Opinion
Nos. 76-1264 and 76-1270
Decided July 6, 1977.
Public Utilities Commission — Certificate of public convenience and necessity — Granted, when — Quality of service to be considered — Applications erroneously denied, when.
1. Quality of service as provided by the sole existing certificate holder is a proper factor to be considered by the Public Utilities Commission in determining under R.C. 4921.10 whether a certificate of public convenience and necessity should be granted to those motor transportation companies desiring to provide similar services in the same area.
2. Where the evidence overwhelmingly demonstrates substandard service provided by the sole existing certificate holder to the public in a specific area, a public need for additional service is demonstrated.
APPEALS from the Public Utilities Commission.
In August of 1970, Morgan Drive Away, Inc., and National Trailer Convoy, Inc., appellants herein, separately made application to the Public Utilities Commission (the "commission") for certificates of public convenience and necessity, seeking authority for the "* * * transportation of mobile homes and/or house trailers and personal effects within such mobile homes and/or house trailers * * *" in certain Ohio counties already serviced by Motor Service Company, Inc., amicus curiae in this cause.
Following the recommendation of its attorney examiner, and upon general findings of fact that the testimony presented at several hearings established a present need for additional motor transportation service as offered by appellants, the commission, on July 13, 1973, ordered Motor Service to improve certain aspects of its authorized service within 60 days.
The commission accepted the findings of the attorney examiner who conducted hearings between October 14, 1970, and March 5, 1971, wherein approximately 68 witnesses testified as to the quality of service provided by Motor Service.
The commission stated in its opinion:
"The evidence gathered at the hearing strongly indicates that the protestant Motor Service, Inc. was tardy in performing its public service, maintained inadequate equipment, was responsible for extensive damage to mobile homes transported and to the trailer parks and other trailer sites. Further, testimony of witnesses established that the protestant fails to honor and pay claims for damage it causes, that protestant employs incompetent employees and fails to perform ancillary services contracted by it, and has failed to observe basic safety rules designed to safeguard the public welfare."
On appeal, this court reversed in part the order of the commission, since, inter alia, it failed to make specific findings of fact to support its order. Motor Service Co. v. Pub. Util. Comm. (1974), 39 Ohio St.2d 5. Upon remand, the commission, instead of proceeding to make specific its general findings of fact in an amended order pursuant to this court's instructions in Motor Service Co., supra, vacated its prior order and denied the appellants' application for failure to prove public convenience and necessity.
In addressing itself to the court's remand order in Motor Service, the commission finds that it has a most difficult task. It must tell the court that literal compliance with its remand order is impossible. Of course, it will tell the court why that is so.
"As the result of its incisive and comprehensive reconsideration of these cases, the commission is forced to the conclusion that these applicants could not have borne their burden of proving a public convenience and necessity for the authorities which they sought if the trial examiner had correctly and properly applied the concept of burden of proof."
On July 14, 1976, the commission, finding that "the applications for rehearing do raise sufficient question with respect to the treatment given to `burden of proof' in its Order of May 19, 1976," stayed such order, pending its disposition of the matter.
On September 29, 1976, the commission affirmed its prior order denying appellants' applications.
Appeals are now before this court as a matter of right.
Messrs. Sanborn, Brandon Duvall, Mr. James Duvall and Mr. E.H. vanDeusen, for appellant Morgan Drive Away, Inc.
Messrs. Stiveson Alden and Mr. John L. Alden, for appellant National Trailer Convoy, Inc.
Mr. William J. Brown, attorney general, Mr. Charles S. Rawlings and Mr. John W. Rudduck, for appellee.
The issue in the instant cause is whether the order of the commission denying appellants' applications for certificates of public convenience and necessity was unreasonable or unlawful.
The statutory procedure for the granting of additional service certificates is set forth in R.C. 4921.10. That section provides, in pertinent part, that:
"No motor transportation company shall commence its operation as such in this state without obtaining from the public utilities commission a certificate declaring that public convenience and necessity require such operation.
"The commission may, after notice and hearing, when the applicant requests a certificate to serve in a territory already served by a motor transportation company holding a certificate of public convenience and necessity from the commission, grant a certificate only when the existing motor transportation company or companies serving such territory do not provide the service required * * * to the satisfaction of the commission. * * *
"Before granting any certificate the commission shall take into consideration other existing transportation facilities in the territory for which a certificate is sought. If it appears from the evidence that the service furnished by existing transportation facilities is reasonably adequate, the commission shall not grant such certificate." (Emphasis added.)
In determining whether the service furnished by Motor Service was "reasonably adequate" to meet the public need, the commission found that, no matter how convincing the evidence was concerning the poor quality of service rendered by Motor Service, appellants could not have demonstrated a public convenience and necessity for additional service. We disagree.
The commission states in its September 29, 1976, order, as follows:
"The commission in analyzing the evidence submitted in an effort to satisfy the burden of proving a definite need of the general public, finds as follows:
"(a) The most numerous group, individual mobile home owners, almost universally testified to dissatisfaction with one or more aspects of service rendered by Motor Service in making a past movement of their respective coaches. The record however is void of any indication that any of the individual coach owners has a present or concrete future need to seek mobile home transportation. * * *
"(b) The mobile home dealers again alleged dissatisfaction with certain aspects of the transportation and/or ancillary services rendered by Motor Service but, conspicuously absent was any concrete testimony of present or future need for common carrier transportation service over and above that available to them. * * *
"(c) The mobile home park owners and/or operators, like the two prior categories, testified to their observance of, and dissatisfaction with, the service provided by Motor Service. * * * The record reveals testimony concerning property damage done by Motor Service within the park and allegations of inadequate personnel and equipment but again, no corresponding testimony of any present or future need of the park owners or operators, for mobile home transportation service over and above that available to them if they had need to utilize the same. * * *
"(d) The mobile home manufacturers appeared generally satisfied with their present service available and there was no testimony that Motor Service was unable or unwilling to make movements for them. The record reveals isolated instances of dissatisfaction with certain driver's abilities or practices but, other than a general feeling that, as production increases, more carriers would be necessary, no testimony of a present or concrete future volume of units needing transportation over and above that available was given. * * *
"The commission, having analyzed the evidence submitted by the joint applicants in an effort to satisfy their burden of proving public convenience and necessity, finds it appropriate to reiterate that allegations of inadequate service do not, by inference or otherwise, establish a definite need for additional common carriers."
The General Assembly never intended that the commission should ignore the quality of service provided by the existing certificate holder to the public in determining under R.C. 4921.10 whether other motor transportation companies have provided justification for entry into a particular market.
Rather, the General Assembly has assigned the commission a much broader role in serving the public interest with respect to the regulation of motor transportation companies as evidenced by its statement of policy found in R.C. 4921.03. This section provides, in pertinent part, that:
"The policy of this state is to:
"(A) Regulate transportation by common and contract carriers by motor vehicle in such manner as to recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest:
"(B) Promote adequate, economical, and efficient service by such motor carriers, and reasonable charges therefor, without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices * * *" (Emphasis added.)
In applying these provisions to the instant cause, this court finds that the commission is charged not only with insuring that an authorized motor transportation company is meeting the demands of its customers in terms of such considerations as adequately handling the volume of traffic, but also with insuring that such service is of acceptable, reasonable quality.
This interpretation of the scope of the commission's role is buttressed when read in conjunction with R.C. 4921.04, which vests in the commission broad powers in supervising and regulating motor transportation companies with respect to all matters affecting the relationship between such companies and the public.
In its September 29, 1976, order, the commission found that it need not consider such allegations against Motor Service, such as damage caused to mobile homes while in transit, discourtesy of its drivers, and mishandling of damage claims, in determining whether a public need for additional service exists. Such a finding is completely inconsistent with the role the General Assembly has assigned the commission. It cannot be forgotten that motor transportation companies were placed under the jurisdiction of the commission for the specific purpose of serving the public interest. McLain v. Pub. Util. Comm. (1924), 110 Ohio St. 1. It is incorrect to say that while the commission must insure that the public's demand for certain transport service is met, it cannot also insure that the public is obtaining service that is of acceptable quality. Such distinctions are not found in the statute, and the commission was in error to have employed them.
