The opinion
[This opinion has been published in Ohio Official Reports at 72 Ohio St.3d 1.]
CANTON STORAGE AND TRANSFER COMPANY, INC. ET AL., APPELLANTS, v.
PUBLIC UTILITIES COMMISSION OF OHIO, APPELLEE.
ADVANCE TRANSFER COMPANY ET AL., APPELLANTS, v. PUBLIC UTILITIES
COMMISSION OF OHIO, APPELLEE.
CARR'S MOVING AND STORAGE COMPANY ET AL., APPELLANTS, v. PUBLIC
UTILITIES COMMISSION OF OHIO, APPELLEE.
[Cite as Canton Storage & Transfer Co. v. Pub. Util. Comm., 1995-Ohio-282.]
Public Utilities Commission—Motor transportation carriers—Commission abuses
its discretion when it issues certificates of public convenience and necessity
to applicants seeking statewide authority to carry household goods, when.
(Nos. 93-2331, 93-2332 and 93-2449—Submitted January 25, 1995—Decided
April 12, 1995.)
APPEALS from the consolidated order of the Public Utilities Commission of Ohio,
Nos. 90-506-TR-ACE, 90-507-TR-ACE, 90-508-TR-ACE, 90-509-TR-ACE, 90-
510-TR-ACE, 90-511-TR-ACE, 90-512-TR-ACE, 90-514-TR-ACE, 90-516-TR-
ACE, 90-517-TR-ACE, 90-518-TR-ACE, 90-519-TR-ACE, 90-520-TR-ACE, 90-
522-TR-ACE, 90-524-TR-ACE, 90-633-TR-ACE, 90-634-TR-ACE, 90-662-TR-
ACE, 90-686-TR-ACE, 90-860-TR-ACE, 90-861-TR-ACE and 90-930-TR-ACE.
__________________
{¶ 1} These consolidated appeals involve the applications of twenty-two
motor carriers for authority to transport household goods throughout the state of
Ohio with no route limitations. At the time of the applications, each applicant was
a member of the Ohio Household Goods Carriers' Bureau and held "radial"
transportation authority, which limits the carrier to transporting household goods
from and/or to specific geographical locations within the state, or authority for
transportation within a county.
SUPREME COURT OF OHIO
{¶ 2} Prior to the order by the Public Utilities Commission of Ohio in these
cases, no carrier had been granted unlimited statewide household goods shipping
authority.1 Instead, carriers were granted either radial shipping authority (e.g., from
anywhere within the state to Columbus or from Columbus to anywhere in the state)
or nonradial authority (between two specified points, e.g., between Columbus and
Mansfield or anywhere within the county). Instead of obtaining additional
authority to operate in areas beyond the scope of their individual authority, carriers
either entered into a leasing arrangement with another carrier or refused to take on
the move for a particular customer.
{¶ 3} Ninety-nine motor carriers protested the applications. Each protestant
possessed a certificate of public convenience and necessity to transport household
goods. Each application was opposed by the protestants.
{¶ 4} On July 11, 1990, the commission consolidated all twenty-two
applications for purposes of hearing and order. The applicants presented their
individual cases over twelve days between October 1, 1991 and February 18, 1992.
Each application essentially sought to further the existing relationships between the
applicant and its supporting shippers so that the shippers could have their chosen
carriers serve them anywhere within the state. A typical customer was a large
corporation that frequently relocated its employees within Ohio and arranged and
paid for the moving of the employees' household goods. The applicants sought to
maintain and enhance their relationships with their existing customers and thereby
reduce the stress for the customers' employees whose household goods were being
moved.
{¶ 5} Twenty-one shipper witnesses supported the various applications.
Twelve carriers supported their individual applications with testimony from one
1. Statewide shipping authority was, however, granted for commodities requiring mechanical
refrigeration in Allen v. Pub. Util. Comm. (1988), 40 Ohio St.3d 184, 532 N.E.2d 1307.
2
January Term, 1995
shipper witness each.2 Two carriers presented two shipper witnesses each to
support their applications.3 Two carriers presented three shipper witnesses each to
support their applications.4 Six carriers presented no shipper testimony in support
of their applications.5 All of the supporting witnesses were commercial business
shippers. No individual consumers or household shippers testified during the
hearing.
{¶ 6} Dr. Edward J. Bardi, professor of marketing at the University of
Toledo, specializing in transportation and logistics, also supported the applications.
Bardi believed that granting the applications would benefit the transportation
industry in Ohio by maintaining and enhancing the existing relationships between
the shippers and their chosen carriers. He also felt that granting the applications
would enhance the efficiency of the household goods transportation industry in
Ohio by eliminating the need to lease authority from other carriers.
{¶ 7} Following presentation of the applicants' cases-in-chief, fifty-eight of
the ninety-nine protesting carriers moved to dismiss the consolidated applications
on the basis that the applicants had failed to prove either that there was a public
need for the proposed service that was not being met by existing carriers or that the
existing carriers were not providing adequate service. A memorandum opposing
the motions and reply memoranda were also filed.
2. Carney-McNicholas, Inc.; Demario Moving & Storage, Inc.; Edward Eyring & Sons, Inc.;
Ehmke/Columbus Movers, Inc.; Ehmke Movers, Inc.; William Fridrich Moving & Storage Co.;
Fullerton Transportation, Inc.; Great Northern Moving Systems, Inc.; Locker Moving & Storage,
Inc.; Berea Moving & Storage Co.; Willis Day Moving & Storage Co.; Stevens Van Lines, Inc.
