CONSTIUTIONAL LAW 1 | BAM MEDINA | TERM 1 AY 2011-2012

TOPIC: Requisites of Judicial Review |Associational standing DOTC s authority to set fare range schemes and to establish a presumption of public needs in applications for certificates of public convenience. THE ISSUES:

25. KMU LABOR CENTER v GARCIA (G.R. No. 115381, December 23, 1994)
Definitions: KMU Kilusang Mayo Uno HELD: PBOAP Provincial Bus Operators Association of the Philippines THE FACTS: y June 26, 1990 LTFRB Chairman Fernando issued DOTC Memorandum Order No. 90-395 allowing provincial bus operators to charge passengers within a range of 15% and above and below the LTFRB official rate of one year. December 5, 1990 PBOAP filed an application for rate increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses. December 6, 1990 PBOAP reduced its proposed fare to of eight and a half centavos (P0.085) per kilometer for all types of provincial buses. December 14, 1990 LTFRB granted the fare rate increase. March 30, 1992 DOTC Secretary Prado issued Department Order No. 92587 defining the policy framework on the regulation of transport services. [The control in pricing shall be liberalized to introduce price competition complementary with the quality of service, subject to prior notice and public hearing. Fares shall not be provisionally authorized without public hearing.] March 1994 PBOAP availed DOTC deregulation policy in which PBOAP announced a 20% fare increase effective on March 16, 1994 March 16, 1994 KMU filed a petition before LTFRB opposing the increase in bus fares. March 24, 1994 LTFRB dismissed KMU s petition for lack of merit. PBOAP, DOTC Secretary Garcia, and LTFRB assert that KMU don t have the standing to maintain the instant suit and claimed that it is within LTFRB and Yes, the court declared that KMU has legal standing since according to the court the parties have suffered and continue to suffer, members of the KMU have been affected by the fare hikes upon the avail of public transportation every day b) Yes, DOTC Department Order No. 92-587 and LTFRB Memorandum Circular No. 92-009 both violates of the Public Service Act and the Rules of Court. a) RULING: y y PBOAP s 20% fare increase without the benefit of a petition and a public hearing is null and void and of no force and effect. Temporary restraining order issued on June 20, 1994 is made permanent and Department Order No. 92-587 and LTFRB Memorandum Circular No. 92-009 are declared invalid. RATIO: y DOTC Department Order No. 92-587, LTFRB Memorandum Circular No. 92009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid insofar as they affect provisions therein: (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and a) Does KMU have locus standi in the case at bar? b) Does DOTC Department Order No. 92-587and LTFRB Memorandum Circular No. 92-009 violate the Constitution, Public service act, and the rules of court?

y y y y

y y y y

CONSTIUTIONAL LAW 1 | BAM MEDINA | TERM 1 AY 2011-2012

(b) creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor. LTFRB Memorandum Circular No. 92-009 is INCONSISTENT with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner. The provision does not put the burden of proof to the oppositor but the applicant.

NOTES: *DOTC deregulation policy [allowed provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing]