CITY OF NORTH LITTLE ROCK, Eddie POWELL, Individually, and as Mayor et al v. John M. GORMAN et al
78-120 & 78-131
Supreme Court of Arkansas
July 17, 1978
568 S.W. 2d 481
(In Banc)
We agree. HARRIS, C.J., and Byrd and HICKMAN, JJ.
78-120. Charles L. Carpenter and Charles L. Carpenter, Jr., for appellees/intervenors.
78-120. Morgan E. Welch, for appellees.
78-131. Charles L. Carpenter and Charles L. Carpenter, Jr., for appellant.
78-131. Jim Hamilton, North Little Rock City Atty., for appellees.
GEORGE HOWARD, JR., Justice. These two appeals have been consolidated for final disposition in this opinion; case number 78-120 is from the Pulaski County Chancery Court, Second Division, while case number 78-131 is from the Pulaski County Circuit Court, Second Division.
The central issue in both cases is whether Ordinance Number 4835, which was passed by the North Little Rock City Council on December 27, 1977, which increased rates for electricity sold by the City is a legislative measure or an administrative one. If the former, the ordinance would have to be referred to the voters of North Little Rock, as requested by a written petition, pursuant to Amendment 7 of the Arkansas Constitution, and if the latter, then such measure would not be subject to referendum.
A secondary issue involved is which court, the Chancery Court of Pulaski County or the Circuit Court of Pulaski County, has jurisdiction to resolve the dispute.
The pertinent facts for an understanding of the dispute, which contain all of the necessary ingredients that, indeed, characterize this controversy as one of public interest, and for a resolution of the issues before us are:
“Rate Making: Nothing contained herein shall be construed as a removal from or abdication by the City Council of the City of North Little Rock from its sole responsibility of adopting ordnances establishing rate schedules for customer classes of the North Little Rock Electric Department . . . .” (Emphasis added)
On July 2, 1977, the Federal Power Commission approved an increase in rates for wholesale power sold by Arkansas Power and Light Company to the City of North Little Rock in the amount of $1.8 million annually. In order to collect these charges, the Commission recommended increases in electric rates to the City Council which the Council adopted by Ordinance Number 4798 entitled “An Ordinance establishing rates for electricity sold by the City... Providing for general fund transfers2 . . .” on July 25, 1977. Subsequently to the enactment of Ordinance Number 4798, petitions were filed with the City Clerk requesting a referen-
On December 27, 1977,3 the City Council again adopted Ordinance Number 4835 which set rates for electric services which were designed to collect the increase in the wholesale rates charged by Arkansas Power and Light Company. Subsequent to the action of the City Council, the City Clerk of the City of North Little Rock received, on January 24, 1978, a petition containing the signatures of more than 2,000 electors seeking to have Ordinance Number 4835 referred to the voters. On January 30, 1978, the City Clerk certified the petition as being sufficient.
On February 3, 1978, a class action was filed in the Chancery Court of Pulaski County praying, among other things, that the City of North Little Rock, the Mayor and Council be enjoined from making use of the funds collected pursuant to Ordinance Number 4835 until such time as a referendum is held pursuant to petitions filed with the Clerk requesting the Council to call a special election; that the Mayor and City Council be ordered to proceed “forthwith with a time certain for the referendum of Ordinance Number 4835.”
On February 7, 1978, a petition to intervene was filed in the Chancery Court proceeding by Don Gilbert, Charles M. Polk, B. R. Johnson, J. W. Springer, John L. Garner, J. R. Matchett, Gene Carr and Jimmy L. Tanner, uniform employees of the City of North Little Rock, requesting, among other things, that the Chancery Court enjoin and restrain the Mayor and City Council of North Little Rock from referring Ordinance Number 4835 to the voters for approval or rejection pending a determination of the issues by the court; and for an order of the court finding that Ordinance Number 4835 was an exercise of an administrative function as opposed to an exercise of its legislative authority.
“IT IS, THEREFORE, BY THE COURT, CONSIDERED, ORDERED, ADJUDGED AND DECREED that the defendants, Eddie Powell, Art Eastham, John Whalen, John Ward, Travis Hardwick, W. B. Hudson, Charles Gassaway, Joe Anousakes and Mary Hess should be, and they are hereby, directed to call an election and refer North Little Rock City Ordinance Number 4835 to the people.”
Relative to case number 78-131 on appeal from the Pulaski Circuit Court, appellant, R. E. Bruce, filed his complaint in the Circuit Court of Pulaski County on April 20, 1978, seeking an order, a writ of mandamus, requiring the Mayor and City Council of North Little Rock to submit Ordinance Number 4835 to the voters for acceptance or rejection “without further delay.”
After the issues were duly joined, the Circuit Court found that the Pulaski County Chancery Court had held that Ordinance Number 4835 was a proper “subject for referendum” and that the chancery case was being appealed to the Arkansas Supreme Court, and therefore, until the Supreme Court acts, “there is no certainty that an election will, in fact, be required.” The Circuit Court concluded by stating:
“. . . [T]he plaintiff‘s request for relief should not be granted at this time, however, in the event the Chancery Court‘s ruling is affirmed, the City of North Little Rock should be prepared to immediately set the election to be held within a reasonably prompt period of time.”
I.
