East Texas Motor Freight Lines, 351 U.S. 49 (1956)

Topics:  East Texas Motor Freight Lines

From the U.S. Government Printing Office via GPO Access
 
Case:   EAST TEXAS MOTOR FREIGHT LINES

Case #: 351US49



NO. 162.  ARGUED MARCH 7, 1956.  - DECIDED APRIL 23, 1956.  - 128 F.
SUPP. 374, AFFIRMED. 


ON COMPLAINT OF THREE MOTOR COMMON CARRIERS UNDER SEC. 204(C) OF THE
INTERSTATE COMMERCE ACT, THE COMMISSION ORDERED FROZEN FOOD EXPRESS,
ANOTHER MOTOR COMMON CARRIER, TO CEASE AND DESIST FROM TRANSPORTING IN
INTERSTATE COMMERCE WITHOUT A CERTIFICATE OF CONVENIENCE AND NECESSITY
FRESH AND FROZEN DRESSED POULTRY, WHICH IT FOUND NOT TO BE WITHIN THE
EXEMPTION UNDER SEC. 203(B)(6) OF THE ACT OF "AGRICULTURAL  ..
COMMMODITIES (NOT INCLUDING MANUFACTURED PRODUCTS THEREOF)."  FROZEN
FOOD EXPRESS SUED IN A FEDERAL DISTRICT COURT TO SET ASIDE THE ORDER. 
HELD:  FRESH AND FROZEN DRESSED POULTRY IS AN "AGRICULTURAL" COMMODITY
WITHIN THE MEANING OF SEC. 203(B)(6), AND NOT A "MANUFACTURED" PRODUCT
THEREOF, AND THE DISTRICT COURT PROPERLY SET ASIDE THE COMMISSION'S
ORDER.  PP. 50-54. 

EAST TEXAS MOTOR FREIGHT LINES, INC., ET AL. V. FROZEN FOOD EXPRESS ET
AL. 

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF TEXAS.* 

*TOGETHER WITH NO. 163, INTERSTATE COMMERCE COMMISSION V. FROZEN FOOD
EXPRESS ET AL., AND NO. 164, AKRON, CANTON & YOUNGSTOWN R. CO. ET AL.
V. FROZEN FOOD EXPRESS ET AL., ALSO ON APPEAL FROM THE SAME COURT. 

MR. JUSTICE DOUGLAS DELIVERED THE OPINION OF THE COURT. 

THREE MOTOR COMMON CARRIERS FILED A COMPLAINT WITH THE INTERSTATE
COMMERCE COMMISSION UNDER SEC. 204(C) OF PART II OF THE INTERSTATE
COMMERCE ACT, 49 STAT. 547, AS AMENDED, 49 U.S.C. SEC. 304(C), ALLEGING
THAT FROZEN FOOD EXPRESS, A COMMON CARRIER BY MOTOR VEHICLE, WAS AND
HAD BEEN TRANSPORTING FRESH AND FROZEN MEATS AND FRESH AND FROZEN
DRESSED POULTRY IN INTERSTATE COMMERCE WITHOUT A CERTIFICATE OF
CONVENIENCE AND NECESSITY FROM THE COMMISSION WHICH COVERS THOSE
COMMODITIES.  THE COMPLAINT PRAYED FOR A CEASE AND DESIST ORDER. 
FROZEN FOOD EXPRESS ADMITTED THAT IT WAS AND HAD BEEN SO TRANSPORTING
THE NAMED COMMODITIES BUT ASSERTED IN DEFENSE THAT THOSE OPERATIONS
WERE WITHIN THE EXEMPTION OF SEC. 203(B)(6).  (FN1) 

