UNITED STATES v. MONTGOMERY, INC.
Term:
- 1960-1969
Facts of the Case
None
Question
None
Conclusion
Decision: 9 votes for Montgomery, Inc., 0 vote(s) against
Legal provision: Interstate Commerce, as amended
Legal provision: Interstate Commerce, as amended
None
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Transcript:
Argument of Morton Hollander
Chief Justice Earl Warren: Number 66 United States et al., Appellants, versus J.B. Montgomery, Incorporated.
Mr. Hollander.
Mr. Morton Hollander: May it please the Court, I would like to move the admission of Mr. Frank I. Goodman, a member of the Bar, the District of Columbia as well as California for the purpose of arguing this case only.
Chief Justice Earl Warren: The motion is granted.
Mr. Goodman.
Argument of Frank I. Goodman
Mr. Frank I. Goodman: Mr. Chief Justice, may it please the Court.
These case is here on direct appeal by the United States and the Interstate Commerce Commission from a decision of the United States District Court for the District of Colorado.
The case arises under Section 212 (c) of the Interstate Commerce Act and involves the validity of certain restrictions which the Commission placed in the certificate of a motor carrier upon converting it from contract carrier status to common carrier status.
I think that a brief description of the legal context of which the case arises might be helpful to an understanding of the facts.
Prior to 1957, the Motor Carrier Act defined contract carriers as any carriers other than common carriers who engaged in transportation under individual contracts or agreements.
In 1957 however, at the request of the Commission, Congress tightened that definition so as to restrict the term 'contract carrier' to those who engaged in transportation under continuing contracts with one or limited number of shippers and who either allocated vehicles for a continuing period for the exclusive use of each individual customer or who performed the service designed to meet a distinctive need of each individual customer.
In addition and also at the urging of the Commission, Congress enacted Section 212 (c) a 'grandfather clause' providing for the conversion to common carrier status of those contract carriers whose operations were so extensive or so generalized that they did not fit the new amended definition of contract carrier.
Section 212 (c) provided that the Commission might revoke the permit of any such contract carrier and issue it instead a common carrier certificate authorizing transportation of the same commodities between the same points or within the same territories as is authorized by the permit.
It's against that legal background that this case arises.
Prior to 1957, J.B. Montgomery Incorporated was operating as a contract carrier under a permit issued to its predecessor in 1943 under the grandfather clause of the Motor Carrier Act.
Montgomery's permit authorized it to serve designated points within abroad mid-western area, and the carry commodities which were described by reference to the particular kinds of businesses which customarily dealt in or used those commodities.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Well --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: -- in -- well, point were in terms of cities.
Justice Arthur J. Goldberg: City?
Mr. Frank I. Goodman: Yes.
In general, it was from Denver to Chicago and various points in between.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: No, no.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: That's right Mr. Justice Goldberg.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: No, I -- I don't conceived at all.
In this particular case, the -- described the points happened to be cities but in many instances, common carriers or contract carriers are limited to shipping points which are not cities but which maybe identified as plant sites for example of particular businesses or particular classes of businesses and in those instances, I would suppose --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Well --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Well --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: No, that is that our contentions Mr. Justice Goldberg.
I might anticipate for a moment by saying that our contention is that under the permit as a practical matter by virtue of restrictions other than the explicit point-to-point restrictions, this carrier was confined in fact, to movements, to from and between the particular kinds of businesses that will later describe in the certificate restriction.
That limitation was not explicit in the permit but it was implicit there.
Now, the commodities which Montgomery was authorized to carry were the following, such commodities as are usually dealt in or used by wholesale and retail department stores.
Secondly, such commodities as are usually dealt in or used by meat, fruit and vegetable packing houses.
And thirdly, such commodities as are usually dealt in by wholesale of retail hardware and automobile accessory business houses.
In addition, in connection with each of these three commodity categories, the permit contained a so-called keystone restriction.
This was a restriction limiting Montgomery to performing services under contract with persons engaged in the particular kind of business associated with the commodities.
In other words, with wholesale and retail department stores, wholesale and retail sellers of packing house products and wholesale and retail auto bill -- automobile accessory in hardware dealers.
Justice Byron R. White: But as long as he was hauling that kind of a commodity or that kind of a customer, you can haul at any place with any of the geographical areas.
Mr. Frank I. Goodman: Yes, to anybody.
That's right.
He was authorized to haul it to anybody so long as it was under contract --
Justice Byron R. White: -- from a particular person --
Mr. Frank I. Goodman: Yes, Mr. Justice White.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: The statute doesn't say anything about customers.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: No, no that is not -- that's not our argument Mr. Justice Goldberg.
