LIVING CROSS AMBULANCE V. PRC
This decision was not selected for
publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA
for restrictions on the citation of non-precedential dispositions. Please also
note that this electronic decision may contain computer-generated errors or
other deviations from the official paper version filed by the Supreme Court.
LIVING CROSS AMBULANCE SERVICE, INC.,
Appellant,
v.
NEW MEXICO PUBLIC REGULATION COMMISSION
and AMERICAN MEDICAL RESPONSE AMBULANCE
SERVICE, INC., d/b/a AMERICAN MEDICAL RESPONSE,
EMERGICARE,
Appellees.
SUPREME COURT OF NEW MEXICO
APPEAL FROM THE NEW MEXICO PUBLIC REGULATION COMMISSION
Joseph E. Earnest, Tesuque, NM, for
Appellant
Russell R. Fisk, Santa Fe, NM, for
Appellee New Mexico Public Regulation Commission
Miller Stratvert P.A., Jennifer Davis
Hall, Stephen B. Waller, Albuquerque, NM, for Appellee American Medical
Response Ambulance Service, Inc., d/b/a American Medical Response, Emergicare
EDWARD L. CHÁVEZ, Justice. WE CONCUR: CHARLES W. DANIELS, Chief Justice, PETRA
JIMENEZ MAES, Justice, BARBARA J. VIGIL, Justice, JUDITH K. NAKAMURA, Justice
{1} The New Mexico
Public Regulation Commission (PRC) granted Appellee American Medical Response
Ambulance Service, Inc., d/b/a American Medical Response, Emergicare (AMR) a
permanent certificate to provide ambulance service in Valencia County under the
provisions of the Motor Carrier Act, NMSA 1978, §§
65-2A-1 to -41 (2003, as
amended through 2013). Valencia County is a rural county that has recently
experienced population growth, with most of its population concentrated in Los
Lunas. Despite this recent growth, patients who live in Valencia County and
require ambulance transportation to a hospital must be transported to
Albuquerque, which can be a 20 to 35 mile trip that occupies an ambulance for
two or more hours.
{2} From 1987 until
April 5, 2013, Appellant Living Cross Ambulance Service, Inc. (Living Cross)
had been the sole and primary provider of ambulance services in Valencia
County, with the exception of a brief period between 1999 and 2000 when
Superior Ambulance Company (Superior) was granted authority to operate in
Valencia County. In December 2012, Living Cross reduced its fleet from three
24-hour ambulances and two 12-hour ambulances to three 24-hour ambulances and
one 12-hour ambulance. Living Cross subsequently reduced its fleet to two
24-hour ambulances in April 2013 to coincide with a grant of temporary
authority from the PRC allowing AMR to operate in Valencia County.
{3} After the
administrative proceedings in this case, the hearing examiner concluded that
Living Cross did not provide continuous and adequate service from 2011 through
2013, prior to AMR’s entry into Valencia County, and Living Cross was not able
to provide continuous and adequate service at the time of the proceeding.
Section 65-2A-13(D)(1). The hearing examiner further concluded that Living
Cross did not adequately show that it would be able to provide continuous and
adequate service in the future if AMR’s application were denied, and also found
that Living Cross did not show that its prior financial difficulties were
substantially impacted by the entry of AMR.
Id.; § 65-2A-8(D). With
respect to AMR, the hearing examiner concluded that (1) AMR was fit, willing,
and able to provide ambulance services in Valencia County, § 65-2A-8(B)(1); (2)
AMR was in compliance with relevant safety and financial responsibility
requirements, § 65-2A-8(B)(2); and (3) granting AMR permanent authority to
provide ambulance services would “meet an ongoing public demand or need and
thereby serve a useful public purpose,” § 65-2A-8(B)(3). The PRC adopted the
hearing officer’s findings and conclusions in full and issued a certificate
allowing AMR “to provide ambulance service from points and places in Valencia
County to points and places in Valencia and Bernalillo Counties, New Mexico.”
