Background and Procedural History

Catalina Red & White Cruises, Inc. (Applicant) seeks authority to operate scheduled and non-scheduled passenger vessel service from Long Beach and San Pedro to Santa Catalina Island. Applicant's name changed to Catalina Classic Cruises, Inc. shortly after this proceeding started. A timely protest was filed by Inlandboatmen's Union of the Pacific, Marine Division, International Longshore and Warehouse Union, AFL-CIO (Protestant). City of Avalon petitioned and was granted intervener status in support of Applicant.

Following a prehearing conference, the assigned Commissioner issued a Scoping Memo dated May 30, 2001, setting forth issues to be considered at evidentiary hearings. These evidentiary hearings were held before Administrative Law Judge (ALJ) Sheldon Rosenthal on June 14-15, 2001. The subject matter of the hearings was interim authority for Applicant to operate scheduled service between Avalon, on Santa Catalina Island, and the mainland, so that the impending tourist season traffic might be accommodated. Applicant was already operating non-scheduled service to camps on the island under a charter agreement with an existing carrier.

Following completion of the hearings and a shortened briefing schedule Applicant was granted interim authority to serve Avalon in Decision (D.) 01-09-061. Still to be determined in further proceedings were issues of safety, employee rights, a request for a zone of rate freedom (ZORF), and a request for non-scheduled service.

Further hearings on these issues and a permanent certificate were held on July 11, 2001, and the matter was submitted upon receipt of briefs. Subsequently, Protestant filed declarations asserting various instances of what it claimed to be unsafe operations. Applicant refuted these allegations. The ALJ ruled that hearings should be held on the safety issues contained in Protestant's declarations. After some difficulty in obtaining dates, hearings were set for April 15-16, 2002. Applicant's attorney then filed a motion to be relieved as counsel, and another counsel filed a notice of substitution. At the request of substituted counsel, the evidentiary hearings were rescheduled for May 21-22, 2002.

On May 8, 2002, Protestant filed a withdrawal of objections to the application. As explained in this document, and at the hearing on May 21, 2002, the employment issues had been satisfactorily settled and the safety problems asserted in the declarations had been resolved.

Notice of this matter appeared in the Commission's Daily Calendar on March 5, 2001. In Resolution ALJ-176-3059, dated March 15, 2001, the Commission preliminarily categorized the application as ratesetting. We affirm the categorization of ratesetting.