6 ELR 20166 | Environmental Law Reporter | copyright © 1976 | All rights reserved


Cartwright Van Lines, Inc. v. United States

No. 72 CV 122W-4 (W.D. Mo. August 4, 1975)

The court dismisses a suit challenging an Interstate Commerce Commission order denying a van line company's request for the elimination of certain gateways on its various routes. Contrary to plaintiff's contention, the Commission did not deprive the van company of a fair hearing by applying atypical decisional criteria to its application. The court also finds that the ICC's new gateway elimination rules moot plaintiff's assertion that the agency failed to discharge its NEPA responsibilities in connection with the denial order. Plaintiff has standing to raise this NEPA issue, even though the challenge is based on an economic interest, because the company claims that the Commission's refusal to grant its request forces it to operate over highly circuitous gateway routes, and thereby to do greater damage to the environment in the form of increased air pollution and fuel consumption than if the gateways were eliminated. In a study which preceded the recently completed gateway elimination rule making, the Commission determined that the combined impact of all gateway operations has a substantial effect on the human environment. This does not mean, however, that a small portion of such operations has the same effect. In fact, the Commission's determination that the gateway operat ons at issue in this case do not significantly affect the human environment is strongly supported by the record, which shows that very little, if any, traffic actually passes through plaintiff's more circuitous gateways. In any event, the promulgation of the new rules and the pendency under them of applications by the plaintiff for elimination of the gateways in question effectively moots plaintiff's NEPA contentions.

Counsel for Plaintiff
James A. Polsinelli
Shapiro, Polsinelli, Waldo & Schulte
209 West 47th Street
Country Club Plaza
Kansas City MO 64112
(816) 931-3353

Charles Ephraim
Ephraim & Clark
Suite 600, 1250 Connecticut Ave., N.W.
Washington DC 20036
(202) 833-1170

Counsel for Defendants
Frederick O. Griffin, Asst. U.S. Attorney
U.S. Courthouse
Kansas City MO 64106
(816) 374-3122

Lloyd J. Osborn
Office of the General Counsel
Interstate Commerce Commission
Washington DC 20423
(202) 343-3775

[6 ELR 20167]

Hunter, J. [excerpted opinion. — Ed.]:

This is an action to set aside an order of the Interstate Commerce Commission (Division I acting as an Appellate Division) dated January 31, 1973. Pursuant to 28 U.S.C. § 2325 requiring a district court of three judges to be convened in suits attacking orders of the Interstate Commerce Commission, the undersigned Court was designated to hear the case.

Plaintiff, Cartwright Van Lines, Inc., is a corporation organized and existing pursuant to the laws of the state of Washington, having its principal place of business in Grandview, Missouri. It is a small, class one motor common carrier of household goods, with gross, annual revenue (1970) of between three and four million dollars. It operates 41 trucks, 71 tractors and 85 trailers. It owns only 2 tractors and 27 trailers. The remainder of the fleet is owned either by agents or by owner-operators. Its 1970 net income before taxes was $43,643.00.

The defendants are the Interstate Commerce Commission, three carriers of household goods who were parties in opposition in the proceedings before the Commission, and the United States which was made a party on this appeal and which stands neutral in this controversy.

Cartwright's total authority to transport household goods was the sum of some thirty-four individual grants of authority to transport household goods, between a limited number of points in forty-six states and the District of Columbia,1 and did not include the right to operate directly between any and all points contained in its various grants of authority. Many of Cartwright's authorities touched another of its authorities so as to provide "gateways" which to some extent Cartwright used in its transportation operations.2

Believing the use of its gateways to be uneconomical and burdensome in that such use resulted in longer routes than would the use of a direct route, on October 20, 1969, Cartwright applied to defendant Commission for permission to eliminate 16 gateways and to be authorized to render direct service to all points it could serve through its tacking process. Cartwright also sought authority to serve the state of Nevada.3 Seven common carriers of property, specializing in the transportation of household goods, filed protests. The Department of Defense intervened in support of Cartwright's application. Fernstrom Storage and Van Company intervened as a party in opposition.

As a result of appropriate hearings, the Hearing Examiner found against Cartwright. Eventually his decision with one modificiation, was adopted on review by the appellate division of defendant Commission.4

Cartwright's Two Contentions

On this appeal Cartwright contends that (1) defendant Commission applied decisional standards or criteria in ruling Cartwright's application different from those employed by its respecting other like contemporary applications, thereby depriving Cartwright of a full and fair hearing; and (2) that defendant Commission failed to discharge its responsibilities under the National Environmental Policy Act of 1969 by summarily finding no significant effect upon the quality of the human environment "while contemporaneously finding that such issues have a significant environmental impact." Cartwright's counsel both in his supporting brief and in oral argument emphasized that Cartwright is not claiming that the action of defendant Commission, for reasons of substantial evidence, is lacking, and concedes that no substantial evidence problem is presented.

* * *

Cartwright's Second Contention

Cartwright's second contention is that defendant Commission failed to discharge its responsibilities under the National Environmental Policy Act of 1969, (N.E.P.A.) 42 U.S.C. §§ 4331 and 4332 in particular by summarily finding no significant effect upon the quality of the human environment "while contemporaneously finding that such issues have a significant environmental impact." Defendants respond (1) that this contention of Cartwright's has been rendered moot by the Commission's gateway elimination rules; (2) that Cartwright has no standing to challenge theCommission's actions on environmental grounds; and (3) that the Commission properly found that the denial of Cartwright's application would have no significant environmental impact.

Turning first to the question of standing, we are aware of that line of cases holding that the fact that one is a competitor of the entity taking the challenged action, and, hence, and economic interest is present, does not give standing to raise a N.E.P.A. challenge.13 We are also aware that the Commission's negative decision is simply one that leaves Cartwright in the same position it has been in all along, and makes no changes from the status quo. However, we are reluctant to dispose of Cartwright's N.E.P.A. contention on lack of standing in view of the additional fact that it is Cartwright who contends it is the one occasioned to cause environmental damage by the negative decision of the Commission, refusing Cartwright permission to eliminate 16 of its gateways.14 Restated, Cartwright contends [6 ELR 20168] the Commission's denial in February, 1973 of Cartwright's application for direct authority has the effect of causing Cartwright to operate over highly circuitous gateway routes, all to the detriment of the environment. Hence, Cartwright implies that more than a mere economic interest is involved. We elect to proceed to consider the merits of Cartwright's N.E.P.A. contention.

To understand the above italicized portions of Cartwright's second contention, it is necessary to explain an earlier action of the defendant Commission under its rule making power. The National Environmental Policy Act (42 U.S.C. § 4333) mandates that all agencies of the Federal Government shall review their statutory authority, administrative regulations, and current policies and procedures for the purpose of determining whether there are any deficiencies or inconsistencies therein which prohibit full compliance with the purposes and provisions of the statute.

Pursuant to the statutory mandate, defendant Commission undertook an in depth study of the combined environmental impact of all gateway operations, solicited the comments of the general public and of all motor carriers, prepared an extensive impact statement, and then proceeded under its rule making powers to make very substantial changes in its motor common carrier regulatory scheme to effectively reduce adverse environmental effects with a minimum of disruption to the transportation.15 In its study the Commission found among other items, that most unnecessary fuel consumption resulted from the more circuitous gateway routes. Accordingly, and on February 28, 1974, it issued new rules providing that gateway operations for which the distance traveled exceeds the direct highway distance between the points to be served, by more than 20 percent may no longer be conducted unless an application for direct route authority has been filed with the Commission.16 Also, where the carrier's operation over a gateway route exceeds by 20 percent or less the distance between the origin and destination points over the most direct available route, the carrier may, but is not required to file a "letter notice" notifying the agency of its intention to conduct direct operations.17 Thus, for all practical purposes Cartwright has had the benefit of a N.E.P.A. study by defendant Commission that resulted in the Commission finding in effect that the national system of all gateways considered as a whole had a substantial effect on the quality of the human environment, and in recognition of its N.E.P.A. duty exercised its rule making power as described above. This, of course, does not relieve defendant Commission from its statutory duties under N.E.P.A. in making decisions and taking other agency action on individual carrier requests for authority for new or modified services. Nor does it mean, as plaintiff contends, that its decision that all gateway operations considered as a whole have a significant effect on the human environment also mean that only a portion of such gateways has that effect. Rather, a separate determination of that question is necessary with regard to each new Commission gateway action or decision.

The defendant Commission in recognition of its duty to make a determination of what the effect of its decision on the Cartwright application would be under N.E.P.A. procedures and standards, decided that the evidence did not indicate that the defendant Commission's decision would in any significant manner affect the quality of the human environment. This decision of the Commission is strongly supported by the record in this case. The record shows that very little, if any, traffic would actually pass through Cartwright's more circuitous gateways. Cartwright's evidence reflected a high incidence of shipments interlined with other carriers rather than transported by Cartwright through its gateways. The Hearing Examiner attributed such interlining to the fact that operations over Cartwright's more circuitous gateway routes were uneconomical and impractical, and that Cartwright would continue to forego their use. Thus, it is doubtful whether the Commission's decision to deny Cartwright's application had any measurable or appreciable impact on the quality of the human environment. Certainly such evidence supports the finding that there would be no significant impact.18

The Mootness Question

Cartwright presumably now uses the direct route in all instances where its circuitous gateway route adds 20 percent or less travel distance as compared to the direct route.

