*1 сlearly arose under the just. those cases and But recognized stand- and stated the be- Act, contains no distinction which Natural Gas Hope and reason- tween the true holding of the except be case that rates ards equivalent application and the no universal in Act of its doctrine There is able. situations, regardless presence stat- to all 7 of the paragraphs 6 and in governing It does not statutes consideration. of standards which here ute under proceed any Act, in are absent Natural Gas require from the the Commission rates; appellees determining by is contended for particular in and manner by opinion how rate base sustained in as to Court’s contains no mandate Under case.6 shall be еstablished. Supreme Act, interpreted by as Gas By I wholly what think was an action any proceed the Commission unauthorized and District statute may even deter- may choose—it manner it terms, appellant in violation fact of its guess long
mine lot subjected —so has a substantial re- be of the rates cannot effect so established I agree duction. cannot what sеems to unreasonable. said to conception grossly me to he a erroneous equally act and erroneous regu- with a different But we deal here Supreme idea of Court’s decisions which, Court latory as this has said statute Pipeline Hope the Natural Gas cases. how to heretofore, directs definite, spe- proceed. presencе of In the standards, principle of statutory cific Hope cases commission apply, not action
does is standards observe those does harms, invalid if even if it does not
fiscate. however, in majority say, the Court’s utility cannot opinion in case that UTILITIES UNITED STATES PUBLIC complain show the does because it DISTRICT OF OF COMMISSION observing without established et al. COLUMBIA confiscatory in statutory procedure to be No. 8995. agree, I if this case had effect. would Appeals Act or some under the Natural ".risen Columbia. District of containing standards ex be reasonable cept that end result Argued April 8, 1946. proceeds But just. when a July 16, Decided statute, governing defiance its ac of its regulation. unauthorized amounts to Opinions Filed Nov. regulation unlawful, if the Unauthorized property, utility deprived even deprivation is
though short of confisca Stone, tion. The late Chief in his Justice Interstate Gas
dissent Colorado Commission, 324 Federal Power laid Interstate down principle Co. the Colorado said case, late Justice case. Chief regulation “But such may, diminution in value utility “Authorized regulation, return, diminu- caused unauthorized course, permissiblе result without is unlawful consti- income, pro- tion of values and reference property * * regulation *. far so tutional So principles. vided the exceed regulation deprives the unauthorized pe- be ‘con- constitutional limitations damage property, deprivation titioner fiscatory’. Hence, loss or caused regulation gives saying if that, cannot au- by authorized rise utility wrong regulation thorized, it would not violate the to no Consti- actionable limitations. tution.” within Such constitutional *2 Justice, Associate dis-
senting. also,
See, 80 U.S.App.D.C. 151 F.2d Taylor, Attorney, Mr. Marvin Depart- C. Justice, C., Washington, ment of D. Curran, with whom Mr. Edward M. Attorney, C., Washington, D. argument, brief, the time was on the Attorney for the United States. Assistant appearance General Shea also entered his resigned the United States’ but before appeal was heard. Lloyd Harrison, Mr. B. Assistant Cor- Counsel, poration Columbia, District of C.,D. Washington, whom Mr. Vernon West, Corporation Counsel, E. District of Columbia, Washington, C.,D. was on brief, for Public Utilities Commission. Keech, Corporation Mr. Richmond B. Counsel, Columbia, District of of Wash- ington, C.,D. at the time record was filed, appearance. entered also his Messrs. T. Moorе and S. Russell Justin Bowen, Washington, C., both of D. Laws, William whom Messrs. K. of Wash- Gibson, of C., urged ington, George D. It is D. brief,