Justice Arthur J. Goldberg: Are you saying that (Inaudible)
Mr. Frank I. Goodman: Well --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Section 212 (c) in terms, does not say anything about customers and therefore would not limit the -- would not preclude the Commission from including in the common carrier certificate.
The keystone restrictions involved here verbatim, in other words had the Commission -- had the Commission carried over the keystone restrictions into the certificate verbatim.
I see nothing in Section 212 (c) which would have precluded that.
It would not -- it would not authorize the carriage of commodities between diff -- any different points or the carriage of any different commodities or within any different territories, then have been authorized in the permit.
In other words, I -- I take it that the objection to carrying over keystone restrictions from the permit to the certificate does not arise from Section 212 (c).
The objection rather is the keystone restrictions in their traditional form, namely as limitations upon the classic persons whom the carrier may serve, are in inconsistent with the status of a common carrier.
Justice Arthur J. Goldberg: Why do you (Inaudible)
Mr. Frank I. Goodman: Well, we don't read that as --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: We don't read that as a -- as a prohibition upon including in the certificate any other provisions that might be contained in the permit and which are not in any way inconsistent with that statutory mandate.
In other words, we think that if the Commission had carried over to the certificate every restriction contained in the permit, so that the certificate was our trainee's copy of the permit.
There could be no objection under Section 212 (c).
The objection would lie rather in the other circumstance that I mentioned a moment ago, namely that it simply wouldn't be appropriate to put keystone restrictions as such in a common carrier certificate.
I think that the principal objection -- I maybe wrong with the principal objection that Mr. Singer makes to -- well I -- let me withdraw that.
I -- I'm exactly sure what the principal objection is but the only objection that might have some substance against carrying over a keystone restriction verbatim would be that a contract -- a common carrier is a carrier which holds itself out to the general public and the --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: That's -- well, if you interpret the language as a common carrier to mean that, then that might be the source of the objection and I will address myself to that objection too.
After the 1957 Amendments to the statute, the Commission instituted a proceeding to determine whether Montgomery's operations were such as to require its conversion to common carrier status.
Montgomery itself later filed an application for conversion to, and various common carriers intervened in opposition.
The Commission concluded that Montgomery's operations did not conform to the amended definition of the contract carrier.
It revoked its permit and issued it in lieu thereof, a common carrier certificate.
The common carrier certificate carried over without significant change, the explicit commodity in territorial descriptions contained in the permit.
It did not carry over, however, in explicit form, the case on restrictions.
The Commission considering it inappropriate to put in a common carrier certificate limitations which explicitly defined the persons with whom the carrier might deal.
The Commission did state, however, that there should be contained in the certificate, provisions which continued to whatever extent was possible.
The substance of the limitations contained in the keystone restrictions.
And accordingly, it placed in the certificate that limitations confining the carrier to move shipments moving to, from and between the designated types of business establishment.
The purpose of this restriction, in the Commission's words, was to enable the carrier to furnish the same service which it had been authorized to provide as a contract carrier thereby ensuring substantial parity between the permanent authority and the certificate authority.
Montgomery filed suit in the District Court to set aside the Commission's order insofar as it contained these particular restrictions.
The District Court held the Commission had no statutory authority to impose such restrictions and it reversed and remanded the case of the Commission.
Justice Byron R. White: (Inaudible)
Mr. Frank I. Goodman: No, Mr. Justice White, it did not.
And I think that's a significant point.
I'd like to say first that there are really two questions involved here under Section 212 (c) and they need to be sharply kept -- sharply distinguished.
The first and the only important question is whether or not, the Commission has authority to transfer to the certificate in any appropriate form whatever, the commodity and territorial limitations which are implicit in the keystone restrictions.
That was the only issue which was decided by the District Court and under the terms of its remand, the Commission would have no alternative but to delete these provisions altogether.
Justice Byron R. White: (Inaudible)
Mr. Frank I. Goodman: Exactly and that is the question --
Justice Byron R. White: (Inaudible)
Mr. Frank I. Goodman: Yes, that's right.
But the Court did not -- did not decide whether the Commission would have -- whether -- did not decide whether these particular restrictions were broad enough to achieve their stated purpose of giving substantial term --
Justice Byron R. White: More important law does decide it here, what happened to the (Inaudible) remand or?
Mr. Frank I. Goodman: Well, let me say this, first, that question wasn't even presented to the Commission in the first place.
The Commission was never advised by Montgomery that there were certain kinds of movements which it could've made under the permit but cannot make under the certificate restrictions.
Had it done so, the Commission would have been of had an opportunity perhaps to modify the language in such a way as to accommodate that objection.
And under the decisions of this Court of course, you can't raise for the first time in Court, an objection you might have raised but didn't before the Commission.
Now, if the Court is prepared to overlook that procedure or obstacle, there might be two possible dispositions to this case.
