Maryland Transportation Co. v. Public Service Commission

Hammond, C. J., delivered the opinion of the Court. This case, which here comes to an end in the spring of 1969, had it's beginning in November 1962 when Elkton Trucking Company, Inc., an interstate motor carrier serving Maryland communities, applied to the Public Service Commission of Maryland for the right of intrastate carriage along its interstate routes. By May 1964 fourteen other applications had been filed by various similar interstate motor carriers. After receiving and considering over an extended period extensive testimony, oral arid \vritten, from a myriad of witnesses, the Commission on February 18, 1966, issued its opinion and order, finding that “after giving due consideration to all of the relevant evidence * * * public welfare and convenience requires the issuance of permits for the intrastate common carriage of freight as specified in each of the applications * * * as amended in these proceedings” to nine of the fifteen applicants.

The Commission’s opinion in part said: “The State of Maryland is strategically located in an area of substantial population, commercial and industrial concentration. Industry and commerce has vastly expanded within the metropolitan area of Baltimore City, the Maryland portion of the Washington Metropolitan area, and in many other areas of the State and very active efforts are being made to attract new industries to locate in the State. “Several general witnesses testified in these proceedings on behalf of all applicants. Among them was Harrison Weymouth, Jr., Executive Director of the Economic Development Committee of Prince George’s County. This witness testified to the industrial and ⁶²¹ commercial growth of this county.

He included a list of larger industries which have located major facilities in Prince George’s County since 1955. It was his prediction that there will be substantial increases of industrial and commercial development in Prince George’s County for the foreseeable future. “8. AV. Parrish, Acting Director, Department of Information and Economic Development for Montgomery County, Maryland, gave figures which showed that the population for Montgomery County in 1930 was 49,206, in 1960 it was 340,928 and that by 1980 the population would be 643,350 based on projections of a County Agency.

He also submitted a list of industrial and manufacturing firms located in Montgomery County. “Benjamin G. Atwood, Manager Area Development Department, The Potomac Edison Company, presented a comprehensive development plant study of an area of 980 square miles which generally encompasses The Potomac Edison System’s Frederick Operating District. Among other matters, the study showed the 1960 population of the area to be 99,370'. In 1980 the population is estimated to be 163,300 and in 2000 the estimate is 335,000. “Sidney Hatkin, Economist, Maryland Department of Economic Development, presented a study showing the new and expanded industries by Economic Districts of Maryland. This study showed in 1962 that 20 new industries were added to the Baltimore Metropolitan Area and 54 other industries expanded.

In 1963, 26 new industries were added and 42 expanded. In the first 9 months of 1964, 38 new industries were added and 39 expanded. For Maryland as a whole, 166 new industries were added during the 2 year, 9 month period and 184 industries expanded.” The opinion went on to summarize in detail the testimony of some 40 witnesses for the applicants who together showed the inadequacy or slowness of present intrastate service and the ⁶²² need for additional such service even in cases where existing intrastate carriers had performed reasonably well. These witnesses gave testimony that permitted the Commission to find that the recent and prospective population, economic, business and manufacturing growth in Maryland generated and would generate a need in the public welfare and convenience for added intrastate service on all routes for which an intrastate permit had been sought.

The Commission’s opinion went on to say: “The basic issue in these proceedings is one which has never before been decided by the Commission. Basically, the two questions which the Commission must determine are as follows: (1) Have the present existing intrastate carriers provided satisfactory service between the growing metropolitan areas of the State? (2) If they have not, should the present carriers be permitted to retain their monopolistic intrastate rights or should additional rights be granted to other carriers in order to improve the service offered to intrastate customers by competitive service? The Commission has no difficulty in finding that the service as offered by the existing intrastate carriers has not been adequate.

