Justia › US Law › US Case Law › US Supreme Court › Volume 108 › Ellis v. Atlantic Mut. Ins. Co.
Where a vessel, before she breaks ground for a voyage, is so injured by fire that the cost of her repairs would exceed her value when repaired, and she is rendered unseaworthy and incapable of earning freight, a contract of affreightment for the carriage of cotton by her to a foreign port, evidenced by a bill of lading, containing the usual and customary exceptions and providing for the payment of the freight money on the delivery of the cotton at that port, is thereby dissolved, so that the shipper is not liable for any part of the freight money, nor for any of the expenses paid by the vessel for compressing and stowing the cotton.
In admiralty. Libel for freight. The facts appear in the opinion of the Court.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
March 5, and before the district court had made any decision or order on the rule to rescind the order for the sale of the cotton, a proctor representing underwriters at Lloyds, by leave of the court, filed an intervention for the interest of the insurers of the freight on the cargo, in which it was prayed that the order for the sale of the cargo be rescinded. This intervention was supported by affidavits filed by the intervenors and by a brief of the proctor. Afterwards, on March 6, after consideration of the rule taken by the master of the ship to rescind the order of sale, and of the evidence and arguments thereon, and of the last-named intervention, and of the affidavits and brief submitted therewith, the court ordered that the master be allowed to bond the ship and such of the cotton then stored in the levee steam cotton press as was in good order, amounting to 523 bales, and that the remainder of the cargo on board the ship or upon the levee, which was more or less damaged, be sold by the marshal after three days' notice, and all questions of freight were reserved by the court, and the court appointed a trinity master to advise and assist in making sale of the cotton. On the 19th of March the underwriters filed their claim, claiming all of the cargo, and procured an order from the judge of the district court to be entered on their claim, suspending the right given to the master on the 6th of March, to bond such of the cotton as was stored in the levee cotton press, to-wit, about 500 bales, until the further order of the court. On March 26, the master not having bonded the cotton a rule was taken and duly served on him to show cause why the order of March 6, so far as it allowed him to bond a portion of the cotton, should not be rescinded, and the movers of the rule, the insurers of the cargo, be allowed to bond the same. The rule was heard on March 27, the movers of the rule and the master being represented by their respective counsel, and was by the court made absolute, without opposition, and the order allowing the master to bond said portion of the cargo was rescinded, and the movers of the rule were allowed to bond the same.
were then in the custody of the marshal, in the suit for salvage. The libel recites the proceedings above mentioned, and alleges that the cotton might have been picked, dried, and rebaled, and sent to its destination, and freight have been earned thereon, but that the application of the master to bond the cargo was refused, owing to the opposition of the libellant for salvage, and especially to the opposition of the underwriters on the cargo, and that, under the contract of carriage, it was the right as well as the duty and the desire of the libellants to pick, dry, and rebale so much of the cotton as might require it, and which could easily have been done, and to carry it to its destination and earn the freight money for carrying it, which they had been unable to do because they had been denied the right to bond it, owing to the opposition of the libellant for salvage and of the underwriters on the cargo, resulting in the taking away of the cargo entirely from the master, in consequence of which the entire freight money agreed on became due, as well as money paid by the libellants for compressing and stowing the cargo in the vessel, and other expenses incident thereto, and for railroad charges, for all of which the libel claims a lien on the cargo and on the proceeds of sale.
were picked, dried, rebaled, and shipped, part to Liverpool and the rest to Philadelphia. All the damaged cotton taken from the ship was unmerchantable cotton, even after it had been picked, dried, and rebaled; that is, it could not be used for making cotton cloth, but could only be used for making felt hats, paper, wadding, and such like articles, having lost, by the submersion and drying, a large part of its natural oil, its fiber being injured and its weight reduced.
On the facts so found, the circuit court held that the libellants had no lien on the cargo or its proceeds for freight, or for money paid by them for compressing and stowing the cargo, and dismissed the libel.
The libellants seek to apply to the present case the principle applied where a voyage partly performed is interrupted by a disaster to the ship, namely, that the ship owner has a lien on the cargo for the earning of the freight, and so has a right to carry the cargo forward by his vessel or some other conveyance, and deliver it and receive his full freight. As in the case of a disaster to the ship in the course of a voyage, the whole freight is payable if, by the fault of the owner of the cargo, the master is prevented from forwarding the cargo from an intermediate port to its destination, it is contended in the present case that the libellants have a right to recover the whole agreed freight, because they had a right to send the cargo to Liverpool and earn full freight, and were prevented from doing so by the action of the underwriters, who became, by abandonment, the owners of the cargo. It is also contended that the owners had a right to repair the ship, even though the cost of repairing would exceed her value when repaired.
he will pay the stipulated freight; but it was only in that event, viz., of their delivery at the place of destination, that he, the freighter, engages to pay anything. If the ship be disabled from completing her voyage, the ship owner may still entitle himself to the whole freight by forwarding the goods by some other means to the place of destination; but he has no right to any freight if they be not so forwarded, unless the forwarding them be dispensed with, or unless there be some new bargain upon this subject. If the ship owner will not forward them, the freighter is entitled to them without paying anything. One party, therefore, if he forward them, or be prevented or discharged from so doing, is entitled to his whole freight, and the other, if there be a refusal to forward them, is entitled to have them without paying any freight at all. The general property in the goods is in the freighter; the ship owner has no right to withhold the possession from him unless he has either earned his freight or is going on to earn it. If no freight be earned and he decline proceeding to earn any, the freighter has a right to the possession."
