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

Supreme Court brief1986

Ask Donna

What actually matters in this document.

Text

No. 84-1044 (2) Office Supreme Court, US. |

FILED

IN THE

1985

SUPREME COURT JUL 20 '9

OF THE UNITED STATES | y. cus STEVAS.

October Term, 1984 asm =

PACIFIC GAS AND ELECTRIC COMPANY,

Appellant,

vs.

PUBLIC UTILITIES COMMISSION OF THE

STATE OF CALIFORNIA, et al.,

Appellees.

ON APPEAL FROM

THE SUPREME COURT OF CALIFORNIA

BRIEF OF THE STATES OF CALIFORNIA,

CONNECTICUT, INDIANA, LOUISIANA,

MONTANA, NEBRASKA, NEVADA, NEW

MEXICO, NORTH CAROLINA, NORTH

DAKOTA, OHIO, RHODE ISLAND, TEXAS

AND WEST VIRGINIA AS AMICI CURIAE

IN SUPPORT OF APPELLEES

State of California

JOHN K. VAN DE KAMP

Attorney General

HERSCHEL T. ELKINS

Senior Assistant Attorney General

*MICHAEL R. BOTWIN

Deputy Attorney General

3580 Wilshire Boulevard

Los Angeles, California 90010

(213) 736-2160

*Counsel of Record

(List of Counsel for Amici continued inside front cover)

a |

Lede!

—=

—

_—

—

edie

Lawyer's Brief Service, Inc. / Legal Publishers / (213) 383-4457

HO PP

State of Connecticut

Department of Public Utility Control

JOSEPH I, LIEBERMAN

Attorney General

WILLIAM B. GUNDLING

Assistant Attorney General

ELLIOT F. GERSON

Deputy Attorney General

One Central Park Plaza

New Britain, Connecticut 06051

(203) 327-1553, Ext. 2114

State of Indiana

LINLEY E, PEARSON

Attorney General

WILLIAM E, DAILY

Deputy Attorney General

219 State House

Indianapolis, Indiana 46204

(317) 232-6217

State of Louisiana

WILLIAM J. GUSTE, JR.

Attorney General

KENDALL L. VICK

Assistant Attorney General

234 Loyola Avenue, 7th Floor

New Orleans, Louisiana 70112

(504) 568-5575

State of Montana

MIKE GREELY

Attorney General

PATRICIA J, SCHAEFFER

Assistant Attorney General

Justice Building

215 North Sanders

Helena, Montana 59620

(406) 444-2026

State of Nebraska

ROBERT M., SPIRE

Attorney General

JOHN BOEHM

Assistant Attorney General

2115 State Capitol

Lincoln, Nebraska 68509

(402) 471-2682

State of Nevada

BRIAN McKAY

Attorney General

WILLIAM E, ISAEFF

Chief Deputy Attorney General

Heroes Memorial Building

Capitol Complex

Carson City, Nevada 89710

(702) 885-4170

State of New Mexico

PAUL BARDACKE

Attorney General

P.O. Drawer 1508

Santa Fe, New Mexico 87504-1508

(505) 827-6000

State of North Carolina

LACY H, THORNBURG

Attorney General

JO ANNE SANFORD

Special Deputy Attorney General

KAREN E. LONG

Assistant Attorney General

P.O. Box 629

Raleigh, North Carolina 27602

(919) 733-7214

State of North Dakota

NICHOLAS J. SPAETH

Attorney General

TERRY L. ADKINS

Assistant Attorney General

State Capitol

Bismarck, North Dakota 58505

(701) 224-2210

State of Ohio

ANTHONY J. CELEBREZZE, JR.

Attorney General

ROBERT S. TONGREN

Assistant Attorney General

180 East Broad Street, 7th Floor

Columbus, Ohio 43215

(614) 466-4395

State of Rhode Island

ARLENE VIOLET

Attorney General

CONSTANCE L. MESSORE

Special Assistant Attorney General

72 Pine Street

Providence, Rhode Islarid 02903

(401) 274-4400, Ext. 290

State of Texas

JIM MATTOX

Attorney General

LARRY J. LAURENT

Assistant Attorney General

P.O. Box 12548

Austin, Texas 78711

(512) 475-1101

State of West Virginia

CHARLIE BROWN

Attorney General

DAVID L. GRUBB

Deputy Attorney General

1204 Kanawha Boulevard East

Charleston, West Virginia 25301

(304) 348-8986

Page

py) Re yy ss 5 eee

gg TREE

SUMMARY OF ARGUMENT. ..........cccccccccssssssssccsscseees

PL SR ON a a ar

I. THE STATE HAS THE POWER TO

Il.

TOPICAL INDEX

REASONABLY REGULATE THE USE

OF BILLING ENVELOPES PURSUANT

TO ITS POLICE POWERS OVER PUBLIC

EET SIENA RR a oe OUR

pL Le Soe, SON OT Oe EI

B. Inasmuch as National Policy Strongly

Disfavors Monopolies, the P.U.C.’s Order

Is a Reasonable Exercise of the State’s

Police Powers in Regulating State-Created

ITI, ciitrnttetidisiicintiniduinitnnnipiaminhatiiinetimimiecss

C. The State Has an Important Interest in

Promoting Public Awareness and Public

Participation in P.U.C. Matters ....................00

THE P.U.C."S ORDER DOES NOT VIO-

LATE PG&E’S RIGHTS OF FREE

SPEECH AND FREE ASSOCIATION

BUT RATHER PROMOTES _— TRA-

DITIONAL FREE SPEECH VALUES ..............

ESET Sa ee Seer er ae me

B. The State Has a Substantial Interest in

Extending Effective Speech to Public

I III crnncorncnstunienssiseesininmrenenmneons

C. The P.U.C.’s Order Does Not Regulate the

Time, Place and Manner of PG&E’s

BROOCH ...00.000.ccseccreccceccsecccccccccsccnscossveseseseseseossecesocess 17

D. The P.U.C.’s Order Is a Permissible

Subject-Matter Regulation ..............ccccseeeeeeeeees 19

E. The P.U.C.’s Order Is Narrowly Drawn to

Serve a Compelling State Interest ....................++. 21

F. The P.U.C.’s Order Does Not Violate

PG&E’s Freedom of Association and

Right to Remain Silent ..............:ccccceceeseeeeeeeeeeeees 22

COINCLIUGIONN ccccccccccccessocccsssccscccscsccccsccccccscctesseosssssccssoscooees 25

TABLE OF AUTHORITIES

Page

Cases

Apex Hosiery Co. v. Leader (1940)

310 U.S. 469, 84 L.Ed. 1311, 310 S.Ct.

gp PARE AR RE EE eh Sento os RnO n 5

Associated Press v. United States (1945)

326 U.S. 1, 89 L.Ed. 2013, 65 S.Ct. 1416

Sshanesheaianeieatibadeitaleipdaaeiiaaiaagiisiaddiaagibidebecichiabecsastmaeenes 13, 24

