DocketNumber： No. WD 32885
Citation Numbers： 658 S.W.2d 448, 1983 Mo. App. LEXIS 3638
Judges： Gler, Kennedy, Lowen, Manford, Pritchard, Shan, Shangler, Somerville, Stein, Wasserstrom
Filed Date： 3/29/1983
Status： Precedential
Modified Date： 11/14/2024
dissents.
Gulf Transport Company applied to the Public Service Commission for authority to transport passengers and equipage in intrastate charter service from points in St. Louis, St. Charles and Jefferson Counties to all points in Missouri, and return, over irregular routes. Gulf is a foreign corporation engaged as a regular route common carrier throughout six states. In addition, Gulf has regular authority in Missouri for a one mile route from the Greyhound Bus Terminal in St. Louis to the Mississippi River Bridge where its Illinois route commences. Gulf also holds interstate authority for charter service from St. Louis and its commercial zone, but no intrastate authority in Missouri. Gulf also operates extensively between St. Louis and other points within eastern Missouri interrupted by travel through Illinois and operates de facto from St. Louis to Kansas City by the deposit of the passengers in Kansas City, Kansas, and so imparts to these movements the aspect of interstate commerce.
The protestants to the Gulf application— Mid-American Coaches, Inc., Greyhound Lines, Inc., Continental Trailways, Inc., Midwest Buslines, Inc., American Buslines, Inc., V-K Bus Lines, Inc. and Vandalia Bus Lines, Inc. — are all motor carriers authorized for both regular route and charter operations within Missouri. The certificates of each of the carriers restrict service between points on the route of another regular route common carrier, or between points on the routes of two or more other regular route common carriers where through or joint service has been authorized under § 390.-051.7, RSMo 1978.
There was evidence, and the Commission found, that Gulf used modern highway buses operated by competent and courteous employees, was financially sound, and in all respects qualified to perform the proposed service. The witnesses in support of the application, the Commission noticed, prefer Gulf services because — among other reasons — that carrier furnishes travel and route attractions information other competitors do not. There was evidence also, and the Commission found — as a fact of general concurrence — that charter operations are more profitable than regular route operations. The Commission found also that virtually no patron was unable to secure charter service through existent carriers in the St. Louis area already authorized for that service and, cognately, that the unused capacity of those carriers was ample to accommodate any additional charter demand.
In accordance with determinations that charter operations are more profitable than regular route operations and so enable the protestant carriers to sustain service on unprofitable regular routes, the Commission concluded that these economic factors dictated that existent regular carriers be allowed access to any additional charter carriage in preference to a new competitor. In the Commission terminology: “[T]he potential for harm to existing carriers, by the creation of the proposed service, more than outweighs any enhancement of existing service for the traveling public.” That ground of decision, as the agency report and order acknowledges, implements a developed Commission policy to grant charter rights only as an incident of regular route authority unless regular route carriers manifestly are unable to perform the required charter service.
The conclusions of the report and order explicate these grounds of decision in terms of the statutory authority granted by the legislature to the Commission to determine applications for motor carrier certificates:
“In considering applications for motor carrier authority, such as herein involved, the Commission must follow the mandate of Section 390.051, RSMo 1978, which states in part;
“ ‘4. If the Commission shall find from the evidence that public convenience and necessity will be promoted, or that there is public need for the creation of the service proposed, or any part thereof, and that the applicant is qualified properly to perform the service proposed and to conform to the provisions of Sections 390.011 to 390.-176 and the requirements, rules and regulations of the Commission established thereunder, a certificate therefor shall be issued.
‘5. In determining whether a certificate should be issued, the commission shall give reasonable consideration to the transportation service being furnished by any common carrier by rail or motor vehicle and the effect which the proposed transportation service may have upon such carriers ....’ [emphasis added]
“Since the applicant has been unable to demonstrate any inability, by the existing carriers, to perform requested service, no public need for the creation of the proposed service has been established. In the Commission’s opinion, public convenience will not be promoted when the support for new service amounts to mere preference. When the evidence establishes that existing carriers, with unutilized capacity, are conducting some operations at a loss, new service should not be created due to the likelihood that diversion of any amount of traffic will further erode unfavorable economic positions of those carriers.
“The policy of this Commission, in implementing motor carrier regulation, is to perserve, [sic] to the maximum extent possible, the complete transportation system for the entire state, not for a particular area. In furtherance of that goal, the Commission has consistently linked charter operations to regular route authorities. This practice is pursued, even to the extent of cancellation of charter rights from points where regular route carriers terminate operations. This policy is in recognition of the frequent losses resulting from regular route operations, which must be subsidized by the more profitable charter carriage. In the Commission’s opinion, it would be an abuse of its discretion to permit the Applicant to subsidize its unprofitable regular route operations in other states by engaging in charter operations in the State of Missouri.” [emphasis added]
The majority opinion remands the agency order, as I understand, on grounds that (1) the Public Service Commission was without authority to rest decision on the premise or to formulate a policy on the principle that charter authority issue only as an incident
For these reasons I dissent.
To come to decision the majority [all without analysis] deprecates the role of the Commission as a policy-maker, denies the agency scope beyond the power the exact words of the statute confers, and then disapprove the Commission order for a standard of decision never employed. The policy premise the Commission applied to the Gulf application [to the extent that consideration prompted the order] was declared by the Commission without equivocation in the preface to the report and order:
“The Commission reiterates its policy of generally authorizing charter rights in conjunction with regular route operations in the absence of a clear showing that regular route carriers cannot perform all requested charter service, [emphasis added]
Then, after recapitulation of the evidence and determination of the facts found: that Gulf and the other carrier witnesses acknowledge that charter operations are more profitable than regular route operations, that the protestant regular route carriers Trailways, Mid-American, Vandalia and others operate at a loss and depend on the charter profits to sustain the total transport operation, that Gulf is not certificated for regular route carriage in Missouri and so cannot be required to service unprofitable regular routes within the state, that there was “virtually no incident where any person has been unable to secure charter service by utilizing the existing authorized carriers in the St. Louis area,’’ but that “the existing carriers generally have unutilized capacity which can be used to handle additional charter work ” — the Commission gave opinion that “it would be an abuse of discretion to permit the Applicant [Gulf] to subsidize its unprofitable regular route operations in other states by engaging in charter operations in the State of Missouri.” The Commission then noted that to grant the Gulf application for charter operations only, a grant to Gulf would require the Commission to grant applications by the regular route carriers [who depend upon the charter subsidy] to abandon unprofitable routes — an alternative contrary to the public interest. The Commission then reiterated the policy premise of that ground of denial of the application:
“This, we are unwilling to do, and reiterate our policy of generally authorizing charter rights in conjunction with regular route operations in the absence of a clear showing that regular route carriers cannot perform all the requested charter service." [emphasis added]
The majority opinion, however unwittingly, misstates the Commission policy rationale and so misdirects the judicial review. The opinion poses not the Commission standard, but a truncated account, and reiterates the misconception throughout its exposition:
The opinion thus begins the expoundment at 452:
“The reading of the findings of fact and conclusions of law entered by the P.S.C. in the instant case reveals that the ‘policy’ of not granting irregular route authority where an applicant holds no regular route authority was a decisive factor in the denial of relator’s application.”
The opinion continues at 453:
“The result of the foregoing declaration of ‘policy’ by the P.S.C. is that entry into*465 intrastate irregular route markets is contingent upon the provision of intrastate regular route service by an applicant before operating authority will be granted.
These recapitulations neglect the condition precedent the Commission imposes for the application of the policy: that regular route carriers cannot perform all the requested charter service. That condition precedent, as the dissent shows, was proven by the evidence and found by the Commission as an adjudicated fact. That distinction is critical because if [as the majority say in dictum] the policy was ineffective as a promulgation of rule for failure to comply with the procedures of § 536.021, RSMo 1978 [Administrative Procedure Act], then the adjudication as a fact that the existent regular carriers are able to perform any request for charter service is substantial evidence to sustain the Commission order to deny the nonregular route carrier Gulf application for a charter certificate — as long as, of course, that the Commission exercise is otherwise enabled by statute.
Whatever may prompt the majority cavil at the Commission, an administrative agency can and does make policy.
The Public Service Commission is constituted an administrative agency of the General Assembly entrusted to supervise the operation of common carriers and public utilities. § 386.260; State ex rel. Chicago, B.I. & P.R. Co. v. Public Service Commission, 312 S.W.2d 791, 796[1, 2] (Mo. banc 1958). In the course of function the Commission exercises mingled governmental powers. When the Commission fixes rates or otherwise promulgates for prospective effect a standard addressed to the public or regulated industry generally, it acts like a lawmaker, and so exercises quasi-legislative power. Missouri Southern R. Co. v. Public Service Commission, 279 Mo. 484, 214 S.W. 379, 380[1] (1919). When the Commission determines facts from disparate evidence and applies the law to come to decision in a particular controversy, it acts as an adjudicator, and so exercises quasi-judicial power. State Tax Commission v. Administrative Hearing Commission, 641 S.W.2d 69, 75[10, 11] (Mo. banc 1982); National Labor Relations Board v. Wyman-Gordon Company, 394 U.S. 759, 770, 89 S.Ct. 1426, 1432, 22 L.Ed.2d 709 (1969); R. Shewmaker, Procedure Before, and Review of Decisions of,
An administrative body makes policy in either role, but the persons affected and bound depends upon which function, the quasi-legislative or quasi-judicial, the agency exercises to make the formulation. When the Commission declares a new policy of general application and future effect to implement a statutory standard, it makes law as does a legislature — but only if done by the rule-making method prescribed by § 536.021 of the Administrative Procedure Act.
