Mississippi Chemical Exp., Inc. v. Louisiana Public Service Com'n

• Decision Date: 23 May 1994
• Parties: 94-0440 La
• Court: Louisiana Supreme Court

Page 93

637 So.2d 93

94-0440 La. 5/23/94

MISSISSIPPI CHEMICAL EXPRESS, INC., Younger Brothers, Inc. Matlack, Inc., Groendyke Transport, Inc. and DSI Transports, Inc. v. LOUISIANA PUBLIC SERVICE COMMISSION.

No. 94-CA-0440.

Supreme Court of Louisiana.

May 23, 1994.

John L. Henchy, Stephen R. Edwards, Brenda H. Verbois, C. Michael Futrell, Baton Rouge, for applicants.

James M. Field, Brian A. Eddington, Baton Rouge, for respondent.

[94-0440 La. 1] HALL, Justice. ^*

The instant case is a sequel to our decision in Matlack, Inc. v. Louisiana Public Service Comm'n, 622 So.2d 640 (La.1993), in which we affirmed a district court decision rescinding the Louisiana Public Service Commission's ("LPSC's") granting of a certificate of public convenience and necessity to L & B Transportation, Inc. ("L & B"). In the instant case, we are presented with a similar issue of whether the district court erred in rescinding the LPSC's granting of a new, somewhat more restricted, certificate of public convenience and necessity to L & B. For the reasons that follow, we find the district court erred and reverse.

BACKGROUND FACTS AND PROCEDURAL HISTORY

Since 1986, L & B has operated continuously in this state as a common carrier, hauling liquid chemicals in bulk statewide under a certificate of public convenience and necessity, which the LPSC granted in December 1986 and which this court rescinded in Matlack, supra, in May 1993. The tortuous six year history of that proceeding is detailed in our Matlack opinion. L & B is a Louisiana corporation having its sole terminal in Port Allen, Louisiana. L & B operates 28 tractors and 55 trailers, of which 17 are rubberlined. None of L & B's equipment is presently idle. Although L & B also has interstate authority from the Interstate Commerce [94-0440 La. 2] Commission ("ICC"), approximately 65 to 70% of its business is intrastate. L & B currently serves 88 intrastate customers and annually transports 15,000 to 20,000 intrastate loads.

In October 1992, before this court's Matlack decision was handed down, L & B, as a prophylactic measure, applied to the LPSC for a new certificate of public convenience and necessity to transport as a common carrier certain chemical products in bulk in tank vehicles statewide. ¹ In February 1993, upon receiving notice that its application was being opposed by twelve existing carriers, L & B restrictively amended its application to exclude generally the transportation of petroleum products. ² Thereafter, five existing carriers, all out of state corporations having overlapping operating authority with that sought by L & B, persisted in opposing L & B's application. The five protesting carriers were: Mississippi Chemical Express, Inc. ("MCX"); Younger Brothers, Inc. ("Younger"); Matlack, Inc. ("Matlack"); Groendyke Transport, Inc. ("Groendyke"); and DSI Transports, Inc. ("DSI") (hereinafter collectively referred to as "Protestants").

Desiring to delay the LPSC hearings on L & B's new application until after this court rendered its decision in Matlack, Protestants filed a motion with the LPSC seeking to stay the scheduled hearings; the LPSC denied that motion. Protestants then filed a motion for a restraining order with the Nineteenth Judicial District Court. The district court granted that motion, restraining L & B and the LPSC from proceeding with the public hearings on L & B's application for certification. In response, L & B filed an emergency writ application with this court. On May 18, 1993, the day the hearings were to commence, we granted L & B's writ [94-0440 La. 3] application, overturned the district court's decision and ordered that the hearings be allowed to continue. The next day, May 19, 1993, the hearings were commenced before the LPSC hearing examiner on L & B's application but, being only partially completed, were adjourned until June 1993.

Meanwhile, on May 24, 1993, we rendered our decision in Matlack, affirming the district court's decision rescinding L & B's original common carrier certificate. We concluded that the evidence in the record was insufficient to satisfy the requisite burden of proof under LSA-R.S. 45:164, i.e., that the public convenience and necessity ("P, C & N") would be materially promoted by the issuance of the additional certificate. ³ However like the district court, we stayed the effect of our decision pending our ruling on L & B's application for rehearing, allowing L & B to continue operating as a common carrier until our decision became final.