THE CHANCERY COURT PROCEEDINGS
The appeal from the Pulaski Chancery Court, case number 78-120, may be quickly and summarily disposed of on jurisdictional grounds. For it is well settled that chancery courts in this State have jurisdiction only to review the action of a county or city clerk in determining the sufficiency of local petitions for initiative or referendum under and pursuant to
We perceive, from the record before us, that counsel for the Mayor and Council and counsel for plaintiffs, as indicated in the amended complaint, recognized the jurisdictional problem, but sought to confer jurisdictional status on the chancery court by asking the chancery court to declare the rights of the parties under our declaratory judgment provision.4 However, it is clear that courts of equity do not have jurisdiction to render declaratory judgments where, as here, the subject matter is not cognizable in a court of equity. Moreover, the parties may not waive the jurisdictional defect where there is no predicate or basis for equitable jurisdiction.
Finally, in Nethercutt v. Pulaski County Special School District, 248 Ark. 143, 450 S.W. 2d 777 (1970), we emphasized that mandamus is a common law writ for a remedy at law which was unknown to equity procedure and, therefore, is designed to enforce legal rights and thus, is for all practical purposes a procedure at law.
We, accordingly, reverse and dismiss the Pulaski County Chancery Court action for want of jurisdiction.
II.
THE CIRCUIT COURT PROCEEDINGS
“. . . [R]eferendum powers of the people are hereby further reserved to the local voters of each municipality and county as to all local, special and municipal legislation of every character in and for their respective municipalities . . .” (Emphasis supplied)
In Scroggins v. Kerr, 217 Ark. 137, 228 S.W. 2d 995 (1950), we made the following observation:
“Not all ordinances enacted by City Councils come under the head of ‘municipal legislation.’ City governments in Arkansas know no such complete separation of powers as would automatically classify all aldermanic activities as legislative in character.”
It is well settled that the test resorted to in determining whether any bill, law, resolution or ordinance is legislative or administrative is to determine whether the proposition is one that makes new law or to execute a law already in existence. The power or authority to be exercised is legislative in its nature if it prescribes a new policy or plan; while on the other
The pivotal question that immediately confronts us is: Does Ordinance Number 4835 prescribe a new law, policy or plan: or is it one that executes a law or plan already in existence?
The City of North Little Rock, the Mayor and Council argue that the history of rate-making authority by the City of North Little Rock dictates a finding that Ordinance Number 4835 is administrative in nature and, therefore, is not subject to the referendum provisions of the Constitution.
In support of this argument, appellees contend that the Arkansas General Assembly gave to cities the authority to own and operate electric distribution systems and establish rates for electric service under
While appellees’ argument is interesting and at first blush seems plausible, we are not persuaded that this argument comes to grips with an element contained in the rate making process that clearly and unequivocally makes Ordinance Number 4835 legislative as opposed to administrative.
First, the Council expressly reserved the power in Ordinance Number 4835 to enact ordinances establishing rate
We conclude that appellant, R. E. Bruce, was entitled to the relief requested, namely, a writ of mandamus directed to the North Little Rock City officials requiring them to schedule an election without undue delay relative to Ordinance Number 4835. It must be remembered that the City Clerk certified the petition filed for a referendum as being sufficient on January 30, 1978, and appellant‘s complaint was filed approximately fourteen weeks later. See: Lewis v. Conlee, 258 Ark. 715, 529 S.W. 2d 132 (1975).
The only function remaining to be performed in connection with the petition for a referendum is the Council‘s duty to call the election which is clearly a ministerial responsibility. It is well settled that a failure to perform a ministerial duty is enforcible by a writ of mandamus. Wright v. Ward, 170 Ark. 464, 280 S.W. 369 (1926).
Reversed and remanded.
HICKMAN, J., not participating.
FOGLEMAN, J., concurs.
JOHN A. FOGLEMAN, Justice, concurring. I concur because of the narrow grounds on which the opinion is based, i.e., (1) the fact that the North Little Rock City Council retained for itself the sole responsibility for rate making when it turned the operation of the electrical distribution system over to an independent commission, as authorized by statute;
Rate making for a franchised utility has always been considered to be a legislative function. Lawrence v. Jones, 228 Ark. 1136, 313 S.W. 2d 228. There is really little difference in rate making for a municipally owned utility operated by an independent commission. When the council fixes rates for that commission, not as “just compensation” as provided by
I suggest, however, that it is contemplated by our statutes that a municipally owned utility be operated for a profit. The term “just compensation” doesn‘t mean that only the cost of operating and financing the system be uncovered. Just compensation means the market value of a product. It means full compensation. Arkansas State Highway Comm‘n v. Stupenti, 222 Ark. 9, 257 S.W. 2d 37. As regards public utilities, it means a fair return on the value of the property. Black‘s Law Dictionary (4th Ed.). It is significant that the provision for just compensation must be applied to franchised and municipally owned utilities alike. Statutes providing for use of the surplus income of a municipally owned utility are a clear indication of the intention of the Arkansas General Assembly that municipally owned utilities be operated at a profit and that those profits (surplus revenues) be devoted to numerous purposes. To illustrate, they may be used under various circumstances to pay bonded indebtedness of certain improvement districts.
It seems clear to me that the rates fixed, however established, would be subject to judicial review for reasonableness, even though it might be done in a manner not subject to referendum. See Delony v. Rucker, 227 Ark. 869, 302 S.W. 2d 287; City of Malvern v. Young, 205 Ark. 886, 171 S.W. 2d 470; 12 McQuillan, Municipal Corporations 483, § 35.37a.
I do not disagree with the majority opinion in any respect. I simply feel compelled to express these additional views.