Summary
In Cornell Steamboat Co. the Supreme Court considered all parts of the Interstate Commerce Act in interpreting Part III, including the newly-enacted Part IV with specific reference to section 402(a)(6), 49 U.S.C.A., § 1002(a) (6). (321 U.S. at 640-41.)
Summary of this case from In re Island AirlinesOpinion
July 7, 1943. Judgment Affirmed April 3, 1944. See 64 S.Ct. 768.
Kirlin, Campbell, Hickox, Keating McGrann, of New York City (Robert S. Erskine, of New York City, of counsel), for plaintiff.
Robert L. Pierce, Sp. Asst. to Atty. Gen., for the United States.
E.M. Reidy, Asst. Chief Counsel, of Washington, D.C., for Interstate Commerce Commission.
Tom C. Clark, Asst. Atty. Gen. (Daniel W. Knowlton, of Washington, D.C., of counsel), for the United States.
Foley Martin, of New York City (James A. Martin and Christopher E. Heckman, both of New York City, of counsel), for National Water Carriers Ass'n, Inc., intervenor.
Bingham, Dana Gould, of Boston, Mass., for Boston Tow Boat Co., Intervenor.
Suit by Cornell Steamboat Company against United States to annul Interstate Commerce Commission order issuing plaintiff a certificate as a common carrier by water and to compel commission to dismiss plaintiff's application for a certificate of appropriate authority, or in alternative to compel commission to issue to plaintiff a certificate as a contract carrier. The National Water Carriers' Association, Inc., and Boston Towing Company intervened.
Complaint dismissed.
Suit by plaintiff against the Interstate Commerce Commission, complaining of an order entered by the Commission pursuant to Part III of the Interstate Commerce Act, 49 U.S.C.A. § 901 et seq. Dismissed.
The plaintiff, Cornell Steamboat Company, a New York corporation, filed an application with the Interstate Commerce Commission for a permit as a "contract carrier by water" under Part III of the Interstate Commerce Act, to continue its operation under the so-called "grandfather" clause of that Act as a "contract carrier"; that clause, § 309, provides for the issuance, without proof that the public convenience and necessity will be served thereby, of a certificate to a carrier engaged in bona fide operations on January 1, 1940, and continually since then, either as a "contract carrier" or a "common carrier." In the alternative, plaintiff asked that its application be considered one for the appropriate form of authority. In its application plaintiff also stated that it was filing the same without prejudice to its contention that it was not a carrier and that it was not subject to the jurisdiction of the Commission; at the same time, plaintiff filed with the Commission a petition to dismiss its application on the same grounds. Evidence was taken before a Commission Examiner who made a proposed report to the effect that plaintiff was a "grandfather" contract carrier. Exceptions to this report were argued before Division 4 of the Commission which held that the plaintiff was "a common carrier by water," entitled to a "grandfather" certificate as such and that such a certificate should issue. On plaintiff's motion, the matter was re-argued before the full Commission which, with a slight modification, affirmed the opinion and findings of Division 4 and entered an order accordingly.
The modification, pursuant to § 303(g), 49 U.S.C.A. § 903(g), provided that no certificate was required for towage performed by plaintiff wholly within New York Harbor, since plaintiff is not, as to such towage, a party to any arrangement for the through carriage of the barges towed or their cargoes to points outside New York State.
The evidence before the Commission showed the following: The plaintiff for many years before and on January 1, 1940, and continuously since then, owned tug-boats which it used to furnish towage services for hire on the Hudson River between Waterford, New York, and New York City, New York, and upon the waters of New York Harbor or the waters surrounding New York City. At the time of the hearing, plaintiff owned thirty-three tugs. It furnishes its services to barges, scows and similar vessels which themselves usually carry cargoes. Plaintiff does not carry any freight or passengers on its tugs. The tugs merely attach their towing lines to the vessels to be towed and move them to points of destination as directed by the owners or operators of those vessels. Each of those vessels thus towed has its own captain on board; plaintiff's employees have nothing to do with the carrying of any cargo on those vessels. Plaintiff issues no bills of lading or similar documents for any such cargoes, and has no arrangement with anybody except the owners or operators of such vessels. Over 70% of plaintiff's customers are shippers who own or operate towed barges used in carrying their own merchandise. The largest part of its business is done on time contracts entered into for a period of years; some contracts run for a single year; from 12% to 13% of its business is done under miscellaneous contracts arranged from day to day. Arrangements for all its towing services are based on separate agreements.
