Executive Transportation Co. v. Pennsylvania Public Utility Commission , 2016 Pa. Commw. LEXIS 187 ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Executive Transportation Co., Inc., :
:
Petitioner :
:
v. : No. 252 C.D. 2015
:
Pennsylvania Public Utility : Argued: December 9, 2015
Commission, :
:
Respondent :
BEFORE: HONORABLE DAN PELLEGRINI, President Judge1
HONORABLE BONNIE BRIGANCE LEADBETTER, Judge2
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE MARY HANNAH LEAVITT, Judge3
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION BY
JUDGE COHN JUBELIRER FILED: April 22, 2016
Executive Transportation Co., Inc., (Executive) petitions for review of the
Pennsylvania Public Utility Commission’s (PUC) January 29, 2015 Opinion and
Order denying Executive’s Petition for Reconsideration of one of two opinions and
1
This case was assigned to the opinion writer on or before December 31, 2015, when
President Judge Pellegrini assumed the status of senior judge.
2
This case was assigned to the opinion writer on or before January 31, 2016, when Judge
Leadbetter assumed the status of senior judge.
3
This case was assigned to the opinion writer before January 4, 2016, when Judge
Leavitt became President Judge.
orders issued by the PUC on December 5, 2014. The PUC, in the December 5,
2014 Opinion and Order at issue in this case, granted Rasier-PA, LLC’s (Rasier)
application at PUC Docket No. A-2014-24161274 for authorization to provide
experimental service pursuant to 52 Pa. Code § 29.3525 for passenger trips between
points in Allegheny County (Allegheny Application). Executive argues that the
PUC abused its discretion when it denied reconsideration because the PUC lacks
jurisdiction to adjudicate Rasier’s Allegheny Application since Rasier proposed to
4
Contemporaneously with this Opinion, we address at consolidated Docket Nos. 238 and
240 the PUC’s separate December 5, 2014 Opinion and Order granting Rasier statewide
authorization to provide experimental service pursuant to 52 Pa. Code § 29.352 at PUC Docket
No. A-2014-2424608 (Statewide Application). Also consolidated with those matters is No. 253
C.D. 2015, which is Executive’s appeal of the PUC’s January 29, 2015 Opinion and Order
denying reconsideration of the December 5, 2014 Opinion and Order at PUC Docket No. A-
2014-2424608.
5
The PUC’s regulation at 52 Pa. Code § 29.352 governs certification for the provision of
experimental service, and provides as follows:
In order to advance and promote the public necessity, safety and
convenience, the Commission may, upon application, grant a new certificate or an
amendment to an existing certificate in order to allow to be provided a new,
innovative or experimental type or class of common carrier service. An
application for a certificate or amendment shall state that it is an application for an
experimental service. Holders of experimental certificates shall abide by this
chapter except those which the Commission shall explicitly state do not apply.
Holders of experimental certificates shall abide by an[y] additional regulations or
requirements, including informational and reporting requirements, which the
Commission shall stipulate upon granting the certificate. A certificate for
experimental service shall be valid only until the service is abandoned, until 2
years have elapsed from the time the certificate was approved or until the
Commission enacts amendments to this chapter pertaining to the new class of
service represented by the experimental service, whichever event occurs first.
2
provide transportation service as a carrier without having custody of any vehicles.
Finding no error, we affirm. 6
Rasier filed its Allegheny Application on April 14, 2014. Executive, among
other existing taxi cab companies that provide services in the areas proposed to be
served by Rasier, filed a protest. Two PUC Administrative Law Judges (ALJs)
held combined evidentiary hearings for the Allegheny Application and for Rasier’s
application for statewide authorization (Statewide Application). The ALJs issued a
Recommended Decision on September 25, 2014 dismissing the Allegheny
Application on the basis that Rasier failed to comply with PUC Orders requiring
production of trip data and, thus, obstructed the hearings. (Recommended
Decision at 9, R.R. at 129.)
