State ex rel. Utilities Commission v. National Merchandising Corp.

Decision Date17 December 1975
Docket NumberNo. 51,51
Citation220 S.E.2d 304,288 N.C. 715
CourtNorth Carolina Supreme Court
PartiesSTATE of North Carolina et rel. UTILITIES COMMISSION et al., Respondents, v. NATIONAL MERCHANDISING CORPORATION, Complainant.

Smith, Moore, Smith, Schell & Hunter by Bynum M. Hunter and Benjamin F. Davis, Jr., Greensboro, for complainant appellant.

Edward B. Hipp, Commission Atty., Maurice W. Horne, Deputy Commission Atty., and John R. Molm, Associate Commission Atty., Raleigh, for N.C. Utilities Commission.

Jerry W. Amos, Brooks, Pierce, McLendon, Humphrey & Leonard by James T. Williams, Jr., Greensboro, for North State Tel. Co., the Concord Tel. Co. and Lexington Tel. Co.

William C. Fleming, Durham, for Gen. Tel. Co. of the Southeast.

Taylor, Brinson & Aycock by William W. Aycock, Jr., Tarboro, for Carolina Tel. and Tel. Co.

Kimzey, Mackie & Smith by James M. Kimzey, Raleigh, for United Tel. Co. of the Carolinas, Inc.

A. Terry Wood, Hickory, for Cent. Tel. Co.

LAKE, Justice.

The complainant is not a public utility. G.S. 62--3(23). Consequently, its production in another state and distribution in North Carolina of plastic covers for telephone directories, even if not immune to State regulation by reason of the Commerce Clause of the Constitution of the United States, a question not now before us and which we do not decide, are not subject to regulation by the Utilities Commission. G.S. 62--2; G.S. 62--30; G.S. 62--31.

The order of the Commission from which the complainant appeals does not purport to require anything of the complainant or to prohibit or regulate any of the complainant's activities. The order leaves the complainant free to manufacture and distribute plastic covers for telephone directories and to print thereon advertising matter. What the order does is to require each telephone company operating in this State to file with the Commission a tariff declaring telephone directories, furnished to subscribers, to be the property of the telephone company and forbidding any person (i.e., the telephone subscriber) to attach to the directory any cover not furnished by the telephone company, with an exception not germane to this appeal, upon the pain of having such person's telephone service suspended. Thus, the order of the Commission is, ostensibly, directed against the telephone subscriber who has purchased, or otherwise acquired, from a source other than the telephone company itself, a cover for the telephone directory supplied to him by the telephone company. The order forbids the telephone subscriber to place this cover upon such directory even though the subscriber, after examining it, concludes that it is more attractive in appearance, or contains information more beneficial to him in his use of the telephone, than is or does the original cover of the directory. Such subscriber may retain such cover on his deak, table or telephone stand and use it as he sees fit so long as he does not attach it to the directory. If he does the latter, the telephone company is authorized, though not required, to discontinue telephone service to him.

The tariff of North State Telephone Company, against which the complaint of the complainant was directed, and which was previously in effect with the approval of the Commission, was to the same effect.

Although the tariffs in question leave the complainant free to manufacture and distribute its covers, their effect is, necessarily, to discourage telephone subscribers from placing such covers on the directories in their homes, offices and places of business. Thus, the tariffs discourage prospective advertisers from contracting with the complainant for the placing of their advertisements on the covers and, therefore, substantially handicap the complainant in carrying on its business. GS 62--73 provides that a complaint may be filed with the Utilities Commission 'by any person having an interest * * * in the subject matter of such complaint,' alleging that any 'rule, regulation or practice is unjust and unreasonable.' We think it clear that the complainant had and has the requisite interest in the original tariff of the company and in the rule so promulgated by the Commission and, therefore, had standing to file the complaint which initiated this proceeding. Consequently, the complainant has standing to prosecute this appeal. GS 62--92; GS 62--96.

Upon this appeal we may reverse the decision of the Commission and declare the said rule so promulgated by it to be null and void if the order of the Commission is in excess of its statutory authority or jurisdiction or is arbitrary or capricious. GS 62--94; Utilities Commission v. Telephone Co., 281 N.C. 318, 336, 189 S.E.2d 705; Utilities Commission v. Morgan, Attorney General, 277 N.C. 255, 267, 177 S.E.2d 405.

The Utilities Commission, being an administrative agency created by statute, has no regulatory authority except such as is conferred upon it by Ch. 62 of the General Statutes. Utilities Commission v. R.R., 268 N.C. 242, 245, 150 S.E.2d 386. Obviously, the Commission may not, by its order, require or authorize a rule or practice by a public utility company which is forbidden by statute, or authorize such company to refuse to perform a duty imposed upon it by statute, unless Ch. 62 of the General Statutes has conferred such authority upon the Commission.

