Case Title: Consolidated Freight. Corp. of Del. v. PUBLIC U. COM'N

Citation: 406 P.2d 83

Docket Number: 

State: colorado

Court: Colorado Supreme Court

Date: 1965-10-04T00:00:00Z

Document:
406 P.2d 83 (1965) CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE (a Delaware Corporation), Orville Dunlap and Harold Ross Dunlap, doing business as Orville Dunlap & Son, Eveready Freight Service, Inc. (a Colorado Corporation), the Denver & Rio Grande Western Railroad Company, the Colorado & Southern Railway Company, and Chicago, Burlington & Quincy Railroad Company, Plaintiffs in Error, v. The PUBLIC UTILITIES COMMISSION of the State of Colorado, Defendant in Error. No. 21226. Supreme Court of Colorado, En Banc. October 4, 1965. T. A. White and Ernest Porter, Denver, for Denver & Rio Grande Western R. Co. *84 Willard L. Peck and J. C. Street, Denver, for Colorado & Southern Ry. Co., and Chicago, B. & Q. R. Co. Jones, Meiklejohn, Kilroy, Kehl & Lyons, Denver, for Consolidated Freightways Corp. of Delaware, Orville Dunlap and Harold Ross Dunlap, d/b/a Orville Dunlap & Sons, and Eveready Freight Service, Inc., plaintiffs in error. Duke W. Dunbar, Atty. Gen., Frank E. Hickey, Deputy Atty. Gen., Robert P. Fullerton, Robert N. Trunk, Asst. Attys. Gen., Denver, for defendant in error. DAY, Justice. This writ of error challenges the lawfulness of the decision and order of the Public Utilities Commission of the State of Colorado, hereinafter referred to as the Commission. Plaintiffs in error will be referred to as such or by name. Pursuant to statutory procedure, the order of the Commission was reviewed on certiorari by the Denver District Court, and judgment was entered upholding the decision and order of the Commission. We are asked to reverse the judgment of the trial court and to declare the decision of the Commission null and void on a variety of grounds, which may be summed up as follows: (a) That the Commission exceeded its jurisdiction. (b) That its order is contrary to the statute governing the law and procedures relating to the regulations of the Public Utilities and the duty imposed upon the Commission in connection therewith. (c) That the action of the Commission was in violation of the concept of due process as guaranteed in the constitution of Colorado and as prescribed in the statutes relating to the Public Utilities Commission and its prescribed duties. (d) That the Commission has abrogated its functions and is refusing to carry out its duties in connection with the regulation of the transportation of petroleum and petroleum products in bulk, in tank trucks, and/or trailers in Colorado. It appears from the record that the decision complained of was entered in case No. 1585. Certified as part of the record on certiorari are prior decisions in this same case, indicating that it has been continuously before the Commission and subject to alteration and amendments over a period of time dating back to April 4, 1944, when the first order was entered therein. The sum total of all of the decisions and orders prior to the one here under attack indicates that continuously for the last nineteen years the Public Utilities Commission has prescribed exact rates for common carriers and minimum rates for private carriers of bulk petroleum and petroleum products in the State of Colorado. These rates, as prescribed, were the only rates that could be published in their tariffs and charged by the common carrier and set a floor below which no private carrier could charge. The order in effect at the time of the Commission's act being reviewed herein was entered April 9, 1957, effective September 1, 1957. After that date and until now all carriers involved in the transportation of petroleum and petroleum products were ordered to cease and desist from demanding, charging and collecting rates and charges which shall be greater or less than those prescribed. At present all petroleum carriers are exempt from that order. The order, sought in this writ of error to be set aside, was promulgated after a request of a change in rates initiated by Groendyke Transport, Inc., a common carrier. It filed an application with the Commission asking permission to offer its services at rates considerably below that applicable to the transportation of bulk petroleum. The application was met by two types of reaction from Groendyke's competitors. Plaintiffs in error here filed protests and asked for suspension of the reduced rates. Others, such as Western Tank Truck Carriers' Conference, Inc., and Colorado Motor *85 Carriers' Association, filed with the Commission similar rates or rates slightly lower than Groendyke. Both the protestants and those who followed Groendyke's strategy and filed their own requests for lower rates had placed before the Commission a common complaint, namely: that the proposed rates of Groendyke had set the stage for the development of a rate war; and that the rates were not reasonable or just and were noncompensatory. Without any hearing, and with only letters and the pleadings and some purported rate comparisons submitted by Groendyke, and further without adequate findings of fact, the Commission entered its order and decision No. 60391 which, in part, is as follows: The order further provided: Petitions for "rehearing" (although no hearing was ever held) were presented to the Commission and summarily denied. The Commission did not, as it had done in all previous amendments and alterations of its orders in connection with case No. 1585, prescribe any new rates to become effective from and after the date of its order or on any date. Likewise, there were no requirements for the common carriers to publish tariffs in conformance with any prescribed rates and charges, nor were minimum rates prescribed for the competing private carriers below which they could not contract. Also missing from the order was the usual language contained in all previous orders requiring all carriers, common or private, not to demand, charge or collect rates and charges greater or less than those prescribed. It appears that the Commission intended to and did