D. R.G.W.R. Co. v. Public Service Comm. , 98 Utah 431 ( 1940 )

The "provided however" part of the last paragraph of Section 9, Chapter 65, Laws of Utah 1935, appears, at first, to apply only to those applicants who cannot take advantage of the "grandfather" provisions of the section. But I agree that it applies to any party aggrieved who has legal standing in the matter, McCarthy v. Public Service Commission, 94 Utah 304,77 P.2d 331, and that it applies also to the "grandfather" clauses of Sec. 9. The history of the legislation points that way. The construction also bears this out because the words "provided however" do not restrain or modify what precedes nor exempt anything from its operation. These words can be ignored and the part on procedure for "review" be read as if it started "any person aggrieved * * *." Thus read it applies to all classes of controversies or applications under Sec. 9.

I do not agree that the "provided however" clause should be construed as limiting the scope of "review" to the record. While the word "review" is used, every other provision of the procedural portion of the section points to trial entirely independent of the record before the Commission. The aggrieved party must "bring an action in the district court." This language does not sound in appeal. There is no provision for certifying the record; no appeal provisions. Furthermore, the Commission must be "served with process as in other cases and within ten days after the commencement of said action." This does not sound in appeal. The Commission is not apprised of an "appeal" by notice and required to certify the record. Its notification comes from a summons. The place of trial may be changed as in other cases — itself a strange procedure in case of an appeal either of fact or law. And lastly, "the hearing in the district court shall proceed as a trial de novo" not as a trial de novo on the record. And a copy of the judgment shall be filed in the office of the Commission. There is no provision for a remittitur nor any provision for a judgment of the District Court that operates on a decision of the Commission by affirming or reversing it. The judgment supersedes the finding of the Commission and the "commission shall act in accordance with said judgment," not with its own, as affirmed, modified, or rearrived at after reversal. Under these preponderating conceptions the term "plenary review" must be taken to mean what it means in statutes like that of Texas where the "action" is to "set aside any decision, rule, order, or act" with which the party is dissatisfied. TexportCarrier Corporation v. Smith, D.C. 8 F. Supp. 28, 33. Our statute involves the setting aside of the decision of the Commission by superseding it.

In the Texport case it was stated:

"In such a proceeding the trial de novo in the sense that while the issue is as to the reasonableness of the Commission's order, and it stands unless overthrown, whether it is overthrown or not is determined not upon the record before the Commission,but upon the evidence adduced in the trial court. If this is sufficient to overthrow the prima facies attending the Commission's orders, plaintiff prevails. If it is not, the order stands." (Italics added.)

See also Railroad Commission of Texas v. Rau, Tex Civ. App., 45 S.W.2d 413, 415, where the court differentiates the procedure in Texas from that of other states having different statutes on the ground that the Texas statute provides that the proceeding "`shall be tried and determined as other civil causes in said court.'" Exactly the same reasoning applies to our statute. The same interpretation was given to the Kansas statute which provided that a person dissatisfied might "commence anaction in a court of competent jurisdiction, against the public utilities commission as defendant, to vacate and set aside any * * * order, finding or decision of the public utilities commission * * * and such action shall be tried and determined as other civil actions." It was held that the trial was one de novo with any competent evidence admissible and "not a mere appeal." Atchison,T. S.F. Ry. Co. v. Public Service Commission of Kansas,130 Kan. 777, 288 P. 755, 757. Also In re Burnette, 73 Kan. 609,85 P. 575.

The distinction becomes immediately clear when we compare the statutes of Texas, Kansas and our own with those of North Dakota where an "appeal from the order or decision * * * may be taken to the court and a trial de novo obtained." In such cases the record goes up and the court weighs the evidence as it appears in the record — as we do on appeal in an equity case. The review is not to consider new evidence but is for the purpose of determining whether under the evidence taken by it the commission came to what the court conceives to be the proper conclusion.Tri-City Motor Transp. Co. v. Great Northern Ry. Co., 67 N.D. 119,270 N.W. 100; In re Russell, 68 N.D. 447, 281 N.W. 239,243. In Missouri it is held that the court may weigh the evidence as in equity, on a writ of review for the purpose of having the reasonableness or lawfulness of the commission's order determined. Laws of Mo. 1913, Sec. 111, p. 641; State ex rel.Case v. Public Service Commission, 298 Mo. 303, 249 S.W. 955,960, and cases there cited. The prevailing opinion adopts the procedure of the North Dakota statute. I think our statute went further because its language is quite different.

