Judges: WRITTEN BY: Don Stenberg, Attorney General L. Jay Bartel, Assistant Attorney General
Filed Date: 3/12/1996
Status: Precedential
Modified Date: 7/5/2016
REQUESTED BY: Rod Johnson, Chairman Nebraska Public Service Commission By letter dated December 12, 1995, the Nebraska Public Service Commission ["Commission"] requested our opinion regarding the jurisdiction of the Commission to regulate taxicab service provided between Eppley Airport to points in Omaha, Nebraska. The issue has arisen as a result of a petition for a declaratory ruling filed by 5th Avenue Cab of Council Bluffs, Iowa [the "Petitioner"]. In re 5th Avenue Cab, Council Bluffs,Iowa, Application No. PI-15. In this proceeding, the Petitioner has asserted that its operation is interstate in nature, and not subject to Commission jurisdiction, because a portion of the route travelled between Eppley Airport and points in Omaha passes through the City of Carter Lake, Iowa. Two other taxicab carriers, Happy Cab and Safeway Cabs, Inc. [the "Intervenors"], have intervened in the proceeding, asserting that the Commission has jurisdiction over Petitioner's taxicab operations. A hearing on the application for declaratory order was held, and briefs were subsequently submitted on behalf of Petitioner and the Intervenors. A majority of the Commission, by Order entered on November 7, 1995, determined the Commission had jurisdiction over Petitioner's taxicab operation "between Eppley Airport and all points in Nebraska." Order at 5.
On December 29, 1995, we requested that the Commission withdraw its request for an opinion on the jurisdictional issue raised in the 5th Avenue Cab proceedings, and suggested that the Commission request briefs from the parties on certain additional issues. These issues were: (1) Whether Petitioner's activities were exempt from jurisdiction of the Interstate Commerce Commission ["ICC"] under the "taxicab service exemption" in 49 U.S.C. § 10526(a)(2) or the exemption of motor vehicle transportation incidental to air transportation under 49 U.S.C. § 10526(a)(8)(A); and (2) If Petitioner's activities were exempt from ICC jurisdiction, whether the Commission had jurisdiction to regulate such activities pursuant to its authority under Neb. Const. art.
For the reasons set out below, we conclude that Petitioner's activities are exempt from federal jurisdiction, and that no federal statute preempts the state's regulation of Petitioner's taxicab service. We further conclude that the Commission has authority under Neb. Const. art.
I. FEDERAL MOTOR CARRIER STATUTES
On December 29, 1995, the President signed legislation abolishing the Interstate Commerce Commission. ICC Termination Act of 1995 [P.L. 104-88,
The Secretary and the Board have jurisdiction, as specified in this part, over transportation by motor carrier and the procurement of that transportation, to the extent that passengers, property, or both, are transported by motor carrier —
(1) between a place in —
* * *
(B) a State and another place in the same State through another State; . . . .
The Act also provides numerous exemptions from the Secretary and Board's jurisdiction over motor carrier transportation.
Finally, the Act contains the following declaration of federal authority over state regulation of intrastate transportation of motor carriers of passengers:
No State or political subdivision thereof and no interstate agency or other political agency of 2 or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to scheduling of interstate or intrastate transportation (including discontinuance or reduction in the level of service) provided by motor carriers of passengers subject to jurisdiction under subchapter 1 of chapter 135 of this title on an interstate route or relating to the implementation of any change in the rates for such transportation or for any charter transportation except to the extent that notice, not in excess of 30 days, of changes in schedules may be required. This subsection shall not apply to intrastate commuter bus operations.
These portions of the Act mirror prior federal statutes governing the Interstate Commerce Commission and motor carrier transportation. See 49 U.S.C. § 10521(a)(1)(B) (general jurisdiction of ICC); 49 U.S.C. §§ 10522 to 10526 (exemptions from ICC jurisdiction); and
Initially, it is evident that Petitioner's operation as a motor carrier of passengers for hire over the Eppley-to-Omaha route, passing, albeit briefly, through Carter Lake, Iowa, involves "interstate" transportation. As such, it would, absent exemption, be subject to the jurisdiction of the Secretary and the Board, based on their general jurisdiction over transportation of passengers by motor carrier "between a place in — (B) a State and another place in the same State through another State; . . . ."