Richmond, Va., period for Poto- scale for were on the in which operation permitted has been in Messrs. mac Electric Power Goff, pany exorbitant, to earn an Kelly E. Lee Henry Robert “unlawful” Wise profit expense *3 C., at the In also entered consumers. Washington, D. both of place the first we practical as note that a appearances for Potomac matter did result steady and substantial reduction in cost Lauderdale, Washing- of W. Mr. James power. of permissible electric The of rate Intervenor, Counsel, ton, C., People’s D. return Company to the was over reduced pro se. period years a оf with the accordance CLARK, EDGERTON, and Before general decline of interest and each MILLER, Associate K. WILBUR Justices. year one-half of the excess were set up reducing as the basis for consumer’s CLARK, Associate Justice. price schedules. ap of appeal, No. is one two This of It is course true that Com Public order peals an from pany surplus during сollected a sizable District of Columbia. years sliding-scale opera in which the opinion in the be found are to facts tive agree but we cannot that No. Potomac companion case “unlawfully” during all acted of these Public Utilities Electric Power years. example Columbia, We note for returns that of the District Commission of approved by - were D.C.-, In 521. U.S.App. F.2d 7% 7%% Supreme Court2 for all know we those appeal through two the United States returns, in relation to the common stock capacity agencies suing in their consum equity, perhaps larger large were as or that the Commission’s order ers contends enjoyed Pepeo over the sev those permits $29,000,000 some to re years. eral It seems us that court main an element in the base. These wrongful tindertaking invasion agencies using the of the United name territory properly regulatory re reserve States was ex contend that served for the Public Utilities power under from the consumers tracted say, Judge EDGERTON we were to “illegal prevailing in rates” accordance high proper, return on the believes that a оperation “sliding-scale plan” with the aof itself, is, equity in and of stock emerged common a consent decree ef from ample for retrospectively holding reason fected 1924.1 invalid rate schedules authorized States, The United consumer, as a makes many years. Commission over a course ingenious interesting a most only saying It is retroactively, which tends to cast considerable reflection rates extracted former were not on the Public Utilities Commission in the “just reasonable”, that can conclude responsibilities matter of its for protecting “surplus” of undistributed power unnecessarily high consumers from was an unlawful accumulation which could However, rates. agree we are unable to devoted sеrvice in such with United Judge States allowing fashion as to warrant Com that the Commission’s order pany to earn a return on it. law, invalid, as a is matter of for the rea- permits $29,000,000 far as son that some So concerns the States, remain as an seems to element in the us that the order, question rate base. is limited whether d 1182; right Angeles The Unite had its Los capacity up Corporаtion in the consumer Gas & Electric v. Railroad Commission, in this held court. States v. Pub U.S.App.D. lic Utilities Board of Telephone F.2d York C. v. New Commissioners 2 See, example, Lindheimer v. Illi 70 L. Telephone Co., nois Bell Ed. consumer, arbitrary (a) process public utility regula
as it affects the
establishing
capricious,
fraught
sundry
(b)
invalid as
ac
technical
counting,
On
policy
engineering,
that are
or unreasonable.
and financial
considerations,
properly
the record before us we cannot conclude
that have been
en
upsetting
bodies,
trusted to
and if
“ * * *
produced
to this there
mission’s Order.
point
result,
inquiry
is careful to
court the United States
is at
end”.6 It does
ap-
out,
Pepco’s
dismissal of
not follow
urging
high profits
from the fact of
re-
peal,
“and
ordered
“just”
that Order
there are
low or
rates.
amply justified
existing together
duction in
were
These two factors
would
findings
of fact.”
happy consequence
high
the Commission’s basic
to be a
*4
launched production
increasing
The attack of the United States
demanded
ever
of law”.3
squarely
consumption.
“error
ap
at what it terms
In the instant case it
Stаtes pears
power
do not believe that the
that
the
We
consumers in this
error
showing
locality enjoy
an
discharged
compare
burden of
rate schedules that
very
part
favorably
of the Commission.4
prevailing
of law on the
those-
adequate
may
to
profits
major
This,
course,
high
Proof of
cities.
is not
been as
has not
show that the Commission
an
to show thаt the rates should
driving
been in
vigilant
might have
lower,
as it
not be still
go
but it does
to establish
do not
Company’s
but
down the
high profits
that
rates
are
“error of law”
an
think that it establishes
prima
incompatible.
facie
remedy,
judicial
requiring
Looking
closely
more
“just and
properly be termed
charged can
“¡profits” aspect
case,
of this
we observe
question but that
Therе is
reasonable”.
