Tennyson v. Gas Service Co.
| Decision Date | 26 November 1974 |
| Docket Number | No. 73-1930,73-1930 |
| Citation | 506 F.2d 1135 |
| Parties | Wade TENNYSON et al., Plaintiffs-Appellants, v. GAS SERVICE COMPANY, and Kansas Gas and Electric Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Michael D. Gragert, Wichita, Kan. (Thomas A. Wood, Wichita, Kan., on the brief), for plaintiffs-appellants.
Donal D. Guffey, Kansas City, Mo. (Richard C. Byrd, Ottawa, Kan., on the brief), for defendant-appellee Gas Service Co.
Robert A. Vohs, Wichita, Kan. (Ralph B. Foster, Wichita, Kan., on the brief), for defendant-appellee Kansas Gas and Elec. Co.
Before HILL and DOYLE, Circuit Judges, and TALBOT SMITH, * Senior District Judge.
The action before us was brought February 21, 1973 under the Civil Rights Act of 1871, 42 U.S.C. 1983. It was brought as a class action and relates to the so-called 'late charge assessments' made by defendants Gas Service Compny and Kansas Gas and Electric Company (hereinafter K.G. & E.). These late charge assessments impose an additional charge upon certain customers for failure to pay the amount due on the regular billing within a specified number of days. Plaintiffs alleged that such practice violates due process of law, that it is violative of their equal protection and that the late charges imposed are 'usurious interest.' 1 they sought declaratory and injunctive relief, as well as an accounting and money damages.
The defendants moved the court to dismiss the action on the ground that 28 U.S.C. 1342 (the Johnson Act) removed the court's jurisdiction in the premises. In addition, defendant Gas Service cited as grounds for its motion that the complaint did not state a claim under the Civil Rights Act and, moreover, that plaintiffs had failed to join an indispensable party, the Kansas Corporation Commission. The plaintiffs, in turn, moved the court 'to dismiss the Defendants' Motions to Dismiss.' Both sides supported their motions with voluminous materials thought to be supportive of their respective positions. The trial court, following (with some reluctance) our holding in General Investment and Service Corp. v. Wichita Water Co., 236 F.2d 464 (10th Cir. 1956) granted the defendants' motions to dismiss upon the ground that its jurisdiction was precluded by the terms of the Johnson Act. We agree.
The Johnson Act provides:
The district courts shall not enjoin, suspend or restrain the operation of, or compliance with, any order affecting rates chargeable by a public utility and made by a State administrative agency or a rate-making body of a State political subdivision, where:
(4) A plain, speedy and efficient remedy may be had in the courts of such State.
The plaintiffs, denominating it the 'focal point' of their appeal, argue principally that the legislative history of the Johnson Act makes clear that the Act 'was never intended to apply to cases of the present character,' i.e. consumer class actions, and urge that we overrule our prior decision in the General Investment case. 2
We thus consider again the problem of federal intervention in state rate matters. The problem has had a long and troublesome history. The evil sought to be remedied by the Johnson Act was the federal courts' interference with the states' own control of their public utility rates. Mr. Justice Frankfurter traced the background of the legislation in the following terms: 3
In Congress, a prolonged debate has ensued over the wisdom of the broad grants of power made to the Federal courts of original jurisdiction-- power which may be invoked against State regulation of economic enterprise. Bill after bill has been proposed to prevent the lower federal courts from interfering with such State action. Finally, in 1910, by a provision in the Mann-Elkins Act, Congress provided that an action for an interlocutory injunction to restrain the action of a State officer acting under a statute alleged to violate the Federal Constitution be heard by a court of three judges, with a right of direct appeal to the Supreme Court. Act of June 18, 1910, 17, 36 Stat. 539, 557. In 1913, this procedure was extended to applications for an interlocutory injunction to restrain enforcement of the order of a State board or commission. Act of March 4, 1913, 37 Stat 1013. By the same statue, a State was empowered to keep litigation concerning the validity of State agency regulation in its own courts if it was willing to stay the administrative order. In 1925, the provision for a three-judge court and direct appeal was extended to a permanent injunction. Act of Feb. 13, 1925, c. 229, 1, 43 Stat. 936, 938.
