McCarthy v. Public Service Commission , 111 Utah 489 ( 1947 )

I concur in the result.

The writer of the main opinion apparently bases his conclusion on the ground that the evidence is insufficient to establish a basis for a finding that there is a public need for services of a common carrier of sand, gravel and cement. In this I concur as will be seen hereunder. However, I still think the statement that the

"only question we have is: did the commission by its order convert `private contracts or mere private business into a public utility or make its owner a common carrier?'"

savors of the idea that the commission attempted by mere reclassification to denominate what were really contract carriers to be common carriers. This it did not do or attempt to do.

To entitle an applicant to a certificate of public convenience and necessity as a common motor carrier he must show that public convenience and necessity require the proposed services. Sec. 76-5-18, U.C.A. 1943.

We have had on previous occasions to determine what is meant by the phrase "public convenience and necessity." In Mulcahy v.Public Service Comm., 101 Utah 245, 117 P.2d 298, 301, we said:

"When a utility desires to enter a new field or to render a new or different service, it must, as a condition to receiving a certificate to so perform, show that service sought to be given is one of `public convenience and necessity.' Fuller-ToponceTruck Co. v. Public Service Comm. of Utah, 99 Utah 28,96 P.2d 722, 724. And in determining whether or not the convenience and necessity of the public will be best subserved by the proposed service, the needs and welfare of the people of the territory or community affected should be considered as a whole. * * * If existing utilities are rendering adequate service ordinarily a certificate will not be granted putting a new competitor in the field. But a service is not necessarily adequate because the community can `get by,' can conduct its business without further or additional service. To be adequate the services must meet the requirements of the public's convenience and necessities in such a way that the needs, growth, and welfare of the community are reasonably met and supplied. To be adequate they must safeguard the people generally from appreciable inconvenience in the pursuit of their business, their wholesome pleasure, and their opportunities for growth and development. And if a new or enlarged service will enhance the public welfare, increase its opportunities, or stimulate its economic, social, intellectual or spiritual life to the extent that the patronage received will justify the expense of rendering it, the old service is not adequate."

Quoted with approval in Union Pacific R. Co. v. PublicService Comm., 103 Utah 459, 135 P.2d 915.

This is not a case of a "new competitor in the field" but is one of existing carriers seeking to supply an "enlarged service," i.e., the services of common motor carries in lieu of the services of contract motor carriers. These applicants propose to give a service different in nature from contract carrier service in that they cannot refuse service, must give it at published rates, etc. Whether this in itself will enhance the public welfare is the difficult question in this case.

There is no evidence that past services have not been adequate in the sense that there is not available means of transportation from one point to another. There is no evidence that the "enlarged" or additional services proposed to be supplied by the applicants, that is, common motor carrier services, will "enhance the public welfare, increase its opportunities or stimulate its economic, social, intellectual or spiritual life." According to the witnesses in this case, people who have need for the hauling of sand, gravel and cement have not just been "getting by" with contract motor carrier services but have had "satisfactory" and even "100% satisfactory" service and there is no showing that contract carrier services will not adequately supply future needs. Indeed, there is no evidence that the convenience or necessity of the public to have sand, gravel and cement hauled will in any way be better served by common carrier service than it has been for the past ten or twenty or more years by contract carrier services. A builder who wants sand, gravel or cement hauled from x to y or from one place to another has always had an adequate and satisfactory group offer to perform the service.

As there is no substantial evidence to support the decision of the commission that public convenience and necessity require the proposed services that decision must be set aside.

I do not want my concurrence to be construed as implying that a contract motor carrier could not petition for a certificate of convenience and necessity as a common carrier and that the commission could not grant it such certificate on a proper showing. In the case at bar had the applicants produced substantial evidence that that segment of the public which requires sand, gravel and cement to be hauled was dissatisfied with past services (contract carrier services) and desiredcommon carrier services available to haul those commodities they could have shown public convenience and necessity so as to require common carrier services in this field. In such case certificates of convenience and necessity would have been properly granted to the applicants. I do not think the requirement that an applicant for a permit to render services as a common motor carrier must show that public convenience and necessity require such services is the equivalent of saying that such applicant must first show that adequate service of the type required could not be furnished by contract motor carries. I can conceive of situations where an application for common motor carrier service might be supported by a showing that public conveinience and necessity required it where there was not a contract motor carrier operating or offering to operate or where it might still be for the public convenience and necessity even if many contract motor carriers were operating and even operating satisfactorily to a limited extent.

At this time I do not think it necessary to determine whether if contract motor carriers were fully rendering adequate and satisfactory services there might not arise situations in which it would still be advisable for public convenience and necessity that there be motor carriers whose services should be mandatory to the public. My concurrence is on the narrow ground that in this particular case there is no substantial evidence to show public convenience and necessity to permit or require common motor carrier service in the hauling of sand, gravel and cement.

The following excerpts from the record reveal that the principal desire of these applicants is to be allowed lawfully to operate in the future as they have in the past and that many if not all of the applicants and other participants in the hearings in this case were under the impression and assumed that the only way these applicants and other truckers could continue to haul sand and gravel and cement as they have in the past is to obtain certificates of convenience and necessity as common motor carriers:

Commissioner Hacking asked Huber, one of the applicants:

"Mr. Huber, if the commission should conclude that these gravel hauls such as you have been performing are not in the contemplation of the laws of Utah a haul for hire, and the commission should conclude that you should go on in the future as you have in the past without a certificate, would that be satisfactory to you?"

"Huber: That is satisfactory, yes.

"Hacking: So long as they reached the same conclusion with respect to your competitors in the field?

"Huber: That's right.

"Hacking: In other words, I take it that you have been satisfied with the nature of your haul in the past and would be satisfied to continue on without any authority from this commission if the commission didn't bother you, didn't stop you?

"Huber: That's right."

On cross-examination applicant Moffat testified:

"Q. How did you come, then, to file the application? A. Well, it is a law.

"Q. Were you so instructed by the authorities, or did you appear indirectly? A. Well, I read an article in the paper that it was, and then I checked with the commission and found they had passed a law last year.

"Q. You were informed by the Commission it was necessary for you to apply for a certificate? A. They didn't say it was necessary. They said first of May of last year there was a law it was a common carrier."

Applicant Dooley testified:

"Q. Tell us what your reason is for filing this application for a certificate of convenience and necessity at this time. A. In order to continue work like I have been doing.

"Q. You have reached the conclusion that it is necessary for that reason? A. That's correct.

"Q. How did you reach that conclusion? A. I reached that conclusion because other applications had been placed before the commission, and I felt that in order to protect myself I would have to do the same thing."

Crosby, a mining company official whose company has need for truck hauling, testified:

"Q. Will you state to the commission whether or not you desire this [Dooley's] application to be granted? A. I think it is necessary as far as from my standpoint that it is granted, to carry on my operations at the present time and in the future.

"Q. If this application is not granted, do you have in mind who you can get who has a certificate of convenience and necessity to haul your ore? A. No, I haven't."

Cooms, an employee of Morrison-Knudsen Construction Company, testified that that company had frequently hired carriers of sand and gravel and that if the company could not continue to hire such truckers, it would be a "hardship" on the company.

Applicant Gunderson was asked by his counsel:

"Q. Is it uncommon for you to have contracts with more than one contractor in one day? A. No. Sometimes we have six or seven in one day, different contractors to work for.

"Q. Would it be convenient for you to make application to the commission for approval of each one of those contracts each time it came up? A. No.

"Q. Will you state the reason for wanting this certificate of convenience and necessity? A. Well, in the first place, to protect myself so I wouldn't be breaking the law as it is. That's about the only reason, I guess, that there is."

Applicant Nielsen testified on direct examination:

"Q. Now, the question has been asked several times as to why you filed this application. Will you just state so that that question will be answered? A. Well, I was afraid I would be set aside and wouldn't be able to make a living if I didn't have it. That's the whole story.

"Q. And you don't feel that you can operate any better whether you have the permit or whether you don't have it? A. I don't think it will make any difference."

Applicant Reavely testified on direct examination:

"Q. Why do you ask for a certificate of convenience and necessity? Doesn't a contract carrier's permit fit your situation? A. No, because I might work for seven different contractors in the space of a half a day. In other words, I am holding myself forth as a public trucker. I will have any one of the trucks on seven different jobs working for seven different people in the space of one day."

On cross-examination:

"Q. When you answered my question that you didn't intend to change your way of business, did you have in mind merely the relations with these other six truckers, or did you have in mind all details of your business? A. Just the business in general, its operating —

"Q. In other words, you have got a going concern operating in a certain way, and you propose to continue it in that same way? A. Yes sir.

"Q. Without change? A. I am trying to do it legally now.

"Q. Trying to get the sanctity of law? A. That's right."

Mr. Hyde, one of the protestants, asked applicant Reavely:

"Well, is there any necessity for you to have a certificate in this territory?"

"Mr. Jensen (counsel for Reavely): "The Legislature says they can't operate without it, Mr. Hyde."

Mr. Hanson (counsel for Nielsen applicants): "No, they haven't."

