# Petition for Writ of Certiorari — Particular Cleaners, Inc. v. Commonwealth Edison Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_1113%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1972 - **Citation:** 409 U.S. 890 ## Text i- 14 No. In the Supreme Court of the United States Ocroser Term, 1971 PARTICULAR CLEANERS, INC. and FRANCES ENTWISTLE, Petitioners, vB. COMMONWEALTH EDISON COMPANY A Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT GEORGE H. GERSTMAN WARREN P. LANDSMAN NORMAN LETTVIN ROBERT L. LANDSMAN 135 South La Salle Street 77 West Washington Street Chicago, Illinois 60603 Chicago, Illinois 60602 Counsel for Petitioners May, 1972 UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581 ae TABLE OF CONTENTS RCI TRE SED SOOO Ni NCS RD CTI "te eee Question Presented ooo cece. Constitutional Provision, Statutes and Ordinance In- i RE SEE EE ET ee a ee a Statement of the Case . snes atti Reasons for Granting the Writ I. The Present Case Raises a Serious Constitu- tion Question 2.0... Il. Respondent’s Action is State Action II. The Decision Below Conflicts With The Deci- sions of Other Courts of Appeals As To The Proper Interpretation of ‘‘State Action’’ By a Public Electric Utility 2000. EE ARE STR ana CF Ca ae ARIES ERE TE a CSR aa PO A a CASES CITED PAGE Gas Light Company of Columbia v. Georgia Power Company, 440 F.2d 1135 (5 Cir., 1971) .................. 9 Parker v. Brown, 317 U.S. 341 (1943) 8 Public Utilities Commission v. Pollak, 343 U.S. 451 IIIT |: sisisnsandcieinscgnonienbinninecneiseitasncatiiniinensvinasicaniisntesctiahibewonsnn 10 United States v. Classic, 313 U.S. 299 (1941) -.............. 8 Washington Gas Light Company v. Virginia Electric and Power Company, 438 F.2d 248 (4 Cir., 1971) .... 8,9 CONSTITUTION U. S. Constitution, Fourteenth Amendment, Section 1 ..2, Al STATUTES AND ORDINANCE > Mis iS TE A I i ssnsonitnhsoncaansscaenensnnie 2, Al Title SB UHC. 6 19008) on... 2, Al ner eee +e oo. 2, Al Illinois Commerce Commission. General Order No. EARNER RB PA SUERE Reet area aaa mmre tee een ee 2, A2 — In the Supreme Court of the United States | OcrosBer Term, 1971 -_— No. PARTICULAR CLEANERS, INC. and FRANCES ENTWISTLE, Petitioners, Vs. COMMONWEALTH EDISON COMPANY, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Petitioners, Particular Cleaners, Inc. and Frances Ent- wistle, respectfully pray that a writ of certiorari issue to review the judgment entered on February 11, 1972 by the United States Court of Appeals for the Seventh Gireuit in its cause numbered 71-1349. OPINIONS BELOW The opinion of the Court of Appeals for the Seventh Cireuit is not yet reported, but is printed in the Appendix to this Petition at p. A9. The opinion of the District Court for the Northern District of Illinois is not reported, but is printed in the Appendix to this Petition at p. Al4. “ ras 7 * +t 5 MG 4 7. aha ie la a tea Pa NE aii Sa Oe orl SR ok CS UR oe PEAT SRA “RETSS 2 JURISDICTION The judgment of the Court of Appeals was entered on February 11, 1972 (App. p. A13),* and this Petition for a Writ of Certiorari was filed within 90 days of that date. The jurisdiction of this Court is invoked under 28 U.S.C. §1254(1). QUESTION PRESENTED As to the Certiorari Policy: Should not the Supreme Court resolve the existing conflict in principle between the Fourth and Fifth Circuit Courts of Appeals on the one hand, and the Seventh Circuit Court of Appeals on the other hand, as to what action of a public electric utility constitutes ‘‘state action’’? On the Merits: Illinois Commerce Commission General Order 172 (App. p. A2) permits public utilities (elec- tric, gas, telephone, water and heating services) to collect an advance security deposit from prospective customers. Is arbitrary discrimination in the collection of security deposits, by a public utility under color of Illinois Com- merce Commission General Order 172, ‘‘state action’’ so as to subject the public utility to provisions of the Civil Rights Act? CONSTITUTIONAL PROVISION, STATUTES AND ORDINANCE INVOLVED This case involves Section 1 of the Fourteenth Amend- ment to the United States Constitution (App. p. Al); Section 1983 of the Civil Rights Act (App. p. A1); Section 1343(3) of Title 28, United States Code (App. p. Al) ; and Illinois Commerce Commission General Order 172 (App. p. A2). *“App. p. A ” refers to the cited page of the Appendix to this Petition. all 3 STATEMENT OF THE CASE The class-action Complaint (App. p. A17) was filed in the District Court on November 12, 1970 and alleges the following facts: Under color of an fllinois Commerce Commission regu- lation, thousands of purchasers of electric service from Defendant Commonwealth Edison Company are not re- quired to pay a security deposit in order to receive electric service, while on the other hand, thousands of purchasers of electric service from Commonwealth Edison are arbi- trarily and discriminatorily required to pay a security deposit based upon unequal standards and policies arbi- trarily dictated by Commonwealth Edison (App. p. A19). Plaintiffs Particular Cleaners and Frances Entwistle are two purchasers that Commonwealth Edison arbitrarily and under color of an Illinois Commerce Commission regula- tion, required to pay a security deposit in order to main- tain electric service (App. pp. A19-A20), Commonwealth Edison has a total monopoly on electric service in the City of Chicago where Plaintiff Entwistle resides and in the Village of Oak Park, Illinois where Plaintiff Particular Cleaners has its principal place of business (App. p. A20). Plaintiff Eutwistle is a *-male of British citizenship and Plaintiff Particular Cleaners is a dry cleaning establishment. Unless Commonwealth Edison provides and sells electric service to Particular Cleaners and F'rances Entwistle, they will be deprived of obtaining and/or maintaining electric service (App. p. A20). ee PMA RUT SMD RINT ea BN NOAA — Count I of the Complaint charges that Commonwealth Edison’s arbitrary discrimination in requiring advance security deposits under color of an Illinois Commerce Com- mission regulation is contrary to the Fourteenth Ameu- ment to the Constitution of the United States (App. p. A20). Jurisdiction of Count I of the Complaint was founded on 28 U.S.C, $1343. In the District Court, Commonwealth Edison moved to dismiss the Complaint on several grounds, one of which was that Commonwealth Edison’s action in re- quiring security deposits was not under color of any state ordinance or regulation (was not ‘‘state action”’), and therefore Commonwealth Edison alleged that it was not subject to the Civil Rights Act (in particular, 42 U.S.C. $1983). The District Court granted Commonwealth Edison’s motion to dismiss, holding that Commonwealth Edison’s action in requiring security deposits is not ‘‘state action’’ sufficient to satisfy 42 U.S.C. §1983 and permit maintenance of the lawsuit (App. p. A16). The Court of Appeals for the Seventh Circuit affirmed the District Court’s dismissal of Petitioners’ Complaint (App. p. A13). 4 — REASONS FOR GRANTING THE WRIT I. The Present Case Raises A Serious Constitutional Question. Electricity is an absolute necessity of today’s life. With- out electricity, Petitioner Particular Cleaners would be unable to operate its dry cleaning establishment and Peti- tioner Frances Entwistle would be unable, among other things, to heat and light her home. Notwithstanding the necessity of having electrical service, Commonwealth Edi- son requires advance security deposits from some and not others, using arbitrary and unreasonable discriminatory standards. Typically those who are required to pay the advance security deposit are those who have most difficulty in paying it. The amount is variable, and as an example, Particular Cleaners was required to pay $900.00 as an advance security deposit. Petitioners contend that every person has the equal right to have electrical service, so long as the person pays for it, But Commonwealth Edison arbitrarily denies that right to some persons by requiring advance security deposits from some, and not others. The security deposit require- ments are not necessarily based on a person’s history with paying Commonwealth Edison’s bills, but upon arbitrary standards such as sex, residence location and race. Such unreasonable discrimination, under color of a state ordi- hance, is clearly violative of the Equal Protection Clause of the Fourteenth Amendment to the United States Con- stitution. NE Ty LG AT VP TY SNORT Te NARI CE 6 Ii. Respondent’s Action Is State Action. The Respondent, Commonwealth Edison Company, has been granted a total monopoly in certain areas by the State of Illinois. In effect, the State of Illinois decided not to supply public electric service itself, but instead permitted Commonwealth Edison to act as its agent. The regulatory agency of Illinois, the Illinois Commerce Com- mission, is empowered to regulate the policies of Common- wealth Edison. Although Commonwealth Edison is privately owned, its security deposit requirements are pursuant to a state ordi- nance, ICC General Order 172 (App. P. A2). The intense contact of Commonwealth Edison and the State of Illinois is evident from the facts that: (1) Commonwealth Edison is subject to close regu- lation by the Illinois Commerce Commission. (2) The regulations of Commonwealth Edison filed with the Illinois Commerce Commission are required to be filed as a condition of Commonwealth Edison’s operation. (3) Commonwealth Edison’s regulations must be ap- proved by the Illinois Commerce Commission to be effective. (4) Commonwealth Edison is given a total monopoly by the Illinois Commerce Commission. (5) The Illinois Commerce Commission controls the rates charged and the services offered by Commonwealth Edison. (6) The actions of Commonwealth Edison are subject to review by the Illinois Commerce Commission. =~" 7 In the Court of Appeals, Commonwealth Edison took the position that it is a privately owned business carrying on its own ‘‘normal business policies with regard to requiring deposits and not state action.’’ However, it is improper to consider Commonwealth Edison as a typical privately owned business because of Commonwealth Edison’s intense contact with the State of Illinois. Where the typical pri- vately owned company is in open compe*tion with other similar companies, Commonwealth Edison has a total mo- nopoly imposed by state mandate, with its profit being controlled by the state. A prospective purchaser of electri- cal service cannot go elsewhere — he must purchase the electrical service from Commonwealth Edison. And the charging of advance security deposits in an arbitrary manner to selected persons is not a normal, internal business practice, such as giving employees certain days off, ete. By arbitrarily selecting who should pay a security deposit, and by arbitrarily selecting the amount of the security deposit, Commonwealth Edison can effectively prevent selected persons, through no fault of such persons, from having electrical service.* Thus the power to grant or not to grant electrical service, which is given Commonwealth Edison by the State of Illinois, is clearly a governmental function. This Court has stated that ‘‘Misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law, is action taken ‘under * Clearly Particular Cleaners would be unable to commence busi- ness without electrical service. Although it is undisputed that Edison had no prior history of any collection problems with Particular Cleaners and there were no debt judgments against Particular Cleaners, Edison arbitrarily required Particular Cleaners to pay a $900.00 security deposit in order to maintain its electrical service. Such a requirement coupled with Particular Cleaners’ starting ex- penses in business may have put it out of business. Sa PIE NE OO LOE Te ~ color of’ state law.’’ United States v. Classic, 313 U.S. 299, 326; 85 L.Ed. 1368, 1383 (1941). This Court should resolve the important question of whether Commonwealth Edison’s action, in arbitrarily charging security deposits to some and not others, is ‘‘state action’’ subjecting Commonwealth } Edison to provisions of the Civil Rights Act. III. The Decision Below Conflicts With The Decisions Of Other Courts Of Appeals As To The Proper Interpreta- tion Of “State Action” By A Public Electric Utility. It is abundantly clear that had the present case been in the Fourth or Fifth Circuits, a contrary decision would have been reached. In those Circuits, it is seen that the action of a public utility under a state regulatory agency’s regulation, is ‘‘state action.’’ In Parker v. Brown, 317 U.S. 341 (1943), the Supreme Court held that a marketing program instituted pursuant to the California Agricultural Prorate Act was exempt from the Sherman Act on the ground that the anti-com- petitive actions involved there were the result of ‘‘state action.’’ Thus the doctrine of Parker v. Brown is that the antitrust laws are directed against individual action, not ; ‘«state action.’’ In other words, if a defendant can show that his action is under color of state law (i.e., ‘state action’), under Parker v. Brown he is immune from Fed- eral antitrust laws. The Court of Appeals for the Fourth Circuit and the Court of Appeals for the Fifth Circuit have considered whether certain practices of public utilities involve ‘‘state action’? thereby making such public utilities immune from antitrust attack under the Parker v. Brown doctrine. These eases are Washington Gas Light Company v. Virginia Electric and Power Company, 438 F.2d 248 (4 Cir., 1971) a 9 and Gas Light Company of Columbus v. Georgia Power Company, 440 F.2d 1135 (5 Cir., 1971). In both of these eases, the respective Courts of Appeal held that the com- plained-of practices by the defendants were ‘‘state action’’ and therefore exempt from the purview of Federal anti- trust legislation under Parker v. Brown. In Washington Gas Light Company v. Virginia Electric and Power Company, the Court of Appeals stated (438 F.2d at 251-252) : “‘The Virginia State Corporation Commission is without question a proper state agency to qualify under Parker. Section 155 of the Virginia State Con- stitution makes explicit provision for the SCC giving it the power, among other things, to prescribe utility rates and, subject to the authority of the state legis- lature, to regulate other non-specified corporate utility activities. Sections of the Virginia Code provide a detailed system of regulatory powers and procedures whereby administrative action may be taken and re- viewed with respect to ‘rates, tolls, charges, schedules’ ete. “‘There can be no doubt. and in fact Washington Gas Light does not argue to the contrary, that the SCC is a regulatory arm of the state, possessing both the authority and powers necessary to qualify under Parker. * * * We think VEPCO’s promotional practices were at all times within the ambit of regulation and under the control of SCC, and we hold these practices exempt from the application of the laws of antitrust under the Parker doctrine.”’ In Gas Light Company of Columbus v. Georgia Power Company, the Court of Appeals stated: **The question presented is whether the court below erred in holding that these rate schedules were the products of state action, i.e., products of the Georgia Public Service Commission, and as such, excluded from —" the proscription of the federal antitrust laws under the teaching of Parker v. Brown, supra. (440 F.2d at 1138). 10 ‘Our view is that the Parker exclusion applies to the rates and practices of public utilities enjoying monopoly status under state policy when their rates and practices are subjected to meaningful regulation and supervision by the state to the end that they are the result of considered judgment of the state regu- latory authority; here the Georgia Public Service Commission.’’ (440 F.2d at 1140). It can be seen that in the Fourth and Fifth Circuits, practices of public utilities under the auspices of state regulatory commissions are considered ‘‘state action’’ thereby immunizing such public utilities from antitrust liability. In sharp contrast, in the present case the Seventh Circuit holds that an action by public utility Commonwealth Edison, which action is clearly under color of a specific state ordinance and under the auspices of the Illinois Commerce Commission, is not ‘‘state action.’’ This Court should not permit an electric utility in the Seventh Circuit to successfully claim ‘‘individual action”’ and become immune from the civil rights laws, while at the same time electric utilities in the Fourth and Fifth Circuits successfully claim ‘state action’’ and become immune from the antitrust laws. This important conflict in construction of ‘‘state action’? between the Fourth and Fifth Circuits on the one hand, and the Seventh Cireuit on the other hand, should be resolved by this Court. . 11 CONCLUSION Commonwealth Edison is granted monopoly status by the State of Illinois and security deposits are arbitrarily re- quired from certain classifications of persons and com- panies under color of Illinois Commerce Commission Gen- eral Order 172. In such collection of security deposits, Commonwealth Edison has the effective power to grant or not to grant electrical ‘service, is cloaked with the au- thority of the State, and its practices constitute ‘‘state action.’’ The decision by the Court of Appeals for the Seventh Cireuit, holding that Respondent’s action is not ‘‘state ac- tion’, is contrary to the decisions that would have been reached by the Courts of Appeals tor the Fourth and Fifth Cireuits. For the reasons stated, a Writ of Certiorari should issue to review the judgment and opinion of the Court of Appeals for the Seventh Circuit. Respectfully submitted, Georce H. GrerstMan Norman Lettvin Warren P. LanpsMan Rosert L. LanpsMan Attorneys for Petitioners LETTVIN AND GERSTMAN 135 South LaSalle Street Chicago, Illinois 60603 Telephone: 641-3320 May, 1972 Al APPENDIX Constitution United States Constitution, Fourteenth Amendment, Sec- tion 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 re- side. 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 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. 