Living Cross appealed the PRC’s decision on numerous grounds. We conclude that
Living Cross’s arguments lack merit, and the PRC’s decision in this case was
not arbitrary, capricious, or an abuse of discretion. Accordingly, we affirm
the PRC.
{4} We may only reverse
the PRC’s order if we determine that it is “(1) arbitrary, capricious or an
abuse of discretion; (2) not supported by substantial evidence in the record;
or (3) otherwise not in accordance with law.” Section 65-2A-35(C). “[W]e apply
a de novo standard of review to the PRC’s rulings regarding statutory
construction.”
Albuquerque Bernalillo Cty. Water Util. Auth. v. N.M. Pub.
Regulation Comm’n,
2010-NMSC-013, ¶ 50,
148 N.M. 21,
229 P.3d 494. “With
respect to questions of fact, we look to the whole record to determine whether
substantial evidence supports the [PRC’s] decision.”
N.M. Indus. Energy
Consumers v. N.M. Pub. Regulation Comm’n,
2007-NMSC-053, ¶ 24,
142 N.M.
533,
168 P.3d 105. Although we view the evidence in the light most favorable to
the PRC’s decision, we uphold the decision only if it is supported by
substantial evidence.
Id. “Substantial evidence on the record as a whole
is evidence demonstrating the reasonableness of an agency’s decision, and we
neither reweigh the evidence nor replace the fact finder’s conclusions with our
own.”
Albuquerque Bernalillo Cty. Water Util. Auth.,
2010-NMSC-013, ¶ 24
(internal quotation marks and citation omitted).
2. The PRC did not err by granting operating
authority to AMR for non-emergency service without considering the need for
such service
{5} Living Cross
contends that the PRC should not have granted AMR the authority to provide
non-emergency ambulance service because AMR did not introduce evidence
supporting the need for such service, a showing which Living Cross claims is
required by the Motor Carrier Act. Under the Motor Carrier Act, an applicant
seeking authority to provide ambulance service has “the burden of proving that
the ambulance service that currently exists in the territory sought in the
application is inadequate and that the proposed service is directly responsive
to a public need and demand for the service proposed.” Section 65-2A-13(C)(1).
The PRC shall not grant an application
for a certificate or permit for
ambulance service, or for amendment, lease or transfer of such a certificate or
permit, if it finds after hearing that the existing ambulance service is provided
on a reasonably continuous and adequate basis in the territory in which the new
service is sought or that the holder of the certificate or lessee providing the
existing ambulance service in such territory is willing and able to provide,
and does subsequently provide, reasonably continuous and adequate service
within such territory, as specified by commission order.
Section 65-2A-13(D)(1). “[A]mbulance service” is “the
intrastate transportation of sick or injured persons in an ambulance meeting
the standards established by the [PRC].” Section 65-2A-3(B). The Motor Carrier
Act does not make any distinction between emergency and non-emergency services.
{6} Despite the plain
language of the Motor Carrier Act, Living Cross contends that the PRC has in the
past granted authority only for non-emergency ambulance service, and therefore
there is precedent for the practice. Living Cross is correct that the PRC
previously granted an applicant under severe financial stress permission to
provide only non-emergency ambulance service.
See Bernalillo Cty. Health
Care Corp. v. N.M. Pub. Regulation Comm’n,
2014-NMSC-008, ¶ 5,
319 P.3d
1284. Although we vacated the PRC’s order because it was arbitrary and
capricious, we found substantial evidence to support the PRC’s determination in
that case that there was a public need for additional non-emergency ambulance
services only.
Id. ¶¶ 27-28.
