Interstate Telephone Cooperative, Inc. v. Public Utilities Commission

not admissi- is not relevant is way idence which already home two-thirds dants 19-12-2. ble.” SDCL only negligence is left. and clear free simply Therefore, instruction was damaging, harmful error.

superfluous but fact, sponte jury instruction this sua the other with itself and with

inconsistent negligence. As indicated

jury on instructions

above, jury that Defendants were it tells the any ... statute to have violated

not “shown (Em- dog.” TELEPHONE ... restraint of a INTERSTATE relating to COOPERATIVE, INC., added.) to include phasis This seems Appellant, ordinary negligence statutory codification provides: 20-9-1 which set forth injury to Every person responsible UTILITIES COMMISSION PUBLIC property, of another person, the STATE OF SOUTH OF by his acts or caused caused his willful DAKOTA, Appellee, skill, subject in ordinary care or

want contribu- cases to the defense of the latter negligence. tory COMPANY, TELEPHONE BROOKINGS OF BROOKINGS MUNIC A DIVISION words, instructions cor- while the other Ap UTILITIES, IPAL Intervenor jury negligence, rectly to consider told pellee. jury that incorrectly told the this instruction No. 18182. dog relating to the restraint of negligence already and Defendants had been considered Dakota. Supreme Court South statutory negligence. There- free from were fore, inconsis- sponte this sua instruction was 1993. on Briefs Oct. Considered jury in- itself and with the other tent with Reassigned April negligence. structions 29, 1994. Decided June trial court to Finally, it was error for the testimony concerning conduct of permit dog. Plaintiff owned

Plaintiffs Whether bearing presented

dog had no on the issues objected to on properly

at trial. This was relevancy

grounds of on two occasions. objections. This

trial court overruled both

was error. defines “relevant evidence” 19-12-1 tendency make having any “evidence any conse- fact that is of

the existence action determination of the

quence to the probable than it would probable or less

more Plaintiff the evidence.” Whether

be without so, of that dog the conduct

owned a “tendency to make absolutely

dog, had NO conse- fact that is of

the existence of the action

quence to the determination probable than would probable

more less 19-12-1. evidence.” SDCL

be without the

Therefore, “Ev- was irrelevant. the evidence Ulmer,

Thomas W. Hertz Hertz & Bertsch, Menno, appellant. Erickson, Helsper of Helsper Richard J. O’Brien, Brookings, appellee Brook- ings Telephone Co. (on

SABERS, reassignment). Justice Telephone Cooperative appeals from the circuit court’s affirmance of Public Utili- setting ties Commission’s decision new ser- vice area. We affirm.

FACTS (ITC), Cooperative Interstate formerly Brookmgs-Lake Telephone Compa- ny, offers telecommunications services within service areas defined the South Dakota (PUC). Public Utilities Commission portion of ITC’s area relevant to this surrounds, excludes, specifically case but City Brookings, South Dakota. Municipal Telephone Company (Telephone Company), matter, Intervenor City vides services for the Brookings (Brookings). Brookings grows, parcels

As it annexes outlying properties. The record reveals that 1958, at since least fifteen annexations of multiple occurred, parcels signifi land cantly expanding Brookings city limits. challenge See SDCL 9^4-1. ITC does not right Brookings proper to annex these ties, challenges but loss of service area to Telephone Company. Telephone Compa ny petitioned has the PUC to revise the assigned telephone service areas as the city Brookings’ limits continue to encroach on ITC’s service This areas. has resulted in disputes litigation between the two enti resulting ties several decisions. See City Tel. Lake S.D. [Brookings I]; Brookings-Lake Tel. Co. v. Brookings, 430 [Brookings II].

