United Transit Co. v. Public Utility Hearing Bd.

• Decision Date: 03 July 1963
• Docket Number: No. 1551,1551
• Citation: 192 A.2d 423,96 R.I. 435
• Parties: UNITED TRANSIT COMPANY v. PUBLIC UTILITY HEARING BOARD. M. P.
• Court: Rhode Island Supreme Court

Page 423

192 A.2d 423

96 R.I. 435

UNITED TRANSIT COMPANY v. PUBLIC UTILITY HEARING BOARD.

M. P. No. 1551.

Supreme Court of Rhode Island.

July 3, 1963.

Armstrong, Gibbons & Lodge, Walter F. Gibbons, Joseph G. Kinder, Providence, for petitioner.

Julius C. Michaelson, J. Joseph Nugent, Atty. Gen., Providence, for respondent.

ROBERTS, Justice.

This petition of the United Transit Company, hereinafter referred to as the Company, was filed with the public utility administrator on September 14, 1962, seeking relief provided for in sec. 7 of its charter as amended by P.L.1959, chap. 144. The Company, in substance, seeks approval of an upward revision in its fares and of certain reductions in the service being maintained on designated routes as proposed in schedules attached to the petition. After a hearing the administrator on November 13, 1962 took affirmative action thereon and to that end issued two consecutively numbered orders, in one of which he approved the revised schedule of fares and in the other approved the proposed reductions in service on some twenty-nine bus routes. On November 23, 1962 Ronald Laurens Andrew Card undertook to prosecute a separate appeal to the public utility hearing board from each of the orders issued as aforesaid.

Thereafter the public utility hearing board during hearing on the appeal dismissed for want of jurisdiction the appeal of the appellant Card from the order of the administrator approving the revised fare schedules. The hearing board then heard and in part sustained the appeal from the order of the administrator approving the proposed reductions in service on certain of the routes designated but in part overruled that order by denying approval of such service reductions on four routes that are specified in the decision. The matter came before this court on the purported appeal of the Company from the order of the hearing board overruling that portion of the order of the administrator wherein he approved the reduction in service on the indicated routes.

The circumstances here are such, in our opinion, as to make it desirable, if not necessary, for this court to make clear the limitations on the jurisdiction of the hearing board to hear and determine appeals taken from orders of the administrator pursuant to § 39-5-9. For that reason we are constrained to raise, sua sponte, a question as to its jurisdiction to entertain the appeal taken from the administrator's order purporting to give approval to the proposed service curtailments independently of his approval of the proposed upward rate revision given after his consideration of the curtailments in conjunction therewith. In our opinion the board lacked such jurisdiction, and its action thereon was null and void. We do not perceive that the administrator, in issuing the orders pursuant to his decision, did anything more than approve rate revisions after considering the minimizing effect thereon of the proposed service curtailments. His fragmentation of the order, in our opinion, had no effect upon its character as an order fixing a rate.

General laws 1956, § 39-5-1, provides that any person aggrieved by an order of the administrator 'fixing any rate, toll, charge * * * may appeal to the supreme court for a reversal of such order on the ground that the rate, toll, charge * * * fixed in the order are unlawful or unreasonable.' It is clear from the above-quoted language that the legislature intended that all appeals from orders wherein a rate is fixed were to be taken to this court, including any order approving a rate that has been established upon a consideration, inter alia, of service curtailments.

On the other hand, the legislature conferred upon the hearing board a substantially restricted jurisdiction to hear appeals from orders of the administrator. In § 39-5-9 it is provided that appeals are to be taken to the hearing board only from orders of the administrator 'other than a decision or order fixing any rate * * *.' When §§ 39-5-1 and 39-5-9 are read together, it becomes clear that the intent of the legislature was to preclude any review by the hearing board of such orders of the administrator as involved rate fixing whether such fixing was by direct action or by indirection.

We are of the opinion, as already indicated, that the order of the administrator here, without regard to his fragmentation thereof, is in effect a rate revision on the basis of the proposed reductions in service. Its character as a rate order is unaffected by the manner of its formulation, and appealability therefrom is to be determined on the basis of its substance rather than its form. See New England Tel. and Tel. Co. v. Kennelly, 80 R.I. 253, 95 A.2d 886. We must reject any contention that the administrator may so divide an order as to confer jurisdiction upon the hearing board to review by indirection an order in which a rate was fixed.