The adjudication of an administrative agency also makes policy, if only as a precedent. “ ‘Adjudicated cases may and do ... serve as vehicles for the formulation of agency policies, which are applied as announced therein’ and ... such cases ‘generally provide a guide to action that the agency may be expected to take in future cases.’ ” N.L.R.B. v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S. 267, 294, 94 S.Ct. 1757, 1771, 40 L.Ed.2d 134 (1974). Or, the adjudication of an agency may represent an emergent policy, still too tentative for promulgation as a formal rule under the statutory procedure.
The majority say at 454 that the failure by the Commission to comply with the § 536.021 procedures prevents the Commission statement of a “regular route policy ‘preference’” from validity as a rule, but even that observance could not “resuscitate the Commission’s ‘policy’ where no statutory authority provides for the discretionary exercise of such a ‘preference’ ”
I agree that the Commission could not— and did not — promulgate a rule by the adjudicated order. That is, whatever the terminology of the report and order, the Commission was without power — by an adjudication — to formulate a “statement of general applicability that implements, interprets or prescribes law or policy” [emphasis added] — the § 536.010 definition of rule. That may be accomplished only by the notice, publication and public comment method prescribed by § 536.021. A promulgation of a policy of general applicability is a legislative function and outside the competence of a court or a quasi-court. A court or quasi-court is competent, however, to adjudicate a particular controversy into a precedent — and to that extent make policy. Therefore, I agree that the declaration by the Commission in the preamble and then in the body of the report and order of “a policy of generally authorizing charter rights in conjunction with regular route operations in the absence of a clear showing that regular route carriers cannot perform all requested charter service” is not a valid rule, has no lawful effect as a policy of general applicability and cannot bind the regulated public prospectively with the force of law.
J do not agree, however, that the Commission may not consider as a factor relevant to adjudication [and hence as a guide to action the agency may be expected to take in the future] that as a general principle, to ensure the integrity of a statewide transportation system which depends upon profitable charter operations to sustain unprofitable regular route operations, the Commission will authorize a charter right in conjunction with an existent regular route — in the absence of a demonstrable inability of regular carriers to perform all the requested charter service. Such an adjudication determines only the particular facts presented, affects only the parties before the agency [except as a precedent, an emergent policy], and operates retrospectively — all legitimate incidents of a quasi-judicial administrative exercise. The order adjudicated in terms of such a consideration avoids effect as a statement of policy of general applicability and prospective operation valid only when promulgated through the rulemaking procedure — an incident of the quasi-legislative administrative exercise. Securities and Exchange Commission v. Chenery Corp., 332 U.S. 194, 201, 67 S.Ct. 1575, 1760, 1579, 91 L.Ed. 1995 (1947); Young Plumbing and Heating Company v. Iowa Natural Resources Council, 276 N.W.2d 377, 383[9] (Iowa 1979).
The report and order of the Commission, then, bears review for validity as any other such decision: that it rest on competent and substantial evidence, is lawful and otherwise reasonable — and. cognately, that the adjudication be an exercise of power legitimately conferred by statute. State ex rel. Utility Consumers Council of Missouri, Inc. v. Public Service Commission, 585 S.W.2d 41, 47[1—3] (Mo. banc 1979); State ex rel. Kansas City Transit, Inc. v. Public Service Commission, 406 S.W.2d 5, 8[3] (Mo. banc 1966); State ex rel. Rice v. Public Service Commission, 359 Mo. 109, 220 S.W.2d 61, 64[2, 3] (banc 1949).
The majority intimate that no statute in express terms confers upon the Commission authority to consider an application for a charter route only as an incident of a regular route [where the regular carrier can fully service the charter business] and so the order to deny [Gulf] application on such
“The kind of government we have compels delegation. The problems of policy, even of major policy, are so extensive that [the legislators] could not conceivably decide them or even write meaningful standards to guide their determination. That is why delegation is inevitable.”
It is the function of the agency to fill the interstices of the statutes of enablement by adjudication or promulgation or rules and to evolve standards for that exercise consonant with the broader policy the legislation directs. “The power of an administrative agency to administer a [legislatively] created and funded program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by [the legislature].” Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270 (1974). Thus, in addition to “positive powers expressly conferred upon the commission it is also vested with all others necessary and proper to carry out fully and effectively the duties delegated to it.” State ex rel. Public Service Commission v. Padberg, 346 Mo. 1133, 145 S.W.2d 150, 151[3] (banc 1940); State ex rel. Kansas City Transit, Inc. v. Public Service Commission, 406 S.W.2d 5, 8[3,4] (Mo. banc 1966). The very terms of delegation endow a power which transcends the literal text and confers upon the Public Service Commission [§ 386.040]: “also all those powers necessary or proper to enable it to carry out fully and effectually all the purposes of this chapter [The Public Service Commission Law].” In actual effect, then, the statute itself expressly commits a large area of discretion to the Public Service Commission and so “many of its decisions necessarily rest largely in the exercise of a sound judgment.” State ex rel. Dyer v. Public Service Commission, 341 S.W.2d 795, 802[8] (Mo.1960).