THE COMMISSION FOUND THAT FROZEN FOOD EXPRESS HAD BEEN PERFORMING
UNAUTHORIZED OPERATIONS AND THAT FRESH AND FROZEN MEATS AND FRESH AND
FROZEN DRESSED POULTRY WERE NOT WITHIN THE EXEMPTION OF SEC.
203(B)(6).  62 M.C.C. 646.  ACCORDINGLY IT ORDERED FROZEN FOOD EXPRESS
TO CEASE AND DESIST FROM ENGAGING IN THESE OPERATIONS.  FROZEN FOOD
EXPRESS BROUGHT SUIT BEFORE A THREE-JUDGE DISTRICT COURT (28 U.S.C.
SEC. 2325) TO SET THE COMMISSION'S ORDER ASIDE, 28 U.S.C. SEC. 1336; 49
STAT. 550, AS AMENDED, 49 U.S.C. SEC. 305(G); 60 STAT. 243, 5 U.S.C.
SEC. 1009.  THE ANSWER OF THE UNITED STATES AND THE COMPLAINT IN
INTERVENTION FILED BY THE SECRETARY OF AGRICULTURE SUPPORTED THE
POSITION OF FROZEN FOOD EXPRESS.  THE ORIGINAL COMPLAINANTS BEFORE THE
COMMISSION AND OTHER INTERESTED CARRIERS AND CARRIER ASSOCIATIONS
INTERVENED IN SUPPORT OF THE COMMISSION.  THE DISTRICT COURT SUSTAINED
THE COMMISSION'S CONCLUSION THAT FRESH AND FROZEN MEATS ARE NONEXEMPT
COMMODITIES.  NO APPEAL WAS TAKEN FROM THAT HOLDING.  THE DISTRICT
COURT HELD THAT FRESH AND FROZEN DRESSED POULTRY ARE EXEMPT COMMODITIES
UNDER SEC. 203(B)(6) AND RESTRAINED THE COMMISSION FROM ENFORCING ITS
CEASE AND DESIST ORDER AS RESPECTS THOSE PRODUCTS.  128 F. SUPP. 374. 
THE CASES ARE HERE BY APPEAL.  28 U.S.C. SECS. 1253, 2101(B). 

WE AGREE WITH THE DISTRICT COURT THAT THE COMMISSION'S RULING DOES
NOT SQUARE WITH THE STATUTE.  THE EXEMPTION OF MOTOR VEHICLES CARRYING
"AGRICULTURAL (INCLUDING HORTICULTURAL) COMMODITIES (NOT INCLUDING
MANUFACTURED PRODUCTS THEREOF)" WAS DESIGNED TO PRESERVE FOR THE
FARMERS THE ADVANTAGE OF LOW-COST MOTOR TRANSPORTATION.  SEE ESPECIALLY
79 CONG.  REC. 12217.  THE VICTORY IN THE CONGRESS FOR THE EXEMPTION
WAS RECOGNITION THAT THE PRICE WHICH THE FARMER OBTAINS FOR HIS
PRODUCTS IS GREATLY AFFECTED BY THE COST OF TRANSPORTING THEM TO THE
CONSUMING MARKET IN THEIR RAW STATE OR AFTER THEY HAVE BECOME
MARKETABLE BY INCIDENTAL PROCESSING. 

THE HISTORY OF THE WORDS "AGRICULTURAL  ..  COOMMODITIES (NOT
INCLUDING MANUFACTURED PRODUCTS THEREOF)" CONTAINED IN SEC. 203(B)(6)
SUPPORTS THAT CONCLUSION.  THE BILL AS IT CAME TO THE FLOOR OF THE
HOUSE FROM THE INTERSTATE AND FOREIGN COMMERCE COMMITTEE (79 CONG. REC.
12204) EXEMPTED "MOTOR VEHICLES USED EXCLUSIVELY IN CARRYING LIVESTOCK
OR UNPROCESSED AGRICULTURAL PRODUCTS."  ID., 12220.  MR. PETTENGILL FOR
THE COMMITTEE OFFERED AN AMENDMENT WHICH SUBSTITUTED FOR THE WORDS
"UNPROCESSED AGRICULTURAL PRODUCTS" THE PHRASE "AGRICULTURAL
COMMODITIES NOT INCLUDING MANUFACTURED PRODUCTS THEREOF."  THAT
AMENDMENT WAS AGREED TO AFTER THE FOLLOWING COLLOQUY: 

"MR. PETTENGILL.  MR. CHAIRMAN, WE HAVE HEARD A GOOD DEAL OF
DISCUSSION THIS AFTERNOON AS TO WHAT IS A PROCESSED AGRICULTURAL
PRODUCT, WHETHER THAT WOULD INCLUDE PASTEURIZED MILK OR GINNED COTTON. 
IT WAS NOT THE INTENT OF THE COMMITTEE THAT IT SHOULD INCLUDE THOSE
PRODUCTS.  THEREFORE, TO MEET THE VIEWS OF MANY MEMBERS WE THOUGHT WE
WOULD STRIKE OUT THE WORD 'UNPROCESSED' AND MAKE IT APPLY ONLY TO
MANUFACTURED PRODUCTS. 

