Mohave Disposal, Inc. v. City of Kingman
| Decision Date | 27 July 1995 |
| Docket Number | CA-CV,No. 1,1 |
| Parties | MOHAVE DISPOSAL, INC., Plaintiff-Appellant, v. CITY OF KINGMAN, an Arizona municipal corporation, Defendant-Appellee. 93-0428. |
| Court | Arizona Court of Appeals |
Bonn, Luscher, Padden & Wilkins, Chartered by Paul V. Bonn, Randall D. Wilkins, John H. Cassidy, Phoenix, for plaintiff-appellant.
Charlotte A. Wells, Kingman City Atty., Kingman, for defendant-appellee.
Gammage & Burnham P.L.C. by Michael B. Withey, Cameron C. Artigue, Phoenix, for amicus curiae, Nat. Solid Waste Management Ass'n, for plaintiff-appellant.
Shelley & Bethea by J. LaMar Shelley, Mesa, for amicus curiae League of Arizona Cities and Towns, for defendant-appellee.
Mohave Disposal, Inc., ("Mohave Disposal"), is a private corporation engaged in garbage collection service in Mohave County, Arizona. It sought compensation under Arizona Revised Statutes Annotated ("A.R.S.") section 9-516.A (1990) as a "public utility service" when the City of Kingman ("City") began providing competing garbage collection service in areas already served by Mohave Disposal. 1 We conclude that Mohave Disposal is neither a public service corporation within the meaning of our Constitution nor is it a public utility for purposes of A.R.S. section 9-516.A. Therefore, we affirm the trial court's judgment dismissing Mohave Disposal's suit against the City.
The material facts are not in dispute. Mohave Disposal provides solid waste transportation and disposal services in unincorporated areas of Mohave County, Arizona. On December 16, 1991, the City annexed a portion of Mohave County in which Mohave In December 1992, Mohave Disposal filed the present lawsuit, claiming that the City had violated A.R.S. section 9-516.A by failing to compensate it for both the lost business and the equipment used in the annexed area. 2 A.R.S. section 9-516.A provides:
[184 Ariz. 370] Disposal had been providing garbage collection services to residences and businesses. On January 6, 1992, the City Council adopted an ordinance imposing its trash collection fee on all city residents in the annexed area, whether or not they used the City's disposal services. As a result, Mohave Disposal lost customers in the annexed area.
It is declared as the public policy of the state that when adequate public utility service under authority of law is being rendered in an area, within or without the boundaries of a city or town, a competing service and installation shall not be authorized, instituted, made or carried on by a city or town unless or until that portion of the plant, system and business of the utility used and useful in rendering such service in the area in which the city or town seeks to serve has been acquired.
Mohave Disposal filed a motion for summary judgment and argued that the Arizona Supreme Court had expansively interpreted the words "public utility service" to include refuse collection and that it need not hold a certificate of convenience and necessity nor be a public service corporation in order to fall within the statute's protection.
The City filed a motion to dismiss, in part contending that Mohave Disposal, as neither a public utility nor a public utility service, was not entitled to compensation. The trial court denied Mohave Disposal's motion and granted the City's motion, 3 ruling that Mohave Disposal "did not provide 'public utility service under authority of law' as that phrase is used in A.R.S. section 9-516.A." Following entry of judgment, Mohave Disposal timely appealed.
In reviewing the grant of a motion to dismiss, we accept as true the facts alleged by the non-moving party. Donnelly Const. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 186, 677 P.2d 1292, 1294 (1984). We will uphold the dismissal if Mohave Disposal would not be entitled to relief under any construction of the facts alleged in support of its claim. Id.
We review the trial court's interpretation of a statute de novo as an issue of law. Canon Sch. Dist. v. W.E.S. Constr. Co., Inc., 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994). When statutory language is subject to conflicting interpretations, "we consider the statute's context; its language, subject matter, and historical background; its effects and consequences; and its spirit and purpose." Hayes v. Continental Ins. Co., 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994).
We examine first whether by enacting A.R.S. section 9-516.A, the legislature intended to protect businesses like Mohave Disposal, which at that time were regarded as common carriers and thus fell within our Constitution's definition of "a public service corporation."
