# Motion to Dismiss Appeal — Los Angeles v. Public Util. Comm'n of Cal.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Motion to Dismiss Appeal
- **Published:** January 1, 1959
- **Citation:** 359 U.S. 119

## Text

SUPREME COURT. U. S. FILED |

| | FEB 18 195
Supreme Court of the United States os

JAMES R. BROWNING, Clerk

OcToBER TERM, 1958

No. 656

™

THe City or Los ANGELES, a municipal corpo-
ration, the Crry or Lona Breacu, a municipal
corporation, RoGeER ARNEBERGH And WaLurrep

JACOBSON
; Appellants,

VS.

Tur Prvauc Urmirres ComMissiox oF THE
‘ me) 1 x >
State oF CattrorNiA, and C. Lyn Fox, PETer
EK. MitcuHett, MattHew J. DooLry, THEODORE
H. Jenner and Everett C. McKeacre, as
members of and constituting the said Publie
Utilities Commission,

Appellees.

4

On Appeal from the Supreme Court of the State of California.

MOTION TO DISMISS APPEAL.

ArtTHUR T’. GrorcE,
140 New Montgomery Street, San Francisco 5, California,

Francis N. MARSHALL,
225 Bush Street, San Franciscc 4, California,

Attorneys for The Pacific Telephone and
Telegraph Company, Appellee.
JouHN Rospert JONES,
Beacon Building, 50 West Gay Street, Columbus 15, Ohio,
Attorney for General Telephone Com-
pany of California, Appellee.
ALVIN HH. PELAVIN,
300 Montgomery Street, San Francisco 4, California,
Attorney for California Water d& Tele-
phone Company, Appellee.
Warren A. PALMER,
405 Montgomery Street, San Francisco 4, California,
Attorney for Sunland-Tujunga Telephone
Company, Appellee.

OLB PEO LE

Page
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ee eel ce eee da ers 2
ee ee Sn nc enckdedens ee ieoevanweeed ns 3
a 5 Ss bad a eal Me Ow kw hee eee es +
ae hae. Gay bce ee spe k aes pa be ee ORROES 6

I. Appellants have no standing to urge their claims in
uae gen eu waders ee
distance factor or “mileage steps,” both effecting an increase in
charges (Appx. B, p. 6).

“The Los Angeles Extended Area is a large area embracing
numerous telephone “exchanges,” wherein interexchange telephone
service is furnished on a “local” rather than a “long distance”

4)

‘arate newspapers published in 27 separate cities in the
Los Angeles Extended Area (Ans.Pac. 11-12). Notice of
the filing of the application was given by letter to the
appropriate officers of the State of California and of the
counties and cities in which The Pacific Telephone and

Telegraph Company provides telephone service (Ans.Pac.
11).

Hearings on the application commenced September 25,
1957 (Appx. B, p. 5). The Cities of Los Angeles and Long
Beach appeared (Appx. B, pp. 19-20). The four telephone
companies joining in this motion were parties to other
proceedings which also involved the multiple message unit
service in the Los Angeles Extended Area. These proceed-
ings were consolidated with the rate application on Sep-
tember 27, 1957 (Appx. B, pp. 4-6). At the hearing on that
day the four companies joined in a motion for an interim
rate increase affecting the multiple message unit rate
(Appx. B, p. 6; Appx. E, p. 62). Hearings continued on
September 27, and October 3, 4 and 10, 1957 (Appx. B,
p. 6; Appx. E, p. 62). On December 10, 1957, the Commis-
sion issued the order challenged here, authorizing in part
the proposed interim rate increases (Appx. B, pp. 3-23).
Attendance and participation of the Cities of Los Angeles
and Long Beach at these hearings are undisputed (Appx.
KE, p. 62; Ans.Pac. 39-48).

basis by means of a multiple message unit rate structure. The
four telephone companies which join in this motion each furnish
telephone service in a part of the Los Angeles Extended Area
(Appx. B, p. 6). Telephone service is unrestrictedly interchanged
between the customers and territories of the respective companies
through physical interconnections of their lines.

A uniform message unit rate for service furnished by the four
companies in the Los Angeles Extended Area prevails under
order of the Commission (Decision No. 50260 (1954) 53 Cai.

P.U.C. 342).

6

Petitions for rehearing, filed by the appellants here,
were denied on January 7, 1958 (Appxs. E and F, pp.
07-66).

The Supreme Court of California denied review on May
21, 1958 (Appx. A).

Previously, on May 6, 1958, the Commission issued its
final order in the consolidated proceeding (Decision No.