     * *         *         *         * 

"MR. WHITTINGTON.  IN OTHER WORDS, UNDER THE AMENDMENT TO THE
COMMITTEE AMENDMENT, COTTON IN BALES AND COTTONSEED TRANSPORTED FROM
THE GINNERIES TO THE MARKET OR TO A PUBLIC WAREHOUSE WOULD BE EXEMPT,
WHEREAS THEY MIGHT NOT BE EXEMPT IF THE LANGUAGE REMAINED, BECAUSE
GINNING IS SOMETIMES SYNONYMOUS WITH PROCESSING. 

"MR. PETTENGILL.  THAT IS CORRECT." 

IT IS PLAIN FROM THIS CHANGE THAT THE EXEMPTION OF "AGRICULTURAL
COMMODITIES" WAS CONSIDERABLY BROADENED BY MAKING CLEAR THAT THE
EXEMPTION WAS LOST NOT BY INCIDENTAL OR PRELIMINARY PROCESSING BUT BY
MANUFACTURING.  (FN2)  KILLING, DRESSING, AND FREEZING A CHICKEN IS
CERTAINLY A CHANGE IN THE COMMODITY.  BUT IT IS NO MORE DRASTIC A
CHANGE THAN THE CHANGE WHICH TAKES PLACE IN MILK FROM PASTEURIZING,
HOMOGENIZING, ADDING VITAMIN CONCENTRATES, STANDARDIZING, AND
BOTTLING.  YET THE COMMISSION AGREES THAT MILK SO PROCESSED IS NOT A
"MANUFACTURED" PRODUCT, BUT FALLS WITHIN THE MEANING OF THE
"AGRICULTURAL" EXEMPTION.  52 M.C.C. 511, 551.  THE COMMISSION ALSO
AGREES THAT GINNED COTTON AND COTTONSEED ARE EXEMPT.  ID., 523-524. 
BUT THERE IS HARDLY LESS DIFFERENCE BETWEEN COTTON IN THE FIELD AND
COTTON AT THE GIN OR IN THE BALE OR BETWEEN COTTONSEED IN THE FIELD AND
COTTONSEED AT THE GIN, THAN BETWEEN A CHICKEN IN THE PEN AND ONE THAT
IS DRESSED.  THE GINNED AND BALED COTTON AND THE COTTONSEED, AS WELL AS
THE DRESSED CHICKEN, HAVE GONE THROUGH A PROCESSING STAGE.  BUT NEITHER
HAS BEEN "MANUFACTURED" IN THE NORMAL SENSE OF THE WORD.  THE COURT IN
ANHEUSER-BUSCH ASSN. V. UNITED STATES, 207 U.S. 556, 562, IN A CASE
ARISING UNDER THE TARIFF LAWS, SAID: 

"  ..  MAANUFACTURE IMPLIES A CHANGE, BUT EVERY CHANGE IS NOT
MANUFACTURE, AND YET EVERY CHANGE IN AN ARTICLE IS THE RESULT OF
TREATMENT, LABOR AND MANIPULATION.  BUT SOMETHING MORE IS NECESSARY, AS
SET FORTH AND ILLUSTRATED IN HARTRANFT V. WIEGMANN, 121 U.S. 609. 
THERE MUST BE TRANSFORMATION; A NEW AND DIFFERENT ARTICLE MUST EMERGE,
'HAVING A DISTINCTIVE NAME, CHARACTER OR USE.'" 

IN THAT CASE IMPORTED CORKS WERE MADE READY FOR USE IN BEER BOTTLES
BY STAMPING, BY REMOVAL OF DUST, MEAL, BUGS, AND WORMS, BY WASHING AND
STEAMING TO REMOVE TANNIN AND TO INCREASE ELASTICITY, AND BY DRYING. 
PLAINLY, THE CORKS WERE PROCESSED.  BUT THE COURT HELD THEY HAD NOT
BEEN MANUFACTURED WITHIN THE DRAWBACK PROVISION OF THE TARIFF LAWS. 
AND SEE HARTRANFT V. WIEGMANN, 121 U.S. 609, 615; UNITED STATES V.
DUDLEY, 174 U.S. 670. 