Thus, to respond to the majority, of course there is no statute which expressly authorizes the standard the Commission applies to come to adjudication against the application of the nonregular route carrier Gulf, nor in any practical sense, could there be. The Gulf application confronts the public policy declared in § 390.051 that a certificate issues to a motor common carrier only by the Commission determination that “public convenience and necessity will be promoted, or that there is public need” for the proposed service and upon “reasonable consideration to ... the effect which the proposed transportation service may have upon [existent] carriers.” That determination is left to the Commission expertise, as informed by a staff current with the technological and economic realities of the industry, and then applied to a set of facts found to carry out the governmental objectives of these statutes. State ex rel. Chicago, R.I. & P.R. Co. v. Public Service Commission, 312 S.W.2d 791, 796[1,2] (Mo. banc 1958).
The Commission found as facts that charter service is more profitable than regular route service, that the protestant carriers operate regular routes within the state at loss and are sustained by the profitable charter operations,
The majority do not inpugn the determination of facts — that the facts do not rest on competent and substantial evidence— but, rather, are uneasy that the adjudication may portend policy. Thus, the majority concludes for itself at 454 “[i]f the instant ‘policy’ is permitted to stand, the effect would be to bar the entry of new competitors into intrastate charter bus markets in our state” — again and again praise the salubriousness of competition, disparage the Commission order as heedless of other alternatives — such as tariff adjustments rather than rejection of the Gulf competition — to accomplish the public interest, and then concludes, as a matter of law at 457, “[t]hus, we hold that the failure to consider the potential desirability of competition is enough to compel reversal of a P.S.C. decision under § 390.051.”
That ground of opinion both misreads the imperative of the statute and is otherwise an incursion by the court into the discretion and fact-finder function reserved by the law to the Commission.
Neither § 390.051 nor the decided cases ascribe to competition the primacy the majority discerns. The statutes treat the entry of competition to meet the public need and the effect of the competition proposed by the application upon existent carriers as correlatives — firsts among equals — but both subordinate to the public interest.
That the Commission weighed the benefits the new competition of the Gulf application augured against the damage to the incumbent carriers such an entry would inflict to come to a balance in favor of the statewise public interest to deny the Gulf request is evident from the report and order. The Commission noted that Gulf operates modern buses, employs competent personnel, and is experienced in the charter service field. It maintains a charter sales office in St. Louis, an amenity duplicated by only one of the protestant carriers [who are available by toll-free or local telephone number], furnishes complete travel information [restaurants, menus, attractions along the route, etc.], and charges less than do some of the protestant carriers. The Commission found that “[generally speaking, all of the individuals supporting the application seek the service of Gulf because of the additional information that can be obtained about attractions in route and the prices charged. Most of the witnesses appeared unfamiliar that the travel agencies perform that service at no additional compensation since they are paid on a commission basis from the proceeds of any fares, admissions or charges arranged.”
The Commission also found, on the other hand, that — with minor exception — the charter service given by the existent carriers has been consistently satisfactory. The Commission found also: “The evidence in this matter establishes virtually no incident where any person has been unable to secure charter service by utilizing the existing authorized carriers in the St. Louis area. In addition, it appears from the evidence that the existing carriers generally have unuti-lized capacity which can be used to handle additional charter work.” Onto the scale the Commission then cast these considerations of weight: [From the report and order] — “The evidence in this matter establishes that a number of the carriers operating in Missouri are operating at a loss on their regular routes and some carriers even at a loss overall.” [From the conclusions]— “[T]he frequent losses resulting from regular route operations . . . must be subsidized by more profitable charter carriage.” [From the conceded evidence] — That Gulf operated no regular route in Missouri and sustained no loss from an imposed obligation of service to subsidize. The Commission then struck this balance in the public interest: [From the report and order] — “In the Commission’s opinion the potential for harm to existing carriers, by the creation of the proposed service, more than outweighs any enhancement of existing service for the traveling public.”
The majority say, nevertheless, that the Commission neglected to consider other alternatives [such as tariff adjustments] to protect the incumbent carriers from undue loss so as to allow the public the benefit of the Gulf new competition and at the same time preserve the economic health of the protestants — so that the order to deny the Gulf application, if for no other reason, was valid neither as an adjudication nor as an emergent policy. In the language of the majority at 455:
*471 [T]he issue herein ... is whether the cross-subsidy policy of the P.S.C. is a permissible means of realizing its statutory obligation. If the position of the respondents were upheld and this court were to approve a policy of protectionism as necessary to guarantee adequate regular route revenues, we would be ignoring the comprehensive rate-making authority of the Commission under § 390.041, RSMo 1978. Even if we were to assume the present regular route tariffs are insufficient, the Commission can review such tariffs and act accordingly. This is a much more precise and far less intrusive approach than that of barring entry of other irregular route operators on the premise that regular route authority is a prerequisite to the grant of a charter bus operating certificate.
That synopsis of the Commission adjudication is mistaken as a matter of fact and the power of a court to deal with it on the grounds asserted is mistaken as a matter of law.
