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Protestant Belger failed to elucidate the full extent of its opposition at the hearing. A review of its compendium of certificates reveals that it is authorized to transport so-called sizeand-weight commodities between points in Kansas. It also holds authority to transport general commodities between Kansas City and nearby identified points. It operates approximately 16 vehicles suitable for transporting the involved commodities. Although some supporting shippers have previously had occasion to use Belger, it has handled an inconsequential amount of the involved traffic. Protestant Thunderbird holds authority to transport iron and steel articles as well as numerous specialty items, such as steel grinding balls, steel fence, and related steel wire specialities, from and to and between identified points in some of the considered States, especially Missouri (including Kansas City), Iowa, and Illinois where it maintains a terminal at Chicago. It operates approximately 190 flat-bed trailers. It serves many of the supporting shippers herein and functions as Laclede's primary carrier in an unrelated operation.

Protestant Steel Haulers is a specialized carrier deriving approximately 90 percent of its revenue from the movement of iron and steel articles. It holds authority to transport steel articles from Kansas City to points in Illinois, Iowa, Kansas, and Oklahoma. Steel Haulers serves as Armco's primary carrier and holds authority to transport iron and steel articles from the latter's Kansas City facility to all points in the considered States. It can also transport iron and steel articles from the facilities of a named manufacturer at Putnam, Ill., to Kansas City. It maintains a terminal at Kansas City and operates 201 flat-bed trailers. In attempting to establish that applicant's proposed service would adversely affect its existing operations, Steel Haulers submits an abstract of shipments handled in January 1974, which, it claims, would be subject to diversion. It concedes however, that applicant would be able to handle an indeterminable number of such shipments under its existing permanent (construction materials) authority and that a portion of the abstracted shipments is actually outside the scope of the instant application. Although it maintains that its equipment generally is not in short supply and states that between January 1 and March 15, 1974, it had flat-bed equipment which was not being fully utilized, it also admits that on occasion it has advertised for additional equipment to meet the demands of the shipping public.

125 M.C.C.

DISCUSSION AND CONCLUSIONS

In applications for motor common carrier authority, we have consistently followed the criteria set forth in Pan-American Bus Lines Operation, 1 M.C.C. 190, 203 (1936). A decision as to whether or not applicant has met its burden of proving that the proposed operation is or will be required by the present or future public convenience and necessity depends on whether the new service will serve a useful purpose, responsive to a public demand or need; whether this purpose can or will be served as well by existing carriers; and whether it can be served by applicant without endangering or impairing the operations of existing carriers contrary to the public interest. These same principles apply where, as here, an applicant seeks authority to conduct operations which previously were conducted without proper authority. The prolonged conduct of an unauthorized operation is insufficient, in itself, to demonstrate the existence of a public need for its legitimate continuance; this prerequisite must be established aliunde. Considering the record in this context, the evidence adduced by the supporting shippers supports the finding of a public need for applicant's proposed service. In this regard, some protestants contend that the evidence was not sufficiently specific as to the volume of present or future traffic destined to identified points, or to representative points in the considered territory. The record, however, lends no support to their contention. The evidence reveals that the supporting firms collectively ship a substantial volume of traffic from and to numerous identified points which superpose the involved territory. Protestants contend that the evidence regarding an equipment shortage, a factor upon which the Administrative Law Judge relied heavily in finding a public need for the proposed operation, is inconclusive. They urge that the supporting shippers were generally unable to show that available service is materially inadequate. Accordingly, they argue that the finding of an equipment shortage is an analogical impossibility. To further support this contention, protestant Steel Haulers points to its uncontroverted assertion that between January 1 and March 15, 1974, it had an excess of flat-bed equipment available. There is little support for protestants' contention in the record, however, which is replete with evidence of equipment shortages. The interlude during which protestant Steel Haulers claims to have had an excess of equipment is generally conceded to have been a slack period in the iron and steel industry, and its advertisements for additional equipment are certainly

inconsistent with its claim, and serve generally to belie protestants' contention. There is substantial evidence to support the finding of an equipment shortage. Such a determination, moreover, renders superfluous a finding of inadequate service. Cf. Frozen Foods Express, Inc. v. United States, 346 F. Supp. 254, 259 (W.D. Tex. 1972).

The contention of protestant Thunderbird that any grant of authority should be restricted against interline service is not supported by the evidence. It is well-established Commission policy not to encumber grants of authority with restrictions against interlining unless protestants show that they would be materially and adversely affected by the omission of such a restriction. See Hogan Storage & Transfer Co. Ext.-Williamson, W. Va., 92 M.C.C. 63, 67 (1963). In order that common carriers may fulfill their public obligation, expressed in section 216(b) of the act, to provide adequate service and facilities for the transportation of property in interstate commerce, the act encourages interchange by providing, in section 216(c) a correlative privilege of establishing through routes and joint rates with other common carriers by motor, rail, and water. Restrictions against the privilege are not, therefore, readily imposed. By and large the transportation requirements of the supporting shippers herein were not shown to extend territorially beyond the scope of the sought authority. Protestants' apprehensions are founded primarily upon some interline operations previously conducted by applicant as reflected in the latter's abstract of shipments which it submitted as an appendix to its exhibit 2. Protestant assumes that applicant will continue to "divert" traffic in the future but does not demonstrate that it holds the authority or has the capabilility to handle such traffic. Protestant's unsubstantiated fear of otherwise legitimate competition from applicant and other unnamed carriers provides a weak justification, especially in view of the demonstrated equipment shortage, for a restriction against interline, while the policy against imposing such restriction is very strong. We conclude, therefore, that the Administrative Law Judge correctly determined that no such restriction should be imposed.

