PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLES TON PROCEDURE. On February 24, 1976, Carroll Trucking Company, a corporation

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1 CHARLES TON At a session of the OF WEST VIRGINIA, at the Capitol in the City of Charleston on the 13th day of July, M.C. CASE NO. 132 and 1902 CARROLL TRUCK I NG COMPANY (Huntington, Cabell County) Application for transfer of certificate unto J. ALLEN MARTIN, INC., (Huntington, Cabell County). M.C. CASE NO CARROLL TRUCKING COMPANY (Huntington, Cabel.1 County) Application for transfer of permit unto J. ALLEN MARTIN, INC., (Huntington, Cabell County). PROCEDURE On February 24, 1976, Carroll Trucking Company, a corporation filed its application with the Public Service Commission for approval of the transfer and assignment unto J. Allen Martin, Inc., a corporation of P.S.C. M.C. Certificate Nos. F1382 and F860. On that same date, the applicant also filed its application to transfer P.S.C. M.C. Permit No. H910, as amended, to the same transferee. The certificate transfer proceedings were designated M.C. Case Nos. 132 and 1902 respectively. The permit transfer proceeding was designated M.C. Case No The three proceedings were set for hearing to be held on March 30, 1976 by Commission orders dated March 1, 1976 (Case No. 3821) and March 3, 1976 (Case Nos. 132, 1902). Public notice by publication was required of the applicant. Subsequently, upon the motion of counsel for the applicant, all proceedings were continued until April 20, Once again, by orders entered on March 9, 1976, public notice by publication was required of the applicant. Public notice was provided as required by the Commission's order and the hearings were held as scheduled. On the Commission's own motion, the records in these three proceedings were consolidated for hearing. The Commission received no letters of protest. However, at the hearing, Alexander J. Ross appeared representing four intervening parties; R. L. Jeffries Trucking Company, Inc., J. L. Coats, Miller.

2 Trucking, Inc., and Midkiff 25 Stowers Trucking, Inc.. The applicant appeared by counsel., Boyce Griffith, and by its Vicc President, Robert M. Carroll. The transferee appeared by counsel., Boyce Griffith, and by its Vice President, James A. Martin. Testimony was taken and evidence adduced, at the close of which, these matters were submitted to the Commission for decision. * I_d DISCUSSION OF THE EVIDENCE AND THE LAW The applicant/transferor, Carroll. Trucking Company, has eiitered into an agreement to transper two common carrier certificate: of convenience and necessity and one contract carrier permit to J. Allen Martin, Inc. The consideration to be paid by the transferee is one hundred thousand dollars; fifty thousand dollars for the certificates and permit and fifty thousand for certain equipment including six trucks and eleven trailers. At the hearing the interveners voiced objection to only one portion of one certificate, M.C. Certificate No. F1382, specifically that portion relating to "...machinery, supplies, materials, and equipment, including rigs and form lumber, used in the drilling and operation of oil and gas wells,...in Jackson, Roane, Clay, Nicholas, and Greenbrie: Counties and in all counties lying south of said counties;... Counsel for the interveners alleged, and subsequently supported by unanswered brief, that this portion of the applicant's authority was dormant and should not be transferred into the hands of a transferee who intended to develop the dormant portion of the certificate. By admission, development of this previously inactive portion of the certifica.te was an important consideration in this transaction to the transferee.? ' ~,i I, The Public Service Commission has long held that the mere holding onese1.f out to provide a certain service is sufficient rebuttal to an allegation of dormancy. Recent research however, reveals that thii Commission is relatively alone in its previous stand. A claim of holding out or solicitation of business has been held to provide little evidence against dormancy, when the transportatio~ rights involved general commodities. llll_l. Rouff Transfer, Inc. v. United States, supra. However, a willingness and ability to serve have been 7

