Douglas Transit, Inc. v. Illinois Commerce Com'n

• Decision Date: 30 December 1987
• Docket Number: No. 4-87-0233,4-87-0233
• Court: United States Appellate Court of Illinois
• Parties: , 115 Ill.Dec. 313 DOUGLAS TRANSIT, INC., and Hunt Super Service, Inc., Plaintiffs-Appellants, v. ILLINOIS COMMERCE COMMISSION, Defendant-Appellee (A & B Freight Lines, Inc.; Holland Motor Express, Inc.; Ruldolph's Express Co.; and Ron Smith Trucking Co., Intervenors-Appellees).

Page 724

517 N.E.2d 724

164 Ill.App.3d 245, 115 Ill.Dec. 313

DOUGLAS TRANSIT, INC., and Hunt Super Service, Inc., Plaintiffs-Appellants, v. ILLINOIS COMMERCE COMMISSION, Defendant-Appellee (A & B

Freight Lines, Inc.; Holland Motor Express, Inc.;

Ruldolph's Express Co.; and Ron Smith

Trucking Co., Intervenors-Appellees).

No. 4-87-0233.

Appellate Court of Illinois,

Fourth District.

Dec. 30, 1987.

Rehearing Denied Jan. 29, 1988.

Robert T. Lawley, Routman & Lawley, Ltd., Springfield, for plaintiffs-appellants.

Neil F. Hartigan, Atty. Gen., Chicago, Douglas Trabaris, Sp. Asst. Atty. Gen. for Illinois Commerce Com'n.

Carl L. Steiner, Paul A. Gajewski, Axelrod, Goodman, Steiner & Bazelon, Chicago, for A & B Freight, Holland Motor Express & Rudolf Exp.

Justice McCULLOUGH delivered the opinion of the court:

Douglas Transit, Inc., and Hunt Super Service, Inc., appeal a circuit court order affirming a decision of the Illinois Commerce Commission (Commission). The Commission granted their joint petition to transfer Douglas' certificate of Public Convenience and Necessity (certificate) but found a large percentage of Douglas' prior hauling activity was outside of the scope of its certificate as originally granted. It found other authority had been abandoned.

Douglas Transit, Inc. (Douglas), and Hunt Super Service, Inc. (Hunt), argue: the Commission improperly modified the scope of the certificate in a transfer proceeding; Douglas' right to notice and an opportunity to be heard on the interpretation issue were violated; the Commission misinterpreted Brink's, Inc. v. Illinois Commerce Comm'n (1982), 108 Ill.App.3d 186, 64 Ill.Dec. 72, 439 N.E.2d 1; the Commission improperly applied the doctrine of ejusdem generis; and the Commission is estopped from limiting the scope of the certificate. The Commission asserts Douglas is collaterally estopped from relitigating the scope of its certificate.

We reverse and remand.

On May 16, 1983, Douglas and Hunt applied for a transfer of Douglas' authority to haul intra-state goods. Douglas and Hunt had entered an agreement for the sale of the certificate. On February 4, 1983, Douglas filed a bankruptcy petition. During the second week of February 1983, Michael Smith started dispatching trucks at the request of Douglas' attorney.

Notice of public hearings on the proposed transfer was published in various newspapers. Douglas' common carrier certificate authorized it to transport "livestock, farm products, feed, coal, merchandise, furniture and commodities general within a fifty (50) mile radius of the Post Office at Newman, Illinois, and to transport such property to or from any point outside such authorized area of operation for a shipper or shippers within such area; also, livestock, farm products, feed, coal, merchandise, furniture and commodities general to or from any point or points within the State of Illinois."

Several firms intervened, objecting to the transfer and raising the scope of the certificate in their arguments as an issue. Gary Armstrong, Douglas' president, testified that in February 1983, Douglas filed a bankruptcy petition. After the petition had been filed, Douglas agreed to sell to Hunt. Douglas and Hunt had filed for a temporary permit, which the Commission granted. Armstrong prepared an abstract of shipping for the hearing. The abstract was a sampling of the type of freight hauled by the firm during the two years preceding the transfer petition. Armstrong testified that Douglas had transported soy bean meal, liquified petroleum gas, all grades of rock, anhydrous ammonia, coal, all types and grades of stone, food stuffs, bulk materials, solvents, plastic bottles, dry fertilizer, dairy products, boring machines, dirt, magazines, corn gluten meal, sand, agricultural limestone, gravel, pallets, tool sheds, road salt, books, liquid fertilizer, garden mulch, lactic acid, cylinders, shortening, grain, road oil, cold patch asphalt, pig iron, pipe, paper rolls, seed corn, dryers, bedding rock, miscellaneous wide loads, junk, and dust. The sampling was merely representative of the types of materials Douglas hauled.

