just isn't performed as a practical matter by utilizing supervisory employees only to handle the freight.

Justice Byron R. White: It would [Inaudible] -- a moment of strike and there would be a trial of economic strike in order to comply with your ordinance, is that right?

Mr. Robert W. Ginnane: It might have happened but that isn't what we did.

All we said here was to carriers, since you won't perform the service, we'll authorize somebody to perform it who had said -- who was willing to do it and we say that that approach more than any other kept the Commission out of any area of overlap to the Labor Board, kept it furthest removed from the labor dispute.

The alternatives suggested by the appellants, arguably at least, would have subjected the Commission into the dispute.

Justice William J. Brennan: I interrupted you, you said there was still another complaint procedure, you mentioned this one under cease-and-desist.

Mr. Robert W. Ginnane: In the second stage, it would be, if the carrier refused to comply with the cease-and-desist order then the Commission could -- after a fur -- after a second hearing, it would determine that the violation was willful, revoked the carrier certificates.

Needless to say, these remedy of revocation of carrier certificates is suggested by the union and not by the appellant carriers.

Justice John M. Harlan: Could I go back to the temporary --

Mr. Robert W. Ginnane: Sure.

Justice John M. Harlan: -- certificate.

As I understand it, incident to a resolution of an application for a permanent certificate, the Commission does have authority to extend -- pending the conclusion of that proceeding, a temporary certificate, is that right?

Mr. Robert W. Ginnane: That's correct, sir, even if it goes on for two or three years.

Justice John M. Harlan: And therefore with this application for a permanent certificate pending, the Commission could've adjourned that proceeding from time to time and continue indefinitely the issue of a temporary certificate, is that right?

Mr. Robert W. Ginnane: I suppose.

Justice John M. Harlan: In other words, there was power to do what Mr. Axelrod claims should have been done.

The question whether it should have been done is another question.

Mr. Robert W. Ginnane: The Commission did issue a temporary authority early in the history of this matter.

Justice John M. Harlan: What page --

Mr. Robert W. Ginnane: But it would've expired at the end of 180 days, except for the pendency of the application for permanent authority.

Justice John M. Harlan: But instead of issuing the permanent certificate that they did, they could've continued the temporary certificate.

Mr. Robert W. Ginnane: Well, no, because if the Commission had denied the application of a permanent authority then the temporary authority would have expired.

Justice John M. Harlan: I understand that but supposing they had not denied it but simply continued the application?

Mr. Robert W. Ginnane: Deliberately?

Justice John M. Harlan: Yes.

Mr. Robert W. Ginnane: There are some doubts as to the propriety of doing that Mr. Justice because this temporary authority is -- power is an exception from the general convenience and necessity standards of the Act.

Justice John M. Harlan: Well, the real -- the real essence of the complaint here as I see it is that by granting a permanent certificate, the Commission has in effect fragmentized or interfered with the ability of the union to unionize these independent carriers in the sense that there was more opportunity to unionize them if they were operating as individual carriers than if they are brought together under the aegis of Short Lines and become a larger organization, that as I see it is the real essence of this -- of their complaint.

Mr. Robert W. Ginnane: Well, then --

Justice John M. Harlan: And to that extent, the Commission has permanently injected itself into a labor dispute, independently of the, what I consider is the narrower question as to whether they should -- this did or did not violate the hot cargo -- inject itself into the Hot Cargo Clause situation?

Mr. Robert W. Ginnane: Well, of course, sir.

A set of facts can have two or three sets of circumstances and it'd be naïve for me to say that the Commission's action in granting a certificate here did not have or might not have some impact upon the labor situation out there.

Now, the Commission was not evaluating its actions in terms of what the consequences would be in labor relations.

It was applying as it felt it was its duty to do, only to conventional standards of public convenience and necessity under the Interstate Commerce Act to meet admitted deficiencies in service to shippers.

It did not purport to evaluate what impact that action might at some later date have -- it have upon labor problems --

Justice John M. Harlan: Well, that's my difficulty --

Mr. Robert W. Ginnane: Really it's not [Inaudible].

Justice John M. Harlan: -- of the Commission's report.

That's my difficulty with the Commission's report that they did treat this matter simply and solely as if it were a conventional public convenience and necessity case.

And where you have got an interlap -- an overlap between two sets of policies, I would suppose that the Commission would have to make findings to show why some procedure, other than a procedure which you admit, does have a permanent impact on the labor policy is none -- nonetheless necessary.

