Esquire, appeared on behalf of John W. Lewis Truckin?

Transcription

1 I 3 % e+ P pqv+ +* H.C. CASE NO. 2360s-C!, PUBLIC SERVICE COMMJSSION,r. OF WEST VIRGINIA CHARLESTON Entered: April 18, 1989 ORLMJ A. MEWEROUGH, an individual, Harrisville, Ritchie County. Application for a certificate to operate as a common carrier. RECOMMENDED DECISION PROCEDURE On March 2, 1988, Orlan A. Newbrough, an individual, Harrisville, Ritchie County, filed an application for a certificate of convenience anc necessity tu operate as a common carrier by motor vehicle in the transport.ation of -- low--grade commodities such as, but not limited to, sand, gravel, limestcne, asphalt, arid ice controls such as cinders, etc., within and between points and places in a 75 mile radius of Harrisville, Ritchie County, on the one h.and, and points and places in West Virginia on the other hand. All trips will O Y ginate ~ or terminate in said radius. The Applicant proposed to charge $1.25 for the first ton mile arid 12 cents for each additienal ton mile. Orlan A. Newbrough provlded notice of his application hy publicatior in newspapers published and. of general circulation in the 31 Counties covered by the requested authority. The matter was scheduled for hearin5 to be conducted on June 2, 1988, as a result of protest received ir response ko the published notice. The hearing was conducted as scheduled on June 2, 1988, in the Ha.rrison County Correctional Facility, Clarksburg, West Virginia, beginni.ng at l1:oc) a.m. At that hearing, David Hanlon, Esquire, appearec on behalf of the Applicant. James C. West, Jr., Esquire, appeared or behalf of the following Protestants: F k F Murray Trucking, Inc.; Radahaugh Trucking, Inc.; G.M.C. Trucking, Inc.; Shaffer Trucking, Xnc.; Preston Trucking, Inc.; S & M Trucking, Inc.; Ansoline Trucking, Inc.; Roy Dunn dba Roy Dunn Trucking; M. L. Trotzrnar,, dba Trotzman Trucking; S. J. Parson Transportation; Jenkins Trucking; and, Ava Trucking. John W. Lewis, Service, Inc. Esquire, appeared on behalf of John W. Lewis Truckin? The various Protestants in this case hold authority tc OF WEST VIRGINIA

2 provide competing motor carrier services throughout all or part of the territory which has been requested by Orlan A. Newbrough. At the conclusion of the hearing, a briefing schedule was established for the simultaneous submission of initial briefs on or before July 7, 1988, and the simultaneous submission of reply briefs en or before July 18, The only brief in this case was submitted by Counsel on behalf of all Protestants other than John W. Lewis Trucking Service, Inc. EVIDENCE The following witnesses provided testimony in this case: Orlan A. Newbrough, Applicant; Patrica Kelly, Carl Kelly Paving, Inc.; Norman Klug; Tim Goodwin, Greer Limestone; John E. Murray, Murray Trucking, Inc.; Robert W. Radabaugh, Radabaugh Trucking, Inc.; Lawrence R. Kale, G & C Trucking, Inc.; Lawrence R. Kale, dba Lawrence R. Kale Trucking; Albert Shaffer of Shaffer Trucking, Inc.; Mark Lynn Hollen of Preston Trucking, Inc.; and, Robert Allen Dunn of Roy Dunn Trucking. Orlan Newbrough testified that he has been in the business of providing dump truck service to transport asphalt and roadbuilding materials for over 40 years. At the present time, he has 15 trucks and about 20 employees. (Tr., pp- 7-8). Mr. Newbrough currently holds a number of permits and authorities from this Commission. Specifically, Mr. Newbrough holds Permit No. H-8144 to operate six (6) motor vehicles as a contract carrier of road building materials in Randolph, Braxton and adjoining counties for Anderson's, Inc. He also holds Permit No. H-6002 to operate two (2) motor vehicles as a contract carrier of asphalt, concrete, zinc, gravel, limestone, dirt and other road construction materials in and between Wood, Ritchie, Wirt, Jackson, Roane, Calhoun, Gilmer, Doddridge, Tyler and Pleasant Counties for Anderson's, Inc., and for transporting gravel from New Martinsville, Wetzel County, to a specific location in Doddridge County, for Osborne Construction Company, Inc. Mr. Newbrough also holds Permit No. H-9768 to operate twenty (20) motor vehicles as a contract carrier of low-grade commodities in a contract with Ohio River Sand and Gravel, and Standard Slag Company, in all Counties except Brooke, Hancock, Marshall, Ohio, Tyler and Wetzel. Finally, Mr. Newbrough holds P.S.C. M.C. Certificate No. F-4216 to operate three (3) dump trucks as a common carrier of low-grade commodities and roadbuilding materials within and between Ritchie County and all adjoining Counties, except for Wood County, and for transporting similar low-grade commodities between Parkersburg, Wood County, and places within Ritchie County. (Obtained from Commission records and M.C. Case No ). Therefore, Mr. Newbrough currently holds common carrier authority which would allow him to operate in Ritchie, Tyler, Pleasants, Doddridge, Gilmer, Calhoun and Wood Counties, as well as transport low-grade com.modities between Parkersburg and Ritchie Counties. Further, Mr. Newbrough holds contract carrier authority to provide hauling of low-grade commodities by dump truck for Anderson's, Inc., in Lincoln, Putnam, Boone, OF WEST VIRGINIA -2-

