State ex rel. Bohon v. Department of Public Service

• Decision Date: 30 December 1940
• Docket Number: 28041.
• Citation: 108 P.2d 663,6 Wn.2d 676
• Court: Washington Supreme Court
• Parties: STATE ex rel. BOHON et al. v. DEPARTMENT OF PUBLIC SERVICE et al.

108 P.2d 663

6 Wn.2d 676

STATE ex rel. BOHON et al. v. DEPARTMENT OF PUBLIC SERVICE et al.

No. 28041.

Supreme Court of Washington, En Banc.

December 30, 1940

Proceeding by the State of Washington, on the relation of W. J. Bohon agent, the North Pacific Coast Freight Bureau and others, to review an order of the Department of Public Service of Washington directing cancellation of certain rate schedules filed by a group of railroad companies through their tariff publishing agency, and fixing minimum rates to be charged by common carriers, whether railroads or motor vehicles, for transportation of products between certain points, wherein the Inland Empire Waterways Association and others intervened. From a judgment affirming the order of the Department of Public Service of Washington, the relators appeal.

Reversed with direction to the trial court to remand proceedings to the Department of Public Service for the preparation of proper findings upon the record made, or to be made, if required, in that Department.

BLAKE C.J., dissenting.

Where facts found by Department of Public Service were insufficient to sustain order cancelling proposed rates for railroads' intrastate transportation of bulk petroleum products and fixing minimum rates, Supreme Court would not review the testimony, and question whether Department proceeded upon fundamentally wrong theory in fixing rates, and such review was required to await preparation of findings which would inform Supreme Court of ultimate facts upon which Department based its conclusions, especially in view of statutory rule that Department's findings are considered as prima facie correct. Rem.Rev.Stat. §§ 10389, 10423, 10424, 10449.

Appeal from Superior Court, Thurston County; John M. Wilson, judge.

J. N. Davis, Thos. H. Maguire R. S. Macfarlane, Dean H. Eastman, and Earl F. Requa, all of Seattle, and Carey, Hart, Spencer & McCulloch, Fletcher Rockwood, Roy F. Shields, and L. W. Hobbs, all of Portland, Or., for appellants.

Smith Troy, Don Cary Smith, and Will M. Derig, all of Olympia, and Johnston B. Campbell, of Spokane, for respondents.

Charles W. Robison, of Portland, Or., amicus curiae.

H. C. Brodie, of Olympia, William B. Adams, of Portland, Or., and Harry Ellsworth Foster, of Olympia, amicus curiae.

STEINERT Justice.

This is an appeal from a judgment of the superior court for Thurston county affirming an order of the Department of Public Service of Washington, entered, as amended, on November 8, 1939.

The departmental order in question directed the cancellation of certain rate schedules filed by a group of railroad companies through their tariff publishing agency, North Pacific Coast Freight Bureau, in which schedules the railroad companies had designated reduced rates for the transportation by rail of bulk petroleum products from marine terminals at Vancouver, Washington, and Puget Sound ports to points in Washington east of the Cascade Mountains. The departmental order also fixed certain rates as the 'minimum reasonable rates' to be charged by common carriers, whether railroads or motor vehicles, for transportation of such products between the points named. Bulk petroleum products to which the rates as established applied emanated from California.

Prior to July, 1937, the rate for bulk petroleum products shipped from Seattle to Spokane was forty-five cents per one hundred pounds, and for similar products shipped from Attalia, which is located on the Columbia river in Walla Walla county, to Spokane was twenty-eight cents per one hundred pounds. In December, 1937, following a co-operative hearing by the Interstate Commerce Commission and the state department of public service, the Seattle-Spokane rate was reduced from forty-five cents to thirty-seven cents, but the Attalia-Spokane rate remained as Before . In April, 1938, pursuant to a request of the railroad companies for a blanket fifteen per cent raise in rates, the Interstate Commerce Commission and the state department each issued an order allowing a ten per cent raise, with the result that the Seattle-Spokane rate was increased from thirty-seven cents to forty-one cents, and the Attalia-Spokane rate was increased from twenty-eight cents to thirty-one cents.

