AGO 1966 No. 78 - Mar 18 1966
OFFICES AND OFFICERS ‑- STATE ‑- UTILITIES AND TRANSPORTATION COMMISSION ‑- CARRIERS ‑- COMMON AND CONTRACT ‑- QUALIFICATIONS FOR "GRANDFATHER" CERTIFICATE OF CONVENIENCE AND NECESSITY UNDER CHAPTER 81.77 RCW.
(1) Section 5, chapter 105, Laws of 1965, Ex. Sess., clarifies the legislative intent of chapter 295, Laws of 1961 (chapter 81.77 RCW) and prohibits a common or contract carrier from engaging in the business of transporting garbage or refuse for compensation except by authority of a certificate of convenience and necessity issued by the utilities and transportation commission.
(2) Carriers not engaged in the business of transporting garbage and/or refuse for compensation on July 1, 1961, but who have subsequently become engaged in such transportation as a business, are not entitled to certification under the "grandfather" clause of RCW 81.77.040, but must prove a public convenience and necessity. In order to qualify for a "grandfather" certificate, an applicant must show operations under authority of a common or contract carrier permit. Mere holding of a permit is not sufficient.
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March 18, 1966
Honorable Patrick D. Sutherland
Washington Utilities and Transportation Commission
Olympia, Washington 98501 Cite as: AGO 65-66 No. 78
By letter, previously acknowledged, you have requested the opinion of this office on questions which we paraphrase as follows:
(1) Are carriers now holding permits under chapter 81.80 RCW which were only incidentally and casually engaged in the transportation of refuse as a commodity on July 1, 1961, (the effective date of chapter 295, Laws of 1961) but who are now serving regular customers in a specified area collecting and disposing of refuse for compensation as a common or contract carrier thereof, or are otherwise fully engaged in [[Orig. Op. Page 2]] business as a refuse collection company, required to make application to the Washington utilities and transportation commission for a certificate of public convenience and necessity if they are to continue to engage in such service?
(2) If the above question is answered in the affirmative are such companies entitled to receive certification under the last paragraph of RCW 81.77.040?
The above questions are answered in the following analysis, and further attention is devoted to several ancillary questions due to our response to the above.
Question number 1 as above expressed requires interpretation of chapter 295, Laws of 1961, and the effect of the 1965 amendment thereto. These have been codified in chapter 81.77 RCW, as amended, and where possible we shall hereinafter refer to the RCW citation. Your attention is further directed to AGO 61-62 No. 67 [[to Washington Utilities and Transportation Commission on October 2, 1961]], a copy of which is attached hereto, and to which some comment will be devoted.
RCW 81.77.010 (7) defines a garbage and refuse collection company as:
". . . Every person or his lessees, receivers, or trustees, owning, controlling, operating or managing vehicles used in the business of transporting garbage and refuse for collection and/or disposal for compensation, . . . over any public highway in this state whether as a 'common carrier' thereof or as a 'contract carrier' thereof."
It is notable that in this definition the legislature used the conjunctive, i.e., garbage and refuse, making possible the implication that a carrier who did not haul both was not within the terms of the act. AGO 61-62 No. 67 did not comment on the use of the conjunctive rather than the disjunctive in the definition of the term "garbage and refuse collection company," but considered only the question of who would qualify for certification under the new law. It concluded as follows:
". . . it is the opinion of this office that the legislature intended the [[Orig. Op. Page 3]] provisions of chapter 295, Laws of 1961, to apply only to those carriers who are in the business of transporting garbage and refuse for collection and/or disposal for regular customers in a specified area. . . ." (Emphasis supplied.)
The opinion went on to suggest that the commission determine by rule what constituted being "in the business of transporting garbage and refuse for collection and/or disposal."
Thereafter, by General Order M.V. No. 158, dated December 19, 1961, and effective January 1, 1962, the commission adopted rules and regulations governing garbage and refuse collection companies. Rule 5 (g) defined the phrase "the business of transporting garbage and refuse for collection and/or disposal for compensation" as applying "only to those carriers who are primarily in the specialized business of transporting garbage and refuse for collection and/or disposal for all potential customers within a specified area." However, there was a note appended to Rule 5 (g) which stated:
"Chapter 295, Laws of 1961, was not intended to cover operations of carriers whose business is other than the primary business of transporting garbage and refuse for collection and/or disposal. Permit holders under the provisions of chapter 81.80 RCW, whose primary business is not the collection of garbage and refuse, need not secure a certificate under the provisions of chapter 295, Laws of 1961. In some instances, carriers may be engaged extensively in both motor freight carrier and in garbage and refuse hauling operations. In cases where such operations are separable, carriers may be required to hold both a certificate and a permit in order to continue both services. In each case it will be within the discretion of the Commission to determine whether a carrier is required to hold both a common carrier permit and a certificate."