6
Executive states in its brief that it seeks review of the January 29, 2015 Opinion and
Order denying its Petition for Reconsideration of the December 5, 2014 Opinion and Order.
(Executive’s Br. at 1.) As such, the merits of the December 5, 2014 Opinion and Order are not
directly before us. As we note subsequently here, Executive challenged the PUC’s jurisdiction to
consider Rasier’s Application before the ALJs, again before the PUC on de novo review, and
again in its Petition for Reconsideration. However, the PUC’s jurisdiction is not implicated
directly by our review of the denial of reconsideration as we look simply to whether the issues
raised on reconsideration were considered previously during the review of Rasier’s Application.
The same posture was presented at No. 253 C.D. 2015. There, we nonetheless addressed
Executive’s argument that the PUC lacks authority even to consider Rasier’s Application as it
provides important guidance with regard to the experimental service provisions at 52 Pa. Code §
29.352, and the PUC fully addressed the issue in its brief. We, thus, were able to conduct
effective appellate review of this question notwithstanding Executive’s limiting its appeal to the
denial of reconsideration. Moreover, it is black letter law that issues concerning an agency's
jurisdiction are never waived and can be raised sua sponte by the court. Blackwell v. State
Ethics Commission, 567 A.2d 630, 636 (Pa. 1989). Our conclusions in No. 253 C.D. 2015 apply
with equal force here.
3
As provided by Section 335(a) of the Public Utility Code, 66 Pa. C.S. §
335(a),7 the PUC exercised de novo review of the Recommended Decision, and
subsequently issued the December 5, 2014 Opinion and Order substantially
reversing the Recommended Decision. The PUC, in the December 5, 2014
Opinion and Order authorized Rasier to provide service in Allegheny County
subject to extensive compliance and operating conditions identical to those the
PUC imposed in the companion December 5, 2014 Opinion and Order granting
Rasier statewide authorization. The PUC would issue a Certificate of Public
Convenience (CPC) allowing Rasier to operate as an experimental common carrier
in Allegheny County if Rasier filed a Compliance Plan. Rasier filed its
Compliance Plan on December 24, 2015, addressing the conditions set forth in
Appendix A of the December 5, 2014 Opinion and Order regarding driver
integrity, vehicle safety, adequate insurance, and other provisions. By Order
entered January 29, 2015, the PUC approved the Compliance Plan (Compliance
Order) and authorized Rasier to operate in accordance with the December 5, 2014
7
Section 335(a) provides in pertinent part:
When the commission does not preside at the reception of evidence, the
presiding officer shall initially decide the case, unless the commission requires,
either in specific cases or by general rule, the entire record to be certified to it for
decision. When the presiding officer makes an initial decision, that decision then
shall be approved by the commission and may become the opinion of the
commission without further proceeding within the time provided by commission
rule. On review of the initial decision, the commission has all the powers which it
would have in making the initial decision except as it may limit the issues on
notice or by rule. When the commission makes the decision in a rate
determination proceeding without having presided at the reception of the
evidence, the presiding officer shall make a recommended decision to the
commission in accordance with the provisions of this part.
66 Pa. C.S. § 335(a).
4
Opinion and Order. Executive did not appeal the Compliance Order. Executive
filed the Petition for Reconsideration on December 22, 2014, which Rasier timely
answered. In addition to entering the Compliance Order on January 29, 2015, the
PUC denied Executive’s Petition for Reconsideration on that date. Executive
subsequently filed this petition for review.8
As noted above, Executive argues that the PUC abused its discretion when it
denied reconsideration. Executive posits that the PUC lacked jurisdiction to
adjudicate Rasier’s Allegheny Application in the first instance because Rasier
proposed to provide transportation service as a carrier without having custody of
any vehicles.
