Opinion of the Justices

• Court: United States State Supreme Judicial Court of Massachusetts
• Citation: 328 Mass. 679,106 N.E.2d 259
• Parties: OPINION OF THE JUSTICES.
• Decision Date: 30 April 1952

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106 N.E.2d 259 328 Mass. 679 OPINION OF THE JUSTICES. Supreme Judicial Court of Massachusetts. April 30, 1952.

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To the Honorable the House of Representatives of the Commonwealth of Massachusetts:

The Justices of the Supreme Judicial Court respectfully submit these answers to the questions set forth in an order adopted by the House on March 20, 1952, and transmitted to the Justices on March 27. A copy of the order is attached hereto, together with a copy of that portion of the annual report of the department of public utilities for the year 1951 which contains drafts for legislative action and is known as House No. 85, and a copy of a pending bill printed as House No. 86, both of which were transmitted to us with the order.

[328 Mass. 680] The questions are these:

'1. May the General Court constitutionally enact legislation providing that the Supreme Judicial Court could not in any case arising under section 5 of chapter 25 of the General Laws hear any evidence?

'2. May the General Court constitutionally enact legislation providing that the Supreme Judicial Court could not hear any evidence if the case involved the question of confiscation of property?

'3. May the General Court constitutionally enact legislation providing that the Supreme Judicial Court could not hear any evidence if the case did not include the question of confiscation of property?

'4. Would said bill, House, No. 86, if enacted into law be violative of the Fourteenth Amendment to the Constitution of the United States?

'5. Would said bill, House, No. 86, if enacted into law be violative of any other provision of the federal constitution?

'6. Would said bill, House, No. 86, be constitutional if enacted into law?'

Section 5 of c. 25 of the General Laws, to which reference is made in the first question, appears also as section 5 of c. 25 of the Tercentenary Edition. It is the section which governs the review by this court of rulings or orders of the department of public utilities. The portions of the section material to the questions read as follows:

'When so requested by any party interested, the commission [of the department], or any member or members acting for the commission, shall rule upon any question of substantive law properly arising in the course of any proceedings before the commission or any member or members thereof, and any party in interest aggrieved by such ruling may object thereto, and may secure a review thereof as hereinafter provided. * * *

'The supreme judicial court shall have jurisdiction in equity to review, modify, amend or annul any ruling or [328 Mass. 681] order of the commission, or of any member or members representing the commission, but only to the extent of the unlawfulness of such ruling or order.'

For reasons which will presently be stated, this section has been interpreted by this court, as applied to rate cases where confiscation of property is claimed, to include

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a review of the issue of confiscation by this court upon its own independent judgment as to both law and facts. Lowell Gas Co. v. Department of Public Utilities, 324 Mass. 80, 88, 84 N.E.2d 811; New England Telephone & Telegraph Co. v. Department of Public Utilities, 327 Mass. 81, 85-86, 97 N.E.2d 509. See Boston Consolidated Gas Co. v. Department of Public Utilities, 327 Mass. 103, 105-106, 97 N.E.2d 521. The primary purpose of the questions seems to be to ascertain whether the method of reviewing facts can constitutionally be controlled by legislation in the manner proposed.

In its order the House refers to three statements by this court contained in two of the decisions just cited. In Lowell Gas Co. v. Department of Public Utilities, 324 Mass. 80 at page 88, 84 N.E.2d 811, at page 816, this court said, 'It must, therefore, be taken to be the law of this Commonwealth, not often stated, to be sure, but nevertheless unanimously, that the Declaration of Rights guarantees to an owner, who alleges that confiscation of his property will result from a rate order of the department, a fair opportunity for submitting that issue to a court for determination upon its own independent judgment as to both law and facts, and that G.L. (Ter.Ed.) c. 25, § 5, affords him a remedy adequate to enforce that right.' And again this court said, 324 Mass. at page 89, 84 N.E.2d at page 817, 'Our conclusion means that inquiry here on the issue of confiscation is not confined to the findings of the department or to the evidence introduced before the department.' In New England Telephone & Telegraph Co. v. Department of Public Utilities, 327 Mass. 81, at page 85, 97 N.E.2d 509, at page 512, this court said, 'It is elementary that the fixing of rates is not a proper judicial function. On the other hand, where a rate established by a public regulatory body is attacked as confiscatory the [328 Mass. 682] Constitution of this Commonwealth and seemingly still that of the United States require that there be a full opportunity for judicial review as to both fact and law.'

