State ex rel. Allied Daily Newspapers of Wash. v. Washington Public Service Com'n

• Decision Date: 28 December 1953
• Docket Number: No. 32491,32491
• Court: Washington Supreme Court
• Parties: STATE ex rel. ALLIED DAILY NEWSPAPERS OF WASHINGTON, v. WASHINGTON PUBLIC SERVICE COMMISSION et al.

Page 1

44 Wn.2d 1

265 P.2d 270

STATE ex rel. ALLIED DAILY NEWSPAPERS OF WASHINGTON, v. WASHINGTON PUBLIC SERVICE COMMISSION et al.

No. 32491.

Supreme Court of Washington, Department 2.

Dec. 28, 1953.

Wright, Innis, Simon & Todd, Seattle, for appellant.

Don Eastvold, Quinby R. Bingham, Olympia, Macbride, Matthews & Hanify, Seattle, for respondents.

DONWORTH, Justice.

On October 24, 1951, Northwest Greyhound Lines filed with the Washington Public Service Commission a tariff increasing its rate on the intrastate transportation of newspapers from $1.04 to $1.50 per hundred pounds. Allied Daily Newspapers of Washington, a corporation composed of twenty papers whose aggregate circulation equals ninety-eight percent of the total daily circulation in the state, filed a protest and petitioned the commission to suspend the rate until a full hearing could be held. The commission suspended the rate and set the matter for hearing.

At the close of the presentation of Northwest Greyhound's case before the commission on January 22, 1952, Allied Daily Newspapers challenged the sufficiency of the evidence to support a rate increase and moved for a cancellation of the tariff. The commission reserved its ruling and after the presentation of evidence by Allied Daily Newspapers the whole matter was taken under advisement. On August 1, 1952, the commission entered its findings and order No. T-8701 denying the motion and approving the rate increase.

In this opinion the term respondent will indicate Northwest Greyhound Lines and the Washington Public Service Commission will be referred to as the commission.

The newspaper business by its very nature is dependent upon prompt distribution of its product. To facilitate shipments to localities outside their immediate publishing areas in the least possible time, the newspapers have developed the following system with respondent's cooperation: First, each newspaper desiring to make such shipments determines which bus departures will provide the earliest deliveries to the desired destinations. It then arranges with respondent for the shipment of approximately the same number of papers on each trip so selected. The same shipment will vary in size from day to day depending upon the number of pages in each edition. The newspaper keeps all records as to the weight of each shipment and on the basis thereof makes periodic settlements with respondent who issues no shipping receipts or way bills and keeps no accounting records. The papers are fastened in compact bundles by the shipper, marked according to destination and delivered to respondent bus company who loads and unloads them. The rate for transportation of newspapers is based on the weight thereof regardless of the distance to point of destination.

Under this system respondent carries the papers only when adequate space is available on its buses. Baggage, express shipments and mail all have priority over papers as to space available. Respondent is not liable for any loss or damage to the papers.

The papers are usually carried in the baggage compartment of the bus except small bundles that are to be dropped off along the main route. In such instances the bundles may be carried on the floor near the driver so that he can drop them off at the required destinations with the least inconvenience. Passengers may or may not be picked up or discharged at these stops.

The rate for the shipment of newspapers has always been less than for express items because they are easier to handle, require no paper work of any kind, and, as previously mentioned, are carried on a nonliability, space-availability basis.

After the hearing above referred to the commission by its finding of facts and order made certain findings, determined that the $1.50 rate per one hundred pounds of newspapers was reasonable and adjudged that it become effective.

Upon appellant's application a writ of review was issued by the superior court for Thurston county. After a hearing upon the commission's record the court entered a judgment affirming its order and vacating the writ of review. From this judgment relator has appealed to this court.

Appellant's six assignments of error are founded upon a single contention urged throughout the proceedings, to-wit: that respondent failed to sustain the statutory burden of proof to show that the proposed rate was just and reasonable. See Rem.Supp.1941, § 10424 [cf. RCW 80.04.130]. It is argued, therefore that the commission's order was arbitrary, capricious, unlawful and void.

