Court Opinion

ID: 9534528
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:40:36.471709+00
Date Added: 2024-06-11T13:31:12.128688
License: Public Domain

UDALL, Justice
(dissenting).
I dissent from the majority opinion.
In this case the Southern Pacific Company is asserting the right to discontinue half of its trans-continental train service through Arizona without notice to the Arizona Corporation Commission, as required under A.R.S„ § 40-367 (1956) et seq. and .the Commission’s General Order No. U-8, and without notice to the Interstate Commerce Commission or to any public authority. In eliminating the east and west ■bound passenger trains the railroad is flying in the face of well settled principles of public utility law which have existed at least since the days of Lord Hale and his Stagecoach.
“The devotion of property to a public use carries with it the duty to serve the public, and such duty must be performed by a public utility or its privileges and franchise must be surrendered. As a general rule, it has no 'right to discontinue ot abandon its service or any part of its property devoted to public use or to disable itself from the performance of its public duties except with the consent of the state; and the mere fact that the enterprise or a particular service is not profitable does not justify the utility in ceasing or refusing to perform its duties.” (Emphasis supplied). 73 C.J. S. Public Utilities § 8, cited with approval in State ex rel. North Carolina Utilities Comm. v. Casey, 245 N.C. 297, 96 S.E.2d 8, 13; and Great Northern Ry. v. Bd. of R.R. Com’rs, 130 Mont. 250, 298 P.2d 1093, 1094.
The obligation on the public utility to secure the consent of the state is an affirmative one, and a public utility can obtain permission to discontinue or abandon service only in a proceeding in which the state is a party. State ex rel. Railroad Com’rs v. Bullock, 78 Fla. 321, 82 So. 866, 8 A.L.R. 232, 236 (1919), aff’d 254 U.S. 513, 41 S.Ct. 193, 65 L.Ed. 380 (1921). In this case the court said:
“By the acceptance of its charter from the state such a company is permitted to exercise certain rights not enjoyed by individuals. It is given certain of the attributes of sovereignty itself, such as the power of eminent domain. It likewise is charged with the performance of certain public duties, namely, the duties of a common carrier. While it is constructed by private capital and *352is primarily controlled by individual effort, it is a public instrumentality subject in its operation to regulation by public authority. Accordingly, therefore, the public has such an interest in the operation of such a road that, when once undertaken, it may not be discontinued by a proceeding in which the state is not represented, when such discontinuance has not been consented to by the state.”
In a case involving the same railroad company now before this court, the Oregon Supreme Court said in 1911:
“The railway corporation is invested with the powers of the sovereign, because it is a trustee and agent of the sovereign, and therefore must exercise its public functions under the supervision of its superior. Its public duties are ministerial, namely, to carry out the objects of its creation with reference to what public necessity and convenience require, and the right to compel this must of necessity reside in its creator, the state.
“The duty of a railway corporation to provide reasonable facilities for the transportation of passengers and freight is one which always existed, and not one created by statute. The statute only provides a method by which these pre-existing duties may be enforced.” Southern Pac. Co. v. Railroad Commission, 60 Or. 400, 119 P. 727, 729 (1911).'
As was said in Barton v. Barbour, 104 U.S. 126, 135, 26 L.Ed. 672 (1881) :
“A railroad is artthorized to be constructed more for the public good to be subserved than for private gain. As a highway of public transportation, it is a matter of public concern, and its construction and management belong primarily to the commonwealth, and are only put into private hands to subserve the public convenience and economy; but the public retain rights of vast consequence in the road and its appendages, which neither the company nor any creditor or mortgagee can interfere with. They take their rights, subject to the rights of the public, and must be content to enjoy them in subordination thereto.”
The Constitution of the United States ■under the due process clause does not grant to a railroad company a continuing privilege .of exercising its' franchise and ,at the same time permit it to escape from the duties incidental thereto. Fort Smith Light & Traction Co. v. Bourland, 267 U.S. 330, 45 S.Ct. 249, 69 L.Ed. 631 (1925).