Mr. Robert W. Ginnane: I would submit, Your Honor, that the Commission did not have available such a choice of remedies.

It did not have available any remedy for the -- for this -- to meet -- by which it could meet shipper's needs that wouldn't have an impact --

Justice John M. Harlan: But it (Voice Overlap) --

Mr. Robert W. Ginnane: -- or potential impact upon the labor (Voice Overlap) --

Justice John M. Harlan: We're not told why.

Mr. Robert W. Ginnane: For example, if the Commission had issued a cease-and-desist order to the interstate carriers, directing them to render service notwithstanding their Hot Cargo Clauses, arguably, hat would have a more direct -- amount to a more direct interjection into the -- into the labor relations area.

The only other remedy as suggested by the appellants is the very drastic sanction of revocation of certificates in which the -- on which the interstate carriers in reliance upon which they have invested millions of dollars in equipment and terminals.

That would be like throwing an atomic bomb into a local situation, revocation of the carrier certificates.

So the choice was, only they were then arguing distance was to authorize a careful retailer, the additional service as it did here or to more directly interject itself into the labor management area by a cease-and-desist order which in effect would be telling the carriers don't honor your court -- your Hot Cargo Clauses.

Justice Arthur J. Goldberg: But Mr. Ginanne, the -- again, I think you know the reason to the heart of that problem by proceeding under 204 (c) which is the cease-and-desist order.

The Commission in effect would be saying to the carriers, “Do at least what Burlington and Santa Fe are doing.”

I don't quite follow why you'd find that that is not an appropriate one to add in this particular situation.

Certainly, it would be a less drastic one than to do what the Commission did which was to issue a permanent franchise, is that correct?

Mr. Robert W. Ginnane: Well may I -- may I answer you at some length as to why that -- why is that inherent in the situation, why the Commission did not proceed by a cease-and-desist order.

First, by way of context and this is an important context, in a wide variety of situations, hundreds and hundreds of cases, the Commission has dealt with demonstrated inadequacies in the sources of existing carriers by authorizing an additional service.

As the court below instinctively recognize in its opinion, the Commission has proceeded that way from the beginning for two reasons.

It conserves its administrative resources.

It doesn't have the resources to please carrier service performance around the country.

We don't attempt to and secondly, it provides the spur of competition.

And as I say, that is our approach -- has been the Commission's approach in dealing with service inadequacies in thousands of cases, not just this.

It's hard to think of a situation in which the Commission has dealt with the demonstrative service inadequacy by existing carriers who have the authority by telling them through a cease-and-desist order to meet the service need.

Secondly, when a proceeding starts out like this, the applicant applying for certificate in the existing carriers protesting, I'm quite sure that that proceeding can't go off like this and result in the issuance of a cease-and-desist order against the existing carriers, unless at some point there's been a formal notice given that such -- that such an order may be the result of proceeding and by that time, the proceeding might be very far advanced indeed.

And finally, proceeding by cease-and-desist order and only -- only by cease-and-desist order means that the Commission cannot provide for immediate service needs by temporary authority for more than a 180 days.

They can issue a temporary authority for a hundred -- more than 180 days only while it is determining and acting upon an application for temporary authority.

Now, that may sound sort of awkward mechanically but that is the structure of the statute.

Chief Justice Earl Warren: Mr. Ginanne --

Mr. Robert W. Ginnane: Moreover --

Chief Justice Earl Warren: -- suppose -- suppose this was the strike against the -- these lines, these -- the Burlington Truck Lines and over some other clause of collective bargaining agreement, not a hot cargo and they -- their service was effective as it has been here for a period of 11 months.

Would your argument tell you as far as to say that in that circumstance the Commission could grant a permanent permit to someone else?

Mr. Robert W. Ginnane: Yes.

The Commission would not evaluate the causes of the labor dispute.

It would not leave them with such a remedy overnight or it's just a relatively brief interruption of service.

In the Commission's approach, while happily, we haven't had much experience with this type of thing but it is illustrated both by this case and the Galveston application which it decided on the same day as this case.

The Galveston Truck Lines asked for a certificate arising out of the same type of situation, a breakdown and interchange with other carriers by who -- that were -- who are honoring their Hot Cargo Clauses.

