Town of Taylorsville v. Modern Cleaners

• Decision Date: 21 September 1977
• Docket Number: No. 7622DC1015,7622DC1015
• Citation: 237 S.E.2d 484,34 N.C.App. 146
• Parties: TOWN OF TAYLORSVILLE v. MODERN CLEANERS, Samuel J. Brookshire d/b/a.
• Court: North Carolina Court of Appeals

Page 484

237 S.E.2d 484

34 N.C.App. 146

TOWN OF TAYLORSVILLE v.MODERN CLEANERS, Samuel J. Brookshire d/b/a.

No. 7622DC1015.

Court of Appeals of North Carolina.

Sept. 21, 1977.

Williams, Pannell & Lovekin by Martin C. Pannell, Newton, for plaintiff-appellee.

Richard L. Gwaltney, Taylorsville, for defendant-appellant.

HEDRICK, Judge.

Assuming arguendo that the ordinance dated 1 July 1975 increasing the rates for sewer only users was duly enacted, the question before us is whether the trial court erred in concluding that "the sewer rates of the Plaintiff when applied to the Defendant are not arbitrary, discriminatory, or an abuse of the Legislative authority of the Plaintiff . . .."

A city's authority to own, operate, and finance a public utility is derived from the legislature.G.S. 160A-311,et seq. G.S. 160A-314(a) provides in pertinent part:

"A city may establish and revise from time to time schedules of rents, rates, fees, charges, and penalties for the use of or the services furnished by any public enterprise.Schedules of rents, rates, fees, charges, and penalties may vary according to classes of service . . .."

It is a fundamental principle that a public utility, whether publicly or privately owned, may not discriminate in the distribution of services or the establishment of rates.Dale v. City of Morganton, 270 N.C. 567, 155 S.E.2d 136(1967);Utilities Commission v. Mead Corp., 238 N.C. 451, 78 S.E.2d 290(1953);Griffin v. Goldsboro Water Co., 122 N.C. 206, 30 S.E. 319(1898);12 McQuillin, Mun. Corp. § 35.37a(3d Ed. 1970).Thus, the statutory authority of a city to fix and enforce rates for its services and to classify its customers is not a license to discriminate among customers of essentially the same character and services.Rather, the statute must be read as a codification of the general rule that a city has "the right to classify consumers under reasonable classifications based upon such factors as the cost of service . . . or any other matter which presents a substantial difference as a ground of distinction."12 McQuillin, Mun. Corp. § 35.37b, at 485-6(3d Ed.1970)(Emphasis added).In Utilities Commission v. Mead Corp., supra, 238 N.C. at 465, 78 S.E.2d at 300, the Supreme Court recognized this rule: "Rates may be fixed in view of dissimilarities in conditions of service, but there must be some reasonable proportion between the variance in the conditions and the variances in the charges.Classification must be based on...