No. MC-84112 (SUB-NO. 2)

S & S BUS SERVICE, INC.-SPECIAL SERVICE

Decided December 31, 1963

Applicant found not shown to be fit to receive a certificate of public convenience and necessity authorizing the proposed operation. Application denied.

Edward L. Merrigan, Warner M. Bouck, and John C. Rice for applicant.

J. G. Dail, Jr., Joel J. Greenberg, S. Harrison Kahn, Martin J. Kelly, Jr., James H. Glavin III, Patrick J. Kenry, and Henry J. Robinson for protestants.

Seymour Glanzer for Bureau of Inquiry and Compliance, Interstate Commerce Commission, intervener in opposition to the application.

REPORT OF THE COMMISSION

DIVISION 1, COMMISSIONERS HUTCHINSON, HERRING, AND TIERNEY

HERRING, Commissioner:

Exceptions to the order recommended by the examiner were filed by applicant and by certain protestants, and the various parties replied to the exceptions of the others. Our conclusions differ in part from those recommended.

By application filed January 2, 1962, S & S Bus Service, Inc., of Rensselaer, N. Y., seeks a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of passengers and their baggage, in round trip charter and special operations, beginning and ending at Rensselaer, N. Y., and points within 30 miles of Rensselaer (excluding the city and county of Schenectady, N. Y.), and extending to points in California,

Connecticut, Delaware, Florida, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, Wyoming, and the District of Columbia. The application is opposed by Vermont Transit Co., Inc., The Greyhound Corporation, and Mountain View Coach Lines, Inc., hereinafter called Vermont Transit, Greyhound, and Mountain View, respectively, and by Adirondack Transit Lines, Inc., Bohl Tours, Inc., Interstate Buses Corporation, and High Adventure Tours, Inc. The Bureau of Inquiry and Compliance, of the Interstate Commerce Commission, hereinafter called the Bureau, intervened in opposition to the application.

The examiner found that though applicant had established a public need for its service, certain unlawful practices rendered it unfit to perform the proposed service, and therefore, recommended that the application be denied. On exceptions applicant contends that the examiner erred in recommending denial of the application because of its lack of fitness to perform the service; that there are no unlawful operations being performed in connection with Yankee Travelers Travel Club, Inc.; that its alleged practice of providing unauthorized individual tour services, or special operations, through the travel club, was found to be lawful in a recent proceeding in a U. S. District Court and the examiner's contrary finding cannot override such decision; that past unlawful operations are no bar to a grant of authority herein; that any unlawful operations involved here arose from the "narrow thread" distinguishing charter operations from special operations; that its certificate formerly authorized "in special or or charter operations," being modified on the Commission's own motion to the present form "in charter operation;" that in a similar situation involving another carrier, such carrier's certificate was amended again by the Commission to read "in special or charter operations, citing No. MC172, Arnold E. Wade, Schenectady, N. Y. (not printed), decided January 25, 1963; and that while applicant concededly is estopped from obtaining relief through amendment of its original "grandfather" certificate, the application should be granted to accomplish the same result.

On joint exceptions, Vermont Transit and Greyhound contend that the examiner erred in concluding that there is a public need for the proposed service. They argue that no person appearing in support of the application expressed any need for charter service beyond that now provided by applicant under its 95 M.C.C.

certificate; that no probative evidence relates to any need for special operations; that existing carriers provide a variety of services more inclusive than that proposed; that existing carriers would lose traffic upon a grant of the considered authority; and that the examiner's conclusion that there is a public need for the proposed service should be reversed. Mountain View and the Bureau, separately, and Vermont Transit and Greyhound, jointly, reply that applicant's exceptions are of no merit. Collectively, they contend that applicant is shown to be unfit to receive authority herein by overwhelming and uncontradicted evidence of willful, unauthorized operations; that the examiner recognized all forms of unlawful operations and did not limit his findings to the arrangements between applicant and its alter ego, Yankee Travelers Travel Club, Inc.; that the court in the proceeding referred to by applicant has not ruled definitively upon such relationship; and that the Commission has consistently denied applications where, as here, there are frequent, flagrant, and continuing unlawful operations. Applicant in its reply to protestants' exceptions contends that the proof of public convenience and necessity for the service proposed is particularly compelling; that no existing carrier meets the needs expressed by the supporting witnesses; and that the application should be granted.

The evidence, the examiner's recommendations, the exceptions, and the replies there to have been considered. We find the examiner's statement of facts to be correct in all material respects, and as supplemented herein, we adopt it as our own. Since 1948 Edward Scheibly, Sr., and his son, Edward Scheibly, Jr., have transported passengers in interstate or foreign commerce under one or more arrangements. 1 .1 Between 1948 and 1958 while operating under the trade name of S & S Bus, they made an unspecified number of charter trips and tours from the involved origin area to certain points in other States without any authority from this Commission. During a trip to Virginia in 1952, an unidentified person informed the Scheiblys that authority from this Commission was necessary for such trips. It is claimed that until then, the Scheiblys were unaware of this

1The activities of the individuals and applicant are interrelated as will be shown herein after. It is well settled that any corporate status will not preclude this Commission from considering all pertinent operations by piercing the corporate veil. See Friocal Transport & Leasing Corp. Contr. Car. Applic., 86 M.C.C. 369.