28 U.S.C. § 1843(3): The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person: * * * (3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States; 42 U.S.C. § 1983 (Civil Rights Act): Every person who, under color of any statute, ordi- nance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Con- stitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. i a ec ale oo a ae Bel a ig : ie. , A2 STATE OF ILLINOIS ILLINOIS COMMERCE COMMISSION GENERAL ORDER 172—Revised 1. SCOPE AND APPLICATION These rules shall apply to the establishment and main- tenance of credit by customers using cooling, electric, gas, heating, telephone, sewer or water service rendered by any public utility which is defined as such by Section 10 of ‘‘ An Act concerning public utilities,’ as amended, the handling of customers’ deposits, discontinuance of such service for nonpayment of bills or failure to establish or maintain credit, and matters relating thereto. 2. THE SAVING CLAUSE The adoption of these rules shall in no way preclude the Commission from altering or amending them, in whole or in part, or from requiring or authorizing rules containing other provisions whenever it shall be deemed to the public interest so to do. The requirements specified herein shall not relieve any Utility of any statutory requirement, shall not supersede any rules heretofore filed by any Utility with the Commission and presently in effect, and shall not pre- clude the application of other rules which may be filed with the Commission by any Utility and permitted by the Com- mission to become effective. 3. DEFINITION OF DELINQUENCY A customer who has not paid his bill for service within the prompt payment period will be considered delinquent. Where the Utility allows no discount for prompt payment, the customer will be considered delinquent if he has not paid his bill within the time specified for payment in the Utility’s rates or rules as filed with the Commission. If the Utility a has no rates or rules on file setting forth the time after which the customer will be considered delinquent, the cus- tomer will be considered delinquent if he has not paid his bill within ten (10) days after the bill is mailed or delivered by other means. 4. ESTABLISHMENT OF CREDIT (a) Present Customers. If any present customer has been delinquent in the payment of any two consecutive bills, or has been delinquent three or more times within the pre- ceding twelve months, or if the Utility has reasonable grounds to believe that the customer is a questionable credit risk, such customer may be required to make a cash deposit in order to establish his credit. Payment by the customer of delinquent bills will not of itself relieve the customer from the obligation of establishing his credit with respect to the account involved or with respect to any other account in connection with the same or any other class of service which the Utility may be providing such customer. A2 (b) Applicants for Service. Before service is rendered, every applicant for initial or additional service in addition to complying with all other applicable’ rules and regulations, may be required to establish credit. The applicant shall be notified promptly of such requirement to prevent any un- due delay in the furnishing of service. Service may be denied as long as the applicant owes the Utility for service of the same class (residential or business) previously fur- nished to him at the same or another location. Any ap- plicant who has not established his credit, as provided under Rule 5, may be required before service is established to (1) pay the service connection charge, if any; and (2) make an advance payment on his service account in an amount equal to an estimated periodic bill. An advance payment shall not relieve the applicant of his responsi- bility subsequently to fully establish his credit. bs PERO MALIA DD B SENTATION E PSY MONIES. SEIS BARN AS LR EES — 5. MEANS BY WHICH CUSTOMER OR APPLICANT MAY ESTABLISH CREDIT Any customer or applicant may establish his credit by compliance with either of the following conditions: A4 (a) If he shall furnish information as to his credit and the Utility, after prudent investigation, shall reasonably believe that he is entitled to credit. (b) If he makes a cash deposit in accordance with the requirements in Rule 6. 6. AMOUNT OF CASH DEPOSIT (a) The amount of the cash deposit which may be re- quired of a customer or applicant for the purpose of estab- lishing his credit, as provided under Rule 5, shall not ex- ceed his estimated bill figured at the gross rate for the class of service involved for a periodic billing period plus forty- five (45) days. The determination of a customer’s (as dis- tinguished from an applicant’s) estimated bill shall be based upon his prior or current use of the class of service involved. (b) The amount of the cash deposit may be adjusted on the basis set forth in Rule 6, Paragraph (a), at the option of the customer or the Utility at any time when the char- acter or degree of the customer’s use of the service has materially changed, or when it develops that the character or degree of such use will materially change. 7. CONDITIONS UNDER WHICH DEPOSITS ARE TO BE APPLIED OR REFUNDED The Utility shall promptly refund the deposit (with in- terest as set forth under Rule 8) and may require the sur- render to the Utility of the receipt or certificate of deposit properly endorsed, or delivery of a cancellation receipt for the deposit: -_ A5 (a) When the customer establishes credit by other means, or (b) When the service is discontinued and the bills there- for are paid in full, or (c) When the service is discontinued and there are charges due the Utility for service to the customer, the cash deposit plus interest will be applied to the charges, and the balance remaining of the deposit and interest, if any, re- turned to the customer. When the deposit is applied to the liquidation of unpaid bills, the Utility shall mail, or de- liver, to the customer a stateiuent showing the amount of the original deposit including accrued interest, if any; the amount of the unpaid bills liquidated by the deposit; and the balance remaining due to either the customer or the utility, In either case and in any event, if there is a balance due the customer wher the service is discontinued it shall then be immediately due and payable to the customer without demand or notice from him. 8. INTEREST TO BE PAID ON DEPOSITS Interest at the rate of not less than seven percent (7%) compounded annually shall be paid by the utility on all deposits held (including accrued simple interest) and ac- quired by the utility on or after January 1, 1970 for the purpose of the customer establishing credit, effective Jan- uary 1, 1970 but in no case shall interest be allowed for a period extending beyond the date of refund or the date service is terminated, whichever date is earlier. 