Opinion ID: 2224144
Heading Depth: 1
Heading Rank: 4

Heading: Findings in Proper Form and Supported by Substantial Evidence.

Text: Although neither on rehearing nor in his current court action has appellant challenged the sufficiency of the findings in so many words, he does seek review of the commission's findings and order denying his permit on the grounds that: (1) The commission acted arbitrarily and capriciously in denying his permit, and (2) the findings of fact made by the commission were not supported by substantial evidence in view of the entire record. Respondent contends that under secs. 227.20 (1) and 196.405 (2), Stats., appellant may not challenge the sufficiency of the findings on appeal to this court. We disagree. Sec. 227.20 (1), Stats. 1963, provides: The review shall be conducted by the court without a jury and shall be confined to the record, except that in cases of alleged irregularities in procedure before the agency, testimony thereon may be taken in the court. The court may affirm the decision of the agency, or may reverse or modify it if the substantial rights of the appellant have been prejudiced as a result of the administrative findings, inferences, conclusions or decisions being: (a) Contrary to constitutional rights or privileges; or (b) In excess of the statutory authority or jurisdiction of the agency, or affected by other error of law; or (c) Made or promulgated upon unlawful procedure; or (d) Unsupported by substantial evidence in view of the entire record as submitted; or (e) Arbitrary or capricious. Sec. 196.405 (2), Stats. 1963, provides in part: . . . No person or corporation shall in any court urge or rely on any ground not so set forth in said application for rehearing. Since appellant did not challenge the sufficiency of the findings in precisely these words in his application for rehearing, the statutes, literally construed, would seem to foreclose review of the sufficiency of the findings for the first time in the supreme court. On the other hand, the appellant states plausible reasons why he should be able to challenge the sufficiency of the findings on this appeal. First, the appellant did challenge the findings on the ground that they were arbitrary or capricious, one of the statutory grounds set forth in sec. 227.20 (1), Stats. (Insufficiency of the findings is not such a statutory ground.) This court has explicitly said that one of the prime reasons for the requirement of findings of fact is to prevent arbitrary and capricious action on the part of an administrative agency, and that unless the findings of fact set forth the relevant facts and circumstances determinative of its decision, the order of the agency is arbitrary and unlawful under sec. 227.13. [22] Second, appellant argues that he did allege in his application for rehearing before the commission and in this action that the order of the commission is unsupported by substantial evidence and thereby implicitly questioned the sufficiency of the findings. We deem the two challenges to the commission's order, namely, that findings of fact are unsupported by substantial evidence in view of the entire record and that they are arbitrary and capricious, are adequate to raise the question of the sufficiency of the findings, both on judicial review in the circuit court and this court. The findings entered by the commission are supported by substantial evidence in view of the entire record. Only Findings five and seven are challenged. There is abundant evidence to support these detailed findings. Finding five reads as follows: 5. The area in Plum Lake occupied by the fill was navigable by small boats. The fill is spoil from the adjacent excavation and is an extension of the upland into the lake. Although there was testimony at both the earlier and later hearings to the effect that motorboats had difficulty crossing the sandbar and that pins would be sheared off in the process when these boats attempted to cross the sandbar with the motor extending below the boat, there was other testimony that the motorboats passed over the bar when their motors were tipped up. There was also evidence that boats without motors could go over the bar, that there was always water over the bar, and that in fact it was several inches deep. Certainly this is ample testimony to support a determination by the commission that the sandbar before the fill was navigable in fact, which has been the time-honored definition of navigability in this state. [23] Finding seven reads as follows: 7. The fill as it exists is an unnecessary obstruction to navigation. It is a material obstruction to navigation. It does not allow for the free flow of water thereunder and is detrimental to the public interest on the navigable water involved. The first sentence of this finding is undisputed in the record. There is no question but what the fill was constructed from spoil taken from the excavation of the area immediately adjacent to the breakwater, and that rowboats, canoes, and motorboats cannot pass over the fill but have to go around it. It is argued that although the particular structure does obstruct navigation in that very area, overall it permits greater movement in the area immediately surrounding the fill. In other words the dredging and construction operation resulting in the structure is really an aid to navigation. The PSC has the function of determining whether or not there was a material obstruction to navigation at the place where the fill was made and this necessarily means that the obstruction to navigation is greater than any offsetting aid to navigation either in the area adjacent to the fill or in the entire lake. The balancing of these two factors is left to the PSC which is acting under its mandate to protect the beds of navigable waters. There is ample evidence to support the PSC finding in this regard. There can be no question whatsoever about the further finding that it does not allow for the free flow of water thereunder. As to the commission's finding that the obstruction is detrimental to the public interest on the navigable water involved appellant's contention is that the finding is inadequate because it does not state any particular reasons why the commission so determined. We do not think any statement of reasons is required beyond those stated by the commission in its findings. To specify particular reasons why the obstruction is detrimental to the public interest would be to require the PSC to state what would amount to legislative or policy reasons for its decision. The legislative job was done at the time the standards were set for the approval of permits by the PSC. Any criticism of the PSC because it did not file more particular findings is no different than contending that the standards set by the legislature are too indefinite. There is no merit in such a challenge of the basic statute, sec. 30.12 (2) (a). To state any more particulars or reasons would be no more than entering findings in the form of policy reasons. In our view, this is not necessary where this agency is performing such a legislative function. We recognize that there is some support for the proposition