Missouri Utilities Co. v. City of California

• Decision Date: 02 November 1934
• Docket Number: No. 622.,622.
• Citation: 8 F. Supp. 454
• Parties: MISSOURI UTILITIES CO. v. CITY OF CALIFORNIA, MO., et al.
• Court: U.S. District Court — Western District of Missouri

8 F. Supp. 454

MISSOURI UTILITIES CO. v. CITY OF CALIFORNIA, MO., et al.

No. 622.

District Court, W. D. Missouri, Central Division.

November 2, 1934.

COPYRIGHT MATERIAL OMITTED

Fordyce, White, Mayne & Williams, of St. Louis, Mo., for plaintiff.

L. P. Embry, of California, Mo., for defendants city of California and city officials.

Henry T. Hunt, of Washington, D. C., for defendant Harold L. Ickes, as Federal Emergency Administrator of Public Works.

Bowersock, Fizzell & Rhodes, of Kansas City, Mo., for defendant Fairbanks-Morse Const. Co.

A. Z. Patterson, D. C. Chastain, Cyrus Crane, Blatchford Downing, and Samuel W. Liske, all of Kansas City, Mo., amici curiæ.

OTIS, District Judge.

The matters under submission are motions of defendants to dismiss plaintiff's bill.

The facts alleged in and the theory of the bill are as follows:

The city of California is a Missouri municipal corporation. Its population in 1930 was 2,384. On October 30, 1933, an election was held in California to determine whether bonds in a total amount of $100,000 should be issued, the proceeds of which would be used for the construction of an electric lighting plant to be owned exclusively by the city. At the election, the proposal to issue bonds carried by the required majority. Thereafter the bonds were issued and were sold to the United States for $100,000. In addition to the purchase price paid to the city, the United States made a grant to the city of $35,000 to be used in the construction of the proposed electric lighting plant. The city then entered into a contract with Fairbanks-Morse Construction Company for the erection of the plant. Work had been begun and some progress made when the plaintiff filed its bill in this case.

The plaintiff, a Missouri corporation, is engaged in the business of manufacturing and selling electric power. It has an electric plant in California, and sells electric power there and in the surrounding territory. It is subject to regulation by, and has been regulated by, the Public Service Commission of Missouri, and, with the approval of the commission, has issued and sold securities. It has no franchise, exclusive or otherwise, from California, but it alleges that it has lawful and valid operating rights (being a certificate of convenience and necessity from the Public Service Commission) for the conducting of its electrical business in that city.

The plaintiff will be greatly damaged, so it is alleged, if the city of California is permitted to have constructed and to operate such an electric lighting plant as is proposed and as is now in process of construction. It will be damaged because it necessarily will lose some, and may lose all, of its business in that city. It may be damaged further in its business outside of California.

The prayer of the bill is that the city of California, its officers, and the Fairbanks-Morse Construction Company, all defendants, be enjoined from constructing the proposed electric lighting plant with any money paid for its bonds by the United States or granted to it by the United States.

The theory of the bill is that the United States has no power under the Constitution to buy bonds or to grant money for the purpose of enabling a municipality to construct a municipal lighting plant, and that the direct result of its so doing in this case will be to deprive plaintiff of its property without due process of law in violation of the Fifth and Fourteenth Amendments and to subject it to illegal competition.

In addition to the defendants originally named in the bill, Harold L. Ickes, Secretary of the Interior, as Federal Emergency Administrator of Public Works, upon his application, has been made a party defendant. He has filed a motion to dismiss the bill. The other defendants have filed a similar motion. The motions in substance and language are identical. They challenge the bill on the grounds: (1) That no federal question is involved; (2) that the facts alleged do not entitle the plaintiff to equitable relief; and (3) that the bill shows on its face such laches in the plaintiff as to defeat its right, if otherwise existing, to any equitable relief.