The order of the Commission now before us purports to authorize a telephone company to discontinue telephone service to a subscriber who pays his telephone bills promptly and complies with every rule of the company except that he places upon the directory, furnished him by the company, a cover which, while in place, prevents him from looking at a picture, which the telephone company considers attractive, and prevents him from reading the name of the company, the names of the towns, telephone directories for which are included in the book, a suggestion that the subscriber consult the yellow pages and such other information about its service as the company may see fit to put on the original cover of the directory.

GS 62--140 requires a telephone company serving in this State to render telephone service, without discrimination, to all within its service area who apply therefor. Dale v. Morganton, 270 N.C. 567, 155 S.E.2d 136; Salisbury & S. Ry. Co. v. Power Co., 179 N.C. 18, 30, 101 S.E. 593, rehear. dism. 179 N.C. 330, 102 S.E. 625. A refusal by the company to serve without a reasonable justification therefor is a violation of the company's duty and the Commission has no authority to permit it. We are, therefore, brought to this question: It is reasonable for a telephone company to discontinue service to a subscriber for the sole reason that such subscriber elects to place an opaque cover upon the directory supplied to him by the company? We conclude that it is not.

No one requires the subscriber to place such cover on the directory. He does so solely because he, after observing all that appears on the original cover of the directory and what appears on the added cover, concludes that the appearance of the added cover is more attractive or the information contained thereon is more useful to him than that which appears on the original cover.

It is completely unrealistic to say that, having placed the added cover on the directory, the subscriber will no longer remember the name of his telephone company or the towns, telephone subscribers in which are listed in the directory, or that the directory contains a yellow page section. The fact that the book is actually composed of several directories, each relating to a separate town, does not mean necessarily that subscribers in such other towns may be called toll free. A subscriber having frequent occasion to call a person or persons in another town will remember that the directory for such other town is included within his book whether or not the original front page of the book is obscured by an added cover. If he does not, such information is readily obtained by him through the simple process of flipping quickly through the pages of the book.

It is equally unrealistic to attempt to justify such discontinuance of telephone service on the ground that the printing on the added cover of telephone numbers of the advertising customers of the producer of the cover is an infringement of the telephone company's copyright of its directory. It is entirely possible and probable that the producer of the cover obtained his information as to the telephone number of his advertising customer from such customer, not from reading the directory. In any, event, nothing in the record before us indicates that this was not the source of the complainant's information. Furthermore, the order in question does not prohibit the producer of the cover from printing thereon such telephone numbers or from distributing such cover to telephone subscribers, even if it be assumed that the Utilities Commission has jurisdiction to deal with a violation of the copyright law. What the order in question does is to declare that the telephone company may discontinue service to its subscriber solely because the subscriber sees fit to place a cover on the directory supplied to him for use in his home or place of business. We are cited to no authority holding this a violation of the copyright law.

We find no reasonable basis in the evidence contained in the record for the Commission's finding that the attachment of the added cover to the directory poses a serious threat to the quality of the telephone company's service. The mere assertion by officials of the various telephone companies testifying at the hearing that such threat to the quality of the service results from the attachment of the added cover is not evidence sufficient to support such a finding. The evidence is that the printed list of 'emergency numbers' and numbers for public institutions such as schools and churches, may include an occasional 'wrong...

To continue reading

Request your trial
12 cases
  • State ex rel. Utilities Commission v. Edmisten
    • United States
    • North Carolina Supreme Court
    • December 21, 1976
    ... ... Illinois Commerce Commission (1958), 13 Ill.2d 607, 150 N.E.2d 776; United Gas Corp. v. Mississippi Public Service Commission (1961), 240 Miss. 405, 127 So.2d 404; City of El Dorado ... Page 670 ... the Commission no authority. Utilities Commission v. Merchandising Co., 288 N.C. 715, 722, 220 S.E.2d 304 (1975); Electric Service v. City of Rocky Mount, 285 N.C ... ...
  • State v. Britt
    • United States
    • North Carolina Supreme Court
    • December 17, 1975
  • State ex rel. Utilities Commission v. Edmisten
    • United States
    • North Carolina Supreme Court
    • January 31, 1977
    ... ... It has no authority except the given to it by statute. Utilities Commission v. Merchandising Co., 288 N.C. 715, 722, 220 S.E.2d 304 (1975); Electric Service v. City of Rocky Mount, 285 N.C ... Peele v. Finch, 284 N.C. 375, 200 S.E.2d 635 (1973); Utilities Commission v. Membership Corp., 275 N.C. 250, 166 S.E.2d 663 (1969); Colonial Pipeline v. Clayton, 275 N.C. 215, 166 S.E.2d 671 ... ...
  • State ex rel. Utilities Commission v. Edmisten
    • United States
    • North Carolina Supreme Court
    • April 17, 1978
    ... ... Utilities Commission v. Merchandising Corp., 288 N.C. 715, 220 S.E.2d 304 (1975); Utilities Commission v. Telephone Co., 281 N.C. 318, ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT