Oklahoma Gas Electric Co v. Oklahoma Packing Co 8212 1934

Citation292 U.S. 386,54 S.Ct. 732,78 L.Ed. 1318
Decision Date21 May 1934
Docket NumberNo. 832,832
PartiesOKLAHOMA GAS & ELECTRIC CO. et al. v. OKLAHOMA PACKING CO. et al. Argued May 3—4, 1934
CourtU.S. Supreme Court

Appeal from the District Court of the United States for the Western District of Oklahoma.

Messrs. Robert M. Rainey, of Oklahoma City, Okl., I. J. Underwood, of Tulsa, Okl., and Streeter B. Flynn, of Oklahoma City, Okl., for appellants.

Messrs. W. R. Brown, of Chicago, Ill., and Fred Hansen, of Oklahoma City, Okl., for appellees.

Mr. Justice STONE delivered the opinion of the Court.

This is an appeal under section 266 of the Judicial Code (28 USCA § 380) from a decree of the District Court for Western Oklahoma, three judges sitting, which dismissed the cause for want of equity jurisdiction. 6 F.Supp. 893. The suit was brought by Oklahoma Natural Gas Company and Oklahoma Gas & Electric Company, two public service companies, against appellees, Wilson & Co., Inc., now Oklahoma Packing Company, a private business corporation, the State Corporation Commission, and the Attorney General of the state, to enjoin enforcement of an order of the commission. The order, which directed the Oklahoma Natural Gas Company to supply Wilson & Company with natural gas at a prescribed rate, was assailed as an infringement of the due process and contract clauses of the Federal Constitution on the ground that it imposed on the gas company a duty to serve which it had never undertaken to perform, and impaired a contract between the two gas companies with respect to the distribution of gas by them to consumers in the vicinity of the plant of Wilson & Co. The order, which was made upon petition of Wilson & Co. to the state commission, directed that the Oklahoma Natural Gas Company be required to supply it with gas at a lower rate than it had been paying for gas supplied by the Oklahoma Gas & Electric Company which that company purchased from the Natural Gas Company for distribution.

On appeal, the state Supreme Court affirmed the order. 146 Okl. 272, 288 P. 316. Pending the appeal, supersedeas bonds were given which suspended the order and Wilson & Co. continued to take its gas supply from the Oklahoma Gas & Electric Company at the higher rate. In the meantime, while the petition to review the order was pending before the state Supreme Court, and before the present suit was brought, the Oklahoma Natural Gas Company acquired the properties of the Oklahoma Gas & Electric Company, and a new industrial rate for natural gas supplied by it was put into effect by order of the commission.

Upon affirmance by the state Supreme Court of the commission's earlier order, Wilson & Co. brought suit in the state district court, joining as defendants the Oklahoma Gas & Electric Company and the sureties on the supersedeas bonds, to recover the amount paid for gas in excess of the rate prescribed by the earlier order of the commission. That suit was defended upon the ground, among others, of the constitutional invalidity of the order. Judgment was given for Wilson & Co., from which an appeal was taken and is now pending in he state Supreme Court.

Following this judgment, the present suit was brought upon a bill of complaint which set up the invalidity of the order, alleged that the action of the state Supreme Court in affirming it was legislative, not judicial, see Oklahoma Gas & Electric Co. v. Wilson & Company, Inc. (C.C.A.) 54 F.(2d) 596, and prayed an injunction restraining appellees from taking any steps to enforce it. The court below construed this as asking both that the state officers be enjoined from enforcing the order and that Wilson & Co. be restrained from prosecuting its pending suit in the state courts to recover the excess payments for gas. Upon the trial, the court below made its finding, not assailed here, that no penalties could be imposed for noncompliance with the challenged order, as it had been suspended by supersedeas in the proceedings to review it before the Supreme Court of Oklahoma, and while they were pending it had become inoperative by reason of the order of the commission establishing the new rate. It found that 'there is no suggestion in the record of any intention on the part of any of the officials of Oklahoma to undertake to impose any statutory penalties for failure to comply with the order.' The court concluded that there was no basis for relief by injunction against state officials, and that the only issue left in the case was the right asserted by appellees to enjoin prosecution of the suit of Wilson & Co. in the state courts, and that, as the alleged invalidity of the commission's order had been interposed as a defense in that suit and had been passed upon by the state court, there was no occasion for relief by a federal court of equity.

The appellants insist here, as they did below, that the District Court of Oklahoma is without jurisdiction to pass upon the issue of the invalidity of the order, since by section 20, art. 9, of the state Constitution, exclusive jurisdiction to review or set aside an order of the commission is conferred on the state Supreme Court. See Pioneer Tel. & Tel. Company v. State, 40 Okl. 417, 138 P. 1033. We are asked on this appeal to sustain the equity jurisdiction of the three-judge court to restrain the prosecution of the suit at law in the state courts, upon the ground that appellants are without adequate legal remedy to protect themselves from the exactions of the unconstitutional order.

By section 266 of the Judicial Code (28 USCA § 380), suits, in which an interlocutory injunction is sought and pressed, to restrain any state officer from enforcing or executing a state statute or an order of a state commission, on the ground of its unconstitutionality, are required to be tried before a court of three judges. The section provides that 'a direct appeal to the Supreme Court may be taken from a final decree granting or denying a permanent injunction in such suit.' Our jurisdiction to hear the present appeal is challenged, and, as this is the only provision authorizing the appeal to this Court, it is necessary at the outset to determine whether this is 'such suit.'

The procedure prescribed by section 266 may be invoked only if the suit is one to restrain the action of state officers. Ex parte Public National Bank, 278 U.S. 101, 49 S.Ct. 43, 73 L.Ed. 202; Ex parte Collins, 277 U.S. 565, 48 S.Ct. 585, 72 L.Ed. 990. That this condition is vital is sufficiently indicated by reference to the part played by Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A.(N.S.) 932, 14 Ann.Cas. 764, in inducing enactment of the section.1 Hence the cause of action alleged against Wilson & Co., although within the jurisdiction of the District Court, is subject to this extraordinary procedure, and appealable directly to this Court, if at all only because it is incidental to the relief prayed against the state officers. See Pittsburgh & West Virginia Ry. Co. v. United States, 281 U.S. 479, 50 S.Ct. 378, 74 L.Ed. 980. Whether it is so incidental we need not inquire, for we conclude that the cas against the state officers was not one within the appellate jurisdiction conferred upon this Court by section 266 so as to bring either that case or its incidents before us for decision. Compare Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 53 S.Ct. 549, 77 L.Ed. 1062; Clark v. Wooster, 119 U.S....

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