Herman Bros., Inc. v. Louisiana Public Service Com'n

• Decision Date: 28 June 1990
• Docket Number: No. 90-CA-0935,90-CA-0935
• Citation: 564 So.2d 294
• Parties: HERMAN BROTHERS, INC. and Material Delivery Service, Inc. v. LOUISIANA PUBLIC SERVICE COMMISSION, et al. 564 So.2d 294
• Court: Louisiana Supreme Court

Page 294

564 So.2d 294

HERMAN BROTHERS, INC. and Material Delivery Service, Inc. v.LOUISIANA PUBLIC SERVICE COMMISSION, et al.

No. 90-CA-0935.

564 So.2d 294

Supreme Court of Louisiana.

June 28, 1990.

Rehearing Denied Sept. 5, 1990.

Carlos Spaht, Baton Rouge, for Herman Bros. Inc. and Material Delivery Serv. Inc., plaintiff-appellant.

Louis Quinn, Baton Rouge, for Coleman American Moving Serv. Inc.Huggard Trucking Co. Inc., defendant-appellee.

Robert Rieger, Jr., Baton Rouge, for Louisiana Public Serv. Com'n, defendant-appellee.

WATSON, Justice.^*

The issue in this appeal is whether the Louisiana Public Service Commission was arbitrary and capricious in approving the transfer of a certificate for common carriage by motor vehicle when the certificate had been issued only fifteen days before the application for approval was filed.

FACTS

Coleman American Moving Services, Inc. holds common carrier certificate No. 5229-F authorizing it to carry special commodities over irregular routes throughout the state of Louisiana.The commodities included in Coleman's certificate are: "oilfield equipment; materials and supplies; Irish and Sweet potatoes; household goods; sugarcane; corn; lumber; potato crates; heavy building materials; rice; fresh and dehydrated vegetables; truck produce; fertilizers; feed; sacks; cotton; cottonseed and syrup."¹Coleman has only been hauling household goods and equipment under its certificate.However, the Commission's policy is to regard transportation of any one commodity as substantial operation under a multi-commodity certificate.²

Acadia Movers of Baton Rouge, Inc., now Haggard Trucking Company, Inc., holds common carrier certificate No. 6019, issued December 21, 1987.Acadia's certificate is limited and only authorizes transportation of household goods over irregular routes state wide.Prior to receiving the state-wide certificate for household goods, Acadia/Haggard had been moving household goods in the Baton Rouge area.

On January 5, 1988, Coleman and Acadia filed a joint application with the Public Service Commission asking approval for the exchange of their certificates.On April 5, 1988, the parties' exchange agreement was amended to provide for the payment of $20,000 in additional consideration by Acadia to Coleman.

In response to threatened opposition from movers of household goods, the parties agreed that if the exchange were approved by the Commission, Coleman's certificate would be amended to delete household goods.Also, Acadia/Haggard agreed it would not apply to the Louisiana Public Service Commission for household goods' operating authority during a period of ten years.Haggard is primarily interested in hauling cement under Coleman's certificate.

Herman Brothers, Inc. and Material Delivery Service, Inc., common carriers for cement and other products, opposed the application on the ground that there was no substantial operation under the permits within the prior six months as required by LSA-R.S. 45:166B. ³ Ronnie Haggard, who owns a majority of the Haggard stock, admitted that he had not had his state-wide operating authority for six months prior to the application for approval of the exchange.

By OrderNo. T-17853 of the Louisiana Public Service Commission, issued June 14, 1988, the exchange was approved.The Commission stated that, in its opinion, all rights under the two certificates had been substantially operated for a period of six consecutive months prior to filing of the application for approval of the exchange.Chairman Don Owen dissented from the Order.Rehearing was denied by an order issued July 22, 1988.

The protesting carriers, Herman Brothers, Inc. and Material Delivery Service, Inc., filed a petition for appeal with the district court pointing out that Acadia's certificate was granted on December 21, 1987, the application for approval of the exchange was filed on January 5, 1988 and nothing had been hauled under Acadia's certificate at the time the application was filed.

The district court affirmed the Order of the Commission and dismissed the appeal.The protesting carriers have appealed to this court.

The exchange agreement was conditioned upon final approval by the Commission.It is contended that there had been six months of operation when a rehearing was denied by the Commission on July 22, 1988.However, since six months' operation is a question for proof before the Commission, the six months' period must be complete when the application for approval is filed.⁴The Commission recognized this in its Order which found substantial operation for six consecutive months prior to filing of the application.

