Opinion
No. 40414
Decided July 26, 1967.
Motor transportation companies — Application for irregular route certificate — Burden of proof on applicant — To establish public need for service — That deficiency in service would be corrected.
When a common carrier engaged in the business of transporting property by motor vehicle in Ohio files an application with the Public Utilities Commission of Ohio for an irregular route certificate of public convenience and necessity, the applicant assumes (1) the burden of proof that there is a public need for such service, and (2) that, if the certificate is issued, any deficiency in service to the public will be corrected. A failure by applicant to meet this burden of proof, in either instance, requires the denial of such application.
APPEAL from the Public Utilities Commission.
On February 1, 1965, Husman Express Company filed an application with the Public Utilities Commission (hereinafter referred to as commission or appellee) for a certificate of public convenience and necessity to transport property as a motor transportation company over irregular routes from and to Bryan, Ohio. It already held certificated authority to operate over irregular routes to and from Cincinnati. Mohawk Motor, Inc. (hereinafter referred to as Mohawk or appellant), held a certificate of convenience and necessity to transport property over irregular routes from and to Bryan, Ohio. Both Husman and Mohawk held certificates to operate over regular routes.
The application was referred to an attorney-examiner to hold hearings and report his findings and recommendations to the commission.
On September 28, 1965, the examiner filed his report, finding a deficiency in transportation service to and from Bryan, Ohio, recommended the issuance of a 60-day order pursuant to the provisions of Section 4921.12 of the Revised Code, and, unless such transportation deficiency be corrected within the 60-day period, then the application of Husman should be allowed.
Mohawk objected and took exception to the report of the examiner. The commission overruled the objections and exceptions of Mohawk and adopted the report of the examiner as if fully rewritten in its opinion and order.
It is advisable, before proceeding further, to consider the evidentiary situation disclosed by the record.
It is not deemed necessary to review the mass of testimony and exhibits to determine if the issuance of the certificate requested is manifestly against the weight of the evidence, but rather to determine if upon the undisputed evidence, as a matter of law, the allowance of the certificate of public convenience and necessity to transport property over irregular routes to and from Bryan would be unreasonable and unlawful.
A shipment (less than a total load) would arrive in Cincinnati in the morning. The bulk shipment would be broken open and the property distributed at the Cincinnati terminal for shipment to various parts of Ohio the next day. Husman emphasized that overnight delivery would be confined to an area within 100 miles of Cincinnati. He described the operating procedure as follows:
"* * * Freight is picked up, or rather the freight is delivered to Cincinnati in the morning, the inbound freight. Afternoon is spent accumulating the out-bound traffic destined to various points in Ohio, and is brought into the terminal around 6:00-7:00 o'clock in the evening, and then is redistributed into runs as the case may be. And the runs are determined after the freight arrives, and we know where we are going. These runs are scheduled out, depending on the length of run, the leaving times, and all runs are scheduled to hit their points of destination at 7:00 o'clock the following morning for distribution of the freight in these areas, and by the agents previously mentioned in the cities, where we are agencies * * *." (Emphasis added.)
It appears clear that property, less than a total load, is placed on board at Bryan in the evening. The load is then taken to Cincinnati arriving there in the morning. During the day it is broken up into lots and distributed in the terminal for shipment that evening on its way to its destination. Bryan does not receive overnight service, but second-day service within 100 miles of Cincinnati. Outbound shipments from Bryan cannot be delivered to an area within 100 miles of Cincinnati in less than two nights and part of the next day.
Of the large number of shippers in Bryan, two appeared and testified on behalf of the applicant. These two had used Husman Express for a number of years. There were two other shippers at Bryan who had used Husman but these two did not testify.
The two shippers who did testify, according to the examiner's review, testified:
"* * * as to the need of their companies for direct overnight service to points and places throughout the state of Ohio in order to meet competition." (Emphasis added.)
The commission overruled appellant's objections and exceptions to the examiner's report as well as appellant's motion for a rehearing, and entered its final order on May 18, 1966. Mohawk perfected its appeal to this court as a matter of right.
Mr. Taylor C. Burneson, for appellant.
Mr. William B. Saxbe, attorney general, Mr. J. Philip Redick and Mr. Langdon D. Bell, for appellee Public Utilities Commission.
Messrs. George, Greek, King McMahon, Mr. Paul F. Beery and Mr. David L. Pemberton, for appellee Husman Express Company.
There appears to be a material variance between the transportation service to be rendered as stated in the application, to wit, to and from Bryan, whereas Husman limits the service to delivery, first to Cincinnati, and then to other points.
It seems further to be undisputed that shippers out of Bryan may receive overnight service out of Cincinnati but not out of Bryan, and such service is limited to places and points within 100 miles from Cincinnati.