{7} However, our
approval of the PRC’s exercise of its discretion in one case involving
financial hardship does not require the PRC to reach an identical result in all
such cases. In this case, AMR applied for a certificate to provide ambulance
services. The question was whether AMR met its burden of proving that the
ambulance service provided by Living Cross is inadequate and that AMR’s
proposed service is directly responsive to a public need and demand. Section
65-2A-13(C)(1) & (D)(1). The hearing examiner found that “[N]o party
presented evidence indicating that there [was] not a need for non-emergency
service or that the certificate should be narrowed for any other reason to
emergency service,” and therefore recommended that the PRC issue a certificate
to AMR for “ambulance service.” By contrast, in
Bernalillo County Health
Care, the applicants provided 39 affidavits and other testimony to
specifically support the need for non-emergency services.
2014-NMSC-008, ¶ 27.
Because there was no specific showing in this case that it was necessary to
conduct distinct analyses of emergency and non-emergency services, and because
the Motor Carrier Act does not require the PRC to conduct such analyses in
every case, the PRC did not err by not distinguishing between emergency and
non-emergency services in considering the public need for ambulance services in
this case.
{8} Additionally, we
note that the PRC did not abuse its discretion in determining that there was a
public need for additional ambulance services in Valencia County. Indeed,
admissions by Living Cross representatives alone suffice to support the PRC’s
conclusion that the ambulance service provided by Living Cross was inadequate.
Justin Wood, Living Cross’s operations manager, testified that Living Cross
voluntarily reduced the number of ambulances it ran from the equivalent of four
24-hour ambulances to three and a half 24-hour ambulances in December 2012, and
eventually to only two 24-hour ambulances, when AMR was granted temporary
authority to operate in Valencia County in April 2013. Wood stated that the
2012 decision to reduce the number of Living Cross’s operating ambulances was made
despite his requests during the previous summer and the longstanding requests
of numerous local emergency medical services agencies that Living Cross
add
ambulances to its fleet. For example, former Fire Chief Atilano Chavez of the
Village of Los Lunas Fire Department testified that he attempted to address the
shortfall of ambulances because whenever Living Cross fell short, the
department’s emergency medical technicians (EMTs) had to transport patients,
which they did at a cost to the municipality and without an operating license
from the PRC. When a 911 call is placed, the Valencia County Fire Department
and a transporting ambulance service both go out. The fire department is
intended to be a first responder to mitigate any potential life-threatening hazards,
after which the fire department hands the person off to the transporting
ambulance service. However, when Living Cross does not arrive, the fire
department requests mutual aid from surrounding ambulance carriers such as
Isleta Pueblo, Albuquerque Ambulance, or Superior. If mutual aid is not
forthcoming, and it often is not, the fire department asks for an estimated
time of arrival from Living Cross and begins to transport the patient,
sometimes with volunteer firemen performing the jobs of EMT transporters. The
fire department will either rendezvous with Living Cross at the side of the
freeway or elsewhere, which typically delays the transport process by 5 to 20
minutes, or it must take the patient all the way to Albuquerque, a task for
which the department does not have either adequate authority or resources. In
2011, the department recorded at least 18 instances where it had to initiate
medical transport. The number grew to at least 50 in 2012 and at least 15 in
the three months prior to AMR’s temporary grant of authority in 2013. Indeed,
the Los Lunas Fire Department had so many issues with Living Cross’s service
that it took it upon itself to create a “Living Cross Ambulance Response
Complaint Form” to keep track of delays and no shows by Living Cross. The
record before the PRC included 33 separate complaint forms that were filed by
fire department employees between July 2012 and February 2013. After numerous
complaints, Living Cross’s attorney eventually told Fire Chief Chavez to stop
calling Living Cross about his concerns.
