SERVICE STORAGE & TRANSFER CO., INC., v. VIRGINIA.
CERTIORARI TO THE SUPREME COURT OF APPEALS OF VIRGINIA.
Argued February 26, 1959.
Decided March 30, 1959.
Petitioner, a motor carrier authorized by the Interstate Commerce Commission to transport commodities between Bluefield, W. Va., and various points in Virginia and West Virginia, was fined by Virginia for carrying certain allegedly intrastate shipments without complying with a Virginia statute governing intrastate operations. The shipments in question were from Virginia points to other Virginia points but were routed through petitioner's main terminal in Bluefield, W. Va., in accordance with petitioner's usual practice regarding less-than-truckload shipments. Subsequently, the Interstate Commerce Commission rendered an opinion construing petitioner's certificate as authorizing Virginia-to-Virginia traffic routed through Bluefield, W. Va. Held: The interpretation of petitioner's interstate certificate should have been litigated before the Interstate Commerce Commission under 204 (c) of the Interstate Commerce Act before the State attempted to fine petitioner for allegedly unlawful operations, and the judgment sustaining the fine is reversed. Pp. 172-179.
Francis W. McInerny argued the cause and filed a brief for petitioner.
Robert D. McIlwaine, III, argued the cause for respondent. On the brief were A. S. Harrison, Jr., Attorney General of Virginia, and Reno S. Harp, III, Assistant Attorney General.
Austin L. Roberts, Jr. and R. Everette Kreeger filed a brief for the National Association of Railroad and Utilities Commissioners, as amicus curiae, urging affirmance.
MR. JUSTICE CLARK delivered the opinion of the Court.
Petitioner, an interstate motor carrier certificated by the Interstate Commerce Commission, but without a permit from Virginia allowing intrastate operations, was fined $5,000 by the State Corporation Commission for carrying 10 shipments of freight alleged to have been of an intrastate character and, therefore, in violation of Chapter 12, Title 56, of the Code of Virginia. 1 The shipments in question originated at Virginia points and were destined to Virginia points but were routed through Bluefield, West Virginia, where petitioner maintains its main terminal. They were transported in a vehicle with freight destined to points outside of Virginia. Upon arrival at Bluefield the freight destined to Virginia was removed and consolidated with freight coming to the [359 U.S. 171, 173] terminal from non-Virginia origins. It then moved back into Virginia to its destinations. The Corporation Commission found that the routes thus employed through Bluefield were a subterfuge to evade state law. The Virginia Court of Appeals agreed but directed that the fine be reduced to $3,500 because of a failure of the Commonwealth's case on three of the shipments. 199 Va. 797, 102 S. E. 2d 339. Petitioner pleads that Virginia's interpretation of its operations conflicts with its interstate certificate as well as an interpretation thereof by the Interstate Commerce Commission. It claims that respondent was without power thus to impose criminal sanctions on its certificated interstate operations. We granted certiorari, 358 U.S. 810 , to test out the conflicting contentions. We agree with the petitioner that under the facts here the interpretation of petitioner's interstate commerce certificate should first be litigated before the Interstate Commerce Commission under the provision of 204 (c) of the Interstate Commerce Act, 49 U.S.C. 304 (c). 2
Petitioner operates its truck lines in parts of Virginia and West Virginia. Its activity is carried on under a certificate of convenience and necessity issued by the Interstate Commerce Commission. The petitioner's present [359 U.S. 171, 174] I. C. C. certificate is a combination of its original 1941 certificate and a second certificate issued in 1943 upon its purchase of the operating rights of another carrier. Neither it nor its predecessor held a certificate from the State Corporation Commission authorizing any intrastate carriage. It is authorized under the relevant parts of its interstate certificate to transport general commodities as a motor common carrier in interstate commerce:
The Commonwealth's criminal case is bottomed on shipments the origin and final destination of which are in Virginia. While it stipulated that all of these shipments were routed through Bluefield, West Virginia, and were, therefore, on their face interstate shipments, 3 Virginia takes the position that they were clearly intrastate in character because had they been moved over direct routes none would ever have left the Commonwealth. It contends that petitioner's circuitous and unnecessarily long routes were a mere subterfuge to escape intrastate regulation and evade its jurisdiction. Aside from the testimony of highway officers as to the actual shipments, none of which is disputed, the Commonwealth's evidence consisted solely of maps substantiating its position that petitioner's routes were circuitous and often long, sometimes exceeding twice the shortest possible route. However, it offered no direct evidence of bad faith on the part of petitioner in moving its traffic through Bluefield, West Virginia.
