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Lehigh Valley Transportation Services, Inc v. Pennsylvania Public Utility Commission

October 10, 2012


The opinion of the court was delivered by: Renee Cohn Jubelirer, Judge

Submitted: September 11, 2012



When J & J Leasing & Rentals, Inc., d/b/a Anytime Airport Taxi by J & J Luxury Transportation (J & J) requested that the Pennsylvania Public Utility Commission (PUC) add "call and demand taxi services" to its existing services, two competitors protested. After a hearing, an Administrative Law Judge (ALJ) approved the addition of these services, and the PUC subsequently denied the competitors' exceptions. On appeal, we hold that the PUC did not err in finding that: (1) J & J met its burden of proving a present public need for the additional call and demand taxi services; and (2) that J & J does not lack the propensity to operate safely and legally.

On February 19, 2010, J & J filed an application (Application) with the PUC to amend its certificate of public convenience to add call and demand taxi services to its existing services.*fn1 Notice of the Application was posted in the Pennsylvania Bulletin, and two competitors, Lehigh Valley Transportation Services, Inc. (Lehigh) and Quick Service Taxi Company, Inc. (Quick Service), filed timely protests. The matter was assigned to an ALJ to hold hearings. J & J, Lehigh, and Quick Service presented both testimony and documentary evidence.

In order to add the call and demand taxi services, J & J had to meet the requirements in Section 1103(a) of the Public Utility Code (Code), 66 Pa. C.S. § 1103(a), and Section 41.14 of the regulations, 52 Pa. Code § 41.14. At issue is whether J & J initially met its burden of proving that there was a present public need for the services, (Section 1103(a)), and whether the protestors thereafter met their burden of proving that J & J lacks a propensity to operate safely and legally, (Section 41.14(b) of the PUC's regulations).

At the hearing J & J presented fact witnesses, who testified in support of the present need for additional call and demand taxi services, and J & J's Vice President of Operations, Denise Sam Cali, who testified about J & J's finances, facilities, all aspects of its operations, and introduced numerous exhibits in support of J & J's Application. Lehigh and Quick Service cross-examined J & J's witnesses and presented witnesses of their own and some documentary evidence in opposition to the Application.

J & J's witnesses testified about the need for call and demand taxi services. Some testified that they would use these services either for themselves, for family members, or business clients.*fn2 Some testified either that they have used Lehigh or Quick Service in the past, but were not satisfied with the service, or that they would not use Lehigh or Quick Service based on concerns about the safety or cleanliness of the vehicles, the "unkempt" appearance or attitude of the drivers, or because they were told that those businesses did not provide service to where the witness lived. Additionally, J & J presented a list of individuals who had contacted them for call and demand services, which J & J referred to other providers. (FOF ¶¶ 26-35; J & J Ex. 16, PUC Br. at Appendix A.)

Additionally, J & J offered the testimony of Ms. Cali, the supervisor of J & J's finances, employees, facilities and vehicles, and who submitted numerous exhibits which were admitted into the record. J & J has the necessary federal permits to provide interstate services and has been licensed by the PUC since 1985 to provide limousine, group and party service, para-transit, and airport transfer services. J & J employs approximately 80 drivers, who, together, speak five different languages. Those drivers must pass a pre-employment examination and receive on-the-job training before they can drive for J & J, the drivers must maintain all the licenses required to operate the appropriate vehicles,*fn3 and J & J requires ongoing testing, training, and evaluations of its drivers. Additionally, J & J uses mystery shoppers to evaluate its drivers, and has rules and a program to address driver training, accidents, vehicle maintenance, and safety. J & J maintains all of the necessary bodily injury and property damage insurance on its vehicles, and already has the meters necessary to provide the call and demand service. J & J operates 24 hours per day, 7 days per week, year round from its offices in Allentown, where 14-16 people work, including day and night supervisors, bilingual dispatchers, 4 mechanics who are on call 24 hours per day, and a safety supervisor. Ms. Cali testified as to J & J's financial particulars, which are not at issue in this appeal. J & J has received two PUC complaints, one of which was withdrawn by the PUC and the other was resolved by settlement. There was no evidence that J & J, or any of its drivers, have been convicted of a crime of moral turpitude and remains under the supervision of a court or prison. (FOF ¶¶ 1-8, 10-17.)

