Davies Warehouse Co v. Bowles, 112

• Citation: 64 S.Ct. 474,88 L.Ed. 635,321 U.S. 144
• Decision Date: 31 January 1944
• Docket Number: No. 112,112
• Parties: DAVIES WAREHOUSE CO. v. BOWLES, Price Administrator
• Court: United States Supreme Court

321 U.S. 144

64 S.Ct. 474

88 L.Ed. 635

DAVIES WAREHOUSE CO.

v BOWLES, Price Administrator.

No. 112.

Argued Nov. 18, 1943.

Decided Jan. 31, 1944.

Mr. Reginald L. Vaughan, of San Francisco, Cal., for petitioners.

Mr. Nathaniel L. Nathanson, of Washington, D.C., for respondent.

Mr. Justice JACKSON delivered the opinion of the Court.

The petitioner, Davies Warehouse Company, is incorporated under the laws of California and conducts a public warehouse in Los Angeles. Its business is declared to be that of a public utility both by the Constitution of California¹ and its Public Utilities Act.² The Act subjects to regulation by the Railroad Commission all warehouses which serve the public generally for compensation. § 2 1/2. New warehouses may be established only after obtaining certificates of public convenience and necessity, which the Commission may refuse or condition and may suspend or revoke at any time for cause. § 50 1/2. Petitioner must grant nondiscriminatory and equal rates to everyone, and it may not alter any existing rate or charge without permission. §§ 19, 15. The Commission upon its own motion or upon complaint may determine 'the just, reasonable or sufficient rates' and fix the same by order. § 32. Petitioner is required to make periodic reports and is subject to numerous restrictions and disabilities. §§ 29, 51, 52, 75, 76, et seq.

Several public warehouses, including the one before us, made application to the Commission for general rate increases. The Commission gave a public hearing in Feb- ruary 1942. From undisputed testimony it appeared that: notice of hearing had been sent to over 3,000 customers and no one appeared in opposition; rates had not been advanced since 1938; wages, however, had been advanced on four different occasions; materials and supplies and wages of clerical and supervisory employees had also increased; overall costs of operation had risen during the period 20-26 per cent. On May 12, 1942, the Commission authorized a general 15 per cent advance which, it said, 'will permit applicants to increase their rates to reimburse them in part for their added labor expense.' The permission was so conditioned, however, that the reasonableness of any particular rate could be attacked by any customer, either by way of reparation proceeding, for which the Act makes provision, or otherwise. The effective date of the new rates was set by the Commission as May 22, 1942.

In the meantime the United States Price Administrator, acting under the Emergency Price Control Act,³ on April 28, 1942 issued a General Maximum Price Regulation. The effect of the federal regulation and later amendments would have been to prohibit petitioner after July 1, 1942 from charging the rate authorized by the California Railroad Commission.

This federal Act provides that 'nothing in this Act shall be construed to authorize the regulation of * * * (2) rates charged by any common carrier or other public utility.'⁴ Petitioner, asserting itself to be within this exemption, made timely protest to the Price Administrator, which was denied. It then filed a complaint with the United States Emergency Court of Appeals, on which the Act confers exclusive original jurisdiction to determine the validity of regulations,⁵ asking it to set aside the General Maximum Price Regulations in so far as they purport to regulate its charges. The Emergency Court of Appeals dismissed the complaint. Davies Warehouse Co. v. Brown, 137 F.2d 201, 209. Importance of the construction of the Act to its administration led us to grant certiorari. 64 S.Ct. 40.

Congress, in omitting to define 'public utility' as used in the Act, left to the Administrator and the courts a task of unexpected difficulty. Use of that term in a context of generality wears an appearance of precision which proves illusory when exact application becomes necessary. Relevant authorities and considerations are numerous and equivocal, and different plausible definitions result from a mere shift of emphasis. It may be contended that the exemption runs in favor of any business generally and traditionally regarded as a utility, irrespective of ac- tual state regulation. Or it may be urged to include any enterprise actually regulated as are utilities, regardless of traditional classification. Or it may be said to extend only to those businesses where actual utility regulation exists along with general and traditional utility character.

