Durango Transp., Inc. v. City of Durango

• Decision Date: 01 June 1989
• Docket Number: No. 88CA0165,88CA0165
• Citation: 786 P.2d 428
• Parties: DURANGO TRANSPORTATION, INC., Plaintiff-Appellant, v. CITY OF DURANGO, the Board of County Commissioners of the County of La Plata and Durango Transit Advisory Board, Defendants-Appellees. . II
• Court: Colorado Court of Appeals

Page 428

786 P.2d 428

DURANGO TRANSPORTATION, INC., Plaintiff-Appellant, v. CITY OF DURANGO, the Board of County Commissioners of the

County of La Plata and Durango Transit Advisory

Board, Defendants-Appellees.

No. 88CA0165.

Colorado Court of Appeals,

Div. II.

June 1, 1989.

Rehearing Denied Aug. 3, 1989.

Certiorari Granted Jan. 16, 1990.

Law Office of Nancy P. Bigbee, Nancy P. Bigbee, Denver, for plaintiff-appellant.

Smith & West, David P. Smith, Durango, for defendants-appellees.

Gerald E. Dahl, Denver, for amicus curiae Colorado Municipal League.

Opinion by Judge FISCHBACH. ^*

Durango Transportation, Inc. (DTI) brought this suit seeking damages and an injunction against defendants--the City of Durango (the City), the Board of County Commissioners of La Plata County (the County), and the Durango Transit Advisory Board--alleging that they were infringing on DTI's authority to operate mass transportation within La Plata County. After a bench trial, the trial court dismissed the complaint. DTI appeals that judgment, primarily asserting that the trial court erred in holding that the Public Utilities Commission (PUC) has no jurisdiction over the City and County's joint operation of a mass transportation system within La Plata County. We reverse on this issue and otherwise affirm.

DTI holds a certificate of necessity and convenience from the PUC authorizing it to operate as a common carrier of passengers and baggage between all points in La Plata County. The City sought authority to operate mass transportation both within the City and between the City and La Plata County Airport and Purgatory Ski Area. The City initially negotiated an agreement with DTI to purchase that part of the company's PUC authority thought necessary to operate call and demand service between the City and the airport and ski area. All parties were aware that no PUC authority was necessary for the City to operate a mass transportation system within City limits.

DTI agreed to seek PUC approval for transfer of the routes outside the city. The parties also agreed that the City had the option to purchase the remainder of DTI's certificate of convenience and necessity. In addition to the lump sum consideration of $50,000, the City promised to pay DTI a percentage of its operating revenue or expenses for all routes "operated by the City for which a PUC authority is required."

Ultimately, after the City perceived that buying only the airport and ski area routes might require passengers to change buses at the City's perimeter, it chose to exercise its option to purchase DTI's entire certificate of transportation within La Plata County. In the amended application for transfer of PUC authority, which incorporated the City's exercise of the option, both parties acknowledged that the City had authority independent of the PUC to operate wholly within its boundaries, which authority would remain unaffected by the transfer.

Several weeks after this amended application was submitted, DTI wrote to the City stating that it would transfer only the airport and ski area routes. The City treated the letter as an anticipatory repudiation and rescinded the contract.

After rescinding the contract, the City entered into an Intergovernmental Agreement with the County to operate mass transportation routes outside the City limits. They have operated pursuant to the agreement since its date of execution.

I.

DTI first contends that the trial court erred in concluding that the City and County's joint operation of a mass transportation system within the territorial boundaries of the county is free from the jurisdiction of the PUC. Defendants, on the other hand, maintain that the trial court's conclusion was correct. They assert that both the City and County are constitutionally or statutorily exempt from PUC jurisdiction for operations within their respective territories, that both are authorized and encouraged to enter into intergovernmental agreements, and that they are consequently exempt from PUC authority for operating jointly. Because we reject defendants' first premise, we agree with DTI.

The jurisdiction of the PUC is set forth in Colo. Const. art. XXV:

"In addition to the powers now vested in the General Assembly of the State of Colorado, all power to regulate the facilities, service and rules and charges ... [of] a public utility ... is hereby vested in such agency of the State of Colorado as the General Assembly shall by law designate.

"Until such time as the General Assembly may otherwise designate, said authority shall be vested in the Public Utilities Commission of the State of Colorado; provided, however, ... that nothing herein shall be construed to apply to municipally owned utilities."

