State ex rel. Mountain States Tel. & Tel. Co. v. District Court In and For Silver Bow, 12293

• Citation: 160 Mont. 443,503 P.2d 526
• Decision Date: 16 November 1972
• Docket Number: No. 12293,12293
• Parties: , 96 P.U.R.3d 520 The STATE of Montana ex rel. The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, Relator, v. The DISTRICT COURT OF the SECOND JUDICIAL DISTRICT of the State of Montana, IN AND FOR the COUNTY OF SILVER BOW, and The Hon. James D. Freebourn, Judge Presiding, Respondents.
• Court: Montana Supreme Court

Page 526

503 P.2d 526

160 Mont. 443, 96 P.U.R.3d 520

The STATE of Montana ex rel. The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, Relator, v. The DISTRICT COURT OF the SECOND JUDICIAL DISTRICT of the

State of Montana, IN AND FOR the COUNTY OF SILVER

BOW, and The Hon. James D. Freebourn,

Judge Presiding, Respondents.

No. 12293.

Supreme Court of Montana.

Submitted June 21, 1972.

Decided Nov. 16, 1972.

Hughes, Bennett & Cain, Alan Cain argued, Helena, for relator.

S. O. Meyer argued, Poore, McKenzie & Roth, James A. Poore, III, argued, Butte, for respondents.

DALY, Justice.

This is an original proceeding wherein relator, The Mountain States Telephone and Telegraph Company (hereinafter referred to as Mountain States), petitioned this Court for a writ of supervisory control directed to and requiring the respondent district court to grant Mountain States' motion for summary judgment in a civil action entitled: 'Mary Jane Davidson and John G. Davidson, Plaintiffs, vs. The Mountain States Telephone and Telegraph Company, Defendant.' Relator asked this Court to review the record of the district court in this action and its order denying relator summary judgment. The civil action seeks damages for omission of plaintiffs' listing and advertisement in defendant's telephone directory and its yellow pages.

This Court assumed jurisdiction, briefs were filed and oral argument had.

Plaintiffs Mary Jane Davidson and John G. Davidson assumed ownership and management of an existing ski shop in Butte. As a part of such ownership and management, they subscribed to a business telephone from Mountain States. In February 1971, plaintiffs were contacted by Mountain States and at that time they requested, in writing, that certain advertising be placed in the yellow pages, and further requested their listing in the white pages be in bold faced print.

In March 1971, Mountain States acknowledged the order and indicated the listings would be in the next issue of the telephone directory. Neither the 'white pages' listing nor the 'yellow pages' listing and advertisement appeared in the spring, 1971, Butte telephone directory.

Suit was brought by plaintiffs alleging negligent omission on the part of Mountain States, resulting in loss of profits and other damages to plaintiffs. Mountain States admitted the omission and admitted the listing should have been in both the white pages and yellow pages of its directory.

In their complaint, plaintiffs demanded damages in the amount of $7,990 for 'actual' damage to their business and $2,000 punitive damages. The punitive damage claim was stricken from the complaint by the respondent court on motion of Mountain States.

At the time of the pretrial conference Mountain States confessed judgment, however only in an amount limited by provisions which it contends are controlling. Mountain States then moved for summary judgment to enforce those limitations. The district court refused to grant summary judgment, and Mountain States now applies to this Court for an appropriate writ.

Mountain States contends that liability for omission in the white pages of its directory is limited by the limitation of liability contained in the General Exchange Tariff, published by the Montana Public Service Commission, and which states:

'3. The Telephone Company's liability arising from errors in or omissions of directory listings shall be limited to and satisfied by a refund not exceeding the amount of the charges for such of the subscriber's service as is affected during the period covered by the directory in which the error or omission occurs.'

Mountain States contends that under section 70-101 et seq., R.C.M.1947, it is required to file a schedule of its rates, tariffs, rules and regulations with the Montana Public Service Commission; that the Commission has complete authority to regulate all activities of the utility and pursuant to this authority requires Mountain States to publish a directory listing the names, addresses and phone numbers of its subscribers.

It further contends errors and omissions in listing are inevitable, despite the most exacting proofreading standards. Even if decreased business or sales can be shown by a business whose listing has been omitted, the problem of causation when the offended subscriber is a business enterprise would be a problem for courts. Businesses suffer fluctuations from year to year, mostly unexplained, making the determination of damage a complex problem. In addition, the telephone company's exposure to liability is one factor which determines the rates the company is permitted by the Public Service Commission to charge. If the company must litigate every case of error in, or omission of a listing, the telephone rates must necessarily rise to reflect this increase in costs. All this is in the area of its public service, properly regulated by the Public Service Commission.

Plaintiffs strongly question the authority of the Public Service Commission to act in the field of limitation of liability in this manner, as beyond its authority and an unconstitutional delegation of legislative powers, (Art. IV, Sec. 1, Montana Constitution), if the legislature has such power. Plaintiffs maintain the entire subject matter is governed by the Montana statutes on damages, sections 17-301 and 17-401, R.C.M.1947.

Plaintiffs cite Great Northern Utilities Co. v. Public Service Comm., 88 Mont. 180, 293 P. 294, (also cited by Mountain States as authority to regulate rates), as a demonstration of the fact that the authority to regulate rates in that case had to be 'inferred' from the statute. Therefore, they contend, the statutes never contemplated permitting the extension of authority of the Public Service Commission to limit liability for error or omission.

In a sense plaintiffs are correct in that in Great Northern Utilities the Court did rule that the statutes enacted in relation to the Public Service Commission did authorize rate making authority, but this was not as arbitrary or confined as the term 'inferred' might imply. Great Northern Utilities was a lengthy in depth discussion by Judge Leiper on utilities, the monopolistic aspect, public interest, statutory construction, legislative intent and much more. The Court either spoke directly or affirmed language from other jurisdictions and the federal courts in many areas. In regard to public utilities generally, the Court discussed and approved the principle of private property devoted to public use, as it differs from property used in business generally. This concept is based on the principle that property devoted to public use or a use in which the public has an interest, grants to the public an interest in the use which can be controlled by the public for the common good. This is done through the Public Service Commission in Montana and the Court further held that the Commission is required not only to regulate charges, but has a duty to see to reasonable service being rendered, among other regulatory functions.

This places the utility in a class of corporations strictly regulated in its rights and privileges and it therefore should be regulated, at least to the extent of its static known exposure to liabilities such as its directory omissions and errors when this function is required by the Commission, and at the very least indirectly involved in rate and service considerations.

The language of Great Northern Utilities is broad enough to include this function by the Commission. The Court there further observed that the utility and the public were adequately protected under the system of regulated monopoly control constitutionally, in as much as all permitted regulations or...