Southern Pac. Co. v. Public Utilities Commission

• Decision Date: 14 August 1953
• Citation: 260 P.2d 70,41 Cal.2d 354
• Court: California Supreme Court
• Parties: , 1 P.U.R.3d 438 SOUTHERN PAC. CO. v. PUBLIC UTILITIES COMMISSION et al. S. F. 18667.

Page 70

260 P.2d 70

41 Cal.2d 354, 1 P.U.R.3d 438

SOUTHERN PAC. CO. v. PUBLIC UTILITIES COMMISSION et al.

S. F. 18667.

Supreme Court of California, in Bank.

Aug. 14, 1953.

Rehearing Denied Sept. 10, 1953.

George L. Buland, E. J. Foulds, James E. Lyons, Robert L. Pierce and Charles W. Burkett, Jr., San Francisco, for petitioner.

Everett C. McKeage, Roderick B. Cassidy and Harold J. McCarthy, San Francisco, for respondents.

SHENK, Justice.

This proceeding was brought by Southern Pacific Company to review an order of the Public Utilities Commission.

On April 15, 1950, the company filed an application with the commission for the approval of its proposal to discontinue the operation of its midday passenger trains, 'The Statesman' and 'The Governor', running between Oakland Pier and Sacramento. The approval was sought on the ground that these 'passenger trains do not handle sufficient business to justify their continued operation and that due to other services available, the public will suffer no substantial, if any, inconvenience by their discontinuance.' A public hearing on this application was held on July 6, 1950, and the matter was submitted.

On September 27, 1950, the commission re-opened the matter for further hearing, and also ordered, on its own motion, as authorized by section 705 of the Public Utilities Code, an investigation into the adequacy of the company's passenger train service 'between various sections of the state, and particularly between San Francisco and Sacramento, and points intermediate thereto, and between San, Francisco, Sacramento and points on its San Joaquin Valley and Coast lines, including local service between San Francisco and San Jose and points intermediate thereto.'

This order stated that the commission had received numerous complaints charging insufficiency and inadequacy of the service afforded by the company, including the service between San Francisco and Sacramento and intermediate points, and that the application for discontinuance of 'The Statesman' and 'The Governor' should not be determined without further study for the purpose of inquiring whether improvement in service and economies of operation might be effected to justify continued operation on those trains and the inauguration of sufficiently frequent and convenient passenger train schedules between those points. The two proceedings were consolidated. Public hearings were held on April 26, 1951, and September 20, 1951.

Pending the determination of the matter the commission's staff made a 12 month's survey and investigation of the services provided by the two trains involved and by other trains and carriers in the area in question. Based on the evidence taken at the hearings and on the investigation of its staff the commission, under date of May 13, 1952, rendered its opinion and the items of the order now under consideration. In the opinion the commission outlined the proceedings that had been taken and a portion of the evidence before it. It then concluded that the company had not justified its request for the discontinuance of the midday trains in question; that the public interest required that the use of the steam locomotive and standard railway equipment employed in the operation of those trains be abandoned and that there should be substituted in their place 'modern self-propelled railway passenger cars'; that trains other than the midday trains were in need of refurbishing and modernization; and that the public interest required that the company make studies and submit to the commission certain plans designated in the order. The order consists of four items as follows:

1. That the company discontinue its midday passenger trains ('The Statesman' and 'The Governor') 'by the use of steam locomotive and standard railway passenger equipment and shall substitute in lieu thereof railway passenger service by modern self-propelled railway passenger cars.'

2. That other trains of the company ('The Senator' and 'The El Dorado') be 'refurbished to a standard comparable to modern, railway passenger equipment.'

3. That the company 'shall make a study and prepare and submit to the commission a plan for establishment of automotive passenger service between San Francisco and its East Bay stations in Oakland and Berkeley to be operated in conjunction with its railway passenger train service'; and

4. That the company 'shall make a study and prepare and submit to the commission a comprehensive plan for modernization of its Oakland Pier passenger terminal facilities.'

