author: Mr. Justice Black

text:
    PRESTON v. UNITED STATES.
    No. 163.
    Argued February 25, 1964.
    Decided March 23, 1964.

      Francis M. Shea, by appointment of the Court, 374 U. S. 823, argued the cause and filed briefs for petitioner.

      Sidney M. Glazer argued the cause for the United States. With him on the brief were Solicitor General Cox, Assistant Attorney General Miller and Beatrice Rosenberg.

   Mr. Justice Black

delivered the opinion of the Court.

Petitioner and three others were convicted in the United States District Court for the Eastern District of Kentucky on a charge of conspiracy to rob a federally insured bank in violation of 18 U. S. C. § 2113, the conviction having been based largely on evidence obtained by the search of a motorcar. The Court of Appeals for the Sixth Circuit affirmed, rejecting the contentions, timely made in the trial and appellate courts, that both the original arrest, on a charge of vagrancy, and the subsequent search and seizure had violated the Fourth Amendment. 305 F. 2d 172. We granted certiorari. 373 U. S. 931. In the view we take of the case, we heed not decide whether the arrest was valid, since we hold that the search and seizure was not-.

The police of Newport, Kentucky, received a telephone complaint at 3 o’clock one morning that “three suspicious men acting suspiciously”- had been seated in a motorcar parked in a business district since 10 o’clock the evening before. Four policemen straightaway went to the place where the car was parked and found petitioner and two companions. The officers asked the three men why they were parked there, but the men gave answers which the officers testified were unsatisfactory and evasive. All three men admitted that they were unemployed; all of them together had only 25 cents. One of the men said that he had bought the car the day before (which later turned out to be true), but he could not produce any title. They said that their reason for being there was to meet a truck driver who would pass through Newport that night, but they could not identify the company he worked for, could not say what his truck looked like, and did not know what time he would arrive. The officers arrested the three men for vagrancy, searched them for weapons, and took them to police headquarters. The car, which had not been searched at the time of the arrest, was driven by an officer to the station, from which it was towed to a garage. Soon after the men had been booked at the station, some of the police officers went to the garage to search the car and found two loaded revolvers in the glove compartment. They were unable to open the trunk and returned to the station, where a detective told one of the officers to go back and try to get into the trunk. The officer did so, was able to enter the trunk through the back seat of the car, and in the trunk found caps, women’s stockings (one with mouth and eye holes), rope, pillow slips, an illegally manufactured license plate equipped to be snapped over another plate, and other items. After the search, one of petitioner’s companions confessed that he and two others— he did not name petitioner — intended to rob a bank in Berry, Kentucky, a town about 51 miles from Newport. At this, the police called the Federal Bureau of Investigation into the case and turned over to the Bureau the articles found in the car. It was the use of these articles, over timely objections, which raised the Fourth Amendment question we here consider.

The Amendment provides:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

The question whether evidence obtained by state officers and used against a defendant in a federal trial was obtained by unreasonable search and seizure is to be judged as if the search and seizure had been made by federal officers. Elkins v. United States, 364 U. S. 206 (1960). Our cases make it clear that searches of motorcars must meet the test of reasonableness under the Fourth Amendment before evidence obtained as a result of such searches is admissible. E. g., Carroll v. United States, 267 U. S. 132 (1925); Brinegar v. United States, 338 U. S. 160 (1949). Common sense dictates, of course, that questions involving searches of motorcars or other things readily moved cannot be treated as identical to questions arising out of searches of fixed structures like houses. For this reason, what may be an unreasonable search of a house may be reasonable in the case of a motorcar. See Carroll v. United States, supra, 267 U. S., at 153. But even in the case of motorcars, the test still is, was the search unreasonable. Therefore we must inquire whether the facts of this case are such as to fall within any of the exceptions to the constitutional rule that a search warrant must be had before a search may be made.

It is argued that the search and seizure was justified as incidental to a lawful arrest. Unquestionably, when a person is lawfully arrested, the police have the right, without a search warrant, to make a contemporaneous search of the person of the accused for weapons or for the fruits of or implements used to commit the crime. Weeks v. United States, 232 U. S. 383, 392 (1914); Agnello v. United States, 269 U. S. 20, 30 (1925). This right to search and seize without a search warrant extends to things under the accused’s immediate control, Carroll v. United States, supra, 267 U. S., at 158, and, to an extent depending on the circumstances of the case, to the place where he is arrested, Agnello v. United States, supra, 269 U. S., at 30; Marron v. United States, 275 U. S. 192, 199 (1927); United States v. Rabinowitz, 339 U. S. 56, 61-62 (1950). The rule allowing contemporaneous searches is justified, for example, by the need to seize weapons and other things which might be used to assault an officer or effect an escape, as well as by the need to prevent the destruction of evidence of the crime — things which might easily happen where the weapon or evidence is on the accused’s person or under his immediate control. But these justifications are absent where a search is remote in time or place from the arrest. Once an accused is under arrest and in custody, then a search made at another place, without a warrant, is simply not incident to the arrest. Agnello v. United States, supra, 269 U. S., at 31. Here, we may assume, as the Government urges, that, either because the arrests were valid or because the police had probable cause to think the car stolen, the police had the right to search the car when they first came on the scene. But this does not decide the question of the reasonableness of a search at a later time and at another place. See Stoner v. California, post, p. 483. The search of the car was not undertaken until petitioner and his companions had been arrested and taken in custody to the police station and the car had been towed to the garage. At this point there was no danger that any of the men arrested could have used any weapons in the car or could have destroyed any evidence of a crime — assuming that there are articles which can be the “fruits” or “implements” of the crime of vagrancy. Cf. United States v. Jeffers, 342 U. S. 48, 51-52 (1951). Nor, since the men were under arrest at the police station and the car was in police custody at a garage, was there any danger that the car would be moved out of the locality or jurisdiction. See Carroll v. United States, supra, 267 U. S., at 153. We think that the search was too remote in time or place to have been made as incidental to the arrest and conclude, therefore, that the search of the car without a warrant failed to meet the test of reasonableness under the Fourth Amendment, rendering the evidence obtained as a result of the search inadmissible.

