Telischak Trucking, Inc. v. Michigan Public Service Commission, Docket No. 3068

• Decision Date: 03 April 1968
• Docket Number: Docket No. 3068,No. 2,2
• Citation: 11 Mich.App. 23,160 N.W.2d 592
• Parties: TELISCHAK TRUCKING, INC., a Michigan corporation, Plaintiff- Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant-Appellee, and Cement Carriers Association, George F. Alger Co. et al., Intervening Defendants-Appellees
• Court: Court of Appeal of Michigan — District of US

Page 592

160 N.W.2d 592

11 Mich.App. 23

TELISCHAK TRUCKING, INC., a Michigan corporation, Plaintiff- Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant-Appellee and Cement Carriers Association, George F. Alger Co. et al Intervening Defendants-Appellees.

Docket No. 3068.

Court of Appeals of Michigan, Division No. 2.

April 3, 1968.

Released for Publication Sept. 4, 1968.

William B. Elmer, East Detroit, Mihelich, Elmer, Dank & Kendall, for appellant.

Frank J. Kelley, Atty. Gen., Lansing, Robert A. Derengoski, Sol. Gen., Lansing, David P. Van Note, Asst. Atty. Gen., Lansing, for Public Service Commission.

Robert A. Sullivan, Detroit, for Cement Carriers, and others.

Before McGREGOR, P.J., and LEVIN and QUINN, JJ.

QUINN, Judge.

Pursuant to C.L.S.1961, § 479.20 (Stat.Ann.1965 Cum.Supp. § 22.585), plaintiff filed complaint in Ingham county circuit court to appeal an order of Michigan Public Service Commission requiring plaintiff to cease and desist from transporting cement, except as specifically authorized in plaintiff's authority. ¹

The pertinent language of the order appealed from is as follows:

'It is therefore our finding that under the portion of Telischak's authority complained of herein respondent may transport only commodities intended for use in the construction, repair and dismantling of pipelines and that Such service is restricted to service for the oil and gas industries.

It is also our finding that respondent may transport only commodities intended to be used directly in such construction, repair or dismantling and that such authority does not authorize transportation of commodities requiring an intermediate manufacturing process prior to such ultimate use.

IT IS THEREFORE ORDERED:

(1) (This part of the order is not pertinent to decision.)

(2) That respondent, Telischak Trucking, Inc., be and the same is hereby ordered to cease and desist from the transportation of cement except as specifically authorized in its authority.'

The trial court judgment affirmed the order of the commission except as to 'such service is restricted to service for the oil and gas industries', and restrained the commission from enforcing that part of its order not affirmed. Under the statute cited above, plaintiff appeals such affirmance. No one appeals that part of the judgment which restrains the commission from enforcing its order restricting service to the oil and gas industries.

The proceedings before the commission which resulted in the order appealed from were instituted on complaint of intervening defendants that plaintiff was hauling illegally bulk cement from Essexville, Michigan, to Flint. The consignees in Flint were 2 Catsman companies, one of which manufactured cement pipe, among other products, but neither of which was engaged in the construction or dismantling of pipelines. Although plaintiff has other certificates of convenience and necessity specifically authorizing transport of bulk cement from Monroe county and from Wyandotte to other points in Michigan, it has no authority to haul bulk cement from Essexville to Flint unless such authority is found in the language quoted in footnote 1, supra. Plaintiff purchased the certificate which contains this language in 1955 but hauled no bulk cement under it until August 1963.

The statute under which plaintiff filed its complaint provides in part:

'In all actions under this section the burden of proof shall be upon the complainant to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.'

The Supreme Court said in Giaras v. Michigan Public Service Commission (1942), 301 Mich. 262 at 269, 3 N.W.2d 268 at 271:

'To declare an order of the commission unlawful there must be a showing that the commission failed to follow some mandatory provision of the statute or was guilty of an abuse of discretion in the exercise of its judgment.'

This test was reiterated in Bejin Cartage Company v. Michigan Public Service Commission (1958), 352 Mich. 139, 89 N.W.2d 607, and in City of Ishpeming v. Public Service Commission (1963), 370 Mich. 293, 121 N.W.2d 462. The inquiry then is, has plaintiff met the statutory burden?

