# Amicus Curiae Brief — Pacific Gas & Electric Co. v. Public Utilities Commission

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0160%3A22

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1986
- **Citation:** 475 U.S. 1

## Text

F i LED
NO. 84-1044 MAY 30 1989
} ALEXANDE 2
OLEeRK
IN THE — -
Supreme Court of the United States

OCTOBER TERM, 1984

PACIFIC GAS AND ELECTRIC COMPANY,
Appellant,

V.

PUBLIC UTILITIES COMMISSION OF THE
STATE OF CALIFORNIA,
Appellee.

On Appeal from the Supreme Court of
California

BRIEF OF AMICUS CURIAE,
THE LEGAL FOUNDATION OF AMERICA

OF COUNSEL: DAVID CRUMP
BRADLEY FORD STUEBING c/o The Legal Foundation
— ad of America

South Texas College of Law
Houston, TX T1008 1303 San Jacinto

Houston, Texas 77002

(713) 659-8040

Counsel of Record

JEAN F. POWERS
Assistant Professor of Law
South Texas College of Law

— ————— SI, SS SSIS a SES

TABLE OF CONTENTS

TABLE OF AUTHORITIES
BRIEF OF AMICUS CURIAE
PRELIMINARY STATEMENT
SUMMARY OF ARGUMENT
ARGUMENT

THE COMMISSION’S APPROACH REGULATES
SPEECH ON THE BASIS OF ITS CONTENT

I.

A.

The Commission’s Approach Necessarily
Requires it to Choose Among a Wide Variety
— 1 Groups with Conflicting Points
of View

The Commission’s Approach Places It in the
Position of Performing a “Function of Editors”

The Commission’s Approach Will Reduce
Information Available to Consumers from
the Utilities that Serve Them, Because it
Will Exclude and Discourage Such Speech

THE PUC’S DECISION CANNOT BE SUPPORTED
BY MONOPOLY OR REGULATORY ARGUMENTS

A.

The Commission ’s “Wasted Space and
Property Rationales Do Not Support Its
Decision

The Utility in Question Does Not have a
Monopoly on the Media of Communications,
and its Billing Envelope is Not a Public Forum

CONCLUSION

W NW NS

11

11

12
15

TABLE OF AUTHORITIES Warren, Regulated Industries’ Automatic Cost of
Service Adjustment Clauses: Do They Increase
or Decrease Cost to the Consumer? 55 NOTRE
CASES DAME LAW. 333 (1980)

Bowles v. Willingham, 321 U.S. 503 (1944) 14
Central Hudson Gas & Electric Corporation v. Public

Service Commission, 447 U.S. 557 (1980) 10, 14
Columbia Broadcasting System v. Democratic

National Committee, 412 U.S. 94 (1973) 9,11,15
Consolidated Edison Company v. Public Service

Commission, 447 U.S. 530 (1980) 9, 10, 14
FERC v. Mississippi, 456 U.S. 742 (1982) 5
Miami Herald Publishing Company v. Tornillo,

418 U.S. 241 (1974) 8,9,15
Missouri ex. rel. Southwestern Bell Telephone

Company v. Public Service Commission,

262 U.S. 276 (1923) 14
Munn v. Illinois, 94 U.S. 113 (1877) 13
NAACP v. FPC, 425 U.S. 662 (1976) 7,14

Pacific Gas & Elec. Co. v. California Energy

Conservation & Devel. Comm'n, 461

U.S. 190 (1983) 4
Perry Education Association v. Perry Local

Educators’ Association, 103 S. Ct. 948

(1983) 13, 14, 15
Pittsburgh Press Company v. Human Relations
Commission, 413 U.S. 376 (1973) 9
Pruneyard Shopping Center v. Robins, |
447 U.S. 74 (1980) 9
Reagan v. Farmer’s Loan & Trust Co., 154 U.S.
362 (1894) 14 |
Smyth v. Ames, 169 U.S. 466 (1898) 14
Wooley v. Maynard, 430 U.S. 705 (1977) 10, 11
SECONDARY AUTHORITIES
Foster Nat. Gas Rep. No. 1515, May 2, 1985 7

Just and Reasonable National Rates for Sales of
Natural Gas (Opinion 699), 51 F.P.C. 2212
(1974) 7
PG&E Progress, Dec. 1984 10 |
Pond, Restraining Regulatory Activism: The Proper
Scope of Public Utility Regulation, 35 ADMIN. :
L. REV. 423 (1983) 14 )

NO. 84-1044
IN THE

SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1984

PACIFIC GAS AND ELECTRIC COMPANY,

Appellant,
V.
PUBLIC UTILITIES COMMISSION OF THE
STATE OF CALIFORNIA,
Appellee.
BRIEF OF AMICUS CURIAE,

THE LEGAL FOUNDATION OF AMERICA
INTEREST OF AMICUS CURIAE

The Legal Foundation of America is a nonprofit corpora-
tion supporting the operations of a public interest law firm as
that term is defined in Internal Revenue regulations. Its goals,
among others, include the preservation of the market system as
a means of resource allocation, the attainment of a better federal-
state balance, and the improvement of the system of criminal
justice. In addition, LFA has appeared in many cases involving
first amendment issues.

LFA is located on the campus of, and shares certain per-
sonnel and activities with, the South Texas College of Law in
Houston. All litigation undertaken by LFA is approved by its
Board of Trustees, which is composed of attorneys, academics
and businesspeople.

PRELIMINARY STATEMENT

It is expected that PG&E’s briefing will thoroughly address
the governing case law, including the proper application of the
first amendment, the requirement of a compelling state interest,
the requirement that regulation conform to the least onerous
alternative, the right not to speak, PG&E’s right to use its own
property, and other issues. Amicus curiae generally agrees with
these arguments. However, because amicus curiae wishes to
avoid unnecessary duplication, this brief concentrates upon other
issues, including policy arguments.

SUMMARY OF ARGUMENT
I.

Content-Based Regulation of Expression. The PUC’s ap-
proach necessarily regulates speech on the basis of its content.
Its decision that TURN’s message is “appropriate” and is an
“efficient” use of the envelope could only have been reached on
the basis of its content. Further, if the Commission is to attain
its stated goal of exposing ratepayers to a variety of views, it will
be immersed in choosing on the basis of message content be-
tween numerous competing groups interested in nuclear power,
cogeneration, alternative fuels, rate design, problems of the
elderly, small business electric rates, problems of the poor, and
other concerns as valid as those favored by TURN. In the pro-
cess, the Commission will serve as an editor or gatekeeper
of speech, inconsistently with this Court’s decisions, and it will
discourage speech by PG&E resulting from the use of its own
envelope. Speech by utilities is itself valuable, and utilities
have contributed significantly to debate about energy and con-
servation issues. Ironically, the PUC’s action ensures that speech
from utilities nationwide will be more bland, less responsive to
controversy, and less useful than ever before.

II.

Monopoly and Regulatory Arguments Insufficient. The
“wasted” space or extra space rationale does not support the
Commission’s decision. By exactly the same reasoning, the PUC
could grant TURN the right to use empty PG&E offices, unused
secretarial time, and advertisements on the sides of PG&E panel
trucks. Furthermore, it is meaningless to support the decision
by “property” rationales, because PG&E is here denied the use
of its own property, and the result is that an asserted property
interest held by millions of ratepayers as tenants in common
is simply given to the use of one entity with which many rate-
payers will vehemently disagree. Finally, while PG&E’s natural
monopoly in gas and electricity justifies regulation of its delivery
of those commodities, PG&E does not have a monopoly, or
anything approaching a monopoly, upon the media of communi-
cation. This monopoly rationale comes dangerously close to
an endorsement of the regulation of metropolitan newspapers,
which many have described as monopolistic. Actually, TURN
can reach anyone interested in its message by telephone, mail,
or cther media, and customers have television, radio, cable,
print and other media available to them in abundance. What
TURN really seeks is a captive audience that must open the
envelope, so that it can have a competitive advantage over other
charities in fundraising. This interest is not a legally cognizable
one, and the decisions of this Court countermand the asserted
monopoly rationale.

I. THE COMMISSION’S APPROACH REGU-
LATES SPEECH ON THE BASIS OF ITS
CONTENT.

The Commission has here determined that granting TURN
the use of PG&E’s billing envelope would be an appropriate
and efficient use of the extra space.” 1 In making this decision,
the Commission must have evaluated the speech at issue on the

1 Appendix at A-16.

basis of its content. It could not have decided that TURN’s
message was “appropriate” or that it would be an efficient“
use of the space without evaluating the content of the message
or its effect on the intended audience. 14

The Commission has also indicated that it seeks to expose
ratepayers to a variety of views,” 2 and it has indicated that it
will consider further applicants. Again, it will necessarily decide
among applicants on the basis of the content of their messages.

A. The Commission’s Approach Necessarily Requires it to
Choose Among a Wide Variety of Competing Groups
with Conflicting Points of View.

PG&E’s ratepayers are not a monolith, and they obviously
include many whose views are not represented by TURN. For
example, there undoubtedly are many who vehemently object
to nuclear generation of electricity. Many of these anti-nuclear
ratepayers would desire to close the Diablo Canyon nuclear
generating station, even though it is already constructed and
its closure would increase rates. These individuals’ views would
conflict sharply with those of groups seeking rates as cheap
as possible, presumably including groups such as TURN. There-
fore, to accommodate these differing viewpoints, the Commis-
sicn should logically extend to the Sierra Club, the Friends of

la Indeed, the Commission quite clearly seeks to advance one side
of the issue. It has favored a group that will argue for reduction
of current rates for certain ratepayers, at the expense of the compet-
ing concerns enumerated here.

2 Appendix at A-17.

3 Some such opposition is based upon environmental or safety
grounds; there is controversy concerning whether nuclear genera-
tion will cost less or cost more. Whichever view TURN takes of
this issue will thus conflict with the positions of substantial numbers
of ratepayers and will affect the rates they pay. See Pacific Gas &
Elec. Co. v. California Energy Conservation & Devel. Comm’n,
461 U.S. 190 (1983).

the Earth, or the Natural Resources Defense Council the same
privilege it has extended to TURN in this case.

If, however, the Commission were to permit anti-nuclear
groups to disseminate literature through PG&E’s billing envelope,
it must logically permit use of the envelope by citizens’ groups
supporting nuclear generation. The Atomic Energy Forum
thus might apply for and be granted the use of PG&E’s envelope.
Nor does the logic of the PUC’s position allow it to stop there.
The Commission would just as logically need to open the en-
velope to a wide variety of other groups with competir~ con-
cerns, among whom it would be required to choose on tae basis
of message content.

For example, many groups believe that more use of co-
generation will lower rates. Others, however, believe that co-
generation primarily benefits those who are able to set up their
own cogeneration facilities while increasing rates for other
ratepayers. * Accordingly, the Commission’s logic means that
it should force PG&E to carry literature from groups on various
sides of the cogeneration controversy, particularly if it is to
provide ratepayers with exposure to a variety of views.

Even more groups would have antagonistic views on rate
design. As the Commission has pointed out, TURN sometimes
favors certain groups of consumers at the expense of other
groups of consumers in its rate design arguments. 5 Such con-
flicts are inherent in rate design. Thus elderly ratepayers, per-
haps represented by a group such as the American Association

4 The depth of this controversy, which clearly affects daily rates
paid by TURN’s constituency, can be appreciated by consideration
of this Court’s decision in FERC v. Mississippi, 456 U.S. 742 (1982).
The Court split five to four, after having received dozens of amicus
curiae briefs from entities on all sides of the cogeneration issue.

5 Appendix at A-15.

of Retired Persons, should obtain envelope space to advance
their concerns. Local chambers of commerce or small business
coalitions, which represent business energy users that are disad-
vantaged by “two-tiered” rates preferring certain consumers and
placing the resultant increased costs upon businesses, should be
permitted to respond. 7 Furthermore, since the poor as a class
are not identical to the elderly and could be disadvantaged by
adoption of their agenda, the Welfare Rights Organization should
be permitted to oppose the views of TURN (as well as opposing »
those of the AARP and small businesses). 8

Groups supporting time-of-day or marginal-cost pricing,”
as well as groups supporting or opposing lifeline“ rates 10 and

6 i.etired persons, for example, might benefit more from lifeline
rates than most other groups, including the poor. See infra note 10.

7 These groups would be “pro-consumer” in that higher electric rates
for businesses mean lesser productivity and hence fewer jobs for
consumers. Economically, two-tiered rate design is open to criticism
as a misallocation of resources. TURN could not be expected to
represent this viewpoint and indeed would be likely vigorously to

oppose it.
8 See infra note 10.