Plaintiff was incorporated in 1878 to continue the towing business started in 1837 by the grandfather of its president who has held that position for the past 29 years. From its inception, the business of plaintiff has been, and still is, owned by succeeding generations of the same family.
It has no direct or indirect interest in, and often has no knowledge of, the character of those cargoes, or of the origin or final destination thereof. Its responsibilities begin when the vessel is taken in tow and ends when the tow is left at the agreed destination. It has nothing to do with the contractual arrangements between the barge-owners and the cargo-owners as to any forwarding or delivery of the cargo. It takes no part in, and has no interest whatever in, and no knowledge of, the arrangements between the owners of the cargoes and the barge-owners either with respect to freight-rates or with respect to any other terms of their contract to carry. Plaintiff's charges are agreed on in its contracts with the owners or operators of the towed vessels, are not dependent in any way upon the freight monies between those vessels and their cargoes, are direct charges against the barge-owners under its contracts with them, and are secured by maritime liens against the vessels towed and not against their cargoes. The agreed towage charges depend upon the size of the vessel towed and her carrying capacity, but the volume, character or weight of the cargo is of no other concern to plaintiff. The rate is lower if the barge is towed with others in a flotilla which plaintiff schedules on its customers to leave New York Harbor on certain days of the week or to leave Albany, New York, or some other point on the Hudson on certain other days of the week. The regular service is maintained under contracts to meet the needs of certain customers. Other customers who can wait for their service until the regular flotilla is towed are given the benefit of the lower unit cost. If a customer desires individual service on a certain date, the rate is higher.
While approximately 95% of its services consist of towing from points of departure in New York State to points of destination in the same State, most of its tows cross into New Jersey waters, as the New York-New Jersey boundary follows the middle of the river and, because the navigable channel of the river, for some seven or eight miles lies west of the boundary line. A small amount, less than 5%, of plaintiff's towing service is rendered between points in New Jersey adjacent to the Hudson River or New York Harbor and points outside the harbor in New York State.
The Commission held that plaintiff was engaged in interstate commerce as "a common carrier by water by towing vessels in the performance of towage of non-self-propelled freight-carrying vessels between points within New York Harbor, New York, and New Jersey, and Waterford, New York * * * and intermediate points on the Hudson River." In making its finding that the plaintiff, pursuant to the Act, is a common carrier, because it held itself out as such, the Commission referred in particular to the testimony of plaintiff's president set forth in the footnote.
"Q. Within the range of your operation, with credit considerations being favorable, contents of the barges being what you think they should be, will you tow for anyone seeking your services? A. We are like to, yes * * *. We don't hold ourselves out at all. As a rule, we do take orders, as I mentioned. I think that 12 or 13 percent of our business is miscellaneous business. People will call up today and say that they want us to take a barge from here to there. We ask what kind of barge it is and how much it carries, and we give them a price, and we do that job. The rest is all by yearly or regular arrangements with customers, even down to the naming of the barge that they want towed * * *. We have some on the blacklist, whom we do not tow, because we know that they don't pay * * *.
"Q. But if there is some boat-owner who may not have a yearly contract with you — and provided that the vessel and the cargo and the credit arrangement are satisfactory — you will tow his boat in that fleet? A. Surely — if he gives us an order for it before the tow starts."
The Commission also pointed out that that same witness "testified that in the tows that leave New York nightly for upriver points, `we have practically no limits; we take all that will come'; and explained that by `all that will come' he meant, `individual customers or people who have made arrangements with us. * * * We must have the order for the barge before the barges leave the stake boat.' He further testified that arrangements for a particular towing job could be entered into over the telephone, and upon inquiry whether such an arrangement would be entered into with persons with whom he had had no prior dealings, replied: `We would want to know something about them. If it was out of the blue, we would want to know who he was, and what he had to go, before we would give him a price.' Sometimes prepayment of charges has been required. As to the breadth of applicant's willingness to transport: Witness testified that `Having been there since 1837, we pretty much know every manufacturer on the river. We go to him and ask him for a contract, and show him what kind of service we can give, and he gives us the contract.' And again, respecting the daily towing schedules: `The business has been going on for so long that everybody knows it.'"