That interruption of service lasted only two months and that it ended several months before the application for the certificate was filed to the Commission.

The Commission said, “We aren't going to grant any certificate under these facts.”

But that was in contrast to this case, and this case involved an 11-month interruption in service which was continued at the time of the record before the Commission was closed.

So by -- so in answer to your question, Mr. Chief Justice, under your facts, if that interruption to the ship -- of the service to the shipping public had continued for 11 months, I must assume that the Commission would take the same action.

Justice John M. Harlan: What bearing, if any, does the fact had that Mr. Weinberg -- that was not shown by the record that the labor dispute at the present time is in fact terminated?

Mr. Robert W. Ginnane: The only answer to that is that these matters have to come to an end to be settled sometime. The Commission held two long hearings before hearing the examiners, the entire Commission held oral argument, entire Commission report, petitions for reconsideration.

I think it was enough that the Commission did not act except upon a showing of serious service interruption of 11 months and continue at the time of hearing.

Justice John M. Harlan: Well, that would be a hazardous assumption to make even looking back at the benefit of hindsight.

At that time that the labor -- that the Commission was entitled to proceed on the assumption that the labor dispute was never entered that it would be continued intermittently for -- permanently -- for a permanent period of time.

Mr. Robert W. Ginnane: 11 months is the longest such situation the Commission has encountered.

Justice William J. Brennan: As of the time the Commission granted its certificate, it had no idea that it was going to be only 11 months, it was still going on then.

Mr. Robert W. Ginnane: As the time of -- as of the -- as of the time of the grant, I'm not sure, sir.

Justice William J. Brennan: Well, I thought -- I thought you said that this is (Voice Overlap) --

Mr. Robert W. Ginnane: As of the time of the record, the hearing record was closed [Inaudible]

Justice Potter Stewart: [Inaudible]

Justice Hugo L. Black: Up to the time of this Mr. Ginanne, had the Commission ever exercised its power to grant any kind of permit in order on -- because traffic was interrupted by strike activities or union activities that were lawful?

Mr. Robert W. Ginnane: No.

There were a couple earlier -

Justice Hugo L. Black: That it -- is it too simple to -- I don't quite under -- is it too simple an analysis of this to say, the question presented is whether the Commission in order to keep the flow of traffic, without moving, has power to grant temporary certificates to different companies that are not on strike to come in and carry the goods which are being delayed by a strike or strike activities that are lawful?

Mr. Robert W. Ginnane: It -- it has done so.

It has issued temporary authority in a number of such situations through the years.

Justice Hugo L. Black: You get down to the question, do you not or is this -- I'm just asking though that maybe too simple idea on here as to whether Congress has through the Interstate Commerce Act, given the Commission to solely governmental power as to -- and decide against the striker or one who's carrying it on, in order to keep the traffic moving?

Mr. Robert W. Ginnane: Well, it's not necessarily against the labor.

Justice Hugo L. Black: But if that -- it has that effect of course?

Mr. Robert W. Ginnane: For --

Justice Hugo L. Black: That's the object in purpose, isn't it?

Mr. Robert W. Ginnane: For example, the three years -- I think it was about three years ago, a number of the larger motor carriers on the West Coast engaged in a lockout as part of their collective bargaining problems.

And the Commission did not hesitate to authorize -- to grant temporary authorities to various small carriers not involved in the lockout to hold food stuff and perishable commodities.

And --

Justice Hugo L. Black: My question is not as to the -- for the idea of you saying that's right or wrong.

I'm just trying to see it does get itself down, does it not, under the facts of this case that the Commission has acted because of an interruption of traffic, solely due to a contract which was made, collective bargaining agreement which was made, which was lawful and where that is interrupting the flow of traffic, whether the Commission can either temporarily or permanently or both -- issue a certificate either temporarily or permanently or both in order to see that traffic moves despite the fact that the employers and the union are in engaging in conduct which is lawful under the National Act -- Labor Act.

Mr. Robert W. Ginnane: And in response to your question sir, the Commission has repeatedly asserted power to issue temporary authorities to meet an urgent need for service which resulted from a labor dispute of one kind or another.

This is the first case in which it has asserted the power to issue a -- to grant a permanent authority.

Justice Hugo L. Black: That emphasizes it, does it not, whatever the power is, the importance of distinguishing between a temporary authority to do such things which carries food and milk and necessary commodities to people and certificate that lasts of course over a long period of time and can result in breaking a strike or destroying the effect of collective bargaining?