9 Marginal-cost pricing consists of higher prices at peak periods, when
generating capacity is used to the point of inefficiency and elec-
tricity costs more than at other times of the day. This rate design
would benefit persons who can shift their energy use, such as some
homeowners. It would disadvantage businesses, persons dependent
on daily air conditioning or heat, and persons seeking jobs.

10 “Lifeline” rate design prices the first units of electricity, up to the
amount necessary for a small household, less than greater amounts.
Large lifeline rates can be criticized as economically inefficient,
because (for example) they would result in subsidy to a wealthy
individual living in a condominium. Such rates might be most
beneficial to elderly ratepayers. Persons below the poverty line,
however, could be given significantly greater assistance by a means-
tested program. Many groups of middle-income consumers, busi-
nesses, their customers, and persons seeking jobs, might be dis-
advantaged by certain lifeline rate designs. Again, TURN opposes
the interest of many ratepayers no matter which position it takes.

6-

i — et

supporting or opposing automatic cost-of-service adjustments, 11
would all have still other agendas, each of which would benefit
certain classes of consumers at the expense of others. Indeed,
citizens having different views of appropriate use of boiler fuels
may have an even greater impact on rates than TURN could
hope for; for example, it has been estimated that certain regu-
latory reforms in the use of natural gas could prevent up to
$44 billion in unnecessary capital inver‘ment 12 Citizens agreeing
with this view might well regard TURN as detracting from the
real issue and sidetracking reforms that would reduce rates.
Finally, some cousumers would be likely to have the view that
TURN’s efforts to lower current rates will mortgage the future
for slight benefit in the present, and will disproportionately
raise future rates.

All of these viewpoints conflict with and have as legitimate
a claim to be included as TURN’s view. Nor is it fanciful to
suppose that such groups will assert their interests in response
to the invitation; such diverse organizations as the NAACP" and
the Friends of the Earth 14 have argued before federal energy
agencies. In choosing among such groups, the PUC would in-

11 Cf. Warren, Regulated Industries’ Automatic Cost of Service Adjust-
ment Clauses: Do They Increase or Decrease Cost to the Con-
sumer? 55 NOTRE DAME LAW. 333, 345 (1980).

12 See Foster Nat. Gas Rep. No. 1515, May 2, 1985, at 1 (report-
ing on efforts to repeal the Powerplant and Industrial Fuel Use

Act, accompanied by worst-case estimates of its costing $44 biilion
and resulting in loss of 1.5 million jobs).

13 NAACP v. FPC, 425 U.S. 662 (1976) (effort to cause FC to regu-
late so as to prevent employment discrimination by its regulatees).

i4 Just and Reasonable National Rates for Sales of Natural Gas (Opin-
ion 699), 51 EPC. 2212, 2288-95 (1974) (effort to use National
Environmental Policy Act to force FPC to prepare environmental
impact statement for natural gas ceilings rejected as a “complete
exercise in futility” that would “so burden this proceeding as to

make it impossible to establish just and reasonable rates as required
by the Natural Gas Act”’).

evitably be making the decision to promote or prevent their
speech on the basis of its content. 15 Furthermore, if the PUC
were to require inclusion of all competing points of view, there
would be inadequate room. Thus if groups other than TURN
were to respond to the Commission’s invitation for applications,
and if the Commission were itself to respond favorably, January
and February’s envelope might be dedicated to pro- and anti-
nuclear groups, March and April might be occupied by pro- and
anti-cogeneration groups, May might be given to small businesses,
June to the AARP, and so on. Indeed, since the potential
number of differing points of view is infinite, most would be
excluded.

The exclusion would obviously extend to messages that
PG&E might otherwise have chosen to distribute. In fact, every
message sent by TURN will represent an instance in which the
PUC has favored the content chosen by TURN over that chosen
by PG&E. The logical extension of the PUC’s policy is to require
carriage of various publie interest groups’ competing messages
during all twelve months of the year, so that PG&E is completely
excluded from the use of its own property. There is no reason
the Commission cannot accomplish this result if it can do what
it has done in the case at bar.

B. The Commission’s Approach Places It in the Position of
Performing a Function of Editors

The Commission’s assumption “that the ratepayers will
benefit more from exposure to a variety of views ic strikingly
similar to the argument considered by this Court in Miami Herald
Publishing Company v. Tornillo, 418 U.S. 241 (1974), that
“government has an obligation to insure that a wide variety of

15 Indeed, the worst possible case would materialize if the variety of
applications here hypothesized failed to result. Now that the
Commission has favored TURN, the segment of ratepayers that
TURN itself favors remains unchecked by any opposing consumer
segment whose interests are harmed by TURN’s positions.

