Los Angeles & Salt Lake R. Co. v. Public Utilities Commission of Utah

• Decision Date: 28 October 1932
• Docket Number: 5285
• Citation: 15 P.2d 358,80 Utah 455
• Parties: LOS ANGELES & SALT LAKE R. CO. v. PUBLIC UTILITIES COMMISSION OF UTAH et al
• Court: Utah Supreme Court

15 P.2d 358

80 Utah 455

LOS ANGELES & SALT LAKE R. CO. v. PUBLIC UTILITIES COMMISSION OF UTAH et al

No. 5285

Supreme Court of Utah

October 28, 1932

Original proceedings in the Supreme Court by the Los Angeles & Salt Lake Railroad Company for a writ of certiorari to review a decision of the State Public Utilities Commission denying petitioner's application to change a certain railroad station from an agency to a nonagency station, and an order denying petition for a rehearing.

Order denying petition for rehearing set aside, with instructions.

Geo. H Smith, R. B. Porter, W. Hal Farr, and L. H. Anderson, all of Salt Lake City, for plaintiff.

Geo. P Parker, Attorney General, and Byron D. Anderson, Deputy Attorney General, for defendants.

WOLFE District Judge. STRAUP, ELIAS HANSEN, FOLLAND, and EPHRAIM HANSON, JJ., concur. CHERRY, C. J., did not participate.

OPINION

WOLFE, District Judge.

The petitioner sued out a writ of certiorari to have reviewed a decision of the public utilities commission denying an application to change St. John Station on its main line in Tooele County, Utah, from an agency to a nonagency station, and to have reviewed an order which denied a petition for a rehearing. The decision on the application to discontinue St. John as an agency station and the order refusing to grant the petition for rehearing stand on somewhat different footings. We shall therefore consider separately the record made on the application to discontinue the agency station, and thereafter the record made on the hearing had upon the petition for a rehearing. The application for permission to discontinue the operating of the station at St. John as an agency station was based on the fact that the revenues derived from the business handled at said station were not sufficient to justify the maintaining and operating of said station as an agency station, and that the plaintiff could furnish adequate and reasonable facilities to serve the public in the business conducted at such station without the presence of a day agent. The record consists of testimony offered by the railroad on the one hand, and by objecting stock raisers and farmers on the other. A decision denying the application resulted.

Subsection 2 of section 4783, Comp. Laws Utah 1917, as far as material to this case, reads as follows:

"Every public utility shall furnish, provide, and maintain such service, instrumentalities, equipment, and facilities as shall promote the safety, health, comfort, and convenience of its patrons * * * and the public, and as shall be in all respects adequate, efficient, just and reasonable."

Section 4834, Comp. Laws Utah 1917, provides in part as follows:

"* * * The review shall not be extended further than to determine whether the commission has regularly pursued its authority, including a determination of whether the order or decision under review violates any right of the petitioner under the constitution of the United States or of the state of Utah. The findings and conclusions of the commissions on questions of fact shall be final and shall not be subject to review. Such questions of fact shall include ultimate facts and the findings and conclusions of the commission on reasonableness and discrimination. * * *"

The matter of determining exactly what questions are before us has not been altogether free from difficulty. Perhaps the best approach to a determination of that matter can be had by determining first what question the commission had before it, and the legal principals to be considered in the determination of that question. The question before the commission may be stated as follows: In view of the gross operating revenues properly accredited to St. John station, would the requirements of subsection 2 of section 4783, as above set out, be satisfied by maintaining and operating said station as a nonagency station? This is the bald and shortest way of stating the question. Elaborated, it could be restated as follows: In view of the cost of maintaining an agency station at St. John, and in view of the gross operating revenue properly chargeable to said station, could the public obtain, without an agent, the adequate, efficient, just, and reasonable services which the public utility is required to furnish under subsection 2 of section 4783?

