Court Opinion

ID: 9559419
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:28:54.464851+00
Date Added: 2024-06-11T09:10:56.408039
License: Public Domain

*213Fatzer, J.,
dissenting: With profound respect for the judgment of my colleagues, I must express my disagreement with the court’s affirmance of this case. The decision is basic and vital to the transportation of property in the state and has far reaching results. The appellee seeks to present this litigation as just another rail versus truck fight; that is not the case. The real issue is common carrier service by rail and motor vehicle versus contract motor carriers. I shall state my views to the extent time permits.
The appellants contend, and I concur, that the provisions of G. S. 1949, 66-1,112d and e, make it clear that before a contract carrier permit may be authorized, the commission must make an affirmative finding with respect to the four criteria or standards detailing the special and limited circumstances under which a contract carrier permit may be issued pursuant to section 66-1,112e, and as set forth in the court’s opinion, they are:
“1. That there does not exist sufficient common carrier service to adequately meet the public needs.
“2. That the contract carrier will not give or cause any undue or unreasonable advantage or preference to those whom he serves, as compared with the patrons of any common carrier.
“3. That the contract carrier will not subject the patrons of any common carrier to any undue or unreasonable discrimination or disadvantage.
“4. That the contract carrier will not by unfair competition destroy or impair the service or business of any common carrier or destroy or impair the integrity of the State’s regulation of the common carriers.”
The foregoing standards have long been followed by the commission in its orders and decisions and reflect the statutory interpretations applied during the formative years of motor carrier regulation in Kansas. No continuing publication of commission decisions is available but see Kansas Motor Carrier Cases by Samuel E. Bartlett, 1940; Bowen Contract Carrier Application, Docket No. 20,214-M; Murphy Contract Carrier Application, Permit No. C 2-22; Palmer Contract Carrier Application, Docket No. 20,439-M; Horrall Contract Carrier Application, Docket No. 727-M, and Sanders Contract Carrier Application, Docket No. 21,378-M. These standards were applied by the commission as late as May 25, 1960, when it denied the applications of the five applicants here involved. In that order, which was set aside by the commission’s order of January 12, 1961, here involved, it was said:
“. . . In deteraiining whether such permits shall be issued, and on what terms and conditions, the Commission is not left to arbitrary action. It may *214refuse or limit the permit when such action is in the public interest. The Commission may refuse or limit a permit to a contract carrier when necessary (1) to prevent ‘any undue or unreasonable advantage or preference to those whom he serves, as compared with the patrons of . . . any . . . common carrier’; (2) to prevent the subjection of ‘the patrons any such common carrier to any undue or unreasonable discrimination or disadvantage’; (3) to prevent by unfair competition the destruction or impairment of ‘the service of any public motor carrier . . . or of any other common carrier; or (4) to prevent the destruction or impairment of ‘the integrity of the state’s regulation of any such service or business.’ (G. S. 1949, 66-1,112e.)”
“The motor carrier act recognizes contract carriers as a class of motor carriers who have a place in the transportation scheme. . . . One of the purposes of conferring authority upon the Commission to grant or deny a contract carrier permit is to prevent the undue diversion of traffic from common to contract carriers.
“If contract carriers are permitted to haul the most lucrative portion of the traffic and thus impair the ability of common carriers to continue to serve the public, the operations of contract carriers will ultimately deprive the public generally of vital motor transportation facilities. This problem is recognized as present. Consequently the motor carrier act specifically states that contract carriers shall not be permitted to impair the integrity of the regulation of common carriers.” (Emphasis supplied.)
It is a well-settled rule that in the construction of a statute, and particularly one of this character, the interpretation placed upon it by an administrative agency whose duties are to carry the legislative policy into effect should he given great weight, and may be entitled to controlling significances when the scope and limitations of such powers must he determined in judicial proceedings. (State, ex rel., v. Public Service Comm., 135 Kan. 491, 496, 497, 11 P. 2d 999; Graves v. Armstrong Creamery Co., 154 Kan. 365, 370, 118 P. 2d 613; Southwestern Bell Telephone Co. v. Employment Security Board of Review, 189 Kan. 600, 607, 371 P. 2d 134, and cases cited.) This is not to suggest, of course, that courts are hound to follow the interpretations of an administrative agency and they should not do so if such interpretations appear to be clearly erroneous. But the general rule is a sound one. Moreover, the Motor Carrier Act was interpreted in 1936 by this court in dealing with a contract carrier matter, and in Baldwin v. State Corporation Comm., 143 Kan. 580, 56 P. 2d 453, it was said:
“It clearly appears one of the main purposes of the act is to protect common carriers by rail and common carrier by motor vehicle alike in territory where there exists sufficient common-carrier service to adequately meet the public needs.” (1. c. 585.)
*215However, the court here sustains the commission’s “turnabout” policy with respect to the application of Sec. 66-1,112d and e, by stating,
“The provisions of this section against discrimination and unfair competition apply to a contract motor carrier after the permit is granted.”
