Anderson v. Public Service Com'n of Utah

Decision Date01 July 1992
Docket NumberNo. 910166,910166
Citation839 P.2d 822
PartiesClifford (Rusty) ANDERSON, dba Image Limousine, Petitioner, v. PUBLIC SERVICE COMMISSION OF UTAH, Respondent.
CourtUtah Supreme Court

Joseph N. Nemelka, Murray, for Anderson.

R. Paul Van Dam, David L. Stott, Salt Lake City, for Public Service Com'n.

DURHAM, Justice:

Petitioner Clifford Anderson (dba Image Limousine) is an authorized common carrier of passengers for hire. He seeks review of a Public Service Commission order revoking his certificate of convenience and necessity. Anderson challenges the Commission's order on the grounds that (1) the Commission failed to comply with the notice and hearing requirements of Utah Code Ann. § 54-6-41, (2) the Commission acted in an arbitrary and capricious manner in cancelling Anderson's certificate, and (3) the Commission is estopped from revoking Anderson's certificate. We reject all of petitioner's contentions and affirm the Commission's order.

I. FACTS AND PROCEDURAL HISTORY

Anderson has a fairly long history of appearances before the Public Service Commission. His most recent violation, for which the Commission subsequently revoked his certificate, involved a failure to maintain on file with the Commission proof of insurance coverage, as required by Utah Code Ann. § 54-6-42. In August 1990, Image allowed its insurance to lapse for twelve days. On October 18, 1990, an administrative law judge conducted a hearing in which Anderson was required to show cause why Image "should not be subjected to sanctions and/or the suspension or cancellation of its Certificate of Convenience and Necessity" for its insurance lapse. At the conclusion of the hearing, the administrative law judge recommended that Anderson be fined $500 for the insurance violation but that the fine be suspended on the condition that Anderson pay a suspended portion of a previously imposed fine within 180 days and that Anderson complete a two-year probation without further violation. The Commission reviewed the administrative law judge's proposed order but found the penalty inadequate in light of Anderson's history of violations. Consequently, on November 9, 1990, the Commission overruled the administrative law judge's proposed order. Instead, the Commission ordered Anderson to "pay the $500.00 fine within 60 days of the date of this order or his Certificate of Convenience and Necessity will be cancelled without further notice."

The Commission sent a copy of the November 9 order by certified mail to the address Anderson had designated as that at which service of process may be made and orders may be delivered. See Utah Code Ann. § 54-6-14 (1990). The mail carrier made several attempts to deliver the order, but Anderson failed to claim his mail. Consequently, the post office returned the order to the Commission unclaimed. Anderson did not pay the $500 fine by January 9, and on February 7, 1991, the Commission issued an order revoking Image's certificate of convenience and necessity. The Commission, again by certified mail, sent Anderson a copy of the order of revocation. It too was returned unclaimed.

On March 14, 1991, after the expiration of the statutory review period, Anderson petitioned the Commission for a rehearing of the cancellation order. The Commission denied the petition. Anderson subsequently filed a petition for a writ of review with this court.

II. STANDARD OF REVIEW

Subsection 63-46b-16(4) of the Utah Administrative Procedures Act ("UAPA") outlines the circumstances under which a reviewing court may grant relief from formal agency action. Under 63-46b-16(4)(d), we may grant relief if "the agency has erroneously interpreted or applied the law." Anderson's allegation that the Commission failed to comply with the notice and hearing requirements of section 54-6-41 falls under this rubric. Under UAPA, as in other contexts, when reviewing an application or interpretation of law we use a correction of error standard, giving no deference to the Commission's interpretation of the law. See Savage Indus. v. State Tax Comm'n, 811 P.2d 664, 669-70 (Utah 1991). But see Morton Int'l v. Auditing Div. of the Utah State Tax Comm'n, 814 P.2d 581, 587 (Utah 1991) (if agency has been granted discretion in interpreting specific term, we review agency's interpretation/application under reasonableness standard). Anderson's second claim, that the Commission acted in an arbitrary and capricious manner when it revised the administrative law judge's proposed order, is reviewable under subsection 63-46b-16(4)(h)(iv). We review claims that an agency action was arbitrary and capricious for reasonableness. See Sisco Hilte v. Industrial Comm'n, 766 P.2d 1089, 1091 (Utah Ct.App.1988).