Reversed and remanded.


source: Caselaw Access Project

license: Public Domain

text:
    HUMBLE PIPE LINE CO. v. WAGGONNER, SHERIFF.
    No. 329.
    Argued March 4, 1964.
    Decided March 23, 1964.

      Leon O’Quin argued the cause and filed briefs for petitioner in No. 329.

      Clarence L. Yancey argued the cause for petitioners in No. 354. With him on the brief was Clyde R. Brown.

      Ferdinand A. Cashio, Assistant Attorney General of Louisiana, argued the cause for respondent in both cases. With him on the briefs were Jack P. F. Gremillion, Attorney General of Louisiana, and Carroll Buck, First Assistant Attorney General.

      Solicitor General Cox and Roger P. Marquis filed a brief for the United States in both cases, as amicus curiae, urging reversal.

      Together with No. 354, Natural Gas & Oil Corp. et al. v. Wag-gonner, Sheriff, also on certiorari to the same court.

   Mr. Justice Black

delivered the opinion of the Court.

The common question these cases present is whether the United States has such exclusive jurisdiction over a 22,000-acre tract of land in Louisiana on which the Barks-dale Air Force Base is located that Louisiana is without jurisdiction to levy an ad valorem tax on privately owned property situated on the tract. The District Court and Court of Appeal of Louisiana upheld such a tax laid on certain oil drilling equipment and pipelines owned, used and kept by the petitioners on this federal enclave. 151 So. 2d 575. The Supreme Court of Louisiana denied review. 244 La. 463, 467, 152 So. 2d 561, 562. We granted certiorari to consider this federal question important to the United States. 375 U. S. 878.

The United States acquired a fee simple title to the entire tract in 1930 by donations from the State of Louisiana, the City of Shreveport, and the Bossier Levee District, a state agency, for the purpose of using the land as a military base. The Government has spent huge amounts of money in creating and operating at Barksdale Field one of its most important military posts. When the State and its agencies gave the land to the United States, Louisiana law provided that the United States should have “the right of exclusive jurisdiction” over any land it “purchased or condemned, or otherwise acquired ... for all purposes, except the administration of the criminal laws . . . and the service of civil process of said State therein . ...” All of the pipelines or equipment in question upon which the State's ad valorem tax has been imposed are, as the Louisiana District Court stated, “situated on the United States Military Reservation known as ‘Barksdale Air Force Base’. . . .”

Article I, § 8, cl. 17, of the United States Constitution permits the United States to obtain exclusive jurisdiction over lands within a State. It provides:

“The Congress shall have Power ... To exercise exclusive Legislation in all Cases whatsoever . . . over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dockyards, and other needful Buildings . . . .”

Louisiana contends that the United States cannot “exercise exclusive Legislation” here because the land for the military base was donated, not “purchased” within the meaning of the constitutional provision. We cannot agree to such a constricted reading of that provision. Louisiana concedes that, as we pointed out in our recent holding in Paul v. United States, 371 U. S. 245, 264, the Government could, with the State’s consent, have acquired exclusive jurisdiction by condemning the land. See also James v. Dravo Contracting Co., 302 U. S. 134, 141-142. This common-sense reading of the constitutional provision simply follows the interpretation given it long ago in Fort Leavenworth R. Co. v. Lowe, 114 U. S. 525, 538:

“The essence of that provision is that the State shall freely cede the particular place to the United States for one of the specific and enumerated objects.”

In accordance with this construction the Court in that case went on to emphasize that although the United States had not “purchased” Fort Leavenworth in the narrow trading sense of the term, the crucial question was whether Kansas had ceded exclusive jurisdiction over the fort. Likewise, we hold here that under Art. I, § 8, cl. 17, the United States acquired exclusive jurisdiction when the land was ceded to it with consent of the State (except for the State’s express reservation as to civil and criminal process) just as if the United States had acquired its title by negotiation and payment of a money consideration.

Relying on the fact that the United States has leased the right to exploit parts of the reservation for oil and gas and for an oil pipeline, Louisiana contends that the Federal Government has thereby lost its power to exercise exclusive jurisdiction over those parts of the area. We cannot agree. We did hold in S. R. A., Inc. v. Minnesota, 327 U. S. 558, that where the United States, while retaining what was in substance a mortgage, had sold land and buildings formerly used for governmental purposes it thereby in effect surrendered its former exclusive jurisdiction, leaving that property taxable by the State. But that cáse does not control the present situation, for here the Government continues to hold all the land subject to its primary jurisdiction and control. This Court has previously held that exclusive federal jurisdiction was not lost either by lease of property for commercial purposes within an enclave, Arlington Hotel Co. v. Fant, 278 U. S. 439, or by conveying a right of way to a railroad across a reservation, United States v. Unzeuta, 281 U. S. 138. And in holding that exclusive jurisdiction was not lost over a part of a reservation used for farming, this Court recognized the responsibility of the Executive Department of the Government to determine what land it will acquire and hold for military purposes. Benson v. United States, 146 U. S. 325, 331. There is no evidence here which would justify a court in deciding that the Government does not need to keep all of this tract intact, ready for use when needed for the highly important military purposes to which it has been dedicated.