In Matlack, we also addressed a "thorny" procedural issue that is pertinent here. That issue involved L & B's request that we remand to the district court to allow it to supplement the record with evidence of its six year operating history. L & B contended that such evidence would clearly establish a presently existing P, C & N for its service and would thus justify, albeit after-the-fact, the LPSC's issuance of the original certificate. In refusing to allow such a nunc pro tunc ⁴ justification of the prior granting of authority, we expressly recognized that L & B was not without a remedy. Defining that remedy, we instructed that L & B could file a successive application with the LPSC, offering its six year operating history in support to establish a present public need and demand for its service. Matlack, 622 So.2d at 649, 661.

On June 8 and 9, 1993, the hearings before the LPSC hearing examiner were continued on L & B's new application. At those hearings, notice was taken of the Matlack decision, and, following our instructions, L & B centered its case on its prior six year operating history. [94-0440 La. 4] Particularly, L & B, through the testimony of its president and co-owner, Bob Connors, presented evidence regarding its operations over the six years spanning 1987 through 1993. Capsulizing Mr. Connors' testimony, the Hearing Examiner stated in his report:

[Connors'] company has grown the last six years although he has not actively solicited business. His customer base has grown, as has revenues and equipment. Loads per year have also grown the last six years, with 10 tractors and 37 trailers being added during this time. All trailers are company-owned and all tractors leased. If this application is approved, he would definitely start actively soliciting additional business. 30 drivers are currently being provided by TMI and are paid by TMI.... Although he has recorded losses for 1990 and 1992, with profit in 1991, he feels the losses were due to high financing of new equipment. 1993 will be a profitable year for L & B.

More precisely, the record reflects that over the six year span, L & B's revenues increased from $1.4 to $3 million; its payroll tripled; its tractor fleet grew from 13 to 23; its trailer fleet grew from 24 to 61; and its intrastate customer base grew from 5 to 88. ⁵

L & B also presented testimony of six of its current intrastate customers; particularly, the six customers that appeared at the hearing on L & B's behalf were: Ciba-Geigy Corp.; Sulfuric Acid Trading Co. ("SATCO"); Sid Richardson Carbon Co. ("Richardson"); LCI Limited ("LCI"); Chemical Distributors, Inc. ("CDI"); and Onyx Product Sales, Inc. ("Onyx"). All the shippers expressed that L & B was their primary public carrier (i.e. it provided 85% to 100% of their intrastate transportation needs) and that they had used L & B for a substantial period of time (i.e., all of them for over a year, some of them for a number of years and some of them had used solely L & B since they started operating in Louisiana). Some of the shippers indicated that because of their need for specialized equipment (i.e., primarily rubberlined trailers) and service (short lead time, i.e., less than 24-hour notice), other carriers were unable to meet their needs; however, L & B was able to provide them with such specialized equipment and service and to dedicate its equipment to transporting their products. Nonetheless, all the shippers admitted that the service provided by existing intrastate carriers was "reasonably satisfactory."

All the shippers expressed their extreme satisfaction with, and reliance on, L & B's superior service. Briefly, we quote the following statements the shippers' representatives made regarding L & B's superior service. SATCO's representative testified that L & B "earned" his [94-0440 La. 5] company's business because of its good response time on the immediate, "spot" service requests. Both Richardson's and LCI's representatives testified that L & B's service was "absolutely essential" to their companies' operations. Richardson's representative further testified that L & B is a "very reliable carrier." CDI's representative testified that "[i]f something would happen to L & B, my decision or my vote would be that we put on another truck because I don't believe anybody could handle it on a short basis." Onyx's representative testified that his company was satisfied with L & B because of "their concern for [his] business." Onyx's representative further testified that he had not experienced many service failures because L & B has been there to take care of his company's needs. Lastly, all the shippers testified that L & B's certification would be beneficial to their companies.

Protestants presented company representatives as witnesses in opposition to L & B's application. Protestants' representatives' testimony, as the district court noted, was all essentially the same: "[t]he representatives testified that the available traffic shared among the existing carriers will be further diluted if L & B's common carrier certificate is granted. This will cause the carriers, most of which have an overabundance in capacity already, to suffer even more. They testified that they, as common carriers, were agreeable to handling the transporters' business and did possess the equipment necessary to realize their needs." Simply put, Protestants all contend that the certificate should not be granted for...