Opposition Brief — City of Seaford v. Delmarva Power & Light Co.

No. 90-234

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1990

CITY OF SEAFORD, DELAWARE,

Petitioner,

Vv.

DELMARVA POWER & LIGHT COMPANY,

Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of the State of Delaware

BRIEF IN OPPOSITION AND APPENDIX

Gregory A. Inskip

350 Delaware Trust Building

P.O. Box 951

Wilmington, Del. 19899

(302) 658-6771

Counsel of Record for

Respondent Delmarva

Power & Light Company

Of Counsel:

Dale G. Stoodley

Richard E. Poole

Potter Anderson & Corroon -

September 5, 1990

PACKARD PRESS / LEGAL DIVISION, 1617 iFK BOULEVARD, PHILA, PA. 19103 (215) 563-9000

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QUESTIONS PRESENTED

Pursuant to Supreme Court Rule 24.2, respondent

Delmarva Power & Light Company (“Delmarva”) re-

States the questions presented which are inaccurately

stated in the petition of the City of Seaford, Delaware

(“Seaford”) for a writ of certiorari (P i).!

1. Is the order of the Delaware Supreme Court,

reinstating Delmarva’s claim which had been dis-

missed on summary judgment and remanding the

case for trial of the issue of just compensation, an

interlocutory order rather than a “final” judgment

within the meaning of 28 U.S.C. § 1257(a)?

2. Pursuant to Delaware statutes, as imple-

mented by Sussex County, Delaware ordinances,

does Delmarva enjoy a proprietary franchise right to

distribute electricity to retail customers in the

County?

3. If Seaford takes over Delmarva’s property

right to distribute electricity to certain customers, is

Seaford required to pay just compensation by the

United States Constitution (Amendments V and

XIV) and independently by the Delaware Constitu-

tion of 1897 (Article I, §§ 7 and 8)?

1. Throughout this brief in opposition, pages in the petition for

a writ of certiorari and petitioner’s appendix are cited as “P—,” or

“P—a.” Delmarva’s appendix attached hereto is cited as “—b.”

TABLE OF CONTENTS

QUESTIONS PRESENTED ..............00000.

TABLES OG} CONE EINES on ccccccccsctncsacceces

RULE 29.1 LISTING OF PARENT COMPANIES

AND SUBSIDIARIES ......................

CONSTITUTIONAL PROVISIONS, DELAWARE

STATUTES AND SUSSEX COUNTY, DELA-

WARE ORDINANCES INVOLVED..........

STATEMENT OF THE CASE ..................

I. THE JUDGMENT BELOW WAS NOT A

“FINAL” JUDGMENT AND THEREFORE

IT IS NOT REVIEWABLE BY WRIT OF

CERTIORARI PURSUANT TO 28 U.S.C.

Oe EER of ae

II. THE COURT LACKS JURISDICTION TO

REVIEW THE DECISION BELOW,

WHICH CONSISTS OF DELAWARE LAW

DETERMINATIONS BY THE DELAWARE

SUE SES GAPRPIRE 60k cavcnd Gedasbanen on

Ill. THE DELAWARE STATE CONSTITU-

TION ALSO PROVIDES AN INDEPEN-

DENT STATE GROUND FOR THE RE-

SULT REACHED BELOW ...............

S37 RDM AR on pili Part ea

APPENDIX

I. RULE 24.1(f) LEGAL PROVISIONS ......

ee SE RIBS iin kale tiki cccarxs

ii

TABLE OF CONTENTS — (Continued)

Page

B. United States Constitutional Provisions.. 1b

C. Provisions of the Constitution of the State

of Delaware Adopted 1897............. 2b

D. Provisions of the Public Utilities Act of

1974 of the State of Delaware, Title 26 of

op S| ere 2b

E. Ordinances of the Levy Court of Sussex

County, State of Delaware ............. 8b

II. EXCERPTS FROM SEAFORD’S MEMO-

RANDUM OF POINTS AND AUTHORI-

TIES, DATED OCTOBER 23, 1987, IN

SUPPORT OF ITS MOTION’ FOR

SUMMARY JUDGMENT IN THE SUPER-

IOR COURT OF THE STATE OF DELA-

III. EXCERPTS FROM ANSWERING BRIEF

OF CITY OF SEAFORD, DATED JULY 7,

1989, IN THE SUPREME COURT OF THE

yy yy oe ge |) 1. Se ee 15b

lii

TABLE OF AUTHORITIES

Cases: Page

Association of Data Processing Service Organiza-

tions, Inc. v. Camp, 397 U.S. 150 (1970).....

Bear Creek Water Ass’n, Inc. v. Town of Madison,

416 So0.26 SPP CREB. TGGS) oon cc ccccecscse

Bishop v. Wood, 426 U.S. 341 (1976) ............

Board of Regents v. Roth, 408 U.S. 564 (1972) ...

Cambridge Telephone Co. v. Pine Telephone System,

Inc., 109 Idaho 875, 712 P.2d 576 (1985).....

Catlin v. United States, 324 U.S. 229 (1945).....

City of Greeley v. Poudre Valley Rural Electric

Ass'n, Inc., 744 P.2d 739 (Colo. 1987) appeal

dismissed, 485 U.S. 949 (1988)..............

City of Jackson v. Creston Hills, Inc., 252 Miss.

SOG, Tie ee ee NE bo cine stewccidces

City of Los Angeles v. Los Angeles Gas & Electric

Ce ee Be Se CE a id ca cnc ccds cusses

City of Tucson v. El Rio Water Co., 101 Ariz. 49,

MBS We te CO, ios goin soi cccacccwveese

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

EP ey eee eee Pee Tee T Tee Ter eee

Diamond State Telephone Co. v. Public Service

Commission, 367 A.2d 644 (Del. 1976).......

Durham v. North Carolina, 395 F.2d 58 (4th Cir.

| MOTT Tes se PTT POT Tee PORTE Tee ETE

Herb v. Pitcairn, 324 U.S. 117 (1945) ...........

Hortonville Joint School District No. 1 v. Horton-

ville Education Ass’n, 426 U.S. 482 (1976) ...