In the meantime, that is, during 1938 and 1939, the producers of oil in Montana began seeking a market in the Pacific Northwest, and, as a result, the California oil companies were faced with their first serious competition in that very lucrative field, particularly in the '8inland Empire,' in Eastern Washinton. The question of rates, therefor, became a very important consideration to the California companies in the struggle which appeared to be imminent between them and the Montana oil producers. As a consequence, the southern oil companies contrived a plan for moving their products by barge up the Columbia river to Umatilla, Oregon, and to Attalia, Washington, at both of which points they erected extensive storage facilities. From those points, their products were transported to Spokane and the surrounding territory by motor trucks operating as common carriers. That arrangement apparently secured, or was intended ultimately to secure, for the southern oil companies a cheaper rate than that previously provided by the railroad companies for transportation of petroleum products from the western terminals at Portland, Vancouver, and Seattle to Spokane and other points in eastern Washington, and to that extent fortified, or was intended ultimately to fortify, the California oil companies against the competition of Montana oil. To that same extent, however, the railroad companies apparently foresaw, or became apprehensive, not only that they would have serious competition for the business of transporting such products from the west coast terminals to Spokane, but also that in time they might lose that business entirely.

Whatever may have been the inciting cause, the fact is that on March 7, 1939, the railroad companies filed revised rate schedules which provided that the rates for the transportation of bulk petroleum productps between designated points in western and eastern Washington be reduced from forty-one cents per one hundred pounds to twenty-five cents per one hundred pounds.

Acting upon the complaints of various interested parties, the department of public service, on March 23, 1939, entered an order suspending the proposed rates and directing that the matter be set for investigation and hearing. On March 25, 1939, the department petitioned the Interstate Commerce Commission to take similar action with respect to the proposed reduction in the same rate schedules of interstate rates between marine terminals in the state of Oregon and points in eastern Washington.

From June 15 to June 28, 1939, joint hearings were held by the Interstate Commerce Commission, the department of public service of Washington, and the public utilities commissioner of Oregon, at which hearings the regulatory authorities of Idaho and Montana were present and cooperated.

On September 25, 1939, the Interstate Commerce Commission issued its order directing the cancellation of the suspended schedules, without prejudice to the establishment of an interstate rate from Portland to Spokane of twenty-eight and one-half cents per one hundred pounds, and indicating that the same rate should apply from Seattle to Spokane. In that order, rates were also prescribed for transportation of petroleum products from northern Montana to eastern Washington.

On November 6, 1939, the state department of public service issued the order here involved, which, as amended on November 8, 1939, directed the cancellation of the proposed rates for intrastate transportation, and fixed minimum rates for the future.

Upon petition, in which all but one of the railroad companies joined, a writ of review was issued by the superior court for Thurston county, and, upon certification of the department's record, hearing was had in that court on January 4 and 5, 1940. Thereafter, on February 21, 1940, the superior court filed its memorandum opinion, upholding the departmental order. A motion for judgment notwithstanding the memorandum opinion, and, in the alternative, for a new trial, was denied, and from the judgment finally entered in the superior court this appeal was taken.

Appellants make three principal contentions. The first contention is that in the proceedings here under review the department did not acquire jurisdiction, and therefore had no power, to fix minimum rates for the future. This contention is made upon the alleged ground that appellants were not given notice that the question of minimum rates was to be considered at the proposed hearing. Appellants' position in this respect is that there was nothing in the order of suspension, or in the notice of hearing which the department issued, or in any complaint or other pleading filed with the department in the instant proceedings, which would tend to raise any issue other than whether the specific rates proposed by appellants should be permitted to become effective or should be cancelled. The extent of appellants' claim upon the immediate point under consideration is best expressed by a quotation from their reply brief, as follows:

'Our contention is simply this: That the Department in its order of suspension merely indicated that the sole issue Before it would be whether the proposed rates were 'substantiated by costs of operation'. If the Department had intended to consider other matters such as the question of fixing minimum rates for the future, it could have done so by stating in its order of suspension or notice of hearing that such matters would be considered in this proceeding. We do not claim that the Department absolutely

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