The most recent annexations involve four parcels of land. One Parcel is reserved as a (S.D.1986). fu- make same re No We landing airport. near the zone clear agency’s of the administrative anticipated view ture by any pre unaided the circuit small as did Two and Three are parcel. Parcels was sumption that the circuit court’s decision containing one each properties, Templeton, re 403 no N.W.2d Company claims correct. Telephone customer. (S.D.1987) Bell, signifi- Northwestern rights parcels. The to those Four, 415-16; v. at Raml Jenkins Method dispute is Parcel N.W.2d property in this cant (S.D. Home, Brookings, 242-43 side ist N.W.2d large tract on the east of 1986)). Questions fully as of law are reviewa fronting on and Interstate described ble, given agency’s to Holiday Inn with no deference the “diagonally across” from City of Brookings law. In re State & Sales conclusions and Convention Center. Motel Quality Repair February in Liab. Serv. Railcar this Tax purchased of (S.D.1989) Brookings Corp., in 437 N.W.2d 210-11 parcel to and annexed the Labor, Four, Dep’t (citing Permann v. as the March 1991. Parcel known of (S.D.1987)); see West Property,” is for N.W.2d also U.S. “Industrial Park reserved Comm’n, Comm'n., Inc. Public Util. and is v. development industrial available (S.D.1993). 115, 122-23 We note wishing in N.W.2d to locate prospective businesses disput none of the of this facts case Brookings. parties. ed annexations, Tele Following recent request phone Company filed a with 1. Res Judicata to revise to transfer

PUC the service area rights Parcel from ITC the service Four Telephone Company PUC2 and decision, In a Telephone Company. judicata prohib urge that the doctrine of res granted Telephone re Company’s the PUC issues our consideration of the substantive and quest. According to the PUC’s Decision particular, urged case. in this Order, this decision of agency our affirmance of determination Brookings provided 430 N.W.2d posi in prohibits II Com precedent for its decision this case. by either or this court. The tion with missioner Laska dissented Schoenfelder judicata applicable res doctrine of part writing, stating in judicata situation. The doctrine res loss Company compensate for the should ITC prevent relitigation of actual issues serves rights. litigated or could have raised ly which been deci- The circuit affirmed the PUC’s court Black in a action. and determined appeals. sion. Indus., Jewelry Felco Mfg. Hills v. Jewel (S.D.1983) (cita Inc., STANDARD OF REVIEW omitted). same It is true that tions appeal as were governed in this parties The involved standard review I In re involved both by SDCL 1-26-361 and 1-26-37. Nevertheless, appeal differ- II. involves Bell Tel. Northwestern (5) Clearly light of entire evi- provides: erroneous in 1-26-36 record; give great weight or court to the find- dence The shall ings (6) made inferences drawn Arbitrary capricious or or characterized questions may The affirm the on of fact. clearly or unwarranted abuse discretion or case for remand the exercise discretion. proceedings. The court reverse further findings of fact and A court shall enter its own modify substantial findings may affirm the conclusions of law or prejudiced appellant because the have been part conclusions entered inferences, findings, conclu- judgment. costs circuit court award sions, or are: decisions chapter specified in the amount maimer (1) statutory In violation of constitutional 15-17. provisions; (2) statutory authority of the In excess of the matter, relying brief in this 2. The filed no agency; Telephone Company defend deci- the PUC’s upon procedure; Made unlawful law; Affected error of sion. other land, point at a later ous or related parcels ent time. stance similar issues could issues, altered, considering although he was Although similar disturbed at we are easily how the certified franchise service ter- they do not arise from the same set facts. See, Rausch, changed, simply by can ritories annex- e.g., Hoven v. Bank of ation. The #2 PUC’s Conclusion of Law (bringing second ac N.W.2d 263 states: involving payment tion for bank the same debt); Jewelry, note and Black Hills The Commission’s Decision Order in (bringing law common trade Docket F-3555 and the Court’s infringement involving mark action the same Brookings- affirmance of that decision in facts, statutory after earlier trademark in Telephone Company Lake decided); fringement was case Butler Bros. Brookings, 430 N.W.2d 575 (S.D. Mason, S.D. N.W. precedent vide for its in this dock- decision 1928) (questioning whether bulk sales act et. transaction). applied to the same In the “prece- This is a that clear statement the ease, wrong the for which redress is of dent” the 1988 case served central as a sought wrong the same which pres- rationale for the PUC’s sought in redress was the earlier action.3 ent matter. In a letter filed with this Benham, Melbourn v. 292 N.W.2d 337- general argue PUC’s counsel to continues (S.D.1980). Especially in the administra II Brookings that is “determinative” and setting, judicata tive note we that “res is at appeal.”4 “controls this Whether an admin- foreclosing in best a second determination precedent, istrative is bound such fact,” of of issues rather than of issues law— embodying application the of stare decisis in Culp presented as are here. Kenneth law, important the field is Davis, § 21:2 Administkative Law Tkeatise law, question in this decision. This is (2d 1983). at 49 ed. fully reviewable this court. judicial In setting, previously the decided