International Longshoremen’s Ass’n v. Davis, 476

Se Cn aces a ewedebdéwensessanense

5

6

7

TABLE OF AUTHORITIES — (Continued)

Cases: Page

Michigan v. Long, 463 U.S. 1032 (1983) ......... 9

Mississippi Power & Light Co. v. City of Clarksdale,

Sse BO.28 D CREB. BOTA) cee ccscdscscscacns 6

O'Dell v. Espinoza, 456 U.S. 430 (1982).......... 3,4

PruneYard Shopping Center v. Robins, 447 U.S. 74

CREE s kaccuscesdnsastavssuels tava tescenn 7

Public Service Co. of Colorado v. Public Utilities

Commission, 765 P.2d 1015 (Colo. 1988) ..... 6

Richmond Elks Hall Ass’n v. Richmond Redevelop-

ment Agency, 561 F.2d 1327 (9th Cir. 1977).. 7

Roundhouse Construction Corp. v. Telesco Masons

Supplies Co., Inc., 429 U.S. 889 (1976)....... 8

Roundhouse Construction Corp. v. Telesco Masons

Supplies Co., Inc., 170 Conn. 155, 365 A.2d

393, cert. denied, 429 U.S. 889 (1976) ....... 8

San Diego Gas & Electric Co. v. City of San Diego,

ae tr ME CR nda tk dab cc aneeanenes 4

Sende Vista Water Co. v. City of Phoenix, 127 Ariz.

42, 617 P.2d 1158 (Ct. App. 1980)........... 5

Summers Appliance Co. v. George’s Gas Co., 244

Ark. 113, 424 S.W.2d 171 (1968) ............ 5,6

Tennessee Electric Power*Co. v. Tennessee Valley

Authority, 306 U.S. 118 (1939),............ 5,7,9

Town of Culpeper v. Virginia Electric & Power Co.,

215 Va. 189, 207 S.E.2d 864 (1974).......... 6

Tri-County Electric Ass'n, Inc. City of Gillette, 584

Fe ee CED iv oeacencnecaancakesdan 6

Constitutional Provisions:

I Ss MS Sb bon tse ci vdvcasdaueatuee i,1,8

TABLE OF AUTHORITIES — (Continued)

Constitutional Provisions: Page

U.S. CONST. amend. XIV, $1.........ccccceces i,1,8

SIRs, GOS GE Oy © Fi ccccctvcccecdéecsccutses i,1,8

Soe: Gs Win My OO ccc cccvcedcceccencsane .i1,1,8

Statutes and Rules:

BS Wa PT 60 bec cctuceuécecuueesaas i,1,2,3,4

BO HO, Gs BE Ane Kecasanapedeatebacecuaeeas 1

Me IGE: Ga FG 8 6a cc cécciecncascentacsdsasa 1

BO DORs Gir Rae et oc cece cctcnctkbetdtoucavees 1

PE, an BE co bcc cccccenacdchentdsuveesucees 1

BD Ts Gs on 6 bc ce cnkatnannucacesansenudes 1

Be Us Ga, OE beck vncacssnaes c4n0ntneeeenses 1

Supreme Court Rule 24.1(f) .....ccccccccccccecs 1

Supreme Court Rus DAZ... cccccccccccccccvccees i

Dupseae COMME TIMED Ges < cc cccacesscbdcesecece vi

RULE 29.1 LISTING OF PARENT

COMPANIES AND SUBSIDIARIES

Delmarva Power & Light Company is publicly held

and does not have a parent corporation. All subsidiaries

of Delmarva Power & Light Company are wholly owned

by it.

CONSTITUTIONAL PROVISIONS,

DELAWARE STATUTES AND

SUSSEX COUNTY, DELAWARE

ORDINANCES INVOLVED

The case raises a threshold jurisdictional issue of

the absence of finality under 28 U.S.C. § 1257(a).

This case was brought under the just compensation

and due process clauses of the United States Constitu-

tion, U.S. CONST. amend. V and amend. XIV, § 1, and

under parallel but independent provisions of the Dela-

ware Constitution of 1897, DEL. CONST. art. I, §§ 7

and 8.

The controversy in the Delaware Courts did not

concern the interpretation of the federal or state consti-

tutional provisions. Rather, the parties joined issue on

the question whethr Delmarva enjoys a franchise by

virtue of (a) statutory enactments of the State of Dela-

ware, as follows: 26 Del. C. §§ 102(1) and (2), 202(a),

203A(a), 203A(c)(i), 204, 906 and 907; and (b) Sussex

County, Delaware franchise grants dated July 10, 1900

and July 22, 1930.

Pursuant to Supreme Court Rule 24.1(f), the text of

each of the foregoing provisions is set forth in the

Appendix attached to this Brief.

STATEMENT OF THE CASE

With one important exception, Delmarva accepts

Seaford’s statement of the case (P 3-5).

The Delaware Supreme Court did not “agree” that

“Delmarva’s franchise was nonexclusive,” as asserted in

the petition (P 4; see also P 2, 5, 6, 9 and 10). What the

Delaware Supreme Court actually he'd was (1) that

Delmarva’s initial (1900 and 1930) franchise grants

were “nonexclusive” (P 17a); (2) that Delmarva later

became a “reguiated monopoly” pursuant to a State

policy to “protect the pioneer utility” from competition (P

14a-15a); and (3) that the combination of Delmarva’s

1

0

2

initially nonexclusive franchise and later regulatory pro-

tection from competition “constitutes a property right as

to customers served by Delmarva, which cannot be

taken without due process” (P 18a; 28a).

Indeed, the Delaware Supreme Court found that

outside Seaford, “Delmarva enjoys an exclusive right to

serve .. .” (P 18a). Delmarva’s franchise is “nonexclu-

sive” as against Seaford only in the sense that as an

unregulated governmental entity, Seaford has the power

to serve new locations within its municipal boundaries

and even to take over Delmarva customers located there.

To take established customers, however, is an infringe-

ment of Delmarva’s franchise for which Seaford must

pay just compensation (P 18a, 28a). The just compen-

sation payable by Seaford is yet to be determined in the

Delaware trial court.