that
Company’s
rates outran the Commis-
depends
cogency
for its
upon the relation
sion’s
to
them down
efforts
cut
under the
ship
to the common stock
“sliding-scale”
operated
as it has
for the
equity,
par
to the
value
the common
Likewise,
years.
several
well
stock, and to the amount which the Com
Commission,
take the view that the
as a
pany actually received for this stock and
working policy,
matter of
should have cut
plant
invested in
and facilities devoted to
deeply
adjustments
more
with its
in thé
“percentage” profit
service. The
“allowable rate of return”. The Commis-
figures
analysis
arrived at
such an
are
may justly
charged
being
con-
impressive
indeed
in the direction of show-
spicuously
stеady
unaware of a
trend
ing that the owners of the common stock
converged
aug-
economic
which
forces
to
extremely
However,
doing
have been
well.
power consumption
locality
ment
in this
analysis provides
types
but one of. the
Company,
and reduce unit costs to the
with-
of information
which the Commission
regard
out
factors of
must
efficientmаn-
agement.
justifiable
arriving
But all of this
into
criti-
take
account
at a “reason-
represents nothing more,
opin-
earnings,
cism
rate. Thése
in percentages,
able”
ion,
they
in judg-
meaningful only
than an attack
an “error
when
are related
body.5
capital
ment”
Such an
to
total
structure.
Commission,
error does not rise to
level of
an error This is a task for the
and wе
impose
of law.
do not think
that
court should
urged
that
It
scale ar-
Note Federal Power
rangement
incep-
Co.,
591, 602,
its
“was unlawful
always
tion,
281, 288,
and has
unlawful
L.Ed.
where
64 S.Ct.
“ * * *
said,
administration.”
Ho
who would
Light
Dayton
upset
&
See
the rate order under
Act car-
Commission,
heavy
making
ries the
burden
con-
Angeles
vincing showing
Los
it is
that
invalid because
Corporation
&
it
sequences.”
v. Railroad
in its
unreasonable
1180; Lindheimer
v. Illinois Bell
Federal Power
575, 586,
Tel.
L.Ed. 1182.
having
out
common stock
orders which fixed
became
annual
the rates
person
years
1939 more
final and conclusive when no
affect
during
1938 and
thereby
years
right
availed
of
during
ed
himself
available
those
Consequently
appeal.
rates
fixed be
payment
Gen-
so
such dividends.
for the
*
* *
periods
legal
during
for
erally
practice is came the
speaking
'
endure,
question
were to
and neither
open
serious
as to financial
party
nor
United States
soundness”.8
Decisions
1570;
phоne
Eisner v.
10
20 F.2d
Co., Cir.,
mission of Louisiana
specific point
F.2d
&
sioners v.
7
Sons
It
Securities
See
540;
is to be observed
Gibbons
&
Board
&
Telegraph
Macomber,
New
Flynn
Reports,
46
F.2d 54.
Eaton
entered this
Blair,
64
York
v.
issue here is reserved.
v. Haas
Exchange
Mahon,
Telephone
Vol.
363,
English
Cf.
Cumberland
App.D.C.
525;
521,
Railroad Com
70 L.Ed.
Bros.,
proceeding
pgs.
Geo.
where
& Mersick
while
9 A.L.R.
189,
Feick
Tele
Cir.,
808;
209,
271
26
pation of
it was not
note also that
for
come
several
cents,
Treasury Department
Works
entitled
tirely
“consumer”,
think,
such
specify
Paragraph
base.
solid front.
Agency
counsel
items,
use as
duty to
amount to
should be trimmed
Hence,
how much of the
take tho
proper
Commission’s
and the Commission was
were not
it did
might
specify,
Representatives
(D.C.Code 43-705).
clearest sort of usur-
thе Government
element
we were to hold
be taken
varying
in
make
present
agreement
it would
authority.
before
$29,000,000
dollars and
out.
from
evidence
Federal
it. We
This,
be-
en-
did
on
thereby
illegal.
affected
can brand them as
It
investment
in this stock.
