Key Transp., Inc. v. Trans Magic Airlines Corp.

• Decision Date: 11 July 1974
• Docket Number: No. 11234,11234
• Parties: KEY TRANSPORTATION, INC., dba Sun Valley Key Airlines, Appellant, v. TRANS MAGIC AIRLINES CORPORATION, and Idaho Public Utilities Commission, Respondents. Application of TRANS MAGIC AIRLINES CORPORATION, an Idaho corporation, for a certificate of convenience and necessity.
• Court: Idaho Supreme Court

Page 1338

524 P.2d 1338

96 Idaho 110

KEY TRANSPORTATION, INC., dba Sun Valley Key Airlines, Appellant, v. TRANS MAGIC AIRLINES CORPORATION, and Idaho Public Utilities Commission, Respondents.

Application of TRANS MAGIC AIRLINES CORPORATION, an Idaho corporation, for a certificate of convenience and necessity.

No. 11234.

Supreme Court of Idaho.

July 11, 1974.

W. J. Anderson of Sharp, Anderson & Bush, Idaho Falls, for appellant.

Joseph M. Imoff, Jr., W. Anthony Park, Atty. Gen., Gary L. Montgomery, Asst. Atty. Gen., Boise, for respondents.

McFADDEN, Justice.

This appeal arises out of an order of the Idaho Public Utilities Commission which granted Trans Magic Airlines, an Idaho intrastate air carrier, authority to operate airline commuter service between Boise and Hailey-Sun Valley. Sun Valley Key Airlines, successor to Sun Valley Airlines which poineered and solely operated air carrier service on this route, protested Trans Magic's application for air carrier service and offered adverse testimony of the IPUC hearing on the application. ¹ After the hearing the IPUC entered an order granting Trans Magic's application for air carrier service on the Boise to Hailey-Sun Valley route. Sun Valley Key petitioned the IPUC for a rehearing, but the IPUC denied the petition. Sun Valley Key then appealed from the IPUC order granting Trans Magic's application and from its order denying the petition for rehearing.

At stake in this appeal is whether Sun Valley Key may maintain its predecessor's position in operating commuter airline service between Boise and Hailey-Sun Valley. ² Trans Magic through its application sought to increase its revenue in order to compete with federally subsidized interstate airlines in other southern Idaho routes. The IPUC in authorizing Trans Magic's operation in the Boise to Hailey-Sun Valley route succinctly summarized the position of Trans Magic and Sun Valley Key in Idaho's intrastate air carrier service as follows:

'That Trans Magic Airlines is presently providing a valuable public service through the operation of its current intrastate air network; that the continuation of said service will be difficult or impossible without additional sources of revenue; and that therefore, the public convenience and necessity requires the granting of the additional authority requested herein.

* * *

'This commission fully recognizes that competition between the two airlines on the Boise to Hailey-Sun Valley route might force one of the two airlines out of operation within the State. But as pointed out above, the alternative may very well have the same result. And if there is not room for two regulated air carriers within Idaho, then this Commission would be constrained to feel that the need for regulation of intrastate air carriers in Idaho operating in competition with subsidized federally regulated air carriers is open to serious question. Therefore, the decision to allow both air carriers to service the Boise to Hailey/Sun Valley route is viewed by this Commission as a test of whether there is any real justification for reglation of intrastate air carriers in the State of Idaho.'

(Tr. vol. 2 of 2, p. 11)

Sun Valley Key in its first assignment of error contends that the commission in granting Trans Magic's application failed to consider the adverse effect of Trans Magic's proposed operation on that of Sun Valley Key in the Boise to Hailey-Sun Valley run.