That lapse of fact apart, the opinion disconcerts the more because of its heedless incursion into the administrative prerogatives of the Public Service Commission. The majority recite a primer of maxims as to the acceptable scope of judicial review but then simply do as they will. Thus, the majority advises the Commission not only that “the Commission can review such tariffs and act accordingly” [in order to offset any loss from the Gulf competition], but also expresses that preference as a means to determine whether the public interest is served by a certificate to Gulf: “This is a much more precise and far less intrusive approach than that of barring entry of other irregular route operators on the premise that regular route authority is a prerequisite to the grant of a charter bus operating certificate.” That is an exercise not open to a court. The legislature has entrusted that aspect of the common carrier regulation to the Public Service Commission, and not to a court [State ex rel. Chicago, R.I. & P.R. Co. v. Public Service Commission, 312 S.W.2d 791 (Mo. banc 1958) l.c. 796[1,2]:
*472 The public service commission is essentially an agency of the Legislature and its powers are referable to the police power of the state. It ⅛ a fact-finding body, exclusively entrusted and charged by the Legislature to deal with and determine the specialized problems arising out of the operation of public utilities. It has a staff of technical and professional experts to aid it in the accomplishment of its statutory powers. Its supervision of the public utilities of this state is a continuing one and its orders and directives with regard to any phase of the operation of any utility are always subject to change to meet changing conditions, as the commission in its discretion, may deem to be in the public interest. Courts of review perform no such function. They do not examine the record under review for the purpose of determining what order they would have made. As long as the commission acts in accord with due process of law and its findings and decisions do not run afoul of constitutional and statutory requirements and the inherent powers of the courts, it is engaged in an exercise of the police power of the state, with which it is not the province of the courts to interfere, [emphasis added]
In that exercise of delegated authority, the Commission acts in the public interest, and not in the interest of any nascent competitor carrier or existent carrier, but applies an expertise — in continuous evolvement — to ensure as efficient a transportation system for the entire state as circumstances allow. Union Electric Company v. City of Crestwood, 499 S.W.2d 480, 482[1] (Mo.1973); State ex rel. National Trailor Convoy, Inc. v. Public Service Commission, 488 S.W.2d 942, 945[4] (Mo.App.1972).
Thus, whether the Commission in the consideration of an application for a route certificate shall accomplish the entrusted task to promote an efficient statewide transportation system — and hence the public interest by a tariff allowance [an alternative rejected by the commission], or by curtailment of service on a particular nonprofitable route [an alternative used], or by an abandonment of that route altogether [an alternative rejected], or by refusal to allow nonregular carrier a certificate for charter operation while existent carriers remain with capacity to fully perform that service involves complicated questions of technical fact and legislative value beyond the competency of a court to assess in the first instance. To fashion a consistent standard on this balance of considerations, the Commission allows even a regular carrier charter authority only as an incident of the regular route — or between points on the routes of two or more regular route carriers where the through or joint service has been authorized.
The majority set aside the Commission order on grounds that the emergent policy of the adjudication has no statutory support and, incidentally, that the neglect by the Commission to accord the need for competition primacy as a consideration in the determination of the public interest amounts to an abuse of discretion. The dissent demonstrates that the adjudication is supported by competent and substantial evidence, and so is valid on its own terms, and as a valid precedent suffices as a basis for a policy which augurs that like evidence will result in a like adjudication. The dissent demonstrates also that in fact the Commission assessed the need for new competition along with the other considerations — which is all the law requires — and came to a balance of the public interest. The majority would have come to a different conclusion. That is not enough, however, to nullify an order of the Commission which otherwise rests on competent and substantial evidence, is reasonable, and otherwise authorized by law. State ex rel. Missouri Water Company v. Public Service Commission, 308 S.W.2d 704, 713[2] (Mo.1957). Nor does a court of review have authority to weigh the evidence — as do the majority — on an appeal from an order to grant or deny a certificate of public convenience and necessity to a carrier. An order of the Public Service Commission bears a strong presumption of validity and the challenger must show convincingly that the decision is not lawful and
The report and order of the Commission denied the Gulf application on the separate ground that there was no public need for that service. “From the evidence in this matter, the Commission cannot find that there is any need for service, embraced by this application, that cannot be fulfilled by existing authorized carriers.”
The majority rejects this ground of adjudication as well for the combined reasons that at p. 460: “The Commission’s exclusive reliance on adequacy of service and its failure to consider the potential benefits of new competition was error as a matter of law.” The majority do not say whether that error was a want of reasonableness, an abuse of discretion, or disregard of statute.