Justice Byron R. White: But the -- certainly the Commission decided that -- and that is giving a certificate of substantial parity.
Mr. Frank I. Goodman: Yes, the Commission --
Justice Byron R. White: It thought it was.
Mr. Frank I. Goodman: It thought it was and it was never advised differently.
Justice Byron R. White: It might be wrong.
Mr. Frank I. Goodman: It might well be wrong.
Now on that point, our position would be this, apart from the fact that the question wasn't raised before the Commission, our first point would be that the statute requires only substantial parity.
It doesn't require absolute parity.
And the fact that there maybe certain marginal types of shipment which once in a blue moon, the carrier might have occasion to make, should not invalidate the restriction.
We think that most of the examples given by Montgomery in its brief of shipments which it can't make now but could've made then would in fact be authorized under a liberal construction of the Commission's certificate restriction.
For example, every one of the examples that involve public warehouses and that makes up about half of them, would probably be authorized under a liberal construction of the types of businesses referred to in the certificate restriction.
But if the Court disagrees with this, if the Court thinks that the statute requires absolute parity and not merely substantial parity, we think the proper disposition might be one of two things.
First, to remand the case to the District Court for considerations to whether in fact absolute parity is provided by these restrictions.
Secondly, a remand to the Commission with instructions to modify the language in such a way as to achieve complete parity, in other words, to permit every kind of movement which the shipper -- which the carrier might have made under its contract carrier permit.
Justice Byron R. White: But you -- you seemed to -- you seemed to agree that they're some regard of to who's responsible, there are some facts the Commission hasn't considered.
Mr. Frank I. Goodman: Yes, that's right.
The Commission has not considered the objection that there are these certain types of movements which is no longer may make but could've made before--
Justice Byron R. White: Was this certificate somewhat broader than in -- in one way broader than the old one?
Mr. Frank I. Goodman: Is it broader?
Justice Byron R. White: Does it give more?
Mr. Frank I. Goodman: Oh yes, yes, it certainly does in one relatively minor respect and in one very major respect.
In a minor respect, the carrier is now authorized to interchange with other common carriers that is to say to deliver points to a trans -- deliver goods to a transfer point from which other common carriers may then transport it.
This is an incident of common carrier status the Commission held and that therefore permitted it to that even though the carrier couldn't have done that as a contract carrier.
But there's a much more important respect in which the certificate broadens the authority of -- of the carrier.
Our contention would be that the -- whatever -- that the limitations of the certificate are inherent in the keystone restrictions.
Anything that the carrier would be barred from doing under the certificate limitations, it would also be barred from doing under the keystone restrictions, perhaps if there were appropriate modifications that is in the certificate restriction.
But the converse is not true.
The certificate restriction does not confine the shipper to serving only those persons whom it was authorized to contract with by the keystone restriction.
Because for example, they -- the shipper need not -- while it can only carry goods to and from department stores, it need not do that under contract with department stores.
It may also do that on behalf of persons whose -- whose make shipments to department stores or who receives shipments from department stores.
For example, manufacturers or wholesale jobbers or other kinds of suppliers who sell to department stores or retail specialty shops who purchase from department store wholesalers or various kinds of food procedures who sell to packing houses and they're number of other examples.
Now to that extent, our conception of the statute does permit in expansion of the carrier's operating rights, but it's only as much of an expansion as is an unavoidable consequence of its acquisition of common carriers status.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Yes, it does Mr. Justice Goldberg.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Yes.
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Well --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Putting aside the question of substantial as opposed to complete parity, putting that question aside --
Justice Arthur J. Goldberg: (Inaudible) get from the statute?
Mr. Frank I. Goodman: Well first of all, from the language of the statute itself, it says, "Same commodities, same points, same territories."
Now, that means parity of commodities, parity of points and parity of territories.
Now --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: Well our --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: We don't derive it from any place other than that but our position is that the restrictions which we have imposed here comply with the letter of the statutory mandate --
Justice Arthur J. Goldberg: (Voice Overlap)
Mr. Frank I. Goodman: -- because --
Justice Arthur J. Goldberg: (Inaudible)
Mr. Frank I. Goodman: No, but that isn't what we've done here Mr. Justice Goldberg and that I think is a crucial point.
The Commission has always been reluctant to place in common carrier certificates, provisions which explicitly limit the classes of customers with who may carry or may deal and it didn't do that here.
But if the restrictions that did carry over into this certificate, are in effect territorial restrictions.
They were called that by the District Court and they're called that by Mr. Singer.
Justice Arthur J. Goldberg: You mean between retail and wholesale staff.
Mr. Frank I. Goodman: Between retail and wholesale esta -- between outlets of retail and wholesale establishments.
Now, there's ample authority for the imposition of highly specialized service restrictions of this kind upon common carriers.
One example as I noted before, was the so-called plant site restriction which authorizes carriage between to or from the plant site of a particular business or class of businesses.
In effect, that's what this is.
But another closely analogous and even more widely used type of limitation is the so-called intended use restriction.
Now, this is a commodity description which limits the carrier to carrying commodities which are identified -- with what -- well, to carrying commodities which have actually been produced or distributed by a particular kind of business or which are intended for -- for future use or distribution by a particular kind of business.
Now, an example of that came before this Court few years ago in the Andrew Nelson case in 355 U.S. and that case involved a contract carrier whose permit contained a commodity description referring to department stores stock in trade.
The Commission held in this Court and an opinion by Mr. Justice Clark, agreed that that phrase, department store stock in trade limited the carrier to carrying goods which were actually intended for a department -- for drugstore rather, drugstore stock in trade.
Not merely goods which are the general type that drugstores usually deal in.
Well that case involved the contract carrier and therefore is not authority in itself.
The Commission has imposed similar restrictions and literally hundreds of cases since the very earliest days of motor carrier regulation upon common carriers.
And they've never been taught inconsistent with common carrier status.
And in fact, in one instance, they were upheld by a District Court against precisely that contention in a decision later affirmed per curiam by this Court.
I refer to the Morehouse case which is cited at page 32 of our brief.
Now with this intended use, commodity descriptions are consistent with common carrier status and not contrary to any statutory injunction, so are the point-to-point or territorial limitations which the Commission imposed in this case.
Even though they do have the indirect effect of limiting somewhat, though not to the same degree as the keystone restrictions, the classes of persons with whom the carrier may deal.
Now essentially, turning to the Section 212 (c) issue, essentially, what the Commission has done is simply to make explicit in the common carrier certificate, the territorial limitations, the point-to-point or movement limitations, which are implicit in the keystone restriction.
Obviously, Section 212 (c) contemplates the parity of some sort between the prior and future operating authorities, and the only question is whether that's a parity of substance or parity of mere form or language.
And in our view, it's a parity of substance.
The substance of the operating rights contained in the contract carrier permit, are to be found not only in those provisions which explicitly refer to shipping points territories and commodities but also in the keystone restrictions which implicitly impose similar restrictions.
For example, any carrier which is subject to a keystone restriction limiting it to dealing with department stores or operating under contract to department stores will in practical effect be limited to carrying commodities which have been used or sold or which are intended for future sale or use by a department store.
So that the keystone restriction limits the carrier to precisely the same extent as would a commodity -- commodity description of the intended use variety.
By the same token of the keystone restriction also limits the contract carrier to the same degree as -- as to its movements, as due the restrictions which were imposed by the Commission in the certificate here.
Now, if those restrictions had been explicit in the contract carrier permit, there would be no question that they have to be carried over.
The letter of the statute would clearly require that explicit commodity or territorial descriptions in the contract carrier permit be carried over.
And we think they should be no less transferable merely because they're only implicit in the keystone restrictions rather than explicit.
Now, the consequence of rejecting our view and accepting the -- the appellee's view would be an enormous expansion of the operating rights of this contract carrier.
Standing alone, the commodity and -- the commodity descriptions are certainly broad enough to authorize the transportation of almost every con -- consumer commodity so that this carrier will in effect become a general common carrier of general commodities for all commerce.
It will thereby acquire rights which are greater than those which most common carriers have, and it will have acquired them without ever having made a showing of public convenience and necessity such as this required of common carriers.
There's no evidence we think that Cong -- Congress intended any such expansion or windfall.
Two considerations I think bear -- bear that out.
In the first place, the whole purpose of the 1957 Amendments was to prevent crippling encroachment upon the business of common carriers by contract carriers.
Under the original statutory definition, many contract carriers had so expanded their operations that some of them had 100 or even more contracts and were really competing very substantially with common carriers and draining off traffic from them.
The original intent at least as the Commission had believed it was that these contract carriers were to be relatively free of regulation because they didn't really compete on any broad scale with common carriers or threatened their economic viability.
This Court held in 1956 that Commission had no statutory authority to place a ceiling upon the number of contracts into which a contract carrier might enter or to prevent the common contract carrier from searching aggressively for a new business within the limits of its permit.
It was for that reason that the Commission went to Congress and secured new legislation which would limit the class of contract carriers and prevent this encroachment.
Senator Smathers in prevent -- presenting the bill of -- to the -- the Senate, explicitly pointed out that the unlimited diversion of traffic from common to contract carriers might well endanger the ability of the common carriers to render adequate service.
Now, we think it would be completely at odds with that statutory progress to construe this grandfather clause as tolerating and even promoting the very evil which Congress sought to cure.
And well it's true that the converted contract carrier is no longer free of regulation as he was before, he now is subject to the same regulation as any other common carrier.
