Interstate Commerce Commission, Plaintiff, Appellee, v. Bay State Transportation Brokers et al., Defendants, Appellants, 579 F.2d 113 (1st Cir. 1978)

The Interstate Commerce Commission filed a complaint in district court on November 23, 1977, seeking to enjoin the defendants from disobeying a subpoena duces tecum served on defendant John E. Jeserski, treasurer and manager of defendant Bay State Transportation Brokers. The district court ordered the injunction to issue on December 30, 1977, and denied a motion to stay pending appeal on March 7, 1978. This court thereupon stayed the injunction on March 24, 1978.

The Interstate Commerce Commission has been investigating Bay State at least since 1975 in an effort to determine whether it has been violating the terms of the Interstate Commerce Act governing motor carriers, 49 U.S.C. §§ 301-1022. Bay State claims to be the agent of Market Produce Lines, Inc., an allegedly exempt agricultural cooperative. According to Bay State, it arranges for freight to be shipped on the return trip of trucks belonging to Market Produce Lines which carry agricultural products from the West Coast to the East. The Commission has made numerous demands on Bay State to permit inspection of its records, especially documents concerning its relationship with Market Produce Lines. On October 5 and 6, 1977, counsel for Bay State apparently made available some of the requested documents to Commission investigators. Bay State contends it provided the investigators with all of what it considered transportation records in its possession and withheld only so-called financial records which it claims to be beyond the Commission's jurisdiction. The Commission responds that Bay State delivered only a small sample of some of the transportation records sought by the Commission, and nothing else. After a hearing, the district court found that Bay State had failed to produce lawfully requested records in its possession and control and enjoined any further efforts to disobey the Commission's subpoena.

Bay State makes two arguments on this appeal. It first contends that the district court lacked jurisdiction to enter the injunction. According to Bay State, 49 U.S.C. § 322(b) (1), the statute permitting district courts to issue injunctions to enforce orders of the Commission, applies only to violations by motor carriers or brokers, and does not authorize an injunctive enforcing an order as to an agricultural cooperative or its agents.¹  Two answers can be made to this argument. First, there is nothing in the record other than the assertions of Bay State to establish that the motor vehicles in question here fall within the agricultural cooperative exemption. Second, and more importantly, Bay State's reading of the law is incorrect. It is only reasonable to infer that when Congress amended 49 U.S.C. § 320 in 1968 to give the Commission the authority to inspect records of agricultural cooperatives, it intended that inspection orders directed to truckers claiming to come within the agricultural cooperative exemption be judicially enforceable in the same manner as orders addressed to others. A different construction would go a long way towards rendering the 1968 amendment ineffective. We agree with the Ninth Circuit that further amendment of 49 U.S.C. § 322(b) to include a specific reference to orders of this type was not necessary to accomplish a purpose so manifest. ICC v. Big Valley Growers Co-op, 493 F.2d 888 (9th Cir. 1974). See also ICC v. Beehive State Agricultural Cooperative, Inc., 575 F.2d 802 (10th Cir. 1978).

Bay State also argues that the Commission cannot demand access to its financial data, as the Commission's jurisdiction extends only to enforcement of the cargo limitations contained in 49 U.S.C. § 303(b) (5).²  According to Bay State, the Commission needs to know only how much of what kind of cargo it arranges to be carried and can have no legitimate interest in its profits, rates, or other financial arrangements. Similar arguments were raised in FTC v. Swanson, 560 F.2d 1 (1st Cir. 1977), where airline tour operators challenged a Federal Trade Commission subpoena on the ground that they were subject to the exclusive jurisdiction of the Civil Aeronautics Board. This court rejected that argument, ruling that "(a)n agency's investigations should not be bogged down by premature challenges to its regulatory jurisdiction." Id. at 2 (citing FTC v. Crafts, 355 U.S. 9, 78 S. Ct. 33, 2 L. Ed. 2d 23 (1957); Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 66 S. Ct. 494, 90 L. Ed. 614 (1946); Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 63 S. Ct. 339, 87 L. Ed. 424 (1943)). The subpoena here does not seek evidence that is "plainly incompetent or irrelevant to any lawful purpose" of the ICC, Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509, 63 S. Ct. 339, 343, 87 L. Ed. 424 (1943). All the information sought, including financial data, is material to a proper Commission purpose: the Commission is empowered not just to determine whether Bay State is satisfying the cargo restriction of 49 U.S.C. § 303(b) (5), but to determine whether Bay State is in fact an agent of an exempt agricultural cooperative.

The stay is vacated and the injunction affirmed.