Opinion ID: 2616196
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: Pursuant to ORS 767.815, all motor carriers using the highways of the state must pay a weight-mile tax which is to be applied to the cost of administration of this chapter and for the maintenance, operation, construction and reconstruction of public highways. During the relevant time, ORS 767.005 [1] defined the terms broker, carrier and common carrier thus: (1) `Broker' means any person not a `motor carrier' or bona fide employe or agent of any carrier who sells or offers for sale any transportation subject to this chapter, or negotiates for or purports to be one who sells or arranges for such transportation. (2) `carrier' or `motor carrier' means common carrier, contract carrier or private carrier.    (7) `Common carrier' means: (a) Any person who transports persons or property for hire or who holds himself out to the public as willing to transport persons or property for hire by motor vehicle; or (b) Any person who leases, rents or otherwise provides a motor vehicle to the public and who in connection therewith in the regular course of business provides, procures or arranges for, directly, indirectly or by course of dealing, a driver or operator therefor. Plaintiff conducts three types of operations. It hauls regulated commodities interstate both as a common carrier under a certificate of authority issued by the Interstate Commerce Commission and as a contract carrier under permits issued by the Interstate Commerce Commission. It also transports in interstate commerce various foodstuffs which are exempted from entry regulation or rate prescription by the Interstate Commerce Commission. When the Commissioner issued his order, plaintiff owned and operated 42 tractors and 56 trailers. Approximately 85 percent of plaintiff's transport operation is conducted with owned equipment; the remaining portion of its business is conducted with both leased equipment and independently owned and operated equipment. Approximately four percent of plaintiff's yearly gross revenue is derived from transportation services using independently owned and operated equipment. The Commissioner's staff conducted a Highway Use Tax audit of plaintiff's operations covering the period May 1, 1977, through February 29, 1980. As a result of the audit, additional weight-mile taxes were assessed against plaintiff. With penalties and interest, the total assessment was $10,509.69. Plaintiff agreed with and paid the additional taxes which it conceded were properly assessed on all hauls made with vehicles it owned and on hauls made by vehicles which it had leased. However, plaintiff contested the assessment of taxes totaling $4,426.51 on 34 trips made in June, 1979, which it claims is attributable to brokerage activities for its customer, Fred Meyer, Inc. It requested a hearing as to those trips and that amount. The hearing was held on January 16, 1981, before a hearings officer. On October 8, 1981, the officer issued a proposed order which contained extensive findings of fact and conclusions of law. The proposed order concluded that plaintiff had acted as a broker with regard to the hauls in question and therefore was not liable for the assessed taxes. The Commissioner's staff filed exceptions to the proposed order and, on October 1, 1982, the Commissioner entered Order No. 82-692 holding plaintiff liable for payment of the assessed taxes. [2] The Commissioner found that plaintiff had an agreement with Fred Meyer under which plaintiff would transport for Fred Meyer ICC exempt and regulated commodities out of specific areas to and from California and Oregon. In carrying out its obligations to Fred Meyer, plaintiff used both leased and independently owned and operated equipment. The hauls conducted with leased equipment are not in issue. The Commissioner found that Fred Meyer provided plaintiff with the name of the shipper, the load, the destination, and the date of pickup. Fred Meyer did not specify how plaintiff should move the loads, although Fred Meyer's traffic manager was familiar with the services offered by plaintiff. He had used plaintiff's common carrier service and brokerage service in the past. Fred Meyer used other brokers and expected service identical to that provided by plaintiff. The only concern of Fred Meyer was that shipments arrive in a timely manner and in good condition. If goods were damaged, Fred Meyer is not concerned with how damages were paid or who paid them but it would look to plaintiff for settlement. Although plaintiff did not insure underlying operators, it would expand its group cargo insurance policy to cover independent operators who, in turn, reimbursed plaintiff for the coverage. The Commissioner found that, when plaintiff used independent operators, it would secure and arrange for transportation, handle all claims, process paperwork and tender to the operator certain fees and other intermediate charges. The Commissioner also found that it was the practice of plaintiff and other brokers to provide lists of published tariff rates for unregulated commodities to its customers and to advance certain incidental funds for fuel, repairs and labor. Operators then reimbursed plaintiff for all advances, claims and shortages. The Commissioner found that plaintiff, like other brokers, settled its claims with the actual carrier, independently of the customer. The Commissioner concluded that, in all significant respects, the relationship between plaintiff and a shipper and its control over the transport of goods were identical, whether the transport was brokered or performed with leased equipment. Finding that plaintiff conducted itself in conformance with criteria he formulated, the Commissioner concluded that plaintiff had acted as a common carrier and was therefore responsible for the additional assessed weight-mile taxes. The present litigation began when plaintiff filed an action pursuant to ORS 756.580 to set aside the findings and order of the Commissioner. The circuit court entered judgment for plaintiff. The Commissioner appealed to the Court of Appeals, which affirmed the circuit court. Market Transport v. Lobdell, 74 Or.App. 375, 703 P.2d 1032 (1985). We granted review to determine whether the Court of Appeals had applied the appropriate test of brokerage.