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  "name": "OIL TRANSPORT COMPANY, Plaintiff-Appellant, v. NEW MEXICO STATE CORPORATION COMMISSION, Eric P. Serna, John H. Elliott and Jerome D. Block, Defendants-Appellees, and Groendyke Transport, Inc., Alfred Hite and Shelby Hite, d/b/a Ash, Inc., and Steere Tank Lines, Inc., Intervenors-Appellees",
  "name_abbreviation": "Oil Transport Co. v. New Mexico State Corp. Commission",
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    "judges": [
      "RANSOM, J., and STEVE HERRERA, District Judge (sitting by designation), concur.",
      "SOSA, C.J., and BACA and MONTGOMERY, JJ., not participating."
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    "parties": [
      "OIL TRANSPORT COMPANY, Plaintiff-Appellant, v. NEW MEXICO STATE CORPORATION COMMISSION, Eric P. Serna, John H. Elliott and Jerome D. Block, Defendants-Appellees, and Groendyke Transport, Inc., Alfred Hite and Shelby Hite, d/b/a Ash, Inc., and Steere Tank Lines, Inc., Intervenors-Appellees."
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      {
        "text": "OPINION\nWILSON, Justice.\nThis matter coming on for consideration by the court on motion for rehearing and the court having considered said motion and being sufficiently advised, now, therefore, the opinion handed down on April 24, 1990 is hereby withdrawn and the opinion filed this date is substituted therefor.\nOil Transport Company (OTC) appeals a district court judgment affirming New Mexico State Corporation Commission\u2019s (Commission) orders denying OTC\u2019s application for a certificate of public convenience and necessity and granting Ash, Inc.\u2019s (Ash) application. We reverse in part, affirm in part, and remand with instructions.\nFACTS\nIn December 1986 Ash applied to the Commission for a certificate of public convenience and necessity to transport petroleum products statewide. See NMSA 1978, \u00a7\u00a7 65-2-80 to -127 (Repl.Pamp.1981). OTC filed a similar application in February 1987. The Commission heard Ash\u2019s application on March 25 and 26, 1987, and heard consolidated applications of OTC and Mission Petroleum Carriers, Inc. (Mission) on May 6, 7, and 8, 1987. OTC and Steere Tank Lines, Inc. (Steere) intervened to protest Ash\u2019s application. Ash, Steere, and Groendyke Transport, Inc. (Groendyke) intervened to protest the OTC and Mission applications. Prior to Ash\u2019s application hearing, and again on April 13, 1987, OTC moved to consolidate the Ash and OTC application hearings for comparative review. The motions were denied by operation of law when the Commission failed to act on them prior to entering final orders on each application. The Commission granted Ash\u2019s application on October 19, 1987, and denied the OTC and Mission applications on October 29, 1987.\nOn January 7, 1988, OTC separately appealed both Commission orders to the district court claiming they were arbitrary, biased, and unsupported by substantial evidence. OTC also claimed the Commission\u2019s failure to consolidate the Ash and OTC applications denied OTC due process and equal protection. OTC consolidated its appeals on March 7, 1988. On February 3, 1988, the Commission filed its answer, in which it denied its orders were improper and claimed OTC lacked standing to appeal the grant of Ash\u2019s application since OTC was merely an intervenor in that proceeding. On April 18, 1988, OTC amended its appellate complaints to include claims that the Commission discriminated against OTC, a Nevada corporation owned by a Lebanese national, in violation of 42 U.S.C. Sections 1981 and 1983 (1982) and erred in assessing record preparation costs against OTC. OTC also sought attorney fees under 42 U.S.C. Section 1988 (1982). The Commission denied these claims. The district court granted Ash, Groendyke, and Steere the right to intervene in these proceedings pursuant to Section 65-2-120(C).\nOn August 11, 1988, the district court vacated the Commission\u2019s orders and remanded for comparative review of the Ash and OTC applications and a resolution of conflicts in the Commission\u2019s findings of fact and conclusions of law. The court declined to review OTC\u2019s discrimination claims and claims for attorney fees and costs, since they were not raised before the Commission. The court concluded the Commission\u2019s grant of Ash\u2019s application was supported by substantial evidence and ordered the Commission to correct a clerical error in Ash\u2019s certificate if, after comparative review, Ash qualified for a certificate.