Opinion ID: 305495
Heading Depth: 1
Heading Rank: 3

Heading: substantive validity of the orders

Text: Sufficiency of the Evidence 44 The Commission found inefficiency in Transit's management, inadequacies in its service, and a relation of cause and effect between the two. 132 These findings, as we have indicated, were based principally on data and analyses presented in the Loconto report and elucidated by Loconto as a witness at the hearings. 133 Transit asserts that the findings lack substantial support in the evidence considered as a whole 134 and, in that connection, that the Commission erred in crediting the evidence Loconto supplied. We deem these arguments unavailing. 45 Transit did not object to admission of Loconto's report in evidence, nor to his competence as a witness. It did not move to strike either the report or the testimony. For these reasons, the Commission, on Transit's application for reconsideration, felt that Transit's credibility objection came too late. 135 It nonetheless examined the reasons in support of Transit's arguments and concluded that they were wholly inadequate. 136 Transit did not include among the numerous assignments of error in its application for reconsideration any other specification that the findings on managment inefficiency and service inadequacy were not sufficiently supported by the vidence. 46 The Compact confers upon those affected by final Commission orders the privilege of requesting reconsideration. 137 The process is inaugurated by an application in writing requesting a reconsideration of the matters involved, and stating specifically the errors claimed as grounds for such reconsideration. 138 The Compact provides, however, that [n]o person shall in any court urge or rely on any ground not so set forth in such application. 139 We search Transit's application for reconsideration in vain for anything stating specifically an insufficiency of supporting evidence as a ground for disturbing the Commission's findings on the caliber of Transit's management and service. 47 The Compact requirement that errors charged on reconsideration be pinpointed is not an empty formality. It subserves the same considerations fostered by the companion rule that contentions to be urged on appellate review of judicial proceedings be properly raised and preserved in the trial court. 140 Not the least of those considerations is the opportunity, through precise identification of the errors alleged, for administrative reexamination and correction prior to judicial intervention in the regulatory process. 141 We have long admonished that points not subjected to agency scrutiny during administrative proceedings will not normally be entertained on judicial review. 142 That admonition, we have held, extends to claims that administrative findings are unsupported by substantial evidence. 143 Transit's insufficiency-of-evidence argument is properly before us only on the challenge to Loconto, 144 to which we now turn. 48 No less in administrative than in judicial tribunals is it the factfinder's function to make the primary assessment as to the weight to be accorded particular items of evidence. Credibility determinations within the agency's sphere of expertise are peculiarly within its province, and courts will upset them only if made irrationally. 145 Our canvass of Transit's objections to Loconto's report and testimony gives us no cause to overrule the Commission on that score. We are mindful that there was evidence from which the Commission arguably might have concluded that Transit's operations are economically and efficiently conducted and its transportation service adequate, but it is not a valid objection that conflicts in the evidence might conceivably have been resolved differently, or other inferences drawn from the same record. 146 We sustain the Commission's findings on this branch of the litigation. Basis for Imposition of Precondition 49 Transit argues strenuously that the Commission erred in constructing its funding requirement as a condition precedent to further consideration of fare increases rather than as a condition to be met concurrently with the enjoyment of higher fares. We do not agree. We have already satisfied ourselves that the Commission has power to impose preconditions as well as concurrent conditions in fare proceedings. 147 We are also satisfied that the Commission was well within its regulatory province, after diagnosing Transit's financial sickness, 148 in prescribing an effective rather than a doubtful cure. 149 Our function as a reviewing tribunal is limited to determining whether the remedy selected by the Commission is arbitrary or unreasonable. 150 The Commission's prescription easily survives that test. 151 50 Order No. 1216 reflects the mature consideration the Commission gave the question whether a fare-increase order with concurrent conditions would sufficiently safeguard the public interest in economical, efficient and adequate transportation. 152 For four reasons, enlarged upon in its order on reconsideration, the Commission was persuaded that it would not. 153 The first was the Commission's conclusion, predicated on the results of the Loconto investigation, that corporate decisions, not inadequate fare revenues, [were] the major factor in Transit's present financial instability, with the consequence that additional funds, not increased fares alone, were required to remedy this situation. 154 The second was the documented history of Transit's unwillingness over the years despite the Commission's urgings, to firm up its shaky financial structure, 155 a history [which] forced us to conclude that Transit cannot be relied upon voluntarily to remedy its own financial ills. 156 Thirdly, with Transit's failures to comply with prior Commission orders, particularly [the] outstanding bus purchase order [which] has directly affected the adequacy of the company's service, 157 the Commission could find no basis to believe that Transit would comply with concurrent conditions; 158 instead, the Commission determined that [its] precondition order was the only method by which we could assure the public that the company would deliver its part of the reciprocal obligations imposed upon it by the Compact. 