Vinson v. Washington Gas Light Co 11 8212 14, 1944

• Decision Date: 27 March 1944
• Docket Number: No. 396,396
• Citation: 64 S.Ct. 731,88 L.Ed. 883,321 U.S. 489
• Parties: VINSON, Director of Economic Stabilization, etc., et al., v. WASHINGTON GAS LIGHT CO. et al. Argued Feb. 11—14, 1944
• Court: U.S. Supreme Court

321 U.S. 489

64 S.Ct. 731

88 L.Ed. 883

VINSON, Director of Economic Stabilization, etc., et al.,

v WASHINGTON GAS LIGHT CO. et al.

No. 396.

Argued Feb. 11—14, 1944.

Decided March 27, 1944.

Mr. Paul A. Freund, of Washington, D.C., for petitioners.

Mr. Richmond B. Keech, of Washington, D.C., for respondent Public Utilities Comm.

Mr. Stoddard M. Stevens, Jr., of New York City, for respondent Washington Gas Light Co.

[Argument of Counsel from page 490 intentionally omitted] Mr. Justice ROBERTS delivered the opinion of the Court.

Certiorari was granted in this case, 320 U.S. 730, 64 S.Ct. 191, at the insistence of the Director of Economic Stabilization and the Administrator, Office of Price Administration, of the United States, to review a rate order of the Public Utilities Commission of the District of Columbia. The application and effect of the Emergency Price Control Act of 1942,¹ and the Act of October 2, 1942,² are involved.

The petitioners, who were intervenors before the Commission, appealed from its order to the District Court of the District of Columbia, which set aside the order as arbitrary and illegal.³ The Court of Appeals for the District of Columbia reversed the District Court.⁴ Understanding of the questions presented requires a detailed statement of their historical background.

The Commission was created, and its powers and duties defined by Act of Congress in 1913, supplemented in 1926, 1935, and 1939.⁵ References will be to the District of Columbia Code, 1940 edition. The statutes require public utilities within the District to furnish safe and adequate facilities, just and reasonable service, at reasonable, just and nondiscriminatory rates, and to obey the lawful orders of the Commission (§ 43—301). There are detailed provisions respecting rates and depreciation (§ 43—315). For the purpose of its functions, the Commission is directed to value 'the property of every public utility within the District of Columbia actually used and useful for the convenience of the public at the fair value thereof at the time of said valuation.' (§ 43—306.) Nothing in the statute is to be 'taken to prohibit a public utility, with the consent of the commission, from providing a sliding scale of rates and dividends according to what is commonly known as the Boston sliding scale, or other financial device that may be practicable and advantageous to the parties interested.' But no such arrangement is lawful until found by the Commission, after investigation, to be reasonable, just, and not inconsistent with the purposes of the Act. Such arrangement must operate under the supervision and regulation of the Commission, may be altered and amended, and may be terminated by the Commission (§ 43—317). Usual powers to fix rates, charges, and make rules and regulations are conferred (§ 43 411). The Commission may make rules and regulations to govern its proceedings and to regulate the mode and manner of investigations and hearings before it (§ 43—402). Appeal from its orders is authorized, and the scope of review defined (§§ 43—705, 43—706).

Pursuant to its authority, the Commission initiated in 1931, and concluded in 1935 a proceeding for the valuation of the property of the Washington Gas Light Company, at an expense of some $750,000 and arrived at a depreciated rate base as of 1932. It then entered upon a further inquiry as to rates. After this had lasted some time it approved and adopted a sliding scale arrangement, which involved a rate base, to be adjusted annually by adding net property additions at cost, a rate of return, and a rate of accrual to retirement reserve, in the light of which the rates of the company were to be adjusted annually. It found that the plan was practical and would be advantageous to all parties interested. This plan calls for an annual determination of the rate of return earned during the 'test year', and of the amount available for rate increase or decrease for the succeeding 'rate year', and schedules and regulations to accomplish such increase or decrease. Such determination is to be made after public notice and opportunity for hearing. The plan defines a rate year as 'the twelve months' period from September 1st to August 31st, inclusive,' and the test year as 'the twelve months' period ending * * * June 30th preceding the rate year.' At the inception of the plan, rates were reduced by some $800,000 annually, and subsequent annual hearings and determinations resulted in rate reductions in each year after 1935, except in 1937 and 1941, when no changes were made.

