Louisiana Tank Truck Carriers, Inc. v. Louisiana Public Service Com'n

• Decision Date: 12 September 1989
• Docket Number: No. 89-CA-1028,89-CA-1028
• Citation: 549 So.2d 850
• Parties: LOUISIANA TANK TRUCK CARRIERS, INC. v. LOUISIANA PUBLIC SERVICE COMMISSION. 549 So.2d 850
• Court: Louisiana Supreme Court

Page 850

549 So.2d 850

LOUISIANA TANK TRUCK CARRIERS, INC. v. LOUISIANA PUBLIC SERVICE COMMISSION.

No. 89-CA-1028.

549 So.2d 850

Supreme Court of Louisiana.

Sept. 12, 1989.

Rehearing Granted in Part and

Denied in Part Oct. 19, 1989.

Janet S. Boles, Boles, Boles & Ryan, Baton Rouge, for appellant.

Anthony Milazzo, Jr., Frank J. Uddo, Uddo & Porter, New Orleans, Robert L. Rieger, Jr., Baton Rouge, Basile J. Uddo, New Orleans, for appellee.

DENNIS, Justice.

This case involves the Public Service Commission's grant of additional authority by certificate of public convenience and necessity to Gorman Transport, Inc. As there were existing certificated carriers servicing shippers statewide, the Commission's grant of authority was based on its finding that Gorman had clearly shown that the public convenience and necessity would be materially promoted by issuance of the certificate. La.R.S. 45:164. The Commission's order amended Gorman's existing motor carrier authority by expanding its operating territory from five parishes to statewide, and by adding lubricating oil and petroleum oil to the list of commodities it could legally transport.

Background Facts and Procedural History

Mr. Gary E. Gorman, the owner, operator, driver and sole employee of a one-vehicle trucking firm located in Chalmette was granted a common carrier certificate by the Public Service Commission in 1987 to transport gasoline and related commodities in a five parish territory: St. Bernard, Orleans, Jefferson, St. Tammany, and Washington Parishes. In 1987, Gorman applied to the Commission to amend his certificate to authorize him to transport these commodities and others on a statewide basis and to change the name of his business to Gorman Transport, Inc. A hearing was held on the application before the Commission's hearing examiner on June 8, 1987.

At the hearing, several carriers with existing certificates authorizing similar transportation statewide, opposed Gorman's application, and upon the grant of authority by the Commission, Louisiana Tank Truck Carriers, Inc., an organization of tank truck motor carriers, sought judicial review in the Nineteenth Judicial District Court in East Baton Rouge Parish. The Public Service Commission answered the appeal, and Gorman intervened. After oral argument, the court remanded the case to the Commission for the production of written reasons for its decision to grant Gorman the additional authority. In its written response to the trial court, the Commission stated that "Gorman's proven track record of a high level of service provides and will continue to provide a useful purpose," and that such service warranted the issuance of the certificate. Upon receipt of these reasons, the court affirmed the Commission's action. Louisiana Tank Truck Carriers timely perfected its appeal to this court. La.Const. Art. 4 Sec. 21(E).

Public Convenience and Necessity

"Public convenience and necessity," the test for obtaining a motor carrier certificate, is not defined by the statutes. The nouns in the phrase possess connotations which have evolved from a century of experience of government in the regulation of transportation. When Congress in 1935 amended the Interstate Commerce Act by adding the Motor Carrier Act, it chose the same words to state the condition for new motor lines which had been employed for similar purposes for railroads in the same act since the Transportation Act of 1920. Such use indicated a continuation of the administrative and judicial interpretation of the language. Interstate Commerce Commission v. Parker, 326 U.S. 60, 65 S.Ct. 1490, 89 L.Ed. 2051 (1945).

As in the case of rail carriers, the statutes dealing with motor carriers do not define the term "public convenience and necessity." However, the Interstate Commerce Commission, in one of its earliest and most frequently cited decisions, Pan-American Bus Lines Operations, 1 M.C.C. 190 (1936), established three jurisprudential considerations to be weighed in determining whether proposed operations satisfy the statutory criterion:

The question, in substance, is whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; whether this purpose can and will be served as well by existing lines or carriers; and whether it can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest. Id. at 203.