3. The Brown Van & Storage Company; Harvey & Sons Moving & Storage Co.
4. Planes Moving & Storage; The Reed Warehouses, Inc.
5. Andrews Moving & Storage Co.; Dussault Moving, Inc.; The Fred Pagels Storage Company;
Berman Moving & Storage, Inc.; Fisher-Gilder & Bord Motor Express, Inc.; The Cotter Moving &
Storage Company.
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SUPREME COURT OF OHIO
{¶ 8} The commission denied the motions to dismiss on the basis that it
would, during the remaining portion of the hearing, "re-examine the various issues
surrounding the granting of authority for the transportation of household goods." It
directed that the applicants would not be permitted to present testimony of
additional shipper witnesses and directed the protestants to be ready to establish
that they were ready, willing, and able to provide the requested service under their
existing authority.
{¶ 9} The protestants presented their cases over eleven days between
October 15, 1992 and January 28, 1993. Thirty-five witnesses opposed the
applications. Each protesting witness believed that granting the applications would
be detrimental to his business. The protestants also presented testimony that they
were available and had the necessary equipment ready to take on additional moving
business in their certificated areas.
{¶ 10} Dr. John Grabner, associate professor of marketing at the Ohio State
University, specializing in transportation, logistics, and marketing management,
presented testimony opposing the applications. Grabner opined that the applicants'
expert had used out-of-date and non-Ohio-specific data in rendering his opinions.
Applicants presented no rebuttal testimony. Briefs and reply briefs were filed by
the parties.
{¶ 11} On September 9, 1993, the commission granted all twenty-two
applications for certificates of convenience and necessity. The commission found
a public need for the proposed service, a deficiency in the current service, and
determined that the applicants were proper parties to receive the new authority.
{¶ 12} On rehearing, the commission found all of the protestants'
assignments of error to be without merit. Timely appeals were then brought to the
court.
{¶ 13} The cause is now before this court upon an appeal as of right.
__________________
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January Term, 1995
Muldoon & Ferris and Boyd B. Ferris, for appellants Canton Storage &
Transfer Company, Inc. et al.
Gamble Hartshorn Alden, John L. Alden and Todd M. Goehring, for
appellants Carr's Moving & Storage Company, et al.
Earl N. Merwin and Beth A. Dinsmore, for appellants Advance Transfer
Company et al.
Betty D. Montgomery, Attorney General, James B. Gainer, Duane W.
Luckey, William L. Wright and Craig S. Myers, Assistant Attorneys General, for
appellee Public Utilities Commission of Ohio.
Thompson, Hine & Flory, Thomas E. Lodge and Christopher Jones, for
intervening appellees, Andrews Moving & Storage Company et al.
__________________
Per Curiam.
{¶ 14} The appellants propound a total of twenty propositions of law. The
majority of these propositions of law focus upon a single issue, whether the
commission abused its discretion when it issued the certificates of public
convenience and necessity. For the reasons that follow, we hold that it was an abuse
of discretion to grant the twenty-two applications for statewide authority to carry
household goods and reverse the order of the commission.6
{¶ 15} Appellants raise four arguments regarding the commission's order:
(1) the commission improperly changed the applicants' burden of proof; (2) the
commission wrongly took administrative notice of testimony from some cases and
used it to support unrelated applications for a certificate of public convenience and
necessity that had little or no individual support; (3) there is no evidence in the
record of a public need for the proposed service; and (4) there is no evidence in the
6. Given our finding of an abuse of discretion by the commission and its disposition of the
consolidated cases, we need not specifically address the remaining propositions of law raised by the
appellants.
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SUPREME COURT OF OHIO
record that the existing service is deficient. Appellants allege that singly and
cumulatively these errors require that the commission's order be reversed.
{¶ 16} We will not reverse a commission order unless it is unlawful or
unreasonable. R.C. 4903.13. We will not reweigh evidence or substitute our
judgment for that of the commission on factual questions where there is sufficient
probative evidence in the record to show that the commission's order is not
manifestly against the weight of the evidence and is not so clearly unsupported by
the record as to show misapprehension, mistake, or willful disregard of duty. Indus.
Energy Consumers of Ohio Power Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d
547, 554, 629 N.E.2d 414, 420; MCI Telecommunications Corp. v. Pub. Util.
Comm. (1988), 38 Ohio St.3d 266, 268, 527 N.E.2d 777, 780. However, we also
have complete and independent power of review as to all questions of law. Id.;
Indus. Energy Consumers of Ohio Power Co. v. Pub. Util. Comm. (1994), 68 Ohio
St.3d 559, 563, 629 N.E.2d 423, 426.
{¶ 17} Determining whether the commission deviated from the proper
standard for issuing a certificate of public convenience and necessity under R.C.
4921.10 is a question of law. Accordingly, we have complete and independent
power of review as to this question. Id.; MCI Telecommunications Corp., supra,
38 Ohio St.3d at 268, 527 N.E.2d at 780.
{¶ 18} The commission, as a creature of statute, may exercise only that
jurisdiction conferred upon it by statute. Columbus S. Power Co. v. Pub. Util.
