Bell Telephone Co. of Pennsylvania v. Driscoll

• Decision Date: 29 September 1941
• Docket Number: 35
• Citation: 343 Pa. 109,21 A.2d 912
• Parties: Bell Telephone Company of Pennsylvania v. Driscoll et al., Appellants
• Court: Pennsylvania Supreme Court

21 A.2d 912

343 Pa. 109

Bell Telephone Company of Pennsylvania v. Driscoll et al., Appellants

No. 35

Supreme Court of Pennsylvania

September 29, 1941

Argued May 27, 1941.

Appeal, No. 35, May T., 1941, from decree of C.P. Dauphin Co., Equity Docket 1939, No. 1473 and Commonwealth Docket 1939, No. 227, in case of Bell Telephone Company of Pennsylvania v. Dennis J. Driscoll et al., constituting Public Utility Commission, and Claude T. Reno, Attorney General. Decree affirmed.

Bill in equity.

Decree entered granting injunction, before HARGEST, P.J., WICKERSHAM and FOX, JJ., and RICHARDS, P.J., specially presiding opinion by RICHARDS, P.J. Defendants appealed.

The decree of the court below is affirmed at the costs of the defendants, but the plaintiff shall bear the expense of printing its own briefs.

Paul D Larimer, with him Harry M. Showalter and Claude T. Reno Attorney General, for appellants.

Benjamin O. Frick, with him Arthur H. Hull, for appellee.

Before MAXEY, DREW, LINN, STERN, PATTERSON and PARKER, JJ.

OPINION

MR. PARKER JUSTICE:

The Bell Telephone Company of Pennsylvania filed a bill in equity asking for an injunction restraining the defendants from enforcing against it Section 702 ^[*] of the Public Utility Law of 1937, as amended by Act of September 28, 1938, P.L. 44 (66 PS § 1272). The defendants moved to dismiss the bill for want of jurisdiction and the plaintiff secured a rule to show cause why a preliminary injunction should not be granted. The chancellor dismissed the preliminary objections to the bill and after hearing granted a preliminary injunction. Certain stipulations were filed with reference to the evidence taken, the bill was dismissed, and a decree nisi filed. The court in banc reversed the decree nisi and entered a final decree, in which the chancellor joined, granting the relief prayed for, and defendants have appealed. The decree must be affirmed.

The appellants renew their objection to the bill, insisting that where a statute requires commission approval of a contract between a public utility and an affiliated interest as a precedent to its validity, one who comes within the terms of the statute but who has failed to make the required application and against whom no attempt has been made to impose penalties cannot complain that the statute is unconstitutional. They suggest that the constitutionality of this section might be raised either by making contracts without prior approval from the commission and raising the constitutional question when penalties for the violation are attempted to be enforced, or by complying with the section, and if at any time approval is refused, arguing the constitutionality of the act on appeal.

We have no doubt about the right of the Court of Common Pleas of Dauphin County in the exercise of its equitable powers to entertain a bill to enjoin an administrative agency of the Commonwealth from exercising powers not conferred on it or unconstitutionally conferred on it. That point has been decided too frequently to be longer in doubt: Martin v. Baldy, 249 Pa. 253, 259, 94 A. 1091; Germantown Tr. Co. v. Powell, 260 Pa. 181, 183, 103 A. 596; York Rys. Co. v. Driscoll, 331 Pa. 193, 196, 200 A. 864; W. Pa. Hospital v. Lichliter, 340 Pa. 382, 392, 17 A.2d 206. The penalties imposed for failure to apply for approval are severe, a maximum of five years' imprisonment and $5,000 fine (66 PS § 1495). It would be grossly unfair to require the corporation and its officers to risk such penalties in order to test the constitutionality of the act: Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 449. It was there said: "When the penalties for disobedience are by fines so enormous and imprisonment so severe as to intimidate the company and its officers from resorting to the courts to test the validity of the legislation, the result is the same as if the law in terms prohibited the company from seeking judicial construction of laws which deeply affect its rights." To the same effect see Pa. R.R. Co. v. Driscoll, 330 Pa. 97, 101, 198 A. 130.