The duration of the system was not prescribed but in its order the Commission stated that it construed the statute to permit a termination upon reasonable notice, and found that ninety days' written notice of termination by Commission or Company would be reasonable.

March 20, 1942, the Commission issued its order of investigation in conformity with the sliding scale arrangement. After preliminary investigation by its agents and the representatives of the company, the Commission, pursuant to statutory requirement, issued, on July 21, 1942, notice of hearing as to rates, charges, and regulations which were to become effective September 1, 1942, in accordance with the sliding scale arrangement. The Price Administrator was given leave to intervene and was represented at a prehearing conference and at all hearings, and his counsel was permitted to cross-examine witnesses and to offer testimony. These began August 18 and continued on August 19, September 4, 8, 11, and 14, and closed on the last named date. The Commission stated that it would welcome testimony with relation to the aims and purposes of the Office of Price Administration during the national emergency and the relation of those aims and purposes to the proceedings, and expressed the hope that the Administrator, as intervenor, would develop testimony along lines which would enable the Commission to determine whether an increase should be granted in view of the national emergency. The Administrator's counsel offered evidence, cross-examined witnesses, argued and filed a brief.

On application of other parties, the proceedings were reopened and further hearing had September 30th. Counsel for the Administrator participated and filed a second brief. The hearings were again closed, and, October 13, the Commission issued its findings, opinion and order.

The petitioners' standing in the proceedings deserves notice. Section 302(c) of the Emergency Price Control Act of 1942⁶ provides: 'Nothing in this Act shall be construed to authorize the regulation of * * * rates charged by any common carrier or other public utility.'⁷ The admission of the Administrator as intervenor was, therefore, not pursuant to statute but was governed by the Commission's rules. The Commission had provided for intervention in its rules. Rule 7.3 is: 'The Commission may grant or deny a petition for leave to intervene, or may grant the petition upon such conditions and limitations as it may prescribe.' Rule 7.5 is: 'The granting of a petition to intervene shall not have the effect of changing or enlarging the issues in the proceeding, except where such change or enlargement is expressly requested in the petition and is expressly granted by the Commission after opportunity for hearing upon the question has been afforded all other parties.'

After final submission, and before promulgation of the Commission's order, the Emergency Price Control Act was amended by the Act of October 2, 1942, which, while prohibiting the President from suspending that portion of the original Act exempting public utilities from the scope of the statute, provided: 'That no common carrier or other public utility shall make any general increase in its rates or charges which were in effect on September 15, 1942, unless it first gives thirty days notice to the President, or such agency as he may designate, and consents to the timely intervention by such agency before the Federal, State, or municipal authority having jurisdiction to consider such increase.' 50 U.S.C.A.Appendix, § 961.

On the showing of the Commission's staff, the company would have been entitled, under the sliding scale, to an increase in rates of $324,718. The increase approved by the Commission was $201,424, effective September 1, 1942. In its order, however, the Commission directed the company's attention to the provisions of the Act of October 2, 1942, and quoted its language. Accordingly the company, October 14, 1942, served notice upon the Director of Economic Stabilization, who had been designated for the purpose by the President, of the proposed increase in rates together with a copy of the Commission's order and later consented to his intervention. The court below has found that the requisite notice and consent to intervention was given by the company in accordance with the Act.

Counsel who had participated in all the prior proceedings for the Administrator filed with the Commission October 19 a petition in the name of the Administrator, and on behalf of the Director, asking that the Commission vacate its order and reopen the proceedings to allow the Director to intervene. The Commission reopened the proceeding and set a hearing for November 2 'for the purpose of receiving from the Office of Price Administration, on behalf of the Director of Economic Stabilization, additional evidence relating to the inflationary effect, if any, of the increase in rates authorized by order No. 2401, and intervention is granted for such purpose.' When the reopened proceedings came on for hearing, the same counsel who had theretofore participated in behalf of the Administrator appeared before the Commission, offered no witnesses, but renewed a motion previously filed that the proceeding be reopened 'without restriction as to the type of evidence to be presented' and that the Commission vacate its order. The motion was denied, the Commission announcing that it was ready...