VINSON, DIRECTOR OF ECONOMIC STABILIZATION, ET AL. v. WASHINGTON GAS LIGHT CO. ET AL.
No. 396
Supreme Court of the United States
Argued February 11, 14, 1944.—Decided March 27, 1944.
321 U.S. 489
The judgment should be reversed.
I am authorized to say that MR. JUSTICE MURPHY joins in this opinion.
substantial equivalent to defense in a criminal trial. And the opportunity should be long enough so that the failure to take it reasonably could be taken to mean that the party intends, by not taking it, to waive the question actually and not by forced surrender. So safeguarded, the foreclosure of such questions in this way would not work a substantial deprivation of defense.
In respect to other questions, such as the drawing of racial or religious lines in orders or by their application, of a character determinable as well by the criminal as by the special tribunal, in my opinion the special constitutional limitations applicable to federal criminal trials, and due enforcement of some substantive requirements as well, require keeping open and available the chance for full and complete defense in the criminal trial itself.
Mr. Stoddard M. Stevens, Jr., with whom Messrs. E. Barrett Prettyman, C. Oscar Berry, and John C. Bruton were on the brief, for the Washington Gas Light Co.; and Mr. Richmond B. Keech, with whom Messrs. Vernon E. West and Lloyd B. Harrison were on the brief, for the Public Utilities Commission of the District of Columbia,—respondents.
Mr. John H. Connaughton filed a brief on behalf of the Federation of Citizens’ Associations, as amicus curiae, urging affirmance.
Certiorari was granted in this case, at the instance of the Director of Economic Stabilization and the Administrator, Office of Price Administration, of the United States, to review a rate order of the Public Utilities Commission of the District of Columbia. The application and еffect of the Emergency Price Control Act of 1942,1 and the Act of October 2, 1942,2 are involved.
The petitioners, who were intervenors before the Commission, appealed from its order to the District Court of the District of Columbia, which set aside the order as arbitrary and illegal.3 The Court of Appeals for the District of Columbia reversed the District Court.4 Understanding of the questions presented requires a detailed statement of their historical background.
The Commission was created, and its powers and duties defined, by Act of Congress in 1913, supplemented in 1926, 1935, and 1939.5 References will be to the District of Columbia Code, 1940 edition. The statutes require public utilities within the District to furnish safe and adequate facilities, just and reasonable service, at reasonable, just and nondiscriminatory rates, and to obey the lawful orders of the Commission (§ 43-301). There are detailed provisions respecting rates and depreciation (§ 43-315). For the purpose of its functions, the Commission is directed to value “the property of every public utility within the District of Columbia actually used and useful for the convenience of the public at the fair value thereof at the time of said valuation.” (§ 43-306.) Nothing in the statute is to
Pursuant to its authority, the Commission initiated in 1931 and concluded in 1935 a proceeding for the valuation of the property of the Washington Gas Light Company, at an expense of some $750,000, and arrived at a depreciated rate base as of 1932. It then entered upon a further inquiry as to rates. After this had lasted some time it approved and adopted a sliding scale arrangement, which involved a rate base, to be adjusted annually by adding net property additions at cost, a rate of return, and a rate of accrual to retirement reserve, in the light of which the rates of the company were to be adjusted annually. It found that the plan was practical and would be advantageous to all parties interested. This plan calls for an annual determination of the rate of return earned during the “test year,” and of the amount available for rate increase or decrease for the succeeding “rate year,” and schedules and regulations to aсcomplish such increase or decrease. Such determination is to be made after public
The duration of the system was not prescribed but in its order the Commission stated that it construed the statute to permit a termination upon reasonable notice, and found that ninety days’ written notice of termination by Commission or Company would be reasonable.
March 20, 1942, the Commission issued its order of investigation in conformity with the sliding scale arrangement. After preliminary investigation by its agents and the representatives of the company, the Commission, pursuant to statutory requirement, issued, on July 21, 1942, notice of hearing as to rates, charges, and regulations which were to become effective September 1, 1942, in accordance with the sliding-scale arrangement. The Price Administrator was given leave to intervene and was represented at a prehearing conference and at all hearings, and his counsel was permitted to cross-examine witnesses and to offer testimony. These began August 18 and continued on August 19, September 4, 8, 11, and 14, and closеd on the last-named date. The Commission stated that it would welcome testimony with relation to the aims and purposes of the Office of Price Administration during the national emergency and the relation of those aims and purposes to the proceedings, and expressed the hope that the Administrator, as intervenor, would develop testimony along lines which would enable the Commission to determine whether an increase should be granted in view
On application of other parties, the proceedings were reopened and further hearing had September 30th. Counsel for the Administrator participated and filed a second brief. The hearings were again closed, and, October 13, the Commission issued its findings, opinion and order.