As to the alternative suggestion it is sufficient to say that the remedy is inadequate. The company was not under obligation to submit to the enforcement of an unconstitutional law. The chancellor found as a fact that appellee enters into more than thirty contracts a year for which it would be required to secure the approval of the commission. Much of its equipment must be obtained from an affiliate, the Western Electric Company, or otherwise it would be embarrassed in exercising its franchises and in furnishing service to the public with resultant injury to it and the public. It was also found that compliance by plaintiff with § 702 would subject it "to expense in each case in the preparation of and the hearings on such applications, and also subject plaintiff to the expense incurred by the Commission in the investigation of and hearings on such applications. . . . These expenses plaintiff would be unable to recover back. There might be delay in the commencement and completion of projects for which such contracts and orders were made or given, due to the necessity of preparation of and hearings on said applications and decision thereon. There would also be delay in the extension, replacement, or improvement of plaintiff's facilities for public service." When we consider that such hearings frequently cause delay of months and even years, it is clear that the company does not have an adequate or sufficient remedy.

It is the contention of the appellee, sustained by the court below, that § 702 unlawfully delegates legislative powers to the commission and is therefore unconstitutional. As the conclusion of that court seems so clearly right, it will not be necessary to consider other objections to the section raised by the company. While we approach the subject with the presumption that the section is valid and constitutional, there are, nevertheless, constitutional limitations upon the power of the legislature to delegate its authority. This is firmly established by previous decisions of this court as well as by those of the Supreme Court of the United States. The constitution of this Commonwealth, in Articles II, § 1, provides: "The legislative power of this Commonwealth shall be vested in a General Assembly which shall consist of a Senate and a House of Representatives." In Boro. of W. Phila., 5 W. & S. 281, 283, we said: "Under a well-balanced constitution, the legislature can no more delegate its proper function than can the judiciary." The limits upon the power to delegate authority are set forth in the leading case of Locke's Appeal, 72 Pa. 491, 498: "The legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend, which cannot be known to the lawmaking power, and must, therefore, be a subject of inquiry and determination outside of the halls of legislation." Where the legislature establishes primary standards and then delegates to an administrative body the power to determine some fact or state of things upon which it makes or intends to make its own action depend, it is the legislature which has legislated and not the administrative body. The same thought was expressed by Chief Justice HUGHES in Panama Refining Co. v. Ryan, 293 U.S. 388, 426, 55 S.Ct. 241, 251, where speaking for the court he said: "Moreover the Congress may not only give such authorizations to determine specific facts, but may establish primary standards, devolving upon others the duty to carry out the declared legislative policy; that is, as Chief Justice MARSHALL expressed it, 'to fill up the details' under the general provisions made by the Legislature." Again, in Interstate Commerce Com. v. Goodrich Transit Co., 224 U.S. 194, 214, 32 S.Ct. 436, 441, the principle is thus stated: "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."

We are here concerned with that portion of § 702 which requires the prior approval of the commission before the utility may make effective or modify any contract with an affiliated interest and our first inquiry is whether the company is affected by the alleged unconstitutional features of the section. The elementary facts found by the court or shown by the pleadings demonstrate that it is. The operating territory of the Bell Telephone Company of Pennsylvania is confined to Pennsylvania but it is surrounded by territory of other Bell companies owned or controlled by the American Telephone and Telegraph Company, so that each has an affiliated interest with the others within the meaning of the Public Utility Law. By reason of the long distance telephone service rendered there is necessarily a close working interest among the affiliates. The lines are not only connected but the method of conducting intercommunications makes necessary the use in common of poles, ducts and other spaces with the result that there are many contractual dealings in varied forms. The appellee has no purchasing department of its own, no warehouses, no organization...