STATE EX REL. UTILITIES COM'N v. Southern Coach Co.

199 S.E.2d 731 (1973)

19 N.C. App. 597

STATE of North Carolina ex rel. UTILITIES COMMISSION and Carolina Coach Company v. SOUTHERN COACH COMPANY.

No. 7310UC721.

Court of Appeals of North Carolina.

October 24, 1973.

Certiorari Denied January 9, 1974.

*733 Allen, Steed & Pullen, by Arch T. Allen and Thomas W. Steed, Jr., Raleigh, for plaintiff appellee Carolina Coach Co.

Boyce, Mitchell, Burns & Smith, by F. Kent Burns, and Clarence H. Noah, Raleigh, for defendant appellant.

Certiorari Denied by Supreme Court January 9, 1974.

BALEY, Judge.

Bus companies and other motor carriers in North Carolina are regulated by G.S. §§ 62-259 to -279. G.S. § 62-262(a) provides that no company shall provide bus service over any route until the Utilities Commission has granted it a certificate authorizing it to use that route. Under G.S. § 62-262(e)(1), before a certificate may be issued, the applicant must satisfy the Commission that "public convenience and necessity require the proposed service in addition to existing authorized transportation service . . . ." See generally Utilities Comm. v. Carolina Coach Co. and Utilities Comm. v. Greyhound Corp., 260 N.C. 43, 132 S.E.2d 249.

Under G.S. § 62-90 an aggrieved party may appeal a Utilities Commission decision to this Court. G.S. § 62-94 provides that on such an appeal, the Commission's decision is considered "prima facie just and reasonable," and it should be affirmed if supported by substantial evidence. Utilities Commission v. Carolina Coach Co., 269 N.C. 717, 153 S.E.2d 461. Substantial evidence has been defined as "more than a scintilla or a permissible inference." Utilities Commission v. Trucking Co., 223 N.C. 687, 690, 28 S.E.2d 201, 203. "It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. N. L. R. B., 305 U.S. 197, 229, 59 S. Ct. 206, 217, 83 L. Ed. 126 (1938). "[I]t must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." N. L. R. B. v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300, 59 S. Ct. 501, 505, 83 L. Ed. 660 (1939). The Commission's decision to grant Carolina's application and reject that of Southern must be judged by this substantial evidence standard.

First, the Carolina application. Carolina did not seek to establish an entirely new route, but only to relocate an existing route. Carolina now operates eighteen round trips daily between Raleigh and Durham. Twelve of these stop at points between the two cities, while six are nonstop. If its application is granted, Carolina intends to reroute its six nonstop trips over Interstate 40 and the Durham North-South Expressway.

The Utilities Commission has developed a special rule for applications that seek only to relocate an existing route over a new highway. In these cases the Commission does not require such an extensive demonstration of public convenience and necessity as in other cases. Instead, the *734 applicant is only required to show "that the proposed route, as it now exists and with future improvements, will provide a much safer, quicker and improved service. . ." Carolina Coach Co., No. B-15, Sub. 167, Recommended Order at 4 (Utilities Comm'n Oct. 19, 1971). This is a sound and proper rule. By encouraging bus companies to make use of new and improved highways soon after they are opened, it serves "to promote, in the interest of the public, the inherent advantages of highway transportation"which is one of the stated purposes of the motor carriers statute. G.S. § 62-259.

In this case Aaron Cruise, a vice president of Carolina, testified that U.S. Highway 70, which is the present route for nonstop trips between Raleigh and Durham, traverses an area of increasing development, such as Crabtree Valley Shopping Center, with reduced speed limits, traffic lights, and congestion, and that the proposed route would be faster, safer, less congested, and more comfortable. He stated further that the change to an improved highway would not result in any reduction in service to the traveling public at the present intermediate points. The Commission found: "[I]t is obvious that the proposed route will provide a fast, comfortable and safer ride for passengers traveling between the cities of Raleigh and Durham to the benefit of both the traveling public and to Carolina Coach Company." Beyond question, the uncontradicted testimony of Cruise is substantial evidence to support the Commission's finding and its decision to approve the Carolina application.

The Southern application is for new routes, not the relocation of existing routes, and is subject to a more stringent standard. Southern has the burden of proof to satisfy the Commission that public convenience and necessity require its proposed service in addition to existing authorized transportation service within the meaning of G.S. § 62-262(e)(1).