The principles set out by the Interstate Commerce Commission in the Pan-American Bus Lines case are so clear and well reasoned that they have endured and have been accepted generally as a fundamental part of transportation regulatory law. See, e.g., G. Hirschbach, Public Convenience and Necessity in Federal Motor Carrier Cases--What are the Criteria?, 16 S.D.L.Rev. 351, 364 (1971); G. Chandler, Convenience and Necessity: Motor Carrier Licensing by the Interstate Commerce Commission, 28 Ohio State L.J. 379, 390 (1967).

When our State Legislature enacted the law regulating motor carriers in 1938, it provided that no motor carrier shall operate as a common carrier without first having obtained from the Commission a certificate of "public convenience and necessity," and that no new or additional certificate shall be granted over a route where there is an existing certificate, "unless it be clearly shown that the public convenience and necessity would be materially promoted thereby." La.R.S. 45:164 (Act 301 of 1938).

This Court has incorporated the principles enunciated in the Pan-American Bus Lines case in its own interpretation of the statutory criterion of public convenience and necessity. CTS Enterprises, Inc. v. Louisiana Public Service Commission, 540 So.2d 275 (La.1989); Miller Transporters, Inc. v. Louisiana Public Service Commission, 518 So.2d 1018 (La.1988). In doing so, however, this Court made it clear that an applicant for authority in a field already occupied by certificated carriers may not succeed by merely proving that his proposed operation is in accordance with public convenience and necessity but he must also show clearly that it will materially promote public convenience and necessity. Miller Transporters, supra at 1019. Also, we have held that a court will not upset the Commission's finding of whether the applicant has made the required showing unless the finding is based on an error of law or is one which the Commission could not have found reasonably from the evidence. CTS Enterprises, supra at 277; Miller Transporters, supra at 1020; M & G Fleet Service, Inc. v. Louisiana Public Service Commission, 443 So.2d 574, 575 (La.1983); Florane v. Louisiana Public Service Commission, 433 So.2d 120, 123 (La.1983). Conversely, it is the court's duty to reverse the Commission's finding if it is based on prejudicial error of law or on material facts that could not have been found reasonably from the evidence.

Application of Statutory Precepts To This Case

Because the Commission previously had issued certificates to conduct the same operations to other common carriers, Gorman, as an applicant for an additional certificate, had the burden of showing clearly that the public convenience and necessity would be materially promoted by its issuance. La.R.S. 45:164. Thus, the applicant faces an onerous dual burden: (A) He must prove that the service he offers is required by public convenience and necessity by showing that: (1) his proposed operation will serve a useful public purpose for which there is a public demand or need; (2) this public purpose cannot and will not be served as well by existing carriers; and (3) applicant can serve this purpose with his new operation without endangering or impairing the operations of existing carriers contrary to the public interest. (B) In addition to proving that his application meets the above test, Gorman must also show clearly that his proposed new operation will materially promote the public convenience and necessity.

1. Public Need or Demand

A carrier seeking operating authority must establish by substantial and competent evidence a public need for the proposed operations. P. Dempsey, Entry Control Under the Interstate Commerce Act: A Comparative Analysis of the Statutory Criteria Governing Entry in Transportation, 13 Wake Forest L.Rev. 729, 736 n. 30. See also, Road Runner Trucking, Inc., 124 M.C.C. 245, 248 (1976); Aero Trucking Inc., 121 M.C.C. 742, 752 (1975); Eleveld Chicago Furniture Service, Inc., 119 M.C.C. 669, 675 (1974); Coastal Tank Lines, Inc., 119 M.C.C. 474, 483 (1974); Hearin--Miller Transporters, Inc., 110 M.C.C. 217, 220 (1969). Public necessity contemplates a need of the entire public as distinguished from that of an individual or any number of individuals. Miller Transporters, supra at 1019; See also, CTS Enterprises, supra at 281.

More specifically, in order to establish a prima facie case of a public need for the proposed operations, an applicant seeking motor carrier authority should comply with the requirements enumerated by the Interstate Commerce Commission in John Novak Contract Carrier Application, 103 M.C.C. 555 (1967):

Those supporting the application should state with specificity the transportation service which they believe to be required.

The shippers and consignees supporting applications for authority to transport property should identify clearly the commodities they ship or receive, the points to or from which their traffic moves, the volume of freight they would tender to applicant, the transportation services now used for moving their traffic, and any deficiencies in existing services.

Those supporting an application for authority to transport passengers should indicate the frequency with which they would use the proposed service and should identify any transportation services now available and the inadequacies believed to exist in such services. Id. at 558.

See also, CTS Enterprises, supra at 281 n. 9...