Louisiana further contends that this record shows that the Government did not intend to accept exclusive jurisdiction here. It is the established rule that a grant of jurisdiction by a State to the Federal Government need not be accepted and that a refusal to accept may be proved by evidence. Atkinson v. State Tax Comm’n, 303 U. S. 20, 23; Silas Mason Co. v. Tax Comm’n, 302 U. S. 186, 207-209. The State’s contention is based chiefly on a statement that Barksdale Air Force Base buys public utility services from the State or a state instrumentality at its gate and pays to the State’s school system a per capita charge for each child of a serviceman attending the State’s schools. We think these circumstances wholly fail to show a rejection by the Government of the State’s cession of exclusive jurisdiction over the base. Nor do we think it possible to find a refusal or an abandonment of exclusive federal jurisdiction from the fact that the oil and gas leases provided that the companies should “pay when due, all taxes lawfully assessed and levied under the laws of the State or the United States upon improvements, oil and gas produced from the lands hereunder, or other rights, property, or assets of the lessee____” It is by no means sure that a federal agency making an oil and gas lease could waive the Government’s exclusive jurisdiction over a federal reservation, but even if it could we see nothing more in this standard contractual provision than a precaution on the Government’s part to guard itself against liability for payment of any state taxes “lawfully assessed” against its lessee. Cf. United States v. County of Allegheny, 322 U. S. 174, 189. A contractual requirement to pay taxes lawfully owing, standing alone, cannot be read as manifesting a purpose of the Government to abandon exclusive jurisdiction over one of its important military enclaves. When Congress has wished to allow a State to exercise jurisdiction to levy certain taxes within a federal enclave it has specifically so stated, as in the Buck Act, 4 U. S. C. §§ 104M10.

The judgments are reversed and the cases remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

       No issue concerning immunity of federal instrumentalities from state taxation, apart from the question of lack of state jurisdiction to tax within a federal enclave, has been raised here.

       Act No. 4, Louisiana Legislature, 1930.

       Act No. 12, Louisiana Legislature, 1892, subsequently amended by Act No. 31, Louisiana Legislature, 1942, La. Rev. Stat. 1950, Tit. 52, c. 1, § 1. The deed to the United States was for a fee simple, and unlike that in Palmer v. Barrett, 162 U. S. 399, the authorizing statute contained no conditions and reserved only “the administration of the criminal laws . . . and the service of civil process.”

       The fact that the oil and gas leases were issued by the Department of the Interior rather than the Department of the Air Force does not affect the exclusive jurisdiction of the United States.

       But cf. International Business Machines Corp. v. Ott, 230 La. 666, 701-702, 89 So. 2d 193, 205-206.


author: Mr. Justice Clark

text:
    A. L. MECHLING BARGE LINES, INC., et al. v. UNITED STATES et al.
    No. 58.
    Argued February 18, 1964.
    Decided March 23, 1964.

      Edward B. Hayes argued the cause and filed briefs for appellants in No. 58.

      Harold E. Spencer argued the cause for appellant in No. 59. With him on the briefs was Richard M. Freeman.

      Frank J. Goodman argued the cause for the United States. On the brief were Solicitor General Cox, Assistant Attorney General Orrick, and Robert B. Hummel.

      H. Neil Garson argued the cause for the Interstate Commerce Commission, appellee in both cases. With him on the brief was Robert W. Ginnane.

      Richard J. Murphy argued the cause and filed a brief for New York Central Railroad Co., appellee in No. 59. Leo P. Day filed a brief for McNabb Grain Co. et al., appellees in No. 59.

      Together with No. 59, Board of Trade of the City of Chicago v. United States et al., also on appeal to the same court.

   Mr. Justice Clark

delivered the opinion of the Court.

This direct appeal from a final judgment of a three-judge District Court is but another episode in the long and continued struggle between the railroads and competing barge lines. In 1960 the Interstate Commerce Commission issued an order permitting a departure from the long- and short-haul provision of § 4 of the Interstate Commerce Act. 310 I. C. C. 437. This order permitted the New York Central and connecting carriers to inaugurate a rate structure on its Belt Line west of Kankakee, Illinois, to eastern destinations under which lower rates were charged for some long hauls than for shorter ones on the same route. The District Court approved this action by dismissing a complaint to set aside the order. 209 F. Supp. 744. We noted probable jurisdiction, 374 U. S. 823, and now reverse the judgment with directions that the District Court vacate the order of the Commission and remand for further consideration in light of this opinion.

I.

The New York Central operates the Kankakee Belt Line, which extends from South Bend, Indiana, through Kankakee, Illinois, and westward to Zearing, Illinois. That portion of the line west of Kankakee to Moronts, Illinois, roughly parallels the Illinois River in Northern Illinois and is used, in large part, to transport corn toward eastern markets. In the mid-1930’s, the Illinois River was developed for barge movement and almost all of the corn traffic was drawn away from the rails to the river, corn being moved to Chicago by barge and then shipped to the East by rail. Prior to 1957, barge rates from ports along the Illinois River to Chicago averaged 4.625(4 per hundred pounds of corn. From Chicago to eastern destinations, rail rates were 49(4 per hundred pounds of corn and 49.5(4 for corn products, so that the total shipping cost from ports on the Illinois River to the East was 53.625(4 for corn and 54.125(4 for corn products. At the same time, rates for shipping corn via all-rail routes from origins on the Belt Line to eastern markets averaged 72(4 for corn and 72.5(5 for corn products, computed either as through rates or as a combination of a 23(4 rail rate to Chicago and the 490 or 49.5(5 rate from Chicago to the East.

