State ex rel. Pacific Northwest Bell Tel. Co. v. Washington Utilities and Transp. Commission

• Decision Date: 10 June 1965
• Docket Number: No. 37111,37111
• Citation: 66 Wn.2d 411,403 P.2d 73
• Parties: , 59 P.U.R.3d 369 STATE of Washington ex rel. PACIFIC NORTHWEST BELL TELEPHONE COMPANY, a corporation, Petitioner and Relator, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, and Francis Pearson, Patrick D. Sutherland and Dayton A. Witten, the members of and constituting said Commission, Respondents, and General Telephone Company of the Northwest, a corporation, and West Coast Telephone Company, a corporation, Additional Respondents. STATE of Washington on the relation of WEST COAST TELEPHONE COMPANY, a corporation, Relator and Plaintiff, v. The WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, Francis Pearson, Commission Chairman, Patrick D. Sutherland, Commissioner, and Dayton A. Witten, Commissioner, Respondents and Defendants, The Pacific Northwest Bell Telephone Company, Additional Respondent and Defendant.
• Court: Washington Supreme Court

Page 411

66 Wn.2d 411

403 P.2d 73, 59 P.U.R.3d 369

STATE of Washington ex rel. PACIFIC NORTHWEST BELL TELEPHONE

COMPANY, a corporation, Petitioner and Relator, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, and Francis Pearson, Patrick D. Sutherland and Dayton

A. Witten, the members of and

constituting said Commission,

Respondents,

and

General Telephone Company of the Northwest, a corporation,

and West Coast Telephone Company, a corporation,

Additional Respondents.

STATE of Washington on the relation of WEST COAST TELEPHONE

COMPANY, a corporation, Relator and Plaintiff, v. The WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, Francis Pearson, Commission Chairman, Patrick D.

Sutherland, Commissioner, and Dayton A.

Witten, Commissioner,

Respondents and Defendants,

The Pacific Northwest Bell Telephone Company, Additional

Respondent and Defendant.

No. 37111.

Supreme Court of Washington, Department 2.

June 10, 1965.

Rehearing Denied Sept. 20, 1965.

[403 P.2d 75] Kizer, Gaiser, Stoeve, Layman & Powell,

Daniel W. Gaiser, John G. Layman, Spokane, John Robert Jones, Columbus, Ohio, Williams & Novack, Parker Williams, Everett, and Charles de Y. Elkus, San Francisco, Cal., for appellant

John J. O'Connell, Atty. Gen., Frank P. Hayes, Asst. Atty. Gen., Olympia, John N. Rupp, and Donald D. MacLean, Seattle, for respondent.

DONWORTH, Judge.

This case involves four separate appeals taken by three public utilities and by the Washington Utilities and Transportation Commission (herein called the Commission) from the decree of the superior court for Thurston County, entered in two proceedings (consolidated by stipulation), which were instituted to review an order of the Commission. The order of the Commission related to the method of determining the division of revenue derived from intrastate interchanged toll traffic between two independent telephone companies and the Pacific Northwest Bell Telephone Company (herein called Pacific or Bell). There were other issue raised as to the correctness of the The public utilities referred to are Pacific and General Telephone Company of the Northwest (herein called General) and West Coast Telephone Company (herein called West Coast). In the review proceeding in the superior court instituted by Pacific, the respondents were the Commission, General, and West Coast, each of whom is also appealing from certain portions of the superior court's decree. In the review proceeding instituted by West Coast, the respondents were Pacific and the Commission, who are likewise appellants in this court.

Commission's order which will be discussed later in this opinion.

The particular issues involved as between the respective parties before us in this court, as well as the disposition thereof by the superior court, will be stated later in this opinion.

The order entered by the Commission (which was reviewed by the superior court) is reported in 42 PUR(3d) 65, and a copy is attached as an appendix to the Commission's opening brief. It is 30 pages in length and contains a very comprehensive statement of the issues and of the testimony and exhibits presented to the Commission and its findings of fact, conclusions of law, and order. For convenience, this document will be referred to as the Commission's findings or order.

The record before the Commission contained 1,723 pages of testimony and oral argument, and 44 exhibits, some of which consist of many pages. The hearings consumed 12 days.

Before discussing the respective assignments of error made by the several appellants, we must first consider what precisely the function of the courts is in reviewing such orders of the Commission.

In State ex rel. Pacific Tel. & Tel. Co. v. Department of Public Service of Washington, 19 Wash.2d 200, 217, 142 P.2d 498 (1943), this court had occasion to discuss this question at considerable length. After citing and discussing a number of decisions 'In the case at bar, it was the province of the trial court to review the departmental orders before it and determine whether or not the department (1) had correctly followed the statutes as to matters of procedure, (2) had failed to grant respondent a fair hearing, (3) in making its findings and orders, had acted arbitrarily or capriciously, or (4) had violated rights secured to respondent by the constitution of the United States or the constitution of the state of Washington, or, as so often stated in our decisions, had, in reaching its results, proceeded upon a fundamentally wrong basis.

of this and other courts of last resort, we stated the rule which is applicable here as follows:

'The trial court was bound by no conclusion of the department as to any question of law, always observing the rule that the burden of proof rested upon the party attacking the order. State ex rel. Kitsap County Transportation Co. v. King County, 3 Wash.2d 392, 101 P.2d 327; State ex rel. Case v. Public Service Commission, 298 Mo. 303, 249 S.W. 955; Clear Creek Oil & Gas Co. v. Ft. Smith Spelter Co., 161 Ark. 12, 255 S.W. 903.