Bates v. State Bar of Arizona (1977)

433 U.S. 350, 53 L.Ed.2d 810, 97 S.Ct.

2691, reh. den. 434 U.S. 881, 54 L.Ed.

eg RLS ISTO nc 23

California Liquor Dealers v. Midcal Aluminum

(1980)

445 US. 97, 63 L.Ed.2d 233, 100 S.Ct.

DO Uilitchactinnchercinitinitaanissibaiaidabintinsbieshtiietnienecessestatintien 6

Cantor v. Detroit Edison Co. (1976)

428 US. 579, 49 L.Ed.2d 1141, 96 S.Ct.

A eS ee 6, 7

CBS, Inc. v. F.C.C. (1981)

453 US. 367, 69 L.Ed.2d 706, 101 S.Ct.

ge nee ie Sn ie aap coe 13

Central Hudson Gas v. Public Service Comm’n

(1980)

447 US. 557, 65 L.Ed.2d 31, 100 S.Ct.

eee ET re a 9, 15, 23

—

Community Communications v. Boulder (1982)

455 U.S. 40, 70 L.Ed.2d 810, 102 S.Ct.

TUTE conssssnnbinpntecnsindiadaaidaantiaendddiinitiabisiniidemndetamensteccsene 6

Consolidated Edison v. Public Serv. Comm’n (1980)

447 US. 530, 65 L.Ed.2d 319, 100 S.Ct.

EEN sctuisiassisinnneicmiaipanntiniiiiiiiciniiadeciaiaenasiin 7, 9, 15, 17

Cornelius v. NAACP Legal Defense and Educa-

tional Fund, Inc., (decided July 2, 1985)

es 8 OU US) 20

F.C.C. v. Nat. Cit. Comm. For Broadcasting (1978)

436 U.S. 775, 56 L.Ed.2d 697, 98 S.Ct.

SEED | cuinscissteientinbistsiliniibiasiiiiniennetaneasionnenen 13, 20, 24

Friedman v. Rogers (1979)

440 US. 1, 59 L.Ed.2d 100, 99 S.Ct. 887,

reh. den. 441 U.S. 917, 60 L.Ed.2d 389, 99

SIE. SPIE ‘Ainapissepientdianiisinsinccenccaniiniitdanenmnsncncetien 17, 20

Garrison v. Louisiana (1964)

379 US. 64, 13 L.Ed.2d 125, 85 S.Ct. 209 ...... 13

Goldfarb v. Virginia State Bar (1975)

421 US. 773, 44 L.Ed.2d 572, 95 S.Ct.

2004, reh. den. 423 U.S. 886, 46 L.Ed.2d

Pe ee WINE etetntentnscdsnnsaedbhnetinctemanststtneseeenerece 6

Hynes v. Mayor of Oradell (1976)

425 US. 610, 48 L.Ed.2d 243, 96 S.Ct.

aT. ciaieecaninasdadanadaarinaninimanidaieidntinidasinidainenmsaiuintentemee 16

Miami Herald Publishing Co. v. Tornillo (1974)

418 US. 241, 41 L.Ed.2d 730, 94 S.Ct.

ETE > ieieticnigiarntimemieantintiemmemene 22, 24

Nebbia v. New York (1934)

291 U.S. 502, 78 L.Ed. 940, 54 S.Ct. SOS ........ 18

Ohralik v. Ohio State Bar Assn. (1978)

436 US. 447, 56 L.Ed.2d 444, 98 S.Ct.

1912, reh. den. 439 U.S. 883, 58 L.Ed.2d

Fo i 20

Parker v. Brown (1943)

317 U.S. 341, 87 L.Ed. 315, 63 S.Ct. 307 .......... 7

Perry Educ. Assn. v. Perry Local Educators’ Assn.

(1983)

460 US. 37, 74 L.Ed.2d 794, 103 S.Ct.

FIT sccicncsintisntisanenneeecnitnisiniansiineniinibiasievestiendinunenianetes 12, 20

Pruneyard Shopping Center v. Robins (1980)

447 US. 74, 64 L.Ed.2d 741, 100 S.Ct.

TIED. iccbidiscchadicaniatantemishincchinimetnerinbarsiendenmntcemenetss 18, 23

Red Lion Broadcasting Co. v. F.C.C. (1969)

395 U.S. 367, 23 L.Ed.2d 371, 89 S.Ct.

SFOS sciccetersibieretnttinntilitntinen 13, 20, 21, 22, 24

Sale v. Railroad Commission (1940)

ee 8

Seattle Times Co. v. Rhinehart (1984)

a Wah ame en GEE ame

Be GRU eieretentecesicdetenntpreessescsveesecenscceesseee 12, 20

United States v. Topco Associates (1972)

405 US. 596, 31 L.Ed.2d 515, 92 S.Ct.

yea RARE dhlita «3 aA NED ES a OOOO 6

US. v. Albertini (decided June 24, 1985)

ey ey De GED crrerecceemnerrrereeeenens 12

US. v. Underwriters Assn. (1944)

322 U.S. 533, 88 L.Ed. 1440, 64 S.Ct.

TI diciasicienieiiecaiaeeinianesniineeteaiateinaibaundeduetnnsnneaninistsinentaccsin 6

U.S. Postal Service v. Greenburgh Civic Assns.

(1981)

453 US. 114, 69 L.Ed.2d 517, 101 S.Ct.

BETTE cocecerereszscecenccenvanssesneensuscusssennscssessumsesasesousees 12, 20

Va. Pharmacy Bd. v. Va. Consumer Council (1976)

425 U.S. 748, 48 L.Ed.2d 346, 96 S.Ct.

BIRT . ccremmstctnttentemamtnenietememmaneimen 12, 24

West Virginia-Citizen Action Group et al. v. Public

Service Comm'n (Case No. 16512, decided

May 30, 1985)

cen WE eRe etait. dete TED. ems. Geenesennenennsneqsevenesnsnccasen 10

Wooley v. Maynard (1977)

430 US. 705, 51 L.Ed.2d 752, 97 S.Ct.

BGITD cssevesunensinnsedsantntnentnnenscennesesssnsnsennscnstoncenssecence 22, 23

Young v. American Mini Theatres (1976)

427 US. SO, 49 L.Ed.2d 310, 96 S.Ct.

2440, reh. den. 429 U.S. 873, SO L.Ed.2d

Seek Gee Be teiitiitientictene 20

Zauderer v. Office of Disciplinary Counsel (decided

May 28, 1985)

ann DE eng BO Da: Ge ccteinteenn 23

Statutes

20 California Administrative Code

A FOS GE GIS cesststnscscccssncvsscevccnsvescvcszseseossvcedeovsenccene 8

California Public Utilities Code

RAED | sccnsecrenesncsasnsenndsllichatenbnidellitinduinsscunssiiteataiiadibitden 3, 11

TRG ccssncienecisscnniansitbincenbeiesernasatincenitintenniacsieveitie 4. 11

1 FH | cccninsecienccnsbnsetslinzcemedtnententensnmnennsnansecnatectilinckablinens 11

o - <a oo —

Federal Statutes

The Sherman Act

Bl CIS UBCA. | 8) nccccrccccccsccccrcccececcevceceecesseeees 5, 6

16US.C.A.

