Opinion ID: 1300217
Heading Depth: 1
Heading Rank: 7

Heading: Public Demand or Need

Text: In regard to the matter of public demand or need, the relevant issue is not whether the commission erred in finding that Nebraskaland presented no evidence showing such for its services, but whether there is evidence supporting the commission's finding that Nebraskaland's proposed services are not required by public convenience and necessity. We begin by recalling that in reviewing a decision of the commission, it is not the province of an appellate court to weigh or resolve conflicts in the evidence or the credibility of the witnesses; rather, an appellate court will sustain the decision of the commission if there is evidence in the record to support its findings. In re Application of Jantzen, 245 Neb. 81, 511 N.W.2d 504 (1994). If there is evidence to sustain the findings of the commission, an appellate court cannot substitute its judgment for that of the commission. Id. Determinations by the commission are a matter peculiarly within its expertise and involve a breadth of judgment and policy determination that will not be disturbed by an appellate court in the absence of a showing that the action of the commission was arbitrary or unreasonable. Id. Section 75-311 provides, in relevant part: A certificate shall be issued to any qualified applicant authorizing the whole or any part of the operations covered by the application if it is found after notice and hearing that (a) the applicant is fit, willing, and able properly to perform the service proposed and to conform to the provisions of sections 75-301 to 75-322 and the requirements, rules, and regulations of the commission under such sections and (b) the proposed service, to the extent to be authorized by the certificate, whether regular or irregular, passenger or household goods, is or will be required by the present or future public convenience and necessity. Otherwise the application shall be denied. In determining public convenience and necessity, the deciding factors are (1) whether the operation will serve a useful purpose responsive to a public demand or need, (2) whether this purpose can or will be served as well by existing carriers, and (3) whether it can be served by the applicant in a specified manner without endangering or impairing the operations of existing carriers contrary to the public interest. In re Application of Kilthau, 236 Neb. 811, 464 N.W.2d 162 (1991). The issues of public convenience and necessity are ordinarily issues of fact, and where there is evidence in the record to sustain the commission's order, an appellate court cannot find the order unreasonable and arbitrary. Id. Of the three public convenience and necessity factors, not all need to be addressed, because an affirmative response to the second factor negates the need for any consideration of the first factor. Regarding public demand or need, the question of adequacy of service of existing carriers is implicit in the issue of whether public convenience and necessity demand the service of an additional carrier in the field. The existence of an adequate and satisfactory service by motor carriers already in the area completely negates public need and demand for added service by another carrier. In re Application of Kilthau, supra . Nebraskaland first argues that the protestants' testimony should be given little weight. In doing so, Nebraskaland cites to Joe and Al's IGA, Inc. v. Nebraska Liquor Control Commission, 203 Neb. 176, 181, 277 N.W.2d 693, 696 (1979), in which we, addressing protests to a liquor license, stated that protests to be effective must be of some substance. Here, stripped of form, they were all authored and signed by citizens involved in the liquor business, competitors if you will, who simply didn't want any competition. The claim that there were too many licenses ... has a hollow ring.... We have also characterized evidence proffered by protestants-competitors in the liquor arena as not being probative. Marting v. Nebraska Liquor Control Comm., 250 Neb. 134, 144, 548 N.W.2d 326, 331 (1996). While it is true that the protestants in the instant case had a financial interest in having Nebraskaland's application denied, they did provide relevant evidence about the nature of their own businesses and their ability and willingness to meet the demand for intrastate transportation. The obvious way to prove the existence of an adequate and satisfactory service by motor carriers already in the area is to question the existing carriers. Also, unlike an application for a liquor license, an application for a certificate of public convenience and necessity to transport household goods intrastate in Nebraska is not likely to draw protest from anyone other than existing carriers. The evidence presented by the protestants demonstrates that the existing carriers are willing and able to meet the public demand and need for intrastate moves in Nebraska. Three of the protestants testified that they hire additional employees to handle the seasonal increase in business during the summer. Andrews testified that he does not receive enough intrastate business to keep his 10 trucks designated for that purpose busy. Wiederspan and Buck both testified that the existing authorized intrastate carriers are meeting the demand for intrastate moves. Finally, Leslie testified that despite advertising in the yellow pages and by direct mail, Chieftain Van Lines has not received any intrastate business since 1994. It is also true, as Nebraskaland notes, that the public demand or need is in part being met because Nebraskaland is involved in serving that demand or need through its lease agreement with Husker Express. However, as the commission observed, if Nebraskaland receives a certificate, Husker Express' authority will continue to be available to the public. Nebraskaland nonetheless argues that the commission should have considered that Nebraskaland was operating under color of right and that it was therefore entitled to a presumption that public convenience and necessity require a continuance of its operations. We begin our review of this aspect of Nebraskaland's appeal by noting that § 75-309 makes it unlawful for any common ... carrier ... to engage in any intrastate operations on any public highway in Nebraska unless there is in force with respect to such common carrier a certificate of public convenience and necessity ... issued by the commission which authorizes such operations. However, § 75-318(2) allows any regulated motor carrier or person to lease, among other things, the certificates of another regulated motor carrier, provided the commission approves the lease. The evidence shows that Nebraskaland has been engaging in intrastate operations in Nebraska without a certificate of public convenience and necessity of its own and that although Nebraskaland acted as if it had been leasing Husker Express' authority, it has not leased Husker Express' certificate of public convenience and necessity. In urging that it should therefore be permitted to continue its operations, Nebraskaland relies upon Dilts Trucking, Inc. v. Peake, Inc., 197 Neb. 459, 249 N.W.2d 732 (1977). There, Dilts had been transporting anhydrous