The railroads chose to meet the barge competition by establishing a new rate structure on December 15, 1956, with a proportional rate for rail shipments of corn to Kankakee which was competitive with the barge rate to Chicago. The railroads continued the regular rates for transportation of corn to Kankakee from points on the Belt Line but allowed credit on reshipment from Kan-kakee to eastern points which resulted in a net rate of 60 for transportation from Belt Line points to Kankakee. The 60 proportional rate applies only if the corn is milled in transit and only if it is reshipped to the East. Because of the credit, the resulting rate system favors eastbound shipments of corn from Belt Line points west of Kanka-kee over similar shipments via the same route starting at Kankakee. For this reason the rate structure violates the long- and short-haul prohibition of § 4 of the Act and the railroads had to apply for authority for fourth-section departures. In 1957 a temporary fourth-section order was entered authorizing the filing and immediate application of the rates but not approving them, “all such rates being subject to complaint, investigation and correction if in conflict with any provision of the Interstate Commerce Act.” The application was set down for hearing, but the Commission did not exercise its power to enter into a general investigation of the lawfulness of the rates under §15(1) or §15(7) of the Act, 41 Stat. 484-487, as amended, 49 U. S. C. §§ 15 (1), 15 (7). Nor did the appellants file a formal complaint under § 13 of the Act, 24 Stat. 383-384, as amended, 49 U. S. C. § 13, assailing the lawfulness of the rates.

Subsequently the Examiner denied § 4 relief because Belt Line rates to Kankakee were less than the out-of-pocket cost and were “lower than necessary to meet the barge competition.” The Commission reversed, holding that the proportional rate from origins along the Kankakee Belt Line to Kankakee “has no independent existence, but is an integral part of the rate which applies on the through transportation from Belt origin” to the East. The Commission found that the through combination rate was compensatory and that since the barges attracted the corn grown adjacent to the river and the rails attracted that along the Belt Line, the rates were not lower than necessary to meet the barge rates and did not constitute destructive competition.

The Chicago Board of Trade, which had intervened in the proceeding, charged that the rates violated § 3 (1) of the Act (as well as § 4) because they discriminated against Chicago grain merchants and processors. The Commission refused to pass upon the question as not being relevant to a § 4 proceeding. Nor did the Commission consider Mechling’s contention that the rates violated § 3 (4) of the Act because they discriminated between connecting carriers. Other objections that the rates violated § 1 (5) of the Act as not being just and reasonable were likewise refused consideration. While the Commission found that the railroad’s action was not a competitively destructive practice, it made no direct finding that the action did not violate the National Transportation Policy, despite the appellants’ insistence that it did.

The District Court approved the Commission’s action in all respects and dismissed the complaint, holding “that the order in question was within the statutory power of the Commission, that it is supported by findings and conclusions based on substantial evidence, and that no prejudicial error occurred in the hearings before the Examiner and Commission.” 209 F. Supp., at 749.

We have concluded that there is error in the holding in two respects: (1) The Commission should have passed upon the questions raised and evidence offered that the rates violated other sections of the Act; (2) the Commission erred in failing to specifically consider and pass upon the question of whether the rates violated the National Transportation Policy.

II.

Contentions were made and proof was offered by the Chicago Board of Trade of discriminatory violations of § 3 (1) of the Act, especially discrimination against whole corn by the milling-in-transit limitation. Under the conclusion of the Examiner that the fourth-section application should be denied, it was not necessary to pass upon the § 3 (1) contention. However, when the Commission took the opposite view on the § 4 application, the claim under § 3 (1) was ripe for decision. The Commission found that “[although the New York Central intends to remove the milling-in-transit limitation, these issues do not directly deal with the fourth-section principles here involved, but are properly matters which may be raised in investigation or complaint proceedings.” 310 I. C. C. 437, 451.

Likewise, appellant Mechling claims discrimination against the barge lines at Chicago in violation of § 3 (4) of the Act, which prohibits carriers from practicing rate discrimination between connecting lines, including common carriers by water. The gist of the grievance is the assertion that the New York Central rate structure results in lower reshipping rates for ex-rail corn eastbound from Chicago than for ex-barge corn. Mechling urges that the Commission should have allowed full inquiry into this contention and should have determined whether § 3 (4) is being violated.

In defense of its position the Commission says that it does not grant relief under § 4 when the rates proposed result in violations of other sections of the Act. However, the Commission does not believe that this policy requires it to consider and decide, in a fourth-section proceeding, every allegation of rate unlawfulness, no matter how remote. Continuing, the Commission argues that since the attack on the rates was on a proportional factor, the 60, and not on the through charge, these other claims of unlawfulness were beyond the immediate § 4 issues. We cannot agree that the mechanism of the rate under attack permits of such easy dismemberment. Indeed, there is a definite tie-in that prevents the compartmentalization of the elements going into the combination. The 60 is not a separate charge but is the result of the railroad’s combination rate. The shipper is charged 230 for the transportation of corn from points west to Kan-kakee, with milling-in-transit, and is allowed a 170 credit on the rate from Kankakee to the East, either direct or via Chicago, on the transportation of the resulting corn products. This combination rate has a real impact on the freight originating along the Belt Line. Further, the rate is not “remote,” as is shown by the undisputed statement of counsel at argument that the barges have lost 53% of their carriage since it was made effective in 1957.

If the proceeding is splintered, contestants will be obliged to await the conclusion of § 4 proceedings before raising claims of violations under other sections of the Act. Not only would this be poor administration but it would result in manifest inequities and allow potential windfalls to some carriers.

Moreover, such splintering appears to be contrary to the consistent policy of the Commission in fourth-section proceedings. Over 50 years ago the Commission said:

“[T]he proviso authorizing this Commission to permit exceptions to the general prohibition of . . . [Section 4] is not a grant of arbitrary or absolute power, but its exercise must be limited and conditioned upon the presence in special cases of conditions and circumstances which would make such exceptions legal and proper and in no wise antagonistic to other provisions of the act.” Railroad Comm’n of Nevada v. Southern Pac. Co., 21 I. C. C. 329, 341 (1911).

