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never imposed the sanction of suspension in a first investigatory proceeding under section 212(a). The Bureau cites various cases wherein it believes such possible action has been recognized and one," in which suspension has actually been imposed. Further, it argues that even assuming no precedent exists for suspending respondents' operating rights, every proceeding must be considered on its own merits, which in this instance renders necessary resort to such sanctions. It is suggested that because of the seriousness of the violations involved here nothing less than a 90-day suspension of respondent Schreiber's privilege to operate in interstate commerce would be appropriate. Lastly, the Bureau contends that any order requiring future compliance with the act and regulations thereunder should be continuing in nature, citing as examples decisions in Pennsylvania Greyhound Lines, Inc., v. American Bus Lines, 52 M.C.C. 117 (1950); and Lane-Revocation of Permit, 52 M.C.C. 427 (1951), and, accordingly, it believes the Administrative Law Judge erred in recommending entry of an order which discontinues this proceeding.

Interveners in their exceptions object only to the conclusion concerning the nature of the orders which should be entered against respondents. They assert that because of the extensive period of time during which these parties engaged in the blatant, flagrant violations shown, their collective operating authority should be suspended for at least 6 months.

Respondents in their joint reply to the foregoing exceptions reiterate their assertion that Schreiber Freight Lines has been sold since the hearing. Figures are submitted indicating that since the sale revenues derived by the new owner have been quite low, and it is argued that suspension of this firm's authority would unnecessarily worsen its financial condition. For this reason they believe it would be highly improper to impose sanctions as sought by the Bureau and interveners. A motion to reopen the record for acceptance of an affidavit by respondent Lesher, expressing familiarity with the requirements of section 5(4) (now 5(5)) of the Interstate Commerce Act is embraced in the considered reply. It is asserted that in view of this document this proceeding is moot as to him and should be dismissed.

"Docket No. MC-C-8076, Quick Air Freight, Inc. Investigation and Revocation of Certificate (not printed), served July 18, 1974.

125 M.C.C.

PROCEDURAL MATTERS

The Bureau and interveners have submitted certain motions in conjunction with their replies to respondents' exceptions. These are directed at assertions that Schreiber Freight Lines had been sold, and that Harry Schreiber has divested himself of control of Loughman since the conclusion of the hearing. Interveners adopt the position that statements in this regard should be stricken from the pleading under consideration inasmuch as no opportunity exists at the current stage of these proceedings to cross-examine any of the parties involved as to the bona fides of the alleged transactions. They aver that some question exists in this regard inasmuch as the record as made here indicates that Mr. Kelly, the purported buyer of Schreiber Freight Lines, may have previously been an employee of respondent Harry Schreiber.

The Bureau points out that the described material is submitted not in the form of evidence, but merely as argument of counsel. While it does not object to the presentation of such arguments, it contends they should be considered, if at all, only in light of certain documents which it tenders with its reply, and the admission of which it seeks into the record. The first of these consists of a copy of the contract allegedly entered into by Mr. Schreiber and Mr. Kelly, for the sale of the former's carrier operations. It includes certain guarantees which, the Bureau believes, insulate Mr. Kelly from loss in case of adverse action in this proceeding which would disrupt revenues or terminate his operating rights. Thus, it is argued that it is of little materiality to the present issues whether or not Mr. Schreiber's interest in authority issued in certificate No. MC-135305 has been effectively terminated by the alleged sale. The second tendered document pertains to the proceeding in No. MC-F-12368. It is a copy of a security interest purportedly given by Mr. Schreiber on behalf of W-P Truck Lines, Inc., on December 11, 1975, to an individual apparently a member of his family, encumbering the Loughman authority. Because of this, the Bureau believes question exists as to whether termination of unlawful common control has, in fact, occurred.

Respondents have replied to the foregoing motions (although their response to the Bureau's "petition to supplement" is framed as a countermotion), and in conjunction therewith tender a pleading entitled "Petition in Mitigation." In their reply to intervener's motion they argue that reference to the purported sale was not made to prove that such a transaction has, in fact, occurred, but rather to

demonstrate that individual respondent Schreiber is sincerely seeking to divorce himself of all control of the operations which formed the basis for these proceedings. Hence, they do not believe this matter should be stricken. As regards the petition of the Bureau, their position appears to be that the documents submitted therewith. constitute impermissible new evidence. They, therefore, believe the petition should be overruled and the tendered matter rejected. Finally, in their so-called "Petition in Mitigation," respondents reiterate earlier assertions that the record warrants, at most, the entry of orders as recommended by the Administrative Law Judge in in his initial decision.

In disposing of the foregoing matters, we would first observe that the assertions concerning the sale or other disposition of operations by one or more of the respondents constitutes new evidence, regardless of the purpose for which such information is offered. Inasmuch as opposing parties have not had an opportunity to crossexamine respondents or counsel, relative to these transactions, it would be highly improper to find as fact that respondent Schreiber has effectively severed his relationship with Schreiber Freight Lines, Inc., or Loughman. At the same time, however, we are inclined to deny interveners' motion to strike the considered allegations inasmuch as such a motion goes more to the weight than the admissibility of such matter.