3 J Jackson, Roane, Fayette, Raleigh, Nicholas, Webster, Braxton, Lewis, Upshur, Randolph, Pocahontas, Pendleton, Barbour, Tucker and Grant Counties. Finally, Mr. Newbrough holds authority to provide contract carrier service in the transportation of low-grade commodities on behalf of Ohio Sand and Gravel and Standard Slag Company in all counties except Brooke, Hancock, Marshall, Ohio, Tyler and Wetzel. Mr. Newbrough testified that he was not primarily operating under any of those described certificates or authorities, although he continued to maintain his common carrier authority that is on file with the Commission. Instead, he testified that he was primarily operating pursuant to authority held by his brother-in-law, W. C. Rutherford. Mr. Rutherford holds the authority to operate as a common carrier by dump truck, with a limited number of vehicles, within a 100 air-mile radius of Harrisville, West Virginia. (P.S.C. M.C. Certificate No. 5033, issued on October 17, 1962 in M.C. Case No ). Although Mr. Newbrough maintained a vehicle for the purpose of keeping his existing motor carrier authority on file with the Commission, the majority of his business is leased to Mr. Rutherford. Pursuant to Mr. Rutherford's authority, Mr. Newbrough testified that he was serving Kelly Paving out of Parkersburg, Cliff Brothers out of New Martinsville and Moundsville, Dockside out of Marietta, Ohio, Orders & Haynes out of Charleston, West Virginia Paving out of Charleston, Anderson out of Rupert, and Greer Limestone out of Morgantown. Most of his business is for the transportation of roadbuilding materials, such as sand, gravel, limestone, and asphalt. (Tr., pp. 9-10, 1-19, 22-23). Currently, the customers interested in using Mr. Newbrough's trucking service contact Mr. Rutherford, and the work is scheduled by Mr. Rutherford, after consulting with Mr. Newbrough. After the job is completed, the check for the work is made out to Mr. Rutherford, and Mr. Rutherford turns over the entire balance to Mr. Newbrough after deducting 2 1/2 % to 3% for taxes. Mr. Newbrough has (14) fourteen of his trucks under this lease arrangement with Mr. Rutherford, and Mr. Newbrough pays Mr. Rutherford $300 per truck per year in compensation for this arrangement. (Tr., pp , ). Mr. Newbrough's trucks are kept and maintained in his own garage at all times. When Mr. Rutherford calls him and informs him of a job to be done, he dispatches his trucks and drivers to do the job, and is compensated for each job after taxes are deducted by Mr. Rutherford. Further, if Mr. Newbrough gets a call for other jobs which he can perforn pursuant to his other authorities, he uses as many of his own trucks ae necessary, including those which are leased to W. C. Rutherford. Mr. Newbrough and Mr. Rutherford have been operating under this type of arrangement for approximately 35 to 40 years. (Tr., pp ). Primarily, Mr. Newbrough testified that it would be more convenient for people utilizing his services to contact him directly for the service instead of routing the request through Mr. Rutherford. He intended tc maintain the same central office, employees and trucks as before. Mr. Newbrough also testified that the work was primarily seasonal and the bulp of his current work has been for various entities out of Wood County. (Tr., pp ). PUBLIC SERVlCE COMMISSION OF WEST VIRGINIA -3-