{9} David Bris,
president and director of Living Cross, also admitted that Living Cross was
aware of complaints about its service and did not attempt to address them. Bris
testified that he met with representatives of local fire departments, who
requested that Living Cross deploy additional ambulances, and that Living Cross
managerial employees met internally to discuss the complaints. Yet Living Cross
actually reduced its ambulance fleet during that time, despite having seven additional
ambulances at its disposal. Bris admitted that five or six ambulances might be
needed to meet the public need for ambulance services in Valencia County. Sam
Ortega, the administrator for Living Cross, similarly testified that four to
five ambulances are needed and that three and a half 24-hour ambulances would
not always meet demand. The evidence in this case overwhelmingly supports a
finding of a public need for both emergency and non-emergency ambulance
services because of the inadequate service provided by Living Cross.
3. Living Cross was not deprived of due process as
a result of the lack of established rules, standards, policies or procedures
for determining missed call rates
{10} Living Cross
observes that the PRC has not adopted any rules or regulations setting forth a
uniform standard for continuous and adequate ambulance service response times,
as it has done for certain other passenger transportation industries. Living
Cross contends that the PRC’s lack of specific uniform rules regarding response
times allows the PRC to arbitrarily decide the merits of applications for
ambulance services contrary to both the Motor Carrier Act and the Ambulance
Standards Act, NMSA 1978, §§
65-6-1 to -6 (1974, as amended through 1998).
Living Cross also argues that it is deprived of its due process rights if the
PRC fails to provide notice as to when it is necessary and appropriate for a
service provider to spend more money or apply for increased tariff rates in
order to keep dropped call rates to the level that the PRC may consider to be
appropriate. We review constitutional issues of law, including due process
claims, de novo.
TW Telecom of N.M., L.L.C. v. N.M. Pub. Regulation Comm’n,
2011-NMSC-029, ¶ 15,
150 N.M. 12,
256 P.3d 24.
{11} The Motor Carrier Act
does not require uniform standards for response times or dropped calls. As
previously discussed under the Motor Carrier Act, AMR was required to prove
that the existing ambulance service provided by Living Cross was “inadequate”
and that AMR’s proposed service would be “directly responsive to a public need
and demand” for the service. Section 65-2A-13(C)(1). The Motor Carrier Act does
not define what constitutes “public need and demand” or what renders a service
“inadequate,” nor does it give the PRC standards for evaluating either of these
terms. However, the Motor Carrier Act does state that the “ ‘ability to
provide certificated service’ means that an applicant or carrier can provide
reasonably continuous and adequate transportation service.” Section 65-2A-3(A).
The term “continuous and adequate service” is further defined as
for full-service carriers,
reasonably continuous availability, offering and provision of transportation
services through motor vehicles, equipment and resources satisfying safety and
financial responsibility requirements under the Motor Carrier Act and
commission rule, which are reasonably adequate to serve the entire full-service
territory authorized in the certificate, with reasonable response to all
requests for service for the nature of passenger service authorized, based on
the nature of public need, expense and volume of demand for the type of service
authorized during seasonal periods.
Section 65-2A-3(M)(1) (emphasis added). It is fair, then, to
conclude that the reasonableness of Living Cross’s response times was a factor
to be assessed in determining whether its service was inadequate. To the extent
that it has included responsiveness in this assessment, the plain language of
the Motor Carrier Act supports only the inference that responsiveness should be
analyzed on a case-by-case basis. Thus, the Legislature has chosen not to
micromanage or specifically define every term in the Motor Carrier Act, but
instead has delegated authority to the PRC to assess these factors and weigh
the reasonableness of a carrier’s response to requests for service according to
the unique circumstances of each case. In fact, a uniform response time
standard might actually be contrary to the discretionary approach that the
Motor Carrier Act appears to endorse.
{12} The Ambulance
Standards Act also does not require the PRC to establish standards for dropped
calls or response times. Instead, the Ambulance Standards Act requires the PRC
to adopt regulations establishing uniform standards for vehicle design, health
and safety equipment used in ambulances, procedures for operating ambulances,
annual safety inspections, and licensing ambulance personnel.
See §
65-6-4 (establishing the legislative purposes of the Ambulance Standards Act).
