Inc., that the present and future public convenience and necessity require operation by applicant, in interstate or foreign commerce, as a common carrier by motor vehicle of acids and chemicals (not including liquefied petroleum gases), in bulk, from Lake Charles, La., and points within 5 miles thereof, to points in Alabama, Arkansas, Florida, Georgia, Mississippi, Oklahoma, Tennessee (except Kingsport), and Texas, over irregular routes, restricted, however, (A) against the transportation of (1) paints, paint materials, and resins to Garland, Tex., (2) new catalyst, in covered-hopper vehicles, to points in Arkansas, Oklahoma, and Texas, (3) spent catalyst, in covered-hopper vehicles, to points in Arkansas and Oklahoma, (4) soda ash, in hopper-type vehicles, to the plant site of Jefferson Chemical Company, Inc., at Port Neches, Tex., (5) barite ore, in tank or hopper-type vehicles, to points in Texas, and (6) nitric acid, to points in Texas within 350 miles of Lake Charles, La., and (B) subject to the further restriction, that applicant shall not tack or join the authority herein granted with any of its other authority for the purpose of performing a through service other than that authorized herein; that applicant is fit, willing, and able properly to perform such service and to conform to the requirements of the Interstate Commerce Act and the Commission's rules and regulations thereunder; that an appropriate certificate should be issued; and that in all other respects each of the applications should be denied. 95 M.C.C.

EX PARTE NO. MC-19

PRACTICES OF MOTOR COMMON CARRIERS OF
HOUSEHOLD GOODS

Decided May 6, 1964

Upon further consideration, and upon notice of proposed rulemaking, definition of household goods contained in rule 1(a) of original report, 17 M.C.C. 467 (49 C.F.R. 176.1 (a)), clarified. prior reports, 53 M.C.C. 177 and 86 M.C.C. 293.

Appearances as shown in prior report, 86 M.C.C. 293.

Additional

REPORT OF THE COMMISSION ON FURTHER CONSIDERATION

BY THE COMMISSION:

Our notice of proposed rulemaking, dated July 15, 1957, which is reproduced in appendix A hereto, indicated that consideration would be given, to the extent described therein, to the necessity and desirability of clarifying the definition of household goods in rule 1 (49 C.F.R. 176.1), as prescribed in this proceeding in 17 M.C.C. 467. Thereafter, an examiner's proposed report was issued following the filing by interested parties of the representations invited by such notice.

Upon the filing of exceptions to the proposed report, we issued our report herein, 86 M.C.C. 293, wherein, although no material changes were made in the existing definition of household goods in rule 1 (a), a new paragraph (b) was added to rule 1 interpreting the three categories of household goods defined in paragraph (a) thereof; and an order was entered setting forth the changes made in rule 1, as more fully appears in appendix B

hereto.

Our report and order resulted in the institution of an action in the United States District Court for the Southern District of California seeking to enjoin and set aside the order in 86 M.C.C. 293; and the court in that proceeding, Movers Conference of America v. United States, 205 F. Supp. 82, hereinafter called the Movers case, enjoined this Commission from enforcing such order for the reasons hereinafter discussed. Following the court's

action, we entered an order vacating and setting aside our order of June 19, 1961, which adopted the rule set forth in appendix B, and reopened this phase of the proceeding for further considera

tion.

As previously stated, the order in 86 M.C.C. 293 made no material changes in the existing definition of household goods in rule 1(a) other than to number certain paragraphs therein for easier reference so as to read as follows:

§176.1 Definitions. As used in this part:

(a) Household goods. The term "household goods" means (1) personal effects and property used or to be used in a dwelling when a part of the equipment or supply of such dwelling; (2) furniture, fixtures, equipment, and the property of stores, offices, museums, institutions, hospitals, or other establishments, when a part of the stock, equipment, or supply of such stores, offices, museums, institutions, hospitals, or other establishments; and (3) articles, including objects of art, displays, and exhibits, which because of their unusual nature or value require the specialized handling and equipment usually employed in moving household goods.