9. PAYMENT OF INTEREST ACCRUALS Interest accruing on cash deposits shall be computed and prompt settlement made: eerrneemnnesmeecnenemcT9) aeRECORNERA AES RE at. A6 (a) By paying the amount of interest accrued on the demand of the customer but not oftener than once in any twelve months’ period, or (b) By adding the amount to the deposit upon the re- turn or application of the customer’s deposit as set forth in Rule 7. 10. ISSUANCE OF RECEIPT OR CERTIFICATE OF DEPOSIT Concurrently with the receipt of a cash deposit by a Utility from a customer under the provisions of these rules, the Utility shall issue and deliver, to said customer, a re- ceipt or certificate of deposit showing thereon (1) the date thereof, (2) the name of the customer, (3) the address of the premises served or to be served, (4) the service to be furnished, (5) the amount of the deposit, (6) the rate of interest to be paid thereon from said date, and (7) stating that (a) the amount of the deposit, plus said interest, will be refunded to the customer when credit has been estab- lished to the satisfaction of the Utility, or may be applied by the Utility at any time to the liquidation of unpaid bills of the customer; (b) the balance, if any, remaining after liquidation of unpaid bills to the date that service to the customer is discontinued will be so refunded ; (c) said inter- est will cease and terminate upon said date of discontinu- ance; (d) any amount remaining on deposit when service is discontinued shall be immediately payable to the cus- tomer without demand by or notice from him; and (e) the Utility will dispose of the balance of any deposit remaining after the period set forth in the Illinois Uniform Disposi- tion of Unclaimed Property Act, which period commences with the date of termination of service, in accordance with the provisions of said Act. A7 11. DISCONTINUANCE OF SERVICE Service may be discontinued by the Utility for failure of a customer to establish credit, or to adjust his cash deposit, or for nonpayment of a delinquent bill owed to the Utility for the same class (residential or business) of service fur- nished to him at the same or another location, but only after the mailing or delivery by other means of a written notice by the Utility of its intention to discontinue service. Service may be discontinued by the Utility at the end of the period established under the Utility’s rules as filed with the Commission, but where the Utility has no such rules on file, service shall not be discontinued until at least five (5) days after the mailing or delivery of such written notice of intention to discontinue service. 12. SERVICE RECONNECTION CHARGE Where service has been discontinued pursuant to the terms of the notice provided for in Rule 11 erein, the Utility shall charge and collect the reconnection charge, if any, set out in any rules, regulations or terms afd condi- tions of service which may be filed by the Utility with the Commission and permitted by the Commission to become effective. 13. RECORDS OF DEPOSITS Each Utility collecting cash deposits from its customers shall maintain a complete record of each and every deposit showing (a) the name of the customer; (b) address of the premises served; (c) date and amount of original deposit and any additional deposits; (d) date and amount of any refund or application to unpaid bills: (e) the amount of interest paid or credited with the date of payment or SRS SR OS eg eRe * A8 credit; and (f) the balance of each deposit, the Commis- sion will require to be shown in each Utility’s annual re- port the total amount remaining in its customer deposit account. 14. FINAL DISPOSITION OF A DEPOSIT * The Utility shall have the right to close its records with reference to any unrefunded deposit and to destroy the records and other data relating to such deposit when such deposit has been disposed of in accordance with the pro- visions of the Illinois Uniform Disposition of Unclaimed Property Act. *Note: This provision supplements the requirements of Para- graph 37 of General Order 186; Paragraph 37 of General Order 187; and Paragraph 37 of General Order 189. A9 in the Runited States Court of Appeals For the Seventh Circuit SepremBer Term, 1971 — January Session, 1972 No. 71-1349 ParticuLak CLEANERs, Inc. and FRANcEs ENTWISTLE, Plaintiff s-A ppellants, Vs. CommMoNWEALTH Epison Company, Defendant-Appellee. Appeal from the United States District Court for the Northern District of Dlinois. — No. 70-C-2831 Wau J. Lyxcu, Judge. February 11, 1972 Before Hastrnes, Senior Circuit Judge, Kuey, Circuit Judge, and Kerner", Circuit Judge. * Judge Kerner heard oral argument, but did not participate in the adoption of this opinion. — Hastines, Senior Circuit Judge. Plaintiffs Particular Cleaners, Inc, an Illinois corporation, and Frances Entwistle, a citizen of the United Kingdom residing in Oak Park, Illinois, filed a so-called ‘‘civil rights”’ action against defendant Commonwealth Edison Company (Edison), a private Illinois corporation engaged in the commercial distribution of electricity. The gravamen of the complaint relates to Edison’s practice of requiring a security deposit from certain customers, who cannot otherwise show credit, prior to the commencement of electrical service. In substance, Count I of the complaint alleges that the method used by Edison for determining which prospec- tive customers will be required to pay the deposit is arbitrary, capricious and discriminatory, and is violative of plaintiffs’ rights secured by the Equal Protection Clause of the Fourteenth Amendment of the Federal Constitution. Plaintiffs seek to prosecute this cause as a class action and apparently predicate their action under Title 42, U.S. C.A. § 1983: and by reason thereof assert jurisdiction under Title 28 U.S.C.A. § 1343(3)? A10 1“§ 1983. Civil action for deprivation of rights. | Every person who, under colcr of any statute, ordinance, regulation, custom, or usage, of any State or Territory, sub- jects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.” 