Chicago & West Towns Railways, Inc. v. Illinois Commerce Commission

The Illinois Commerce Commission on July 9, 1940, after a hearing, granted a certificate of public convenience and necessity to Bluebird Coach Lines, Inc., to install and operate a motorbus-line extension between Berwyn, Cicero and Chicago, Illinois. On appeal to the circuit court of Cook county the order of the Commerce Commission was affirmed. The application of the Bluebird Coach Lines, Inc., for such certificate of public convenience and necessity was opposed by A.A. Sprague, as trustee for Chicago Rapid Transit Co., and by Chicago West Towns Railways, Inc. For convenience Bluebird Coach Lines, Inc., will be hereafter referred to as Bluebird, A.A. Sprague, trustee for Chicago Rapid Transit Co. as Rapid Transit Co., and Chicago West Towns Railways, Inc., as West Towns. The order entered by the commission restricted Bluebird from doing any local business within the city of Berwyn, or within the town of Cicero or between them, or within the city of Chicago. The Rapid Transit Co. and West Towns appeal from the order of the circuit court of Cook county.

Prior to July, 1936, Bluebird was operating as a motor carrier for transportation of passengers between the city of Joliet and Chicago over U.S. route 66, which extended from Berwyn and Cicero on Ogden avenue. It made an application with the Commerce Commission setting forth that public convenience and necessity required an extension of its existing route through Berwyn and Cicero in order that some of its busses might pass through the business sections of those cities. This proposed extension diverged from the existing route on U.S. 66, at its intersection with Harlem avenue at Ogden avenue in Berwyn and extended north on Harlem avenue to Riverside drive, thence northeasterly to Cermak road, thence east on Cermak road through Berwyn and Cicero to the junction with the existing route at Cicero avenue, and then along the existing route to the central business district of Chicago.

The appellants and other companies not appealing were named as respondents. At the time the application was filed Bluebird was restricted under an order entered by the Commerce Commission from doing any local business east of the Desplaines river, and, as Berwyn and Cicero both lie wholly east of the river, Bluebird was restricted from doing local business in either of said towns or in the city of Chicago. Cicero adjoins Chicago immediately on the west and Berwyn joins Cicero to the west. Cicero has a population of about 66,000 and Berwyn about 47,000. Ogden avenue, which is followed by Bluebird's route from Joliet, extends diagonally from southwest to northeast through Berwyn and Cicero, and thence into Chicago. During the course of the hearing Bluebird sought and obtained leave to amend its application so as to turn north at Oak Park avenue in Berwyn to reach Riverside drive instead of going north on Harlem avenue.

The Rapid Transit operates a system of elevated railways throughout Chicago and its suburbs. All of its lines lead to the central business district of Chicago, where they enter an elevated loop circling the business district. Its lines extend into the western suburbs of Chicago, and one of them runs through Cicero and Berwyn all of the way to Oak Park avenue, which lies in the westerly part of Berwyn. It has a double-track road and runs parallel to and within two hundred feet of Cermak road, so that the proposed change in the route of Bluebird will parallel Rapid Transit from Oak Park avenue at the place where Rapid Transit intersects Ogden avenue some distance east of Cicero. Rapid Transit operates through Cicero and Berwyn at surface grade and connects in said towns with eleven stations at intersecting streets a quarter of a mile apart. Twenty-four-hour service is maintained and trains are operated during heavy travel at four-minute intervals, and during midnight hours at thirty-minute intervals.

West Towns operates a system of bus lines and streetcars in the suburbs west of Chicago including Cicero and Berwyn. In these two municipalities it has east and west lines on Roosevelt road, Sixteenth street, Cermak road and Ogden avenue, with other lines extending through Berwyn and into Cicero. It also has north and south lines through Berwyn and through Cicero. The change in route proposed by Bluebird will parallel West Towns' route along Cermak road and Oak Park avenue in Berwyn to the east limits of Cicero. The different branches of West Towns have numerous connections with stations on Rapid Transit, and also the Burlington Railroad and the Chicago Surface Lines, which all run downtown into the Chicago "Loop" district. West Towns also has a bus line on Oak Park avenue, which will be paralleled by Bluebird from the place it diverges on Ogden avenue north to Riverside drive. Transfer privileges are maintained between Rapid Transit, West Towns and the Chicago, Burlington Quincy railroad.

Appellants opposed the application of Bluebird on the grounds that adequate transportation between Berwyn and Cicero on the one hand and between such towns and Chicago on the other was already being furnished over existing lines; that the proposed service of Bluebird would be in direct competition with existing services, and that public convenience and necessity did not require the proposed service, but if the commission should find that public convenience and necessity did require such service, a certificate therefor should be granted to the carriers now furnishing the existing transportation. There were other objections made to the granting of the certificate not necessary to consider at this time.

