Metropolitan Edison Co. v. FEDERAL POWER COM'N.

• Decision Date: 27 January 1938
• Docket Number: No. 6447.,6447.
• Citation: 94 F.2d 943
• Parties: METROPOLITAN EDISON CO. et al. v. FEDERAL POWER COMMISSION.
• Court: U.S. Court of Appeals — Third Circuit

94 F.2d 943 (1938)

METROPOLITAN EDISON CO. et al. v. FEDERAL POWER COMMISSION.

No. 6447.

Circuit Court of Appeals, Third Circuit.

January 27, 1938.

Walter Biddle Saul, Saul, Ewing, Remick & Saul, all of Philadelphia, Pa., and Travis, Brownback & Paxson, of New York City, for petitioners.

Dozier A. DeVane, Oswald Ryan, and Lambert McAllister, all of Washington, D. C., for respondent.

Before BUFFINGTON, DAVIS, and BIGGS, Circuit Judges.

DAVIS, Circuit Judge.

The Public Service Commission of Pennsylvania instituted an inquiry and investigation into certain contracts and working arrangements which the petitioners and four other Pennsylvania corporations had with third parties. These other four corporations were not electric light or power companies. They were a bus company, a gas company, a water company, and a street railway company and have now been dropped from these proceedings. The Pennsylvania Public Service Commission, hereinafter called the Pennsylvania Commission, desired certain information in its investigation of the petitioners but could not secure it under the laws of Pennsylvania. The Governor and the Pennsylvania Commission called upon the Federal Power Commission, hereinafter called the Federal Commission, for assistance in securing the desired information. Thereupon the Federal Commission began an investigation of the petitioners in an effort to secure the information for use by the Pennsylvania Commission in its local or state problems.

Pursuant to its undertaking, the Federal Commission on January 6, 1936, made an "Order of Inquiry and Investigation of" the petitioners, the purpose of which was, the petitioners allege, to aid the Pennsylvania Commission in enforcing local law in regulating local affairs. The petitioners filed answers to this order of January 6, 1936, challenging the jurisdiction and power of the Federal Commission to make the order.

Investigators or "accounting representatives" furnished the Federal Commission by the Pennsylvania Commission, made an accounting and report to the Federal Commission which thereupon made another order on January 26, 1937, directing the petitioners and thirty-three other companies to appear before it on March 3, 1937, in the Federal Commission's hearing room in Washington, D. C., for a hearing "to ascertain and determine all facts, conditions, practices and matters regarding the ownership, operation, management and control of said respondents or either of them; all contracts and working arrangements between said respondents and any person who controls, directly or indirectly, said respondents or who is controlled by any such person, and all expenditures and obligations incurred thereunder that in any way affect or relate to the business of said respondents or either of them," etc.

The petitioners believing themselves aggrieved by the order, on February 23, 1937, petitioned the Federal Commission for a rehearing as provided in section 313 of the Federal Power act, 16 U.S.C.A. § 825l, as a prerequisite for a court review. The petitioners raised two questions for the determination of the Federal Commission. They said that: (1) The Federal Commission did not have power to conduct an investigation for the sole purpose of supplying information to a state commission for use in a proceeding designed to impose penalties under local law; and (2) the Federal Commission did not have jurisdiction over three of the petitioners because they operated entirely within the Commonwealth of Pennsylvania having no transmission lines, no interstate connections, transacting no business in interstate commerce and were not a "public utility" within the meaning of the Federal Power Act.

The day after the petition for rehearing was filed, the Federal Commission adjourned the hearing set for March 3, 1937, without day.

On March 24, 1937, the Federal Commission notified the petitioners that it had "granted the petition for rehearing * * * and assigned the matters involved in this proceeding for hearing in the hearing room of the Commission in Washington, D. C., on April 14, 1937 at 10 A. M."

At the rehearing the petitioners offered evidence to show that three of them were not "public utilities" as defined by the Federal Power Act and that the purpose of the inquiry and investigation was to supply information to the Pennsylvania Commission for use in local proceedings designed to impose penalties under local, state law.