In greater detail, Executive argues that custody of vehicles used to provide
service as a “common carrier”9 is a sine qua non of the Public Utility Code’s
8
In an appeal of the December 5, 2014 Opinion and Order, our review would be limited
to determining if a constitutional violation or error has occurred; if the decision is in accordance
with law; and if substantial evidence supports necessary findings of fact. PECO Energy Co. v.
Pennsylvania Public Utility Commission, 791 A.2d 1155, 1160 (Pa. 2002); 2 Pa. C.S. § 704.
Evidence is substantial when relevant and of a nature that a reasonable mind might accept as
adequate to support a conclusion. Lancaster County v. Pennsylvania Labor Relations Board, 82
A.3d 1098, 1109-10 (Pa. Cmwlth. 2013). Here, we review a denial of reconsideration for abuse
of discretion. J.A.M. Cab Company, Inc. v. Pennsylvania Public Utility Commission, 572 A.2d
1317, 1318 (Pa. Cmwlth. 1990). The PUC abuses its discretion if the denial of reconsideration
demonstrates bad faith, fraud, capricious action, or abuse of power. Columbia Gas of
Pennsylvania, Inc. v. Pennsylvania Public Utility Commission, 535 A.2d 1246, 1248 (Pa.
Cmwlth. 1988).
9
Section 102 of the Public Utility Code sets forth the following relevant definitions for
this term:
“Common carrier.” Any and all persons or corporations holding out,
offering, or undertaking, directly or indirectly, service for compensation to the
(Continued…)
5
public for the transportation of passengers or property, or both, or any class of
passengers or property, between points within this Commonwealth by, through,
over, above, or under land, water, or air, and shall include forwarders, but shall
not include contract carriers by motor vehicles, or brokers, or any bona fide
cooperative association transporting property exclusively for the members of such
association on a nonprofit basis.
“Common carrier by motor vehicle.” Any common carrier who or which
holds out or undertakes the transportation of passengers or property, or both, or
any class of passengers or property, between points within this Commonwealth by
motor vehicle for compensation, whether or not the owner or operator of such
motor vehicle, or who or which provides or furnishes any motor vehicle, with or
without driver, for transportation or for use in transportation of persons or
property as aforesaid, and shall include common carriers by rail, water, or air, and
express or forwarding public utilities insofar as such common carriers or such
public utilities are engaged in such motor vehicle operations, but does not include:
(1) A lessor under a lease given on a bona fide sale of a motor vehicle where
the lessor retains or assumes no responsibility for maintenance, supervision, or
control of the motor vehicles so sold.
(2) Transportation of school children for school purposes or to and from
school-related activities whether as participants or spectators, with their
chaperones, or between their homes and Sunday school in any motor vehicle
owned by the school district, private school or parochial school, or transportation
of school children between their homes and school or to and from school-related
activities whether as participants or spectators, with their chaperones, if the
person performing the school-related transportation has a contract for the
transportation of school children between their homes and school, with the private
or parochial school, with the school district or jointure in which the school is
located, or with a school district that is a member of a jointure in which the school
is located if the jointure has no contracts with other persons for the transportation
of students between their homes and school, and if the person maintains a copy of
all contracts in the vehicle at all times, or children between their homes and
Sunday school in any motor vehicle operated under contract with the school
district, private school or parochial school. Each school district shall adopt
regulations regarding the number of chaperones to accompany students in
connection with school-related activities.
(3) Any owner or operator of a farm transporting agricultural products from, or
farm supplies to, such farm, or any independent contractor or cooperative
(Continued…)
6
regulatory scheme for motor carrier services. Executive contends that custody and
control is the sole manner in which a CPC holder can ensure compliance with the
safety requirements, and points out that “Section 1501 of the Public Utility Code,
66 Pa. C.S. § 1501,[10] requires all public utilities to furnish and provide a certain
agricultural association hauling agricultural products or farm supplies exclusively
for one or more owners or operators of farms.
(4) Any person or corporation who or which uses, or furnishes for use, dump
trucks for the transportation of ashes, rubbish, excavated and road construction
materials. This paragraph does not include the use or furnishing of five-axle
tractor trailers.