No case has been cited which restricted the scope of a trial de novo to the equivalent only of an equity review, under language providing for the "bringing of a new action in the courts."

It is said that to permit an issue of fact to be retried would make the proceedings before the Commission a useless preliminary as practically everyone would resort to the courts and use the Commission to run a preliminary heat. This is by no means to be assumed. In many cases the evidence on the question of whether the applicant came under the "grandfather clause" might be so convincing as to make further proceedings a mere long shot. But be the procedure in Sec. 9 wise or foolish, if it is within the power of the Legislature to pass the law, we are functus officio.

As to power: The Attorney General, arguing for the Commission, contends that under Article 5, Sec. 1 of our Constitution, the portion of Sec. 9 of Chap. 65 which provides for a plenary review and a trial de novo before a District Court is unconstitutional because it constitutes an unlawful delegation of legislative powers to the judiciary. Article 5, Sec. 1 of the Utah Constitution provides that "no person charged with the exercise of powers properly belonging to one of these departments [Legislative, Executive, and Judicial], shall exercise any functions appertaining to either of the others, except in the cases herein expressly directed or permitted." (Italics added.) The majority seem to think that they escape this question of separation of powers because of the construction they give to Sec. 9, Chap. 65. Their opinion states: "In view of our interpretation of Section 9, it is unnecessary to discuss the constitutional question raised by the Commission." But whether Sec. 9 is interpreted as in the prevailing opinion or as in this opinion, the question remains. It is not so easily evaded. It makes no difference whether we interpret Sec. 9 to mean that the district court must read the record and weigh the evidence or take evidence anew and weigh it. In either case the court makesits conclusions on the evidence submitted to it. This is a function different in nature from that of examining the record to see if the commission regularly or properly pursued its authority or acted within its authority. Such latter function would be judicial even if the Commission's function were legislative. Under proper procedure a court may even determine whether a legislature has acted within its power; hence, it acts judicially when it determines the basic question of whether a legislative agency acted within its power. But if the Commission was exercising a legislative function in determining the factual matter of whether Sims was entitled to a license, certainly the district court in determining that fact, whether on the record made by the Commission or by evidence taken independently, is exercising a legislative function. So, in any event, the problem is not evaded. But in attempting to escape the question, this court, by a single line, impliedly holds that in every case when the district court only weighs the evidence on a record made by a Commission, it is exercising a judicial function. I wish the problem were as simple as that. Certainly if the end act which the Commission was required to do, and for which the record was made, was legislative then the function that the court was to perform by weighing the evidence in order to accomplish the same thing, was legislative. The court must make a judgment and "a copy of the judgment therein shall be filed in the office of the commission. The commission shall act in accordance with said judgment."

I am compelled to handle the problem presented by the Attorney General in quite a different manner.

Much has been written concerning the delegation and separation of powers. It is one of the most troublesome fields of law. Mr. Kenneth C. Davis in a most comprehensive article in 44 West Virginia Law Quarterly, 270 (June 1938) entitled "Judicial Review of Administrative Action in West Virginia — A Study in the Separation of Powers," has given us a masterful and critical analysis of the West Virginia cases on review from Administrative Agencies. The contradictions and inconsistencies in thought and the hopelessly irreconcilable decisions due to the attempt of the courts to label the powers of administrative bodies under a constitutional provision somewhat like our own, are, in Mr. Davis' article, given dramatic exposition. I shall not permit myself to become morassed in that Stygian bog. No modern government can run without administrative agencies and many of these agencies in order to function in the field to which they are allotted must exercise executive, legislative, and judicial powers. There is no other way for governance under modern conditions. And the problem is not solved by calling a judicial power quasi-judicial, or labeling a power as legislative-administrative. The Industrial Commission, in determining whether an applicant was the wife of a deceased employee, exercises a function every bit as judicial in nature as does a court when it determines whether an applicant for letters of administration is the widow of a decedent. The Bureau of Registration in determining whether a doctor has committed an abortion and is therefore guilty of unprofessional conduct, determines exactly the same question as does a jury when it determines whether the doctor has committed the crime of abortion. But the mode and end purpose are different. To quote from Mr. Davis' article, supra:

"More than a century ago Mr. Justice Story discerned the pitfall with respect to separation of powers which has caused the West Virginia court so much difficulty: `* * * a perfect separation is occasionally found supported by the opinions of ingenious minds, dazzled by theory, and extravagantly attached to the notion of simplicity in government * * *.'"