Because the responsiveness of an ambulance service provider is outside of the
ambit of the Ambulance Standards Act, it does not impose any requirement to
establish uniform standards for adequate ambulance service, as Living Cross
claims.
{13} There are sound
reasons for the PRC to avoid adopting a uniform responsiveness standard. For
example, acceptable standards of responsiveness may differ substantially in
more rural areas versus suburban or urban areas, and can depend on weather
conditions or the size of the territory served.
See 18.3.14.10(I) NMAC
(listing “factors that can cause delays in meeting anticipated response times”
such as “(1) the geography of the territory; (2) whether the service uses
volunteer or paid drivers; (3) whether the territory is urban or rural or both;
(4) stationing points for ambulances and crews; [and] (5) weather”). Indeed,
witnesses for AMR, Superior, and Living Cross acknowledged during the PRC
proceedings that they are not aware of any uniform national, state, local, or
industry standards for ambulance response times or missed calls, and the
parties have not cited to any such standards in the briefing before this Court.
{14} Likewise, Living
Cross has not presented a persuasive argument that the lack of uniform
standards for ambulance response times presents a constitutional due process
problem. Living Cross claims that the lack of a uniform response time standard
“fails to give adequate notice to the carrier as to what level [of response
time] is expected.” However, as discussed above, the Motor Carrier Act provides
a sufficiently definite standard by requiring that response times, among other
factors, be “reasonable” and must provide both parties with an opportunity to
present evidence as to reasonableness, which Living Cross did in this case.
Sections 65-2A-3(M)(1); 65-2A-13(C). Thus, the statutory scheme followed by the
PRC provides adequate due process.
See TW Telecom of N.M.,
2011-NMSC-029, ¶ 17 (“[F]undamental requirements of due process in an
administrative context are reasonable notice and
opportunity to be heard and
present any claim or defense.” (emphasis in original) (internal quotation
marks and citations omitted)).
{15} We agree with the
hearing examiner that proof of a public need, the failure of the existing
carrier to provide reasonably continuous and adequate service, and proof of the
existing carrier’s inability to cure or provide continuous and adequate service
in the future are sufficient standards by which the PRC could grant a
certificate to operate ambulance service on a case-by-case basis. Moreover, a
prior PRC case cited by Living Cross where a 1 percent 911-emergency
zero-status dispatch unavailability in Bernalillo County was one of several
factors considered in the PRC’s finding that there was insufficient evidence to
justify a new emergency ambulance carrier, and was not dispositive to the PRC’s
consideration of call response time or its weighing of individual factors in
this case.
4. The PRC did not err by considering Living
Cross’s financial stability when assessing whether Living Cross was providing
continuous and adequate service
{16} Living Cross filed a
motion in limine before the hearing examiner seeking to exclude evidence
related to its financial fitness, tax conditions, and economic status, and
claiming that those factors were not relevant to assessing its fitness to
provide ambulance services. The hearing examiner found that Living Cross’s
financial debts and unpaid tax bills were relevant to several issues concerning
the burdens of proof borne by both AMR and Living Cross.
See 1.2.2.35(A)
NMAC (setting forth the rule that in administrative proceedings, all relevant
evidence is generally admissible and that the presiding officer shall consider,
but not be bound by, the New Mexico rules of evidence).
{17} Living Cross asserts
that it was error for the PRC to consider this evidence because in 2013 the
Legislature amended the Motor Carrier Act to prohibit the PRC from considering
a carrier’s financial fitness in recognition of the financial vulnerability of
small businesses in a traditionally thin market transportation industry. We
disagree. The policy behind the Motor Carrier Act is “to foster the
development, coordination and preservation of a safe, sound and adequate motor
carrier system, requiring financial responsibility and accountability on the
part of motor carriers through state licensing and regulation of motor
carriers.” Section 65-2A-2. In addition, Section 65-2A-13(C)(2) imposes the
burden on the protesting carrier—in this case, Living Cross—to demonstrate
“with reasonable specificity . . . the . . . economic
analysis related to expenses and revenues of the full-service operation and the
anticipated economic, business or functional effect of the proposed service on
the existing provision of, or rates for, full-service transportation within the
full-service territory.” The PRC was also required to consider whether AMR’s
entry into the Valencia County market would cause financial harm to Living
Cross.