Congress, fully aware of the problem, was still not satisfied with the jurisdiction it had left to the federal district courts. Accordingly, in 1934, it passed the Johnson Act which withdrew their jurisdiction over suits to enjoin the enforcement of State rate orders, providing that a remedy was available in the State courts. 4
Plaintiffs argue to us that the 'sole' purpose of the Act was to prevent forum-shopping by utilities between State and Federal courts, a practice that had bedeviled the administration of the rate structures of the various states. Doubtless this was one purpose. But we find no substantial support that the Act is to be so restricted. Rather, by its broad wording it is clear that it was intended to keep constitutional challenges to orders affecting rates out of the federal courts 'lock, stock and barrel,' or, as Professor Moore succinctly puts it, to effect a 'general hands-off policy relative to state rate making.' 5 The Act is not framed in terms of categories of plaintiffs, whether municipalities, state commissions, utilities or consumers, but in terms of enumerated conditions. Behind the Act were years of hostilities generated from jurisdiction in both the state and federal systems, removal of which was deemed desirable to the national policy. Thus the restriction imposed was far-reaching, going to jurisdiction itself. Should it be thought desirable to resurrect the federal jurisdiction in favor of any particular class or group, such is a matter for the Congress, not for this court. We do not find the General Investment decision or the ruling below to be oblivious to the intended purposes of the Act. 6 Indeed, these urposes are peculiarly served here, for the late charge issue has recently (April 16, 1974) been ruled on by the Kansas State Corporation Commission in a proceeding involving both defendants. 7
Plaintiffs next seek to avoid the proscription of the Johnson Act by basing their claimed jurisdiction and framing their prayer for relief in terms not only of injunctive relief, which is specifically prohibited by the Act, but for declaratory and monetary relief as well. Congress has prohibited federal injunctive interference not only with state rate-making but with state tax matters. 28 U.S.C. 1341 provides:
The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.
The language and history of this provision parallel the Johnson Act. 8 With respect to its interpretation it was held in Great Alkes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 298-299, 63 S.Ct. 1070, 1073-1074, 87 L.Ed. 1407 (1943) that:
The earlier refusal of federal courts of equity to interfere with the collection of state taxes unless the threatened injury to the taxpayer is one for which the state courts afford no adequate remedy, and the confirmation of that practice by Congress, have an important bearing upon the appropriate use of the declaratory judgment procedure by the federal courts as a means of adjudicating the validity of state taxes.
It is true that the Act of Congress speaks only of suits 'to enjoin, suspend, or restrain the assessment, levy, or collection of any tax' imposed by state law, and that the declaratory judgment procedure may be, and in this case was, used only to procure a determination of the rights of the parties, without an injunction or other coercive relief. It is also true that that procedure may in every practical sense operate to suspend collection of the state taxes until the litigation is ended. But we find it unnecessary to inquire whether the words of the statute may be so construed as to prohibit a declaration by federal courts concerning the invalidity of a state tax. For we are of the opinion that those considerations which have led federal courts of equity to refuse to enjoin the collection of state taxes, save in exceptional cases, require a like restraint in the use of the declaratory judgment procedure.
It is equally true in the area before us that the considerations which we have briefly considered as influencing the Congressional hands-off policy relating to rate making are not to be defeated by the use of either the declaratory judgment procedure 9 alone or combined with a claim for money damages. 10 A decision going to the merits of the additional relief claimed would of necessity involve our decision as to the same issues proscribed by the Johnson Act. If favorable to the plaintiffs it would impinge upon duly filed rate schedules and thus would effect indirectly that which the Johnson Act precludes.
The plaintiffs urge also that the charge made by the utilities for failure to pay the amount due within 15 days of the billing is not a 'rate' at all but is 'interest,' and, being interest, is not covered by the Johnson Act which concerns 'order(s) affecting rates.' The issue presented requires an examination of the theory of, and the procedures followed under, the...
To continue reading
Request your trial
-
City of Cleveland v. CLEVELAND ELEC., ETC.
...circumstances, federal court interference with the states' administration of their public utility rates. See Tennyson v. Gas Service Co., 506 F.2d 1135 (10th Cir. 1974); Bridgeport Hydraulic Co. v. Council on Water Co., etc., 453 F.Supp. 942, 953-54 (D.Conn.1977), aff'd., 439 U.S. 999, 99 S......
-
Public Service Co. of New Hampshire v. Patch
...Final Plan and the implementing orders are orders affecting rates within the meaning of the Johnson Act, compare Tennyson v. Gas Serv. Co., 506 F.2d 1135, 1140 (10th Cir.1974), with Public Util. Comm'n v. United States, 355 U.S. 534, 540, 78 S.Ct. 446, 2 L.Ed.2d 470 (1958); and the utilitie......
-
United States v. PUBLIC SERVICE COM'N
...permissible route not a rate order). See generally Tennyson v. Gas Serv. Co., 367 F.Supp. 102, 104-05 (D.Kan.1973), aff'd, 506 F.2d 1135 (10 Cir. 1974) (Johnson Act not broad limitation of federal Moreover, jurisdiction in this suit is not predicated solely on diversity of citizenship or re......
-
Long Island Lighting Co. v. Cuomo
...807 F.2d 28, 31 (2d Cir.1986); Hanna Mining Co. v. Minnesota Power & Light Co., 739 F.2d 1368, 1370 (8th Cir.1984); Tennyson v. Gas Service Co., 506 F.2d 1135 (10th Cir.1974). The language and statutory history of the Johnson Act reveals a clear intent "to keep constitutional challenges to ......