Many hearings were had and the Commerce Commission from time to time entered three orders, the first two of which were vacated and rehearings granted. In its first order the commission authorized Bluebird to operate over the extension of its routes on its trips between Joliet and Chicago, and the order provided that headways should provide for hourly service over the route as extended, commencing at Joliet. A rehearing was granted on this order. The second order authorized Bluebird to extend its operations in conjunction with or in addition to, or as an integral part of, its present operations on its trips between Joliet and Chicago over the extension of route beginning at any point west of Oak Park avenue and Ogden avenue. A rehearing was granted on this order. Its final order was entered July 9, 1940, granting a certificate to Bluebird to operate over a route commencing at the intersection of Oak Park and Ogden avenues in Berwyn, following the extension described above to a junction with the existing route, and also removed the restrictions relating to local operations east of the Desplaines river, and thereby permitted direct carriage of passengers by Bluebird between the city of Berwyn and the town of Cicero and Chicago.

In addition to the objections made that the transportation between Berwyn and Cicero on the one hand and Chicago on the other was already adequate and would be in direct competition with West Towns and Rapid Transit, West Towns, in the course of the proceeding, offered to install and operate a motorcoach service similar to that proposed by Bluebird between Berwyn and Cicero and downtown Chicago over the route proposed by Bluebird, if the commission should find public convenience and necessity required such an operation by the carrier.

Numerous findings were made by the commission, among which was that the busses of West Towns are of late type, of recent date, in good repair and operate on schedule, and that the drivers are courteous and effort is made to satisfy the comfort and ease of its patrons to the extent of its operations and ability, and that under its operating conditions the company is well managed. There are also findings that the proposed service of Bluebird was service of an express nature from the two cities in question to the central district of Chicago, without rendering local service in the towns or between the towns; that the service proposed is distinct from that rendered by West Towns and Rapid Transit in that the latter is intended to accommodate the transfer of heavy loads between points along their lines, and operate a large number of vehicles with many stops, and that their cars are designed to provide as many seats as possible with sufficient room at the same time for standing loads during rush hours; that, on the other hand, the proposed service of Bluebird is not intended for mass transportation; is a more luxurious type; that space within the operating units is sacrificed to provide comfortable seats for passengers; that its headways are not as frequent as those of appellants, its scheduled stops much fewer, and its rates of fare higher, being designed to attract those who are willing to pay higher rates for additional comfort and safety. It is then found the conditions in the metropolitan area of Chicago have changed since it was restricted from doing business east of the Desplaines river, and with the increase of population in the western surburbs, the advent of all types and classes of transportation services is made desirable. It is also found West Towns pioneered in the business of local transportation in the western surburbs of the city of Chicago, and materially helped the growth and welfare of many of the communities, and that its system is now operated at a flat rate of ten cents within a zone east of La Grange, Illinois, with extensive transfer privileges.

It will be observed the commission does not find appellants are not adequately rendering the service to the communities involved, nor is there any finding that West Towns would be unable, if the commission should so order, to render the same service in the same manner as that proposed by Bluebird. This brings forward the opposing theories with respect to the rights of the Commerce Commission to issue a certificate of convenience and necessity as between competing carriers, one of which is already in the field.

Appellants take the position that before the commission is authorized to issue a certificate of convenience and necessity to a competing carrier it must first permit or direct the existing carrier to furnish the service required by the commission. But, on the other hand, the appellee contends in the instant case that neither of the appellants nor any other utility has offered to supply this service or made showing in the form required by law that they are in fact ready, able and willing to do so, and, without directly asserting that it is the law, claim, in effect, that the day of monopoly for public utilities is a thing of the past, especially in view of the provisions of section 55 of the Public Utilities Act, which specifically provides no certificate shall be construed as granting a monopoly.

The public policy underlying the granting of certificates of convenience and necessity to a newcomer in the field of transportation as against the rights of one already in the field and rendering service was fully considered in EgyptianTransportation System, Inc. v. Louisville and Nashville RailroadCo. 321 Ill. 580, and it was there said: "To authorize an order of the Commerce Commission granting a certificate of convenience and necessity to one carrier though another is in the field it is necessary that it appear first that the existing utility is not rendering adequate service. (West Suburban Transportation Co. v.Chicago and West Towns Railway Co. 309 Ill. 87.) The method of regulation of public utilities now in force in Illinois is based on the theory of a regulated monopoly rather than competition, and before one utility is permitted to take the business of another already in the field it is but a matter of fairness and justice that it be shown that the new utility is in a position to render better service to the public than the one already in the field. * * * The power of the State to regulate a utility carries with it the power to protect such utility against indiscriminate competition, and such power should be exercised to that end."

In West Suburban Transportation Co. v. Chicago and West TownsRailway Co. 309 Ill. 87, we held that to authorize the Commerce Commission to grant a competing carrier a certificate of convenience and necessity and authorize it to operate its line to serve the public already served by an existing utility, it was required that it be shown the existing utility was not rendering adequate and convenient service and the operations of the applicant would eliminate such inadequacy and inconvenience.

