Rozel Corp. v. Department of Public Service Regulation, Public Service Com'n, 86-404
| Decision Date | 31 March 1987 |
| Docket Number | No. 86-404,86-404 |
| Citation | 44 St.Rep. 618,735 P.2d 282,226 Mont. 237 |
| Parties | , 55 USLW 2600 ROZEL CORPORATION, a Montana corporation, Petitioner and Appellant, v. DEPARTMENT OF PUBLIC SERVICE REGULATION, PUBLIC SERVICE COMMISSION, an agency of the State of Montana, and Three Rivers Disposal, a Montana partnership, Respondents and Respondents. |
| Court | Montana Supreme Court |
Bryan, Atkins, Anacker, John P. Atkins, argued, Bozeman, for petitioner and appellant.
Robin McHugh, argued, Helena, for Public Service Commission.
Joseph W. Sabol, argued, Bozeman, for Three Rivers.
Rozel Corporation appeals a May 6, 1986, order of the Eighteenth Judicial District Court, Gallatin County, which upheld a final order of the Public Service Commission (PSC). The PSC final order denied Rozel's application to begin a garbage service in the Bozeman area. We affirm the District Court.
Rozel presents two issues for our review:
1. Did the District Court err in holding that the PSC's regulation of entry into the garbage-hauling business, without regulation of rates, did not violate the "Unfair Trade Practices" statutes, Title 30, Chap. 14, Parts 1 and 2, MCA?
2. As applied to the denial of Rozel's application, does Sec. 30-14-105(1), MCA, which exempts the PSC from the purview of the Unfair Trade Practices and Consumer Protection Act, violate Article XIII, Section 1(2), of the Montana Constitution?
In August 1984, appellant Rozel applied to the PSC for a Class D Certificate of Public Convenience and Necessity, so that he could begin a garbage-hauling service in Gallatin County and Big Sky, Montana. Respondent Three Rivers Disposal is currently the only private garbage service in the area. Three Rivers filed a protest to Rozel's application. The PSC held a public hearing on the matter on November 15 and 16, 1984.
On March 11, 1985, the PSC issued a 23-page final order denying Rozel's application. The order cited the satisfactory service of Three Rivers, the lack of demand for Rozel's additional service, and the potential adverse effect of Rozel's service upon Three Rivers' service. The heart of the PSC's reasoning is contained in Findings 52 and 53, where it states a preference for service stability over competition:
52. Some witnesses did contend that competition in the area would tend to decrease garbage rates. This may very well be true in the short run. However, history indicates that in the past it also led to severe financial difficulties for the companies involved and resulted in the ultimate failure of each of those companies. Customers in the area have benefited from periods of competition and relatively low rates; perhaps even below cost at times. However, they have also been subjected to a very unstable and unhealthy industry.
53. Given that there does not appear to be any unmet demand and that service appears to be adequate and prices reasonable, it seems that what the area really needs at this time is a period of stability. This is not to say that the public should be prepared to tolerate unmet demand or inadequate service or unreasonable rates should they occur in the future. The existing carrier remains on notice that the Commission retains the power to reexamine the situation and grant a new authority should the circumstances merit it. [Emphasis added.]
The PSC did not consider the fitness and ability of Rozel to meet any perceived additional need. Based upon the "public convenience and necessity" and the "impact to existing transportation services," the PSC concluded that Gallatin County and Big Sky did not require another garbage carrier.
On April 26, 1985, pursuant to the Montana Administrative Procedure Act, Rozel petitioned the District Court for a review of the PSC order. The District Court heard the case on April 21, 1986. On May 6, 1986, the District Court found no violation of federal antitrust laws or the Montana Unfair Trade Practices and Consumer Protection Act. The District Court also found that the PSC order did not violate due process or equal protection, and that the decision of the PSC was not arbitrary or capricious. On July 15, 1986, the District Court denied Rozel's motion for reconsideration, because forty-five days had passed since the District Court had filed its order. Rozel appeals the District Court's May 6, 1986, order.
Did the District Court err in holding that the PSC's regulation of entry into the garbage-hauling business, without regulation of rates, did not violate the "Unfair Trade Practices" statutes, Title 30, Chap. 14, Parts 1 and 2, MCA?
Our standard of review of PSC determinations is defined in Sec. 2-4-704(2), MCA:
The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(a) in violation of constitutional or statutory provisions;
(b) in excess of the statutory authority of the agency;
* * *
(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;
(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or
* * *
On this issue, Rozel's argument can be reduced to three sentences: The PSC does not have the authority to regulate rates of garbage-haulers. Therefore, the PSC should not have the authority to regulate entry into the garbage-hauling business. Conversely, if the PSC regulates entry, it should also regulate rates. Rozel blends the partial language of several statutes to reach this summary conclusion. Rozel argues that without rate regulation, the public is subject to monopolistic garbage-haulers. Rozel generally asserts that the PSC acted in excess of its statutory authority, in violation of Sec. 30-14-101 et seq., and 30-14-201, et seq., MCA. However, Rozel fails to cite any specific instance of excess or statutory violation.
The PSC contends that the regulation of entry into the garbage-hauling business by the PSC does not violate the Consumer Protection Act, Sec. 30-14-101 et seq., MCA, because the Act does not cover actions of the PSC. The PSC asserts that Sec. 30-14-105(1), MCA, specifically exempts the PSC from the scope of the Consumer Protection Act, by stating:
The PSC argues that the word "part" in Sec. 30-14-105(1) actually means "state" in order to avoid an absurd result; for if Sec. 30-14-105(1) is read literally, then the actions of the PSC are exempt from the Consumer Protection Act only when those actions are taken pursuant to the authority of the Consumer Protection Act. However, the Act grants no such authority to the PSC. Therefore, the plain meaning of Sec. 30-14-105(1) is that the actions and transactions of the PSC, acting under its statutory authority of Title 69, "Public Utilities and Carriers," are exempt from the Consumer Protection Act. This interpretation accords with the federal model act from which the Consumer Protection Act was drafted, where the word "state" is used in place of "part."
Respondent Three Rivers contends that the new enactment of Sec. 69-12-323(2)(b), MCA, "Decision on application," containing the phrase "may include a consideration of competition," provides the PSC...
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