Lake Transport, Inc. v. Railroad Commission of Texas ( 1974 )

STEAKLEY, Justice.

The question here is whether Petitioner, Lake Transport, Inc., the holder of an inactive contract carrier permit, had standing to appeal an order of the Railroad Commission of Texas granting Coastal Transport Company, Inc., a certificate of public convenience and necessity as a specialized motor carrier. The courts below have held that it did not. We agree and affirm.

The circumstances posing the question are reviewed in detail in the opinion of the Court of Civil Appeals, 497 S.W.2d 329, and will be repeated only as necessary.

Lake’s contract carrier permit was issued by the Railroad Commission in 1964; pursuant to the supporting contract, the permit authorized the transportation of plaster and gypsum products for United States Gypsum Company from its facilities at Galena Park, Texas, to Texas points within a 400 mile radius. United States Gypsum Company cancelled its contract with Lake, effective November 12, 1970, pursuant to the contractual provisions for termination; the right of such cancellation is not questioned. Indeed, Lake had the same contractual right of cancellation and cannot be required by the Commission to continue to serve its contracting shipper, or any other.

Since the contract cancellation, Lake has not rendered any motor carrier service and may not resume doing so except and unless the contract is renewed, or unless Lake enters into a contract with another shipper and its permit is amended to authorize service for such shipper.

The order of the Railroad Commission which Lake seeks to set aside by invoking the appeal provisions of Art. 911b,¹ later noted, authorized an amendment of the existing specialized motor carrier certificate of Coastal Transport Company, Inc., so as to authorize the transportation of gypsum products “from the plant site of United States Gypsum Company at Galena Park, Texas, to all points in Texas,” subject to certain restrictions not here pertinent. A specialized motor carrier is a common carrier rendering a specialized service as authorized by Art. 911b, the Texas Motor Carrier Act. See, Alamo Express, Inc. v. Railroad Commission, 407 S.W.2d 479 (Tex.1966). As such, the carrier is under the common carrier obligation of serving the general public in the manner authorized by the certificate issued by the Commission.

Lake in this suit sought to invoke the appeal provisions of Sec. 20 of Art. 91 lb which provide, as pertinent here:

Sec. 20. 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 person, association, corporation, or 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, or to either or all of them in the District Court in Travis County, Texas, against said Commission as defendant. ... 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 is added)

Rule 10 of the Rules of Practice and Procedure for the Transportation Division of the Railroad Commission states:

Any party in interest may appear in any proceeding before the Transportation Division. All appearances shall be subject to a motion to strike upon a showing that the party has no justiciable or administratively cognizable interest in the proceeding. As applied to proceedings under Article 911a and 911b of the Revised Civil Statutes of 1925 involying operating authority, a party in interest is any carrier operating over a route within that territory or serving any point proposed to be served by any applicant, and transporting any of the same class or classes of commodities or persons proposed to be transported by the applicant.

The current status of Lake Transport, Inc. was noted as follows in the report and recommended order of the examiner which was adopted and made a part of the order of the Commission granting the application of Coastal Transport Company, Inc.:

As the applicant points out in its brief, a contract carrier has no statutory obligation, apart from its contract, to provide service to a contracting shipper. Likewise, the Commission has no statutory authority to require a contract carrier to serve its supporting shipper or shippers. It follows that as a general proposition the Commission should not require a contracting shipper to utilize a particular contract carrier. The contract carrier permit issued to Lake only authorizes service under a continuing contract with USG. The Commission cannot dictate the terms of the contract between Lake and USG, or for that matter, force the parties to enter into a contract. There now exists no contract between the parties, and at least with respect to USG, no intention to again enter into a contract with Lake. It is therefore the Examiner’s opinion that in the absence of such contract, Lake is not properly authorized to serve USG, and hence, is not an ‘existing carrier’ within the meaning of Article 911b.

The trial court sustained Coastal’s plea in abatement to Lake’s suit, on the ground that Lake had no justiciable interest and was without standing to seek judicial review of the order of the Railroad Commission granting Coastal’s specialized motor carrier certificate. As noted, this action was affirmed by the intermediate court. It held that Lake was not a motor carrier at interest with any statutory or constitutional right to appear and protest Coastal’s application, or to appeal under Section 20 of Art. 911b. Particular emphasis was given to the undisputed fact that Lake was neither operating over any route or serving any point, nor transporting any commodities as a contract carrier at any of the times material to the application of Coastal.

In Groendyke Transport, Inc. v. Railroad Commission, 426 S.W.2d 645 (Tex. Civ.App.1968, writ ref’d n. r. e.), this statement of the rule from 2 Am.Jur.2d, Administrative Law, Sec. 559, was quoted with approval:

Where judicial review of. administrative action is provided in the statute under which the administrative action is taken, the right of appeal to the courts is to be determined by looking at the statute, the valid regulations promulgated pursuant to it, and proven administrative practice throwing light upon their meaning.