4 Ms. Patricia A. Kelly, of Carl Kelly Paving, testified that she has been doing business with Mr. Rutherford and Mr. Newbrough for approximately ten years. Carl Kelly's business is primarily seasonal, and when it has the work to do, it can utilize as many trucks as can be made available. Currently, all of its dealings regarding Mr. Rutherford and Mr. Newbrough are through Mr. Rutherford. If Mr. Rutherford cannot provide the requested number of trucks, then Mr. Newbrough provides the trucks. Ms. Kelly testified that currently Mr. Newbrough is doing more of their trucking than Mr. Rutherford. (Tr., pp ). Primarily, Ms. Kelly testified that it was inconvenient to have to contact Mr. Rutherford instead of contacting Mr. Newbrough directly. In other regards, Ms. Kelly testified that Mr. Newbrough performs satisfactory work, and he has been responsive to Carl Kelly Paving's needs when he has done the work. (Tr., pp ). Carl Kelly Paving requires hauling out of two locations, with one plant located in Parkersburg, Wood County, and another plant located in Leetart, Mason County. Carl Kelly Paving is able to transport asphalt for approximately a radius of 80 miles from these locations. Its delivery area extends from Parkersburg and Letart to New Martinsville, Fairmont, Clarksburg and Charleston. (Tr., pp , 44-48). Ms. Kelly testified that Carl Kelly Paving may need up to 80 trucks in one day, and she believed that there were instances in which the Company wasn't able to arrange the necessary numbers of trucks needed for a particular day. However, Ms. Kelly testified that she did not directly schedule the trucks, and she could not cite any specific instances in which the Company was unable to meet its hauling needs. (Tr., pp ). Mr. Norinan Klug of Moundsville, West Virginia, is in the business of selling asphalt to serve the northern area of the State, primarily in the northern panhandle and Wetzel and Tyler Counties. Mr. Klug has also utilized the services of Orlan A. Newbrough pursuant to the lease arrangement with Mr. Rutherford. Mr. Klug also testified that it would be more convenient to deal directly with Mr. Newbrough as proposed to dealing through Mr. Rutherford. (Tr., pp ). Mr. Klug testified that there were numerous occasions on which he has been unable to line up the number of trucks which his Company needed the following day to complete a job. He testified that, during the midsummer season, he would regularly limit the number of jobs that he accepted, based upon the number of available trucks. (Tr., pp ). Mr. Tim Goodwin, Salesman for Greer Limestone, although called as a witness by the Applicant, testified that he had no problem meeting hie hauling needs at any time, and he commonly had to turn down trucks which were on call to provide hauling services for Greer Limestone. Greer Limestone has 15 trucking companies on its hauling list, and it normal11 doles out work on a first-come, first-served basis. Greer Limestone has plants in Monongalia and Harrison Counties. (Tr., pp ). Mr. John E. Murray, Murray Trucking, Inc., testified that he has the authority to operate as a common carrier within a 100 air mile radius of Reedsville, West Virginia. Currently, Mr. Murray is operating sever OF WEST VIRGINIA -4-

5 trucks, and he testified that he was capable and willing to expand his fleet to meet the established needs within that territory. However, he observed that quite a few of his trucks were not being used all of the time. (Tr., pp ). As a practical matter, he testified that he was primarily hauling for Greer Limestone, with a few of his loads going into Wheeling, Clarksburg and Weston, and a few to Charleston and Martinsburg. (Tr., pp ). Robert W. Radabaugh, of Radabaugh Trucking, Inc., testified that he had common carrier authority to serve Preston, Monongalia, Taylor, Harrison and Marion Counties, as well as contract carrier authority with Greer Limestone. Currently, Mr. Radabaugh keeps five trucks on the road. He also had a sixth truck which he does not have a driver for, simply due to a lack of work. If there was sufficient work available, Mr. Radabaugh testified that he was ready, willing and able to expand his fleet, and the addition of other competitors would harm his business. (Tr., pp ). Mr. Lawrence R. Kale, President of G & C Trucking, Inc., and dba Lawrence Kale Trucking, has the authority to operate as a contract carrier for Greer Limestone, and has common carrier authority within a fifty (50) mile radius of Kingwood, which includes Randolph, Harrison, Tucker, Preston, Monongalia, Marion and Doddridge Counties. Mr. Kale testified that he was operating ten trucks right now, but two of them were sitting most of the time due to lack of work. If he saw a sufficient need for additional trucks, Mr. Kale testified that he is ready, willing and able to expand his fleet of trucks to meet that need. He also stated that the granting of the additional authority, as requested, would further limit the available work. (Tr., pp ). Mr. Albert Shaffer, of Shaffer Trucking, testified that he had the authority to operate as a common carrier within a fifty (50) air mile radius of Masontown, Preston County, as a hauler of low-grade commodities, and holds authority as a contract carrier for Greer Limestone. He currently has 14 trucks and leases three additional vehicles. Mr. Shaffer testified that he has not turned down any business and the addition of the requested authority was not needed due to the number of trucks which are currently idle. (Tr., pp ). Mark Lynn Hollen of Mark Hollen Trucking, Inc., protested the application on behalf of Mark Hollen Trucking, Inc., and Preston Trucking. Those Companies have authority to provide common carrier service from a 75 air-mile radius from Albright, West Virginia. Currently, he operates 13 trucks to haul coal, sand, gravel, dirt, stone, blacktop, and other low-grade commodities, and the work is primarily seasonal. He also retains four leased trucks to provide service. On certain days, he hauls with all 17 vehicles, and on other days, he may have four or five vehicles sitting idle. In his opinion, there was no other reasonable need for certificated common carriers in his service area, and he believed his business could be adversely affected by the addition of Mr. Newbrough's requested authority. (Tr., pp ). Robert Allen Dunn, of Roy Dunn Trucking, testified that that Company has the authority to haul coal, limestone, sand and gravel in 36 Counties of West Virginia, specifically serving all territories south of Marshall OF WEST VIRGINIA -5-

