State ex rel. Kitsap County Transp. Co. v. King County

• Decision Date: 10 April 1940
• Docket Number: 27673.
• Citation: 101 P.2d 327,3 Wn.2d 392
• Parties: STATE ex rel. KITSAP COUNTY TRANSP. CO. et al. v. KING COUNTY et al.
• Court: Washington Supreme Court

101 P.2d 327

3 Wn.2d 392

STATE ex rel. KITSAP COUNTY TRANSP. CO. et al. v. KING COUNTY et al.

No. 27673.

Supreme Court of Washington

April 10, 1940

Department 2.

Proceeding by the State of Washington, on the relation of the Kitsap County Transportation Company, the Puget Sound Navigation Company, and another, against the Department of Public Service, King County, and others for a writ of review of an order of the Department of Public Service, wherein the Vashon Island Commercial Club and Willard Fletcher appeared as additional defendants and filed a answer and cross-complaint. From a judgment affirming the order, King County, the Vashon Island Commercial Club, and Willard Fletcher appeal.

Affirmed.

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

B. Gray Warner and Patrick M. Tammany, both of Seattle, for appellant King County.

Fairbrook & Williams and Elliott W. Reynolds, all of Seattle, for appellants Vashon Island Commercial Club and Willard Fletcher.

Bogle Bogle & Gates and Edward G. Dobrin, all of Seattle, for respondents Kitsap County Transp. Co., Puget Sound Nav. Co. and Washington Route, Inc.

G. W Hamilton, Atty. Gen., and Don Cary Smith and Will M. Derig both of Olympia, for respondent Department of Public Service and its members.

BLAKE Chief Justice.

This is an appeal by King county and Vashon Island Commercial Club from a judgment of the superior court of Thurston county affirming an order of the Department of Public Service by which rates were fixed for ferry service on the Fauntleroy-Vashon Heights-Harper route. While only two questions are presented for determination, it is necessary, in considering them, to have a comprehensive view of the historical background and economic conditions from which they arise.

Some time prior to 1921, King county established a ferry route between the Marion street dock in Seattle and Vashon Heights and Harper. December 8 of that year, King county entered into an agreement with Kitsap County Transportation Company whereby the latter acquired the right to the use of the docks and two steam ferries owned and used on the route by King county for a term of ten years. The agreement provided minimum service and maximum fares. The county reserved the right to modify the route 'so that another Seattle Terminal * * * shall be located at some suitable location between Alki Point and Three Tree Point.' In 1925 such a terminal was established at Fauntleroy cove, and service has ever since been maintained between that point and Harper, touching at Vashon Heights, first, both ways.

On December 27, 1927, King county and Kitsap County Transportation Company entered into a contract covering ferry service on the two routes: Harper to the Marion street dock and Fauntleroy-Vashon Heights-Harper.

In passing, we shall, at this juncture, dispose of a point which appellants seem to think of some importance. It is their contention that this contract is but a renewal or extension of the contract of December 8, 1921. We think, that, in view of the following paragraph of the later contract, the position of appellants on this point is so clearly untenable that it does not merit discussion. Section 29 of the 1927 contract provides: 'It is understood and agreed that the lease dated December 8, 1921, between the County and the Company, hereinBefore referred to, is terminated and at an end as of close of business, 1927; and each party acknowledges full and complete performance of all the terms, conditions and provisions thereof by the other party.'

The contract of 1927 provided for maintenance of a minimum of service on each route and a maximum in fare rates. Owing to the shortness of the run and the distance of the Fauntleroy dock from downtown Seattle, the fare rates for all classes of traffic were substantially less on the Fauntleroy-Vashon Heights-Harper route than on the Harper-Vashon Heights-Marion street dock route. Yet the former route has, at all times, proved to be a very profitable operation.