SUMMARY OF ARGUMENT

1. The Court lacks jurisdiction to review the order of

the Delaware Supreme Court because that order is not

“final” within the meaning of 23 U.S.C. §1257(a). The

case remains pending in the trial court where the just

compensation payable by Seaford to Delmarva will be

assessed.

2. The Court lacks jurisdiction to review the issue

decided by the Delaware Supreme Court, which is

whether, under Delaware law, Delmarva enjoys propri-

etary franchise rights to distribute electricity to Sussex

County, Delaware custonfers. This Court has long rec-

ognized that such property law questions are a matter of

state law, and Seaford conceded below that Delaware

law controls the case at hand.

3. The hoiding of the Delaware Supreme Court that

Seaford must pay just compensation for taking Delmar-

va’s property is supported independently by the Dela-

ware constitution, and in any event is correct as a matter

of settled federal constitutional law.

3

ARGUMENT

I. THE JUDGMENT BELOW WAS NOT A “FINAL”

JUDGMENT AND THEREFORE IT IS NOT REVIEW-

ABLE BY WRIT O¥ CERTIORARI PURSUANT TO 28

U.S.C. $1257(a)

The Court has jurisdiction to review, by writ of

certiorari, only “[f]inal judgments or decrees rendered

by the highest court of a State in which a decision could

be had .. .,” 28 U.S.C. §1257(a); O'Dell v. Espinoza, 456

U.S. 430 (1982).

In the opinion and order sought to be reviewed by

the petition, the Delaware Supreme Court ruled that

Seaford has taken Delmarva’s property, and*remanded

the case for trial of the compensation payable by Seaford

on a theory of inverse condemnation (P 18a, 27a-28a).

This clearly was not a “final” decision within the mean-

ing of 28 U.S.C. §1257(a):

Ever since this Court’s decision in Grays Har-

bor Co. v. Coats-Fordney Co., 243 U.S. 251, 37 S.Ct.

295, 61 L.Ed. 702 (1917), a state court’s holding

that private property has been taken in violation of

the Fifth and Fourteenth Amendments and that

further proceedings are necessary to determine the

compensation that must be paid has been regarded

as a Classic example of a decision not reviewable in

this Court because it is not “final.” In such a case,

“the remaining litigation may raise other federal

questions that may later come here.” Radio Station

WOW, Inc. v. Johnson, 326 U.S. 120, 127, 65 S.Ct.

1480, 89 L.Ed. 2092 (1945). This is because “the

federal constitutional question embraces not only a

taking, but a taking on payment of just compensa-

tion. A state judgment is not final unless it covers

both aspects of that integral problem.” North Da-

kota Board of Pharmacy v. Snyder’s Drug Stores,

4

Inc., 414 U.S. 156, 163, 94 S.Ct. 407, 412, 38

L.Ed.2d 379 (1973).

San Diego Gas & Electric Co. v. City of San Diego, 450

U.S. 621, 632 (1981); see also Catlin v. United States,

324 U.S. 229, 233-34 (1945) (federal and state condem-

nation rulings are not reviewable “in advance of deter-

mination of just compensation”); Cax Broadcasting

Corp. v. Cohn, 420 U.S. 469, 477 n.6 (1975) (same);

O’Dell v. Espinoza, supra, 456 U.S. 430 (state supreme

court decision remanding case for trial was not final).

There is thus no basis for Seaford’s contention that

the judgment below was final or its citation of Cax

Broadcasting in support of that claim (P 9-10). Like the

San Diego Gas & Electric case, Cax Broadcasting makes

clear (1) that just compensation is a substantial federal

issue and (2) that where as here the compensation issue

is yet to be tried, the judgment below is not “final” as

required by 28 U.S.C. §1257(a). 420 U.S. at 477 n.6.

II. THE COURT LACKS JURISDICTION TO REVIEW

THE DECISION BELOW, WHICH CONSISTS OF

DELAWARE LAW DETERMINATIONS BY THE

DELAWARE SUPREME COURT

“This Court from the time of its foundation has

adhered to the principle that it will not review judg-

ments of state courts that rest on adequate and indepen-

dent state grounds.” Herb v. Pitcairn, 324 U.S. 117, 125

(1945). The Court is bound.to accept the interpretation

of a state’s law by the highest court of the State,

Hortonville Joint School District No. 1 v. Hortonville

Education Ass’n, 426 U.S. 482, 488 (1976). The Court

has “no authority to review state determinations of

purely state law,” International Longshoremen’s Ass'n v.

Davis, 476 U.S. 380, 387 (1986).

The decision below turned upon the state law deter-

mination that Delaware statutes and County ordinances

confer a proprietary franchise upon Delmarva which

5

Seaford infringed when it appropriated two of Delmar-

va’s customers (P 17a-18a, 28a). In other words, the

controversy below was whether Delmarva enjoys a prop-

erty right under Delaware law, not whether the federal

and Delaware constitutions protect property rights that

do exist under state law. Seaford’s contention that the

decision below “directly conflicts with a number of

rulings of this Court and of the United States courts of

appeals” (P 5) is wrong.” Even if there were a split of

authority, the decision of the Delaware Supreme Court

would be dispositive of the Delaware law issues here

presented.?

2. The federal authorities relied upon by Seaford hold that the

owner of a non-exclusive franchise is not entitled to an injunction

against the construction and operation of a competing plant by a

governmental entity. See Tennessee Electric Power Co. v. Tennessee

Valley Authority, 306 U.S. 118 (1939), overruled Association of

Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150

(1970); Durham v. North Carolina, 395 F.2d 58 (4th Cir. 1968);

and the further citations at P 6-7, n.3.

In this case Delmarva does not seek to preclude Seaford from

owning and operating its own electric system. It simply seeks to be

compensated for the loss of two customers which it had the

proprietary right to serve under Delaware law (pp. 1-2, supra).

