Texas Ind. Traffic League v. Railroad Com'n of Texas

• Decision Date: 09 May 1984
• Docket Number: No. 13380,13380
• Citation: 672 S.W.2d 548
• Parties: TEXAS INDUSTRIAL TRAFFIC LEAGUE, et al., Appellants, v. RAILROAD COMMISSION OF TEXAS, et al., Appellees.
• Court: Texas Court of Appeals

Page 548

672 S.W.2d 548

TEXAS INDUSTRIAL TRAFFIC LEAGUE, et al., Appellants, v.RAILROAD COMMISSION OF TEXAS, et al., Appellees.

No. 13380.

Court of Appeals of Texas Austin.

May 9, 1984.

Deborah A. Chadbourne, Irving, Steven J. Kalish, Balnap, McCarthy, Spencer, Sweeney & Harkaway, Washington, for appellants.

Jim Mattox, Atty. Gen., Phyllis B. Schunck, Asst. Atty. Gen., John R. Whisenhunt, Robinson, Felts, Starnes & Latting, Austin, for appellees.

Before SHANNON, POWERS and GAMMAGE, JJ.

ON MOTION FOR REHEARING

POWERS, Justice.

We withdraw our opinion of September 7, 1983 and substitute the following.

Appellants are three organizations: the Texas Industrial Traffic League, National Small Shipments Traffic Conference, and Drug and Toilet Preparation Conference.Appellees are the Texas Railroad Commission and a corporation named Common Carrier Motor Freight Association, Inc.(CCMFA).This being our second decision in the appeal, we shall briefly outline the procedural history of the case.

The Commission fixes the rates, fares, and charges permitted to be assessed by motor carriers for their intrastate service.Tex.Rev.Civ.Stat.Ann. art. 911b, § 4(a), (d)(1964).In behalf of two categories of carriers, CCMFA applied to the Commission for an increase in the rates permitted to be charged by the carriers on their intrastate shipments.Appellants appeared in the agency proceeding and opposed the rate increase sought by CCMFA.After hearing, the Commission granted the application with respect to one category of carrier and denied it as to the other, ordering that certain tariff rates be amended accordingly.

Appellants sued in district court for judicial review and appealed from that court's judgment affirming the Commission's final order.Tex.Rev.Civ.Stat.Ann. art. 911b, § 20(1964).By way of cross-point in that appeal, CCMFA contended that appellants lacked "standing" to maintain the statutory cause of action granted by art. 911b, § 20 and that this Court, in consequence, lacked jurisdiction to decide their appeal.We sustained the cross-point and reversed the judgment of the district court.628 S.W.2d 187(Tex.App.1982).We remanded the cause in the interest of justice, however, in order that appellants might have an opportunity to prove the minimum facts essential to establish subject-matter jurisdiction under art. 911b, § 20, there being no presumption of jurisdiction in such special causes of action created by statute and in derogation of the common law.Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084, 1089(1926).

The Supreme Court of Texas reversed our judgment, holding that "[f]ailure of the party bringing suit to show a justiciable interest in the controversy is not a matter of fundamental error," and may therefore be waived, and that "[t]he issue of standing was therefore waived" by CCMFA because it failed to raise the issue of "standing" by a "plea in abatement" filed in the district court.633 S.W.2d 821, 823(Tex.1982).Cf., Mingus v. Wadley, supra;California Products, Inc. v. Puretex Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780, 781-83(1960).Accordingly, we were instructed to determine the appeal "on the merits."

Our jurisdiction having been thus declared, we now affirm the judgment of the district court.

The Commission calculated the carriers' revenue requirements on the basis of an "operating ratio" of 90%--an assumption by the agency that the carriers' operating expenses from intrastate shipments, exclusive of interest and income taxes, would be 90% of the revenue derived by them from such shipments.Contending that the Commission should rather have estimated the carriers' revenue requirements by applying a rate of return to the capital contributed by the carriers' shareholders, appellants charge in their first and second points of error that the Commission's utilization of the "operating ratio" was (1) arbitrary and capricious and (2) not supported by substantial evidence, two grounds for reversal and remand of an agency decision specified in Tex.Rev.Civ.Stat.Ann. art. 6252-13a, Administrative Procedure and Texas Register Act (APTRA), §§ 19(e)(5), (6)(Supp.1982) for instances where the law authorizes review under the substantial evidence rule, or where the law does not define the scope of judicial review.Appellees rejoin that a reviewing court may not invalidate the Commission's rate order on the ground that the Commission employed an improper method in its ratemaking, but may do so only on the statutory basis that the resulting rates are unreasonable or unjust as they were finally fixed by the agency, the standard for judicial review specified by the applicable constitutive statute--Tex.Rev.Civ.Stat.Ann.art. 911b, § 20.SeeRailroad Commission of Texas v. Houston Natural Gas Corporation, 155 Tex. 502, 289 S.W.2d 559, 573(1956)(the Alvin case);Railroad Commission of Texas v. Galveston Chamber of Commerce, 105 Tex. 101, 145 S.W. 573, 580(1912).