Comm. (1993), 67 Ohio St.3d 535, 537, 620 N.E.2d 835, 838. The commission's
authority to grant a certificate of public convenience and necessity is set forth in
R.C. 4921.10:
"The commission may, after notice and hearing, when the applicant requests
a certificate to serve in a territory already served by a motor transportation company
holding a certificate of public convenience and necessity from the commission,
grant a certificate only when the existing motor transportation company or
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January Term, 1995
companies serving such territory do not provide the service required or the
particular kind of equipment necessary to furnish such service to the satisfaction of
the commission. * * *
"Before granting any certificate the commission shall take into
consideration other existing transportation facilities in the territory for which a
certificate is sought. If it appears from the evidence that the service furnished by
existing transportation facilities is reasonably adequate, the commission shall not
grant such certificate." (Emphasis added.)
{¶ 19} In accordance with this statute, the commission acknowledges that
it may grant an application for a certificate of public convenience and necessity
only where there is a public need for the proposed service and the existing service
is inadequate. However, it believes that "Ohio law does not mandate how an
applicant's evidence must be presented, only that the Commission find that a need
exists for the service proposed based upon the facts presented." Thus, the
commission contends that it is free to apply evidence to support those findings as it
sees fit. This is incorrect.
{¶ 20} The commission's discretion does not extend to changing an
applicant's standard of proof for obtaining a certificate:
"Irrespective of the nature of shipping contemplated by the applicant, the
degree of proof required for the issuance of a certificate of public convenience and
necessity, under existing statutes of the Motor Transportation Act, as interpreted by
the courts, is the same, and must be universally applied and enforced by the Public
Utilities Commission in determining whether a certificate shall issue." (Emphasis
added.) Mason v. Pub. Util. Comm. (1973), 34 Ohio St. 2d 21, 63 O.O.2d 43, 295
N.E.2d 412, syllabus.
{¶ 21} Thus, the commission is bound to apply the same standard when
reviewing all applications for a certificate of public convenience and necessity,
including applications to carry household goods.
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SUPREME COURT OF OHIO
{¶ 22} Appellants contend that the commission erred by not requiring at
least two shipper witnesses per applicant in order to obtain a certificate under R.C.
4921.10. We agree.
{¶ 23} An applicant must support its application with more than its desire
to serve the public. Doc Goodrich & Son, Inc. v. Pub. Util. Comm. (1978), 53 Ohio
St.2d 70, 7 O.O.3d 148, 372 N.E.2d 354. Moreover, we have held that since carriers
can obtain contract carrier permits to service individual shippers on a statewide
basis under R.C. 4923.07, a single shipper witness is not enough to support a
finding of public need for a certificate under R.C. 4921.10:
"A single shipper's need for additional service does not establish public
convenience and necessity for a new certificate where the shipper's need can be met
under a permit for contract carriage." Id. at paragraph three of the syllabus; Bob's
Truck Serv., Inc. v. Pub. Util. Comm. (1982), 2 Ohio St.3d 83, 85, 2 OBR 637, 638,
443 N.E.2d 145, 147; F.J. Egner & Son, Inc. v. Pub. Util. Comm. (1968), 13 Ohio
St.2d 131, 132, 42 O.O.2d 340, 235 N.E.2d 131, 132.
{¶ 24} Therefore, more than one supporting witness is required before the
commission can find a public need for a proposed new service. This standard was
not met below.
{¶ 25} Eighteen of the twenty-two applications were directly supported
either by only one shipper witness or none at all. Twelve applications were
supported by only one shipper witness each. Six applications had no shipper
witness support. Only four of the twenty-two applications were supported by two
or more shipper witnesses each. Thus, only four of the twenty-two applications
granted by the commission were adequately supported by shipper testimony.
{¶ 26} The commission argues that the multiple-witness standard does not
apply here because carriage of household goods is less suitable to rigorous
regulation than the carriage of freight. The commission also argues that the court's
decisions in F.J. Egner & Son, Inc. and Doc Goodrich & Son, Inc., supra, do not
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January Term, 1995
stand for the proposition that "the testimony of a single shipper's needs is
insufficient to support the granting of common carrier authority." Both of these
assertions are incorrect.
{¶ 27} In F.J Egner & Son, Inc. we were faced with the commission's denial
of an application to amend common carrier authority to carry commodities in a tank
vehicle. The carrier and one shipper witness supported the application. The shipper
had no competition in its county, and no common carrier in Ohio had authority to
serve the shipper. The commission found that the need for the proposed service
had not been established and denied the application. We agreed, stating:
"It is not enough that an applicant declare his intention to serve the public
as a common carrier if the record is devoid of evidence that anyone other than a
single supporting shipper will have need of applicant's service. That need could be
fulfilled under a permit for contract carriage." 13 Ohio St.2d at 132, 42 O.O.2d at
340, 235 N.E.2d at 132.
{¶ 28} In Doc Goodrich & Son, Inc., we applied the multiple-witness rule
from F.J. Egner & Son to an application to carry household goods. 53 Ohio St.2d
70, 7 O.O.3d 148, 372 N.E.2d 354. The applicant had sought a certificate to carry
household goods from and to points in Lucas County, Ohio. Six carriers protested
the application. The commission denied the application. We agreed, stating:
"The only evidence of a need for services not already available from the
existing carriers was the testimony of a witness for the Xerox Corporation, who
said that his company needed the services of a carrier with a warehouse. But a
single shipper's need for additional service does not establish public convenience
and necessity in a certification proceeding where the shipper's need can be met
under a permit for contract carriage." 53 Ohio St.2d at 73, 7 O.O.3d at 150, 372
N.E.2d at 356.
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SUPREME COURT OF OHIO
{¶ 29} Thus, a single shipper witness does not establish a public need for a
certificate of public convenience and necessity to carry household goods, where
that shipper's need can be satisfied under a permit for contract carriage.