3. The decision below does not rest upon some idiosyncratic

“ ‘Delaware rule,’ ” as Seaford implies (P 9). While some variation in

conceptualization is to »e expected in matters controlled by state

law, state courts from around the country recognize that state

regulation confers a vested property right upon an established

company — protecting it against all competition — whether termed

an “exclusive franchise” or by some other name. Thus a previous

decision of the Delaware Supreme Court described a regulated

utility as “a legalized monopoly.” Diamond State Telephone Co. v.

Public Service Commission, 367 A.2d 644, 646 (Del. 1976); accord,

City of Tucson v. El Rio Water Co., 101 Ariz. 49, 415 P.2d 872, 875

(1966) (a regulatory certificate of convenience and necessity

“creates a monopoly” whose value must be paid by a city in a

condemnation action); Sende Vista Water Co. v. City of Phoenix,

127 Ariz. 42, 617 P.2d 1158, 1161 (Ct. App. 1980) (certificate

constitutes property which city should acquire before providing

service in certificated area); Summers Appliance Co. v. George’s Gas

6

Seaford’s contention that the decision below turned

solely upon the federal constitution and not upon Dela-

ware law (P 7) is belied by its own arguments to the

Delaware courts that were framed entirely in terms of

Delaware law (see Appendix points II and III at 11b —

17b). Seaford concluded its opening brief in the Dela-

ware Superior Court as follows (13b):

The only issue is the legal issue of whether DP&L

has a valid or compensable franchise right to serve

the properties in question.’ By the operation of appli-

cable provisions of the Delaware Constitution and

Delaware statutory law, and pursuant to case law

precedent established in Delaware courts, it is clear

NOTES (Continued)

Co., 244 Ark. 113, 424 S.W.2d 171, 173 (1968) (regulated utilities

enjoy “exclusive privileges” including franchises and protection

from competition); Public Service Co. of Colorado v. Public Utilities

Commission, 765 P.2d 1015, 1021 (Colo. 1988) (“This exclusive

right to serve an area is a property right which cannot be affected

except by due process of law”); City of Greeley v. Poudre Valley

Rural Electric Ass’n, Inc., 744 P.2d 739, 745 (Colo. 1987) appeal

dismissed, 485 U.S. 949 (1988) (same); Cambridge Telephone Co. v.

Pine Telephone System, Inc., 109 Idaho 875, 712 P.2d 576, 579

(1985) (same); Bear Creek Water'Ass’n, Inc. v. Town of Madison,

416 So.2d 399, 400 (Miss. 1982) (“the certificate of public conve-

nience and necessity has value for which just compensation must

be made. . . .”); Mississippi Power & Light Co. v. City of Clarksdale,

288 So.2d 9, 11 (Miss. 1973) (“grandfather” certificate is “an

exclusive right to operate in a designated area” and as such, a

valuable franchise right which must be condemned and paid for by

city wishing to take over service); City of jackson v. Creston Hills,

Inc., 252 Miss. 564, 172 So.2d 215, 220 (1965) (“grandfather”

certificate “is a valuable right, entitled to protection by the courts”

against municipal competition); Town of Culpeper v. Virginia

Electric & Power Co., 215 Va. 189, 207 S.E.2d 864, 867-68 (1974)

(“The weight of authority, and the principle with which we agree, is

that a certificate of public convenience and necessity is a franchise

and is a property right. As such it is entitled to the protection of the

courts.”); Tri-County Electric Ass'n. Inc. City of Gillette, 584 P.2d

995, 1001, n.9 (Wyo. 1978) (noting that certificate is a franchise).

7

that DP&L has no valid franchise rights whatsoever

to serve these properties. Having no exclusive fran-

chise rights, and having claimed no other compens-

able interest in its Complaints in these proceedings,

DP&L makes no claim for which it may be compen-

sated.

Seaford similarly relied on Delaware law in concluding

its brief in the Delaware Supreme Court (17b):

DP&L has failed to show that the opinion and

judgment below were in error in the law relied upon

for the Superior Court’s decision, or that it has any

compensable right to serve the properties at issue

under the law of this state.

In the proceedings below, Seaford clearly was cor-

rect to approach the franchise question as a question of

Delaware property law.* Just as clearly, Seaford is wrong

to seek this Court’s review of the Delaware Supreme

Court’s determination of the Delaware property law

question.

4. See Richmond Elks Hall Ass'n v. Richmond Redevelopment

Agency, 561 F.2d 1327, 1330 (9th Cir. 1977) (“In determining what

property rights exist and therefore are subject to taking under the

Fifth Amendment, federal courts look to local state law”); Bishop v.

Wood, 426 U.S. 341, 344 (1976) (property interests are created by

state law, not by the United States Constitution); Board of Regents

v. Roth, 408 U.S. 564, 577 (1972) (same); PruneYard Shopping

Center v. Robins, 447 U.S. 74, 84 (1980) (“as a general proposition

. . . the United States, as opposed to the several States, [is not]

possessed of residual authority that enables it to define ‘property’ in

the first instance”).

Even the authority relied upon most strenuously by Seaford

(P 4, 6-7) recognized that “[w]hether competition between utilities

shall be prohibited, regulated or forbidden is a matter of state

policy,” not federal constitutional law. Tennessee Electric Co.,

supra, 306 U.S. at 141.

8

Ill. THE DELAWARE STATE CONSTITUTION ALSO

PROVIDES AN INDEPENDENT STATE GROUND

FOR THE RESULT REACHED BELOW

In the proceedings below, Seaford disputed the

existence and nature of Delmarva’s franchise. It did not

dispute the settled law that the Fifth and Fourteenth

Amendments together require that a municipality pay

just compensation for taking or displacing a state-

franchised utility. City of Los Angeles v. Los Angeles Gas

& Electric Corp., 251 U.S. 32, 39-40 (1919).

Even if Seaford had fairly presented federal consti-

tutional arguments to the courts below and the Dela-

ware Supreme Court had somehow misinterpreted the

federal constitution, the decision below still would have

an adequate state ground in the Delaware Constitution

of 1897, which prohibits deprivation of “property, unless

... by the law of the land” (art. I, § 7), and which further

provides that no “man’s property [shall] be taken or

applied to public use . . . without compensation being

made,” art. I, § 8. Seaford’s contention that the state

provisions “are construed to provide the same rights and

guarantees” as the federal ones (P 7-8) does not matter.