In Utilities Commission v. Trucking Co., supra at 223 N.C. 690, 28 S.E.2d at 203, the court defined public convenience and necessity as follows:

"It is to be remembered that what constitutes `public convenience and necessity' is primarily an administrative question with a number of imponderables to be taken into consideration, e. g., whether there is a substantial public need for the service; whether the existing carriers can reasonably meet this need; and whether it would endanger or impair the operations of existing carriers contrary to the public interest."

This definition involves two primary considerations: (1) whether there is a substantial public need for the service which could not be met by existing carriers and (2) whether the proposed service would endanger or impair the operations of existing carriers contrary to the public interest.

Southern contends that there is a public need for its proposed service: (1) to provide local service in the Research Triangle; (2) to establish continuous service between Wilmington and Durham without change of bus in Raleigh; and (3) to reduce its expenses in operating between Raleigh and Durham.

Southern presented several witnesses who testified that there was a need for local bus service in the Research Triangle area. These witnesses were interested in commuter buses, to carry Triangle employees to work in the morning and home in the afternoon. Commuter service is excluded from the coverage of the motor carriers statute and is not regulated by the Utilities Commission. G.S. § 62-260(a)(7). Either Carolina or Southern is free to establish commuter bus service in the Research Triangle at any time. The record indicates that since the 20 October 1972 hearing, Carolina has taken preliminary steps toward providing this service.

While several witnesses testified they would like continuous service reestablished between Wilmington and Durham without *735 change of bus, the witness Aaron Cruise testified that he had studied Carolina and Southern ticket sales records and found that the average number of passengers traveling south from Durham to Wilmington (or to points on the Raleigh-Wilmington route) was 1.6 per day while the average number traveling north was 1.7 per day. The Utilities Commission is not required to establish new bus routes for the benefit of three persons a day. Southern already has a route from Wilmington to Durham which it could use to provide continuous service between the two cities now. However, Southern has found that it cannot operate this route profitably, and it has used the Wilmington-Raleigh route instead.

As to the reduction in operating expenses, the present franchise authority of Southern authorizes service between Durham and Raleigh only by way of Holly Springs. This is not a direct line between the two cities and does not offer any realistic competition in bus service between Raleigh and Durham. The new routes do not constitute an improvement for the purpose of effecting operating economies in present service, but constitute new service in direct competition with Carolina. The testimony of witness Cruise indicates that the volume of traffic has been steadily decreasing in recent years causing a reduction in average passenger load. Over 57% of the available seats on buses operated by Carolina between Raleigh and Durham are presently unoccupied. The Commission found: "In order to continue to provide the present service between Raleigh and Durham, Carolina Coach Company must continue to carry its present Raleigh-Durham passengers and any substantial decrease in passenger traffic could result in the curtailment of the present service contrary to public interest." There is substantial evidence to support this finding.

The Utilities Commission has determined that Southern has failed to carry the burden of proving that public convenience and necessity require that it be granted its proposed routes. The decision of the Commission denying the Southern application is clearly supported by substantial evidence.

In addition to granting Carolina's application and denying Southern's application, the Utilities Commission entered the following order:

"2. That Southern Coach Company and Carolina Coach Company shall renegotiate an equitable equipment interchange agreement to provide passengers through service without a change of coaches between Durham and Wilmington, North Carolina over the franchised routes of both carriers and submit the proposed agreement to the Commission for its consideration within thirty (30) days from the date of this order."

The Commission has no power to issue an order in this manner. G.S. § 62-262 (j) provides that the Commission may modify a carrier's certificate "by requiring the holder to furnish more or less transportation service . . . or by imposing other reasonable terms, conditions, restrictions, and limitations as public convenience and necessity . . . may require; provided, that the procedure in all such cases as to notice and hearing shall be the same as provided in this section for the issuance of a certificate or permit." Here the Commission issued its directive without any notice or hearing whatever. It simply instructed the parties peremptorily that they must enter into an agreement. Such a procedure is entirely contrary to the statutory requirements, and this portion of the Commission's order is invalid.

The Commission's order is reversed insofar as it requires Carolina and Southern to resume joint operation of the Durham-Wilmington route. In all other respects, it is affirmed.

Affirmed.

CAMPBELL and MORRIS, JJ., concur.