We find extremely significant the testimony of Joseph C. Bianco, President and General Manager of Central Maryland Lines, Inc. He testified that for the six year period 1958 to 1963, the combined increase in business for seven of the present intrastate carriers * * * was about 8%. “During the same period the economic growth in Maryland has been at a much higher level and apparently because, of either private carriage, or illegal freight movements, the present carriers did not increase their business at a rate even remotely approximating the economic growth of the State. In some instances the use of either private carriage or illegal carriers can be attributed to dissatisfaction with the service provided by the present intrastate carriers. “The Commission believes that there is a great de ⁶²³ mand for additional service to be supplied by the motor transport carriers within the State of Maryland and that the State of Maryland has in effect been losing substantial tax revenues and the businesses in Maryland have been receiving inferior services because the present intrastate carriers have failed to actively pursue the business which exists in the State. We believe that the granting of additional permits for intrastate carriage of goods will not materially diminish the business available to the existing intrastate carriers and if anything, the additional competition should result in additional business for them, since many of the shipments now transported by private carriers would be available to both intrastate and interstate shippers if the service is improved. Based on the testimony of witnesses before us, it is obvious that the Commission has every right to expect a continuing commercial and industrial growth in the metropolitan areas of the State and it is our responsibility to see that this growth is not hampered by the lack of adequate intrastate carriage of goods. “The Commission is keenly aware of the needs of the existing intrastate carriers and intends to continue to examine the results of the effect of the issuance of any additional permits in this case upon the ability of the existing intrastate carriers to survive.” After a rehearing had been denied and a stay granted pending court review, six appeals were taken to various courts and later were consolidated for trial in the Circuit Court for Frederick County.

On December 22, 1966, that court upheld the Commission’s action in granting the intrastate permits to nine of the applicants. Judge Clapp filed a thorough and sound opinion, which we adopt as the opinion of this Court, on those aspects of the case with which it deals, in the following pertinent parts: “The cases had their inception before the Commission in an application filed by Elkton Trucking Co., an interstate carrier through Maryland, for permits to ⁶²⁴ operate as a common carrier by motor vehicles over certain Specified Maryland intrastate routes. Fourteen similar applications by other carriers soon followed. Each of these fifteen applicants, by various amendments and stipulations before the Commission, limited its original application to those routes in Maryland over which they had interstate authority from the Interstate Commerce Commission. “Protests against these applications were promptly filed by the appellants and others not parties to these appeals, all of the protestants being motor carriers operating in intrastate commerce under permits previously issued by the Commission and each of whom would be in competition for such intrastate commerce with one or more of the appellees if their applications were granted. * * * “The stated objections of the appellants were that there was no need for additional intrastate motor carrier service over the routes requested, that the existing services were more than adequate to the shipping public and that competition for intrastate business by the large interstate carriers would divert and dilute the available freight to an extent that would seriously jeopardize their ability to continue their intrastate operations and might even force some of them out of business altogether.

They argued, therefore, that public welfare and convenience did not and would not require the grant of any of the applications. “The initial application by Elkton was filed on November 16, 1962, and the taking of testimony and the filing of additional documents and affidavits, creating a voluminous record, continued until the Opinion and Order of the Commission on February 18, 1966. “Thereafter, and in view of the grant of intrastate authority to the nine appellees, the six appellants filed a petition for a rehearing before the Commission alleging in substance that the record before it was stale and should be supplemented. * * * “It was further contended in the petition for rehear ⁶²⁵ ing that the Commission had considered evidence of future economic growth in certain portions of Maryland where intrastate authority was sought and that this came as a surprise to the protestants. Following argument, the Commission, by Order dated May 25, 1966, refused to reopen the matter. “These appeals from both Orders were duly perfected and the Commission subsequently stayed its grants of intrastate authority pending court review. By agreement of all counsel the appeals were consolidated and forwarded to this Court for hearing and disposition. “The scope of judicial review of orders of the Public Service Commission is specified in § 97 of Art. 78 of the Annotated Code of Maryland (1957 Ed.), as follows: ‘Every * * * order * * * of the Commission shall be prima facie correct and shall be affirmed unless clearly shown to be, (1) in violation of constitutional provisions, or, (2) not within the statutory authority or jurisdiction of the Commission, or, (3) made upon unlawful procedure, or, (4) arbitrary or capricious, or, (5) affected by other error of law, or, (6) * * * is unsupported by substantial evidence on the record considered as a whole.’ “The Order of the Commission must be affirmed on appeal unless one or more of the above grounds is clearly shown to exist. Clark v. Public Service Commission, 209 Md. 121 . “In these appeals, counsel for the appellants, in answer to a question from the bench, stated that he relied upon all of these grounds but further questioning showed that his entire argument was based upon a charge that there was no substantial evidence in the record to sustain the orders of the Commission and, therefore, its action was arbitrary and capricious.

He ⁶²⁶ then reasoned that this brought into existence all of the other statutory grounds for reversal. “The standards for issuance of permits by the Commission to motor carriers such as those here involved •are set forth in § 33a of Art. 78 as follows: ‘Public welfare and convenience—No motor carrier permit shall be issued unless the Commission, after considering the number of vehicles to be used, the rate to be charged, potential demand, qualifications of