See § 65-2A-13(C)(2) & (D)(1). Therefore, Living Cross’s
financial condition prior to and following the temporary grant of authority to
AMR in April 2013 was relevant.
{18} Living Cross’s
financial condition was alarming. Living Cross had incurred large debts,
outstanding federal and state tax bills, improper loans to Bris, loans from
Bris’s family to Living Cross with high interest rates, lease agreements
designed to mask compensation, and systemic financial problems that began years
before AMR filed its application. Bris testified in a deposition that Living
Cross owed about $1,000,000 in federal taxes that had been delinquent since the
1990s. As of April 1, 2013, Living Cross still owed $532,948.78 to the IRS as
evidenced by an installment agreement. Living Cross also owed $811,544.72 in
New Mexico state taxes as of November 6, 2006. As a result, the New Mexico
Taxation and Revenue Department filed an application for injunction from
engaging in business, and thereafter Living Cross entered into an installment
agreement to pay back the taxes to avoid being put out of business. As of
September 3, 2014, Living Cross still owed $75,196.09 to the State of New
Mexico. Further, at least two loans from Bris’s mother to Living Cross carried
a 25 percent annual interest rate. One lease agreement required Living Cross to
pay David Bris $3100 per month to lease space identified as his residence and
was signed by David Bris, lessor, and David Bris, lessee for Living Cross—a
troubling arrangement.
{19} Living Cross took
out other questionable loans prior to AMR’s application. For example, Living
Cross entered into a promissory note in 1994 with J. Edward Hollington &
Associates, amended the note 17 times, and modified it 14 times. As of October
5, 2012, Living Cross owed $146,052.20 on the note and was borrowing an
additional $60,000 from the lender. There are other examples of indebtedness in
the record that we do not need to detail. Suffice it to say that Living Cross’s
balance sheets as of December 31, 2013 showed total assets of $228,457.58 and
total liabilities of $1,906,990.69.
{20} It was not
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law for the hearing examiner to admit this evidence and then rely on it in
determining the merits of this case. Section 65-2A-35(C) (detailing the
circumstances under which this Court may reverse a PRC order pursuant to the
Motor Carrier Act). It was reasonable to conclude that the evidence of Living
Cross’s financial distress was relevant to whether (1) AMR’s proposed entry
into Valencia County was directly responsive to a public need and demand for
the service proposed; (2) Living Cross’s existing ambulance service in Valencia
County was provided on a reasonably continuous and adequate basis; (3) Living
Cross, the current operator, was willing and able to provide, and did
subsequently provide, reasonably continuous and adequate service within
Valencia County; and (4) AMR’s entry into the market would have a financial
impact on Living Cross. There is substantial evidence that Living Cross was
operating in severely distressed financial conditions long before AMR entered
the market. This evidence supports the PRC’s conclusions.
5. The PRC did not err by refusing to allow Living
Cross to implement lease agreements with another provider as an alternative to
granting AMR’s application
{21} Living Cross asserts
that even if it failed to meet a standard of continuous and adequate service in
the past, it is entitled to remedy the situation by entering into lease
agreements with other private companies under the provisions of Sections
65-2A-13(D)(1) and 65-2A-24(A) rather than the PRC authorizing AMR to operate
in Valencia County. Under Section 65-2A-13(D)(1), the PRC should not have
granted AMR’s application in this case if it found that Living Cross provided
ambulance service “on a reasonably continuous and adequate basis” in Valencia
County, or if it found that Living Cross “is willing and able to provide, and
does subsequently provide, reasonably continuous and adequate service within
[Valencia County].” However, there was ample justification in this case for the
PRC’s conclusion that the proposed lease agreements were insufficient to prove
that Living Cross could provide continuous and adequate service or would be
able to do so in the future.
