Braxton County Citizens for a Better Environment v. Public Service Com'n of West Virginia, 21358

• Decision Date: 23 April 1993
• Docket Number: No. 21358,21358
• Citation: 429 S.E.2d 899,189 W.Va. 249
• Court: West Virginia Supreme Court
• Parties: BRAXTON COUNTY CITIZENS FOR A BETTER ENVIRONMENT, in its capacity as an Unincorporated Association; and Virginia Carr, in her capacity as Chairperson of Braxton County Citizens for a Better Environment, Plaintiffs Below, Appellants, v. The PUBLIC SERVICE COMMISSION OF WEST VIRGINIA and Central West Virginia Refuse, Inc., Defendants Below, Appellees.

Page 899

429 S.E.2d 899

189 W.Va. 249

BRAXTON COUNTY CITIZENS FOR A BETTER ENVIRONMENT, in its

capacity as an Unincorporated Association; and Virginia

Carr, in her capacity as Chairperson of Braxton County

Citizens for a Better Environment, Plaintiffs Below, Appellants, v. The PUBLIC SERVICE COMMISSION OF WEST VIRGINIA and Central

West Virginia Refuse, Inc., Defendants Below, Appellees.

No. 21358.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 20, 1993.

Decided April 23, 1993.

Syllabus by the Court

" 'The principle is well established by the decisions of this Court that an order of the public service commission based upon its finding of facts will not be disturbed unless such finding is contrary to the evidence, or is without evidence to support it, or is arbitrary, or results from a misapplication of legal principles.' United Fuel Gas Company v. Public Service Commission, 143 W.Va. 33 ." Syllabus point 5, Boggs v. Public Service Commission, 154 W.Va. 146, 174 S.E.2d 331 (1970).

Michael C. Farber, Sutton, for appellants.

Lisa L. Wansley, Charleston, for appellee, Public Service Com'n.

Arden Curry, Pauley, Curry, Sturgeon & Vanderford, Charleston, for appellee, Central West Virginia Refuse, Inc.

PER CURIAM:

In this appeal, the appellants, Braxton County Citizens for a Better Environment and Virginia Carr, its chairperson, claim that the West Virginia Public Service Commission erred in authorizing Central West Virginia Refuse, Inc., to sell and assign to another corporation, Regional Resource Development Corporation, all its capital stock. The appellants argue that the evidence developed before the Public Service Commission fails to show that Regional Resource Development Corporation has sufficient financial standing to conduct the business of Central West Virginia Refuse, Inc., in a manner that does not adversely affect the public interest and that given this circumstance the law dictates that the Public Service Commission should disallow the transfer of the stock. After reviewing the questions presented, as well as the documents filed, this Court disagrees with the appellants' position. The decision of the West Virginia Public Service Commission is, therefore, affirmed.

Central West Virginia Refuse, Inc., operates a refuse collection service in Braxton, Gilmer, and Clay Counties, West Virginia. It also operates a solid waste disposal facility in Braxton County. Kenton Meadows Company, Inc., is the owner of all the issued and outstanding stock of Central West Virginia Refuse, Inc.

On August 2, 1989, Kenton Meadows Company, Inc., petitioned the West Virginia Public Service Commission for permission to sell and assign all the common stock of Central West Virginia Refuse, Inc., to Regional Resource Development Corporation, a Delaware corporation, which proposed to establish a West Virginia affiliate to be called Gassaway Resource Development Corporation.

A public hearing on the question of whether the stock should be transferred was conducted in Braxton County on November 2, 1989. At the conclusion of that hearing, an administrative law judge recommended that authority be granted for the sale of the stock.

The staff of the West Virginia Public Service Commission, after examining the recommended decision, took exception to it, and the case was remanded to the administrative law judge for further hearing and consideration.

Additional hearings were conducted in June and July, 1990, and the appellant, Braxton County Citizens for a Better Environment, was granted intervenor status at the beginning of those hearings.

Braxton County Citizens for a Better Environment, during the hearings, opposed the sale of the stock premised upon the belief that the proposed purchaser, Regional Resource Development Corporation, was so grossly undercapitalized that it was not financially able to operate a garbage collection service and solid waste landfill, of the type maintained by Central West Virginia Refuse, Inc., in the State of West Virginia. It, in essence, argued that Regional Resource Development Corporation was nothing more than a "shell" corporation and that serious questions existed as to whether its takeover of Central West Virginia Refuse, Inc., would adversely affect the public interest.

Evidence developed during the hearings showed that Regional Resource Development Corporation, the proposed purchaser, was a newly organized, for-profit business corporation and that it had authority to issue 2000 shares of common stock. The promoters of the corporation, Fred Harrison, Sr., and Fred Harrison, Jr., had operated solid waste businesses in New Jersey and Pennsylvania.

The evidence also showed that Regional Resource Development Corporation did not own real any property and that it did not intend to own real estate in West Virginia in the future. It also appeared that neither Regional Resource Development Corporation nor its proposed subsidiary, Gassaway Resource Development Corporation, had performed any financial analysis of Central's garbage collection service or landfill operation based upon its permitted tonnage.

Lastly, evidence regarding the financial situations of Frederick Harrison, Jr., and Frederick Harrison, Sr., proposed officers of Regional Resource Development Corporation, was introduced, as well as evidence that they intended to be guarantors of the corporation's operations. The evidence, which the appellant, Braxton County Citizens for a Better Environment, calls "self-serving, unaudited financial reports" showed that the Harrisons, taken together, had a substantial net worth.

At the conclusion of the hearings, the administrative law judge found that:

At this time, the Transferee could not adequately discuss how the operation of the landfill and the motor carrier would be financed if and when the transfer of stock is approved. The Harrisons did express a willingness to divert some of their personal resources and the resources of their affiliated corporations into the new venture, but the primary source of funding was anticipated to be through bank loans. The Transferee had no letter of commitments from any financial institution, and it had only very ambiguous preliminary discussions with certain banks.

Based upon these conclusions, the administrative law judge found that Regional Resource Development Corporation was financially unfit to acquire the common stock of Central West Virginia Refuse, Inc., because of "... too many uncertainties and unsubstantiated claims at this time to allow the ALJ to responsibly find that ... Regional ... [has] the necessary financial commitments and resources to operate the landfill on a prospective basis."

After receiving the administrative law judge's recommended decision and considering the record made, the West Virginia Public Service Commission, on November 8, 1991, reversed the recommended decision and approved the transfer of the stock. In so doing, the Commission reasoned that, while the evidence showed that Regional Resource Development Corporation was arguably underfunded, the fitness of the proposed transferee could be evaluated only realistically by considering the fitness of its owners and proposed guarantors of its operation, Fred Harrison, Sr., and Fred Harrison, Jr. It also concluded that when their...