\nOn August 30, 1988, OTC moved the court to reconsider its conclusion that substantial evidence supported the Commission\u2019s grant of Ash\u2019s application, as it conflicted with the court\u2019s vacation and remand of the Commission orders. The court denied this motion on September 2, 1988, stating there was no conflict since the two applications were not mutually exclusive as an economic fact. The court retained jurisdiction to review the Commission\u2019s orders entered upon remand.\nOn remand, the Commission affirmed its orders on grounds that Ash presented substantial evidence the public needed its services and OTC did not. The Commission also found OTC\u2019s intervenors showed substantial evidence that granting OTC\u2019s application would contravene public convenience and necessity. The Commission again concluded that the applications were not mutually exclusive as an economic fact, but did not make a comparison of Ash and OTC\u2019s qualifications as carriers.\nOn October 12, 1988, OTC moved the district court for relief from the Commission\u2019s orders on the above grounds. On December 13, 1988, the court denied this motion, finding that the Commission complied with the remand instructions and that the orders were supported by substantial evidence. OTC appeals the district court\u2019s judgment.\nISSUES\nOn appeal OTC asserts: (1) the Commission\u2019s denial of its application was not supported by substantial evidence; (2) the Commission\u2019s orders were arbitrary; (3) the Commission\u2019s orders were domestically biased against OTC, in violation of 42 U.S.C. Sections 1981 and 1983 (1982); and (4) the Commission erred in assessing record preparation costs against OTC. No appeal was taken from the district court\u2019s order directing the Commission to comparatively review the Ash and OTC applications. In view of this fact, the issue before us is not whether a comparative review was required, but rather, whether the Commission complied with the district court\u2019s order and comparatively reviewed the applications.\nOn review we must determine whether the Commission\u2019s orders were: (1) within the scope of its authority; (2) supported by substantial evidence; (3) arbitrary, capricious, or fraudulent; or (4) the result of bias or an abuse of discretion. NMSA 1978, \u00a7 12-8-22(A) (Repl.Pamp. 1988); Groendyke Transp., Inc. v. New Mexico State Corp. Comm\u2019n, 101 N.M. 470, 477, 684 P.2d 1135, 1142 (1984). In making this determination, we independently review the whole record for district court error. National Council on Compensation Ins. v. New Mexico State Corp. Comm\u2019n, 107 N.M. 278, 282, 756 P.2d 558, 562 (1988). On appeal we may correct an administrative agency\u2019s misapplication of the law. Conwell v. City of Albuquerque, 97 N.M. 136, 138, 637 P.2d 567, 569 (1981); Ortiz v. New Mexico Employment Sec. Dep\u2019t, 105 N.M. 313, 315, 731 P.2d 1357, 1359 (Ct.App.1986).\nOTC does not dispute the Commission\u2019s authority to decide common carrier applications. The Commission has constitutional authority to determine matters of public convenience and necessity relating to common carriers. N.M. Const, art. XI, \u00a7 7. The Commission also has statutory authority to establish reasonable license requirements to perform its functions. NMSA 1978, \u00a7 65-2-83(C) and (D) (Cum.Supp. 1989). We discuss OTC\u2019s issues in this context.\n(I)SUBSTANTIAL EVIDENCE\nOTC argues substantial evidence does not support the Commission\u2019s denial of OTC\u2019s application due to its failure to consider Ash\u2019s evidence of public need for a statewide petroleum carrier in evaluating OTC\u2019s application. Substantial evidence supporting administrative agency action is relevant evidence that a reasonable mind might accept as adequate to support a conclusion. National Council on Compensation Ins. v. New Mexico State Corp. Comm\u2019n, 107 N.M. 278, 282, 756 P.2d 558, 562 (1988); Viking Petroleum, Inc. v. Oil Conservation Comm\u2019n, 100 N.M. 451, 453, 672 P.2d 280, 282 (1983).\n(a) Certificate Requirements\nExcept as provided in NMSA 1978, Section 65-2-84 (Repl.Pamp.1981), the Commission shall issue a certificate of public convenience and necessity authorizing the applicant to provide transportation as a common carrier under the Motor Carrier Act if it finds:\n(1) that the person is fit, willing and able to provide the transportation to be authorized by the certificate and to comply with the Motor Carrier Act and regulations of the commission; and\n(2) on the basis of evidence presented by persons supporting the issuance of the certificate, that the service proposed will serve a useful public purpose, responsive to a public demand or need.