prior rulings by the Commission. But, the trouble with this is that the conclusions to be drawn from those prior rulings would be more likely those of counsel appearing for the Commission, than of the Commission itself.

The provision for private suits probably would result in a great increase in litigation against private operators and truck lessors, in the form of numerous suits by for-hire carriers for injunctions, in at least some of which the courts would determine questions of distinction between private operations, leasing and for-hire carriage without benefit of prior proceedings before the Commission.

HOW THE PRESENT LAW WORKS

Under the present act, most questions of interpretation which are of general interest arise first in proceedings before the Commission and are decided first by the Commission or its examiners, in the light of their "expertise" and the informed participation of intervenors such as the council, ATA and other associations, intimately familiar with this special field of regulation. These intervenors point out, on behalf of broad groups of interested persons, the general implications of such questions, and are freely granted leave to intervene because of their important contribution to sound development of the law. Judges, in turn, on appeal from Commission decisions, have the benefit of this prior process before a specialized agency, and the intervenors also are parties on appeal. Of considerable practical importance also is the fact that such proceedings are focused in Washington, so that it is relatively simple to learn of them in time, to keep track of them, and if advisable to participate in them. (It has been through this process, for example, that the "primary business test" was established.)

HOW THE PROPOSED LAW WOULD WORK

In sharp contrast would be the situation under the proposed amendment, which could result in a multiplicity of private suits by innumerable for-hire carriers in district courts throughout the United States. In such suits judges might decide questions of widespread industry and public interest without those advantages of the present administrative process. Associations such as the council could not participate, unless to the limited extent of amicus curiae, a privilege frequently denied, even if they learned of them and their implications in time, and had sufficient funds and available qualified personnel for necessary legal services and travel and other expenses. The bill could thus result in an interpretative jungle, in a field of regulatory government which Congress has so far regarded as requiring a specialized, expert administrative agency and process.

The "primary jurisdiction" clauses in S. 1727 and H.R. 5401, we have said, would be inadequate because they are permissive only, and might never result in an agency proceeding.

The reason assigned for the provision for private suits is that the Commission lacks funds and personnel for enforcement. How then could it or its staff be sure of following and dealing adequately with a potentially great mass of litigation initiated directly in the courts, which would proceed in the courts without benefit of Commission proceedings unless the Commission were able to determine summarily to assert its jurisdiction?

We believe they could not, and that complainants should instead register their complaints as already provided in section 204 (c), with the Commission given such funds as are needed to handle them.

Mr. Chairman, we have devoted earnest study and conferences to an effort to develop some suggested change in the provision for private suits which would cure its basic unsoundness, but have been unable to do so.

For example, we considered suggesting the following language, but were forced to conclude that this would only highlight the inherent anomoly of the provision and reduce it to absurdity:

"Nothing in this paragraph shall be construed to deprive the Commission of its primary jurisdiction to determine whether there has been such violation, and the court shall not have jurisdiction in the absence of a previous determination by the Commission as to the particular alleged violation pursuant to section 204 (c) of this part."

That would make it mandatory for the Commission to act as an agency, but it must already do so if a complaint is filed with it under section 204 (c), so that such a suggestion would leave the direct lawsuits a meaningless but costly and obstructive appendage to existing law.

We are forced to the conclusion that the provision for private suits should be wholly rejected.

Moreover, how can the Commission, or a member of the Commission staff, known in advance, from the bare pleadings, before a case is tried, whether it will involve important, precedent-making issues of broad interest?

The whole thing is impracticable and unrealistic. The primary responsibility must be left with the Commission, where it now is, to preside over the application and continuing development of surface transportation law. Otherwise, in our considered judgment, this is the beginning of an erosion and breakdown of this body of law, and the beginning of the end of the Interstate Commerce Commission.

WHAT ARE THE PRACTICAL IMPLICATIONS?

Let us presume for-hire carriers will take full advantage of the second paragraph of section 4, else they would not have sponsored it. This in turn means an increased caseload for an already overburdened Federal court system. The ICC seems to be suggesting it, too, is overburdened and, with reservations, approves of the provision which would authorize the for-hire carriers to bypass the ICC and proceed directly in a Federal court. Indeed, this portion of section 4 is familiarly referred to as the self-help provision.

Now, there is already in existence a self-help provision, 204 (c), and the record is silent as to whether for-hire carriers are making full use of it. But, for the moment, let us presume they are.

Thus we have two overburdened Federal agencies. One is an administrative body particularly fitted and specifically designated as the arbiter in technical aspects of transportation. The other is not so fitted and not so designated, and, in fact, with obvious exceptions never adjudicates transportation matters of the kind envisioned in the absence of a full record developed before the aforesaid administrative body.

This then would seem to boil the matter down to one of increased appropriations for one or the other of the two bodies. Which should be favored over the other in exercising "primary jurisdiction" in matters of this nature, all other considerations being equal?