2. Precedent questions involving of law similar fact situa- value, ITC provide precedential claims the decision of the PUC in tions often em- part matter bodying concept was based in on error of stare decisis. Both law, being the error that our repeatedly federal and courts have state not- Brookings controlling ed, however, II is in this that administrative incorrectly and that matter the PUC felt applies bound as it decisis to strictly by precedent. bound At the time decisions. The U.S. Su- hearing, that, preme the PUC commissioners agency’s were Court has stated “An by general informed counsel for the may PUC view of what is precedent” that there “clear change, was and since either with or without a similar,” very application “the facts are circumstances.” Motor Vehicle Ass’n Mfrs. States, Inc., Telephone Company granted. should be the United v. State Farm vote, casting When 29, 57, his at least one of the Mutual Auto. Ins. expressed PUC commissioners his feeling S.Ct. 77 L.Ed.2d (citation omitted). that there was not “much latitude” and that See also Alma v. impression States, he was under previ- F.Supp. United Describing Thus, judicata, example, subsequent the doctrine of res one as an if to our deci- II, administrative law (now ITC) treatise stated: Brookings-Lake sion in judicata conclusive, judgment brought In res the first is had another action on those same facts only actually not litigated, all matters which were raising but a new issue that could have been but all matters which could have facts, judicata apply decided on those res would litigated. been This is because the effect of the bar second action. judgment extinguish first was to the cause of subsequent action. Where suit is on a dif- (May 4. Letter from S.D. Public Util. Comm’n action, principles cause cannot ferent 1993) (informing the PUC would not operate. Telephone Company file a brief H. Charles Koch, Jr, Administrative Law and decision). defend the PUC added). § (emphasis 6.63 Practice (“An unequivocally by that (S.D.Ga.1990) it was bound not forever claim agency is determinations, precedent. as its view may change, public interest is in the what facts and circumstances Under different not.”). if the circumstances do even legislative intent with both “consistent underlying policy considerations and the

3. Decision competing in- balancing the the statutes for II, decided that this court involved,” of an the PUC’s definition terests ITC, any, surround right of if tele- “occupied and served another area right, very qualified ing municipality is a company” communications serving it is fact only to ITC if available particular the facts of a changed. Id. When annexed. in the area customer competing inter- those tip case the balance of effect, a customer ests, modify its choose to annexed, prop it has no absolute area to be such modification could definition—and erty right See area. PUC, how- appealed to court. Until the (“SDCL 49-31-20 limits at 578 ever, 49- called, upon interpret telephone services City’s ability expand amended, 49-31-21 as occupied or areas which Brookings into annexed in II stands affirmed definition telephone by company- another precedent. served ‘occupied by area is served [A]n annexed in the area is not a customer company,’ under another telecommunications in property right it has no annexed AND 49-31-20, when a SDCL Therefore, prop- this a matter that area. in the already one or more customers serves by and the PUC erly regulated the PUC area.”). fully reviewed This annexed The of this case regulated properly. facts 49-31-20, that PUC’s and concluded Brookings by precedent of are controlled “con 49-31-20 was