In at least 10 subsequent cases, as well as in its annual reports, the Commission has re-emphasized the same principle. See 34 I. C. C. Ann. Rep. 47. Furthermore, the application of all of the Act’s prohibitions against discrimination “as a whole” furthers the purpose of the Congress in its enactment. The Senate Committee on Interstate Commerce once stated it this way:

“The provisions of the . . . [Interstate Commerce Act] are based upon the theory that the paramount evil chargeable against the operation of the transportation system of the United States as now conducted is unjust discrimination between persons, places, commodities, or particular descriptions of traffic. The underlying purpose and aim of the measure is the prevention of these discriminations, both by declaring them unlawful and adding to the remedies now available for securing redress and enforcing punishment . . . .” S. Rep. No. 46, 49th Cong., 1st Sess., 215-216 (1886).

In accordance with this policy, this Court declared in New York v. United States, 331 U. S. 284, 296 (1947), that “[t]he principal evil at which the Interstate Commerce Act was aimed was discrimination in its various manifestations.” In the Intermountain Rate Cases, 234 U. S. 476, 485-486 (1914), the Court held that the Commission's power to relieve carriers from the requirements of § 4 depends upon

“the facts established and the judgment of that body in the exercise of a sound legal discretion as to whether the request should be granted compatibly with a due consideration of the private and public interests concerned and in view of the preference and discrimination clauses of the second and third sections.” (Emphasis added.)

The fact that the long- and short-haul prohibition of § 4 is particularized does not require any different interpretation. The Congress might well have concluded that such a practice was so pernicious that it required specific condemnation.

Finally, by hearing and determining, in a single proceeding, all charges of discrimination bearing upon the formal § 4 application, the Commission would further the legislative purpose as declared by the National Transportation Policy. It directed that the Interstate Commerce Act “shall be administered and enforced with a view to carrying out” its purpose “to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discrimina-tions, undue preferences or advantages, or unfair or destructive competitive practices . . . .” 54 Stat. 899, 49 U. S. C., note preceding § 1.

We do not say that such a rule of consolidation is an absolute. Many of these applications are filed each year and the Commission summarily disposes of the majority of them. Certainly where issues are not raised or brought to adversary position there is no need to consolidate. Likewise, where consolidation would inordinately delay the § 4 proceeding, good administration would require its denial. However, in the instant case, we see no practical reason why the merits of the several contentions should not have been reached. To require the parties to begin anew and thus spawn several cases, all of which might have been easily disposed of in the § 4 proceeding, needlessly subjects appellants' claims to the rigors of circumlocution so deadly to effective administrative and judicial processes. This proceeding is now in its seventh year— during all of which period the rate under attack has been in force — and, still, basic questions as to the validity of the rate have not been considered by the Commission.

III.

The Examiner entered a finding, which is uncontested, that the proportional rate here under attack did not cover the out-of-pocket costs of the railroad. In spite of this finding, the Commission gave little, if any, consideration to any resulting violation of the National Transportation Policy. There is no economic analysis, no expert testimony, no supporting data. Instead, the Commission found that the through rate, which it thought compensatory, rather than the Belt Line proportional rate, was controlling. Viewed in this manner, the Commission determined that the rate was not a destructively competitive practice. However, it supported this conclusion only with passing references to the first-year experience under the rate of two Illinois elevators and 10 Illinois River ports. One of the elevators had experienced no adverse effects from the rate while the other had lost some grain grown closer to the Belt Line. The 10 ports experienced about a 23% larger corn shipment to Chicago but the proportion of this increase to the whole grain movement is not shown. Nevertheless, the Commission concluded from this “that while corn grown adjacent to the Belt was attracted to the rails, that grown adjacent to the river remained with the barges. Thus, it is evident that the proposed rates are not lower than necessary to meet the barge competition.” 310 I. C. C. 437, 452. In contradiction to this we have the undenied statement of counsel at argument, quoting statistics of the Chicago Board of Trade, that much corn traffic has been diverted from barge to rail since the rate went into effect, so that the barge lines carried 53% less corn to Chicago in 1963 than they did in 1957. The finding that the through rate was compensatory does not answer the question of whether the direct effect of the below-cost proportional rate on the Belt Line traffic is wholly at odds with the National Transportation Policy. Prior to the establishment of the rate, the barge lines enjoyed practically all of the traffic. However, the combination rate appears to have diverted appreciable traffic from the barge lines without any apparent profit to the railroad. Indeed, the Commission has not indicated whether any additional trafile resulted on the rail haul between Chicago or Kankakee and New York. We, therefore, do not believe it sufficient for the Commission to approve such a rate simply on a finding that the through rate is reasonably compensatory and no lower than necessary to meet competition. In light of the facts present here, the claim of violation of the National Transportation Policy, raised and insisted upon by the appellants at all stages of the proceedings, must be specifically considered.

The judgment is, therefore, reversed and the cases are remanded to the District Court with directions to vacate the order of the Commission and remand for further proceedings consistent with this opinion.

It is so ordered.

