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BLACK BALL FREIGHT SERV. v. UNITED STATES

April 4, 1967

Black Ball Freight Service; Inland Transportation Co., Inc.; Edmonds-Alderwood Auto Freight Company; Bestway Motor Freight, Inc.; Interstate Freight Lines, Inc.; S & S Auto Freight, Inc.; Portland-Seattle Freight Lines, Inc.; Renton-Issaquah Auto Freight, Inc.; Los Angeles-Seattle Motor Express, Inc.; James J. Williams, Inc.; Tacoma-Fort Lewis Auto Freight, Inc.; Ralph Pozzi, Carl A. Pozzi, Clinton D. Pozzi and Wayne Pozzi, Doing Business as Pozzi Bros. Transportation Company; Oregon-Nevada California Fast Freight, Inc.; Asbury Transportation Co.; Garrett Freightlines, Inc.; Pacific Intermountain Express Co.; and Consolidated Freightways Corporation of Delaware
v.
United States of America, Interstate Commerce Commission, Federal Transfer and Storage Company, D. W. Ramsey Motor Freight, Inc.; Western Cartage, Inc.; Evergreen Transfer and Storage Company, and Western Hauling, Inc.


Boldt, D.J.


The opinion of the court was delivered by: BOLDT

Plaintiff motor freight carriers operating in the State of Washington brought this action under Section 17(9) of the Interstate Commerce Act (Title 49 U.S.C.A. Section 17(9)), and pursuant to Title 28 U.S.C.A. Sections 1336, 1398, 2284 and 2321 through 2325, and Section 10 of the Administrative Procedure Act (Title 5, U.S.C.A. Sec. 1009), to set aside an order of the Interstate Commerce Commission (hereinafter "ICC").

 By that order the ICC, over plaintiffs' protest, granted applications for the federal "grandfather" certificates of registration provided for by Public Law 87-805 (76 Stat. 911) to eleven motor freight carriers previously operating under Washington State permits.

 Plaintiffs' primary contention is that the ICC erred as a matter of law in holding permits issued from 1935 to 1963 by the Washington Public Service Commission *fn1" (hereinafter "WPSC") in substance and effect were "certificates of public convenience and necessity" within the meaning of that term as used in the second proviso of Section 206(a)(1) of the Interstate Commerce Act *fn2" and in the above-cited statute deleting the second proviso and authorizing the "grandfather" Certificates of Registration granted in the ICC decision from which this review is taken. *fn3" During argument all counsel agreed and we hold the stated contention presents a question of law, to be determined upon our examination of the pertinent Washington State statutes, regulations and Supreme Court decisions, and reversal is required if we conclude and hold contrary to the ICC ruling. *fn4"

 Defendants do not question that consideration of "necessity," as well as "public convenience," is mandatory for the issuance of a certificate of public convenience and necessity within the meaning of the second proviso and the "grandfather" amendment. Undoubtedly during the 1935-1963 period the Washington statutes and decisions required the WPSC to consider and determine "public convenience." Whether or not in that period the WPSC, before granting a state permit, was mandatorily required to consider "necessity" in the particulars and to the extent required by federal law is the ultimate question for our determination.

 The pertinent Washington legislative enactments are: Chapter 111, Laws 1921, Sections. 4, 5; Chapter 184, Laws 1935, Sec. 5; Chapter 166, Laws 1937, Sec. 6; Chapter 163, Laws 1941, Sec. 1; Chapter 264, Laws 1947, Sec. 2; Chapter 95, Laws 1953, Sec. 17; and Chapter 242, Laws 1963, Sec. 1. A review of these statutory provisions discloses:

 The 1921 statute brought motor transportation under supervision of a state Public Service Commission and expressly provided for "certificates of public convenience and necessity." Under the statute, consideration and findings by the Commission as to the essential elements for issuance of such certificates, i.e., both "public convenience" and "necessity," was mandatory.

 The 1935 statute expressly abolished certificates of public convenience and necessity and authorized the issuance of permits with minimal limitations on the discretion of the Commission. Thereafter in 1937, 1941, 1947 and 1953 a series of amendments specified factors to be considered by the Commission in granting permits. These amendments provided limitations on the discretion to be exercised by the Commission. In adding some factors relating to "necessity" the legislature used the term "may," not "shall". Since each term is applied to different provisions in the same enactments, in such context it can hardly be questioned that the legislature intended "may" as permissive and "shall" as mandatory. State ex rel. Railway Express Agency, Inc. v. Washington Public Service Commission, 57 Wash. 2d 32, 354 P.2d 711 (1960).

 The 1963 statute re-established certificates of public convenience and necessity both in name and substance. Consideration by the Commission of both "convenience" and "necessity" expressly became mandatory. All previous conflicting statutes were repealed.

 Prior to the 1941 amendment the ICC in Crumpacker Common Carrier Application, 4 M.C.C. 264; Pratt Common Carrier Application, 7 M.C.C. 448; Tooker Common Carrier Application, 12 M.C.C. 552; and Puget Sound Express, Extension, 14 M.C.C. 315 held Washington state permits were not registerable under the federal Act. In Puget Sound Express the Commission said:

 
"* * * The State of Washington does not require certificates of public convenience and necessity as a condition precedent to the authorization of intrastate rights * * *"

 The only significant amendment to the state statute after the cited decisions was that of 1941 which provided:

 
"The Commission shall also consider the amount and type of service rendered in any area by any class of service and may deny an application for permit or extension if it appears that the grant of such permit or extension would tend to impair the stability or dependability of existing service essential to the public needs or requirements."

 The ICC Act [Interstate Commerce Act], 49 U.S.C. § 307, provides that in passing on applications for certificates of public convenience and necessity the Commission ...


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