A CHICKEN THAT HAS BEEN KILLED AND DRESSED IS STILL A CHICKEN. 
REMOVAL OF ITS FEATHERS AND ENTRAILS HAS MADE IT READY FOR MARKET.  BUT
WE CANNOT CONCLUDE THAT THIS PROCESSING WHICH MERELY MAKES THE CHICKEN
MARKETABLE TURNS IT INTO A "MANUFACTURED" COMMODITY.  (FN3) 

AT SOME POINT PROCESSING AND MANUFACTURING WILL MERGE.  BUT WHERE THE
COMMODITY RETAINS A CONTINUING SUBSTANTIAL IDENTITY THROUGH THE
PROCESSING STAGE WE CANNOT SAY THAT IT HAS BEEN "MANUFACTURED" WITHIN
THE MEANING OF SEC. 203(B)(6). 

THE COMMISSION IS THE EXPERT IN THE FIELD OF TRANSPORTATION.  AND ITS
JUDGMENT IS ENTITLED TO GREAT DEFERENCE BECAUSE OF ITS FAMILIARITY WITH
THE CONDITIONS IN THE INDUSTRY WHICH IT REGULATES.  AMERICAN TRUCKING
ASSNS.  V. UNITED STATES, 344 U.S. 298, 310.  BUT CONGRESS HAS PLACED
LIMITS ON ITS STATUTORY POWERS; AND OUR DUTY ON JUDICIAL REVIEW IS TO
DETERMINE THOSE LIMITS.  SEE SOCIAL SECURITY BOARD V. NIEROTKO, 327
U.S. 358.  THOSE LIMITS WOULD BE PASSED HERE IF THE COMMISSION WERE
PERMITTED TO EXPAND "MANUFACTURED" TO INCLUDE SUCH INCIDENTAL
PROCESSING AS IS INVOLVED IN DRESSING AND FREEZING A CHICKEN. 
AFFIRMED. 

FN1  SEC. 203(B)(6) PROVIDES: 

"NOTHING IN THIS PART, EXCEPT THE PROVISIONS OF SECTION 204 RELATIVE
TO QUALIFICATIONS AND MAXIMUM HOURS OF SERVICE OF EMPLOYEES AND SAFETY
OF OPERATION OR STANDARDS OF EQUIPMENT SHALL BE CONSTRUED TO INCLUDE
..  MOOTOR VEHICLES USED IN CARRYING PROPERTY CONSISTING OF ORDINARY
LIVESTOCK, FISH (INCLUDING SHELL FISH), OR AGRICULTURAL (INCLUDING
HORTICULTURAL) COMMODITIES (NOT INCLUDING MANUFACTURED PRODUCTS
THEREOF), IF SUCH MOTOR VEHICLES ARE NOT USED IN CARRYING ANY OTHER
PROPERTY, OR PASSENGERS, FOR COMPENSATION  ..  ."" 

FN2  TWO MORE CHANGES WERE MADE IN THE AGRICULTURAL EXEMPTION CLAUSE
BEFORE THE BILL REACHED FINAL FORM.  THE WORDS "FISH, INCLUDING
SHELLFISH," WERE ADDED AFTER THE WORD "LIVESTOCK" (79 CONG. REC.
12220), AND THE EXEMPTION WAS STRENGTHENED BY MAKING IT "ABSOLUTE
RATHER THAN DISCRETIONARY" WITH THE INTERSTATE COMMERCE COMMISSION. 
ID., AT 12225-12226. 

