Market St Ry Co v. Railroad Commission of State of California

• Citation: 324 U.S. 548,65 S.Ct. 770,89 L.Ed. 1171
• Decision Date: 26 March 1945
• Docket Number: 511,Nos. 510,s. 510
• Parties: MARKET ST. RY. CO. v. RAILROAD COMMISSION OF STATE OF CALIFORNIA et al. (two cases)
• Court: United States Supreme Court

324 U.S. 548

65 S.Ct. 770

89 L.Ed. 1171

MARKET ST. RY. CO.

v RAILROAD COMMISSION OF STATE OF CALIFORNIA et al. (two cases).

Nos. 510, 511.

Argued Feb. 26, 1945.

Decided March 26, 1945.

Rehearing Denied April 23, 1945.

See 324 U.S. 890, 65 S.Ct. 1020.

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

Mr. Francis R. Kirkham, of San Francisco, Cal., for appellant.

Mr. Everett C. McKeage, of San Francisco, Cal., for appellees.

Mr. Justice JACKSON delivered the opinion of the Court.

Two appeals have been taken from a single judgment of the Supreme Court of California because counsel was uncertain when the judgment became final for our jurisdictional purposes. The decision was rendered July 1, 1944; it concluded, 'The order is affirmed'; a petition for rehearing was denied July 27, 1944. The first appeal was applied for and allowed on July 31, 1944. If the judgment became final on denial of rehearing, this appeal was timely. However the California Rules on Appeal expressly provide that a decision of the Supreme Court 'becomes final thirty days after filing unless otherwise ordered prior to the expiration of said 30-day period.'¹ Remittitur does not issue until the end of the 30-day period.² It issued on August 1 and certified, according to practice, that 'the foregoing is a true copy of an original judgment entered in the above entitled cause on the 1st day of July, 1944; and now remaining of record in my office.' If the date of its issue, being also the date of finality fixed by the rule, governs finality for purposes of our jurisdiction, the judgment was not a final one at the time the first appeal was granted. On the chance that it might be dismissed as premature, a second appeal was presented and allowed on September 21.

Our jurisdiction to review a state court judgment is confined by long-standing statute to one which is final. Judicial Code, § 237, 28 U.S.C. § 344, 28 U.S.C.A. § 344. Final it must be in two senses: it must be subject to no further review or correction in any other state tribunal; it must also be final as an effective determination of the litigation and not of merely interlocutory or intermediate steps therein. It must be the final word of a final court.

We have held that finality of a judgment of a state court for determining the time within which our jurisdiction to review may be invoked is not controlled by the designation applied in state practice. Department of Banking, State of Nebraska, v. Pink, 317 U.S. 264, 63 S.Ct. 233, 87 L.Ed. 254; Cole v. Violette, 319 U.S. 581, 63 S.Ct. 1204, 87 L.Ed. 1599. The judgment for our purposes is final when the issues are adjudged. Such finality is not deferred by the existence of a latent power in the rendering court to reopen or revise its judgment. The waiting period prescribed by the statute here seems to reserve a power of that character. The decision during this period does not lack the attributes of an adjudication, it is not awaiting lapse of time to become a judgment, it merely is subject to modification. When this period runs, unless the court has moved meanwhile, it becomes powerless to change or modify the judgment. City of Oakland v. Pacific Coast Lumber and Mill Co., 172 Cal. 332, 337, 156 P. 468, Ann.Cas.1917E, 259; In re Estate of Ross, 189 Cal. 317, 318, 207 P. 1014. The rule is thus a limitation on the time during which the court may reconsider, which in absence of such rule might expire only with the end of the term or some other event determinative under local law. Such latent powers of state courts over their judgments are too variable and indeterminate to serve as tests of our jurisdiction. Our test is a practical one. When the case is decided, the time to seek our review begins to run. A timely petition for rehearing defers finality for our purposes until it is acted upon or until power to act upon it has expired as here it would appear to do at the end of the 30-day period.³ If rehearing is granted, the judgment is opened, and does not become final as a prerequisite to application for review by us until decision is rendered upon rehearing.

We postponed consideration of jurisdiction until hearing on the merits.⁴ We hold that this judgment became final on denial of rehearing, that the first appeal was timely and that the precautionary second appeal is duplication. Accordingly the appeal in No. 511 is dismissed and that in No. 510 is entertained upon its merits.

