Southern Pac. Transportation Co. v. Public Utilities Com.

• Decision Date: 23 November 1976
• Docket Number: S.F. 23217
• Citation: 134 Cal.Rptr. 189,556 P.2d 289,18 Cal.3d 308
• Court: California Supreme Court
• Parties: , 556 P.2d 289 SOUTHERN PACIFIC TRANSPORTATION COMPANY, Petitioner, v. PUBLIC UTILITIES COMMISSION, Respondent. In Bank

Page 189

134 Cal.Rptr. 189

18 Cal.3d 308, 556 P.2d 289

SOUTHERN PACIFIC TRANSPORTATION COMPANY, Petitioner, v. PUBLIC UTILITIES COMMISSION, Respondent.

S.F. 23217.

Supreme Court of California,

In Bank.

Nov. 23, 1976.

Harold S. Lentz, San Francisco, for petitioner.

William M. Siegel, County Counsel, San Jose, Gerald J. Thompson, Asst. County Counsel, Peter G. Stone, City Atty., San Jose, Richard K. Karren, Asst. City Atty., Donald C. Atkinson and William B. Mayfield, Deputy City Attys., San Jose, as amici curiae on behalf of petitioner.

Richard D. Gravelle, J. Calvin Simpson and John S. Fick, San Francisco, for respondent.

CLARK, Justice.

Southern Pacific Transportation Company seeks review of Decisions 83509 and 82933 of the Public Utilities Commission, holding that Public Utilities Code section 1202.3 is unconstitutional. ¹

Following an auto-train collision at a crossing on Southern Pacific Coast Route Main Line, the Public Utilities Commission (commission) investigated the safety, maintenance, operation and use of the crossing.

The commission found that public welfare, convenience and necessity require the crossing be protected by flashing light signals and automatic gate arms. It also found the crossing is 'publicly used' within the meaning of section 1202. However, concluding that section 1202.3 is unconstitutional, ² the commission ordered the costs of installing and maintaining the protective devices be paid by the railroad, the City of San Jose, County of Santa Clara, and the Department of Transportation.

Section 7537 gives the owner of adjoining lands the right to Private or farm crossings necessary or convenient for egress or ingress. The railroad must maintain the crossing, and the commission is given the authority to fix and assess the cost thereof. ³

Section 1202 gives the commission exclusive power to regulate Public or Publicly used road or highway crossings, including locating, maintaining, protecting, and closing them. The section further provides for allocation of costs by the commission among the railroad and public entities, including the abolition expense of the crossings. ⁴

Section 1202.3, added in 1971 and the subject of this appeal, provides that, in any proceeding under section 1202 involving a Publicly used road or highway not on a publicly maintained road system, the commission may apportion costs of improvement to the public entity if the commission finds (a) express dedication and acceptance of the road or (b) a judicial determination of implied dedication. If neither condition is found, the commission shall order the crossing abolished by physical closing. The section further provides that the railroad shall in no event be required to bear improvement costs 'in excess of what it would be required to bear in connection with the improvement of a public street or highway crossing.' ⁵

Concluding that section 1202.3 unconstitutionally delegates the state's police power to private litigants, the commission reasoned that the statute unlawfully allows private litigants absolute discretion to require closing of crossings merely by commencing a proceeding under section 1202.

The Legislature may not confer upon private persons unrestricted authority to make administrative determinations. (Blumenthal v. Board of Medical Examiners (1962) 57 Cal.2d 228, 235--237, 18 Cal.Rptr. 501, 368 P.2d 101; State Board of Dry Cleaners v. Thrift-D-Lux Cleaners, Inc. (1953)40 Cal.2d 436, 448, 254 P.2d 29; see 1 Davis, Administrative Law Treatise (1958) § 2.15, pp. 148--151.) However, the limitation on delegation has never been interpreted to invalidate reasonable grants of power to an administrative agency, when suitable safeguards are established by the Legislature to guide the power's use and to protect against its misuse. (Clean Air Constituency v. California State Air Resources Bd. (1974) 11 Cal.3d 801, 817, 114 Cal.Rptr. 577, 523 P.2d 617; Kugler v. Yokum (1968) 69 Cal.2d 371, 375 et seq., 71 Cal.Rptr. 687, 445 P.2d 303; Wike & Holzheiser, Inc. v. Department of Alcoholic Beverage Control (1966) 65 Cal.2d 349, 365 et seq., 55 Cal.Rptr. 23, 420 P.2d 735.)

The standard of public convenience and necessity has been upheld in appropriate circumstances (FCC v. Pottsville Broadcasting Co. (1939) 309 U.S. 134, 138, 60 S.Ct. 437, 84 L.Ed. 656), and this court has repeatedly applied the standard in utility cases (e.g., Southern Pac. Co. v. Public Utilities Com. (1953) 41 Cal.2d 354, 365--367, 260 P.2d 70.)

We are satisfied that implicit in section 1202.3 are suitable safeguards to guide the administrator's exercise of his power to close crossings and to guard against misuse of the power. By the introductory phrase 'in any proceeding under Section 1202,' the Legislature has declared that section 1202.3 is an exception to the former section and that the provisions for cost allocation and closing crossings in the latter section are only applicable when the commission would otherwise have ordered improvement of a crossing pursuant to the former section. The standard for compelling crossing improvement implicit in section 1202 is obviously public convenience and necessity, including safety concerns (see In re Petersen (1958) 51 Cal.2d 177, 185--186, 331 P.2d 24. Rescue Army v. Municipal Court (1946) 28 Cal.2d 460, 471, 171 P.2d 8), and this standard must be read into section 1202.3.

Thus, before the commission may close a crossing under section 1202.3, it must not only find public use and lack of requisite dedication, but also find that necessity and convenience preclude continued use of the crossing in its existing condition. Such findings--rather than mere commencement of a proceeding under section 1202--is the basis for closing a crossing under section 1202.3.

The function of the private litigant within the statutory framework is merely to call the commission's attention to the need for improving or closing a crossing and perhaps to urge action on the commission. When the private litigant points to facts requiring closure of the crossing, he is merely calling upon the commission to carry out the Legislature's direction. Acts of private parties prerequisite to operation of a statute containing valid standards for action do not constitute unlawful delegation. (Wilke & Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control, supra, 65 Cal.2d 349, 365, 55 Cal.Rptr. 23, 420 P.2d 735.) This is not a case where the Legislature has provided that private persons in their absolute discretion may veto or make inapplicable legislative standards and administrative determinations. (See 1 Davis, Administrative Law Treatise, Supra, § 2.14, pp. 141--143.)

The commission also held invalid the provision of section 1202.3 limiting the railroad's costs for improvements for a Publicly used crossing to those the railroad would be required to bear in connection with improvement of a Public crossing. The commission reasoned that the provision is unconstitutionally vague because, although the commission presently has a policy for apportioning costs as to public crossings, it might abrogate that policy and apportion improvement costs on a case-by-case basis. The plain meaning of the statute is that the railroad should pay no more for a Publicly used crossing improvement than it would be required to pay for a Public crossing improvement. ⁶ Whether determined on broad principles or on a case-by-case basis, allocation of costs for publicly used crossings shall be the same as for public crossings. There is nothing vague or unintelligible in the provision. ⁷

The decisions are annulled.

WRIGHT, C.J., and McCOMB, TOBRINER and RICHARDSON, JJ., concur.

MOSK, Justice (concurring and dissenting).

I concur with the result reached by the majority, but disagree with their opinion that the Public Utilities Commission (PUC) may declare a duly enacted statute unconstitutional. Absent authorization in the state charter itself, such formidable action is beyond the power of any administrative agency. Indeed, it is incongruous for the will of the people of the state, reflected by their elected legislators, to be thwarted by a governmental body which exists only to implement that will.

Case law is sparse in this area because administrative agencies are understandably reluctant to assert the power to hold statutes unconstitutional, and accordingly the question rarely is resolved in court. (Davis, Administrative Law Treatise (1958) § 20.04, p. 74, fn. 1 (hereinafter Davis).) What precedent there is, however, lends but scant support to the assertion of authority by the PUC.

In Walker v. Munro (1960), 178 Cal.App.2d 67, 2 Cal.Rptr. 737, the Court of Appeal suggested that an administrative agency may declare a statute unconstitutional; but Walker was indirectly criticized and implicitly disapproved in State of California v. Superior Court (1974), 12 Cal.3d 237, 250--251, 115 Cal.Rptr. 497, 524 P.2d 1281. In the latter case, a litigant sought to challenge in court the constitutionality of the Coastal Zone Conservation Act without first exhausting its administrative remedies by raising the issue before the Coastal Zone Conservation Commission. We held that the constitutional issue was raised in a timely manner under the circumstances, noting that 'since an administrative agency is not the appropriate forum in which to challenge the constitutionality of the basic statute under which it operates, there seems little reason to require a litigant to raise the constitutional issue in proceedings before the agency as a condition of raising that issue in the courts.' Id. at p. 251, 115 Cal.Rptr. at p. 506, 524 P.2d at p. 1290. (See also Flores v. Los Angeles Turf Club (1961) 55 Cal.2d 736, 13 Cal.Rptr. 201, 361 P.2d 921 (ruling on the merits of a litigant's constitutional attacks on a statute, while holding that his other contentions should have been pursued through administrative channels).) ¹

The United States Supreme Court, on at least...