\nNMSA 1978, \u00a7 65-2-84(D) (Repl.Pamp. 1981). See also Groendyke Transp., Inc. v. New Mexico State Corp. Comm\u2019n, 101 N.M. 470, 473, 684 P.2d 1135, 1138 (1984). Notwithstanding an applicant\u2019s prima facie showing pursuant to Section 65-2-84(D), the Commission must deny an application if it finds, based on intervenor and protestant evidence, that a grant would be inconsistent with public convenience and' necessity. Id. at 473-74, 684 P.2d at 1138-39; see also \u00a7\u00a7 65-2-84(E), (F).\n(b) Public Need\nThe Commission denied OTC\u2019s application in part for failure to show, in its hearing, a public need for its services. The Commission\u2019s order was based on a strict interpretation of NMSA 1978, Section 65-2-84(D) (Repl.Pamp.1981), which requires \u201cpersons supporting the issuance of the certificate ...\u201d to present evidence the public needs their services, (emphasis added). We disagree with this interpretation of the statute.\nPrima facie evidence of public need is established by identifying: (1) commodities to be shipped; (2) points to and from which traffic moves; (3) the volume of freight to be tendered to the applicant; and (4) why present freight transportation services fail to meet present demands. See Refrigerated Transp. Co. v. Interstate Commerce Comm\u2019n, 616 F.2d 748, 751 (5th Cir.1980); Novak Contract Carrier Application, 103 M.C.C. 555, 557 (1967). \u201c[P]ublic need is a fact and is not the exclusive property of any party or supporting witness, and that having been proven by any one of severar applicants for the same authority, or by all of them collectively, the public interest must control as to which shall receive the operatipg rights.\u201d Contractors Transport Corp. Extension-Iron and Steel Articles, 126 M.C.C. 637, 641 (1977). This court has held that the statutory terms \u201cconvenience\u201d and \u201cnecessity\u201d refer to a definite need by the general public, rather than individuals. Transcontinental Bus Sys., Inc. v. State Corp. Comm\u2019n, 61 N.M. 369, 372, 300 P.2d 948, 951 (1956); Ferguson-Steere Motor Co. v. State Corp. Comm\u2019n, 63 N.M. 137, 146, 314 P.2d 894, 903 (1957). \u201cOnce it has been determined that consolidation of several proceedings is appropriate, it is axiomatic that the evidence adduced in one of the proceedings becomes a part of the entire consolidated record and is to be considered in making decisions on the merits of each of the other embraced proceedings.\u201d Contractors Transport Corp. Extension-Iron and Steel Articles, 126 M.C.C. at 640-41.\nIn this case, the Commission twice determined that the Ash and OTC applications were not mutually exclusive. Nevertheless, the district court ordered a comparative review of the Ash and OTC applications on remand and that order has not been appealed. Thus, under the above law, Ash and OTC\u2019s evidence of \u201cpublic need\u201d was also consolidated.\nBoth Ash and OTC presented evidence of commodities to be shipped, points of transportation, and prospective freight volume. Ash presented evidence that, in many areas of New Mexico, only one carrier was available to transport petroleum products. Its witnesses stated they needed more than one carrier to meet their demands and to encourage competition among carriers. Ash also presented evidence that the New Mexico economy could support more carriers and present demands exceeded available services. In addition, Ash presented evidence that its customers were pleased with its performance and would use it, as well as other certified carriers, to transport statewide. Intervenors in Ash\u2019s case objected to the wording of its application and generally stated that present carrier services met state demands.\nOTC presented evidence that only one statewide carrier was presently certified. Its witnesses stated they needed more statewide carriers to increase competition in the industry, to ensure product transportation, and to allow business expansion. Some of OTC\u2019s witnesses stated they would need less carrier service, as New Mexico business was declining. OTC\u2019s intervenors presented evidence that New Mexico business was declining and OTC\u2019s certification would harm present carriers.\nAfter hearing this evidence, the Commission determined that Ash presented sufficient evidence of \u201cpublic need\u201d and OTC did not. This finding is contrary to the law stated above. We conclude that the Commission should have considered Ash\u2019s evidence of \u201cpublic need\u201d in evaluating OTC's application and its failure to do so deprived OTC of the substantial evidence necessary to support its application.