(5) Transportation of property by the owner to himself, or to purchasers
directly from him, in vehicles owned and operated by the owner of such property
and not otherwise used in transportation of property for compensation for others.
(6) Transportation of voting machines to and from polling places by any
person or corporation for or on behalf of any political subdivision of this
Commonwealth for use in any primary, general, municipal or special election.
(7) Transportation of pulpwood, chemical wood, saw logs or veneer logs from
woodlots.
(8) Transportation by towing of wrecked or disabled motor vehicles.
(9) Any person or corporation who or which furnishes transportation for any
injured, ill or dead person.
66 Pa. C.S. § 102(emphasis added).
10
Section 1501 provides:
Every public utility shall furnish and maintain adequate, efficient, safe,
and reasonable service and facilities, and shall make all such repairs, changes,
alterations, substitutions, extensions, and improvements in or to such service and
facilities as shall be necessary or proper for the accommodation, convenience, and
safety of its patrons, employees, and the public. Such service also shall be
reasonably continuous and without unreasonable interruptions or delay. Such
service and facilities shall be in conformity with the regulations and orders of the
(Continued…)
7
quality of service and facilities and imposes affirmative duties upon them to
maintain such quality.” (Executive’s Br. at 10.) According to Executive, absent
custody or control, a CPC holder functions merely as a “broker,” someone who
facilitates transportation services with no responsibility to comply with regulatory
standards. Executive notes that the PUC “does not hold brokers responsible for the
vehicle standards of the services it brokers because it would be absurd to do so.”
(Executive’s Br. at 11.)
Thus, the PUC’s conclusion that it had jurisdiction over Rasier’s Allegheny
Application and that vehicle ownership is not required for jurisdiction is, under
Executive’s interpretation, inconsistent with Section 1501 of the Public Utility
Code and the PUC’s position on brokers. For Executive, the critical factor is
custody or control over a vehicle, not ownership. It argues that while a “common
carrier by motor [vehicle]” is not required to own or operate a vehicle, such carrier
has an “obligation[] under the [Public Utility] Code to assume custody, control and
supervision of each vehicle it operates under its [CPC.]” (Executive’s Br. at 12.)
As such, Executive maintains that the PUC erred in assuming jurisdiction to grant
commission. Subject to the provisions of this part and the regulations or orders of
the commission, every public utility may have reasonable rules and regulations
governing the conditions under which it shall be required to render service. Any
public utility service being furnished or rendered by a municipal corporation
beyond its corporate limits shall be subject to regulation and control by the
commission as to service and extensions, with the same force and in like manner
as if such service were rendered by a public utility. The commission shall have
sole and exclusive jurisdiction to promulgate rules and regulations for the
allocation of natural or artificial gas supply by a public utility.
66 Pa. C.S. § 1501.
8
the Allegheny Application because Rasier proposes to act as a “broker,”11 as
defined at 66 Pa. C.S. § 2501(b), and not a “common carrier by motor vehicle”
within the meaning of the Public Utility Code. On that basis, Executive asserts, the
PUC misapplied the law and abused its discretion when it approved Rasier’s
Allegheny Application.
The PUC argues that it denied Executive’s Reconsideration Petition because
it failed to meet the standard articulated in Duick v. Pennsylvania Gas and Water
Company, 56 Pa. PUC 553, 559 (1982). Duick requires that a reconsideration
petition identify “new and novel arguments, not previously heard, or
considerations which appear to have been overlooked or not addressed by the
Commission,” not “‘a second motion to review and reconsider, to raise the same
questions which were specifically considered and decided against them.’” Id.
(quoting Pennsylvania Railroad Co. v. Pennsylvania Public Service Commission,
179 A. 850, 854 (Pa. Super. 1935)). The PUC contends that Executive, in its
Reconsideration Petition, sought what Duick and Pennsylvania Railroad Co.