interpretation We II the 2-1 decision PUC. legislative intent and with both the sistent affirm. underlying policy considerations balancing competing inter for statutes J., HENDERSON, C.J., MILLER, N.W.2d at 578. There ests involved.” 430 concur. reasons, fore, court affirmed this those JJ., AMUNDSON, dissent. II5 Brookings in WUEST PUC WUEST, (dissenting). Justice ease, majority of the PUC this Utilities Commission 1. The Public modify pre not to their Commissioners chose in simi- by precedent a properly bound “occu viously definition of an area affirmed lar matter. by pied another telecommunica and served an is whether company” pivotal 49-31-20. Id. issue in this case under SDCL The tions com- case, agency—a public its opinion in the PUC stated its II, protection of the charged with the Brookings and this mission previous in decision by precedent affirmance, pre consuming public—is bound provided subsequent court’s case, In the a similar matter. of law—it did not for its conclusion cedent stock, controlling bonds a hold we II: 5. As stated com- by Coop assets of another telecommunications interpretation or offered switch, line, expansion owning competing ex- preclude pany further a areas, newly into annexed change facilities. or other telecommunications Coop's by city entire is surrounded since the person may commission an file with the A prohibition an Such absolute service area. merge application or telecom- to consolidate provisions with the would be inconsistent companies. If the commission munications 9-41. and SDCL SDCL 49-31 and, investigation, with or notice finds after an at N.W.2d 578. without, hearing public interest that the merg- rewritten 1992 and the consolidation was will be benefited SDCL 49-31-20 provides: er, permit grant- may now a issue the commission person merger. who owns telecommunications ing No the consolidation with or in this state consolidate facilities precedent record shows members vide this dock- strictly incorrectly by precedent. felt et. Thus, decision of the in this matter added.) (Emphasis Only Commissioner on an error law. This error is

was based Schoenfelder stated she “was not con- majority’s compounded refusal to al- overturning precedent” cerned about when low the commissioners to decide this matter dissenting she her east vote. unbounded the shackles of stare decisis. noted in opinion, As the U.S. The record shows the two PUC mem- Supreme Court an has stated that adminis voting bers favor the transfer felt that trative view of what they do were bound to so interest,” “is even when the change. circumstances do not Motor Vehicle hearing, 575. At the time of the Ass’n, S.Ct. at Mfrs. the commissioners were advised PUC’s Likewise, 77 L.Ed.2d at 466. state courts general counsel: facing this issue have made similar determi that, nations. Does the Commission want to Wisconsin courts have noted deliberate “Quasi-judicial agencies this? Let me such as the make Public recommendation subject first, Service Commission are not and then we can to rule decide whether or First, Light decisis[.]” not want to Power we deliberate. I Wisconsin & believe Wis., Co. v. Public precedent [citing there’s clear Serv. Comm’n this issue (App.1989) This is Wis.2d II]. one of those rare Galecki, Union Bank eases where we have even State Bank Court Comm’r, ing for the I Commission’s decision. Wis.2d Further, (App.1987)). very agency may think the similar to that facts only “reopen prior Therefore, decision. and reconsider its the Commission orders particular grant problem ... application adopt but it [Telephone should also matter, Company] in entertain a different view of the also. law subsequent Bank, cases.” Union State 417 added.) Thus, (Emphasis based counsel’s (citing N.W.2d 63 Dep’t Fond du Lac v. advice that precedent” there was “clear Resources, 620, Natural 45 Wis.2d 173 very since “the facts are similar” commis- 605, (1970); N.W.2d 608 State ex rel. Schleck sioners did not deliberate but cast their votes Zoning v. App., 42, Bd. 254 Wis. 35 immediately. vote, casting When his one of 312, (1948)). 313 See also Nick v. (Chairman Burg) PUC commissioners Comm’n, Hwy. 489, State 21 Wis.2d 124 “I am stated: disturbed the ease with 574, (1963), denied, 577 cert. 376 U.S. which I think certified being territories are 963, 1125, (1964) 84 S.Ct. 11 L.Ed.2d 981 shifted, able to be but I think as [PUC] (stating that an administrative is not said, counsel that was set ... / prior determinations); bound its Robert gives don’t believe us much latitude at this Transp. Comm’n, son Co. v. Public Serv. 39 added.) (Emphasis time[J” Commissioner 653, (1968) (holding Wis.2d 159 N.W.2d 636 past Stofferahn also upon voted “based Com- that arising inconsistencies determinations precedent.” mission Clearly, both by comparison proof not are of arbitrariness incorrectly PUC members felt bound eaprieiousness). precedent. As noted in the opinion, both the PUC Conclusion of Similarly, Law Supreme Court of Utah has # 2 and the letter from PUC counsel indicate public discussed the role aof service commis- “precedent” served as the basis for the sion a decision-making body: decision. The PUC’s Conclusion of # 2 Law must, do, agencies Administrative states: power prior overrule a