{¶ 30} The commission downplays the benefits from contract carriage
permits. Yet, Dr. Bardi, the applicants' expert, agreed that contract permit authority
would eliminate most of the shippers' problems in this case and also strengthen the
relationships between the shippers and their chosen carriers. Shipper witness Bruce
Jackson and protestants' expert, Dr. John Grabner, also supported the contract
permit approach. Shipper witness Jackson stated that B.P. Oil had sought a contract
permit with its preferred carrier, but that the application had drawn strong
opposition and was still pending before the commission. Grabner also suggested
that many of the shippers' needs in this case could be resolved through a contract
permit, instead of statewide authority to carry household goods.
{¶ 31} The commission cited no facts to support its finding that the shippers
below could not be adequately served through contract authority. It is unclear from
our review of the record how many of the shippers in this case could be served
through authority for contract carriage. Dr. Bardi and Dr. Grabner both opined that
this mechanism would eliminate many of the shippers' problems. Therefore, we
find that the multiple-witness rule is applicable in this case.
{¶ 32} The commission argues that the multiple-witness rule was satisfied
when it took administrative notice of the shipper testimony supporting the
individual applications and used it on a unified basis to support a finding of a public
need for all of the applications. This is incorrect. The commission never expressly
took administrative notice of any testimony below. It simply relied on the shipper
testimony as a whole to support what it apparently viewed as some type of class
application for a certificate:
"[T]he Commission notes that, unlike a traditional commercial situation,
the request for authority in this case is for service to a large class of customers,
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January Term, 1995
both residential and corporate. In this regard, the present case is most analogous
to a class action lawsuit. As with any class action lawsuit, it is impractical to
require testimony from all members of the class. Consequently, a carrier should
be able to meet the need requirement by a more general reference to the needs of
the particular class (provided the need is defined with specificity) without
requirement of individual shipper testimony.
"* * *
"Consequently, we find that the showing of need required by the applicants
in this case is different from that usually required and that the applicants' requests
should not fail simply because individual residential members of the class did not
testify about a specific need to move goods from point A to point B in the state on
a continuous basis. Indeed, if we were to follow such an approach as the protestants
urge then, due to the unique nature of the need and the diverse class of shippers and
destination points, we would have created a burden of proof which could never be
met." (Emphasis added.)
{¶ 33} We find the commission's use of the testimony in this fashion
improper. In Allen v. Pub. Util. Comm. (1988), 40 Ohio St.3d 184, 185, 532 N.E.2d
1307, 1309, we noted that there was neither an absolute right for nor prohibition
against the commission's taking administrative notice of facts outside the record in
a case. Each case was to be resolved on its facts. We also established factors for
determining whether administrative notice was proper:
"[T]he factors we deem significant include whether the complaining party
had prior knowledge of, and had an opportunity to explain and rebut, the facts
administratively noticed. Moreover, prejudice must be shown before we will
reverse an order of the commission." Id. at 186, 532 N.E.2d at 1310.
{¶ 34} Therefore, the commission may take administrative notice of facts if
the complaining parties have had an opportunity to prepare and respond to the
evidence, and they are not prejudiced by its introduction. Id.
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SUPREME COURT OF OHIO
{¶ 35} Administrative notice of the testimony in this case prejudiced the
protestants because the applicants' burden of proof was reduced by this use of the
testimony. Six carriers did not present any shipper witnesses to support their
applications. But for the commission's unified-testimony approach, these
applications would have been summarily rejected because of inadequate support.
Doc Goodrich & Son, Inc., supra, 53 Ohio St.2d 70, 7 O.O.3d 148, 372 N.E.2d
354; Bob's Truck Service, Inc., supra, 2 Ohio St.3d at 85, 2 OBR at 638-639, 443
N.E.2d at 147; F.J. Egner & Son, Inc., supra, 13 Ohio St.2d at 132, 42 O.O.2d at
340, 235 N.E.2d at 132. The burden of proving their case was effectively
eliminated for these six carriers by the commission's unified-testimony approach.
{¶ 36} Twelve other carriers presented only one shipper witness each to
support their individual applications. These applications also would have been
rejected without the unified-testimony approach. Thus, the burden of proof was
reduced for the carriers that supported their applications with only one witness each.
In total, eighteen applications that should have been rejected for inadequate support
were granted under the unified-testimony approach.
{¶ 37} Using the testimony in this fashion also contradicted the express
intent of the shipper witnesses. Every shipper witness but one limited his or her
testimony to supporting only a single carrier's application. The shippers testified
that they were consciously reducing the number of carriers that they work with, and
that they would provide their chosen applicant with most, if not all, of their service
in the future, if its application were granted. These witnesses made it clear during
cross-examination that they wanted to deal only with their chosen carriers, and no
others. Thus, the shipper witnesses did not intend to support a class action type of
application. Therefore, based on the overwhelming evidence of record, we find
that the shipper witnesses did not intend to support the applications of other carriers,
and, under these circumstances, it was unreasonable for the commission to use the
testimony in that fashion.
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January Term, 1995
{¶ 38} We have also held that consolidation of cases and the exchange of
testimony is impermissible where it eliminates a portion of a party's burden of
proof. Motor Serv. v. Pub. Util. Comm. (1994), 39 Ohio St.2d 5, 68 O.O.2d 3, 313
N.E.2d 803. In Motor Service Co., we determined that the commission's
consolidation procedure prejudiced Motor Service Company and was, therefore,
subject to reversal:
"The procedure adopted by the commission, in allowing consolidation and
adoption of this testimony, eliminated Transit Homes' burden of proving the
inadequacy of the existing service and the ability of Transit Homes to provide it in
the Wood County area, where the public witnesses resided, who testified at the
October 28 hearing. The commission's procedure eliminated the necessity for
Transit Homes making its own record before the commission." Id. at 12, 68 O.O.2d
at 7, 313 N.E.2d at 808.