AS ORIGINALLY ENACTED IN 1935, SEC. 203(B)(6) EXEMPTED MOTOR VEHICLES
"USED EXCLUSIVELY" IN CARRYING AGRICULTURAL COMMODITIES.  IN 1938 THE
WORD "EXCLUSIVELY" WAS DELETED AND THE FOLLOWING LANGUAGE WAS ADDED AT
THE END OF THE CLAUSE:  "IF SUCH MOTOR VEHICLES ARE NOT USED IN
CARRYING ANY OTHER PROPERTY, OR PASSENGERS, FOR COMPENSATION."  52
STAT.  1237.  IN 1940 THE WORD "ORDINARY" WAS INSERTED BEFORE THE WORD
"LIVESTOCK," MAKING THE EXEMPTION APPLICABLE TO "ORDINARY LIVESTOCK." 
54 STAT. 921.  FINALLY, IN 1952, THE WORDS "AGRICULTURAL COMMODITIES"
WERE BROADENED TO "AGRICULTURAL (INCLUDING HORTICULTURAL)
COMMODITIES."  66 STAT. 479. 

FN3  THE FACT THAT MOST POULTRY IS SOLD ALIVE AND IS NOT KILLED AND
PROCESSED BY THE GROWER IS NOT CONTROLLING.  FOR SEC. 203(B)(6) EXEMPTS
CARRIERS TRANSPORTING "AGRICULTURAL COMMODITIES" UNLESS THOSE PRODUCTS
ARE "MANUFACTURED."  THE EXEMPTION IS CONCERNED WITH THE STAGE OF THE
PROCESSING, NOT WITH THE PERSON WHO DOES IT. 

MR. JUSTICE BURTON, WHOM MR. JUSTICE FRANKFURTER, MR. JUSTICE MINTON
AND MR. JUSTICE HARLAN JOIN, DISSENTING. 

FOR THE REASONS GIVEN BY THE INTERSTATE COMMERCE COMMISSION, 52
M.C.C. 511, 62 M.C.C.  646, AND ITS ADMINISTRATIVE PRACTICE OF OVER 15
YEARS, I WOULD SUSTAIN ITS INTERPRETATION OF THE ACT TO THE EFFECT THAT
FRESH AND FROZEN DRESSED POULTRY, LIKE FRESH AND FROZEN DRESSED MEATS,
ARE NOT ENTITLED TO EXEMPTION AS AGRICULTURAL COMMODITIES.  NO APPEAL
HAS BEEN TAKEN FROM THAT PART OF THE JUDGMENT WHICH HELD VALID THE
COMMISSION'S DETERMINATION THAT FRESH AND FROZEN DRESSED MEATS ARE
PRODUCTS MANUFACTURED FROM AGRICULTURAL COMMODITIES.  THE COMMISSION'S
LIKE TREATMENT OF POULTRY IS NOT ARBITRARY OR UNREASONABLE.  ON THE
CONTRARY, THERE WAS MUCH EVIDENCE BEFORE THE COMMISSION WHICH CLEARLY
SUPPORTED ITS DECISION.  CONSEQUENTLY, WE SHOULD ACCORD THAT DECISION
THE WEIGHT ORDINARILY GIVEN TO INFORMED ADMINISTRATIVE ACTION.  WE
CANNOT SAY THAT THE ORDER OF THE COMMISSION, WHICH HELD THAT THERE IS
NO SIGNIFICANT DISTINCTION BETWEEN THE TWO, IS NOT AN ALLOWABLE
JUDGMENT. 

"SUCH DETERMINATIONS OF FACT BY THE SHIPPING BOARD OR INTERSTATE
COMMERCE COMMISSION AS A BASIS FOR ADMINISTRATIVE ORDERS WILL NOT BE
SET ASIDE BY COURTS IF THERE IS EVIDENCE TO SUPPORT THEM.  EVEN THOUGH,
UPON A CONSIDERATION OF ALL THE EVIDENCE, A COURT MIGHT REACH A
DIFFERENT CONCLUSION, IT IS NOT AUTHORIZED TO SUBSTITUTE ITS OWN FOR
THE ADMINISTRATIVE JUDGMENT."  SWAYNE & HOLT, LTD. V. UNITED STATES,
300 U.S. 297, 304.  SEE ALSO, FEDERAL COMMUNICATIONS COMMISSION V.
WOKO, INC., 329 U.S. 223, 229; UNITED STATES V. PIERCE AUTO FREIGHT
LINES, INC., 327 U.S. 515, 535-536; BARRETT LINE, INC. V. UNITED
STATES, 326 U.S. 179, 199.