{22} Living Cross
proposed to enter into one of two alternative lease agreements with Superior;
the first would be a lease for personnel and equipment, and the second would be
a personnel-only lease. The personnel and equipment lease requires Superior to
lease both ambulances and crews to Living Cross on an as-needed basis, 24 hours
per day, for emergency ambulance calls within Valencia County. Living Cross and
Superior represented that Superior would dedicate two units to the lease and
additional units would be provided as needed during peak periods. Living Cross
would have full control and responsibility for the deployment and operation of
the leased units. Similarly, under the personnel-only lease, Superior would
make available to Living Cross two paramedic and EMT teams 24 hours per day.
Living Cross represented that it presently had sufficient ambulances and
equipment to run five ambulances, and it would be able to immediately provide
five ambulances in Valencia County with leased personnel from Superior. Living
Cross also stated that leased personnel would be under its control and it would
be solely responsible for their actions.
{23} It was reasonable
for the hearing examiner to conclude that these lease agreements do not show
that Living Cross would be able to provide continuous and adequate service.
1 Paragraph 3 of the proposed
personnel and equipment lease states in pertinent part that
Superior shall give a request for
deployment of a staffed ambulance unit and under this Agreement for response to
a call for emergency ambulance service in Valencia County pursuant to this
Agreement priority over its non-emergency and inter-facility carriage in
Bernalillo County, but shall have full discretion of whether to dispatch
equipment and/or personnel as set forth below, to the extent that its units may
be involved in, or anticipated to be required in, emergency ambulance transport
within Bernalillo County.
(Emphasis added.) As Bris conceded, this provision means that
Superior is not necessarily required to respond and assist Living Cross when
such assistance is requested. Under paragraph 13 of the personnel and equipment
lease, the agreement may be terminated by either party with 30 days’ written
notice at any time, with or without cause. In light of these facts, the PRC did
not abuse its discretion in concluding that there was simply no assurance that
the proposed personnel and equipment lease would provide the necessary services
to Valencia County, or even continue for more than one month at a time.
{24} The PRC’s misgivings
regarding the proposed personnel-only lease were also reasonable. That
agreement can be terminated by either party for any reason with six months’ written
notice. The hearing examiner reasonably concluded that termination of the
personnel-only lease upon six months’ notice, much like the 30-day notice
provision of the personnel and equipment lease, would not provide a sufficient
opportunity for the PRC to certify another carrier to provide ambulance service
in Valencia County.
{25} The hearing examiner
also reasonably concluded that Living Cross did not sufficiently establish how
either lease agreement would help restore its tenuous financial condition. For
example, Superior would bill for and retain 100 percent of the revenues for the
services that its leased equipment and employees provided under the personnel
and equipment lease, which means that Living Cross would not gain any revenue
or cash flow from those services. Under the personnel-only lease, Superior
would retain 80 percent of the revenues. Even though Living Cross would retain
20 percent of the revenues under the personnel-only lease, it would bear all of
the fuel costs and other expenses associated with the ambulance units and
equipment. Although Living Cross argued that the lease agreements would allow
it to slowly build up its fleet over time, the hearing examiner’s skepticism
regarding these vague plans for financial recovery was reasonable, given Living
Cross’s inability to operate profitably with a larger fleet long before AMR’s
application to operate in Valencia County.
{26} The hearing examiner
reasonably concluded that based on Living Cross’s history of failing to deploy
an adequate number of ambulances and the uncertainty created by both leases and
the lack of any definite business plan, Living Cross had not demonstrated an
ability to return to reasonably continuous and adequate ambulance service in
Valencia County in the near future. For the reasons discussed, this conclusion
was supported by substantial evidence and was not arbitrary.
