Home Telephone Telegraph Company v. City of Los Angeles

• Decision Date: 24 February 1913
• Docket Number: No. 610,610
• Parties: HOME TELEPHONE & TELEGRAPH COMPANY, Appt., v. CITY OF LOS ANGELES et al
• Court: U.S. Supreme Court

227 U.S. 278

33 S.Ct. 312

57 L.Ed. 510

HOME TELEPHONE & TELEGRAPH COMPANY, Appt.,

v CITY OF LOS ANGELES et al.

No. 610.

Submitted October 28, 1912.

Decided February 24, 1913.

Mr. James A. Gibson for appellant.

Messrs. John W. Shenk and George E. Cryer for appellees.

[Argument of Counsel from page 279 intentionally omitted] Mr. Chief Justice White delivered the opinion of the court:

The appellant, a California corporation furnishing telephone service in the city of Los Angeles, sued the city and certain of its officials to prevent the putting into effect of a city ordinance establishing telephone rates for the year commencing July 1, 1911.

It was alleged that by the Constitution and laws of the state the city was given a right to fix telephone rates, and had passed the assailed ordinance in the exercise of the general authority thus conferred. It was charged that the rates fixed were so unreasonably low that their enforcement would bring about the confiscation of the property of the corporation, and hence the ordinance was repugnant to the due process clause of the 14th Amendment. The averments as to the confiscatory character of the rates were as ample as they could possibly have been made. The charge of confiscation was supported by statements as to the value of the property, and the sum which might reasonably be expected from the business upon the application of the rates assailed. The confiscatory character of the rates, it was moreover alleged, had been demonstrated by the putting into effect during the previous year of rates of the same amount as those assailed, which it was charged the corporation, at great sacrifice, had, after protest, submitted to in order to afford a practical illustration of the confiscation which would result.

Being of the opinion that no jurisdiction was disclosed by the bill, the court refused to grant a restraining order or allow a preliminary injunction, and thereafter, on the filing of a formal plea to the jurisdiction the bill was dismissed for want of power as a Federal court to consider it. This direct appeal was then taken.

The plea to the jurisdiction was a follows:

'. . . that this court ought not to take jurisdiction of this suit, for that the said suit does not really or substantially involve a dispute or controversy properly within the jurisdiction of this court, forasmuch as the Constitution of the state of California, in article 1, § 13 thereof, provides that 'no person shall be . . . deprived of life, liberty, or property without due process of law;' that this complainant, a citizen of the state of California, has never invoked the aid or protection of its said state to prevent the alleged taking of its prop- erty, nor has complainant appealed to the courts of said state, nor to any of them, to enforce the law of said state.'

The ground of challenge to the jurisdiction advanced by the plea may be thus stated: As the acts of the state officials (the city government) complained of were alleged to be wanting in due process of law, and therefore repugnant to the 14th Amendment,—a ground which, on the face of the bill, if well founded, also presumptively caused the action complained of to be repugnant to the due-process clause of the state Constitution,—there being no diversity of citizenship, there was no Federal jurisdiction. In other words, the plea asserted that where, in a given case, taking the facts averred to be true, the acts of state officials violated the Constitution of the United States, and likewise, because of the coincidence of a state constitutional prohibition, were presumptively repugnant to the state Constitution, such acts could not be treated as acts of the state within the 14th Amendment, and hence no power existed in a Federal court to consider the subject until, by final action of an appropriate state court, it was decided that such acts were authorized by the state, and were therefore not repugnant to the state Constitution. There is no room for doubt that it was upon this interpretation of the plea that the court held it had no power as a Federal court. The court said:

'It is true that the bill in the present case alleges that, if the ordinance complained of 'is enforced, and your complainant thereby prevented from charging and receiving higher rates than the rates fixed by said ordinance, the state of California will thereby deprive your complainant of its property without due process of law, etc. This charge, however, that the ordinance complained of is state action, is but a legal conclusion, while the facts alleged are, that the ordinance, if confiscatory, as shown by the bill, is directly prohibited by the Constitution of the state, which, in article 1, § 13, expressly provides, among other things:

'No person shall . . . be deprived of life, liberty, or property without due process of law.

