Brief for Respondents in Opposition — Ohio Ex Rel. Klapp v. Dayton Power & Light Co.

ale A SE FS

ieee ano +

- tAS Ww Of

No. 851 JAM.» :

in the

Supreme Court of the United States

October Term, 1958

SEAT E OF OHIO, on the Relation ci PAUL |. KLAPP.

Prosecuting Attorney.

Petitioner,

Vs

[Hr DAYTON POWER AND LIGHT COMPANY

and IRVING PRUST COMPANY

Respondents

Petition For A Writ of Certiorari to The United States

Court of Appeals for The Sixth Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

Y jULiaAN pbE BReyn Kors

“14 Gas & Elec Bide

‘ Dayton, Ohio

XK FRANKLIN 1.. SHIPMAN

12 South Plum

Lroy, Ohio

Counsel for Respondents

mm J. KR. NEWLin

Wb Gras \& hlee ide

Dayton, Ohio

OF Counsel tor Respondent

a

INDEX

Page

I 60 ad dv uw Ghd oo dO 46 A Ree BO l

pe EI ee OP eee eee ee eee ae

Statutes and Constitutional Provisions Involved .... 2

I ey tn sue vk eateries bees 2

Ee ee ee ee ee ee 2

Jurisdiction of the District Court ................ 3

Argument—

A. The Question of Removal is No Longer of

US RUN goss os nos oxen ene 3

B. The Decisions Below Are Supported by Ohio

Bea id as N sd Ube ic une Peers teueh es 5

EE Wnett ons.7 4 eee Sede eye Cp ort err 10

APPENDIX

Removal Statute

28 U. S. Code, Sec. 71 (repealed September 1,

ae 2 8 ra ee lb

Ohio Constitution

article XVIII, Section 3 (Page’s Ohio Revised

JO See Pere re eee eee lb

Ohio Statutes — Page’s Ohio Revised Code

Section 4905.20 Revised Code (Sec. 504-2, Gen-

Ps Se Fata exe i Giars se Os be ¥ eh a8 } 2b

Section 4905.21 Revised Code (Sec. 504-3, Gen-

SEE foe Sci G eae ke eeinbeteewiedt > 2b

Section 4933.13 Revised Code (Sec. 9195, Gen-

SR ids siwira so se Ames 2 VC EN is 3 4b

Section 9196, General Code (repealed 1949, 123

Rr rare reste eres eee 4b

Page

CASES CITED

Aircraft & Diesel Equipment Corporation v. Maurice

Hirsch et al (1946) 331 U.S. 752 ........ oot ae

Billings v. Railway Company (1915) 92 Ohio St. 478,

BI SS) A og ee ewe ie RENEE § 5

Brush Electric Light Company v. Jones Brothers Elec

tric Company (1891) 5 O.C.C. 340, 3 O.C.D. 168

afirmed 29 Weekly Law Bulletin 72 ........--. 6

Chase National Bank v. Norwalk, (1934) 291 U.S. 431 4-5

City of Cincinnati v. Public Utilities Commission of

Ohio (1940) 137 Ohio St. 437 ....-..---+-5 +>: 6

City of Weliston v. Morgan (1898) 59 Ohio St. |

Fast Ohio Gas Co. v. Akon (1909) 81 Ohio St. 33... 9

Kast Ohio Gas Co. v. Cleveland (1922) 106 Ohio St.

ESO SME SE. Te Gh oe hE. eee 9

Hardin-Wyandott Lighting Company, The, v. Viilage

of Upper Sandusky , The, (1916) 93 Ohio St. 423 5

Markley v. Village of Mineral City (1898) 58 Ohio

per rrery Seer ere ara haha 6

Natural Gas Pipeline Co. v. Slattery (1937) 302 U.S.

ee ee OP CY ee ee oa end ato 6

Ravenna v. Pennsylvania Co. (1887) 45 Ohio St. 118 5

State ex rel. Wear, Pres. Atty. v. Cincinnati & Lake

Erie Railroad Co. (1934) 128 Ohio St. 95 ...... , 8

STATUTES

28 U.S. Code, Sec. 71, (repealed September }, 1948) 3,4

Section 39 of the Act of June 25, 1948, c. 646, 1, 62

Stat. 869, which revised Title 28 of the U. S. Code

Statutes at Large as the Acts of March 3, 1911, C. 231,

3h Stat. 1094, 1101; January 20, 1914, C. 11, 38

Stat. 278; and January 31, 1928, C. 14, 45 Stat. ;

i re he oS cea Rees tae eR ee!