The commission states, in its conclusions of law:
"(9) Allegations of damage to a coach in transit, or at its park origin, or at its park destination, discourtesy on the part of drivers, mishandling of damage claims, illegal movements, and other similar repeated allegations do not constitute parts of `transportation service, for hire' as that phrase is used in Section 4921.01 Revised Code.
"(10) The commission is not empowered to adjudicate the rights of parties in the event of loss or damage and an aggrieved party must seek his remedy at law in a proper forum of competent jurisdiction."
The commission, in support of its order, cites numerous precedents of this court dealing with the need to establish elements of public convenience and necessity, but none are applicable to the present situation, in which the appellants support their applications for additional service with overwhelming evidence that service provided by the solely authorized motor transportation company in the area is unsatisfactory.
Specifically, the commission cites Lykins v. Pub. Util. Comm. (1926), 115 Ohio St. 376; Erie Rd. Co. v. Pub. Util. Comm. (1927), 116 Ohio St. 710; Canton-East Liverpool Coach Co. v. Pub. Util. Comm. (1930), 123 Ohio St. 127; A T Motor Freight v. Pub. Util. Comm. (1932), 125 Ohio St. 617; Penn-Ohio Coach Lines Co. v. Pub. Util. Comm. (1942), 140 Ohio St. 263; and Mason v. Pub. Util. Comm. (1973), 34 Ohio St.2d 21.
The commission places great reliance on Mason v. Pub. Util. Comm. (1973), 34 Ohio St.2d 21, wherein a motor transportation company unsuccessfully challenged an order of the commission denying its application to serve the public in transporting household goods, office furniture, and fixtures over certain irregular routes. In that case, the appellant relied primarily on the testimony of five witnesses, who had dealt with the existing certificate holders in the past, to demonstrate the need for this additional service. In determining whether the commission's order was unreasonable or unlawful, this court noted that there were three instances in which the witnesses were having difficulty in obtaining service — upon requests to be moved on short notice, on Saturdays, or during peak seasonal moving periods. We stated that the applicant failed to demonstrate a public need for additional service, since, at best, he only proved that existing certificate holders might be unable to specifically meet every demand through use of their own equipment. Proof of convenience, without a demonstrative showing of public necessity for such additional service, could not justify the commission in granting the application.
The commission, in exhaustively reviewing the testimony of record in this cause, likewise found that the statements made by the witnesses before the attorney examiner at the initial hearings failed to show the present or future need for additional services other than those already provided by Motor Service, and therefore found Mason, supra, to be controlling.
The commission's reliance on the Mason case is misplaced. In the instant cause, appellants challenge the capability of Motor Service to adequately respond to the public demand for motor transportation service because of the poor quality of service provided. Also, as opposed to the situation in the Mason case, Motor Service was the only authorized certificate holder in the area in question. In initially granting Motor Service a certificate of public convenience and necessity, the commission recognized that a need for adequate service existed in that area. Thus, by successfully demonstrating that the only service provided to the public in this area was patently inadequate, appellants could show that there was a need for additional service.
In reviewing the record, this court finds that the evidence overwhelmingly establishes that the service provided by Motor Service was inadequate to meet the public need under R.C. 4921.10.
See fn. 3, supra.
Because the September 29, 1976, order is unreasonable and unlawful, it is reversed, and the cause is remanded for further proceedings consistent with this opinion.
Order reversed.
O'NEILL, C.J., HERBERT, CELEBREZZE, STERN, P. BROWN and LOCHER, JJ., concur.
STERN, J., retired, assigned to active duty under authority of Section 6(C), Article IV, Constitution, sitting for W. BROWN, J.