A petition for rehearing was filed. Particularly applicable to item 1 it alleged that the decision 'is unlawful in that the commission has not regularly pursued its authority, has acted beyond or in excess of tis jurisdiction, and has violated the rights' of the company under the state and federal constitutions; that the application to discontinue its midday trains was denied notwithstanding the undisputed evidence that they were being operated at a net annual loss of $105,000 or more; that there was a lack of evidence of further need for the operation of those trains, and that there was undisputed evidence of the existence of an abundance of public-carrier passenger transportation service furnished by other common carriers between the points served by those trains, and 'sufficient to meet every public passenger transportation request'; that the commission in ordering the substituted service has done so without an affirmative finding that the public interest requires it, and has completely usurped the 'role of management' by prescribing the particular type of equipment.

With reference to item 2 the rehearing was sought on the ground that it pertained to the equipment of trains other than midday trains not sought to be discontinued, and as to which no findings were made by the commission to support the order.

Item 3 was objected to on the ground that it was made without notice or opportunity to be heard on the subject, and without evidence or findings to support it as required by law.

Item 4 was challenged also on the ground that it was made without notice or an opportunity to be heard and without findings to support it.

The petition for a rehearing was denied but the commission modified the decision by supplementing its findings to meet the contentions of the company in the petition for rehearing. It was found that public convenience and necessity required that the midday passenger service between San Francisco and Sacramento be continued, that 'the service, equipment and facilities, now being furnished, used and employed, are inadequate and insufficient,' and that an improvement in such service is required; that the company has not discharged its public duty in that it failed to provide the improvements in service required, having the ability so to do; that the improvements in service, equipment and facilities required will not constitute an undue financial or other burden upon the company; and that public convenience and necessity require that the investigations and reports ordered by the commission be made by the company and submitted to the commission; that the 'operations, service, equipment and facilities concerning which said studies and reports are to be made are inadequate and insufficient and that public convenience and necessity requires the improvement thereof.'

The items in the order will be considered separately as enumerated. As to item 1 the company reiterates its contention that in refusing to authorize the discontinuance of the midday passenger service between Oakland Pier and Sacramento, and in requiring a change in equipment for that service, the commission has exceeded its authority; that its action is not supported by and is contrary to the evidence; that its action is arbitrary and unreasonable and deprives the company of its property without due process of law, and that the action of the commission is an unauthorized burden on interstate commerce.

The power of the commission to act in the premises and the scope of review by this court age again brought into question and sought to be examined. These questions have been determined, it would seem, with sufficient particularity and clarity; however they will again be briefly stated.

It is provided in Section 23 of the Article XII of the state constitution that the commission shall have and exercise such jurisdiction to supervise and regulate public utilities in this state 'as shall be conferred upon it by the Legislature, and the right of the Legislature to confer powers (upon the commission) respecting public utilities is hereby declared to be plenary and to be unlimited by any provision of this Constitution.'

Referring to the re-organization of the commission in 1911 this court said in San Diego & Coronado Ferry Co. v. Railroad Comm., 210 Cal. 504, at page 509, 292 P. 640, at page 642 (in 1930 and before the amendment of section 67 of the Public Utilities Act in 1933, hereinafter noted),: 'The administration of the new law was placed in the hands of the Railroad Commission (now called Public Utilities Commission), unhampered and uncontrolled by court interference, except to a specified and limited extent. Section 67 of the Public Utilities Act, with reference to the powers of this court, provides in part: 'The review shall not be extended further than to determine whether the commission has regularly pursued its authority, including a determination of whether the order or decision under review violates any right of the petitioner under the constitution of the United States, or of the State of California. The findings and conclusions * * * on questions of fact shall be final and sahll not be subject to review; such questions of fact shall include ultimate facts and the findings and conclusions of the commission on reasonableness and discrimination. * * * No court of the state (except the supreme court to the extent herein specified) shall have jurisdiction to...