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In re Application of Pasha Hawaii Transport Lines LLC

Intermediate Court of Appeals of Hawaii

October 10, 2013

In the Matter of the Application of PASHA HAWAII TRANSPORT LINES LLC for Issuance of a Certificate of Public Convenience and Necessity and Approval of its Local Tariff No. 1 for Service Between and Among the Ports of Honolulu, Kahului, Hilo and Nawiliwili

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER

APPEAL FROM THE PUBLIC UTILITIES COMMISSION OF THE STATE OF HAWAI'I (DOCKET NO. 2009-0059).

Craig I. Nakanishi Tracy G. Chinen Erin H. Yoda (RUSH MOORE LLP) for Appellant/Cross-Appellee YOUNG BROTHERS, LIMITED.

Jon S. Itomura Lane H. Tsuchiyama for Cross-Appellant DIVISION OF CONSUMER ADVOCACY DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

Bonita Y.M. Chang for Appellee/Cross-Appellee STATE OF HAWAI'I, PUBLIC UTILITIES COMMISSION

Clifford K. Higa Bruce Nakamura Anthony F. Suetsugu (KOBAYASHI SUGITA & GODA) for Appellee/Cross-Appellee PASHA HAWAII TRANSPORT LINES LLC

Foley, Presiding Judge, Fujise and Leonard, JJ.

MEMORANDUM OPINION

Intervenor-Appellant Young Brothers, Limited (Young Brothers) and Cross-Appellant Division of Consumer Advocacy (Consumer Advocate) appeal from the September 20, 2010 Interim Decision and Order (Interim Decision) of Appellee State of Hawai'i Public Utilities Commission (PUC). In the Interim Decision, the PUC granted Applicant-Appellee Pasha Hawaii Transport Lines LLC's (Pasha's) request for a Certificate of Public Convenience and Necessity (Certificate) to operate as an intrastate water carrier in Hawai'i, until December 31, 2013. The appellants challenge the Interim Decision on various grounds. In addition, Young Brothers challenges the PUC's denial of its request for certain discovery from Pasha. We affirm.

I. BACKGROUND

On March 13, 2009, Pasha applied to the PUC for a Certificate to provide intrastate "water transportation services for heavy commercial and military truck/trailer equipment, tracked vehicles, buses, automotive/recreational vehicles, and other general cargoes, excluding passengers and livestock, " on a motor-driven vessel called the M/V Jean Anne. Pasha sought to provide service between and among ports in Honolulu, Kahului, and Hilo, as well as Nawiliwili Harbor on Kaua'i, and Barbers Point, O'ahu, upon inducement. At that time, Pasha had been transporting vehicles and large pieces of cargo for Hawai'i customers between Hawai'i and the U.S. mainland.

The Consumer Advocate became an ex officio party to this case. Pursuant to a stipulation entered into between Pasha and the Consumer Advocate, the PUC issued a protective order regarding all confidential information identified in the course of the proceedings and in connection with the application. The Consumer Advocate made recommendations to the PUC regarding Pasha's application for a Certificate in an Initial Statement of Position (Initial SOP) and a Supplemental Statement of Position (Supplemental SOP). In its Supplemental SOP, the Consumer Advocate stated that although Pasha was "fit, willing, and able to properly perform" its proposed services, the PUC should deny Pasha's application on the basis that Pasha had "not met its burden of proof in regards to the related public interest and public convenience and necessity issues." The Consumer Advocate argued that, based on the information that had been submitted, it was unclear whether the proposed service would adversely affect certain customer classes. The Consumer Advocate recommended that the PUC offer Pasha an opportunity to file a more fully supported application in a subsequent filing.

On April 27, 2009, Young Brothers, a regulated water carrier operating throughout Hawai'i, [1] filed a motion to intervene in the proceedings. The PUC granted the motion on May 28, 2009.

On September 20, 2010, the PUC filed the Interim Decision, concluding, inter alia, that:

(1) in accordance with the requirements of Hawaii Revised Statutes (HRS) § 271G-10(c), [2] Pasha is "fit, willing, and able to properly perform the proposed service, and is able to conform to HRS Chapter 271G and the requirements and rules of the commission"; and
(2) in accordance with the requirements of HRS § 271G-10(c) and Hawaii Administrative Rules (HAR) Rule 6-61-81, Pasha's proposed service "is or will be required by the present or future public convenience and necessity."

On October 4, 2010, Young Brothers filed, inter alia, a motion for reconsideration of the Interim Order and a motion to stay the Interim Order. On December 1, 2010, the PUC denied the motion for reconsideration and dismissed the motion to stay as moot. The PUC found that Young Brothers had previously raised the arguments made in the motion for reconsideration and had not presented any new evidence that would justify reconsideration.

Young Brothers filed a notice of appeal on December 29, 2010. On January 21, 2011, Young Brothers herein filed an emergency motion to stay the Interim Decision. On March 14, 2011, this court entered an order denying Young Brothers's motion to stay.

II. POINTS OF ERROR ON APPEAL

Young Brothers raises the following points of error:

(1) The PUC exceeded its statutory authority under the Hawaii Water Carrier Act (HRS Chapter 271G), specifically HRS §§ 271G-10 and 271G-12, by granting Pasha authority to operate until December 31, 2013 as an intra-state water carrier;
(2) The PUC failed to require Pasha to meet its burden of proof, and Pasha failed to meet its burden, to demonstrate that its proposed intra-state water carrier service is or will be required by the present or future public convenience and necessity pursuant to HRS § 271G-10, and the PUC improperly shifted the burden of proof to Young Brothers and the Consumer Advocate to show harm from Pasha's service;
(3) The Interim Decision erroneously replaced legislative policy and the statutory standard under HRS § 271G-10 with the PUC's own erroneous findings, standards, and policies;
(4) The PUC, in failing to apply the requirements of HRS § 271G-10, ignored the public interest, and misapplied and violated HRS § 271G-2;
(5) The Interim Decision was based upon out-of-context information from Young Brothers's 2008 rate case and, therefore, the PUC erroneously interpreted Pasha's impact on Young Brothers; and
(6) The PUC abused its discretion in denying Young Brothers's Motion to Compel.

The Consumer Advocate also contends that the PUC erred in its determination that Pasha met its burden of proof.

III. APPLICABLE STANDARD OF REVIEW

The standards applicable to the review of the PUC's rulings are well-defined:

The applicable standard of review is established by HRS § 91-14 (g) (1993), which provides:

(g) Upon review of the record the court may affirm the decision of the agency or remand the case with instructions for further proceedings; or it may reverse or modify the decision and order if the substantial rights of the petitioners may have been prejudiced because ...

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