Mr. Robert W. Ginnane: I would agree.

I would agree entirely.

I think the way the Commission handled this case and the companion Galveston case indicates its acute awareness of that.

The Galveston case, shorter interruption of service, already terminated.

The Commission -- the Commission denied the application.

Here, the only case in which it has granted such a permanent authority, interruption and interchange, interruption and service, 11 months contending through the date of hearing.

It's the first time the Commission had encountered such a set of facts and hopefully it will not encounter very often in the future.

Justice Hugo L. Black: Is it your judgment on the case, maybe you have noticed that side of it, that what is being done -- was being done by this company and the union were both within the range of activities that are lawful under the Labor Relations Act?

Mr. Robert W. Ginnane: The Commission assumed that they were.

It did not purport to determine whether they were lawful or unlawful.

I think I would be authorized to say that the Commission would regard itself as not competent to pass upon such matters.

Justice Hugo L. Black: Well, I agree to that.

That gets the questions of preemption of course, when you get to that point.

Mr. Robert W. Ginnane: And --

Justice Hugo L. Black: I was just trying to find out if what you said at the case and you know far more better than I do, whether in your judgment there is anything that has been attributed to the union or the employers by the Commission, that is unlawful?

Mr. Robert W. Ginnane: No, indeed.

That --

Justice Hugo L. Black: Your question then of whether doing that which is lawful in connection with the labor dispute, the Commission has power by reason of the Interstate Commerce Act to issue a certificate because of the interruption of traffic due to that conflict, issue a certificate either temporary or permanent?

Mr. Robert W. Ginnane: That's the correct posture of the case.

The Commission did not purport to evaluate the conduct under the National Labor Relations Act of employers or union.

It purported only to apply conventional standards of public convenience and necessity in looking only to -- how to meet shipper's needs solely to that.

Justice William J. Brennan: [Inaudible] before the hearings closed, it had appeared that this labor dispute was terminated, that this would have had a bearing on whether or not the permanent certificate would issue?

Mr. Robert W. Ginnane: Oh! I think I have to say yes, because in the companion Galveston case in denying the application, that was one of the reasons given by the Commission.

Justice William J. Brennan: Was there any reason why the Commission could not have deferred final action longer than it did?

Mr. Robert W. Ginnane: Well, this proceeding has been pending between the Commission and the courts from 1956 --

Justice William J. Brennan: Well, I'm speaking of --

Mr. Robert W. Ginnane: -- up to the present time.

Justice William J. Brennan: -- at the time the Commission acted and I didn't get this clearly.

You said at the time the hearings closed it did not appear or it was not the fact that this labor dispute was terminated.

Did you suggest that before the Commission decision came down, however, it had been terminated?

Mr. Robert W. Ginnane: I entered -- Justice Stewart asked the same question and I said I did not recall just what the timing was.

Justice William J. Brennan: Well, is there any discretion in the Commission in respect to the timing of the handing down of a decision on an application of this kind?

Mr. Robert W. Ginnane: Oh! I would suppose so, yes.

Justice William J. Brennan: Do you have any idea how long after the Commission did hand down its decision, the dispute in fact terminated once before?

Mr. Robert W. Ginnane: I do not in fact know. I have been told it is not in the record, that gradually the service -- interchange service was resumed and at the present time, it's back to what it was before 1956.

Justice John M. Harlan: Does the record show -- I understand that the investment of the stockholder carriers in the formation of Short Line?

Mr. Robert W. Ginnane: Yes, and it was not very extensive.

I think I can find it quickly where, on page 101 of the record.

Justice John M. Harlan: Thank you.

Mr. Robert W. Ginnane: So, at the time of the hearings herein, one share of preferred stock had been issued and there had been issued and paid for in cash $37,500 in common stock.

Justice John M. Harlan: That's the total investment?

Mr. Robert W. Ginnane: That would be the implication of it.

Justice Arthur J. Goldberg: Mr. Ginanne, is there any other case where the Commission issued [Inaudible] order that in Galveston, in the labor dispute [Inaudible]

Mr. Robert W. Ginnane: Yes, in -- for example, on page 27 in reference to Planters Nut and Chocolate Company v. American Transfer.

Justice Potter Stewart: Page 27 of your brief?

Mr. Robert W. Ginnane: Yes.

