Illinois Bell Telephone Co. v. Smith

• Decision Date: 01 July 1927
• Docket Number: No. 3746.,3746.
• Citation: 39 F.2d 157
• Parties: ILLINOIS BELL TELEPHONE CO. v. SMITH et al.
• Court: U.S. District Court — Northern District of Illinois

39 F.2d 157

ILLINOIS BELL TELEPHONE CO. v. SMITH et al.

No. 3746.

District Court, N. D. Illinois, E. D.

July 1, 1927.

Charles S. Cutting, of Chicago, Ill., Phillip Barton Warren, of Springfield, Ill., and William D. Bangs and Horace Kent Tenney, both of Chicago, Ill., for plaintiff.

Oscar E. Carlstrom, Atty. Gen., of Illinois, for defendant.

Samuel Ettelson, Simon Herr, Benjamin F. Goldstein, Edmund D. Adcock, and George I. Haight, all of Chicago, Ill., for intervenor City of Chicago.

Before EVANS and PAGE, Circuit Judges, and WILKERSON, District Judge.

PER CURIAM.

Plaintiff has moved for a permanent injunction on the pleadings. This is on the assumption that the record affirmatively discloses a prejudicial error made by the Illinois commerce commission and which error appears in finding nine of the commission's order of August 16, 1923. Upon the assumption of this error, plaintiff argues that the order must be enjoined regardless of whether the rate fixed is just or not. In support of this contention, it cites and relies upon Wichita Railroad & Light Co. v. Public Utilities Commission of State of Kansas et al., 260 U. S. 48, 43 S. Ct. 51, 55, 67 L. Ed. 124.

In that case, the court held the order of the commission to be void because it did not contain a finding of fact, necessary under the Kansas statute to the validity of the order. It seems to us that the force of the entire decision is summed up in the single sentence, "When, therefore, such an administrative agency is required as a condition precedent to an order, to make a finding of facts, the validity of the order must rest upon the needed finding. If it is lacking, the order is ineffective."

Our case is entirely different. The Illinois commerce commission heard the evidence and made findings. It is the contention of plaintiffs that it can, and has, demonstrated that the commission erred. But did its error result in a confiscatory rate? That is the question. Plaintiff's bill recites facts which indicate, and the allegation is directly made, that such rates are confiscatory. The answer denies the charge. Defendants, in their ninth paragraph, say:

"This defendant denies that the rates and charges prescribed by the order of the Illinois Commerce Commission will not afford the plaintiff a fair return upon the fair value at the time of use of its property used or useful in and exclusively devoted to intrastate telephone service in the City of Chicago and denies that such rates and charges are confiscatory and denies that they are not fair and reasonable rates. This defendant further denies, on information and belief, that said rates and charges, if permitted to become effective, will reduce the amount available for the return of the plaintiff by not less than the sum of $1,700,000 per annum, and in this connection this defendant says that it is impossible to predict in advance that for any length of time, if at all, the revenues of plaintiff will be reduced if said order of the Commission is allowed to become effective; that it is to be expected that if the rates for the four classes of service covered by said order, are permitted to go into effect, the telephone subscribers enjoying said classes of service will increase their use thereof and that this increased use will produce for the plaintiff a revenue nearly, if not equal, to that at present enjoyed by it from those classes of telephone users. And this defendant further answering denies that said rates and charges, if enforced, will deprive plaintiff of its property without due process of law, or will deny to plaintiff the equal protection of the laws in violation of its rights under the Fourteenth Amendment of the Constitution of the United States."

In other ways and places defendants deny material facts alleged in the plaintiff's bill.

Plaintiff very clearly and concisely stated its position thus:

"We contend that if an order of the commission is void for want of a required finding, or if the facts found by the commission in its order show conclusively and affirmatively that the order is void, as a matter of law the order must be enjoined."

Accepting for the purpose of this argument the correctness of this position, controversy immediately arises as to its application.

Obviously there is no "want of a required finding," and this ground of attack upon the order can be definitely and promptly eliminated. We must therefore direct our attention to the query, do the facts found by the commission in its order show conclusively and affirmatively that the order is void as a matter of law? The answer to this query necessitates an examination of the findings and finding sixteen is herewith set forth verbatim.

"(16)...