Opinion
No. 76-1302
Decided July 6, 1977.
Public Utilities Commission — Motor carriers — Unlawful movements — Suspension of certificate — Unreasonable, when.
APPEAL from the Public Utilities Commission.
On June 13, 1975, the Public Utilities Commission issued a citation entry against Duff Truck Line, Inc. (Duff), charging that the citee had engaged in the transportation of property in the state of Ohio in a mode contrary to the provisions of R.C. 4921.07, 4921.10 and 4921.14 and the commission's rules and regulations in the following particulars:
The citation, issued pursuant to R.C. 4921.10, alleged the following:
"(1) Duff, Inc. did upon the date hereinafter set out enter into contracts for the transportation of, and did in fact transport property for hire, tendered to it for that purpose at points and places of origin for the transportation and delivery, at points and places of destination neither of which points is a base point, from and to, the service of which is authorized pursuant to any irregular route certificates of Duff, Inc. to wit: * * * [Thereupon listing 67 bills of lading and freight bills showing the origin, destination, date, and pro number of each.]
"(2) Duff, Inc. did upon the dates hereinafter set out enter into contracts for the transportation of and did in fact transport property for hire, tendered to it for that purpose at points and places not authorized as points and places of origin under its several certificates for delivery at, and in fact delivered at points and places authorized under its several regular route certificates, to wit: * * * [Thereupon listing three bills showing the origin, destination, date, and pro number of each.]
"(3) Duff, Inc. did upon the dates hereinafter set out enter into contracts for the transportation of and did in fact transport property for hire tendered to it for that purpose to points and places where they improperly interlined freight under irregular route authority with other regular route carriers for a continuous movement to destination to wit. * * * [Thereupon listing 14 bills showing the origin, destination, date, and pro number of each.]
"(4) Duff, Inc. did enter into the contracts for transportation described above in paragraphs 1, 2 and 3, and did in fact transport property from points and places of origin to points and places of delivery as heretofore set out in paragraphs 1, 2 and 3, all contrary to the provisions of Sections 4921.07, 4921.10 and 4921.14 Revised Code and the Rules and Regulations of the Public Utilities Commission of Ohio."
(1) Duff transported property from points and places to points and places, neither the origin nor destination of which constituted the authorized base point from or to which Duff was authorized to transport property under any of its irregular route certificates;
(2) Duff transported property from points and places not situated upon its authorized regular routes to points and places situated upon said authorized regular routes; and
(3) Duff transported property from points and places, under irregular route authority, to points and places where the freight was interlined with other regular route carriers.
Duff filed an answer denying the charges of unlawful movements. A hearing was held on July 7, 1975.
At approximately the same time and apparently as part of the same enforcement scheme, the commission instituted a similar action against Commercial Motor Freight, Inc. (Commercial), in PUCO case No. 75-388-TR-CAU. On October 16, 1975, the commission issued an opinion and order in that case finding Commercial to have engaged in unlawful "tacking" of certificates of authority and ordering Commercial to suspend all of its operations under its irregular route authorities for 30 days. Commercial appealed the commission's order to the Supreme Court. The court issued its decision on May 12, 1976, upholding the finding of a violation, but reversing the imposition of the penalty. Commercial Motor Freight v. Pub. Util. Comm. (1976), 46 Ohio St.2d 195, 348 N.E.2d 132.
In the interim, the Attorney Examiner had issued his report in the instant case on March 18, 1976, relying heavily on the commission's order in Commercial. Exceptions to the Attorney Examiner's report were filed by Duff on April 2, 1976. Supplemental exceptions were filed by Duff on May 24, 1976, following the Supreme Court's decision in Commercial.
The commission issued its opinion in the instant case on September 8, 1976. In its findings of fact, the commission included the following:
(1) There existed no promulgated rule or regulation defining, authorizing, or prohibiting the tacking of certificates, the cross hauling of traffic or the interlining of traffic;
(2) the record and the certificates setting forth Duff's regular and irregular route authority revealed that shipments made as illustrated in the commission's citation entry paragraphs (1) and (2) could not have been made lawfully. Shipments illustrated in paragraph (3) could have been handled on a through service directly by Duff under one of its irregular route certificates, but instead were unlawfully interlined with another Ohio certificated carrier; and
(3) the record, while not supportive of a specific intent on the part of the citee to violate the law of Ohio with regard to proper certificate utilization, was supportive of a finding of gross negligence in permitting or causing unlawful movements between points in Ohio with sufficient frequency to warrant disciplinary action herein.
In concluding that the movements alleged in the citation entry constituted violations of law, the commission ordered, in part, as follows:
"It is, therefore,
"ORDERED, That the commission hereby reaffirms its long established policy as follows: (1) the transportation of property in intrastate commerce, from a point of origin to a point of destination, by the combination of one irregular route certificate in combination with another irregular or regular route certificate, commonly referred to in the motor carrier industry as `tacking;' (2) the use of a single route certificate by splitting the `to' and `from' language of an irregular certificate to perform a transportation of property from an origin which is not an irregular base point to a destination which is not an irregular base point, commonly referred to in the motor carrier industry as `cross haul,' and; (3) the interlining of freight between the holder of an irregular route certificate and either a holder of a regular or irregular route certificate holder, constitutes a violation of Sections 4921.07, 4921.10, and 4921.14, Ohio Revised Code, and Rule 3.30 of the Rules and Regulations of the Public Utilities Commission of Ohio. It is, further,
"ORDERED, That Duff Truck Line, Inc., immediately cease and desist from transporting property unlawfully, beyond the scope of the authority granted in their various certificates. It is, further,
"ORDERED, That all intrastate certificates of Duff Truck Line, Inc., be suspended for a period of three (3) days, for the dates of November 9, 10, and 11, 1976, and that Duff Truck Line, Inc., refrain from picking up or delivering property for transport for hire, in intrastate commerce for those dates; November 9, 10 and 11, 1976."