56652; 56 Cal.P.U.0. 277, 23 PUR 3d 209) which reaffirmed
and made permanent the interim rates.

ARGUMENT.
I.

APPELLANTS HAVE NO STANDING TO URGE
THEIR CLAIMS IN THIS COURT.

Appellants are (a) two California cities, claiming to act
for themselves and ‘‘in effect in behalf of all of the sub-
seribers within the Los Angeles area who would otherwise
have been without representation’’ and (b) their city at-
torneys ‘‘as individual subscribers.’’ The appellants as a
group claim to appeal ‘‘in behalf of all telephone sub-
scribers within the Los Angeles area.’

A. The cities.

1. The cities have nc right which they may invoke under the Federal
Constitution against the legislative action of their parent state, or
its duly constituted agent, the Public Utilities Commission.

As to any purported violation of their constitutional
rights, Los Angeles and Long Beach as municipal corpo-
rations have no privileges or immunities under the Fed-

5Al] these quotations appear in the Jurisdictional Statement,
p. 12.

(

eral Constitution which they may invoke in opposition to
the will of their creator, the state.
Wiliams v. Mayor (1933) 289 U.S. 36, 40;
R.R.Comm’n v. Los Angeles R.Co. (1929) 280 U.S.
145, 156;
Risty v. Chicago, Rl. & Pac.Ry.Co. (1926) 270 U.S.
378, 390;
Trenton v. New Jersey (1923) 262 U.S. 182, 192;
Newark v. New Jersey (1923) 262 U.S. 192, 196;
Pawhuska v. Pawhuska Ou Co. (1919) 250 U.S. 394,
399 ;
Worcester v. Street Railway Co. (1905) 196 U.S.
539, 548-549.

This principle applies to legislative determinations of
the state’s duly constituted agent, the public utilities com-
mission.

R.R.Comm’n v. Los Angeles R.Co., supra, 280 U.S.
145, 156;

Pawhuska v. Pawhuska Ou Co., supra, 250 U.S. 394,
399.

This court has repeatedly cited the Pawhuska and other
cases referred to above in per curiam decisions as com-
pelling the dismissal of appeals sought to be taken by
municipal corporations to invalidate rate orders of state
commissions. For example:

City of Winfield v. Court of Industrial Relations
(1923) 263 U.S. 680; |

Borough of Edgewood v. Wilkinsburg & East Pitis-
burgh Street Railway Company and Borough of
Edgewood v. Public Sergice Commission of the
Commonwealth of Pennsylvania (1922) 258 U.S.
604 ;

8

City of Sapulpa v. Oklahoma Natural Gas Com-
pany (1922) 258 U.S. 608;

People of the State of Michigan ex rel. Alez. J.
Groesbeck, Attorney General v. Detroit United
Railway (1921) 257 U.S. 609;

City of Chtwago v. Chicago Railways Company
(1921) 257 U.S. 617;

City of Hillsboro, Oregon v. Public Service Com-
mission of Oregon (1921) 255 U.S. 562;

State of Missouri at the Relation of City of Sedalia
v. Public Service Commission of Missouri (1920)
251 U.S. 547;

Kansas City v. Public Service Commission of Mis-
sourt (1919) 250 U.S. 652.

2. The cities have no standing to assert the constitutional claims of
others.

As to any purported violation of constitutional rights
of subscribers within cities, or elsewhere within the ‘‘Los
Angeles area,’’ municipal corporations, just as any other
litigant, have no standing to champion the constitutional
rights of others.

Lampasas v. Bell (1901) 180 U.S. 276, 283-284;

Tileston v. Ullman (1943) 318 U.S. 44, 46;

Premier-Pabst Co. v. Grosscup (1936) 298 U.S. 226,
22% $

Cronin v. Adams (1904) 192 U.S. 108, 114.

The cities’ suggestion that the subscribers within the Los
Angeles area would have been without representation un-
less the cities appeared in their behalf (Jur.St. 12) is
unsound. Aside from the widespread notice of rate in-
crease applications and the liberal practice of the Com-

9

mission in allowing interested parties to appear,® under
California law the Commission itself represents the public
interest in the field of public utility regulation and is
charged with the protection of that interest.’
Sale v. Railroad Commission (1940) 15 Cal.2d 612,
617-618, 104 P.2d 38, 41-42;
Hanlon v. Eshleman (1915) 169 Cal. 200, 202, 146
Pac. 656, 657; *
Pacific Telephone Etc. Co. v. Eshleman (1913) 166
Cal. 640, 187 Pac. 1119.