Division 4 noted the testimony that plaintiff sometimes refused requests for services when they could not be rendered without injurying one of the regular customers, saying, "How such injury could result is not explained, and, in view of the evidence that there is practically no limit to the number of barges it can include in a flotilla, the statement is unintelligible." The Commission regarded as immaterial the fact that plaintiff frequently had declined to perform towage unless it was given a release from all liability, including liability for negligence."
The Commission stated: "We find that the evidence discloses the fact of a general holding out tempered by prudence, a desire for business rather than a desire to exclude any. We find as a fact that applicant holds itself out to the public to tow for anyone with ability and willingness to pay for the service. Such a holding out, accompanied by performance, constitutes one a common carrier."
Plaintiff began this suit, pursuant to 28 U.S.C.A. §§ 41(27, 28) and 43-48, praying that the Commission be ordered to grant plaintiff's petition to dismiss its application or, in the alternative, that this court direct the Commission to issue to plaintiff a certificate as a contract carrier. The evidence presented at the hearing before this court consisted solely of the petitions filed before, the testimony presented to, and the opinion, findings and orders of, the Commission.
National Water Carriers Association, Inc., and The Boston Towing Company, having been permitted to intervene in the Commission's proceedings, sought intervention in this suit. Objections to these interventions were made but were later withdrawn and the interventions were accordingly permitted.
1. Plaintiff contends that, as a tower, it is not a "carrier by water" within the meaning of the Act. We cannot agree. Plaintiff literally "engage[s] in the transportation by water * * * of * * * property * * * for compensation," which is the test under § 302(c) and (d). For the dictionary tells us that, nautically, to transport is "to haul a vessel by hawsers." And a barge is both a "vessel" and "property." Section 302(h) states that transportation "includes the use of any transportation facility" and § 302(g) includes, in the term "transportation facility," "any vessel," while "vessel," in turn, is defined in § 302(f) to mean "any watercraft." Plaintiff, however, argues that § 302(g) also defines "transportation facility" to include "any * * * wharf," and yet the Commission has held that wharfingers are not within the Act; but the Commission so held because the legislative history showed a clear Congressional intent to exclude wharfingers. Finally, and most important, § 303(f)(2) which expressly excludes certain kinds of towage would be meaningless if towage generally were not included; and plaintiff's activities are not within the excluded varieties of towage.
Cf. Union Stock Yard Transit Co. v. United States, 308 U.S. 213, 217, 60 S.Ct. 193, 84 L.Ed. 198.
Status of Wharfingers, 251 I.C.C. 613.
2. Plaintiff argues that even if it' be a "carrier by water" within the meaning of the Act, it is not a "common carrier by water." Plaintiff points to decisions in which, before the passage of this Act, persons engaged in activities such as that in which it engages were held not to be common carriers. It is suggested that, accordingly, the constitutional power of Congress to regulate plaintiff as a common carrier is doubtful and that a statute should be so construed as to avoid raising grave doubts as to its constitutionality. But, since Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469, Olsen v. State of Nebraska, 313 U.S. 236, 61 S.Ct. 862, 85 L.Ed. 1305, 133 A.L.R. 1500, there have been no such doubts; for it is now well settled that "there is no closed class or category of * * * businesses affected with a public interest." [ 291 U.S. 502, 54 S.Ct. 506, 78 L.Ed. 940.] There is no need to repeat here what was said in Fordham Bus Corporation v. United States, D.C., 41 F. Supp. 712, 715, where this very question was fully discussed with reference to the regulation of motor carriers under Part II of this Act.
Cf. Alton R. Co. v. United States, 315 U.S. 15, 23, 62 S.Ct. 432, 85 L.Ed. 586, which indicated that one who was a "contract carrier" under a state permit can claim "grandfather" rights as a common carrier under Part II of this Act, 49 U.S.C.A. § 301 et seq.
We fail to understand plaintiff's contention that, because it was not a common carrier for purposes of liability under the Harter Act, 46 U.S.C.A. § 190 et seq., or otherwise in Admiralty or at common law, this Act should be construed as not intended to include it as a common carrier; for in § 320(d) Congress showed that it had in mind the difference between the question of liability and that of regulation. By labeling persons such as plaintiff "common carriers" in this Act, they do not become such for all purposes; this is made clear by § 302 which, in so labeling them, expressly states that it does so "for the purposes of this Act." And see State of Washington ex rel. Stimson Lumber Co. v. Kuykendall, 275 U.S. 207, 211, 212, 48 S.Ct. 41, 72 L.Ed. 241; United States v. Brooklyn Eastern Dist. Terminal, 249 U.S. 296, 304, 39 S.Ct. 283, 63 L.Ed. 613, 6 A.L.R. 527; Liverpool G.W. Steam Company v. Phenix Insurance Co., 129 U.S. 397, 440, 9 S.Ct. 469, 32 L.Ed. 788.