The Commission approved the transfer. However, in a section of the order entitled "Interpretation of Transferor's Common Carrier certificate," it reviewed the Brink's decision. The Commission noted that the common carrier authority held by Douglas had been granted pursuant to the grandfather provision of the Illinois Vehicle Code (Code) (Ill.Rev.Stat.1983, ch. 95 1/2, par. 18- 305). The Commission further noted the appellate court held Douglas' certificate did not authorize transportation of armored car commodities. The Commission then stated that Brink's applied in the instant proceeding. Based on the doctrine of ejusdem generis, it determined that grain, feed, coal, fertilizer, seed, dairy products, food stuffs, plastic bottles, boxes, pallets, tool sheds, books, boring machines, magazines, cylinders, pig iron, pipe, and paper rolls were within the scope of Douglas' hauling authority as originally granted in its certificate. It found the remaining commodities listed in the abstract of shipment were not similar to items listed in the certificate and were, thus, outside the scope of the operating authority. Then, the Commission analyzed activities which Douglas had engaged in in the prior two years as evidenced in the shipping abstract. It determined that Douglas had abandoned its authority to transport any commodities which it had not specifically transported in the prior two years which had been determined to be within the scope of its certificate.

A brief review of the relevant statutory provisions is necessary to an understanding of our disposition. In order to transport goods in Illinois, each carrier must be licensed and regulated by the State. Section 18-305 of the Code provides for the automatic issuance of a certificate to firms which were operating under the former trucking act. The section provides that authorization is limited to services actually performed under the former law. Ill.Rev.Stat.1983, ch. 95 1/2, par. 18-305.

Section 18-305(b) of the Code provides:

"If after hearing on complaint of any interested party, or on its own motion, it is shown that the certificate or permit issued by the Commission pursuant to the provisions of paragraph (a) of this Section does not conform to the operating rights actually exercised by the holder of such certificate or permit issued pursuant to the provisions of 'The Illinois Truck Act', * * * then, the Commission shall promptly modify such certificate or permit so that it shall conform to the authority and actual use under such Act." Ill.Rev.Stat.1983, ch. 95 1/2, par. 18-305(b).

Section 18-307 of the Code provides that after notice, the Commission on its own motion, may amend, suspend, or revoke the authority granted in any certificate for failure to comply with any provision of the Code. Ill.Rev.Stat.1983, ch. 95 1/2, par. 18-307.

Section 18-309 of the Code provides a procedure for the transfer of operating authority. Section 18-309(3) of the Code states:

"When a transaction is proposed under this section, the carrier or the person seeking authority therefor shall present an application to the Commission. The application shall contain a copy of the contract, including the terms of the proposed transaction, and an abstract of shipments performed by the transferring party within the last year prior to the date of such contract. The Commission shall, after due notice, set the application for a public hearing to determine whether the findings specified below may properly be made. When the Commission finds that (a) the purchaser or lessee is fit, willing and able, (b) that the operations of the proposed seller or lessor have not been abandoned, suspended, discontinued or dormant and (c) that the transaction proposed will be consistent with the public interest and the declaration of policy set forth under Section 18-101, it shall enter an order approving and authorizing the transaction, upon the terms and conditions, and with the modifications, so found to be just and reasonable.

In determining whether the operations of the proposed seller or lessor have not been abandoned, suspended, discontinued or dormant, the Commission shall only consider the operations of the transferring party performed within the last 2 years prior to the date of such contract * * *." (Emphasis added.) Ill.Rev.Stat.1983, ch. 95 1/2, par. 18-309(3).

The instant proceedings were brought pursuant to section 18-309 of the Code. Douglas argues the Commission erred as a matter of law in interpreting the scope of the grandfather certificate in the transfer proceeding. The Commission argues that the fact the certificate was a grandfather certificate is irrelevant since the instant case involved a transfer application under section 18-309 of the Code. The Commission asserts that it did not limit its analysis to Brink's but found a dormancy of operations. Therefore, it correctly modified the Douglas certificate. The intervenors argue that the manner in which the certificate has been issued should have no effect on its subsequent transfer under section 18-309.

The Commission's order reveals that it first interpreted the scope of the original authority granted Douglas Trucking, Inc. Then, it assessed the operations which it determined were within the scope of the authority as it had limited that authority. In the instant case, the intervenors had argued the original grandfather certificate did not provide for the transportation of general commodities. They asserted the language of the grandfather certificate should be limited to the specific items named in the certificate and similar commodities. Since they were asking for an interpretation of the certificate's language for all purposes, the action should have been asserted under the provisions of section 18-305(b). Evidence should have been presented concerning the...