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AGO 1956 No. 189 - January 23, 1956
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Don Eastvold | 1953-1956 | Attorney General of Washington

BUSES ‑- JURISDICTION OF PUBLIC SERVICE COMMISSION OVER SERVICE AND RATES OF BUS COMPANIES OPERATING INTRACITY

Matters pertaining to rates and service of an intracity bus company affecting the general public are subject to commission jurisdiction notwithstanding a city franchise covering such matters, but matters pertaining to the cities' proprietary interest, such as the manner of the use of the streets, is under the control of the city.

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                                                                 January 23, 1956

Honorable Hugh H. Evans
Prosecuting Attorney of Spokane County
Spokane County Courthouse
Spokane, Washington                                                                                                              Cite as:  AGO 55-57 No. 189


Dear Sir:

            This is in response to your letter of January 5, 1956, previously acknowledged, wherein you request the opinion of this office relative to the regulatory authority over the operations of the Spokane City Lines, Inc. within the city of Spokane.

            With your letter you have enclosed a copy of the ordinance of the city of Spokane granting a franchise to Spokane City Lines.  This ordinance, effective June 30, 1947 among other things prescribes the original routes the company is to follow, contains provisions in respect to changing and consolidating the routes, and matters pertaining to schedules.  The ordinance further contains provisions regarding safety measures, provisions for free transportation for firemen and policemen when in uniform, insurance, and matters pertaining to city streets.

            In your letter you also refer to a hearing before the Washington Public Service Commission at Spokane in May of 1955 involving a petition by the Spokane City Lines requesting Commission approval of certain proposed changes in routes  [[Orig. Op. Page 2]] and the curtailment of service during certain hours of the day and on holidays.  Following this hearing the Commission, as you pointed out, issued its order approving most of the requested changes and denying others.

            With this background you have asked our opinion if, under the statutes relating to the powers and duties of the public service commission, the city of Spokane can, under the terms of the franchise, control rates, schedules and routes of the Spokane City Lines?  Your inquiry, as we interpret it, raises the question as to whether the statutes relating to common carriers and auto transportation companies in respect to matters concerning rates and service abrogate or supersede the franchise provisions covering such matters.

            Before analyzing this question we wish to point out that at the hearing before the public service commission referred to above no objection was raised by either the company or the city concerning the commission's jurisdiction to pass on the proposed routes and schedule changes.  We attach no particular significance to this point but merely mention it to complete the facts giving rise to your inquiry.

            In answer to your question, it is our opinion that matters affecting the general public, such as the rates and service of the Spokane City Lines, are subject to the jurisdiction of the public service commission notwithstanding the provisions of the franchise, but the matters relating to the city's proprietary and pecuniary rights such as the manner of the use of city streets and imposition of various fees is under the control of the city.

                                                                     ANALYSIS

            The public service commission's jurisdiction over auto transportation companies and bus companies is based upon certain statutes now codified in RCW Chapters 81.04, 81.68 [[chapters 81.04, 81.68 RCW]].  In RCW 81.68.030 (Chapter 111, Laws of 1921) it is provided in part that the commission shall regulate every auto transportation company (1) by fixing its rates (2) regulating service and safety of operations, (3) requiring the filing of reports, and (4) by supervising such companies in all matters affecting the relationship between them and the traveling public.

             [[Orig. Op. Page 3]]

            However, by the terms of RCW 81.68.010 (Chapter 120, Laws of 1935) the provisions of Chapter 81.68 do not apply to persons operating motor vehicles wholly within the limits of incorporated cities and for a distance not exceeding 3 miles beyond the corporate limits.  Thus, it would appear to follow from the above statute that the commission has no jurisdiction over bus companies operating within incorporated cities.  This conclusion might also find support in the case of Evergreen Trailways v. Renton, 38 Wn. (2d) 82, 228 P. (2d) 119, wherein the court in referring to the above statute stated:

            "It would thus appear that the legislature did not attempt to regulate the transportation of passengers by motor vehicles operating exclusively within incorporated limits of any city but left such regulation to the cities."

            This decision will be referred to more fully hereinafter.

            Thus, looking only at the above statutes and the quoted language of the court in the above case a rather forceful argument may be made that the commission has been denied regulatory authority over a bus company operated solely within the limits of an incorporated city.  It may well be that such a conclusion would also be desirable.  However, our Supreme Court inState ex. rel. Spokane United Railways v. Department of Public Service, 191 Wash. 595, 71 P. (2d) 661, has also held that a company operating motor busses within the city of Spokane was a "common carrier" and that its rates were subject to the jurisdiction of the commission.  In so holding our Supreme Court made no reference to the provisions of RCW 81.68,supra, although the provisions of RCW 81.68.010 were in effect at the time.

            Accordingly, our court has expressly held that motor busses are common carriers and as such are subject to commission jurisdiction.  Although this case concerned only the matter of rates and not service, we must further conclude that since the court has affirmatively ruled that bus companies are common carriers, as such, the adequacy and sufficiency of their service and matters relating thereto are, like other common carriers, subject to commission jurisdiction.  In this connection, RCW 81.28.240 (taken in part from Chapter 117, Laws of 1911) provides that the commission, after hearing, shall determine the just, reasonable, safe, adequate, and proper service to be observed, furnished or enforced.