159 Fourthly, the Commission cited its lack of power to insure compliance with a concurrent-condition order by requiring bond indemnifying the public 160 or by ordering reparations in the event of noncompliance 161 as additional factors supporting an order establishing preconditions. 162 51 These reasons, in our view, amply sustain the Commission's decision to address the problem by conditions precedent to a far adjustment rather than conditions concurrent therewith. The Commission was called upon to look into the future and determine whether, if rates were adjusted, the public could be reasonably assured that the company would correct the inefficient and uneconomic method of operation which we had identified and provide the adequate service which is the riders' due. 163 By the Commission's appraisal, [t]he record clearly showed that a fare adjustment alone would not remedy the situation and that if our only order was an adjustment in fares, the result would be continued financial instability and a deterioration in the level and quality of transportation service afforded the public. 164 Mere exhortation had not been productive, the Commission felt, and drastic remedial action was required to bring the company's capital structure into balance to provide the stability necessary to achieve an efficient and economical transit operation. 165 We find no fault with the Commission's disposition of this aspect of the case. 52 To be sure, as Transit says, the Commission might have resorted to some other method of seeking compliance with the Compact's specifications respecting the quality of Transit's service. The Commission might, as Transit suggests, have ordered the capital changes it felt necessary and in the event of disobedience have gone to court to enjoin compliance. 166 It might have set the debtequity ratio it deemed appropriate and then established fares hypothetically on that basis; 167 or it might have granted a fare increase with an accompanying requirement that Transit hold the disputed increment in a special reserve pending fulfillment of its Compact duties. 168 Undoubtedly other techniques in the Commission's regulatory arsenal were available to ameliorate, in some degree at least, Transit's current fare plight consistently with an improved response to its service obligations. 53 These considerations, however are largely beside the point. The relevant inquiries relate not to the availability of alternatives or the wisdom of shunning them, but solely to the legal propriety of the sanction the Commission selected. 169 The Compact, we repeat, empowers the Commission to take such action as it may find necessary or appropriate to achieve its objectives. 170 The choice is initially the Commission's, and we may upset it only if it is unlawful or was capriciously derived. 171 Here the Commission concluded that concurrent conditions would not effectuate the Compact's goals in terms of Transit's service. It said: 54 Mindful of the fact that our responsibility to protect the public interest is at least equal to our obligation to consider Transit's interests, we hold that while we may grant a fare increase, and condition that increase on a carrier's satisfaction of the steps we have found necessary to insure future performance of its statutory obligation to provide economical, efficient and adequate transportation, we are not compelled to do so if we conclude, as we have in this case, that such an order will not provide sufficient assurance that the public will be protected. 172 55 Referring to the precondition specified in Order No. 1216, the Commission added: 56 We were forced to conclude that if fares were adjusted before the company produced the required funds, we would have no basis for insuring that they, in fact, would be forthcoming. This, we held, would be calling upon the bus rider to pay a fare to an inefficiently and uneconomically operated transit company without any assurance that the company would remedy those defects and fulfill its obligation to the rider by providing, in the future, efficient, economical, and adequate transportation. We declined to impose such a one-sided and unjust burden on the bus-riding public. 173 57 We discern no basis for reversing the Commission in this regard. 58 We are not confronted on this review with any question as to the validity of the Commission's precondition arising from the carrier's inability to meet it. Transit did not contest Loconto's recommendation of preconditions during the hearings, and although Transit's application for reconsideration alleged a multitude of errors, it nowhere claimed impossibility of compliance. The Commission took note of that circumstance, 174 as we take care to do now. Transit does state in its briefs, not that it cannot raise the $6.4 million which the precondition set, but that it cannot do so within a 90-day period 175 without liquidation or sale of assets at prices below fair market value, 176 but the statement assumes an erroneous premise. Order No. 1216 does not require performance within 90 days. It simply admonishes that performance more than 90 days removed might necessitate the making of a fresh administrative record to enable disposition of Transit's application for a fare increase. 177 Indeed, Order No. 1219 explicates that [i]n the event Transit elects not to comply with our precondition during the 90-day period following issuance of our main order, it is nevertheless free to apply for a rate adjustment whenever it does so comply, and to then ask us to use whatever portion of the present record may remain sufficiently fresh as to permit proper disposition of its application. 178 We have every confidence that, once compliance is forthcoming, the Commission will maximize its use of the present administrative record, and will proceed expeditiously to a resolution of Transit's request for a fare increase. 179 59