Where the decision of the state supreme court is based

upon parallel provisions of the federal and state consti-

tutions, certiorari should be denied on the basis “that the

judgment below rests upon an adequate state ground.”

Roundhouse Construction Corp. v. Telesco Masons Sup-

plies Co., Inc., 429 U.S. 889 (1976) and Roundhouse

Construction Corp. v. Telesco Masons Supplies Co., Inc.,

170 Conn. 155, 365 A.2d 393, 395, cert. denied, 429

U.S. 889 (1976).

Seaford contends that the Delaware Supreme Court

“conceived of its ruling” as based upon the federal

constitution alone and not as “independently founded on

the Delaware constitution” (P 7). That contention is

belied by express language of the opinion below (see,

e.g., P 27a), and by the very opinion of this Court cited by

9

Seaford in support of its contention, Michigan v. Long,

463 U.S. 1032 (1983). Long indicated that state law

might not provide an adequate and independent ground

for a decision “when it fairly appears that the state court

rested its decision primarily on federal law,” 463 U.S.

1042.

Seaford stands Long on its head, arguing that be-

cause the Delaware Supreme Court distinguished and

did not follow the Tennessee Valley Authority case, it

somehow felt “required” to construe the state due pro-

cess and just compensation clauses consistently with

the federal ones (P 7). In fact, at that juncture of its

opinion, the court below was not focusing on either the

state or the federal constitutional provisions. Rather, the

Delaware Supreme Court concluded, after respectful

consideration, that the Tennessee Valley Authority de-

cision was primarily procedural and factual and not

“authority for defining the [Delaware law] property

rights of the parties in this case.” (P 17a). Those

Delaware law property rights on the one hand, and the

Delaware Constitution on the other, each provide ade-

quate and independent grounds for the result below, and

for the denial of the petition for a writ of certiorari.

10

CONCLUSION

For the foregoing reasons, this Court should deny

the City of Seaford’s petition for a writ of certiorari to

review the decision of the Supreme Court of the State of

Delaware.

Respectfully submitted,

Inskip

are Trust Building

P.O. Box 951

Wilmington, Del. 19899

(302) 658-6771

Counsel of Record for

Respondent Delmarva

Power & Light Company

Of Counsel:

Dale G. Stoodley

Richard E. Poole

Potter Anderson & Corroon

September 5, 1990

APPENDIX

I. RULE 24.1(f) LEGAL PROVISIONS

A. 28 U.S.C. $1257(a)

Final judgments or decrees rendered by the highest

court of a State in which a decision could be had, may be

reviewed by the Supreme Court by writ of certiorari

where the validity of a treaty or statute of the United

States is drawn in question or where the validity of a

statute of any State is drawn in question on the ground

of its being repugnant to the Constitution, treaties, or

laws of the United States, or where any title, right,

privilege, or immunity is specially set up or claimed

under the Constitution or the treaties or statutes of, or

any commission held or authority exercised under, the

United States.

B. United States Constitutional Provisions

Amendment V.

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in

the land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process

of law; nor shall private property be taken for public use,

without just compensation.

Amendment XIV.

Section 1. All persons born or naturalized in the

United States, and subject to the jurisdiction thereof,

are citizens of the United States and of the State

wherein they reside. No State shall make or enforce any

law which shall abridge the privileges or immunities of

citizens of the United States; nor shall any State deprive

1b

2b

any person of life, liberty, or property, without due

process of law; nor deny to any person within its

jurisdiction the equal protection of the laws.

C. Provisions of the Constitution of the State of Delaware

Adopted 1897

Article I, § 7. Procedural rights in criminal prosecu-

tions; jury trial; self-incrimination; deprivation of

life, liberty or property.

Section 7. In all criminal prosecutions, the accused

hath a right to be heard by himself and his counsel, to be

plainly and fully informed of the nature and cause of the

accusation against him, to meet the witnesses in their

examination face to face, to have compulsory process in

due time, on application by himself, his friends or

counsel, for obtaining witnesses in his favor, and a

speedy and public trial by an impartial jury; he shall not

be compelled to give evidence against himself, nor shall

he be deprived of life, liberty or property, unless by the

judgment of his peers or by the law of the land.

Article I, § 8. Prosecution by indictment or informa-

tion; double jeopardy; just compensation for prop-

erty.

Section 8. No person shall for any indictable offense

be proceeded against criminally by information, except

in cases arising in the land or naval forces, or in the

militia when in actual service in time of war or public

danger; and no person shall be for the same offense

twice put in jeopardy of life or limb; nor shall any man’s

property be taken or applied to public use without the

consent of his representatives, and without compensa-

tion being made.

D. Provisions of the Public Utilities Act of 1974 of the

State of Delaware, Title 26 of the Delaware Code

§ 102. Definitions.

3b

As used in this title, unless the context otherwise

requires:

(1) “Commission” means the Public Service Com-

mission.

(2) “Public utility” includes every individual, part-

nership, association, corporation, joint stock company,

agency or department of the State or any association of

individuals engaged in the prosecution in common of a

productive enterprise (commonly called a “coopera-

tive”), their lessees, trustees, or receivers appointed by

any court whatsoever, that now operates or hereafter

may operate, within this State, any steam, manufactured

gas, natural gas, electric light, heat, power, water,

telephone, excluding telephone service provided by cel-

lular technology, or by domestic public land mobile radio

service or heating oil (for residential consumption di-

rectly to residences by means of a pipeline) service,

system, plant or equipment, for public use.

§ 201. General jurisdiction and powers.

(a) The Commission shall have exclusive original

supervision and regulation of all public utilities and also

over their rates, property rights, equipment, facilities,

service territories and franchises so far as may be

necessary for the purpose of carrying out the provisions

of this title. Such regulation shall include the regulation

of the rates, terms and conditions for any attachment

(except by a governmental agency insofar as it is acting

on behalf of the public health, safety or welfare) to any

pole, duct, conduit, right-of-way or other facility of any

public utility, and, in so regulating, the Commission

shall consider the interests of subscribers, if any, of the

entity attaching to the public utility's facility, as well as

the interests of the consumer of the public utility ser-

vice.

e-@¢@ «

§ 202. Limitations on jurisdiction of Commission.

