Morey v. Public Utilities Commission of State of Colo.

• Decision Date: 08 June 1981
• Docket Number: No. 79,79
• Citation: 629 P.2d 1061
• Parties: C. M. MOREY, doing business as Star Motor Freight Lines, Plaintiff-Appellant, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO; Edwin R. Lundborg, Edythe S. Miller and Sanders G. Arnold, as the Members thereof; Thacker Bros. Transportation, Inc.; Ephraim Freightways, Inc.; Cargo and Transportation Services, Inc.; Graves Truck Lines, Inc.; and Regular Route Common Carrier Conference of the Colorado Motor Carriers' Association, Defendants-Appellees. SA 301.
• Court: Colorado Supreme Court

Page 1061

629 P.2d 1061

C. M. MOREY, doing business as Star Motor Freight Lines, Plaintiff-Appellant, v. The PUBLIC UTILITIES COMMISSION OF the STATE OF COLORADO;

Edwin R. Lundborg, Edythe S. Miller and Sanders G. Arnold,

as the Members thereof; Thacker Bros. Transportation, Inc.;

Ephraim Freightways, Inc.; Cargo and Transportation

Services, Inc.; Graves Truck Lines, Inc.; and Regular Route

Common Carrier Conference of the Colorado Motor Carriers'

Association, Defendants-Appellees.

No. 79 SA 301.

Supreme Court of Colorado, En Banc.

June 8, 1981.

John P. Thompson, Thompson & Kelley, Denver, for plaintiff-appellant.

J. D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Mary J. Mullarkey, Sol. Gen., John E. Archibold, Sp. Asst. Atty. Gen., Denver, for defendant-appellee The Public Utilities Commission of the State of Colorado.

Stockton & Lewis, Truman A. Stockton, Jr., John H. Lewis, Denver, for defendants-appellees Thacker Bros. Transp., Inc., Ehpraim Freightways, Inc., and Cargo and Transp. Services, Inc.

Edward T. Lyons, Jr., Jones, Meiklejohn, Kehl & Lyons, Denver, for defendants-appellees Graves Truck Lines, Inc. and The Regular Route Common Carrier Conference of Colorado Motor Carriers' Assn.

DUBOFSKY, Justice.

Appellant C. M. Morey, doing business as Star Motor Freight Lines (Star) ¹, appeals from a district court order affirming a decision of the Public Utilities Commission (P. U. C. or Commission). The P. U. C. denied Star's application for a certificate of convenience and necessity authorizing it to transport general commodities as a motor vehicle common carrier ² between Denver, Pueblo and Lamar, Colorado. ³

We previously considered the Commission's denial of this application in Morey v. Public Utilities Commission, 196 Colo. 153, 582 P.2d 685 (1978) (Morey I ). There we remanded the matter to the Commission for "a decision properly applying the doctrine of regulated competition." 196 Colo. at 158, 582 P.2d at 688. In compliance with our mandate, the P. U. C. reviewed the record and, in Decisions C78-1696 and C79-192, again refused to issue the certificate requested by Star. Star now contends that the P. U. C.'s decisions on remand misconceive our ruling in Morey I that "(u)nder the policy of 'regulated competition,' the controlling consideration is the public need," 196 Colo. at 156, 582 P.2d at 687 (emphasis in original), and are otherwise unsupported by competent or substantial evidence in the record. Because we conclude that the criterion of "public need" announced in Morey I is broad enough to subsume the decisional guidelines applied by the P. U. C. in Decisions C78-1696 and C79-192, and because we find that the Commission's findings and conclusions in those decisions are adequately supported in the record, we affirm the order of the district court.

Star has held contract carrier ⁴ authority to serve the routes in question for many years. However, it did not actively begin serving Pueblo until sometime after 1967, and did not initiate service to points in the Arkansas Valley until 1974. Shortly after it began operations in the Valley, Star filed an application for "conversion" to a common carrier with authority to serve Colorado Springs, Pueblo and the Arkansas Valley. ⁵

Several common carriers already serving these routes or municipalities intervened to protest the application. After a series of hearings at which Star presented the testimony of public witnesses favoring its application and the protestants adduced evidence that additional competition would have an adverse impact on existing common carrier services, the hearing officer recommended approval of the greater part of Star's application. ⁶ The protestants filed exceptions to the examiner's recommended decision and, after reviewing the record of the hearing, the P. U. C. entered its own decision denying the bulk of the application but authorizing Star to operate as a common carrier between Denver and Colorado Springs.

Star appealed to the district court, which reversed the Commission and granted the entire authority recommended by the hearing officer. The protestants and the P. U. C. appealed to this Court, which affirmed the Denver-Colorado Springs certification, reversed the decision of the district court granting the remainder of the application, and remanded the cause to the Commission for reconsideration in light of the statutory policy of "regulated competition" adopted by the legislature in 1967, section 40-10-105(2), C.R.S.1973, and first construed by this Court in Miller Brothers, Inc. v. Public Utilities Commission, 185 Colo. 414, 525 P.2d 443 (1974) and its companion cases.

After remand, the Commission reviewed the record a second time and entered two new decisions, Nos. C78-1696 and C79-192, again denying Star's application. It is from these decisions that Star appeals.

I.

To understand the context in which the questions presented by this appeal have arisen, the bases for the remand in Morey I must be summarized. There the Commission ruled that, notwithstanding our decisions in Miller Brothers, Inc. v. Public Utilities Commission, supra, Red Ball Motor Freight, Inc. v. Public Utilities Commission, 185 Colo. 438, 525 P.2d 439 (1974); and D & G Sanitation, Inc. v. Public Utilities Commission, 185 Colo. 386, 525 P.2d 455 (1974):

"Even assuming ... that the testimony of (Star's) own presently satisfied customers makes out a case of public need, there has been no showing of any substantial inadequacy in the existing service. It is true, of course, that since (section 40-10-105(2)) a showing of inadequacy is no longer an indispensable element of every case. In several of the prior conversion cases, the adequacy issue was in fact relegated to fairly minor importance. But those were unusual cases. They marked the transition from the days of regulated monopoly to a competitive common carrier system. The establishment of a competitive system was the driving consideration in those earlier cases. It was necessary to look beyond the mere adequacy of existing service."

Morey I, 196 Colo. at 157, 582 P.2d at 688 (quoting from the decision of the P. U. C.) (emphasis added). Because Star, unlike the applicants in the Miller Brothers, Red Ball, and D & G Sanitation cases, did not commence its Denver-Pueblo and Arkansas Valley contract carrier services until after the enactment of section 40-10-105(2), the Commission distinguished Star's application for "conversion" from the applications granted in those earlier, "unusual" cases. In the Commission's eyes, Star's application for common carrier authority stood on "... the same footing as any other application in which a carrier is seeking to expand its operations into a new territory," id., and it held that, in such cases, a certificate of public convenience and necessity may not be granted unless the applicant proves both a public need for the proposed services and a substantial inadequacy in the services furnished by existing common carriers. Since Star's evidence failed to disclose any such inadequacy in existing common carrier services, the P. U. C. denied its application.

We rejected the Commission's purported distinction between the earlier "conversion" applications and Star's 1974 application. Recurring to our interpretation of section 40-10-105(2) in Miller Brothers, Inc. v. Public Utilities Commission, supra, we reasoned that the legislature intended the doctrine of "regulated competition" to supplant the old policy of "regulated monopoly" not for the limited purpose of integrating contract carriers then operating as de facto common carriers into the state's de jure common carriage transportation system, but for the broader purpose of bringing the common carrier industry in Colorado under a permanent regime of "regulated competition."

"There is simply no basis for this position of the Commission. Nowhere in (section 40-10-105(2)) does it say that the benefits of the 'regulated competition' doctrine are to be reserved for only those pre- (section 40-10-105(2)) contract carriers who were actively operating on the route in question at the time of its enactment. While it is true that the plight of those contract carriers existing at the time of the enactment of (section 40-10-105(2)) may have been the impetus for the reform, there is no indication that the legislature intended the relief to apply to only a small group of existing carriers."

Morey I, 196 Colo. at 158, 582 P.2d at 688. Having rejected the Commission's interpretation of section 40-10-105(2), we reaffirmed the interpretation of that statute advanced in Miller Brothers, Red Ball and D & G Sanitation :

"Under the doctrine of 'regulated monopoly,' the controlling consideration in granting a new certificate was whether the existing service was adequate or inadequate. Under the policy of 'regulated competition,' the controlling consideration is the public need. While adequacy of existing service is a factor to be considered, it is no longer the controlling determinant."

Morey I, supra, 196 Colo. at 156, 582 P.2d at 687 (emphasis in original).

In short, we remanded this case to the Commission because the Commission's denial of Star's application for common carrier authority rested on a legally erroneous reading of section 42-10-105(2). The error, however, was a narrow one: the Commission had ruled that a certificate could not be granted unless the applicant demonstrated that existing common carrier services were inadequate or materially insufficient. We held that failure to prove inadequacy was not, without more, an insuperable obstacle to certification. Therefore, on remand, we did no more than direct the Commission to reach a decision "properly applying the doctrine of regulated competition," Morey I, supra, 196 Colo. at 158, 582 P.2d at 688, i. e., to determine whether a "public need" existed for Star's proposed services.

II.

On remand, the P. U. C. abandoned its ruling that Star's...