Sections 4905.20 and 4905.21, Revised Code of Ohio

(Sections 504-2 and 504-3, General Code of Ohio)

the “Miller Act” ......-ececcecereeeeereerr®

Ill.

Sections 9195 and 9196, General Code of Ohio

Section 4933.13 Revised Code

123 Ohio Laws 202

OHIO CONSTITUTION

Article XVIII, Section 3

es & 68 o.8 8 eee a

Ree Gee er Oe Ce ee ae ee ee em

eee e ©

In the

SUPREME COURT OF THE UNITED STATES

October Term, 1958

No. 851

STATE OF OHIO, on the Relation of PAUL T. KLAPP,

Prosecuting Attorney,

Petitioner,

VS.

THE DAYTON POWER AND LIGHT COMPANY

and IRVING TRUST COMPANY,

Respondents.

Petition For A Writ of Certiorari to The United States

Court of Appeals for The Sixth Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinions of the District Court and the Court of

Appeals are unreported. The District Court’s opinion is

set forth on page 49a of the record. The opinion of the

Court of Appeals is set forth on page 3a of the Appendix

attached to the Petition.

JURISDICTION

The jurisdictional grounds are set forth in the Petition.

STATUTES AND CONSTITUTIONAL

PROVISIONS INVOLVED

The statute governing removal of causes from the State

to the District Court in effect at the time this cause was

removed is set forth at page 1b herein. ‘The Ohio con-

stitutional and statutory provisions involved are set forth

on pages 1b through 5b.

QUESTIONS PRESENTED

1. Respondents accept Petitioner's statement of the

first question.

9. Whether an Ohio municipality may require a public

utility, which had been serving the municipality and its

inhabitants for nearly fifty years without a franchise, to

remove its facilities from the streets of such municipality

without the consent and authority of Tle Public Uulities

Commission of Ohio?

STATEMENT OF THE CASE

The Petitioner will for convenience be referred to as

“City of Piqua”, and Respondent, The Dayton Power and

Light Company, as “Dayton Company” and Respondent,

Irving Trust Company, as “Irving Trust”.

Although generally agreeing with the Statement of the

Case contained in the Petition of the City of Piqua, Re:

spondents desire to point out that the original petition

filed in this cause in the Court of Appeals of Miami County,

Ohio on March 25, 1933 (R. 3a) as well as the Amended

Complaint filed with the District Court for the Southern

District of Ohio on February 23, 1955 (R. 44a) sought

the removal of all of the facilities of the Respondent, Day-

ton Company, fromthe streets and public places of the

3

City of Piqua and not just those facilities used for the

distribution of electricity in such City. It was only in

the argument before the Court of Appeals for the Sixth

Circuit that the City of Piqua agreed to file a stipulation

limiting the relief sought to those facilities used in local

distribution.

JURISDICTION OF THE DISTRICT COURT

This cause was removed from the Court of Appeals of

Miami County, Ohio in 1935 under the authority of 28

U.S. Code, Sec. 71, repealed effective September 1, 1948.

ARGU MENT

The City of Piqua has advanced two reasons why this

Court should review the decisions of the District Court

and the Court of Appeals for the Sixth Circuit which pre-

“stnt questions of very limited application and in one in-

stance a question involving a statute no longer in effect.

A. The Question of Removal Is No Longer of

Judicial Importance

The City of Piqua presents a question of removal which

arose under a statute, 28 U. S. Code, Sec. 71 (p. Ib),

repealed September 1, 1948. Thus the issue raised by the

City of Piqua as to tke removability of this cause to the

District Court neither presents an important question of

federal law which has not been, but should be, settled by

this Court nor a federal question in conflict with the de-

cisions of this Court.

Section 39 of the Act of June 25, 1948, c. 646, 1, 62 Stat.

869, which revised Title 28 of the U. S. Code provides:

“Sec. 39. The sections or parts of the * * * Statutes

at Large enumerated in the following schedules are

4 =

—

—_

hereby repealed. Any rights or liabilities now exist-

ing under such sections or parts thereof shall not be

affected by this repeal.”

