Opinion ID: 1799231
Heading Depth: 1
Heading Rank: 3

Heading: Application of Statutory Precepts To This Case

Text: Because the Commission previously had issued certificates to conduct the same operations to other common carriers, Gorman, as an applicant for an additional certificate, had the burden of showing clearly that the public convenience and necessity would be materially promoted by its issuance. La.R.S. 45:164. Thus, the applicant faces an onerous dual burden: (A) He must prove that the service he offers is required by public convenience and necessity by showing that: (1) his proposed operation will serve a useful public purpose for which there is a public demand or need; (2) this public purpose cannot and will not be served as well by existing carriers; and (3) applicant can serve this purpose with his new operation without endangering or impairing the operations of existing carriers contrary to the public interest. (B) In addition to proving that his application meets the above test, Gorman must also show clearly that his proposed new operation will materially promote the public convenience and necessity. 1. Public Need or Demand A carrier seeking operating authority must establish by substantial and competent evidence a public need for the proposed operations. P. Dempsey, Entry Control Under the Interstate Commerce Act: A Comparative Analysis of the Statutory Criteria Governing Entry in Transportation, 13 Wake Forest L.Rev. 729, 736 n. 30. See also, Road Runner Trucking, Inc., 124 M.C.C. 245, 248 (1976); Aero Trucking Inc., 121 M.C.C. 742, 752 (1975); Eleveld Chicago Furniture Service, Inc., 119 M.C.C. 669, 675 (1974); Coastal Tank Lines, Inc., 119 M.C.C. 474, 483 (1974); HearinMiller Transporters, Inc., 110 M.C.C. 217, 220 (1969). Public necessity contemplates a need of the entire public as distinguished from that of an individual or any number of individuals. Miller Transporters, supra at 1019; See also, CTS Enterprises, supra at 281. More specifically, in order to establish a prima facie case of a public need for the proposed operations, an applicant seeking motor carrier authority should comply with the requirements enumerated by the Interstate Commerce Commission in John Novak Contract Carrier Application, 103 M.C.C. 555 (1967): Those supporting the application should state with specificity the transportation service which they believe to be required. The shippers and consignees supporting applications for authority to transport property should identify clearly the commodities they ship or receive, the points to or from which their traffic moves, the volume of freight they would tender to applicant, the transportation services now used for moving their traffic, and any deficiencies in existing services. Those supporting an application for authority to transport passengers should indicate the frequency with which they would use the proposed service and should identify any transportation services now available and the inadequacies believed to exist in such services. Id. at 558. See also, CTS Enterprises, supra at 281 n. 9; West Nebraska Express, Inc., 118 M.C.C. 423, 428 (1973); Carl Edwin Cloud, Jr., Common Carrier Application, 115 M.C.C. 77, 79 (1972). In other words, to make a prima facie case of public need an applicant should tell the Commission (1) what is to be shipped, (2) where the shipments are to move, and (3) how much traffic will be available. Chandler, supra at 392. Consequently, the applicant will fail to carry his burden of proof that there is a public need for the service if he fails to show that the need of the supporting shippers is significant, fails to have them specifically indicate the volume, frequency of movement and type of product to be hauled, and fails to show that the supporting shippers had sought to avail themselves of the services of carriers who had preexisting authority to serve them. Ashworth Transfer, Inc. v. United States, 315 F.Supp. 199 (D.Utah 1970). See also, Garrett Freightlines, Inc. v. United States, 307 F.Supp. 1245 (D.Idaho 1969). By the same token, additional authority cannot be predicated upon the preference of a shipper or a group of shippers for a particular carrier. If it is apparent that the shippers' desire to have the proposed service is based upon a preference for the service of a particular carrier without regard to the existence of other facilities capable of meeting their transportation requirements, the evidence is insufficient to establish a public need or demand. CTS Enterprises, supra at 284; Clyde R. Sauers, 61 M.C.C. 65, 67 (1952). See also, Hirschbach, supra at 367. The evidence of record in this case does not provide a sufficient basis for a finding that there is a public need or demand for Gorman's proposed new statewide service. Gorman's six supporting shippers, all of whom were located in his presently certificated area, failed to testify to any significant need for his proposed new operation, i.e., statewide service outside his currently authorized territory. All but one of the shippers who said they would give Gorman some business outside his present authority if he received a state-wide certificate admitted that their needs for this service were being served adequately by carriers with preexisting certificates. The only shipper who did not so testify had never used other carriers, making his testimony regarding a need for service statewide speculative at best. Even this need, which was not significant or unfulfilled, was restricted mainly to a handful of parishes adjacent to or near Gorman's presently authorized five parish territory. The supporting shippers' advocacy of Gorman's application was candidly based, not on their need for his service, but on their preference for him because of his trustworthy character and the personal attention he was able to give them and their customers as the owner-driver of a one-truck operation. Several of the shippers acknowledged that there were numerous other carriers with existing authority that they could call upon. None of them testified that any of their reasonable transportation needs were not being served by existing carriers. Even Mr. Gorman seemed to tacitly concede in his own testimony that there was no known public need or demand for his proposed new statewide operation. He testified that if he were granted statewide authority he would buy one additional truck and then wait to see exactly what type of business is out there before making any further expansion. He admitted that he had not planned to open an additional terminal and that he had not interviewed or hired any employee. The sum and substance of his testimony was simply that he believed his trucking business would grow and succeed if he were granted additional operating authority, not that he perceived a demonstrable statewide public demand that he proposed to serve. 