Atchison, Topeka and Santa Fe Ry. Co. v. Public Utilities Com'n of State of Colo.

• Decision Date: 31 October 1988
• Docket Number: No. 87SA102,87SA102
• Citation: 763 P.2d 1037
• Court: Colorado Supreme Court
• Parties: The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Petitioner-Appellant, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO, the City and County of Denver, the Denver & Rio Grande Western Railroad Company, the Burlington Northern Railroad Company, the City of Arvada, the City of Colorado Springs, State Department of Highways--State of Colorado, the Union Pacific Railroad and the City of Westminster, Respondents-Appellees.

Page 1037

763 P.2d 1037

The ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Petitioner-Appellant, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO,

the City and County of Denver, the Denver & Rio Grande

Western Railroad Company, the Burlington Northern Railroad

Company, the City of Arvada, the City of Colorado Springs,

State Department of Highways--State of Colorado, the Union

Pacific Railroad and the City of Westminster, Respondents-Appellees.

No. 87SA102.

Supreme Court of Colorado,

En Banc.

Oct. 31, 1988.

Rehearing Denied Nov. 28, 1988.

Grant, McHendrie, Haines & Crouse, Peter J. Crouse, Denver, for petitioner-appellant.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Eugene C. Cavaliere, Deputy Atty. Gen., Denver, for respondent-appellee Public Utilities Com'n.

Stephen H. Kaplan, City Atty., John L. Stoffel, Jr. Asst. City Atty. Denver, for respondent-appellee City and County of Denver.

VOLLACK, Justice.

The Atchison, Topeka and Santa Fe Railway Company (Santa Fe) appeals the order of the Denver District Court affirming the decision of the Public Utilities Commission (Commission) to impose upon Santa Fe a fee of $572,000 as its share of the cost of rebuilding the 8th Avenue viaduct (viaduct). Santa Fe argues that the Commission failed to comply with the statutory requirements of section 40-4-106(3)(c), 17 C.R.S. (1984), and based its decision to impose costs not upon evidence in the record, but upon an "assumption" concerning the amount of benefit that Santa Fe and Burlington Northern Railway Company (Burlington), the affected railroads, and the City and County of Denver (Denver) received from construction of the viaduct. We affirm the order of the district court.

I.

The viaduct was constructed in 1936 to serve east-west pedestrian and motor traffic between Vallejo and Mariposa streets. The two-lane viaduct provided a separate grade crossing above railroad tracks and facilities owned by Santa Fe, Burlington, and the Denver and Rio Grande Railway Co. (Rio Grande). ¹ The viaduct was condemned in November 1983, and traffic was rerouted primarily to the 6th Avenue viaduct. On December 31, 1983, Denver applied to the Commission for authority to demolish and rebuild the viaduct. Santa Fe, Burlington, and Rio Grande were granted permission to intervene in the application proceedings, and hearings were held in January 1984. ²

On February 7, 1984, the Commission granted Denver's application for permission to rebuild the viaduct, and assessed costs of $572,000 against Santa Fe based on the recommendation of John Baier, the Commission's transportation engineer. After exhausting its administrative remedies, Santa Fe appealed the Commission's decision to the Denver District Court. The district court affirmed the decision of the Commission on February 17, 1987, and Santa Fe appealed to this court pursuant to section 40-6-115(5), 17 C.R.S. (1984).

II.

The January 1984 hearings were the first to be conducted pursuant to House Bill No. 1569, codified as subsections (3)(b) and (3)(c) of section 40-4-106. These subsections were approved June 10, 1983, and made effective July 1, 1983. Ch. 453, § 1, § 40-4-106, 1983 Colo.Sess.Laws 1558, 1558-60. Section 40-4-106 governs rules for public safety, crossings, and allocation of expenses. Subsection (3)(b) ³ describes procedures for processing applications for grade separation construction projects. Subsection (3)(c) ⁴ describes the method of allocating cost of such projects between one or more class I railroads ⁵ and the public authority in interest. Subsection (3)(c)(I) requires the Commission to examine the railroads and public authorities affected by a proposed construction project, and to "give equal weight to the benefits, if any, which accrue from the grade separation project and the responsibility for the need, if any, for such project." Subsection (3)(c)(II) describes the method of allocating cost between two or more class I railroads. It requires the Commission to consider the relative benefits, if any, that each railroad receives from the project. Neither subsection (3)(b) nor subsection (3)(c), however, prescribes a particular method of measuring these benefits and responsibilities.

