Welsand v. RAILROAD & WAREHOUSE COMMISSION

88 N.W.2d 834, 251 Minn. 504, 1958 Minn. LEXIS 578
CourtSupreme Court of Minnesota
DecidedMarch 7, 1958
Docket37,306
StatusPublished
Cited by9 cases

This text of 88 N.W.2d 834 (Welsand v. RAILROAD & WAREHOUSE COMMISSION) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Welsand v. RAILROAD & WAREHOUSE COMMISSION, 88 N.W.2d 834, 251 Minn. 504, 1958 Minn. LEXIS 578 (Mich. 1958).

Opinion

Matson, Justice.

Appeal from an order denying a new trial.

Appellants’ permit as contract carriers was canceled by the Railroad and Warehouse Commission. Upon appeal to the district court the commission’s order was affirmed. Appellants moved for a new trial which was denied.

Appellants are copartners doing business as the Welsand Transfer Company with their principal place of business in Litchfield, Minnesota. They have operated their trucking business under a contract-carrier permit since 1951. At that time they were authorized by the Railroad and Warehouse Commission (hereinafter called the commission) to transport freight for four customers. In 1952 they applied to the commission for permission to transport for thirteen accounts, but were only authorized to haul for ten accounts. Since 1952 appellants transported freight for the same ten customers although application for additional customers and to substitute customers have, at various times, been made to and rejected by the commission.

In December 1955, following a complaint that appellants were operating in violation of their contract-carrier permit by transporting for customers not approved by the commission, the commission conducted a hearing pursuant to which it ordered appellants’ permit suspended and ordered appellants to cease all operations under the authority of *506 their contract-carrier permit from January 4, 1956, to midnight on January 13, 1956. The commission’s order also provided that any further violation of appellants’ authority would be considered a wilful and knowing violation of law, and of the rules of the commission, and that proof of such a violation would be considered sufficient grounds to cancel their permit.

Appellants failed to appeal the commission’s order. Moreover, during the period of suspension, appellant Howard Welsand violated the order by transporting freight in his automobile from Minneapolis and St. Paul to Litchfield. Welsand admitted this violation in an informal hearing before the commission. No action was taken at that time to enforce the commission’s order, but instead appellants were placed on probation for three months and were notified that the commission would consider their requests to substitute customers if they operated within the bounds of their authority under their permit for the probation period. During the probation period, however, appellants transported fifteen different shipments of freight for various customers, none, of which was on their list of customers approved by the commission. Upon complaint that appellants were operating in violation of their contract-carrier authority, and after an investigation, the issuance of an order to show cause, and a hearing, the commission found that appellants had violated commission rule 316.02 and also the commission’s order of December 1955. It ordered appellants’ permit canceled and directed them to cease operation'as of November 30, 1956.

On appeal to the district court, the commission’s order canceling their permit was held to be lawful and reasonable and commission rule 316.02 was held to have been duly adopted and to be lawful and reasonable in all respects.

This appeal presents the following basic issues: (1) Where the legislature (M.S.A. 15.042) prescribes the persons to whom notice of a hearing be given prior to the adoption of an administrative rule, and such persons receive notice, is such rule invalid as to others not receiving such notice? (2) Where, under a broad statutory rule-making authority (§ 221.18) the Railroad and Warehouse Commission adopts a rule (here rule 316.02) which requires an applicant for a contract-carrier permit to list its customers and, where the list exceeds ten or *507 the commission finds the carrier to be serving more than ten, requires the carrier to show cause why it is not acting as a common carrier, is such rule invalid per se because it is not explicitly or literally authorized by the statute? (3) Does the adoption of the above rule (316.02) as applied to contract carriers and as indirectly affecting shippers constitute an unreasonable exercise of the police power in violation of the state and Federal constitutions?

Is rule 316.02 of the commission invalid because notice of the public hearing for its adoption was not given to all contract carriers and shippers who would be affected by the rule? Clearly not. Thirty days’ notice of the adoption-of-rules hearing was mailed to all accredited representatives of trade associations or other interested groups who had registered their names with the secretary of state for that purpose as required by § 15.042, subd. 4, which is applicable to all administrative agencies. 1 There was therefore no failure to comply with the statute.

Despite statutory compliance, appellants urge that the promulgation of rule 316.02 is nevertheless invalid on the theory that the statutory provision (§ 15.042, subd. 4) for the giving of notice does not operate uniformly on all persons similarly situated. Appellants contend that all shippers and contract carriers were vitally interested in the commission’s adoption of the rules and that they were in the same class as those notified of the hearing on the rules. It is further urged that the failure to notify them resulted in a nonuniform operation of the law against persons of the same class. We do not concur in this contention. It is obvious that the notice provision of § 15.042, subd. 4, operates uniformly against all of the same class, namely, those interested in the commission’s promulgation of rules. It required that all who were interested indicate their desire to receive notice by registering their names with the secretary of state. None were barred from taking advantage of the registration provision. Those shippers and contract carriers who did in fact register with the secretary of state received notice.

It is not to be overlooked that due process does not require an administrative agency — here the commission — to give notice to all *508 interested parties of a hearing for the promulgation of its rules. 2 In Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 445, 36 S. Ct. 141, 142, 60 L. ed. 372, 375, Mr. Justice Holmes, in passing on the validity of the promulgation of a rule of the State Board of Equalization and Colorado Tax Commission, appropriately said:

“Where a rule of conduct applies to more than a few people it is impracticable that every one should have a direct voice in its adoption. The Constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule.”

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Cite This Page — Counsel Stack

Bluebook (online)
88 N.W.2d 834, 251 Minn. 504, 1958 Minn. LEXIS 578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/welsand-v-railroad-warehouse-commission-minn-1958.