It is the universal practice of railroads to. ask permission of the ' state to discontinue passenger train service, even where the reasons for the discontinuance of the passenger train service is so clear , *353that the request is a meaningless formality. Chicago B. & Q. R. Co. v. Municipalities of Holdrege, 152 Neb. 352, 41 N.W.2d 157 (1950). We have found only one instance in which the right to'discontinue a passenger train without notice was claimed by the railroad, and in that case the right of the railroad to discontinue the trains without notice was denied. Great Northern Ry. v. Bd. of R.R. Com’rs, 130 Mont. 250, 298 P.2d 1093, 1094 (1956), appeal dismissed for want of a substantial federal question, 352 U.S. 904, 77 S.Ct. 146, 1 L.Ed.2d 114 (1956).1 The court said:
“The order of the board complained of here simply requires the railroad company to continue the operation of its trains until it obtains approval of the railroad commission, upon a proper showing, to abandon such service. In such proceedings the burden of proof rests upon the railway company to make a showing warranting the abandonment of the service within the principles laid down by this court in Chicago, M., St, P. & P.R. Co. v. Board of Railroad Commissioners, 126 Mont. 568, 255 P.2d 346. The railway company may not, by abandoning the service without permission of the board of railroad commissioners and without a hearing, shift the 'burden of proof to the board to submit sufficient proof authorizing an order for the continuance of such service. Rather the proper procedure was followed by the board here to compel the continuance of the service until the railroad company itself submits adequate proof in appropriate proceedings that the public interest no longer requires the service within the principles of the above cited case and the cases therein cited.
“It may well be conceded that if the board were ordering the institution of new or additional service without notice and without an opportunity to be heard the action and the statute authorizing it would be contrary to the state and federal Constitutions within the principles announced in the casé of Chicago, M. & St. P. Ry. Co. v. Board of Railroad Commissioners, 76 Mont. 305, 247 P. 162. But as before stated the board here made no findings of fact and in fact' heal'd no testimony that would sustain the institution of any additional service. Tfdid not order new or additional service. All that has been done is to order the maintenance of the status quo until the railway company proceeds in the regular way provided by,law and the regulations of "the board to. sustain the bur*354den of proving a sufficient case justifying the discontinuance of- the service in question.”
The matter of burden of proof is essential in cases of this kind. Where discontinuance is at issue, the railroad must present the evidence which it has that the trains are no longer needed by the public. It cannot, by arbitrarily discontinuing the trains, as was done here, place upon- the Commission the burden of establishing that the trains are needed, as the Commission would be required to do if it was .to order new or additional service for the public convenience.
In the instant case the majority has clearly shifted the burden of proof to the Commission, requiring that before the Railroad can be compelled to continue with its present schedules and service the. Commission will be required to prove that such service and schedules are necessary for the convenience and necessity of-the-public.
The majority has held that the only remedy available to the public is to -be found in A.R.S. §§ 40-421 (1956); 40-424 (1956), and 40-425 (1956), which authorize that all violations be promptly prosecuted and penalties due the state therefor be recovered and collected. It will be 'noted that these penalty provisions give no belief whatever to the public. -The finés, if any, are collected by the Commission for the benefit of the state. The only recourse available to the public, is to wait until the matter has been prosecuted hi the trial courts under the direction of the Attorney General, and until the appeal has been taken in the courts of last resort, state and federal, and only then would the- public know whether service would be restored.
The majority loses sight of the fact that fhis is not just a contest between the railroad and the Commission; but that the parties who should receive the first consideration is the traveling public who are entitled to have uninterrupted service until that service has been terminated by the authority of law. A.R.S. § 40-367 (1956) and Commission's General Order U-8.
If the railroad has a just cause in seeking to cut down the number of daily schedules of passenger trains running over its lines in Arizona it has ample authority to apply for such relief under existing- law. This court has displayed a sympathetic attitude toward the problems of the Southern Pacific in reviewing service orders of the Corporation Commission. Arizona Corporation Com’n v. Southern Pac. Co., 87 Ariz. 310, 350 P.2d 765 (1960). If this case was before us on its merits, an order for the discontinuance of the trains might be secured. It has been held that a railroad company has the duty to seek, and regulatory agencies have the duty to permit, elimination of those services and facilities which are no longer needed or used by the public to any substantial extent. Chicago, B. & Q. *355R. Co. v. Municipalities of Holdrege, 152 Neb. 352, 41 N.W.2d 157 (1950); Reading Co. v. Pennsylvania Public Utility Comm., 191 Pa.Super. 635, 159 A.2d 61 (1960).
The majority opinion, in order to reach, a particular result, resorted to declaring the Commission’s General Order U-8 invalid. With respect to the contention the Commission did not have authority to promulgate General Order U-8 an examination of the pertinent Constitutional and statutory provisions reveals the following. Arizona Constitution Article 15, § 3 states:
“The Corporation Commission shall have full power to, and shall, prescribe just and reasonable classifications to be used and just and reasonable rates and charges to be made and collected, by public service corporations within the State for service rendered therein, and make reasonable rules, regulations, and orders, by which such corporations shall be governed in the transaction of business within the State and may prescribe the forms of contracts and the systems of keeping accounts to be used by such corporations in transacting such business, and make and enforce reasonable rules, regulations, and orders for the convenience, comfort, and safety, and the preservation of the health, of the employees and patrons of such corporations; Provided, that incorporated cities and towns may be authorized by law to exercise supervision over public service corporations doing business therein, including the regulation of rates and charges to be made and collected by such corporations ; Provided further, that classifications, rates, charges, rules, regulations, orders, and forms or systems prescribed or made by said Corporation Commission may from time to time be amended or repealed by such Commission.” (Emphasis added).
At first blush it would appear that this constitutional provision alone is sufficient authority to the Commission to promulgate General Order U-8. However, this Court in Corporation Comm, of Arizona v. Pacific Greyhound Lines, 54 Ariz. 159, 94 P.2d 443 (1939) said :
“ * * * we are of the opinion that the ‘full power to * * * make reasonable rules, regulations and orders, by which such corporations shall be governed in the transaction of business within the State’, qualifies and refers only to the power given the commission by the same section to
‘prescribe just and reasonable classifications to be used, and just and reasonable rates and charges to be made and collected, by public service corporation’,” 54 Ariz. at 176, 94 P.2d at 450.
*356However, it should he noted that Article 15, § 6 of the Constitution provides:
“The law-making power may enlarge the powers and extend the duties of the Corporation Commission, and may prescribe rules and regulations to govern proceedings instituted by and before it; but, until such rules and regulations are provided by law, the Commission may make rules and regulations to govern such proceedings.” (Emphasis added). • ■
Consistent with this provision the legislature has passed the following statutes:
A.R.S. § 40-202 (1956), which provides:
“A. The commission may supervise and regulate every public service corporation in the state and do all things, whether specifically designated in this title or in addition thereto, necessary and convenient in the exercise of such power and jurisdiction.”
A.R.S. § 40-367 (1956), which provides:
“A. No change shall be made by any public service corporation in any rate, fare, toll, rental, charge or classification, or in any rule, regulation or contract relating to or affecting any rate, toll, fare, rental, charge, classification or service, or in any privilege or facility, except after thirty days notice to the commission and to the public as provided in this chapter.
“B. Notice shall be given by filing with the commission and keeping open for public inspection new schedules stating plainly the change to be made in the schedules then in force, and the time when the change will go into effect.
“C. The commission, for good cause shown, may allow changes without requiring the thirty days notice provided for in this section by an order specifying the changes so to be made and the time when they shall take effect, and the manner in which they shall be filed and published.”
We feel it is clear that these statutory provisions are adequate authority under which the Commission could pass General Orders such as U-8 in this case.
