Rowe v. Chesapeake and Potomac Telephone Co. of Maryland

• Decision Date: 13 October 1983
• Docket Number: No. 1871,1871
• Citation: 56 Md.App. 23,466 A.2d 538
• Parties: Richard ROWE et al. v. The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF MARYLAND et al.
• Court: Court of Special Appeals of Maryland

Page 23

56 Md.App. 23

466 A.2d 538

Richard ROWE et al. v. The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF MARYLAND et al.

No. 1871.

Court of Special Appeals of Maryland.

Oct. 13, 1983.

Robin Ficker, Bethesda, for appellants.

James P. Garland, Baltimore, with whom were Bruce E. Alexander, Semmes, Bowen & Semmes, J. William Sarver and Robert J. Hallock, Baltimore, on brief, for appellees.

Argued before LISS, ADKINS and GETTY, JJ.

LISS, Judge.

On November 24, 1982, the Chesapeake and Potomac Telephone Company, appellee herein, filed a suit naming Montgomery County, its County Executive, its Chief Administrative Officer and its Director of Finance as respondents. In its suit the appellee sought a declaratory judgment declaring that Section 313 A of the Montgomery County Charter, as amended and adopted in the general election in 1982, was unconstitutional, illegal and null and void. The appellee further sought a permanent injunction to restrain Montgomery County and its officials from adopting, implementing or enforcing Section 313 A as amended.

The Chesapeake and Potomac Telephone Company also prayed for preliminary injunction naming the same respondents and requesting the same injunctive relief until the underlying petition for declaratory judgment had been heard and decided on its merits. Each of the respondents in the underlying suit consented to the issuance of the interlocutory injunction and is not a party to this appeal.

Section 313 A as approved by a majority of the voters at the election in November of 1982 provided as follows:

The County Government may not purchase and contract for goods and services with The C & P Telephone Company (C & P) unless C & P includes telephone subscribers in Gaithersburg, Maryland and Montgomery Village in the Washington Metropolitan Area Telephone Exchange (MET) at local rates no higher than local rates charged MET subscribers in Bethesda, Silver Spring, Kensington and Rockville telephone exchange areas.

On December 6, 1982, Richard Rowe and Chester Roy Julian, individual taxpayers and residents respectively of Gaithersburg and Montgomery Village, both located in Montgomery County, together with Delegate Robin Ficker, a member of the Maryland Legislature, filed a motion to intervene as respondents in both the underlying case and in the case involving the petition for interlocutory injunction. After a hearing the presiding judge granted Rowe and Julian permission to intervene but denied permission to Ficker on the basis of a lack of standing. No issue has been raised in this appeal as to the correctness of the order denying Ficker the right to intervene.

A hearing was held on the issue of the petition for preliminary injunction, memoranda were filed, and counsel were heard. At the conclusion of the hearing the presiding judge made findings of fact and granted the prayer for preliminary injunction as permitted by Maryland Rule BB 70. c.

The court made the following findings:

1. The Complainant has standing to bring this action and this Court has jurisdiction of the subject matter of the controversy and of the persons of the Respondents.

2. Complainant will suffer serious immediate irreparable injury if the adoption, implementation, enforcement or other carrying out of the provisions of Proposed Amended Section 313 A of the Montgomery County Charter is not enjoined pending determination of this matter on the merits, and, as to such injury Complainant has no adequate remedy at law.

3. The damage to Complainant will be greater if injunctive relief is not granted pendente lite than would be any conceivable damage to Respondents if such relief is not granted.

4. There is a likelihood that Complainant will prevail on the merits of its allegations that Proposed Amended Section 313 A is unconstitutional and illegal.

The intervenor/appellants have filed an answer to the bill of complaint but have not moved the circuit court to modify or dissolve the interlocutory injunction as permitted by Maryland Rule BB 79. Rowe and Julian, as appellants, have appealed the granting of the interlocutory injunction.

They raise the following questions to be determined by this appeal:

I. Was the circuit court clearly erroneous in finding

(a) the "balance of convenience" favored granting the injunction; or

(b) the appellee would suffer irreparable injury if the injunction were not granted; or

(c) the appellee is likely to succeed on the merits?

