Manufacturers' Light & Heat Co. v. Ott

• Decision Date: 29 July 1914
• Citation: 215 F. 940
• Parties: MANUFACTURERS' LIGHT & HEAT CO. v. OTT et al., Public Service Commission of West Virginia.
• Court: U.S. Court of Appeals — Fourth Circuit

215 F. 940

MANUFACTURERS' LIGHT & HEAT CO. v. OTT et al., Public Service Commission of West Virginia.

United States District Court, N.D. West Virginia.

July 29, 1914

[Copyrighted Material Omitted]

A. Leo Weil, of Pittsburg, Pa., Geo. E. Price, of Charleston, W Va., B. M. Ambler, of Parkersburg, W. Va., and Charles McCamic, of Wheeling W. Va., for plaintiff.

A. A Lilly, Atty. Gen., of Charleston, W. Va., and Frank W. Nesbitt and J. B. Sommerville, both of Wheeling, W. Va., for defendant.

Before PRITCHARD and WOODS, Circuit Judges, and DAYTON, District judge.

WOODS Circuit Judge.

The Public Service Commission of West Virginia made an order on April 22, 1914, setting forth the finding of unjust, unreasonable, and excessive rates charged consumers of natural gas in the state of West Virginia by Manufacturers' Gas Company, Tri-State Gas Company, Wheeling Natural Gas Company, Ohio Valley Gas Company, Blacksville Oil & Gas Company, Cameron Gas & Oil Company, Wetzel Gas Company, and New Cumberland Water & Gas Company, and declaring and prescribing as reasonable and just rates ranging from 11 to 25 cents per thousand cubic feet, according to the class of service and the Commission's view of the situation of the company. Thereafter the Manufacturers' Light & Heat Company, a Pennsylvania corporation, and the West Virginia corporations above named brought this suit to enjoin the Commission from putting the prescribed rates into effect. The bill asserts the right of the Pennsylvania corporation to be heard on the ground that it has acquired all of the stock of the West Virginia corporations and is operating all their pipe lines and other property as a unit. A temporary restraining order was granted by Hon. Alston G. Dayton, District Judge, and the application for a temporary injunction was heard and is now to be passed on by three judges, as required by the statute. The numerous grounds upon which the injunction is asked will be considered in what seems to be their logical sequence.

1. The statute creating the Public Service Commission and prescribing its powers and duties enacted February 20, 1913, is attacked on the ground that it confers legislative, executive, and judicial powers and unites the three forms of power in one Commission, contrary to the Constitution of the state. Detailed analysis of the statute is not required to show that it is in no essential particular unlike the numerous similar statutes which have been sustained by the courts. It confers the power to investigate and ascertain if the public service corporations of the kind named in it are charging reasonable rates, as a means of fixing reasonable rates for the future; but no judicial power is conferred to adjudge damages or other relief for making unreasonable charges or for other violations of law. The provision for appeal from the orders of the Commission to the Supreme Court of the state does not connote judicial power in the Commission. The point is decided by the Supreme Court of the state in United Fuel Co. v. Public Service Commission (W. Va.) 80 S.E. 931, holding that the appeal provided only meant to enlarge somewhat the power before exercised under the writs of mandamus and prohibition; that under it the court could not review any act of the Commission falling within the scope of its power; that the court's action must be judicial in holding the Commission within its sphere as prescribed by the statute and limited by the statute, the Constitution of the state, and the Constitution of the United States, as distinguished from the limited administrative power of the Commission. The powers of the Commission have no feature of the executive branch of the government, for it controls no power nor machinery for the enforcement of its orders. The Legislature of the state has not delegated its legislative power, but merely provided an agency for carrying out the legislative scheme with respect to public service corporations. The statute falls within the distinction thus stated by Justice Day in Interstate Commerce Commission v. Goodrich Transit Co., 224 U.S. 194, 32 Sup.Ct. 436, 56 L.Ed. 729, and applied in many other cases:

'The Congress may not delegate its purely legislative power to a commission, but, having laid down the general rules of action under which a commission shall proceed, it may require of that commission the application of such rules to particular situations and the investigation of facts, with a view to making orders in a particular matter within the rules laid down by the Congress.'