The contention of laches may be dismissed at once. Whatever may be the real facts, laches cannot be predicated upon the facts alleged. With this contention dismissed from further consideration, I conceive that the real questions here are these: (1) In purchasing the bonds issued by the city of California and in making a grant of money to that city, did the Administrator of Public Works act within the authority purported to be conferred upon him by any act of Congress? (2) If any act of Congress conferred on the Administrator the authority exercised by him, was that act within the constitutional power of Congress? (3) If the second of these questions is answered in the negative, is the plaintiff so directly affected that it may raise the question of constitutionality in this court? (4) Is the plaintiff entitled to equitable relief upon any theory?

The Administrator Acted Within the Scope of His Authority.

1. On July 16, 1933, the President approved the National Industrial Recovery Act. 48 Stat. 195. In title 2 of that act (40 USCA § 401 et seq.), the President was authorized to create a Federal Emergency Administrator of Public Works. Section 201 (a), 40 USCA § 401 (a). It is the duty of the Administrator, under the direction of the President, to prepare a comprehensive program of public works. Section 202, 40 USCA § 402. The President is authorized, through the Administrator, to finance, or aid in the financing of and to make grants for, the construction of any public works project included in the program referred to in section 202, among which is the construction of "publicly owned instrumentalities and facilities." Section 203 (a), 40 USCA § 403 (a). An appropriation of $3,300,000,000 is made for the purposes of the act. Section 220, 40 USCA § 411.

Such is a brief outline of the pertinent provisions of title 2. To indicate that what the Administrator did in connection with the financing of the construction of the proposed municipal lighting plant in the city of California was within the terms and provisions of the act, it is enough to show that that is a public works project within the meaning of the act. That it is such a project scarcely is controvertible. Certainly, when constructed, it will be a "publicly owned instrumentality and facility."

Power of Congress.

2. What the Administrator did Congress authorized him to do, but did Congress have the power so to authorize him? That question now will be considered.

The question should be stated as exactly as may be. Endeavoring to do that, we have: In such a national emergency as the present period of economic depression has been and is, one of the aspects of which emergency is the unemployment of millions of men and women, and on that account privation and suffering among them and a consequent grave danger of widespread unrest, in such a national emergency does the Congress have the power to appropriate money from the Treasury of the United States, for the purpose of relieving unemployment, to be used in financing the construction of such public works as electric lighting plants in and by municipalities? Is that power to be found in any of the provisions of the supreme law of the land, the Federal Constitution, which rules alike the President, the Congress, and the courts?

Those who have studied the history of this nation know that the Constitution came into being in a period filled with dangers threatening the destruction of the republic. The gravity of the situation caused by those then threatening dangers greatly was magnified by the pitiful weakness of the federal government under the Articles of Confederation. To prevent the evils which certainly soon would have ensued, it was necessary that a strong and powerful national government be provided, a government capable of dealing effectively with dangers which had threatened, were then threatening, and might thereafter threaten, the United States as a sovereign and independent nation. Provision for such a government is of the very essence of that Constitution which was established and ordained to form a more perfect union, to establish justice, to insure domestic tranquility, to provide for the common defense, to promote the general welfare, and to secure to the American people the blessings of liberty. The people of the United States in their Constitution gave power to their government that in their interest it could preserve the nation against whatever might endanger its continued existence, and they denied it any power to take away from the individual citizen any of his inalienable rights. Those who have studied the history of this nation know these facts.

Those who have studied the history of the world as well as those who are familiar only with contemporaneous events throughout the world know that the existence of a nation may be imperiled by foreign aggression not only, by civil war not only, it may be imperiled, it may be destroyed utterly, by the unreasoning rage of masses, a rage aroused by hunger, by want in every form, by a sense of injustice, a rage stirred up alike by sincere and honest, as well as by villainous, leaders. It is a rage which does not analyze, which does not discriminate. It is not content with driving the money changers from the temple; it destroys the temple itself.

Every one should know that in general economic distress is possibility of grave danger to the established order. The political branches of government, that is, the executive and legislative branches, must guard and protect the national existence, if it is to be done at all, and that they can do only through the enactment and enforcement of laws. It is for them to decide whether a situation has arisen which endangers the existence or general welfare of the nation; it is for them to decide what measures shall be...