employees safety of operations or standards of equipment. The latest compilation of the Revised Safety Regulations of the Commission, published as of January 1, 1965, by the American Trucking Associations, Inc., contains over 160 pages in small print with an additional 8 pages of index. Many of the regulations contain uncertain terms and with respect to these even a most prudent and conscientious man cannot be certain that his judgment and that of the Commission personnel will agree as to what constitutes satisfactory compliance. An operator may have taken all possible steps to comply but still through mechanical failure or the fault of others, not his own, be guilty of failure to comply with some one or more of the regulations.

We, therefore, recommend that the increased civil penalties as authorized in section 3 of S. 1727 and in S. 1733 be omitted insofar as they would be made to apply to failure or refusal to comply with safety regulations.

DELETE PRIMARY JURISDICTION PROVISO

We recommend that the proviso beginning on line 2, page 5, of S. 1727 be deleted. It reads as follows: “Provided, however, That nothing in this section shall deprive the Commission of its primary jurisdiction to determine the validity of an operation in dispute under the primary business test."

Section 3 in addition to authorizing imposition of civil penalties (forfeitures) for failure or refusal to comply with safety regulations, also authorizes such penalties for failure or refusal to comply with certain operating authority provisions of the Interstate Commerce Act. The Interstate Commerce Commission would be the moving party in these actions and as the agency charged with the administration of all the provisions of the Interstate Commerce Act, it should and presumably would, determine that in its opinion there has been a failure or refusal to comply with a specified provision before it proceeded in a civil forfeiture action against any carrier: common, contract, private, or "exempt." Therefore, unless the proviso is intended to have some meaning not clear from the words used, we believe it should be deleted. If it is intended to result in some different treatment of private carriers from other types of motor carriers as to application of the "civil penalties" provisions, then it is discriminatory as to the other types of motor carriers and should be deleted for that reason.

I would like to add a few words concerning the expanded concept of civil forfeiture actions as proposed in these bills. The council has definite reservations concerning the wisdom of expansion of this concept. However, in spite of its reservations, it has authorized support of the imposition of civil penalties (forfeitures) for violation of operating authority provisions of the Interstate Commerce Act. There are definite hazards in this proposal which could work a grave injustice and costly burden to motor carriers of all types who honestly strive to comply with the law unless the authority herein proposed to be vested in the Interstate Commerce Commission is discharged very sparingly and responsibly. The whole area of motor carrier operations for which the term "gray area" has been coined is admittedly recognized by the term itself as an area in which honest and informed men may differ as to whether a particular operation is legal or illegal. In many cases the answer has to be found in the Federal courts and sometimes in the Supreme Court of the United States. It is immaterial whether lack of definiteness in the law itself or lack of certainty in the regulations issued under the law account for the alleged difficulty under existing procedure for prompt determination of whether a particular motor carrier operation is legal or illegal. We do not believe that civil forfeiture action requiring no proof of willfulness or knowledge is a proper proceeding to resolve justly on its merits the doubt, the honest doubt, resulting from the law or regulations thereunder as to whether a particular motor carriage operation does or does not require operating authority. In such cases we believe the appropriate procedure is an action brought under the criminal penalty provisions of the act where any alleged violation must be shown to be knowingly and willfully committed, or by an injunction proceeding sought by the Commission.

PRIVATE SUITS

The council has in the past indicated support, with reservations, for private suit proposals. However, the present proposals as contained in section 4 of S. 1727 and in section 5 of H.R. 5401 cannot in their present form be supported by the council.

I understand it has been announced that the immunity granted common and contract carriers from private suits being brought against them (S. 1727, p. 6, lines 15-18) is not intended to be in the bill. With this understanding I shall not comment at length on that exclusion. However, we desire to point out that exclusion of any class of carriers who operate in clear and patent violation of the specified provisions of the Interstate Commerce Act would be discriminatory and unfair as to those classes of carriers not likewise excluded. If the private suits are in the judgment of Congress to be authorized at all, they should be permitted without favor or prejudice against any person who operates in clear and patent violation of the law.

The remaining serious defect in section 4 of S. 1727 is found in the last sentence reading as follows:

"Nothing in this paragraph shall be construed to deprive the Commission of its jurisdiction to interpret or construe certificates of public convenience and necessity or permits, or rules or regulations issued by the Commission, or deprive the Commission of its primary jurisdiction to determine the validity of an operation in dispute under the primary business test."

The inclusion of this language indicates an intention to prefer common, contract and private carriers over other types of motor carriers, namely, the "exempt" carriers. I refer specifically, as of primary interest to the members of the council, to cooperative associations as referred to in section 203(b) (5) and to motor vehicles used in transporting agricultural commodities and other commodities designated as exempt in section 203(b) (6) of the Interstate Commerce Act.

We believe this proviso as now worded would be interpreted to mean that Congress intended some prior determination to be required by the Interstate Commerce Commission in the exercise of this jurisdiction as to alleged violations by common, contract and private carriers before the private suits could be heard in the district courts, but that no such prior determination by the ICC in the exercise of its jurisdiction would be required as to "exempt" carriers. We are confident that your subcommittee and the Congress will recognize the basic unfairness of any such discriminatory procedure.

We made similar representations to the House Committee on Interstate and Foreign Commerce with respect to similar provisions in H.R. 5401 and the committee, before the bill was reported to the House, eliminated the primary jurisdiction proviso as to private carriers but retained it as to carriers holding certificates and permits.

The House of Representatives on May 6, 1965, in approving H.R. 5401 added this amendment:

"Subparagraph 3. In any action brought under subsection (b) (2) of this section, the Commission may notify the district court of the United States in which such action is pending that it intends to consider the matter in a proceeding before the Commission. Upon the filing of such a notice the court shall stay further action pending disposition of the proceeding before the Commission."

But the House did not remove the provision that "nothing in this paragraph shall be construed to deprive the Commission of its jurisdiction to interpret or construe certificates of public convenience and necessity, permits, or rules and regulations issued by the Commission."

What does this reservation as to the holders of certificates of public convenience and necessity or permits mean? It must be intended to provide some favored treatment for motor carriers holding certificates or permits before the private suits for alleged injury from the violation of such certificates or permits could proceed in the district court. We respectfully urge that no favored or special treatment be given common or contract motor carriers or any other types of carrier, including private and exempt, as to actions by private persons for alleged clear and patent violations of the operating provisions of the act.

Unless this proviso giving the common and contract carriers a special insulation against private suits which is not accorded to other types of carriers is removed, the council cannot support the private suits sections of S. 1727 and H.R. 5401. Our position simply is that if Congress in its judgment believes that it is sound procedure and in the public interest to authorize private suits by persons alleging that they have been injured by violation of the operating authority provisions of the Interstate Commerce Act, then private suits for such alleged violations should lie equally against all types of carriers whether they hold operating authority from the Interstate Commerce Commission and have exceeded it, or whether they are carriers who hold no operating authority.

MOTOR CARRIER AND FREIGHT FORWARDER REPARATIONS

The council supports sections 5 and 6 of S. 1727 and sections 6 and 7 of H.R. 5401 providing for motor carrier and freight forwarder reparations. The council 5 years ago adopted a policy, reaffirmed in 1965, authorizing support of legislation to incorporate in parts II and IV of the Interstate Commerce Act provisions for award of reparations to shippers equally as fair as those now contained in parts I and III of the act. We believe that the specified provisions of the bills before your committee meet the objectives of council policy and the council supports them.

In summary, the council opposes any proposal to extend civil forfeiture provisions to failure or refusal to comply with the safety regulations of the Commission and opposes any provisos or other provisions as to civil forfeitures or private suits which would favor any class of motor carriers over others.

The council supports provisions for motor carrier and freight forwarder reparations.

APPENDIX VI

STATEMENT OF J. WILLIAM HARRELL, PRESIDENT, AMERICAN INSTITUTE FOR SHIPPERS' ASSOCIATIONS, INC.

My name is J. William Harrell. I appear in behalf of the American Institute for Shippers' Associations, Inc., of which I am president. AISA is a national trade organization doing business in the District of Columbia. AISA has been in existence since 1961 and today its membership includes 72 shippers' associations, manufacturers and retailers. Through the member associations AISA speaks for in excess of 1,500 industrial and retail concerns located throughout the United States.

As a trade association, we promote high and ethical standards among shippers' associations and are dedicated to the preservation of cooperative shipping. One of our purposes is to testify before the Congress of the United States on all matters which affect the interests of our membership. AISA strenuously objects to section 5(b) of H.R. 5401 which would permit any person to file a direct injunctive suit in a Federal district court against a shippers' association which derives its status from section 402 (c) of the Interstate Commerce Act.

Neither AISA nor any shipper association interest had the opportunity to voice our objections on this legislation before the House Interstate and Foreign Commerce Committee. The reason for this is that H.R. 5401 as originally introduced did not affect shippers' associations. H.R. 5401 was originally designed to curb illegal trucking. Logically shippers' associations were not included in the original bill since these associations do absolutely no trucking, but rely upon the services of regulated carriers, both motor and rail, to handle their transportation needs.

It is my understanding that on the last day of House committee hearings an individual representing freight forwarder interests requested that the injunctive provisions applicable to part II of the Interstate Commerce Act be likewise made applicable to part IV of the act. Following the hearings H.R. 5401 was completely rewritten and for the first time shippers' associations became affected since direct injuctive suits could be filed against them for a alleged violation of section 410 of the Interstate Commerce Act. The rewritten bill with the detrimental provision came out of committee 12 weeks prior to the actual vote by the House. Thus, shippers' associations had no opportunity to voice their objections. The position advanced today is being made for the first time.

The injunctive process of H.R. 5401 originally pertained to private carriage and should have gone no further. Shippers' associations and private carriers do not have common problems. In any court suit envisioned by the proposed legislation the issues would radically differ. Because of the many complex transportation issues involved in shipper association cases, we must necessarily leave these cases in the hands of the Interstate Commerce Commission.

The American Institute of Shippers' Association (AISA) is basically opposed to this legislation because it places an awesome tool of harassment in the hands of motor carriers and freight forwarders. The experience in the industry over the past number of years has borne out that cooperative shipping has been the object of a very strong campaign of harassment. We feel that the proposed legislation provides absolutely no protection to legitimate shippers' associations and places our fate in the hands of a court who has not had the opportunity to gain expert knowledge in the highly technical field of shippers' associations and on the issues which distinguish the nonprofit shippers' association from the regulated profit-motivated freight forwarder.

Ronald N. Cobert, AISA general counsel, has testified today and I hereby adopt his statement. AISA on behalf of its numerous members requests that section 5(b) of H.R. 5401 amending section 417 of the Interstate Commerce Act be removed in its entirely.

APPENDIX VII

TESTIMONY OF A. C. INGERSOLL, JR., CHAIRMAN, EXECUTIVE COMMITTEE, COMMON CARRIER CONFERENCE OF DOMESTIC WATER CARRIERS

I am A. C. Ingersoll, Jr., president of Federal Barge Lines, St. Louis, Mo., and chairman of the executive committee of the Common Carrier Conference of Domestic Water Carriers. I am appearing today on behalf of the latter organization, a national trade association of certificated common carrier water carriers, operating ships and barges in coastwise and intercoastal service, to Alaska, Hawaii, and Puerto Rico, on the Great Lakes, and on the inland waterways. We provide common carrier water service to 39 of the 50 States.

The conference supports in principle S. 1143, a bill now before this subcommitte, to amend part III of the Interstate Commerce Act to authorize the Interstate Commerce Commission to revoke, amend, or suspend water carrier certificates or permits under certain conditions. We propose a qualifying amendment to this bill which I shall describe hereafter.

The conference opposes in general section 8 of H.R. 5401, as amended, a bill also now before this subcommittee, to amend the Interstate Commerce Act so as to strengthen and improve the national transportation system, and other purposes. Section 8 of H.R. 5401 is similar in some respects to S. 1143. We oppose it to the extent that it goes beyond S. 1143 as we would urge the latter be amended.

These bills concern highly technical matters of interstate commerce law involving the certification of carriers to engage in regulated water transportation. Accordingly, we have brought as an expert witness on the subject Mr. Nuel Belnap of Chicago.

With the chairman's permission I will ask Mr. Belnap to describe what the law is today on certification of water carriers and related matters, how the law works in practice, and how these bills would change the law.

At the conclusion of Mr. Belnap's testimony on the law, I shall explain the position of the Common Carrier Conference on these bills and offer our recommendation.

Mr. Nuel D. Belnap is the senior partner in Belnap, Spencer, Hardy & Freeman, a Chicago firm specializing in the practice of transportation law. As a member of that firm and its predecessors, he has devoted his professional life, spanning nearly half a century, to practice before the Interstate Commerce Commission, and throughout that practice he has been closely associated with the water carrier industry. His experience in water carrier certificate matters predates the passage of part III of the Interstate Commerce Act as he was actively involved with cases arising under the Dennison Act of 1929 which provided for certification of water carriers even before the general controls enacted in 1940.

Following the enactment of part III he actively participated in a number of the "grandfather" cases in which existing carriers sought to continue their operations. He has, since then, prosecuted or defended very many extension or new carrier cases under the public convenience and necessity provisions of the act.

Mr. Belnap has been counsel for Federal Barge Lines since it came under private ownership in 1953. Before that, for more than 30 years he was counsel for its predecessor, the Inland Waterway Corporation, while it was owned and operated by the Federal Government during the period when it was performing the pioneering and development functions for which it was created by act of Congress. He has participated in almost all of the major ICC proceedings involving the water carrier industry in the Mississippi Valley and Great Lakes area since World War I. At one time or another he has represented individually, or as a member of an industry group, every major water carrier on the Mississippi River system. I consider him to be the dean of his profession, with more accumulated knowledge and experience in the field of water carrier certificate law than any living ICC practitioner.

272