[[Orig. Op. Page 4]]
Thus, the commission undertook to define what it conceived to be the business of operating as a garbage and refuse collection company, exempting by the above note the incidental haulers of these commodities. Inherent in your question is the assumption that prior to July 1, 1961, the carrier was an incidental hauler of refuse as a commodity and exempt under the note to Rule 5 (g). However, you further assume that the same carrier isnow in the business of transporting this commodity as the commission's rules define that term.
That chapter 295, Laws of 1961, was not a masterpiece of clarity is revealed by the conflicts leading to the issuance of AGO 61-62 No. 67. The opinion pointed out the imperative need for the adoption of rules and regulations, holding that carriers with general freight rights or special commodity rights among which was the commodity "refuse" are not subject to regulation under chapter 81.77 RCW, if their operations were incidental and were not such as to be in the business of transporting garbage and refuse. Although the opinion did not discuss whether a carrier holding such "refuse" rights who is in fact in the business of hauling this commodity is subject to regulation under chapter 81.77, your letter indicates that the commission has adopted a policy of issuing certificates to those permittees for the transportation of pure refuse who were actually engaged primarily in the movement of this commodity. This position is fortified by Rule 5 (e) and (f) in which the commission differentiates between "garbage" and "refuse" for definition purposes. To distinguish the two commodities would seem futile and redundant unless the law were deemed to apply to haulers of either.
In any event, the scope of the law was not clear. It could be legitimately construed to include only haulers of both commodities, or to haulers of either commodity. We take the commission's rules and regulations and the statement in your letter as to prior commission policy on the issuance of certificates to refuse companies as an administrative interpretation of the language of RCW 81.77.010 (7) reading "garbage and refuse" to mean "garbage and/or refuse."
It is a firmly entrenched rule of statutory construction that the interpretation placed upon an ambiguous statute by a department or commission charged with its administration is persuasive in determining the legislature's intent where the legislature has not sought to change such construction. Buffelen Lumber & Manufacturing Co. v. State, [[Orig. Op. Page 5]] 32 Wn.2d 40, 200 P.2d 509 (1948); In re Smiley's Estate, 35 Wn.2d 863, 216 P.2d 212 (1950). Thus the commission's construction, while not conclusive, is entitled to some weight until it has been judicially overturned, or until such time as the legislature may act. In the instant case, the legislature did act, ostensibly to eliminate any dispute as to its intent, and in so doing confirmed the administrative construction. To resolve any doubts, the legislature adopted as § 5, chapter 105, Laws of 1965, Ex. Sess., the following:
"Whenever in this chapter the phrase 'garbage and refuse' is used as a qualifying phrase or otherwise it shall be construed as meaning 'garbage and/or refuse'."
Regardless of the possible interpretations to which chapter 81.77 RCW may have been subject prior to this legislative construction, it is clear that the legislature intended that refuse companies be included within the scope of the garbage and refuse law. The above language has none of the latent ambiguities of the prior law. We must therefore be guided by one of the most basic rules of statutory construction, that is, when the language of a statute is plain, unambiguous and well understood according to its natural and ordinary sense and meaning, the statute itself furnishes a rule of construction beyond which a court cannot go. Seattle v. Ross, 54 Wn.2d 655, 344 P.2d 216 (1959).
There can be no question that since the adoption of the 1965 legislation a person engaged in thebusiness of transporting garbage or refuse for compensation may do so only pursuant to a certificate issued under chapter 81.77 RCW.
In our judgment, however, the "incidental" hauler of garbage and/or refuse, as that language appears in the note to Rule 5 (g), may continue to operate under permit, since he is by definition not "in the business" of transporting garbage and/or refuse for collection or disposal. With this reservation, your first question is answered in the affirmative.
We come now to the issue of "grandfather" rights, which involves a determination of whether the 1965 enactment creates any right to certification independent of [[Orig. Op. Page 6]] the original provisions of RCW 81.77.040. In our opinion it does not. The 1965 amendment to the garbage and refuse law constitutes nothing more or less than a legislative construction of its prior enactment. The power of the legislature to do this, and the legal effects of such action, are established byCarpenter v. Butler, 32 Wn.2d 371, 377, 201 P.2d 704 (1949), wherein the court states:
"It seems to us, as contended by respondent, that the language of the statute upon which appellant relies is clearly ambiguous, and that the legislature has, by its later enactment, in no uncertain terms clarified its meaning.
"We stated inState ex rel. Oregon R. & N. Co. v. Clausen, 63 Wash. 535, 116 Pac. 7:
"'Courts are not at liberty to speculate upon legislative intent when that body, having subsequent opportunity, has put its own construction upon its prior enactments.'
". . .