In 1935 all of the voting stock of Kitsap County Transportation Company was acquired by Puget Sound Navigation Company. These two companies own all the stock of Washington Route, Inc. The three companies comprise what is known as the 'Black Ball Line,' operating ferries on many routes: to the islands in Puget Sound and to various points on the Olympic Peninsula. The eastern termini of nearly all these routes are within the metropolitan area of Seattle. The only one of these routes (other than the Fauntleroy-Vashon Heights-Harper) with which we are concerned on this appeal is the Manchester-Seattle route, having its eastern terminus at the Colman dock and its western at Manchester, in Kitsap county. Owing to the close proximity of Harper and Manchester, these are essentially competing routes. Prior to 1937, however, rates for all classes of traffic were substantially lower on the Harper-Vashon Heights-Fauntleroy route than that from Manchester to the Colman dock. This differential may be ascribed to two factors: (1) a difference in mileage in the water carriage; (2) a difference of eight miles to the downtown center of Seattle between the landings at Colman dock and Fauntleroy--attended, as the latter landing was, by the bus, street car fare or cost of gasoline to traverse the eight miles.

In the latter part of May, 1937, a strike was called and effectuated, tying up the ferries of the Black Ball Line for a period of several weeks. Through the mediation of the Governor, the strike was settled upon terms by which the Black Ball Line's cost of operation was increased $169,000, on account of additional labor charges. As a part of the settlement, the companies were permitted to put in effect an increase of rates designed to absorb this increase in cost of operation. Upon settlement of the strike, the department of public utilities immediately began a survey of the entire problem of ferry transportation on Puget Sound. This investigation resulted in an order by the department of public utilities permitting Puget Sound Navigation Company and its affiliates to increase fares on all its routes in an amount sufficient to absorb the increased cost of operation which attended the settlement of the strike. In determining the amount of increase of fares on the various routes, the department treated the operation of the Black Ball Line as a united system.

Prior to the investigation from which this order resulted, the department had been considering the problem as to whether rates should be based upon a consideration of ferry transportation as an integrated operation or whether they should be based on the experience of each individual route.

In its Fifteenth Report, the department said:

'A great deal of our time is being claimed by numerous difficult problems affecting the operation of ferries on Puget Sound. Ferry operations on may routes do not pay and cannot be made to pay. Yet service to the islands in the Sound and the Olympic Peninsula is absolutely essential.

'* * *

'Our investigations have disclosed that several ferry routes on Puget Sound are not self-supporting. Some of these routes are separately owned, while others are owned by companies who also operate on routes which undoubtedly are least selfsupporting. The question then is whether the Department is compelled to consider each route by itself. If that is the rule which must be applied, it is certain that we cannot compel the continuance of a number of operations now in existence. On the other hand, if the Department may consider together all of the operations of any one company, it is possible that some unprofitable routes can be continued because they will be carried by profitable routes operated under common ownership. * * *

'The matter of ferry service presents a social problem as well as an economic problem. * * *' (Italics ours.)

And in the order under review the department found:

'When establishing rate bases, rates, services and practices shall we deal with each route independently of all other routes? If not, shall we deal with the routes of each corporation as a group independently of the routes of the other corporations? Or shall we consider all the routes of all the corporations as one complete transportation system? These questions are squarely raised in Cause No. 7040, as well as in Causes No. 6970 and No. 7036, which are consolidated herein. They must be answered Before we can determine values, rates, service and practices. * * *

'The transportation problems of the Puget Sound Area generally, are not the problems of any particular locality or of any particular route. Our habit of moving about freely and frequently and the enlargement of the situs of our business and social activities make the resident of Bellingham neighbor to the citizen of Bremerton, and the dairyman at Sequim. All of us need adequate service in all parts of the Sound country. One may travel the Vashon route today, use the Bremerton service tomorrow, the Ballard--Ludlow route another time, and journey to Orcas Island for the week-end. The Vashon Island resident who works in Seattle, or sells his produce in its markets is vitally interested in the development of all the territory which both supports and is dependent upon the metropolis. Whether he realizes it or not he is deeply concerned with the problem of promoting and maintaining adequate transportation facilities in all parts of the Sound county. No one community or area lives in, of, and by itself. * * *

'What we have said applies with particular force to all the operations which serve Seattle directly, and a reference to the map will show that practically all of the routes involved in this proceeding have their eastern termini within the city limits...