2. Tangent to this point is the objection made by the Commission, relying on Prentis v. Atlantic Coast Line R.R., 211 U.S. 210, 29 Sup.Ct. 67, 56 L.Ed. 150, that this court should not entertain the bill until the complainants have sought relief by the appeal to the Supreme Court of the state provided by the statute. At least two questions under the federal Constitution are made by the pleadings, whether the rates prescribed are confiscatory, and whether the complainant's property is about to be taken without due process of law. In the case last cited the court restated the principle laid down in Smyth v. Ames, 169 U.S. 466, 18 Sup.Ct. 418, 42 L.Ed. 819, and other cases that the sufficiency of rates with reference to the federal Constitution is a judicial question over which federal courts have jurisdiction by reason of its federal nature, and that one entitled to sue in the federal courts cannot be deprived of that right by reason of being allowed a remedy in the state court. True, in the Prentis Case it was held that the complainants must carry their grievance to the Supreme Court of Appeals of West Virginia for review before invoking the equity jurisdiction of the federal courts; but this was on the distinguishing ground that under the Virginia Constitution and statute the proceedings by which the matter was to be carried to the Supreme Court were legislative in character, and that the court in reviewing the action of the Commission was performing an extrajudicial function. The distinction is clearly drawn by the Supreme Court of West Virginia in United Fuel Co. v. Public Service Commission, supra, and by the Supreme Court of the United States in Bacon v. Rutland R.R., 232 U.S. 134, 34 Sup.Ct. 283, 58 L.Ed. 538.

3. The contention that the term 'gas companies' used in the statute was not intended to embrace companies furnishing natural gas has no foundation. The statute was enacted in view of the fact that a very large part of the gas consumed in the state was natural gas. But even if there were ground for debate, the matter has been settled by the holding of the State Supreme Court in the United Fuel Company Case that the statute embraces companies furnishing natural gas.

4. The statute is not subject to the objection that it attempts to authorize the Commission to take property without due process of law in that it makes no provision for notice and a hearing before fixing rates. The complainants were entitled to notice and a hearing, but express statutory requirement for such notice is not essential, for the reason that the constitutional requirement that there shall be notice and an opportunity to be heard is a part of the law governing the Commission. As the statute is silent on the subject, the presumption is that the Legislature intended the Commission to comply with the Constitution, not to violate it. Such commissions are under two laws, namely, the statute law of the state, which confers upon them certain powers over public service corporations, and the constitutional law of the state and of the United States, which requires that they shall exercise the powers conferred by statute only by due process of law, that is, after giving the companies due notice and opportunity to be heard. A statute is invalid which requires something to be done which is forbidden by the Constitution, but it cannot be essential to the validity of a statute that it should enjoin obedience to the Constitution. Paulsen v. Portland, 149 U.S. 30, 13 Sup.Ct. 750, 37 L.Ed. 637; Chicago, B. & Q.R.R. v. Nebraska, 170 U.S. 57, 18 Sup.Ct. 513, 42 L.Ed. 948; French v. Barber A.P. Co., 181 U.S. 324, 21 Sup.Ct. 625, 45 L.Ed. 879.

5. We are unable to agree that the fixing of the rates to be charged by complainants to their customers in West Virginia is an unlawful regulation of interstate commerce. The regulation of companies engaged in the transportation of gas is expressly excluded from the scope of the interstate commerce statute. Neither the West Virginia statute nor the orders of the Commission purport to interfere in any manner with the transportation of natural gas from West Virginia to other states. Nothing is attempted except the regulation of the prices of natural gas to the citizens of West Virginia to be charged by corporations operating in West Virginia under state authority. The action of these corporations in uniting their operations with those of like corporations of Ohio and Pennsylvania in pumping gas into a common system of pipes supplying customers in the three states may produce the result that some gas from Ohio and Pennsylvania comes into West Virginia, although it is undisputed that a much larger quantity of gas goes out of West Virginia into Ohio and Pennsylvania than can possibly come in from these states. But this interflow of gas from one state to another according to the pressure from the main gas pipes as common reservoirs cannot affect the power of the state of West Virginia to make reasonable regulations as to rates for gas furnished to its own citizens. West v. Kansas Gas Co., 221 U.S. 229, 31 Sup.Ct. 564, 55 L.Ed. 716, 35 L.R.A. (N.S.) 1193, relied on by complainants, has no application, for in the present case no effort is made to prevent...