Section 71, 28 U. S. Code, is referred to in these schedules

under the Statutes at Large as the Acts of March 3, 1911,

c. 241, 36 Stat. 1094, 1101; January 20, 1914, c. 11, 38

Stat. 278; and January 31, 1928, c. 14, 45 Stat. 54. It is

clear therefore that not only is 28 U. S. Code, Sec. 71 appli-

cable to this cause but also that the City of Piqua presents

no question of future judicial importance warranting re-

view by this Court. The possibility of the question arising

in the future is extremely remote, since over ten years

have elapsed since the repeal of Sec. 71.

Even if Sec. 71 had not been repealed the District Court

and the Court of Appeals for the Sixth Circuit correctly

interpreted and applied Sec. 71 herein. At the time (1935)

this case was removed, 28 U. S. Code, Sec. 71, provided in

part:

“* # * And when in any suit mentioned in this sec-

tion there shall be a controversy which is wholly be-

tween citizens of different states, and which can be

fully determined between them, then either one or

more of the defendants actually interested in such

controversy may remove said suit into the district

court of the United States for the proper district.

* *

The cause was removed to the District Court because

the pleadings at that point clearly disclosed a separable

controversy between Irving Trust, a citizen of New York,

and the City of Piqua, a citizen of Ohio. Irving Trust

being the Trustee for the bondholders under a pre-existing

mortgage of the Dayton Company (R. 24a, 25a). In Chase

5

National Bank v. Norwalk, 291 U.S. 431, this Court recog-

nized that a mortgagee such as Irving Trust, whose interest

was acquired prior to the beginning of the action, had

rights separable and distinguishable from those of its

mortgagor.

If, as in Chase National Bank, a mortgagee or trustee for

the bondholders under a mortgage may maintain a separate

suit to determine its rights, then certainly in this cause

such mortgagee or trustee as a party defendant has a separ-

abie controversy with the City of Piqua. As Mr. Justice

Brandeis stated in the Chase National Bank case at page

438:

“For in every case where a mortgage was given be-

fore the litigation against the mortgagor was instituted,

the mortgagee is entitled to have a decision deter-

mining his rights rendered on the basis of the facts

and considerations adduced by him.”

B. The Decisions Below Are Supported by Ohio Law

Prior to the adoption of the amendment to the Consti-

tution of Ohio in 1912 granting to municipal corpora-

tions “Home-Rule” powers (Article XVIII, Section 3, p.

lb) municipalities possessed only those powers express-

ly granted by the General Assembly of Ohio. Billings

v. Railway Company (1915) 92 Ohio St. 478, 482; Ravenna

v. Pennsylvania Co. (1887) 45 Ohio St. 118. |

The City of Piqua was not given statutory authority to

grant to an electric light company the right to erect poles

and stretch wires as contemplated by the Ordinance of

1884 (R. 34a) until 1886. In The Hardin-Wyandott

Lighting Company v. The Viliage of Upper Sandusky

(1916) 93 Ohio St. 428, the Supreme Court of Ohio said

at page 438:

6

“Prior to 1886 there was no statute conferring power

on the municipality to grant to an electric light com-

pany the right to erect poles.”

See further Brush Electric Light Company v. Jones Brothers

Electric Company (1891) 5 O.C.C. 340, 3 O.C.D. 168;

which the City cf Piqua neglected to state in the petition

(p. 12) was affirmed by the Supreme Court of Ohio. See

(1898) 29 W. L. Bull. 72.

Any ordinance purporting to exercise a power not given

was and is ultra vires and void. City of Wellston v. Morgan

(1898) 59 Ohio St 147; Markley v. Village of Mineral

City (1898) 58 Ohio St. 430. ,

The law of Ohio is clear and the Courts below correctly

applied this law in hol*ing that the Dayton Company had

been occupying the streets and public places of the City of

Piqua without the benefit of:a franchise. Therefore, under

applicable Ohio law the City of Piqua before commencing

this cause must apply to The Public Utilities Commission

of Ohio under Sections 4905.20 and 4905.21 of the Re-

vised Code of Ohio (Sections 504-2 and 504-3, General

Code of Ohio), the “Miller Act” (p. 2b), to secure the

consent and authority of such Commission to the abandon-

ment of electric service in the City of Piqua by the Day-

ton Company. City of Cincinnati v. Public Utilities Com-

mission of Ohio (1940) 137 Ohio St. 437. State ex rel.