This Court has recognized that state regulatory au-
thority is responsible for safeguarding the public interest.
Smith v. Ill. Bell Tel. Co. (1926) 270 U.S. 587, 592;
New York City v. N.Y. Tel. Co. (1923) 261 U.S. 312,
316,
and, on the authority of the Pawhuska case, it has with-
out any differentiation dismissed appeals by municipal
corporations seeking to invalidate rate orders where rep-
resentation of resident subscribers was asserted.
City of Winfield v. Court of Industrial Relations,
supra, 263 U.S. 680;
City of Sapulpa v. Oklahoma Natural Gas Com-
pany, supra, 257 U.S. 617;
City of Chicago v. Chicago Railways Company,
supra, 257 U.S. 617.

Appellants refer to a number of cases as illustrative
of instances where municipalities have appeared as rep-

6For newspaper publicity, see Ans.Pac. 11-12.

For appearances of interested parties in the proceeding below,
see Appx. B, pp. 19-20.

7The Commission so determined in the present proceeding
(Appx. E, p. 61).

10

resentatives of ‘‘customer interests’’ (Jur.St. 24, n. 19).
But the fact of such appearances before federal and state
regulatory bodies, or in proceedings to review their ac-
tions, does not, of course, negate the Pawhuska rule and
confer standing in this Court to argue constitutional claims
on behalf of others.

B. The city attorneys as individuals.

In an admitted effort to circumvent the decisions of
this Court cited above (Jur.St. 12, n. 7) the two city
attorneys added their names ‘‘as individual subscribers’’
to the petitions for rehearing which they filed in the Com-
mission on behalf of their principals. This was their first
appearance other than in their official capacity.

1. Not having established in the record any interest in their individual
capacities as to which they now claim their constitutional rights
have been infringed, the city attorneys have no standing to make
such claim in this Court.

The city attorneys made no showing either by testi-
mony, documentary evidence pr affidavit that in their
individual capacities they were in fact subscribers for
telephone service from any of the four telephone com-
panies which join in this motion; or, if they were such
subscribers, what class, type or grade of service they
used; or how their service was affected by the Commis-
sion order in question.

In the absence of a showing in the record of a consti-
tutionally protected interest, the city attorneys have no
standing to challenge in this Court the order of the Com-
mission on the ground that it infringed an unproved
interest.

11

‘It is the settled law of this court that one who
would strike down a state statute as violative of the
Federal Constitution must bring himself by proper
averments and showing within the class as to whom
the act just attacked is unconstitutional. He must
show that the alleged unconstitutional feature of the
law injures him, and so operates as to deprive him
of rights protected by the Federal Constitution’’
(emphasis added) (Southern Railway Co. v. Kumg
(1910) 217 U.S. 524, 534).

To the same effect is:
Standard Stock Food Co. v. Wright (1912) 225
U.S. 540, 550.

2. Under California law, the city attorneys as individuals had no
standing to seek a writ of review, the denial of which is the subject
of their present appeal. As to them, therefore, the judgment reste
on an adequate nonfederal ground.

Under California law only a party who has duly ap-
plied to the Commission for a rehearing is given the right
to seek a judicial review of the Commission’s order by
means of a petition for that purpose.* Under the same law
the right tc apply for a rehearing in the Commission is
given only to (a) ‘‘any party to the action or proceeding’’
or (b) ‘‘any stockholder or bondliolder or other party
pecuuiarily interested in the public utility affected.’” The
city attorneys in their individual capacities were not
parties to the proceeding; admittedly (Jur.St. 12) they
had entered no appearance in their individual capacities

8Public Utilities Code, sees. 1731 and 1756; Appx. G, pp. 76-77.
®Public Utilities Code, sec. 1731; Appx. G, p. 76.

12

unti! all the proceedings with respect to the interim rate
increase order were completed and the order had been
issued. They then added their names to the cities’ peti-
tions for rehearing, without any proof in the record of
their interest in the matter.

Under the California statute noted above, one not pre-
viously a party tu the proceeding in the Commission, and
therefore not within the class authorized to apply for a
rehearing, does not acquire the status of a party simply
by filing an application for a rehearing. Nor did the city
attorneys show, or make any effort to show, any stock-
holding, bondholding, or any other pecuniary interest in
any of the four public utilities affected. Not having been
in a position under California law to apply to the Com-
mission for a rehearing, they had no standing to petition
the Supreme Court of California for a writ of review.