These remarks were made in regard to a voyage partly performed, and interrupted by a disaster, where freight money was claimed pro rata itineris peracti. But no case can be found in which freight money has been allowed, where the voyage was not commenced, and the ship was, by a disaster for which the shipper was not at all responsible, put into the situation of the vessel in this case after the contract of carriage was made.
undamaged bales, and there was no suspension of that order until the 19th of March, they were not bonded.
We are of opinion that by the disaster which occurred before the ship had broken ground or commenced to earn freight, the circumstances with reference to which the contract of affreightment was entered into were so altered by the supervening of occurrences which it cannot be intended were within the contemplation of the parties in entering into the contract, that the shipper and the underwriters were absolved from all liability under the contract of affreightment. The contract had reference to a particular ship, to be in existence as a seaworthy vessel and capable of carrying cargo and earning freight and of entering on the voyage. All the fundamental conditions forming part of the contract of the ship owner were wanting at the time when the earning of freight could commence. In addition, as the result of the fire, and by no fault of the shipper, all but 523 bales of the cotton was rendered unmerchantable, and put into such a condition that its owner might well hesitate to incur the expense of sending it to Liverpool. As to the undamaged cotton, the master had an opportunity for thirteen days to bond it, and failed to do so.
The money paid by the ship owners for compressing and stowing the cotton, and for other expenses incident thereto, must be understood as having been included in the freight money, and to be reimbursed out of that, and to be money for which, in any event, the shipper of the cotton would not have been liable in addition to the freight money. If the ship owner was not entitled to the latter he was not entitled to anything. He took, as to the expenses, the risk of losing them if he lost the freight money. So, the two are bound up together.
the vessel, the shipper cannot reclaim the goods without paying at least full freight. But, subject to this qualification, it is a principle of the maritime law that if a ship does not begin her voyage at all, does not break ground, no freight can be payable. This was laid down and applied in the early case of Curling v. Long, 1 Bos. & Pul. 634. That case has never been overruled, and no case holding to the contrary is cited or has been found. It is a case directly in point in two particulars, and it will be useful therefore briefly to examine it. Some hogsheads of sugar were shipped, under bills of lading, on a vessel while lying in a port in Jamaica, bound for London. Before the vessel sailed, she was cut out by privateers and carried to sea, but was recaptured and taken into another port. Under a libel for salvage in the Admiralty Court of Jamaica, the cargo was sold by order of the court and the net proceeds were remitted to the defendants for the owners of the cargo. The ship owners had expended money in lading the cargo, according to the usage of the Jamaica trade. They sued the defendants to recover the freight money or the expenses. It was held that they could not recover anything; that the inception of freight was breaking ground, and that the expenses incurred were to be reimbursed in the freight money or not at all.
The case of Jones v. Holm, L.R. 2 Exch. 335, was a different case. By a charter party, a vessel was to go to a specified port and take a specified cargo and deliver it at Liverpool for a specified freight. She went to the port and was partly laden when she was so damaged by fire that she was scuttled. The cargo was injured and sold, except a small part, not on board, which was forwarded to Liverpool by the master. The vessel was repaired and tendered to take the remainder of the cargo. The charterer refused to supply more cargo, and the vessel obtained a cargo carried it to England at a less freight than she would have earned for a full freight under the charter party. In a suit to recover damages for a breach of the charter party, it was held that the charterer was bound to complete the lading of the vessel.
J. 225; Clemson v. Davidson, 5 Binn. 392, and in various textbooks. 3 Kent's Com. 223; 1 Parsons on Ship. & Adm. 220; Abbott on Shipping, 11th Lond. ed. 407; Maclachlan on Shipping, 2d ed. 458; Smith's Mercantile Law, 3d. Am. ed. 400.
"in contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance."
"any express stipulation that the destruction of the person or thing shall excuse the performance, . . . that excuse is by law implied, because from the nature of the contract it is apparent that the parties contracted on the basis of the continued existence of the particular person or chattel."
and that the plaintiffs were not entitled to sue in respect to those portions of work which had been completed, whether the materials used had become the property of the defendant or not. See Benjamin on Sales, 3d Am. ed., § 570; Wells v. Calnan, 107 Mass. 514, and cases there cited.