John Baier, the Commission's transportation engineer, developed a new methodology in an attempt to comply with section 40-4-106. He provided written and oral testimony about his "base case method" at the January 1984 Commission hearings. The base case method is a three step process. First, a theoretical model is created to simulate typical traffic patterns. Second, the base case is compared to the actual project. Deviations from the base case are then analyzed "on a component basis addressing the question of benefit and responsibility for need." Third, costs for each component are allocated among the respective parties based on this comparison of the actual project to the base case.

In this base case, Baier assumed that one public authority desired to build a road that intersected one set of railroad tracks. He stated that the road could be built on ground level or "at-grade," above grade by means of a viaduct or overpass, or below grade by means of a tunnel or underpass. He then compared the benefits the public authority and the railroad receive from construction of an above grade road to the benefits received from construction of an at-grade railroad crossing. He observed that construction of a grade separation construction project was mutually beneficial to the public authority and the railroad because it eliminated any chance of collisions between trains and road traffic, disruption of train or traffic patterns, release of hazardous materials, and delay of emergency road vehicles. The railroad received additional benefits from construction of an above grade road, said Baier, including eliminating the possibility of damage to switches, tracks and equipment; decreasing the possibility of train delay or derailment; avoiding cost of installing and maintaining at-grade safety devices; and maintaining the railroad's "freedom of operation." ⁶ He stated: "It is extremely difficult to measure and quantify these benefits [to the railroad and the public authority]. However, the benefits are shared equally."

Baier then weighed the responsibility that the railroad and the public authority had for the need for construction of a grade separation construction project. He surmised that a grade separation construction project "would not be required if either the railroad or the roadway did not occupy the same right of way." Accordingly, he concluded that in the base case the railroad and the public authority bore equal responsibility for the need for construction of the project. As a result, he concluded that, under subsection (3)(c)(I), the railroad and the public authority received equal benefit from and bore equal responsibility for removing and replacing the viaduct.

In measuring the benefit under subsection (3)(c)(II) that each railroad derived from construction of the viaduct, Baier divided the viaduct into two components: the eastern component, which crossed the airspace above land owned by Rio Grande; and the western component, which crossed the airspace above tracks owned by Santa Fe and Burlington. He calculated that the cost of constructing the western component of a basic grade separated viaduct was $2,288,013. ⁷ Of that amount, Baier recommended that half should be paid by Denver, while the other half should be paid equally by Santa Fe and Burlington, because each railroad owned one track. He placed no weight on the number of trains each railroad operated or to the revenue generated from each track. Santa Fe's share of the cost of building the viaduct was calculated to be 25% of the cost of building the western component of the viaduct, or $572,000. ⁸

III.

Review of the Commission's decisions is limited to three concerns: whether the Commission has regularly pursued its authority; whether its decisions are just and reasonable; and whether its conclusions are in accordance with the evidence. § 40-6-115(3), 17 C.R.S. (1984); see also Colorado Office of Consumer Counsel v. Public Util. Comm'n, 752 P.2d 1049, 1057 (Colo.1988); RAM Broadcasting of Colorado, Inc. v. Public Util. Comm'n, 702 P.2d 746, 750 (Colo.1985). Orders of the Commission are presumed to be reasonable and valid, Caldwell v. Public Util. Comm'n, 200 Colo. 134, 137, 613 P.2d 328, 330 (1980), and the party challenging an order bears the burden of showing its impropriety, Public Util. Comm'n v. Weicker Transp. Co., 102 Colo. 211, 217, 78 P.2d 633, 636 (1938).

Factual determinations of the Commission are entitled to considerable deference. G & G Trucking Co. v. Public Util. Comm'n, 745 P.2d 211, 216 (Colo.1987). A reviewing court must view the evidence in the light most favorable to the Commission. Peoples Natural Gas Div. v. Public Util. Comm'n, 193 Colo. 421, 427, 567 P.2d 377, 381 (1977). It may not disturb those factual determinations that are supported by substantial evidence in the record. Acme Delivery Serv. v. Cargo Freight Sys., 704 P.2d 839 (Colo.1985). Nor may a reviewing court substitute its judgment for that of the Commission. Public Serv. Co. v. Public Util. Comm'n, 644 P.2d 933, 940 (Colo.1982).

In determining whether to disturb the factual determinations of the Commission, the reviewing court must search the record for evidence favorable to the Commission, North Eastern Motor Freight, Inc. v. Public Util. Comm'n, 178 Colo. 433, 437, 498 P.2d 923, 925 (1972), because findings may be express or implied from a reading of the record as a whole, see Aspen Airways, Inc. v. Public Util. Comm'n, 169 Colo. 56, 62, 453 P.2d 789, 792 (1969). Findings may not be set aside merely because the evidence before the Commission is conflicting or because more than one inference can be drawn from the evidence. Morey v. Public Util. Comm'n, 629 P.2d 1061,...