United Parcel Service, Inc. v. California Public Utilities Commission

77 F.3d 1178, 96 Cal. Daily Op. Serv. 1284, 96 Daily Journal DAR 2200, 1996 U.S. App. LEXIS 3196
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 28, 1996
DocketNo. 94-15079
StatusPublished
Cited by5 cases

This text of 77 F.3d 1178 (United Parcel Service, Inc. v. California Public Utilities Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Parcel Service, Inc. v. California Public Utilities Commission, 77 F.3d 1178, 96 Cal. Daily Op. Serv. 1284, 96 Daily Journal DAR 2200, 1996 U.S. App. LEXIS 3196 (9th Cir. 1996).

Opinion

T.G. NELSON, Circuit Judge:

United Parcel Service, Inc. (“UPS”), appeals the district court’s summary judgment, dismissing UPS’s 28 U.S.C. §§ 2201-2202 action against the California Public Utilities [1180]*1180Commission (“the CPUC” or “the Commission”) on the basis of res judicata, following a California Supreme Court decision summarily denying review of UPS’s claims. UPS contends that a February 3, 1993, rate-setting decision by CPUC violates UPS’s state and federal constitutional rights. UPS further argues that the district court’s res judi-cata ruling deprives it of a forum for its federal claims, which it reserved in its petition to the state court. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.

FACTS AND PROCEDURAL HISTORY

The following facts are not in dispute. UPS, a common parcel carrier engaged in extensive interstate and intrastate transportation was, until recently, subject to regulation by the CPUC. On October 11,1993, the Governor of California signed Assembly Bill No. 2015, amending the Public Utilities Code to deregulate carriers registered as “integrated intermodal small package carriers.” UPS registered as this new type of carrier on January 1, 1994, and is thus no longer subject to CPUC’s prospective regulation. The instant dispute concerns CPUC rulings affecting UPS’s rates prior to the new legislation.

In 1938, the CPUC exempted UPS from certain rate regulations pertaining to general common carriers. The exemption, which was apparently granted in view of UPS’s direct competition with the United States Postal Service, allowed UPS to change its rates without receiving prior approval from the CPUC. In January 1992, UPS raised its small parcel delivery rates in accordance with its exemption, and consistent with its usual practice, by filing tariff pages with the CPUC and scheduling increases to take effect on thirty days’ notice. The CPUC accepted the tariff pages and UPS imposed the new rates beginning February 24,1992.

A UPS competitor, Cal Pak Delivery, Inc., subsequently filed a complaint with the CPUC alleging that UPS had followed the wrong procedure in making its rate changes. UPS answered the complaint and filed a formal application asking the CPUC to clarify the rate-making procedures UPS was to follow in keeping with its exemption.

The CPUC consolidated the two proceedings and on February 3, 1993, issued Decision No. 93-02-001 (“the Decision”), articulating for the first time that under the exemption UPS must file a formal rate increase application for rate increases of any magnitude. By contrast, all other common carriers within the state could, on ten days notice, raise rates up to 10% without getting CPUC approval.1 While the CPUC in its Decision approved UPS’s rate increase for future use as of February 3, 1993, it determined that the increase was “not just and reasonable” prior to that date because UPS had not followed the correct rate-making procedures.

The CPUC gave UPS an opportunity to amend its application within thirty days to propose alternative rate-making procedures. UPS filed an amended application on March 2, 1993, but withdrew it on November 5, 1993, apparently in light of the newly enacted California AB 2015, which ended the CPUC’s rate-making authority over UPS. On March 5, 1993, pursuant to Cal.Pub.Util.Code § 1731, UPS filed for a rehearing with CPUC, arguing that the Decision was inconsistent with prior CPUC rulings and that it violated UPS’s federal and state constitutional rights.

The CPUC denied UPS’s request on May 7, 1993. On June 9, 1993, in keeping with the review provisions of Cal.Pub.Util.Code § 1756, UPS filed a petition for a writ of review in the California Supreme Court, reserving its right to a federal hearing on its federal constitutional claims pursuant to England v. Louisiana State Bd. of Medical Examiners, 375 U:S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964). On the same day, UPS filed an action in the federal district court.

On August 12, 1993, before the motion was heard in the district court, the California Supreme Court denied without hearing or comment UPS’s petition for review. The CPUC moved to dismiss the federal action under Fed.R.Civ.P. 12(b)(6). After hearing [1181]*1181oral argument on November 12, 1993, the district court converted the CPUC’s motion to one for summary judgment, and dismissed the action on res judicata grounds. United Parcel Serv., Inc. v. California Pub. Util. Comm’n, 839 F.Supp. 702 (N.D.Cal.1993). UPS timely appealed.

ANALYSIS

A. Mootness

As a preliminary matter, we address the CPUC’s contention that the case is mooted by recent legislation. Questions of mootness are reviewed de novo. Aiona v. Judiciary of State of Hawaii, 17 F.3d 1244, 1246 (9th Cir.1994). “The usual rule in federal cases is that an actual controversy must exist at stages of appellate or certiorari review, and not simply at the date the action is initiated.” Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 713, 35 L.Ed.2d 147 (1973).

On October 11, 1993, the Governor of California signed Assembly Bill No. 2015, enacting § 4120 and amending §§ 212 and 3511 of the Public Utilities Code. The Bill was prompted by our decision in Federal Express Corp. v. California Public Utilities Commission, which held that state regulation of the trucking operations of intermodal small package carriers organized as air carriers is preempted by federal law. 936 F.2d 1075, 1078 (9th Cir.1991), cert. denied, 504 U.S. 979, 112 S.Ct. 2956, 119 L.Ed.2d 578 (1992).

The California Legislature stated that Federal Express “has seriously compromised the ability of the State of California to ensure the safety of the operations of providers of inter-modal small package service.” Section 1, Stats.1993, c. 1226 (AB 2015). In the interest of consistency and public safety, see id., the new legislation acts, inter alia, to deregulate “integrated intermodal earners,” which are defined as those carriers which provide “air-ground transportation service for the packages or articles in both interstate and intrastate commerce.” Cal.Pub.Util.Code § 4120.

UPS registered as an integrated intermo-dal carrier on January 1, 1994. The parties dispute whether the new legislation moots the instant controversy.2 We hold that it does not.

The CPUC contends that the relief sought by UPS in the district court — a declaratory judgment that the CPUC’s classification violates its equal protection rights and an injunction preventing the CPUC from enforcing its orders in accordance with its allegedly illegal classification — is prospective, hence moot in light of AB 2015, which terminates the CPUC’s authority to classify UPS for rate-making purposes.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
77 F.3d 1178, 96 Cal. Daily Op. Serv. 1284, 96 Daily Journal DAR 2200, 1996 U.S. App. LEXIS 3196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-parcel-service-inc-v-california-public-utilities-commission-ca9-1996.