BEE cccecccccecescsccscsevcccesccsscvessoscssconoscecssceccsesscccossesescnse 11

BD BEBE cccccccceccsrsccecccccecscscssssecsnsscvcencssescsscscseoscssosssses 4, 11

D BGSI ncccccrccecccvscscorcccevecscsovcescosecsccsscsscscsesocescosssssecoeoes 11

Constitutions

California Constitution

Article 12 § 2 cccccccccccsseee Dcocccsintniusitnnstipiniuthsncesbichsinisns 11

Asthala 12 GS ncccccccccccrcccrccserscovcegeccecseccccssecceosessscssees 11

Mate 13 BG cccorccrcrcrererescrscsccrccsccsssccssesccocensceseee 4, 11

United States Constitution

. EE 2, 4, 12, 15

Fourteenth Amendment ............cc00 2, 4, 12, 15

No. 84-1044

IN THE

SUPREME COURT

OF THE UNITED STATES

October Term, 1984

PACIFIC GAS AND ELECTRIC COMPANY,

Appellant,

vs.

PUBLIC UTILITIES COMMISSION OF THE

STATE OF CALIFORNIA, et al.,

Appellees.

BRIEF OF THE STATES OF CALIFORNIA,

CONNECTICUT, INDIANA, LOUISIANA,

MONTANA, NEBRASKA, NEVADA, NEW

MEXICO, NORTH CAROLINA, NORTH

DAKOTA, OHIO, RHODE ISLAND, TEXAS

AND WEST VIRGINIA AS AMICI CURIAE

IN SUPPORT OF APPELLEES

INTEREST OF AMICI

Amici are the States of California, Connecticut, Indiana,

Louisiana, Montana, Nebraska, Nevada, New Mexico,

North Carolina, North Dakota, Ohio, Rhode Island, Texas

and West Virginia. Public utilities, operating as

monopolies, exist in our jurisdictions. They cannot exist

without State sanction, and having given such sanction, we

have the responsibility to closely supervise and regulate

these utilities to protect the public from monopolistic

abuses. Each State must be free to exercise this power in a

reasonable manner for the benefit of its citizens.

Appellant's brief challenges the ability of the State to

issue reasonable orders it deems appropriate to enhance

public awareness of and participation in the State's

regulatory proceedings concerning public utilities by

allowing ratepayer associations access to public utility

billing envelopes. Such public participation can greatly

assist the State in fulfilling its duties to assure efficient

utility services at reasonable rates. We consequently appear

aS amici to protect our traditional police powers over public

utilities.

SUMMARY OF ARGUMENT

American policy strongly disfavors monopolies. Public

utilities can only operate as monopolies with State

permission. Because of the inherent dangers that monopo-

lies pose, public utilities are subject to strict State control.

Pursuant to its traditional police powers, the State can issue

orders authorizing ratepayer associations to insert their

literature in the billing envelopes. Such orders can be

properly made regardless of whether the “empty space” in

the billing envelopes belongs to the public utility or to the

ratepayers.

Requiring envelope sharing does not violate the public

utility’s right of free speech or free association under the

First and Fourteenth Amendments. The challenged order

neither compels nor prohibits PG&E’s speech. PG&E

remains free to enclose its literature in each monthly billing

envelope without restriction. Rigid disclosure requirements

prevent the public from confusing ratepayers’ literature for

that of appellant.

The challenged order promotes the values of free speech

by extending a voice to ratepayers. By encouraging

ratepayers’ speech, the public becomes better informed and

more active in the regulatory process. Consequently, the

State receives a broader spectrum of views, information,

and proposals from its citizens. Thus, the State is able to

regulate public utilities in a wiser and more equitable

manner.

ARGUMENT

THE STATE HAS THE POWER TO REA-

SONABLY REGULATE THE USE OF

BILLING ENVELOPES PURSUANT TO ITS

POLICE POWERS OVER PUBLIC UT-

ILITIES

A. Introduction

This case challenges the State's right and ability to

regulate public utilities. Public utilities are state-created and

regulated monopolies. Like most regulatory agencies, the

California Public Utilities Commission (hereinafter

“P.U.C.” or the “Commission” has a mandated duty to set

“just and reasonable rates.” Cal. Pub. Util. Code § 451 (cf.

16 U.S.C.A. §§ 2601 and 2611(3) re: federal requirements

concerning electric utilities). It also has the duty to assure

“adequate, efficient, just and reasonable service” to the

public. Cal. Pub. Util. Code § 451.

Effectuating these policies requires public awareness of

and public participation in Commission activities. For

example, state law requires that utilities notify customers of

requested rate increases and provide them with an

opportunity to contest the proposed increases. Cal. Pub.

Util. Code § 454. Federal law pertaining to electric utilities

contains similar provisions. 16 U.S.C.A. §§ 2621 and

2625(f).

The P.U.C., after public notice and hearing, gave a

consumer advocacy organization, Toward Utility Rate

Normalization (hereinafter ““TURN”), the right to include

inserts in the “empty space” of the billing envelopes of

Pacific Gas and Electric Company (hereinafter “PG&E”)

four times per year. The P.U.C.’s order provides a

mechanism whereby knowledgeable ratepayer associations

have the opportunity to solicit membership and funds, to

disseminate important information, and to participate

effectively in the regulatory process. This order was well

within the P.U.C.’s constitutional authority to establish

rates and rules, and take testimony. (Cal. Const. art. 12,

§ 6). The “empty space” was determined by prior decision

to be the property of the ratepayers and not that of the

public utility. (P.U.C. Decision No. 93887.) This order is

now final. See P.U.C.’s Motion to Dismiss, p. 8.

PG&E contends that the Commission’s order granting

TURN access to the billing envelopes is constitutionally

infirm as it violates PG&E's rights to freedom of speech

and freedom of association under the First and Fourteenth

Amendments.

Amici contend that the central issue in this case does not

turn on who owns the billing envelope, who pays the

postage, or peculiarities of postal rates, but upon more

fundamental issues concerning the State’s ability to regulate

public utilities. The order is a reasonable exercise of the

Commission’s regulatory powers. It fosters public knowl-

edge, debate and participation in P.U.C. matters. Moreover,

the order encourages our citizenry to petition their

government on the cost of vital services and minimizes the

potential harm of undue influence by state-created

monopolies in subjecting them to more adversarial

proceedings before the P.U.C. Ultimately, the goal is to

enhance the Commission’s ability to set equitable rates and

assure reasonable service to the public.