{¶ 39} In this case, the commission's consolidation of shipper testimony
reduced the burden of proof for eighteen of the twenty-two applicants. This
prejudiced the protestants by eliminating the applicants' need to make a record at
the commission. This was not our intention in Allen. Nor is it consistent with
Motor Service Co., Mason, Doc Goodrich & Son, Inc., or F.J. Egner & Son, Inc.
Therefore, we find that the commission erred when it consolidated the shipper
testimony below.
{¶ 40} The commission committed further error when it stated prior to the
hearing that the existing service for all of the applicants would be considered per
se deficient if any one of the twenty-two applicants established a need for the
proposed service. The commission's order confirms this per se deficiency finding:
"With respect to the issue of deficiency, we find that the existing service is
deficient by virtue of the fact that none of the protestants [is] authorized to transport
household goods between all points in Ohio. * * *"
"* * *
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SUPREME COURT OF OHIO
"CONCLUSIONS OF LAW
"* * *
"7) A deficiency has been demonstrated in this case by virtue of the fact
that none of the protestants hold[s] statewide authority for the transportation of
household goods."
{¶ 41} The commission's entry on rehearing reaches the same conclusion.
{¶ 42} The commission's reasoning is circular and presumes, without
record support, that statewide authority is required to provide adequate service. The
commission's statement proves only that it has not previously granted statewide
authority for the transportation of household goods. The absence of statewide
authority does not, itself, prove that the existing service is deficient. Thus, the
commission improperly reduced the applicants' burden of proof by eliminating their
need to make a record on this issue.
{¶ 43} Thus, the commission changed the standard for issuing a certificate
under R.C. 4921.10 by using testimony from unrelated application cases to support
the consolidated applications and by determining prior to the hearing that each
applicant's existing service would be per se deficient if any one applicant could
prove a public need. These changes in the standard to obtain a certificate under
R.C. 4921.10 were error. Mason, supra, 34 Ohio St.2d 21, 63 O.O.2d 43, 295
N.E.2d 412. Accordingly, we find that appellant Advance Transfer's first, second,
third, and eighth propositions of law, Carr's Moving's propositions of law three and
four, and Canton Storage's first, second, fourth, and fifth propositions of law have
merit.
{¶ 44} In addition to disputing the legal standard used by the commission,
appellants contend that the record evidence does not establish a public need for the
proposed service or that the existing service is inadequate.
{¶ 45} An applicant must prove that the general public has a definite need
for the proposed service. Bob's Truck Service, Inc., supra, 2 Ohio St.3d at 84, 2
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January Term, 1995
OBR at 638, 443 N.E.2d at 146; Harold D. Miller, Inc. v. Pub. Util. Comm. (1982),
1 Ohio St.3d 162, 163, 1 OBR 194, 195, 438 N.E.2d 448, 449. Whether a definite
need has been established is a question of fact to be determined by the commission.
See R.C. 4921.10.7 We will not disturb the commission's finding of need if there
is sufficient probative evidence in the record to support it. MCI
Telecommunications Corp., supra, 38 Ohio St.3d at 268, 527 N.E.2d at 780; Indus.
Energy Consumers of Ohio Power Co., supra, 68 Ohio St.3d at 554, 629 N.E.2d at
420. That evidence does not exist in this record.
{¶ 46} A public convenience is not the same as a public need:
"A 'necessity' for motor transportation service as contemplated by the motor
transportation act is not synonymous with a 'convenience,' but is a definite need of
the general public for a transportation service where no reasonably adequate service
exists." Canton-East Liverpool Coach Co. v. Pub. Util. Comm. (1930), 123 Ohio
St. 127, 174 N.E. 244, paragraph two of the syllabus; accord Transport Supply,
Inc. v. Pub. Util. Comm. (1979), 60 Ohio St.2d 155, 157, 14 O.O.3d 391, 392, 397
N.E.2d 1352, 1354; Mason, supra, 34 Ohio St.2d at 23-25, 63 O.O.2d at 44-45, 295
N.E.2d at 414-415; A&T Motor Freight, Inc. v. Pub. Util. Comm. (1932), 125 Ohio
St. 617, 184 N.E. 11, paragraph one of the syllabus.
{¶ 47} Proof that additional service would be more convenient does not
justify issuing a certificate:
"[I]t must be conceded that every additional transportation service in every
territory, where people live or where people go, may reasonably be expected to be
at some time a convenience to some one, and probably to many; and the Legislature
must have known that any public transportation operation, anywhere within the
state, would be a convenience to some degree to the inhabitants of its territory and
7. "The commission may * * * grant a certificate only when the existing motor transportation
company or companies serving such territory do not provide the service required * * * to the
satisfaction of the commission." (Emphasis added.)
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SUPREME COURT OF OHIO
to the persons desiring to go into or out of such territory. The Legislature, however,
was not attempting to make a certificate to operate available to every one who might
apply, but was attempting to regulate the number of operations, the places of
operation, and the character of the operation; and so it provided that, before a
certificate could issue, not only a convenience but a necessity for such operation
should exist." Canton-East Liverpool Coach Co., supra, 123 Ohio St. at 129-130,
174 N.E. at 245; see, also, Bob's Truck Service, Inc., supra, 2 Ohio St.3d. at 85, 2
OBR at 638-639, 443 N.E.2d at 147 (need not proven where two supporting
shippers described their needs in terms of general objectives rather than specific
requirements, painting a picture of occasional snags in an otherwise routine
shipping schedule); R.D.S. Mowery, Inc. v. Pub. Util. Comm. (1981), 66 Ohio St.2d
22, 24, 20 O.O.3d 14, 15, 419 N.E.2d 7, 8 (need not proven where evidence
established only that the carrier's customers were pleased with its service and
wanted to use it in the future); D.G.&U. Truck Lines, Inc. v. Pub. Util. Comm.
(1953), 158 Ohio St. 564, 574-575, 49 O.O. 477, 482, 110 N.E.2d 587, 592-593
(need not proven where supporting witnesses wanted additional, competitive
service, but record showed that thirty-nine of forty-five areas sought to be served
had existing service from other carriers); A&T Motor Freight, Inc., supra, 125
Ohio St. 617, 184 N.E. 11 (need not proven by desirability of new service where
evidence establishes the abundance of service currently existing in the region in
question); N.Y. Cent. RR. Co. v. Pub. Util. Comm., 123 Ohio St. at 374-375, 175
N.E. at 597 (need not proven where all but four of the proposed service locations
were already served by certificated carriers ready, willing, and able to render
additional service).
{¶ 48} We find no evidence in the record of a definite need for the proposed
statewide service. All twenty-one shipper witnesses based their need for the
proposed service on (1) maintaining their existing relationship with their chosen
household goods carrier and (2) reducing stress on their employees who are
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January Term, 1995
moving. No other evidence of need appears in this record.8 Only one shipper was
refused a move by an applicant. All other shippers made their moves with or
through their chosen carriers. No shipper stated that it had been unable to ship
goods to any location within the state under the existing service.
{¶ 49} The carrier applications do not support a finding of need for the
proposed service. The applicants state that the purpose of their applications is to
maintain and enhance their relationship with their existing customers and thereby
reduce the stress for the customers' employees. However, most of the applicants
were willing to enter into leasing arrangements with other carriers in order to move
household goods outside their individual authority. The applicants do not discuss
assisting the public, being solicited by the public for statewide service, or opening
new facilities in new locations in order to serve the public. The only rationale for
the additional authority appearing in the record is to provide additional services to
current customers. This does not establish a public need for the proposed service.
{¶ 50} The applicants' expert also failed to support a finding of public need
for the proposed service. Dr. Bardi testified generally regarding the relationship
between movers and the moving family. He acknowledged that the focus of the
applications was to maintain and enhance the relationships between shippers and
their chosen carriers. He also acknowledged that his testimony was prepared based
8. The shippers also used cost savings as a third basis for establishing their need. However, the
applications do not seek to change the current rate structure. Additionally, since all of the applicants
were members of the Ohio Household Goods Carriers' Bureau, they are required to charge the
customer the Bureau tariff rate. Therefore, unless a carrier publishes its own tariff at the
commission, which it may do at its discretion, there would be no cost savings to the shipper if the
applications were granted. Appellants argue that the grant of authority below may drive rates down
in the future. This argument has no support in the record. No carrier stated that it would file an
individual tariff with the commission as a result of the commission's actions below. Accordingly,
the commission's order below likely would have no effect on rates.
9. The absence of the applicants' evidence on this issue is understandable given the commission's
statement that it would presume that the current service was deficient per se, if any applicant proved
that there was a need for the proposed service.
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upon his experience in the transportation industry, not upon any specific facts in
the record.
{¶ 51} Bardi did not claim that the current service is inadequate, only that
the existing relationship between the shippers and carriers would benefit if the
applications were granted. He did not conduct any analysis of the economic impact
of granting the applications or perform any analysis specific to Ohio before
rendering his opinion in this case. Bardi did, however, claim that statewide
authority would enhance the efficiency of the household goods transportation
industry by reducing or eliminating the need to lease authority from other carriers
in order to move goods into or from an area in which the original carrier does not
have authority. While this testimony may show it would be more convenient for
commercial shippers if the applications were granted, it does not support a finding
that there is a public need for the proposed service.
{¶ 52} Finally, the commission concluded that the public need in this case
arose from the individual shippers' desire to use the carrier of their choice and
thereby reduce the stress upon the shippers' employees. That is not enough.
Significantly, the commission noted the applicants' failure of proof on this issue:
"[T]here are a multitude of existing carriers out there to serve the need [for
shipping household goods]. * * * In the case of residential and small business
household goods moving needs, the need is a sporadic one and, as Dr. Bardi's
testimony points out, is driven more by the public's interest in returning to a carrier
* * * than by the need to move goods specifically from one point to another on a
continuous basis." (Emphasis added.)
{¶ 53} A shipper's desire to give a specific carrier more business does not
constitute a public need for statewide household goods carrier service. See Bob's
Truck Service, Inc., supra, 2 Ohio St.3d at 85, 2 OBR at 639, 443 N.E.2d at 147;
R.D.S. Mowery, supra, 66 Ohio St.2d at 24, 20 O.O.3d at 15, 419 N.E.2d at 8;
D.G.&U. Truck Lines, Inc., supra, 158 Ohio St. at 574-575, 49 O.O. at 482, 110
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January Term, 1995
N.E.2d at 592-593; A&T Motor Freight, Inc., supra, 125 Ohio St. 617, 184 N.E.
