Court Opinion

ID: 9793649
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:51:00.858253+00
Date Added: 2024-06-11T08:06:20.020914
License: Public Domain

MOSK, J.
I dissent.
The convoluted history of the Public Utilities Commission’s adoption of single message rate timing (SMRT) is a seemingly endless series of false starts, second thoughts, and reversals which does little credit to the administrative process.1 From this welter of indecision, however, there *546has now emerged at least one clear result: ratepayers who subscribe to the limited service of 60 local message units per month are to be the guinea pigs in the SMRT experiment. Although these ratepayers constitute but 11 percent of residential customers, the decision under review makes them the only such customers to be charged according to a scheme conceded by the commission to be “radical and distasteful” to many persons. Not surprisingly, the commission wholly fails to justify this rank discrimination: as will appear, I disagree with the majority’s conclusion that the decision is supported by the specific findings of fact required both by statute and by settled case law.
We are the exclusive state court with jurisdiction to review commission decisions. (Pub. Util. Code, § 1759.)2 In such review our function is to examine “whether the commission has regularly pursued its authority, including a determination of whether the order or decision under review violates any right of the petitioner under the Constitution of the United States or of this State.” (§ 1757.) Among the steps which the commission must take in order to “regularly pursue its authority” is compliance with the statutory mandate that each of its decisions “shall contain, separately stated, findings of fact and conclusions of law by the commission on all issues material to the order or decision.” (§ 1705.) Petitioner makes a convincing showing that this statute was violated in the case at bar.
The requirement of specific findings of fact and conclusions of law was added to section 1705 in 1961. We first construed and applied this statute in California Motor Transport Co. v. Public Utilities Com. (1963) 59 Cal.2d 270 [28 Cal.Rptr. 868, 379 P.2d 324]. There, the commission issued a certificate of public convenience and necessity to a trucking firm, but its decision recited only the ultimate finding of such convenience and necessity. Speaking through then Associate Justice Traynor, the court held that “Every issue that must be resolved to reach that ultimate finding is ‘material to the order or decision’ ” within the meaning of section 1705. (Id., at p. 273.) Because the commission had failed to make separate findings on each of the basic facts supporting the ultimate finding of convenience and necessity, we unanimously annulled the decision.
*547Our opinion in California Motor Transport listed a number of compelling reasons for the requirement of specific findings of fact. (Id., at pp. 274-275.) These reasons have repeatedly been invoked in later cases, and were summarized as follows in Greyhound Lines, Inc. v. Public Utilities Com. (1967) 65 Cal.2d 811, 813 [56 Cal.Rptr. 484, 423 P.2d 556]: “such findings afford a rational basis for judicial review and assist the reviewing court to ascertain the principles relied upon by the commission and to determine whether it acted arbitrarily, as well as assist parties to know why the case was lost and to prepare for rehearing or review, assist others planning activities involving similar questions, and serve to help the commission avoid careless or arbitrary action.” (Accord, City of Los Angeles v. Public Utilities Commission (1972) 7 Cal.3d 331, 337 [102 Cal.Rptr. 313, 497 P.2d 785]; Southern Pacific Co. v. Public Utilities Com. (1968) 68 Cal.2d 243, 244 [65 Cal.Rptr. 737, 436 P.2d 889]; Associated Freight Lines v. Public Utilities Com. (1963) 59 Cal.2d 583 [30 Cal.Rptr. 466, 381 P.2d 202],)3 In each of the cited cases we unanimously annulled a commission decision for failure to separately state findings on all facts necessary to support the ultimate finding, e.g., of public interest, necessity, or convenience.
The decision under review contains 15 purported “findings of fact.”4 Of these, only findings 14 and 15 even arguably support the imposition of SMRT on 60-message-unit subscribers; but because items 14 and 15 are no more than statements of the ultimate finding that the new rates are “just and reasonable,” they cannot alone satisfy the requirements of the foregoing case law.
*548To support the commission’s action, accordingly, it would have been necessary for items 1 through 13 to contain findings on the basic facts upon which the ultimate finding was predicated. Findings 1 through 13, however, are plainly devoid of any basic facts relevant to the reasonableness of or justification for ordering Pacific to impose SMRT on 60-message-unit subscribers. Thus findings 1 and 12 concern 30-message-unit (lifeline) service only. Finding 2 expresses the commission’s view that the price of an initial message unit should remain at five cents, and finding 3 states the commission’s conclusion that SMRT charges ought to be based on one-minute rather than five-minute increments. Finding 4 recites that SMRT will be removed during off-peak hours as an incentive to use of the telephone system in that period. Findings 5 through 10 relate only to regrade charges and refunds. Finding 11 is *549notice of how the commission intends to handle SMRT’s effect on Pacific’s revenues, while finding 13 is a statement that charities will not be exempted from SMRT.
The irrelevance of each of the listed findings to the question before us is obvious. Indeed, this is impliedly conceded in the majority opinion, as it relies on none of them. Instead, the majority turn to other portions of the challenged decision and, apparently, to the record itself, and from these sources derive additional “facts” that assertedly support the decision. Thus it is said that because 60-message-unit customers pay a lower monthly rate than flat-rate subscribers, it is “not necessary” to provide them with “precisely the same form of service.” (Ante, p. 539.)5 The majority further recite that “it may be years” before Pacific will have enough equipment to fully implement SMRT and hence it is “not unreasonable” to begin by imposing the system on the relatively small class of 60-message-unit customers (ante, pp. 539-540);6 that “various witnesses before the Commission noted” that imposition of SMRT on that class will give Pacific experience with its effect on customer usage as a whole (ante, p. 539);7 and that 60-message-unit customers retain the ability to avoid any increase in charges either by switching to flat-rate service or “by limiting the duration of their on-peak local telephone calls to .five minutes.” (Ibid.)8
The overwhelming objection to invoking any of these “facts,” however, is that none is a finding separately stated in the decision as required by section 1705. Even a superficial reading of the commission’s 15 findings herein (fn. 4, ante) shows that the majority’s “facts” are nowhere to be seen among them. It follows that we cannot know if the commission would have made findings on any of the majority’s “facts,” or intends any of them to serve as a basis for its ultimate finding. The majority’s reliance thereon is thus sheer guesswork.
*550It is also contrary to our prior decisions. For example, in Southern Pacific Co. v. Public Utilities Com. (1968) supra, 68 Cal.2d 243, the commission ordered installation of flashing light signals at a grade crossing. The sole finding of fact stated in its decision was that such signals were adequate to serve “public safety, welfare, convenience and necessity.” We did not hesitate to annul the decision because of its failure to provide separately stated findings on each of the facts upon which that ultimate finding was based, even though we acknowledged that “a basis for the commission’s order may be gleaned from its decision . . . .” (Id., at p. 244.)
The majority here engage in precisely the kind of “gleaning” process we unanimously rejected in Southern Pacific. The “facts” relied on by the majority have apparently been disinterred not only from the body of the decision itself but also from a record consisting of 550 documents and over 7,000 pages of testimony. Given enough time and staff we could probably find at least some evidence in such a voluminous record to sustain virtually any order or decision. But the Legislature has wisely commanded the commission to provide us with explicit, “separately stated” findings to spare this court from having to search the record and speculate as to the factual basis of the decision.
Indeed, in this instance speculation is the only source available to support the conclusion of the majority. In its fourth interim opinion in the checkered history of this case, filed November 2, 1976, the commission expressly found it “unreasonable” to continue with SMRT for 60-message-unit residential service. (Dec. No. 86594, finding l.)9 Certainly the ratepayers, as the consuming public, and we, as the reviewing court, are entitled in this fifth interim opinion to a recitation of the facts which assertedly rendered reasonable on July 12, 1977, that which was unreasonable on November 2, 1976, only eight months earlier. No such explanation is offered.
Past experience has taught us the strength and persistence of the tendency of the commission to make inadequate findings in the name of *551expediency. If we allow the present violation of section 1705 to pass unchallenged, it will encourage others and we will surely regret the precedent in cases yet to come.
I would annul the decision.
Bird, C. J., and Newman, J., concurred.
Petitioner’s application for a rehearing was denied November 24, 1978. Mosk, J., was of the opinion that the application should be granted.