"Where an act is to be performed by the plaintiff before the accruing of the defendant's liability under his contract, the plaintiff must prove either his performance of such condition precedent, or an offer to perform it which the defendant rejected, or his readiness to fulfill the condition until the defendant discharged him from so doing, or prevented the execution of the matter which the contract required him to perform. . . . A contract may be so framed that the promises upon one side may be dependent on the promises upon the other, so that no action can be maintained founded on the written contract without showing that the plaintiff has performed, or at least has been ready, if allowed by the other party, to perform his own stipulations, which are a condition precedent to his right of action."
On a full consideration of the case, we are of opinion that the decree of the circuit court must be affirmed.


Ernest Carl Darcus, Jr., seeks a writ of habeas corpus pursuant to 28 U.S.C. § 2241. His petition for writ of habeas corpus is denied.
Mr. Darcus was convicted of a drug offense in the United States District Court for the Eastern District of Virginia in 2009. He agreed to plead guilty in 2009 and was sentenced to 292 months' imprisonment.
In 2011, the Court of Appeals for the Fourth Circuit dismissed Mr. Darcus's appeal because he waived his right to appeal in his plea agreement. The Supreme Court of the United States denied his petition for writ of certiorari later that year.
In 2012, Mr. Darcus filed a motion to vacate pursuant to 28 U.S.C. § 2255 in the United States District Court for the Eastern District of Virginia, which was denied on the merits in 2015. He filed a motion seeking permission for a successive § 2255 motion in 2016, and a Certificate of Appealability was denied.
Mr. Darcus has now filed a petition for habeas relief pursuant to § 2241 in this court. He challenges the lawfulness of his sentence. He argues his sentence was wrongly enhanced under the U.S. Sentencing Guidelines. Mr. Darcus believes the enhanced sentence violates due process and creates a miscarriage of justice.
To proceed under § 2241, a motion pursuant to 28 U.S.C. § 2255 must be “inadequate or ineffective to test the legality of his detention.” 28 U.S.C. § 2255(e). Section 2255 is inadequate or ineffective if the following three requirements are met: “(1) the petitioner must rely on a case of statutory interpretation (because invoking such a case cannot secure authorization for a second § 2255 motion); (2) the new rule must be previously unavailable and apply retroactively; and (3) the error asserted must be grave enough to be deemed a miscarriage of justice, such as the conviction of an innocent defendant.” Davis v. Cross, 863 F.3d 962, 964 (7th Cir. 2017).
As argued by the respondent, the savings clause of § 2255(e) does not give Mr. Darcus a further bite at the post-conviction relief apple in this case. Mr. Darcus argues that he is entitled to § 2241 relief due to the decision in Webster v. Daniels, 784 F.2d 1123 (7th Cir. 2015). Mr. Darcus asserts that Webster allows his habeas corpus petition because Mr. Darcus “has not been given a reasonable opportunity to obtain a reliable judicial determination of the fundamental legality of his conviction and sentence.” Dkt. No. 12 at 3.
Additionally, there is nothing in Webster to suggest that its holding applies outside the context of new evidence. Indeed, the Webster court took great care to assure that its holding was narrow in scope-“[i]t will be a rare case where records that predate the trial are found much later, despite diligence on the part of the defense, and where those records bear directly on the constitutionality of the death sentence.” 784 F.3d at 1140 (first emphasis added).


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BASS, Collector of Internal Revenue.
Petitioner brought suit in the District Court for Western Texas to recover federal income taxes alleged to have been illegally exacted for its fiscal years 1925 to 1928, inclusive. It set up that in those years it received income derived from the sale of oil and gas produced under leases to it by the state of Texas; that these leases were instrumentalities of the state for the development of its public domain; and that petitioner's income derived from them was constitutionally immune from the tax as one imposed by the federal government on an instrumentality of the state. The District Court gave judgment for petitioner, 38 F.(2d) 680, which the Circuit Court of Appeals for he F ifth Circuit reversed, holding that the immunity, if any, had been waived by the state by section 27 of chapter 83, Laws of 1917, which provided that rights acquired under leases, including the present ones, were to be 'subject to taxation as is other property.' 41 F.(2d) 483. This Court granted certiorari, 282 U. S. 830, 51 S. Ct. 88, 75 L. Ed. —, November 24, 1930.
Petitioner's leases relate to parts of the public domain of the state, set apart by the Legislature for the benefit of the state university, under a mandate of the state constitution of 1876, art. 7, §§ 10-15, inclusive. See Texas Laws 1917, c. 83. In terms they 'grant and lease' for a period of ten years, with renewal privileges, the right to enter on designated lands for the purpose of 'drilling and operating' for petroleum and gas, and to erect and maintain all necessary structures for the production, transportation, and storage of petroleum and gas. The lessee or 'owner of the rights * * * conveyed' is required to pay the state the value of one-eighth of the petroleum produced and of one-tenth of the gas sold. The challenged tax is measured by the net profits derived by petitioner from the sale of oil and gas produced, after making allowed deductions from gross receipts, including the royalties paid to the state.