On the other hand, petitioner offered the testimony of its manager and others as to the bona fides of its operation. [359 U.S. 171, 176] It proved that it and its predecessor-operator had been carrying on its business in Virginia in a similar manner for many years and that it enjoyed certificates from the Interstate Commerce Commission authorizing its operations. Petitioner admits that some of its routes are circuitous but claims this is because of its method of gathering less-than-truckload shipments regardless of final destination and routing them through its "gateway" terminal at Bluefield where they are assorted according to final destination. It stands uncontradicted that its operation is not only practical, efficient and profitable, but also that the creation of this "flow of traffic" is a timesaver to the shipper since there is less time lost waiting for the making up of a full truck load. It also claims a unique service for less-than-truckload shipments of central Virginians who ship commodities to southwest Virginia and Kentucky and who otherwise would suffer long delays on deliveries or would be obliged to ship by special truck at higher rates. While these considerations are not controlling, they throw light on petitioner's claim of bona fides.
In Castle v. Hayes Freight Lines, 348 U.S. 61, 63 -64 (1954), we observed that "Congress in the Motor Carrier Act adopted a comprehensive plan for regulating the carriage of goods by motor truck in interstate commerce." We pointed out that 49 U.S.C. 312 provides "that all certificates, permits or licenses issued by the Commission `shall remain in effect until suspended or terminated as herein provided' . . . . Under these circumstances, it would be odd if a state could take action amounting to a suspension or revocation of an interstate carrier's commission-granted right to operate." To uphold the criminal fines here assessed would be tantamount to a partial suspension of petitioner's federally granted certificate. Even though the questioned operations constitute only a minor, i. e., three percent, portion of the petitioner's business, that [359 U.S. 171, 177] portion is nevertheless entitled to the same protection as are the other operations which are conducted under the certificate. In fact, the method of handling is identical and the freight is often transported in the same vehicle. The certificate on its face covers the whole operation. In fact, in 1953, in approving the acquisition of petitioner by another carrier, the I. C. C. expressly approved the very type of operation now being carried on. In its unpublished report, the Commission noted:
Nor is Eichholz v. Public Service Comm'n, 306 U.S. 268 (1939) to the contrary. There Missouri revoked a carrier's interstate permit because it crossed state lines into Kansas City, Kansas, for the sole purpose of creating an interstate operation. Eichholz, however, had no certificate from the Interstate Commerce Commission, and this Court's opinion was premised on this fact rather than that the interstate operations were merely a subterfuge and hence not bona fide. The words of Chief Justice Hughes there clearly distinguish that case from the present:
Finally, the Commonwealth is not helpless to act. If it believes that petitioner's operation is not bona fide interstate but is merely a subterfuge to escape its jurisdiction, it can avail itself of the remedy Congress has provided in the Act. Section 204 (c), supra, note 2, authorizes the filing of a "complaint in writing to the Commission by any . . . State board . . . [that] any . . . carrier . . ." has abused its certificate. See also Castle v. Hayes Freight Lines, supra. Thus the possibility of a multitude of interpretations of the same federal certificate by several States will be avoided and a uniform administration of the Act achieved.
The judgment is
[ Footnote 2 ] That section provides:
(c) "Upon complaint in writing to the Commission by any person, State board, organization, or body politic, or upon its own initiative without complaint, the Commission may investigate whether any motor carrier or broker has failed to comply with any provision of this chapter, or with any requirement established pursuant thereto. If the Commission, after notice and hearing, finds upon any such investigation that the motor carrier or broker has failed to comply with any such provision or requirement, the Commission shall issue an appropriate order to compel the carrier or broker to comply therewith. Whenever the Commission is of opinion that any complaint does not state reasonable grounds for investigation and action on its part, it may dismiss such complaint." 49 U.S.C. 304 (c).
[ Footnote 3 ] 49 U.S.C. 303 (10) defines "interstate commerce" as including "commerce . . . between places in the same State through another State, . . . ." 49 Stat. 544.
[ Footnote 4 ] In its declaratory opinion the Commission noted: