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Brink's, Inc. v. Commerce Com.

OPINION FILED DECEMBER 31, 1981.

BRINK'S, INCORPORATED, ET AL., PLAINTIFFS-APPELLEES,

v.

ILLINOIS COMMERCE COMMISSION, DEFENDANT-APPELLANT. — (WELLS FARGO ARMORED SERVICE CORPORATION, INTERVENING DEFENDANT-APPELLANT.)



APPEAL from the Circuit Court of Cook County; the Hon. JAMES C. MURRAY, Judge, presiding.

JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 4, 1982.

Appellants, Illinois Commerce Commission (Commission) and Wells Fargo Armored Service Corporation (Wells Fargo), appeal the decision of the circuit court of Cook County setting aside a Commission order granting a contract carrier permit to Wells Fargo.

On June 18, 1976, Wells Fargo applied to the Commission for a permit under section 18-302 of the Illinois Vehicle Code (Ill. Rev. Stat. 1975, ch. 95 1/2, par. 18-302) to operate as a contract carrier of valuable property in armored vehicles in Cook, Lake, Du Page and Will Counties. Pursuant to Commission rule, six existing carriers were allowed to intervene and those intervening included Brink's, Incorporated (Brink's), Purolator Security, Incorporated, and Purolator Courier Corporation.

Hearings were held during 1976, 1977 and 1978, generating over 7000 pages of transcript. The record was marked "heard and taken" on February 9, 1978. The full Commission considered oral arguments on September 27, 1978. On May 16, 1979, the Commission granted the application and issued a contract carrier permit to Wells Fargo. Brink's and Purolator Security appealed to the circuit court of Cook County and requested a stay of the Commission's order. The stay was allowed, and the stay order was affirmed on appeal. (Brink's, Inc. v. Illinois Commerce Com. (1979), 79 Ill. App.3d 275, 398 N.E.2d 296.) On October 17, 1980, the circuit court set aside the order of the Commission for the reasons set forth in its decision on review. Wells Fargo and the Commission appealed.

Appellants present the following issues for review: (1) whether prior to issuing a contract carrier permit, section 18-302 of the Illinois Vehicle Code (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-302) requires the Commission to make express findings concerning (a) unmet shipper needs for carrier service and (b) the inadequacy of existing service; (2) whether the Commission's order contains findings concerning shipper needs for armored carrier services; (3) whether the trial court erred in taking judicial notice of matters outside the Commission's certified record, over objection, without an opportunity for rebuttal, and in disregard of evidence of record; (4) whether the Commission's order is lawful and reasonable; and (5) whether Brink's and Purolator have standing to appeal the Commission's order.

We reverse.

LAW OF COMMON AND CONTRACT CARRIERS

Before discussing the issues raised by this appeal, it is appropriate that we discuss the definitions and law of common and contract carriers.

A contract carrier is defined as "any person, who under individual written bilateral contracts, transports property over the highways of this State by motor vehicle for-hire." (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-100(10).) This contrasts with the definition of common carrier which is "any person who undertakes to transport property over the highways of this State for the general public by motor vehicle for-hire, whether over regular or irregular routes." (Emphasis added.) Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-100(9).

Common carriers serve the needs of the general public. They are prohibited from unjustly discriminating or establishing undue or unreasonable preferences to any person, place, or "description of traffic." (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-313.) Their rates must be just and reasonable (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-310), and a schedule of those rates must be filed with the Commission (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-501). Finally, common carriers must carry insurance to protect shippers from loss or damage to cargo. (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-701.) In contrast, contract carriers serve particular types of shippers and are not required to serve the general public. They are not bound by the prohibition against discrimination and preferences in rates and are not required to carry insurance on cargo. In short, the individual contract determines the relationship between a contract carrier and its shipper. Allied Delivery System, Inc. v. Illinois Commerce Com. (1981), 93 Ill. App.3d 656, 659, 417 N.E.2d 777, 779-80.

