constitutional challenge to Natural Gas Act; "regulation does not insure that the business shall produce net revenues, nor does the Constitution require that the losses of the business in one year shall be restored from future earnings by the device of capitalizing the losses and adding them to the rate base on which a fair return and depreciation allowance is to be earned.”
How later courts described this case
- constitutional challenge to Natural Gas Act; "regulation does not insure that the business shall produce net revenues, nor does the Constitution require that the losses of the business in one year shall be restored from future earnings by the device of capitalizing the losses and adding them to the rate base on which a fair return and depreciation allowance is to be earned.”
- “The Constitution does not bind rate-making bodies to the service of any single formula or combination of formulas”
- Brandeis, J., dissenting: amortization of "prudent investment" need make no allowance in excess of costs
- defining "reasonable rates" in utility regulation as those that are "not confiscatory in the constitutional sense"
Written by the judges who cited it.
The opinion
*609 Mr. Justice Feankfubtee,
concurring:
I wholly agree with the opinion of the Chief Justice.
Congress has in the Natural Gas Act specifically cast upon courts the duty to review orders of the Federal Power Commission fixing “just and reasonable” rates. The constitutional scope of judicial review of rate orders where Congress has denied judicial review is therefore not in issue in this case. Discussion of the problem is academic, especially since we all concur in the Chief Justice’s conclusions on the rate order here made by the Commission. But since the issue has been stirred, I add a few words because legal history still has its claims.
While the doctrine of “confiscation,” as a limitation to be enforced by the judiciary upon the legislative power
to fix utility rates, was first applied in Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 418 , that decision followed principles expounded in Stone v. Farmers’ Loan & Trust Co., 116 U. S. 307 , especially at 331. See 134 U. S. at 465-56 . Mr. Chief Justice Waite, who delivered the opinion in the Stone case as well as in the earlier decision in Munn v. Illinois, 94 U. S. 113 , was therefore the author of the doctrine of “confiscation” and its corollary, “judicial review.” His view was shared by such stout respecters of legislative power over utilities as Mr. Justice Miller (see Fairman, Mr. Justice Miller and the Supreme Court, passim), Mr. Justice Bradley (see his dissent in Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 418, 461 ), and Mr. Justice Harlan. The latter, indeed, agreed with Mr. Justice Field' that the regulatory power exercised in the Railroad Commission Cases, 116 U. S. 307 , constituted an impairment of the obligation of contract. By no one was the doctrine of judicial review more emphatically accepted, and applied in favor of a public utility, than by Mr. Justice Harlan in the decision and opinion in Covington & Lexington Turnpike Co. v. Sandford, 164 U. S. 578 , especially at 591-95.
*610 But while this historic controversy over the constitutional limitations upon the power of courts in rate cases is not presented here, if it be deemed that courts have nothing to do with rate-making because that task was committed exclusively to the Commission, surely it is a usurpation of the Commission’s function to tell it how it should discharge this task and how it should protect the various interests that are deemed to be in its, and not in our, keeping.