United Parcel Service, Inc. v. California Public Utilities Com'n
| Decision Date | 28 February 1996 |
| Docket Number | No. 94-15079,94-15079 |
| Citation | 77 F.3d 1178 |
| Parties | 96 Cal. Daily Op. Serv. 1284, 96 Daily Journal D.A.R. 2200 UNITED PARCEL SERVICE, INC., Plaintiff-Appellant, v. CALIFORNIA PUBLIC UTILITIES COMMISSION; Daniel Wm. Fessler; Patricia M. Eckert, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Appeal from the United States District Court for the Northern District of California, Marilyn H. Patel, District Judge, Presiding.
Ellis Ross Anderson and Dwight C. Donovan, Anderson, Donovan & Poole, San Francisco, California, for plaintiff-appellant.
Timothy E. Treacy, Public Utilities Commission, San Francisco, California, for defendants-appellees.
Before: D.W. NELSON, T.G. NELSON, Circuit Judges, and KING, * District Judge.
The following facts are not in dispute. UPS, a common parcel carrier engaged in extensive interstate and intrastate transportation was, until recently, subject to regulation by the CPUC. On October 11, 1993, the Governor of California signed Assembly Bill No. 2015, amending the Public Utilities Code to deregulate carriers registered as "integrated intermodal small package carriers." UPS registered as this new type of carrier on January 1, 1994, and is thus no longer subject to CPUC's prospective regulation. The instant dispute concerns CPUC rulings affecting UPS's rates prior to the new legislation.
In 1938, the CPUC exempted UPS from certain rate regulations pertaining to general common carriers. The exemption, which was apparently granted in view of UPS's direct competition with the United States Postal Service, allowed UPS to change its rates without receiving prior approval from the CPUC. In January 1992, UPS raised its small parcel delivery rates in accordance with its exemption, and consistent with its usual practice, by filing tariff pages with the CPUC and scheduling increases to take effect on thirty days' notice. The CPUC accepted the tariff pages and UPS imposed the new rates beginning February 24, 1992.
A UPS competitor, Cal Pak Delivery, Inc., subsequently filed a complaint with the CPUC alleging that UPS had followed the wrong procedure in making its rate changes. UPS answered the complaint and filed a formal application asking the CPUC to clarify the rate-making procedures UPS was to follow in keeping with its exemption.
The CPUC consolidated the two proceedings and on February 3, 1993, issued Decision No. 93-02-001 ("the Decision"), articulating for the first time that under the exemption UPS must file a formal rate increase application for rate increases of any magnitude. By contrast, all other common carriers within the state could, on ten days notice, raise rates up to 10% without getting CPUC approval. 1 While the CPUC in its Decision approved UPS's rate increase for future use as of February 3, 1993, it determined that the increase was "not just and reasonable" prior to that date because UPS had not followed the correct rate-making procedures.
The CPUC gave UPS an opportunity to amend its application within thirty days to propose alternative rate-making procedures. UPS filed an amended application on March 2, 1993, but withdrew it on November 5, 1993, apparently in light of the newly enacted California AB 2015, which ended the CPUC's rate-making authority over UPS. On March 5, 1993, pursuant to Cal.Pub.Util.Code § 1731, UPS filed for a rehearing with CPUC, arguing that the Decision was inconsistent with prior CPUC rulings and that it violated UPS's federal and state constitutional rights.
The CPUC denied UPS's request on May 7, 1993. On June 9, 1993, in keeping with the review provisions of Cal.Pub.Util.Code § 1756, UPS filed a petition for a writ of review in the California Supreme Court, reserving its right to a federal hearing on its federal constitutional claims pursuant to England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964). On the same day, UPS filed an action in the federal district court.
