Central Maine Power Co. v. Public Utilities Commission

• Citation: 156 Me. 295,163 A.2d 762
• Parties: , 36 P.U.R.3d 19 CENTRAL MAINE POWER CO. (Re Increase in Rates) v. PUBLIC UTILITIES COMMISSION of the State of Maine et al.
• Decision Date: 16 August 1960
• Court: Supreme Judicial Court of Maine (US)

Page 762

163 A.2d 762

156 Me. 295, 36 P.U.R.3d 19

CENTRAL MAINE POWER CO. (Re Increase in Rates) v. PUBLIC UTILITIES COMMISSION of the State of Maine et al.

Supreme Judicial Court of Maine.

Aug. 16, 1960.

Frederick G. Taintor, Lewiston, Joseph P. Gorham, Augusta, Vincent L. McKusick, Leonard A. Pierce, Portland, William H. Dunham, Augusta, for plaintiff.

Peter Kyros, Portland, for defendant.

Before WILLIAMSON, C. J., and WEBBER, TAPLEY, SULLIVAN, DUBORD and SIDDALL, JJ.

SULLIVAN, Justice.

This case comprises two review proceedings instituted by the Company following the refusal by the Commission to allow to the Company rates which would have increased the latter's gross income some $2,794,000 and after the fixing of rates by the Commission granting a partial increase of $898,000.

The Company has filed both exceptions asserting errors in fact and in law and a petition in equity alleging confiscation of property. R.S.1954 c. 44, §§ 67, 69. This Court has overruled the Commission's demurrer to the petition and has ordered that both causes be entertained concurrently. A general denial in equity has been interposed by the Commission and the parties have stipulated that both controversies shall be heard upon the evidence presented before the Commission.

As for the exceptions, alleged errors of law must be adjudged exclusively by this Court. Averred errors of fact are to be conceded or rejected in accordance with the presence or absence of any substantial evidence to sustain the factual findings. Rioux v. Employers Liability Assurance Co., 134 Me. 459, 465, 187 A. 753; Wade and Dunton, Inc. v. Gordon, 144 Me. 49, 51, 64 A.2d 422; Picken v. Richardson, 146 Me. 29, 32, 77 A.2d 191; D'Aoust Appellant, 146 Me. 443, 444, 82 A.2d 409; Central Maine Power Co. v. P. U. C., 153 Me. 228, 231, 136 A.2d 726.

'If a factual finding, basic of an order of the Commission, is supported by any substantial evidence, that is, by such evidence as, taken alone, would justify the inference of the fact, the finding is final. Hamilton v. Caribou, etc., Company, 121 Me. 422, 424, 117 A. 582.' Gilman v. Somerset Farmers' Co-Operative Telephone Co., 129 Me. 243, 248, 151 A. 440.

The Massachusetts Legislature has succinctly defined substantial evidence:

"Substantial evidence' means such evidence as a reasonable mind might accept as adequate to support a conclusion.' Annotated Laws of Massachusetts, ch. 30A, § 1(6).

As for the petition in equity, this Court has not hitherto had occasion to construe formally R.S. c. 44, § 69. That statute characterizes the equity petition as an 'appeal.' The power of this Court under the act 'to review, modify, amend or annul' is reminiscent of the language of the former equity appeal law which was R.S. c. 107, § 21 (Repealed, P.L.1959, c. 317, § 86) and which authorized this Court to 'affirm, reverse or modify.'

R.S. c. 44, § 69 prescribes the review in ratemaking legislative cases in which the applicant utility alleges that confiscation of property has resulted to it from an order or decree of the Commission. The act is thus calculated to afford the indispensable court hearing to satisfy the constitutional property rights of the utility. By legislative mandate this Court is required to supply such a hearing and

'* * * exercise its own independent judgment as to both law and facts.'

The equity cause contains the Commission record of both oral testimony and printed evidence. Rulings of law by the Commission to be reviewed must be considered independently by this Court.

The burden of proof at the rate hearing had rested upon the Company and it continues to lie there in the instant proceeding. R.S. c. 44, §§ 71, 35.

The legislative direction that this Court 'exercise its own independent judgment as to * * * facts' places the Court at no noteworthy disadvantage so far as the printed exhibits are concerned save for the specialized knowledge and superior familiarity of a Commission in utility technology and economy. But in respect to the oral testimony this Court has enjoyed no opportunity to hear or observe the witnesses, particularly the experts in attenuated disagreement.

Independent judgment as to facts as a judicial technique or function in an equity review such as that obtaining here had been authoritatively evolved and been given reduced and abridged connotations by the Supreme Court of the United States long prior to the enactment by our Legislature in 1953 of R.S. c. 44, § 69 (P.L.1953, c. 377, § 3). We are to assume, then, that the Legislature was quite aware of such precedents in the highest court in the land when the Legislature expressly invoked a judicial process which had been scrutinized many times by the Supreme Court of the United States.