II. Whether the circuit court properly exercised its discretion in granting the preliminary injunction?

I. (a)

This controversy had its roots in a proceeding before the Public Service Commission of Maryland. Robin Ficker, counsel for the appellants, had appeared before the Commission representing a number of his constituents with a petition requesting that a portion of the Gaithersburg telephone exchange be transferred to the Rockville zone of the Washington Metropolitan Exchange area (hereafter MET). If the transfer had been approved, the affected customers would thereafter have been permitted to make toll-free calls to all zones in MET without the payment of a surcharge. The Commission, after a hearing, concluded the requested transfer was neither necessary nor warranted and issued its order as follows:

We note that approval of such a charge would increase the revenue burden on the Company's customers statewide by approximately $3,000,000, and in balancing the competing interests involved, we conclude that the requested transfer of part of the Gaithersburg exchange should not be accepted at this proceeding.

[Public Service Commission Order No. 65714, Case No. 7591 at 73 (March 14, 1982) ].

Appellants concede that Article 78 of the Maryland Code (1957, 1980 Repl.Vol.) provides the "comprehensive and detailed administrative machinery for the regulation of public utilities throughout the State," including telephone companies. See Spintman v. C & P Telephone Company, 254 Md. 423, 255 A.2d 304 (1969). The statutory scheme established by Article 78, § 68 authorizes the Public Service Commission of Maryland to establish rates for public service companies and prohibits companies from giving unreasonable preferences or discriminating against localities with respect to services rendered. See Maryland Code, Article 78, § 26. It is admitted by appellants that a charter county, whether by ordinance or charter amendment, may not interfere with this statutory scheme or require a telephone company to offer particular service or rates to a locality within its borders. Cf., City of Crisfield v. Chesapeake & Potomac Tel. Co. of Baltimore City, 131 Md. 444, 102 A. 751 (1917). In spite of these admissions and concessions, however, the appellants did not appeal the order of the Commission issued on March 14, 1982. Appellants had simultaneously, with their petition to the Public Service Commission, begun a petition drive to place Charter Amendment 313 A on the ballot for submission to the voters at the next election and were successful in obtaining the necessary number of signatures of registered voters. In what they obviously regard as a triumph of the democratic process over recalcitrant bureaucrats, the proposed amendment received 55% of the votes cast and the amendment to Montgomery County's charter was approved.

Appellants ingenuously concede in their brief that the obvious intent of the measure is to influence or induce the telephone company to offer MET rates and services to the Gaithersburg area.

Appellants argue that the trial court erred in granting the preliminary injunction in this case and in finding that the "balance of convenience" favored the granting of the injunction. Appellants concede that the granting of a preliminary injunction is a matter resting in the sound discretion of the court.

The Court of Appeals, in State Department of Health and Mental Hygiene v. Baltimore County, 281 Md. 548, 554, 383 A.2d 51 (1977), mentioned the "balance of convenience" doctrine without explicating the elements of the test to be applied. However, the United States Court of Appeals for the 4th Circuit noted in Federal Leasing, Inc. v. Underwriters at Lloyds, 650 F.2d 495, 499 n. 4 (1981), that the test under Maryland and Federal law is essentially the same, i.e., the benefits to the plaintiff must be equal to or outweigh the potential harm which the defendant may incur if the injunction is granted.

The trial judge had before her at the time she granted the preliminary injunction information from which she could have concluded that if Section 313 A were implemented, essential communication services to and from police, fire, ambulance, water, sanitation and other vital county services would have been required to be terminated or in the alternative the Chesapeake and Potomac Telephone Company would have been required to adopt a rate structure implicitly prohibited by the Public Service Commission, the regulatory body vested with the sole authority to determine its rates. The effect on both emergency and non-emergency service of the County government would have been chaotic. It is not surprising, therefore, that the responsible officials of the County not only did not object to the issuance of the preliminary injunction but actually consented to its entry. Weighed on the scales with the benefits of Section 313 A to the ratepayers in Gaithersburg, it is obvious to us that the circuit court was not clearly erroneous when it issued its preliminary injunction before the case had been heard on its merits. Appellants argue that the "balance of convenience" should be weighted in their favor because the issuance of the preliminary injunction has resulted in the Gaithersburg and Montgomery Village ratepayers being required to pay approximately eleven dollars a month in surcharges because of the refusal of the appellee to include these areas in the MET area.

It seems clear to us that the trial court had before it at the time it considered the request for a...