Opinion
No. 15549
6-10-1953
PEOPLE v. UNITED AIR LINES, Inc. *
Everett C. McKeage and J. Thomason Phelps, San Francisco, for appellant. Treadwell & Laughlin, Edward F. Treadwell, Reginald S. Laughlin and Colin C. Kelley, San Francisco, Mayer, Meyer, Austrian & Platt, John T. Lorch and Edmund A. Stephan, Chicago, Ill., for respondent.
PEOPLE
v.
UNITED AIR LINES, Inc.
June 10, 1953.
Hearing Granted Aug. 6, 1953.
Everett C. McKeage and J. Thomason Phelps, San Francisco, for appellant.
Treadwell & Laughlin, Edward F. Treadwell, Reginald S. Laughlin and Colin C. Kelley, San Francisco, Mayer, Meyer, Austrian & Platt, John T. Lorch and Edmund A. Stephan, Chicago, Ill., for respondent.
FRED B. WOOD, Justice.
Upon the direction of the Public Utilities Commission of California, the plaintiff on January 23, 1952 filed a complaint in the superior court alleging the incurrence by defendant, United Air Lines, Inc., of penalties of $2,000 a day for charging unauthorized passenger rates during a period of 69 days in 1951.
A general and special demurrer to the complaint was sustained with leave to amend. The complaint was amended. A similar demurrer to the amended complaint was sustained without leave to amend. Judgment for the defendant was entered thereon. The judgment recites that the plaintiff 'informed the Court that it did not desire to further argue the matter but was willing to submit the same on the argument on the demurrer to the original complaint' and 'that in case the demurrer was sustained it might be sustained without leave to amend.' Plaintiff has appealed from the judgment.
In the amended complaint plaintiff alleges that the commission has jurisdiction over the intrastate rates of all transportation companies, common carriers and public utilities operating within this state insofar as the intrastate operations of such agencies may be concerned; that defendant was and is engaged in the intrastate transportation of passengers by air within this state, holding itself out to and offering and furnishing such transportation for compensation generally to the public and to the members thereof indifferently; that defendant is a transportation company, a common carrier, and a public utility by virtue of and within the contemplation of Article XII of the Constitution and of chapter 11 of Part I of Division I, §§ 2101-2113, of the Public Utilities Code of this state; that by decision dated March 14, 1950, the commission found that one-way fares of $9.95 and $9.99 for air line coach class service between Los Angeles and San Francisco were reasonable (49 Cal.P.U.C. 494); that on March 30, 1950, defendant filed with the commission its intrastate local passenger fares tariff No. 7, effective April 29, 1950, specifying a rate of charge of $9.95 for one way daily air coach service between Los Angeles and Oakland or San Francisco and for round trip air coach service between those points a charge of twice the one-way fare, which tariff of rates was accepted and permitted by the commission; that on March 1, 1951, defendant raised its rate of charge for such transportation without prior showing before the commission that the increase was justified, and on and after said date to and including May 8, 1951, defendant without prior or any authorization of the commission did on each of 69 days, March 1 to May 8, 1951, charge and receive for said transportation $11.70 for said one-way service and $23.40 for said round trip service; that by its decision reported in 50 Cal.P.U.C. 563, effective May 9, 1951, the commission authorized the defendant to publish, file and maintain a one-way daily coach fare of $11.70 for transportation of passengers between said points; that by reason of such conduct defendant has incurred a penalty to the people of the state in the sum of $2,000 for each day's violation of law during the period March 1 to May 8, 1951, inclusive, a total penalty of $138,000.
The commission's decision of April 24, 1951, cited in the amended complaint and discussed by the parties in their briefs, shows that prior to March 1, 1951, this defendant and several other air carriers applied to the commission seeking authority to make the indicated fare increase but commenced charging the proposed increased rate prior to the granting of their applications by the commission. Concerning the occasion for starting to charge the increased rates prior to commission approval of those applications, the commission said, 'At the hearing and in their briefs the three carriers [California Central Airlines, United Air Lines, Inc., and Western Air Lines, Inc.] urged various extenuating circumstances. Primarily they challenged the Commission's power to regulate in any respect the activities and business of air transportation companies. They contended, and offered evidence to establish, that the fare increase was made in response to a request by the chairman of the Civil Aeronautics Board, which request the companies construed to be tantamount to a demand. They asserted that in any event the $11.70 fare is fully justified, and, without waiving their objection that the Commission lacks jurisdiction, introduced financial and other evidence designed to support the assertion.' (50 Cal.P.U.C. 563 at 566.)