Commission.2

On November 30, 1953, Edward Scheibly, Sr. purchased a controlling interest in Calisant Bus Lines, Inc., which was authorized to transport, as a common carrier, passengers and their baggage, in charter operations, from Albany, N. Y., and points within 30 miles of Albany, to points in Vermont, New Hampshire, Maine, Massachusetts, Connecticut, Rhode Island, New Jersey, New York, Pennsylvania, Delaware, Maryland, the District of Columbia, Ohio, and Michigan, and return. At the time of the purchase, the Scheiblys assertedly believed that the certificate authorized special as well as charter operations. However, Scheibly, Sr., in a letter, dated December 6, 1954, to a Commission representative, admitted that he had conducted without authority, a brokerage operation under the trade name of Yankee Travelers Travel Club in order to obtain passenger business for Calisant. He further stated that he would refrain from such activities until appropriate authority therefor was obtained. On July 14, 1955, the Calisant certificate was transferred to applicant, a corporation wholly owned by Scheibly, Sr. On September 12, 1956, applicant was convicted on 14 counts of transporting passengers, in special operations, under individual fare arrangements, without appropriate authority between May 28 and October 12, 1955, and of one count of furnishing brokerage services without authority on March 3, 1956. See No. 31946, United States District Court for the Northern District of New York, United States v. S & S Bus Service, Inc. In a proceeding before this Commission, No. MC-C-1807, Bohl Tours, Inc., et. al.

Edward Scheibly, Sr., Edward Scheibly, Jr., and Elizabeth Scheibly, the named defendants were found to be engaging in transporting passengers on an individual ticket basis without appropriate authority in conjunction with the applicant corporation. An order of August 1, 1957, was entered compelling defendants to cease such transportation. Elizabeth Scheibly is the wife of the elder Scheibly.

Except for a pending proceeding mentioned below, no further formal action has been taken against the Scheiblys or applicant. Admittedly, however, the transportation of passengers, in interstate or foreign commerce, under individual ticket arrangements has continued. The full extent of this transportation is not known, but more than 5,000 trips have been performed by the

2 The evidence, however, shows that Scheibly, Sr. drove a bus for The Greyhound Corporation in 1943 for a short period.

Scheiblys, including authorized charter operations. In the latter part of the 1950's, presumably after the entry of the cease and desist order of August 1957, the individuals involved became aware that the Calisant certificate was issued originally to William G. Schultz in a 1935 "grandfather" proceeding. The certificate issued pursuant thereto on February 26, 1938, authorized the transportation of passengers and their baggage, in special or charter service. On March 23, 1942, a supplemental order of the Commission amended the certificate to its present form which authorizes the transportation of passengers and their baggage, in charter operations. Upon becoming aware of this, applicant conducted tour or special operations under a claimed color of right, especially after reputedly being advised to do so by an attorney in Washington D. C. in January 1961 during a trip for the presidential inauguration. No proceeding for correction or modification of the original "grandfather" certificate has been filed by applicant with this Commission. On December 28, 1961, the Commission filed a suit for injunctive relief against applicant, Yankee Travelers Travel Club, Inc., Edward Scheibly, Sr., and Edward Scheibly, Jr. Therein a limited temporary restraining order was issued on December 28, 1961; and on September 5, 1962, a preliminary injunction was issued against all defendants, except Yankee Travelers Travel Club, Inc., restraining them from performing special operations pending the final determination of the injunction proceeding. See Civil No. 8862, United States District Court, Northern District of New York, Interstate Commerce Commission v. S & S Bus Service Inc., Yankee Travelers Travel Club, Inc., Edward P. Scheibly, Sr., and Edward P. Scheibly, Jr3 Since the issuance of the preliminary injunction, it appears on this record that the unauthorized operations have not continued.

Certain of the practices of applicant and the Scheiblys should be mentioned in detail. Beginning in the early 1950's Scheibly, Sr., operated under the name of Yankee Travelers Travel Club. The Club has a "loose" organization, but it appears to have been nothing more than a trade named used to attract passengers. On April 20, 1959, the so-called club was incorporated as Yankee Travelers Travel Club, Inc., obstensibly to further the interest in travel of its members. Scheibly, Sr., was an incorporator, became its president, and conducted most of its affairs.

3In the memorandum decision granting the preliminary injunction, it is noted that applicant's president drove a bus for Greyhound for several years. See footnote 2, supra.