Dollar-A-Day Rent-A-Car Systems, Inc. v. Pacific Tel. & Tel. Co.

• Decision Date: 27 June 1972
• Docket Number: A-C,RENT-A-CAR,A-D,DOLLAR-A-DAY
• Citation: 102 Cal.Rptr. 651,26 Cal.App.3d 454
• Court: California Court of Appeals Court of Appeals
• Parties: SYSTEMS, INC., a California corporation, and D. W. Whiting, Inc., doing business as Dollar-ay Rent-ar of Beverly Hills, Plaintiffs and Appellants, v. The PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Defendant and Respondent. Civ. 39199.

Page 651

102 Cal.Rptr. 651

26 Cal.App.3d 454

DOLLAR-A-DAY RENT-A-CAR SYSTEMS, INC., a California corporation, and D. W. Whiting, Inc., doing business as Dollar-A-Day Rent-A-Car of Beverly Hills, Plaintiffs and Appellants, v. The PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Defendant and Respondent.

Civ. 39199.

Court of Appeal, Second District, Division 3, California.

June 27, 1972.

Axelrad, Sevilla & Ross, Los Angeles, for appellants.

Lawler, Felix & Hall, Charles L. Rogers, Stephen T. Swanson, Los Angeles, for respondent.

ALLPORT, Associate Justice.

Plaintiffs appeal from orders sustaining a demurrer without leave to amend to their complaint and dismissing this action as to defendant Pacific Telephone and Telegraph Company, a corporation, hereinafter referred to as 'Pacific.' The appeal lies from the order of dismissal. ¹ (Code Civ.Proc., §§ 581, subd. 3, 581d, 904.1(a).) By their complaint plaintiffs seek injunctive relief and damages against Pacific based upon allegations of unreasonable, arbitrary and discriminatory practices in regulation of plaintiffs' display advertising in the yellow pages of Pacific's telephone directory. The demurrer was sustained and the action dismissed upon the ground that the court lacked jurisdiction over the subject matter. It is contended on appeal that the court erred in so holding because the subject matter of the action lies in the concurrent jurisdiction of both the superior court and the Public Utilities Commission, hereinafter referred to as 'PUC.' We do not agree.

At the outset we point out that while seeking an injunction and compensatory and punitive damages, the basis for all relief sought lies in the claim of 'an unreasonable, arbitrary and discriminatory exercise of said Defendant's right of regulation of advertising.' This involves a factual determination to this effect by an appropriate tribunal before such relief may be granted.

The California Constitution and the Legislature have charged the PUC with the duty to regulate public utilities. Article XII section 23 of the California Constitution provides that 'The Railroad Commission (Public Utilities Commission) shall have and exercise such power and jurisdiction to supervise and regulate public utilities . . . as shall be conferred upon it by the Legislature, and the right of the Legislature to confer powers upon the Railroad Commission respecting public utilities is hereby declared to be plenary and to be unlimited by any provision of this Constitution.' Public Utilities Code section 701 provides:

'The commission may supervise and regulate every public utility in the State and may do all things, whether specifically designated in this part or in addition thereto, which are necessary and convenient in the exercise of such power and jurisdiction.'

Pacific is a public utility and subject to the requirements of section 216 of the Public Utilities Code. Pursuant to section 489, as a public utility Pacific is required to and has filed tariffs establishing rules pertaining to its rates and service. Telephone directories are a portion of the public service rendered by Pacific and over which the PUC has 'full control.' In California, etc., Storage Co. v. Brundige, 199 Cal. 185, at pages 188, 189, 248 P. 669, at page 670, the court said:

'A telephone directory is an essential instrumentality in connection with the peculiar service which a telephone company offers for the public benefit and convenience. It is as much so as is the telephone receiver itself, which would be practically useless for the receipt and transmission of messages without the accompaniment of such directories.'

'(W)e cannot do other than regard its use for such purposes as a mere incident in the operation of its public service over which the regulating body ought to have full control.'

Pacific's tariff provides for classified telephone directory advertising. Schedule Cal. P.U.C. No. 40--T, Special Conditions Numbers 2, 9, 11, 12, 15, 16, provide:

'2. Advertising copy furnished by the advertiser must be acceptable to the Utility and the printing of the advertising specified in the contract will constitute such approval.'

'9. The Utility reserves the right to accept or refuse any advertising when such action will not result in unlawful discrimination. Such acceptance or refusal is subject to the review of the Public Utilities Commission of the State of California.'

'11. No specific position for display advertising is guaranteed in any issue, and the Utility reserves the right to place such advertising in any position either on any page on which appears the heading with which such advertising is to be associated or on any page opposite any such page.