The provisions of APTRA § 19(e)(5) and (6), the grounds for reversal invoked by appellants, are applicable to the case only if "the law under which review is sought.... authorizes review under the substantial evidence rule, or ... does not define the scope of judicial review, ...."APTRA § 19(e).We hold that the law under which review is sought does not authorize review under the substantial evidence rule; and, we hold that such law does, indeed, define the scope of judicial review--specifically, it provides that the judicial review of the rate orders of the Commission shall be by trial de novo in the district court of Travis County, wherein the plaintiff is required to show by a preponderance of the evidence that the rates challenged by him are unreasonable and unjust to him, such actions to be "tried and determined as other civil causes in said court."Tex.Rev.Civ.Stat.Ann. art. 911b, § 20(1964).Accordingly, we may not reverse the Commission's final order on the only grounds raised in appellants' first two points of error.

Our holdings in this regard are not reached lightly--they are, in fact, compelled by decisions of the Supreme Court of Texas that we may not conveniently and discreetly disregard.We are as fully and acutely aware as anyone of the inconvenience of trials de novo as a means of reviewing the final orders of administrative agencies, but that is the nature of the review plainly specified by art. 911b, § 20; and in construing statutory language that is almost identical, the Supreme Court of Texas has held trial de novo, based on evidence taken in the district court, to be the requisite manner of judicial review in other rate cases.These decisions by our highest court, both preceding and following the enactment of APTRA, have never been overruled.To these matters we now turn.

THE APPLICABLE STATUTORY PROVISIONS

Article 911b, § 20 provides as follows:

If any motor carrier or other party at interest be dissatisfied with any decision, rate, charge, rule, order, act, or regulation adopted by the Commission, such dissatisfied ... party after failing to get relief from the Commission may file a petition setting forth the particular objection to such decision, rate, charge, rule, order, act or regulations ... in the District Court in Travis County, Texas, against said Commission as defendant.Said action shall have precedence over all other causes on the docket of a different nature and shall be tried and determined as other civil causes in said court.Either party to said action may appeal to the Appellate Court having jurisdiction of said cause ....In all trials under this section the burden of proof shall rest upon plaintiff, who must show by the preponderance of evidence that the decisions, rates, regulations, rules, orders, classifications, acts or charges complained of are unreasonable and unjust to it or them.[emphasis added]

The pertinent parts of APTRA read as follows:

Section 1.It is declared the public policy of this state to afford minimum standards of uniform practice and procedures for state agencies, ... and to restate the law of judicial review of agency action.

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Sec. 3.As used in this Act:

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(2)"Contested case" means a proceeding, including but not restricted to ratemaking and licensing, in which the legal rights, duties, or privileges of a party are to be determined by an agency after an opportunity for adjudicative hearing.

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Sec. 19.(a) A person who has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this Act.This section is cumulative of other means of redress provided by statute.

(b) Proceedings for review are instituted by filing a petition ....

(3)[T]he filing of a petition vacates an agency decision for which trial de novo is the manner of review authorized by law, but does not affect the enforcement of an agency decision for which another manner of review is authorized.

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(c) If the manner of review authorized by law for the decision complained of is by trial de novo, the reviewing court shall try all issues of fact and law in the manner applicable to other civil suits in this state but may not admit in evidence the fact of prior agency action or the nature of that action (except to the limited extent necessary to show compliance with statutory provisions which vest jurisdiction in the court).Any party to a trial de novo review may have, on demand, a jury determination of all issues of fact on which such a determination could be had in other civil suits in this state.

(d) If the manner of review authorized by law for the decision complained of is other than by trial de novo:

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(3) the review is conducted by the court sitting without a jury and is confined to the record, except that the court may receive evidence of procedural irregularities alleged to have occurred before the agency but which are...