in fact "cut loose" the transportation of petroleum and petroleum products from any further regulation of the Commission other than to require that whatever charges the carrier initiated be filed with the Commission. We conclude such to be the legal effect of the Commission's action because it ordered two sets of proposed rates (Groendyke's and Western's) to be effective immediately and that other carriers, common and private, could publish either set of rates if they did so within ten days. We deem this to result in at least two sets of rates and possibly three if other carriers did not choose to file tariffs in a timely manner, thus meeting the Groendyke and Western rates. And there is no doubt that there has been a Commission declaration, in any event, that there would not be established any prescribed rates nor minimum rates for private carriers. That the order itself contained evidence of rate-cutting and an invitation to engage in a rate war cannot be doubted by *86 other portions of the Commission "findings" in its decision, as for example: "These reduced rates are published and filed to combat unwarranted and vicious rate cutting tactics which have placed our member-carriers in the untenable position of not being able to petition for suspension without jeopardizing shipper relations, and also of being unable to retain their share of the available business by merely meeting the reduced rates. Can the Commission Refuse to Set Prescribed Rates for Common Carriers and Minimum Rates for Private Carriers? This question is answered in the negative. The Commission's duties are set forth in the considerable number of sections in chapter 115, C.R.S.1963. We call attention to some as particularly pertinent as follows: It needs no citation of authority to support a statement that motor carriers for hire, of whatever commodity, are public utilities. It is of particular significance that the legislature, in each of the two above sections, not only granted "power and authority" but also made it the Commission's duty to adopt rates. Reading 115-11-5 it would be impossible for the Commission to carry out a duty to prescribe minimum rates for private carriers if it established no rates for common carriers. The one duty is tied in with the other, and the prescribed rates for one class are the basis for the minimum rates for the other. In the face of these sections and the mandatory language therein, the Commission has no authority to discontinue "in force the provision of our order, * * * as it pertains to rates, rules and regulations * * * in connection with the transportation of petroleum and petroleum products, in bulk, in tank trucks and/or tank trailers * * *." We add the additional comment that it not only cannot be done under the law but there is no evidence in this record that it is in the public interest or in the interest of the carriers who are entitled to rates which are fair and just, non-confiscatory, and fully compensatory, to discontinue its rate-making authority and duty. Can the Public Utilities Commission Change, Alter, Amend or Strike an Order Previously in Force without a Hearing When Requested? This question is answered in the negative. We again call attention to a pertinent section of the statutes of Colorado, particularly C.R.S. 1963, 115-6-12, as follows: As we analyze that section, it is squarely applicable in the situation here. The action was, as noted, in case 1585. It did affect all of the public utilities covered thereby. It did rescind, alter and amend orders and decisions previously made in full force and effect from 1957 until the date of the Commission's order herein. There was no opportunity to be heard as in the case of complainants, and the notice and hearing procedures provided in case of complaints as set forth in 115-6-8 and 115-6-9 were not accorded any one. Apparently the Commission has predicated its action and construed its authority by giving emphasis to the word "necessary" as contained in some of the sections of chapter 115 alluded to herein. It seemingly has taken the position that if it "declares" it "not necessary" it need not then prescribe rates. We do not so interpret the law. The legislature itself has declared the necessity and the duty and left to the Commission *88 the determination of a rate that is fair to the public and sufficiently compensatory to the utility to insure a fair return on its investment. Regulationnot non-regulationhas been declared to be in the public interest. The Commission has been charged with the duty to carry out its mission in two areas, to-wit: to protect the public and to prevent destructive rate-making which could result in non-availability of the service to the public. In any event this record, such as it is, belies any conclusion that regulation of the transportation products "is no longer necessary." Every pleadingindeed even the rates request by Groendyke and Westernspelled out a competitive situation that cried out for regulation. To be sure, there was probably some good reasons to consider adjustments in the rates, but certainly that does not call for complete exemption of this commodity from rate regulation. In order also to further explore the validity of the Commission's action, we are called upon to determine whether another order previously issued in case No. 1585 can be resorted to by the Commission to support its action. Pursuant to the rule-making power which is vested in the Commission by the legislature (though it can never be said that such rules can contravene the statutes), the Commission published a "Procedure to change rates prescribed under case No. 1585." This is a rather lengthy procedural rule, and for our purposes need not be quoted in full. We note, however, that nowhere in the procedure is there a provision for opportunity to be heard in the event of a change in the rates. We now hold that insofar as the Commission purported to eliminate the necessity of a hearing as prescribed in 115-6-12, such order was defective. We also note, however, that the Commission violated its own procedural rules in the case in the