In the Movers case, the court was concerned with the following interpretations in subparagraphs (1) and (2) of newly added paragraph (b) to rule 1 of the definition of household goods contained in the corresponding subparagraphs in paragraph (a) thereof:

(b) Interpretation of the definition in (a) of this rule: Subsection (1) shall be construed to include only property transported as an incident of a move by a householder from one dwelling to another, and shall not be construed to include property moving from a factory or store, except such property as the householder has purchased with intent to use in his dwelling and which is transported at the request of the householder and as an incident of a move by the householder from one dwelling to another. Subsection (2) shall be construed to include the commodities mentioned therein only when transported as an incident to the removal of the establishment, or a portion thereof, from one location to another, and shall not be construed to include such commodities when transported as an incident to the purchase, sale, lease, or rental of the commodities by the shipper or consignee. ***

Such interpretations were based on the principle that the involved movement should be incidental to a change of abode or a change of business location to be encompassed by the definition. The court pointed out that the interpretation in subparagraph (1) of paragraph (b) of rule 1, intentionally or not, excluded from the term "household goods" the movements of household furnishings from location in the dwelling of one householder to a final resting place in the dwelling of another householder, as the incident of a 95 M.C.C.

gift or sale, and from location in the dwelling of a householder to a repair shop or storage warehouse, and return at a later date to the same dwelling; and that the movement of used office furnishings, such as file cabinets and desks, from location within one branch office of a business establishment to location within another branch office was excluded from the term "household goods" by the interpretation in subparagraph (2) of paragraph (b). The court found that such movements of property, not involving any change in the domicile of a householder or in the location of a business establishment, have heretofore been performed by the household goods carriers as part of their regular operations, and concluded that the interpretations in subparagraphs (1) and (2) of paragraph (b) would preclude their participating in such movements in the future. The court further found that the definition was narrowed unduly, and that such interpretation had not been commonly accepted by the industry or by this Commission; and concluded that the proposed rule would have the effect of reducing the scope of the household goods carriers' operating authorities by a procedure other than that prescribed in section 212(a) of the act, and that the order accompanying the report in 86 M.C.C. 293 was erroneous in that it would thereby deprive such carriers of property rights without due process of law.

We are faced with the necessity, therefore, of redefining and clarifying the existing definition of "household goods" in accordance with the decision in the Movers case and our prior decisions. It should be noted at the outset that, since the inception of regulation, the proper nature of the household goods carriers' service under subparagraphs (1) and (2) of paragraph (a) of rule 1 has historically been considered, with certain limited exceptions, to be the transportation of the articles described thereunder as an incident to a change of dwelling of a householder or to a change of location of a business establishment. This was clearly stated in an earlier report herein in 53 M.C.C. 177 at page 182:

Clearly, part 1 relates to a change in the domicile of a householder, and part 2 relates to a change in the location of a store, office, museum, institution, hospital, or other establishment.

It was found in that case, wherein a proposed modification or construction of rule 1 (a) was rejected, that the definition of household goods contained in rule 1 (a), as prescribed herein in 17 M.C.C. 467, was definite and unambiguous, and that such

definition reasonably reflected the proper functions of the motor common carriers of household goods.

In a subsequent criminal proceeding in North American Van Lines, Inc., v. United States, 243 F. (2d) 693, however, the court found that an ambiguity, which that court did not identify, in the definition of "household goods" in subparagraph (2) of paragraph (a) of rule 1 created a reasonable doubt which had to be resolved in favor of the defendant therein, despite the fact that defendant was there engaged in the transportation of the stock-in-trade of a shipper, not incidental to a change in business location.1 It became readily apparent that if the court could find that an ambiguity existed under the longstanding definition of household goods with respect to defendant's transportation of articles historically excluded in the circumstances from the household goods authority, then a more specific definition of the proper extent of such authority should be prescribed, and, accordingly, the notice of proposed rulemaking set forth in appendix A was issued.

The court in the Movers case found no impropriety in the changes made in rule 1 by our order in 86 M.C.C. 293, except to the extent that the movements cited in that decision, which we regard as examples of types of service properly performed under the household goods definition, were excluded from the definition of "household goods" by the interpretations in subparagraphs (1) and (2) of paragraph (b) of rule 1. In view of the fact that the changes made in rule 1 otherwise correctly describe the proper nature of the operations historically associated with the household goods carriers since the inception of regulation, and were considered in detail in our prior report, they will be adopted here without further discussion.

We are of the opinion that the following clarification in the existing language in subparagraphs (1) and (2) of paragraph (b) of rule 1 will meet the objections of the court in the Movers case: (b) Interpretation of the definition in (a) of this rule: Subsection (1) shall be construed to include property transported as an incident of a move by a householder from one dwelling to another, and property transported (i) from location in the dwelling of one householder to a location in the dwelling of another householder in It may be noted that the court deciding the Movers case was not troubled by any such supposed ambiguity. In speaking of the movement of "stock-intrade" it stated that in this situation *** it has always been understood by

all parties that a change of dwelling or business location must be involved in order for the stock to be transferred by a household goods carrier." 205 F. Supp. at page 86.