             [[Orig. Op. Page 4]]

            The conclusion that the commission's jurisdiction extends to bus companies operated intracity can in our view be reconciled with the decision of our court in theEvergreen Trailways case, supra.  This decision does not hold that the commission lacks jurisdiction over the rates and service of a bus company operated intracity but simply holds, as we do herein, that incorporated cities have the sole power over the use of their streets and without a franchise the bus company could not operate within the city.  The decision in this case makes no reference to the case ofSpokane United Railways v. Department, supra, Thus, it cannot be said that the holding of this latter case was overruled or its effect diminished.  As stated before, these two decisions in our view are not in conflict and it is our opinion that with the exception of matters pertaining to the adequacy and sufficiency of service and rates, the city's right over the use of its streets is controlling.

            Our conclusion that the rates and service of common carriers are subject to commission jurisdiction is supported by many early cases from this state.  In Seattle Electric Co. v. the City of Seattle, 78 Wash. 203, 138 Pac. 892, the city passed an ordinance designed to prevent overcrowding of the cars of the Seattle Railway Company and to fix a schedule of the company's operation.  The Superior Court enjoined the city from enforcing this ordinance.  On appeal the Supreme Court affirmed the lower court and on page 211 stated:

            "* * * it seems plain to us that it was the legislative intent that the power and authority to regulate public utilities was vested in the public service commission from and after the time the law took effect; and that, when the law became effective, it revoked the powers of the city to legislate upon the subject matter covered by the ordinance."

            InState ex rel. Seattle v. Seattle‑Rainier Valley Railway Company, 113 Wash. 684, 194 Pac. 820, our court held that the public service commission laws of 1911 did not supersede municipal franchise provisions relating to free rides for firemen and policemen when on duty.  In so concluding our court enunciated the principle which determines the respective areas of jurisdiction of cities and the state.  In this connection the court noted that those cases dealing with the question of the power of the state through the commission to  [[Orig. Op. Page 5]] supersede franchise provisions falls into two classes.  The first, those cases affecting rates or service involving the public, and the second, those affecting the individual pecuniary and proprietary rights of the city itself.  In this connection the court stated on page 691:

            "* * * As to the latter, the kind here involved, it has been decided that the legislature intended to, and did, vest the city with the whole of the state's police power touching the subject matter which has not been interfered with the public service commission law."

            This view was also expressed in Monroe Water Company v. Town of Monroe, 135 Wash. 355, 237 Pac. 997, involving a franchise provision requiring the water company to give free water service to the city.  In holding that this provision was a proprietary right which the laws of the public service commission did not supersede the court expressed itself on page 355 as follows:

            "* * * the power granted to it (public service commission) to regulate rates, fares, and service, related only to rates, fares, and service as affecting the general public as distinguished from the proprietary rights of the municipality * * *."

            We need not cite all of the decisions bearing in some respect upon the issue herein involved.  In our view, to summarize the conclusion most strongly supported by our Supreme Court decisions is that matters involving the rates and service of common carriers and other public service companies as they affect the general public are subject to the jurisdiction of the public service commission and the statutes relating thereto.  In respect to those matters affecting the cities' pecuniary or proprietary interest such as the manner of the use of their streets and the power to impose a reasonable use of the streets exaction or franchise fee, the cities' control thereof is absolute.

            If the city and the company can agree to certain schedule and route adjustments, we assume that such adjustments would be looked upon favorably by the commission.

            In this connection, it would appear that some discretion as to the choice of streets upon which the bus company shall offer service could concern a proprietary  [[Orig. Op. Page 6]] right of the city.  For example, if the city should find that injury or damage to a street, or undue traffic congestion, may be avoided by the use of another street which would not detract from the adequacy or sufficiency of the service, we feel that the city could properly prohibit the company from using such a street.  Should, however, the city take such action which would lessen the service required by the public, or impose unreasonable or arbitrary service conditions upon the company not related to the city's proprietary interests, then, in such a case, the matter could properly be brought to the attention of the commission by the filing of a formal complaint.  Likewise, a municipal corporation may, under our statutes file a complaint when it appears that inadequate service is being rendered.

            In the company's franchise the business and occupation tax is referred to in lieu of the imposition of a franchise fee.  In those instances where a franchise fee or use of the streets exaction is to be imposed the determination of the amount thereof could be governed somewhat by the facts surrounding the particular routes to be utilized.  This is an example of the manner in which the city's proprietary or pecuniary interests may be related to the establishment of service standards.

            We cannot set forth a standard or rule covering every conceivable situation which may arise.  Our remarks in the preceding two paragraphs are simply intended to express more precisely the broad principle which we feel is the law applicable to the problem.

            The conclusion reached herein is based upon those decisions interpreting existing statutes.  If it be desirable that greater regulatory control be vested in the municipalities this is a matter that should receive legislative attention.

            We trust that the above will be of assistance to you.

Very truly yours,

DON EASTVOLD
Attorney General

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