III. NOTICE AND HEARING

Anderson contends that the Commission failed to comply with the notice and hearing requirements of Utah Code Ann. § 54-6-41, thereby depriving him of due process in the revocation of his license. 1 Section 54-6-41 states, "The commission may at any time for good cause, and after notice and hearing, suspend, alter, amend, or revoke any certificate, permit, or license issued by it under this chapter." Utah Code Ann. § 54-6-41 (1990). Although Anderson admits he was afforded a hearing on the matter that led to the revocation of his certificate, he argues that this hearing and the subsequent notices the Commission sent him regarding the future status of his license were insufficient to comport with the due process standards inherent in section 54-6-41.

We first address Anderson's contentions that the Commission did not conduct sufficient hearings before cancelling Anderson's certificate. Anderson points out that in the October 18, 1990 hearing, the administrative law judge focused only on Anderson's failure to maintain insurance coverage and not on whether his license should be revoked. Anderson argues that after the Commission amended the administrative law judge's recommended order and before it revoked his certificate, the Commission should have conducted another hearing directly addressing whether his certificate should be revoked. 2 His argument is meritless.

After Anderson allowed his insurance to lapse, the Commission sent him an order to show cause ("OSC") requiring him to "appear before the Commission and show cause why [Image's] Certificate of Convenience and Necessity ... should not be suspended or cancelled...." The notice provided to Anderson advising him of the OSC hearing unambiguously informed him that the purpose of the hearing was to determine why his certificate should not be revoked. An administrative law judge conducted a hearing on the OSC at which Anderson appeared and defended his position. Such a hearing, focusing on the violation for which a license is later suspended and the notice which informs the parties of the nature of the potential penalty involved, clearly comports with the hearing requirement set forth in section 54-6-41.

Anderson further alleges that the Commission gave him insufficient notice of its modifications of the administrative law judge's proposed order. He contends that when the Commission received his returned order, it had a duty to take additional steps to ensure that he got actual notice of the amended order (i.e., the order that required him to pay the full $500 penalty within 60 days or have his certificate revoked automatically).

This argument is unpersuasive. Section 54-6-14 of the Motor Carrier Act mandates that all common and contract motor carriers maintain on file with the Commission "written designation of the name and post office address of a person maintaining a residence within this state upon whom service of any process, notice, or order may be made under this chapter." Utah Code Ann. § 54-6-14 (1990). The statute further provides, "Service of process shall be by certified mail to the designated person at the address filed." Id. The statute makes no reference to any sort of personal service or actual notice requirement. The most burdensome form of service articulated is certified mail. Thus, we can infer that, at most, the legislature intended that the Commission be obligated to serve its orders by certified mail, not by personal service.

Despite the statute's apparent approval of serving orders by certified mail, Anderson argues that he is constitutionally entitled to actual notice of Commission orders. We do not believe that the Constitution requires actual notice under these circumstances.

In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313-14, 70 S.Ct. 652, 656-57, 94 L.Ed. 865 (1950), the United States Supreme Court held that to comport with due process, notice must be "reasonably calculated under all the circumstances" to give interested parties an opportunity to protect their interests. Under this standard, the proper inquiry focuses on whether the agency "acted reasonably in selecting means likely to inform persons affected, not whether each [affected person] actually received notice." Weigner v. City of New York, 852 F.2d 646, 649 (2d Cir.1988). To determine whether the agency has acted reasonably in choosing a method of notice, we balance the interest sought to be protected against the interest of the agency. Tulsa Professional Collection Servs. Inc. v. Pope, 485 U.S. 478, 484, 108 S.Ct. 1340, 1344, 99 L.Ed.2d 565 (1988); Carlson v. Bos, 740 P.2d 1269, 1273-74 (Utah 1987). In undertaking this analysis, we focus on whether the method of service strikes a reasonable balance between the interests of the agency and the affected individual, see Tulsa, 485 U.S. at 484, 108 S.Ct. at 1344, while keeping in mind that the state's burden is less onerous in administrative proceedings. See Worrall v. Ogden City Fire Dep't, 616 P.2d 598, 602 (Utah 1980) (Hall, J., dissenting) ("[T]he sufficiency of 'notice' for due process purposes is more limited in administrative matters than in other areas of the law.").

In the instant case, Anderson's interest lies in a certificate of...

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