The Emergency Court of Appeals weighed the conflicting factors in thorough opinions and divided as to result.⁶ Judges Maris and Magruder gave little weight to the existence of actual regulation and held the phrase to comprehend enterprises of the general utility type, among which they thought this warehouse had no place. They held that the federal price regulation superseded that of the state, but said, 'This is one of those unfortunate cases where doubts would remain whichever way the case was decided'—a reservation we share. Chief Judge Vinson declared that this public warehouse possesses the basic indicia of a public utility and in addition has its rates fixed by an agency of the state, and under these circumstances must be considered a public utility within the meaning of the Act. He thought the state regulation should prevail over that of the Federal Price Administrator.

In Munn v. Illinois, 1877, 94 U.S. 113, 152, 24 L.Ed. 77, this Court recognized that the business of public warehousing is 'affected with a public interest' and that its regulation by the state is appropriate and constitutionally permissible. Cf. Budd v. New York, 143 U.S. 517, 544, 12 S.Ct. 468, 476, 36 L.Ed. 247. Twenty-one states regulate warehouses in some respects.⁷ Three states include warehouses in their statutory definition of public utilities,⁸ and eight include limited types of warehouses.⁹ Forty-seven states have adopted the Uniform Warehouse Receipts Act, which gives warehouse receipts legal standing somewhat similar to that of a common carrier's bill of lading.¹⁰

We cannot, therefore, assume that Congress was unaware that a general statutory reference to 'public utilities' might well be taken at least in some states to comprehend public warehouses. But Congress did not see fit to employ that precision of definition which it has used when it desired to make sure that its classification of public utilities for federal purposes would depend upon the nature of their activities uninfluenced by any state policy.¹¹ Legislative history is ambiguous, and in no instance was attention directed to the particular problem presented here as to the scope of the term 'public utility.' But the phrase was used to measure inclusions as well as exemptions and it seems to have been employed in a practical rather than legalistic sense. An effort was made in the Senate to insert a provision that public utility rates should not be increased without consent of the President.¹² That proposal was rejected, however, and a provision was substituted which required any public utility which asked for an increase in rates to notify the President and to assent to the appearance of such agent as the President may designate to appear in behalf of the consuming public before the appropriate railroad or public utility commission, be it a state, federal, or municipal commission.¹³ It is difficult to believe that a different scope was intended to be given to the same words in different sections of the legislation. The use of the same generic term in these different contexts indicates that it had no narrower connotation and should receive no stricter interpretation in the exemption merely because used to define an exemption.

Legislative history is unequivocal in its showing that rates already subject to state regulation as public utility rates were not considered in need of further control. Mr. Leon Henderson, one of the authors of the bill and the first Price Administrator, gave as reasons for exempting utilities that they seemed to be under an adequate system of state regulation;¹⁴ that this was an area not likely to give difficulty or to cause, so far as could then be seen, any inflationary trend; that utilities had problems peculiar to themselves and no further regulation seemed necessary;¹⁵ and that he had found the agencies in control of utility rates 'just as earnest as we are about keeping those costs down.'¹⁶

Under these circumstances the reasonable view appears to be that Congress by the term 'public utilities' exempted those whose charges already were regulated as public utilities and hence were not probable sources of inflationary dangers. It may be and probably is the case that in its rate regulation the California Commission will take account of different factors and have different objectives than does the Federal Price Administrator. That might have appealed to Congress as a reason for not exempting utilities at all, but it hardly helps define the limits of the exemption, for that objection is as cogent against what admittedly is included as against that which is left in doubt.

We think Congress desired to depart from the traditional partitioning of functions between state and federal government only so far as required to erect emergency barriers against inflation. No question as to the power of Congress to reach and regulate this business, should it find it necessary to do so, has been raised here. But as matter of policy Congress may well have desired to avoid conflict of occasions for conflict between federal agencies and state authority which are detrimental to good administration and to public acceptance of an emergency system of price control that might founder if friction with public authorities be added to the difficulties of bringing private self-interest under control.¹⁷ Where Congress has not clearly indicated a purpose to precipitate conflict, we should be reluctant to do so by decision.¹⁸ In view of assurances to Congress that the evil would proceed only in a minor...