following particulars: 1. Commission Rule 18 C (1) (a) provides in pertinent part: " * * * As we interpret the now existing Commission order, this order as it pertains to rates is "stricken" or no longer "in force," If it is still the rule of the Commission, the decision is in conflict with it. By this rule the Commission has given itself wide latitude, unlimited discretionary power, and no guidelines for the exercise of "its judgment." But from what we see in the record, it is difficult to understand how the Commission determined that the protests were not "sufficient in number and importance" to warrant a hearing, or further investigation, and that suspension of the requested Groendyke rate change was not in order until its fairness could be determined. *89 But aside from the application of the unambiguous language of the statutes, there is still a more cogent reason for the Commission being required to "afford opportunity to be heard" in a case such as this. There are serious allegations, even by carriers who have filed lower rates in conformance with the Groendyke rates, that they are in the midst of a "rate war." There are serious allegations by the Commission that if such is the case "it is self evident that the operations of those carriers are grossly inefficient." There are substantial allegations in protests filed by other carriers that if the "Groendyke rates" do become the prescribed rates for all carriers, they are confiscatory. The allegations of some of the carriers were made with supporting data. The request of Groendyke was also made with supporting data. Statements, both of Groendyke and of other carriers, have been challenged by protestants on the one hand and by the Commission itself on the other. There has been no opportunity for cross-examination of any witnesses or for the sifting of the truth or falsity of the data in relation to innumerable other factors. The opportunity to file a protest does not comport with the "opportunity to be heard." Likewise, what is there to enable us to perform our function on review? On the record here, consisting of letters, columns of figures and legal conclusions, we cannot determine on review: The review procedures provided to test the orders and decisions of the Commission are set forth in C.R.S. 1963, 115-6-15, in pertinent part as follows: This section of the act also states: "The findings and conclusions of the commission on disputed questions of fact shall be final and shall not be subject to review, except that, in any proceeding wherein the validity of any order or decision is challenged on the ground that it violates any right of petitioner under the constitution of the United States, or the constitution of the state of Colorado, the district court shall exercise an independent judgment on the law and the facts, and the findings or conclusions of the commission material to the determination of the said constitutional question shall not be final. * * *" (Emphasis supplied) This section contemplates there be in the Commission's files some evidence to support a decision and order which the courts can review and which will enable the court intelligently to determine whether the Commission has exceeded its jurisdiction, abused its discretion, and whether its order and decision is warranted by the facts. Some of the questions of fact which the Commission has cavalierly brushed off with an order "protests denied" are: 1. that competing carriers are in a rate war; 2. that such carriers cannot long continue *90 under a depressed rate scale; 3. that the delicate competitive balance of rate structure between rail and motor carriers in the transportation of bulk petroleum is being destroyed to the deteriment of rail carriers; 4. that Groendyke is not more highly efficient and other competitors are not less efficient as charged in the order; 5. that the request of Groendyke is not supported by complete financial facts and should be open to challenge and cross-examination. All these allegations demand an opportunity to present evidence. They contemplate that by the production of documents, financial statements, expert opinion and pertinent cross-examination, a true and realistic rate schedule can eventually be determined. As was said in Public Utilities Commission v. City of Loveland, 87 Colo. 556, 289 P. 1090: We do not mean to declare here a hard and fast rule that the evidence in support of the Commission's order must always be testimonial and must always be obtained at a hearing. We recognize that the Commission can take notice of other evidence in its files, annual statements and data gathered through its own investigation. But if it had such evidence and relief upon it, it did not include it in the record as certified on certiorari in the District Court. Also such evidence, if relied on, does not justify a holding that because the protestants did not submit complete evidence in writing, their protests would not be considered. When one relies on a statute which provides "opportunity to be heard" one is justified in believing that means opportunity to prove the allegations of the complaint or protest. In a case reviewing an Interstate Commerce Commission decision, Erie R. Co. v. United States, D.C., 59 F. Supp. 748, a three-judge Federal court said: The judgment of the trial court is reversed and remanded with directions to enter a judgment setting aside and holding for naught decision No. 60391 of the Public Utilities Commission in case No. 1585. The Commission should be further ordered to suspend the rates filed by Groendyke and Western Tank Truck Carriers' Conference, Inc. and enter an order reinstating the prescribed rates for common carriers and minimum rates for private carriers of petroleum and petroleum products in bulk and in tank trucks and/or trailers in Colorado; that the trial court *91 further order the Commission to proceed to conduct hearings to determine the just and fair rates and appropriate orders prescribing the rates so found as those to be charged by common carriers and as the minimum rates for private carriers. FRANTZ, J., concurs in the result.