Regulation of Launch Services

UTILITIES AND TRANSPORTATION COMMISSION--VESSELS--COMMON CARRIERS--Regulation of Launch Services

1.  A launch service which only transports freight between the dock and ships at anchor is not required to obtain a certificate of public convenience and necessity from the Utilities and Transportation Commission pursuant to RCW 81.84.010.

2.  A launch service which only transports freight between the dock and ships at anchor is a common carrier and is subject to regulation by the Utilities and Transportation Commission as a common carrier.

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                                                                   May 26, 1992

HonorablePaul Conner
State Senator, District 24
401-D Legislative Building
Olympia, Washington 98504-0424
                                                                                                                   Cite as:  AGO 1992 No. 7

Dear Senator Conner:

            By letter previously acknowledged, you asked our opinion regarding the extent to which certain launch service operations are subject to regulation by the Washington Utilities and Transportation Commission.  You asked:

            1.         If a launch service restricted its operations to freight service only, would it be required to obtain a certificate of public convenience and necessity from the Utilities and Transportation Commission pursuant to RCW 81.84.010?

            2.         If a certificated launch service restricts the operations of certain vessels to freight-only service, are those particular vessels exempt from regulation?

            3.         Does the answer to either of these questions depend on whether a certificated launch service is already in operation within a particular anchorage area?

            For the reasons stated in this opinion, we answer your first and third questions in the negative.  We answer your second question in the manner set forth below.

                                                                BACKGROUND

            The Washington Constitution has specific provisions which relate to the regulation of transportation businesses.  Article 12, section 13 of the Washington Constitution provides that "canal and other transportation companies are declared to be common carriers and subject to legislative control."  Article 12, section 15 of the Washington Constitution provides that

            [n]o discrimination in charges or facilities for transportation shall be made by any . . . other transportation company between places or persons, or in the facilities for the transportation of the same classes of freight or passengers within this state . . . .

Article 12, section 18 authorizes the Legislature to "pass laws establishing reasonable rates of charges for the transportation of passengers and freight, and to correct abuses and prevent discrimination and extortion in the rates . . . on . . . common carriers in the state[.]"

            A.        The 1911 Public Service Act

            In 1911 the Legislature enacted the "Public Service Commission Law" (hereinafter "1911 Public Service Act") to provide for the regulation of "public service properties and utilities".  Laws of 1911, ch. 117.  Among the "public service companies" subject to the 1911 Public Service Act are "common carriers", which include "steamboat companies".  RCW 81.04.010.  The 1911 Public Service Act defines "steamboat company" as follows:

                        "Steamboat company" includes every corporation . . . owning, controlling, leasing, operating or managing any vessel over and upon the waters of this state.

RCW 81.04.010 (emphasis added).  "Vessel" is defined as follows:

                        "Vessel" includes every species of watercraft, by whatsoever power operated, for public use in the conveyance of persons or property for hire over and upon the waters within this state, excepting all towboats, tugs, scows, barges, and lighters, and excepting rowboats and sailing boats under twenty gross tons burden, open steam launches of five tons gross and under, and vessels under five tons gross propelled by gas, fluid, naphtha or electric motors.

RCW 81.04.010 (emphasis added).

            Since passage of the 1911 Public Service Act, all steamboat companies carrying passengers or freight for hire in Washington have been subject to regulation by the Utilities and Transportation Commission or its predecessors.[1]See generallyWashington ex rel. Stimson Lumber Co. v. Kuykendall, 275 U.S. 207 (1927).

            The 1911 Public Service Act requires all common carriers, including steamboat companies, to file tariff schedules with the Utilities and Transportation Commission "showing the rates, fares, charges, and classification for the transportation of persons and property within the state between each point upon the carrier's route and all other points thereon".  RCW 81.28.040; see AGO 1913-14, at 151.  Charges must be "just, fair, reasonable and sufficient" (RCW 81.28.010; see Const. art. 12, § 15), and the Commission has power to regulate them.  E.g., RCW 81.28.040, .050; see Const. art. 12, § 18.

            As originally enacted, the 1911 Public Service Act did not require steamboat companies to obtain certificates of public convenience and necessity.  Laws of 1911, ch. 117.

            B.         The 1927 Certificate Law

            In 1927 the Legislature amended the 1911 Public Service Act to require certain steamboat companies carrying passengers to obtain a certificate of public convenience and necessity.  Laws of 1927, ch. 248; see generallyState ex rel. Scofield v. Schaaf, 185 Wash. 354, 54 P.2d 1014 (1936); AGO 1935-36, at 152.  Section 1 of the 1927 Act provided, in relevant part:

                        No steamboat company shall hereafter operate any vessel or ferry for the public use for hire between fixed termini or over a regular route upon the waters within this state, including the rivers and lakes and Puget Sound, without first applying for and obtaining from the department of public works a certificate declaring that public convenience and necessity require such operation:  Provided, That no certificate shall be required for a vessel primarily engaged in transporting freight other than vehicles, whose gross earnings from the transportation of passengers and/or vehicles, are not more than ten per cent (10%) of the total gross earnings of such vessel . . . .

Laws of 1927, ch. 248, § 1, p. 382 (emphasis added).  That language, virtually unchanged, appears today in RCW 81.84.010.[2]

            Steamboat companies subject to Laws of 1927, chapter 248 also remain subject to the other provisions of the 1911 Public Service Act that govern steamboat companies generally.  See RCW 80.01.040(2).  All steamboat companies, whether subject to the 1927 law or not, must file tariff schedules showing their transportation charges.  RCW 81.28.040; seePuget Sound Navigation Co. v. Department of Pub. Works, 157 Wash. 557, 289 P. 1006 (1930), aff'd, 160 Wash. 703, 295 P. 949 (1931); Puget Sound Navigation Co. v. Department of Pub. Works, 156 Wash. 377, 287 P. 52 (1930).