11
Section 2501(b) of the Public Utility Code defines “Broker” as:
“Broker.” Any person or corporation not included in the term “motor
carrier” and not a bona fide employee or agent of any such carrier, or group of
such carriers, who or which, as principal or agent, sells or offers for sale any
transportation by a motor carrier, or the furnishing, providing, or procuring of
facilities therefor, or negotiates for, or holds out by solicitation, advertisement, or
otherwise, as one who sells, provides, furnishes, contracts, or arranges for such
transportation, or the furnishing, providing, or procuring of facilities therefor,
other than as a motor carrier directly or jointly, or by arrangement with another
motor carrier, and who does not assume custody as a carrier.
66 Pa. C.S. § 2501(b).
9
expressly deny: a second review of questions definitively decided against
Executive.
Before we address the parties’ respective positions, a brief review of
Rasier’s proposed services is in order. In the companion case to this one, we also
discussed Rasier’s Transportation Network Company (TNC) service. Capital City
Cab Services, et al. v. Pennsylvania Public Utility Commission, __ A.3d __, __
(Pa. Cmwlth., Nos. 238, 240, 253 C.D. 2015, filed April 19, 2016), slip op. at 11
(Capital City Cab). The PUC, in its brief, describes a TNC as:
a fee-based motor carrier employing various modes of mobile digital
computing to connect passengers with prequalified drivers of
passenger vehicles. TNCs utilize electronic and social media forms of
communication, including mobile applications and web-based
reservation services, to facilitate these connections. The TNC business
model generally does not seek to own vehicles or employ drivers.
(The PUC’s Br. at 4.) Rasier is a wholly owned subsidiary of Uber Technologies,
Inc. (Uber). (Hr’g Tr., August 18, 2014 at 53, 60, S.R.R. at 5b, 12b.)12 Uber owns
the smartphone application, digital platform, and technology (App) Rasier has
licensed. Rasier uses the App to offer transportation to the public for
compensation using non-certificated drivers operating their personal vehicles.
(Hr’g Tr. at 57, 75, 77, 90, 101-02, 262-63, S.R.R. at 9b, 27b, 29b, 42b, 53b-54b,
180b-181b.) Potential customers create a user account with Uber and proffer an
acceptable form of electronic payment. (Hr’g Tr. at 55-57, S.R.R. at 7b-9b.) A
12
The hearing transcript is from the hearing on the Application held before the ALJs.
10
customer who requests a ride is paired by the App with the nearest driver available
to accept passengers. The App notifies the rider who then views a map showing
the driver’s location, the driver’s photograph, the vehicle type used by the driver,
its license plate number, and an estimated time of arrival. (Hr’g Tr. at 58, S.R.R. at
10b.) Upon arrival, the driver provides a ride as directed. The App charges the
customer electronically when the customer exits the driver’s vehicle. (Hr’g Tr. at
56, S.R.R. at 8b.)
Turning now to the parties’ arguments and the record, we see that Executive
raised the same arguments before both the ALJs and the PUC as in its Petition for
Reconsideration and its appeal here. Indeed, Executive does not argue that the
December 5, 2014 Opinion and Order granting Rasier’s Allegheny Application or
the January 29, 2015 Opinion and Order denying reconsideration failed to address
Executive’s claims. Instead, Executive reiterates the arguments made below and
does not explain why it is entitled to reconsideration under Duick.
Executive argued before the ALJs that Rasier is not a common carrier
because it did not propose to provide transportation service with its own vehicles in
the Allegheny Application, and that Rasier really sought authority to act as a
“broker” as defined at 66 Pa. C.S. § 2501. (Executive’s Br. to the ALJs at 2-3, 11-
13, R.R. at 80-81, 89-91). In the alternative, Executive argued before the ALJs
that Rasier could not be a “broker” within the meaning of that term because
Rasier’s Allegheny Application did not propose to use certificated carriers to
provide service. (Executive’s Brief to the ALJs at 3, 14-15, R.R. at 81, 92-93).