Justice Arthur J. Goldberg: What was the [Inaudible]

Mr. Robert W. Ginnane: Planters Nut and Chocolate Company v. American Transfer Company.

Justice Arthur J. Goldberg: Do you remember what you did on that [Inaudible] in terms of the labor disputes, the efficacy of the inducements forward?

Mr. Robert W. Ginnane: Well it was sort of a tangled situation and one of them illustrates the problem which is inherent in trying to -- proceed by Section 204 (c).

As that proceeding develops, some of the service was restored and then another thing happened which shows the weakness of the 204 (c) remedy.

Some of the carriers simply cancelled their tariffs which provided for inter -- provided for interchange through-routes and joint rates.

In other words, the Commission can proceed through a long hearing, a long contested proceeding and issue a cease-and-desist order.

At that point, the carriers are free to do this.

They can refuse to interline service at -- through -- at joint rates because under Part II of the Interstate Commerce Act as distinguished from Part I dealing with railroads, the Commission cannot require motor common carriers of freight to enter into it through-routes and joint rates with each other.

They have this through-route and joint rate arrangements.

That is only a matter of choice.

It's embodied in their tariffs.

So when the Commission finally issued a cease-and-desist order and was sustained by the courts, the carriers can simply change those tariffs at which point their obligation will be limited to moving freight on their own bills of lading over their own lines and at the local rate.

The result will be almost invariably service at the higher rates, a combination of local rates, instead of a normal interchange service on a single bill of lading at a normally lower joint rate.

That was one of the things that was happening to shippers in this case in Central Nebraska.

When the stuff did move, it often moved like this.

The inbound shipments would be transferred by the -- by the interstate carrier to a railroad at Omaha and be delivered by rail, usually with delays to the interior point.

But how did it move?

It moved at a combination of the inbound motor carrier rate to Omaha and the local rail rate from Omaha to the interior point.

That can range from 25% to 50% to 100% higher than the -- through motor carrier joint rate.

So the -- that the Planters Nut case shows one of the inherent defects in trying to restore adequate service to a cease-and-desist order, because by the time you get to the end of that road, the carrier is free as a matter of law to cease participating in a through-service at a single bill of lading and at joint rates.

Now, as to --

Chief Justice Earl Warren: Mr. Ginanne, before you --

Mr. Robert W. Ginnane: I'm sorry, sir.

Chief Justice Earl Warren: -- change to another subject, I was just wondering if to what extent, if and to what extent, the Commission took into consideration the statement by the applicant that it was nonunion and that under no circumstances would it ever -- and ever, ever agree to a collective bargaining under -- to a Hot Cargo Clause in its -- in any contract and that if it did, it would surrender its charter.

Mr. Robert W. Ginnane: There is no indication that the Commission gave any consideration to that statement and I hope it never did.

Chief Justice Earl Warren: It is in the record though.

Mr. Robert W. Ginnane: It is in the record at the hearing that the applicant was making such statements.

The Commission as far -- the Commission has never and I'm sure would never issue any certificate condition upon the union or nonunion carrier or the applicant or the contents of its collective bargaining agreements.

And there's not the slightest indication of the Commission's report that it paid the slightest bit of attention to such -- to that window dressing from the applicant.

Justice William J. Brennan: [Inaudible] in what we are discussing yesterday, namely that Landrum-Griffin Amendment probably precludes the making of hot cargo agreements of the kind which in this instance resulted in the difficulties in interchange of traffic that at least perhaps that possibility for the future has been minimized.

Mr. Robert W. Ginnane: Depending upon how that is interpreted and applied by the Commission and by the courts.

It seems to me that may well be so.

We've -- in our --

Justice William J. Brennan: Without any consideration for us in this case, do you think?

Mr. Robert W. Ginnane: I would suggest that is not a consideration as to how you decide this case on the merits.

I think it does relate to the probable frequencies of the Commission in taking this sort of action in the future.

Certainly, the Griffin-Landrum Amendment seems to add something new to the law.

I would like to avoid offering any interpretation of it.

I am committed to yield the balance of my time to fellow counsel.

Thank you.

Justice William J. Brennan: Thank you.

Chief Justice Earl Warren: Mr. Harding.

Argument of J. Max Harding

Mr. J. Max Harding: Mr. Chief Justice, may it please the Court.