An application for rehearing was denied by the commission in November of 1976. Pursuant to Duff's motion, the commission issued an entry staying the three-day suspension of Duff's intrastate authority and the requirement that Duff notify its shippers of the suspension pending resolution of Duff's appeal to this court.
The cause is now before this court as a matter of right.
Messrs. Vorys, Sater, Seymour Pease, Mr. Robert W. Minor and Mr. Charles S. DeRousie, for appellant.
Mr. William J. Brown, attorney general, Mr. Charles S. Rawlings and Mr. Samuel C. Randazzo, for appellee.
The issue before this court is whether the commission abused its discretion in ordering that the intrastate certificate of a motor carrier be suspended for a period of three days.
This issue can be resolved by this court's decision in Commercial Motor Freight v. Pub. Util. Comm., supra ( 46 Ohio St.2d 195) . In that case the court affirmed a decision of the commission finding the "tacking" of certificate authorities to be unlawful, but reversed the imposition of a 30-day suspension of Commercial's irregular route certificates. The court held the imposition of a 30-day suspension order was unreasonable.
Analyzing the present order in light of the standards established by Commercial, supra, we find the board's choice of sanctions unreasonable. As with the motor carrier in Commercial, Duff has engaged in tacking. It has also engaged in practices of cross-hauling and interlining. For simplicity, "cross-hauling" can be defined as the utilization of the same certificate twice; "interlining" of traffic between two carriers as the joinder or combination of certificates separately held by two carriers to accomplish a through movement; and "tacking" as the same joinder of certificates as set forth in interlining, but where the two certificates in question are held by the same carrier. Basically, all three practices involve different manners of utilization of certificates of public convenience and necessity. In both the Commercial case and the case at bar, the parties stipulated or conceded that the commission had not promulgated rules defining, authorizing or prohibiting cross-hauling, tacking or interlining.
Under circumstances similar to this cause, the court in Commercial concluded as follows:
"* * * [Al]though the court affirms the commission's finding of a violation, the majority of the court cannot agree that the suspension of appellant's irregular route authorization was reasonable as a penalty for that violation. Appellant has presented a colorable legal argument that tacking is permissible, an argument which the court agrees has been urged with more vigor than persuasion. * * *
"Were there a definite commission rule, order, or decision either forbidding tacking of different certificates by a single operator or requiring prior approval by the commission for such practice, there would be no question that the penalty was reasonable. Here, the penalty of a major suspension of this operator's permit was imposed because the operator engaged in a questionable practice which other operators also engage in, as shown by the Duff case, and which the commission had under advisement at the time. Under these circumstances the penalty of a 30-day suspension is unreasonable."
Having found the principles enunciated in Commercial dispositive of this appeal, this court modifies this order solely to remove the three-day suspension of Duff's operating privileges. The order is affirmed in all other respects.
Order affirmed as modified.
O'NEILL, C.J., HERBERT, W. BROWN, P. BROWN and SWEENEY, JJ., concur.
CELEBREZZE and LOCHER, JJ., concur in part and dissent in part.
The determination of the administrative action invoked against a carrier is for the Public Utilities Commission (commission) and that determination should not be modified by the court unless it is unreasonable or unlawful. Ohio Transport v. Pub. Util. Comm. (1955), 164 Ohio St. 98. The three-day suspension of Duff's operating privileges was neither unreasonable nor unlawful.
Duff was required to apply for the operating privilege which is the subject of this cause. Furthermore, Duff was required to demonstrate to the commission that the public convenience and necessity would be served by granting to Duff this valuable right of providing transportation. Having applied for and proven the need for this operating privilege, Duff's argument — that it should not be charged with the knowledge of the scope of these operating privileges — is ostensibly inconsistent with the procurement by Duff of this operating authority.
The promulgation of a rule stipulating that practices not expressly permitted by the operating authority are illegal would be an unnecessary redundancy, because the operating privileges granted Duff are limited by their very nature.
The commission is charged by the General Assembly with the responsibility of protecting the public interest in its supervision of the operations of these transportation companies. Duff, being granted a valuable right, should be held to a higher duty to the public. However, Duff, through the utilization of a combination of its operating privileges, attempted to circumvent the commission and its determination of the effect of these unauthorized practices upon the public well-being. Thus, the avoidance of the penalty, assessed for activities which Duff admits occurred, should not rest merely upon the specious claim of ignorance of the law.
Additionally, the finding of gross negligence, the range of the violations and the light penalty accentuate the disparity between the instant cause and Commercial Motor Freight v. Pub. Util. Comm (1976), 46 Ohio St.2d 195.
The application of the rule espoused in Commercial Motor Freight, supra, to the present cause is not dictated by precedent, justice nor a concern for the public welfare. Therefore, I am unable to agree with the majority's eradication of the three-day suspension of Duff's operating privileges imposed by the commission.
CELEBREZZE, J., concurs in the foregoing concurring and dissenting opinion.