B. Inasmuch as National Policy Strongly

Disfavors Monopolies, The P.U.C.’s Order Is

a Reasonable Exercise of the State’s Police

Powers in Regulating State-Created

Monopolies

The dangers of monopolies are well known in American

history. The Sherman Act —

“was enacted in the era.of ‘trusts’ and of

‘combinations’ of businesses and of capital

organized and directed to control of the market

by suppression of competition in the marketing of

goods and services, the monopolistic tendency of

which had become matter of public concern. The

end sought was the prevention of restraints to free

competition in business and commercial transac-

tions which tended to restrict production, raise

prices or otherwise control the market to the

detriment of purchasers or consumers of goods

and services, all of which had come to be regarded

as a special form of public injury.” Apex Hosiery

Co. v. Leader (1940) 310 U.S. 469, 492-93, 84

L.Ed. 1311, 310 S.Ct. 982.

Section 1 of the Sherman Act (15 U.S.C.A § 1) was

drafted in the broadest possible terms. “Language more

comprehensive is difficult to conceive.” U.S. v. Under-

writers Assn. (1944) 322 U.S. 533, 553, 88 L.Ed. 1440, 64

S.Ct. 1162; Goldfarb y. Virginia State Bar (1975) 421 US.

773, 787, 44 L.Ed.2d 572, 95 S.Ct. 2004, reh. den. 423 US.

886, 46 L.Ed.2d 118, 96 S.Ct. 162. This court has observed

that —

“Antitrust laws in general, and the Sherman Act

in particular, are the Magna Carta of free

enterprise. They are as important to the

preservation of economic freedom and our free-

enterprise system as the Bill of Rights is to the

protection of our fundamental personal

freedoms.” United States v. Topco Associates

(1972) 405 U.S. 596, 610, 31 L.Ed.2d 515, 92 S.Ct.

1126; Community Communications vy. Boulder

(1982) 455 U.S. 40, 56, 70 L.Ed. 2d 810, 102 S.Ct.

835.

Public utilities are not exempt from antitrust laws. 16

U.S.C.A. §§ 2602(1) and 2603. Their right to exist and

function as monopolies is premised upon State authoriza-

tion and then, only when actively supervised by the State.

Cantor v. Detroit Edison Co. (1976) 428 U.S. 579, 596-597,

49 L.Ed.2d 1141, 96 S.Ct. 3110; California Liquor Dealers

v. Midcal Aluminum (1980) 445 U.S. 97, 63 L.Ed.2d 233,

100 S.Ct. 937.

An implied exemption to the Sherman Act was created

by this Court in the area of State economic regulation.

There is “nothing in the language of the Sherman Act or in

its history which suggests that its purpose was to restrain a

state or its officers or agents from activities directed by its

legislature.” Parker v. Brown (1943) 317 U.S. 341, 350-51,

87 L.Ed. 315, 63 S.Ct. 307.

State regulation of public utilities falls well within the

“implied exemption” rule. This Court has observed that —

“...[Plublic utility regulation typically assumes

that the private firm is a natural monopoly and

that public controls are necessary to protect the

consumer from exploitation.” Cantor v. Detroit

Edison Co., supra at 595-596.

In his dissenting opinion in Consolidated Edison v. Public

Serv. Comm’n (1980) 447 U.S. 530, 65 L.Ed.2d 319, 100

S.Ct. 2326, Justice Blackmun noted the unique nature of a

public utility as a state-created monopoly and commented

as follows:

“This exceptional grant of power to private

enterprises justifies extensive oversight on the part

of the State to protect the ratepayers from

exploitation of the monopoly power through

excessive rates and other forms of overreaching.

For this reason, the State regulates the rates that

utilities may charge.” Id. at 550.

In Cantor v. Detroit Edison Co., supra, this Court made a

similar observation:

“Unquestionably there are examples of eco-

nomic regulation in which the very purpose of the

government control is to avoid the consequences

of unrestrained competition ...[A]ll economic

regulation does not necessarily suppress competi-

tion. On the contrary, public utility regulation

typically assumes that the private firm is a natural

monopoly and that public controls are necessary

to protect the consumer from exploitation.” Jd. at

595-596; Sale v. Railroad Commission (1940) 15

Cal.2d 612, 617, 104 P.2d 38.

The P.U.C.’s order promotes effective regulation of

utilities. The Commission reasonably found that a

knowledgeable and active public represented by experi-

enced ratepayer organizations will provide ideas, sugges-

tions, information and proposals that will lead to better

informed decision-making by the Commission. Clearly, the

order enhances public scrutiny of public utility proposals.

Rate setting is a complex and difficult process and is

beyond the ability of most citizens to present meaningful

comment. While state law provides for the payment of

attorneys’ fees, expert fees and other costs to consumers

under certain circumstances (20 Cal.Admin. Code §§ 76.01

et seq. cf. 16 U.S.C.A. § 1632), compensation for these

expenses are not guaranteed. Nor does the possibility of

such compensation necessarily encourage grassroots parti-

cipation in P.U.C. matters. Requiring public utilities to

“envelope share” with ratepayer organizations is the most

effective means of affording the general customer

population a meaningful mechanism to become involved in

P.U.C. matters.

The value of the contributions made by ratepayer

organizations in P.U.C. proceedings is substantial. The

P.U.C. expressly found that “{plarticipation by representa-

tives of consumer groups tends to enhance the record in our

proceedings and complements the efforts of the Commis-

sion staff” and that “‘TURN’s proposal will help assure the

fullest possible participation in our proceedings.” (See

P.U.C.’s Motion to Dismiss, A-36, Findings 29 and 30.)

Both utility shareholders and utility customers have

strong economic reasons for having their views prevail.

Shareholders want high rates in order to achieve higher

dividends. Conversely, customers want to minimize the

amount of their utility bills. The P.U.C. is interested in

making wise, informed decisions so that rates will be ‘“‘just

and reasonable” to customers and so that shareholders may

enjoy a reasonable rate of return on their investment. In

order to foster these goals, the P.U.C. exercised its broad

police powers over public utilities and established a

mechanism to give PG&E’s 3.6 million electric customers

and 2.9 million gas customers an effective voice before the

Commission.

In the area of public utility regulation, the competition in

the “marketplace of ideas” comes from the public utility’s

customers rather than from competing businesses. The

P.U.C.’s order encourages such competition which is the

cornerstone of our economic system. Through weighing

competitive ideas, information and proposals, the Commis-

sion can more ably discharge its duties in regulating public

utilities.

C. The State Has an Important Interest in

Promoting Public Awareness and Public

Participation in P.U.C, Matters

Both Consolidated Edison v. Public Serv. Comm'n, supra,

and Central Hudson Gas y. Public Service Comm’n (1980)

447 US. 557, 65 L.Ed.2d 341, 100 S.Ct. 2343, concerned the

public utility’s right of free speech. Now this Court must

decide if the State can foster the speech of its citizens by

requiring public utilities to enclose literature from ratepayer

associations in billing envelopes. In the case of PG&E,

customers in 48 of the State’s 58 counties, 3.6 million

electric customers, 2.9 million gas customers, and 3.7

million households are involved. (See Appellant’s Brief, pp.

