State ex rel. Utilities Commission v. M.L. Hatcher Pickup & Delivery Services, Inc.

PARKER, Judge.

G.S. 62-3(8) defines a “contract carrier by motor vehicle” as “any person which, under an individual contract or agreement with another person and with such additional persons as may be approved by the Utilities Commission, engages in the transportation other than [transportation by common carriers], by motor vehicle of persons or property in intrastate commerce for compensation ...” Under G.S. 62-262, no carrier may transport property in intrastate commerce unless that person has applied for and obtained a certificate or permit. Subsection (i) of G.S. 62-262 specifies what the Utilities Commission must consider before granting a permit to a contract carrier:

If the application is for a permit, the Commission shall give due consideration to:

(1) Whether the proposed operations conform with the definition in this chapter of a contract carrier,

(2) Whether the proposed operations will unreasonably impair the efficient public service of carriers operating under certificates, or rail carriers,

(3) Whether the proposed service will unreasonably impair the use of the highways by the general public,

(4) Whether the applicant is fit, willing and able to properly perform the service proposed as a contract carrier,

(5) Whether the proposed operations will be consistent with the public interest and the policy declared in this Chapter, and

(6) Other matters tending to qualify or disqualify the applicant for a permit.

Pursuant to its rulemaking powers under G.S. 62-31, the Utilities Commission has promulgated NCUC Rule R2-15(b) establishing the burden of proof for an applicant seeking contract carrier authority:

If the application is for a permit to operate as a contract carrier, proof of a public demand and need for the service is not required; however, proof is required that one or more shippers or passengers have a need for a specific type of service not otherwise available by existing means of transportation, and have entered into and filed with the Commission with a copy to the Public Staff prior to the hearing or at the time of the hearing, a written contract with the applicant for said service, which contract shall provide for rates not less than those charged by common carriers for similar service.” (emphasis added).

Unless the requirements of both G.S. 62-262(i) and Rule R2-15(b) are met, the Commission may not grant the authority sought. NCUC Rule R2-10(b). Protestant contends on appeal in the present case that the applicant failed to meet its burden under both G.S. Chap. 62 and the Commission rules in that it did not show the need for a specific type of service, the unavailability of the needed service from existing carriers, or the absence of detrimental effect on common carriers.

In support of its contention that applicant did not carry its burden of showing the need for a specific type of service, protestant challenges the full Commission’s findings of fact that Reynolds needs a carrier with statewide authority on the grounds that the findings of Reynolds’s need are unsupported by competent, material, and substantial evidence in view of the entire record as submitted. It is well established that if the findings of the Utilities Commission are so supported, they are conclusive and binding upon the appellate court. Utilities Commission v. Coach Company, 269 N.C. 717, 153 S.E. 2d 461 (1967). The record discloses that the container industry is highly competitive and that Reynolds must be in a position to provide services comparable to those provided by its competitors. Although at the time of the hearing Reynolds had only two actual North Carolina customer locations, Charlotte and Eden, and the Division Manager of Reynolds’s Can Division, Roy Grabman, testified that Reynolds had no present plans to establish warehouses at any specific point in North Carolina, Grabman also testified as follows:

The demand for metal cans is extremely volatile and varies with the seasons and the weather. Our Salisbury plant will operate three shifts throughout the year, and will warehouse cans produced during the cooler months when demand is relatively low. At the present time, we operate a warehouse at Greensboro, North Carolina, and we anticipate the storage space for considerable number of cans will be available at our Salisbury plant. We also anticipate that from time to time, we will need to lease warehouse space in other locations in the State. Such warehouse locations are usually established on relatively short notice, and the actual location will be dependent on several factors, such as the availability of warehouse space, its proximity to our customers’ locations, its costs, and its suitability for storing cans. Since we cannot foretell when or where new sales will be made or the locations of future warehousing operations, we need a carrier who can pick up and deliver shipments at any point in the State of North Carolina.

This testimony, along with evidence of the competitive nature of the container industry, is amply sufficient to support the Commission’s finding of Reynolds’s statewide need. To limit the scope of Reynolds’s needs to its immediate geographic customer locations would be to ignore the realities of the marketing strategy necessary to Reynolds’s business.

