Southern Bell Telephone & Telegraph Co., Inc. v. Louisiana Public Service Commission

• Decision Date: 15 October 1935
• Docket Number: 33416
• Citation: 164 So. 786,183 La. 741
• Parties: SOUTHERN BELL TELEPHONE & TELEGRAPH CO., Inc., v. LOUISIANA PUBLIC SERVICE COMMISSION
• Court: Louisiana Supreme Court

164 So. 786

183 La. 741

SOUTHERN BELL TELEPHONE & TELEGRAPH CO., Inc., v. LOUISIANA PUBLIC SERVICE COMMISSION

No. 33416

Supreme Court of Louisiana

October 15, 1935

Rehearing Denied December 2, 1935

Appeal from Nineteenth District Court, Parish of East Baton Rouge W. Carruth Jones, Judge.

Proceeding by the Southern Bell Telephone & Telegraph Company, Inc. against the Louisiana Public Service Commission. From the judgment, plaintiff appeals, and defendant files an answer to the appeal.

Affirmed and remanded, with directions.

C. C. Bird, Jr., of Baton Rouge, E. D. Smith, of Atlanta, Ga., and J. C. Henriques, of New Orleans, for appellant.

Huey P. Long and Peyton R. Sandoz, both of Baton Rouge, for appellee.

HIGGINS Justice. O'NIELL, C. J., ROGERS, J., Justice (concurring in part and dissenting in part).

OPINION

HIGGINS, Justice.

On December 7, 1934, the Louisiana Public Service Commission, on its own motion, issued a citation to the plaintiff telephone company, to show cause on December 13, 1934, why an inquiry into its rates, charges, and practices in the state of Louisiana should not be made.

In reply to the citation and rule, plaintiff filed certain exceptions and an answer. On December 13, 1934, the hearing was started, and plaintiff introduced testimony and exhibits. The case was continued for further hearing until January 24, 1935, at which time plaintiff offered additional testimony and exhibits. The matter was again continued until February 25, 1935, when the commission offered certain testimony and exhibits, and the plaintiff also produced further testimony and exhibits. The case was then closed and the matter taken under advisement by the three commissioners.

On March 2, 1935, the commission rendered its order No. 1530, wherein the plaintiff was ordered to fix its rates, charges, and tariffs, as set forth in the schedule attached to and made a part of the order, which was to become effective on that date. The order reduced the rates to be paid by the subscribers in various amounts ranging from approximately 50 cents to $ 1 per month for each subscriber, thereby reducing the plaintiff's income from intrastate exchange rates in the state of Louisiana approximately $ 600,000 per annum.

On March 8, 1935, plaintiff, acting under the provisions of the Constitution of this state, and particularly section 5 of article 6, filed this proceeding in the Nineteenth judicial district court of Louisiana in and for the parish of East Baton Rouge, the domicile of the Louisiana Public Service Commission, praying that the order be declared null, void, and of no effect for the reason that it was unreasonable, arbitrary, and confiscatory, and in violation of the Constitution of the state of Louisiana and of the Constitution of the United States, particularly the Fourteenth Amendment thereof. It further prayed for the issuance of a temporary restraining order against the enforcement of the rates fixed by the defendant commission, upon furnishing proper bond, and asked that a rule issue directing the commission to show cause on a day and hour to be fixed by the court, why an interlocutory injunction should not issue as authorized by the provisions of the Constitution of this state. On the same day, the district judge granted a temporary restraining order, enjoining the enforcement of the order of the commission upon furnishing bond in the sum of $ 75,000 with good and solvent surety, and he further ordered that the rule for an interlocutory injunction be made returnable on March 18, 1935.

Plaintiff furnished a bond with the United States Fidelity & Guaranty Company of Maryland, as surety, containing a clause whereby the surety obligated itself to pay all such judgments as might be rendered against the plaintiff for damages and costs "in case it be decreed that the restraining order applied for was wrongfully issued."

The defendant commission, in its return to the rule to show cause why an interlocutory injunction should not be issued, pleaded that the petition did not state a right or cause of action for such relief; that the order of the commission was legal and the rates fixed therein were fair and reasonable; and "that the restraining order should be set aside and defendant granted attorney's fees in the sum of $ 20,000 for damages done by reason of the necessity for employing an attorney herein." The defendant also filed an answer to the merits of plaintiff's lengthy petition setting forth fully various reasons why the order of the commission should be declared valid by the court, and in reconvention asked the court for attorney's fees in the sum of $ 20,000 for the purpose of having the temporary restraining order rescinded and recalled.

