Charley's Tour & Transp., Inc., Application of

• Decision Date: 15 May 1974
• Docket Number: No. 5383,5383
• Citation: 522 P.2d 1272,55 Haw. 463
• Parties: Application of CHARLEY'S TOUR AND TRANSPORTATION, INC.
• Court: Hawaii Supreme Court

Page 1272

522 P.2d 1272

55 Haw. 463

Application of CHARLEY'S TOUR AND TRANSPORTATION, INC.

No. 5383.

Supreme Court of Hawai'i.

May 15, 1974.

Rehearing Denied Aug. 19, 1974.

Syllabus by the Court

1. An appellate court's review of a decision of the Public Utilities Commission is limited to a determination of whether such decision has a rational basis in the facts found, and such findings will be presumed to be reasonable if supported by substantial evidence.

2. Substantial evidence is relevant and credible evidence of a quality and quantity to justify a reasonable man to reach a conclusion.

3. An appellate court may not consider errors or grounds for appeal from a decision of the Public Utilities Commission not specifically cited in a petition for reconsideration, as required by HRS § 271-32(b).

4. The health and stability of existing carriers and the adequacy of existing services are but two of the elements to be considered by the Commission in determining whether present or future public convenience and necessity will require the proposed service.

5. The applicant may meet his burden of proving public convenience and necessity by demonstrating either a lack of adequate existing facilities to presently serve the public, or insufficient facilities to meet anticipated future demands for service.

6. Testimony that there existed a steady increase in the volume of tourist visitor arrivals in Hawaii, including seasonal surges of Japanese tourists, resulting in a need for more and better bus service on Oahu; that certain sectors of the public were inadequately serviced by the exising carriers; that the contemplated sale of the Honolulu Rapid Transit Co. to the City and County of Honolulu would deprive existing carriers of their major source of long-term and short-term leased busses; that applicant had experienced difficulty in chartering busses in advance from existing carriers to satisfy the demands of its customers; and that most of the existing carriers either contemplated purchasing or leasing additional busses, or had additional busses on order; was substantial evidence to support a finding that the proposed service was required by the present and future public convenience and necessity.

7. Submission of the applicant's financial statement for the nine months ending September 30, 1971, in addition to testimony that the applicant had a long history as a carrier in a lower classification and through a separate corporate entity, in the taxi industry; that applicant desired to initiate innovative tours; that by the applicant's certified public accountant, the applicant's sole stockholder had made an inter-company loan to the applicant of $12,300, and that the applicant's deficit financial position was not unusual for a recently-acquired company which had assumed large existing debts of its predecessor; and that by applicant's business manager, he had arranged for the purchase and delivery of four busses and that applicant's sole stockholder and other undisclosed financial institutions would finance the acquisition was substantial evidence to support a finding that the applicant was fit, willing, and able to perform the proposed service.

Jack H. Mizuha, Arthur S. K. Fong, Honolulu, for intervenors-appellants.

Wendell K. Kimura and Ben F. Kaito, Honolulu, for applicant-appellee.

Harry S. Y. Kim, Deputy Atty. Gen., and George Pai, Atty. Gen., Honolulu, for the Commission.

Before RICHARDSON, C. J., LEVINSON, KOBAYASHI and OGATA, JJ., and Circuit Judge LUM assigned by reason of vacancy.

RICHARDSON, Chief Justice.

On February 19, 1971, appellee-applicant Charley's Tour and Transportation, Inc., a certified common carrier of passengers by motor vehicles, applied to appellee, the Public Utilities Commission, hereinafter the 'Commission,' for an expansion of its operating authority under Certificate of Public Convenience and Necessity No. 428-C to include, in addition to existing authority to operate motor vehicles with seating capacities of 1-7 and 8-12 passengers, authority to operate motor vehicles with a seating capacity of 12 or more passengers over irregular routes on the island of Oahu. On November 9, 1971, applicant amended its application to include a request for temporary expansion of authority to operate motor mehicles with a seating capacity of 12 or more passengers. The Commission permitted appellants Robert's Ilima Tours, Inc., Trade Wind Transportation Co., Ltd., and Gray Line Hawaii, Ltd., three competing carriers, to intervene in the proceedings to protest the granting of the application.

Hearings on the application were held on November 9, 10, 11, 12, and 15, 1971, before the four members of the Commission (one of the memberships of the Commission was vacant). Commissioner Wasano was absent from the hearings on November 12 and Chairman Dolim was absent for 41 minutes from the hearings on November 15. On November 16, the Commission granted the application for temporary authority effective December 1. Appellants filed proposed findings of fact, conclusions of law, decision and order on December 15, 1971. Applicant filed proposed findings of fact, conclusions of law, decision, and order on December 27, 1971.