Property sold or otherwise disposed of by the government, either state or national, in order to raise revenue for government purposes, is in a broad sense a government instrumentality, with respect to which neither the property itself before sale, nor its sale by one government, may be taxed by the other. But it does not follow that the same property in the hands of the buyer, or his use or enjoyment of it, or the income he derives from it, is also tax immune. City of New Brunswick v. United States, 276 U. S. 547, 48 S. Ct. 371, 72 L. Ed. 693; Forbes v. Gracey, 94 U. S. 762, 24 L. Ed. 313; Tucker v. Ferguson, 22 Wall. 527, 22 L. Ed. 805; see Weston v. Charleston, 2 Pet. 449, 468, 7 L. Ed. 481; Veazie Bank v. Fenno, 8 Wall. 533, 547, 19 L. Ed. 482. Theoretically, any tax imposed on the buyer with respect to the purchased property may have some effect on the price, and thus remotely and indirectly affect the selling government. We may assume that, if the property is subject to tax after sale, the governmental seller will generally receive a less favorable price than if it were known in advance that the property in the hands of later owners, or evenof t he buyer alone, could not be taxed.
But the remote and indirect effects upon the one government of such a nondiscriminatory tax by the other have never been considered adequate grounds for thus aiding the one at the expense of the taxing power of the other. See Willcuts v. Bunn, 282 U. S. 216, 231, 51 S. Ct. 125, 75 L. Ed. 304; Educational Films Corporation v. Ward, 282 U. S. 379, 51 S. Ct. 170, 75 L. Ed. 400, decided January 12, 1931; Metcalf & Eddy v. Mitchell, 269 U. S. 514, 523, 524, 46 S. Ct. 172, 70 L. Ed. 384. This Court has consistently held that, where property or any interest in it has completely passed from the government to the purchaser, he can claim no immunity from taxation with respect to it, merely because it was once government owned, or because the sale of it effected some government purpose. City of New Brunswick v. United States, supra; Forbes v. Gracey, supra; Tucker v. Ferguson, supra; see Gromer v. Standard Dredging Co., 224 U. S. 362, 371, 32 S. Ct. 499, 56 L. Ed. 801; Choctaw, O. & G. R. R. Co. v. Mackey, 256 U. S. 531, 537, 41 S. Ct. 582, 65 L. Ed. 1076; Central Pacific R. R. v. California, 162 U. S. 91, 125, 16 S. Ct. 766, 40 L. Ed. 903; Union Pac. Railroad Co. v. Peniston, 18 Wall. 5, 35-37, 21 L. Ed. 787; Weston v. Charleston, supra, page 468 of 2 Pet.
Property which has thus passed from either the national or a state government to private ownership becomes a part of the common mass of property and subject to its common burdens. Denial to either government of the power to tax it, or income derived from it, is order to insure some remote and indirect antecedent benefit to the other, would be an encroachment on the sovereign power to tax, not justified by the implied constitutional restriction. See Weston v. Charleston, supra, page 468 of 2 Pet. The interest which passed to petitioner here, as defined by the laws of the state, is not distinguishable from the mining claims, acquired in lands of the United States under its statutes, which, together with minerals and ores derived from them, were held subject to state taxation in Forbes v. Gracey, supra.
True, since restricted, allotted, or tribal lands of Indians are instrumentalities of the federal government, it has been held that neither leases of the lands, Indian Territory Illuminating Oil Co. v. Oklahoma, 240 U. S. 522, 36 S. Ct. 453, 60 L. Ed. 779, nor gross income derived from them, Choctaw, O. & G. R. R. Co. v. Harrison, 235 U. S. 292, 35 S. Ct. 27, 59 L. Ed. 234; see Howard v. Gipsy Oil Co., 247 U. S. 503, 38 S. Ct. 426, 62 L. Ed. 1239; Large Oil Co. v. Howard, 248 U. S. 549, 39 S. Ct. 183, 63 L. Ed. 416; Jaybird Mining Co. v. Weir, 271 U. S. 609, 46 S. Ct. 592, 70 L. Ed. 1112; nor net income, Gillespie v. Oklahoma, 257 U. S. 501, 42 S. Ct. 171, 66 L. Ed. 338, may be taxed by a state. But no case has extended such immunity to property, real or personal, or income derived from its sale, where it has passed to the buyer by a completely executed act of sale, without restriction, and no interest in it has been retained for the benefit of the Judians. Whatever may be the appropriate limits of the immunity, as applied in this class of cases, those limits are clearly exceeded by that asserted here.

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[397 U.S. 532 , 533] Joseph A. Califano, Jr., Washington, D.C., at appellant American Farm lines.
The first alleged error in the case is the failure of the Interstate Commerce Commission to require strict compliance with its own rules. The rules in question, unlike some of our own, do not involve 'jurisdictional' problems but only require certain information to be set forth in statements filed in support of applications of motor carriers for temporary operating authority.
Concededly, the Caputo statement did not give the dates of DOD's efforts to secure service from other existing carriers or a complete list of the names and addresses of the carriers who failed or refused to provide service, as required by the terms of subsections (8) and (9), 49 CFR 1131.2(c). Such a complete listing of this in- [397 U.S. 532 , 538] formation, given the volume of traffic involved, would indeed have been a monumental undertaking.
We agree with the Commission that the rules were promulgated for the purpose of providing the 'necessary information' for the Commission 'to reach an informed and equitable decision' on temporary authority applications. ICC Policy Release of January 23, 1968. The Commission stated that requests for temporary authority would be turned down 'if the applications do not adequately comply with (the) ... rules.' Ibid. ( Emphasis added.). The rules were not intended primarily to confer important procedural benefits upon indivduals in the face of otherwise unfettered discretion [397 U.S. 532 , 539] as in Vitarelli v. Seaton, 359 U.S. 535 ; nor is this a case in which an agency required by rule to exercise independent discretion has failed to do so. United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260 ; Yellin v. United States, 374 U.S. 109 . Thus there is no reason to exempt this case from the general principle that '(i)t is always within the discretion of a court or an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it. The action of either in such a case is not reviewable except upon a showing of substantial prejudice to the complaining party.' NLRB v. Monsanto Chemical Co., 8 Cir., 205 F.2d 763, 764. And see NLRB v. Grace Co ., 8 Cir., 184 F.2d 126, 129; Sun Oil Co. v. FPC, 5 Cir. 256 F.2d 233; McKenna v. Seaton, 104 U.S.App.D.C. 50, 259 F.2d 780.
We deal here with the grant of temporary authority similar to that granted in Estes Express Lines v. United States, D.C., 292 F.Supp. 842, aff'd, 394 U.S. 718 . There the grant of temporary authority was upheld even though there may not have been literal compliance with subsections (8) and (9) of the Commission's rules. That result was in line with 210a(a) of the Act which was designed to provide the Commission with a swift and procedurally simple ability to respond to urgent transportation needs. That functional approach is served by treating (8) and (9) not as inflexible procedural conditions but as tools to aid the Commission in exercising its discretion to meet 'an immediate and urgent need' for services where the existing service is incapable of meeting that need. Unlike some rules, the present ones are mere aids to the exercise of the agency's independent discretion.
After the Commission issued its first order, petitions for reconsideration were filed and before they were passed [397 U.S. 532 , 540] upon, some carriers filed suit and a single judge temporarily restrained operation of that first order. It was after that order issued and over a month before the case was argued to the three-judge court that the Commission granted the petitions for rehearing and reopened the record and received the Caputo verified statement.
The power of the Commission to grant rehearings is not limited or qualified by the terms of 49 U.S.C. [397 U.S. 532 , 541] s 17(6) or (7). Thus in 17(6) it is said, 'Rehearing, reargument, or reconsideration may be granted if sufficient reason therefor be made to appear.' And 17(7) provides that if after rehearing or reconsideration the original decision, order, or requirement appears 'unjust or unwarranted,' the Commission may 'reverse, change, or modify' the same. These broad powers are plainly adequate to add to the findings or firm them up as the Commission deems desirable, absent any collision or interference with the District Court.
This power of the Commission to reconsider a prior decision does not necessarily collide with the judicial power of review. For while the court properly could provide temporary relief against a Commission order, its issuance does not mean that the Commission loses all jurisdiction to complete the administrative process. It does mean that thereafter the Commission is 'without power to act inconsistently with the Court's jurisdiction.' Inland Steel Co. v. United States, 306 U.S. 153, 160 , 59 S. Ct. 415, 419. When the Commission made the additional findings after its first order was stayed by the court, it did not act inconsistently with what the court had done. It did not interfere in the slightest with the court's protective [397 U.S. 532 , 542] order. What the Commission did came before the court was ready to hear arguments on the merits and before the record was filed with it. Moreover, the Commission in light of the District Court's stay, by express terms, directed AFL not to perform operations under the first order and made the second order effective only on further order of the Commission. 9 Since by the Act the Commission never lost jurisdiction to pass on petitions for rehearing, and since the stay order did not forbid it from acting on those pending petitions, it was not necessary for the Commission to seek permission of the court to make those rulings.
I would affirm the judgment of the District Court on the ground that '( e)ven if ICC had jurisdiction to reopen the ICC proceeding and to consider the [397 U.S. 532 , 543] Caputo verified statement, (the statement) would not meet the requirements of categories (8) and (9) of ICC Rule 49 C.F.R. 1131.2(c).' 298 F.Supp. 1006, 1011.
Insofar as ICC regulations emphasize the requirement of information concerning the ability of existing carriers to provide the service sought by a shipper, they implement not only the statutory standard under Interstate Commerce Act 210a, 49 U.S.C. 310a, but also the fundamental scheme of our national transportation policy. Ever since the enactment in 1887 of the Interstate Commerce Act, 24 Stat. 379, national policy has reflected the congressional determination that the public interest is served by regulating competition among carriers. See, e.g., Act of September 18, 1940, 1, 54 Stat. 899, 49 U.S.C. preceding 1. Regulation of entry into the motor transportation industry is one important feature of the pattern of regulation. American Trucking Associations, Inc. v. United States, 344 U.S. 298 (1953); Pan- Atlantic Steamship Corp. v. Atlantic Coast Line R. Co., 353 U.S. 436, 440 , 1002 (1957) (Burton, J., dissenting). The Motor Carrier Part of the Interstate Commerce Act was passed because 'the industry was unstable economically, dominated by ease of competitive entry and a fluid rate picture' and 'as a result ... became overcrowded with small economic units which proved unable to satisfy even the most minimal standards of safety or financial responsibility.' Therefore, 'Congress felt compelled to require authorization for all interestate operations to preserve the motor transportation system from overcompetition.' American Trucking Associations, Inc. v. United States, supra, 344 U.S. at 312-313, 73 S.Ct. at 316. To ensure fair and effective regulation of entry, 49 U.S. C. 305-309 require that entry ordinarily be authorized by the ICC only after full adversary proceedings.
This congressional concern to protect existing carriers was again forcefully expressed in the 1968 amendment to 203(b)(5) of the Act, 82 Stat. 448, 49 U.S.C. 303(b)(5) (1964 ed., Supp. IV), which curtails substantially the authority of agricultural cooperatives like AFL to haul nonmembers' freight.
'The relative decline of the Nation's common carrier system in recent years is a matter of serious [397 U.S. 532 , 545] concern. Several traffic studies reveal that common carriers have lost considerable traffic which they formerly handled and, at the same time, have been unable to share proportionately in the additional traffic generated by the Nation's expanding economy.
The ICC recognizes its duty to give effect to this congressional concern for existing carriers in the provision of Rule 1131.4(b)(2) that '( a)n immediate and urgent need justifying a grant of temporary authority will be determined to exist only where it is established that there is or soon will be an immediate transportation need which reasonably cannot be met by existing carrier service.' This key determination is made upon the basis of the information supplied in response to items (8) and (9) of 49 CFR 1131.2(c). Reasonable disclosure of whatever evidence there may be as to the inadequacy of existing service is thus of crucial importance. Disclosure makes it possible for protestants to frame specific objections addressed to concrete situations, and thereby comply with the provision of Rule 1131.3(a)(2) that protests 'must be specific as to the service which ( the) protestant can and will offer ....' Disclosure also permits the ICC to come to an informed judgment that properly respects the congressional concern for existing carriers. It follows that details and not generalities are called for. There must be disclosure, by dates and results, of efforts made by the shipper to obtain the needed service from existing carriers, with names and specific reasons given for failure or refusal [397 U.S. 532 , 546] to provide the service. In a case such as this, ICC action without such information flouts the congressional concern.
ICC Rules 1131.2(c)(8) and (9) are not hypertechnical rules, or mere matters of housekeeping convenience. They go to the heart of the issue in a temporary authority proceeding. The significance of the rules does not depend on whether, in the Court's words, they 'confer important procedural benefits upon individuals.' but rather on the fact that they are designed to elicit information crucial to determining whether in light of congressional policies a particular factual situation warrants the grant of a temporary authority. Nor is the question in this case, as the Court assumes, whether the ICC erred in failing to require 'strict' compliance with the rules. The District Court did not hold the Commission to a standard of strict compliance, and appellees have not argued that strict compliance is required. The issue is whether there was reasonable compliance with rules that the ICC purported to apply in this case. 2 The District Court found that the Caputo statement relied on by the ICC in issuing the new order 'fails to show any efforts by the Department of Defense to obtain from existing carriers the service AFL seeks to provide, or the identity of any existing carriers who failed or refused to provide the needed service and the reasons given for any such failure or refusal.' 298 F.Supp., at 1011. I [397 U.S. 532 , 547] reach the same conclusion from my examination of the statement.
AFL argues that (8) and (9) require information, not action, and that therefore a response that no effort has been made to obtain the service from other carriers is compliance with both items. However, apart from the doubtful premise that in the circumstances of this case the statute would authorize a grant of temporary operating authority without proof of such effort, the argument is foreclosed by the ICC's express finding in its second order that DOD did in fact attempt to obtain the service elsewhere. 3 See SEC v. Chenery Corp., 332 U.S. 194, 196 , 1577, 1760 (1947); Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 -169, 245-246 (1962).
Thus it was not enough for the statement to assert simply that DOD desires AFL's single-line service because DOD is interested in economy and efficiency; the requirement is that the statement spell out in detail just what DOD's needs are, why these needs cannot be met by existing carriers, and why the authority applied for will enable AFL to meet the needs. Consequently, in this case reasonable compliance with (8) and (9) means at least compliance sufficient to permit an informed application of the standard set forth in 1131.4(b)(4). In my view the DOD statement fails this test. It does not indicate specifically what needs are not being satisfied by the joint- or single-line services provided by existing certificated carriers, or how those needs were brought to the attention of the unsatisfactory carriers so as to discover whether they could improve their performance to meet DOD's needs.
The statement begins by noting that DOD ships a 'tremendous volume' of freight between the nine-state area and the five-state area in question, and that '(a) part of this traffic requires that it be transported from origin to destination in the most expeditious manner possible.' It adds that '(t)his defense need for speed has not been met in many, many instances by the current certified motor carriers due to a number of factors,' among which are the facts that the 'majority' of carriers offer only joint-line service, that 'virtually all' carriers use regular routes which 'often' are circuitous, and that 'some carriers use single drivers instead of two-man teams. The statement then gives three examples of inadequate service. The first two examples show that joint-line service is in these instances [397 U.S. 532 , 549] slower than single-line service, but the single-line service cited is currently being provided by a certificated carrier. Thus these two examples do not show that any of DOD's needs are not currently being met. The third example states that in some instances, where single-line service is available over regular routes, service over irregular routes would be faster. But the statement does not identify these instances; it does not state whether DOD brought the inadequacies to the attention of any carrier; nor does it state that to DOD's knowledge there is no way the certificated carriers could speed up their service between the points in question so as to meet DOD's reasonable 'immediate and urgent need.' This entire segment of the Caputo statement fails substantially to carry out the purpose of Rules 1131.2(c)(8) and (9) because it does not sufficiently identify what DOD regards as particular inadequacies in current service, so as to permit the protestants to make a focused response and the ICC to make a focused assessment of DOD's asserted needs.
The statement next refers to particular situations calling for reliable delivery times, and examples of how present service is unreliable. Again, there is a fatal lack of specific information showing that present service is inadequate. The statement explains that it is often necessary to coordinate arrival of inbound shipments with production schedules at factories. As an example, it cites a situation in which only one of the currently certificated carriers has proven able to meet the delivery schedules, even though other car- [397 U.S. 532 , 550] riers were made aware of the need for 'timed' deliveries. The one satisfactory carrier cannot transport the entire load. However, the statement does not identify the carriers whose service has been unsatisfactory; it does not say what efforts were made to have them improve their service; and it does not say why they have not conformed to DOD requirements. The same is true of the example of present carriers' failure to make deliveries on time for transshipment outside the United States. It is also claimed that current carriers sometimes lack authority to formulate truckload shipments of diverse commodities, but no examples whatever are cited.
In sum, the DOD statement fails to supply that concrete evidence of the inability of particular existing carriers to provide the needed service that would enable protestants and ICC to make an informed assessment of AFL's application. Of course, DOD was not called upon to supply the specifics of innumerable instances of inadequate or unavailable service or of every effort to obtain improved service. However, the congressional concern expressed in the statutory limitation demanded that ICC be given at least enough specifics concerning inadequate or unavailable service and efforts to obtain better service so that protestants would have an opportunity for informed rebuttal and ICC the basis for an informed determination. It is of course irrelevant that DOD is the Nation's largest shipper and that its freight consists almost entirely of defense needs. ICC has held that '(w)here necessary facts are lacking' the Govern- [397 U.S. 532 , 551] ment is in no better position than any other shipper. Riss & Co., Inc., Extension-Explosives, 64 M.C.C. 299, 328 (1955), National Freight, Inc., Extension-Commodities in Bulk, 84 M.C.C. 403, 407 (1961).
The Court purports to find in Estes Express Lines v. United States, 292 F.Supp. 842 (D.C.E.D.Va.1968), aff'd per curiam, 394 U.S. 718 (1969), some support for its glossing over the inadequacies in the DOD statement. In that case an ICC grant of temporary authority was sustained without a showing that efforts had been made to establish whether any other carrier was able to meet the asserted need for the applicant's services. But the differences between that case and the present one are instructive. There the application was supported by statements of 11 separate shippers, each of whom reported that he had previously obtained the service from the applicant, and thus had never sought it elsewhere and, further, knew of no other carrier with the special characteristics of the applicant. The application covered a single route between the District of Columbia and Richmond, Virginia, and thus it could reasonably have been found that protestants were not prejudiced by any lack of information in the supporting statements. In striking contrast, the authority sought by AFL covers transportation between all points in a nine-state area and all points in a five-state area. In my view, where an applicant seeks temporary authority as broad as this, reasonable compliance with Rules 1131.2(c)(8) and (9) requires more information than DOD provided. Accordingly, I would affirm.
[ Footnote 3 ] See 49 CFR 1131.2(c).
[ Footnote 4 ] AFL is a federation of agricultural marketing cooperatives created in 1964 to provide transportation for its members. By virtue of 203(b)(5) of the Interstate Commerce Act, 54 Stat. 921, as amended, 49 U.S.C. 303( b)(5), AFL may transport freight for its members without obtaining a certificate of convenience and necessity from the ICC. In 1965 203(b)(5) was construed to exempt from the certification requirement any freight transportation by an agricultural cooperative for shippers other than its own members to the extent that such nonmember transportation is incidental and necessary to its principal transportation activities. See Northwest Agricultural Cooperative Assn. v. ICC, 9 Cir., 350 F.2d 252. The next year, AFL began transporting freight for DOD. In 1968-1969 AFL's ability to continue serving DOD was restricted by two events. First, certain competing carriers obtaned injunctions prohibiting AFL from making two consecutive movements for DOD and from transporting freight for any nonmember except when going to pick up or returning from delivery of, a member's freight. Munitions Carriers Conference, Inc. v. American Farm Lines, 10 Cir., 415 F.2d 747. Second, 203(b)(5) was amended to restrict the exemption for agricultural cooperatives to those whose transportation for nonmembers does not exceed 15% of their total annual interstate transportation, measured by tonnage. See 82 Stat. 448, 49 U.S.C. 303(b)( 5) (1964 ed., Supp. IV). AFL had transported 74,155,685 pounds for DOD between December 1966 and June 1968, and, in an effort to continue providing this service, applied to the ICC in May 1968 for temporary operating authority. The authority sought was to transport general commodities, including Class A and B explosives moving on government bills of lading over irregular routes between points in Kentucky, Indiana, Illinois, Missouri, Arkansas, Louisiana, Texas, Oklahoma, and Kansas on the one hand, and points in Washington, California, Nevada, Utah, and Arizona on the other.
AFL has applied to the ICC for a certificate of permanent authority. It was estimated at oral argument that final action on this application will not be taken by ICC before mid-1971. Meanwhile the ICC may extend the temporary authority. Pan-Atlantic Steamship Corp. v. Atlantic Coast Line R. Co., 353 U.S. 436 .
[ Footnote 5 ] The precise chronology of these events is shown in n. 9, infra.
[ Footnote 6 ] ICC is not appealing from the District Court's decision setting aside the first order.
[ Footnote 7 ] It was once proposed that the same requirement be written into the law respecting those orders of the Commission reviewed by the courts of appeal as distinguished from the three-judge district courts. See H.R.Rep. No.1619, 80th Cong., 2d Sess., 4. But the ICC was deleted from the measure. Id., at 1. And the Act as approved covered only other designated agencies. 28 U.S.C. 2342 (1964 ed., Supp. IV).
[ Footnote 8 ] See Baldwin v. Scott County Milling Co., 307 U.S. 478, 484 , 59 S. Ct. 943.
[ Footnote 9 ] The District Court's stay was issued October 2, 1968. On October 9, the Commission stayed the effective date of its first order 'until further order of the Commission.' On November 5, 1968, the Commission reopened the proceeding before it and directed AFL, in light of the District Court's order, 'not to perform' any operations under its first order 'until further order of the Commission.' On November 12, 1968, the Commission advised the District Court of its action. On December 20, 1968, the Commission entered its second other which authorized commencement of service by AFL only on further notice by the ICC. On December 31, 1968, a supplemental complaint was filed in the District Court challenging the Commission's second order. On January 6, 1969, a single judge of the District Court stayed that order. On March 26, 1969, the District Court entered its judgment now being reviewed.
[ Footnote 1 ] In some 'emergency' situations temporary authority may be granted without the notice to protestants otherwise required by ICC rules. See 49 CFR 1131.2(d). That provision is not at issue in this case.
[ Footnote 2 ] The ICC makes no claim that it did not apply its regulations in this case; the insistence is that DOD's supporting statement satisfied the rules. There is, therefore, no occasion to consider the question mooted in the briefs whether, in light of the principle applied in Service v. Dulles, 354 U.S. 363 (1957), the ICC could depart from its own rules. See also Vitarelli v. Seaton, 359 U.S. 535 (1959); Accardi v. Shaughnessy, 347 U.S. 260 (1954); Yellin v. United States, 374 U.S. 109 (1963); Bridges v. Wixon, 326 U.S. 135, 153 , 1452 (1945).

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