Wear, Pros. Atty. v. Cincinnati & Lake Erie Railroad Co.

(1934) 128 Ohio St. 95. The City of Piqua admits such

consent and authority has not been obtained. (R. 3la).

The City of Piqua has failed to exhaust its administrative

remedies. Aircraft & Diesel Equipment Corporation V.

Maurice Hirsch et al (1946) 331 U. S. 752; Natural Gas

Pipeline Co. v. Slattery (1937) 302 US. 300.

The City of Piqua argues that Article XVIII, Sec. 3, the

“Home-Rule” provisions of the Constitution of Ohio, limit

7

the applicability of u.c “Miller Act’ (Secs. 4905.20 and

4905.21, Revised Code of Ohio) to the “main line” of any

public utility and therefore The Public Utilities Commis-

sion of Ohio has no jurisdiction over local distribution

facilities. ‘This argument 1uns contrary not only to the

purpose and intent of this Act to protect the consumers of

any public utility wherever located but to the language of

the statutes themselves. These sections insofar as applicable

here provide:

“4905.20 * * * no public utility * * * furnishing

service or facilities within this state, shall abandon or

be required to abandon or withdraw any main track or

depot of a railroad, or main pipe line, gas line, tele-

graph line, telephone toll line, electric light line

* * *, or the service rendered thereby * * *, nor

shall any such facility be closed for * * * service

thereon, therein or thereover except as provided in

section 4905.21 of the Revised Code. * * *

“4905.21 * * * any * * © political subdivision de-

siring to abandon or close, or have abandoned, with-

drawn, or closed for * * ® service or any part of

any line * * * referred to in Section 4905.20 of the

Revised Code, shall make application to the public

utilities commission in writing. * * *

“* * * the commission shall ascertain the facts * * *

and if such facts satisfy the commission that the pro-

posed abandonment, withdrawal or closing for * * *

service is reasonable, having due regard for the welfare

of the public and the cost of operating the service or

facility, it may allow such abandonment, withdrawal,

or closing; * * *. If the application asks for the

abandonment or withdrawal * * * of any main

track, main pipe line, gas line, telegraph line, telephone

8

toll line. electric light line * * * or the service ren-

dered thereby, in such manner as can result in the

permanent abandonment * * * of service and facili-

ties of any such public utility, no application sha!l be

granted unless the * * * public utility has operated

said * * * electric light line for at least five years.

* * *”’

The word “main” quoted by Petitioner refers only to a

railroad track or depot or a “main” pipe line, and clearly

does not rer to electric tines. Even it it did the distri-

bution system (lines) of a gas or electric or water company

is a system of “main lines”, without which service to con-

sumers in the City of Piqua would be impossibie. 1t is

without question that the facilities of Dayton Company and

the service rendered thereby have been operated for nearly

seventy-five years in the City of Piqua.

The relief sought by the City of Piqua in this cause, if

granted, would result in the permanent abandonment of

electric lines and service to the Dayton Company's electric

customers in the City of Piqua. The Public Utilities Com-

mission of Ohio under the statutes quoted above can look

to and protect the interests of all parties involved, i-.,

City of Piqua, Dayton Company, the electric customers of

Dayton Company in the City of Piqua, Irving Trust and

the general public.

In State ex rel Wear, Pros. Atty. v. Cincinnati and Lake

Erie Railroad Co. (1934) 128 Ohio St. 95; this same argu-

ment concerning the “Home-Rule”’ provisions of the Ohio

Constitution was advanced. The Court at page 101 dis-

posed of this argument as follows:

“It is asserted, however, that to require the consent

of the Public Utilities Commission before the municl-

pality may oust the respondent company from its

9

streets is, in effect, to confer * * * the power to grant

a franchise. * * * The dedication of property, and

the establishment of service upon which the public

comes to rely bring into consideration a new and vital

interest. The public is interested in the continuance

of service, and that interest the Utilities Commission

is empowered to conserve.”

It should be noted that each case cited by the City of

Piqua in support of its “main line” contention involves a

railroad and that the “Miller Act” uses the phrase “main

line” with reference to railroad property.

