Cambridge Electric Light Co. v. Atwill

• Decision Date: 11 April 1928
• Docket Number: No. 2931.,2931.
• Citation: 25 F.2d 485
• Parties: CAMBRIDGE ELECTRIC LIGHT CO. v. ATWILL et al.
• Court: U.S. District Court — District of Massachusetts

25 F.2d 485 (1928)

CAMBRIDGE ELECTRIC LIGHT CO. v. ATWILL et al.

No. 2931.

District Court, D. Massachusetts.

April 11, 1928.

Robert G. Dodge, of Boston, Mass., for plaintiff.

Arthur K. Reading, Atty. Gen., and Sherman L. Whipple and Lothrop Withington, both of Boston, Mass., for defendants.

Before BINGHAM, Circuit Judge, MORTON, and MORRIS, District Judges.

MORTON, District Judge.

This is an application for an injunction pendente lite, to restrain the Public Utilities Department of Massachusetts from enforcing an order requiring the plaintiff to make material reductions in its rate for domestic and commercial lighting. The record before us consists of the pleadings and ex parte affidavits filed by both sides and exhibits therein referred to.

The principles upon which such injunctions are granted or refused are well established. "It is well settled that the granting of a temporary injunction, pending final hearing, is within the sound discretion of the trial court." Sanford, J., Prendergast v. N. Y. Telephone Co., 262 U. S. 43 at 50, 43 S. Ct. 466, 469, 67 L. Ed. 853. "The rates fixed by the commission are presumed to be just and reasonable. The burden is upon the plaintiff to show that they are unjust, unreasonable, or confiscatory." Bryan, J., Cumberland T. & T. Co. v. Louisiana P. S. Commission (D. C.) 283 F. 215, 217, 219 (statutory court). See, too, Railroad Commission of Louisiana v. Cumberland T. & T. Co., 212 U. S. 414, 421, 29 S. Ct. 357, 53 L. Ed. 577. "It is elementary that the jurisdiction now invoked is not to be exercised except `in a case reasonably free from doubt,' and `when necessary to prevent great and irreparable injury.'" Mass. State Grange v. Benton, Atty. Gen. (D. C.) 10 F.(2d) 515 (Mass. statutory court), quoting Cavanaugh v. Looney, Atty. Gen., 248 U. S. at 456, 39 S. Ct. 142, 63 L. Ed. 354.

The decisions relied on by the plaintiff conform to these rules. In the Ohio Bell Telephone Case (D. C.) 3 F.(2d) 701, it was found by the court that the valuation of the commission was "probably too low"; and in the Monroe Gaslight & Fuel Co. Case (D. C.) 292 F. 139, it was said "these decisions require that a preliminary injunction should issue, if there is reasonable probability italics ours that the utility will prevail upon a final hearing," etc. Cases in which there has been a full hearing before a master stand, of course, upon a very different footing from the present application. The considerations mentioned by Judge Colt in Carpenter v. Knollwood Cemetery (C. C.) 188 F. 856, as governing the issue of injunctions pendente lite, refer to cases between private individuals. Where the acts of a state are drawn into question, somewhat different principles apply, as the foregoing quotations show. Governmental acts within the general power of the state are presumptively valid, and ought not to be interfered with by a federal court upon a mere balance of possible injuries. To warrant interference, it must appear that there is a reasonable probability that the utility will prevail upon final hearing.

The question is whether the plaintiff makes out a case within these requirements. The order which is attacked reduced its rate on domestic and commercial lighting from 8 cents to 5½ cents per kilowatt hour. There is no contention that the new rate will not produce income enough to pay all operating expenses; but the plaintiff does contend that it will not furnish an adequate return on the invested capital. In support of this contention it has filed the affidavit of Edward J. Cheney, apparently a competent expert on such matters, valuing its property for rate-making purposes at about $8,000,000, and stating that the new rate will not yield a return of over 4.83 per cent. on this amount. There are other affidavits to the same effect, and to the point that such a rate of return will be inadequate and confiscatory; the company contending that the rate to be adequate must return at least 8 per cent. on the value of the invested property. Mr. Cheney and some of the other affiants testified before the department in the rate proceeding.

The facts relied upon by the state authorities are found in the decision of the Public Utilities Department, in the returns made from time to time by the plaintiff company, in certain exhibits introduced by the plaintiff company in the rate proceedings before the department, and in certain affidavits. The department in its decision finds "that the fair value (of the) property for rate-making purposes, * * * based upon the principles enunciated by the Supreme Court of the United States in McCardle v....