You might at this point ask yourself why the for-hire carrier desires this new self-help provision. Is it that the present self-help provision, 204(c), is inade quate? (We've not heard that suggested.) Is it that the for-hire carrier can obtain an unfair advantage by subjecting unregulated carriers to proceedings which they themselves are not subjected to? Is it that they hope for a form of harassment which would automatically force small companies to give up their private truck operations rather than face an expensive legal battle? Is it that they anticipate novel decisions which would not have occurred had they been originally subjected to an orderly administrative process, decisions which would henceforth tie the Commission's hands in their own future deliberations?

The answers to these questions are of grave concern to private truck operators all over the country. They are aware you are faced with a problem and that you are seeking a solution to this problem, but it is their hope and the council's hope you will not approve legislation which could have a basic and underlying purpose of endangering the right of industry and agriculture to engage in their own private truck operations.

Mr. Chairman, let me quote to you what common carriers had to say of a proposed provision like this, when it would have been applicable to them. On June 28, 1961, in testimony before the subcommittee in reference to "decline of regulated common carriage," Mr. M. T. Richmond, president of the Common Carrier Conference-Irregular Route of the American Trucking Associations, Inc., said: "It is the considered opinion of this conference that if motor carriers should be subjected to injunctive proceeding in the Federal courts by persons other than the Interstate Commerce Commission, or its duly authorized agents, that Pandora's box will be opened as far as the interest of the motor carrier industry is concerned. Such a right would place a substantial weapon in the hands of a competitor so as to harass the operations of a motor carrier and would result in endless litigation before the Federal court" (Record p. 213).

COUNCIL'S OPPOSITION TO CIVIL FORFEITURE, SECTION 3, S. 1727

As to the proposed civil forfeiture provision, we think that too is bad, although of secondary concern.

Unlike the criminal penalties, civil forfeitures apply where there is no intent to violate.

The Commission's legislative committee says in effect that it would be easier and quicker to proceed under the civil forfeiture provision than under the criminal provision, because the former would apply even where the defendant is innocent of any knowledge or intent of violation, and the prosecution would be freed of having to show any such knowledge or intent.

That to us is a basic objection to the proposed extension of the civil forfeiture provision, especially with respect to minor or technical violations of the Motor Carrier Safety Regulations.

In the sense in which "forfeiture" is used in the legislation, "Forfeitures are not favored; they are considered harsh exactions, odious, and to be avoided when possible." (37 C.J.S. Forfeitures sec. 4b).

Moreover, paragraph (1) in section 4 of S. 1727, and section 4 of H.R. 5401, would amend subsection 222 (b) of the Interstate Commerce Act, providing for suits by the Commission for court injunctions. Such suits could be brought in the district court for any district where a motor carrier (including a private truck operator) or a broker operates, including as parties any persons acting in concert or participating with the motor carrier or broker in an alleged violation, without regard to their residence. The amendment also provides that process could be served on any of the parties anywhere, without regard to the district or State in which the proceeding is brought. We submit such a provision would adequately answer the claimed need for expanding the harsh and arbitarary civil forfeiture provision.

Lastly, and in order to consume as little of your valuable time as possible, may we quickly suggest, for reasons which other witnesses have ably presented, that we strongly urge the deletion of the so-called safety violations contained in section 3 of S. 1727; and we are opposed to S. 1733 which is an even more objectionable civil forfeiture version of section 3 of S. 1727.

Mr. Chairman, we thank you for the opportunity of appearing before you today. We sincerely hope we've made our position clear. As I believe is obvious from what I have said, the matter to which I have directed most of my remarks is of serious and grave concern to private truck operators and we earnestly commend them to you for your consideration.

APPENDIX XI

STATEMENT OF GEORGE H. SEAL FOR THE CHAMBER OF COMMERCE OF THE

UNITED STATES

My name is George H. Seal. I am president and chief executive officer of C. H. Sprague & Son Co., Boston, Mass. Our company transports fuel by tanker, collier, railroad, and truck. I am appearing today on behalf of the Chamber of Commerce of the United States. I am the chairman of the chamber's transportation and communication committee.

The national chamber supports S. 1727, to amend the Interstate Commerce Act so as to strengthen and improve the national transportation system, with three exceptions. The first exception relates to the extension of the civil forfeiture provisions to safety violations. The second relates to the exclusion of regulated motor carriers from injunction proceedings under section 4 of the bill. The third exception relates to the provisions in sections 3 and 4 of the bill regarding the primary jurisdiction of the ICC with respect to the primary business test.

Section 1 of the bill authorizes the Interstate Commerce Commission to enter into cooperative agreements with the States to enforce State and Federal economic and safety laws and regulations concerning highway transportation. This provision appears to us to contemplate informational exchanges between State and Federal authorities in order that such information may be used in the enforcement of registration requirements, operating authorities, and safety requirements.

Under the provisions of section 205 (f) of the Interstate Commerce Act, the ICC is now authorized to avail itself of information provided by State authorities. However, no similar provision authorizes the Commission specifically to make similar information available to the States in return. Section 1 of the bill appears to us to provide a two-way street for the beneficial exchange of information, thus strengthening our dual system of State-Federal regulations.