\n(II) ARBITRARY, CAPRICIOUS OR FRAUDULENT\nOTC next claims the Commission\u2019s disparate treatment of Ash and OTC was arbitrary. An administrative agency acts arbitrarily or capriciously when its action is unreasonable, irrational, wilful, and does not result from a sifting process. Perkins v. Department of Human Servs., 106 N.M. 651, 655, 748 P.2d 24, 28 (Ct.App.1987); Garcia v. New Mexico Human Servs. Dep\u2019t, 94 N.M. 178, 179, 608 P.2d 154, 155 (Ct.App.1979) (quoting Olson v. Rothwell, 28 Wis.2d 233, 239, 137 N.W.2d 86, 89 (1965), reversed on other grounds, 94 N.M. 175, 608 P.2d 151 (1980)).\nThe Commission separately evaluated the \u201cpublic need\u201d evidence presented by Ash and OTC, contrary to the law stated above. The Commission then found \u201cpublic need\u201d supported only Ash\u2019s application. Once a \u201cpublic need\u201d was shown, the Commission had no rational basis for denying OTC\u2019s application for failure to show \u201cpublic need\u201d for its services.\nIt appears that once the determination of no mutual exclusivity was made, the Commission did not thereafter consider the consolidated record in denying OTC\u2019s application in finding nos. 5, 6, 9 and 10. However, in finding no. 12, the Commission found, based on the record of the Ash application, that OTC\u2019s application was not consistent with \u201cpublic convenience and necessity.\u201d If the Commission refused to look at the consolidated record on \u201cpublic need\u201d when it would help OTC while looking at the consolidated record on \u201cpublic convenience and necessity\u201d when it would hurt OTC, such decision making is clearly arbitrary. We conclude the Commission\u2019s decision was arbitrary.\n(III) BIAS OR ABUSE OF DISCRETION\n(a) Bias\nOTC next argues the Commission unconstitutionally applied NMSA 1978, Section 65-2-84(D) (Repl.Pamp.1981) to deny OTC\u2019s application. Specifically, OTC alleges the Commission\u2019s orders were domestically biased against OTC, in violation of 42 U.S.C. Sections 1981 and 1983 (1982), and it seeks attorney fees under 42 U.S.C. Section 1988 (1982). In support, OTC cites Commission findings that: (1) OTC was a Nevada corporation owned by a Lebanese national; and (2) Ash, a New Mexico corporation, provided twenty-two jobs for New Mexicans.\nAs stated, the district court declined to hear these issues, first raised on appeal. \u201c[Ijssues not raised in administrative proceedings will not be considered for the first time on appeal.\u201d Wolfley v. Real Estate Comm\u2019n, 100 N.M. 187, 189, 668 P.2d 303, 305 (1983). See also Kaiser Steel Corp. v. Revenue Div., 96 N.M. 117, 120, 628 P.2d 687, 690 (Ct.App.), cert. denied, 96 N.M. 116, 628 P.2d 686 (1981). The district court may remand original issues to the Commission, if it is necessary to dispose of the case. NMSA 1978, \u00a7 12-8-22(B) (Repl.Pamp.1988). The district court determined that these issues were not dispositive of the case and did not remand them. We find the Commission\u2019s failure to jointly consider the applicants\u2019 \u201cpublic need\u201d evidence dispositive of this c\u00e1se and affirm the district court\u2019s refusal to consider these claims.\n(b) Abuse of Discretion\nOTC next claims that the Commission abused its discretion by originally failing to consolidate the Ash and OTC applications. See Ashbacker Radio Corp. v. Federal Comm. Comm\u2019n, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945). An agency abuses its discretion when its decision is not in accord with legal procedure or supported by its findings, or when the evidence does not support its findings. Perkins v. Department of Human Servs., 106 N.M. 651, 655, 748 P.2d 24, 28 (Ct.App.1987). An agency also abuses its discretion when its decision is contrary to logic and reason. Id. The Commission has discretion to consolidate hearings. N.M. State Corp. Comm\u2019n R.P. 44 (Nov. 14,1985). The Commission may prescribe its own procedural rules within constitutional limits. N.M. Const. art. XI, \u00a7 4; In re Atchison, T. & S.F. Ry., 37 N.M. 194, 20 P.2d 918 (1933).\nEven were we to assume the Commission had discretion not to consolidate the applications originally, the Commission had no discretion to ignore the district court\u2019s order requiring a comparative review. As stated, the Commission twice determined that the applications were not mutually exclusive. However, since the district court ordered a comparative review of both applications, including \u201cpublic need\u201d evidence, we conclude the Commission abused its discretion by failing to consolidate the evidence of public need when considering OTC\u2019s application.