The rule was heard before the trial judge on March 18, 1935, and the matter taken under advisement until March 21, 1935, when he rendered a decision and written opinion dissolving the temporary restraining order, refusing the application for interlocutory injunction, and recalling the rule nisi.

On March 21, 1935, plaintiff filed motions for a suspensive appeal and a devolutive appeal, which were granted and made returnable on March 29, 1935. On the following day, the original order of appeal was recalled and the plaintiff granted only a devolutive appeal.

On March 21, 1935, and simultaneously with the filing of the motions for the appeals, plaintiff served notice upon the trial judge and the defendant commission that it would apply to this court for writs of certiorari, mandamus, and prohibition for the purpose of having the judgment of the district court reviewed. On April 2, 1935, we refused to grant the writs on the ground that the trial court had a discretion in granting or refusing to grant temporary restraining orders and interlocutory injunctions, and that the plaintiff had failed to show that the trial judge had abused his discretion.

On April 12, 1935, the defendant commission made application to this court for a writ of certiorari, which we denied for the reason that the remedy for the dismissal of an appeal was to either apply to the district court for the recision of the order of appeal, or, if the appeal had been perfected, to file a motion in this court forthe dismissal thereof.

Upon proper motion, the case was set for a special preference hearing in this court on June 6, 1935. The defendant commission promptly filed an answer to the appeal praying that the judgment of the district court be amended so as to allow $ 20,000 attorney's fees for the dissolution of the restraining order, in accordance with the return of the defendant commission to the plaintiff's rule in the district court, and that in all other respects the judgment below be affirmed.

Plaintiff contends that it is entitled to an interlocutory injunction on either of the following grounds:

(1) That the overwhelming preponderance of the evidence shows that the commission abused its authority and arbitrarily reduced the rates so extremely low that they are palpably and manifestly unreasonable, unfair, and confiscatory.

(2) That, even though the court might hold on the merits that the new rates are fair and reasonable and that the plaintiff will obtain a fair return on its investment therefrom, plaintiff is entitled to an interlocutory injunction to maintain the status quo pending a determination of the case on its merits, because it will suffer irreparable injury in being unable to collect from subscribers the difference between the two rates, if the court, on the merits, decides the case in its favor, whereas, the subscribers can be adequately protected against any loss by the court requiring a sufficient bond guaranteeing the return of the difference between the two rates, should the court decide against the company on the merits.

It is conceded by both parties litigant that the case is not before us on the merits, but solely and only on appeal from the judgment of the district court, refusing to grant the interlocutory injunction.

The first ground urged here by the plaintiff as the basis for its statement that the trial court erred in refusing to grant the interlocutory injunction necessitated our reading the very large record consisting of testimony, affidavits, and exhibits.

This issue is so interwoven with the question presented on the merits of the case that it is difficult, if not impossible, to give our views in detail with reference to the ten errors assigned by the plaintiff without committing ourselves upon the merits of the controversy to the prejudice of one or both of the parties to this proceeding. We are not required to go that far, nor is it necessary to do so. City of Louisville v. Louisville Home Tel. Co. (C.C.A.) 279 F. 949, 956; City of Owensboro v. Cumberland Co. (C.C.A.) 174 F. 739, 747 and Allen v. Omaha Co. (C.C.A.) 275 F. 1-3.

The law is clear that the burden is upon the plaintiff to show that the commission reduced the rates to such an extent that it is patent and obvious that the company will be unable to realize a fair and just return upon its investment. The plaintiff must also demonstrate that the trial judge abused his discretion in refusing the interlocutory injunction. Section 5, article 6, Constitution of Louisiana of 1921.

In interpreting this paragraph, in the case of Standard Oil Co. v. Louisiana Public Service Commission, 154 La. 557, at page 566, 97 So. 859, 862, we said:

"The first paragraph of section 5 declares that orders affecting rates, tolls, etc., shall go into effect at such time as may be fixed by the Commission, and remain in effect until set aside by the Commission, or the final judgment of a court of competent jurisdiction; provided, that if irreparable injury is shown, a temporary restraining order, to remain in...