Turning to the more than 20 percent type of circuitous route, Cartwright contends the February, 1973 denial of its application for direct authority to operate over highly circuitous routes forced it to operate over highly circuitous gateway routes to the great detriment of the environment. Assuming that Cartwright would actually conduct such likely to be unprofitable operations and further assuming that those so conducted would cause some significant harm to the environment, the answer is that it is precisely those circuitous operations which have been positively proscribed by the new and now effective gateway elimination rules.19 Under these new gateway rules which we judicially notice, Cartwright cannot use these highly circuitous gateways, and must obtain authority to transport directly or not transport. Cartwright may or may not be successful under the new gateway rules in obtaining direct route authority as a result of its pending applications which include the applications involved here. But successful or not, Cartwright will no longer be using the highly circuitous gateways in question in this suit. Hence, no present question or controversy of any appreciable consequence remains concerning any significant effect on human environment being possibly caused by defendant Commission's decision in this case not to grant the requested authority to Cartwright. Thus, Cartwright's N.E.P.A. contentions are now moot.

In accordance with the views above [6 ELR 20169] expressed, we find no merit in Cartwright's second contention, and further find that contention is now moot.

It is ordered that the relief sought by plaintiff be denied and that the complaint be dismissed.

1. Cartwright did not have authority to transport in Hawaii, Alaska, North Dakota and Nevada.

2. A "gateway" operation results when a carrier tacks or combines two grants of authority at a point common to both in order to provide a service from a point authorized to be served under one grant of authority to a service point contained within another. The common point is called a gateway. For example, a carrier holds authority from points in the state of Washington to points in the state of Minnesota, and, additionally, is authorized to serve from points in minnesota to points in California. The carrier is permitted to tack these authorities to provide a through service from Washington to California by routing traffie through the common point, the state of Minnesota. Some of Cartwright's tacking is very complex. In going from Maryland to the west coast five separate authorities and four separate gateways are involved.

3. Cartwright's application was assigned Docket Number MC-88368 (Sub-No. 22) and titled "Cartwright Van Lines, Inc., Extension-Elimination of Gateways".

4. The Hearing Examiner did not consider the evidence presented by the Department of Defense concerning the military commercial traffic in concluding that Cartwright was not providing an effective and competing service with existing carriers. The Hearing Examiner felt that since the Department of the Defense rotated this business, it lacked any competitive effect. However, the Commission did consider this evidence and still adopted the remainder of the findings and the result reached by the Hearing Examiner.

13. See Data Processing Service v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970); Clinton Community Hospital v. Southern Maryland Medical Center, U.S. , 95 S. Ct. 2666, 45 L. Ed. 2d 700 (1975).United States v. S.C.R.A.P., 412 U.S. 669, 93 S. Ct. 2405, 37 L. Ed. 2d 254 (1973).

14. See cases cited in previous footnote. Compare. Sierra Club v. Morton, 405 U.S. 727, 92 S. Ct. 1361, 31 L. Ed. 2d 636 (1972): Zlotniek v. D.C. Land Rederelopment Agency (D.D.C.1974) affirmed 494 F.2d 1157 (1975); Pizitz v. Volpe, 467 F.2d 208 (5th Cir. 1972); Calvert Cliffs' Coors. Com. v. United States A.E. Comm., 146 U.S. App. D.C. 33, 449 F.2d 1109 (1971). Here, use of substantially more circuitous routes might present additional highway safety hazards, highway congestion, fuel and rubber consumption, air and noise pollution, etc.

15. Motor Common Carriers of Property, Routes and Scrrices, Ex parte No. 55 (Sub. No. 8), 119 M.C.C. 170 (1973).

16. 49 C.F.R. § 1065(b). Even then, such gateway operations will be permitted only until the direct route application has been decided. The Commission is endeavoring to expedite the handling of such applications.

17. 49 C.F.R. § 1065(a). Defendant agency advises that Cartwright has filed 67 such letter notices. Presumably this permits Cartwright to use the direct route rather than conform to the former gateway use requirement.

18. The statutory test is whether the federal agencydecision is a "major federal action significantly affecting the quality of the human environment". See 42 U.S.C. § 4331-4332.

19. These new gateway rules which are presumptively valid absent successful challenge have been resorted to by Cartwright to obtain the direct routes it desires. These new gateway rules which we take judicial notice of became effective on February 28, 1974. Cartwright's applications under them are currently pending. See Docket No. M.C. 88368 (Sub-No. 27G). We note that Cartwright under the new rules can continue the use of these gateways only until the I.C.C. acts on its applications concerning them. In view of the I.C.C.'s policy to expedite such action, as a practical matter any possible significant adverse effect on the quality of the human environment resulting from this small interval is so remote as in our judgment to moot Cartwright's N.E.P.A. contentions presented on this appeal.


6 ELR 20166 | Environmental Law Reporter | copyright © 1976 | All rights reserved