Any doubt concerning the rate-fixing nature of the order of the administrator will be resolved by a consideration of the posture in which the matter was submitted to him and of the circumstances surrounding his issuance of the order. This petition was not filed pursuant to § 39-3-11, which provides in general terms for the approval of proposed rate revisions by utilities. Rather, it was filed under a particular provision of the Company's charter, namely, sec. 7(a) thereof as amended by the legislature in the 1959 act. Said sec. 7(a) reads in pertinent part as follows: 'Whenever the operating ratio, as herein-defined, of the United Transit Company for any six months' period ending on the last day of any quarterly period of any calendar year shall be greater than 94% or whenever the rate of return on the company's rate base, as herein defined, shall be below 5%, for any such six-months' period of time, the state administrator of public utilities shall, after investigation, and within 60 days after receipt of any petition filed by said United Transit Company for relief, permit such revision in the company's fare structure, or allow the company to reduce bus miles operated on non-profitable routes or any portion thereof, or the administrator shall authorize a combination of fare revisions and mileage reductions in a manner and to the degree that will enable said United Transit Company to maintain an operating ratio of at least 94% or to secure a rate of return on the company's rate base of at least 5% for the next succeeding twelve calendar months from the date of the order so issued * * *.' (italics ours)

It is to be noted then that the Company sought relief under sec. 7(a) of its charter that would enable it to maintain an operating ratio of at least 94 per cent or to secure a rate of return on its rate base of at least 5 per cent. Upon a showing by the Company that it was unable to maintain the prescribed operating ratio or to secure the prescribed rate of return, the administrator must give relief, having discretion only to provide for such relief by way of one of three alternatives. He may provide for such relief, first, by permitting a revision in the fare schedule or, in the alternative, by allowing a reduction in the bus mileage operated on nonprofitable routes. As a third alternative the administrator may authorize a combination of fare revisions and mileage reductions in a manner and to the degree that will enable the Company to maintain the operating ratio or to secure the rate of return provided in sec. 7(a).

In other words, upon making the appropriate findings the administrator must issue orders that will provide the relief contemplated by the statute. In these orders he may permit a fare reduction or a reduction in service on nonprofitable routes, or he may authorize fare revisions with service reductions, whether the routes so affected were profitably operated or not. The third alternative contemplates the issuance of an order in which fare revisions are authorized on the basis of mileage reductions which, in our opinion, constitutes an order fixing a rate within the purview of § 39-5-1.

In his decision the administrator made it clear that he acted to give the Company relief under sec. 7(a) on the basis of combining an increase in the rates with a curtailment of service. At page 10 thereof he found 'that the application of the revised fare schedule coupled with the program of service curtailments as proposed in the Company's petition of September 14, 1962, will provide Petitioner with an operating ratio not in excess of 94%, and will permit a rate of return on Petitioner's rate base slightly in excess of 5% * * *.' The administrator then went on to state that he had no alternative other 'than to permit the Company to revise its fare structure and to curtail its service schedules * * *.'

In other words, it is clear from the language of the decision that the administrator intended to grant relief that would enable the Company to maintain the prescribed operating ratio and rate of return by authorizing it to combine fare revisions with mileage reductions. When his orders are examined in this light, the conclusion is inescapable that, despite their fragmentation, they constitute a single order approving fare revisions on the basis of the proposed service curtailments and that therefore the hearing board was without jurisdiction to hear and determine it, in whole or in part.

The appellant Card, in taking his appeal from the orders of the administrator to the hearing board, was in fact prosecuting his appeal in the wrong tribunal. We have heretofore held that a mistake of this kind was fatal to a right of appeal provided by statute in a particular tribunal. Canzano v. McLaughlin, 68 R.I. 22, 26 A.2d 350. It is clear, however, that he was attempting to pursue an appellate procedure that would enable him to prosecute in this court a further appeal from an adverse decision by the hearing board. While it is true that the procedure pursued by Card did not have the effect of bringing...