People of State of New York New York Queens Gas Co v. Call

• Decision Date: 10 December 1917
• Docket Number: No. 407,407
• Citation: 62 L.Ed. 337,245 U.S. 345,38 S.Ct. 122
• Parties: PEOPLE OF STATE OF NEW YORK ex rel. NEW YORK & QUEENS GAS CO. v. McCALL et al., Public Service Commission of New York for First District
• Court: U.S. Supreme Court

245 U.S. 345

38 S.Ct. 122

62 L.Ed. 337

PEOPLE OF STATE OF NEW YORK ex rel. NEW YORK & QUEENS GAS CO.

v McCALL et al., Public Service Commission of New York for First District.

No. 407.

Argued Nov. 6 and 7, 1917.

Decided Dec. 10, 1917.

Mr. John A. Garver, of New York City, for plaintiff in error.

Messrs. Godfrey Goldmark and George S. Coleman, both of New York City, for defendants in error.

Mr. Justice CLARKE delivered the opinion of the Court.

It sufficiently appearing that the Court of Appeals retained practical control over the record and judgment in this case, while the motion for reargument in that court was pending, the motion to dismiss the writ of error on the ground that the application for it came too late, will be denied, and the case will be disposed of upon its merits.

The Public Service Commission of the State of New York for the First District ordered the New York & Queens Gas Company to extend its gas mains and service pipes in such a manner as would be 'required reasonably to serve with gas' the community known as Douglaston, including Douglas Manor, which was located about a mile and a half beyond the then terminus of the company's gas mains, but within the Third ward of the borough of Queens, city of New York.

When this order of the Public Service Commission was reviewed by the Supreme Court at the Appellate Division, that court assumed that it had authority to review generally the reasonableness of the order of the Public Service Commission, and upon such review found the order unreasonable and annulled it. 171 App. Div. 580, 157 N. Y. Supp. 707.

From the decision of the Appellate Division an appeal was taken to the Court of Appeals, which reversed that decision (219 N. Y. 84, 113 N. E. 795, Ann. Cas. 1916E, 1042), and held that the Appellate Division had no power under the New York law to substitute its own judgment for the determination of the Public Service Commission as to what was reasonable, under the circumstances of the case. The case is now in this court for review of the judgment entered upon the decision of the Court of Appeals and it is presented upon a single assignment of error, viz.:

'That the order of the Public Service Commission * * * was illegal and void in that it deprived the Gas Company of its property with out due process of law and denied to it the equal protection of the laws, in violation of the Fourteenth Amendment to the Constitution of the United States, in requiring the company to extend its distributing system under great physical difficulties and at enormous expense to an independent and remote community which the company was under no present duty to supply with gas when it appeared that the Gas Company would not obtain an adequate return from the expenditure required to make such extension.'

More compactly stated, this assignment of error is, that the order deprived the gas company of its property without due process of law, because obedience to it would require an expenditure of money upon which the prospective earnings would not provide an adequate return.

The Court of Appeals of New York decided that the Public Service Commission was created to perform the important function of supervising and regulating the business of public service corporations; that the state law assumes that the experience of the members of the Commission especially fits them for dealing with the problems presented by the duties and activities of such corporations; that the courts in reviewing the action of the Commission have no authority to substitute their judgment as to what is reasonable in a given case for that of the Commission, but are limited to determining whether the action complained of was capricious or arbitrary and for this reason unlawful; and that it was clearly within the power of the Commission to make the order which is here assailed.

This interpretation of the statutes of New York is conclusive, and the definition, thus announced, of the power of the courts of that state to review the decision of the Public Service Commission, based as it is in part on the decision in Interstate Commerce Commission v. Illinois Central R. R. Co., 215 U. S. 452, 470, 30 Sup. Ct. 155, 54 L. Ed. 280, differs but slightly, if at all, from the definition by this court of its own power to review the decisions of similar administrative bodies, arrived at in many cases in which such decisions have been under examination. Typical cases are: Baltimore & Ohio R. R. Co. v. Pitcairn Coal Co., 215 U. S. 481-494, 30 Sup. Ct. 164, 54 L. Ed. 292; Kansas City Southern Co. v. United States, 231 U. S. 423, 443, 444, 34 Sup. Ct. 125, 58 L. Ed. 296, 52 L. R. A. (N. S.) 1; Louisiana R. R. Commission v. Cumberland Tel. & Tel. Co., 212 U. S. 414, 420-422, 29 Sup. Ct. 357, 53...