Lucas v. Wisconsin Electric Power Company

• Decision Date: 02 August 1972
• Docket Number: No. 71-1113.,71-1113.
• Citation: 466 F.2d 638
• Parties: Alvin LUCAS, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin public utility company, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

466 F.2d 638 (1972)

Alvin LUCAS, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin public utility company, et al., Defendants-Appellees.

No. 71-1113.

United States Court of Appeals, Seventh Circuit.

Argued May 24, 1972.

Decided August 2, 1972.

Certiorari Denied January 8, 1973.

COPYRIGHT MATERIAL OMITTED

Mark E. Wilson, Milwaukee, Wis., for plaintiff-appellant.

Robert H. Gorske, Milwaukee, Wis., Robert W. Warren, Atty. Gen., Madison, Wis., Paul Rodgers, Gen. Counsel, Ray M. Druley, Deputy Asst. Gen. Counsel, National Assoc. Regulatory Utility Comnrs., Washington, D. C., for defendants-appellees.

Before SWYGERT, Chief Judge, KNOCH, Senior Circuit Judge, KILEY, FAIRCHILD, CUMMINGS, PELL, STEVENS and SPRECHER, Circuit Judges.

Argued En Banc May 24, 1972.^*

Certiorari Denied January 8, 1973. See 93 S.Ct. 928.

STEVENS, Circuit Judge.

This appeal arises out of a dispute over plaintiff's monthly billing of $9.89 for residential electric service for November, 1969. The question presented is whether the Power Company's proposed method of resolving the dispute— by terminating plaintiff's service unless the disputed bill is paid within five days—is proscribed by § 1 of the Civil Rights Act of 1871, 17 Stat. 13, now 42 U.S.C. § 1983.¹ The statute protects the plaintiff from deprivation of his federal constitutional rights by a defendant acting "under color of any statute, ordinance, regulation, custom, or usage" of the State of Wisconsin.

Because the defendant proposes to act before the dispute has been resolved, plaintiff contends that he will be deprived of liberty or property without due process of law;² because the proposed termination is consistent with disconnect rules which have been approved by the Wisconsin Public Service Commission, he contends that the Power Company's threat is made "under color of" state law. We shall consider both contentions after describing the background of this particular dispute and the Power Company's disconnect procedures as approved by the Wisconsin Commission.

I.

Plaintiff is one of the 599,051 customers of the defendant Wisconsin Electric Power Company. As a representative of that class, and also on his own behalf, he filed a complaint on July 2, 1970, requesting that a three-judge court be convened to enjoin the enforcement of § 113.13(4) of the regulations of the Wisconsin Public Service Commission, and to prevent defendant Power Company from "terminating electrical services for alleged arrearages without prior, adequate notice and hearing."

The complaint alleged that plaintiff had paid his monthly bill in cash on December 23, 1969, but failed to obtain a stamped receipt. Thereafter he paid current charges, but consistently refused to pay the alleged arrearage. In due course the Power Company notified him that his service would be disconnected on July 6, 1970.

After filing his complaint on July 2, 1970, plaintiff moved for a temporary restraining order. The parties apparently agreed informally that his service would continue while the litigation was pending.³ A few days later, plaintiff amended his complaint to join the commissioners of the Wisconsin Public Service Commission as individual defendants. In his amended complaint and in his argument in this court he emphasized the absence of "an impartial decision maker" to resolve the dispute before service could be discontinued.⁴

The defendant commissioners moved to dismiss the complaint on the ground that the relevant provisions of the Wisconsin Administrative Code "do provide due process of law to plaintiff and to all similarly situated." The motion was supported by affidavits describing the commission's disconnect regulations and the rules of the defendant Power Company relating to collections. The affidavits also described both formal and informal procedures which the commission employs to resolve disputes between customers and a regulated utility. The affidavits indicated that the plaintiff had not invoked these procedures.

Every utility is required to furnish reasonably adequate service and to comply with a variety of commission regulations as well as detailed rules which each utility must file with the commission.⁵ The commission's rule covering deposits, guarantees and disconnects (§ 113.13) contains the following provision specifically attacked by plaintiff in this litigation:

"(4) DISCONNECT RULE. (a) Service may be disconnected if a customer\'s current bill for service as defined in the utility\'s filed rules is not paid within a reasonable period set forth in said rules."