11; Canton-East Liverpool Coach Co., supra, 123 Ohio St. at 129-130, 174 N.E. at
245. There is no need if, as here, the goods are currently deliverable within a
reasonable time under the existing service. At best, the evidence of record
establishes a public convenience. Thus, there is insufficient probative evidence in
the record to support the commission's finding of a public need for the proposed
service. Therefore, we hold that the commission's finding of need in this case is
against the manifest weight of the evidence.
{¶ 54} As with the issue of public need, the question of the adequacy of the
existing service is one reserved for the commission. R.C. 4921.10. If there is
sufficient probative evidence in the record to support the commission's deficiency
finding, that finding will not be disturbed. MCI Telecommunications Corp., supra,
38 Ohio St.3d at 268, 527 N.E.2d at 780; Indus. Energy Consumers of Ohio Power
Co., supra, 68 Ohio St.3d at 554, 629 N.E.2d at 420. Appellants correctly argue,
however, that the record evidence demonstrates that the existing service is
"reasonably adequate" for all of the applicants.
{¶ 55} " 'Reasonably adequate' does not contemplate the highest character
of service, either as to frequency or directness, but only contemplates a service
which, when measured by the expense of the service, the volume of traffic and the
needs of the public, is practicable." Canton-East Liverpool Coach Co., supra, 123
Ohio St. 127, 174 N.E. 244, at paragraph three of the syllabus; see, also, Transport
Supply, Inc., supra, 60 Ohio St.2d at 158, 14 O.O.3d at 393, 397 N.E.2d at 1354;
A&T Motor Freight, Inc., supra, 125 Ohio St. 617, 184 N.E.2d 11, at paragraph
two of the syllabus.
{¶ 56} Thus, in order for a certificate to issue, an applicant must, in addition
to showing the public's need for the proposed service, prove that there is no
practicable alternative available. No applicant established this fact below.
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{¶ 57} Neither the shipper witnesses, the applicants, nor the applicants'
expert addressed the deficiency issue in prefiled testimony. No shipper claimed
that there were shipments that could not be delivered because there were no
available carriers. With one exception, every shipper was able to ship goods to
every location within the state under the current system within a reasonable time,
irrespective of any limitation on its chosen carrier's authority.
{¶ 58} Shipper witnesses were uniformly unaware which carriers were
available and/or had authority to carry household goods to and from various
locations around the state. Further, the shippers acknowledged that they were
periodically solicited by other carriers seeking to haul household goods on an
intrastate basis.
{¶ 59} The protestants testified that they were available and had the
necessary equipment ready to take on additional moving business in their
certificated areas. Applicants' failure of proof is also evident in the commission's
order and entry on rehearing. The commission does not cite a single fact supporting
its conclusory statement that the current service is inadequate.
{¶ 60} Each applicant had the burden of proving each element of its
application. None proved this aspect of its case.9 Our review of the record reveals
no support for the commission's finding that the current transportation service for
household goods in Ohio is inadequate. To the contrary, the record evidence
supports only one finding, that the current service was adequately serving the needs
of the shipping public. Accordingly, we find that the commission's conclusion that
the existing service was deficient is against the manifest weight of the evidence.
{¶ 61} Appellants also contend that the commission's order contravenes the
legislative policy enunciated in R.C. 4921.03. R.C. 4921.03 provides in part:
9. The absence of the applicants’ evidence on this issue is understandable given the commission’s
statement that it would presume that the current service was deficient per se, if any applicant proved
that there was a need for the proposed service.
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January Term, 1995
"The policy of this state is to:
"(A) Regulate transportation by common and contract carriers by motor
vehicle in such manner as to recognize and preserve the inherent advantages of, and
foster sound economic conditions in, such transportation and among such carriers
in the public interest;
"(B) Promote adequate, economical, and efficient service by such motor
carriers, and reasonable charges therefor, without unjust discriminations, undue
preferences or advantages, and unfair or destructive competitive practices."
{¶ 62} We have recognized that the state's policies are created to protect the
public interest, not the interests of individual carriers. In that regard, any benefits
and rights incidental to certificate ownership are secondary to the needs of the
public:
"It is a fundamental principle that in the matter of the regulation of motor
transportation carriers the purpose of motor transportation legislation is to secure
to the public necessary and convenient common carrier service over the highways
* * * and that * * * certificates are issued for the benefit of the public rather than
for the benefit of the recipients of the certificates. Anticipated benefits to the
applicant or possible detriment to other certificate holders are only incidental and
secondary." (Emphasis added.) Modern Motor Express, Inc. v. Pub. Util. Comm.
(1950), 154 Ohio St. 271, 275, 43 O.O. 162, 164, 95 N.E.2d 764, 767-768; Mason,
supra, 34 Ohio St.2d at 26, 63 O.O.2d at 46, 295 N.E.2d at 415.
{¶ 63} This possible detriment to certificate holders is balanced with the
recognized policy of limited competition within the certified area. We have
repeatedly stated "the established public policy of this state that no more trucks or
busses be placed on the public highways than the public necessity requires."
