Complaint of Residents of Struthers, Ohio, 87-8482

• Decision Date: 06 September 1989
• Docket Number: No. 87-8482,No. 88-1147,87-8482,88-1147
• Citation: 45 Ohio St.3d 227,543 N.E.2d 794
• Parties: , 107 P.U.R.4th 438 In re Complaint of RESIDENTS OF STRUTHERS, OHIO, against Ordinanceof the City of Struthers.
• Court: Ohio Supreme Court

Page 227

45 Ohio St.3d 227

543 N.E.2d 794, 107 P.U.R.4th 438

In re Complaint of RESIDENTS OF STRUTHERS, OHIO, against Ordinance No. 87-8482 of the City of Struthers.

No. 88-1147.

Supreme Court of Ohio.

Submitted May 30, 1989.

Decided Sept. 6, 1989.

Syllabus by the Court

1. The provisions of Section 4, Article XVIII of the Ohio Constitution are clear, specific and self-executing, and the powers therein enumerated are not subject to statutory restriction. (Pfau v. Cincinnati [1943], 142 Ohio St. 101, 26 O.O. 284, 50 N.E.2d 172, followed.)

2. A product and service contract entered into by a municipality with a public utility is valid and binding upon the parties thereto, unless disapproved by the majority of electors voting thereon at a referendum election held pursuant to Section 5, Article XVIII of the Ohio Constitution. (Link v. Pub. Util. Comm. [1921], 102 Ohio St. 336, 131 N.E. 796, followed.)

3. Pursuant to Sections 4 and 5, Article XVIII of the Ohio Constitution, R.C. 4909.36 is constitutionally invalid insofar as it permits jurisdictional review by the Public Utilities Commission of Ohio of a valid contract entered into between a public utility and a municipality.

On or about December 16, 1987, the City Council of the city of Struthers, Ohio, passed Ordinance No. 87-8482, establishing rates to be charged by Ohio Water Service Company for water supplied to the city and its inhabitants for a two-year term commencing January 1, 1988. Section 10 of the ordinance provides in relevant part:

"This Ordinance is hereby declared to be an emergency measure * * *. Said emergency exists by reason of the fact that said rates must be established and contract must be entered into immediately, and, as such, this Ordinance shall take effect immediately upon its passage and approval by the Mayor."

On February 12, 1988, appellant Tony Marchionda, a taxpayer of the city of Struthers, filed a complaint with the Public Utilities Commission of Ohio ("commission") entitled "Taxpayers' Complaint as to Unreasonable and Unjust Rates Pursuant to O.R.C. 4909.36." Attached to the complaint were copies of petitions purporting to bear the signatures of a total of 1,835 registered voters of the city of Struthers who supported the complaint filed before the commission. In objecting to the contract rates entered into by the city and the Ohio Water Service Company, the complainants-appellants requested " * * * that this matter be set for hearing at a convenient location here in Mahoning County within a reasonable time in the future."

By entry of March 8, 1988, the commission sua sponte dismissed the complaint on the grounds that it was without jurisdiction to review the terms of the ordinance contract by virtue of the holding in Link v. Pub. Util. Comm. (1921), 102 Ohio St. 336, 131 N.E. 796. Appellants' application for a rehearing was denied.

The cause is now before this court upon an appeal as of right.

Breckenridge & McCroom and E. Winther McCroom, Youngstown, for appellants.

Anthony J. Celebrezze, Jr., Atty. Gen., Robert S. Tongren and Thomas C. Nader, Columbus, for appellee.

SWEENEY, Justice.

As a preliminary matter, it would appear that the Struthers ordinance is facially unconstitutional under Section 5, Article XVIII of the Ohio Constitution, ¹ since it was passed as an emergency measure and was effective "immediately." As emergency legislation, the ordinance appears to conflict with the thirty-days and referendum provisions of the aforementioned constitutional section. Nevertheless, since this potentially unconstitutional aspect of the ordinance was neither raised nor argued by any party to this action, and since the record does not clearly establish unconstitutionality of the Struthers ordinance, this court will decline to decide such issue. As this court noted in State, ex rel. Herbert, v. Ferguson (1944), 142 Ohio St. 496, 27 O.O. 415, 52 N.E.2d 980, paragraph two of the syllabus:

"Constitutional questions will not be decided until the necessity for a decision arises on the record before the court."

Notwithstanding the foregoing, we are faced with the issue in this case of whether the commission's sua sponte dismissal of the appellants' complaint was unreasonable or unlawful. Since we believe that the commission was without jurisdiction to review the terms of the ordinance contract between the city of Struthers and Ohio Water Service Company, we answer such issue in the negative, thereby affirming the commission's order of dismissal.

A review of the record indicates that the complaint was filed before the commission pursuant to R.C. 4909.36. This statute provides in pertinent part:

"If any public utility has accepted any rate, price, charge, toll, or rental fixed by ordinance of a municipal corporation or ordinances of a group of municipal corporations, it shall become operative, unless a complaint signed by not less than ten per cent of the qualified electors of such municipal corporation or not less than ten per cent of the qualified electors of each municipal corporation in such group has been filed with the public utilities commission within sixty days after such acceptance. Upon such filing, the commission shall forthwith give notice of the filing and pendency of such complaint to the mayor of such municipal corporation or the mayors of the group of municipal corporations, and fix a time and place for the hearing of such complaint. The commission shall, at such time and place, hear such complaint, and may adjourn the hearing from day to day. * * * "

In dismissing the complaint, the commission found that although it appears that R.C. 4909.36 vests it with jurisdiction to hear the complaint, such apparent jurisdiction was nullified by this court's decision in Link, supra.

A review of the factual background of Link reveals that it closely resembles the facts of the cause sub judice. In Link, the city of Cleveland passed an ordinance that was accepted in writing by the Cleveland Electric Illuminating Company. The ordinance established the rates to be charged for steam and hot water service that the utility was to supply the city for a five-year period. A complaint was brought pursuant to G.C. 614-44, the predecessor statute of R.C. 4909.36, by the requisite percentage of electors of the city alleging that the ordinance was unjust, unfair and unreasonably high. Upon the utility's motion, the commission dismissed the complaint for want of jurisdiction. Id. at 336-337, 131 N.E. at 796-797. In affirming the commission's dismissal of the complaint, the Link court essentially held, inter alia, that the commission could not review a valid contract made by and between a municipality and a utility company for the product or service of the utility company because of certain provisions in the Ohio Constitution.

The Link holding was reaffirmed by this court in the syllabus of Akron v. Pub. Util. Comm. (1933), 126 Ohio St. 333, 185 N.E. 415:

"Where a city, by ordinance regularly passed, fixes a rate whereby a particular public utility will be permitted to market its product to the city for a specified time, and the proffer contained in such ordinance is accepted, in writing, by such public utility, a contract is thereby made between the city and the public utility, and a contract rate is established which the Public Utilities Commission has no power to alter during the term of the contract. (Link v. Public Utilities Commission, 102 Ohio St., 336 approved and followed.)"

Such holding was explained in the Akron case as...