2««¢ 1343. Civil rights and elective franchise The district courts shall have original jurisdiction of any an Count II of the complaint is based on the claim that Edison’s security deposit policies violate Section 38, Lil. Rev. Stat., ch. 11134 (1969), which prohibits rate discrimi- nation. The only jurisdiction of the federal district court on this count was based on the theory of pendent juris- diction. The trial court dismissed both counts of the complaint on Edison’s motion. Count I was dismissed on the ground that Edison’s challenged security deposit requirement did not coustitute state action sufficient to satisfy the juris- dictional requirements of § 1983, supra. Since Count I was dismissed, the trial court necessarily dismissed Count II, there being no remaining pendent jurisdiction. All The primary question on this appeal is whether the alleged discriminatory collection of security deposits by Edison, authorized by General Order 172 — Revised issued by the Illinois Commerce Commission, constitutes conduct under color of state action that will subject it to a civil rights action under § 1983, supra. Further, is the disposition of this case controlled by Kadlec vy. Illinois Bell Telephone Company, 7 Cir., 407 F.2d 624 ( 1969), cert. denied, 396 U.S. 846, as the district court held? General Order 172 — Revised provides, inter alia, for the collection of limited security deposits from applicants {footnote continued) civil action authorized by law to be commenced by any person : **# @ (3) To redress the deprivation, under color of any State law, statute, ordinances, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the juris- diction of the United States; ; * # o*# eg a AD SORT RN ORL DEL CBE IE PEI, TORE EGS BEE Pte IIE Al2 or customers seeking to use ‘‘cooling, electric, gas, heating, telephone, sewer or water service rendered by any public utility.”” The complaint does not challenge the propriety of the action of the Illinois Commerce Commission or the order itself. It complains of ‘‘the standards and policies arbitrarily dictated by numerous representatives of” Edison. The order in no way directs or orders the collec- tion of any security deposits. It merely serves to limit the power of public utilities to require deposits. There is no allegation that a public utility could not require such a deposit without this regulation. The decision to require security deposits to insure credit and its applica- tion of this policy in any particular case is strictly a private management decision to be made by Edison in its own normal business operation. Edison is neither the State of Illinois nor an agency thereof. We fail to see how the execution of these policies by Edison in the context of the case before us could constitute state action. In Kadlec v. Illinois Bell Telephone Company, supra, we held that a telephone company’s discontinuance of plaintiffs’ ‘‘Call-Pak’’ service pursuant to its own regula- tions filed with state authorities did not amount to conduct taken under color of state law and would not support an action based on § 1983. Plaintiffs seek to distinguish _ Kadlec from their case by claiming that in Kadlec it was the public utility’s own regulation that was involved while here the regulation was issued by the Illinois Commerce Commission. We find this unpersuasive. As above pointed out, the state did not act on its own regulation. Edison executed its own policies, limited only by the state regula- tion. In the case at bar, the statute in no sense benefited from, encouraged, requested or cooperated in the decision to collect security deposits from plaintiffs. See Kadlec, at 626. A13 Kadlec was followed in Martin v. Pacific Northwest Bell Telephone Company, 9 Cir., 441 F.2d 1116 (1971), cert. denied, 404 U.S. 873 (October 12, 1971), where the court said at 1118: ‘‘The fact that a private corporation, such as Pacific Bell, enjoys an economic monopoly which is protected and regulated by the state does not necessarily bring its every act within the purview of Section 1983. ** * [citing Kadlec] * * *. In this case, plaintiff’s allega- tions at most concern Pacific Bell’s public service func- tions; they neither show nor tend to show an intrusion by the State into matters of Pacific Bell’s internal manage- ment.’’? See Powe v. Miles, 2 Cir., 407 F.2d 73, 81 ( 1968) ; and Lucas v. Wisconsin Electric Power Company, D.C.E.D. Wis., 322 F.Supp. 337, 340 (1970). We have considered cases cited by plaintiffs seeking to distinguish Kadlec and find them inapposite to our present consideration. Further, the parties have argued other issues on appeal which were argued to the district court but not reached by it in its decision. We do not find it necessary to reach them here. As was simply stated in Kadlec, at 626-27: ‘*Here, the nexus between the state and defendant’s conduct was not sufficient to maintain an action under § 1983.’’ And we perceive no substantial difference between the state action asserted in Kadlec and that asserted here. We affirm the district court’s dismissal of appellants’ complaint. AFFIRMED. A true Copy: Clerk of the United States Court of Appeals for the Seventh Circuit. ENS INCE IL A FN EAE EOI SIEGE LA CUT SF WS — IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION Al4 PARTICULAR CLEANERS, INC., an Illinois corpora- tion, and FRANCES ENTWISTLE Plaintiffs vs. COMMONWEALTH EDISON COMPANY, an Illinois corporation Defendant MEMORANDUM OF DECISION (Filed March 16, 1971) Defendant, Commonwealth Edison, filed a motion to dis- miss this cause of action for want of jurisdiction. The com- plaint asserts a cause of action predicated on 42 U.S.C. § 1983. Jurisdiction, if it exists, obtains pursuant to 28 U.S.C. § 1343. The gravamen of the complaint concerns the defendant’s practice of requiring a security of deposit from certain customers prior to the commencement of electrical service. The plaintiff alleges that the method used for determining which prospective customers will be required - to pay this deposit is arbitrary, capricious and discrimi- natory, and accordingly inimical to rights secured by the Equal Protection Clause of the fourteenth amendment. The crucial strain of all complaints sounding under this “provision of this reconstructionist civil rights statutes is action taken under color of state law, or more prosaically Al5 state action. Further, such state action is a necessary requi- site for obtaining this court’s jurisdiction. Here the com- plaint is not asserted against an acknowledged state officer or agency. Rather the defendant is a private corporation. However, the plaintiffs assert that this private corporation is so circumscribed and protected by the state that its action is in fact state action sufficient to satisfy the jurisdictional requirements of 42 U.S.C. § 1983 and permit the mainte- nance of this suit. “ At the outset it must be recognized that the mere regu- lation of a business by a state is in itself insufficient to satisfy the jurisdictional requisite of § 1983. Something more than mere regulation is required. In Kadlec v. Illinois Bell Telephone Co., 407 F.2d 624 (1969) a similar complaint was brought under § 1983. The Court of Appeals of this circuit held that a motion to dis- miss was properly granted. The court noted that the termi- nation of a particular type of service that was the basis for the complaint was precipitated by private economic reasons and was pursuant to the company’s own regulations. The court continued: The only apparent state connection with the termina- tion rests in the fact that defendant Company filed its regulations with state authorities. The state in no sense benefited from, encouraged, requested or co- operated in this suspension of service. The mere filing of these regulations with the state neither clothed Illinois Bell with state authority nor did it bring it under the aegis of the state. The § 1983 requirement of conduct taken under color of law ‘‘. . . ean rarely be satisfied in the case of anyone other than tL ORR LENS ROE RTPI SO TENE ese Meneea ap REGIA EEE PEN BIS a a state official.’’ (cites omitted) Here the nexus be- tween the state and defendant’s conduct is not sufi- cient to maintain an action under § 1983. 407 F.2d 624, 626. This court’s review of the complaint convinces us that the requisite nexus does not exist in this matter. We perceive no substantial difference between the state action asserted in Kadlec (supra) and that asserted here. Accord- ingly this court grants the defendant’s motion to dismiss Count I of the Complaint. Further, since jurisdiction over Count IL of the Complaint is predicated on a theory of pendant jurisdiction that Count is also dismissed. A16 Wiuuam J. Lynou Judge, United States District Court Dated: March 15, 1971 » a IN THE UNITED STATES DISTRICT COURT FOR THE NortrHern District or ILuNots Eastern Division A17 PARTICULAR CLEANERS, INC., an Illinois Corpora- tion, and FRANCES EN TWISTLE, Plaintiffs, vs. COMMONWEALTH EDISON COMPAN Y, an Illinois Corporation, Defendant. Civil Action — No. 700-2831 Class Action Complaint Jury Trial Demanded COMPLAINT (Filed November 12, 1970) COUNT I JURISDICTION 1, This Count I is a civil rights action arising under the Fourteenth Amendment to the Constitution of the United States. Jurisdiction is founded on the existence of a Fed- eral question and U.S.C., Title 28, Section 1343. A18 PARTIES AND VENUE 2. Plaintiff, PARTICULAR CLEANERS, INC., is a corporation incorporated under the laws of the State of Illinois having its principal place of business in this judicial district. The Plaintiff, FRANCES ENTWISTLE, is an individual residing in the State of Illinois. Defendant, COMMONWEALTH EDISON COMPANY, is a corpora- tion incorporated under the laws of the State of Illinois, having its principal place of business in this judicial dis- trict. Plaintiffs have purchased or offered to purchase electric service sold by the Defendant named herein within the period covered by this Complaint. CLASS ACTION 3. Plaintiffs bring this action on behalf of themselves and pursuant to Rule 23 of the Federal Rules of Civil Pro- cedure in behalf and as representatives of the class of all such purchasers or prospective purchasers in the State of Illinois that have been required to pay a security deposit to Defendant as a prerequisite to obtaining or maintaining electric service. The class is so numerous that joinder of all members is impracticable. Except as to the amount of damages each member of the class has sustained, all other questions of law and fact are common to the class. The questions common to the class predominate over any ques- tions affecting only individual members. This class action is superior to other methods for the fair and efficient adjud- ication of the controversy described herein. The named Plaintiffs will fairly and adequately protect the interests of the class. Defendant, COMMONWEALTH EDISON COMPANY has acted on grounds generally applicable to the class thereby making appropriate final injunctive relief with respect to the class as a whole. A19 VIOLATIONS COMPLAINED OF 4, Thousands of prospective purchasers of electric serv- ice from Defendant, COMMONWEALTH EDISON COM- PANY, are not required to pay a security deposit in order to receive electric service. On the other hand, thousands of prospective purchasers of electric service from Defen- ant, COMMONWEALTH EDISON: COMPANY are arbi- trarily and discriminatorily required to pay a security de- posit based upon unequal and discriminatory standards and policies arbitrarily dictated by numerous representa- tives of Defendant, COMMONWEALTH EDISON COM- PANY. 9. Plaintiff, PARTICULAR CLEANERS, INC., has been and is currently a purchaser of electric service from Defendant, COMMONWEALTH EDISON COMPANY, within the State of Illinois since as early as October 1, 1970. Plaintiff is not indebted to Defendant, COMMON- WEALTH EDISON COMPANY, with respect to any bills or charges for electric service purchased from Defendant, COMMONWEALTH EDISON COMPANY. 