Michigan Intra-State Motor Tariff Bureau, Inc. v. Public Service Com'n

• Decision Date: 22 June 1993
• Docket Number: A,Docket No. 155900,INTRA-STATE,AFL-CI
• Parties: MICHIGANMOTOR TARIFF BUREAU, INC., Plaintiff-Appellant, v. PUBLIC SERVICE COMMISSION, Defendant-Appellee, and Association for Safe and Competitive Transportation, and American Automobile Manufacturers Association, Intervenors-Appellees, and International Brotherhood of Teamsters and Michigan Statemici Curiae.
• Court: Court of Appeal of Michigan — District of US

Page 677

504 N.W.2d 677

200 Mich.App. 381

MICHIGAN INTRA-STATE MOTOR TARIFF BUREAU, INC., Plaintiff-Appellant, v. PUBLIC SERVICE COMMISSION, Defendant-Appellee and Association for Safe and Competitive Transportation, and American Automobile Manufacturers Association Intervenors-Appellees and International Brotherhood of Teamsters and Michigan State AFL-CIO, Amici Curiae.

Docket No. 155900.

Court of Appeals of Michigan.

Submitted March 16, 1993, at Lansing.

Decided June 22, 1993, at 10:00 a.m.

Released for Publication Sept. 23, 1993.

Foster, Swift, Collins & Smith, P.C. by Webb A. Smith, Robert E. McFarland, and Kathryn M. Niemer, Farmington Hills, for Michigan Intra-State Motor Tariff Bureau, Inc.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Don L. Keskey and Richard M. Karoub, Asst. Attys. Gen., for Public Service Com'n.

Hill Lewis by Nancy L. Lukey, Lansing, for Ass'n for Safe and Competitive Transp. and the American Auto. Mfrs. Ass'n.

James P. Hoffa, P.C. by James P. Hoffa, Detroit, for Intern. Broth. of Teamsters.

Sachs, Waldman, O'Hare, Helveston, Hodges & Barnes, P.C. by Theodore Sachs, Detroit, for Michigan State AFL-CIO.

Before: DOCTOROFF, C.J., and HOLBROOK and SAWYER, JJ.

PER CURIAM.

The Michigan Intra-State Motor Tariff Bureau, Inc., appeals as of right the August 14, 1992, decision of the Public Service Commission that terminated appellant's collective ratemaking agreement. See M.C.L. § 479.20; M.S.A. § 22.585 and M.C.L. § 462.26; M.S.A. § 22.45. We affirm.

Appellant is an association, known as a "bureau," of trucking companies of various sizes. Appellant's members are general commodity carriers who operate throughout Michigan. There are similar carriers operating in Michigan who are not members of appellant. Through appellant, and with the approval of the PSC, appellant's members are able to establish collectively the rates they charge shipping customers. Ratemaking in this collective fashion was recognized by our Legislature when it adopted M.C.L. § 479.6b; M.S.A. § 22.571(2), enacted as part of 1982 P.A. 399. Moreover, collective ratemaking has been practiced for several decades.

All rates charged by common carriers, including collectively established rates, must be just and reasonable and must not be unjustly discriminatory. M.C.L. § 476.7; M.S.A. § 22.540. The PSC is charged with the duty of supervising and regulating rates. M.C.L. § 476.10; M.S.A. § 22.543. It is axiomatic that ratemaking is a legislative function. Michigan Consolidated Gas Co. v. PSC, 389 Mich. 624, 644, 209 N.W.2d 210 (1973) (Williams, J., dissenting); Attorney General v. PSC No. 2 133 Mich.App. 790, 798-799, 350 N.W.2d 320 (1984).

M.C.L. § 479.6b; M.S.A. § 22.571(2) requires collective rates to be established pursuant to an agreement that must be approved by the PSC. Approval is permissible only if certain conditions are satisfied and the PSC finds that the agreement is in furtherance of the statutory transportation policy set forth in § 2 of the Motor Carrier Act, M.C.L. § 475.2; M.S.A. § 22.532. When the PSC approves an agreement, the collectively established rates may be charged. In addition, those rates may be changed with PSC approval. Thus, the supervision of collective ratemaking agreements is largely part of the PSC's overall ratemaking authority and a legislative function of the PSC.

The PSC initially approved appellant's collective ratemaking agreement by an order entered on March 5, 1985. Appellant's application for approval was published, there was no opposition to the application, and the PSC found the application to comply with the statutory requirements. The PSC also found that the application would further the transportation policy expressed in M.C.L. § 475.2; M.S.A. § 22.532.