On actual analysis, the majority simply is wrong that the Commission “fail[ed] to consider the potential benefits of new competition.” The dissent has dealt with that same contention already, and that discussion applies with equal validity to dispel this ground of opinion as well. What the majority mean — as is evident from the use it makes of the terminology of cited cases [State ex rel. Twehouse Excavating Company, Inc. v. Public Service Commission, 617 S.W.2d 104 (Mo.App.1981), most prominently] — is that they would have determined in the first instance [and actually do on the appeal], that the new competition subserves the public interest more nearly, and hence public need, than does the preservation of the solvency of existent carriers. That, however, is a balance confided to the discretion of the Commission. State ex rel. Inman Freight System, Inc. v. Public Service Commission, 600 S.W.2d 650, 655[8] (Mo.App.1980). The majority merely prefer to find the facts for themselves. The reversal of the Commission order because “exclusive reliance on adequacy of service” to find a lack of public need for the Gulf certificate, also upon analysis, is simply a euphemism for disagreement with the administrative determination of the evidence. The adequacy of service, obviously, was not the exclusive basis for the public need adjudication. In clear terms, the Commission iterates [report and order, pp. 10 and 11], and then reiterates with amplitude [conclusions, p. 12]:
Since the Applicant has been unable to demonstrate any inability, by the existing carriers, to perform the requested service, no public need for the creation of the proposed service has been established. In the Commission’s opinion, public convenience will not be promoted when the support for new service amounts to mere preference. When the evidence establishes that existing carriers, with unutilized capacity, are conducting some operations at a loss, new service should not be created due to the likelihood that diversion of any amount of traffic will further erode unfavorable economic positions of those carriers.
Thus, the public need determination of the Commission rests also on a balance of economic hardship on existent carriers and, hence, as the Commission conclusions express, on a danger to the “complete transportation system for the entire state.”
The majority reassess the evidence to undo the Commission order. The Commission found that Gulf uses 61 modern highway buses, about half of them based in St. Louis during the summer, and has six more on order. Gulf also has a charter sales office in St. Louis. Like most carriers, the Gulf charter business burgeons from May through October, and during that period in year 1979, all Gulf buses were committed or
There was evidence none of the protestant carriers except V-K had a charter office in St. Louis. Greyhound recently closed such an office in St. Louis, and now handles the business by a toll-free number to the Chicago office. This arrangement allows Greyhound to use its equipment more efficiently and reflects the practice that, even when the St. Louis office functioned, more than 90 percent of the charters were arranged by telephone. Greyhound usually keeps 28 to 40 buses available for charter work at a St. Louis equipment point. Trailways keeps about 15 buses for that service and increases the number when sales indicate the need. Trailways solicits charters, as does Greyhound, by nationwide advertisements and by direct mail to travel agents. Mid-American is sited in Washington, Missouri, and has available from 30 to 36 buses for charters, most of them older than the Gulf equipment but in good repair. Mid-American uses a St. Louis telephone directory for direct calls to the Washington office. V-K has St. Louis headquarters and has 17 buses available for its charter activity. Vandalia is sited in Caseyville, Illinois, some nine miles from St. Louis, and has some 18 buses available for charter service. Vandalia also uses an exchange number in the St. Louis directory and advertises extensively in the yellow pages for charter business. Except for Greyhound [when all charter equipment was committed or sold out on three occasions — for a Missouri-Texas football game, and the visit by the Pope to Chicago and Des Moines], none of the protestant carriers had to refuse a charter because equipment was unavailable. The protestant bus equipment, although in some instances not as modern as that used by Gulf, was described by repeated evidence as comparable to that offered by Gulf, as was the service.
The report and order of the Commission noted that “[generally speaking, all of the individuals supporting the application seek the services of Gulf because of the additional information that can be obtained about attractions in route and the prices charged. Most of the witnesses appeared unfamiliar with the fact that the travel agencies perform that service at no additional compensation since they are paid on a commission basis from the proceeds of any fares, admissions or charges arranged.” [emphasis added]. The Commission found that the rates between Gulf and the protestants were in some cases, higher, lower or comparable. The Commission found also that there was virtually no instance when a person was unable to secure charter service from among the existent carriers in the St. Louis area, and that those carriers already authorized for charters have unused capacity for additional charter work. The Commission then concluded: “From the evidence in this matter, the Commission cannot find that
The majority dispute the evidential basis for the finding of fact that the route information service furnished by Gulf was available to any traveler from a travel agent, free of cost. The opinion rescripts a span of testimony at p. 458 by Gulf witness travel agent Johnson to conclude that such testimony was too “meager” and “not accompanied by any other evidence in the record” of such a practice. The opinion reinforces that conclusion with a rescript of testimony at p. 458 from Ms. Kemmy, a Catholic group representative, to the effect that a trip arranged personally — rather than through a travel agency — saves $4 to $5 the person. The majority then disposes of the Commission finding on the basis that at p. 458: “In essence, the P.S.C. seizes upon one statement (see Johnson testimony above) to support its conclusion that the service proposed by relator could be provided by travel agents. Considering the record as a whole, it cannot be concluded that the asserted provision by travel agents of services similar to those offered by relator is supported by competent and substantial evidence on the whole record.”
The record, more fully disclosed, however, shows clearly that Johnson more fully testified on cross-examination;
Q. Let me ask you about your particular aspect of the operation of a total charter package. As Mr. Douglas was asking you, you arrange an itinerary and I guess lodging, visits, meals, and what have you for a particular preformed group; is that correct?