Their standing before the Supreme Court of California
was duly questioned before that court (Ans.Pac. 30-31,
n. 9). Since that court’s denial of a writ of review, with-
ont opinion, under California law is a determination on
the merits of the legal and factual issues raised in the
review proceedings,

Napa Valley Co. v. R. R. Comm. (1920) 251 U.S.
366, 372-373;

People v. Western Air Lines, Inc. (1954) 42 Cal.2d
621, 630-631, 268 P.2d 723, 728, appeal dismissed
(1954) 348 U.S. 859;

Funeral Dir. Assn. v. Bd. of Fumeral Dirs. (1943)
22 Cal.2d 104, 107-108, 136 P.2d 785, 787;

People v. Hadley (1924) 66 Cal.App. 370, 375, 226
Pac. 836, 839, .

13

that point is res judicata against appellants, and the deci-
sion below in this particular rests upon an adequate non-
federal ground.
Rogers v. Jones (1909) 214 U.S. 196, 204;
De Saussure v. Gaillard (1888) 127 U.S. 216, 232-
234.

It is the rule of this Court that one not a party to pro-
ceedings below has no standing to appeal or petition for
a writ of certiorari from the judgment therein:

Bayard v. Lombard, et al. (1850) 9 How. (50 U.S.)
530, 551;

Louisiana v. Jack (1917) 244 U.S. 397, 402;

Ex parte Leaf Tobacco Board of Trade (1911) 222
U.S. 578, 581;

Posner v. Anderson (1934) 293 U.S. 531.

$3. The two city attorneys have no standing to urge the constitutional
claims of other individuals.

Despite their unsupported assertions that they appeal
‘‘in behalf of all of the telephone subscribers within the
Los Angeles area’’ (Jur.St. 12), the two city attorneys as
individuals are not the champions of anyone’s constitu-
tional rights except their own (supra, p. 8).

II.

THE FINAL ORDER OF THE COMMISSION, DETERMINING THAT
THE INTERYM RATE RELIEF WAS JUSTIFIED AND AFFIRM-
ING AND MAKING PERMANENT THE RATE INCREASES
FIXED THEREIN, RENDERS THE APPEAL MOOT.

The gist of appellants’ claim is that lack of sufficient
notice and full hearing before the interim rate increases

14

were ordered denied them adequate opportunity to con-
test the proposed rate increases. Inherent in their ciaim
is the assumption that if they had had such opportunity,
they could have succeeded in establishing to the Commis-
sion’s satisfaction that the rates which the Commission
subsequently ordefed were unjust or unreasonable. How-
ever, after the hearings preceding the interim rate order,
hearings in the matter continued for several months until
u total of 32 days of public hearings had been held.’
Here was ample opportunity for appellants to make fur-
ther inquiry and offer any showing with respect to the
rates in question, had they seen fit to do so.

Ultimately,.on_ May 6, 1958, the Commission issued its
finai order (Pac. Tel. & Tel. Co., Decision No. 56652
(1958) 56 Cal. P.U.C. 277; 23 PUR 3d 209). In this final
decision, the Commission summarized the additional evi-
dence upon the-subject of the message unit rates which
had been adduced during the days of hearing subsequent
to the issuance of the interim order, and went on to state:
(56 Cal. P.U.C. 292; 23 PUR 3d 225):

‘‘The additional evidence leads the Commission to
-the further conclusion that Decision No. 55936, which
authorized rate changes on an interim basis, should
now be made permanent. The Commission finds, there-
fore, that the rate relief granted under Decision No.
55936 was justified and said decision as amended by
Decision No. 56048 with respect to its effective date
is hereby affirmed and made permanent.”’

The result is that upon completion of all hearings, in-
cluding all showings that were offered and received and

Pac, Tel. & Tel. Co., Decision No. 56652 (1958) 56 Cal.P.U.C.
277, 279; 23 PUR 3d 209, 213 (the final decision).

‘15

all cross-examination, the Commission ended with the de-
termination that the rates in question were (and had been
from the time fixed in the interim order) just and reason-
able. This disposes of any intimation by appellants that
they suffered any injury as a result of the interim rate
order.

In short, even if both the judgment appealed from and
the Commission’s interim rate order were set aside, the
final order of the Commission reaffirming the rate in-
creases embodied in the interim order still confronts the
appellants. The final order renders moot the present chal-
lenge of the interim order. The case is like those in which
an order denying a preliminary injunction has become
merged in a final judgment denying injunction; in such
cases this Court has dismissed appeals from the orders
denying the temporary injunctions.