Even in the instant case the dilemma presents itself. If the determination of whether an applicant is entitled to a permit to transport goods as a contract motor carrier is a legislative act, then at best the courts can do no more than determine whether the Commission has acted within its powers. If it is a judicial act then the courts may review it as an equity case or even take evidence anew. But would not the meticulous lawyer ask, what right has the legislature to give an administrative body judicial powers?

Most governmental action — as indeed most human activity — involves the exercise of judgment, then of will, leading to action consequent on that judgment. Therefore, because most actions are preceded by the exercise of the mental faculty of judgment and will, in that sense, all legislatures, courts, commissions, executives, agencies, bureaus, and all instrumentalities functioning governmentally exercise powers which have been labeled as judicial, legislative and executive. We know that Art. 5, Sec. 1 of our Constitution could not have meant strictly to separate and limit the exercise of such functions or modern government would have to cease. Judicial, legislative, and executive are not to be defined in terms of the nature of the mental processes involved which contribute to their fulfillment nor even by the incidental outward acts which accompany their performance. We think of legislative acts as those which were historically and traditionally performed by the legislature, and those as judicial which have been traditionally looked on as being peculiarly functions of the court. See Tite v. Tax Commission, 89 Utah 404,57 P.2d 734. That is, we know, that a court cannot make a law for general application although when it makes a rule for court administration it really makes a law of limited application but incidental to its end purposes. Likewise, we know that the legislature cannot try a civil case in law or equity or try a criminal case and impose a penalty. But it can condemn property under the power of eminent domain and even determine its value. But it has been the practice to delegate the power to fix value to the courts. Also, in times gone by, state legislatures tried divorce cases and, absent any prohibition against special legislation, passed special laws granting privileges to specified corporations and individuals, and, in some cases, actually determined the value of property for taxation and fixed the levy. So, if we accepted the purely historical and traditional tests, all of these would have to be denominated legislative. ParaminoLumber Co. et al. v. William A. Marshall, Deputy Com'r, March 11, 1940, 60 S. Ct. 600, 84 L. Ed. 545. If the historical and traditional basis for testing the nature of the power, for the purpose of Art. 5, Sec. 1, were confined to our own jurisdiction, we would eliminate divorce actions as having any aspect of legislative, but outside of that, we would find that our Utah courts and legislature have performed generally and ordinarily the functions which those instrumentalities have performed in American jurisprudence for more than a century. It is quite likely that all that Art. 5, Sec. 1 intended to do was to prevent either the legislature or judiciary from performing those functions distinctly and notoriously belonging to the other department. The difficulties arose when agencies necessarily were created to perform governmental functions. The movement for extensive administrative regulation is comparatively new. Dean James M. Landis places its beginning at about 1905. See Proceedings New Hampshire Bar Assn. 1938-1939 p. 83 et seq. By this development acts, in the narrow sense, essentially legislative and judicial were unconsciously fused under the term administrative. This was perhaps made necessary largely because of the very requirement that there be a separation of powers. It was realized that the legislature could not perform certain acts except in conjunction with other acts, in obtaining desired governmental control over the matter which it was necessary to regulate. Necessity is the mother of the administrative agency. No one stopped to analyse the intrinsic nature of the powers which it was necessary to give to administrative agencies to enable them to carry out their functions. It was impossible to establish an agency for the legislative part of the whole administrative function, and run to the courts to have them perform what may in nature have been judicial. So, instead of calling an agency legislative or judicial it was denominated administrative or quasi-judicial. But honest minds recognized that a change in labels did not effectuate a change in the nature of the power. See the excellent discussion in State ex rel.Wisconsin Inspection Bureau v. Whitman, 196 Wis. 472 at page 481 et seq., 220 N.W. 929; also Ferretti et al. v. Jackson etal., 88 N.H. 296, 188 A. 474. And these agencies functioned in blissful ignorance of their hybrid nature until lawyers attempted to pick out the ingredients of administrative acts and to label them as executive, judicial or legislative, measured alongside of the sort of things legislatures and courts traditionally did. Having labeled the various functions, the next step was to call attention to certain constitutional provisions such as ours, the language of which required strict separation of powers, and to invoke constitutional sanctions against such agencies. But when the early American constitutions were drafted, the framers were under Montesquieu's spell. It was thought that there would be a sort of automatic protection to the people if each department would check and balance the others. It was not seen that when the complexities of our civilization increased, strict separation of powers might act as a checkmate to, rather than as a check on, government. And, as we know, our later constitutions somewhat blindly have been patterned after those early ones.