The commission, in its 1951 opinion and decision, discussed the jurisdiction question and concluded that it had jurisdiction over the rates of transportation companies by air, jurisdiction conferred by certain provisions of Article XII of the state Constitution. It authorized the three air lines mentioned to charge and collect the proposed increased rate (effective 15 days after the date of the decision), ordered them to make reparation wherever possible to passengers paying coach fares in excess of the fares reflected by tariffs previously filed, and admonished them that they may not in intrastate commerce between points in this state raise any rate of charge except upon a showing before the commission that an increase is justified, nor make any unreasonable charges, nor discriminate in charges or facilities, 'nor in any other manner violate any of the provisions of Article XII of the Constitution * * * applicable to transportation companies.' (Defendant herein petitioned for a writ of review, which was denied by the State Supreme Court, without written opinion, July 31, 1951; United Air Lines v. Public Utilities Comm., 37 Cal.2d 1, following page 633. Defendant's petition for a review by the Supreme Court of the United States was denied January 7, 1952, for want of a substantial federal question; 342 U.S. 908, 72 S.Ct. 304, 96 L.Ed. 679.)
The sole issue upon this appeal is whether or not this defendant by charging the increased rates mentioned, during the period March 1 to May 8, 1951, incurred penalties which under certain circumstances the provisions of § 2107 of the Public Utilities Code by its terms imposes. That section declares that 'Any public utility which violates or fails to comply with any provision of the Constitution of this State or of this part [§§ 2101 to 2113; the Public Utilities Code], or which fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission, in a case in which a penalty has not otherwise been provided, is subject to a penalty of not less than five hundred dollars ($500) nor more than two thousand dollars ($2,000) for each offense.' (Emphasis added.)
The key words in this section are 'public utility.' Unless defendant is a 'public utility,' as that term is used in § 2107, it cannot be subject to the penalty which that section imposes.
For a definition, we turn to § 216 of the code. It states that "Public utility' includes every common carrier, toll bridge corporation, * * * [and a number of types of corporations other than transportation companies] * * * where the service is performed for or the commodity delivered to the public or any portion thereof. * * *'
Here the key words are 'common carrier,' defined in § 211 of the code as follows: "Common carrier' includes: (a) Every railroad corporation; street railroad corporation; express corporation; freight forwarder * * * [several types of car corporations] * * * operating for compensation within this State. (b) Every corporation or person, owning, controlling, operating, or managing any vessel engaged in the transportation of persons or property for compensation between points upon the inland waters of this State or upon the high seas between points within this State, except as provided in Section 212. 'Inland waters' as used in this section includes all navigable waters within this State other than the high seas. (c) Every 'passenger stage corporation' operating within this State. (d) Every highway common carrier and every petroleum irregular route carrier operating within this State.'
In this definition of 'common carrier' there is no specific mention of common carrier by air. It is true that this enumeration of carriers is preceded by the word 'includes,' which ordinarily is used by way of illustration or enlargement, not by way of limitation. Oil Workers International Union v. Superior Court, 103 Cal.App.2d 512, 570, 230 P.2d 71, and cases there cited. Here, however, it appears that 'includes' is used as a word of limitation. The enumeration of several types of common carriers (railroad, street railroad, vessels, passenger stage corporations, highway common carriers) suggests an intention to include only the carriers specifically mentioned. The history of this section, which finds its prototype in subdivision (l) of section 2 of the Public Utilities Act of December 23, 1911, Stats.1911, Ex.Sess., ch. 14, p. 18, at pp. 19-20, compels such a conclusion.
To get the full significance of this history, we start with the state Constitution of 1879, which imposed certain obligations upon carriers for hire and used certain terms in referring to them. Section 21 of Article XII prohibited discrimination in charges or facilities for transportation by any 'railroad or other transportation company'. Section 22 of Article XII gave the railroad commission power to establish rates of charges for transportation of passengers and freight by 'railroad or other transportation companies'; implemented by the power to examine books of such companies, issue subpoenas and other process, hear and determine complaints against such companies, take testimony, and punish for contempt. Section 19 of Article XII declared that no 'railroad or other transportation company' shall grant free passes or tickets at a discount to any public officer other than a railroad commissioner. Section 17 of Article XII said: 'All railroad, canal, and other transportation companies are declared to be common carriers, and subject to legislative control.' Section 18 used the expression 'railroad or canal company'; section 20, 'railroad company or other common carrier'.
An Act of April 15, 1880, evidently designed to implement these provisions of the new Constitution, followed the pattern set by these sections of Article XII, in the terms which it used. Thus, the 1880 act used the term 'transportation companies,' defining it, somewhat narrowly, to mean and include companies operating railroads (other than street railroad) or steamboats from port to port or upon the rivers and inland waters. Stats. 1880, ch. 59, § 14, p. 45, at 48. However, section 12 of this Act was designed to implement the constitutional powers and duties of the railroad commission to the full extent of the constitutional grant, without limitation as to types of companies affected. P. 48.
The Railroad Commission Act of March 19, 1909, continued to use the expression 'transportation company,' enlarging it to include 'railroads operated for commercial purposes, express companies, sleeping car companies, and companies operating vessels engaged in carrying freight or passengers on the waters of this state.' Stats.1909, c. 312, p. 499; § 11, p. 501.
The Railroad Commission Act of February 9, 1911, followed much the same pattern. Stats.1911, Reg.Sess., c. 20, p. 13. In section 9 it declared: 'All railroad and other transportation companies, owned or operated by any individual, company, * * * or association are hereby declared to be common carriers, and under the jurisdiction, * * * of the commission and subject to the provisions of this act.' P. 16. But it continued to define 'transportation company' as meaning and including certain specified kinds of companies, adding several types of car companies. § 13, p. 17. It imposed a penalty to $500 to $2,000 per day for willful failure by any railroad or other transportation company to comply with certain requirements of the statute or failure strictly to observe any rate established by the commission. § 41, p. 36.
At the special election held in October, 1911, the voters approved amendments to sections 20, 21, 22, and 23 of Article XII of the Constitution. These amendments enlarged the membership of the Railroad Commission from three to five, made the members appointive instead of elective, and to some extent enlarged the constitutional grant of power to the commission, including the power to order reparation to any shipper for excessive or discriminatory rates charged him. In so doing it retained the use of the expression 'railroad or other transportation company' when dealing with the direct grant of constitutional power to the commission. Significantly, these amendments used a different form of expression when conferring 'plenary power' upon the Legislature to confer additional powers upon the commission. The 1911 amendment to section 23 declared that every private corporation, individual, or association owning or operating a 'commercial railroad, interurban railroad, street railroad, canal, pipe line, plant, or equipment, * * * for the transportation or conveyance of passengers * * * express * * * or freight * * *, or for the transmission of telephone or telegraph messages, or for the production, * * * or furnishing of heat, light, water or power or for the furnishing of storage or wharfage facilities, * * * to or for the public, and every common carrier, is hereby declared to be a public utility subject to such control and regulation by the railroad commission as may be provided by the legislature, and every class of private corporations, * * * hereafter declared by the legislature to be public utilities shall likewise be subject to such control and regulation.' (Emphasis added.)
We may assume, for present purposes, that 'common carrier' as thus used in section 23 meant the same as defined in section 17 of the same article: 'All railroad, canal, and other transportation companies'. We may further assume, for the purpose of discussion, that airline transportation companies were included in this definition of common carrier; and hence, that a common carrier by air is a 'public utility' which section 23 gives the legislature power to subject to the control and regulation of the commission. Has the legislature done so, with this type of transportation company? The answer is furnished by the Public Utilities Act of December 4, 1911, the first statute on this subject enacted after the adoption of the 1911 constitutional amendments. Stats.1911, Ex.Sess., c. 14, p. 18. Of prime significance, is the fact that the expression 'transportation company' was neither defined nor used in that act. We there find the same pattern that now obtains in the code. 'Common carrier' was defined by subdivision (l) of section 2 of the Act as including certain specific types of transportation agencies (such as railroad corporations, street railroad corporations, car corporations, corporations operating vessels) without the use of 'transportation company' or other generic term. 'Public utility' was defined in subdivision (bb) of section 2 of that Act as including every common carrier and certain specific types of agencies (such as pipe line, gas, electric, telephone, telegraph, and water corporations, wharfingers and warehousemen) without the use of 'transportation company' of similar expression. In each of those subdivisions, the definition expressly applied to the term defined 'when used in this act,' a limitation now expressed in § 203 of the code.
It would seem, therefore, that the absence of the term 'transportation company' from the code is no accident; that it is the result of an intentional act of exclusion. This fact, coupled with the specific enumeration of carriers in the statutory definition of 'common carrier,' suggests that the legislature, soon after the 1911 amendment of the Constitution, adopted the policy of not exercising its 'plenary' power over any new type of 'transportation company' such as a stage line, truck line, or air line) until that type of transportation shall have been in operation long enough for the legislature to determine how much, if any, regulation and control over it should be given the commission in addition to that directly conferred by the Constitution.
Not inconsistent with this view was the construction placed upon the statute by the commission and approved by the court in Western Ass'n of Short Line R. R. v. Railroad Comm., 173 Cal. 802, 162 P. 391, 1 A.L.R. 1455, decided in December, 1916. The question at issue was whether or not common carriers by truck or stage upon the highways, operating between cities in this state, were subject to the jurisdiction of the commission. The court held that jurisdiction over such carriers, as 'transportation companies,' was conferred by section 22 of Article XII of the Constitution.
Concerning the lack of statutory regulation of carriers by stage or truck (methods of transportation that were relatively new in 1916), the court said: 'We agree with the construction placed by the commission upon the legislative enactments and with its conclusion that the Legislature inadvertently failed or deliberately declined to make a specific grant of power to the railroad commission to regulate the affairs of these classes of transportation companies. We need not here repeat the convincing reasoning of the commission in this behalf, since doubtless its views will find expression in its own official reports, and it is sufficient for the purposes of this determination to express our concurrence in and with them.' 173 Cal. at page 804, 162 P. at page 391.
The history of statutory changes on this subject since 1911 indicates adherence to a policy of the legislature not to exercise its 'plenary' power over new types of transportation until experience might demonstrate a need therefor.
An act adopted in 1917 imposed certain requirements upon the owners and operators of stages and trucks when functioning as common carriers. It placed them under the regulation and control of the commission. Stats.1917, c. 213, p. 330.
The definition of 'common carrier' in the Public Utilities Act was enlarged in 1927 to include passenger stage corporations, Stats.1927, c. 42, p. 72 at 73, adding § 2 1/4 to the Act of 1915; in 1933, to add freight forwarders, Stats.1933, c. 784, p. 2083 at 2085, amending § 2 of the Act; in 1935, to include highway common carriers, Stats.1935, c. 664, p. 1830 at 1831, adding § 2 3/4 to the Act; and in 1949, to add petroleum irregular route carriers, Stats.1949, c. 1399, p. 2440 at 2441, amending § 2 3/4 of the Act.
Note should be made of a Supreme Court decision rendered in 1943 which held constitutional a certain city ordinance concerning taxicab service. We refer to In re Martinez, 22 Cal.2d 259, 138 P.2d 10. The court found that the legislature had not yet put taxicabs under the jurisdiction of the commission. After quoting the pertinent features of the statutory definitions of 'common carrier' and 'public utility,' the Court said: 'Nowhere in the quoted provisions of the Public Utilities Act, nor in its other provisions, do we find any reference to toxicabs or taxicab companies. Each of the many agencies designated in subdivisions (dd) and (l) is specifically mentioned and described in detail or is included in groups carefully described in the act. If the Legislature had intended to include taxicabs it would not have omitted reference to them while including detailed descriptions of all other agencies covered by the act, some of which perform similar services. Moreover, references in other parts of the act to common carriers 'subject to the provisions of this act' indicate a legislative intention not to include all common carriers.' 22 Cal.2d at page 262, 138 P.2d at page 11.
The court did not mention section 22 of Article XII of the Constitution, which by its own terms puts 'railroad and other transportation companies' under the jurisdiction of the commission to a limited extent. Section 22, perhaps, was deemed inapplicable because it refers to compensation for transportation of passengers or freight 'between the points named in any tariff of rates' established by the commission, and the city ordinance in question was 'confined in its effect to service performed within the city'. 22 Cal.2d at page 262, 138 P.2d at page 12.
We note in passing that section 2113 of the code, relating to contempt of the commission and its power to punish such a contempt, is broader in its application than section 2107. Section 2113 applies to every 'public utility, corporation, or person'. That may well include a common carrier by air to the extent that such a carrier, viewed as a 'transportation company,' may be subject to the jurisdiction which section 22 of Article XII of the Constitution confers upon the commission. Our attention has been called to no other provision of the Public Utilities Act portion of the code which directly or indirectly mentions common carriers by air.
The judgment is affirmed.
PETERS, P. J., and BRAY, J., concur. --------------- * Subsequent opinion 268 P.2d 745. 1 In this opinion 'commission' means 'Public Utilities Commission of California' unless otherwise indicated. 2 We cite these rulings as a part of the antecedent history of this case. The questions whether the commission's decision in 50 Cal.P.U.C. 563 is res judicata and, if so, what issues it finally determined, are not before us. 3 § 2108 of the code states that every such violation is a separate and distinct offense, 'and in case of a continuing violation each day's continuance thereof shall be a separate and distinct offense.' 4 During oral argument counsel for plaintiff expressed the view that the clause of § 2107 in which the word 'Constitution' appears makes the penalty applicable to a 'transportation company' which violates any provision of Article XII even if such company is not a 'public utility' within the meaning of that term as used in the code. Logic is against such a view. The word 'Constitution,' appearing, as it does, in the object of the sentence, in no way changes or enlarges the meaning of the subject, 'any public utility.' Especially so in view of the fact that such a change is not necessary to give meaning and effect to the phrase in which the word 'Constitution' occurs. Numerous transportation agencies that are included in the code concept of 'public utility' are subject to the constitutional mandates and prohibitions as well as to those expressed in the code. Moreover, it would have been easy to broaden the subject of the sentence in § 2107 by adding 'corporation or person' to 'public utility,' as was done in § 2113 of the code, when the legislature was dealing with contempt of any order of the commission. 5 The defendant herein does not in this proceeding question that it is a 'transportation company' as that term is used in the Constitution and, as such, is subject to the jurisdiction which the Constitution directly confers upon the Commission over such companies.