            C.        Launch Services

            "Launch services" are a relatively recent subject of regulation under Laws of 1927, ch. 248.  In 1977, the holder of an existing certificate under that chapter sought to amend its certificate to include authority to operate a "launch service", which it described as

            a boat service on schedules set by the incoming ships' captains or ship owners' agents in which pilots and customs and immigration officers, ships chandlers, repairmen, or others are conveyed to and from the ships at anchor to and from the adjacent dock.  Crew are also conveyed according to schedules which vary. . . . The launch service also includes transportation of ship supplies such as groceries, equipment, oil and machinery to the ships and parts to shore for repair on occasions only.

In re Island Mariner, Order S.B.C. No. 363, Proposed Order at 7 (June 30, 1977), aff'd, Order S.B.C. No. 364 (Utils. & Transp. Comm'n Sept. 1, 1977) (emphasis added).  The Utilities and Transportation Commission concluded that such activities fell within the scope of RCW 81.84.010 because customarily recognized "anchorage areas" were "fixed termini" under that section.  Order S.B.C. No. 363, at 4.  The Commission determined it had authority to grant the requested amendment, id. at 11, and ordered that Island Mariner's certificate be amended to include a "[f]reight and passenger launching service".  Id. at App. A.

            The Commission has continued to apply the provisions of RCW 81.84.010 to "launch services" whose activities fall within the scope of that section.  We assume in this analysis that "launch services" operate "vessels" as defined in RCW 81.04.010, and that "launch services" are "steamboat companies" under that section.

            With that background, we turn now to your questions.

                                                                    ANALYSIS

            Question 1:

            If a launch service restricted its operations to freight service only, would it be required to obtain a certificate of public convenience and necessity from the Utilities and Transportation Commission pursuant to RCW 81.84.010?

            As described above, RCW 81.84.010 requires a steamboat company to obtain a certificate of public convenience and necessity before engaging in certain operations.  The express language of RCW 81.84.010 exempts from that requirement vessels "primarily engaged in transporting freight other than vehicles, whose gross earnings from the transportation of passengers and/or vehicles, are not more than ten percent of the total gross earnings of such vessel".  Thus, a launch service that restricted its operations to freight service only would not be required to obtain a certificate of public convenience and necessity under RCW 81.84.010.

            Question 2:

            If a certificated launch service restricts the operations of certain vessels to freight-only service, are those particular vessels exempt from regulation?

            Your second question combines two concepts:  (1) A vessel engaged in a freight-only launch service, that need not obtain a certificate of public convenience and necessity, which is (2) operated by a launch service, that has obtained a certificate of public convenience and necessity, which relates to other vessels.

            A launch service holding a certificate of public convenience and necessity under RCW 81.84.010 must comply with the conditions of the certificate.  RCW 81.84.030.  By its express language, however, RCW 81.84.010 does not apply to vessels carrying only freight.  Thus, a certificated launch service may operate freight-only vessels free of the restrictions shown on its certificate of public convenience and necessity.  For example, a certificated launch service may operate freight-only vessels in anchorage areas or over routes not shown on its certificate.

            However, freight operations are subject to other regulation.  The definition of "steamboat company" in the 1911 Public Service Act includes companies that operate vessels carrying only freight.  RCW 81.84.010.  Thus, freight-only operations of steamboat companies are subject to state laws that regulate steamboat companies, common carriers, and public service companies generally, and to laws that regulate freight operations specifically.  E.g., RCW 81.24.030; RCW 81.28.020-.040.[3]For example, steamboat companies must file tariff schedules showing their charges for freight-only operations, RCW 81.28.040, and must pay to the Utilities and Transportation Commission a yearly fee based on gross operating revenues.  RCW 81.24.030.

            Thus, a freight-only launch service is not subject to regulation pursuant to any certificate of public convenience and necessity.  It is subject to regulation as a steamboat company and common carrier.

            Question 3:

            Does the answer to either of these questions depend on whether a certificated launch service is already in operation within a particular anchorage area?

            As discussed above, certain steamboat companies carrying passengers are required to obtain a certificate of public convenience and necessity under RCW 81.84.010.  To obtain such a certificate, the steamboat company must file an application with the Utilities and Transportation Commission.  RCW 81.84.010.  The Commission

            shall not have power to grant a certificate to operate between districts and/or into any territory already served by an existing certificate holder, unless such existing certificate holder shall fail and refuse to furnish reasonable and adequate service . . . .

RCW 81.84.020.  Thus, an existing certificate holder furnishing reasonable and adequate service has exclusive rights to operate within the territory it serves.  Kitsap Cy. Transp. Co. v. Department of Pub. Works, 170 Wash. 396, 403-05, 16 P.2d 828 (1932).

            No such limitations apply to freight-only operations of steamboat companies, however.  Thus, a launch service operating under a certificate of public convenience and necessity may not invoke chapter 81.84 RCW to exclude freight-only launch service operations from a particular anchorage area.

            We trust this opinion will be of assistance to you.

                                    KENNETH O. EIKENBERRY
                                    Attorney General

                                    FRONDA WOODS
                                    Assistant Attorney General

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