980323.docx

DECISION MEMORANDUM
TO:COMMISSIONER HANSEN
COMMISSIONER NELSON
COMMISSIONER SMITH
MYRNA WALTERS
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
RON LAW
ALLAN KILLIAN
DAVID SCOTT
WORKING FILE
FROM:BRAD PURDY
DATE:MARCH 23, 1998
RE:CASE NO. M-8346-1
APPLICATION FOR AUTHORITY TO TRANSPORT PASSENGERS OF CLASS- ACT LIMO SERVICE.
On January 8, 1998, the Commission received an application from Class-Act Limo Service, Inc. for authority to transport passengers in limousine charter service.  On January 29, 1998, the Commission issued a Notice of Modified Procedure soliciting comments in response to Class-Act’s application.  On February 18, 1998, the Commission received a timely protest from Elizabeth F. and Rickey L. Bishop dba Excalibur Limousine Service (Excalibur).  
Excalibur’s Protest
Excalibur alleges that Class-Act has been operating as a limousine service since 1990 without the proper Commission authority.  Excalibur contends that Class-Act has done so intentionally as evidenced by a one time approval for authority by the Commission. [Staff has found no evidence in its files that Class-Act ever applied for or was issued motor carrier authority from the Commission].  Excalibur alleges that Class-Act has presented itself as a Commission authorized limousine service to the Grove Hotel in Boise and has presented the Grove Hotel with a copy of a Commission permit which, Excalibur contends, is invalid and fraudulent.  Excalibur alleges that Class-Act has shown a total disregard for all licensing requirements by any city, county or state laws, as evidenced by its operation in the city of Nampa without the proper license.  Excalibur alleges that Class-Act has informed its potential customers that there is no permit or licensing requirement in the state of Idaho germane to limousine service.  Excalibur alleges that Class-Act has informed potential customers that its competitors operate sub-standard vehicles, are “fly by nights”, are not properly insured and have old converted funeral home limousines.  Excalibur argues that it would constitute an unfair business advantage to grant Class-Act’s Application because Class-Act has bypassed all insurance and vehicle inspection requirements in addition to making slanderous comments about its competitors.  Excalibur contends that Class-Act should not be granted Commission authority until it has operated the “same number of years” [apparently as its competitors].  Excalibur requests that the Commission conduct a full hearing to enable it to present evidence supporting its allegations.  
Class Act Response
On March 2, 1998, Class-Act filed a response to Excalibur’s protest.  Class-Act alleges that it incorporated in the state of Idaho in December of 1990 and has operated a limousine service from Canyon County since that time.  Class-Act states that, in a letter dated December 23, 1997, the Commission informed Class-Act that a Certificate of Authority issued by the Commission was required for the operation of a limousine service.  Class-Act alleges that at no time prior to the receipt of the aforementioned letter, did it know that such a Certificate of Authority was required and consequently had never made application for such Certificate.  Class-Act contends that immediately upon receipt of the letter, it filed an Application for intrastate authority on January 6, 1998.
Class-Act contends that, according to Rule 41 of the Commission’s Motor Carrier Rules, an applicant for a motor carrier permit is qualified if it establishes (1) its fitness, willingness and ability to serve, (2) a present or future public convenience or necessity and (3) compliance with the Motor Carrier Act and and the Commission’s Motor Carrier Rules.  Class-Act contends that it has successfully operated its business since December 1990 and has consistently paid all of its obligations when due.  It currently operates four limousines having a net market value of approximately $90,000.  Class-Act contends, therefore, that it has clearly demonstrated its fitness, willingness and ability to provide limousine service.
Class-Act argues that the fact it has operated since 1990 and has increased its number of limousines from one to four evidences a need for limousine service within the state of Idaho consistent with the public convenience and necessity.
Class-Act notes that Rule 41(04) of the Commission’s Carrier Rules states that the Applicant must show that it “will” conform to the provisions of the Motor Carrier Act and other Commission requirements.  Class-Act states that its failure to file for an application for a permit in the past was due to its ignorance of the requirement of the law but that it is not a violation of Rule 41 of the Commission’s Motor Carrier Rules.  Class-Act notes that prior to receiving the letter from the Commission, the Company had been carrying liability insurance in the amount of $1.5 million through Shaffer Buck agency in Caldwell.  Class-Act represents that, since 1990, it has had no accidents nor any claims or losses of any kind filed against its insurance policies.  Class-Act has always required its drivers to be over the age of 25 years and to furnish motor vehicle reports showing no citations of any kind.
Class-Act states that the protest filed by Excalibur is replete with unsubstantiated, false and potentially libelous statements.  Class-Act contends that it has never represented that it has Commission Authority to operate as a limousine service.  Nonetheless, Class-Act argues that it is not the function of the Commission to arbitrate disputes between competitors.  Rather, Class-Act posits, it is the function of the Commission to grant or deny Class-Act’s Application based upon the criteria set forth in the Commission’s Motor Carrier Rules for the protection and safety of the public.
In the event the Commission determines to set this matter for hearing, Class-Act requests that a pre-hearing conference be scheduled for the purpose of clarifying the issues, identifying proof and scheduling discovery.
Commission Staff
Idaho Code § 61-802 provides:
61-802.  Permit required-scope of permit-Commission may refuse permit.—It shall be unlawful for any motor carrier, as the term is defined in this chapter, to operate any motor vehicle and motor transportation without first having obtained from the Commission a permit covering such operation.
A permit shall be issued to any qualified applicant authorizing the whole or any part of his operations covered by the application made to the Commission in accordance with the provisions of this chapter, if it is found that the applicant is fit, willing and able properly to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules and regulations of the Commission thereunder, and that the proposed service, to the extent authorized by the permit, is or will be required by the present or future public convenience and necessity.
In considering public convenience and necessity the Commission shall, prior to the issuance of a permit, consider the effect of such proposed motor carrier operation upon the operations of any authorized common carrier then operating over the routes or in the territories sought.  The mere existence of a common carrier in the territories sought who possess authority similar to that sought shall be insufficient cause to deny the issuance of the permit.
On January 11, 1995, the Commission issued Order No. 25847 in Case No. GNR-M-94-4, suspending Rule 41.03 of the Commission’s Motor Carrier Rules in light of federal preemption of any state activity regulating price, route or service of any motor carrier.  Additionally, the Commission issued Order No. 26940 in Case No. GNR-M-97-2 suspending Rule 41.02(a) of the Motor Carrier Rules pertaining to the financial ability of a motor carrier to provide service; again, as a result of federal preemption in this area.  The upshot of this is that, regardless of what Idaho Code § 61-802 and the Commission’s Motor Carrier Rules provide, the Commission’s regulatory authority over motor carriers is now limited to issues pertaining to insurance and safety.
Excalibur has alleged that Class-Act has shown a disregard for the Commission’s Motor Carrier Rules but has not alleged that Class-Act has violated any specific safety-related rules.  Excalibur has requested a formal hearing in this matter.  Staff believes that if the Commission finds that the issue of safety has been adequately raised, then a formal hearing should be conducted.  Otherwise, Staff believes, the matter is ready for resolution.
Commission Decision:
Does the Commission wish to conduct an evidentiary hearing regarding the Application of Class-Act in this proceeding?  If not, how does the Commission wish to rule?

Brad Purdy
cm\M:m83461.bp