The City of Piqua also argues that its constitutional lack

of power in 1884 was cured by the enactment of Sections

9195 and 9196, General Code of Ohio, in 1897 (p. 4b).

An examination of Section 9196, General Code of Ohio,

upon which the City of Piqua relies, discloses that it was

intended only to cover situations where “there is an omis-

sion or error from want of conformity to the statutes of

this state” and not situations where the municipality was

without power to accomplish the act as in this cause. Ai-

ihough Section 9195, General Code of Ohio, was substan-

tially re-enacted in 1953 as Section 4933.13, Revised Code

of Ohio, Section 9196, General Code of Ohio was repealed

in 1949. 123 Ohio Laws 202. In addition East Ohio Gas

Co. v. Akron (1909) 81 Ohio St. 33 and East Ohio Gas Co.

v. Cleveland (1922) 106 Uhio Si. 489 involved the inter-

pretation of valid franchise ordinances, and not situations

where the municipality was without authority and power

to act as here.

As a final effort the City of Piqua calls upon equity to

assist its position. It is sufficient to point out that “he who

seeks equity must do equity”. Is it equitable to deprive

customers of Dayton Company of electric service? Is it

equitable *o require Dayton Company to remove its facili-

10

ties from the streets and public places of Piqua at a loss

to it estimated at $425,000? (R. 1b, 2b).

On page 12a of the Appendix to the Petition, the City

of Piqua has printed two sections of the Ohio Municipal

Code as revised in 1878. No reference is made to these

sections in the Petition itself, but it should be noted that

Chapter 3, Section | is found in Division 8 of such Code,

under the heading “Gas Companies” and Chapter 13, Sec-

tion 1 is also found in Division 8 under the heading

“Streets”. There are no provisions in such code covering

electric light companies.

The Courts below have followed clear Ohio law and

their decisions should stand.

CONCLUSION

For the foregoing reasons it is respectfully submitted

that this Petition For A Writ of Certiorari should be

denied.

Respectfully submitted,

Junttan pe Bruyn Kops

FRANKLIN L. SHIPMAN

Counsel for Respondents

J. R. NEWLIN

Of Counsel for Respondent

lb

APPENDIX

REMOVAL STATUTE

28 U. S. Code, Sec. 71 (repealed September, 1948, 62

Stat. 992)

“Removal of suits from State Courts. Any suit of

a civil nature, at law or in equity, atising under the

Constitution or laws of the United States, or treaties

made, or which shall be made, under their authority,

of which the district courts of the United States are

given original jurisdiction, in any State Court, may

be removed by the defendant or defendants therein

to the district court of the United States for the proper

district. Any other «uit of a civil nature, at law or in

equity, of which the district courts of the United States

are given jurisdiction, in any State Court, may be

removed into the district court of the United States

for the proper district by the defendani or defendants

therein, being non-residents of that state. And when

in any suit mentioned in this section there shall be a

controversy which is wholly between citizens of dif-

ferent states, and whic can be fully determined as

between them, then ei‘her one or more of the de-

fendants actually interested in such controversy may

remove said suit into the district court of the United

States for the proper district. * * *”

OHIO CONSTITUTION

ARTICLE XVIII, Section 3 (Pages Ohio Revised Code,

Appendix)

“Sec. 3, Municipalities shall have authority to exer-

cise all powers of local self-government and to adopt

and enforce within their limits such local police, sani-

‘ary and other similar regulations, as are not in con-

flict with general laws.”

2b

OHIO STATUTES

Pages Ohio Revised Code

Section 4905.20 Revised Code (Sec. 504-2, General Code)

“No railroad as defined in section 4907.02 of

the Revised Code, operating any railroad in this

state, and no public utility as defined in ection

4905.02 of the Revised Code furnishing service

or facilities within this state, shall abandon or

be requ:red to abandon or withdraw any main track or

depot of a railroad, or main pipe line, gas line, tele-

graph line, telephone toll line, electric light line,

water line, steam pipe line, or any portion thereof,

pumping station, generating plant, power station, Or

service station of a public uulity, or the service ren-

dered thereby, which has once been laid, constructed,

opened, and used for public business, nor shall any

such facility be closed for traffic or service thereon,

therein, or thereover except as provided in Section

4905.21 of the Revised Code. Any railroad or public

utility violating this section shall forfeit and pay into

the state treasury not less than one hundred dollars,

nor more than one thousand dollars, and shall be

subject to all other legal and equitable remedies for

the enforcement of this section and section 4905.21

of the Revised Code.”