6 . County, east of the Ohio River, north of U.S. Route 60 and West of U.S. Route 19. Mr. Dunn stated that most of his hauling was in Monongalia, Preston, Marion, Harrison and Doddridge Counties. He currently operates six trucks, and there are many times when the existing vehicles are not being utilized. (Tr., pp ). The Protestants uniformly stated that the Applicant's current operations were depriving them of business, and a number of the Protestants observed that the Applicant had underbid them on a State Road contract by buying roadbuilding materials from Greer Limestone and delivering the materials to the construction sites. (Tr., pp , 81-85, 94-96, 110, ). Mr. Newbrough explained that he also operates as a reseller of road building materials, as well as a common carrier. He purchases materials from Greer Limestone and other suppliers, stores material at his yard in Harrisville, and resells his purchased materials at a delivered price to various construction sites. He obtained the described State Road contract by submitting a bid on the delivered price for his resold materials. He stated the opinion that he did not need any common carrier rights to transport his own road building materials to construction sites. (Tr., pp ). Neither Mr. Klug nor Carl Kelly Paving had previously requested transportation service by any of the Protestants. Some of the Protestants did not have the authority to serve either Mr. Klug or Carl Kelly Paving, and all the Protestants' operating headquarters were located further away from the particular plant sites of these potential customers than Orlan Newbrough's Rivesville headquarters. While the carriers with authority were willing to haul for these businesses, they noted that*the business would have to be steady for them to justify sending vehicles to haul from Parkersburg, Letart and other areas on the fringe of their operating territories. (Tr., pp. 69, 71-72, , 129, , ). DISCUSSION The Commission's statutory power to authorize operations as a common carrier's contained in West Virginia Code S24A-2-5, which provides, in part, that: [IJf the commission finds from the evidence that the public convenience and necessity require the proposed service or any part thereof, it shall issue the certificate as prayed for, or issue it for the partial exercise only of the privilege sought, and may attach to the exercise of the right granted by such a certificate such terms and conditions as in its judgment the public convenience and necessity may require.... (West Virginia Code 524.A-2-5) The Commission has interpreted West Virginia Code 924A-2-5 to require the Applicant to establish to the Commission's satisfaction that the OF WEST VIRGINIA -6-