8.

views reach the public.” This Court rejected that argument in
Tornillo, noting that

[h]Jowever much validity may be found in these
arguments, at each point the implementation of
a remedy such as an enforceable right of access
necessarily calls for some mechanism, either govern-
mental or consensual. If it is governmental coer-
cion, this at once brings about a confrontation
with the express provisions of the First Amendment.

The essence of the problem, both in Tornillo and in the case at
bar, is that government is prohibited from intruding in the “func-
tion of editors.” Jd. at 254-59. See also Consolidated Edison
Company v. Public Service Commission, 447 U.S. 530 (1980)
(“Government action that regulates speech on the basis of its
subject matter ‘slip[s] from the neutrality of time, place and
circumstance into a concern about content:); Columbia
Broadcasting System v. Democratic National Committee, 412
U.S. 94 (1973); Pittsburgh Press Company v. Human Relations
Commission, 413 U.S. 376, 391 (1973) (decisions do not
authorize any restriction whatever, whether of content or
layout,” and Court reaffirmls] unequivocally the protec-
tion afforded to editorial judgment’’).

For these reasons, the present case is different from Prune-
yard Shopping Center v. Robins, 447 U.S. 74 (1980). Govern-
ment need not perform any function as “gatekeeper” or editor
to require a shopping center to accommodate leaflets, as in
Pruneyard. Government need not evaluate any leaflet to deter-
mine whether it is an appropriate or “efficient” use of the
shopping center. The PUC’s approach, however, would require
it to decide on a continuous basis, as editor or gatekeeper, which
of various competing uses of PG&E’s envelope was most ap-
propriate or efficient in any given month.

C. The Commission’s Approach Will Reduce Information
Available to Consumers from the Utilities that Serve Them,
Because it Will Both Exclude and Discourage Such Speech.

Information from utilities is valuable to consumers. TO

take but one example, utilities have been in the forefront in
advocating and explaining conservation measures! © Thus the
reason that speech by a utility is protected is not merely that
it is of value to the utility, but that it is of value to recipients.
Cf. Consolidated Edison Company v. Public Service Commission,
supra; Central Hudson Gas & Electric Corporation v. Public
Service Commission, 447 U.S. 557 (1980).

The avenues of communication available to utilities, how-
ever, are limited. Unlike self-styled consumer advocates such as
those at TURN or others of Respondents, their personnel are
unlikely to be featured guests on television programs, and they
are extremely unlikely to be able to obtain charitable contribu-
tions to publish their views, as TURN expects to do. Restric-
tions upon their advertising budgets, which are imposed either
directly by regulation or by the marketplace, together with
regulatory approaches such as that of the PUC in this case, would
reduce the ability of utilities to furnish consumers valuable
information concerning how they are serving the marketplace
or how consumers can best use the resources available to them.

The editorial intrusion in the present case is all the more
likely to discourage such speech because it not only sets up
an artificial public forum, but requires carriage of views directly
attacking the utility by the utility itself.17 Such cases as Wooley

16 See PG&E Progress, Dec. 1984, at 6, reproduced in Appendix at
A-183 (newsletter concerning weatherstripping); Cf. Id. at 3 (win-
dow coverings); Id. at 8 (pilotless, energy-efficient appliances).
PG&E is typical of local gas and electric utilities in this regard.

17 Nor does the disclaimer required by the Commission solve the
problem. No reasonable person would have believed that the car’s
owner was the author of the motto in Wooley, but the lack of
attribution, or lack of necessity of a disclaimer, was not sufficient
to support the state’s requirement that the objectionable message
be carried. Furthermore, the PUC’s choice of TURN as the proper
entity to be favored with governmentally required use of the billing
envelope, reflects the PUC’s express finding that TURN’s message

v. Maynard, 430 U.S. 705 (1977), and Columbia Broadcasting
System v. Democratic National Committee, supra, establish
what has been called the right not to speak. One rationale
for the right not to speak is that, if forced speech is tied to
everyday activities or to the exercise of the speaker’s own
expression, it discourages those activities or speech. CBS v.
DNC, supra. Throughout the United States, entities such as
PG&E will likely be discouraged by the PUC’s action here from
engaging in speech that is vigorously responsive to current
issues, which is the kind of speech that is most likely to be
useful to recipients, because they will reasonably fear that
their expression will be considered controversial and will invite
retaliatory regulation in the form of a requirement that they
carry TURN-type inserts. The PUC’s action thus assures speech
from utilities that will be more bland, timid, and noncontrover-
sial, and hence less useful, than ever before. 18