The Commission’s Decision and Order in doing when there is a reasonable basis for Docket F-3555 and Court’s so- an “Certainly agen- administrative affirmance of that Brookings- cy duty decision in protect which has a public Lake Company v. ought precluded interest not be im- from Brookings, 430 N.W.2d 575 proving its collective mind should it find

755 Culp (1980) (quoting 1254 from Kenneth not now in accor- prior decision is § Davis, idea what the 18.09 its dance with Law Tkeatise AdministRative added). (1958)) (emphasis at 610 See also public requires.” interest of Nev., Cargo v. Comm’n Motor Public Serv. Cong. v. Mountain States Salt Lake Citizens 335, 1328, 108 P.2d 1330 Nev. 830 (Utah Co., 1245, P.2d 1258 Tel. & Tel. (noting to follow that failure some deci 1992) Reaveley v. Serv. (quoting Public an sions is not abuse discretion because Comm’n, 797, 237, 436 20 Utah 2d P.2d agencies bound not added)). (1968) (emphasis See also Williams Sale, decisis); Ark. stare Central Auction Utah, 41, P.2d Public Comm’n v. Serv. (8th 724, Bergland, F.2d Inc. v. 1988) (Utah (stating that administrative denied, 957, Cir.1978), cert. 436 U.S. 98 S.Ct. free of limitations of stare deci- 57 L.Ed.2d 1121 NLRB v. (cit- setting) apply judicial they sis as Co., Aerospace Bell Culp Davis, AdministRative ing Kenneth (1974); NLRB v. S.Ct. L.Ed.2d 20.9, 31-33; § §§ 20.- Law TREATISE 759, 765-66, Wyman-Gordon (2d 1983); 2 at 37-43 ed. Am.JuR.2d Ad- 1426, 1429-30, 22 L.Ed.2d 709 89 S.Ct. (1962)). § ministrative Law 478 (1969)) (“[A]n agency precluded is not from impor- A California court discussed adjudicative announcing principles new why agency con- tance of an administrative proceeding.”); Citizens Util. Co. Ill. public interest cerned with the not be bound Comm’n, Ill.App.3d Illinois Commerce by stare decisis: (1987), 105 Ill.Dec. 504 N.E.2d 1367 with An administrative concerned aff'd, 124 Ill.2d Ill.Dec. furtherance of the interest (1987) (stating “an adminis N.E.2d 510 rigid precedent. bound to adherence to absolutely trative “The what [agency’s] view of is best adjust “may prior determinations” time policies light experi standards and change, time. themselves Commissioners ence”). differ, experi- underlying philosophies recognized long the value This court “has changes.” [Citations ence dictates often decisis]; but at the [of of this doctrine omitted.] to its same time we have been blind Indeed, properly government could not premise being har- theoretical inherent of were bound in function administrators mony public policy.” Hunt v. with extant determinations, perpetuity to initial and (S.D.1981). Hunt, 818, 822 As 309 N.W.2d input experience of and the of lessons by present Miller: noted Chief Justice not personnel could influence and varied disposition just a What be considered policy. government enrich history may a at of dispute of one state Garamendi, Am. v. Ins. Ins. Co. of Safeco social, considering stage, be at another 1428, Comm’r, 14 Cal.Rptr.2d Cal.App.4th 21 society. conditions of economic other (2 621, Dist.1992), granted, 18 rev. Cal. was not principle stare decisis of (1993) 129, (emphasis Rptr.2d 848 P.2d keep stranglehold develop- meant to a added). Similarly, Supreme Idaho Court values, responsive new ments which are to quoted approval from an administrative with “ experiences and circumstances. purpose reg is one of ‘[w]hen law treatise: Owen, (S.D. action, merely ulatory distinguished as from Owen v. 1989) Sabers, JJ., (Miller, facts, policy past agency Henderson applying law or Mey v. concurring specially) (quoting steps at times to take such must all be free Hofer er, 333, 