O/o voell A-114505 PM 3/18/99 .us



PENNSYLVANIA

PUBLIC UTILITY COMMISSION

Harrisburg, PA 17105-3265

Public Meeting held March 2, 2000

Commissioners Present:

John M. Quain, Chairman

Robert K. Bloom, Vice Chairman

Nora Mead Brownell

Aaron Wilson, Jr.

Terrance J. Fitzpatrick

|Application of Reinhart Leasing Company |A-00114855 |

|To transport persons, in limousine service, | |

|between points in the County of Lancaster and | |

|from points in said County to other points in Pennsylvania and return. | |

OPINION AND ORDER

BY THE COMMISSION:

Before the Commission for consideration are the Exceptions filed by Reinhart Leasing Company (Applicant) to the Initial Decision of Administrative Law Judge (ALJ) Wayne L. Weismandel, issued on August 2, 1999, relative to the above-captioned proceeding.

History of the Proceeding

The initial Application was filed on April 20, 1998, in the name of Nicholas J. Reinhart, t/a Reinhart Leasing Company. On September 30, 1998, the Applicant filed proof of its incorporation as a Pennsylvania corporation. Notice of the amended Application in the name of Reinhart Leasing Company was published in the Pennsylvania Bulletin on October 31, 1999. The Application was protested by Krapf’s Coaches, Inc. (Krapf’s); Garden Spot Equipment Auction, Inc., t/d/b/a Landis Luxury Coaches (Landis); King Limousine Service, Inc. (King); Main Line Limousine Service (Main Line); Steve Copeland, t/a A La Carte Limousine Service (Copeland); and Paoli Airport Limousine Service, Inc. (Paoli).

After a restrictive amendment, the Application seeks authority:

To transport persons, in limousine service, between points in the County of Lancaster and from points in said County to other points in Pennsylvania and return.

The Applicant proposes to commence the operation of limousine service with two (2) vehicles, one (1) of which is presently owned by the Applicant’s president[1] and sole shareholder. It would employ four (4) drivers, one (1) office person, and one (1) detailer. It understands its insurance, safety, and driver training obligations. Through affiliations, it has access to business quarters and the full mechanical shop of a new car dealership, including state inspection facilities. It anticipates that its customer base will be special occasions such as proms, weddings, and special events but that the business will be able to expand into other functions as necessary to serve the market demands. The Applicant has access to $200,000 in start-up cash. (I.D., pp. 9-11; Tr. pp. 9, 14).

Krapf settled its Protest. Main Line, Copeland, and Paoli did not actively pursue their Protests, and they were dismissed at the May 5, 1999 hearing before ALJ Weismandel. The Initial Decision recommended that the Application be denied. The ALJ concluded that the Applicant had (1) failed to prove that approval would serve a useful public purpose responsive to a public demand or need, and (2) failed to prove that it possessed the technical capacity or operating skills to render the proposed service. (I.D., p. 36).

The Applicant filed Exceptions, and Landis filed Reply Exceptions.

Discussion

The ALJ made seventy-three (73) Findings of Fact ( I.D., pp. 7-16), and drew eight (8) Conclusions of Law ( I.D., pp. 36-37), which we shall adopt and incorporate herein by reference, unless, expressly or by necessary implication, they are reversed or modified by this Opinion and Order.

Noting that the burden of proof was on the Applicant to establish the requisite entry criteria, the ALJ concluded that the Applicant proved that it was financially fit to render the proposed service (I.D., p. 36), and that there was no question as to the Applicant’s propensity to operate legally and safely. (I.D., p. 34).

The ALJ further concluded that Landis had not proven that approval of the Application would endanger or impair the operations of existing carriers to such an extent that, on balance, the granting of authority would be contrary to the public interest. (I.D., p. 37). Further, the ALJ found that Landis is unable to meet market demand for limousine service up to ten (10) times a year, cannot always provide specific equipment, has been unable to accommodate requests for service without twenty-four (24) hours’ lead time, and has been unable to satisfy requests for limousine service annually during the month of May. (I.D., p. 12).

The ALJ, however, recommended denying the Application, relying upon his conclusions that (1) approving the Application would not serve a useful public purpose, responsive to a public demand or need, and (2) the Applicant lacked the technical capacity or operating skills to render the proposed service.

As noted above, the Applicant filed Exceptions, and Landis filed Reply Exceptions. We are reminded that we are not required to consider expressly or at great length each and every contention raised by a party to our proceedings. (Univ. of Pa. v. Pa. PUC, 86 Pa. 410, 485 A.2d 1217, 1222 (1984). Any exception or argument which is not specifically addressed herein shall be deemed to have been duly considered and denied without further discussion.

In evaluating the evidence of record herein, we note that the term “substantial evidence” has been defined by the Pennsylvania Supreme, Superior, and Commonwealth Courts as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. More is required than a mere trace of evidence or a suspicion of the existence of a fact sought to be established. (Norfolk & Western Ry. Co. v. Pa. PUC, 489 Pa. 109, 413 A.2d 1037 (1980); Erie Register Corp. v. Unemployment Comp. Bd. of Review, 194 Pa. Superior Ct. 278, 166 A.2d 96 (1961); and Murry v. Comm., Dept. of Public Welfare, 480 A.2d 382 (Pa. Cmwlth., 1984)).

Exception No. 1

The Applicant claims that the ALJ mischaracterized the vehicle owned by its president as being less than the requisite length in Finding of Fact No. 15.

We shall take notice that the vehicle in question is 209½ inches. This issue was not viewed by the ALJ as determinative of the merits of the Application, but our comments do serve to clarify the record.

Exception No. 2

The Applicant claims that the record indicates that it would provide transportation to sporting events and other activities as requested by business groups. The Applicant refers us to pages 14, 110, and 161-162 of the Transcript in support of its assertion. Further, the Applicant argues that the witnesses who testified to business needs for limousine services are members of the “public” encompassed by Section 1103(a) of the Public Utility Code, 66 Pa. C.S. §1103(a).

We agree with the Applicant that its proposed service is not limited to proms, weddings, and similar special events. The Applicant intends to meet the needs of its customers by providing service for proms, weddings, and special events even when the special events are sporting events or concerts or myriad other potential requests from the customers. Limousine service is part of what makes events special; it can turn ordinary functions into special events. We also agree with the Applicant that need witnesses do not need to testify as to personal use but may testify to the use their employers make or would make of the proposed services. As such, the testimony would serve to demonstrate public need.

While we have clarified this issue, we note that this factor was also not ultimately determinative in the ALJ’s recommendation to deny the Application.

Exceptions Nos. 3 & 4

The Applicant asserts that the ALJ erred in concluding that the proposed service would not serve a useful public purpose and would not be responsive to public need or demand.

Landis asserts that the Applicant “simply failed to provide a sufficient number of witnesses to support the assertion of need in a county as heavily populated as Lancaster” and that we should require a cross-section of the population of Lancaster County to testify as to need for the proposed services. Landis also disputes the sufficiency of the need witnesses because they are employed in advertising sales by entities with whom the Applicant’s president does business. Landis asserts that need must be demonstrated by witnesses who have a “personal need” rather than a professional need for the proposed services. (R.Exc., pp. 2-3).

We agree with the Applicant and disagree with Landis. These types of cases do not turn on the number of witnesses or personal versus business nature of the projected need for the proposed services. In Application of Roadrunner Express, Inc., Docket No. A-00113274 (April 24, 1998) (Roadrunner), this Commission reaffirmed the need for a sufficient number of witnesses when broad operating authority is sought. In Roadrunner, we affirmed an Initial Decision to deny a limousine application based on the insufficient demonstration of need through four (4) need witnesses in the Counties of Delaware, Chester and Philadelphia. In the instant proceeding, the Applicant presented the testimony of the same number of witnesses to establish need within a single county, Lancaster. We believe that there are other significant distinguishing factors between Roadrunner and the instant proceeding.

In Roadrunner, the applicant proposed to operate fourteen (14) vehicles with thirty (30) drivers, a number of whom had been previously cited for various traffic-related violations. (See, pages 3-4 of the Roadrunner Initial Decision, issued on December 23, 1997, at Docket No. A-00113274). The Applicant herein, however, intends to operate with four (4) drivers and two (2) vehicles, while initially serving a niche market (i.e., companies with whom its president does business and short-notice service). The Roadrunner applicant intended to provide significantly more service with fourteen (14) vehicles and thirty (30) drivers. Furthermore, two (2) of the Roadrunner “need witnesses” testified that they had used or arranged for illegal intrastate trips for compensation within Pennsylvania. The unauthorized service was not in good faith, and their testimony, therefore, could not be used as evidence of need to support the Roadrunner application.[2] (Roadrunner, pp. 13-14). Thus, Roadrunner is clearly distinguishable from the instant proceeding.

Further, there must be significantly more evidence of need to justify market entry of a carrier the size of the Roadrunner applicant as compared to a carrier with proposed operations the size of the Applicant’s operations. The evidence of need in Roadrunner, while comprising a significantly larger service territory but with numerically the same number of witnesses as the Applicant herein presented, was significantly less credible or demonstrative of need on a relative, or comparative, basis. (See also Application of Voell, t/a Archway, Docket No. A-00114505 (March 19, 1999)). Also, an applicant is not required to establish an actual demand or need for the proposed service in each and every point of the requested territory. The particular circumstances of each case dictate what constitutes sufficient evidence of a public demand or need for a proposed service. (Application of Blue Bird Coach Lines, Inc., 72 Pa. P.U.C. 262 (1990)).

We also believe that projected usages of a proposed service by businesses have a greater likelihood of extensive repeat business (e.g., transporting business and entertainment clients as proposed herein) than do projected individual usages of a personal nature (e.g., weddings and proms). We find that the Applicant’s evidence of record as to need is competent, probative, and credible. (See, i.e., Tr., pp. 109-110, 120, 128, 137, and 151).

Additionally, we have clear and uncontroverted evidence, as found by the ALJ, that the public need is presently not being met and that there is demand for additional limousine service in the area. The ALJ found that Landis has been unable to meet market demand for limousine service up to ten (10) times a year, cannot always provide specific equipment, has been unable to accommodate requests for service without twenty-four (24) hours lead time, and has routinely been unable to satisfy requests for limousine service during the month of May. (I.D., p. 12). Coupled with the testimony of the Applicant’s witnesses, we find that this is clear demonstration of public demand or need in the proposed service territory sufficient to support approving the Application. While the burden of proof rests at all times upon an applicant, an applicant will not be denied the benefit of the clear implication of record whether it is adduced by the applicant’s witnesses or by a protestant’s witnesses. In its Reply Exceptions, Landis did not dispute these findings that it was unable to meet present demand.

Accordingly, these Exceptions are granted.

Exceptions Nos. 5 & 6

The Applicant asserts that the ALJ erred in finding that it was not technically fit or equipped with sufficient operating skills to provide the proposed service.

Landis asserts that the Applicant could have met its burden of proof by demonstrating “either sufficient staff and facilities or operating skills ‘to make the proposed service feasible, profitable, and a distinct service to the public.’” (R. Exc., pp. 4-5; citing Application of Adegbola Ige, t/a Globe Limousine Service, Docket No. A-00108943). Landis further argues that an applicant must currently possess either (1) sufficient staff and facilities or (2) sufficient operating skills to meet the burden of proof regarding technical fitness. (R. Exc., p. 4).

We agree with the Applicant and reject Landis’ suggested application of the law to the facts herein. We find that the Applicant’s business plan is sufficiently detailed to support the Application. We do not require applicants to buy the vehicles, hire and train the employees, or obtain the insurance and other mandatory attributes prior to completion of the application process. That would be economically wasteful inasmuch as many applications are denied, and most of those that are approved are subjected to protracted proceedings prior to approval. The credibility and experience of the Applicant’s president and the Applicant’s access to the facilities of its affiliates provide an ample basis upon which to predicate a finding of technical fitness and operating skill commensurate with the proposed services. Furthermore, there has been no evidence produced to refute the evidence of technical fitness as produced by the Applicant. While the burden of proof rests at all times upon an applicant, the burden of going forward shifts to a protestant to refute or prove to be false that which an applicant has ostensibly proved. Bald assertions are insufficient.

Accordingly these Exceptions are granted.

Accordingly, we find that the evidentiary criteria used to decide a motor carrier application, as forth in Section 41.14 of the Commission’s Regulations, 52 Pa. Code §41.14, has been met in this case.[3] We shall approve the Application as amended.