6. The PRC did not err by failing to adequately
consider the financial impact to Living Cross of authorizing AMR to operate in
Valencia County
{27} Living Cross argues
that the economic harm it would suffer due to AMR’s entry into Valencia County
alone was a sufficient ground to deny AMR’s application, and therefore the PRC
did not properly consider the effect of AMR’s application on the existing ambulance
service. Section 64-2A-8(D) provides that “[b]efore granting a certificate for
ambulance service, the [PRC] shall also consider the effect that issuance of
the certificate would have on existing ambulance service in the territory.”
When read in conjunction with Section 65-2A-13(D)(3), it is clear that the
diversion of revenue from an existing carrier is only one factor to be
considered in determining the effect on existing ambulance service. Section
65-2A-13(D)(3) provides, in relevant part:
In considering the potential effect
on provision of transportation services to the public . . . the [PRC]
shall consider all evidence presented pertaining to such potential effect,
including evidence of the effect that diversion of revenue or traffic may have
on the provision of full-service passenger service to the community. Diversion
of revenue or traffic from an existing motor carrier shall not, however, be
sufficient grounds for denying the application without a showing that the
diversion presents a reasonable potential to affect the provision of
full-service passenger service to the community.
{28} In compliance with
the Motor Carrier Act, the PRC considered the financial impact on Living Cross
in assessing AMR’s application. The hearing examiner found that the impact on
Living Cross from authorizing an additional carrier could be determined more
definitively in this case because AMR was already operating in Valencia County
pursuant to the authority granted in NMPRC Docket No. 13-00079-TR-M
2 and under the temporary authority
the PRC granted to AMR in this case. The hearing examiner recognized that
Living Cross’s transport revenues declined when AMR serviced many of the calls
that Living Cross previously would have serviced. However, Living Cross’s
expenses also declined, and Living Cross actually made a profit through October
31, 2014. By contrast, in 2012, the year before AMR applied for authority to
operate in Valencia County, Living Cross suffered heavy financial losses. The
hearing examiner reasonably found that Living Cross’s underlying financial
troubles predated AMR’s initial entry in April 2013 and were not caused by AMR.
{29} We conclude that
contrary to Living Cross’s contentions, the PRC
did adequately consider
the financial impact to Living Cross of granting AMR’s application. In so
doing, the PRC did not abuse its discretion by concluding that AMR’s entry had
a “limited incremental financial impact” on Living Cross, and then finding that
the impact was outweighed by the need for an additional service provider as a
result of Living Cross’s inability to provide reasonably continuous and
adequate service.
7. The PRC was not obligated to give AMR
supplemental authority rather than granting its application
{30} Finally, Living
Cross contends that the PRC should have modified its certificate to AMR to only
allow AMR to operate when Living Cross’s fleet was fully deployed. As an
initial matter, Living Cross does not offer any legal basis that would make it
error for the PRC to refuse to grant supplemental authority in lieu of the
operating authority sought in the application in this case. Instead, Living
Cross broadly contends that granting AMR only supplemental authority would be
consistent with the policy of the Motor Carrier Act, and points to its
cross-examination of a PRC expert witness who acknowledged that he had not
considered allowing AMR to provide services only when Living Cross ambulances
were not available. Living Cross argues that the PRC failed to consider this
alternative, which is not so. The PRC specifically addressed granting AMR only
supplemental authority and rejected it because Living Cross’s supplemental
authority proposal was unclear, and no such alternative was put forth by any of
Living Cross’s witnesses. Based on the briefing before the PRC, the PRC
reasonably determined that this alternative was vague and properly rejected it.
{31} For the foregoing
reasons, the PRC’s decision is affirmed.
EDWARD L. CHÁVEZ, Justice
CHARLES W. DANIELS, Chief Justice
PETRA JIMENEZ MAES, Justice
BARBARA J. VIGIL, Justice
JUDITH K. NAKAMURA, Justice