No. MC-124211 (SUB-NO. 121) HILT TRUCK LINE, INC., PETITION FOR Decided September 8, 1976 Upon petition seeking modification of "grandfather" certificate heretofore issued to petitioner's predecessor, (1) petitioner found entitled to modification of certificate by substituting "groceries, and commodities dealt in by grocery stores" in lieu of “groceries, and grocery store supplies" in one of three places where the latter description appears, and (2) public convenience and necessity found to require modification of certificate by adding authority to transport meats and related items between points in Nebraska. Modification of certificate authorized upon compliance by petitioner with certain conditions, and petition in all other respects denied. Frederick J. Coffman for petitioner. Arnold L. Burke and Richard A. Kerwin for protestants. REPORT OF THE COMMISSION DIVISION 1, COMMISSIONERS MURPHY, GRESHAM, AND MACFARLAND MACFARLAND, Commissioner: Exceptions to the initial decision of the Administrative Law Judge were filed by petitioner. Our conclusions differ in part from those recommended. Petitioner is the holder of certificate of public convenience and necessity No. MC-124211 (Sub-No. 121) issued, in its present form, January 8, 1969, following approval by the Commission of a purchase by Hilt from another carrier of those rights.' Those portions of the certificate specifically at issue involve the commodity description "groceries, and grocery store supplies." The certificate authorizes, among other things, the transportation of those commodities (1) from Chicago, Ill., to Lincoln and Fairbury, Nebr., over a regular route, serving certain intermediate and offroute points in Illinois restricted to pickup only, and serving the 'No. MC-F-9818, Hilt Truck Line, Inc.-Control & Merger-Baumann Bros. Transportation, Inc., decided July 25, 1967. intermediate point of Fremont, Nebr., restricted to delivery only, (2) serving points in Washington County, Nebr., as intermediate and offroute points in connection with that regular-route authority, and (3) "between Smith Center, Kans., and points in Nebraska." The westbound regular-route rights had been acquired by Baumann in 1951 from Karl C. Brinkman, an original "grandfather" authority applicant, while the source of the other two authorities were unopposed applications filed by Baumann decided in 1966.2 Petitioner took the position in an investigation proceeding instituted at the request of this Commission's Bureau of Enforcement that the commodity description "groceries, and grocery store supplies" was equivalent to the description "such commodities as are dealt in or sold by wholesale, retail, and chain grocery stores." That contention was rejected in Hilt Truck Line, Inc. Investigation of Operations, 117 M.C.C. 9 (1972). That report concluded that ambiguity had not been demonstrated in that proceeding to justify looking behind the certificate at the underlying record in the "grandfather" proceeding in order to interpret the commodity description. The decision recognized, however, that it was possible that the interpretation reached might confine Hilt to operations lesser in scope than might have been supported by the underlying record of the "grandfather" application of petitioner's predecessor, and indicated that if such were the case petitioner's proper recourse would be to seek reopening of the "grandfather" proceeding. This petition was filed to have the certificate modified to reflect the broader commodity description after petitioner's administrative remedies were exhausted in the investigation proceeding and a Federal court temporary restraining order was obtained. 3 Two carriers initially appeared in opposition to the petition, but then withdrew from the hearing after completion of the direct examination of petitioner's principal witness. The withdrawals were based upon a stipulation by Hilt that it had no authorities that it could tack to serve certain territories* and that protestants would be materially and adversely affected if the decision on this petition were to allow Hilt to institute new operations to such areas. The Washington County rights were initially issued in Certificate No MC-2593 (Sub-No. 9). dated May 17, 1966, and the Smith Center authority was first issued in No. MC-2593 (Sub-No. 12), dated February 1. 1967. They were Midwest Emery Freight System. Inc., and Little Audrey's Transportation Co., Inc. 'Midwest Emery's principal interest was in traffic "from points in the midwest to points east and northeast of Ohio and Michigan." The destination territory of concern to Little Audrey's involves "points west of Wyoming, Kansas, Oklahoma, and Texas." The Administrative Law Judge denied petitioner's request for relief. In its exceptions Hilt contends that he misunderstood the purpose of the petition and failed to consider critical issues by viewing the matter as an inquiry into the correctness of actions taken by the Commission in the "grandfather" proceeding, rather than determining what was intended to be covered by the commodity description chosen in 1940 as compared to present interpretation of such authority. Except as modified herein, we adopt the statement of facts of the Administrative Law Judge as our own. SUMMARY OF THE FACTS The "grandfather" application was filed by Karl C. Brinkman in January 1936. At that time Brinkman sought contract carrier authority to operate over six regular routes. Exhibits attached to the application named service points and the shippers served and also described commodities handled and the highway routes used. Affidavits from shippers were filed describing in very brief and general terms services rendered by Brinkman prior to the "grandfather" clause cutoff date of June 1, 1935. During the processing of the application a petition for leave to amend it to an application for common carrier authority was filed, and on July 29, 1938, a Commission order granted Brinkman common carrier rights to transport various specifically named commodities from and to several combinations of named points over described regular routes. The operations authorized from