§ 320(d) reads: "Nothing in this part shall be construed to affect any law of navigation, the admiralty jurisdiction of the courts of the United States, liabilities of vessels and their owners for loss or damage, or laws respecting seamen, or any other maritime law, regulation, or custom not in conflict with the provisions of this Part."
That plaintiff supplies merely the hauling power and has no contractual relations with those who ship their goods on the barges towed by plaintiff is irrelevant, as appears from decisions as to similar situations with respect to railroad carriers under Part I of this Act, 49 U.S.C.A. § 1 et seq.
United States v. California, 297 U.S. 175, 182, 183, 56 S.Ct. 421, 80 L.Ed. 567; Union Stock Yard Transit Co. v. United States, 308 U.S. 213, 219, 60 S.Ct. 193, 84 L.Ed. 198; United States v. Brooklyn Terminal, 249 U.S. 296, 305, 39 S.Ct. 283, 63 L.Ed. 613, 6 A.L.R. 527; Belt Ry. Co. v. United States, 7 Cir., 168 F. 542, 544, 22 L.R.A., N.S., 582; United States v. Sioux City Stockyard Co., C.C., 162 F. 556.
Plaintiff urges that Congress could not have intended it to be classified as a common carrier under the Act because it was not such before the passage of the Act and because the "grandfather" clause, § 309(a), provides that, if a carrier was in operation "as a common carrier by water" on a stated date before the Act was enacted, it is entitled to a "grandfather" certificate. But clearly what Congress meant was that a person is entitled to such a certificate if, on the specified date before the enactment of the legislature, it had been engaged in activities which, after the statute went into effect, would constitute it a common carrier.
Note that the "grandfather" clause of Part II, as to motor carriers, § 206(a) 49 U.S.C.A. 306(a), is identical in language with § 309(f) and see Alton R. Co. v. United States, 315 U.S. 15, 23, 62 S.Ct. 432, 86 L.Ed. 586; cf. Fordham Bus Corp. v. United States, D.C., 41 F. Supp. 712.
There is substantial evidence to sustain the Commission's finding that plaintiff so "holds itself out to the general public," see § 302(d), that it is a "common" and not a "contract carrier." The differentiation between a "common" and a "contract" carrier is well explained by Judge McGuire in Doyle Transfer Co. v. United States, D.C., 45 F. Supp. 691; that case, to be sure, related to Part II of the Act, 49 U.S.C.A. § 301 et seq., but the definitions of "common" and "contract" carriers in Parts II and III are identical (excepting that in the latter "by water" appears in the place of "by motor vehicle.") See also Fordham Bus Corporation v. United States, D.C., 41 F. Supp. 712, 717, 718.
See the legislative history and the Commission decisions there cited and quoted.
It goes without saying that, since there is substantial evidence to support the Commission's finding, we must sustain it, whether or not we would have made that finding, and also that it is not our province to consider the wisdom of the legislation. On the basis of the finding, we hold that the Commission's conclusion and order was not erroneous.
See, e.g., Sperry Gyroscope Co., Inc. v. N.L.R.B., 2 Cir., 129 F.2d 922, 924, and cases there cited in note 1.
That there were dissenting opinions filed by some of the Commissioners is immaterial. Cf. Virginian Ry. v. United States, 272 U.S. 658, 674, 675, 47 S.Ct. 222, 71 L.Ed. 463.
3. Plaintiff argues that, in any event, it is not engaged in transportation, under § 302(i)(1), "wholly by water from a place in a State to a place in any other State." Literally, of course, it is, for it transports from a "place" in the waters of New York to a "place" in the waters of New Jersey.