Many practical problems may arise under the limitations imposed by Husman. For example, Toledo is approximately 67 miles from Bryan. But a Bryan shipper, in order to secure a shipment of property to Toledo, under the proposed certificate, is required to ship his property over 200 miles south to Cincinnati, where it lays over until the next day. It is then shipped north over 200 miles to Toledo when it again lays over the next day before delivery. By going a direct route from Bryan to Toledo the shipper could secure delivery in one day or "direct overnight service."
From Bryan to Cleveland is approximately 145 miles. A Bryan manufacturer, shipping to Cleveland and the industrial northeast, would certainly be loathe to see his shipment going south 200 miles, there to lay over one night, before starting for its final destination in the northeast. He would, without doubt, conclude that such a circuitous and delaying route would not be in the public interest.
It is strange that neither the examiner, in his long report, nor the commission, in its opinion, did not make any reference or mention of the requirement fixed by Husman that if the certificate should issue all outbound traffic from Bryan would be required to go south to Cincinnati, some 200 miles, before it could be shipped to its destination.
It is further strange that neither the examiner nor the commission made any reference that the overnight service would be confined to points and places within 100 miles of Cincinnati, and further that such overnight service would not be out of Bryan but would be out of Cincinnati.
Husman may have recognized that there was no public need for the requested certificate but only that it would take some dollars out of certain carriers' treasury and put them in the treasury of other carriers, as disclosed by the record in Husman's testimony as follows:
"Q. Well, now, your company has authority to transport freight from Bryan to Cincinnati zone and return, so that type of authority, if granted in this case, would be duplicative of what your company already has, would it not? A. That's right.
"* * *
"Q. * * * Now, you said the granting of this would be an advantage, economically, to your company. I assume then that you mean you would pick up a few more dollars? A. Few more dollars.
"Q. And at the same time you would be taking those dollars away from other carriers now handling the traffic, wouldn't you? A. Well, I don't — I would be taking it away from some one, of course.
"Q. That is what I mean. Somebody would lose what you gain? A. That's right." (Emphasis added.)
The commission, in its opinion, endeavors to point out deficiencies in the present authority stating:
"That existing transportation service of certificated carriers authorized to transport property from and to Bryan, Ohio, is deficient in that it does not offer to the shipping public efficient, direct, next-day service for the transportation of property, including less-than-truckload traffic, from Bryan, Ohio, to points and places in the state of Ohio, and from points and places in the state of Ohio to Bryan, Ohio." (Emphasis added.)
If there is such a deficiency, which the record fails to disclose with clarity, the proposed certificate would not, in any way, correct such deficiency. It is conceded that the proposed certificate does not offer direct service but rather under Husman's direction all traffic would be diverted south from Bryan away from any direct course to the east or northeast. Husman admits that there would be no next-day service out of Bryan but that the only next-day service would be out of Cincinnati. Consequently, it follows that the granting of the certificate would not, in any way, provide any improvement over the present method of transportation of property so far as the public interest is served.
One of the two public witnesses who testified was a Morris Snyder, traffic manager of Aro Corporation, which employs approximately 1,087 people. In discussing the distribution of the products of his company, he said, according to the review by the examiner, that:
"This distribution is primarily through jobbers who request that direct shipment be made to their customers. These customers may be located at any crossroads in the state of Ohio where a gas station exists." (Emphasis added.)
It would hardly be possible or to the public interest to provide "direct next-day service for" motor transportation to every crossroads in Ohio.
The remaining witness for the applicant testified that he "believes that his company is entitled to expect direct carrier service to most points in the state of Ohio."
Requiring that all shipments out of Bryan go directly south to the Ohio River would hardly be direct service to the north and to the east.
In the case of D.G. U. Truck Lines, Inc., et al., v. Public Utilities Commission, 158 Ohio St. 564, 573, it was stated in the opinion of Judge Matthias that:
"* * * Such convenience and necessity must be shown by evidence adduced, the burden of which is upon the applicant for such certificate."
In Mohawk Motor, Inc., v. Public Utilities Commission, 159 Ohio St. 77, at page 80, Judge Middleton stated that:
"* * * the burden of proving such public need is upon the applicant for the certificate."
A very pertinent suggestion is stated by the late Chief Justice Marshall at page 497, in the case of New York Central Rd. Co. v. Public Utilities Commission, 115 Ohio St. 493, that, when there is a showing of need, there must "* * * also be a showing of ability on the part of the applicant to supply that need adequately."
From a consideration of the entire record it appears doubtful that there is a deficiency in present transportation service. If any such deficiency can be claimed it is abundantly clear that the proposed certificate will not, in any way, correct any such deficiency but will largely duplicate service already established and in use, and, at the same time, will fail to provide overnight transportation service to and from Bryan, Ohio.
It follows that the order of the Public Utilities Commission is unreasonable and contrary to law, and such order of the commission is, therefore, reversed.
Order reversed.
TAFT, C.J., ZIMMERMAN, MATTHIAS, O'NEILL, SCHNEIDER and BROWN, JJ., concur.