       24 Stat. 380, as amended, 71 Stat. 292, 49 U. S. C. § 4 (1):
      “(1) It shall be unlawful for any common carrier subject to this part or part III to charge or receive any greater compensation in the aggregate for the transportation of passengers, or of like kind of property, for a shorter than for a longer distance over the same line or route in the same direction, the shorter being included within the longer distance, or to charge any greater compensation as a through rate than the aggregate of the intermediate rates subject to the provisions of this part or part III, but this shall not be construed as authorizing any common carrier within the terms of this part or part III to charge or receive as great compensation for a shorter as for a longer distance: Provided, That upon application to the Commission and after investigation, such carrier, in special cases, may be authorized by the Commission to charge less for longer than for shorter distances for the transportation of passengers or property, and the Commission may from time to time prescribe the extent to which such designated carriers may be relieved from the operation of the foregoing provisions of this section, but in exercising the authority conferred upon it in this proviso, the Commission shall not permit the establishment of any charge to or from the more distant point that is not reasonably compensatory for the service performed; and no such authorization shall be granted on account of merely potential water competition not actually in existence: Provided further, That any such carrier or carriers operating over a circuitous line or route may, subject only to the standards of lawfulness set forth in other provisions of this part or part III and without further authorization, meet the charges of such carrier or carriers of the same type operating over a more direct line or route, to or from the competitive points, provided that rates so established over circuitous routes shall not be evidence on the issue of the compensatory character of rates involved in other proceedings: And provided further, That tariffs proposing rates subject to the provisions of this paragraph requiring Commission authorization may be filed when application is made to the Commission under the provisions hereof, and in the event such application is approved, the Commission shall permit such tariffs to become effective upon one day’s notice.”

       Reshipment of a commodity which has previously been shipped by barge is termed “ex-barge.” When prior transportation is by rail, reshipment is termed “ex-rail.”

       Raised to 4.8250 in December 1957.

       A rate which covers only a portion of the total transportation and is therefore only a portion of the total transportation charge.

       The net rate was 50 when the plan was established, later 5%0, and now 60.

       Proposed report, sheet 26.

       310 I. C. C. 437, 450.

       24 Stat. 380, as amended, 54 Stat. 902, 49 U. S. C. § 3 (1):
      “It shall be unlawful for any common carrier subject to the provisions of this part to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic, in any respect whatsoever; or to subject any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever: Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.”

       24 Stat. 380, as amended, 54 Stat. 903-904, 49 U. S. C. § 3 (4):
      “All carriers subject to the provisions of this part shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines and connecting lines, and for the receiving, forwarding, and delivering of passengers or property to and from connecting lines; and shall not discriminate in their rates, fares, and charges between connecting lines, or unduly prejudice any connecting line in the distribution of traffic that is not specifically routed by the shipper. As used in this paragraph the term ‘connecting line’ means the connecting line of any carrier subject to the provisions of this part or any common carrier by water subject to part III.”

       24 Stat. 379, as amended, 41 Stat. 475, 49 U. S. C. § 1 (5):
      “All charges made for any service rendered or to be rendered in the transportation of passengers or property ... as aforesaid, or in connection therewith, shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful.”

       National Transportation Policy, 54 Stat. 899, 49 U. S. C., note preceding § 1:
      “It is hereby declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this act (chapters 1, 8, 12, 13 and 19 of this title), so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate, economical, and efficient service and foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices; to cooperate with the several States and the duly authorized officials thereof; and to encourage fair wages and equitable working conditions — all to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense. All of the provisions of this act (chapters 1, 8, 12, 13 and 19 of this title), shall be administered and enforced with a view to carrying out the above declaration of policy.”

        Transcontinental Cases of 1922, 74 I. C. C. 48, 71; Commodity Rates on Lumber and Other Forest Products, In Carloads, From South Pacific Coast Territory To Points In Central Freight Association Territory, 165 I. C. C. 561, 569; Differential Routes To Central Territory, 211 I. C. C. 403, 421; Bituminous Coal to Buffalo, N. Y., 219 I. C. C. 554, 560; Pig Iron To Butler, Pa., 222 I. C. C. 1, 2; Iron and Steel to Minnesota, 231 I. C. C. 425, 428; Iron and Steel from Minnequa to Kansas, Nebraska, and South Dakota, 278 I. C. C. 163, 168-169; Coal and Coal Briquets in the South, 289 I. C. C. 341, 376-377; Passenger Fares, Hell Gate Bridge Route, New York, N. Y., 296 I. C. C. 147, 153; Nepheline Syenite from Ontario. Canada, to the East, 308 I. C. C. 561, 564-565.

       Friendly, The Federal Administrative Agencies: The Need for Better Definition of Standards, 75 Harv. L. Rev. 863, 884.

       On Mechling’s claimed violation of § 3 (4), proof on cross-examination was offered before the Examiner and refused as being relevant only in a “division case.” The report of the Commission is silent on the point. It was stated before the Examiner that the record “made fairly plain” the contention which, if true, should permit the Commission to proceed on remand to pass upon it; if not, then the record should be supplemented by stipulation or by additional evidence before the Examiner, if necessary.


author: Mr. Justice Clark Mr: Justice Harlan,

text:
    UNITED STATES et al. v. J. B. MONTGOMERY, INC.
    No. 66.
    Argued January 8, 1964.
    Decided March 23, 1964.

      Frank I. Goodman, pro hac vice, by special leave of Court, argued the cause for the United States et al. With him on the briefs were Solicitor General Cox, Assistant Attorney General Orrick, Robert B. Hummel, Elliott H. Moyer, Robert W. Ginnane and Betty Jo Christian.

      Charles W. Singer argued the cause and filed a brief for appellee.
   Mr. Justice Clark

delivered the opinion of the Court.