I may -- I would like to tell you just a little bit about the background of this proceeding and what precipitated the application, its all in the record.

However, I think the local situation is important as to determine the election of remedies that we sought here.

I had represented many of these small drastic carriers for some years and as the record shows, they are quite small.

Some of them have four or maybe five trucks, Clark being the largest by far with some 40 trucks, but on a national scale, they are very small carriers.

And for instance, one of them Fremont Express' gross revenue for a year was just about $20,000. So you can see that they have very limited financial means or financial facility.

Now, we filed this application actually as a joint enterprise for the obvious reason that no single one of them could have afforded to go into a proceeding of this sort.

$37,500 doesn't seem like much money perhaps to many large carriers.

It was an enormous amount of money for many of these carriers to raise.

Now, this application as it was pointed out was filed --

Justice Potter Stewart: What's the relevance of that figure, $37,500?

Mr. J. Max Harding: I think the question was asked what the amount of investment was made by these carriers and I just reiterated sir that that was --

Justice Potter Stewart: I see.

Mr. J. Max Harding: -- the figure.

Now, we filed this application as it has been pointed out under Section 207 of the Act and proceeded with it just as it would be any other public convenience and necessity case.

Throughout these proceedings and I'm sure it's not in the record, there has been some mentioned made as to union organizers working in Nebraska in 1954 and I don't know where that came from, perhaps it incurred some in the brief or a litigation but I don't believe it's in the record and if they were there, certainly, some of my clients didn't know they were around because they never talked to them, they never talked to the -- their employees and maybe they were there but we didn't know about it.

Now, be that as it may, when this service deteriorated, we had to do something.

These small carriers were conducting their regular operations to and from Omaha on their regular schedule basis.

And they started getting their complaints from the receivers of the freight and there was nothing they could do about it when this service stopped.

Repeated request were filed with these carriers and the receivers of the merchandise complained and it was -- it would to offer situation.

And as this record shows, we attempted to prove the standard elements of a public convenience and necessity case which has been outlined by the Commission in the old Pan-American Bus Line's case.

Whether there is a real public demand in need for the service, whether the existing carriers are willing to provide that service and third, whether it can be inaugurated by unduly impairing the operation of the existing carriers.

Now, we believe that we amply support the findings of the Commission in the issuance of the authority which it did grant.

There were some -- well, in excess of 50 public shipper witnesses who appeared and testified before the Commission examiner and outlined their extreme difficulty in conducting their business because they depended upon this transportation.

These small carriers and the aggregate served over 200 Nebraska communities.

And as Mr. Ginanne pointed out, many of the small communities are entirely dependent upon these carriers for service to conduct their -- and to receive their daily needs of living.

And when that service stops, it was catastrophic as far as some of these interior towns were concerned.

Justice Hugo L. Black: There's not any doubt -- any dispute about that, isn't it?

Mr. J. Max Harding: No sir.

Justice Hugo L. Black: Because the question is, isn't it that the [Inaudible] -- that that was due to the effectiveness of picketing and whether the Commission has a right to grant the certificate to the new company because of the effectiveness of the picketing --

Mr. J. Max Harding: Well, Mr. --

Justice Hugo L. Black: -- [Inaudible]

Mr. J. Max Harding: Mr. Justice Black, there was no picketing.

My clients had no dispute with anyone.

Justice Hugo L. Black: Whether you call it picketing or carrying hot cargo and it was due to the fact that the labor union's activities and standing up there and blocking the ships because people didn't want to carry a hot cargo.

Mr. J. Max Harding: Well now --

Justice Hugo L. Black: [Inaudible] -- I'm not saying that's right --

Mr. J. Max Harding: Yes.

Justice Hugo L. Black: -- or it isn't or that that doesn't -- but is there any dispute about the fact, it was the fact [Inaudible]

Mr. J. Max Harding: I'd like to touch on this labor dispute as fact.

I know that that term has been used a great deal here and perhaps I don't understand just what a labor dispute is.

But these unionized carriers testified in this record that they ceased doing business with these nonunion carriers in Nebraska on the advice of a labor counsel located in Chicago.

They never at any time said that there was any dispute but they just relied upon his advice that they should stop doing business with these Nebraska carriers.

Now we necessarily assume that these labor counsel in Chicago received his information some place else that they should stop doing business with them.

But there --

Justice Hugo L. Black: But whatever -- whatever that is, its -- I don't want to interrupt you but --

Mr. J. Max Harding: That's alright.