The fact remains that he has never been required to make a showing of public convenience and necessity.
And for that reason alone, we don't think that Congress could've intended to permit this tremendous augmentation of his operating authority at the expense of existing common carriers who had made such a showing.
And the second reason why we don't think Congress could possibly have intended this tremendous expansion of operating rights is the fact that this is a grandfather clause repeatedly referred to as such by the people who described it or discussed it in the legislative history.
The other grandfather clauses of the Motor Carrier Act had been construed by this Court as expressing a congressional purpose to maintain substantial parity between the prior and subsequent operations of the carrier or in this case, operating rights.
We see no reason why this grandfather provision should be construed in accordance with any other principle.
Justice Byron R. White: (Inaudible)
Mr. Frank I. Goodman: There is a difference in the --
Justice Byron R. White: -- grand or the other grandfather clauses (Inaudible)?
Mr. Frank I. Goodman: There is a difference in the language but I think it relevant to point out that this very Congress in the very next session, the very next year in 1958, would've enacted another grandfather clause using exactly the same language that it used in the original grandfather clauses of the Motor Carrier Act, described that grandfather clause.
That is to say the Committee reports described the grandfather clause and precisely the language that was used in the statute, namely, it was said that it authorized the carrier to make this -- to transport the same commodities between the same points and within the same territories as it had before.
So we think these shows that Congress simply -- that the language Congress used in Section 212 (c) was just its way of saying, this is a grandfather clause which is to be construed in -- in light of concept of substantial parity.
Thank you.
Chief Justice Earl Warren: Mr. Singer.
Argument of Charles W. Singer
Mr. Charles W. Singer: The basic issue before this Court is whether or not Montgomery as a converted carrier, precede a certificate which authorized the transportation of the same commodities between the same points or within the same territory as contained in its permit of the contract carrier.
It is our basic position that the imposition of restrictions limiting shipments to those moving from to or between particular types of businesses is a territorial restriction which detracts or takes away from the authority held by Montgomery as a contract carrier.
It is our further basic position that the Commission was wholly without the statutory authority and right to impose such restriction.
The attorney for the Government indicates that the whole basis for their position is that they were -- the Commission was attempting to establish substantial parity between the authority held by Montgomery as a contract carrier and that to be received by it as a common carrier.
The Commission and the Government virtually admit both in their brief and in this oral presentation that something has been taken away from Montgomery as converted carrier.
In their brief, they say that this would be a small price to pay for the mischief of a grant of unlimited authority.
We submit that so far as Montgomery is concerned, it is a very great price and something very real and substantial is being taken away from this carrier.
Now, I know that -- that my opponent did not intentionally misstate Montgomery's authority but Montgomery's authority is not a point-to-point authority.
It is a broad territorial grant of authority.
It authorizes service between Chicago and Denver on the one hand and on the other, all points in Northern Illinois, all points in Iowa, Nebraska, Kansas and that portion of Colorado East to the continental divide.
This is an extremely broad territorial authority and permits Montgomery or permitted them as a contract carrier to originate at or deliver shipments at any point within this territory.
In response to Mr. Justice White's question, the Commission properly stated the law that as a contract carrier under contract with certain types of shipper, shipments could be originated at or destined to any point within the authorized scope of Montgomery's authority.
As a converted carrier, Montgomery is limited to movements from, to or between certain points within that territory.
Basically, in the transportation of meat for example, meat packing houses --
Justice Byron R. White: (Inaudible) covered two points now, haven't you?
You've said, they had no authority to impose any restrictions beyond a commodity and a territory restriction --
Mr. Charles W. Singer: That's correct.
Justice Byron R. White: -- you've made that point.
Mr. Charles W. Singer: That's correct.
Justice Byron R. White: Now, you're saying that -- that they've also -- even if they had that -- even if they had authority to impose some restrictions that they couldn't impose the ones you're now talking about.
Mr. Charles W. Singer: That's right.
They have -- even assuming and we don't conceive this and we submit it's wholly contract, the legislative history in the Act that -- that this case should have been decided on the basis of substantial parity.
The authority that was granted to Montgomery as a common carrier did not fulfill the test of substantial parity.
Justice Byron R. White: Now, is that -- is that point here now?
Mr. Charles W. Singer: Yes.
Justice Byron R. White: Your opponent suggests that this was never raised before the Commission or in the District Court and that couldn't be here.
Mr. Charles W. Singer: That isn't correct.
The -- the questions -- the four questions of the -- the keystone type of restrictions were raised before the Commission in our case, I'm talking about the Montgomery case, was decided in the Commission on the basis of the T.T. Brooks case, a -- a precedent case on this field --
Justice Byron R. White: But did you bring up the fact that you -- you suggested you did not bring up the fact that there were many of -- many of the -- many runs that you were making before you could not make in this --
Mr. Charles W. Singer: Well, we did this Mr. Justice White.