'Thus, the case at bar comes within the rulings of the circuit court of appeals in the Seattle and San Francisco cases, and is precisely covered by the conclusions of the court in the latter case as follows: "What we hold is that the averments of the bill itself exclude the case from the cognizance of the Federal court as a case arising under the Constitution of the United States by alleging that the very ordinances which the appellees relied upon as constituting a violation of its contracts have been enacted in violation of the positive law of the state."

It is true that in passages of the opinion subsequent to those just quoted there are forms of expression which, when separated from their context, might tend to justify the inference that the court thought city ordinances of the character of the one assailed could not, in any event, be treated as state action. But when the passages referred to are considered in connection with the context of the opinion, it is certain that those expressions were but a reiteration in a changed form of statement of the previous ground; that is to say, that state action could not be predicated upon the ordinance because, if it was treated as repugnant to the due-process clause of the Constitution of the United States, it would also have to be considered as in conflict with the state Constitution. Under this hypothesis the decision was that it could not be assumed that the state had authorized its officers to do acts in violation of the state Constitution until the court of last resort of the state had determined that such acts were authorized.

Coming to consider the real significance of this doctrine, we think it is so clearly in conflict with the decisions of this court as to leave no doubt that plain error was committed in announcing and applying it. In view, however, of the fact that the proposition was sanctioned by the court below, and was by it deemed to be supported by the persuasive authority of two opinions of the circuit court of appeals for the ninth circuit, before coming to consider the decided cases we analyze some of the conceptions upon which the proposition must rest, in order to show its inherent unsoundness, to make its destructive character manifest, and to indicate its departure from the substantially unanimous view which has prevailed from the beginning.

In the first place, the proposition addresses itself not to the mere distribution of the judicial power granted by the Constitution, but substantially denies the existence of power under the Constitution over the subject with which the proposition is concerned. It follows that the limitation which it imposes would be beyond possible correction by legislation. Its restriction would, moreover, attach to the exercise of Federal judicial power under all circumstances, whether the issue concerned original jurisdiction or arose in the course of a controversy to which otherwise jurisdiction would extend. Thus, being applicable equally to all Federal courts, under all circumstances, in every stage of a proceeding, the enforcement of the doctrine would hence render impossible the performance of the duty with which the Federal courts are charged under the Constitution. Such paralysis would inevitably ensue, since the consequence would be that, at least in every case where there was a coincidence between a national safeguard or prohibition and a state one, the power of the Federal court to afford protection to a claim of right under the Constitution of the United States, as against the action of a state or its officers, would depend on the ultimate determination of the state courts, and would therefore require a stay of all action to await such determination. While this would be obviously true as to cases where there was a coincident constitutional guaranty, in reason it is clear that the principle, if sound, could not be confined to a case of coincident Federal and state guaranty or prohibition, since, as the Constitution of the United States is the paramount law, as much applicable to states or their officers as to others, it would come to pass that in every case where action of a state officer was complained of as violating the Constitution of the United States, the Federal courts, in any form of procedure, or in any stage of the controversy, would have to await the determination of a state court as to the operation of the Constitution of the United States. It is manifest that, in necessary operation, the doctrine which was sustained would, in substance, cause the state courts to become the primary source for applying and enforcing the constitution of the United States in all cases covered by the 14th Amendment.

It would certainly be open to controversy if the proposition were carried to its logical result, whether the only right under the 14th Amendment, which the proposition admits, to exert Federal judicial power growing out of wrongful acts of state officers, would not be unavailing. This naturally suggests itself, since, if there be no right to exert such power until, by the final action of a state court of last resort, the act...