ORDER NO. 95-968

ENTERED SEP 26 1995

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

ME 1767

DISPOSITION: VIOLATIONS FOUND; PENALTIES MITIGATED

The Commission's staff filed a complaint against defendant on April 18, 1994. The complaint alleges that defendant violated ORS 767.105 on 40 occasions between February 2, 1993, and March 26, 1993. Counts one through five allege that Mr. Eichler transported commodities as a common carrier without having the required operating authority. Counts six through 40 allege that Mr. Eichler hauled commodities as a private carrier on 35 days without having the required operating authority. In addition, the complaint alleges that during the ten-day period between January 19 and January 28, 1994, Mr. Eichler failed to produce records required by the Commission, in violation of Commission rule 860-68-048. The complaint requests that a $100 civil monetary penalty be imposed for each violation, for a total penalty of $5,000, and that defendant’s operating authority be suspended until he produces the requested records.

Defendant filed an answer denying the allegations on May 24, 1994.

The Commission scheduled a hearing, and served notice on the parties. Lowell Bergen, a Hearings Officer for the Commission, presided over the hearing in Salem on February 28, 1995. The following appearances were entered:

For the Commission staff:

Mike Weirich, Assistant Attorney General

For defendant:

Rich Rodeman, Attorney at Law

Proposed Order

Commission Rule 860-14-092 authorizes a Hearings Officer to issue a proposed order in a transportation case such as this one. However, a proposed order is not required, and in this case the Commission directs the Hearings Officer not to issue one. The main issues involved in this proceeding have been addressed in other proceedings by the Commission in the recent past, and are on appeal to the judicial system. No useful purpose would be served by issuing a proposed order in this case.

This order is based on the preponderance of the evidence received at the hearing.

Procedural Ruling

Staff presented evidence in support of its contention that defendant made five of the hauls as a common carrier. Defendant testified that the straw involved in those hauls was his, putting the hauls into the private carriage category. During the hearing staff moved to amend its complaint to conform to the evidence if the Commission accepts defendant’s version of the events surrounding the hauls. Defendant objected to the motion. The Hearings Officer took the motion under advisement. The Commission accepts defendant’s version of the events surrounding the transportation activities, so a decision on the motion is necessary.

Staff points to Commission Rule 860-11-000(5) and Oregon Rules of Civil Procedure (ORCP) 23B in support of its motion. The Commission rule says the Commission will construe its rules to secure a just and inexpensive determination of disputed issues. As relevant here, ORCP 23B allows a decision-maker to allow the amendment of pleadings to conform to the evidence when the presentation of the merits of the dispute will be enhanced, unless the objecting party demonstrates that to do so would prejudice the presentation of its case. Staff argues that the amendment is helpful to reach the merits of the case, and that defendant has not shown any prejudice from the proposed amendment because the case turns on whether defendant qualifies under the farm exemption.

Defendant argues that a decision-maker does not have authority to render a decision on an issue not framed by the pleadings, and argues that a defendant should know what charges are the basis of the complaint. He notes that he objected to any amendment. He points out that being convicted of a violation would be prejudicial to him.

The Commission will allow the complaint to be amended to conform to the evidence received at the hearing. The important issue is whether defendant’s operations qualify under the farm exemption, not whether his hauls should be defined as private or common carriage. Defendant presented a thorough defense on the issue of the farm exemption. The distinction between private and common carriage is not important in this case because defendant had no authority to make either type of haul. Each party presented evidence to support its version of the transportation activities at issue. It is true that a finding that defendant has violated the law would penalize defendant, but the rule requires a showing that a defendant’s presentation of evidence would be prejudiced. See LaPointe’s, Inc. v. Beri, 73 Or App 773, at 779, where the court stated that pleadings may be amended unless the objecting party shows "that the admission of the evidence would prejudice its ability to defend upon the merits." No such showing has been made here.

A similar issue needs to be addressed. The complaint alleges 40 violations of ORS 767.105, which applies to common, contract, and private carriers. The body of the complaint alleges that the 40 hauls were made in for-hire carriage. However, the attachment to the complaint detailing the alleged violations specifies that five hauls were made in common carriage and 35 hauls were made in private carriage. For-hire carriage does not include private carriage, so there is an inconsistency between the body of the complaint and its attachment. Staff requests that the complaint be amended to conform the body of the complaint to its attachment.