We pointed out in our evidence the operations that we were performing, and we pointed out that the examiner in the case granted us an unrestricted authority.
We brought before the District Court the same examples and the Court --
Justice Byron R. White: Well, how about the Commission?
Mr. Charles W. Singer: Yes, this was brought before the Commission --
Justice Byron R. White: It's the same -- the same runs if you list in your brief?
Mr. Charles W. Singer: No, not the same examples.
We told the Commission that we were not receiving an authority that permitted the transportation of the same commodity between the same points.
No, we didn't give all of the examples.
Justice Byron R. White: Did you give some of those?
Mr. Charles W. Singer: We gave some of them, yes.
Now, in the -- in the case before the District Court, the District Court as I read the opinion, assumed that there were territorial limitations.
We brought up before the District Court and in our brief, substantially the same examples that are before this Court and the Court specifically indicated.
I see if I can find the -- the Montgomery contends that the last paragraph, sentence of Section 212 was mandatory and allows the Commission no discretion to -- or power to impose territorial restrictions not contained in the permit.
And while the lower court did not specifically point out these examples, they -- they assumed that these were territorial restrictions and then dealt with the question of whether the Commission had the statutory power to impose these restrictions.
So going back to your question, we submit that these are territorial restrictions and that any similar restrictions which could be imposed by the Commission, would be territorial restrictions and would be beyond the statutory power.
Now, we've given numerous examples in our brief as to the territorial taper restrictions but just so that it would be clear, let we give several pertinent examples.
For example, under the contract with a department store which was within the authority of Montgomery, it could perform service from or to any point that was designated by that department store contracting shipper.
It could go from a supplier of a department store, a manufacturing concern and make delivery directly to a customer.
It could perform a service in handling small packages for example, where the shipment instead of originating at the department store, originated either at a public warehouse or consolidation point or supplier in --
Justice Byron R. White: (Inaudible) to show that the Commission understood this?
Mr. Charles W. Singer: Well --
Justice Byron R. White: (Voice Overlap)
Mr. Charles W. Singer: -- Mr. Justice White --
Justice Byron R. White: Or that -- or -- or should have understood it?
Mr. Charles W. Singer: They should've understood it because they -- they were purportedly the expertise --
Justice Byron R. White: Experts.
Mr. Charles W. Singer: -- in the matter and the only thing that we did in our presentation before the Commission was to show as required by the statute that the operations of Montgomery as of the statutory date, did not fall within the new definition of contract carry were those of the common carrier and were otherwise lawful.
And this question came up at the hearing.
The -- the argument was raised at the hearing, well maybe Montgomery's rights are dormant and certainly --
Justice Byron R. White: -- here it sounds like you're turning the question around that saying that, the issue that's really here is the validity of the precise restrictions that they imposed on Montgomery, if they might've -- if they could've put less restrictions on that question isn't here.
Mr. Charles W. Singer: Well, the -- the question -- there're two questions before this Court as I see it.
One, of whether or not the Montgomery did in fact receive a certificate authorizing the transportation of the same commodities within the same point.
Unknown Speaker: Of the two?
Mr. Charles W. Singer: Between the same point.
And two, whether the Commission had any statutory power at all to impose a restriction of this nature because if the restriction had read -- restricted to movements from, to and between warehouses, suppliers, ports, farms and -- and wholesale and retail department store, that would still be a -- a territorial restriction.
It would be like the Commission flipping a coin to try to determine that the restriction they impose would allow Montgomery to perform the same operations that they were authorized as a contract carrier.
The simple fact is that as a contract carrier under contract for the department store or under contract for the wholesale or retail, meat, fruit and vegetable packing house, they could go from or to any point within their territory.
If the -- if the -- a meat packing house told him to go out and -- and pick up some hides, they're out on the farm, they would have the authority to do it.
If the meat packing company told him to go to a port, Chicago is becoming a great port through the St. Lawrence Seaway, and make a delivery to a customer of Armour or Swift, they could do it.
But, as a -- as a common carrier, every movement that they have must go from, to or between a wholesale or retail department store or from, to or between a meat, fruit and vegetable packing house.
And if the Commission then -- if this was remanded that the Commission for the purpose of an -- of lessening that, they would have to think of some other points where they thought the carrier might have gone as a contract carrier and I -- I think that -- that even in the infinite wisdom of the Interstate Commerce Commission, they could not conceive of the operations which for the future might be formed by Montgomery.
The legislative history of this Act is so clear that nothing would be taken away from the converted carrier.
We have quoted on pages 21 and 22 of our brief, what I considered to be the controlling legislative history in this case.
