The opinion of the court was delivered by: KEECH
This is an appeal from Order No. 4052 of the Public Utilities Commission of the District of Columbia, increasing fares to be charged by the Capital Transit Company for service in the District of Columbia. The order, dated January 20, 1954, and effective January 31, 1954, was issued after a protracted hearing on the petition of the Capital Transit Company, filed April 3, 1953, seeking an increase in its existing rates. The record below consists of some 3200 pages and 73 exhibits, and incorporates by reference numerous other orders and material. The petitioners are all residents of Maryland and users of the Company's railway and motor bus lines within the District of Columbia,
who claim to be adversely affected by Order No. 4052. One of the petitioners, George Spiegel, Esq., was permitted limited intervention in the proceeding before the Public Utilities Commission and appeared before the court on behalf of himself and the other petitioners.
A petition for reconsideration filed by the petitioners with the Public Utilities Commission was deemed denied, under the terms of § 43-704, D.C.Code, the Commission not having acted thereon within thirty days after its filing.
This appeal was brought against the Commission, as respondent, under § 43-705, D.C.Code. The Capital Transit Company was permitted to intervene as a respondent. The scope of the proceeding is narrowly defined by the statute. Under the terms of § 43-705, it must be heard upon the record before the Commission and no new or additional evidence may be received by the court. The petitioners may not in any court urge or rely on any ground not set forth in their application for reconsideration. § 43-704, D.C.Code. The court's review is limited to questions of law, and the findings of fact by the Commission are conclusive, unless it appears that they are unreasonable, arbitrary, or capricious. § 43-706, D.C.Code.
Petitioners set forth in their pleadings many allegations of error, but in the course of the four-day proceedings before the court, these were reduced to twelve points, eleven of which were pitched on the basic contentions either that the Commission's order lacked the necessary findings as to essential elements or that such findings as were made lacked the support of substantial evidence, the twelfth issue being purely a question of law. Each and all of these challenges were denied by the respondent Public Utilities Commission and the intervenor Capital Transit Company. The latter claims that if anyone has a grievance against the order it is the Company, not the consumers.
At the close of the petitioners' case, the Commission and Transit Company moved to dismiss. They conceded that an appeal to the court would lie from the Commission's order and that petitioners were properly before the court, but argued that they had failed to allege, much less prove, that they were harmed by the order in question or that the rates fixed were unreasonable, arbitrary, or capricious. Counsel for the petitioners has conceded that he is without information which would enable him to conclude what rates would have been fixed had the order included the essential findings which he contends were omitted, but argued that without these findings the order is arbitrary and capricious and any rate fixed by it is unlawful and invalid. The motions to dismiss were denied by the court without prejudice. Thereupon the Commission and Company proceeded with their defense of the order, renewing their motions to dismiss at the close of their defense.
In reviewing any order of the Public Utilities Commission the court must be guided by certain general principles of law.
There is a presumption in favor of the validity of the orders of public service commissions. Lone Star Gas Co. v. State of Texas, 1938, 304 U.S. 224, 240, 58 S. Ct. 883, 82 L. Ed. 1304; Union Dry Goods Co. v. Georgia Public Service Corp., 1919, 248 U.S. 372, 374, 39 S. Ct. 117, 63 L. Ed. 309; Louisiana Railroad Commission v. Cumberland Telephone & Telegraph Co., 1909, 212 U.S. 414, 421, 29 S. Ct. 357, 53 L. Ed. 577.
'He who would upset the rate order * * * carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.' Federal Power Commission v. Hope Natural Gas Co., 1944, 320 U.S. 591, 602, 64 S. Ct. 281, 288, 88 L. Ed. 333; Potomac Electric Power Co. v. Public Utilities Commission, 1946, 81 U.S.App.D.C. 225, 228, 158 F.2d 521, 524, certiorari denied 1947, 331 U.S. 816, 67 S. Ct. 1303, 91 L. Ed. 1834.
In the absence of a contrary statute, a commission is not bound to use any single formula or combination of formulate in determining rates. 'Under the statutory standard of 'just and reasonable' it is the result reached not the method employed which is controlling. * * * If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry * * * is at an end.' Federal Power Commission v. Hope Natural Gas Co., supra, 320 U.S. at page 602, 64 S. Ct. at page 287, 88 L. Ed. 333; Washington Gas Light Co. v. Baker, 1950, 88 U.S.App.D.C. 115, 118, 188 F.2d 11, 14, certiorari denied 1951, 340 U.S. 952, 71 S. Ct. 571, 95 L. Ed. 686.
Findings need take no particular form, and need not be labeled as such. 'There is no requirement that the Commission specify the weight given to any item of evidence or fact or disclose mental operations by which its decisions are reached.' Baltimore & Ohio Railroad Co. v. United States, 1936, 298 U.S. 349, 359, 56 S. Ct. 797, 803, 80 L. Ed. 1209.
As stated by our Court of Appeals: 'The process of public utility regulation is fraught with sundry technical accounting, engineering, and financial policy considerations, that have been properly entrusted to the regulatory bodies, and if there is produced '* * * no arbitrary result, our inquiry is at an end'.' United States v. Public Utilities Commission, 1946, 81 U.S.App.D.C. 237, 240, 158 F.2d 533, 536, certiorari denied 1947, 331 U.S. 816, 67 S. Ct. 1305, 91 L. Ed. 1835, citing Federal Power Commission v. Natural Gas Pipeline Co., 1942, 315 U.S. 575, 586, 62 S. Ct. 736, 86 L. Ed. 1037.
Section 43-1003 of the District of Columbia Code provides that substantial compliance with the requirements of the Public Utilities Act shall be sufficient to give effect to all orders of the Commission and they shall not be declared invalid for any omission of a technical nature.
Considering each of the petitioners' twelve points in turn:
1. Officers' salaries and directors' fees and expenses:
Petitioners contend that the order is deficient in its failure to make a finding as to the amount of excessive salaries paid to certain officers and in allowing as operating expense the total amount paid, after stating that such salaries appear excessive.
The table of salaries appearing at page 11 of the order is not part of the record before the Commission, but was taken from the annual reports of the Company filed with the Commission, which are matters of public record. The comparison with salaries paid transit officials in other cities is also based on material outside the record. The record below discloses that at the time of the hearing the Commission's staff challenged the salary paid to the Chairman of the Board, Mr. Wolfson, and in its order the Commission effected a reduction of $ 15,000 in the allowance for his salary. The only other challenge of salaries was as to the fee paid to E. C. Gerbert of Jacksonville, Florida, in the amount of $ 8,700 for 'public relations services.' The order shows on its face that the Commission eliminated this amount in its considerations. The Commission's comments in the order relating to other officers' salaries are therefore not based on any evidence at the hearing. Although the information concerning salaries was available to Mr. Spiegel in public records and he was present at the hearing, he raised no question at that time as to excessive allowance for other officers' salaries.
Petitioners further complain that although the Commission in its order found there had been presented no adequate justification for the increase in directors' fees and travelling expenses to out of town directors,
the Commission failed to find and disallow the amount of such excess, stating that it disregarded such amount because the sum involved was not sufficient to require a recalculation of record figures for the future annual period. Petitioners contend that it was the duty of the Commission to investigate and make a finding as to whether such fees were, in fact, excessive.
Here again, the petitioners' objection arises from a statement of the Commission in the order which throws a cloud on an item of expense allowed. As shown in the table at note 13, infra, however, the Commission correctly found that the amount involved was ...