2. Inadequacy of Existing Carrier Service The inadequacy of existing services is a fundamental ingredient in the determination of what constitutes the public convenience and necessity. See, e.g., CTS Enterprises, supra; Southern Kansas Greyhound Lines, Inc. v. United States, 134 F.Supp. 502 (W.D.Mo.1955); Hudson Transit Lines, Inc. v. United States, 82 F.Supp. 153 (S.D.N.Y.1948); Inland Motor Freight v. United States, 60 F.Supp. 520 (E.D.Wash.1945). To protect certificated common carriers providing adequate and dependable service, the applicant must affirmatively demonstrate that the proposed transportation service is one that existing available carriers either cannot or will not perform in a reasonably satisfactory manner. Zuzich Truck Lines, Inc., 83 M.C.C. 625, 637 (1960); Dempsey, supra at 739. In other words, existing carriers are ordinarily entitled to handle all traffic which they can transport adequately, efficiently and economically within the scope of their respective operating authorities before a new competitive operation will be authorized, at least where it cannot be demonstrated that the existing carriers are unable or unwilling to satisfy the reasonable transport requirements of the shipping public. CTS Enterprises, supra at 280; South Arkansas Vacuum Service, Inc. v. Louisiana Public Service Commission, 457 So.2d 655, 659 (La.1984); Gulf Coast Pre-Mix Trucking, Inc. v. Louisiana Public Service Commission, 336 So.2d 849, 855 (La.1976); J. Guandolo, Transportation Law (3d ed.1979); Dempsey, supra at 742. In the absence of a showing that available motor carrier services are materially inadequate, it does not promote the public convenience and necessity to authorize the entry of a competitive newcomer into the field. CTS Enterprises, supra at 281 n. 9; Chandler Trailer Convoy, Inc., 83 M.C.C. 577, 580 (1960). To deprive existing motor carriers of the traffic they are authorized to transport by diluting the field with the addition of a new competitive service can prevent the existing carriers from operating at full capacity. Moreover, such deprivation might result in idle equipment and employees, declining revenues, inactive terminals and inefficient operations. Buanno Transportation Co., 117 M.C.C. 700, 704 (1972). The institution of needlessly duplicative transportation services which have not been proven to be responsive to the public need endangers existing carriers without corresponding benefit to shippers and receivers. CTS Enterprises, supra at 282 n. 9; Bestway Express, Inc., 123 M.C.C. 441, 451 (1975); Landgrebe Motor Transit Inc., 119 M.C.C. 96, 100 (1973); Midwestern Express Inc., 117 M.C.C. 720, 723 (1973). Part of the applicant's burden to show affirmatively that existing carriers cannot and will not perform the alleged needed service adequately is the submission of evidence explaining why each supporting shipper considers the existing transportation services to be unsatisfactory. The burden is upon the applicant to establish this element of the case, and it is not a matter which is left to the protestants to bring out in rebuttal. Before an application can be granted it must appear that the shipper has made an investigation of available existing service. Authorized carriers are not required to seek out the shipper, and the fact that an opposing carrier has not solicited the business of the supporting shipper is of no particular importance. The applicant is required to show that the shipper has tried and failed to obtain service, or that service, when provided, was inadequate. Warren Transport, Inc., 69 M.C.C. 241, 246 (1956); John G. Miller, 61 M.C.C. 631, 637 (1953); E. Hutchinson and G. Chandler, Evidence In Motor Carrier Application Cases, 11 Vand. L.Rev. 1053, 1066 (1958). The record in this case does not warrant a reasonable finding that the existing carrier service is inadequate or that existing available carriers cannot or will not adequately perform the service involved in the new operation proposed by applicant. Not one of Gorman's six supporting shipper witnesses testified that he had attempted and failed to obtain service, or that service, when provided, was truly inadequate. None of the shippers had conducted an investigation of available existing service; nor had any called the Commission for a list of carriers. Several of the supporting shippers acknowledged that numerous existing carriers were available to perform the service proposed but admitted they had either not called on them at all or had not done so in a long time. All but one of the shippers testified that they were currently using existing carriers for the type of operations proposed and not one branded the transportation service provided by those carriers as inadequate. In essence, the upshot of the supporting shippers' testimony was not that they had been unable to obtain adequate service from existing carriers but that they preferred doing business with Gorman because of their previous highly satisfactory experience with him. 3. Effect On Existing Carriers Even when the applicant succeeds in proving that his proposed new operation is responsive to a public need or demand which will not or cannot be served by existing carriers, the applicant still has the burden of showing that the need for the proposed new service outweighs the detriment accruing to the existing carriers so that granting the application is consistent with the public interest. CTS Enterprises, supra; Miller Transporters, supra; Application of Black Hills Stage Lines, Inc., 174 Neb. 425, 118 N.W.2d 498 (1962); Richard R. Johnson, 121 M.C.C. 9 (1975); Liberty Trucking Co., 111 M.C.C. 423 (1970); All American Bus Lines, Inc., 18 M.C.C. 755, (1939). Based on the evidence in the present case, however, a commission properly could not have reached this issue or have found a need to resort to the balancing process, because the applicant here did not prove either that there was a public need for his operation or that the existing service was inadequate. 4. Clear Showing Of Material Promotion Gorman failed to carry his burden of proving that the ordinary requirements of public convenience and necessity were fulfilled by his proposed new operation. Consequently, his case is even more wanting of proof when measured by the more rigorous standard of La.R.S. 45:164 which demands that it be shown clearly that the proposed operation will materially promote the public convenience and necessity.