Dakota Cent Telephone Co v. State of South Dakota Payne
| Decision Date | 02 June 1919 |
| Docket Number | No. 967,967 |
| Citation | 39 S.Ct. 507,4 A. L. R. 1623,250 U.S. 163,63 L.Ed. 910 |
| Parties | DAKOTA CENT. TELEPHONE CO. et al. v. STATE OF SOUTH DAKOTA ex rel. PAYNE, Atty. Gen., et al |
| Court | U.S. Supreme Court |
Mr.Solicitor General King, for plaintiffs in error.
[Argument of Counsel from pages 164-170 intentionally omitted] Mr. Oliver E. Sweet, of Rapid City, S. D., for defendants in error.
[Argument of Counsel from pages 170-179 intentionally omitted]
Involving as this case does the existence of state power to regulate, without the consent of the United States, telephone rates for business done wholly within the state over lines taken over into the possession of the United States and which by the exercise of its governmental authority it operates and controls, it does not in principle differ from the North Dakota case (Northern Pac. Ry. Co. v. State of North Dakota, 250 U. S. 135, 39 Sup. Ct. 502, 63 L. Ed. ——), just announced, where it was decided that under like conditions the state had no such power as to railroad rates. We consider this case as far as may be necessary, by a separate opinion, however, because the authority under which the control was exerted is distinct and because of the assumption in argument that this distinction begets a difference in the principles applicable.
In January, 1919, the state of South Dakota on the relation of its Attorney General and Railroad Commissioners sued the Dakota Central and other telephone companies doing business within the state to enjoin them from putting in effect a schedule of rates as to local business which it was alleged had been prepared by the Postmaster General and which it was averred the telephone companies were about to apply and enforce. It was charged that such rates were higher than those fixed by state authority and that the proposed action of the companies would be violative of state law, since the companies were under the
duty to disregard the action of the Postmaster General and apply only the lawful state rates. The duty of the relators, as state officers, to prevent such wrong was alleged—a duty in which, it was further asserted, the state had a pecuniary interest springing from the expenditure which it was obliged to make for telephone services.
The companies answered, disclaiming all interest in the controversy on the ground that by contract, a copy of which with one of the defendant companies was annexed, their telephone lines and everything appurtenant thereto had passed into the possession and control of the United States and were being operated by it as a governmental agency. The answer also alleged that any connection of the companies through their officials or employes with the business was solely because of employment by the United States. The purpose to enforce the rates fixed by the Postmaster General was admitted and it was averred that the suit was one over which the court had no jurisdiction because it was against the United States.
The case was heard on the bill, answer, exhibits, and an admission by all the parties that the contract annexed to the answer was accurate and that a similar one had been made with all the other defendants.
Assuming that Congress had power to take over the telephone lines, that it had conferred that power upon the President, that the power had by the President been called into play conformably to the authority granted, and that the telephone lines were under the complete control of the United States, the court yet held that the state had the power to fix the local rates. In reaching this conclusion the o urt, assuming argumentatively that the right which the United States possessed gave at least the implied authority to fix all rates, nevertheless held that such power did not embrace intrastate rates because they had been carved out of the grant of power by Congress in conferring authority on the President. It was
therefore decided that the President, the Postmaster General, and those operating the telephone service under his authority were mere wrongdoers in giving effect to the rates fixed by the Postmaster General and in refusing to enforce the conflicting intrastate rates made lawful by state law. The proceedings to prevent this wrong, it was held, did not constitute a suit against the United States and the injunction prayed was granted.
The appellees do not confine their contention to the question of statutory construction below decided. On the contrary, they press questions of power which the court below assumed and did not pass upon and insist upon a construction of the statute contrary to that which the court below took for granted as a prelude to the question of construction upon which is based its conclusion.
We must dispose of the issues thus insisted upon before testing the soundness of the interpretation of the statute upon which the court below acted, and for the purpose of considering them as well as the question of construction which the court below expressly decided, we state the case.
On the 16th of July, 1918, congress adopted a joint resolution (40 Stat. 904, c. 154 [Comp. St. 1918, § 3115 3/4 x, appendix]), providing:
'That the President during the continuance of the present war is authorized and empowered, whenever he shall deem it necessary for the national security or defense, to supervise or to take possession and assume control of any telegraph, telephone, marine cable, or radio system or systems, or any part thereof, and to operate the same in such manner as may be needful or desirable for the duration of the war, which supervision, possession, control, or operation shall not extend beyond the date of the proclamation by the President of the exchange of ratifications of the treaty of peace: Provided, that just compensation shall be made for such supervision, possession, control, or operation, to be determined by the President: * * *
Provided further, that nothing in this act shall be construed to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems.'
Six days thereafter, on the 22d of July, the President exerted the power thus given. Its exercise was manifested by a proclamation, which, after reciting the resolution of Congress, declared:
'It is deemed necessary for the national security and defense to supervise and take possession and assume control of all telegraph and telephone systems and to operate the same in such manner as may be needful or desirable.
'Now, therefore, I, Woodrow Wilson, President of the United States, under and by virtue of the powers vested in me by the foregoing resolution, and by virtue of all other powers thereto me enabling, do hereby take possession and assume control and supervision of each and...
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