Section 2 of the measure is designed to bring more uniformity to State laws relating to registration of operating authority by interstate motor carriers. In increasing numbers, States are requiring regulated interstate carriers to register their ICC operating authorities. Without uniformity, carriers must be familiar with all the different requirements of all States in which they operate. The purpose is to establish a means of effectively reaching those who operate in violation of the law. If a for-hire carrier operates without ICC authority, then, of course, he has nothing to register with a State. In such an instance, where a State requires registration, the State may institute action against the carrier for violation of the State registration law.

Section 3 of the bill would extend the civil forfeiture provisions as set forth in subsection (h) of section 222 of the Interstate Commerce Act to unlawful operations by motor carriers. It would also increase the amount of the forfeitures. The extent of the increase would be to provide for forfeiture "not to exceed $500" for each offense, instead of a fixed forfeiture of "$100" as now provided for each offense. This section of the bill would also provide that in the case of a continuing violation, forfeiture shall be in an amount "not to exceed $250 for each additional day" as the act now reads. Increases in the present forfeiture provisions would appear to be of substantial assistance as a deterrent to unscrupulous operators who persist in unlawful practices. This section includes a provision not contained in H.R. 5401, the companion bill considered by the House. I am referring to the extension of the civil forfeiture provisions to violations of safety regulations. The Chamber of Commerce of the United States, while favoring all efforts for improved safety on our highways, takes no position on the extension of the civil forfeiture provisions thereto.

291

Section 4 of S. 1727 would enable the Interstate Commerce Commission to obtain service of process upon motor carriers and to join other necessary parties without regard to where the carrier or other party may be served. Section 222(b) of the Intestate Commerce Act sets forth the procedure under which proceedings may be instituted to enjoin unlawful motor carrier operations or practices. When such proceedings are instituted in a Federal district court, service of process is limited to the territorial limits of the State in which the court is located. The difficulty under the present law rests in the fact that the Commission cannot, even where necessary, obtain service upon both carrier and shipper where both carrier and shipper are not situated within the territorial limits of the same State.

Another factor that combines with this situation to make matters even more difficult, is the fact that the Commission may not proceed against a shipper without proceeding against the carrier. This proposed amendment would enable the Commission to institute a proceeding against a carrier wherever it conducts its operations, and irrespective of where service is obtained, while at the same time providing for the joining of a shipper as a party defendant, also irrespective of where service is obtained on the shipper. This proposed amendment would appear to simplify the procedures by which actions are brought to enjoin unlawful motor carrier operations or practices.

Section 4 would also provide that any injured party may institute a proceeding in a United States district court for any district where a person is unlawfully operating without a certificate, permit, or under a temporary authority. This would be an injunction proceeding brought against any person, except a motor carrier holding a certificate, or permit, or grant of temporary authority issued by the Interstate Commerce Commission, operating in "clear and patent" violation of the specified sections of part II of the Interstate Commerce act.

This section of the bill also differs from the corresponding provision in H.R. 5401, in that under S. 1727 a motor carrier holding operating authority from the ICC might operate in clear and patent violation of the specified sections of part II of the act without being subject to action thereunder by injured parties. The chamber of commerce of the United States takes the position that the parenthetical phrase, contained in lines 15 to 18, page 6, of the bill, which excepts regulated motor carriers should be excluded from the bill.

It is our understanding that the words "clear and patent" shall be a standard of jurisdiction to be used by the court, rather than a measure of the burden of proof. In other words, the violation complained of must, if the district court is to entertain the action, be openly and obviously for-hire motor carriage without authority.

The provision that appropriate security shall be posted by the plaintiff, in such amount as may be deemed proper by the court, affords protection against harassing lawsuits. Thus, while persons being injured by the illegal activities of those operating without authority would be afforded a right of action, protection is given so that this proposed remedy may not be used to harass a competitor. The chamber took no position with respect to the question of the primary jurisdiction of the ICC regarding the primary business test.

Sections 5 and 6 of the measure would make motor common carriers and freight forwarders, respectively, subject to reparations for damages and set out the procedure for bringing suit. These two provisions of the bill represent a step in the direction of equality of treatment between the various modes of transportation, inasmuch as rail and water carriers have been subject to provisions relating to the awarding of reparations for many years. The proposed language, as we understand it, would reestablish the situation with respect to reparations as it existed prior to the 1959 decision of the Supreme Court of the United States in T.I.M.E., Inc. v. United States (359 U.S. 464). The court there held that a shipper by motor carrier subject to part II of the Interstate Commerce Act cannot challenge in postshipment litigation the reasonableness of past charges made in accordance with tariffs filed with the Interstate Commerce Commission. Thus, this measure would give a shipper a remedy for injury that arises out of the application of an unlawful rate charged by a motor common carrier or freight forwarder, requiring them to pay reparations to such a shipper.

S. 1148

S. 1148 provides for utilization by the Interstate Commerce Commission of its employees in a more effective manner and for improved administrative efficiency. As we understand the proposal, it contemplates delegation of certain responsi