One of the first questions which should be discussed and decided is the question of what, if any, relationship there is between service and revenue. There is no absolute standard of a reasonable, adequate, or efficient service. There is a point at which almost any one might say that services were inadequate, and there is a point above which almost any one could say that the railroad company was giving more in the way of facilities than it should be required to give. But in between these points it would be somewhat a matter of each man's judgment as to what the quantum of service should be to satisfy the requirements of subsection 2 of section 4783. From a strictly logical standpoint, one might ask why the question of revenues should have any place in the discussion. That is to say, why the quantum of facilities or services which satisfies the requirements of section 4783 should be variable, depending on the question of revenues. It might be argued that if you determine what service or facility is reasonable, efficient, adequate, or just for the community, then such service and facility is not the more or less adequate or reasonable because of the question of revenues. As a practical matter, however, the quantum of facilities or services which is necessary to satisfy the requirements of subsection 2 of section 4783 does depend upon the revenues which the station produces or helps to produce. As a practical matter, it seems perfectly obvious that the railroad can afford to give and should give more, or a service of a higher or better type or character, and provide better or more facilities where the station yields ample and sufficient revenue to do so, than where the station is a low producer of revenue. See St. Louis & S. F. R. Co. v. Newell, 25 Okla. 502, 106 P. 818.

However, we cannot accept the principle that the revenue chargeable or accredited to a certain station should be the sole controlling factor in determining the services of facilities to be provided. It is quite true that in certain cases the railroad cannot be compelled to carry on the business of transportation at a loss. A railroad may go out of business altogether. See Brooks-Scanlon Co. v. Railroad Commission of Louisiana, 251 U.S. 396, 40 S.Ct. 183, 184, 64 L.Ed. 323. In this case it was held that:

"A carrier cannot be compelled to carry on even a branch of business at a loss, much less the whole business of carriage"--citing Northern Pacific Ry. Co. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429, 434, 59 L.Ed. 735, L. R. A. 1917F, 1148, Ann. Cas. 1916A, 1, and Norfolk & Western Ry. Co. v. Conley, Atty. Gen., West Virginia, 236 U.S. 605, 35 S.Ct. 437, 59 L.Ed. 745.

"* * * It is true that if a railroad continues to exercise the power conferred upon it by a charter from a State, the State may require it to fulfill an obligation imposed by the charter even though fulfillment in that particular may cause a loss."

This is quite a different case than that contended for here by the plaintiff. We do not believe it has ever been held that every facility or every service of the railroad must be made to pay, or that it can be discontinued. In the case of Vandalia Railroad Co. v. Schnull, etc., 255 U.S. 113, 41 S.Ct. 324, 65 L.Ed. 539, it was held that:

"A railroad rate fixed by the state authority violates the Fourteenth Amendment if it does not yield the carrier a reasonable return upon the class of traffic to which it applies."

The railroad company contended:

"That the revenue from traffic to which the rates apply is the test of their legality and any deficiency in them cannot be made up by rates on some other traffic. * * *"

The contention of the defendants in error was:

"That the revenue from all of the intrastate business of the Railroad Company is to be taken into account, and, if it be sufficient to remunerate the Railroad Company, the particular rates, though unremunerative, are nevertheless legal."

The court held with the railroad's contention.

It was held in the West Virginia case above cited that the state

"has no arbitrary power over rates; * * * and that the state may not select a commodity or class of traffic, and instead of fixing what may be deemed to be reasonable compensation for its carriage, compel the carrier to transport it either at less than cost, or for a compensation that is merely nominal."

In the North Dakota case above cited the court held that the Legislature

"has a wide range of discretion in the exercise of the power to prescribe reasonable charges, and it is not bound to fix uniform rates for all commodities, or to secure the same percentage of profit on every sort of business. * * * It is not bound to prescribe separate rates for every individual service performed, but it may group services by fixing rates for classes of traffic."

And in the Schnull Case, the court said:

"This court will not sit in judgment upon such action and substitute its judgment for that of the legislature when reviewing 'a particular tariff or schedule which yields substantial compensation for the services it embraces, when the profitableness of the intrastate business as a whole is not involved.' 'But * * * a different question arises when the State has segregated a commodity, or a class of traffic, and has attempted to compel the carrier to transport it at a loss or without substantial compensation even though the entire traffic to which the rate is applied is taken into account.'"

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