The constitutional rights to equitable review by a court utilizing independent judgment as to both law and facts in the instance of rate cases heard before an administrative tribunal had been implied by the United States Supreme Court years before the remedy was more extensively elaborated.

City of Knoxville v. Knoxville Water Co., 1909, 212 U.S. 1, 29 S.Ct. 148, 53 L.Ed. 371, was an appeal from an equity decree of a Circuit Court of Appeals restraining the enforcement of a city ordinance fixing the maximum rates chargeable by a utility. The grievance was that the ordinance had denied a reasonable return and was confiscatory. The matter had been referred to a Master whose report had been confirmed by the Circuit Court which had found the ordinance confiscatory. The U. S. Supreme Court said at page 8 of 212 U.S., at page 150 of 29 S.Ct:

'* * * In view of the character of the judicial power invoked in such cases it is not tolerable that its exercise should rest securely upon the findings of a master, even though they be confirmed by the trial court. The power is best safeguarded against abuse by preserving to this court complete freedom in dealing with the facts of each case. Nothing less than this is demanded by the respect due from the judicial to the legislative authority. It must not be understood that the findings of a master, confirmed by the trial court, and without weight, or that they will not, as a practical question, sometimes be regarded as conclusive. All that is intended to be said is, that in cases of this character this court will not fetter its discretion or judgment by any artificial rules as to the weight of the master's findings, however useful and well settled these rules may be in ordinary litigation. We approach the discussion of the facts in this spirit.' (Emphasis supplied.)

In 1920 came the decision of the widely known case of Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S. 287, 40 S.Ct. 527, 64 L.Ed. 908. At page 289 of 253 U.S., at page 528 of 40 S.Ct., the Court said:

'* * * In all such cases, if the owner claims confiscation of his property will result, the state must provide a fair opportunity for submitting that issue to a judicial tribunal for determination upon its own independent judgment as to both law and facts; otherwise the order is void because in conflict with the due process clause, Fourteenth Amendment. Missouri Pac. R. R. v. Tucker, 230 U.S. 340, 347, 33 S.Ct. 961, 57 L.Ed. 1507; Wadley Southern Ry. Co. v. Georgia, 235 U.S. 651, 660, 661, 35 S.Ct. 214, 59 L.Ed. 405; State of Missouri v. Chicago, Burlington & Quincy R. R., 241 U.S. 533, 538, 36 S.Ct. 715, 60 L.Ed. 1148; Oklahoma Operating Co. v. Love, * * * 252 U.S. 331, 40 S.Ct. 338, 64 L.Ed. 596.'

The case of Los Angeles Gas & Electric Corp., v. R. R. Comm., 1953, 289 U.S. 287, 53 S.Ct. 637, 77 L.Ed. 1180, was an appeal from a decree of a District Court, constituted of three judges, which dismissed a bill in a suit by the appellant gas company praying that the defendant state commission and its officers be enjoined from enforcing new gas rates attacked as confiscatory. We quote from page 304 of 289 U.S., at page 643 of 53 S.Ct.:

'4. We approach the decision of the particular question thus presented in the light of the general principles this court has frequently declared. We have emphasized the distinctive function of the court. We do not sit as a board of revision, but to enforce constitutional rights. San Diego Land & Town Co. v. Jasper, 189 U.S. 439, 446, 23 S.Ct. 571, 47 L.Ed. 892. The legislative discretion implied in the rate-making power necessarily extends to the entire legislative process, embracing the method used in reaching the legislative determination as well as that determination itself. We are not concerned with either, so long as constitutional limitations are not transgressed. When the legislative method is disclosed, it may have a definite bearing upon the validity of the result reached, but the judicial function does not go beyond the decision of the constitutional question. That question is whether the rates as fixed are confiscatory. And upon that question the complainant has the burden of proof, and the court may not interfere with the exercise of the state's authority unless confiscation is clearly established.' (Emphasis supplied.)

In Lindheimer v. Illinois Tel. Co., 1934, 292 U.S. 151, 54 S.Ct. 658, 78 L.Ed. 1182, Chief Justice Hughes for the Court held:

At page 164 of 292 U.S., at page 663 of 54 S.Ct. '* * * The question is whether the company has established, with the clarity and definiteness befitting the cause, that this reduction would bring about confiscation. Los Angeles Gas and Electric Corp. v. Railroad Comm., 289 U.S. 287, 304, 305, 53 S.Ct. 637, 77 L.Ed. 1180. * * *'

At page 169 of 292 U.S., at page 665 of 54 S.Ct. 'Confiscation being the issue, the Company has the burden of making a convincing showing that the amounts it has charged to operating expenses for depreciation have not been excessive. That burden is not sustained by proof that its general accounting system has been correct. The calculations are mathematical, but the predictions underlying them are essentially matters of opinion. They...