These were the only issues of fact raised by the petition and the evidence of the petitioners. The Federal Commission, the petitioners allege, at the conclusion of the evidence of the petitioners over their vigorous objection, introduced evidence relating to the entire subject-matter of the orders of January 6, 1936, and January 26, 1937, and in no way limited to the issues raised by the petition. They charge that the Federal Commission was continuing its investigation under the guise of conducting a rehearing for the purpose of determining the issues raised by the petition; that evidence was offered, for example, to show payments to various companies as far back as 1928, expenses incurred by petitioners in opposing the Wheeler-Rayburn Bill; charges for stationery and supplies; to show whether or not a foreign corporation (not one of the petitioners) was properly domesticated in Pennsylvania; the contents of minute books of foreign corporations other than the petitioners; what constitutes sound accounting practice; the business relations of persons other than petitioners with companies not claimed to be related to them in any way, etc.

They contend that the evidence introduced to establish these and other facts relates to the subject-matter of the orders for the investigation of the petitioners and not to the issues raised in the petition for rehearing.

After the Federal Commission refused to change its course, a petition was filed in this court praying for an injunction to restrain the Federal Commission from thus continuing its investigation until it had determined the issues raised in the petition. The petitioners say that if the Commission is not restrained from continuing the investigation under the guise of a rehearing, the questions raised in the petition will be moot when the rehearing is completed and this court will be deprived of its appellate jurisdiction.

The Federal Commission says that:

1. This court does not have jurisdiction to review the Federal Commission's order of January 26, 1937; and,

2. If it does have such jurisdiction, the course pursued by the Federal Commission on the rehearing, if continued, was not such as to destroy the appellate jurisdiction of the court.

The Federal Commission contends that the so-called order of January 26, 1937, is really not an "order" but the mere notice of a hearing coupled with a subpœna duces tecum.

If this contention is true, the "Order of Inquiry and Investigation of Metropolitan Edison Company et al.," made on January 6, 1936, was a mere notice, for that one and the one of January 26, 1937, are both called "order." Both begin and end in the same manner. After the declaratory parts, both orders continue with the mandate, "Now, therefore, it is ordered"; in the one case, "That an investigation be and the same is hereby instituted," and in the other, "That a hearing be held," etc. In both orders the petitioners are required to do definite things and to submit themselves to the further direction of the Federal Commission. The order has all the affirmative characteristics of a genuine order of the Federal Commission as we think it was intended to be, and constrained the petitioners to obedience at the risk of suffering severe penalties, civil and criminal, imposed by sections 315 and 316 of the act, 16 U.S.C.A. §§ 825n, 825o.

The next technical question raised by the Federal Commission is that this order was not a final order and in consequence was not reviewable.

Section 313(a) of the act, 16 U.S.C.A. § 825l(a), provides that: "Any person, State, municipality, or State commission aggrieved by an order issued by the Commission in a proceeding under this Act chapter to which such person, State, municipality, or State commission is a party may apply for a rehearing within thirty days after the issuance of such order. * * * No proceeding to review any order of the Commission shall be brought by any person unless such person shall have made application to the Commission for a rehearing thereon."

In order to preserve the right to a rehearing, it is necessary that application therefor shall be made within thirty days after the order was made and no proceeding to review it shall be brought unless application for a rehearing has been made. Implicit in this provision is the right to a review of "any order," final or interlocutory, by which any person is aggrieved if he makes application for a rehearing within thirty days.

Coming to the merits of the case, when the petition was filed and granted it was the plain duty of the Federal Commission to determine the issues raised in the petition. We are going to remand the case for such determination. In doing so the evidence admitted should be strictly confined to the two issues raised in the petition and not extended to the scope of the investigation proposed in the orders of January 6, 1936, and January 26, 1937. The relation of the evidence to the two questions involved should be apparent and logical and not farfetched and remotely inferential. Some of the evidence admitted when the case was before the Federal Commission on rehearing was not relevant and material. If both sides will seek to produce only such evidence as is clearly admissible, we venture to hope that the determination of the issues will be speedy, final and satisfactory.

In remanding the case, we express no opinion on the merits of the questions to be decided. The determination of them is for the Federal Commission under relevant and competent evidence. The act has provided a...