II. THE PUC’S DECISION CANNOT BE SUP-
PORTED BY MONOPOLY OR REGULA-
TORY ARGUMENTS.

A. The Commissions Wasted Space and “Property”
Rationales Do Not Support Its Decision.

The Commission’s ‘‘wasted space or extra space reason-
ing could be equally applied to a wide variety of PG&E property.
For example, the side panels of PG&E trucks might be viewed as

is “appropriate” and “efficient.” This finding, and the choice of
TURN, is itself an endorsement. Finally, the disclaimer does not
remove the effect of the order in discouraging PG&E’s own expres-
sion. See infra note 18 and accompanying text.

18 The disclaimer required by the Commission does not address this
concern.

In addition, the possibility that PG&E will be excluded from

the use of its own envelope in certain months reduces its speech.

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wasted space. Taxicabs and express trucks sometimes carry
advertising, and the requirement that one-quarter of PG&E’s
panel trucks carry a TURN advertisement (or an advertisement
from one of the many other groups whose views might conflict
with TURN’s) would be as logical as the order in question
here. Similar reasoning supports the conclusion that vacant
utility company offices, such as those not used when employees
are on vacation, should be made available to TURN, and utility
company secretaries who have any spare time during the day
should use that time typing for groups such as TURN. Again,
these conclusions are as logical as the one in the present case.

Nor can the “property” reasoning of the PUC support its
order. In the first place, property interests are characterized
entirely by rights of use and enjoyment, 19 and the PUC’s deci-
sion creates a fictional property in order to deprive PG&E of
the use of the actual property, its envelope. Further, it is mean-
ingless to speak of a property interest in extra space” that
would be theoretically held as a tenancy in common by millions
of people with antithetical interests, the ratepayers. The same
reasoning could be used to convert every item of shareholders’
property to ratepayers property. The assignment of that
alleged property to a single entity such as TURN, which has
interests antagonistic to the uses many persons would make
of it, cannot be justified by any traditional view of property.

B. The Utility in Question Does Not Have a Monopoly on the
Media of Communications, and its Billing Envelope is Not a
Public Forum.

PG&E does not have a monopoly in any sense upon any
medium of communication. Its customers have access to many
television channels, dozens of cable channels, a variety of metro-
politan newspapers, a wide selection of neighborhood news
sources, dozens of radio stations, thousands of periodicals, and
an infinite variety of communications by mail or telephone. By

19 See infra note 20.

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oe

es: |

— — = a

indicating interest in the views of any of a diverse variety of
organizations (presumably including TURN), and sometimes
for the payment of a modest fee, PG&E’s customers can cause
themselves to be recipients of the newsletters of groups ranging
from Accuracy in Media to the ACLU. Furthermore, any or-
ganization can reach PG&E’s customers, through solicitation by
mail, telephone, or other media. Thus the State’s authority to
regulate does not, and cannot, find its justification in any defect
in the communications market.

In Perry Education Association v. Perry Local Educators’
Association, 103 S. Ct. 948 (1983), this Court rejected an argu-
ment strikingly similar to Respondents’ here. A union seeking
to organize teachers sued for the right to use the school’s internal
information distribution system and internal teacher mailboxes.
The Court squarely held that the school’s internal distribution
system was not, by tradition, a public forum; neither was it
dedicated as a limited public forum, as the union argued, or
as TURN argues here. Furthermore, the mere fact that the
school allowed church groups, the YMCA, or the Cub Scouts
to use the internal system did not make it a “limited public fo-
rum.“ Nor did its use by the union’s rival, which was an estab-
lished teacher union. The Court in Perry relied heavily upon the
existence of a wide variety of media of expression, including
the post office, that were available to the petitioner there and
are available to TURN here. Perry squarely refutes the mono-
poly contention in the case at bar, as well as the contention that

PG&E’s use of its own billing envelope makes the envelope a
public forum.