7 public convenience and necessity require the proposed service before the authority to operate will be granted. Ford Brothers, Inc., M.C. Case No (1981). "To establish this need, the applicant must produce public witnesses who can testify that the proposed service is needed in the area of application." Harless Excavatinq Company, Inc., M.C. Case No (1982); 9uality Builders, M.C. Case No (1978). If the evidence reveals the existence of some need in the proposed area of application, the applicant has made a prima facie case that the public convenience and necessity require that the certificate be granted. The burden then shifts to the Protestants to show that (a) service furnished by existing transportation facilities is reasonably efficient and adequate, and (b) the granting of a certificate would be detrimental to the public because, for example, additional competition would be ruinous to existing carriers, and (c) all reasonable needs in the area of application are being met. Mac's Wrecker Service, Inc., M.C. Case No (1979); Ford Brothers, M.C. Case No (1981). =., Once presented with an established public need, which has not been adequately rebutted, the determination of an appropriate scope of authority to serve that need by its nature requires an exercise of judgment by the Administrative Law Judge since the evidence of need presented is merely representative of the needs of the community in general. Therefore, in granting any certificate, the Administrative Law Judge must decide what operating authority is appropriate to serve the type of need submitted by the evidence. Based upon the record in this case, Carl Kelly Paving has had difficulty in obtaining the requisite number of trucks to meet the needs of its plants located in Letart, Mason County, and Parkersburg, Wood County. It produces asphalt from both of these plants, and needs to have asphalt transported to construction sites located within eighty (80) miles of each plant. Territories covered by these areas extend to Wetzel County and Fairmont to the north, and to Mason, Putnam and Kanawha Counties to the south. (Tr., pp ). In an easterly direction, its hauling needs extend to Clarksburg and Fairmont. (Tr., pp ). For the past ten years, Carl Kelly Paving has been relying, in part, upon the trucks of Orlan Newbrough to meet its hauling needs, pursuant to a leasing arrangement between Mr. Newbrough and W. A. Rutherford. While Mr. Newbrough, himself, did not have the authority to serve Carl Kelly Paving from either its Parkersburg plant or its Letart plant, he has been serving those territories pursuant to a questionable leasing arrangement which has been in existence between himself and Mr. Rutherford for approximately 40 years. While the Administrative Law Judge shall comment upon the propriety of the leasing arrangement as it relates to Mr. Newbrough's fitness, Ms. Kelly has established a need for additional trucks, either through Mr. Newbrough or another motor carrier, to serve Carl Kelly Paving's Wood County and Mason County plants. The future unavailability of Mr. Newbrough's trucks would further increase the need for an additional common carrier of road materials to serve Carl Kelly Paving' s hauling needs. Mr. Norman Klug testified that he had difficulty lining up carriers to meet his needs to transport asphalt in Brooke, Ohio, Marshall, Wetzel OF WEST VIRGINIA -7-

8 and Tyler Counties. He, too, has utilized Mr. Newbrough in the past pursuant to the same questionable leasing arrangement, and his ability to meet his transportation needs would be further hampered if Mr. Newbrough's services were not available to him. Mr. Tim Goodwin of Greer Limestone testified that there was no need for additional haulers to serve Greer Limestone's facilities in Monongalia or Harrison County. Further, there was no evidence in the record to support Mr. Newbrough' s requested authority to haul from the surrounding counties. Based upon the testimony of Ms. Kelly and Mr. Klug, the Administrative Law Judge hereby determines that a prima facie showing of need has been established in part of the requested territory. The Administrative Law Judge wishes to make it clear that, public need was not established, in the Administrative Law Judge's opinion, to remedy the stated inconvenience of having to contact Mr. Rutherford to obtain Mr. Newbrough's service. Rather, this prima facie showing of need was based upon the difficulties experienced by Carl Kelly Paving and Mr. Klug to locate enough trucks to fill their seasonal needs. Mr Klug even testified that he has had to restrict the number of jobs that he has been able to accept due to the availability of trucks. Since these difficulties would be accentuated in the absence of Mr. Newbrough's services, either directly obtained through his authority as a certificated common carrier or through the use of his trucks under a leasing arrangement through another certificated carrier, the Administrative Law Judge is of the opinion that a prima facie showing of need has been established. As stated previously, the Administrative Law Judge has observed that the described leasing arrangement which existed between Mr. Newbrough and Mr. Rutherford was highly questionable, and apparently contradicted the Commission's rules and regulations concerning the leasing of vehicles. The Commission rules and regulations governing the use of leased equipment are set forth in Rule 9.00 of the Commission's Rules and Requlations for the Government of Motor Carriers of Passengers and Property. Pursuant to those rules and regulations, a motor carrier of passengers and property may lease up to the entire amount of equipment operated under its authority. When vehicles are leased, uniform vehicle identification cards are obtained for each vehicle in the name of the carrier under whose authority the equipment is to be operated. The leased equipment is to be operated by the common carrier after that carrier has filed a certificate of lease with this Public Service Commission, pursuant to Rule 10 of the Commission's Rules and Requlations for the Government of Motor Carriers of Passengers and Property. Pursuant to Rule 9.05, under the Commission's rules, the equipment leased by the common carrier from the supplier shall be under the exclusive direction and control of the common carrier for the duration of the lease. Further, Rule 9.03 specifically states that no lease of a vehicle should be construed to confer upon the lessee any right to operate under the authority held by the lessor. The Administrative Law Judge observes that the leasing arrangement would have been proper if Mr. Rutherford had maintained exclusive control over the use and direction of the leased vehicles throughout the period of the lease, and the drivers and operators of the leased vehicles were also OF WEST VIRGINIA -8-