The Market Street Railway Company at the commencement of these proceedings operated a system of passenger transportation by street car and by bus in San Francisco and its environs. The Railroad Commission of California instituted on its own motion an inquiry into the Company's rates and service. After hearings, an order was promulgated reducing the fare from seven to six cents. ⁵ The Company, after rehearing was denied,⁶ obtained review by the Supreme Court of California. It also obtained a stay of the Commission's order, conditioned upon impounding the disputed one cent per passenger to abide settlement of the issues upon which its ownership would depend. The Supreme Court of California affirmed the order⁷ and appeal is taken to this Court. Meanwhile the Company sold its operative properties to the City of San Francisco. The case is saved from being moot only because its decision is necessary to determine whether the Company is entitled to the impounded portion of the fares or whether the money shall be refunded to passengers making claims and unclaimed amounts thereof be paid over to the state, as required by conditions of the stay order.

The appeal raises constitutional issues only. The contention is that the order deprives the appellant of its property without due process of law, contrary to the Fourteenth Amendment. Appellant claims denials of due process in matters of procedure in that it had no adequate notice that its rates were under attack or adequate opportunity for a hearing thereon, that the order in several vital particulars is not supported by substantial evidence or by any evidence, and that it was improperly based on matters outside of the record on which there was no opportunity to cross-examine or to be heard. It claims a taking of its property as a result of the order on the ground that it would force the Company to operate at a loss because the Commission used a rate base of $7,950,000, the price at which appellant had offered to sell its operative properties to the City, and did not consider reproduction cost historical cost, prudent investment, or capitalization bases, on any of which under conventional accounting the six-cent fare would produce no return on its property and would force a substantial operating deficit upon the Company.

The appellant in support of its contentions that it has been denied due process in procedure and has been subjected to an unconstitutional taking of its property invokes many decisions of this Court in which statements have been made that seem to support its contentions. But it should be noted at the outset that most of our cases deal with utilities which had earning opportunities, and public regulation curtailed earnings otherwise possible. But if there were no public regulation at all, this appellant would be a particularly ailing unit of a generally sick industry. The problem of reconciling the patrons' needs and the investors' rights in an enterprise that has passed its zenith of opportunity and usefulness, whose investment already is impaired by economic forces, and whose earning possibilities are already invaded by competition from other forms of transportation, is quite a different problem. The Company's practical situation throws important light both on the question whether the rate reduction has taken its property and also upon the criticisms it makes of the conduct of the hearings.

Transportation history of San Francisco follows a pattern not unfamiliar. This property has passed through cycles of competition, consolidation and monopoly, and new forms of competition; it has seen days of prosperity, decline, and salvage. In the 1850's an omnibus service began to operate in San Francisco. In the 1860's came the horse car. The 1870's saw the beginning of the cable car, for which the contour of the city was peculiarly adapted. The Market Street Railway Company was incorporated in 1893 and took over 11 of the 17 street car lines then independently operated in the city. In 1902, United Railroads of San Francisco was organized. This consolidated under one operating control properties of the Market Street Company and five other lines, comprising 229 miles of track, much of which was cable-operated. It suffered greatly from the earthquake and fire of 1906, but carried out a considerable program of reconstruction between 1906 and 1910. In 1921 it failed to pay interest on outstanding bonds. Bondholders acquired the properties and revived the Market Street Railway Company, which had been a dormant subsidiary of United, to operate them.

In 1912 the City and County of San Francisco began operation of a municipal street railway line. This line is not and never has been under the Railroad Commission's jurisdiction. It expanded rapidly, its routes in some instances parallel those of appellant, and its competition has been serious. Throughout the period of competition the municipal lines have operated on a five-cent fare. The Market Street Line also operated on a five-cent fare until July 6, 1937. In that year it applied to the Commission for an increase to a seven-cent fare. This was denied, but a two-cent transfer charge and other adjustments were authorized. In March 1938 the Company again petitioned for a seven-cent fare, with reduction for school children. The Commission authorized a seven-cent fare, but required some concession to token buyers. A few months later the Company again asked a straight seven-cent fare and relief from the token rate. The Commission directed the Company to apply...