The petitioners’ standing in the proceedings deserves notice. Section 302 (c) of the Emergency Price Control Act of 19426 providеs: “Nothing in this Act shall be construed to authorize the regulation of . . . rates charged by any common carrier or other public utility.”7 The admission of the Administrator as intervenor was, therefore, not pursuant to statute but was governed by the Commission‘s rules. The Commission had provided for intervention in its rules. Rule 7.3 is: “The Commission may grant or deny a petition for leave to intervene, or may grant the petition upon such conditions and limitations as it may prescribe.” Rule 7.5 is: “The granting of a petition to intervene shall not have the effect of changing or enlarging the issues in the proceeding, except where such change or enlargement is expressly requested in the petition and is expressly granted by the Commission after opportunity for hearing upon the question has been afforded all other parties.”
After final submission, and before promulgation of the Commission‘s order, the Emergency Price Control Act was amended by the Act of October 2, 1942, which, while prohibiting the President from suspending that portion of the original Act exеmpting public utilities from the scope of the statute, provided: “That no common carrier or other
On the showing of the Commission‘s staff, the company would have been entitled, under the sliding scale, to an increase in rates of $324,718. The increase approved by the Commission was $201,424, effective September 1, 1942. In its order, however, the Commission directed the company‘s attention to the provisions of the Act of October 2, 1942, and quoted its language. Accordingly the company, October 14, 1942, served notice upon the Director of Economic Stabilization, who had been designated for the purpose by the President, of the proposed increase in rates together with a copy of the Commission‘s order, and later consented to his intervention. The court below has found that the requisite notice and consent to intervention was given by the company in accordance with the Act.
Counsel who had participated in all the prior proceedings for the Administrator filed with the Commission October 19 a petition in the name of the Administrator, and on behalf of the Director, asking that the Commission vacate its order and reopen the prоceedings to allow the Director to intervene. The Commission reopened the proceeding and set a hearing for November 2 “for the purpose of receiving from the Office of Price Administration, on behalf of the Director of Economic Stabilization, additional evidence relating to the inflationary effect, if any. of the increase in rates authorized by Order No. 2401, and intervention is granted for such purpose.” When the reopened proceedings came on for heаring, the same counsel who had theretofore participated in behalf of the Administrator appeared before the Commission, offered no
The Commission reconsidered the record and the testimony and, November 9, issued its order in which it reviewed the proceedings and found that the evidence adduced failed to show that the rates authorized by order No. 2401 were unduly inflationary. It denied the Direсtor‘s petition to vacate the order. Thereafter the company put the new rates into effect as of November 16th. On appeal by the petitioners, the District Court held that the action of the Commission, in the light of the record, was arbitrary and illegal, and vacated the order. The Court of Appeals reversed, holding that the Commission had afforded petitioners full opportunity for a hearing upon any question which, under the law and the rules of the Commission, was open in the procеeding and that it was not arbitrary or illegal for the Commission, on the record made, to deny the abandonment of the sliding-scale plan and the prosecution of an entirely new rate investigation involving fair value, depreciation, rate of return,
The petitioners seek vacation of the order on the ground that the Commission denied them a full and fair hearing. This contention is based upon the substantive contention that under the Acts оf January 30 and October 2, 1942, they were entitled to demand that the Commission enlarge the scope of the hearing and convert the inquiry into one whether an increase of rates was necessary to the company to prevent hardship. The Commission, on the other hand, insists that it was entitled to conduct the proceedings in accordance with its statutory powers as they existed prior to 1942, and, at most, accord the petitioners a full hearing as to the effect of any order in its relatiоn to inflation in the war emergency. Thus it appears that the controversy is essentially one between two governmental agencies as to whether the powers of the one or the other are preponderant in the circumstances.
In view of the petitioners’ insistence that they were entitled, in effect, to control and direct the inquiry without regard to the statutory powers of the Commission, we shall first examine the extent of the authority conferred upon petitioners by Congress.
The Emеrgency Price Control Act of 1942, while it gives the Administrator power over prices of “commodities,” which are not generally regulated by public authority, specifically and expressly withholds from the Administrator jurisdiction over public utility rates. And, as we have noted, the Stabilization Act of October 2, 1942, did not alter this prohibition but required merely that no utility should generally increase rates in effect September 15, 1942, unless it first gave thirty days’ notice to the President or his representative and consented to the timely intervention of that representative before the federal, state, or municipal authority having jurisdiction to consider the increase.