12. Reasonable care will be exercised to prevent the publication of advertisements or listings which may be misleading, and the Utility assumes no responsibility with respect to the authenticity of advertising copy furnished by any advertiser.'

'15. All advertisements and advertising matter will be printed in one color except as otherwise specified.

16. The size, style and arrangement of the type to be used in all listings and advertising matter will be determined by the Utility.'

A public utility's tariffs filed with the PUC have the force and effect of law. (Dyke Water Co. v. Public Utilities Com., 56 Cal.2d 105, 123, 14 Cal.Rptr. 310, cert. denied 368 U.S. 939, 82 S.Ct. 380, 7 L.Ed.2d 338.) A court may take judicial notice of the provisions of a tariff. (Evid.Code, § 452; Pratt v. Coast Trucking, Inc., 228 Cal.App.2d 139, 143, 39 Cal.Rptr. 332.) The PUC has taken steps to regulate Pacific with respect to the right of Pacific to regulate advertising. In Frank Serpa, Jr. v. Pacific Telephone and Telegraph Company (1957) Decision No. 54355, 55 CPUC 359 (17 PUR3d 378, 380) we find the following:

'The policy of defendant in refusing to include prices in any advertising placed in its classified telephone directory is found to be reasonable and necessary to prevent misleading and unfair advertising. The prices included in advertisements in a telephone directory which is published only once a year will very probably become unrealistic in view of changes and costs of labor and materials. Also, it permits 'bait' advertising, which is found to be undesirable.

'The publication of a classified telephone directory, while it is a venture not essential to the performance of telephone service, is so materially required in connection with such service as to become colored with the same considerations of regulation. No one except the telephone company can adequately carry on the venture.

'Since the publication of advertisements and listings of business in a directory is vital to proper rendition of telephone service, it is a matter within the regulatory jurisdiction of the Commission. . . . It (the telephone company) must, therefore, be permitted a reasonable amount of supervision and the determination of proper policy as to the content of advertisements published. These policies must be nondiscriminatory and fair.'

In Society for Individual Rights, Incorporated v. The Pacific Telephone and Telegraph Company (1968) Decision No. 78101, --- CPUC ---, the PUC upheld Pacific's refusal to publish an advertisement in the yellow pages of its San Francisco directory. It appears abundantly clear from the foregoing constitutional, statutory, decisional and administrative law that the publication of the advertising directory (Yellow Pages) by Pacific is a service over which the PUC may, and has, undertaken general supervision and control but that the superior court is without jurisdiction at this stage of the proceedings with respect to the relief sought in the complaint. In 41 Cal.Jur.2d 358, section 124, we find the following:

'By virtue of the broad grant of powers in the constitution, the legislature has authority to divest the courts of all jurisdiction respecting the control and activities of public utilities. ¹⁰ Pursuant to this authority, the Public Utilities Code provides that the courts may not restrain or interfere with the public utilities commission in the performance of its official duties, except that mandamus lies from the supreme court to the commission in proper cases. ¹¹ The clear intent of this provision is to place the commission, insofar as state courts are concerned, in a position where it will not be hampered by any court in the performance of any official act, except to the extent and in the manner permitted by the statute itself. At least to the extent the commission has acted in a particular matter, ¹² the jurisdiction of the superior court seems to be entirely taken away except in certain actions specially authorized by statute to be brought at the instance of the commission to enforce penalties or compel compliance with provisions of law. ¹³ ' (Footnotes omitted.)

In Product Research Associates v. Pacific Tel. & Tel. Co., 16 Cal.App.3d 651 at 655, 94 Cal.Rptr. 216 at 218, the court said:

'We observe, initially, that the Commission does not have exclusive jurisdiction over any and all matters having any reference to the regulation and supervision of public utilities. (Vila v. Tahoe Southside Water Utility, 233 Cal.App.2d 469, 477, 43 Cal.Rptr. 654.) Thus, under Public Utilities Code, section 2106 the courts of this state are expressly granted jurisdiction to award both compensatory and (in a proper case) exemplary damages against a public utility for a loss, damage or injury resulting from any unlawful act or omission to perform a required act. (See Vila v. Tahoe Southside Water Utility, supra; and see Schultz v. Town of Lakeport, 5 Cal.2d 377, 383, 54 P.2d 1110, 55 P.2d 485, 108 A.L.R. 1168; Thompson v. San Francisco Gas, etc., Co., 18 Cal.App. 30, 34--35, 121 P. 937.) Accordingly, an aggrieved party may...