"It seems to us there can be no question but that the legislature intended to define the meaning or limit the effect of statutes already in existence. . . . We agree with respondent thatwhen the legislature acts to construe an ambiguity in a pre‑existing statute, it is not legislating retroactively. . . ." (Emphasis supplied.)
In our judgment, it is beyond dispute that the legislature by the 1965 enactment was "seeking to define the meaning or limit the effect" of statutes already in existence, and in so doing clarified its meaning "in no uncertain terms." We have, then, a situation in which the commission was dealing with a statute subject to multiple construction, and had followed an administrative interpretation of that statute to mean "garbage and/or refuse." Whether the commission interpretation is correct becomes academic by the subsequent [[Orig. Op. Page 7]] action of the legislature in construing its own work product. The clear purport of the 1965 clarification was to relate back to the original language of chapter 295, Laws of 1961, including the critical date and qualifications for the purpose of determining "grandfather" rights. The 1965 law created no new or different period for issuance of a "grandfather" certificate, and operations subsequent to the critical date will not support the award of "grandfather" authority. United States v. Maher, 307 U.S. 148, 83 L.Ed. 1162 (1939).
Your second question is therefore answered in the negative, i.e., only persons who on July 1, 1961, were engaged in the business of transporting refuse under authority of a common or contract carrier permit and who have not previously been certificated, are entitled to certificates of convenience and necessity pursuant to the "grandfather" provision of chapter 81.77 RCW. Persons holding permits but who had not become "engaged in the business" of transporting garbage and refuse until after July 1, 1961, are not qualified applicants for "grandfather" authority.
As previously noted, the apparent motivation of the commission which prompted this request for an opinion lies in the fact that certain permittees under chapter 81.80 RCW had either not commenced operations or were only incidentally engaged in the transportation of refuse as a commodity on the critical date. The problem is the status of those carriers who have since enlarged the scope of their operations to the extent that they are now engaged in such transportation as a business. In our opinion they have no status. Chapter 81.77 RCW prohibits a carrier from engaging in the business of transporting garbage and/or refuse for compensation unless the carrier holds a certificate. The same carrier is prohibited from performing more than incidental service under his common carrier permit. Thus, where a carrier subsequent to July 1, 1961, has undertaken to develop his operation to a point where he is in the business of moving these commodities, he has done so in violation of the public service laws. He is not qualified for "grandfather" rights. His only alternative is to secure the necessary authority under the remaining standards set out in the law. In short, he would have to prove that the public convenience and necessity require his services.
In addition to the above primary questions, you have made certain inquiries, the answers to which are calculated to aid in the administration of chapter 81.77 RCW. The first supplemental question is:
[[Orig. Op. Page 8]]
In connection with an application under the last paragraph (grandfather provision) of RCW 81.77.040, must the applicant offer proof of operations as a garbage and/or refuse collection company or is mere possession of a common carrier permit containing such operating authority issued under chapter 81.80 RCW sufficient to qualify for issuance of a certificate?
In our opinion, response to this question is answered by the terms of the statute itself, and further by reference to the only case as yet before the state supreme court in which the issue of "grandfather" rights under chapter 81.77 RCW has been at issue. RCW 81.77.010 (7) as clarified by legislative construction now defines a garbage and refuse collection company as "every person or his lessees, receivers or trustees owning, controlling, operating or managing vehicles used in the business of transporting garbage and/or refuse . . ." The last clause, or "grandfather" clause of RCW 81.77.040 provides in pertinent part:
"Any garbage and refuse collection company which upon July 1, 1961 isoperating under authority of a common carrier or contract carrier permit issued under the provisions of chapter 81.80 shall be granted a certificate of necessity without hearing upon compliance with the provisions of this chapter. . . ." (Emphasis supplied.)
The state supreme court in Sanitary Ser. v. Washington Utilities and Transportation Commission, 64 Wn.2d 739, 393 P.2d 952 (1964), stated at pages 745-746:
". . . it is equally clear that the legislature sought to preserve those operating rights existing upon the critical date and to prescribe a procedure whereby an operating garbage and refuse collector could obtain a certificate of public convenience and necessity without being required to justify the continuation of his business in terms of ability and public convenience.
"We conclude, therefore, that an applicant seeking to qualify for a certificate under the last paragraph of Laws of 1961, [[Orig. Op. Page 9]] chapter 295, § 5, RCW 81.77.040, need only establish, and the commission need only find, that (1) upon July 1, 1961, such applicant wasoperating as a 'garbage and refuse collection company' as defined in the statute, and (2) such applicant was then operating under and pursuant to the authority of a common or contract carrier permit issued under the provisions of RCW 81.80. . . ." (Emphasis supplied.)