337-38 proper irre 295 N.W.2d in the circumstances Cir.J., (Wuest, concurring specially)). How past spective of its decisions. Even when ever, same, majority will have the effect opinion administrative un conditions remain putting “stranglehold” a on our state ad may change, derstanding those conditions ’” agencies charged with to act. ministrative agency and the must free agency an public Once an Idaho interest. Washington Water Power Co. v. Pub. 567, 1242, decision, affirmed Comm’n, especially if it is P.2d nounces a 101 Idaho Util. merits, appeal, agency its a court on will be and make light decisions in forever. that decision what course of action best serves the primary purpose at that time. “The Any agency fears that an administrative public utility laws in this state is the change position can its on a whim un- protection consuming public.” Wis holding courts founded. State adminis- Decade, consin Environ. Inc. v. Public Serv. not bound trative stare deci- of Wis., Comm’n 81 Wis.2d emphasized agency may sis have that an (citations omitted). an A position arbitrarily issue capriciously. agency When alters its should not be “forever issue, the court uphold stance on an should bound” to its own This determinations. precedent departure from if the properly matter should be reversed and re explanation” gives a “reasoned the new manded to reconsideration. Alma, position. City 744 F.Supp at 1561. Ass’n, See Motor Vehicle 463 U.S. Mfrs. 2. The service terri- transfer certificated S.Ct. at L.Ed.2d at 466 tory telephone company one to an- from (stating agency changing that “an its course taking other constitutes a valuable supply analysis”). must Depar- a reasoned property, thereby requiring process due precedent “explicitly tures from should be just compensation. rationally justified.” Michigan v. Thom urges right provide as, (6th Cir.1986) (citing 805 F.2d area, service in an even where there are no Atchison, Topeka Ry. Santa Fe & Co. customers, valuable Trade, 800, 808, Wichita Bd. right. such, As the transfer of those service 2367, 2375, S.Ct. 37 L.Ed.2d 350 (plu rights Telephone Company constitutes a rality opinion); Freight, Ohio Fast Inc. v. taking, subject which must be to consider- States, (6th United 574 F.2d Cir. process just ations of compensation. due 1978)). Further, departures dissenting opinion of Commissioner arbitrary capricious. should not be In re Schoenfelder, she stated: Peoples Natural Gas 615 (Minn.App.1987); Citizens Util. Co. Court, [The PUC] and Ill., 105 Ill.Dec. N.E.2d at 1370.1 decisions, their have failed to con- sider the property interests or the value This decision not improperly em- future service that a telecommunica- power the PUC or other state adminis- tions has in assigned territo- trative overturn rule of law made ry[J though territory Even may not by this court. As stated the PUC’s Con- presently any customers, assigned all (as quoted clusion of # 2 Law potential territories have the for future opinion) we a PUC decision in affirmed growth. potential customer growth Such is, Brookings II. applied That is of assigned value to the that is standard of review as found in SDCL 1-26- 36, territory and should be considered and agency determined that the compensated and whenever a company’s was not in error. A opposite, different or away[.] are taken agency may have likewise passed muster our under standards of re- Telephone Company argues that because view. Affirmance of decision is right provide telephone a necessarily a statement this court that given an unqualified area is not property decision is the law. right, that there has been no taking prop-