It was also recognized in Groendyke that Rule 10 of the Commission (formerly Rule 30), has been in effect in substantially the same form since 1946 and has consistently been enforecd to disallow appearances by protesting specialized motor carriers who held no permanent certificated authority to perform any of the services proposed to be performed by an applicant.

Sec. 1(h) of Article 911b defines a “contract carrier” as a motor carrier transporting property for compensation or hire over any highway in this State “other than as a common carrier.” Sec. 6(a) of Art. 911b says that a permit to operate as such shall not be issued unless the character of the proposed motor carrier operation strictly conforms with the definition of a contract carrier. Sec. 6-bb of Art. 911b not only prohibits the granting of a contract carrier permit to any person operating as a common carrier, but also prohibits the granting of a common carrier certificate to any person operating as a contract carrier. Under these statutory provisions the contract carrier is but a regulated private carrier who does not, may not, and cannot be required to serve the shipping public, or even to continue to serve a contracting shipper. It has been held that the state cannot constitutionally impose upon a private carrier the duties and obligations of a common carrier. Frost Trucking Co. v. R. R. Commission, 271 U.S. 583, 46 S.Ct. 605, 70 L. Ed. 1101 (1926). And later, in Stephenson v. Binford, 287 U.S. 251, 53 S.Ct. 181, 77 L.Ed. 288 (1932), the court spoke as follows concerning the contract carrier permit requirement of Art. 911b:

On the contrary, the Texas statute in respect of permits deals exclusively with the private contract carrier, and requires the issue of the permit not to him in the imposed character of a common carrier, but in his actual character as a private contract carrier.

See, also Victory Truck Line v. Red Arrow Freight Lines, 186 S.W.2d 98 (Tex. Civ.App.1945, writ ref’d, w. o. m.).

The underlying concept of common carriage is that of a transportation service bound to respond to the needs of the shipping public without discrimination or difference between shippers. The Railroad Commission of Texas, the statutory agency charged with regulating motor carriers using the public highways, decides whether the public convenience and necessity requires a proposed common carrier service. In doing so, consideration must be given to the competitive effect upon presently operating carriers in the area and their continued ability to render effective public service. Railroad Commission v. Jackson, 157 Tex. 32, 299 S.W.2d 266 (1957). Accordingly, motor carriers performing an authorized existing service with which the proposed service will be competitive have the statutory right to appear and protest the granting of a new service on the ground that their service, and that of other existing carriers, is adequate, and hence the proposed service is not required by the public convenience and necessity. A carrier in this position also has a statutory right of appeal to the courts from an adverse order of the Commission. Sec. 20 of Art. 911b, supra. This concept, that interested parties in a proceeding involving motor carrier operating rights are “carriers (that) operate over the routes and serve the points” in question, was recognized by this Court in Brown Express, Inc. v. Railroad Commission, 415 S.W.2d 394 (Tex. 1967), citing Railroad Commission of Texas v. Red Arrow Freight Lines, 96 S.W.2d 735 (Tex.Civ.App.1936, writ ref’d). Necessarily, the right of appeal provided by the statute presupposes that an appealing carrier is authorized to perform, and is performing, the character of service authorized by the Commission; thus the appealing carrier is in a position to show not only that the new service will impair its existing service by the loss of sustaining revenues, but also by reason of the availability of the existing services, there is not a public need for the newly authorized service.

It is manifest that the holder of an inactive contract carrier permit such as Lake cannot make this showing. It is of no significance in this respect that it is the policy of the Commission not to subject such a permit to cancellation. The salient fact is that Lake is not performing an existing service and may never do so again. Lake is not a common carrier and, as stated, is under no duty or responsibility as such. It cannot show any impairment of its service. To say that Lake has a statutory right of appeal under such circumstances would be to say that it has the right to defeat a service which it is not rendering, and even to the limited extent of its permit, a service which it may possibly never render again; and this notwithstanding the common carrier service in question has been found by the Commission to be required by the public convenience and necessity. In our view, such an anomaly was not intended by the Legislature and is precluded by the requirement in Section 20 of Article 911b that an appealing party must be a party at interest and one in the position to show that the order under attack is unreasonable and unjust as to its existing service. Cf. our writing in Oil Field Haulers Ass’n. v. Railroad Commission, 381 S.W.2d 183, 195 (Tex.1964), with respect to the burden of an appealing party under the identically stated requirements of Art. 6453. And see City of Jefferson v. Railroad Commission, 453 S.W.2d 906 (Tex. Civ.App.1970, writ ref’d, n. r. e.).

The judgments below are affirmed.

Dissenting opinion by POPE, J., joined by WALKER and JOHNSON, JJ.

1 . Reference is to Vernon’s Tex.Rev.Civ.Stat.Ann.