On January 18, 1972, Commissioner Arakaki was sworn in to replace Commissioner Wasano, who had resigned, and Commissioner Horikawa was sworn in to fill the vacancy. At the Commission's meeting on February 11, 1972, the three commissioners who had attended the hearings, including Chairman Dolim, who had absented himself from a portion of the hearings, voted to grant the application for permanent expansion of authority. The two new commissioners, who did not participate in the hearings, abstained from the voting. The parties were notified of this decision by letter on February 18, 1972.

On March 15, 1972, appellants filed a petition to reopen to take additional new evidence of applicant's financial responsibility. On April 18, 1972, the Commission filed Decision and Order No. 2941 formally granting the application. At no prior time, however, did the Commission submit a proposed decision to the parties. Appellants filed a petition for reconsideration with the Commission on April 28, 1972. At the Commission's meeting of May 2, 1972, Chairman Dolim and the two 'new' commissioners voted to deny the petition, the other commissioners being absent. From the denial of the petition this appeal was taken.

We affirm.

I

At the outset we note that our review in this case is limited to a determination of:

. . . whether the Commission has observed the requirements of the law in the conduct of their proceedings and additionally, whether the conclusions as to public convenience and necessity have a rational basis in the facts found, which must be supported by substantial evidence on the record considered as a whole. Watkins Motor Lines, Inc. v. United States, 243 F.Supp. 436, 439 (D.Neb.1965).

Appellants raise seven citations of error. First they contend that because not all of the commissioners who voted to approve appellee's application heard and examined all of the evidence presented, the Commission violated the requirements of HRS § 91-11 ¹ by not sending a proposed decision to the appellants. Second they argue that the commission violated the requirements of HRS § 91-12 ² by failing to make a ruling on each finding of fact proposed by appellants. This court has in four recent cases, In re Oahu Terminal Services, Inc., 52 Haw. 221, 473 P.2d 573 (1970); In re Western Motor Tariff Bureau, Inc., 53 Haw. 14, 486 P.2d 413 (1971); and In re Terminal Transportation, Inc., 54 Haw. 134, 504 P.2d 1214 (1972), and In re Hawaiian Telephone Co., 54 Haw. 663, 513 P.2d 1376 (1973), admonished the Commission for failure to comply with the procedural requirements of the Hawaii Administrative Procedures Act. We will not, as we indicated in In re Terminal Transportation Inc., supra, 54 Haw. at 138, 504 P.2d at 1216,

in the absence of clear legislative direction to the contrary, . . . interpret provisions of the Hawaii Administrative Procedure Act so as to give government even 'an appearance of being arbitrary or capricious.' (Citations omitted.)

Both appellees (the Commission and the applicant) reply that the appellants cannot raise these procedural errors on appeal to this court because the errors were not specifically set forth in their petition for reconsideration to the Commission as required by HRS § 271-32(b). ³

Appellants raised ten citations of error in their petition for reconsideration. Because no citations to violations of the Administrative Procedures Act were properly raised, we find ourselves powerless under the statute to consider them on appeal. It is well established that this court has hurisdiction to review the actions of an administrative board only to the extent allowed by statute. Gustetter v. City and County of Honolulu Motor Vehicle Dealers' & Salesmen's Licensing Bd., 44 Haw. 484, 485, 354 P.2d 956, 957 (1960).

The Supreme Courts of Ohio, Wisconsin, and Illinois have followed this policy in construing similarly-worded statutes. ⁴ City of Struthers v. Penn Central Co., 23 Ohio St.2d 1, 4, 260 N.E.2d 836, 839 (1970); Village of Cobb v. Public Service Commission, 12 Wis.2d 441, 457-458, 107 N.W.2d 595, 604 (1961); Meinhardt Cartage Co. v. Illinois Commerce Comm., 15 Ill.2d 546, 550, 155 N.E.2d 631, 634 (1959). The court in Meinhardt explained that the purpose of this statute is not to seek a reconsideration of the entire proceeding, but to 'point out and have corrected mistakes of law or of fact, or both, which it is claimed the Commission has made in reaching its determination.' The court reasoned that such errors 'can be remedied by the Commission while it has full control of the matter and no appeal may be necessary.'

II

Before granting or expanding a certificate of public convenience and necessity, the Commission must determine that (1) the applicant is fit, willing, and...