The scope of judicial review in such matters was defined in State ex rel. Model Water & Light Co. v. Department of Public Service, 199 Wash. 24, 90 P.2d 243, 249, as follows:

'The findings of the department are to be given the same weight accorded to any impartial tribunal, and may not be overturned unless the clear weight of the evidence is against it conclusions, or unless it has mistaken the law applicable to the matter adjudicated, or, as sometimes expressed, unless the findings show evidence of arbitrariness and disregard of the material rights of the parties to the controversy.'

This rule has subsequently been cited with approval in the cases of State ex rel. Oregon-Washington R. & Nav. Co. v. Walla Walla County, 5 Wash.2d 95, 104 P.2d 764; Manlowe Transfer & Distributing Co. v. Department of Public Service, 18 Wash.2d 754, 140 P.2d 287; State ex rel. Pacific Tel. & Tel. Co. v. Department of Public Service, 19 Wash.2d 200, 142 P.2d 498, and Department of Transportation v. Snohomish County, 35 Wash.2d 247, 212 P.2d 829.

The history of rail and bus rates for transporting newspapers may be concisely stated as follows: Prior to February 1, 1947, the railroad intrastate rate for newspapers was 90cents per hundred pounds regardless of distance. At that time the rate was increased to $1.04. This rate remained in effect until September 24, 1950, when the present rate of $1.25 was put in effect.

From 1930 to 1947 the intrastate bus rate was $1 per hundred pounds of newspapers regardless of distance. On June 15, 1947, the rate was increased to $1.25. This rate was in effect only until September 1, 1947, when a compromise was effected between respondent and a newspaper association (appellant neither admits nor denies being a party thereto) whereby a rate of $1.04 was agreed upon for both intrastate and interstate transportation of newspapers. This rate was identical with the then existing rail rate. The tariff filed by respondent which is the subject of this litigation would increase the bus rate from $1.04 to $1.50 per hundred pounds of newspapers.

We will briefly discuss the evidence to the extent necessary to an understanding of the legal questions raised by appellant's assignments of error.

Mr. James Neely, the administrative assistant to the president of Northwest Greyhound Lines and assistant secretary of the Greyhound Corporation was the chief witness for respondent. He identified, explained and elaborated upon respondent's six exhibits which were relied upon to show that the proposed rate increase was just and reasonable. Four of them consisted of figures (taken from respondent's books of account) showing itemized expenses of operation and maintenance, the operating income from all sources with special emphasis on the transportation of newspapers. These exhibits were broken down to show actual dollars and cents, percentages and costs per mile of operation and were based on a comparison between the first ten months of 1940 and the same period in 1951.

Generally these figures showed substantial increases in both expenses and income since 1940, but, while the percentage of income derived from most items remained fairly constant, that derived from the transportation of newspapers dropped from .89 of one percent in 1940 to .43 of one percent in 1951. The exhibits showed that if the proposed increase had been in effect during the first ten months of 1951, newspaper revenues would have amounted to .62 of one percent of the total revenues or $36,877.50. Appellant estimated the costs which would be incurred in earning that sum at $34,736. This figure represents .62 of one percent of the total costs. On the basis of these figures respondent contended that its profit for transporting newspapers for the first ten months of 1951 would have been $2,141.50 if the proposed increase had been in effect. Respondent would thus have made $5.80 profit from every $100 collected for transporting newspapers as compared with $6.50 profit from every $100 collected for the system's entire operations.

Respondent's figures were based on a comparison of ten months operation rather than a full year because no figures were available for the last two months of 1951 at the time the exhibits were prepared. No explanation was given as to why 1940 was chosen as a base period instead of 1947 which was the year of the last rate increase.

On cross-examination Mr. Neely stated that he had no statistics at hand to show the increases in costs since 1947. The next day he was recalled to the stand and testified that between 1946 and 1950 respondent had a 22.65 percent increase in driver's wages, a 39.97 percent increase in mechanic's wages and an increase in depreciation costs on buses from 1.97 cents per mile in 1946 to 3.55 cents per mile in 1950. In 1951 respondent had an additional increase in wages amounting to roughly ten percent. Wages are 65 to 70 percent of total expenses.

There was also some evidence comparing bus rates and convenience of service with other carriers. Respondent also introduced in evidence two exhibits one of which showed the average monthly income derived from individual newspapers in the state and the other a history of bus company rates for the transportation of newspapers and express items since 1930.

Respondent's operations are not confined to the state of Washington but extend to Vancouver, British Columbia on the north, to Portland, Oregon, on the...