Says Professor Davis:

"The soundness of Montesquieu's theory, limited as Madison and Story limited it, is not questioned: `His [Montesquieu's] meaning, as his own words import, and still more conclusively as illustrated by the example in his eye, can amount to no more than this, that where the whole power of one department of the government is exercised by the same hands which possess thewhole power of another department, the fundamental principles of a free constitution are subverted.'"

And Montesquieu's own countryman, Professor Larnaude in 7 Congress of Art and Science 602, 613 interpreted the doctrine of Separation of Powers:

"`The separation of powers is merely a formula, and formulas are not working principles of government. Montesquieu had chiefly aimed to indicate by his formula the aspirations of his times and country. He could not and did not wish to propose a definite and permanent solution of all the questions brought up by the government of men and their long-felt longings for fairness and justice.'"

But the question presents itself whether the matter of separation of powers may be considered as being only a formula or policy where there is an express constitutional provision prohibiting one department from exercising the functions of another. The problem becomes intensified when in the Constitution the word "any" is used as is done in Art. 5, Sec. 1. But certainly this provision should be given the broadest construction possible. If possible, constitutional provisions must be construed so as to permit government to work under contemporary conditions.

The matter of determining whether Sims should have a permit to conduct the business of contract motor carrier may be, in nature, legislative. Art. XII, Sec. 12 of our Constitution, makes all railroads and other transportation companies subject to legislative control. Whether this entirely excludes judicial control or whether the legislature, by delegating to the judiciary the right to decide whether applicants may transport in a certain manner, with power to reclaim such right, in that way exercises its constitutional control — may rest in doubt. True it is that to us falls the duty of saying whether the power is constitutionally granted to the courts. But, as has been many times reiterated by the courts: It is not the function of the courts to set aside an arrangement made by the legislature unless it is a clear and flagrant violation of the principle of separation of powers. I cannot say beyond peradventure of a doubt that the power is so distinctively legislative as to preclude its being given to the courts even though I may believe that it is unwise to delegate to the court instead of an experienced commission, the ultimate duty of determining, on the facts, whether the applicant is entitled to a permit. In consequence, at least until I am better advised, I hold the statute to be constitutional.

"Generally speaking, it may be said that when a power is not peculiarly and distinctly legislative, executive, or judicial, it is within the authority of the legislature to determine where its exercise shall be vested." Vol. 2, Willoughby on the Constitution. (1910) Sec. 743, p. 1264.

Reference is made to "Power of Congress over Procedure in Criminal Contempts in `Inferior' Federal Courts — A Study in Separation of Powers" by Frankfurter and Landis, 37 Harvard Law Review, 1010, 1012, to 1016. Also, to a very clear exposition entitled "Administrative Commissions and the Judicial Power" by Ray A. Brown, 19 Minnesota Law Review, 261.

Since I cannot, at this time, say that the proviso clause of Sec. 9 is unconstitutional, I must agree that it gives an adequate remedy at law in this particular kind of case where the decision must rest on evidence. But I think that where the question is, whether the Commission acted without power or denied a definite right, as in the case of McCarthy v.Public Service Commission, supra, rather than a testing of whether a court would come to the same factual conclusion, there could still be a review of such questions arising under Sec. 9 under the provisions of Sec. 76-6-16, R.S.U. 1933.