The railroad argues that A.R.S. § 40-202 (1956) standing alone to authorize General Order U-8 is invalid as an unconstitutional delegation of legislative authority. In the case of Haggard v. Industrial Commission, 71 Ariz. 91, 223 P.2d 915 (1950) we said:
“The ordinary rule, of course, is that legislative powers cannot be delegated to administrative bodies. * * *
But this does not mean that when authorized to do so by the act itself administrative bodies may not make rules and regulations supplementing legislation for its complete operation and *357enforcement, if such rules and regulations are within the standards set forth in the act of the legislature. * * *
“The extent and character of these rules and regulátions must be fixed in accordance with common sense and the inherent necessities of governmental coordination, and the standards laid down by the legislature and within which the administrative body may act may be in broad and general terms.” (Emphasis added) 71 Ariz. at 100-101, 223 P.2d at 921-922.
In view of the power granted the Commission by' A.R.S. § 40-324 (1956) allowing the Commission to order changes in service to insure adequate service by a particular railroad, and the notice requirement of A.R.S. § 40-367 (1956), common sense would dictate that the Commission could pass a General Order requiring railroads to seek Commission authority before curtailing present existing service. We feel the “necessary and convenient” requirement of A.R.S. § 40-202 (1956) is a sufficient standard to meet the test of Haggard, which said “the standards laid down by the legislature * * * may be in broad and general terms.” This is consistent with the general case law on this subject of delegation of legislative authority. See Davis, Administrative Law Treatise §§ 2.01 and 2.16 (1958). I therefore would hold that the General Order U-8 is valid insofar as the Commission had the proper authority to promulgate such an order.
The railroad next contends that the application of General Order U-8 to them in this case is unconstitutional as an interference with interstate commerce.
The Interstate Commerce Act, 49 U.S. C.A. § 1(17), provides in pertinent part:
“ * * * nothing in this chapter shall impair or affect the right of a State, in the exercise of its police power, to require just and reasonable freight and passenger service for intrastate business, except insofar as such requirement is inconsistent with any lawful order of the Commission made under the provisions of this chapter and except as otherwise provided in this chapter.”
The United States Supreme Court in Southern Pacific Co. v. State of Ariz. ex rel. Sullivan, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945) has said:
“Although the commerce clause conferred on the national government power to regulate commerce, its possession of the power does not exclude all state power of regulation. Ever since Willson v. Black-Bird Creek Marsh Co., 2 Pet. (US) 245, 7 L.Ed. 412, and Cooley v. Board of Wardens, 12 How. (U.S.) 299, 13 L.Ed. 996, it has been recognized that, in the absence of conflicting legislation by Congress, there *358is a residuum of power in the state to make laws governing matters of local concern which nevertheless in some measure affect interstate commerce or even, to some extent, regulate it.” 325 U.S. at 766-767, 65 S.Ct. at 1519.
The railroad has made no claim that any order of the ICC or provision of the Interstate Commerce Act has been violáted by General Order U-8. The order does not purport to control or regulate interstate commerce. The order deals only with those railroads providing public service within the State. I believe the order is clearly within the exception of 49 U.S.C.A. § 1(17) quoted above giving the States power to regulate intrastate passenger service provided such regulation is not inconsistent with any order of the ICC. There is nothing in the record to indicate that the railroad elected to have the ICC pass on the • discontinuance of service by giving the appropriate notice pursuant to 49 U.S.C.A. § 13(a) and thereby preempting the State of jurisdiction in the matter. I therefore would hold that General Order U-8 as applied in this case to the railroad is not unconstitutional.
Lastly, the railroad contends that they were denied an opportunity to present evidence regarding the discontinuance of service. The railroad cannot be heard to complain that they have been denied a hearing until -they, comply with the orders of -the Commission and make proper application' I pursuant to General Order U-8 for per- ^ mission to discontinue passenger service.' Great Northern Ry. v. Bd. of R. R. Com’rs, supra. At that time the railroad will be entitled to a full and adequate hearing on the matter. I do not condone the attempted fait accompli by the railroad in this case.

. It should he noted, here the ultimate arbiter of federal questions dismissed this ease which is substantially identical to the one at bar for want of a- substantial federal question, yet the majority base their . opinion bn a denial of “due process”!