The request is granted. The attachment to the complaint gave adequate notice of what the allegations were, and the case was tried as if the allegations detailed in the attachment were controlling.

FINDINGS OF FACT

Ken Eichler lives on a 170-acre farm near Perrydale, Oregon, and engages in various farming activities. One of his activities involves the straw-baling business. It is the transportation of the straw associated with his straw-baling business that is the subject of this proceeding.

Ken Eichler has oral agreements with neighboring farmers who grow grass and other seed crops on their farms. The farmers prepare the fields, buy, plant, and fertilize the seeds, and harvest the seed crops. When they finish their seed-crop activities, straw remains in their fields. Defendant goes to their farms and gathers the straw, squeezes it into bales, cleans the fields, and transports the straw to other locations. Defendant also selectively sprays herbicides on portions of the fields during the winter. The seed farmers own and operate the farms, and bear the costs, risks, and rewards of their farming operations. Defendant obtains ownership of the straw in exchange for removing it from the fields. Defendant’s operations are similar to those of his parents described in Order No. 94-467.

Defendant obtains about 750 tons of straw per year from his own farm. He bales and transports yearly between 2,500 and 10,000 tons of straw grown on other farms.

Defendant did not have any authority from the Commission to transport commodities as a private or common carrier during the subject time period.

On 35 days between February 11 and March 26, 1993, defendant transported straw grown on his and neighboring farms to a straw-pressing facility near Albany, Oregon. On five days between February 3 and March 5, 1993, defendant transported straw from the pressing facility to Portland, Oregon. He used the public highways to make the transportation movements.

Defendant received a check from Feed Star International, Inc. for $1,665 for five hauls of straw from Albany to Portland. Some of the shipping documents for the hauls list the commodity owner as Feed Star. Defendant explained the situation as follows: the shipping documents were casual and did not accurately and completely explain the actual facts; the payment constituted reimbursement for overpayments made to Feed Star; the overpayments were occasioned when defendant paid Feed Star for pressing the straw and transporting it to Portland, but on the subject five occasions, defendant made the hauls to Portland because Feed Star could not make the hauls when they needed to be made; because defendant had already paid for that transportation as part of his continuing contract with Feed Star, Feed Star reimbursed him.

Staff argues that the check shows the hauls to have been made in behalf of Feed Star. On their face, the documents supporting the check could easily cause an investigator to believe that common carriage was involved. However, defendant naturally understood his operations more completely, and explained how the documents represented reimbursements for overpayments. Defendant’s testimony was credible and is accepted.

In conducting its investigation of defendant’s activities, Commission staff members requested that Mr. Eichler produce a variety of documents. He produced the records that he used in his business, such as certain invoices and expense and income information. He did not, however, produce the records of transportation activities requested by staff, such as bills of lading, freight bills, and hauling statements.

Commission staff members and defendant had previously discussed defendant’s business. Staff members had told Mr. Eichler in 1989 what records he needed to prepare and keep for his transportation activities.

OPINION

Violation of ORS 767.105

ORS 767.005(13) defines a private carrier as any person who "operates a motor vehicle over the public highways of this state for the purpose of transporting persons or property when the transportation is incidental to a primary business enterprise, other than transportation, in which such person is engaged."

ORS 767.905 tells every common, contract, and private carrier to keep daily records of all vehicles used and to provide monthly summaries to the Commission of their daily records showing the miles traveled by their vehicles.

ORS 767.105 prohibits anyone from operating as a common, contract, or private carrier without holding appropriate authority from the Commission. ORS 767.470 establishes a monetary penalty of up to $500 for each violation of ORS 767.105. It also provides for a monetary penalty of up to $100 for each violation of any order, rule, or decision of the Commission.

ORS 767.030 provides an exemption from the application of ORS Chapter 767 for farm vehicles used by farmers in certain operations. One such operation is specified in ORS 805.390. As relevant in this proceeding during the subject time period, subsection 1 of that statute limited the exemption to vehicles "transporting the farmer's own agricultural commodities, agricultural products or livestock that were originally grown or raised by the farmer on the farmer's own farm."

ORS 805.310 establishes the qualifications a person must meet to qualify for a farm vehicle registration. Included is the requirement that the person be engaged, either as an owner or a renter, in operating a farm.