While Petitioner's operation would fall within the general jurisdiction of the Secretary or the Board, Congress has precluded the Secretary or the Board from exercising jurisdiction over "motor vehicle[s] providing taxicab service and having a capacity of not more than 6 passengers and not operated on a regular route between specified places; . . . ."
Cases construing the "taxicab service exemption" under prior federal statutes recognized that this exception to ICC jurisdiction was based on Congressional policy recognizing that "[t]axicabs generally perform local transportation services, . . . ." I.C.C. v. Mr. B's Services, Ltd.,
Based on the foregoing, it appears that Petitioner's provision of taxicab service from Eppley Airport to Omaha, while traversing through a portion of Iowa, is exempt under federal law from any exercise of jurisdiction by the Secretary or the Board.1 Moreover, while the Act contains a provision limiting state authority to regulate motor carriers of passengers in certain contexts, this provision, by its terms, applies only to transportation "by motor carriers of passengers subject to jurisdiction under subchapter I of chapter 135 of this title on an interstate route. . . ."
As there is no federal statute expressly preempting the State's regulation of Petitioner's taxicab service, it appears that two questions remain: (1) Whether the Commission has jurisdiction to regulate Petitioner's activity; and (2) Whether, in the absence of federal regulation, State regulation of Petitioner's activity would unduly burden interstate commerce.
II. COMMISSION JURISDICTION
Neb. Const. art.
There shall be a Public Service Commission, consisting of not less than three not more than seven members, as the Legislature shall prescribe, . . . . The powers and duties of such commission shall include the regulation of rates, service and general control of common carriers as the Legislature may provide by law. But, in the absence of specific legislation, the commission shall exercise the powers and perform the duties enumerated in this provision.
Commission authority over common carriers is "rooted in legislative, judicial, and electoral activities during the early 1900s." State ex rel. Spire v. NorthwesternBell Tel. Co.,
Briefly stated, the [Commission] is created by section 20, article IV, of the Constitution. It is granted powers and duties which include the regulation of rates, service, and general control of common carriers as directed by the Legislature. In a field where the Legislature has not acted, the commission is authorized to exercise the powers and perform the duties enumerated in the constitutional provision. This means, of course, that the Legislature may properly enact specific legislation limiting the scope of the commission's powers.
Union Transfer Co. v. Bee Line Motor Freight,
The Nebraska Supreme Court, discussing the construction to be applied to the constitutional powers of the Commission, has stated:
All powers and jurisdiction of the Public Service Commission must be found within the constitutional provision creating it. This provision should not be construed so narrowly as to defeat its purpose. Rather, it should be liberally construed to effectuate the purpose for which the commission was created, which is primarily to serve the public interest.
Myers v. Blair Telephone Co.,
"In the absence of implementing legislation the powers of the . . . commission under" art. IV, § 20, "are plenary in character and self-executing." In re Application ofRichling,
The Legislature, in defining the scope of the Commission's regulatory powers, has provided that, with specified exceptions, "the commission shall regulate and exercise general control as provided by law over all common carriers . . . engaged in the transportation of freight or passengers for hire . . . in Nebraska intrastate commerce." Neb. Rev. Stat. §
Thus, while the Legislature has enacted "specific legislation" regarding the Commission's power to regulate "intrastate commerce", the above-cited statutes do not clearly constitute "specific legislation" evincing a legislative intent to "limit" the Commission's otherwise plenary constitutional power to exert "general control of common carriers" under art. IV, § 20. In our opinion, the Commission is therefore authorized to exercise regulatory authority over Petitioner's activities under its constitutional grant of power, even though Petitioner's activities in transporting persons by motor vehicle as a common carrier for hire over the Eppley-to-Omaha route via Carter Lake fall outside the definition of "intrastate commerce" in §
III. COMMERCE CLAUSE ANALYSIS
If, as we have determined, there is no federal statute preempting the Commission from exercising regulatory authority over Petitioner's taxicab service, and the Commission appears to have jurisdiction under the Nebraska Constitution to regulate Petitioner's activity, the only issue remaining for consideration is whether State regulation would violate the Commerce Clause of the U.S. Constitution. U.S. Const. art.