9 4 under the exclusive control and direction of Mr. Rutherford. However, this is clearly not the case or the intent of the parties since Mr. Newbrough essentially paid Mr. Rutherford for the use of his operating rights, rather than Mr. Rutherford paying Mr. Newbrough for the use of his vehicles. Therefore, the prior operations under the leasing arrangement were clearly improper under the Commission's rules and regulations. In review of the circumstances in this case, the Administrative Law Judge is of the opinion that the past operations of Orlan A. Newbrough pursuant to an improper leasing arrangement do not disqualify him to hold authority as a common carrier by motor vehicle in this State. " Re c en t Commission decisions have emphasized the principal that past unauthorized or illegal operation does not, ipso facto, bar the granting of operating authority upon subsequent application. The mere fact of prior operation without Commission approval is not per equivalent to an offense which will prohibit absolutely the acquisition of proper authority when application is subsequently made. This rule is especially applicable when the operation has been conducted in good faith and under 'color of authority' does not represent a willful, defiant, disregard of law." See, Ball Trucking, Inc., M.C. Case Nos and (1983); Russell Transfer, Inc. v. Alleqheny Freiqht Lines, Inc., M.C. Case No (1978) and Jessie D. Covey, M.C. Case No P (1984). Though prior illegal acts are not an absolute bar to the subsequent grant of authority, such acts of past misconduct are to be considered by the Commission in assessing the Applicant's present and prospective fitness under the statutory provisions. The primary consideration in evaluating the impact of prior illegal operations on the Applicant's fitness is whether the violations occurred as the result of a good faith error or were the result of defiance or disregard for the Commission rules. In this case, the Applicant was operating under color of authority pursuant to a misapplied lease arrangement which had been in effect over 40 years, without being contested or cited by the Public Service Commission. Since Mr. Newbrough openly described the arrangement and brought it to the Commission's attention without fear of repercussion, the Administrative Law Judge is of the opinion that his prior operations were "good faith" operations under apparent color of authority which, although improper, do not render him unfit to hold authority as a common carrier. While this arrangement was improper, the Administrative Law Judge is satisfied that Mr. Newbrough did not knowingly defy a Commission regulation or even realize that it was a violation at the time of the hearing. Therefore, while the Administrative Law Judge would expect Mr. Newbrough to cease and desist in these de facto illegal operations under the improper leasing arrangement, the ALJ does not find that his actions openly flaunted the Commission's rules and regulations or rendered hin unfit. The Administrative Law Judge further notes that it is the Commission's policy that past illegal operations cannot and should not be used to establish public need for the proposed service. In this case, the Administrative Law Judge is satisfied that there is enough independent OF WEST VIRGINIA -9-

10 evidence of need in certain territories to establish a prima facie showing of need for the requested service in the previously identified Counties. Therefore, upon finding the Applicant a fit and proper person to hold the requested authority and finding that a prima facie case is established in portions of the requested territory, the burden then shifts to the Protestants to establish that the grant of the certificate would be detrimental to the public and that all reasonable needs in the area of application have been met. The Administrative Law Judge notes that all of the Protestants testifying in this case were primarily protesting against the Applicant's authority to operate a common carrier so that it could transport road building materials from Greer Limestone plants located in Monongalia County and Harrison County. The Administrative Law Judge agrees that there was no established need for an additional carrier to serve Greer Limestone's facilities or the surrounding areas, based upon the testimony of Mr. Goodwin, a representative of Greer Limestone. Although the Protestants' evidence showed that some carriers are currently experiencing difficult financial times because not all of their vehicles are regularly in use, it was not shown that the introduction of this additional carrier would present ruinous competition to their respective markets. Therefore, the Protestants have failed to rebut the Applicant's prima facie showing of need. Once presented with an established public need, which has not been adequately rebutted, the determination of an appropriate scope of authority to serve that need by its nature requires an exercise of judgment by the Administrative Law Judge since the evidence of need presented is merely representative of the needs of the community in general. Therefore, in granting any certificate, the Administrative Law Judge must decide what operating authority is appropriate to serve the type of need submitted by the evidence. The evidence in this case establishes a need for hauling services from plant sites in Wood, Mason and Marshall Counties to points and places in West Virginia. Further, since most of the Protestants described practical limitations in hauling loads from Counties which were located as far or further from the Protestants' bases, the ALJ finds its reasonable to conclude that this evidence is illustrative of a public need within the Applicant's requested 75 mile radius in counties which are equally removed from the Protestants' headquarters and central operations in Preston, Monongalia, Marion, Harrison, Taylor, Tucker and Barbour Counties. The ALJ also observes that the Applicant already holds common carrier authority in Pleasants, Tyler, Doddridge, Ritchie, Gilmer, Wirt, and Calhoun Counties. Therefore, the ALJ finds it reasonable to allow the expansion of the Applicant's authority in these Counties and other areas within his requested 75 mile radius except for the Counties of Preston, Monongalia, Marion, Harrison, Taylor, Barbour and Tucker. As limited, the Applicant will be able to make hauls from his approved territory to these named Counties as a common carrier, but will not have the authority to conduct hauls as a common carrier from those Counties. OF WEST VIRGINIA -10-