3-4.)

—_—

The State’s ability to provide a forum for speech to

millions of its citizens is critical to its police powers over

public utilities. Recently, this issue was decided favorably to

the State by the West Virginia Supreme Court. West

Virginia-Citizen Action Group et al. v. Public Service

Comm’n (Case No. 16512, decided May 30, 1985) —

W. Va. —_., — S.E.2d —. In that case, the Appalachian

Power Company, a public utility, enclosed a pamphlet in

each billing envelope which described acid rain as a

“perceived but unproved problem” and urged each

customer to contact certain elected officials to defeat

pending federal legislation. Several non-profit organizations

which had an interest in the acid rain problem requested

permission first from the public utility and subsequently

from the Public Service Commission to enclose literature

presenting the opposing side of the issues in the billing

envelopes. The public utility denied the request outright,

while the commission denied the request on jurisdictional

grounds.

In reversing the order of the Public Service Commission,

the West Virginia Supreme Court stressed the importance

of “fairness” and providing a “public forum” so that

complete information involving controversial issues may

reach the consuming public. The Supreme Court stated the

following:

“Accordingly, we hold that where a public utility

communicates, through its billing process, with its

customers upon matters concerning the costs

customers must bear if certain legislation con-

cerning utilities is enacted into law, the Public

Service Commission of West Virginia has

jurisdiction under its authority to (1) safeguard

the interests of the public, and (2) regulate the

oe ee teeth

—

‘practices, services and rates of public utilities,’ to

establish methods by which the utility’s customers

may receive contrasting or opposing viewpoints

concerning such costs.” (Slip Opinion, p. 21.)

Similarly, the P.U.C.’s order is well within its regulatory

powers over public utilities. The Legislature has plenary

powers over public utilities. Cal. Const. art. 12,§ 5. Many

of these powers have been delegated to the Commission

including the power to establish its own procedures (Cal.

Const. art. 12, § 2), the power to “fix rates, establish rules,

examine records, issue subpenas, administer oaths, take

testimony, punish for contempt, and prescribe a uniform

system of accounts” for all public utilities under its

jurisdiction (Cal. Const. art. 12, § 6), and the power to “do

all things, whether specifically designated in this part or in

addition thereto, which are necessary and convenient in the

exercise of such power and jurisdiction” (Cal. Pub. Util.

Code § 701). The P.U.C.’s order is a reasonable exercise of

its authority to fix rates, establish rules and take testimony.

It fosters the Commission’s information-gathering ability by

stimulating public awareness and participation in Commis-

sion matters, thereby creating a “check and balance”

approach to Commission proceedings through broader-

ranging speech.

State law requires that the retail rates charged by public

utilities to their customers be “‘just and reasonable” and that

the public has a right to participate in the rate setting

process. (E.g. Cal. Pub. Util. Code §§ 451 and 454; c/.16

US.C.A. §§ 2601, 2611, 2621, 2631, 2632.) In furtherance

of these legislative goals, the Commission’s order provides a

forum from which the ratepayers’ voice can be heard

thereby encouraging a full, public discussion of issues

pertaining to rates and services while promoting more

—

active, informed public participation in the Commission’s

proceedings. Consequently, the order is a reasonable

exercise of the State’s supervisory powers over its public

utilities because it establishes a procedure to assure that the

Commission discharges its duty in setting equitable rates

and assuring reasonable services in a wise and prudent

manner. As discussed in Argument II, infra, the order does

not infringe on the utility’s freedom of speech or freedom of

association.

Even though the ratepayers do not have a constitutional

right to include their notices in public utility billing

envelopes nor to receive information via such envelopes (c/.

U.S. Postal Service v. Greenburgh Civic Assns. (1981) 453

U.S. 114, 69 L.Ed.2d 517, 101 S.Ct. 2676; Seattle Times Co.

vy. Rhinehart (1984) — U.S. —, — L.Ed.2d —, 104 S.Ct.

2199; Perry Educ. Assn. v. Per.y Local Educators’ Assn.

(1983) 460 U.S. 37, 74 L.Ed.2d 794, 103 S.Ct. 948), U.S. v.

Albertini (decided June 24, 1985) — U.S. —, 53 U.S.L.W.

4844), the State does have an interest and a right to require

such notices when it determines that this is a reasonable

means to promote speech and greater participation by the

public in the rate-setting process. The value of both political

and commercial speech is unquestioned. This court has

recognized —

‘(T]hat people will perceive their own best

interests if only they are well enough informed,

and that the best means to that end is to open the

channels of communication rather than to close

them.” Va. Pharmacy Bd. v. Va. Consumer Council

(1976) 425 U.S. 748, 770, 48 L.Ed.2d 346, 96 S.Ct.

1817.

The goal of the First Amendment is to achieve “the

widest possible dissemination of information from diverse

ne ee ee

ee ee ee ~

and antagonistic sources ...” (F.C.C. v. Nat. Cit. Comm.

For Broadcasting (1978) 436 U.S. 775, 795; 56 L.Ed.2d 697,

98 S.Ct. 2096, quoting from Associated Press v. United

States (1945) 326 US. 1, 20, 89 L.Ed. 2013, 65 S.Ct. 1416)

and “to preserve an uninhibited market place of ideas in

which truth will ultimately prevail, rather than to

countenance monopolization of that market, whether it be

by the Government itself or a private licensee.” Red Lion

Broadcasting Co. v. F.C.C. (1969) 395 U.S. 367, 390, 23

L.Ed.2d 371, 89 S.Ct. 1794, also quoting from Associated

Press v. United States, supra at 20.

“{S]peech concerning public affairs is more than self-

expression; it is the essence of self-government.” Garrison y.

Louisiana (1964) 379 U.S. 64, 74-75, 13 L.Ed.2d 125, 85

S.Ct. 209; Red Lion Broadcasting Co. v. F.C.C., supra at 390;

CBS, Inc. v. F.C.C. (1981) 453 U.S. 367, 396, 69 L.Ed.2d

706, 101 S.Ct. 2813. The State has a compelling interest in

assuring public access to information and meaningful public

participation in the P.U.C.’s regulatory process over

monopolistic public utilities. Cléarly, the services public

utilities provide such as gas, electricity and water serve

basic human needs. Each public utility customer has an

interest in and is affected by utility rates. To the

economically disadvantaged, the cost of such services is

vital. The P.U.C. acted reasonably and responsibly in giving

utility customers a voice that can be heard through billing

envelope access.

Unless this court upholds the P.U.C.’s order, public

utilities may be able to limit effective participation by

customers at Commission hearings, thereby restricting the

free flow of essential information from ratepayers to the

P.U.C. No public benefit can come from such a situation.

The States must be free to enact effective regulations

on.

assuring a public voice in the establishment of the cost of

those services vital to everyone.