"In its modern form the power to grant monopolies is exercised through the granting [by the Corporation Commission] of a certificate of public convenience and necessity to the first, or favored applicant, and in denying a certificate to all others." Visco v. State, 95 Ariz. 154, 160, 388 P.2d 155, 159 (1963). Our Constitution defines the businesses which, through the issuance of a certificate of convenience and necessity, may be granted limited monopolies; these businesses are called public service corporations. Article 15 governs the Corporation Commission. It provides in part:
All corporations other than municipal engaged in furnishing gas, oil, or electricity for light, fuel, or power; or in furnishing water for irrigation, fire protection, or other public purposes; or in furnishing, ... hot or cold air or steam for heating or cooling purposes; or engaged in collecting, transporting, treating, purifying and disposing of sewage ..., or in transmitting messages or furnishing public telegraph or telephone service, and all corporations other than municipal, operating as common carriers, shall be deemed public service corporations.
Trash collection and disposal is not one of the described services or products, although the above section provides that a common carrier can be a public service corporation. Mohave Disposal argues that at the time the legislature adopted A.R.S. section 9-516, it intended to protect privately owned providers of garbage collection services from competing services offered by cities and towns.
The mistaken opinion of an individual senator, 4 the Attorney General, 5 or of the Corporation Commission as to which businesses are public service corporations is not determinative of legislative intent. Further, no presumption exists that a business is under the Corporation Commission's jurisdiction. See Arizona Corp. Comm'n v. Continental Sec. Guards, 103 Ariz. 410, 415, 443 P.2d 406, 411 (1968) (). For the Corporation Commission to grant a monopoly to a private business, our Constitution and statutes must clearly sanction such action. Cochise Sanitary Serv., Inc. v. Arizona Corp. Comm'n, 2 Ariz.App. 559, 562, 410 P.2d 677, 680 (1966). Visco, 95 Ariz. at 169, 388 P.2d at 165.
The fact that the owners of some refuse collection businesses considered their businesses to be common carriers and that the Corporation Commission at one time granted certificates of public convenience and necessity to them is not determinative. The Arizona Supreme Court made it unmistakably clear in 1963 that such businesses were not common carriers and were neither entitled to certificates of convenience and necessity nor required to submit to regulation by the Corporation Commission. Visco, 95 Ariz. at 169, 388 P.2d at 165; see also Cochise, 2 Ariz.App. at 562, 410 P.2d at 680 ().
Thus, a mistaken belief that a business is a common carrier or a desire on the part of a business owner to obtain the benefits of limited competition cannot confer jurisdiction on the Arizona Corporation Commission beyond that granted by our Constitution or statutes. See id. Mohave Disposal is neither explicitly nor implicitly a public service corporation and on this basis cannot be a public utility. We turn next to the argument that it is nevertheless "a public utility service" entitled to compensation for losses caused by the City's competing service.
In City of Tucson v. Polar Water Co., 76 Ariz. 126, 259 P.2d 561 (1953), as modified, 76 Ariz. 404, 408, 265 P.2d 773, 775 (1954), the Arizona Supreme Court held that a municipality, without payment of any compensation, could compete in newly-annexed areas with an existing water company holding a certificate of convenience and necessity. The court nevertheless acknowledged that the legislature could "protect the integrity" of a contract between a company operating a private utility under a certificate of convenience and necessity and "the investments made upon the faith thereof against damage or destruction by the activities of one of its municipalities." 76 Ariz. at 409, 265 P.2d at 776.
In response to the perceived economic unfairness of the Polar Water decision, the legislature adopted A.R.S. section 9-516 in 1954. See Journal of the House, 21st Leg., 2d Sess. 610-11 (1954) (comments of Douglas Holsclaw and Alvin Wessler, Representatives); City of Mesa v. Salt River Project...
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Mohave Disposal, Inc. v. City of Kingman
...addressed only the first part of the phrase and concluded that Mohave Disposal did not perform a "public utility service." 184 Ariz. at 372-74, 909 P.2d at 439-41. Having reached that conclusion, the court saw no need for further analysis and held that the statute afforded Mohave Disposal n......