The statutes establish the obligation to obtain authorization from the Commission before beginning common, contract, or private transportation operations over Oregon highways. The statutes provide for certain exemptions from that requirement, including one for farm vehicles used by farmers. Defendant’s operations meet the definition of a private carrier specified in ORS 767.005. Defendant does not have authority from the Commission to operate as a private carrier, so the issue in this proceeding is whether the farm vehicle exemption applies to his operations.

In order to qualify for the exemption established in ORS 767.030, a farmer must meet the requirements of ORS 805.310. That statute says the exemption applies if a person operates, either as an owner or a renter, a farm producing sufficient quantities of products or livestock to require transportation. As to the hauls at issue in this proceeding, Mr. Eichler fails to qualify. Most of the straw he transports comes from fields owned by neighboring farmers. Defendant does not grow the straw; it is grown by the farmers on their farms. Defendant argues that he has rental agreements with the neighboring farmers, thus qualifying under the exemption. However, the farmers have agreed that defendant come and remove the straw. They have not agreed that defendant grow the straw on their fields. Having access to the farms to remove the straw and assist the owners' farming activities do not qualify defendant as the renter of farms to grow crops. The landowners have title to the land, grow the principal crops being farmed, pay taxes on the land, and assume the other risks normally associated with farming operations.

In addition, ORS 805.390 limited the uses of farm vehicles operated under the farm vehicle exemption. One restriction was that the commodity being hauled must have been originally grown or raised by the farmer on the farmer's own farm. It can be argued that the phrase "farmer’s own farm" includes farms rented by the farmer. Such a construction would be consistent with the reference in ORS 805.310 to a person being the "owner or renter" of a farm. Defendant is not helped by that construction, however. Defendant removes a left-over crop; he does not grow the straw and does not operate the farms from which the straw is removed.

The Commission has considered this issue in other proceedings. In dockets MT 611, ME 1477, ME 1824, and MT 644, the Commission addressed the status of straw-baling farmers who use the public highways to transport straw residue that remains after a seed crop is harvested. The Commission, in Orders numbered 93-1844, 94-467, and 95-035, found that the straw-baling farmers did not qualify for the exemption under ORS 767.030. The Commission determined that the straw balers did not own or rent the land on which the crops were grown. The straw balers therefore did not meet the statutory definition.

The decision in this case is consistent with those orders.

Failure to Produce Records

ORS 767.905 requires every common, contract, and private carrier to keep daily records, and submit monthly summaries to the Commission, of the miles traveled by each vehicle used. Defendant operated as a private carrier in the transportation movements at issue in this proceeding. As such, he was required to keep daily records on his transportation activities. He failed to do that. He gave staff members a copy of his business records, but did not produce the records required for his transportation activities.

Defendant argues that he did not have an obligation to keep the records until there was an adjudication of carrier status. There is no such requirement. Defendant met the definition of a private carrier, so he had the obligations incident to that status. The Commission is not required to make an adjudication of carrier status before the statutorily-mandated record-keeping requirements apply. Defendant knew Commission staff took the position that his transportation activities did not qualify under the farm exemption. He chose to run the risk that he could prove otherwise.

Mitigation

The issues involved in deciding the status of straw-baling farmers and their obligations under the motor carrier statutes are complicated. It is easy to understand how misunderstandings could occur. The Commission is sympathetic to the difficulties farmers may have understanding regulatory law. Mr. Eichler has been cooperative, and has incurred the expense of legal counsel. The Commission is convinced that no useful purpose would be served by imposing substantial penalties on him. Therefore, the Commission will mitigate the normal penalties to zero, and not suspend Mr. Eichler’s operating authority.

CONCLUSIONS

Defendant violated ORS 767.105 on 40 occasions by providing transportation services without possessing the requisite operating authority.

 

The 40 transportation movements were not exempt under ORS 767.030.

 

Defendant violated Commission Rule 860-68-048 on ten occasions by not maintaining the required records.

 

4. Penalties should be mitigated to zero.

 

ORDER

IT IS ORDERED that:

 

1. A civil monetary penalty of $5,000 is imposed against Ken Walter Eichler, dba Eichler Farms and dba Northwest Forage;

 

2. The monetary penalty is mitigated to zero.

 

 

Made, entered, and effective ________________________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements in OAR

860-14-095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-13-070(2)(a). A party may appeal this order to a court pursuant to ORS 756.580.