3 I_ I 1_11_4 I ~_ I given substantial weight when the certificate holder was engaged in the transportation of a highly specialized service (e.g. transportation of househo1.d goods, haulage of cement and limestone). U.S. Van Lines, 1nc. PurchaseJ. _ Norman Geipe Van Lines, Inc., 87 M.C.C. 467 (196:l.), Snlith v. Andrews 'Van Lines,.L Inc 187 Neb. 533, 192 N.W.2d 406 (1971).. I In t1i:is proceeding, very specialized rights are at i.ssue, so.,. "1 substantial weight will be given to the transferor's presentation. The Commission must now look to the facts in search of corroboration of the transferor's position. Examination of the Vice President of the transferor corpo:ratic revealed that none of the following equipment, considered by the iatervenors to be essential, was owned by the transferor: winches, rollinglail boards, trailers with rollers, skitype tandems, floattype trailers, non..pulling bumpers. water tanks, rigur The transferor admitted that it had not, in the past four years, hau1ed;drilling mud, water, pipe from one gas well to another, nor drilling equipment. The transferor was given an opportunity to examine its bi:llsoflading for the past four years during a recess called especially for that purpose. He was not, however, after examination able to indicate ev n one haul made under this portion of his authority. The transferor did provide the Commission with an itemization of its gen.eral use equipment adaptable for such hauling, inc1ud:ing an expandab:le trailer, a f iftyton lowboy, and a threeaxled vehicle. Mr. Glen A. Midkiff, speaking for the intervenor, Midkiff & Stowers Trucking, Inc., testified that the type of hauling authorized by the contested portion of the certificate was his main source of business. He further testified that he had n&t seen the transferor hauling under the contested authority for ten years. Consequently, the transferor had never been a competitive factor. Mr. Midkiff stated that currently his equipment is idle almost half of the time. Mr. C1a.irmont Miller, speakin for the intervenor, Miller Trucking Company, testified that he has not seen the transferor hauling within the contested authority for forty year : The concept of "dormancy" with respect to operating rights 0.L' 1 : motor carriers has been defi.ned as "a lack of substantial service to a representative number of points in the franchised area. I' Houff 'Transfer, c) 3.

4 I I Inc. v, United States 291 F. Supp. 831, 835 (W. D. Virginia, 1968). The issue of dormancy becomes important primarily when operating rights are sold or transferred as in this proceeding, to another carrier. The almost universa.1 rule is that dormant rights will NOT _ to transferred unless a public need or the service can be shown. _ Alabama Public _I_I_ Service Commission v. ChemHaulers, Inc., 293 Ala. 677, 309 So.2d 453 (1975), Bradley v. United States, 322 F. Supp. 369 (D. Alaska, 1971), Re Walters (1941), Cal, 41 P.U.R. (N.S.) 299, I Re Monks (1957), Colo., 20 P. U.R. 3d 339, Lombard Bros., Inc. v. United States, 226 F. Supp. 905 (D. Conn., 1964), Re Evansville City Coach Lines (1959), Ind., 28 P.U.R. 3d 483, Cedar Rapids Steel Transportation, Inc. v. Interstate Commerce Commission, 391 F. Supp. 181 (N.D. Iowa, 1975), Wright Trucking Inc. v, United States, 403 I?. Supp. 119 (D. Mass., 1975), Application of E. S.B. Rigging and Transfer, Inc., 191 Neb. 714, 217 N.W.2d 813 (1974 Bennett v. State Corporation Commission, 73 N.M. 126, 385 P.2d 978 (1963 Atkinson Lines, Inc. v. United States, 381 F. Supp. 39 (S.D. Ohio, W.D., 1974), Re Moyer (1945), Pa., 59 P.U.R. (N.S.) 322, Arrow Transportation I_ Co. v. United States, 300 F. Supp. 813 (R.I., 1969), gluff Transfer, Inc_ v. United States 291 F. Supp. 831 (W.D. Virginia, 1968), Herrett Trucki.). Co., Inc. v. Washington Public Service Commission, 81 Wash. 2d 234, 377 P.2d 871 (1963), Gateway Transporta,tion Co., Inc. v. United States, 371 I?. Supp. 180 (W.D. Wis., 1973). This rule is so well established that one Federal District Court recently stated: "It is too well established to require citation that dormant rights cannot be sold." Arrow Transportation Co. v. United _I_ States, 300 F. Supp. 813, 817 (R.I., 1969). The underlying premise of the dormancy rule is that where a selling carrier's activity has become minimal or nonexistent, the area's shippers are presumed to be receiving adequate service from other Carrie who have adjusted their operations to meet these needs. Wright Trucking Inc. v. United I_I_ States, 403 F. Supp. 119 (D. Mass., 1975). This necessit the commitment of capital, equipment, and manpower by the other carrier, Thus, to allow the reactivation of the dormant operating rights would create a new, competitive service, NOT I required by the pub1i.c convenienc aiid necessity, and would result in damages to the carriers who conducted operations during interruption of such services. Arrow Transportation "I ~ ~ 4..