As the majority point out (ante, pp. 544-545), in the matter under review the commission is even compelled to rule illegal one of its own decisions (No. 86602) rendered earlier in *546this “admittedly confusing sequence of events . . . .” (See also finding 8, fn. A, post.) Nor is the end of this byzantine tale in sight: the commission entitles the present decision its “Fifth Interim Opinion on Rehearing,” and warns that it “may not be our final resolution on how SMRT should be implemented.”

Unless otherwise specified, all statutory references herein are to the Public Utilities Code.

The several purposes served by the findings requirement of section 1705 are strikingly similar to those underlying the requirement (Code Civ. Proc., § 657) that a trial court specify its reasons for granting a new trial. (See Mercer v. Perez (1968) 68 Cal.2d 104, 113-114 [65 Cal.Rptr. 315, 436 P.2d 315].)

“1. SMRT should not be applicable to lifeline residence telephone service. However, it may be reasonable to charge a premium for messages in excess of the 30-message allowance. We will require Pacific to study this or similar plans.
“2. The initial period for business and residence measured service should continue to be priced at five cents for the first five minutes of use or fraction thereof.
“3. We find that the present SMRT plan wherein overtime usage is charged in five-minute increments for usage beyond the initial period is unreasonable. A reasonable plan is to charge residential and business subscribers on a per-minute basis for overtime use. It is reasonable to reduce the present one message unit (5 cents) for five minute overtime rate to one-fifth message unit (one cent) for one minute of overtime use.
“4. We find that to promote efficient use and conservation of communications facilities SMRT should include off-peak incentives in the form of removal of timing from 5:00 p.m. to 8:00 a.m. on weekdays and all day on Saturdays, Sundays, and holidays.
*548“5. In order that residential subscribers may select the service consistent with their requirements, in view of these late modifications, it is reasonable to waive charges for the regrade of residence service in the SMRT areas for 90 days after the rates herein become effective. Pacific should notify the affected subscribers of these rate changes and the regrade waiver.
“6. The residential SMRT revenues held by Pacific, subject to refund pursuant to Ordering Paragraph No. 4 of Decision No. 86678, should be returned. Pacific should submit a proposed refund plan within 30 days for the Commission’s approval.
“7. When the revenue requirement was last determined for Pacific in Decision No. 85287, Application No. 55214, dated December 30, 1974, the Commission did not recognize estimated annual revenues to be derived from SMRT.
“8. Decision No. 86602 dated November 8, 1976 unlawfully modified Decision No. 86594. The rates authorized by Decision No. 86594 are the rates that were lawfully applicable.
“9. Refunds that are to be made to residential subscribers subject to SMRT should be calculated from November 8, 1976 (the date that SMRT was reinstituted on residential subscribers following Decision No. 86602).
“10. Pacific should file a refund plan for the Commission’s approval to refund SMRT revenue collected from residential subscribers from November 8, 1976 through November 23, 1976. (November 23, 1976 was the date that all residential SMRT revenue was made subject to refund.) Pacific shall file that refund plan as well in conjunction with its plan to refund residential SMRT rates collected after November 23, 1976 (pursuant to Decision No. 86678).
“11. We will consider the annual test year revenue effect of the SMRT rate modifications ordered herein when we establish Pacific’s revenue requirement in this proceeding. Pacific should be directed to present the estimated annual test year revenue effect of this order within 15 days.
“12. Pacific and the staff should submit evidence on possible modifications to lifeline service to prevent abuse of that service.
“13. It is unreasonable to establish discounted or special SMRT rates for nonprofit or charitable business subscribers.
“14. The increases in rates and charges and the other tariff changes authorized herein are justified.
“15. The rates, charges, and other tariff changes authorized herein are just and reasonable, and present rates and charges, insofar as they differ therefrom, are for the future unjust and unreasonable.”

Of course the lower monthly rate is already fully justified by the limited number of calls allowed such customers—an average of only two calls per day.

Although the class is small, the length of time its members will be discriminated against is not, as the majority concede. Such discrimination thus appears to violate the statutory mandate that “No public utility shall establish or maintain any unreasonable difference as to rates [or] charges ... as between classes of service.” (§ 453, subd. (c).)

But by the same token, imposition of SMRT will also give incentive to all members of the 60-message-unit class who make calls of long duration to switch to flat-rate service. To the extent this effect occurs, the purpose of the experiment will be frustrated.

The first alternative, as just noted, would defeat the aim of giving Pacific “experience” with this pricing system; and the second suggestion—voluntarily limiting calls to five minutes—is obviously applicable to all classes of subscribers, and hence cannot serve to justify imposition of SMRT on 60-message-unit customers alone.

In the cited decision the commission also terminated SMRT on 30-message-unit service, and explained that “we question whether it is reasonable to apply timing strictures to two out of three classes of residential service. There is no showing that there is any abuse of the system (i.e., overly long calls) by 30MU and 60MU customers; in fact, the service which is most susceptible of abuse by way of too many long calls or heavier than normal traffic is the flat rate residential service, since there is no timing at all.
“We will order an end to residential SMRT,. . .”