As a preliminary matter, we address the CPUC's contention that the case is mooted by recent legislation. Questions of mootness are reviewed de novo. Aiona v. Judiciary of State of Hawaii, 17 F.3d 1244, 1246 (9th Cir.1994). "The usual rule in federal cases is that an actual controversy must exist at stages of appellate or certiorari review, and not simply at the date the action is initiated." Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 713, 35 L.Ed.2d 147 (1973).
On October 11, 1993, the Governor of California signed Assembly Bill No. 2015, enacting § 4120 and amending §§ 212 and 3511 of the Public Utilities Code. The Bill was prompted by our decision in Federal Express Corp. v. California Public Utilities Commission, which held that state regulation of the trucking operations of intermodal small package carriers organized as air carriers is preempted by federal law. 936 F.2d 1075, 1078 (9th Cir.1991), cert. denied, 504 U.S. 979, 112 S.Ct. 2956, 119 L.Ed.2d 578 (1992).
The California Legislature stated that Federal Express "has seriously compromised the ability of the State of California to ensure the safety of the operations of providers of intermodal small package service." Section 1, Stats.1993, c. 1226 (AB 2015). In the interest of consistency and public safety, see id., the new legislation acts, inter alia, to deregulate "integrated intermodal carriers," which are defined as those carriers which provide "air-ground transportation service for the packages or articles in both interstate and intrastate commerce." Cal.Pub.Util.Code § 4120.
UPS registered as an integrated intermodal carrier on January 1, 1994. The parties dispute whether the new legislation moots the instant controversy. 2 We hold that it does not.
The CPUC contends that the relief sought by UPS in the district court--a declaratory judgment that the CPUC's classification violates its equal protection rights and an injunction preventing the CPUC from enforcing its orders in accordance with its allegedly illegal classification--is prospective, hence moot in light of AB 2015, which terminates the CPUC's authority to classify UPS for rate-making purposes.
UPS maintains that the controversy is still alive because the new "statute does not relieve UPS or any other carrier coming within its definition from complying with any existing CPUC regulations or orders." According to UPS, enforcement of the Decision in question includes the following: 1) invalidation of UPS's February 24, 1992, tariff; 2) "the rendering of advice to the general public that UPS overcharged its shippers"; and 3) "potentially, the determination that refunds to UPS' shippers are in order."
While the CPUC stated in its briefs that UPS is no longer subject to its rate-making authority, a CPUC decision of March 22, 1995, submitted by UPS, indicates that the CPUC continues to assert such authority and that UPS may be liable for refunds to customers the CPUC ruled it had overcharged. See CPUC Decision No. 95-03-044. In question are rates charged by UPS between February 24, 1992, the date of its rate increase and February 3, 1993, the date of the CPUC decision approving the rates prospectively, but not retrospectively.
The CPUC reiterated and emphasized that "to the extent that UPS has actually put such increased rates into effect, UPS has overcharged its customers," and maintained its ongoing jurisdiction over the matter, specifically with regard to refund claims, in no uncertain terms We have a strong regulatory interest in maintaining jurisdiction over any complaints seeking refunds for any overcharges.... [W]e have in D. 93-02-001 already found that overcharges may have occurred during the period between February 24, 1992 and February 3, 1993, as a result of UPS charging rates which were on file with the Commission but not yet in effect because UPS had not yet obtained the Commission's approval of the rate increase as required by [Cal.Pub.Util.Code] section 454.
Id. Because UPS is still subject to suits for overcharge refunds pursuant to the CPUC's decisions, we hold the case is not moot.
The district court dismissed the action on the basis of res judicata and entered summary judgment in favor of the CPUC. 3 See United Parcel Service, 839 F.Supp. at 705-08. Dismissal on res judicata grounds is reviewed de novo. Palomar Mobilehome Park Ass'n v. City of San Marcos, 989 F.2d 362, 363 (9th Cir.1993).
UPS contends it "reserved" its federal constitutional claims for federal review according to the process laid out in England v. Louisiana State Bd. of Med. Examiners, 375 U.S. 411, 84 S.Ct. 461,...
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