5 I ~ ~ ~~ Company I v. United States, supra., _I_ Ilouff Transfer, Inc. v. United States, 291 F. Supp (W.D. Virginia, 1968). A concurrent rationale is that of the equity concept of estoppel. Dormancy has deprived the public of service and has induced the other carriers to take action to fill the void in service, thus the dormant carriers will be estoppedfrom an assertion of its previously awarded rights. I Atkinson Lines, Inc. v. United States, 381 F. Supp. 39 (S.D. Ohio, W.D., 1974), Re Monks (1957), Colo., 20 P.U.R. 3rd 339. Although most courts have treated it as abandonment, rather than dormancy, dormancy has been held as a matter of law where a carrier has demonstrated a will ful failure to comply with applicab1.e statutes, orders, rules, regulations, or any term, condition or limitation of the certificate. Canning v. McKay, 173 Neb. 103, 112 N.W.2d 737 (1962). For example, dormancy mas found where a carrier had disposed of his equipment and had permitted his insurance to lapse several months prior to the attempted transfer. Schmunk v. West Nebraska Express, 159 Neb. 134, 64 N.W.2d 386 (1.954). Dormancy is most often a question of fact and involves an irregul.arroute carrier. The test developed by the Interstate Commerce Commission is "whether the carrier has rendered substantial service to a representative number of points withiln its authorized territory in order to support the conclusion that its operations have been substantial and continuous. 'I The New Dixie Lines, Inc. ControlJocie Motors Lines, Inc., I^ ^. ~ 75 M.C.C. 659, 666 (1958). Under this definition, dormancy has been found where the carrier had NOT completely abandoned and discontinued service. Houff Transfer, Inc. v. _. United._' States supra. Many factors must be considered, including, but not limited to: the nature and scope of the operating rights, the population and concentration of industry in the area served, the availability of other carriers, the specializatio of equipment required, and the willingness and ability to serve. See ~~ Miami Transp. Co., Inc. PurchaseStrothman, 97 E4.C.C. 600 (1964). As in this proceeding, the issue of dormancy has almost always been raised by intervenors or Protestants during the hearing which jnvolves the transfer of certain operating rights, However, Ru1.e 9( g) 3f the Washington Utilities and Transportation Commission provides that P

