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June 23, 1965

NATIONAL MOTOR FREIGHT TRAFFIC ASSOCIATION, Inc., Common Carrier Conference -- Irregular Route and Regular Common Carrier Conference, Plaintiffs,
UNITED STATES of America and Interstate Commerce Commission, Defendants and Delaware Valley Freight Terminal, Excelsior Truck Leasing Co., Inc., and Pennsylvania Railroad Company, Intervening Defendants

The opinion of the court was delivered by: WALSH

This matter came before the Court on plaintiffs' motion to convene a three-judge court, which motion was granted. Briefs were filed, said Court was convened, and all parties heard.

Plaintiffs National Motor Freight Traffic Association, Inc., the Common Carrier Conference -- Irregular Route, and the Regular Common Carrier Conference, seek to set aside, enjoin, and annul an order of the Interstate Commerce Commission *fn1" which dismissed their complaint seeking a finding by the Commission that the activities of Delaware Valley Freight Terminal (Delaware) were those of a freight forwarder in interstate commerce without appropriate authority from the Commission, and seeking a Commission finding that Pennsylvania Railroad Company (Pennsylvania) and Excelsior Truck Leasing Company (Excelsior) were aiding and abetting Delaware in these activities. Plaintiffs clearly having standing to challenge the validity of the Commission's order in this Court. National Motor Freight Traffic Assn. v. United States, 372 U.S. 246, 83 S. Ct. 688, 9 L. Ed. 2d 709 (1963). Delaware, Pennsylvania, and Excelsior all have been granted leave to intervene in this action.

 The basic issue before the Commission was, under the proper interpretation of the statutes involved, whether Delaware and the other intervenors here, jointly or severally, were shown to be conducting a freight forwarder operation and, as such, are subject to the licensing requirements of Part IV of the Interstate Commerce Act. The Act, in Section 402(a)(5) defines 'freight forwarder' as follows:

 'The term 'freight forwarder' means any person which (otherwise than as a carrier subject to part I, II, or III of this Act) holds itself out to the general public as a common carrier to transport or provide transportation of property, or any class or classes of property, for compensation, in interstate commerce, and which, in the ordinary and usual course of its undertaking, (A) assembles and consolidates or provides for assembling and consolidating shipments of such property, and performs or provides for the performance of break-bulk and distributing operations with respect to such consolidated shipments, and (B) assumes responsibility for the transportation of such property from point of receipt to point of destination, and (C) utilizes, for the whole or any part of the transportation of such shipments, the services of a carrier or carriers subject to part I, II, or III of this Act.' (Emphasis supplied.)

 Section 402(c) reads as follows:

 'The provisions of this part shall not be construed to apply (1) to the operations of a shipper, or a group or association of shippers, in consolidating or distributing freight for themselves or for the members thereof, on a nonprofit basis, for the purpose of securing the benefits of carload, truckload, or other volume rates, or (2) to the operations of a warehouseman or other shippers' agent, in consolidating or distributing pool cars, whose services and responsibilities to shippers in connection with such operations are confined to the terminal area in which such operations are performed.'

 The licensing provision of Part IV of the Act, Section 410(a)(1), is as follows:

 'No person shall engage in service subject to this part unless such person holds a permit, issued by the Commission, authorizing such service; * * *'.

 Finally, the phrase 'service subject to this part' is defined in Section 402(a)(7) as meaning:

 '* * * any or all of the service in connection with the transportation in interstate commerce which any person undertakes to perform or provide as a freight forwarder * * *.'

 In the hearing before the Commission, the only testimony offered by the complainants was from two of the partners of Delaware, the adverse party, and from a representative of Jones Motor Company, Incorporated, which has handled trailers in connection with the service offered by Delaware.

 Applying the elements of the Section 402(a)(5) definition, as well as the other sections set out above, the Commission hearing examiner, after hearing, made the following findings which were adopted by the Commission (at page 572 of its order):

 Concerning the break-bulk and distribution, the record will not support the conclusion that such services and responsibilities are not confined to their respective terminal areas * * * If anything, the facts tend to refute such presumptions and dictate that Delaware has no connection with or control over distributor. For example, this is shown by Delaware being unaware of the transaction made between the distributor and ultimate consignee; the rail carrier and not Delaware notifying the distributor of trailer arrivals; charges for distribution are unknown to Delaware as the distributor bills the shipper direct for services rendered; and Delaware makes no payments to the distributors * * * There is no showing that two shippers with mated trailers to the same point could not request a distributor other than the one suggested and have such request honored by Delaware. ...

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