Section 4905.21 Revised Code (Sec. 504-3, Gencral Code)

“Any railroad or any political subdivision desiring to

abandon, close, or have abandoned, withdrawn, OT

closed for traffic or service or of any part of a main

track or depot, and any public utility or political sub- .

division desiring to abandon or Close, or have aban-

doned, withdrawn, or closed for traffic or service or of

any part of any line, pumping station, generating plant.

wer station, or service station, referred to in sec:

tion 4905.20 of the Revised Code, shall make appli:

3b

cation to the public utilities commission in writing.

The Commission shall thereupon cause reasonable

notice of the application to be given, stating the time

and place fixed by the Commission for the hearing

of said application.

“Upon the hearing of said application, the Com-

mission shall ascertain the facts and make its finding

thereon, and if such facts satisfy the commission that

the proposed abandonment, withdrawal, or closing

for trafhc or service is reasonable, having due regard

for the welfare of the public and the cost of operating

the service or facility, it may allow such abandon-

ment, withdrawal, or closing; otherwise it shall be

denied, or if the facts warrant, the application may

be granted in a modified form. If the application

asks for the abandonment or withdrawal of any main

track, main pipe line, gas line, telegraph line, tele-

phone toll line, electric light line, water line, steam

p-pe line, pumping station, generating plant, power

station, service station, or the service rendered thereby,

in such manner as can tesuit in the permanent aban-

donment of service between any two points on such

railroad, or of service and facilit:es of any such public

utility, no application shall be granted unless the

railroad or public utility has operated said track, pipe

line, gas line, telegraph line, telephone toll line,

electric light line, water line, steam pipe line, pump-

ing station, generating plant, power station, or service

station for at least five years. Such notice shall be

given by publication in a newspaper of general circu-

lation throughout any county or municipal corpora-

tion which has granted a franchise to said railroad

or public utility, under which said track, pipe line,

gas line, telegraph line, telephene toll line, electri«

light line, water line, steam pipe line, pumping sta-

tion, generating plant. power station, or service station

is Operated or in which the same is located, once a

week for four consecutive weeks before the hearing

of said application. Notice ot said hearing shall be

given such county, municipal corporation or public

4b

utility in the manner provided for the service of

ord@gs of the commission in section 4905.53 of the

Revised Code. This section and section 4905.20 of

the Revised Code do not apply to a ¢as company

when it is removing or exchanging abandoned held

lines.

“The provisions of this section shall apply to all

service now rer.dered and facilities furnished or here-

after built and operated and an order of the public

utilities commission authorizing the abandonment or

withdrawal of any such service or facility shall not

affect rights and obligations ot a railroad or public

utility beyond the scope of said order, anything in

its franchise to the contrary notwithstanding.”

Section 4933.13 Revised Code (Sec. 9195, General Code)

“A company organized for supplying electricity for ~

power purposes, and for lighting the streets and public

and private buildings of a municipal corporation, may

manufacture, sell, and furnish the electric light and

power required in such municipal corporation for

such or other purposes. With the consent of the

municipal corporation, under such reasonable regu-

lations as such municipal corporation prescribes, such

company may construct lines for conducting elec-

tricity for power and light purposes through the

streets, alleys, lanes, lands, squares, and public places

of such municipal corporation, by the erection of the

necessary fixtures, including posts, piers. and abut-

ments necessary for the wires.”

Pages Ohio General Code

Section 9196, General Code (repealed 1949, 123 Ohio Laws

202)

‘When contracts for electric lighting have been

heretofore entered into in which there is an omls-

sion or error from want of conformity to the

5b

statutes of this state, but which contracts have

been made as herein required, and when by

reason of the expenditure of money or labor in

the performance of such contracts, or on any other

account, it is just and equitable fully to execute them,

in such cases the courts are authorized to uphold such

contracts «> binding on all parties to them and to

carry them into effect as theugh no such defect, omis-

sion or error existed, any law of this state to the con-

trary notwithstanding.”