This appeal tests the validity of an order of the Interstate Commerce Commission issued under § 212 (c) of the Interstate Commerce Act as amended in 1957, 71 Stat. 411, 49 U. S. C. § 312 (c), converting the appellee’s contract carrier permit into a common carrier certificate but limiting its coverage “to movements from, to, or between outlets or other facilities of particular businesses of the class of shippers with whom it may now contract.” Ap-pellee contends that this limitation violates the mandate of the Congress in § 212 (c) that any certificate so issued “shall authorize the transportation, as a common carrier, of the same commodities between the same points or within the same territory as authorized in the permit.” The Commission answers that the restrictions are necessary to maintain “substantial parity” between the appel-lee’s old and new operations. The District Court held the Commission “without statutory authority to impose the restrictions in question” and set aside the order and remanded the case for further proceedings. 206 F. Supp. 455, 461. Probable jurisdiction was noted. 372 U. S. 952. We affirm the judgment.

I.

Prior to 1957 appellee operated under a contract carrier permit originally issued in 1943 under the “grandfather” clause contained in § 209 (a) of the Motor Carrier Act, 1935, 49 Stat. 543, 552. It permitted carriage of: (1) such commodities as are usually dealt in by wholesale or retail hardware and automobile-accessory business houses, and in connection therewith, equipment, materials and supplies used in the conduct of such business; (2) such commodities as are usually dealt in, or used, by meat, fruit, and vegetable packing houses; and (3) such commodities as are usually dealt in, or used, by wholesale and retail department stores. The permit contained a “Keystone restriction” which limited appellee to transporting such commodities only under contracts with persons operating the businesses specified. It permitted the carriage of a wide variety of commodities within specified territories, without limitation of consignee, but only for those shippers under contract with appellee and engaged in the specified businesses.

In 1957, at the behest of the Commission, the Congress amended the statutory definition of a contract carrier, § 203 (a)(15) of the Interstate Commerce Act, so as to thereafter read:

“The term ‘contract carrier by motor vehicle’ means any person which engages in transportation by motor vehicle of passengers or property in interstate or foreign commerce, for compensation (other than transportation referred to in paragraph (14) and the exception therein), under continuing contracts with one person or a limited number of persons either (a) for the furnishing of transportation services through the assignment of motor vehicles for a continuing period of time to the exclusive use of each person served or (b) for the furnishing of transportation services designed to meet the distinct need of each individual customer.”

In order to protect existing contract carrier permits, Congress enacted § 212 (c) which, as we have indicated, provided for the revocation of such a permit in appropriate proceedings before the Commission and the issuance of a common carrier certificate. In so doing, however, the Congress provided that the resulting common carrier certificate “shall authorize the transportation, as a common carrier, of the same commodities between the same points or within the same territory as authorized in the permit.”

In 1958 these proceedings were begun under this section and, after extended hearings, the Examiner found that the permit should be revoked and the common carrier certificate issued covering the same commodities and without restrictions. In addition he recommended the inclusion of authority for carriage of “materials, equipment, and supplies used by manufacturers of rubber and rubber products, from Chicago, and points in Illinois within 100 miles of Chicago, to Denver . . . The Commission adopted the latter recommendation and it was not contested in the District Court. As to the remaining authorizations, the Commission appended to the recommendations of the Examiner a restriction against combining or “tacking” appellee’s various operating rights in order to render a through service (likewise not contested), and also subjected each grant of authority to the following restriction:

“Restriction: The. authority granted immediately above is restricted to shipments moving from, to, or between wholesale and retail outlets, . . .”

The validity of this restriction is the sole challenge raised in this proceeding.

II.

The Commission contends that § 212 (c), read in the light of its background, is a “grandfather clause.” Its purpose, therefore, is merely to continue, without expanding, the authority of those contract carriers whose operations are lawful under United States v. Contract Steel Carriers, Inc., 350 U. S. 409 (1956), by revoking their contract carrier permits and issuing in lieu thereof common carrier certificates. The Commission concludes that, while the Congress specified only a continuance of the commodity and territorial limitations, Congress also intended that the effects of the “Keystone restriction” in the old permit be carried forward in the new one. Even if this is incorrect, the Commission says that it remains free to impose the restriction by reason of its general power under the Interstate Commerce Act to confine carrier operations within appropriate limits.

The difficulty with this argument is that the “Keystone restriction” under which appellee operated permitted it to carry commodities “dealt in, or used by” certain businesses without limitation, except that appellee was required to have a contract with the shipper so engaged. Although the Commission has eliminated this last requirement by certificating appellee as a common carrier, the restriction it has imposed here limits shipments “to shipments moving from, to, or between wholesale and retail outlets” and stores. Appellee insists that this restriction limits its carriage in that appellee cannot deliver from a supplier to a consumer, to or from a public warehouse or ship dock, between warehouses, to consolidation or transfer points or to a laborer or modification agent. The record does not show whether appellee exercised these claimed privileges under its contract carrier permit. We hold that if it did enjoy them or any others that we have not enumerated, then it is entitled to have the same freedom in its common carrier certificate.

The legislative history indicates that the Commission in its presentation to the Congress on § 212 (c) represented through its Chairman that the legislation would disturb no property rights of the contract carrier. Indeed, it asserted that such carriers would have “greater opportunity.” Moreover, the “Keystone restrictions” received the attention of the Congress. In the same Senate hearings, the difference between contract and common carriers was made clear, i. e., while the former were limited in the “character” of their carriage to the type of commodities named in their permits, they were not limited to particular shippers. Common carriers, on the other hand, were not limited in any way in their certificated territories. It appears to us that Congress intended to leave the converted contract carrier in as good a position as it previously enjoyed. Under the facts claimed, the Commission has not done so in this case.

We do not believe that appellee waived its rights by not proving that it had exercised the claimed privileges under its contract carrier permit. The permit has no restriction on its face in this regard, and such proof was understandably not presented in light of the recommendation of the Examiner that a common carrier permit include no restrictions whatever. At this late date it would be unfair to strip appellee of its claimed rights upon this basis.