The question was presented to the then Chairman of the Interstate Commerce Commission, Mr. Clarke.
Is there any constitutional question involved in this conversion?
And I think he meant was any property being taken away from these converted carriers without due processes of law and Mr. Chairman Clarke says, "No, I can see none.
It isn't taking away from them anything that they have."
And -- and it's clear here and it's admitted by the Government that something is being taken away from them in any restriction that is imposed would take something away from them.
And Mr. Clarke then goes on to point out that they are given greater opportunities.
They have the opportunity to serve the public.
This Court would go back and review its decision in the Noble case which was the decision wherein in this Court affirmed in 1943, the right of the Commission to oppose the original keystone restrictions.
It would find that the Court said that if they should remove the keystone restrictions, it would result in a conversion of the carrier to common carriage.
For all we're asking this Court to do is to say that -- that since this Conversion Act was enacted by the Commission as a result of -- of your decision in the Contract Steel Carriers case that let's give Montgomery an authority that's a common carrier authority.
The imposition of the keystone restrictions were for the specific purpose of preventing it from serving the general public and now the Commission comes along and they say, it's inappropriate for us to impose the keystone type of restriction because of the obligation of the -- of the common carrier -- of a common carrier, but they tried to reward the thing so that Montgomery can't even do as much for its former contracting shippers as it could before.
And I say that this --
Justice Byron R. White: Assuming that the -- that's a little different point than you just -- just had -- just made, you say that it didn't have any right to put on a keystone restriction at all.
Mr. Charles W. Singer: That's right.
Justice Byron R. White: And --
Mr. Charles W. Singer: And -- and --
Justice Byron R. White: -- they --
Mr. Charles W. Singer: And I'll say the reason why they had the right to put on a keystone restriction originally was the specific language of Section 209.
Now, there is nothing that ties in Section 212 (c) with Section 208 or there's nothing whereby the Commission could have implied that they had the power to try to take the keystone restriction and work it around into what they term something manageable and impose it on the carrier.
The Commission went the great length in imposing the keystone restriction to -- to show that they have the power to the specific statutory language of Section 209.
This Court in affirming the Interstate Commerce Commission said they -- they derive their power from Section 209, in 209 and in -- in essence said that the Commission had the right to specify the business of the contract carrier and to impose such conditions for limitations as were consistent with the contract carrier's status.
So when you -- when you have one Act or one Section of the Act, where the Commission has the specific statutory power, when you have Section 208 of the Interstate Commerce Act which was the basis for deciding the grandfather applications of -- of common carriers in 1935 where they are specifically given the power to impose restrictions or limitation, how can you say that -- that Congress did not intend -- or that Congress intended to give them the power under Section 212 when they don't even mention it?
If --
Justice Byron R. White: (Inaudible) I didn't hear that the Commission did have the power to uphold the restrictions which would affect substantial parity.
What would -- if the Court gets that far and then what do you suggest?
Mr. Charles W. Singer: Well, then they -- if they would get that far and I'd hope they wouldn't, they'd have to remand this case back to the Interstate Commerce Commission.
Justice Byron R. White: Why?
Mr. Charles W. Singer: Because -- because it is clear and it's admitted by the Government that the certificate issued to Montgomery does not maintain substantial parity.
Justice Byron R. White: Well, the Commission thought it did.
Mr. Charles W. Singer: Well, they were --
Justice Byron R. White: The Commission thought it did but it was maybe not parity --
Mr. Charles W. Singer: Well, they did it.
Justice Byron R. White: -- substantial parity.
Mr. Charles W. Singer: They did.
Justice Byron R. White: How do we differ with it and how can we be differ with the Commission of what -- of what substantial --
Mr. Charles W. Singer: Well, you don't have to differ with the Commission, you just remanded -- if you reach that point --
Justice Byron R. White: Didn't the Commission think to be substantial parity?
Mr. Charles W. Singer: What?
Justice Byron R. White: Didn't the Commission think this was -- this certificate effected substantial parity?
Mr. Charles W. Singer: Well, I don't think that they -- they dwell on it.
They had decided in the Brooks case, they were going to impose these types of restrictions.
Our case came along a year later and every other case, like it and they said the Brooks case controls.
Justice Byron R. White: Yes, but this is -- their aim is that the Brooks case into this one is to affect substantial parity.
Mr. Charles W. Singer: Yes, but it's -- it's clear to -- to me as it's admitted by the Government then -- the bench seems to have the same view that -- that there was not substantial parity affected.
Justice Byron R. White: Well, the District Court didn't even get to this issue.
Mr. Charles W. Singer: Well, I'm -- I think they did.
Really, the first question that was asked by the Circuit Court Judge Brandenstein to the Commission's attorney, isn't this a case where something that being taken away from the converted carrier?