The language of Part I, § 1(1), 49 U.S.C.A. § 1(1), as to railroads is virtually the same, i.e., "from one State * * * to any other State." That language was construed, many years before the enactment of Part III, to apply to continuous transportation beginning in a state, running through a second state, and returning to the first state. Missouri Pacific R.R. Co. v. Stroud, 267 U.S. 404, 45 S.Ct. 243, 69 L.Ed. 683; United States v. D.L. W.R. Co., C.C., 152 F. 269. It is true that this interpretation has been said (152 F. at page 272) to be strengthened by the fact that § 1(2) in Part I provides that jurisdiction over railroads shall not apply "to the transportation * * * wholly within one State." But § 303(k) in Part III similarly precludes jurisdiction, as to water carriers, over "intrastate transportation." As the Commission says, if the words "wholly within one State" in Part I fortify the conclusion that it has jurisdiction under Part I over transportation between points in a single state through another state, the language quoted above from § 303(h) fortifies a similar conclusion under Part III.
Plaintiff points to the fact that, in 1935, Congress, in § 203(a)(10), Part II, 49 U.S.C.A. § 303(a)(10), as to interstate motor carriers, conferred jurisdiction by expressly defining "interstate commerce" to mean "commerce between any place in a State and any place in another State or between places in the same State through another State." Plaintiff argues that the omission from the definition of "interstate transportation" in Part III of the words we have italicized in this provision in Part II conclusively shows that Congress did not intend to confer such jurisdiction as to water carriers. Had Parts II and III been enacted at the same time, that argument would have been most persuasive; but Part III was enacted in 1940, five years after the enactment of Part II. Congress must be deemed to have known in 1940 that the courts had held that the language employed in Part I had precisely the meaning of the language employed in Part II. Congress then had a choice of two methods of expressing the same intention; therefore, no significance can be given to the fact that, when it enacted Part III in 1940, it selected the language which it had used in Part I rather than the language which it had used in Part II.
Italics added.
These comments also answer a possible suggestion based upon the definition of "interstate commerce," similar to that used in Part II, in § 402(a)(6) of Part IV, 49 U.S.C.A. § 1002(a)(6), that Part having been enacted in 1942, two years after the enactment of Part III.
Plaintiff places much reliance on Cornell Steamboat Co. v. Sohmer, 235 U.S. 549, 35 S.Ct. 162, 59 L.Ed. 355. There this very plaintiff was subject to a tax imposed by a statute of the State of New York, for the privilege of doing business as a corporation, equal to a percentage of the gross earnings on transportation originating and terminating in that State; the statute expressly provided that the tax would not apply to earnings derived from interstate business. The State assessed the tax on earnings from towage between New York ports which passed through New Jersey waters. Plaintiff in that case contended that such traffic was interstate and not constitutionally taxable by the State, but the Supreme Court held otherwise. There is substantially no difference between the way traffic is now handled by plaintiff and the way it was then handled as described in that opinion. Accordingly, plaintiff argues that it has been held that it is not engaged in interstate commerce, and is therefore not subject to the Commission's jurisdiction. In so far as this is a contention that Congress lacks the power constitutionally to regulate plaintiff under the Commerce clause, the contention must fail. Criteria employed in determining whether a state may validly tax because of the Commerce clause are not applicable to a determination whether the federal government may validly regulate under that clause. The Sohmer case itself relies upon, and cites, Lehigh Valley R.R. v. Pennsylvania, 145 U.S. 192, 12 S.Ct. 806, 36 L.Ed 672, and Ewing v. City of Leavenworth, 226 U.S. 464, 33 S.Ct. 157, 57 L.Ed. 303, where that distinction is clearly made. See also Hanley v. Kansas City Southern Ry. Co., 187 U.S. 617, 621, 23 S.Ct. 214, 47 L.Ed. 333.
Plaintiff also suggests that the Sohmer decision is a finding of fact, conclusive for all purposes, that it is engaged in intrastate commerce. The answer is that the "finding" was there made with reference to the power of the State to tax. In the instant case, the Commission, after a hearing, has made an express finding that plaintiff is engaged in interstate transportation as that term is defined in Part III.
The Commission urged that we apply the doctrine of such cases as Gray v. Powell, 314 U.S. 402, 413, 62 S.Ct. 326, 86 L.Ed. 301, as to the weight to be given to administrative interpretations of the statute. We have found it unnecessary to do so. Cf. Hartford Electric Light Company v. Federal Power Comm., 2 Cir., 131 F.2d 953, 966.
Pursuant to Federal Rules of Civil Procedure, rule 52, 28 U.S.C.A. following section 723c, we are filing herewith our findings of fact and our separate conclusions of law; as provided in that Rule, we will entertain a motion by either party that we amend the findings or make additional findings.
Dismissed.
COXE and BRIGHT, District Judges, concur.