LAIDLAW ENVIRONMENTAL v. LA PUBLIC SERVICE

Decision Date30 November 1999
Docket NumberNo. 99-CA-1306.,99-CA-1306.
Citation752 So.2d 748
PartiesLAIDLAW ENVIRONMENTAL SERVICES, INC. v. LOUISIANA PUBLIC SERVICE COMMISSION. Allwaste Environmental Services of Louisiana, Inc. v. Louisiana Public Service Commission.
CourtLouisiana Supreme Court

James L. Ellis, Baton Rouge, Taylor, Porter, Brooks & Phillips, Counsel for Applicant.

Jay Jones Harris, Harris & Pugh, Denham Springs; Eve Kahao Gonzalez, Baton Rouge, Counsel for Respondent.

KIMBALL, Justice.1

This appeal raises the issue of whether the Louisiana Public Service Commission (Commission) erred in granting the transfer of Waste Management of Louisiana, LLC's (WML) common carrier certificate to Custom Ecology, Inc. (CEI) in exchange for CEI's contract carrier permit plus $50,000.00. On appeal to the Nineteenth Judicial District Court, pursuant to La. R.S. 45:1192, the Commission's order was affirmed. Protestants appeal directly to this court pursuant to art. IV, sec. 21 of the Louisiana Constitution of 1974. After considering the evidence presented in this case, we conclude that the Commission's decision that WML showed by a clear preponderance that it substantially operated all rights under its certificate for a period of six consecutive months immediately prior to the transfer was erroneous as a matter of law. Therefore, the trial court's judgment is reversed.

FACTS

The Commission issued Common Carrier Certificate No. 5653-G (common carrier certificate) to WML on February 18, 1997, which authorizes the following:

Transportation of hazardous and nonhazardous waste, except oilfield waste, statewide. Restricted against the transportation of all commodities to or from oilfield drilling sites, oilfield production facilities and oilfield service companies, including but not limited to salt water, brine water, liquid mud, oil well completion fluids and oilfield waste.

The Commission issued Contract Carrier Permit No. 1099-G (contract carrier permit) to CEI on November 1, 1996, which authorizes the following:

A permit to operate in Louisiana intrastate commerce as a contract carrier by motor, serving not more than five parties, to operate as follows: Over irregular routes; from, to and between all points within the state of Louisiana.

Hence, a common carrier certificate allows the transportation company to haul for anyone in the general public. Such certificate specifies the types of regulated waste allowed to be carried, the type of equipment that may be used and the geographic areas in which the company may operate. The common carrier certificate does not limit the number of customers with which its holder may contract. A contract carrier permit also specifies the type of waste allowed to be carried, the type of equipment that may be used and the geographic areas in which the company may operate. However, a contract carrier permit only authorizes a transportation company to transport for up to five customers. Further, under a contract carrier permit, the company must keep its contracts to transport on file with the Commission. Thus, a common carrier certificate allows a company to transport for an unlimited number of customers; a contract carrier permit restricts the number of customers to five or less.

On September 4, 1997, WML entered into a contract with CEI whereby WML agreed to exchange its common carrier certificate for CEI's contract carrier permit plus $50,000.00. The two companies filed an application with the Commission on September 8, 1997 to approve the transfer. After the application was published in the Commission's bulletin as required by law, the Commission received statewide opposition from numerous common carrier certificate holders in the state. Protestants in this matter are two of the common carrier certificate holders that objected to the transfer.

In order to transfer a common carrier certificate or contract carrier permit, applicants must meet the requirements of La. R.S. 45:166(B), which provides:

B. No certificate or permit shall be sold, leased or transferred, nor shall such certificate or permit be used by any other than the person, firm or corporation to whom it was originally granted, unless and until it be shown by a clear preponderance and to the satisfaction of the commission that the owner thereof shall have for a period of six consecutive months, immediately prior to the lease transfer or use thereof by one other than the owner, substantially operated all rights under said certificate or permit; or that the failure to so operate was due to bankruptcy, receivership, or other legal proceedings, or to other causes beyond his or its control. Accordingly, a hearing on the matter was held on November 20, 1997, before an administrative law judge (ALJ) and a final recommendation, that the transfer be granted by the Commission, was issued on December 16, 1997. At a public hearing held on December 17, 1997, the commission, over Protestants' objections, found that both WML and CEI met the substantial operation requirement of La. R.S. 45:166(B) and granted the transfer with Order No. T-22757. In reaching its decision, the Commission noted that its General Order of January 9, 1989 provides that when a waste hauler transports waste to a waste facility owned or operated exclusively under contract by the transporter, or its corporate affiliate, such hauls are exempt from regulation by the Commission. Thus, as a result of this General Order of January 9, 1989, the daily transportation of large volumes of waste by WML that it disposes of at its own facilities are considered exempt hauls and do not qualify as operations under its common carrier certificate, which provides for regulated hauls only. The Commission noted that the facts in this case were unique, given that WML owns four of the nine landfills in Louisiana; thus, even though it engages in daily transports of waste, because these are exempt hauls, it technically does not meet the substantial operations requirements of La. R.S. 45:166(B) to transfer its certificate. However, the Commission, apparently relying upon Matlack v. Louisiana Pub. Serv. Comm'n, 260 La. 359, 256 So.2d 118 (1971), found that because WML was ready, willing and able to provide transportation of waste to disposal facilities owned by third parties, despite the fact that its efforts had been unsuccessful, those efforts were sufficient to satisfy the requirements of La. R.S. 45:166(B). The Commission noted that the decision was a close one, but that WML met the requirements, because of its unique circumstances and willingness to haul for third parties, to allow the transfer.

As to CEI, the main objection by protestants was the fact that, in a previous matter before the commission, it had been cited for illegally hauling waste. Protestants contend CEI should not be allowed to use these "illegal" hauls as evidence that it has engaged in substantial operation under its contract carrier permit to meet the requirements of La. R.S. 45:166(B). The Commission took the position that this was the first and only violation by CEI and that fact, in and of itself, did not require it to deem CEI unfit. CEI contends that even if the hauls it was cited for were disregarded, it still provided enough evidence to prove substantial operations under its contract carrier permit.

After their application for rehearing was denied (Order No. T-22757A), protestants appealed to the district court for the Nineteenth Judicial District, Parish of East Baton Rouge alleging: (1) neither WML nor CEI met their burdens of proving substantial operation under their common carrier certificate or contract carrier permit, respectively, as per the requirements of La. R.S. 45:166(B); (2) CEI should not have been allowed to use "illegal" hauls as evidence that it substantially operated all its rights under its contract carrier permit; and (3) the Commission's decision was arbitrary and capricious as the findings are clearly contradicted by the evidence. The district court affirmed the findings of the Commission, concluding its decision was not arbitrary and capricious. However, the district court did note that it "has some question as to the sufficiency of the proof presented," but that the ruling of the commission based upon the recommendation of the ALJ was supported by the evidence given the standard of review and the holding of Matlack, 260 La. 359, 256 So.2d 118. Thus, the district court refused to substitute its view where the ruling "is not clearly erroneous or unsupported by the record."

Pursuant to La. Const. art. IV, sec. 21, protestants appeal the trial court's decision directly to this court.

LAW

The general rule applicable in cases involving the Public Service Commission is that an order of the Commission "should not be overturned unless it is shown to be arbitrary, capricious, a clear abuse of authority, or not reasonably based upon the factual evidence presented." Alma Plantation v. Louisiana Pub. Serv. Comm'n, 96-1423 p. 5 (La.1/14/97), 685 So.2d 107, 109, (citing Washington St. Tammany Elec. Coop., Inc. v. Louisiana Pub. Serv. Comm'n, 95-1932 (La.4/8/96), 671 So.2d 908, 912; Radiofone, Inc. v. Louisiana Pub. Serv. Comm'n, 573 So.2d 460, 461 (La.1991)). An order by the Commission is arbitrary and capricious "only when the record does not and could not reasonably support its finding." Ken-Go Servs. v. Louisiana Pub. Serv. Comm'n, 483 So.2d 141, 142 (La.1986) (citing South Arkansas Vacuum Serv. of Louisiana, Inc. v. Louisiana Pub. Serv. Comm'n, 457 So.2d 655 (La.1984); M & G Fleet Serv., Inc. v. Louisiana Pub. Serv. Comm'n, 443 So.2d 579 (La.1983)). Further, the Commission is "entitled to deference in its interpretation of its own rules and regulations, though not in its interpretation of statutes and judicial decisions." Alma Plantation, 96-1423 p. 5, 685 So.2d at 110 (citing Washington St. Tammany Elec. Coop., Inc., supra, at 912; Dixie Elec. Membership Corp. v. Louisiana Pub. Serv. Comm'n...

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