Champlin Rfg. Co. v. Commission (1932) 286 U.S.
210, 212, 224;

Pacific Tel. Co. v. Kuykendall (1924) 265 U.S. 196,
205-206 ;

Shaffer v. Carter (1920) 252 U.S. 37, 44.

16

III.

THE APPELLANT CITIES ACTUALLY APPEARED IN THI: PRO-
OCEEDINGS BEFORE THE COMMISSION WHICH CULMINATED
IN THE CHALLENGED ORDER, AND WERE GIVEN FULL
OPPORTUNITY TO AND DID PARTICIPATE IN THE VARIOUS
PHASES OF THESE PROCEEDINGS, INCLUDING OROSS-
EXAMINATION AND ARGUMENT. THERE IS NO FACTUAL
BASIS FOR THEIR OLAIM THAT THEY WERE DENIED ADF.-
QUATE NOTICE AND HEARING.

In point of fact, appellants’ claims that the Commission
denied them adequate notice and hearing are specious. As
indicated above, the two city attorneys did not see fit to
appear in their individual capacities until after the interim
order had issued (and then nominally joined in petitions
for rehearing for the avowed purpose of circumventing
the ‘‘Pawhuska rule,’’ supra), although they had pre-
viously appeared on behalf of their municipal principals
and obviously knew all about the hearings. The two cities
were represented throughout the proceedings (Appx. B,
pp. 19-20, Appx. E, p. 62).

A. Appellants have produced no record to contradict the Com-
mission’s determination that due notice and hearing were
accorded.

The Commission determined that appropriate notice and

a full hearing had been accorded, in its Decision No. 56048

denying the petition of the City of Los Angeles and Roger

Arnebergh for a rehearing (Appx. E). The Commission

said (Appx. E, pp. 60-62) :

‘*# * © the burden of the petition is that due process
of law was denied petitioners, lawful notice of the
proposed interim increase of rates was not given °* * *.

The record in these proceedings and the law con-
stitute a complete refutation of petitioners’ unsup-
ported allegations.

17

The repeated assertion by petitioners in their peti-
tion for rehearing that a full hearing was not ac-
corded the parties on the motion by the telephone
companies for interim relief is incorrect and the
record irrefutably so shows. Hearings on the two
complaints were held on September 19, 20, and 26,
1957. * * * On the third dav of hearing in the appli-
cation proceeding (September 27, 1957) * * * the
four telephone utilities made a motion (or interim
relief, and hearings thereon were held on September
27, October 3, 4 and 10, 1957. Petitioner City of Los
Angeles appeared at all of the above hearings.

After the telephone companies had presented their
evidence in support of such motion and the protesting
and interested parties including the City of Los An-
geles,"!1] had cross-examined the witnesses for the tele-
phone companies, the presiding officer inquired of
these parties if they had any evidence to offer in
connection with the motion for interim relief and they
answered in the negative. No suggestion or request
was made by ary of these parties for a continuance
to enable said parties to present evidence. Also, the
motion for interim rate relief was argued by the par-
ties, including the City of Los Angeles and other pro-
testing and interested parties. In these circumstances,
the repeated insinuation of petitioners that the inter-
ested parties were denied an opportunity to be heard
and that a full hearing was not had on the motion for
interim relief is disingenuous, to say the very least.’’

Appellants’ conduct parallels the situation in Market
Street R. Co. v. Comm’n (1945) 324 U.S. 548, where this
Court said (p. 559):

‘‘But even if a more convincing showing were made
that the Company had relevant evidence to be heard,

11These interested parties also included the City of Long Beach,
appearing by Walhfred Jacobson (Appx. B, p. 20).

we find no adequate excuse for the failure to offer it
in the proceeding. No offer was rejected, no request
for time to obtain such evidence was denied. A mis-
apprehension by a litigant of the steps which its best
interests require during a trial may be appealing
grounds for a plea to the discretion of the hearing
tribunal for another chance, but it is not grounds for
our interference as a denial of constitutional rights.’’

In the record on this appeal, the above determination
by the Commission is not contradicted by any showing to
the contrary. Appellants have not supported their naked
assertions as to lack of due notice and hearing by bring-
ing up the record before the Commission to show, if they
could, that the Commission’s determination was erro-
neous. In such a situation this Court will accept the find-
ings of the Commission as correct.’?

Miss. Valley Barge Co. v. U.S. (1934) 292 U.S. 282,

286;

Edward Hines Trustees v. U.S. (1923) 263 U.S. 143,
148;

Nashville Ry. v. Tennessee (1923) 262 U.S. 318,
324.

