Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc.

In 1969 hearing examiners for the Interstate Commerce Commission (ICC), following hearings in 1966 and 1967 and the subsequent filing of extensive briefs, rejected appellant motor carriers' applications for certificates of public convenience and necessity to transport general commodities between specified points in the Southwest and Southeast. In 1971 the ICC, over the opposition of appellee competing motor carriers, authorized the issuance of the certificates. Appellees then brought action in the District Court to set aside the ICC's order. The District Court refused to enforce the order on the ground that the ICC had acted arbitrarily in refusing to credit certain evidence introduced by appellees. Held:

1. The District Court erred in refusing to enforce the ICC's order. Pp. 284–294.

(a) Under the "arbitrary and capricious" standard the scope of review is a narrow one whereby a reviewing court must "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416. P. 285–286.

(b) The ICC's observation that appellees' exhibits as to the acceptability of their existing service covered periods subsequent to the ICC's notice of hearing supported its refusal to credit this evidence. The ICC was entitled to regard such exhibits as nonrepresentative of the usual service, to reason that the shortcomings [p282] were greater than the exhibits showed, and to conclude that service would be improved by granting the applications. Pp. 286–289.

(c) There was a rational basis for the ICC's attributing little significance to appellees' exhibits showing appellants' transit times over other routes. The question was whether service on the routes at issue would be enhanced by new entry and, as to this, performance by prospective entrants on other routes was of limited relevance. The ICC erred in not attributing the same qualification to appellants' transit time exhibits, but its finding that service would be improved by new entry was supported by other evidence. Pp. 289–292.

(d) The ICC's conclusion that consumer benefits of new entry outweighed any adverse impact upon the existing carriers reflects the kind of judgment that is entrusted to it, namely, the power to weigh the competing interests and arrive at a balance that is deemed "the public convenience and necessity." Pp. 292–294.

2. The lapse of time between the conclusion of evidentiary hearings and the ultimate agency decision in this case does not justify a reviewing court's requiring that the record be reopened. Pp. 294–296.

3. The ICC was entitled to take an approach, divergent from that of its examiners, favoring added competition among carriers. Pp. 297–299.

4. Whether or not the certificate granted appellant Bowman Transportation Co. conformed to the authority set forth in its application, an issue not briefed or argued in this Court, should be considered by the District Court on remand. Pp. 299–300.

364 F. Supp. 1239, reversed and remanded.

, J., delivered the opinion for a unanimous Court.

Charles S. Rhyne argued the cause for appellants in Nos. 73-1055, 73-1069, 73-1070, and 73-1071. With him on the briefs were Bryce Rea, Jr., Donald E. Cross, Courts Oulahan, Robert L. Jones, Jr., Maurice F. Bishop, Sander W. Shapiro, and Jerry C. Prestridge. William L. Patton argued the cause for the United States et al. in No. 73-1072. With him on the brief were Solicitor General Bork, Assistant Attorney General Kauper, Carl D. Lawson, [p283] Fritz R. Kahn, Betty Jo Christian, and Richard H. Streeter.

Phineas Stevens argued the cause for appellees in all cases. With him on the brief were Drew L. Carraway, Phillip Robinson, M. Ward Bailey, Don A. Smith, Thomas Harper, Wentworth E. Griffin, Frank W. Taylor, Jr., William O. Turney, and J. William Cain, Jr.