In our view, the statutory language is absolutely clear, and it is evident that the court stated its conclusion in terms of the statute with which it was dealing. Consequently, it is our opinion that the mere possession of a common or contract carrier permit is not sufficient. The standard prescribed in the act is operation on the critical date, and inferentially in the immediate past. Yet these operations must be of a particular character in order to qualify the carrier as a garbage and/or refuse collection company as that term has been defined. In short, the act as supplemented by commission rule requires the qualified applicant to be in thebusiness of operating as a garbage and/or refuse collection company.
However, we do not conceive the intent of the legislature to be that certificate authority issued to a qualified "grandfather" applicant necessarily be coextensive with the scope of his physical operations. On the contrary, we view the purport of the legislature to be that the scope of the certificate coincide with the scope of the prior permit authority, that is the legislature sought to protect the right where the carrier was actually in the business of operating as a garbage and/or refuse collection company.
The interpretation of "grandfather" clauses in the transportation industry is a problem frequently encountered by the interstate commerce commission, and through that commission by the federal courts. The supreme court of the United States, considering the pertinent language of § 206 of the interstate commerce act (the motor carrier "grandfather" provision), said inUnited States v. Carolina Freight Carriers Corp., 315 U.S. 475, 86 L.Ed. 971 (1942), at page 480:
[[Orig. Op. Page 10]]
". . . The Act provides the test of 'bona fide operation.' That standard carriers the connotation of substantiality. It also makes clear that a holding out to serve a specified area is not alone sufficient. It is 'actual rather than potential or simulated service' which is required. . . . Substantial, as distinguished from incidental, sporadic, or infrequent, service is required. . . ."
Under the rule above cited we deem the word "substantial" to be more qualitative than quantitative, for it describes the nature of the service rendered. It should be obvious that operations must depend to some extent upon the nature of the traffic and upon the routes and territories involved. In effect, what the court said in Carolina Freight Carriers, supra, was that there must be some consistency in movement as distinguished from a merely sporadic or incidental shipment at remote intervals of time. That is, there may be a regular or irregular service, but if irregular, the service should be of such consistency and continuity as to be undoubted.
We should note here the distinction between § 206 of the interstate commerce act and the situation that prevails with respect to chapter 81.77 RCW. Section 206 came into being as part of the 1935 amendments to the interstate commerce act which brought motor carriers under regulation for the first time. While motor carriers had obviously been providing service to the public for many years prior to that time, they had not been doing so under any regulatory scheme. For this reason, the interstate commerce commission was concerned only with operations, since it had no prior permit or certificate authority to contend with. On the other hand, garbage and refuse haulers in this state have been subject to the regulatory jurisdiction of the Washington commission since the decision of our supreme court in State v. Diamond Tank Transport, Inc., 2 Wn.2d 13, 97 P.2d 145 (1939), and have been operating under permit. A common carrier permit once issued and exercised becomes a property right, Lee & Eastes v. Public Service Commission, 52 Wn.2d 701, 328 P.2d 700 (1958), and these rights that were vested prior to July 1, 1961, are protected by the "grandfather" provision of chapter 81.77 RCW, rather than the scope of the operations under them.
[[Orig. Op. Page 11]]
With this qualification we see no reason why the commission could not employ the standard of "bona fide" operation in determining the validity of grandfather applications. In our judgment the definition of "bona fide" to mean "substantiality" does not differ in substance from the statutory standard and the definitions in the commission's rules requiring a carrier to be engaged in the business of transporting garbage and/or refuse in order to qualify for certification.
Your final question is:
If a permittee under chapter 81.80 RCW who is engaged in the business of collection and disposal of refuse now requiring a certificate of convenience and necessity under chapter 81.77 RCW is unable to qualify for such under the last paragraph of section 81.77.040 or under other provisions of chapter 81.77 RCW, what disposition is to be made of its operating authority under chapter 81.80 RCW?
Under the commission's own rules, a permittee under chapter 81.80 RCW whose permit includes refuse may still haul this commodity as an inseparable incident to his other permit operations. What is prohibited is engaging in the business (as hereinbefore interpreted) of transporting garbage and/or refuse without certificate authority.
We do not believe that the commission is presently authorized to or could effect summary cancellation of carrier permits when "incidental" operation by a permittee in the garbage and refuse collection field is still lawful. While further refinement of the commission's rules as to what constitutes being in the business may be of some assistance, affirmative action by the commission against a carrier would presumably have to be on a complaint basis, alleging operations in violation of permit authority. Upon a proper showing that a carrier is engaged in the business of transporting garbage and/or refuse for compensation, which a carrier may no longer do under permit, the commission could then take action by way of penalties or possibly cancellation or amendment of the permit authority under RCW 81.80.280.
We can make no general statement as to the "disposition" of carrier authority. The problem appears to be one of [[Orig. Op. Page 12]] enforcement, keeping carriers from engaging "in the business" of transporting garbage and/or refuse without compliance with the demands of chapter 81.77 RCW.
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
JAMES R. CUNNINGHAM
Assistant Attorney General