Protestant next contends that even if the Commission’s findings of statewide need are supported by competent, material and substantial evidence, that need is not the type of “specific need” contemplated by NCUC Rule R2-15(b). This contention ignores the fact that the Commission did not rely solely on Reynolds’s geographic requirement, but rather considered it as merely one factor along with Reynolds’s other special needs. The Commission’s order contained extensive findings of fact concerning the specialized equipment necessary to transport Reynolds’s containers, the need for a carrier with expertise in handling such specialized equipment, and the need for dedication of equipment to the exclusive use of Reynolds for extended periods of time. This Court has in the past shown deference to the Commission’s determination that a need for a specific type of service justifies the grant of contract carrier authority. In Utilities Comm. v. Transport Co., 10 N.C. App. 626, 179 S.E. 2d 799 (1971), the Court held that the applicant for a contract carrier permit had met its burden of proof under G.S. 62-262(i) and NCUC Rule R2-15(b) where the evidence showed that the shipper, a buyer and seller of gas, required a carrier that could deliver liquified petroleum gas within twelve hours and that the permit applicant intended to devote equipment solely for the benefit of the shipper. Viewing the Final Order of the Commission in this case in its entirety, it is manifest that the applicant met its burden of showing that Reynolds has a need for a specific type of service.

The question remains, however, whether the applicant also met its burden under NCUC Rule R2-15(b) of showing that the specific type of service is not otherwise available by existing means of transportation and under G.S. 62-262(i) of showing that its proposed operations will not unreasonably impair the efficient public service of common carriers. Protestant has assigned error to the Commission’s finding of fact that “[t]he Protestant and other existing carriers in North Carolina are unable or unwilling to provide the service and the type of equipment that Reynolds Metals needs.” It is undisputed that at the time of the hearing protestant did not own any trailers equipped with mechanically self-unloading rollerbed systems such as Reynolds requires, although it was leasing one such trailer and had ordered five more at a cost of $125,000.00. It is also undisputed that Reynolds needs a shipper which can dedicate equipment to its exclusive use. The Commission found that the contract between applicant and Reynolds provides for the dedication of specific pieces of motor vehicle equipment to the exclusive use of Reynolds, and that this provision was inconsistent with the concept of common carriage. Although protestant contends that a tariff exists providing for the “dedication” of equipment by common carriers, that does not imply that the type of dedication which Reynolds requires is consistent with the concept of common carriage such that protestant could provide the needed service. Even if protestant has authority to spot equipment at Reynolds’s plant, it nevertheless has a duty as a common carrier to serve the public generally. Utilities Commission v. Transport, 260 N.C. 762, 133 S.E. 2d 692 (1963); Utilities Comm. v. McCotter, Inc., 16 N.C. App. 475, 192 S.E. 2d 629 (1972); affirmed, 283 N.C. 104, 194 S.E. 2d 859 (1973). Thus, should any conflict arise between its duty to the public and its “dedication” of equipment to Reynolds, the former would prevail to the economic and competitive disadvantage of Reynolds. Further, in veiw of our determination that the Commission’s findings of fact that Reynolds has a need for a carrier with statewide authority are supported by competent, material, and substantial evidence, the geographical restrictions on protestant’s common carrier authority render it incapable of furnishing the required services. The facts of the present case distinguish it from Utilities Comm. v. Petroleum Transportation, Inc., 2 N.C. App. 566, 163 S.E. 2d 526 (1968), in which this Court found insufficient evidence to support the Commission’s finding that the shipper had a need for a specific service not otherwise available.

As to the Commission’s conclusion that the grant of contract carrier authority to applicant will not unreasonably impair the efficient public service of common carriers, protestant’s only contention is that the grant of contract carrier authority to applicant will result in denying it the future opportunity to transport Reynolds’s cans. A similar contention was rejected in Utilities Comm. v. McCotter, Inc., supra, in which this court stated.

It is true that protestant might reasonably expect to receive a portion of [the shipper’s] business should contract carrier authority be denied to applicant. This fact alone, however, does not compel a determination that the efficient service of protestant as a common carrier will be unreasonably impaired. ‘There is no public policy condemning competition as such in the field of public utilities; the public policy only condemns unfair or destructive competition.’ Utilities Comm. v. Coach Co., 261 N.C. 384, 389, 134 S.E. 2d 689, 694. Neither protestant, nor any other intrastate carrier, has handled any of the shipping which applicant will handle under the contract authority granted herein. Consequently, a continuation of applicant’s operations under proper authority could hardly constitute unfair or destructive competition with respect to protestant or other carriers.

16 N.C. App. at 480-481, 192 S.E. 2d at 632-633.

The Commission, upon findings of fact fully supported by competent, material and substantial evidence in view of the record as a whole, concluded that applicant was entitled to the contract carrier authority sought. The Final Order appealed from is

Affirmed.

Judges Martin (Harry C.) and Hill concur.