210 F. 667 | D. Or. | 1914
The court has not been able to formulate a written opinion owing to the fact that the last brief in the case was not filed until Friday afternoon. However, I have reached a conclusion in the matter, and in order that there may be no unnecessary delay I feel that I should announce it this morning.
The suit is brought to enjoin the enforcement of.an ordinance of the city, adopted November 5, 1913, requiring street railway companies within the city engaged in the transportation of passengers to sell six tickets for 25 cents', and to provide conductors with such tickets for sale whenever demanded by a passenger, upon payment of the price specified. Upon the filing of the bill an order was made requiring the defendant to appear and show cause why a preliminary injunction should not issue. In obedience to this order the defendant appeared and filed a motion 'to dismiss the complaint on the ground that the court was without jurisdiction and because it does not state facts sufficient to constitute a cause of suit.
Again, it is claimed that the ordinance in question if enforced will deprive the plaintiff of its property without due process of law, and therefore violates the fourteenth amendment to the federal Constitution because the city has no authority to pass such an ordinance, since the amendment to the charter, under which it was enacted, is in conflict with the Utility Laws of the state and therefore void. This also presents a federal question under the recent case of Home Tel. & Tel. Co. v. Los Angeles, 227 U. S. 278, 33 Sup. Ct. 312, 57 L. Ed. 510, and gives this court jurisdiction. In that case it is said that:
“The fourteenth amendment provides * * * for a case where one who is in possession of state power uses that power to the doing of the wrongs which the amendment forbids even although the consummation of the wrong may not be within the powers possessed if the commission of the wrong itself is rendered possible or is efficiently aided by the state authority lodged in the wrongdoer. That is to say, the theory of the amendment is that, where an officer or other representative of a state in the exercise of the authority with which he is clothed misuses the power possessed to do a wrong forbidden by the amendment, inquiry concerning whether the state has authorized the wrong is irrelevant, and the federal judicial power is competent to afford redress for the wrong by dealing with, the officer and the result of his exertion of power.”
Again, it is claimed that the rates fixed by the ordinance are confiscatory and will deny the company a reasonable return on its investment and therefore, deprive it of its property without due process of law. This presents a federal question, and, if the averments of the bill are sufficient to state a cause of action, plaintiff is entitled to be heard upon this point.
And, finally, it is claimed that the penalties provided in the ordinance are so excessive as to prevent persons affected thereby from resorting to the courts for the purpose of determining the validity of the ordinance, and they are therefore denied the equal protection of the
As already said, no answer has been filed, but the case has been submitted on a motion to dismiss, which serves the purpose of a demurrer. The allegations of the complaint must therefore be taken as true, and if it states facts sufficient to constitute a cause of suit the plaintiff is. entitled to the preliminary injunction prayed for.
I doubt whether the complaint as amended states facts sufficient to show that the rates as fixed by the city will be confiscatory. The value of plaintiff’s property devoted to street railway purposes within the city is stated in the complaint, but it is silent as to the income derived therefrom or the operating expenses. The only averment in that connection is that from the present revenues the plaintiff is earning only a certain per cent, on its investment. This is but a conclusion, and under the recent decisions of the Supreme Court in the Minnesota and kindred -rate cases is not sufficient. The omission in the complaint is probably due to an error of some amanuensis in copying the amendment. In the original bill it was alleged that the total revenues of the company for the year ending June 30, 1913, were $3,577,627.94, and the total expenses, including taxes, fixed charges, etc., for the same period, were $2,878,263.56, leaving a net revenue of $499,364.38, being an income of about 4 per cent, on the $12,284,487, the alleged present value of the railway plant within the city. But these averments are omitted from the amended bill, no doubt by an oversight in drafting the amendment. Nor do the affidavits filed give any data upon which the court could proceed in this connection. An affidavit filed on behalf .of the city shows that from the reports of the company filed with the city auditor the revenues for the year preceding the filing of the bill were $4,012,706.78, and the expenses $2,183,698.34, leaving a net revenue of $1,829,008.44. But upon attention being called to alleged errors in this statement, a supplemental affidavit was filed, in which the operating expenses are undertaken to be stated in detail, and as so stated show that the total was $4,214,434.09, or in all $200,000 more than the income. It is apparent therefore that there must be some error in these affidavits. The operating expenses, as stated in the last affidavit, probably include those of the entire system.
Now, the right to regulate rates of public service corporations is a governmental power vested in the state in its sovereign capacity. It may be exercised by the state directly or through a commission appointed by it, or it may delegate such power to a municipality. But I do not understand that a municipality may assume to itself such power without .the consent of the state where there is a general law on the ¿subject emanating from the entire state. It is true that under the Oregon system the legal voters of every city or town are given power to enact and amend their municipal charter, subject to the Constitution and criminal laws of the state. But this does not authorize the people of a city to amend its charter so as to confer upon the municipality powers beyond what are purely municipal or inconsistent with a general law of the state constitutionally enacted. Straw v. Harris, 54 Or. 424, 103 Pac. 777, and Kiernan v. Portland, 57 Or. 454, 111 Pac. 379, 112 Pac. 402, 37 L. R. A. (N. S.) 339. It was so held by the Supreme Court of the state in Riggs v. City of Grants Pass, 134 Pac. 776, where a city attempted to amend its charter so as to authorize its council to incur an indebtedness for the building of railroads. The regulation of fares to be charged by public service corporations is not primarily a municipal matter, but is a sovereign right belonging to the state in its sovereign capacity. All authority over the subject must emanate from the state. The effect of the amendment to the charter of the city of Portland is an attempt to ignore the state authority' and to assume sovereign rights superior and contrary to the expressed will of the state as manifested in its legislation. If the amendment is valid and takes the public utilities within the city of Portland out of the operation of the Public Utility Act and the jurisdiction of the commission, created by it, then every municipality in the state may amend its charter with like effect, and .the Public Utility Act will become a useless and emasculated piece of legislation, the will of the entire people as expressed therein be practically ignored, and the people of a part of the state become greater than the whole. The Public Utility Act was not only passed by the Legislature but approved by a majority of the people on a referendum vote. It is therefore the expressed will of the sovereign power of the state concerning a subject over which it has jurisdiction, and it cannot be amended or abrogated by the people of a particular or given locality. The purpose was to provide a uniform system throughout the entire state for the control and regulation of public utilities and fixing the rates to be charged by them, and to create a tribunal for that purpose. It is true the Public Utility Act does recognize the authority of municipalities over public service corporations within its boundaries for certain purposes, but not in the matter of regulating or prescribing rates or fares. That power is vested alone in the Public Service Commission.
Now, Portland, or the people of Portland, are not without remedy if the rate charged by the plaintiff is unreasonable or unjust. They have a full and complete remedy by application to the tribunal created