On January 17, 1992, the PSC issued a notice that it intended to investigate collective ratemaking and to consider whether previously approved collective ratemaking agreements continued to further transportation policy. The notice was published and was sent to five bureaus, including appellant. The PSC's authority for its investigation was M.C.L. § 479.6b(10); M.S.A. § 22.571(2)(10), which provides:

The commission is authorized, upon complaint or upon its own initiative, to investigate and determine whether any agreement previously approved by it under this section, or terms and conditions upon which the approval was granted, is not or are not, in furtherance of the transportation policy set forth in section 2 of article I, or whether the terms and conditions are unnecessary for the purposes of conformity with that policy. After investigation, the commission shall, by order, terminate or modify its approval of the agreement, or the terms and conditions of approval, if it finds the action necessary to assure conformity with the policy. The effective date of any order terminating or modifying approval, or modifying terms and conditions, shall be postponed for a period which the commission determines to be reasonably necessary to avoid undue hardships.

A conference was held on February 11, 1992, with a hearing referee presiding. The parties present, including intervening parties the Association for Safe and Competitive Transportation and the American Automobile Manufacturers Association, agreed to a hearing schedule, accepted by the referee, that placed appellant in a responsive position. By an order entered on February 27, 1992, the PSC ordered that it would preside at the hearings (jointly with the referee) and established an expedited schedule that required the simultaneous filing of prepared testimony by all parties on March 31, 1992, cross-examination of all witnesses on April 13 to 15, and simultaneous filing of briefs two weeks later. Appellant moved for a rehearing regarding the new schedule and also moved for disqualification of Steven Fetter, the PSC chairman. Rehearing was denied on April 1, and the motion to disqualify was denied at the outset of the hearing on April 13.

Prepared testimony was filed by all parties and cross-examination took place as scheduled. The PSC permitted rebuttal testimony between May 8 and May 11. Briefs of all parties were filed on June 1. Appellant participated in all phases of the proceeding, submitting testimony of eleven witnesses and filing an extensive brief. In an opinion and order issued on August 14, 1992, the PSC (with one commissioner dissenting) determined that there were "at least" six reasons why appellant's collective ratemaking agreement should be terminated. All of these reasons related to the transportation policy set forth in M.C.L. § 475.2; M.S.A. § 22.532. The PSC continued its approval of the collective ratemaking agreement of two other bureaus, modified its approval of the agreement of another bureau, and terminated its approval of the agreement of a fifth bureau. After this Court denied the appellant's motion for a stay of the PSC's order, our Supreme Court, in lieu of granting leave to appeal, stayed the PSC's order with regard to appellant pending this appeal. 441 Mich. 900 (1992).

Appellant has the burden of proving by clear and satisfactory evidence that the PSC's order is unlawful or unreasonable. M.C.L. § 462.26(8); M.S.A. § 22.45(8). Appellant must show that the PSC's order was arbitrary, capricious, an abuse of discretion, or not supported by the record. Consumers Power Co. v. PSC, 189 Mich.App. 151, 183, 472 N.W.2d 77 (1991). The PSC's findings must be supported by competent, material, and substantial evidence on the whole record. Const. 1963, art. 6, § 28. The testimony of even one expert can be "substantial" evidence. Ass'n of Businesses Advocating Tariff Equity v. PSC, 192 Mich.App. 19, 27, 480 N.W.2d 585 (1991). This Court gives due deference to the PSC's administrative expertise and will not substitute its judgment for that of the PSC. Id. In legislative matters, such as setting rates, this Court must defer to the PSC. See Colony Park Apartments v. PSC, 155 Mich.App. 134, 138, 399 N.W.2d 32 (1985).

This case is intricately connected with an aspect of the PSC's ratemaking function, a matter with which we do not interfere. The PSC exercised legislative authority when it initially approved and when it later terminated appellant's collective ratemaking agreement. These decisions were based on transportation policy established by the Legislature under M.C.L. § 475.2; M.S.A. § 22.532 and left to the PSC to interpret. We find nothing unlawful or unreasonable in the PSC's actions, all of which were expressly authorized by M.C.L. § 479.6b(10); M.S.A. § 22.571(2)(10). To the extent that the PSC found facts, those findings were supported by ample evidence, including the testimony of staff witness Thomas Lonergan, the director of the PSC's motor carrier regulatory section.

Appellant first argues that it was deprived of several procedural protections afforded a licensee before the administrative termination of a license. Among other things, appellant argues it received no preliminary notice of charges and had no informal opportunity to comply, as required by Rogers v. State Bd. of Cosmetology, 68 Mich.App. 751, 244 N.W.2d 20 (1976). Appellant further argues it was not afforded the due process protection of M.C.L. § 24.292; M.S.A. § 3.560(192), § 92 of the Administrative Procedures Act, regarding revocation of licenses.

The APA defines a license as including the "whole or part of an agency permit, certificate, approval, registration, charter, or similar form of permission required by law, but does not include a license required solely for revenue purposes." M.C.L. § 24.205(1); M.S.A. § 3.560(105)(1); Bukhtia v. Bureau of State Lottery, 190 Mich.App. 323, 325, 475 N.W.2d 475 (1991). We do not view the PSC's approval of appellant's collective ratemaking agreement in 1985 to have created a "license" within the meaning of the APA.

Pursuant to the terms of the Motor Carrier Act, M.C.L. § 475.1 et seq.; M.S.A. § 22.531 et...