6. Notwithstanding the fact that PARTICULAR CLEANERS, INC. is not indebted to the Defendant, COM- MONWEALTH EDISON COMPANY, said Defendant has, under color of an Illinois Commerce Commission Regula- tion, arbitrarily, capriciously and discriminatorily classified Plaintiff, PARTICULAR CLEANERS, INC., as a deposit purchaser of electric service whereby a deposit of approxi- mately three times one month’s basic service is required in order to maintain electric service at the corporation’s place of business in Oak Park, Illinois. Such acts of Defendant place Plaintiff, PARTICULAR CLEANERS, INC., at an economic disadvantage using an instrumentality of the State, and seriously interfere with Plaintiff’s ability to commence and carry on its business, thereby resulting in denial to the corporation of equal protection of the laws, ME TOLIOE S/ AATI ARENAS, BE IRN ONT APRIL ETRY A20 contrary to the Fourteenth Amendment to the Constitution of the United States, and such discrimination is a violation of Section 38, lll. Rev. Stat. 1969, ch. 1113. 7. Plaintiff, FRANCES ENTWISTLE, is a citizen of the United Kingdom and is not indebted to the Defendant. Notwithstanding the fact that the Plaintiff, FRANCES ENTWISTLE, is not indebted to the Defendant, COM- MONWEALTH EDISON COMPANY, said Defendant has, under color of an Lilinois Commerce Commission Regula- tion arbitrarily, capriciously and discriminatorily required said Plaintiff to pay a security deposit as a prerequisite to purchasing electric service at her residence in Chicago, Illinois. Such acts of Defendant place Plaintiff, FRANCES ENTWISTLE, at economic disadvantage using an instru- mentality of the State, thereby resulticg in denial to her of equal protection of the laws, contrary to the Fourteenth Amendment to the Constitution of the United States and such discrimination is a violation of [Sec. 38, Ill. Rev. Stat. 1969, ch. 111%4].* | 8. Defendant has a total monopoly on electric service | in the City of Chicago, Illinois, where Plaintiff, FRANCES ENTWISTLE, resides and PARTICULAR CLEANERS, INC. in the Village of Oak Park, Illinois, where the Plain- ' tiff, PARTICULAR CLEANERS, Inc., has its principal place of business. 9. Unless Defendant, COMMONWEALTH EDISON COMPANY, provides and sells electric service to Plain- tiffs, PARTICULAR CLEANERS, INC. and FRANCES ENTWISTLE, said Plaintiffs will be deprived from ob- taining and/or maintaining electric service. ® The bracketed portion was added by an Amendment filed November 13, 1970. - 10. Thousands of other purchasers or prospective pur- chasers, not indebted to Defendant have, under color of an Illinois Commerce Commission Regulation, arbitrarily, eapriciously and discriminatorily been and will be required to pay a security deposit to Defendant as a prerequisite to purchasing electric service. Such acts place such other persons at an economic disadvantage using an instrumen- tality of the State, thereby resulting in the denial to persons within the State of Illinois equal protection of the laws, contrary to the Fourteenth Amendment to the Constitution of the United States, and such acts violate Section 38, Til. Rev. Stat. 1969, ch 11124. 11. The specific amounts of damage have not yet been determined since such determination will require discovery and analysis of Defendant's books and records. When these amounts have been determined, Plaintiffs will seek leave of Court to amend this Complaint to include such amounts. 12. Plaintiffs herein have been compelled to employ attorneys to prosecute this suit and the attorneys for the Plaintiffs are entitled to reasonable attorneys’ fees out of a fund which this court is asked to establish by the col- lection of the fund of deposits in the above-entitled cause. The attorneys for Plaintiffs should be awarded reasonable attorneys’ fees and costs and expenses incurred in this proceeding. A21 PRAYER FOR RELIEF WHEREFORE, as to this Count 1, Plaintiffs pray A. That the Court adjudge and decree that Defendant has violated the civil rights of Plaintiffs and the acts done in furtherance thereof, were and are in violation of the Fourteenth Amendment to the Constitution of the United States and of Section 38, Ill.Rev.Stat. 1969, ch 1112. i. B. That the Court determine that this action may be maintained as a class action under Rule 23 of the Federal Rules of Civil Procedure and that reasonable notice of this action be given each member of the class represented by Plaintiffs. C. That the Court enjoin the Defendant from continuing the unlawful practice as alleged in Count I of this Com- plaint and order such other relief as may be necessary and appropriate to dissipate the effect of Defendant’s unlawful acts. D. That the Court appoint a receiver to receive and collect all deposits unlawfully required, charged and col- lected by Defendant, COMMONWEALTH EDISON COM- PANY, and to distribute said collected deposits to the Plaintiffs of class named herein. E. That the Court award to the attorneys for the Plain- tiffs such reasonable and proper attorneys’ fees as the Court deems appropriate. F. Plaintiffs pray that the Court grant such other and further relief as the Court shall deem just. Warren P. Lanpsman Warren P. Landsman Rosert L. LanpsmMan Robert L. Landsman Warren P. Lanpsman and Rosert L. LanpsmMan Attorneys for Plaintiffs 77 W. Washington Street Financial 6-0531 Of Counsel: Lerrvin and GzersTman 135 South LaSalle Street 641-3320 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_1113%3A1. Public record. Not legal advice.