• 1 Different standards govern the issuance of certificates to common carriers and permits to contract carriers. The standard for issuance of certificates to common carriers is public convenience and necessity. Section 18-301 provides in pertinent part that:

"(a) * * * [I]t shall be unlawful for any common carrier of property by motor vehicle to operate * * * without first having obtained from the Commission a certificate * * * declaring that public convenience and necessity require such operation. The Commission shall issue a certificate to any qualified applicant therefor after hearing, pursuant to an application filed, authorizing the whole or any part of the operation covered by the application, and may attach to the exercise of the rights and privileges granted by such certificate such terms and conditions as the public convenience and necessity may require, if it is found that the applicant is fit, willing and able properly to perform the service proposed and to conform to provisions of this Chapter and the requirements, rules and regulations of the Commission thereunder, and that the proposed service, to the extent authorized by the certificate, is required by the present and future public convenience and necessity; otherwise such application shall be denied. In determining whether or not a certificate of public convenience and necessity shall be issued, the Commission shall give due consideration among other factors as to whether or not the granting of the authority of the proposed service would recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest, and whether or not the granting of the authority for the proposed service would tend to promote safe, adequate, economical and efficient service by motor carriers of property for-hire, provided however, that the mere existence of a competing transportation service in the area sought to be served shall not in and of itself be proof sufficient to support a denial of the existence of the present or future public necessity and convenience. The order of the Commission granting or denying a certificate shall set forth the specific findings of fact on which such order is based." (Emphasis added.) Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-301.

• 2 In McMann v. Illinois Commerce Com. (1967), 38 Ill.2d 126, 230 N.E.2d 197, our supreme court held that a finding of inadequate existing service was not essential to a Commission order granting a certificate of public convenience and necessity. In McMann, Springfield Van and Storage Co. had filed for a certificate to operate as a common carrier of household goods and used office furniture and equipment. The Commission granted the certificate finding the operation consistent with the public interest and that there was a present and future need for the proposed services. Plaintiffs, who had intervened to oppose the application, argued that such a grant of authority required a specific finding of inadequacy of existing service. In affirming the Commission order, our supreme court stated:

"The requirement of a Commission finding that existing service is inadequate was developed in those cases where existing carriers or utilities have been held to be entitled to territorial protection under the so-called `first in the field' doctrine. [Citations.] This theory is based on a consideration of the time and money expended by the pioneer in developing its business and rendering adequate service to the public. [Citations.]

Cases requiring specific findings of inadequacy involved common carriers over regular routes only or utilities confined to a definite area such as electric, gas, water or sewer service. The authority here sought is to provide service over irregular routes all over the State of Illinois. Plaintiffs have not cited nor have we found any case involving common carriers over irregular routes wherein a failure to make the specific finding of inadequacy of service by existing carriers resulted in a reversal of a Commission order. * * * The Commission did make a specific finding in its original order that the greater weight of the evidence established that other carriers in the same territory were unable to meet the public demand for such services, and in its order on rehearing it made a finding of need for additional service which implies an inadequacy of existing service. We do not think that the failure to make a specific finding of inadequacy was fatal to the Commission's order." 38 Ill.2d 126, 128-29.

The standard for the issuance of permits to contract carriers is that the proposed service will be consistent with the public interest. Section 18-302 of the Act provides in pertinent part that:

"(a) * * * [I]t shall be unlawful for any contract carrier of property by motor vehicle to operate or furnish service * * * without first having obtained from the Commission a permit * * *. The Commission shall issue a permit to any qualified applicant therefor after hearing, pursuant to an application filed * * * if it is found that the applicant is fit, willing and able properly to perform the service proposed and to conform to the provisions of this Chapter, and the requirements, rules and regulations of the Commission thereunder and that the proposed service, to the extent authorized by the permit, will in the judgment of the Commission be consistent with the public interest; otherwise such application shall be denied; * * *. In determining whether or not a permit shall be issued, the Commission shall give due consideration among other factors as to whether or not the granting of the authority for the proposed service would recognize and preserve the inherent advantages of, and foster sound economic conditions in such transportation and among such carriers in the public interest, and whether or not the granting of the authority for the proposed service would tend to promote safe, adequate, economical, and efficient service by motor carriers of property for-hire; provided further, that the mere existence of a competing transportation service in the area sought to be served shall not in and of itself be proof sufficient to support a finding of inconsistency with the public interest. The order of the Commission granting or denying a permit shall set forth the specific findings of fact on which such order is based." (Emphasis added.) Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-302.

This court has interpreted section 18-302 of the Act in two recent cases. In Allied Delivery System, Inc. v. Illinois Commerce Com. (1981), 93 Ill. App.3d 656, 417 N.E.2d 777, this court addressed the issue of what standards govern the Commission's decision to grant or deny a permit for contract carrier authority. This court found guidance in the expression of Illinois public policy in relation to the transportation of property which is embodied in section 18-101. (93 Ill. App.3d 656, 663.) This section provides in pertinent part as follows:

"It is hereby declared to be the policy of the State of Illinois to supervise and regulate the business of the transportation of property for-hire by motor vehicle upon and over the public highways of this State in such manner as to (1) recognize and preserve the inherent advantage of, and foster sound economic conditions in, such transportation and among such carriers in the public interest: (2) promote adequate, economical, and efficient service by such motor carriers, and reasonable charges therefor, without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices: (3) improve the relations between and coordinate transportation by and regulation of, such motor carriers and other carriers: (4) develop and preserve a highway transportation system properly adapted to the needs of commerce and the state: and (5) co-operate with the federal government and the several states, and the duly authorized officials thereof, and with any organization of motor carriers in the administration and enforcement of the regulatory statute; * * *." Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-101.

• 3 Illinois public policy must be considered in conjunction with the express standards for granting a contract carrier permit as stated in section 18-302(a) (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-302(a); Allied Delivery System, Inc. v. Illinois Commerce Com. (1981), 93 Ill. App.3d 656, 663).

• 4 In Carlson Transport, Inc. v. Illinois Commerce Com. (1981), 93 Ill. App.3d 793, 416 N.E.2d 1239, this court held that section 18-302 required two findings for the issuance of a permit: (1) that the applicant is fit, willing and able to perform the service proposed, and (2) that the grant will in the judgment of the Commission be consistent with the public interest. (93 Ill. App.3d 793, 795.) We noted that "While no Illinois Court has had to interpret the term `consistent with the public interest' as utilized in section 18-302, other States accord that term a broad interpretation." (93 Ill. App.3d 793, 796.) "Consistent with the public interest" has been held to mean not detrimental to the public and not contrary to public policy as set forth in the Motor Carrier Act. A showing of consistent with public interest is a lesser standard than the showing of public convenience and necessity required under section 18-301. The determination of what constitutes public convenience and necessity and what constitutes consistent with the public interest is within the discretionary powers of the Commission. The Commission's expertise in deciding what is consistent with public interest in petitions pursuant to section 18-302 must not be set aside unless it is clearly against the manifest weight of the evidence. 93 Ill. App.3d 793, 796.

The principal issue raised by this appeal is whether the Illinois Vehicle Code (Ill. Rev. Stat. 1977, ch. 95 1/2, par. 18-100 et seq.) requires the Commission to make express findings concerning unmet shipper needs and the inadequacy of existing service before issuing a contract permit.

In its order of May 16, 1979, the Commission made the following findings:

"(7) four officers and/or employees of Wells Fargo as well as eleven shipper witnesses from banks, savings and loan associations, retail department stores, a drug clinic, a jeweler, and other businesses appeared and testified in support of the instant application for a contract permit, * * *;

(8) nineteen witnesses who were employed in various capacities by the four intervening carriers appeared to oppose the application * * *;

(9) Dr. Leon N. Moses and Dr. Alfred A. Kuehn appeared and were allowed to testify as expert witnesses and each expressed his opinions to support the respective position of his client(s), including opinions as to the ultimate issues of the case, * * *;

(10) shippers reasonably seeking contract carriage are entitled to the personalized flexible service normally associated with contract carriage, and the record shows that shippers who seek to use armored carrier service frequently have special needs for unscheduled service to meet unusual business contingencies, as well as particular time schedule requirements including a desire for either early or late pick-ups and deliveries to meet either cash flow or deposit credit requirements;

(11) the entry of Wells Fargo would result in more trucks available to serve the market and that would result in an increased supply of routes generally available throughout the four county area;

(12) with more routes throughout the area forming a tighter network, more potential users would necessarily be along routes and therefore would be more likely to obtain service to meet their needs;

(13) the testimony of the shipper witnesses, the statistical and econometric data admitted into evidence support the various opinions expressed by Wells Fargo's expert witness, Dr. Alfred A. Kuehn, and further show that there is a potential market for additional armored carrier service in the four county area and that the public interest will be served by the entry of another carrier which would be willing and able to provide a transportation service of these valuable commodities and which has sufficient experience and knowledge of the necessary security measures to provide such service safely and efficiently;

(14) the evidence discloses that there are other carriers operating within the Illinois Counties of Cook, Du Page, Lake and Will which are transporting the proposed commodities pursuant to individual written bilateral contracts with their shippers, engaging in competitive bidding, and providing a service similar to that proposed by Applicant;

(15) neither the evidence adduced by the intervening carriers nor the opinions expressed by their expert witness, Dr. Leon N. Moses, nor the arguments set forth in their attorneys' post hearing briefs, persuade the Commission that the entry of an additional carrier in the four county area will result in destructive competition that will cause a deterioration in service quality and consequent harm to these existing carriers and the shipping public;

(16) the evidence shows that a grant of contract carrier authority to Applicant is consistent with a public interest in that it will tend to promote safe, adequate, economical ...


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