Puget Sound Traction Light & Power Co. v. Reynolds

• Decision Date: 28 April 1915
• Docket Number: 60.
• Citation: 223 F. 371
• Court: U.S. District Court — Western District of Washington
• Parties: PUGET SOUND TRACTION, LIGHT & POWER CO. v. REYNOLDS et al.

223 F. 371

PUGET SOUND TRACTION, LIGHT & POWER CO. v. REYNOLDS et al.

No. 60.

United States District Court, W.D. Washington, Northern Division.

April 28, 1915

James B. Howe and Hugh A. Tait, both of Seattle, Wash., for plaintiff.

W. V Tanner and Scott Z. Henderson, both of Olympia, Wash., for defendants.

Before GILBERT, Circuit Judge, and RUDKIN and NETERER, District judges.

RUDKIN District Judge.

This suit was instituted by the plaintiff to restrain the defendants from enforcing an order of the Public Service Commission of the state of Washington. The plaintiff is a citizen of the state of Massachusetts, and the defendants are the Public Service Commissioners and the Attorney General of the state of Washington, and citizens of that state. The jurisdiction of this court is invoked on the ground of diversity of citizenship, and on the further ground that the order complained of impairs the obligation of certain contracts, and deprives the plaintiff of its property without due process of law, and denies to it the equal protection of the laws, in violation of the Constitution of the United States. The order is as follows:

'It is therefore ordered:

'(1) That the defendant company continue the operation of through service on the Ballard Beach line.

'(2) That the Alki Point and Fauntleroy Park lines be operated through the city of Seattle on First or avenue, as far north at least as Virginia street.

'(3) That the defendant company furnish sufficient cars to provide seats for substantially all persons using the Alki Point and Fauntleroy Park lines.

'It is understood that a substantial compliance shall be considered a sufficient compliance with this order directing the furnishing of seats for passengers on the Alki Point and Fauntleroy Park lines, the company not being required to provide for emergency crowds that might apply for seats, but shall provide seats at all times for the usual patronage of said lines, and shall so operate said lines at all times with sufficient cars to provide seats for all patrons, except on extraordinary and unusual occasions.'

A brief statement of the case, as presented at the hearing of the application for an interlocutory injunction, is necessary to a proper understanding of the requirements of this order and the objections urged against it:

The plaintiff owns and operates a street railway system in the city of Seattle, and is the assignee of numerous franchises for street railways heretofore granted to its predecessors in interest by the city of Seattle, the city of West Seattle, the city of Ballard, and King county. The Ballard Beach line, referred to in the order, is operated under Ordinance No. 1020 of the city of Ballard, entitled:

'An ordinance granting to the Seattle Electric Company, its successors and assigns, a franchise to construct, maintain and operate street railway extensions connecting with its present street railway system, and extending over certain parts of Railroad avenue and Fourth avenue, Crawford street and other streets, avenues and places in the city of Ballard.'

For some time prior to the promulgation of the order in question the cars operated on the Ballard Beach line ran beyond the franchise limit and into the business district of the city of Seattle; but immediately before the promulgation of the order this service was discontinued, and passengers were required to transfer to other lines at the end of the franchise limit of the Ballard Beach line in order to reach the downtown districts. The effect of the order was, therefore, to require the plaintiff company to reinstate the through service on the Ballard Beach line.

The Alki Point line and the Fauntleroy Park line, each about eight miles in length, are operated under franchises heretofore granted to the predecessors in interest of the plaintiff by the city of Seattle. The northerly limit of these franchises is at or south of Yesler Way. For a period of two or three years prior to the date of the order in question the cars operating on these two lines ran north or Yesler Way on First or Second avenue to Virginia street, a distance of approximately a mile. Shortly prior to the promulgation of the order this through service was discontinued, and passengers going north of Yesler Way were required to transfer to other cars at that point, and a like transfer was required at the same point by passengers going in the opposite direction. The effect of the order was, therefore, to compel the company to reinstate the through service over these two lines north of Yesler Way on First or Second avenue as far as Virginia street. The uncontradicted testimony further shows that the two latter lines ran for a considerable distance over the tide flats, receiving and discharging but few passengers en route, so that a majority of the passengers are carried a distance of five or six miles before leaving the cars or reaching their destination. For this reason, among others, these two lines have never paid operating expenses, and perhaps never will, because the average haul is so long that the more cars operated and the more passengers carried the greater will be the loss to the company. It further appears, without substantial contradiction, that for about two hours in the morning and two hours in the evening of each day the cars on these two lines are so crowded that from 30 to 40 per cent. of the passengers are compelled to stand up for a period of 30 minutes or more while the cars are traveling a distance of five or six miles.

The franchise ordinances of the city of Ballard and the city of Seattle under which the three lines in question are operated provide, in substance, that the grantee, its successors and assigns, shall have the right at any and all times to make reasonable rules and regulations for the management and operation of the railway lines therein provided for, not inconsistent with the laws of the state or the charter and ordinances of the city; that the grantee shall have the right to charge a passenger fare of not exceeding five cents for one continuous passage for each passenger; that the grantee shall keep on sale at its main office and power station in the city of Seattle commutation tickets for $1 each, entitling the purchaser to 25 rides, but such tickets shall not be transferable, nor entitle the owner to a transfer, and the company is authorized to make reasonable rules and regulations to enforce the prohibition against transfers.

The first contention on the part of the plaintiff is that the order compels it to carry passengers on the Alki Point and Fauntleroy lines beyond the franchise limits of these lines, and in effect compels it to grant transfers on commutation tickets, in violation of the contract contained in the franchise ordinances. The order itself is silent as to rates or fares, but for the purposes of this case we will assume that it has the effect claimed for it. We are unable to yield assent, however, to the proposition that these franchise ordinances create inviolable contracts between the municipality and the company protected by the contract clause of the federal Constitution. That a city ordinance may constitute a contract within the meaning of the Constitution is well settled; but it is equally well settled that a municipal corporation cannot barter away the police power of the state by unalterably fixing rates and fares during the life of a franchise, unless specifically and expressly authorized so to do by the supreme legislative authority in the state. Discussing this question in Home Telephone Co. v. Los Angeles, 211 U.S. 265, 272, 29 Sup.Ct. 50, 51 (53 L.Ed. 176), the court said:

'Did the city council have the power to enter into a contract fixing unalterably, during the term of the franchise, charges for telephone service, and disabling itself from exercising the charter power of regulation? If so, was such a contract in fact made? The first of these two questions calls for earlier consideration, for it is needless to consider whether a contract in fact was made until it is determined whether the authority to make the contract was vested in the city. The surrender, by contract, of a power of government, though in certain well-defined cases it may be made by legislative authority, is a very grave act, and the surrender itself, as well as the authority to make it, must be closely scrutinized. No other body than the supreme Legislature (in this case, the Legislature of the state) has the authority to make such a surrender, unless the authority is clearly delegated to it by the supreme Legislature. The general powers of a municipality, or of any other political subdivision of the state, are not sufficient. Specific authority for that purpose is required. This proposition is sustained by all the decisions of this court, which will be referred to hereafter, and we need not

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