Chicago to Lincoln covered only agricultural implements and parts, twine, cocoa, wallpaper, paint, and paint materials. By a letter dated August 9, 1940, Brinkman wrote to the Commission stating that since early 1934 one of his principal shippers had been a wholesale grocery house with headquarters in Lincoln and a branch office in Fremont, that he had been transporting all grocery items normally handled by a large wholesale grocery concern for this firm from Chicago and points in Iowa continuously to the date of his letter, that he understood that the earlier compliance order authorized him to continue the same operations he had been performing, and that he was recently informed by a new district supervisor that the compliance order did not grant him that right. Accordingly, he sought reopening and further consideration of the application. An affidavit of M. E. Rolfsmeyer, traffic manager of H. P. Lau Company, dated October 17, 1940, was filed. It shows that Lau was a large wholesale grocer doing business in Lincoln, Fremont, and Fairbury, Nebr.; that it handled "a varied and general line of groceries and many other articles handled in grocery stores"; that it purchased its "supplies" at many points, principal ones being Chicago, its suburbs, and Rochelle, Ill.; that Rolfsmeyer had personal knowledge that as early as 1934 Lau was using Brinkman "in getting groceries and general store supplies from Chicago, its suburbs, and Rochelle"; that Lau had used those services up to the time of the making of the affidavit; and that it desired to continue using Brinkman. The affidavit explained why the earlier affidavits were so general (lack of experience and knowledge of what was expected), acknowledged that only one specific shipment was previously listed (involving cocoa), stated that Lau buys “a general and varied stock of grocery items" from producers and suppliers in the Chicago area, and indicated that Brinkman was transporting prior to June 1, 1935, "practically any and all commodities" that Lau desired to have transported from the Chicago vicinity. Finally, Rolfsmeyer explained that because Lau's regular practice was to retain most of its records for only 2 years he was unable at the time of his making this latest affidavit to provide data on specific shipments or to list the particular commodities that Brinkman had transported. Under date of December 26, 1940, a supplemental order of the Commission, Division 5, was entered. It amended the order of July 29, 1938, by adding the regular-route authority to transport "groceries, and grocery store supplies" from Chicago that now appears in Hilt's certificate. Hilt has introduced in this proceeding other background evidence. Certified copies of articles of incorporation and amended articles of incorporation of H. P. Lau Company were admitted in evidence showing that it was formed in 1898 for the purpose, as pertinent, of conducting "a wholesale grocery business; for the buying and selling of merchandise; ***." Amended articles filed October 2, 1941, described the general nature of the business, as pertinent, to be "to buy and sell groceries of every kind and description, both at wholesale and retail." Lau was shown, by a certificate of the Secretary of the Nebraska Liquor Control Commission, to have held "Wholesale Distributor of Beer Licenses" at Lincoln and Fremont during 1935. A sworn statement from a There had been amendments prior to that one which were not introduced in evidence. former salesman for Lau was also introduced into evidence. It lists numerous products and commodities dealt in and used by Lau during 1934 and 1935, including such items as canning supplies, clothing, drugs and sundries, glassware, household utensils and related products, matches, meats and packinghouse products, notions, paper and paper articles, school supplies, and toys. A reproduction of Brinkman's Motor Freight Tariff No. 1, MF-ICC No. 1, issued March 16, 1942, also was received as an exhibit in this proceeding. Other exhibits include representative lists of commodities transported and destination points served by Baumann during 1966. They relate to Baumann's operations generally, however, and are not specifically identified with relation to the particular authorities under review. An abstract was introduced of shipments transported (purportedly pursuant to the authorities sought to be modified in this proceeding) by Hilt during 1973 and part of 1974. Another exhibit by petitioner is a list of shipments of fresh meats and packinghouse products transported by Hilt from Norfolk, Nebr., during the same time period. In neither instance does Hilt identify the particular one of the three "groceries, and grocery store supplies" authorities that assertedly was utilized. In numerous instances the operations would have involved joinder of one or more of those rights with still other authorities. There were 133 shipments of fresh meats and packinghouse products from Norfolk, about 110 meat shipments from Omaha, and approximately 40 such consignments from 9 other Nebraska points. The destination States for the meat shipments included Arkansas, Illinois, Indiana, Iowa, Louisiana, Michigan, Minnesota, Missouri, Ohio, Oklahoma, Texas, and Wisconsin. Since those movements were outbound from Nebraska points the westbound regular-route authority could not have been used nor could the off-route point rights that were usable only in conjunction with the regular-route authority. The meat shipments thus would have had to have been handled pursuant to the "Smith Center, Kans., and points in Nebraska" rights by tacking with other unidentified authorities at unidentified gateways. A large portion of the shipments listed involved commodities that clearly are groceries, such as bakery goods and many other foodstuffs. Other categories of commodities listed include liquor (about 50 shipments), petroleum products, oil, and gasoline additives (about 70 loads), fiberboard boxes (about 31 shipments), and several other miscellaneous items in much lesser quantities. Eleven of the leds of liquor were shipped from Minneapolis, Minn., to Omaha and ree |