Conclusion

Having reviewed the record as developed in this proceeding, we shall grant the Exceptions and reverse the ALJ’s Initial Decision, approving the Application, as amended. The Protests are dismissed. The Restrictive Amendment and Stipulation between the Applicant and Krapf’s is approved; THEREFORE,

IT IS ORDERED:

1. That the Exceptions filed by Reinhart Leasing Company, on August 9, 1999, to the Initial Decision are granted.

2. That the Initial Decision of Administrative Law Judge Wayne L. Weismandel, issued on August 2, 1999, is reversed.

3. That the Application of Reinhart Leasing Company, at Docket No. A-00114855, as amended and published in the Pennsylvania Bulletin on October 31, 1999, is approved consistent with this Opinion and Order.

4. That the Protests filed by Krapf’s Coaches, Inc., Garden Spot Equipment Auction, Inc., t/d/b/a Landis Luxury Coaches, King Limousine Service, Inc., Main Line Limousine Service, Steve Copeland, t/a A La Carte Limousine Service, and Paoli Airport Limousine Service, Inc., are dismissed.

5. That the Restrictive Amendment and Stipulation between Reinhart Leasing Company and Krapf’s Coaches, Inc., is approved.

6. That Reinhart Leasing Company is granted the authority to transport, as a common carrier by motor vehicle, persons in limousine service between points in the County of Lancaster and from points in said County to other points in Pennsylvania and return, consistent with this Opinion and Order.

7. That Reinhart Leasing Company shall not engage in any transportation authorized herein until it shall have complied with the requirements of the Pennsylvania Public Utility Code and the rules and regulations of this Commission relative to the filing of insurance and the filing (and acceptance by the Commission) of a tariff establishing just and reasonable rates.

8. That Reinhart Leasing Company shall comply with all the provisions of the Public Utility Code, as now exist or may be hereafter amended, and with all pertinent rules, regulations, and Orders of the Pennsylvania Public Utility Commission, now in effect or as may be prescribed by the Pennsylvania Public Utility Commission. Failure to comply shall be sufficient cause to suspend, revoke, or rescind the rights and privileges conferred herein.

9. That the authority granted herein, to the extent that it duplicates authority now held by, or subsequently granted to, Reinhart Leasing Company shall not be construed as conferring more than one (1) operating right.

10. That, if Reinhart Leasing Company has not, within sixty (60) days from the date of entry of this Opinion and Order, complied with the requirements set forth herein, the Application at Docket No. A-00114855 shall be dismissed, and the authority granted herein shall be canceled without any further proceeding.

11. That upon the compliance with this Opinion and Order, including the filing of an approved tariff and proper evidence of insurance, a Certificate of Public Convenience will be issued to reflect the authority granted herein, consistent with this Opinion and Order.

BY THE COMMISSION,

James J. McNulty

Secretary

(SEAL)

ORDERED ADOPTED: March 2, 2000

ORDER ENTERED:

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[1] The president, Mr. Nicholas J. Reinhart, is a “significant shareholder” in Reinhart Enterprises, Reinhart Acquisition, Reinhart Federal, and Reinhart Limited. He is part owner of Reinhart Flint. He is actively involved in retail sales and service of automobiles and holds franchises from Ford Motor Company, Kia Motor Company, and Suzuki Motor Company. (Tr., p. 10).

[2] Additionally, the record in Roadrunner was found to be “replete” with evidence that the applicant was unfit. The applicant therein had provided 267 illegal trips in five (5) months of 1997, fifty-eight (58) of which were after the first hearing on the application therein. (Roadrunner, pp. 2, 8-9.)

[3] Section 41.14 provides as follows:

(a) An applicant seeking motor common carrier authority has the burden of demonstrating that approval of the application will serve a useful public purpose, responsive to a public demand or need.

(b) An applicant seeking motor common carrier authority has the burden of demonstrating that it possesses the technical and financial ability to provide the proposed service, and, in addition, authority may be withheld if the record demonstrates that the applicant lacks a propensity to operate safely and legally.

(c) The Commission will grant motor common carrier authority commensurate with the demonstrated public need unless it is established that the entry of a new carrier into the field would endanger or impair the operations of existing common carriers to the extent that, on balance, the granting would be contrary to the public interest.

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