Pursuant to that rule, the defendant Power Company had filed detailed rules and regulations describing, among other things, its collection procedures. The section applicable to arrearages amounting to between $5 and $20 stated that when collection action is required, the following steps should be taken:

"1. A written notice shall be sent to the customer, stating the amount the customer is in arrears, and notifying him that service will be disconnected if such arrears are not paid within five days.

"2. If the arrears remain unpaid at the end of the period specified on the disconnection notice and satisfactory arrangements for payment have not been made, service may be disconnected without further notice to the customer."

It is the commission's acceptance of these "filed rules" as adequate compliance with § 113.13(4) that plaintiff attacks as unconstitutional.

The affidavit of the Director of the Rates and Research Division of the commission described the manner in which customer complaints involving service, including situations in which a public utility threatens to invoke the disconnect rule for nonpayment, are handled by the commission. Formal complaints may be brought by no less than 25 private citizens. Such a procedure might lead to the modification of a utility's disconnect procedures, but apparently has not been invoked for that purpose. However, affiant received an average of about two informal complaints per week concerning either actual or threatened terminations of service. It was his practice to make a written record of each such complaint and to request the utility to withhold actual disconnection until he could inquire into the relevant facts. The "great bulk of all complaints" was settled by mutual agreement. If no settlement was reached, the affiant indicated that the commission was authorized to initiate a formal investigation. However, he did not describe what had happened to any complaint which was not resolved by an agreement between the customer and the utility.

The defendant Power Company filed an answer to the complaint specifically denying that it received a payment from plaintiff on or about December 23, 1969,⁶ and admitting that it had notified plaintiff that his electric service would be discontinued if plaintiff did not comply with the Company's filed rule procedure respecting delinquent accounts. The Company averred that plaintiff had an adequate remedy in the courts of the State of Wisconsin for resolution of the dispute over the alleged nonpayment; that injunctive relief was inappropriate; that the case was not proper either for a declaratory judgment or for a three-judge federal court; denied that plaintiff's claim was typical of a significant definable class; and specifically denied that either § 113.13(4) or the rules which the Power Company had filed with the commission violated plaintiff's rights under the Fourteenth Amendment to the United States Constitution.

Plaintiff propounded detailed interrogatories to the Power Company pertaining to its procedures for resolving disputes with customers and the records relating to plaintiff's specific claim. In response, the defendant identified various Company personnel who handled such complaints and indicated that during 1969, 71 disputes had been presented to persons other than regular Company personnel. Of the total of 71 cases, 33 disputes were presented to the Public Service Commission, 35 to Company officers, 2 to the Better Business Bureau, and 1 to the Milwaukee Journal. The interrogatory answers stated that the number of service terminations for nonpayment of bills in 1968 and 1969, respectively, were 10,691 and 9,970. The answers then described in great detail the Company's billing procedures, the way in which its computers are employed, and stated that no customer billings were corrected in 1969 due to computer errors, although a total of 646 errors due to human agency had been brought to the attention of the Company. Most of the errors resulted either from incorrect meter readings or clerical errors; in all such cases the errors had been corrected when they became known.⁷

The defendant Power Company took plaintiff's deposition. Although his testimony indicated that the accounting discrepancy might have arisen in part because of his move from one address to another in January, or possibly because he had given two monthly receipts to a Power Company clerk who had failed to return them to him in accordance with her promise, we assume for present purposes that the factual dispute involves nothing more than the question whether he actually made the cash payment in December, 1969, as alleged in the amended complaint.⁸ Plaintiff was employed by the City of Milwaukee at the time the litigation was commenced and, although he subsequently lost his job and was permitted to prosecute this appeal in forma pauperis, he made no claim of inability to pay electrical bills when rendered.

In response to the motion to dismiss, and apparently without relying on any facts developed by affidavits or discovery, the district court dismissed the complaint for failure to state a claim on which relief can be granted and for failure to state a substantial federal question. The court held that the defendant Power Company was a private company whose rights had not been enlarged by the...