Justice Hugo L. Black: Isn't it the fact that -- can you think of anything else that caused this interruption factually, except the position of the labor union and position of other people who wouldn't carry a hot cargo.

Mr. J. Max Harding: We must necessarily assume that was the --

Justice Hugo L. Black: That was --

Mr. J. Max Harding: That's what precipitated.

Justice Hugo L. Black: That's this whole thing, isn't it?

That's what --

Mr. J. Max Harding: Yes.

Justice Hugo L. Black: -- brought it on.

Chief Justice Earl Warren: The examiner found that, didn't he, specifically?

Mr. J. Max Harding: I think one of them did.

I'm not sure that they both did sir.

My time is short and I would like to touch briefly upon the election of the remedy which we sought here.

There's been quite a bit of argument about the proper thing to have done here.

Now, we did not file a complaint with the Interstate Commerce Commission.

We did not go to the National Labor Relations Board or seek any of those remedies for the reason we didn't think we had time and those that had previously done so had been entirely unsuccessful in getting any relief.

Clark, one of the stockholders had been having some labor difficulty.

He's the only one, but the experience of Clark showed us that it was fruitless to attempt to work through the National Labor Relations Board.

Clark had a picket line established September 15, 1955.

On October 1, 1955, unfair labor charges were filed against the Teamsters.

This is all in the record.

On December 7, 1955, a settlement agreement was made between Clark and the Teamsters and the notices were posted about the various truck line terminals that they were not to interfere with Clark or that sort of thing.

On February 15, 1956, a complaint was issued by the National Labor Relations Board against the Teamsters Union for its failure to comply with that order.

Now, we're getting up to the time where all the other breakdown takes place, but we of course were familiar with what had happened to Clark.

Then on July 6, 1956, the National Labor Relations Board examiner issued his report and findings and found that the union had been conducting unlawful picketing about Clark's place of business and suggested that it be stopped.

At case -- that examiner's report of course was later appealed, but then, on July 30th, 1956 and to me this is what broke the camel's back, a temporary injunction was issued and signed by the chief judge for the District of Nebraska against the Teamsters Union and ordering them to cease these unlawful activities insofar as Clark was concerned.

And the record shows that the unionized carriers paid no attention to that order and certainly, if they're not going to pay any attention to the order issued by a federal judge, they're not going to pay attention to a cease-and-desist order issued by the Interstate Commerce Commission or the National Labor Relations Board.

So it's our belief that was the only last thing we could do, was to ask for operating authority in order to render the service.

And I still think we were right and I think we amply sustained a need for that service and the Commission so found and so did the lower court.

We ask your affirmance to that order.

Chief Justice Earl Warren: Why didn't you ask for a temporary -- a temporary permit confined to the area rather than ask for a permanent permit to extend all over that part of the country, 35 states I think, Mr. Ginanne (Voice Overlap) --

Mr. J. Max Harding: Well, of course, the Commission denied that extensive (Voice Overlap) --

Chief Justice Earl Warren: Yes, they did, but I say if that was the reason why you elected in this case, why didn't you -- why didn't you take the other course in that for --

Mr. J. Max Harding: Well, we did ask for --

Chief Justice Earl Warren: -- (Voice Overlap) a temporary --

Mr. J. Max Harding: -- temporary authority Mr. Chief Justice and as Mr. Ginanne points out, had we not asked for the permanent authority, the temporary automatically expires that gave them 180 days, that's by statutory requirement.

Chief Justice Earl Warren: Yes, I see.

Mr. J. Max Harding: Thank you.

Chief Justice Earl Warren: Very well.

Argument of David Axelrod

Mr. David Axelrod: May it please the Court, so that there'll be --

Chief Justice Earl Warren: I think -- have you more time Mister?

I didn't know you have more time.

Mr. David Axelrod: I have reserved -- I thought I have Mr. Chief Justice.

I'm sorry.

Chief Justice Earl Warren: Well, I thought -- our record here shows that the two of you together had 64 minutes.

Mr. David Axelrod: I beg your pardon. I assumed that I have my time.

Chief Justice Earl Warren: Well, am I correct on this?

Mr. David Axelrod: Yes.

Chief Justice Earl Warren: The clerk tells me that I am correct in that.

So, I guess we will have to go to the next case Mr. Axelrod.