Opinion ID: 1174031
Heading Depth: 2
Heading Rank: 3

Heading: Other Decisions Reasonableness or Rationality.

Text: Between the foregoing extremes of no deference on questions of general law and the greatest deference on questions of basic fact are a variety of issues on which Commission decisions are entitled to weight, but are subject to judicial review to assure that they fall within the limits of reasonableness or rationality. The existence of this intermediate category of issues is a pragmatic concession  born of experience  that the terms law and fact and the extent of judicial review associated with them have not provided the analytical framework to explain the various types of review actually exercised by the courts. As Judge Henry Friendly has said, The common approach seeking to dichotomize all decisions as either `law' or `fact' is too simplisitic. United States v. J.B. Williams Co., 498 F.2d 414, 431 (2d Cir.1974). Professor Kenneth C. Davis has even argued that law and fact are not analytical categories that dictate results, but only functional labels to signify what the courts choose to review and not to review. [14] In any case, practical experience with judicial review has unquestionably identified a major category of administrative decisions on which reviewing courts exercise a scope of review more extensive than when reviewing agency findings on questions of basic fact, but less extensive than when reviewing to correct error in agency decisions on questions of general law. Salt Lake Corporation v. Department of Employment Security, Utah, 657 P.2d 761 (1982). A variety of different issues are governed by this intermediate standard. Most notably, they include what has been described as mixed questions of law and fact or the application of the findings of basic facts ( e.g., what happened) to the legal rules governing the case. [15] Also included are the types of issues treated in the third sentence quoted from § 54-7-16, referring to ultimate facts and the findings and conclusions of the commission on reasonableness and discrimination. Such questions as these are sometimes included within the Commission's conclusions of law. Also among these intermediate issues are the Commission's decisions on what can be called questions of special law. These are the Commission's interpretations of the operative provisions of the statutory law it is empowered to administer, especially those generalized terms that bespeak a legislative intent to delegate their interpretation to the responsible agency. In reviewing agency decisions of this type, we apply what we have called the time honored rule of law ... that the construction of statutes by governmental agencies charged with their administration should be given considerable weight... . McPhie v. Industrial Commission, Utah, 567 P.2d 153, 155 (1977); West Jordan v. Department of Employment Security, Utah, 656 P.2d 411 (1982). [16] An agency's interpretation of key provisions of the statute it is empowered to administer is often inseparable from its application of the rules of law to the basic facts, discussed above. In reviewing decisions such as these, a court should afford great deference to the technical expertise or more extensive experience of the responsible agency. Salt Lake Corp. v. Department of Employment Security, supra; Central Bank & Trust Co. v. Brimhall, 28 Utah 2d 14, 18, 497 P.2d 638, 641 (1972). But, on issues of special law, as with other issues under this heading, the decision of the Commission is subject to judicial review under the standard elucidated here. The degree of deference extended to the decisions of the Commission on these intermediate types of issues has been given various expressions, but all are variations of the idea that the Commission's decisions must fall within the limits of reasonableness or rationality. As used in this context, the words arbitrary and capricious mean no more than this. The test of rationality may be simply a matter of logic or completeness, such as when the question is whether the Commission's findings of fact support its conclusion. [17] Similarly, the Commission's selection of a particular course of action as a means toward achieving a known policy goal can be examined for rationality... . [18] When the decision being reviewed represents the agency's weighing of competing values to select a particular goal, its interpretation of a special law, or its application of its findings of fact to a finding or conclusion on the ultimate facts in the case, judicial review necessarily involves an independent judgment of the reasonableness of the agency decision. In these circumstances, reasonableness is measured against a specific standard: The reasonableness of the Commission's order must be determined in light of the statutory setting in which it operates. Milne Truck Lines, Inc. v. Public Service Commission, 13 Utah 2d 72, 75, 368 P.2d 590, 592 (1962). Thus, reasonableness must be determined with reference to the specific terms of the underlying legislation, interpreted in light of its evident purpose as revealed in the legislative history and in light of the public policy sought to be served. Such judicial review does not violate the oft-voiced principle that it is not this Court's prerogative to pass on the wisdom of the policy decisions of regulatory commissions. [19] Thus, in PBI Freight Service v. Public Service Commission, Utah, 598 P.2d 1352, 1354 (1979), we emphasized: The Public Service Commission is charged with the duty of seeing that the public receives the most efficient and economical service possible. This requires consideration of all aspects of public interest... . Considerations of policy are primarily the responsibility of the Commission. It is well settled that this Court cannot substitute its judgment for that of the Commission ... . [Emphasis added.] There is an obvious difference between a reviewing court's substitution of its own preferences for the policy judgments of a commission, which is forbidden, and a court's reviewing commission decisions to assure that they fall within the outer limits of reasonableness as measured by the statutory language, purpose, and policy, which is its proper function. A particularly significant example of the application of the reasonableness standard is Silver Beehive Telephone Co. v. Public Service Commission, 30 Utah 2d 44, 512 P.2d 1327 (1973), where this Court set aside the Commission's revocation of a telephone company's authority to provide service to an area not otherwise served. In that case, the Court could find no reasonable way of reconciling the Commission's order with its statutory responsibility to see that the public has the best possible and most economical telephone service. Id. at 46, 512 P.2d at 1328-29. The Court's opinion omits the traditional arbitrary or capricious phraseology of the scope of review in favor of a statement that notwithstanding the language of finality in the statute and the presumed expertise of the Commission, judicial review was not intended to be merely perfunctory... . Instead, this Court's review was intended to be a substantial and meaningful review for the purpose of giving correction and guidance when it appears that the actions of the Commission are so clearly inconsistent with its purpose of regulating utilities on behalf of the public interest and the utility involved that they transgress the tolerable limits of reason. [Emphasis added.] Id. at 46, 512 P.2d at 1328; Utah State Board of Regents v. Utah Public Service Commission, Utah, 583 P.2d 609, 610 (1978). Similarly, in reversing a Commission order denying a certificate of convenience and necessity even though the Commission had found that there was an unfulfilled public need for the proposed service, this Court explained: The significant point in this case is that the plaintiff's attack is not upon the findings of the Commission. On the contrary, he himself places reliance upon the findings. His argument is that he is entitled to application of the rule that if the only reasonable conclusion to be deduced from the findings would be to grant his application, then the refusal was capricious and arbitrary and should be reversed. With that proposition we agree... . [I]f on the basis of the Commission's findings, its action is so unreasonable that it must be deemed capricious and arbitrary, it should not be sustained.       ... [W]e fail to see any basis in reason for the order denying plaintiff's application. Accordingly, it is reversed. [Emphasis added.] Williams v. Public Service Commission, 29 Utah 2d 9, 11, 14, 504 P.2d 34, 36, 38 (1972). Other decisions of this Court reversing other agency actions that have been found to fall outside the limits of reasonableness are cited in the footnote. [20] Decisions sustaining the Commission on the basis that its findings and conclusions were within the limits of reasonableness are cited in the footnote. [21] These authorities dictate our scope of review on the question whether the proposed settlement between MFS and the Division of Public Utilities is consistent with the public interest (Part IV). Considerations of policy being primarily the responsibility of the Commission, PBI Freight Service v. Public Service Commission, supra , we give great weight to its conclusions on matters of this nature, and set its decision aside only if it is outside the tolerable limits of reason, Silver Beehive Telephone Co. v. Public Service Commission, supra , or so unreasonable that it must be deemed capricious and arbitrary. Williams v. Public Service Commission, supra .