4b

(a) The Commission shall have no supervision or

regulation over any public utility or over the rates,

property, property rights, equipment, facilities, service

territories or franchises of any public utility that is

municipally owned or any municipal electric company

formed pursuant to Chapter 13 of Title 22.

§ 203A. Certificate of public convenience and neces-

sity; abandonment or discontinuance of business,

operations or service.

(a) (1) Subject to the provisions of subsection (b) of this

section and §§ 102, 201 and 202 of this title, no individ-

ual, copartnership, association, corporation, joint stock

company, agency or department of the State, coopera-

tive, or the lessees, trustees or receivers thereof, shall

begin the business of a public utility nor shall any public

utility begin any extension of its business or operations

without having first obtained from the Commission a

certificate that the present or future public convenience

and necessity requires or will require the operation of

such business or extension.

(2) This section shall not be construed to require

any public utility to secure such a certificate for any

extension within the perimeter of any territory already

served by it.

(3) The Commission, after hearing, on the com-

plaint of any public utility claiming to be adversely

affected by any proposed extension, may make such

order and prescribe such terms and conditions with

respect to the proposed extension as may be required by

the public convenience and necessity.

. . *

(c) (1) No public utility shall abandon or discontinue, in

whole or in part, any business, operations or services

provided under a certificate of public convenience and

necessity or otherwise which are subject to jurisdiction

Sb

of the Commission without first having received Com-

mission approval for such abandonment or discontinu-

ance.

(2) Applications for such approval shall be made to

the Commission in writing, verified by oath or affirma-

tion and be in such form and contain such information

as the Commission may from time to time require.

(3) The Commission shall approve any such appli-

cation when it finds that the utility has met its burden of

proving that the abandonment or discontinuance is

reasonable, necessary and not unduly disruptive to the

present or future public convenience and necessity.

(4) The Commission may make such investigation

and hold such hearings in the matter as it deems

necessary or appropriate, and may attach reasonable

terms and conditions to the granting of such approval.

(5) If, within 60 days after the filing of such appli-

cation, the Commission has not acted concerning the

application, it shall be deemed to have been approved.

The Commission may, within such 60-day period, set

the matter for hearing, in which event the Commission

shall render a decision concerning said application

within 7 months from the date such application was filed

or the application shall be deemed in fact and law to be

approved, unless within said 7-month period the Com-

mission for good cause shown shall enter an order

extending the period for decision for a further reason-

able time not to exceed 120 days.

(6) Nothing contained in this section shall be con-

strued to require formal application for approval of

abandonment or discontinuance of service to any indi-

vidual customer or customer class where the basis for

such abandonment or discontinuance is nonpayment of

bills or other violation of the utility's rules, regulations

and tariffs.

(7) The Commission may seek injunctive relief in

the Court of Chancery to prevent any abandonment in

violation of this subsection and in such proceeding shall

6b

not be required to post security for any temporary or

preliminary injunction. (47 Del. Laws, c. 254, § 8; 48

Del. Laws, c. 371, § 13; 26 Del. C. 1953, § 162; 53 Del.

Laws, c. 364, §§ 1-4; 54 Del. Laws, c. 38, § 1; 57 Del.

Laws, c. 665, §§ 2, 3; 59 Del. Laws, c. 397, § 1; 64 Del.

Laws, c. 150, § 1; 66 Del. Laws, c. 50, § 1.)

§ 204. Extension of utilities’ facilities.

The Commission may, after hearing, upon notice, by

order in writing, require every public utility to establish,

construct, maintain and operate any reasonable exten-

sion of its existing facilities where, in the judgment of

the Commission, such extension is reasonable and prac-

ticable and will furnish sufficient revenue to justify the

construction and maintenance of the same, and when

the financial condition of the public utility reasonably

warrants the original expenditures required in order to

make and operate such extension; provided, however,

the Commission shall consider, among other things, the

size and amount of additional and potential customers to

be served, whether the new customers will contribute to

any Capital expenditures required by the extension and

whether the public utility must borrow funds to provide

the extension of service. (47 Del. Laws, c. 254, § 4; 26

Del. C. 1953, § 136; 59 Del. Laws, c. 397, § 1.)

§ 906. Powers and duties of electric utility corpora-

tions; regulation of use of public roads, streets, etc.

(a) Every corporation organized under Chapter 1 of

Title 8 for the purpose of constructing, maintaining and

operating works for the supply and distribution of elec-

tricity for electric lights, heat or power, in addition to the

powers conferred upon corporations generally, may use

the public roads, highways, streets, avenues and alleys

in this State for the purpose of erecting posts or poles on

the same to sustain the necessary wires and fixtures.

The consent of the council, town commissioners or other

persons having control over the public roads, highways,

streets, avenues and alleys of the city, town and district

7b

in or upon which the posts or poles are to be erected

shall first, and as a condition precedent, be obtained.

(b) No posts or poles shall be erected in any street of

any city or incorporated town except in those streets

which are designated by the authorities thereof and then

only in such place and manner as is thus designated,

and the same shall be so located as in no way to interfere

with the safety or convenience of persons traveling on or

over the streets, highways and roads. The use of the

public streets in any of the cities and incorporated towns

of this State shall be subject to such regulations and

taxation as may be first imposed by the corporate au-

thorities of such cities and towns.

(c) No posts or poles shall be erected upon the soil or

property of any person without first obtaining the con-

sent in writing of the owner of the soil or property.

(d) Any wire crossing a railroad shall not be at a less

elevation than 23 feet. (21 Del. Laws, c. 273, § 101; 22

Del. Laws, c. 166, § 17; Code 1915, § 2044; Code 1935,

§ 2188; 26 Del. C. 1953, § 906.)

§ 907. Laying pipes, conduits or wires by electric

utility corporations.