There is no question that Ronnie Haggard, the owner of the Acadia/Haggard certificate, did not substantially operate all rights under that certificate for six consecutive months immediately prior to the application for exchange.Six months' operation would have been impossible, because Haggard had not held the certificate for six months.

It has been held that the purpose of the six months' requirement is suppression of traffic in dormant or abandoned certificates.Transway, Inc. v. Louisiana Public Service Commission, 253 La. 933, 221 So.2d 53(1969).⁵However, even if the purpose is to prevent transfer of dormant certificates, the statutory language does not except new certificates from the requirement of six months' operation.Since an applicant for a common carrier's certificate must show "public convenience and necessity," allowing a successful applicant to immediately transfer that certificate would be anomalous.⁶Because the language of the statute is unambiguous and does not lead to absurd consequences, it must be applied as written.LSA-C.C arts. 11 and 12.⁷

It is contended that the legislative provision conflicts with the constitutional grant of power to the Commission in the 1974Constitution.Article 4, Sec. 21, La. Const. of 1974.⁸Two cases, La. Consumers' League, Inc. v. Louisiana Public Service Commission, 351 So.2d 128(La.1977)andCajun Electric Power v. Louisiana Public Service Commission, 544 So.2d 362(La.1989), are cited for the proposition that the Commission's plenary authority over motor carriers cannot be restricted by legislative enactments.

La. Consumers' League, Inc., a plurality opinion, held that the Administrative Procedure Act does not apply to the Public Service Commission.However, this legislative prohibition is substantive.It is not a procedural rule.

Cajun Electric Power held that the Public Service Commission has jurisdiction over electric cooperatives which are public utilities and thereby subject to the Commission's authority.Cajun Electric Power is not decisive here.The legislature's lack of power to alter the Commission's constitutional jurisdiction does not prevent the legislature from enacting substantive provisions affecting motor carriers.The very definition of common carrier by motor vehicle is contained in a statute.SeeLSA-R.S. 45:162(5).⁹The Commission has recognized and acquiesced in the legislative enactments affecting motor carriers.It is conceded in brief that the Commission "... in its exercise of regulatory authority over motor Common Carriers is bound by legislative enactments directing the Commission in the manner in which it will exercise this authority...."¹⁰In the instant case, the Commission's Order gives pro forma recognition to the statute in the wording of its Order.

Since a Commission's Order is entitled to great weight, it will not be reversed unless it is based on an error of law or lacks a reasonable evidentiary basis.Southern Message Service v. Louisiana Public Service Commission, 554 So.2d 47(La.1989);Big Diamond Truck Service, Inc. v. Louisiana Public Service Commission, 553 So.2d 431(La.1989);Southern Message Service v. Louisiana Public Service Commission, 520 So.2d 734(La.1988);Miller Transporters, Inc. v. Louisiana Public Service Commission, 518 So.2d 1018(La.1988).A Commission's Order should be upheld unless it is arbitrary and capricious or a clear abuse of power.Central Louisiana Electric Co. v. Louisiana Public Service Commission, 508 So.2d 1361(La.1987);Central Louisiana Electric Co. v. Louisiana Public Service Commission, 437 So.2d 278(La.1983);andFlorane v. Louisiana Public Service Commission, 433 So.2d 120(La.1983).

This Order cannot be upheld.There is a complete lack of evidence establishing six months' consecutive prior operation before filing of the application for approval.Since the Commission's Order lacks any evidentiary basis, it is arbitrary and capricious and must be reversed.

DECREE

For the foregoing reasons,

THE JUDGMENT OF THE DISTRICT COURT IS REVERSED AND LOUISIANA PUBLIC SERVICE COMMISSION ORDERNO. T-17853 IS REVERSED AND VACATED.ALL COSTS ARE ASSESSED TO COLEMAN AMERICAN MOVING SERVICES, INC.AND HAGGARD TRUCKING, INC.(FORMERLY ACADIA MOVERS OF BATON ROUGE, INC.).

REVERSED AND RENDERED.

COLE, J., concurs additionally to note the absurdity of the Commission's plenary authority argument, the continued pursuit of which exhibits constitutional illusions of being a fourth branch of government.

LEMMON, J., dissents and assigns reasons.

DENNIS, J., concurs with reasons.

DENNIS, Justice, concurring.

I respectfully concur.

Although the result reached by the majority is correct, the arbitrary and capricious standard of review is inappropriate because the...