'This rule applies whether questions presented concern constitutional or statutory limitations. Los Angeles Gas & Electric Corp. v. Railroad Commission, 289 U.S. 287, 304, 53 S.Ct. 637, 77 L.Ed. 1180.'

Recently we had occasion to discuss the legal status of an order of this same Commission. In City Sanitary Service, Inc. v. Washington Utilities & Transportation Comm., 64 Wash.Dec.2d 751, 393 P.2d 952 (1964), we said:

'(1) The Washington Utilities and Transportation Commission is an administrative agency, and as such is a fact-finding tribunal. Herrett Trucking Co. v. Washington Public Ser. Comm., 58 Wash.2d 542, 364 P.2d 505; State ex rel. Arrow Transp. Co. of Delaware v. Washington Util. & Transp. Comm., 60 Wash.2d 825, 376 P.2d 433. Its findings of fact are by statute (RCW 81.04.430) made prima facie correct, and the burden is upon the one attacking a finding, conclusion or decision to show that it is unlawful, unsupported by material and substantial evidence, or is arbitrary or capricious. RCW 34.04.130(6) Herrett Trucking Co. v. Washington Public Ser. Comm., supra; Herrett Trucking Co. v. Washington Public Ser. Comm., 61 Wash.2d 234, 377 P.2d 871. See also State ex rel. Dawes v. Washington State Highway Comm., 63 Wash.2d 34, 385 P.2d See, also, State ex rel. Allied Daily Newspapers of Washington v. Washington Public Service Comm., 44 Wash.2d 1, 265 P.2d 270 (1953).

376. Courts should not and will not interfere with or substitute their judgment for a decision of the commission when it has properly acted within the sphere of its purpose, expertise, and competence. Herrett Trucking Co. v. Washington Public Ser. Comm., 61 Wash.2d 234, 377 P.2d 871.'

On appeals in cases such as the present, we are required to determine whether the superior court erred in the entry of its judgment. In other words, we review Its judgment entered pursuant to RCW 80.04.170, and not the findings and order of the Commission. In re Foy, 10 Wash.2d 317, 116 P.2d 545 (1941). Nevertheless, in order to perform our function, it is necessary for us to examine the evidence which was before the Commission and its findings and order, because RCW 80.04.190 provides that:

'The original transcript of the record and testimony filed in the superior court in any action to review an order of the commission, together with a transcript of the proceedings in the superior court, shall constitute the record on appeal to the supreme court.

'* * * The general laws relating to appeals to the supreme court shall, so far as applicable and not in conflict with the provisions of this title, apply to appeals taken under the provisions of this title.'

No additional evidence may be introduced in the superior court. State ex rel. Country Club of Seattle v. Department of Public Service, 198 Wash. 37, 86 P.2d 1104 (1939).

Therefore, in order to state the issues which were presented to the superior court and which are likewise before us on this appeal, we shall endeavor, as briefly as possible, to quote from the Commission's findings of fact, conclusions of law, and order.

In 1960, two independent telephone companies (General and West Coast) each instituted a proceeding before the Commission against Pacific involving the appropriateness The Commission's order disposing of these proceedings (entered November 22, 1961) stated the principal problem as follows:

of certain separation methods governing the division of toll revenues between each independent and Pacific derived from the interchange of intrastate long-distance telephone messages. The two proceedings were consolidated, and hearings were held in 1960 and 1961.

'Representatives of Pacific have met frequently with officers of both complaining Independent companies in an effort to arrive at a mutually acceptable toll settlement agreement. Despite protracted negotiations, the parties have been unable to reach agreement upon some of the basic principles essential to a comprehensive toll settlement. We have been requested to assume jurisdiction under RCW 80.36.160 in order to make a reasonable and equitable division of toll avenues obtained from the interchange between the parties of intrastate toll telephone messages. RCW 80.36.160 reads in part as follows:

"In order to provide toll telephone service where no such service is available, or to promote the most expeditious handling or most direct routing of toll messages and conversations, or to prevent arbitrary or unreasonable practices which may result in the failure to utilize the toll facilities of all telephone companies equitably and effectively, the commission may * * * establish reasonable joint rates or charges by or over said lines and connections and just, reasonable, and equitable divisions thereof as between the companies participating therein. It may resort to all of these remedies simultaneously.'

'The parties agree that an equitable division of toll revenues will require that each...