THE P.U.C.’S ORDER DOES NOT VIOLATE

PG&E’S RIGHTS OF FREE SPEECH AND

FREE ASSOCIATION BUT RATHER PRO-

MOTES TRADITIONAL FREE SPEECH

VALUES

A. Introduction

At issue in this case is not whether PG&E’s speech is

restricted, but whether other voices can be heard. The

Commission’s order does not regulate the content of

PG&E's speech nor does it prevent PG&E from inserting its

publication, Progress, in each billing envelope at its own

expense. As the Commission stated —

“Nothing in the decision prohibits PG&E from

disseminating Progress in the billing envelope,

even in the months in which access is granted to

TURN, so long as it pays the additional postage

costs, if any; and if the envelope space is lacking,

PG&E is free to expand the size of its envelope.”

P.U.C.’s Motion to Dismiss, p. 15.

Simply put, the order gives billing envelope access to

TURN, a ratepayer association with a track record of

proven value to the P.U.C. !

' The P.U.C. expressly found that “TURN has demonstrated in its

testimony and in past perticipation in proceedings before this

Commission an ability to represent the interests of a substantial segment

of the PG&E residential ratepayer population.” P.U.C.’s Motion to

Dismiss, p. A-19.

— =

This Court has recently held that public utilities have the

right of free speech under the First and Fourteenth

Amendments and may exercise that right through the

utilities’ billing envelopes. Central Hudson Gas v. Public

Service Comm'n, supra; Consolidated Edison v. Public Serv.

Comm’n, supra. These rulings were based on the high value

this country places on public debate and public awareness.

“Freedom of speech is ‘indispensable to the discovery and

spread of political truth,’ [citation] and ‘the best test of truth

is the power of the thought to get itself accepted in the

competition of the market. ...’" Consolidated Edison vy.

Public Serv. Comm’n, supra at 534. In Central Hudson Gas

v. Public Service Comm'n, upra at 562, this Court stressed

that people “ ‘will perceive their own best interests if only

they are well enough informed, and ... the best means to

that end is to open the channels of communication, rather

than to close them. ...’” Our historic commitment to the

freedom of speech is based on the premise that the “ ‘use of

such freedom will ultimately produce a more capable

citizenry and more perfect polity....’" Consolidated

Edison v. Public Serv. Comm’n, supra at 534.

In this case, a public utility seeks to suppress speech while

the State has fashioned a means to encourage it. The same

factors which compelled this court to extend the freedom of

speech to public utilities should now prompt it to uphold the

P.U.C.’s order extending effective speech to the utility’s

customers.

——

B. The State Has a Substantial Interest in

Extending Effective Speech to Public Utility

Ratepayers

P.U.C.’s rationale for providing public access to billing

envelopes through representative ratepayer associations

includes the following: (1) the empty space in the envelope

belongs to the ratepayers; (2) the utilities have been

permitted to use the extra space, without charge, to

communicate with ratepayers; (3) the extra space should be

used for the benefit of ratepayers; (4) TURN represents the

interest of a substantial number of ratepayers and will be

unable to do so in future proceedings because of fiscal

constraints; (5) allowing TURN to occasionally use the

extra space assures more complete ratepayer understanding

and participation in energy issues involving their utility; and

(6) the P.U.C. benefits by the effective participation of

consumer organizations in its proceedings. See generally

P.U.C.’s Motion to Dismiss, pp. A-19 to A-24, A-33 to A-36.

The Commission summarized its reasons as follows:

“Our goal ... is to change the present system to

one which uses the extra space more efficiently

for the ratepayers’ benefit. It is reasonable to

assume that the ratepayers will benefit more from

exposure to a variety of views than they will from

that of PG&E.” P.U.C.’s Motion to Dismiss, p.

A-22.

PG&E argues that by giving consumers envelope access,

the Commission has limited PG&E’s speech. For the

reasons set forth below, PG&E’s speech has not been

limited. If, arguendo, there is some limitation, nonetheless,

the right to exercise free speech must be balanced against

societal interests. E.g. Hynes v. Mayor of Oradell (1976)

— =

425 US. 610, 48 L.Ed.2d 243, 96 S.Ct. 1755

(noncommercial speech); Friedman vy. Rogers (1979) 440

US. 1, 59 L.Ed.2d 100, 99 S.Ct. 887, reh. den. 441 U.S. 917,

60 L.Ed.2d 389, 99 S.Ct. 2018 (commercial speech). The

P.U.C.’s order regulating speech must meet one of three

standards: “(i) a reasonable time, place, or manner

restriction, (ii) a permissible subject-matter regulation, or

(iii) a narrowly tailored means of serving a compelling state

interest.” (Emphasis added). Consolidated Edison v. Public

Serv. Comm’n, supra at 535.

Amici believe that when this court balances the State’s

interest in promoting speech against appellant’s interest in

suppressing speech under each of the three enumerated

standards, the scales will careen down on the side of the

State in each instance.

C. The P.U.C.’s Order Does Not Regulate the

Time, Place and Manner of PG&E’s Speech

“A restriction that regulates-only the time, place, or

manner of speech may be imposed so long as it is

reasonable” and is content-neutral. Consolidated Edison v.

Public Serv. Comm'n, supra at 536. PG&E seemingly

contends that the Commission’s order does not meet this

standard because the “time, place, or manner” test applies

only when the speaker (who is supposedly interfering with

PG&E’s speech) has a pre-existing right in the speaker’s

platform whereas the Commission’s order requires forced

entry into PG&E’s billing envelopes. Appellant draws the

analogy to governmental limitations on the use of public

sidewalks. App. Brief, pp. 20-22. Appellant’s argument

must fail for three reasons.

= =

First of all, the Commission’s order does not attempt to

regulate the time, place or manner of PG&E’s speech. As

previously discussed, PG&E is free to enclose Progress in

each month’s billing envelope, even in the months when

TURN ’'s literature is enclosed.

Secondly, the P.U.C. clearly held that the “empty space”

was the property of the ratepayers, and not Appellant’s.

This order is now final. See P.U.C.’s Motion to Dismiss, pp.

8 and A-33.

Thirdly, even if the Commission had found that the

empty space belonged to PG&E, proprietary rights in

, civate property are subject to State regulation. Pruneyard

Shopping Center v. Robins (1980) 447 US. 74, 64 L.Ed.2d

741, 100 S.Ct. 2035 is a case in point. At issue in Pruneyard

was whether members of the public had a right under state

law to circulate petitions and distribute pamphlets of a

political nature in a privately owned shopping center

against the owner's wishes. Holding that they did, this

Court observed that “neither property rights nor contract

rights are absolute. ... Equally fundamental with the

private right is that of the public to regulate it in the

common interest... .” Jd. at 84-85, quoting from Nebbia v.

New York, (1934) 291 U.S. 502, 523, 78 L.Ed. 940, 54 S.Ct.

2 The P.U.C.’s order was not based solely upon that premise. In its

order, the P.U.C. emphasized that “our jurisdiction over the extra space

does not depend solely or entirely on a determination of the ownership

of the extra space or the exact nature of a property right in such space.”

P.U.C.’s Motion to Dismiss, p. A-6.

