General Telephone Co. of Southwest v. Lowe
| Citation | 569 S.W.2d 71,263 Ark. 727 |
| Decision Date | 26 June 1978 |
| Docket Number | No. 78-18,78-18 |
| Parties | GENERAL TELEPHONE COMPANY OF the SOUTHWEST, Appellant, v. Lynn LOWE, Appellee. |
| Court | Supreme Court of Arkansas |
Spitzberg, Mitchell & Hays, Little Rock, Ward W. Wueste, San Angelo, Tex., for appellant.
Joe E. Griffin, Texarkana, amicus curiae.
Stephen Cuffman, Little Rock, amicus curiae.
Autrey, Weisenberger, Lingo & Johnson, Texarkana, for appellee.
For many years the telephone rates on both sides of the Arkansas-Texas line in Texarkana were the same. In May, 1977, the appellant, which serves a number of cities and towns in Arkansas and Texas, raised its rates in Texarkana, Arkansas, without raising its rates in Texarkana, Texas. The appellee brought this class suit to enjoin the enforcement of the rate increase in Texarkana, Arkansas. This appeal is from a decree permitting the company to collect its former rates on the Arkansas side, but enjoining the collection of the increase until a similar increase has been put into effect on the Texas side. For reversal the telephone company contends that it is entitled to collect the increase regardless of the rates across the state line.
The continuous equality of telephone rates throughout the cities of Texarkana was the result of there having been in the franchises granted by each city a provision similar to the following paragraph, which we quote from the most recent franchise granted by Texarkana, Arkansas:
Notwithstanding any other section or provision hereof, it is specifically agreed that the Grantee shall never charge a higher rate for telephone services within the City of Texarkana, Arkansas, than is charged for the same or similar services in the City of Texarkana, Texas, and the Grantee waives all rights it may have or claims which are inconsistent with this section.
The appellant argues that the above provision was nullified by Act 164 of 1977, which took away the authority of cities and towns in Arkansas to regulate utility rates. Ark.Stat.Ann. §§ 73-202a and -202b (Supp.1977).
The background of the 1977 statute is pertinent. Under Act 324 of 1935 cities and towns on the one hand and the Public Service Commission (then the Department of Public Utilities) on the other exercised concurrent jurisdiction in fixing utility rates in municipalities. Ark.Stat.Ann. § 73-208(e). The same statute, in subsection (f), provided that neither the act nor the Department (Commission) nor any court should deprive a municipality of benefits accruing to it under any franchise to which it was a party. Under the 1935 statute it was this appellant's practice, at least as far back as 1950, not to put into effect on the Arkansas side any rate increase granted by the Public Service Commission or by the city until the increase had also been approved on the Texas side.
In February, 1976, the company applied to the Commission for a general rate increase to be effective in all the 49 cities and towns served by the company in Arkansas. The Commission conducted a hearing on the application in December, 1976. Before the Commission reached its decision the legislature adopted Act 164, Supra, effective February 14, 1977, vesting exclusive rate- making jurisdiction in the Commission. Section 5 of Act 164 maintained the status quo generally by providing that existing utility rates should not be affected until changed by order of the Commission.
The appellant did not in any way bring Act 164 to the Commission's attention. In April, after the passage of the act in February, the Commission handed down its decision granting the company an increase in rates not exceeding $1,325,528 annually. The company was directed to submit schedules designed to put the increase into effect. The company promptly submitted such schedules, still with no mention of Act 164. The Commission approved the schedules, which divided the various cities and towns into seven classifications according to the number of telephones in use. Texarkana, Arkansas, was put in Class V, but the city was not singled out for...
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