As regards the Bureau's petition we believe it would be inappropriate to reopen the record to accept the tendered. documents in light of the provisions of rule 86 of the Commission's General Rules of Practice (49 CFR 1100.86). This petition will, therefore, be denied. We will, however, on our own motion take official notice of these documents, inasmuch as they are from this Commission's files and the relevant matters contained therein should be considered in view of the gravity of the issues involved in these proceedings.

Our decision above regarding the Bureau's petition renders moot respondents' "countermotion" with respect thereto, and it will, therefore, be overruled. Otherwise, the so-called "Petition in Mitigation" tendered by respondents in conjunction with their "countermotion" comprises nothing more than a reply to the replies by the Bureau and respondents to their exceptions, and for this reason no formal action is necessary with respect to this pleading. Finally, the petition as described above, to accept an affidavit. tendered by respondent Lesher, and the accompanying motion to

dismiss these proceedings as to him, will be denied and overruled, respectively, in light of our findings below.

DISCUSSION AND CONCLUSIONS

Essentially two issues are presented in these proceedings. The first is whether the conduct of respondents is correctly characterized as being "willful." The second is whether, if willfulness is found, authority issued respondents may or should be suspended by reason of the provisions of section 212(a) of the act. In prior proceedings before the Commission involving investigations of carrier operations under section 204(c) and section 212(a) it has been determined that persistence in violations over a period of time, despite admonitions and enforcement penalties justifies characterizing the conduct under consideration as willful.10 Safeway Trails, Inc.-Investigation and Revocation, 91 M.C.C. 936, 950 (1963); and Houff Transfer, Inc.-Revocation of Certificates, 78 M.C.C. 275, 284 (1958). The Supreme Court, on considering the meaning of the term "willful" as used in regulatory statutes in the landmark case of United States v. Illinois Cent. R. Co., 303 U.S. 239, 243 (1938), approved the conclusion that "willfully" means purposely or obstinately and is designed to describe the attitude of a carrier, who, having a free will or choice, either intentionally disregards the statute or is plainly indifferent to its requirements." Under this interpretation it is not necessary that the violations charged be motivated by an evil purpose or a criminal intent, nor that there be a purpose to act contrary to a specific statutory requirement. It is only required that some culpability be present such that the conduct in question is other than unwitting. Cf. Aero Mayflower Transit Company, Inc., Allied Van Lines, Inc., v. The Interstate Commerce Commission and the United States of America, Civil Action Nos. 75-1654 and 75-1817 p. 3 (7th Cir. 1976).

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Applying these principles to the present proceeding we believe the Bureau's showing (particularly as to matters in footnote 3) is sufficient to establish a strong inference that respondents acted out of intentional disregard for or plain indifference toward statutory and regulatory requirements. Clearly, in view of the efforts engaged

The record does include general reference to me prior enforcement action against respondents, but there is no specific information given concerning the number and nature of such proceedings. The decision of the Administrative Law Judge as to the nature of respondents' conduct does not, however, rely on such circumstances to any significant extent.

in to falsify freight bills and to otherwise frame them so as to give the appearance that only legitimate operations have been performed, it may hardly be said that respondents were unaware of licensing requirements imposed by the Interstate Commerce Act. No innocent explanation has been offered for this conduct, nor is there a showing that conditions under which these practices occurred changed in any significant respect prior to hearing. Clearly, the evidence of the Bureau, even discounting to some extent assertions by the former Schreiber employee on its behalf, establishes a prima facie showing of willfulness. In this light the implication by respondents on exceptions that a finding to this effect must necessarily reflect bias on the part of the Administrative Law Judge rings extremely hollow. Furthermore, his finding of willfulness does not appear to have resulted from an assignment of any weight to the absence of rebuttal testimony by individual respondents nor is there reason to believe that he acted in a manner inconsistent with his assigned function in the course of hearings in this matter. Accordingly, arguments in the pleadings under consideration to this effect must be found wholly without merit. Turning to the remaining specifications of error of respondents we would only observe that the objections to the failure of the Commission to accept their proposed "Offer of Settlement" apparently have as their basis the ultimate conclusion in the initial decision that it would be inappropriate to enter orders other than those authorized in section 204(c) of the act in the complaint proceeding. Our discussion below rejecting the position asserted in the initial decision and finding a need for the entry of orders other than those agreed to in the "Offer" should adequately dispose of this issue.

Similarly without merit are arguments that insufficient notice was afforded respondents concerning the matters to be asserted at the hearing to satisfy section 554(b) of the Administrative Procedure Act. The Jaffee decision, supra, upon which respondents rely is inapposite in this respect for the Court was there concerned with the prejudicial impact of a change of theories by a regulatory agency during the course of proceedings before it. Correspondence from the Bureau advised respondents here that the 61 shipments with respect to which it intended to submit testimony would be treated as a representative sampling of a number of similar violations found during its investigation. It can hardly be said that the submission of general testimony corroborating the representative nature of this

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