Amici do not believe that ownership of the empty space controls the

propriety of the Commission’s order. Rather, we maintain that the

P.U.C.’s order is a valid exercise of the State’s police powers over public

utilities even absent the ratepayers’ proprietary interest in the empty

space.

— =

505. This is even more evident when the State is regulating a

utility which provides vital services a consumer cannot

otherwise obtain.

D. The P.U.C.’s Order Is a Permissible Subject-

Matter Regulation

The P.U.C.’s order does not regulate the content of

speech. Rather, it controls the vehicle by which speech can

be delivered to the public. As discussed in Argument I,

infra, the State has plenary powers over public utilities,

broad powers of which were delegated to the P.U.C. This

power has been summarized by the P.U.C. (which has

always exercised control over billing envelopes) as follows:

“The extra space in the billing envelope is a by-

product of an activity essential to the operation of

the regulated utility — billing. Since billing is an

essential and proper function of a regulated

utility, this Commission has allowed the utility to

recover its reasonable expenses — postage, mate-

rials, labor, overhead — from ratepayers. The

existence of the extra space is a direct conse-

quence of the act of billing for utility services and

the way in which postal costs are assessed.

“Because the billing space is so inextricably

related to activities subject to routine regulation,

we have repeatedly exercised our authority under

the State Constitution and Public Utilities Code

section 701 to permit and require the space to be

used for the benefit of ratepayers.” P.U.C.’s

Motion to Dismiss, pp. A-6 to A-7.

Billing envelopes have routinely been used to inform

customers of proposed rate hikes and public hearings

—-— =

without challenge. Public utilities have also been required

to enclose important information concerning conservation

programs, federal tax law and other public service-oriented

information. P.U.C.’s Motion to Dismiss, p. A-7. PG&E

does not even challenge that portion of the P.U.C.’s order

which gives the Commission first priority “to the billing and

legally-mandated notices to customers.” P.U.C.’s Motion to

Dismiss, p. A-22. Rather, its challenge is limited to the

propriety of TURN’s use of the empty space.

The government’s control over speech has always been

recognized where a regulation was a reasonable exercise of

its police powers. E.g., Red Lion Broadcasting Co. v. F.C.C,,

supra (broadcasters may be required to air opposing views);

U.S. Postal Service v. Greenburgh Civic Assns. (1981) 453

US. 114, 69 L.Ed.2d 517, 101 S.Ct. 2676 (public access to

mail boxes may be properly outlawed); Perry Education

Assn. vy. Perry Local Educators’ Assn., supra (public access

to school mail boxes may be restricted); Seattle Times Co. v.

Rhinehart, supra (public access to discovery documents may

be restricted); Ohralik v. Ohio State Bar Assn. (1978) 436

U.S. 447, 56 L.Ed.2d 444, 98 S.Ct. 1912, reh. den. 439 US.

883, 58 L.Ed.2d 198, 99 S.Ct. 226 (attorneys’ means of

soliciting clients may be restricted); Friedman v. Rogers,

supra (use of trade names by optometrists may be

prohibited); Young v. American Mini Theatres (1976) 427

U.S. 50, 49 L.Ed.2d 310, 96 S.Ct. 2440, reh. den. 429 USS.

873, 50 L.Ed.2d 155, 97 S.Ct. 2440, (location of adult

theaters may be regulated); F.C.C. v. Nat. Cit. Comm. For

Broadcasting (1978) 436 U.S. 775, 56 L.Ed.2d 697, 98 S.Ct.

2096 (co-ownership of newspapers and broadcast stations

may be regulated); Cornelius v. NAACP Legal Defense and

Educational Fund, Inc., (decided July 2, 1985) —_ US. —,

53 U.S.L.W. 5116 (government can properly exclude legal

defense and political advocacy organizations from partici-

pation in the Combined Federal Campaign.)

By requiring public access to billing envelopes, the P.U.C.

acted reasonably in exercising its regulatory powers over

appellant. The Commission uses the billing envelope for its

own legal notices “‘precisely because the billing envelope is

such an effective method of communicating with rate-

payers.” P.U.C.’s Motion to Dismiss, p. A-7. For probably

the same reason, PG&E uses the billing envelope to

disseminate Progress. Creating a doctrine of fairness

which provides a shared soapbox as the catapult of free

speech pursuant to the State’s regulatory powers over public

utilities is not unreasonable. Cf. Red Lion Broadcasting Co.

v. F.C.C., supra.

E. The P.U.C.’s Order Is Narrowly Drawn to

Serve a Compelling State Interest

Appellant gives a plethora of reasons why its speech

alone should be protected. PG&E claims that the P.U.C.’s

order impairs its right to communicate with its customers,

mandates the carrying of others’ messages, and is not

content-neutral. Amici contends the Commission’s order

democratically enhances its regulatory proceedings by

providing free speech to utility customers without impairing

the speech of others,

Nothing in the order prohibits PG&E’s right to speak to

its customers directly through each billing envelope or by

any other lawful means. The only restriction is the firmness

of appellant’s hold on its own purse strings. PG&E may

include its literature in each month’s billing envelopes as

long as it pays the additional postage. Since the empty space

is ratepayers’ property, Appellant’s literature will continue

—_—

to be mailed at ratepayers’ expense during the other

months. The order neither precludes nor compels speech by

PG&E or by others. It only provides a forum for speech.

See Red Lion Broadcasting Co. v. F.C.C., supra at 375.

Appellant expresses concern that “the commission takes

on the awesome and completely unmanageable task of

picking and choosing from the multitude of competing

interests, including political groups, who may wish to

communicate through PG&E’s envelope.” App. Br. p. 25,

n. 19. This concern is speculative at best and ignores the

facts of this case. The record reveals that out of millions of

customers served by Appellant, TURN was the only

applicant who requested use of the empty space. P.U.C.’s

Motion to Dismiss, p. A-35

Clearly, this lack of other requests emphasizes the

importance of opening the billing envelope to the speech of

others. The Commission expressly reserved the right to

review additional meritorious proposals should any arise in

the future. P.U.C.’s Motion to Dismiss, p. A-37. If the

P.U.C. abuses its authority concerning future proposals,

such orders will obviously be subject to appropriate judicial

review.

F. The P.U.C.’s Order Does Not Violate

PG@&E’s Freedom of Association and Right

to Remain Silent

Appellant and its amici supporters contend that the

Commission’s order violates PG&E’s right of free

association and right to remain silent, relying on Wooley v.

Maynard (1977) 430 U.S. 705, 51 L.Ed.2d 752, 97 S.Ct.

1428 and Miami Herald Publishing Co. v. Tornillo (1974)

418 US. 241, 41 L.Ed.2d 730, 94 S.Ct. 2831 for the

lin

proposition that state-mandated speech is constitutionally

infirm. Their reliance on these cases is misplaced.

In Wooley, this court upheld an injunction prohibiting

New Hampshire from arresting and prosecuting motorists

who cover up the State’s motto “Live Free or Die” on

vehicle license plates. This Court found that there was

insufficient State interest to compel such ideological speech.