In my opinion, the court’s conclusion has the effect of shifting the burden of proof with respect to the standards of 66-1,112e forbidding discrimination and unfair competition from an applicant to protesting carriers. If the commission is now correct as the court concludes, then the specific “thou shall nots” directed to contract motor carriers by section 66-1,112e become mere declarations, devoid of real meaning, and impossible of enforcement. The burden of proof upon an applicant before the commission does not shift to protestants but remains in the applicant to show that pertinent standards are satisfied to entitle the issuance of a permit, or an authority. (Community of Woodston v. State Corporation Comm., 186 Kan. 747, 754, 755, 353 P. 2d 206.) As the court presently construes section 66-1,112e, the sole issue before the commission on a contract motor carrier’s application will be the willingness of the applicant to go into the trucking business and the desire of a shipper to use the applicant’s service. A hearing on such an application would be a mere formality and the appearance of protesting common carriers a waste of time. Clearly, the statutory scheme of the Motor Carrier Act places the burden upon the applicant to prove that there does not exist sufficient common carrier service to adequately meet the public needs and that discrimination and unfair competition prohibited by section 66-1,112e are not present. An order granting a contract motor carrier’s application can be valid only if it contains express findings as to each provision of 66-1,112e, and the order granting the applications here involved contains no such express findings.
In my opinion the commission’s order of January 12, 1961, is unlawful and indicates a change of policy unwarranted by the statute, and the court’s opinion permitting such a change is likewise a departure from the long and continuous interpretation and application of the statute by the commission, in addition to being unwarranted by the statute itself. If the commission seeks to change present applicable procedure for granting contract motor carrier permits, the road is to the legislature and not to this court.
*216Another reason exists why the order of the commission is unlawful. As previously indicated, before the commission may grant a contract carrier permit it must first affirmatively find that there does not exist sufficient common carrier service to adequately meet the public needs. This standard was laid down by this court in Baldwin v. State Corporation Comm., supra, and so long as there exists sufficient common carrier service to adequately meet the public needs, a contract carrier authority may not be granted. An order granting a contract carrier permit is valid only when a specific finding has been made that such common carrier service is not available. Likewise, the order must contain an unequivocal finding that preference and discrimination forbidden by section 66-1,112e are not present. No such findings were made in the commission’s order, nor could they be made under the evidence. The order simply states a conclusion wholly inconsistent with the preceding findings. It states in part, as follows:
“The Commission is concerned about price setting in this industry, the fact that cement is delivered to any given point in Kansas at a given price regardless of what cement place supplies it or the distance from which the cement is shipped, and with the fact that competition is thus limited, and is also concerned about the shipper’s ability to supply or deny cement to various purchasers and/or users. There is some reason to believe that the granting of the contract motor carrier authority will foster and perpetuate this ability of cement plants to not only control the production and price of cement, but also the transportation and destination thereof. We are concerned with the same problem with which the Pennsylvania Public Utility Commission was concerned when it granted motor common carrier authority and denied contract motor carrier authority.
“We have some concern about whether the granting of contract carrier authority will make possible and foster the kind of discrimination and unfair competition prohibited by our Kansas Statutes, particularly G. S. 66-1,112. But on the basis of evidence at hand, wa cannot at the present time say that there is or will be such discrimination and unfair competition.”
Here the commission found that it was “concerned” about (1) “price setting,” (2) “competition is thus limited,” (3) “shipper’s ability to supply or deny cement.” The commission further found “some reason to believe” that the granting of contract carrier authorities “will foster and perpetuate this ability of cement plants” to (4) “control the production and price of cement,” (5) to control the "transportation and destination thereof.” Further findings were made of “concern” as to whether the granting of contract carrier authorities (6) will make possible and foster “discrimination and *217unfair competition.” I submit there is no rational connection between these six findings and the commissions conclusion, “we cannot at the present time see that there is or will be such discrimination and unfair competition.”
The law is well settled that an administrative agency must make findings that support its decision, and those findings must be supported by substantial evidence. (Burlington Truck Lines, Inc. v. United States [1962], 371 U. S. 156, 9 L. Ed. 2d 207, 83 S. Ct. 239, cited and quoted from in the court’s opinion.) Moreover, it is equally well settled that in tibe absence of the finding of essential basic facts the order cannot be sustained, and the lack of express findings of fact by an administrative agency may not be supplemented by implication. (Atchison Ry. v. United States, 295 U. S. 193, 79 L. Ed. 1382, 55 S. Ct. 748.) The court’s opinion quotes four paragraphs of the commission’s order and concludes “that the first two paragraphs of the commission’s heretofore quoted findings are the equivalent of a finding that the common carrier service does not adequately meet the public needs.” It is suggested that the conclusion supplies by implication the lack of an express finding by the commission that there does not exist sufficient common carrier service to adequately meet the public needs.
Likewise, I disagree with the court’s conclusion that the third paragraph of the four quoted paragraphs of the commission’s order is a finding that “the granting of the contract motor carrier permit will not tend to divert any business from existing common carriers by motor.” At most, the commission’s finding above referred to, that all cement plants in the state of Kansas have adamantly refused to use or even try the common carrier type of motor carrier service that has been available for some months and for that reason the adequacy or inadequacy thereof has not been demonstrated by practice and experience, is nothing more than a finding that if a shipper is large enough and sufficiently adamant, the commission will give it what it wants regardless of the public need to develop over-all transportation service available to all. Such a finding is not an affirmative finding that the present available common carrier service is not adequate and sufficient.
In view of the foregoing, I would reverse the judgment of the district court with directions to hold invalid the commission’s order of January 12,1961, as being unlawful.