6 ~ since I ~. _~_l ll ~~~ I. where the Commission believes that a permit or part thereof is dormant, the Commission shall file a complaint to revise the complaint to eliminate? dormancy. Wlack Ball Freight Service v. Washington Utilities and ~. Transportation Commission, _I 77 Wash.3d 479, 463 P.2d 169 (1969). This is but another example which demonstrates the importance that other jurisdictions have placed on the issue of dormancy. As stated earlier, dormant rights will not be transferred unless a public need for the service has been shown. Few cases discuss the standard to be applied by the regulatory commission to determine whether a public need has been shown. This is because the courts use a standard : or review of the agency's decision such as "reasonableness and not arbitrary." See ~ Jefferies v. Eanes, Inc. v. W.F. Gettle, Inc., 173.I Neb. 337, 113 N.W.2d 476 (1962), Floyd and Beasley Transfer Co., Inc. _ v. Alabama I Public Service Commission, 276 Ala. 130, 159 So.2d 833 (1963). The most prevalent view is that if authority of a motor Carrie: under certificate is sought to be transferred and is dormant, the acquiring carrier has the burden to show that the transfer would be required by present and future public convenience and necessity. Application of Neuswanger, 170 Neb. 670, 104 N.W.2d 235 (1960). Thus, the burden is the same as that of obtaining a new certificate of convenience and necessity. Bradley v. United States, 322 F. Supp. 309 (D. Alaska, 1971.). However, in reality, the burden is probab1.y more difficult the intervening and protesting carriers have already demonstrated that they have adequately served the area when the selling carrier's rights became dormant. supra. Wright ~ Trucking, Inc. v. United States, FIND I NGS 1. Even after having been given substantial weight, the transferors contention that it is a,ctively pursin.g the contested portion of authority is not adequately supported by the evidence. 2. The transferor has not rendered substantial service to a representative number of points within its authorized territory, and has thereby failed to indicate to the Commission that its operations have been substantial and continuous in this respect. 3. To allow reactivation of dormant operahing rights would create a new, competitive service, NOT required by the public convenience 1 6.

7 and necessary and would thwart the commitment of capital, equipment, and manpower.by the intervening carriers. 4. The transferee satisfies all criteria necessary for the Commission's approval. 5. That portion of the transferor's certifi.ca.te No. F1382, authorizing transportation of 'I...machinery, supplies, materials, and equipment, incl.uding rigs and form lumber, used in the drilling and operation of oil and gas wells...i.n Jackson, Roane, Clay, Nicholas, and Greenbrier Counties and in all counties lying south of said counties..,'i is dormant and cannot be reactivated by transfer. authorized. 6. In all other respects, the transfer as requested should he ORDER Carroll Trucking Company is hereby authorized to tra,nsfer and assign unto J. Allen Martin, Inc., P.S.C. R4.C. Certificate No. F1382, amended to read as follows: P.S.C. M.C. Certificate No. F1382, to operate as a common carrier by motor vehicle in the tramsportation of commodities generally within a radius of ten miles of the Town of Milton, Cabell County, and between said Town of Milton, Cabell. County, and between said Town of Milton and the City of Huntington, Cabell County; conc,rete products, including pipe, from the Town of Kenova, Wayne County, and the Cities of Huntington, Cabell County, and Charleston, Kanawha. County, and iron and steel articles, including structural and reinforced steel, steel rails, and mine cars, from said City of Huntington to points and places in West Virginia; and heavy machinery, equipment, boilers, and tanks, used or any purpose, in Jackson, Roane, Clay, Nicholas, and Greenbrier Counties and in all counties lying south of said counties. Carroll Trucking Company is hereby authorized to transper and assign unto J. Allen Martin, Inc., P.S.C. F4.C. Certificate No. F8G0, authorizing operation as a common carrier by motor vehicle in the transportation of commodities generally and household goods within a. radius of fifteen miles of the Town of Milton, Cabell County; in the transportation of commodities generally between points and 'places within

8 said fifteenmile radius and points and places within a radius of thirtyfive miles of said town; and in the transportation of household goods between points and pl.aces within said fifteenmile radius and points and places in West Virginia. Carroll Trucking Company is further authorized to transper and assign unto J. Allen Martin, Inc., P.S.C. M.C. Permit No. H910, as amended, authorizing operation as a contract carrier by motor vehicle in the transportation of line poles and equipment to and from all points an( places in the Counties of Kanawha, Lincol.n, Cabell, Putnam and Mason, and serving these Counties to and from all points and places in West Virginia under contract with American Telephone and Telegraph Company, End in the transportation of bulk ice from Huntington to Logan under contract with ServIce & Storage Company. IT IS FURTHER ORDERED that operation under all of the above authorized transfers shall commence within sixty (60) days of the date of this order or these transfer authorizations shall. be null and void. The Secretary of the Commission is instructed to place a copy of this final dispensation of all matters in the Commission's files for M.C. Case Nos , 1902 and 132. CTO:wr 8.