A. Yes, sir.
Q. And you also arrange the transportation services?
A. Right.
Q. Now, as far as the group is concerned, is your compensation any— tie price that they must pay you, is that taken out of the overall rates for transportation or is it an additional charge for those groups? I’m not sure how that’s settled.
A. Any package tour you get, your revenue from the Commission is given to you by each particular aspect of the tour like hotels, buslines.
Q. So, if an individual like, for example, Mrs. Kemmy who testified here earlier, if she were to make the individual arrangements with the hotels, the eating places, the buslines, or if she were to go to you and have you do it, the price that she sees, bottom line, would not change then, would itl
A. No. Most people have the conception that doing it themselves they save money.
[emphasis added]
This evidence was reinforced by Greyhound District Manager Kyle who explained that Greyhound pays the travel agent a commission for every charter tour arranged with that carrier.
The Commission finding of fact rests on substantial evidence and cannot serve as a ground to discredit the order entered against the Gulf application for want of a public need.
The final ground of the majority to set aside the Commission denial of the Gulf application reformulates the contention of that carrier on appeal that the record does not show any substantial impact on the charter business of the protestants in the area of proposed certification, nor any justification that the charter customers in St. Louis, St. Charles and Jefferson Counties should subsidize the regular routes of the protestants. The contention asserts parochial considerations. The duty delegated to the Commission is a power to regulate common carriers in the public interest statewide [§ 390.041], an authority which transcends local bournes and concerns, to ensure uniformly adequate, sustained and complete transportation system for the entire state, and not for a limited area. The evidence abounds [and Gulf agrees] that charter operations are more profitable than regular route operations, that the protestant charter service sustains unprofitable regular
The order of the Commission is supported by competent and substantial evidence, is reasonable and otherwise lawful. I would sustain it.
. The majority then insinuates another distraction from a fair consideration of the Commission rationale as actually implemented in the order. The opinion attributes to the Commission, and then refutes, certain terminology and statutory citation employed by counsel in the course of briefs and argument, and not by the Commission. The majority invokes the recognized right of a court to review an administrative order reached by an erroneous view of the law free from any constraint of the agency interpretation to comment and conclude at 453:
“Where, as in the instant proceedings, the P.S.C. ‘recognizes a preference for the motor carrier service provided by a regular route carrier,’ such pronouncement is of no importance if upon analysis of the statutory law of this state, a reviewing court reaches a different conclusion. The P.S.C. urges this court to extrapolate from the language of § 390.-051(8) a preference for regular route service ... The foregoing section has been considered by this court in State ex rel. Phillip[sic] v. Public Service, 599 S.W.2d 82 ... ITiis court concludes that neither the language of § 390.051(8) nor the rule in State ex rel. Phillip, [sic] either directly or by implication, authorize the P.S.C. to recognize ... ‘a preference for a regular route carrier’ and by such recognition establish a policy that an applicant for an irregular route operating certificate must furnish regular route authority as a condition precedent.”
The report and order of the Commission, nor any prefatory declaration of policy, nor any other comment mentions § 390.051.8 or “a preference for regular route carriers” or that the cited section implies the preference in those terms. The terminology and citation of statute are employed by counsel to make an analogy. A court reviews the order of the Public Service Commission, not the arguments of counsel, to assess the validity of the agency action. State ex rel. Kansas City Transit, Inc. v. Public Service Commission, 406 S.W.2d 5, 11 [10-12] (Mo. banc 1966).
. The term policy in this usage connotes a governmental practice or rule exercised according to the perceived public interest objective involved. [Dille v. St. Luke’s Hospital, 355 Mo. 436, 196 S.W.2d 615, 619[2,3] (1946) ] in this case, according to the purposes of the matrix of The Public Service Commission.
. An order of the Public Service Commission— such as the Gulf application for irregular route certificate — issues only after hearing [§ 390.-051.3] and so is governed by the contested case procedures defined in the Administrative Procedure Act [§ 536.090, among them] and therefore is, by definition as well as fact, “a proceeding before an agency in which legal rights, duties or privileges of specific parties are required by law to be determined after hearing.” § 536.010(2) of Defínitions. State ex rel. St. Louis Public Service Company v. Public Service Commission, 365 Mo. 1032, 291 S.W.2d 95, 98[2] (Mo. banc 1956); State ex rel. Hotel Continental v. Burton, 334 S.W.2d 75, 87[7] (Mo.1960). Such an order falls within the Article V § 22 ambit which requires judicial review of all “final ... orders of any administrative officer or body ... which are judicial or quasi-judicial and affect private rights.” State ex rel. St. Louis Public Service Company, supra, l.c. 101[7-10]; State ex rel. Missouri Water Co. v. Public Service Commission, 308 S.W.2d 704, 713[2] (Mo.1957); F. Davis, The Missouri Public Service Commission, 42 U.M.K.C.L.Rev. 279, 285 (1974).
