R-W Service System, Inc. v. The United States of America and the Interstate Commerce Commission, Associated Truck Lines, Inc., Intervenors , 580 F.2d 487 ( 1978 )

Opinion for the court filed by Circuit Judge TAMM.

Dissenting opinion filed by Chief Judge BAZELON.

TAMM, Circuit Judge:

Petitioner, R-W Service System, Inc. (RW), appeals from an order¹ of the respondent Interstate Commerce Commission (Commission) dated April 27, 1976.²

R-W possesses regular route authority³ to transport general commodities between Toledo, Ohio, and points in Indiana, Illinois, and Michigan. Additionally, R-W has irregular route authority to transport general commodities between Toledo and all points within the state of Ohio. By combining its regular route authority and its irregular route authority at Toledo, Ohio, R-W is able to transport general commodities between Ohio and points in Indiana, Illinois, and Michigan. However, the commodities must physically pass through the “gateway” of Toledo. To the extent that a carrier’s operations are thus “tacked,” there is, of course, no underlying determination of public convenience and necessity upon which the extended operation is predicated.⁴

By application of July 6, 1973, R-W sought a certificate of public convenience and necessity for irregular routes between all points in Ohio, on the one hand, and three Indiana points,⁵ on the other. The matter was directed to Review Board Number 3 for disposition under the so-called “modified procedure.” See 49 C.F.R. §§ 1100.45-54 (1976). In its decision, the Review Board noted that the practical effect of R — W’s proposal was elimination of the Toledo gateway. No. MC-55896 [Sub-No. 41], R-W Service System, Inc., Extension — Additional Gateways, Doc. # 103 at 16; Joint Appendix (J.A.) at 268. Therefore, its analysis was directed not only toward traditional public necessity and convenience criteria, but also toward the now familiar gateway elimination criteria of Childress — Elimination Sanford Gateway, 61 M.C.C. 421 (1952).⁶

R-W’s application was rejected on both grounds. No. MC-55896 [Sub-No. 41], R-W Service System, Inc., Extension — Additional Gateways, Doc. # 103 at 15-25, J.A. at 267-77. R-W filed a petition for reconsideration. J.A. at 294-314. At this stage, R-W mounted essentially a two-pronged attack. First, it attempted to amend its application, arguing that the amended application met the Childress criteria. Second, it argued that certain expressed National Transportation Policy considerations⁷ and regulations thereunder had not been applied to R-W, and it had therefore been subject to arbitrary, capricious, and discriminatory treatment. R-W’s petition was denied by order of the Commission bearing service date of April 27, 1976. J.A. at 373.

It is the latter of the arguments which R-W emphasized in its petition for reconsideration that it urges most fervently on appeal. The basis of R-W’s argument is that, by regulation, the Commission has allowed “gateways” to be eliminated where the bypass will save less than twenty percent of the mileage through the gateway in instances where two irregular route authorities are tacked. 49 C.F.R. § 1065 (1976); Ex Parte No. 55 (Sub-No. 8), Motor Common Carriers of Property, Routes and Service, (Petition for the Elimination of Gateways by Rulemaking), 119 M.C.C. 530 (1974) . The Superhighway and Deviation Rules, 49 C.F.R. § 1042 (1976), were amended so that carriers tacking two regular routes could operate under a twenty percent circuity rule as opposed to the former fifteen percent rule. See 40 Fed.Reg. 24906 (1975); Ex Parte No. MC-65 (Sub-No. 5), Petition for Enlargement of the Amount of Operational Circuity Reduction Permitted Under Certain Provisions of the Property Motor Carrier Superhighway and Deviation Rules, 121 M.C.C. 685 (1975).

R-W believes that, even in the absence of a promulgated regulation permitting a similar procedure for a carrier that combines regular and irregular route authorities, the same twenty percent rule should apply to its own petition. However, Ex Parte No. 55 specifically excludes from coverage situations where regular and irregular route authorities are tacked, 119 M.C.C. at 547-48, and the Review Board was cognizant of this in its decision. No. MC — 55896 [Sub-No. 41], R-W Service System, Inc., Extension — Additional Gateways, Doc. # 103, at 15 n. 4, J.A. at 267 n. 4. We cannot agree that the failure to apply this regulation, inapplicable by the terms of its own promulgation, is an abuse of discretion, nor do we believe that the failure to extend the regulations to carriers tacking regular and irregular routes is impermissible. See United States v. Florida East Coast Railway, 410 U.S. 224, 246, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973).

Finally, it is important to note that the Review Board did explicitly consider energy and efficiency policies as a factor in reaching its conclusion. No. MC-55896 [Sub-No. 41], R — W Service System, Inc., Extension — Additional Gateways, Doc. # 103 at 25, J.A. at 277. Whereas, for obvious practical reasons, it is true that the Board is “precluded in ordinary circumstances from affording this factor any overwhelming weight in certification proceedings,” id., there can be no doubt that the Board was well aware of these policies when it rejected R-W’s application, and its decision to minimize the weight given to this factor was quite conscious.

We affirm.⁸

Affirmed.

1 . Intervening are Associated Truck Lines, Inc., Central Transport, Inc., Michigan Express, Inc., Holland Motor Express, Inc., Interstate Motor Freight System, The National Transit Corporation, United Trucking Service, Inc., McDuffee Motor Freight, Inc., and United Trucking of Kentucky, Inc. See Fed.R.App.P. 15(d).

2 . Joint Appendix (J.A.) at 373.

3 . “A regular-route motor carrier operates according to a predetermined plan, habitually uses certain fixed routes, operates between fixed termini, has terminals devoted to the expeditious handling of traffic, maintains a constant periodicity in service, and observes definite or published schedules or their equivalent. [Citations omitted].” Ex Parte No. 55 (Sub-No. 8), Motor Common Carriers of Property, Routes and Service, (Petition for the Elim¡nation of Gateways by Rulemaking), 119 M.C.C. 170, 178 (1973).

4 . It is thus said that “inefficiencies resulting from this type of operation are of the carrier’s own choosing, and the mere fact of such operation is no assurance of need for such service or of economy and efficiency of operation.” Bowman Transportation, Inc., Extension — Substitution of Gateways, 100 M.C.C. 314, 326 (1965).

5 . The three Indiana points (Fort Wayne, Richmond, and Union City) were to serve as additional gateways.

6 . The Childress — Elimination Sanford Gateway, 61 M.C.C. 421 (1952), criteria are

(1) whether applicant is actually transporting a substantial volume of traffic from and to the points involved by operating in good faith through the gateway and, in so operating, is effectively and efficiently competing with the existing carriers, and (2) whether the elimination of the gateway requirement would enable applicant to institute a new service or a service so different from that presently provided as to materially improve applicant’s competitive position to the detriment of existing carriers.

61 M.C.C at 428.

7 . The National Transportation Policy provides, in part, “It is hereby declared to be the national transportation policy of the Congress to promote safe, adequate, economical, and efficient service and foster sound economic conditions in transportation . . . .” 49 U.S.C., preceding § 1, § 301, § 901, § 1001 (1970). See also Ex Parte No. 55 (Sub-No. 8), Motor Common Carriers of Property, Routes and Service, (Petition for the Elimination of Gateways by Rulemaking), 119 M.C.C. 530, 531-33 (1974).

8 . We likewise see no merit in petitioner’s contention that it is entitled to relief under the Childress criteria.