Nor do we believe that the Commission can impose the restrictions on a rule of “substantial parity” under its general powers. Since § 212 (c) specifically commands that the Commission “shall” authorize the same carriage as was included in the contract carrier permit, we are unable to place § 212 (c) authority under the general power of other unrelated sections, such as § 208, where specific power is granted to assure “substantial parity.” The appellee carried on certain operations under its contract carrier permit. Congress intended that these operations be continued under the common carrier permit.

The judgment of the District Court is therefore affirmed. On remand the Commission will be free to contest appellee’s factual claims as to what service it performed under its contract carrier permit and to limit the common carrier certificate to such activity.

Affirmed.

Mr: Justice Harlan,

concurring.

I agree with what I understand to be the basic premise of the Court’s holding — that the Commission may, under § 212 (c), carry over “Keystone” restrictions in converting a contract carrier’s permit into a common carrier certificate, but may not impose any new limitations on the scope of the carrier’s operations.

Appellee contends that the language of § 212 (c), comments by members of Congress, and the traditional notion that a common carrier serves the “public” suggest a congressional intent to preclude the continuance of Keystone restrictions in the certificates of converted carriers. Although this argument is not without force, it leads to the conclusion that the Commission is powerless to prevent even the widest expansion of the previous activities of a converted carrier, resulting from the replacement of its contract carrier permit by a common carrier certificate. Absent what I regard as compelling evidence that Congress intended so to cripple the supervisory power of the Commission, I am constrained to read § 212 (c) as consistent with other statutory provisions dealing with national transportation and to conclude that the Commission may limit the entry of the converted carriers into types of carriage previously proscribed to them.

Nonetheless, there appears to be no persuasive support in the language of § 212 (c), legislative history, or policy for permitting the Commission to inhibit activities open to the carrier before conversion. Congress evinced an intent not to impose any new limitations on carriers subject to conversion, and, in view of the greater obligations owed by common carriers and the more extensive regulation to which they are subject, it is difficult to argue that the maintenance of existing carriage privileges will advantage the converted carriers to the possible prejudice of other common carriers. The Commission, therefore, may not include in the common carrier certificate a Keystone restriction that renders impermissible operations allowed under the contract carrier permit.

The determinative consideration in fixing the limit to the Commission’s power is, according to these principles, the authorization conferred by the contract carrier permit; absent dormancy or abandonment, the extent of appellee’s actual prior operations should be irrelevant. Since in the proceedings before the Commission appellee contended that § 212 (c) is inconsistent with any Keystone restriction and the Commission’s position was that it is fettered in imposing such restrictions only by the concept of “substantial parity,” the questions of dormancy or abandonment were not dealt with in the Commission proceedings, but the Commission should be free to consider any such issue on remand.

On these bases I concur in the judgment of the Court.

       “The Commission shall examine each outstanding permit and may within one hundred and eighty days after ... [August 22,1957] institute a proceeding either upon its own initiative, or upon application of a permit holder actually in operation or upon complaint of an interested party, and after notice and hearing revoke a permit and issue in lieu thereof a certificate of public convenience and necessity, if it finds, first, that any person holding a permit whose operations on . . . [August 22, 1957] do not conform with the definition of a contract carrier in section 203 (a) (15) as in force on and after . . . [August 22, 1957]; second, are those of a common carrier; and, third, are otherwise lawful. Such certificate so issued shall authorize the transportation, as a common carrier, of the same commodities between the same points or within the same territory as authorized in the permit.” 71 Stat. 411.

       This provision is now substantially contained in 49 U. S. C. § 309 (a)(1) :
      “Except as otherwise provided in this section and in section 310a of this title, no person shall engage in the business of a contract carrier by motor vehicle in interstate or foreign commerce on any public highway or within any reservation under the exclusive jurisdiction of the United States unless there is in force with respect to such carrier a permit issued by the Commission, authorizing such person to engage in such business: Provided, That, subject to section 310 of this title, if any such carrier or a predecessor in interest was in bona fide operation as a contract carrier by motor vehicle on July 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time . . . the Commission shall issue such permit, without further proceedings, if application for such permit was made to the Commission as provided in paragraph (b) of this section and within one hundred and twenty days after October 1, 1935

       The phrase “Keystone restriction” comes from the title of the proceeding, Keystone Transportation Co. Contract Carrier Application, 19 M. C. C. 475. Such restrictions were approved by this Court in Noble v. United States, 319 U. S. 88 (1943).

       71 Stat. 411, 49 U. S. C. § 303 (a) (15). The former § 203 (a) (15) stated the definition as follows: “The term ‘contract carrier by motor vehicle1 means any person which, under individual contracts or agreements, engages in the transportation (other than transportation referred to in paragraph (14) and the exception therein) by motor vehicle of passengers or property in interstate or foreign commerce for compensation.” 54 Stat. 920.

       During the hearings before the Subcommittee of the Senate Interstate and Foreign Commerce Committee the following colloquy ■occurred between Mr. Barton, transportation counsel of the committee, and Mr. Clarke, then chairman of the Interstate Commerce Commission:
      “Mr. Barton: . . .
      “Mr. Clarke, do you think there is any constitutional difficulty in changing, as we say, as you propose, a contract carrier to a common-carrier status?
      “Mr. Clarke: No; I can see none. It isn’t taking away from them anything that they have; it isn’t disturbing any property rights of the contract carrier. It is giving him greater opportunity. He can still serve his contract shippers, but through the conversion provisions of the bill he would also have the opportunity to serve the general public as well as the obligation.” (Emphasis added.) Hearings before the United States Senate Subcommittee on Surface Transportation of the Committee on Interstate and Foreign Commerce, 85th Cong., 1st Sess., Surface Transportation — Scope of Authority of I. C. C., p. 35.

       Id., at 182.