\n(IV) COMPARATIVE REVIEW OF OTC AND ASH AS CARRIERS\nThe Commission failed to make findings or conclusions regarding the comparative merits of OTC and Ash, despite the district court\u2019s instructions that the Commission should make a comparative review of the Ash and OTC applications to determine whether either or both should be awarded permits. The record supports the Commission\u2019s finding that there is a public need and necessity for the services to be rendered by Ash and OTC. It is therefore necessary that the Commission make a comparative review of the whole record. After reviewing both the Ash and OTC application proceedings and all of the evidence presented, it should make a determination of whether the grant of a certificate to OTC would be \u201cinconsistent with the public convenience and necessity\u201d and whether OTC is \u201cfit, willing and able to provide transportation to be authorized by the certificate and to comply with the Motor Carrier Act and the regulations of the commission.\u201d NMSA 1978, \u00a7 65-2-84(D)(l) (Repl.Pamp.1981).\nThe Commission should make additional findings of fact as may be necessary to support its decision.\n(V) RECORD PREPARATION COSTS\nLast, OTC argues it should not be assessed preparation costs for a record that the Commission is required to keep in triplicate. The Commission is statutorily required to keep three copies of all witness testimony at its hearings. NMSA 1978, \u00a7 63-7-13 (Repl.Pamp.1989). The Commission is not required to keep three copies of the entire record, as OTC suggests. Commission Rule 64 requires the appellant to pay appellate record preparation costs. N.M. State Corp. Comm\u2019n R.P. 64 (Nov. 14, 1985). As stated, the Commission may prescribe such rules. N.M. Const. art. XI, \u00a7 4; In re Atchison, I & S.F. Ry., 37 N.M. 194, 20 P.2d 918 (1933). Thus, the Commission\u2019s assessment of record preparation costs against OTC was proper.\nWe reverse and remand to the Commission with instructions that, having determined a lack of mutual exclusivity, it enter additional findings of fact and conclusions of law, based upon the entire consolidated record, as to whether the grant of a certificate to OTC would be, \u201cinconsistent with the public convenience and necessity\u201d and whether OTC is, \u201cfit, willing and able to provide the transportation to be authorized by the certificate and to comply with the Motor Carrier Act and regulations of the commission.\u201d NMSA 1978, \u00a7 65-2-84(D)(l) (Repl.Pamp.1981).\nIT IS SO ORDERED.\nRANSOM, J., and STEVE HERRERA, District Judge (sitting by designation), concur.\nSOSA, C.J., and BACA and MONTGOMERY, JJ., not participating.",
        "type": "majority",
        "author": "WILSON, Justice."
      }
    ],
    "attorneys": [
      "Jones, Snead, Wertheim, Rodriguez & Wentworth, James G. Whitley, Elizabeth Woldman, Santa Fe, for plaintiff-appellant.",
      "Hal Stratton, Atty. Gen., Joseph Van R. Clarke, Asst. Atty. Gen., Santa Fe, for defendant-appellee Corp. Com\u2019n.",
      "Raymond G. Sanchez, F.M. Mowrer, Albuquerque, for intervenor Ash, Jnc.",
      "Civerolo, Hansen & Wolf, Wayne C. Wolf, Bruce T. Thompson, Albuquerque, for intervenor Groendyke.",
      "Jack A. Smith, Albuquerque, for intervenor Steere Tank Lines, Inc."
    ],
    "corrections": "",
    "head_matter": "798 P.2d 169\nOIL TRANSPORT COMPANY, Plaintiff-Appellant, v. NEW MEXICO STATE CORPORATION COMMISSION, Eric P. Serna, John H. Elliott and Jerome D. Block, Defendants-Appellees, and Groendyke Transport, Inc., Alfred Hite and Shelby Hite, d/b/a Ash, Inc., and Steere Tank Lines, Inc., Intervenors-Appellees.\nNo. 18212.\nSupreme Court of New Mexico.\nJuly 17, 1990.\nRehearing Denied Aug. 10, 1990.\nJones, Snead, Wertheim, Rodriguez & Wentworth, James G. Whitley, Elizabeth Woldman, Santa Fe, for plaintiff-appellant.\nHal Stratton, Atty. Gen., Joseph Van R. Clarke, Asst. Atty. Gen., Santa Fe, for defendant-appellee Corp. Com\u2019n.\nRaymond G. Sanchez, F.M. Mowrer, Albuquerque, for intervenor Ash, Jnc.\nCiverolo, Hansen & Wolf, Wayne C. Wolf, Bruce T. Thompson, Albuquerque, for intervenor Groendyke.\nJack A. Smith, Albuquerque, for intervenor Steere Tank Lines, Inc."
  },
  "file_name": "0568-01",
  "first_page_order": 596,
  "last_page_order": 602
}