I.C. § 61-1104 provides in part:

'In considering the public convenience and necessity, the commission shall, prior to the issuance of a certificate, consider the effect of such proposed air carrier operation upon the operations of any authorized air carrier then operating over the routes or in the territory sought. The mere existence of an air carrier in the territory sought who possesses authority similar to that sought by the applicant shall not be sufficient cause to deny the issuance of the certificate; except that, the commission may not award a certificate of public convenience and necessity which allows duplication of service over a route or in a territory already served by an air carrier certificated by this commission without a specific finding that the certificated carrier presently serving such route or territory has failed to conform to the terms of its certificate or has failed to comply with the provisions of this act or the orders, rules or regulations of the commission.' (Emphasis supplied.)

The commission in its order granting Trans Magic's application and in its order denying Sun Valley Key's petition for rehearing considered the impact of Trans Magic's proposed air carrier service on the Boise to Hailey-Sun Valley route on Sun Valley Key's operation. We conclude that such consideration met the commission's statutory obligation under I.C. § 61-1104.

Sun Valley Key in tis second assignment of error contends that the commission erred in finding Trans Magic economically able to provide service on the proposed route. This court may not weigh the evidence considered by the commission other than to decide whether or not there is competent and substantial evidence to support the commission's order. See, Taylor v. Union Pac. RR Co., 60 Idaho 185, 89 P.2d 1005 (1939); I.C. § 61-629. The commission's ruling will be reversed only when it appears that the commission failed to follow the law or has abused its discretion. Kent v. Idaho Public Utilities Comm'n, 93 Idaho 618, 469 P.2d 745 (1970). We have reviewed the record and find substantial, competent evidence to sustain the commission's finding of Trans Magic's financial soundness and stability.

Sun Valley Key in its fifth assignment of error challenges the commission's failure to find pursuant to I.C. § 61-1104 that the present air carrier serving the Boise to Hailey-Sun Valley route failed either to comply with the provisions of the Air Carrier Act (I.C. § 61-1101 et seq.), the orders, regulations or rules of the commission, or conform to the terms of its certificate of public convenience and necessity. It is a well settled rule that in an appeal from the commission matters may not be raised for the first time on appeal and that where the objections were not raised in the petition for rehearing, they will not be considered by this court. Sun Valley Key failed to raise this issue in the petition for rehearing in spite of the commission's request that the parties submit briefs on the scope of I.C. § 61-1104. The policy requiring objections to be presented to the commission is that:

"The purpose of an pplication for the rehearing provided by statute, and it must be presumed to have a useful purpose, is to afford an opportunity to the parties to bring to the attention of the Commission, in an orderly manner, any question theretofore determined in the matter, and thereby afford the Commission an opportunity to rectify any mistake made by it before presenting the same to the Supreme Court." Idaho Underground Water Users Ass'n v. Idaho Power Co., 89 Idaho 147, 154, 404 P.2d 859, 862 (1965).

It is our conclusion that the issue raised by appellant's fifth assignment of error (failure of the commission to find that Sun Valley Key has 'failed to conform to the terms of its certificate or has failed to comply with the provision of this act or the order or regulations of the Commission') was not presented to the commission for rehearing as required and, thus, will not be considered in this appeal. I.C. § 61-626, 61-627; Idaho Underground Water Users Ass'n v. Idaho Power Co., supra; Consumers' Co. v. Public Utilities Comm'n, 40 Idaho 772, 236 P. 732 (1925); Consumers' Co. v. Public Utilities Comm'n, 41 Idaho 498, 239 P. 730 (1925).

Sun Valley Key's second, fourth and sixth assignments of error related to the scope and meaning of the term 'public convenience and necessity.' Sun Valley Key contends first that the commission erred in emphasizing or considering the general public interest in other commuter airline routes in relation to the one sought by Trans Magic. In this regard, Sun Valley Key contends that the commission should have confined itself to the public interest involved in the particular route. Respondents Trans Magic and the commission both argue that the public interest involved in a particular route may encompass the public interest in transportation as a whole and that the commission may consider the relationship of an application for air carrier service on a particular route with other air carrier routes in the state.

The authority of the commission to grant a certificate is conditioned on a finding by the...