11 As a final observation, the Administrative Law Judge notes that certain Protestants objected to Mr. Newbrough' s purchase and subsequent resale and delivery of roadbuilding materials to a State road construction site. Mr. Newbrough stated that he also operates as a reseller of road building materials, and stores materials for resale at his operating site in Harrisville. Although some of those road building materials were purchased from Greer Limestone, the delivery of road materials by the owner of the material does not normally constitute operation as a common carrier. This does not mean that an existing carrier can exceed the bounds of its authority by setting up a fictitious or illusory purchase and resale of the materials it is transporting between the quarry to the construction site. However, the record does not establish that the Applicant did anything improper by purchasing and transporting road building materials in the cited instances. FINDINGS OF FACT 1. Carl Kelly Paving has had difficulty obtaining the requisite number of trucks to meet the shipping needs of its asphalt plants in Letart, Mason County, and Parkersburg, Wood County. Each plant is capable of delivering asphalt to construction sites located within eighty (80) miles of the plants, which includes Wetzel County and Fairmont to the north, Mason, Putnam and Kanawha Counties to the south, and Clarksburg and Fairmont to the east. (Tr., pp , 45-48). 2. Norman Klug has had difficulty securing an adequate number of carriers to transport roadbuilding materials to Brooke, Ohio, Wetzel, Marshall and Tyler Counties from his Moundsville plant. Mr. Klug has had to decline some work due to the lack of trucks. (Tr., pp ). 3. Mr. Tim Goodwin, of Greer Limestone, testified that it had a stable of common carriers to meet its shipping needs from its plants located in Monongalia and Harrison Counties, and it distributes work on a first-come, first-served basis. (Tr., pp ). 4. Mr. Newbrough has been serving all of the requested authority pursuant to a leasing arrangement with his brother-in-law, W. A. Rutherford, who holds common carrier authority to serve a 100-mile radius of Harrisville, Ritchie County. Under the described arrangement, which had been in place for a number of years, Mr. Rutherford dispatched jobs to Mr. Newbrough, and let Mr. Newbrough keep all revenues, less a 3% tax deduction. Although fourteen of Mr. Newbrough' s 15 trucks were "leased" to W. A. Rutherford, in fact these trucks were operated and maintained by Mr. Newbrough, who alternately used the vehicles for his own purposes as well as for jobs referred by Mr. Rutherford. Mr. Newbrough paid Mr. Rutherford $300 per vehicle per year to "lease" his vehicles in this manner. (Tr., pp , ). 5. Mr. Newbrough also operates as a reseller of roadbuilding materials, and maintains and stores purchased material at his yard. He resells the materials to various construction sites at a delivered price. (Tr., pp ). OF WEST VIRGINIA -11-