The United States Supreme Court has recognized that, while the "Commerce Clause significantly limits the ability of the States and localities to regulate . . . interstate commerce, . . ., it does not elevate free trade above all other values." Maine v. Taylor,
Although the Constitution gives Congress the power to regulate commerce among the States, many subjects of potential federal regulation under that power inevitably escape congressional attention `because of their local character and their number and diversity.'. . . In the absence of federal legislation, these subjects are open to control by the States so long a they act within the restraints imposed by the Commerce Clause itself. . . . The bounds of these restraints appear nowhere in the words of the Commerce Clause, but have emerged gradually in the decisions of this Court giving effect to its basic purpose. (citations omitted) (emphasis added).
Discussing the State's ability regulate matters affecting interstate commerce consistent with the Commerce Clause, the Court has stated:
Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. [Citation omitted.] If a legitimate local purpose is found, then . . . the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. Occasionally the Court has candidly undertaken a balancing approach in resolving these issues [citation omitted], but more frequently it has spoken in terms of `direct' and `indirect' effects and burdens.
Pike v. Bruce Church, Inc.,
Assertion of Commission jurisdiction over Petitioner's taxicab service is strongly supported by the U.S. Supreme Court's decision in Buck v. California,
Initially, the Supreme Court noted that, under the federal Motor Carrier Act of 1935, the Interstate Commerce Commission was given "broad power of regulation over motor vehicles", but that "Congress partially excluded taxicabs from such regulation. . . ."
Addressing the contention that application of the County ordinance placed an undue burden on foreign commerce, the Court stated:
The operation of taxicabs is a local business. For that reason, Congress has left the field largely to the states. Operation of taxicabs across state lines or international boundaries is so closely related to the local situation that the regulation of all taxicabs operating in the community only indirectly affects those in commerce, and so long as there is no attempt to discriminatorily regulate or directly burden or charge for the privilege of doing business in interstate or foreign commerce, the regulation is valid. The operation is "essentially local," and in the absence of federal regulation, state regulation is required in the public interest.
Id. at 102 (emphasis added).
The Court found that, under the circumstances presented, the County's ordinance did not contravene the Commerce Clause:
Even if appellants were engaged in foreign commerce at the time of their arrest and did not intend to engage in intrastate commerce, the permit was not required because they were engaged in foreign commerce. Under the permit they were free to engage in both intrastate and foreign commerce. The ordinance requires a written application for a permit, a small fee, and compliance with certain standards relating to the service and to the public safety. Our prior cases would not justify us in holding that the ordinance is an unreasonable burden on foreign commerce in its application to the stipulated facts here.
Id. at 102-103 (emphasis in original).
In addition to the decision in Buck, the case ofYellow Cab Co. v. Broward County,
The court in Broward County noted that the Interstate Commerce Act provided an exception from federal regulation for "the transportation of person or property by motor vehicle when incidental to transportation by aircraft; . . . ."Id. at 3 (citing 49 U.S.C. § 203(b)(7a)). It found that the transportation provided by Yellow Cab was "incidental to air transportation", and, therefore, was "exempt from the certificate and permit requirements of the interstate commerce act." Id. The question presented, then, involved "who [was] entitled to license carriers providing motor transportation incidental to prearranged interstate air transportation". Id.
Discussing the application of the commerce clause in this context, the court stated "[i]t [was] clear that the county [did] not have the power to totally prohibit the mentioned operation."Id. The county did, however, "have the power to license and impose reasonable regulations regarding operations. . . ." Id. The court quoted the following language from Park'N'Fly of Texas, Inc. v. Cityof Houston,
"It is well established that a State or city may validly regulate interstate commerce `as long as there is a real relation to the suitable protection of the people of the state and the regulation is reasonable in its requirements' . . . . But the principle that a `State may enact local laws under its police power in the interest of the welfare of the people, although they affect interstate commerce' until the area of regulation is preempted by Congress, is not applicable where the State or local government `passes beyond the exercise of its legitimate authority, and undertakes to regulate interstate commerce by imposing burdens on it.'"