The State’s authority to regulate, here, derives from PG&E’s
natural monopoly in the furnishing of gas or electricity. Regu-
lation is a substitute for economic competition. This regulatory
authority is not unlimited; it must not be exercised so as to
engage in management decisions or interfere with PG&E’s legiti-
mate use of its property or exercise of its business.2°As this

20 Historically, this regulatory authority traces to Munn v. Illinois,
94 U.S. 113 (1877), in which the court said that the grain elevators

-13-

Court has said, While the State may regulate with a view to
enforcing reasonable rates and charges, it is not the owner of
the property of public utility companies, and it is not clothed
with the general power of management incident to ownership.
... Missouri ex rel. Southwestern Bell Telephone Company
v. Public Service Commission, 262 U.S. 276, 289 (1923); See
also Pond, Restraining Regulatory Activism: The Proper Scope
of Public Utility Regulation, 35 ADMIN. L. REV. 423 (1983)
(discussing Consolidated Edison and Central Hudson as well as
other cases in the context of the asserted monopoly justifica-
tion for regulation).

The same argument concerning monopoly made by the PUC
here could actually be better asserted in Perry Education Associa-
tion, supra, or in the case of a major metropolitan newspaper.
While PG&E does not have a monopoly (or anything close to
one) in the relevant media of expression, a metropolitan news-
paper in the United States today is in fact very likely to be
precisely such a monopoly. Yet no court would accept the
argument that such a newspaper, no matter how firmly estab-
lished its monopoly might be, could be required to provide

at issue stand. . . in the very ‘gateway of commerce,’ and take
toll from all who pass.” Id at 132. PG&E stands at the “gateway
of commerce” only with respect to gas and electricity. It does
not stand at the “gateway of commerce” in expression or com-
munications; in fact, it is itself a user and tollpayer at that gate.

This Court has repeatedly rejected efforts to require even
businesses affected with a public interest to allow public use of their
property without compensation. E.g., Reagan v. Farmer’s Loan &
Trust Co., 154 U.S. 362, 410 (1894) (“Is it any less a departure
from the obligations of justice to seek to take, not the title, but
the use, for the public benefit, at less than its market value?”);
Smyth v. Ames, 169 U.S. 466, 546 (1898) (“the corporation may
not be required to use its property for the benefit of the public
without receiving just compensation”); Bowles v. Willingham,
321 U.S. 503, 517 (1944) (rent controls upheld only on condition
that owners not be required to sell any commodity or offer any
accommodation”); NAACP v. FPC, supra; Consolidated Edison
Co. v. Pub. Serv. Co., supra; Central Hudson Gas & Elec. Corp.
v. Pub. Serv. Co., supra.

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——

its pages for the use of a separate entity selected by a government
agency, when the newspaper’s own editors would not choose
to publish the view of that separate entity and indeed would not
even see the pages until they were published. Precisely that
result has been reached by the PUC here. See Miami Herald
Publishing Company v. Tornillo, supra. Such a requirement
would be unconstitutional even in the broadcasting context,
in which there is justification for regulation to prevent frequency
interference. Columbia Broadcasting System v. Democratic
National Committee, supra. It is even less logical to uphold
such a requirement in the case of an entity such as PG&E, that
is not in the communications business and has no claim to any
communications monopoly.

A part of TURN’s argument hinges on the theory that
TURN will obtain more reader attention for its monetary
solicitations if they are sent with the recipient’s electric bill.
Thus TURN expects to gain a fundraising advantage over groups
that must use direct mail, such as the American Cancer Society,
the YMCA, or the Cub Scouts, by using for solicitation pur-
poses an envelope that a captive audience must open and give
attention to. TURN’s effort to obtain such a competitive ad-
vantage in the marketplace of fundraising is not a cognizable
legal interest. It consists, ironically, of an effort to obtain the
involuntary competitive benefits of the billing envelope for the
benefit of TURN, so as to obtain monetary contributions that
would otherwise flow to charitable organizations that PG&E’s
customers might consider more worthy. TURN's argument
in this regard is inconsistent with Perry Education Association,
supra.

CONCLUSION

The decision of the California Public Utilities Commission
is inconsistent with the first amendment and should be reversed.

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Respectfully submitted,

David Crump,

Counsel of Record

Jean Powers

South Texas College of Law
1303 San Jacinto

Houston, Texas 77002
(713) 659-8040

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0160%3A22. Public record. Not legal advice.