that an administrative agency, acting in a nonlegislative capacity, in making findings should include reasons for its action, beyond ultimatefact conclusions that are required. The federal government Administrative Procedure Act requires that all decisions shall include a statement of findings and conclusions, as well as the reasons or basis therefor. [24] A leading authority on administrative law notes that the Model State APA and most of the state acts make no requirement of a statement of reasons . . . . [25] It is true that in the recent case of Northeast Airlines, Inc., v. Civil Aeronautics Board , [26] the federal court of appeals for the first circuit overruled a determination by the civil aeronautics board denying a renewal of an air carrier permit and remanded the cause for further proceedings on the grounds that the reasons given by the board for its denial were irrelevant or inadequately developed. The court held that Courts ought not to have to speculate as to the basis for an administrative agency's conclusion. [27] The court stated that to prevent just such speculation the United States Administrative Procedure Act provides that all agency decisions shall include not only the appropriate rule, order, sanction, relief or denial thereof, but also findings and conclusions `as well as the reasons or basis (emphasis added) therefor, upon all the material issues of fact, law, or discretion presented on the record.' [28] But there is no such explicit provision in the Administrative Procedure Act for Wisconsin. There is no authority requiring findings to be other than those prescribed by sec. 227.13, Stats., and the findings in the instant case meet the requirements of sec. 227.13 in that they are stated in terms of the ultimate-factual determinations that were necessary to support the commission's order. It may be true that the commission's findings were couched in the very words of the statute but what closer adherence to the legislative standards could one expect? Appellant contends that the questioned findings do not meet the requirements of the Cointe and Clintonville Cases. Cointe [29] was a contract action in which the plaintiff sought recovery for the reasonable value of drilling and constructing a well. Defendant, the church corporation, after a trial was victorious in resisting this claim. The trial court issued a long detailed opinion disposing of the case but entered very limited findings. On review this court considered that the findings were adequate to make it clear (1) that there was no binding contract between the plaintiff and defendant, (2) that the pastor and bishop had not acted as agents of the defendant, and (3) that the corporation had not accepted the benefits of plaintiff's work. This resulted in the dismissal of plaintiff's claim. In its controlling statement about what form the findings should take, the court said: The ultimate facts which a finding should contain are, generally speaking, the issuable facts which a pleading should contain (sec. 2646, Stats.), and practically the same as the facts which a special verdict should contain (secs. 2857, 2858, Stats.). In either case the statement of the ultimate fact frequently includes a legal conclusion from evidentiary facts, and in either case it should, generally speaking, be such a fact that, if it were to be successfully denied, the conclusion of liability or nonliability based upon the findings as a whole is untenable. [30] In our view the findings in paragraphs 5 and 7 meet the requirements of Cointe. Clintonville Transfer Line v. Public Service Comm . [31] presented a case in which another PSC determination was questioned. In that case, the PSC proceeding concerned an application by Clintonville Transfer Line for authority to operate as a common motor carrier in a particular area, beyond its existing authority. The commission denied the application, and the circuit court reversed the commission, pointing out that although the commission filed a 10-page opinion, the opinion did not indicate whether the commission had given any consideration to certain points of service actually served by the applicant on its existing authority. The supreme court ruled that the PSC had failed to comply with the requirements of sec. 227.13, Stats., because the PSC had not entered findings of fact although it had set forth its findings as conclusions of law. This is a far cry from the present case where the PSC has filed detailed findings of fact. We conclude that the findings were not only in proper form but also were supported by substantial evidence in view of the entire record. Since the function performed by the PSC in processing this permit application was legislative, the ultimate test for the judicial review of its findings was stated by this court in the first Ashwaubenon Case, as follows: . . . when the `substantial evidence' rule of sec. 227.20 (1) (d), Stats., is applied to a legislative-type decision, the test is whether reasonable minds could arrive at the same conclusion reached by the commission. [32] Or as stated in Weyauwega Telephone Co. v. Public Service Comm .: [33] The weighing of these various factors is a policy function which lies peculiarly within the province of the PSC. If there exists any reasonable basis in the evidence for the determination made by the commission, a reviewing court should not disturb it. [34] Ch. 227 does not contemplate that the reviewing court make an independent determination of facts. [35] As stated in Gateway City Transfer Co. v. Public Service Comm .: [36] The court on review is required by statute to give effect to the legislative command that `upon such review due weight shall be accorded to the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it.' Sec. 227.20 (2), Stats. Whether the granting of the franchise or amendment sought is in the public interest presents a matter for the exercise of legislative discretion by the commission. It cannot be answered by the application of a proposition of law. It is clear therefore that a trial court must have compelling reasons for reversal where the final conclusion of the agency is based upon a determination which is not only highly discretionary but rests upon the agency's finding as to what is necessary and convenient in the public interest, two terms of indefinite and varying content. We concur in the conclusion of the trial court that such reasons are not present in this case. . . . The majority of this court stated, in conjunction with its analysis of judicial review of a PSC decision on the establishment of bulkhead lines: . . . Even though there is a large hurdle confronting one who seeks to upset the order of a commission in performance of its legislative functions, it is preferable to allow such judicial review rather than to bar it entirely. [37] The cause was remanded to the PSC for further proceedings and findings. We would conclude that the appellant has not cleared this hurdle, that the PSC entered findings which are proper in form, are supported by substantial evidence in view of the entire record, evidence from which reasonable minds could have arrived at the same conclusion.