12There arc in the record before this Court several statements
paraphrasing the record before the Commission and-also verbatim
excerpts from that record, which show beyond question that the
cities were given every opportunity to cross-examine witnesses
and make any affirmative showing that they saw fit. These state-
ments and excerpts appear in the answer of The Pacific Telephone
and Telegraph Company, et al., to petition for writ of review
(sipra, p. 2, n 2) pp. 39-48.

While the appellants say that the “factual assertions in denial
or avoidance” in the answers to the appellants’ petition for writ
of review were “traversed by the appellants’ reply” (Jur.St. 8),
their rep'y failed either to challenge the accuracy of any of the
excerpts from the record or to produce any contradictory evi-
dence or record references whatever.

B. The appearances of appellant cities by the appellant city at-
torneys in the Commission proceedings waived any objection
to the adequacy of notice.

The participation of the appellant cities by their city
attorneys in the Commission proceedings has already
been noted. It is fundamental that the actual appearance
of a party at a proceeding waives any objection to the
adequacy of notice of such proceeding.

United States v. Miller (1948) 317 U.S. 369, 382;
Doty v. Love (1935) 295 U.S. 64, 74;
Detroit &c. Ry. v. Osborn (1903) 189 U.S. 383, 391.

IV.

IN ANY EVENT TEE APPELLANTS HAVE NO CONSTITUTIONAL
RIGHT TO NOTICE AND HEARING, BEFORE THL COMMIS-
SION WAS ENTITLED TO MAKE ITS ORDER INCREASING
TELEPHONE RATES ON AN INTERIM BASIS.

Even if the appellants were right in their contentiors
+-at they were denied adequate notice and hearing before
the Commission’s interim rate order issued, that fact
would not avail them a remedy here. They have no con-
stitutionally protected right to prior notice and hearing
because (a) the Commission itself represents the public
interest in rate-making proceedings, (b) the state law
affords utility customers adequate protection against arbi-
trary rate-fixing action by giving them a right, under
section 1702 and section 1704 of the California Public
Utilities Code,!* to challenge before the Commission any

131702, Complaint may be made by the commission of its
own motion or by wny corporation or person, chamber of com-
merece, board of trade, labor organization, or any civic, commercial,
mercantile, traffic, agricultural, or manufacturing association or

al

‘‘charge heretofore established or fixed by or for any
public utility, in violation or claimed to be in violation,
of any provision of law * * *’’ (Cal.Pub.U.Code, sec.
1702), and (c) as subscribers, appeilants have no such
property interest in the rates fixed for public service cor-
porations as to entitle them or each customer or potential
customer to notice and hearing before the Commission
can increase a particular rate.

This Court recognized all three of these grounds in
United States v. Merchants €c. Ass’n. (1916) 242 US.
178, a case arising under the Interstate Commerce Act.
In disposing of the contention of certain shippers that
they had been denied their right to a hearing in the
rate-making procecding, this Court declared (p. 188):

organization, or any body politic or municipal corporation, by
written petition or complaint, setting forth any act or thing done
or omitted to be doue by any public utility, including any rule
or charge heretofore established or fixed by or for any public
utility, in violation or claimed to be in violation, of any provision
of law or of any order or rule of the commission. No complaint
shali be entertained by the commission, except upon its own
motion, as to the reasonableness of any rates or charges of any
gas, electrical, water, or telephone corporation, unless it is signed
by the mayor or the president or chairman of the board of trus-
tees or a majority of the council, commission, or other legislative
body of the city or city and county within which the alleged
violation occurred, or by not less than 25 actual or prospective
consumers or purchasers of such gas, electricity, water, or tele-
phone service” (Appx. G, p. 74).

“1704. Upon the filing of a complaint, the commission shall
cause a copy thereof to be served upon the corporaticn or person
complained of. Service in all hearings, investigations, and pro-
ceedings pending before the commission may be made upon any
person upon whom a summons may be served in accordance with
the provisions of the Code of Civil Procedure and may be meade
personally or by mailing in a sealed envelope, registered, with
postage prepaid. The commission shall fix the time when and
place where a hearing will be had upon the complaint and shall
serve notice thereof, not less than 10 days before the time set for
such hearing, unless the commission finds that public necessity
requires that such hearing be held at an earlier date.”