If the petitioners were admitted as intervenors by a state commission, or by the District Commission, which is a respondent here, they might, of course, be admitted to participation in the proceeding upon reasonable terms; and one of the most usual procedural rules is that an intervenor is admitted to the proceeding as it stands, and in respeсt of the pending issues, but is not permitted to enlarge those issues or compel an alteration of the nature of the proceeding. To this effect was the Commission‘s rule on the subject. It would seem then that, in the absence of clear legislative mandate to the contrary, the petitioners should not possess greater rights than other intervenors.
This the petitioners deny. They say that, notwithstanding the absence of any categorical enactment, the general purpose of the originаl Act and its supplement
The other contention of the petitioners stems from their view as to the effect of the Emergency Price Control Act and the Stabilization Act. They insisted below that they were denied a fair hearing because the Commission refused, in the current proceeding, to alter and enlarge the scope and the character of the inquiry. It will be remembered that, under the Commission‘s existing order, a termination оf the sliding scale arrangement required ninety days’ written notice. There was no application of any rate payer or any purpose of the Commission in the spring of 1942 to abrogate the arrangement. On the contrary, the Commission gave the required notice for the usual annual adjustment under the plan; and, after the necessary investigations by its agents, gave notice of hearing with respect to such adjustment. At that point, and at a time when no notice of increase of rates was required by any Act of Congress, the Administrator, upon his application was permitted to intervene in the proceeding.
In his petition, and at the hearings, he asserted and reiterated that he had the right to go into the propriety of the rate base, the operating expenses, including depreciation expenses, taxes, and rate of return, summarizing his
If we consider the petitioners’ present position we find that the Commission heard all evidence offered, and says it weighed it. The Administrator urged that the straight-line method of depreciation embodied in the sinking fund plan must be discarded in favor of a sinking fund method under the force of decisions of this Court, a position unsupported by our cases, and evidence was offered to show the result which would ensue the substitution. Some testimony was adduced as to rate of return, and the Commission‘s report shows this was considered. In short, if the inquiry was limited to the issues comprehended in the Commission‘s order of investigation, the petitioners were afforded every opportunity for a full hearing. On the subject respecting which the petitioners were especially competent to enlighten the Commission,—namеly the inflationary effect of a rate increase of 2.28% for one year, amounting, on the average, to three cents per month per customer, in the light of wage increases and increased commodity prices and over-all conditions in the national
The judgment is
Affirmed.
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK and MR. JUSTICE MURPHY concur, dissenting.
This case goes hand in hand with Davies Warehouse Co. v. Bowles, 321 U. S. 144. That decision expanded the “public utility” exemption in the Emergency Price Control Aсt to include a wide variety of enterprises. The present decision illustrates the value of that preferred treatment.
The Stabilization Act prohibits any “utility” from making “any general increase in its rates or charges which were in effect on September 15, 1942” without giving the President‘s agent the right to intervene in the proceedings. The present decision goes far towards making that provision ineffective. It allows the Commission so to shape the issues of the rate proceeding as to exclude the data most relevant to a determination of whether any rate increase should be allowed. The power of a commission to shape the issues as it desires and to restrict the Director of Economic Stabilization to those issues is not a power which is apt to be neglected. The Director may of course proclaim against rate increases. But he does not need the right to intervene to prove that rate increases are inflationary. That is self-evident. The right to intervene, if it is not a right to introduce relevant data bearing on the true earnings and returns of the utility, is an empty right indeed.
I agree that Congress did not transfer rate-making powers from the commissions to the Director. I agree that Congress must have contemplated that some rate increases might take place or else it would have treated
We are told that this company has an inflated rate base of some $1,000,000. We are told that its excessive charges for depreciation expense were over $225,000 a year as compared with the rate increase of about $200,000 a year. We are told that a full hearing would have disclosed that the company was in fact earning more than 6 1/2%. I do not know what the evidence would show. But an offer of proof in a rate case could not be more relevant.
I believe, moreover, that when Congress halted general rate increases and gave the Director a right to intervene, it did not sanction rate increases regardless of need and regardless of inflationary effect. I think it meant to make utility commissions at least partial participants in the war against inflation and gave them a sector of the front to control. Though it did not remove the established standards for rate-making, I do not think it intended utility commissions to proceed in disregard of the requirements of emergency price control and unmindful of the dangers of general rate increases. To the contrary, I think Cоngress intended that there should be as great an accommodation as possible between the old standards and the new wartime necessities. The failure of the Commission to make that accommodation is best illustrated perhaps by its treatment of taxes. The Commission allowed the company to deduct as operating expenses all income taxes up to and including 31%. That this amount