All
arguments
being
government,
necessarily
all
follow that
based
question'
the mistaken idea that the orders on this stock should
That
cеase.
past years
made
the Commission in
can is for the
Commission.1The
now,
rejected
be attacked
judicial
must
are interpreting
be
limits
review to
foundations,
“questions
provides
failure of their
well
of law” and
that “find
as for the
ings
other reasons
stated.
heretofore
fact
the Commission shall
conclusive
unless it shall
that such
reasons,
For the foregoing
judgment
findings of the Commission are unreason
of the lower
court Case No.
should
able,
66)
arbitrary,
capricious.” (Par.
be affirmed.
arbitrary
might
It
legally
neither
nor
Affirmed.
erroneous
dis
to fix
produce
cretion
rates which would
(dissent-
Associate Justice
some return on this stock. But the Com
ing)-
ceiling
mission’s
discretion has a
as well
my opinion
I
think it follows from
produce
a floor. Since rates
ex
Pоtomac
Power Co. v. Public
profits
cessive
are
rates2 it
excessive
-
U.S.App.D.C.
that, despite
to find
the Com
-,
F.2d
pany’s
history,
financial
dismissing
erred
will
to earn in a
reasonable which
allow it
States.
year
upon
single
common stock
a return
Though
the excessive rates
equal
the par
value
more than one-third of
justify
require
do not
and would not
of the stock
than one-half the
more
*6
history
unfairly
future,
low rates
which it received
amount
stock and
important bearing
pres-
has an
on what is
plant.
Company’s
invested
Since the
ently fair. The doctrine Board
of Pub- surplus is
returns
excessive
lic
v. New
Commissioners
York over
excessive
dividends
Telephone Co.,
23, 31,
271 U.S.
surplus,
beyond
amount
include
363, 366,
808,
70 L.Ed.
rates must
what the
obtained from investors
provide a return on the
prop-
“value
plant,
invested in
in a base on which
erty” even when
property
is derived any return is to be allowed. It is an error
rates, obviously
from excessive
law
not
hold,
of law to
appears
today, since
provide
rates need
now
not
held,
to have
must be done. It
on
property”
return
the “value of the
even
suppose,
an errоr of law to
the Commis
property
when
is not derived from ex-
appears
supposed,
to have
cessive rates.
approximately
low
they
enough are lower Railway
Washington
and were and lower
once
than rates still
always
are-
Company has
owned
com-
many
cities.
It is an error of
law to-
mon stock
The excessive
ignore
have enаbled the
interest
Com-
low
pany
pay
process
holding
rate-making
rates. “The
divi-
under the
many
e.,
‘just
repaid
Act,
fixing
dends which
have
times over
i.
reasonable’
1 “Regulation
“judicial
But
insure that
does
consumers.”
review
* * *
produce net
revenues.”
confined
shall
should
and re-
business
review,
v. Natural
under similar
Federal Power Commission
stricted as
stat-
315,
utes,
Co.,
575, 590,
Pipeline
of other
62
orders
U.S.
administrative
agencies.”
736,
Federal Power Commission
L.Ed.
Federal
86
Power
S.Ct.
Co.,
Hope
Natural Gas
575, 608,
L.Ed.
62
S.Ct.
86
1037
88
S.Ct.
L.
(Black, Douglas,
J.T.,
Murphy,
Special
circumstances
333.
Ed.
curring) .
body
rate-making
“warrant
con
cluding
Dayton-Goose
that a return
historical cost
R.
Creek
v.Co. United
though
States,
prudent
investment,
456, 483,
fair
grossly
investors,
unfair
A.L.R.
and affirm
order or sustain the
investor
balancing
involves
69 au-
But Par.
and vacate the order.
interests.”
and the consumer
its order
the Commission to amend
thorizes
in-
these
balance
order does
mission’s
my
hearing
appeal.
pending the
terests.
opinion the
should be remanded to
case
provides
65 of the
Par.
hold
with instructions to
the District Court
the conclusion
shall
an amend-
file
it until
authority given
from the Commis-
within the
ed order
hearing
appeal Congress.4
order,
dismiss
either
shall
sion’s
Products,
Holly Hill
Fruit
Addison v.
Commission v.
Federal
607, 619-623,
Inc.,