In Bartonville Bus Line v. Eagle Motor Coach Line, 326 Ill. 200, we again said: "It is the policy in this State, established by legislation for the regulation of all public utilities, to provide the public with efficient service at a reasonable rate by compelling an established public utility occupying a given field to provide adequate service and at the same time protect it from ruinous competition, (Illinois Power and Light Corp. v. CommerceCom. 320 Ill. 427,) and where additional or extended service is required in the interest of the public and a utility in the field makes known its willingness and ability to furnish the required service the Commerce Commission is not justified in granting a certificate of convenience and necessity to a competing utility until the utility in the field has had an opportunity to demonstrate its ability to give the required service. EgyptianTransportation System v. Louisville and Nashville Railroad Co.321 Ill. 580."

It is also held in Illinois Power and Light Corp. v. CommerceCom. 320 Ill. 427, where the contest was between competing carriers, one of whom was already in the field, that "The Public Utilities Act provides the means for compelling appellant to provide adequate service for the public in the territory which it serves. If the company now occupying the territory is incapable of providing adequate service, then, and not until then, will a situation arise when the public convenience and necessity may require the establishment of another utility."

We know of no reason why the principles announced in the foregoing decisions should be departed from. In the present case, in the answer to the Bluebird petition, appellants questioned the authority of the Commerce Commission to grant the certificate of convenience and necessity to Bluebird, and in the course of the hearing West Towns made a specific offer to render the same service proposed to be rendered by appellee in case it should be found that public convenience and necessity required it. There are no findings made by the Commerce Commission that indicate the inability of appellants to render all of the service necessary for people of the territory which they serve, nor are there any findings that West Towns is not capable of rendering the specific service proposed to be rendered by Bluebird. The basis of the order of the commission seems to be that for a limited number of customers who might be willing to pay a higher rate of fare and obtain a slightly improved service, this would be justification for putting competition in the field without regard to the ability or willingness of the established carrier to render the same service in case it should be ordered so to do.

In our opinion the foregoing cases conclusively establish the right of appellants to have an opportunity as a regulated monopoly to render whatever service convenience and necessity may require, and it is only when it has been demonstrated that it is unable either from financial or other reasons to properly serve the public that a competing carrier will be allowed to invade the field. As the record stands the question was raised by the answer of appellants, and also by the offer of West Towns, but no evidence was taken by the commission which would justify it in granting a certificate of convenience and necessity to a competing carrier, until it has been established the utility in the field was unable to render the service. The commission should have made findings upon this proposition.

Section 68 of the Public Utilities Act (Ill. Rev. Stat. 1939, chap. 111 2/3, par. 72,) provides that on appeal to the circuit or superior court no new or additional evidence may be introduced. But the same section also provides: "If it appears the Commission failed to receive evidence properly proffered on a hearing or a rehearing, or an application therefor, the court shall remand the case to the Commission with instructions to receive the testimony so proffered and rejected, and to enter a new order based upon the evidence theretofore taken, and such new evidence as it is directed to receive, unless it shall appear that such new evidence would not be controlling, in which case the court shall so find in its order."

The petition for rehearing set up that the evidence failed to show there was not at the present time sufficient and adequate transportation facilities between Berwyn and Cicero and Chicago, and no finding that the existing transportation facilities between said communities are inadequate or insufficient; and also further, that while the order shows appellants had for many years provided the local transportation between said cities and Chicago, and pioneered the field and spent large sums of money in developing and furnishing the service, nevertheless the Commerce Commission permitted appellee to install a new and competitive service without directing appellants, or either of them, to install such service as might be required by public convenience and necessity.

Many other suggestions are made in the petition for rehearing which adequately called the attention of the Commerce Commission to appellants' contentions, which required the commission to take evidence and make findings which would justify its order in granting the certificate of convenience and necessity to appellee. Upon the showing made in the record, the Commerce Commission was without authority to issue the certificate of convenience and necessity to the Bluebird line. Before it may do so it must be established that appellants, as pioneers in the field, are unable to adequately perform the service which may be found necessary or convenient by the Commerce Commission.

There are several other important questions raised and argued by the parties, which are not now necessary to determine, and which are not determined because, if upon the taking of additional testimony it should be found the appellants can adequately perform the service rendered by appellee, they become immaterial. And if, on the other hand, it is found and determined the additional service is required by public convenience and necessity, and appellants are unable to render such service, the decision of these additional points may be unnecessary.

For the reasons indicated, the judgment is reversed and the cause remanded to the circuit court of Cook county with directions to remand the cause to the Commerce Commission, with instructions to take such additional testimony and make such additional findings as may be necessary and proper to determine the issues raised by appellants, in conformity with the views expressed herein.

Reversed and remanded, with directions.