aL

‘“‘The carrier is the only necessary party to the
proceeding under §4. The Commission represents
the public. While it is proper and customary for
cormarunities or shippers interested to participate in
‘earings held, there is no provision for notice to
incom. They are not bound by the order entered; at
least in the absence of such participation. And if the
rates made by tariffs filed under the authority granted
seem to them unreasonable or unjustly discrimina-
tory, §§ 13 and 15 afford ample remedy. Respond-
ents contend that, after the amended order was
entered and the tariffs filed, they did apply to the
Commission for relief ‘but were denied the right of
a hearing’ and that ‘their protest and demand were
ignored and denied.’ What they did was to petition
for a ‘rehearing’ in the proceedings under the Fourth
Section, to which they now say they were not parties,
instead of applying for redress under $13, as they
had a legal right to do. They mistook their remedy.
To permit communities or shippers to seek redress for
such grievances in the courts would invade and often
nullify the administrative authority vested in the
Commission; and, as this case illustrates, the at-
tempt of the court to remove some alleged unjust dis-
crimination might result in creating infinitely more.
The decree of the District Court canceis the amended
order and the tariff only so far as it concerns the
four complaining cities and thereby discriminates
perhaps most unjustly in their favor as against the
other 181 interior cities.’’*

14In accord with United States v. Merchants &c. Ass’n., state
court cases hold that notice to and a hearing for consumers are
uot vonstitutional prerequisites to the issuance of rate orders.

See:
Staie v. Rawlings (1951) 229 Ind. 552, 99 N.E.2d 597, 602;
Gateway City Transfer Co. v. Public Service Commission
(1944) 245 Wis. 304, 14 N.W.2d 6, 7-8;

The same situation _prevails in California. It has al-
ready been pointed ott that (1) the California Public
Utilities Commission is expressly charged with the repre-
sentation of the public interest (supra, p. 9) and (2)
utility customers have adequate right to challenge any
rate and have a hearing thereon, afer the rate has been
fixed, under sections 1702 and 1794 of the California Pub-
lic Utilities Code (supra, p. 19).

Moreover, it is settled that the subscribers’ right to
service exists only because of statute and is not such a
property right as may form the basis of a claim of con-
fiscation. A leading case is the decision of the United
States Circuit Court of Appeals for the Second Circuit:

United States Light & Heat Corp. v. Niagara Falls
G. d E. L. Co. (2 Cir. 1931) 47 F.2d 567, 570,
certiorari denied (1931) 283 U.S. 864.

In accord are numerous state court cases.'5

Lenthan v. Tri-State Telephone & Telegraph Co. (1940)
208 Minn. 172, 293 N.W. 601, 605, certiorari denied

- (1940) 311 U.S. 711;

Consumers’ Gas Co. v. Corporation Commission (1923) 95
Okl. 57, 219 Pac. 126, 129;

City of Bartlesville v. Corporation Commission (1921) 82
Okl. 160, 199 Pac. 396, 398;

City of Atlanta v. Georgia Ry. & Power Co. (1919) 149
Ga. 411, 100 S.E. 442, 444-445;

Union Dry Goods Co. v. Georgia Public Service Corp.
(1916) 145 Ga. 658, 89 S.E. 779, affirmed (1919) 248
U.S. 372.

15City of Birmingham v. Southern Bell Tel. & Tel. Co. (1937)
234 Ala. 526, 176 So. 301, 306-307;
City of New Haven v. New Haven Water Co. (1946) 132
Conn. 496, 45 Atl.2d 831, 838-839;
State v. Mountain States Tel. & Tel. Co. (1950) 54 N.M.
315, 224 P.2d 155, 161-166;

ao

Prior notice and hearing to all utility customers before
a public utilities commission could raise a rate, even on
an interim basis, would be intolerable from the practical
standpoint. If the Commission were required to give no-
tices and hold hearings before it could increase any of
the thousands of separate utility rates on file in Cali-
fornia, upon pain of having the amended rates set aside
as unconstitutional, the legislative function of rate mak-
ing would be clogged to the point of paralysis.

Neither of the decisions of this Court with which ap-
pellants say the judgment conflicts—Hollis v. Kutz (1921)
255 U.S. 452; Wichita R. R. v. Pub. Util. Comm. (1922)
260 U.S. 48 (Jur.St. 2, 19, 25-26)—furnishes any support
for their contention. In the Hollis case the Court inter-
preted a federal statute as permitting gas consumers to
challenge a rate order of the Publie Utilities Commission
of the District of Columbia in an equity suit without hav-
ing appeared in the commission hearing or having asked
the commission to review its decision; and further held
that ‘‘the plaintiffs have no right to require equality [of
rates] with the Government and they have no other
ground upon which to found their supposed right’’ (255
U.S. 455). Nothing in the decision suggests that the