Now, they didn't -- they didn't spell it out in their opinion.
They gave my contention that there was a territory restriction and their whole decision was on the basis -- was there statutory power?
Justice Byron R. White: (Inaudible)-- there some authority that he remanded the Commission and say what?
Mr. Charles W. Singer: Say, review this matter --
Justice Byron R. White: Decide --
Mr. Charles W. Singer: -- in the light of our --
Justice Byron R. White: Decide whether their substantial parity?
Mr. Charles W. Singer: No.
No, you review this in this light of our opinion.
You say that -- that from the arguments it presented, it appears that -- that there is not substantial parity affected between the permit granted to Montgomery as a contract carrier.
I mean, the certificate granted to him as a common carrier and they affirmed it as a contract carrier.
So you don't -- you don't decide to what extent it should be modified but it -- it's obvious from a reading of the certificate that they cannot do for their former contracting shippers what they could've as a contract carrier.
So, that's plain from the -- from the certificate itself, from the examples that I gave so it is -- you don't have to go beyond that or you don't have to say to the Commission, "You should impose this type of restriction."
But if you felt that they have the statutory power to impose the restriction, then at a minimum, it should be remanded to them to give consideration to what type of restrictions should be imposed that would create substantial parity.
Justice Byron R. White: I know, but it sounds as though we're saying to them, you have the power to affect substantial parity with these restrictions.
We could guess that you do your job over.
Mr. Charles W. Singer: No, they don't --
Justice Byron R. White: You've already --
Mr. Charles W. Singer: -- you're not telling to --
Justice Byron R. White: -- found substantial parity that we think you were wrong so --
Mr. Charles W. Singer: No.
Justice Byron R. White: -- you do it again.
Mr. Charles W. Singer: You just ask them to -- to look at it.
If they come up with the same result, then the matter can be -- re-litic -- re-litigated.
But if -- if you are merely telling that -- that this question was not considered by you, in your report, take the case back and reconsider it.
I hate to think that that -- that's going to be the result of this case because I -- I feel so strongly that -- that the Commission just push without any statutory power that they -- they usurped the legislative function or maybe the legislature was remised in not enacting the statute that was clear.
But I'll -- I'd like to point out that -- that in this whole field of contract carriers, the Commission appears that it had a mental block.
You have before you the Contract Steel Carrier's case, where the Commission said that we could -- that they would have the power to limit the number of contracts that the contract carrier would enter into.
You said that that was wholly beyond their statutory power.
They were reading into then Section 209, a power they didn't have.
You had before you the J-T case which involved the -- the criteria for granting contract carrier authority and the Commission read into that a fifth or sixth test for determining the application, the adequacy of existing common carrier service.
I think Mr. Justice Douglas wrote that opinion and -- and you said they -- they tried to legislate in that case.
Well, I submit that they tried to legislate here.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: The first -- the original affirmative on page 7, 8 and 9 --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: 56 --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: Yes, I think that --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right, yes.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: Yes.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's -- that's correct.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
That was also the keystone restriction that we're referring to.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: Points in territory -- points in territory.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right.
I'm saying that that is -- is the territorial restriction that in effect the Commission purports to grant the same territory but then takes away from it by the -- by saying that all of the movements have to be from, to or between specified types of businesses.
And that's where I say that the --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: They --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: Yes.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's correct.
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right but I'd like to point out --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: That's right, and I'd --
Unknown Speaker: (Inaudible)
Mr. Charles W. Singer: I'd like to point out that the plant site restrictions, the Commission imposes, derive -- or the Commission derives the power to impose that specifically from Section 208 of the Act.
That's one of the powers that they have in granting certificates under Section 208 but Section 208 is limited to application under Section 206 or 207.
Now, if -- if the Congress had put the same statute under 206 or 207, then the Commission might have had a power to impose restrictions under 208.
But this is sitting off by itself.
It stands by itself.
It refers to nothing else from the Act and just seems that it -- that Congress had intend that nothing would be taken away from the converted carrier and it would be given this very opportunity to serve the public because under the restrictions from, to or between departments stores, it can't serve the public.
It can't -- it can't serve anybody other than who -- the person who's serving for and it can't do as completed job for them as it could before.
Thank you very much.
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UNITED STATES v. MONTGOMERY, INC.. The Oyez Project at IIT Chicago-Kent College of Law. 26 April 2013. <http://www.oyez.org/cases/1960-1969/1963/1963_66>.
UNITED STATES v. MONTGOMERY, INC., The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1960-1969/1963/1963_66 (last visited April 26, 2013).
"UNITED STATES v. MONTGOMERY, INC.," The Oyez Project at IIT Chicago-Kent College of Law, accessed April 26, 2013, http://www.oyez.org/cases/1960-1969/1963/1963_66.