In light of these principles, the court noted that "the county would be empowered to consider matters such as safety, operational fees, procedural safeguards, restrictions on the carrier to operations within its exceptional status, and insurance." Id. It found, however, that "the county [could not] bar appellant from functioning due to the exclusive franchise" awarded to another carrier, "as such action [would] constitute an improper burden upon interstate commerce."Id. It nevertheless upheld the trial court's refusal to grant Yellow Cab "permission to pick up passengers at the Airport without bridle or regulation . . .", as it had not applied to the County "for licensing in order that the County could impose such reasonable regulations and supervision" as noted by the court. Id. at 4.
The decisions in Buck and BrowardCounty indicate that the Commission's exercise of regulatory jurisdiction over Petitioner's activities would not place an impermissible burden on interstate commerce. While the passenger common carriage engaged in by Petitioner is, technically, "interstate" in nature, because a small portion of the route travelled by Petitioner from Eppley Airport to Omaha passes through the State of Iowa, the dominant character of Petitioner's common carriage service is "intrastate". The service provided by Petitioner is predominately local. Commission regulation of Petitioner's activities would not, under these circumstances, pose an undue burden on interstate commerce.
The "absence of federal [regulation]" of taxicab service, which Congress has recognized is predominately local in character, leaves this "subject . . . open to control by the State so long as [the Commission] act[s] within the restraints imposed by the Commerce Clause itself." City ofPhiladelphia v. New Jersey,
We caution, however, that our conclusion is limited to determining that the exercise of Commission regulation
over Petitioner's common carriage activities would not contravene the Commerce Clause, if done so in a reasonable and evenhanded manner. As illustrated by the decision in BrowardCounty, there is a difference between the exercise of state regulatory power which may have some effect on interstate commerce, and state action prohibiting activity involving interstate commerce. As was the case in BrowardCounty, we do not think that, if Petitioner applied for authority to operate in this manner, the Commission could prohibit Petitioner from engaging in common carriage activity over this route, as this would place an improper burden on interstate commerce. Based on the decision in BrowardCounty, however, we believe that the Commission would be justified in undertaking regulation of Petitioner's activities with regard to matters such as "safety, operational fees, procedural safeguards, restrictions on the carrier to operations within its exceptional status, and insurance."
V. CONCLUSION
Based on the foregoing, we conclude that Petitioner's activities are exempt from federal jurisdiction, and that no federal statute preempts the state's regulation of Petitioner's taxicab service. We further conclude that the Commission has authority under Neb. Const. art.
Sincerely,
DON STENBERG Attorney GeneralL. Jay Bartel Assistant Attorney General
Approved:
Don Stenberg Attorney General
Interstate Commerce Commission v. Mr. B's Services, Limited,... , 934 F.2d 117 ( 1991 )
State Ex Rel. Spire v. Northwestern Bell Telephone Co. , 233 Neb. 262 ( 1989 )
ICC v. Miller , 360 F. Supp. 1167 ( 1973 )
In Re Application No. 30466 , 195 Neb. 55 ( 1975 )
Application of Neuswanger , 170 Neb. 670 ( 1960 )
Richling v. Transit, Inc. , 154 Neb. 108 ( 1951 )
City of Philadelphia v. New Jersey , 98 S. Ct. 2531 ( 1978 )
Buck v. California , 72 S. Ct. 502 ( 1952 )
Pike v. Bruce Church, Inc. , 90 S. Ct. 844 ( 1970 )
Maine v. Taylor , 106 S. Ct. 2440 ( 1986 )
Wycoff Company v. United States , 240 F. Supp. 304 ( 1965 )
Park 'N Fly of Texas, Inc. v. City of Houston , 327 F. Supp. 910 ( 1971 )
Crescent Express Lines, Inc. v. United States , 49 F. Supp. 92 ( 1943 )