Boston Real Estate Bd. v. Department of Public Util. (1956)
334 Mass. 477, 136 N.E.2d 243, 251-252;

State v. Municipal Corporations of Scotland Neck (1955)
243 N.C. 193, 90 S.£.2d 519, 528;

Ten Ten Lincoln Place v. Consolidated Edison Co. (1947)
190 Mise. 174, 73 N.Y.S.2d 2, 5-6, affirmed (1948) 273
App.Div. 903, 77 N.Y.S.2d 168, leave to appeal denied
(1948) 298 N.Y. 937, 80 N.E.2d 547;

Childs v. Brooklyn Edison Co. of N.Y. (Supreme Ct., Kings
Co. Pt. I, 1951) 105 N.Y.S.2d 503. 508-509 ;

McCormick v. Westchester Lighting Co. (1931) 141 Mise.
261, 252 N.Y.S. 454, 458.

~

consumers had a right, protected by the Federal Constitu-
tion, to a hearing before the commission prior to an order
allowing increased rates. :

The Wichita decision struck down an order of the
Kansas Pubiic Utilities Commission increasing utility
rates fixed by private contract prior to the commission’s
inception, on the ground of a Kansas statutery require-
ment that an express finding of unreasonableness by the
commission was indispensable and had not been made
(260 U.S. 59). This determination obviated any decision
upon the plaintiff’s claim that the commission order
violated its constitutional rights." The other holding in
the case, that the plaintiff was entitled, in its action to
test its claim that the order of the commission had in-
fringed its constitutional rights, to an opportunity to
maintain by evidence and argument before the district
court the issue as to due process of law and equal protec-
tion of the law (260 U.S. 55), has no relation to the issue
here. Under California law, opportunity te maintain such
an issue by evidence and argument is afforded by Public
Uiilities Code section 1702, supra.'’

1€Any suggestion that even a consumer with a contract is con-
stitutionally entitled to notice and hearing before the Commission,
on the propriety of rates to be fixed under a regulatory statute,
is answered by this Ceourt’s decision in Midland Co. v. K. C.
Power Co. (1937) 300 U.S. 109, 114. As this Court said in United
Gas Co. v. Mobile Gas Corp. (1956) 350 U.S. 332, 345-346:
“In Midland * * ® the Court held only that a statute inter-
preted by the state court as authorizing unilateral contract
changes by a public utility was not unconstitutional. On the
other hand, in Wichita this Court internreted a Kansas stat-
ute, not yet fully construed by the state court, as not giving
such a power to a public utility * * *.”

17In a footnote (Jur.St. 19) appellants refer to Panama Re-
fining Co. v. Ryan (1935) 293 U.S. 388 and Maaler v. Eby

Appellants cite a number of cases as conflicting ‘‘in
principle’’ with the judgment below (Jur.St. 26). With
two exceptions’® these cases simply restate the established
doctrine that the property of a public service corporation,
dedicated to public uxe, is protected from confiscation by
the requirements of due process.

—

ae...

~~

(1924) 264 U.S. 32 as citing the Wichita case. They have no
relevance here. Their holdings that a federal agency must make
findings in support of its orders were based on the constitutional
framework of the federal government in order to prevent an
unconstitutional delegation of congressional legislative power to
administrative agencies. The case here involves the framework of
state government, with no similar inhibition (Cal. Const., Art.
XII, sees. 22 and 23). The fact that the California legislature, by
statute, has imposed a requirement of Commission findings in
certain instances (e.g., Publie Utilities Code section 454; Appx.
G, p. 70) does not make the requirement a constitutional one.

187m re Oliver (1948) 333 U.S. 257 is not even in the utility
field. It involved the requirements of procedural due process
where a suspected criminal was imprisoned without a hearing.
The case has no bearing here.

Hollis v. Kutz (1921) 225 U.S. 452 is discussed supra, p. 23.

CONCLUSION.
For the foregoing reasons, we respectfully submit that
the appeal should be dismissed.

Dated, San Francisco, California,
February 17, 1959.

Respectfully submitted,

Artuur T. GEorGE,
Francis N. MaRSHALL,
Attorneys for The Pacific Telephone and
Telegraph Company, Appellee.
JoHN Rosert JONEs,
Attorney for General Telephone Com-
pany of California, Appellee.
Auvyin H. PEvavin,
Attorney for California Water & Tele-
phone Company, Appellee.
Wakren A. PALMER,
Attorney for Sunland-Tujunga Telephone
Company, Appellee.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385610_1197%3A4. Public record. Not legal advice.