Mohawk Motor, Inc. v. Pub. Util. Comm. (1953), 159 Ohio St. 77, 84, 50 O.O. 63,
66, 110 N.E.2d 909, 912; see, also, D.G.&U., supra, 158 Ohio St. at 575, 49 O.O.
at 482, 110 N.E.2d at 593 (R.C. 4921.10's predecessor "'requires the commission
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to limit its authorization so that no more motor trucks or buses are placed on the
highways of the state than the public necessity requires.'"); Canton-East Liverpool
Coach Co., supra, 123 Ohio St. at 130, 174 N.E. at 245 ("The Legislature, however,
was not attempting to make a certificate to operate available to every one who might
apply, but was attempting to regulate the number of operations, the places of
operation, and the character of the operation
* * *."); McClain v. Pub. Util. Comm. (1924), 110 Ohio St.1, at 7-10, 143 N.E. 381,
at 382-383. The policy's focus is protecting the public and the certified
transportation routes:
"The best interests of and the most efficient services to the public do not
require a greater number of motor trucks upon the highway of the state than are
necessary to supply the public need for such transportation. * * * The policy
announced by the existing statutes, and frequently applied in these cases, is to
preserve and protect previously certified transportation routes, not primarily for
their benefit, but for the benefit of the public." N.Y. Cent. RR., Co., supra, 123
Ohio St. at 377-378, 175 N.E. at 598.
{¶ 64} Thus, although certificate holders have no vested right to limited
competition in their certified territories, we have held that the state's policy is to
limit competition within an area only to that which is necessary to fulfill the public's
need. The commission's order obviously violates this policy if, as in this case, there
is no public need for the additional services. Id.; McClain, supra, 110 Ohio St. at
7-10, 143 N.E. at 382-383. On this basis alone, the commission's order violates the
state's transportation policy enunciated in R.C. 4921.03.
{¶ 65} Although the commission's order may be grounded in sound public
policy and furthers the commission's recent attempts to foster free and open
competition in Ohio, it is beyond the scope of the commission's statutory authority.
The General Assembly, not the commission, must make changes in the regulatory
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January Term, 1995
climate to permit increased competition. The current statutory framework does not
permit the commission to effect this expansion.
{¶ 66} We addressed this issue in Edwards Motor Transit Co. v. Pub. Util.
Comm.:
"[T]he primary purpose of R.C. 4921.10 is to insure that the public
convenience and necessity [are] adequately served; whether the accomplishment of
this goal restricts or expands competition is irrelevant. Indeed, it may reasonably
be argued that regulation, in any form, is the antithesis of free enterprise and an
anathema to the ideal of competition. While this may be an interesting and proper
subject for debate, it is patently clear that this court is not the proper forum for such
debate. We concur with the commission's statement that '[i]f the public interest
may be better served by unrestricted competition in the bus industry, it is a
determination that should be made through the legislative process.'
"We have held that '[i]t is not the policy of the motor transportation statute
* * * to promote unrestricted competition between common carriers.' Likewise,
'[u]nrestricted competition among common carriers * * * is not the policy of the
legislation covering motor transportation companies. * * * Such policy is that the
public be served by the existing carriers and that additional service be authorized
only when the service being rendered is inadequate.'" (Citations and footnotes
omitted.) Edwards Motor Transit Co. v. Pub. Util. Comm. (1982), 1 Ohio St.3d 3,
4, 1 OBR 29, 30, 437 N.E.2d 291, 293.
{¶ 67} Thus, only the General Assembly makes policy decisions based
upon the concept of free competition. If the household goods transportation
industry is to become freely competitive, the General Assembly must effect that
change. Absent that type of change in the statutory framework, the commission is
constrained, as we are, to apply the existing framework to all applications for a
certificate of public convenience and necessity. Accordingly, the commission erred
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when it attempted to bypass the General Assembly and create, by administrative
fiat, a freely competitive household goods transportation industry in Ohio.
{¶ 68} Appellant Carr's Moving also believes that the commission's order
violates state policy by giving the applicants an undue preference. We disagree.
No record evidence establishes that issuing the requested certificates will provide
any applicant an undue preference. Although there might initially have been some
preference to these applicants, that preference would be short-lived. The
commission made it clear that any carrier that wants statewide authority should be
able to obtain it. When the commission issued the certificates in this case, it did so
with the proviso that the recipients should not object to the issuing of similar
authority to other carriers in the future. Thus, any qualified carrier could obtain a
statewide certificate and compete on equal footing. Therefore, the commission's
decision, with the sole exception of the timing of the certificates, does not appear
to provide any carrier with an undue preference.
{¶ 69} Appellant Advance Transfer argues that the commission erred when
it found that the leasing of equipment/authority in these cases was not an adequate
substitute for statewide authority. Whether leasing arrangements are a reasonable
substitute for statewide authority is a factual issue for the commission to determine.
There is ample evidence in the record supporting the commission's statement that
the current practice of leasing of authority is problematic. As a result, there is
adequate record support for the commission's finding in this case. We will not
substitute our judgment for that of the commission on this issue.
{¶ 70} Advance Transfer implies that the commission's decision effectively
eliminated a carriers' right to lease equipment or otherwise engage in an oral trip
lease under Ohio Adm. Code 4901:2-3-03(E)(4). This is incorrect. The
commission's decision is without the global scope imparted to it by this appellant.
Were the commission's intent to prohibit trip leasing as a whole, it would have said
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January Term, 1995
so. The commission made no such statement. Accordingly, we do not substitute
our judgment for that of the commission on this issue.
{¶ 71} For the reasons set forth above, we find that the commission abused
its discretion when it granted the twenty-two applications for statewide authority to
haul household goods. Accordingly, the commission's order is reversed and the
cause is remanded.
Order reversed
and cause remanded.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER and COOK, JJ.,
concur.
WRIGHT, J., concurs in judgment only.
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