The exemption for municipally owned utilities has been construed to extend only to operations within the municipality's territorial boundaries, City & County of Denver v. Public Utilities Commission, 181 Colo. 38, 507 P.2d 871 (1973), unless there is explicit statutory authority for a municipality's exercise of a particular power beyond its boundaries and explicit statutory exemption from PUC authority. See Board of County Commissioners v. Denver Board of Water Commissioners, 718 P.2d 235 (Colo.1986).

The defendants assert that the exemption of municipalities from PUC jurisdiction for operating public utilities within their boundaries applies to counties. We disagree.

"Municipality" is not defined in the Colorado Constitution itself. However, its repeated use in Colo. Const. art. XX concerning home rule cities and towns and its absence from Colo. Const. art. XIV concerning counties (except in reference to cities and towns) lend credence to the view that "municipality" refers only to cities and towns. The statutory definition confirms this view: " 'Municipality' means a city or town, and, in addition, means a city or town incorporated prior to July 3, 1877, whether or not reorganized, and any city, town, or [combined] city and county which has chosen to adopt a home rule charter pursuant to the provisions of Article XX of the state constitution." Section 31-1-101(6), C.R.S. (1986 Repl.Vol. 12B).

Defendants also argue that even if the constitutional provision does not expressly exempt counties from the jurisdictional control of the PUC vis a vis public utilities, § 30-11-101(1)(f), C.R.S. (1986 Repl.Vol. 12A), by empowering counties "[t]o develop, maintain and operate mass transportation systems," does imply such an exemption. We reject the implication.

It is presumed that the General Assembly, in enacting a statute, intended to comply with the Colorado Constitution. Section 2-4-201(1)(a), C.R.S. (1980 Repl.Vol. 1B). Thus, a construction of a statute that would raise a conflict between the statute and the constitution should be avoided if the statute is reasonably susceptible to construction in harmony with the constitution. Ohmie v. Martinez, 141 Colo. 480, 349 P.2d 131 (1960). If a general statutory provision conflicts with a special or local statutory provision, it shall be construed, if possible, so that effect is given to both. Section 2-4-205, C.R.S. (1980 Repl.Vol. 1B).

Colo. Const. art. XXV and § 40-1-101, et seq., C.R.S. (1984 Repl.Vol. 17) vest in the PUC authority to regulate the facilities, service, rates, and charges of the public utilities with certain exemptions, including one for municipal utilities. Section 40-10-102, C.R.S. (1984 Repl.Vol. 17) provides that all motor vehicle carriers are public utilities within the meaning of the act, and a motor vehicle carrier is defined as "every person ... owning, controlling, operating or managing any motor vehicle used in serving the public in the business of the transportation of persons or property ... for compensation as a common carrier over any public highway...." Section 40-10-101(4)(a), C.R.S. (1984 Repl.Vol. 17). " 'Person' means any individual, partnership, corporation, company, association, joint stock association, or other legal entity." Section 40-10-101(5), C.R.S. (1984 Repl.Vol. 17).

Section 30-11-101(1)(f), cited by defendants, empowers counties "[t]o develop, maintain and operate mass transportation systems, either individually or jointly with any government or political subdivision pursuant to the provisions of part 2 of article 1 of title 29, C.R.S.1973." Section 29-1-203, C.R.S. (1986 Repl.Vol. 12A), in turn, endorses intergovernmental cooperation in general, subject to other legal provisions for special types of agreements.

Construing the constitution and statutes to give effect to all their provisions, we conclude that the General Assembly has empowered counties to provide mass transportation systems subject to regulation by the PUC.

Our conclusion is supported by the purpose of Colorado's system of regulated competition applicable to motor vehicle carriers. At the heart of the system, as codified in § 40-10-105(2), C.R.S. (1984 Repl.Vol. 17), is the "obligation to safeguard the general public against the impaired services and/or higher rates accompanying destructive or excessive competition." Morey v. Public Utilities Commission, 629 P.2d 1061 (Colo.1981). Because of this obligation, the PUC can require a carrier to serve unprofitable routes that are important to certain segments of the population as a condition of granting it authority to operate more lucrative routes. See City & County of Denver v. Public Utilities Commission, supra. If a county were entitled unilaterally, without any input from the PUC, to displace an existing, certificated common carrier on the most widely traveled routes at the most favorable times, then an existing common carrier could be forced out of business and the PUC would have no means of securing service for rural routes.

We note, in addition, that when the General Assembly has intended to grant an exemption from PUC authority, it has done so expressly. Sections 40-1-103, 40-1.1-101, et seq., C.R.S. (1984 Repl.Vol. 17); see Board of...