ammonia intrastate in Nebraska since 1972 without an intrastate certificate. However, Dilts had held a certificate of public convenience from the Interstate Commerce Commission since 1969 to transport anhydrous ammonia and honestly, but erroneously, believed that its operations were covered by that certificate. In April 1975, the commission herein informed Dilts that it was involved in intrastate commerce and that it must obtain the appropriate certificate. Dilts immediately stopped its operations and applied for the certificate. The commission found that Dilts was fit, willing, and able to properly perform the services proposed and conform to the commission's rules and regulations, but denied its application on the ground that it failed to meet its burden of proof regarding public convenience and necessity. The commission also ruled that it was not a proper color of right case and that Dilts' illegal operations could not go unnoticed and unpenalized. On appeal, Dilts maintained that the commission erred in failing to find that the present and future convenience and necessity required a grant of its application, arguing that the situation presented a color of right case. We wrote that different rules are applied in color of right cases than in ordinary applications for certificates of public convenience and necessity. If the [c]ommission erred in its conclusion that Dilts was not a color of authority case and neglected or refused to apply the law applicable to such cases, then it would appear that the [c]ommission erred in the determination of what law was applicable in the instant case, and its order would be illegal and entitle the applicant to a further hearing before the [c]ommission for a reconsideration of the evidence in the light of the correct principles of law. Id. at 466-67, 249 N.W.2d at 737. We reiterated that in cases such as now before the court, where the applicant seeks to obtain a lawful certificate to continue in a business which it has been operating under color of authority, we do not think [the standard analysis for determining the issue of public convenience and necessity] controls ....  `Successful operation in the past creates a presumption that public convenience and necessity require a continuance of such operation.' [Citation omitted.] (Emphasis in original.) Id. at 469-70, 249 N.W.2d at 738-39. We held that the commission should have treated the matter as a color of right case, inasmuch as while Dilts was operating without a certificate, it was without knowledge that it was operating without the proper authority. In reversing the judgment and remanding the matter for further proceedings, we ruled that the commission's action was illegal, arbitrary, and unreasonable in light of the fact that it did not consider the application in accordance with applicable principles of law, which are that an applicant who has been operating under color of authority need not make the same showing that an applicant who has never operated must make, and that there is a presumption that the proposed service is or will be required by the present or future public convenience and necessity. Id. at 471-72, 249 N.W.2d at 739. The color of right doctrine can apply even where an applicant has been operating without any certificate at all. For example, in Groenewold v. Building Movers, Inc., 197 Neb. 187, 247 N.W.2d 629 (1976), we affirmed the decision of the commission granting a certificate to a mover of houses and other buildings who had been conducting such moves without a certificate. The applicant in Groenewold did not realize that a certificate was required when he conducted his illegal moves. We held that it was proper to consider evidence of past illegal operations of the applicant as evidence of public convenience and necessity where there is not willful and intentional violation. In Gentry Real Estate Co. v. King's Limousine Service, Inc., 201 Neb. 761, 272 N.W.2d 359 (1978), the applicant had operated a luxury limousine service without a certificate for as long as 2 to 3 years prior to applying for a certificate. The applicant knew that a certificate was required, but failed to apply for one because of the cost and because  `nobody seemed to be making any, many fusses about it.'  Id. at 765, 272 N.W.2d at 361. We held that King's Limousine Service, Inc., was not a `color of right' or `color of authority' case because it is clear King was not operating under any misunderstanding as to the extent of his right or authority to provide the services in question, and he freely admitted he operated without authority to do so. Id. at 768, 272 N.W.2d at 363. Similarly, in In re Application of Slack, 234 Neb. 704, 709, 452 N.W.2d 538, 541-42 (1990), we held that the color of authority doctrine was not applicable, as the applicants were operating with no authority[, and] the evidence shows that the applicants were aware that authority was required to haul fertilizer and anhydrous ammonia.... The above cases demonstrate that when an applicant has been illegally conducting business under a mistaken belief that its operations were legal, the color of right principles of law apply. The applicant also must have been doing so for a sufficient period of time. In re Application of Amsberry, Inc., 220 Neb. 353, 370 N.W.2d 109 (1985). However, if the applicant knew that its operations were illegal, then the color of right principles do not apply. In the instant case, the commission found that Nebraskaland's prior operations were not being conducted under color of authority and that they have no probative value on the issue of public demand or need because they are either tacitly illegal or reflect the operations of another carrier whose authority will continue to be available to the public. The only testimony in the record regarding this issue suggests that Nebraskaland believed that it had been leasing Husker Express' authority. Also, the testimony indicates that Husker Express has been relaying all of its Nebraska intrastate business to Nebraskaland. However, in view of the lease provisions noted in part III, the commission could certainly conclude that Nebraskaland did not honestly misinterpret the agreement as a lease of Husker Express' authority. To support its contention that the existing companies are not meeting the public demand, Nebraskaland offered the testimony of the Hartshorns, as detailed in part III. In summary, the Hartshorns testified concerning 10 telephone calls they made to existing Nebraska intrastate carriers whereby the Hartshorns asked the carriers if the carriers could perform an intrastate move. In each instance, the carrier was given about 1 week's notice, and all of the requested dates included at least one date falling on the 1996 Fourth of July weekend. Of the 10 inquiries, 5 carriers responded that they could not perform the move, 3 responded that they could perform the move 3 or 4 days after the requested dates, 1 said that it could possibly perform the move 1 day after the requested date at an increased rate due to the weekend, and 1 responded that it could possibly perform the move on 1 of the requested dates. This evidence falls short of showing that there is a public demand or need for another carrier.