Under the facts and circumstances as developed in the record before us, we conclude that applicant has met its burden of establishing that a public need does exist for its proposed service. Applicant's burden of proof is not limited to this issue, however. It is also required to establish that it is fit properly to perform such

service. We now turn our attention to the question of applicant's fitness.

Section 207(a) of the act requires that an applicant for motor common carrier authority must be found fit, willing, and able properly to perform a proposed service before any certificate may be issued. The burden of establishing its fitness properly to perform a proposed transportation service, in keeping with applicable statutory requirements, is upon the applicant seeking motor carrier authority. Cf. Kroblin Refrigerated Xpress, Inc. v. United States 197 F. Supp 39, 47 (N.D. Iowa 1961). This burden is not diminished by the fact that protestants rather than the Bureau of Enforcement raise the issue. In determining whether an applicant has met its statutory burden of proof in establishing its fitness to perform a proposed operation, full consideration must be given to the following factors: (1) the nature and the extent of the past violations shown, (2) the mitigating circumstances, if any, shown to exist and to have existed, (3) whether applicant's conduct represents a flagrant and persistent disregard of the provisions of the act and the carrier's certificates, (4) whether it has made sincere efforts to correct its past mistakes, and (5) whether applicant is willing and able to comport in the future with the statute and the applicable rules and regulations thereunder. See Peoples Express Co., Ext.-Empty Containers, 118 M.C.C. 675, 678 (1973), and Pre-Fab Transit Co., Ext.-International Falls, 112 M.C.C. 664, 675 (1970). Limiting his inquiry, as we do ours, primarily to those violations which relate directly to the proposed service (i.e., the transportation of iron and steel articles not embraced in applicant's authority to transport construction materials under the "intended use" test,") the

Contrary to arguments propounded at the hearing, the intended use test is a concept of longstanding within the Commission, having been thoroughly developed more than 20 years ago in Point Pleasant Transp. Co., Inc., Declaratory Order, 61 M.C.C. 666 (1953). See also Converse v. United States, 109 F. Supp. 807 (N.D. Calif. 1953); Hides & Skins Transp. Corp.-Int. of Certificate, 69 M.C.C. 657 (1957); Contractors Transit, Inc.-Investigation and Revocation, 78 M.C.C. 347 (1958); and Mitchell Bros. Truck Lines-Investigation, 91 M.C.C. 267 (1962). Strictly applied, this test requires that before accepting a shipment, the carrier make investigation as to the intended use of the commodity if such fact was not already known to the carrier. With respect to those commodities, such as iron and steel articles, having a general utility in many lines of work, no absolute assumption may be indulged in by the carrier. It may transport such commodities only after they have been in some way earmarked for the use referred to in its authority (by being consigned to such a user, for instance) so that the carrier can be reasonably certain that such use, at the time of shipment, is intended. The commodities must be, without further processing or manufacturing, in a form or condition, at the time of transportation, to be used in the particular activity specified. W. T. Mayfield Sons Trucking Co.-Interpretations, 92 M.C.C. 167, 169-70 (1963). See also Eagle Trucking Co.-Investigation of Operations, 113 M.C.C. 148, 152-154 (1971).

Administrative Law Judge found that applicant's conduct warrants merely an admonition but that otherwise applicant is fit to conduct the proposed service. We do not share this view.

Applicant's violations which were uncovered by our Bureau of Operations were both numerous and flagrant. With respect to the transportation of commodities (iron and steel articles) not authorized in its pertinent certificate, applicant claims that it was not aware that the commodity authority "construction materials" was subject to the "intended use" test. Given the length of time applicant or its predecessor has held such commodity authority and the experience of applicant's officers in the motor carrier industry, we find its claim somewhat implausible. The uncertificated operations undertaken by applicant on the strength of a recommended grant of authority are, under the circumstances, inexcusable. The aforementioned violations are persuasive indicia that applicant has little regard for the provisions of the act or the limitations of its certificates. Ignorance of the prevailing law is a poor excuse for violation of the act, especially where, as here, the violator has been subject to the act's provisions for many years. We do not reach the question whether the violations uncovered by the investigation would, standing alone, render applicant unfit. Any doubts concerning applicant's fitness raised by such violations are resolved against it, however, when its conduct following the investigation is examined.

Even if applicant was not aware that its construction materials authority was subject to the intended use test until the Bureau of Operations concluded its investigation on March 14, 1973, the record nonetheless reveals that applicant thereafter continued to transport commodities which could not possibly be considered construction materials, in violation of the act, until it was issued emergency temporary authority to transport such commodities more than 5 months later. In mitigation, applicant claims that such operations were undertaken on advice of counsel. Under the circumstances, we can give little credence to such a claim.

Advice of counsel, even if precisely followed, is not an absolute defense to a violation of the act. We recognize, however, that when a party which has erred in the past seeks, in good faith, the guidance of capable counsel who, after evaluating all the facts fully and honestly placed before him, gives reasonable advice for the future, and there is a significant improvement in the party's conduct, it ought not be viewed as having such a proclivity for wrongdoing that subsequent transgressions be cast in the worst possible light. Since

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