For a proper understanding of our answers to the questions transmitted it will be advisable to say a word as to the origin and history of the propositions embodied in the three foregoing statements.

The Supreme Court of the United States has often said that, in all cases where there is an order, legislative in character, prescribing a complete schedule of maximum future rates, 'if the owner claims confiscation of his property will result, the state must provide a fair opportunity for submitting that issue to a judicial tribunal for determination upon its own independent judgment as to both law and facts; otherwise the order is void because in conflict with the due process clause, Fourteenth Amendment.' Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S. 287, at page 289, 40 S.Ct. 527, 528, 64 L.Ed. 908.

The expression of the Supreme Court of the United States in the Ben Avon case was the culmination of a long development which began almost as soon as the regulation of railroad rates became a matter of serious national concern. Thus as early as the Railroad Commission Cases [Stone v. Farmers' Loan & Trust Co.], 116 U.S. 307, 6 S.Ct. 334, 29 L.Ed. 636, decided in 1886, the court held that the 'power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense of regulating fares and freights, the state cannot require a railroad corporation to carry persons or property without reward; neither can it do that which in law amounts to a taking of private property for public use without just compensation, or without due process of law.' 116 U.S. at page 331, 6 S.Ct. at page 345, 29 L.Ed. 636. Only four years later in Chicago, Milwaukee & St. Paul Railway v. Minnesota, 134 U.S. 418, at page 457, 10 S.Ct. 462, 466, 702, 33 L.Ed. 970, in declaring unconstitutional a statute which attempted to make final the decision of a commission as to the reasonableness of rates, the court said, 'It [the statute] deprives the company of its right to a judicial investigation, by due process of law, under the forms and with the machinery provided by the wisdom [328 Mass. 683] of successive ages for the investigation judicially of the truth of a matter in controversy, and substitutes therefor, as an absolute finality, the action

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of a railroad commission which, in view of the powers conceded to it by the state court, cannot be regarded as clothed with judicial functions or possessing the machinery of a court of justice.' The result of the case is that the final determination of the fact of confiscation is a judicial question. The quotation from the Ben Avon case, decided in 1920, is a rephrasing of what had been, in substance, decided at least thirty years before. The doctrine of that case and others in accord with it was reaffirmed by a majority of the court in St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, at page 52, 56 S.Ct. 720, 80 L.Ed. 1033. These cases have been cited and followed many times. Their doctrine has been frequently criticized, largely in dissenting opinions. We have not thought it necessary to prolong this opinion by citing the numerous cases on the subject both before and after the leading Ben Avon and St. Joseph cases. Some of them, but by no means all, are cited in Lowell Gas Co. v. Department of Public Utilities, 324 Mass. at pages 86-89, 84 N.E.2d 811.

Notwithstanding the criticism of these two Supreme Court decisions, and notwithstanding assertions from various apparently competent sources that they are no longer law, we have not been able to discover when and where they have been overruled. One writer announces that the doctrine of these cases has 'gradually died,' because of subsequent decisions inconsistent with it. ¹ Davis, Administrative Law, § 255, at page 919. Perhaps so, but we would prefer to see the death certificate. The doctrine was not regarded as dead in 1947 by the Court of Appeals of New York in Staten Island Edison Corp. v. Maltbie, 296 N.Y. 374, 381-382, 73 N.E.2d 705, 8 A.L.R.2d 825; nor in 1948 by a court of three Federal judges in Atlantic Coast Line Railroad v. Public Service Commission of South Carolina, D.C., 77 F.Supp. 675, 680-681; nor, in 1948, apparently, by the United States Court of Appeals for the [328 Mass. 684] Seventh Circuit, in Pittsburgh Steamship Co. v. Brown, 171 F.2d 175; nor in 1948 by a Federal district judge in Pichotta v. Skagway, D.C., 78 F.Supp. 999, 1004; nor by several State courts in decisions rendered subsequent to some of the decisions of the Supreme Court of the United States by which it is said that the doctrine was overruled. Georgia Public Service Commission v. Atlanta Gas Light Co., 205 Ga. 863, 876, 55 S.E.2d 618; Public Service Commission v. Indianapolis Railways, Inc., 225 Ind. 30, 39, 72 N.E.2d 434; State v. Department of Public Service of Washington, 19 Wash.2d 200, 218, 142 P.2d 498. It...