. A rule means “each agency statement of general applicability that implements, interprets, or prescribes law or policy_” § 536.010(4). The rule-making procedures of § 536.021 are designed to allow general participation by all those who may be affected or regulated by the rule, and so ensure that fairness.
.The exercise by an administrative agency of the adjudicative function to evolve a policy case by case, ultimately to be embodied in a legislative rule, is authoritatively recognized: “Or the problem may be so specialized and varying in nature as to be impossible of capture within the boundaries of a general rule. In those situations, the agency must retain power to deal with the problems on a case-to-case basis if the administrative process is to be effective ... There is thus a very definite place for the case-by-case evolution of statutory standards.” Securities and Exchange Commission v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 1760, 1580, 91 L.Ed. 1995 (1947); General Development Corporation v. Division of State Planning, 353 So.2d 1199, 1209[11-13] (Fla.App.1977); Shapiro, The Choice of Rule-making or Adjudication in the Development of Administrative Policy, 78 Harv.L.Rev. 921, 927 (1965).
. The majority observe at p. 454 n. 3: “Neither research of this court nor counsel for the Commission in oral argument disclosed any express statutory support of the Commission’s regular route ‘preference,’ ” — and then decide at p. 455: “This court concludes that there is no statutory basis for permitting the P.S.C. to deny the relator the authority to operate an irregular route on the ground that relator holds no preexisting regular route authority. The order of the P.S.C. was based on a ‘policy’ which has no statutory support. Such ‘policy’ is found to have no application to the instant proceedings, nor to relator herein, and is held ■ inapplicable and void.”
. The protestant Greyhound during 1979 — the year which preceded the Commission hearing on the application, sustained a net loss of $566,898 on its Missouri operations. The regu
The protestant Trailways also operated some regular routes within Missouri at a loss and depends upon the charter operations to sustain those regular routes.
The protestant Mid-American has operated its regular routes at a net loss since year 1975 and for year 1979, the regular route loss was $65,999. The profit from the charter operations, however, resulted in a net income of $108,688, before taxes and interest, for that year.
The protestant V-K, a small scale motor carrier, operates a regular route between St. Louis and Vienna and suffered a net loss of $6,023 for year 1979. Even with the benefit of the charter profits, V-K operated at a net loss that year.
The protestant Vandalia formerly operated a regular route from St. Louis to Piedmont, but the route was reduced to St. Louis to Ironton, two days a week, because of reduced patronage and continued losses. The actual regular route loss for year 1979 was $28,378 — and exceeded revenues from the charter operations along the route.
. The majority rationale that the potential benefits of competition is the most dominant single consideration as to whether a certificate should issue to a carrier under § 390.051 pervades the entire opinion exposition — it applies to nullify the Commission assessment that the Gulf presence to serve charters only will undermine the regular route structure throughout the state— and recurs to decide that the Commission determination that there was no public need for the Gulf service was an abuse of discretion.
. § 390.051.6 provides:
In determining whether a certificate should be issued the commission shall give reasonable consideration to the transportation service being furnished by any common carrier ... and the effect which the proposed transportation service may have upon such carriers; provided, that the issuance of a certificate of convenience and necessity to one carrier shall not prohibit the granting of such certificate to another carrier over the same route if in the opinion of the commission the public convenience and necessity will be promoted by so doing.
. I overlook the persistent tendency of the majority opinion to condemn the Commission adjudication as protectionism or as some other variety of arbitrary practice. The careful balance of the evidence the report and order de-play as well as the discretion applied dispel that notion. Whether a court endowed with the authority to find the facts and apply a legislative discretion might reasonably disagree is another matter.
. In response, the majority note at p. 455: “In drawing this conclusion, the P.S.C. interpreted ‘public convenience’ to require a showing that ‘there is a failure, breakdown, incompleteness or inadequacy in the existing facilities.’ ” That statement appears nowhere in the report and order, conclusions or any other rendition by the Commission. It derives, actually, from the brief of counsel on appeal. We review the report of the Commission and not an assertion of counsel.
. Gulf witness Evelyn Cornwell of the American Association of Retired Persons in St. Charles County testified she thought the Greyhound equipment was comparable to that used by Gulf, as was that used by Trailways. The Mid-American air conditioner did not function effectively on one trip, but that would not discourage her use of that service in future. She preferred Gulf, however, because she was familiar with their equipment from other tour episodes.
Gulf witness Miller Johnson, Travel Center, Inc. — travel agency — employee, testified he would continue to use Greyhound, Mid-American, Trailways and Vandalia even if Gulf were certificated. He found Mid-American equipment very good, and their quality of service excellent, and the Vandalia and V-K service comparable to that provided by Gulf.
Gulf witness Jerry Cornish, an employee of Liberty Tours, has used both Gulf and Mid-American to arrange charter tours, and has found Mid-American and Gulf very comparable and Mid-American “very acceptable.”
Gulf witness William Schmitt, group tour specialist with Travel Center, Inc., prefers both Gulf and Mid-American because “the service from both those carriers had been excellent.”