Reaveley: "Yes, there is. There is a law that says so. Your own Commissioner was the one that informed me of it."

Mr. Jensen: "He is operating. He's got to have a certificate."

Obviously applicants and counsel for some of them were under the impression that if certificates of convenience and necessity are not granted the applicants must either go out of the business of hauling sand, gravel and cement or operate in violation of law or go through the impracticable procedure of obtaining a permit for each haul and show a contract before such permit is granted which procedure is not required by the statute. It appears plain that these applicants for certificates of convenience and necessity rested on a wrong idea of the law.

These applicants are contract motor carriers. The public needs their services as contract motor carriers. I see no reason why general contract carrier permits could not be issued after the required notice and hearing, which general permits would allow these carriers to haul sand and gravel and cement anywhere in the state (or in specific areas, depending on the showing made). The permits could limit the hauls to such distances as would prevent undue competition with satisfactory common carriers of the same commodities in the same area.

If such permits were issued to these applicants they could continue to operate as they have in the past subject, however, to the commission's authority and power to impose insurance and other reasonable requirements on operations under the permits.

There is no statutory provision which prohibits the issuance of such general contract carrier permits. Indeed, where "grandfather rights" to contract carrier permits are concerned such general permits were contemplated by the legislature when it provided in Sec. 76-5-21, U.C.A. 1943, as amended by laws of Utah 1945, Chap. 105:

"The commission shall grant on application to any applicant who was a contract motor carrier as defined by this act on the 1st day of January 1940, a permit to operate as a contract motor carrier on the same highways and to carry on the same type of motor service as he was on said date." (Italics added.)

The "grandfather right" there given was not limited to a particular contract or for hauling for a particular person. If an applicant for a permit showed that before January 1, 1940, he was hauling sand, gravel and cement within all the cities of this state and within 15 miles therefrom (so his hauling at that time without a permit would be legal) and that he was hauling for anyone with whom he chose to contract, I hazard the opinion that he would be entitled as a matter of right to a contract carrier permit general enough to enable him to continue to haul gravel and cement and sand within all the cities of this state and within 15 miles outside for whomsoever he chose to contract. The statute says he is entitled to "a permit" not a series of permits each based on one or more written contracts. The legislature intended such "grandfather" permits to be practicably available and not to be so encumbered with conditions and regulations as to make it so difficult to enjoy that right as to render it of no practical value.

The legislature contemplates a general contract motor carrier permit in an appropriate "grandfather rights" case. The legislature does not prohibit such general permits in appropriatenon-grandfather rights cases. I see no reason why an applicant for a "non-grandfather right" permit upon proper showing could not be issued a general contract motor carrier permit, just the same as an applicant for a "grandfather right" permit is entitled to a general permit upon proving the facts which give rise to a general "grandfather right."

Although the legislature gave the commission power to control contract motor carriers it did not require the commission to exercise the close control over contract carriers as it must exercise over common motor carriers. For example, as to common motor carriers the commission

"is vested with power and authority, and it shall be its duty, to supervise and regulate all common motor carriers and to fix, alter, regulate and determine just, fair, reasonable and sufficient rates, fares, charges, etc." (Italics added.) Sec. 76-5-17.

However, as to contract motor carriers, while they must obtain a permit, the legislature said:

"The commission is hereby vested with power and authority and it may supervise and regulate every contract motor carrier in this state and fix and approve reasonable maximum or minimum rates, fares, charges and classifications, and to adoptreasonable rules and regulations pertaining to all such motor carriers." (Italics added.) Sec. 76-5-24, U.C.A. 1943.

It may be that the public good requires contract motor carriers to certain commodities over certain routes to be regulated and controlled almost to the same extent as common motor carriers must be regulated. If the commission determines such close regulation of certain carriers is required it has power and authority to impose such regulations. Our statute expressly authorizes supervision of contract motor carriers to practically the same extent as is authorized for common motor carriers — provided the commission determines that such close control is reasonably required. However, merely because the power and authority to regulate contract motor carriers is given that power and authority need not be exercised unless required for the benefit of the public and then only to the extent required. It is for the Public Service Commission to adapt its regulations and practices to fit the different situations to assure continued essential contract carrier services with only reasonable and necessary regulations on such services.

I see no reason why in a proper proceeding motor carrier permits of the general nature mentioned above could not be issued to these applicants and why such permits could not be conditioned upon requirement of insurance, mechanical inspection, and such other requirements as the commission deems necessary and why the applicants could not continue to supply the indispensable service they have supplied adequately and satisfactorily as contract motor carriers in the past.

McDONOUGH, Chief Justice, concurs in the opinion of WOLFE, J.