Every corporation mentioned in § 906 of this title

may lay pipes, conduits or wires beneath the public

roads, highways, streets, avenues and alleys as it deems

necessary. The pipes, conduits and wires shall be laid at

least 2 feet below the surface of the same and shall not

in any way unnecessarily obstruct or interfere with

public travel or damage public or private property. No

public streets shall be opened for such purpose without

the consent of the counsel of any city, or the town

commissioners of any incorporated town, or other per-

sons having control over the public roads, highways,

streets, avenues and alleys. Such use of the public

streets in any of the cities and towns of this State shall be

subject to such regulations,.taxation and restrictions as

may be first imposed by the corporate authorities of such

8b

cities and towns. (21 Del. Laws, c. 273, § 102; 22 Del.

Laws, c. 166, § 17; Code 1915, § 2045; Code 1935,

§ 2189; 26 Del. C. 1953, § 907; 57 Del. Laws, c. 446.)

E. Ordinances of the Levy Court of Sussex County, State

of Delaware

Ordinance of July 10, 1900

Be it resolved by the Levy Court of Sussex County at

the July Session A.D. 1900, that THE DELAWARE

ELECTRIC COMPANY its successors and assigns, be

and the same is hereby authorized to use the Streets and

Highways of Sussex County for the purposes of erecting

poles for carrying wires, and the placing of wires on the

same, for transmitting electricity for light, heat and

power, or for building and maintaining of subways for

the transmitting electricity for light, heat and power.

PROVIDED that all poles placed by the said Com-

pany on the Streets or Highways of the said County shall

be placed or set on the extreme side limit of the said

Streets or Highway and in all cases where the wires of

the said Company shall cross the said Streets or High-

ways they shall be placed at such a distance from the

ground as not to interfere with or hinder the public in

the use of the said Streets or Highways.

AND PROVIDED FURTHER that all subways built

by said Company uponnthe [sic] Streets or Highways of

the said County shall be built under and along the

extreme side limit of the said Streets or Highways, and

in all cases where the wires of said Company cross the

said Streets or Highways the said Subways shall be run

directly across said Streets or Highways and at such

depth that the same shall not interfere with or hinder the

public in the use of said Streets or Highways.

July 10, 1900

9b

Ordinance of July 22, 1930

BE IT RESOLVED by the Levy Court of Sussex

County, Delaware, that the right, revocable at the plea-

sure of the Levy Court, to erect and maintain poles and

to string wires thereon, be and the same hereby is

granted to and vested in Eastern Shore Public Service

Company, a corporation of the State of Delaware, its

successors and assigns, over and along all roads and

highways within the limits of Sussex County over which

the said Levy Court of Sussex County has jurisdiction,

and provided that all such poles and wires be erected

and located on the extreme side of such County Roads so

as in nowise to interfere with the free and unimpeded

use of said County roads for vehicular or other traffic.

BE IT FURTHER RESOLVED that whenever said

Eastern Shore Public Service Company desires or pro-

poses to erect poles and string its wires along any of the

County roads under the jurisdiction of the Levy Court of

Sussex County, notice of its intention so to erect poles

and string wires shall be given to the County Engineer

of Sussex County, and all poles so to be erected on and

along said County roads shall be erected under the

supervision and according to the instructions of the

County Engineer of Sussex County.

I, John S. Cooper, Clerk of the Peace in and for the

County of Sussex and State of Delaware, and as such

Clerk of the Levy Court of Sussex County, hereby certify

that attached hereto is a true and correct copy of a

franchise granted unto Eastern Shore Public Service

Company by said Levy Court of Sussex County on the

twenty-second day of July, A.D. 1930.

10b

IN WITNESS WHEREOF, I have hereunto set my

hand and affixed the seal of said Levy Court this

twenty-second day of July, A.D. 1930.

/s/ John S. Cooper

Clerk of the Peace and

Clerk of the Levy Court of

Sussex County, Delaware

11b

Il. EXCERPTS FROM SEAFORD’S MEMORANDUM

OF POINTS AND AUTHORITIES, DATED OCTO-

BER 23, 1987, INSUPPORT OF ITS MOTION FOR

SUMMARY JUDGMENT IN THE SUPERIOR COURT

IV.

IV.

OF THE STATE OF DELAWARE

[p. i) TABLE OF CONTENTS

. THESE CONSOLIDATED CASES ARE AP-

PROPRIATE AND RIPE FOR SUMMARY

SEAFORD HAS THE EXCLUSIVE RIGHT

TO SERVE THE CHURCH PROPERTIES

AND THE COUNTRY CLUB...............

A. TEQUGe LOGSIAION .. . 6 5.0 ccc ccc ccasee

Se ETE E TCC TEEPE CTCL OEE

DELMARVA’S ATTEMPTED SHOWING

THAT IT POSSESSES COMPENSABLE

RIGHTS IS INSUFFICIENT AND UNPER-

SUASIVE AS A MATTER OF LAW..........

A. The Nature of Delmarva’s Evidence ......

B. None of DP&L’s Proffered Documents or

Assertions Supports Its Claim............

1. DP&L’s Claim of State Statutory Author-

SA eer, i eee are

2. DP&L’s Asserted “Franchise” .........

3. Under Legal Doctrines Generally Appli-

cable to Franchises, Delmarva’s Claim

Clearly Has No Weight as a Matter of

BY cdbbe caw cue ees edeseeewsaaaeds see

Page

FACTUAL BACKGROUND................. 1

. PROCEDURAL BACKGROUND............ 4

12b

a. Franchises Are Not Exclusive Unless

Specifically Provided for in the Lan-

guage of the CWE ids kc bn saceos ee 31

b. Franchise Law Holds That Where a

Franchise Is Not Exclusive, Compet-

ing Franchises May Be Granted..... 32

c. Whatever Franchise Rights Delmar-

va’s Predecessors May Have Received

Were Impliedly Repealed by Subse-

quent State Action, As a Matter of

LaW. . 0045006000056 el eee 38

[p. ii]