The PUC erty commissioners should be free to this case. The opinion consider each matter that wrongly comes before it on holds that because ITC is not serv- Similarly, another administrative capriciously arbitrarily. recog- law treatise or The courts states: agencies nize must be free to actions; are, otherwise, policies general, Administrative and en- effective [the] [of doctrine forcement decisis]. of statutes will be An frustrated. change prior rulings is free to § and 40.02 Stein al„ Jacob A. et Administrative Law long (1992). decisions so as such action is not done at 40-19 to -20 annexed, life, liberty property pro- in the area to be without due mg a customer thus, ‘[pjrivate property cess of law1 and that no property right”; due has no “absolute use, damaged, shall be taken for just process compensation are not forth- ” just compensation....’ without U.S. West coming to ITC. Commun., (quoting 505 N.W.2d at 126 n. 24 property In a of the nature of discussion Const, VI, 2, 13; citing §§ S.D. art. property rights, Judge Posner noted that Chicago, Burlington Quincy & R.R. v.Co. “property process the due clause is under Chicago, 166 17 S.Ct. 41 L.Ed. U.S. government giv- a has interest which Const, (1897) (noting that U.S. amend. V an entitlement.” Patterson v. en someone prohibition against taking private property (7th Cir.1988) Portch, 853 F.2d just compensation applicable without is made added) (emphasis Regents v. Board of Const, XIV.)). to the states via U.S. amend. Roth, 564, 577-78, 92 S.Ct. South Dakota statutes set out “due (1972)). pre- 33 L.Ed.2d 548 We have cess” to be followed when one com- viously granted noted that a to a franchise pany desires to extend its service area into telephone company “constitutes a valuable[] telephone company. that of another right,” alienable and taxable even language 49-31-21.2 Pertinent of the statute perpetual where it is not or exclusive in states: I, nature. 177 N.W.2d at 491. proposed facility If the location of a inis Similarly, the U.S. Court has stated exchange territory [previously] the local right city to use the of a streets assigned telephone company], another [to operate telephone company property; a proposed the commission allow the such, taxable, it was alienable and transfer- facility only upon finding the additional able. Louisville v. Cumberland Tel. exchange company operating that the local 649, 661, & Tel. 32 S.Ct. existing facility furnishing rea- (1912). 56 L.Ed. The court sonably adequate telecommunications ser- stated: reasonably vice and will not ade- furnish considering the duration of such a fran- quate service within a reasonable time. necessary it is chise to consider that added). (emphasis SDCL 49-31-21 We have telephone system operated cannot with- apply held that 49-31-21 does to a conduits, poles, out the use of wires municipal telephone company. Brookings permanent fixtures. These structures are at 577. See SDCL 49-31-2 require large in their nature and invest- (stating ap- that telecommunications statutes ment for their erection and construction. ply companies). to all telecommunications say right To to maintain these However, necessity making PUC’s will, appliances ... could be revoked at finding” easily such an circum- “additional purpose ... defeat the State’s vented in the circumstances of the telephone system secure use. case, by annexing parcel a vacant of land For, manifestly, no one would have been 9-4-1; under SDCL and because of SDCL willing heavy expense to incur the of in- 9-41-1, city which authorizes a to establish a stalling necessary costly fixtures system “for inhabitants.” they city were removable at will of the non-municipal telephone compa- Where two utility plant and the and value of the entire areas, adjacent nies are one cannot destroyed. thereby previously assigned claim vacant land to the 663-64, 32 S.Ct. at 56 L.Ed. territory, simply by an second as its at 940. procedure. protections The annexation recently imply legis- and -21 We reiterated that our Constitu- SDCL 49-31-20 “ provides, person deprived assigned telephone franchise ‘[n]o tion shall be lature viewed statute, company[.]” 2. A related was revised er telecommunications The PUC 49-31-20 statute, language in 1992. Prior in exis- "occupied meant that at found that and served" inception dispute, at the of this stated that tence already least one customer must exist in the telephone company may a new not move into a territory. Brookings 430 N.W.2d at 578. territory "already occupied and served anoth- property right, service areas as a valuable precluded that ITC will be from participating any transfer which from one growth in demand for telecommunica- company to another must be accorded due tions services in the area. The process. legislature could not have in- majority opinion assures that ITC will be meaningless tended these statutes to become precluded participation any such municipal simply telephone compa- because a growth in the surrounding Brookings. area ny is involved. Assigned service area potential with the for growth future and revenue is a valuable The record attempts shows that ITC property right. The PUC “exercise plan growth significant for future and makes powers necessary properly supervise and plant equipment investment provide control” companies. SDCL 49-31- present service to and future customers. As 3. This case should be remanded so that the pointed dissenting member, out PUC may properly apply process the due encompassed by the land Parcel Four—the protections afforded SDCL 49-31-20 Property—was Industrial Park previously -21, proceedings and hold to determine assigned within ITC’s Any service area. just compensation the amount of paid to be businesses that would have located on this any taking to ITC for assigned of its customers, would have been ITC area. potentially large ITC, sources of revenue until the annexation and transfer of service AMUNDSON, J., joins this dissent.

area to Company. Rather than plan any growth any or make

related investments under

scheme—and under the decision announced opinion—ITC might do better simply surrender presently as-

signed service near Brookings area to Tele- now,

phone Company history has shown

Case Details

Case Name: Interstate Telephone Cooperative, Inc. v. Public Utilities Commission

Court Name: South Dakota Supreme Court

Date Published: Jun 29, 1994

Citation: 518 N.W.2d 749

Docket Number: 18182

Court Abbreviation: S.D.