12 6. Neither Mr. Klug nor Carl Kelly Paving had previously requested transportation service by any of the Protestants. Some of the Protestants did not have the authority to serve either Mr. Klug or Carl Kelly Paving, and all the Protestants' operating headquarters were located further away from the particular plant sites of these potential customers than Orlan Newbrough's Rivesville headquarters. While the carriers with authority were willing to haul for these businesses, they noted that the business would have to be steady enough to be economical for them to justify sending vehicles to haul from Parkersburg, Letart and other areas on the fringe of their operating territories. (Tr., pp. 69, 71-72, , 129, , ). 7. The Protestants in this case, which primarily operated as common carriers or contract carriers for Greer Limestone, testified that they had the ability to expand to meet an established public need, some of their trucks stayed idle, and the addition of another authorized common carrier would hamper their business. (Tr., pp , 75-79, 87-91, , , ). 8. The Protestants also object to the Applicant's current operations, contending that they were improper and harmed their businesses. (Tr., pp. 67, 71-72, , 129, , ). CONCLUSIONS OF LAW 1. The testimony of Ms. Kelly and Mr. Klug has established some kind of need for the proposed authority. Therefore, the Administrative Law Judge is of the opinion that a prima facie showing of need has been 2establ i shed. 2. The Applicant's operation under the described leasing arrangement violated Rule 9.03 and 9.05 of the Commission's Rules and Requlations for the Government of Motor Carriers of Passengers and Property, since the leased equipment was not under the exclusive control and direction of W. A. Rutherford for the duration of the lease, and the described arrangement was used to effectively allow Mr. Newbrough to operate under W. A. Rutherford's authority. 3. The record does not establish that Mr. Newbrough's described delivery of his own resold materials to state construction sites constituted operations as a motor carrier for hire. Therefore, the described operations are not determined to be improper or illegal. 4. In this case, the Applicant was operating under color of authority pursuant to a misapplied lease arrangement which had been in effect over 40 years, without being contested or cited by the Public Service Commission. Since Mr. Newbrough openly described the arrangement and brought it to the Commission's attention without fear of repercussion, the Administrative Law Judge is of the opinion that his prior operations were "good faith" operations under apparent color of authority which, although improper, do not render him unfit to hold authority as a common carrier. OF WEST VIRGINIA -12-

13 A 5. The ALJ finds and concludes that the Applicant has established a prima facie showing of public need for portions of the requested authority which has not been adequately rebutted by the Protestants in this case, and the Applicant is financially and otherwise a fit and proper person to meet the established need. 6. Upon consideration of the complete record established in this case, the ALJ shall grant the requested authority in all Counties included in the 75 mile radius requested by the Applicant, except for the authority to conduct hauls originating in the Counties of Marion, Harrison, Monongalia, Preston, Taylor, Barbour, and Tucker. As limited, the Applicant will be able to make hauls from his approved territory to those Counties as a common carrier, but will not have the authority to conduct hauls as a common carrier from those Counties. 7. The Administrative Law Judge finds that the proposed rates and charges are just and reasonable and should be adopted for the approved operations. ORDER IT IS, THEREFORE, ORDERED that Orlan A. Newbrough is hereby issued P.S.C. M.C. Certificate No. F-6849, which shall hereby grant the following authority to operate as a common carrier by motor vehicle in the transportation of-- low-grade commodities such as, but not limited to, sand, gravel, limestone, asphalt, and ice controls such as cinders, etc., within and between points and places in a 75 mile radius of Harrisville, Ritchie County, on the one hand, and points and places in West Virginia on the other hand. All trips will originate or terminate in said radius, except no hauls conducted pursuant to this authority shall originate in Barbour, Harrison, Marion, Monongalia, Preston, Taylor or Tucker Counties. IT IS FURTHER ORDERED that the Applicant is hereby directed to cease and desist from conducting operations as a common carrier pursuant to the improper lease arrangement with W. A. Rutherford, as described at the hearing. If such vehicles or manpower are to be leased to Mr. Rutherford in the future, the leased vehicles must be maintained under the exclusive control and direction of Mr. Rutherford or the duration of the lease. IT IS FURTHER ORDERED that, on the date that this Decision becomes the Final Order of the Commission, Mr. Newbrough's duplicative operating authority under P.S.C. M.C. Certificate No. F-4216 shall be voided and replaced by the operating authority and certificate approved by this Order. IT IS FURTHER ORDERED that, within ten (10) days of the date of commencing operations under this certificate, the Applicant shall file a copy of his approved tariff with the Commission..-

14 The Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written exceptions supported by a brief with the Executive Secretary of the Commission within fifteen (15) days of the date this order is mailed. If exceptions are filed, the parties filing exceptions shall certify to the Executive Secretary that all parties of record have been served said exceptions. If no exceptions are so filed this order shall become the order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless it is ordered stayed or postponed by the Commission. Any party may request waiver of the right to file exceptions to an Administrative Law Judge's Order by filing an appropriate petition in writing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to make any Administrative Law Judge's Order or Decision the order of the Commission sooner than five (5) days after approval of such waiver by the commission. RFW: jas Robert F. Williams Administrative Law Judge