C. The Seaford Line of Cases Controls This

Question of Law. i.<isscees 44

D. Delmarva’s Legal Arguments That It Pos-

sesses Franchise Rights Due to Prescrip-

tion, Capital Investment Activities, and PSC

Protection Must Fall ...<s.¢15545523 61

1. Prescription .....<sesvessselee 61

2. DP&L’s Assertion that Capital Invest-

ments Have Given Rise to a Franchise Is

Without Weight ....+s¢e0ss0en eee 65

3. Public Service Commission Regulation

of Franchises Does Not Create An Ex-

clusive Franchise Right .....scsesses<s 66

CONCLUSION. . .....s. 45055 8am sen 68

PRAYER. ... 2... 450000 00 a 69

ere

13b

{p. 68] CONCLUSION

In these consolidated proceedings, Delmarva Power

& Light Company seeks compensation in inverse con-

demnation for the alleged taking by Seaford of Delmar-

va’s alleged franchise rights to supply electricity to

certain properties located within the boundaries of the

City of Seaford. The factual circumstances underlying

these actions are simple, and there are no material facts

in dispute. The only issue is the legal issue of whether

DP&L has a valid or compensable franchise right to

serve the properties in question. By the operation of

applicable provisions of the Delaware Constitution and

Delaware statutory law, [p. 69] and pursuant to case law

precedent established in Delaware courts, it is clear that

DP&L has no valid franchise rights whatsoever to serve

these properties. Having no exclusive franchise rights,

and having claimed no other compensable interest in its

Complaints in these proceedings, DP&L makes no claim

for which it may be compensated. Pursuant to Rule 56 of

the rules of Civil Procedure for the Superior Court of the

State of Delaware, and pursuant to recent United States

Supreme Court precedent, Seaford has herein demon-

strated that DP&L has presented no evidence of a

factual dispute, and no evidence that can support its

case. Therefore, these actions are appropriate for sum-

mary judgment. The weight of legal precedent demon-

strates that summary judgment must be entered in favor

of defendant City of Seaford in these actions.

14b

PRAYER

WHEREFORE, the City of Seaford hereby respect-

fully prays that summary judgment be entered in its

favor in these proceedings, and against plaintiff Del-

marva Power & Light Company, and that these consol-

idated cases be dismissed with prejudice.

Respectfully submitted,

/s/ James A. Fuqua, Jr.

James A. Fuqua, Jr.

City Solicitor

City of Seaford

P.O. Box 750

Stein Highway

Seaford, DE 19973

(302) 629-7989

Attorney for Seaford

[p. 70] Of Counsel:

DUNCAN, WEINBERG, MILLER & PEMBROKE, P.C.

1615 M Street, N.W.

Suite 800

Washington, D.C. 20036

/s/ Janice L. Lower

Frederick L. Miller, Jr.

Janice L. Lower

Dated: October 23, 1987

ne eee ene

ee a ee Oe 8 RI ne

15b

Ill. EXCERPTS FROM ANSWERING BRIEF OF CITY

OF SEAFORD, DATED JULY 7, 1989, IN THE SU-

PREME COURT OF THE STATE OF DELAWARE

[p. i]

TABLE OF CONTENTS

TABLE OF AUTHORITIES ...............000..

STATEMENT OF THE NATURE OF THE PRO-

CEEDING AND JUDGMENT TO BE RE-

SUMMARY OF ARGUMENT...............006.

STATEMENT OF] FACTS 2. ccc cccsccccccccccece

D. BION 6. o.c ce cscpectnecsacsecscnesscts

2. Facts Leading to the Instant Controversy....

I. THE COURT BELOW WAS CORRECT IN

FINDING THAT DELMARVA DOES NOT

ENJOY AN EXCLUSIVE FRANCHISE BY

VIRTUE OF THE PUBLIC SERVICE COM-

MISSION’S REGULATION OF THE UTIL-

A. Standard and Scope of Review ...........

DD. DEON oc cccccccnsshcscacssddsdescadeaes

1. DP&L’s Argument That the Court Below

Decided This Issue on the Basis of Anti-

quated Legal Doctrine Has No Merit...

2. Regulation of DP&L by the Delaware

Public Service Commission Does Not

Confer Exclusive Franchise Rights ....

13

13

14

15

16

16b

3. Delmarva’s Argument That It Has the

Exclusive Right to Serve the Customers

at Issue because They Are Within

DP&L’s “Territory” Is Inconsistent and

PUNO. co cccccsccscosseseennanennass 24

4. The Fact that The Customers At Issue

Affirmatively Chose to be served by Sea-

S006 19 TRGGOUEEE «occ cscccceseceacsecesa 27

5. The Kline Decision Clearly Supports the

FUGRMMOEE BERG oo cccccccsocccececees 28

Il. THE HOLDING OF THE COURT BELOW

THAT SEAFORD’S RIGHTS UNDER ITS

CHARTER EXTINGUISH DELMARVA’S

FRANCHISE RIGHTS SHOULD BE AF-

yi MPrrrrrrrTT TT 30

A. Standard and Scope of Review ........... 30

DB. DECEMD occcccccccccccsccescecscoeseoseen 30

Il. DP&L HAS NOT SHOWN THAT IT HAS ANY

RIGHT TO COMPENSATION DUE TO SER-

VICE BY SEAFORD OF THE PROPERTIES

sige 8 35 6 | SMPPPPTTTITTTT Tri ee 33

A. Standard and Scope of Review ........... 33

DD. REOGED cccdccccdccccccvcseseusstsuuneeut 33

17b

[p. 35] CONCLUSION

DP&L has failed to show that the opinion and

judgment below were in error in the law relied upon for

the Superior Court’s decision, or that it has any com-

pensable right to serve the properties at issue under the

law of this state. Therefore, for the reasons stated herein,

the order below granting summary een against

Delmarva must be affirmed.

Dated: July 7, 1989

Respectfully submitted,

/s/ James A. Fuqua, Jr.

James A. Fuqua, Jr.

City Solicitor

City of Seaford

P.O. Box 750

Stein Highway

Seaford, DE 19973

(302) 629-7989

Attorney for Seaford

Of Counsel:

DUNCAN, WEINBERG, MILLER

& PEMBROKE, P.C.

1615 M Street, N.W.

Suite 800

Washington, D.C. 20036

(202) 467-6370

/s/ Janice L. Lower

Janice L. Lower