Instead of advancing clear and satisfactory proof that the order complained of is unreasonable, plaintiff argues that the only limitation in its certificate is a commodity limitation and that by application of the 'intended use rule' employed by the Interstate Commerce Commission in interpreting its certificates to the language of plaintiff's certificate here involved, the plain and unambiguous meaning of the latter is that plaintiff may transport commodities which are used as pipe construction materials to any point in Michigan if it is demonstrated that such materials are pipe construction materials.

Assuming that the only limitation in plaintiff's certificate is a commodity limitation, the foregoing argument fails because it ignores some essential language in the Interstate Commerce Commission's description of the intended use rule. In Great Western Motor Lines, Inc., and Eugene G. Sharp--Investigation of Operations and Practices, 96 MCC 522, the commission said:

'Basically, the test is rather simple. Commodity descriptions governed by the test are those which identify the commodities authorized to be transported by reference to their intended future use. Strictly speaking, under the test, only those commodities specified in the description which are intended, at the time of movement, for use in the particular type of activity, enterprise, or place specified in the description and Which, at the time of movement are, without further processing or manufacturing in a form and condition to be so used, may be transported.'

Here, at time of movement of bulk cement from Essexville to Flint, the commodity was not in a form for use as 'pipe and pipeline laying and construction materials, supplies, equipment and machinery, incidental to or used in connection with the construction, repairing or dismantling of pipelines' without further processing or manufacturing.

In addition, a reading of all the language of the authority here in issue convinces us that the Michigan Public Service Commission's finding that plaintiff may transport only commodities intended to be used directly in such construction, repair or dismantling and that such authority does not authorize transportation of commodities requiring an intermediate manufacturing process prior to such ultimate use is not unreasonable, but is rather the most reasonable finding on this record.

The only possible showing that the order is unlawful is plaintiff's argument that in effect the order of the commission altered or modified its certificate and such alteration or modification is only possible by proceeding under C.L.1948, § 479.18 (Stat.Ann. § 22.583), and the proceedings here were brought under C.L.1948, § 479.14 (Stat.Ann. § 22.579). The argument is untenable for the reason its validity depends on the assumption that plaintiff's certificate contains authority which Michigan Public Service Commission, the trial court and this Court have found is not contained in such certificate.

Affirmed with costs to defendants and intervening defendants.

LEVIN, Judge (dissenting).

Telischak contends that the certificate of authority contains 'a Commodity description and not a job site delivery restriction,' and invokes the 'intended-use' test utilized by the interstate commerce commission in interpreting commodity descriptions. (Emphasis supplied.) The attorney general for the commission asserts the 'findings of the defendant commission that the transportation of cement under this certificate is subject to a Construction site limitation cannot be said to be illogical or irrational.' ¹ (Emphasis supplied.) The intervening defendants assert the certificate contains a 'commodity description restriction and also a construction site restriction.'

On appeal the circuit judge affirmed the commission on the ground that the record showed that only a portion of the cement delivered by Telischak to the consignees ultimately found its way into pipelines. ² The majority now affirm the circuit judge on the ground that Telischak failed to advance clear and satisfactory evidence showing the order of the commission is unreasonable, that under the intended- use test the commodity transported must at the time of transportation be in a form and condition so that it can be used without further processing or manufacturing, and that the commission's interpretation is 'the most reasonable finding on this record.'

The statute provides:

'In all actions under this section the burden of proof shall be upon the complainant to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.' C.L.1948, § 479.20 (Stat.Ann.1968 Cum.Supp. § 22.585).

There are no reported Michigan cases concerning the standard by which we review an order of the commission interpreting one of its certificates. The attorney general asserts the commission's construction is controlling unless clearly erroneous, arbitrary, an abuse of discretion or in contravention of some established principle of law, and that the judicial function is exhausted when it is found there is a rational basis for the conclusions of the commission, citing Whitehouse Trucking, Inc. v. United States (D.C.N.D.Ohio W.D.1966), 261 F.Supp. 9; Mitchell Bros. Truck Lines v. United States (D.C.Or., 1963), 225 F.Supp. 755 (15 F.Carr.Cases, § 81.595); and Ace Lines, Inc. v. United States (D.C.S.D.Iowa, 1960), 197 F.Supp. 591.

The commission has not, however, stated the reason ³ for its decision, and thus we have no basis for determining whether the commission's order is soundly based. The commission merely states its

'opinion that even if such authority * * * includes transportation of commodities for use in industries other...