Southwestern Bell Telephone Co. v. Public Utility Commission

CHADICK, Justice,

dissenting.

I take this opportunity to elaborate my dissent previously filed.

The Texas Constitution, unlike the United States Constitution and that of many states, contains in Article V, Section 10, an express guarantee of a jury trial in every case in the district court. The guarantee is worded as follows:

“[I]n the trial of all causes in the District Courts, the plaintiff or defendant shall . have the right of trial by jury.”

The majority has held that an appeal from an order of the Public Utility Commission fixing the compensation a utility is to receive for the use of its property by the public is controlled by Section 19(d)(3) of the Administrative Procedure Act, Article 6252-13a, which specifically provides:

“[T]he review is conducted by the court sitting without a jury and is confined to the record . ..”

The constitutional guarantee that the Company shall “have the right of trial by jury” has been cut to shreds.

The majority’s action can be correct if, and only if, the issue before the Court (the adequacy of the compensation for the public use of the utility’s property) involved an administrative determination.

The scope of the Constitutional requirement for a jury trial has recently been exhaustedly examined by this Court in the case of State v. Credit Bureau of Laredo, Inc., 530 S.W.2d 288 (Texas 1975). With regard to the guarantee of a jury trial the Court said:

“We also hold that Article Y, Section 10, [the Judiciary Article], of the Constitution extends the right to a jury .

“In Cockrill v. Cox, 65 Tex. 669 (1886), the court correctly wrote that the present Judiciary Article protecting the right to a jury was added by the Constitution of 1845 because the Bill of Rights Article contained in the Constitution of the Republic did not extend to causes in equity. Tex.Const. art. IV, § 16 (1845). In other words, the Judiciary Article was intended to broaden the right to a jury afforded by Article I, Section 15. Tolle v. Tolle, 101 Tex. 33 , 104 S.W. 1049, 1050 (1907); Hatten v. City of Houston, 373 S.W.2d 525, 531-535 (Tex.Civ.App. 1963, writ ref’d n.r.e.); Walsh v. Spencer, 275 S.W.2d 220 (Tex.Civ.App. 1955, no writ). Subsequent constitutions extended the right to a jury to ‘all cases of law or equity.’ Tex.Const. art. V, § 16 (1868); Tex.Const. art. IV, § 20 (1866); Tex.Const. art. IV, § 16 (1861); Tex.Const., art. IV, § 16 (1845). It was the present Constitution of 1876 which changed the words of the earlier constitutions from ‘all cases of law or equity’ to its present form, ‘trial of all causes.’

“The term ‘cause’ is defined in Black, Law Dictionary (4th ed. 1951), as ‘a suit, litigation, or action. Any question, civil or criminal, litigated or contested before a court of justice.’ The United States Supreme Court in Ex parte Milligan, 71 [4 Wall.] U.S. 2, 112, 18 L.Ed. 281 (1866), stated that in any legal sense, ‘action,’ ‘suit’ and ‘cause’ are convertible terms. The court then defined the terms to mean any legal process which a party institutes to obtain his demand or by which he seeks his right. This broad meaning of the word, ‘cause,’ comports with the interpretation given by other courts and legal writers in the period when our present Constitution was drafted.” ( 530 S.W.2d 292 ).

With regard to possible exceptions to the entitlement to a jury the court explained:

“Special circumstances justify our former holdings that not all adversary proceedings qualify as a ‘cause’ under the Judiciary Article. . . . They include such proceedings as . appeals in administrative proceedings, State v. De Silva, 105 Tex. 95 , 145 S.W. 330 (1912); *518 Texas Liquor Control Board v. Jones, 112 S.W.2d 227 (Tex.Civ.App. 1937, no writ), and others. In each of the above instances, there is some special reason that a jury has been held unsuitable, . . .”

By examining the two cases cited by the Court with regard to administrative proceedings, it is found that the special reason supporting such exception is that the administrative proceeding did not involve a property right. This is demonstrated by the opinion in the first case cited, State v. De Silva, 105 Tex. 95 , 145 S.W. 330 (1912), where the opinion was as follows:

“The answer to the second question depends upon the character of the act of removal. Was it judicial? The fact that the person who declared the license forfeited was a county judge does not make the act judicial in character. That depends upon the matter in controversy, and the remedy applied. It would be a useless consumption of time to adduce authorities or arguments to the effect that a license to sell intoxicants is not a property right, but is a privilege granted by the state, which may be revoked. The state had the power to prescribe the manner of enforcing the law by revoking a license granted, which action was not judicial, but administrative or ministerial.” ( 145 S.W. 333 ).

The second case cited for the administrative proceeding exception, Texas Liquor Control Board v. Jones, 112 S.W.2d 227 (Tex.Civ.App. 1937, no writ), is similar in character. There the Court quoted with approval the following pronouncement of the law:

“The cancellation of a permit to sell liquor under the Liquor Control Act and the principle of law governing such matters is not a civil suit or cause of action; but the power and authority to cancel such a permit is merely the exercise of an administrative function and duty imposed by the act upon the board or its administrator. A permittee or licensee under the act has no vested right to sell liquor, but is a mere permittee or licensee with the privilege of selling liquor in accordance with the terms of the act, and accepts his permit or license subject to the authority of the board to cancel it for any violation of the statutes or any rule or regulation promulgated by the board under authority of the act.” ( 112 S.W.2d 229 ).

The Court made it clear that the administrative proceeding exception will not apply where a property right is involved. Could it possibly be argued a property right is not involved when the issue is the adequacy of compensation for public use of property? The question answers itself. Not only is a property right involved but one specifically protected by the Texas Constitution. Article I, Section 17, of our Texas Constitution provides:

“[N]o person’s property shall be . . . applied to public use without adequate compensation”.

This Court in its prior decisions has made it abundantly clear that the fixing of rates would not come under an administrative proceeding exception but is a matter involving a full judicial determination.

In Lone Star Gas Company v. State, 137 Tex. 279 , 153 S.W.2d 681, 696 (1941), the Court held:

“. . . When the Commission acts to prescribe rates to be charged by common carriers and public utilities, it fixes the price or rate that such concerns must subject their property to the use of the public for. It therefore operates legislatively, not administratively, and the courts, in such matters, under the statutes mentioned will determine for themselves, in the manner and way prescribed by law, whether the properties of such concerns have been confiscated fpr the benefit of the public, or whether the properties of such concerns have been appropriated to, or required to serve, the public for an unreasonable and unjust return.” ( 153 S.W.2d 696 ).

Also in General Telephone Company v. City of Wellington, 156 Tex. 238 , 294 S.W.2d 385 (1956), the Court held:

“By our recent and unqualified refusal of the writ of error in City of Houston v. Southwestern Bell Tel. Co., Tex.Civ.App., 263 S.W.2d 169 we undoubtedly held that, with or without any review statutes such as those involved in the gas and railroad *519 rate decisions mentioned, the failure of telephone rates to produce a fair return on the fair value of the properties of the exchange in question was an enjoinable violation of constitutional guarantees, although there was no ‘confiscation’ in the sense of an out-of-pocket loss.

“Whether the City of Houston opinion be taken to refer only to the federal constitution or to both it and our state constitution, the result for most practical purposes is the same, and we see no good reason to distinguish between the two as to this largely academic concept of ‘confiscation’ being distinct from ‘mere unreasonableness’ in the matter of the return from public utility rates. Once we admit that the return of a given rate is so low that no reasonable or just man would require it and that he who suffers from it suffers beyond the limits of reason and justice, are we not overly metaphysical if we add that there is no constitutional question involved, or no right to judicial review without a statute, unless the rate actually produces red figures on a financial statement? Economic values exist largely in relation to other economic values. If the going rate for labor be $2 per hour and a given laborer be prohibited by law from charging over 20<t per hour, is he any less a slave because he manages to subsist on his 20<p?” ( 294 S.W.2d 389 ).

In Railroad Commission v. Houston Natural Gas Corp., 155 Tex. 502 , 289 S.W.2d 559 (1956), the Court held:

“[W]e have concluded that there are two genuine issues of material fact in the case at bar. They are:

(1) What is the fair value of the company’s property used and useful in serving the City of Alvin?

(2) What is the lowest’ composite percentage rate of return which will induce the investment of adequate capital?

“The trial court should make its own findings of fact based upon admissible evidence and test the new rate against its findings.” ( 289 S.W.2d 575 ).

Returning to the Judiciary Article of the Constitution (Article V, Section 10), the foregoing decisions clearly demonstrate that an appeal from a Commission Order fixing rates is a case or cause in the District Court where the “right of trial by jury” is mandatory. The case is not an appeal from an administrative decision.

If the majority opinion is permitted to stand, where will it all end? Will the Texas constitutional guaranty of jury trial be completely read out of the Constitution? Perhaps the Legislature will next pass a law allowing the Highway Commission to fix compensation to be paid when private property is taken for highway purposes with the landowner limited to a substantial evidence appeal without a jury under the Administrative Procedure Act. When this happens the farmer who lost his land for the amount of the Highway Commission appraisal will be as dismayed as I that this fundamental right to jury trial has vanished, taken from him by the sophistic and deceptively vague reasoning in a short series of court opinions.

I do not necessarily agree with what the Court of Civil Appeals has written, I do think its disposition of the appeal was correct.