In opposition to J & J's request, Lehigh's General Manager (General Manager) testified that, on January 29, 2011 and April 9, 2011, he was solicited by individuals who offered to provide transportation to him from the Sands Casino in Bethlehem to a non-airport location in vehicles marked for J & J's airport transport service. (Hr'g Tr. at 165-72, R.R. at 85a-92a.) A consultant for Lehigh testified that a person, who proffered a J & J business card but did not have a J & J marked vehicle, transported him for a flat $10.00 fee, rather than a rate based on mileage. (FOF

¶¶ 18-20.) Quick Service's evidence revealed that its services are not co-extensive with those J & J seeks, as Quick Service cannot provide services in Northampton County. Quick Service receives calls for services at the Lehigh Valley International Airport and sends one to five taxis there each day. Lehigh and Quick Service also presented copies of J & J's on-line and telephone book advertising, which were unclear exactly what call and demand services (interstate or intrastate airport transfer service) are being offered by which J & J entity, Anytime Taxi by J & J or Anytime Airport Taxi by J & J. (FOF ¶¶ 20-22.)

The ALJ determined, in relevant part, that J & J satisfied its burden of proving that there was a current public need for the proposed service and that the witnesses represented a cross-section of the public to whom the services would be offered. The ALJ also found that J & J, as a current certificate holder, is entitled to the continuing presumption of fitness to perform its services, citing In Re Blue Bird Coach Lines, Inc., 72 Pa. P.U.C. 262, 274 (1990). The only fitness requirement at issue, as set forth in Section 41.14 of the regulations, is whether J & J had the propensity to operate safely and legally. Although Lehigh and Quick Service argued that J & J, in charging flat rates for its limousine and group/party services, violated its tariff, and J & J violated its certificate when it offered call and demand service to non-airport bound riders, the ALJ concluded that the cited isolated incidents did not indicate that J & J has the propensity to operate illegally. (ALJ Decision at 34-36, R.R. at 222a-24a.) The ALJ noted Ms. Cali's testimony that she would not tolerate such behavior, had not heard of these allegations before the hearing, would investigate and, if necessary, discharge drivers if warranted. Although the ALJ was troubled by the allegations that J & J may have charged rates different than its tariff, she concluded that the testimony was vague, did not indicate what fare was actually charged and, therefore, was insufficient to show that J & J has a "persistent disregard for, flouting, or defiant attitude toward the [Code], or orders and regulations of the [PUC]." (ALJ Decision at 35, R.R. at 223a.) Similarly, the ALJ indicated that, while the advertisements should have been clearer about what services were being offered by which J & J entity, Ms. Cali testified that the website was a work in progress, there were errors on the website, and there had been some confusion initially as to what services J & J could provide. (Hr'g Tr. at 155-57, R.R. at 81a-83a.) For these reasons, the ALJ concluded that the record did not contain sufficient evidence to rebut the presumption of J & J's continuing fitness to operate and, therefore, recommended that the PUC grant the Application.

Lehigh filed exceptions to the ALJ's determination, in which Quick Service joined, asserting that the ALJ erred in finding a present need for the proposed service and that J & J had the propensity to operate safely and legally. In its first exception Lehigh argued, based on Ace Moving & Storage, Inc. v. Public Utility Commission, 935 A.2d 75 (Pa. Cmwlth. 2007), that the need witnesses had to be "actual users," not users who would be recommending the service to someone else or paying for the service for someone else. Lehigh stated that there "must be more than a professed possibility that if a service was available by a specific individual[,] the witness [']might['] utilize that service," and it would be "illogical to assume that a service is reasonably necessary" because the witnesses testified that they have not used call and demand services and did not know that such services were available. (Exceptions at 4, R.R. at 239a.) In its second exception, Lehigh challenged the ALJ's determination that J & J has the propensity to operate safely and legally, noting that J & J has had a PUC certificate since 1985 and still violated its tariffs and its certificate by offering flat rates and de facto call and demand taxi services. Lehigh argued, inter alia, that the ALJ erred in placing the burden on it and Quick Service to rebut the presumption of fitness and prove that J & J was not fit. Rather, according to Lehigh, the burden should have been placed on J & J, and J & J did not satisfy its burden. According to Lehigh, J & J has a pattern of disregard for the Code, the PUC's regulations, and its tariff, which demonstrates that it is not fit to operate a call and demand service.

The PUC reviewed the record and, for the most part, adopted the ALJ's findings of fact and conclusions of law. The PUC denied Lehigh's first exception, finding that the witness testimony cited by the ALJ "was credible and probative and, considered as a whole, more than sufficient to establish" a public need for the proposed services. (PUC Op. at 8.) The PUC concluded that Ace Moving & Storage supported the ALJ's determination because J & J presented thirteen public witnesses who testified to present and future needs for the proposed service in Lehigh and Northampton Counties, twelve of whom had present taxi needs and were satisfied ...

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