Wooley did not prohibit the State from displaying its motto

on license plates, but merely gave motorists the right to

disassociate themselves from it if they wished to do so.

Unlike Wooley, the Commission’s order clearly states

that “all of TURN’s bill insert material should clearly

identify TURN as its source and state that its contents have

neither been reviewed nor endorsed by PG&E or this

Commission.” P.U.C.’s Motion to Dismiss, p. A-23. Such

disclosures have been recognized as an effective means of

preventing public confusion. See Bates v. State Bar of

Arizona (1977) 433 U.S. 350, 384, 53 L.Ed.2d 810, 97 S.Ct.

2691, reh. den. 434 US. 881, 54 L.Ed. 164, 98 S.Ct. 242;

Central Hudson Gas v. Public Service Comm’n, supra at

565, 570-71; Pruneyard Shopping Center v. Robins, supra at

88; Zauderer v. Office of Disciplinary Counsel (decided

May 28, 1985) __ U.S. —, 53 U.S.L.W. 4587, 4594.

Appellant’s concern that the public will confuse TURN’s

literature for that of its own is purely speculative. The

public is not likely to confuse TURN’s literature as being

that of PG&E any more than it is likely to regard the

Commission’s notices as coming from appellant. Certainly,

the P.U.C. is not impotent to address the problem of public

confusion should it ever arise. As the Commission noted, it

“expect[s] PG&E and TURN to work together in good faith

to overcome problems. If insurmountable problems arise,

we may have to issue further clarifying orders.” P.U.C.’s

—* a

Motion to Dismiss, pp. A-23 to A-24. Surely, the State has

the ability to assure that “information flow(s] cleanly as well

as freely.” Va. Pharmacy Bd. v. Va. Consumer Council,

supra. The mandated disclosures will assure a clean and

free flow of information.

In Tornillo, this Court ruled that a Florida statute which

required newspapers to publish replies of political

candidates they criticized to be an _ unconstitutional

infringement on the newspapers’ right to determine what to

print and omit. This court observed that if a right-of-access

statute was upheld, “editors might well conclude that the

safe course is to avoid controversy” (Jd. at 257) thereby

stifling rather than promoting free speech.

The instant case is substantially different from that of

Tornillo. As Justice White stated in his concurring opinion,

“(a] newspaper or magazine is not a public utility subject to

‘reasonable’ governmental regulation in matters affecting

the exercise of journalistic judgment as to what shall be

printed.” Jd. at 259. While the number of newspapers may

be in attrition, no monopoly exists on news. Other

uuewspapers, publications, radio and television broadcasts

expose Americans to a rainbow of viewpoints. Civil

remedies are available for candidates who feel they have

been libeled, the pursuit of which may in turn constitute

news. Unlike public utilities, newspapers are not creatures

of government and do not depend on governmental

permission for their right to exist. Cf. Red Lion

Broadcasting Co. v. F.C.C. supra. Nor are newspapers

exempt from antitrust laws. Associated Press v. United

States, supra; F.C.C. v. Nat. Cit. Comm. For Broadcasting,

supra. The Commission’s order does not compel PG&E to

speak against its wishes.

Amici Wisconsin State Telephone Association and

Wisconsin Bell, Inc. complain in their joint brief that while

“utilities were formerly free to speak to their customers

through the billing envelope without concern that their

statements would be immediately attacked through the

same medium ...”, the “utilities must respond or suffer

the clear implication that the accusations are true.

(Footnote omitted)” The Appendix to their joint brief

shows examples of the ratepayers’ speech. This is exactly

the type of public debate the Commission is trying to

promote. The Commission will be in a far superior position

to properly regulate when responding to a variety of views

rather than just one.

CONCLUSION

Public utilities operating as monopolies exist by the grace

of the State. Without State sanction, public utilities would

not be permitted to exist in monopolistic form. Because of

the potential harm to the public -which is inherent in any

monopoly, the State has the responsibility to carefully

regulate that which it created in order to safeguard the

legitimate interests of its citizens.

Our American heritage has taught us the value of free

speech, the safety valve exposing us as citizens and

regulators to competing ideas with the trust that truth will

prevail and wise decisions will consequently ensue. With

these principles in mind, the P.U.C., having previously

found that such input was beneficial to the Commission in

exercising its regulatory functions, issued its challenged

order, the purpose of which was to provide greater public

participation in its proceedings.

==26——

It is self-evident to Amici that the State has a compelling

and overriding interest in being able to solicit the comments

of its citizens in discharging its official duties. Of

appellant's millions of customers, only one voice asked to be

heard. Without that voice, there is silence.

The billing envelope is the sidewalk of public debate in

public utility regulation, and the platform from which both

the Commission and PG&E speak to the public. Opening

the billing envelope to competing messages fosters, not

frustrates, free speech. We ask this court to affirm the

P.U.C.’s order.

Respectfully submitted,

JOHN K. VAN DE KAMP

California Attorney General

HERSCHEL T. ELKINS

Senior Assistant Attorney General

MICHAEL R. BOTWIN

Deputy Attorney General

MICHAEL R. BOTWIN

Attorneys for Amici States

PROOF OF SERVICE BY MAIL

I am a citizen of the United States and a resident of the City

and County of Los Angeles; I am over the age of eighteen

years and not a party to the within action; my business

address is: 3550 Wilshire Boulevard, Suite 216, Los Angeles,

California. On this date July 18,

I served the within BRIEF OF AMICI CURIAE IN

SUPPORT OF APPELLEES in re: "Pacific Gas

and Electric Company vs. Public Utilities

Commission of the State cf California” in

the United States Supreme Court, October

Term, 1984, No. 84-1044;

on the persons interested in said action by placing —_3_ true

copies thereof enclosed in sealed envelopes with first class

postage prepaid, in the United States post office mail box at

Los Angeles, California, addressed as follows:

FREDERIC D. WOOCHER, JOHN R. PHILLIPS,

CENTER FOR LAW IN THE PUBLIC INTEREST,

3rd Floor, 10951 West Pico Boulevard, Los

Angeles, CA 90064;

JEROME B. FALK, JR., STEVEN L. MAYER, HOWARD,

RICE, NEMEROVSKI, CANADY, ROBERTSON & FALK,

7th Floor, Three Embarcadero Center, San

Francisco, CA 941ll;.

JANICE E. KERR, 5066 State Building, 350

McAllister Street, San Francisco, CA 94102;

MALCOLM H. FURBUSH, PACIFIC GAS AND ELECTRIC

COMPANY, P. O. Box 7442, 77 Beale Street,

San Francisco, CA 94120;

All parties required to be served have been served

I certify (or declare) under penalty of perjury that the

foregoing is true and correct.

Executed on July 18, 1985

at Los Angeles, California.

Kid Jy Kuz Len Lake

Lawyer's Brief Service, Inc. / Logal Publishers / (213) 383-4457

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.