These are the same arguments made to this Court.
11
Our review of the December 5, 2014 Opinion and Order shows that the PUC
cited to those sections of Executive’s brief when the PUC rejected the argument
that Rasier was required under the Code to own vehicles in order to be a motor
carrier. (December 5, 2014 Opinion and Order at 29-31.) The PUC, in the
December 5, 2014 Opinion and Order, concluded that the definitions for
transportation public utilities stood for the contrary, i.e., that the PUC has
jurisdiction over transportation services offered to the public for compensation
independent of vehicle ownership or custody. The PUC in the December 5, 2014
Opinion and Order further concluded that Rasier’s service fell within its
jurisdiction because Rasier utilized Uber software and back office functions to
unquestionably offer and operate an “on demand” motor carrier passenger service
to the public for compensation. (December 5, 2014 Opinion and Order at 20.)
In addition, the December 5, 2014 Opinion and Order also addressed
Executive’s alternative argument regarding “broker” service and uncertificated
carriers. The PUC concluded that Rasier will not use certificated motor carriers
and, thus, cannot be a “broker” under the Public Utility Code, and also concluded
that 52 Pa. Code § 29.352 allows flexibility to authorize on a trial basis new motor
carrier service that is not an exact definitional fit in order to determine if such
service is beneficial to the public. (December 5, 2014 Opinion and Order at 21.)
On that basis, the PUC determined that it was appropriate to consider Rasier’s
TNC service as a common carrier under the experimental service regulation
because Rasier is not a broker and because Rasier proposes to provide
transportation service to the public for compensation. (December 5, 2014 Opinion
and Order at 20.)
12
In Executive’s Petition for Reconsideration, it asserts the same argument
regarding Rasier acting, not as a motor carrier, but rather as a broker without using
certificated motor carriers. (Petition for Reconsideration at 5-7, R.R. at 232-34).
The PUC in the January 29, 2015 Order denying Reconsideration declined to
reconsider whether Rasier was a broker absent any new basis for doing so.
(January 29, 2015 Order at 21.) After further review, we conclude that the PUC
did not err or abuse its discretion when it denied Executive’s Petition for
Reconsideration. J.A.M. Cab Company, Inc. v. Pennsylvania Public Utility
Commission, 572 A.2d 1317, 1318 (Pa. Cmwlth. 1990); Pennsylvania Railroad Co,
179 A. at 854; Duick, 56 Pa. PUC at 559.
As noted above, Executive seeks review only of the PUC’s denial of its
Petition for Reconsideration. Thus, we are not called upon to review the merits of
the December 5, 2014 Opinion and Order granting Rasier’s Allegheny Application.
As such, we will not address here whether that decision is in accordance with law
or supported by substantial evidence. However, we note that we performed that
analysis in Capital City Cab, wherein we addressed the merits of the December 5,
2014 Opinion and Order granting Rasier’s Statewide Application and affirmed the
PUC’s determination. Capital City Cab, __ A.3d at __, slip op. at 13-21. The
record in that matter was made in conjunction with the PUC’s consideration of the
Allegheny Application, and many of the same participants made the same
arguments and relied on the same witnesses and evidence. We would, thus, have
concluded that the PUC, likewise, did not err here.
13
For these reasons, the January 29, 2015 Opinion and Order denying
Executive’s Petition for Reconsideration is affirmed.
________________________________
RENÉE COHN JUBELIRER, Judge
President Judge Pellegrini concurs in result only.
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Executive Transportation Co., Inc., :
:
Petitioner :
:
v. : No. 252 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
ORDER
NOW, this 22nd day of April, 2016, the January 29, 2015 Opinion and Order
of the Pennsylvania Public Utility Commission denying Executive Transportation
Co., Inc.’s Petition for Reconsideration is affirmed.
________________________________
RENÉE COHN JUBELIRER, Judge