Washington Water Power Co. v. City of Coeur D'Alene

• Decision Date: 03 December 1938
• Citation: 25 F. Supp. 795
• Parties: WASHINGTON WATER POWER CO. v. CITY OF COEUR D'ALENE et al.
• Court: U.S. District Court — District of Idaho

25 F. Supp. 795

WASHINGTON WATER POWER CO. v. CITY OF COEUR D'ALENE et al.

District Court, D. Idaho, N. D.

December 3, 1938.

John P. Gray, W. F. McNaughton, and Robert H. Elder, all of Coeur d'Alene, Idaho, for plaintiff.

Enoch E. Ellison and Joseph B. Hobbs, both of Washington, D. C., John A. Carver, U. S. Dist. Atty., E. H. Casterlin, Asst. U. S. Dist. Atty., and Frank Griffin, Asst. U. S. Atty., all of Boise, Idaho, and W. B. McFarland and C. H. Potts, both of Coeur d'Alene, Idaho, for defendants.

CAVANAH, District Judge.

The City of Coeur d'Alene, and Harold L. Ickes, Federal Emergency Administrator of Public Works, separately petitioned the Court for a modification of the decree entered on September 9, 1935, enjoining the defendant City and its officers and the Administrator from making and entering into any contract with the Federal Emergency Administration of Public Works or with the United States for the purpose of providing for the construction of a municipal electric power generating plant, and distribution system in the City and financing the same with funds received from the Federal Emergency Administration of the United States, whether with loan, gift or grant, or the issuing, pledging, delivering or selling to the Federal Emergency Administration or the United States any bonds of the City issued under its ordinance.

On November 20, 1934, the complaint was filed by the plaintiff, which was thereafter amended, against the defendants, to restrain them from performing the acts referred to. The evidence at the trial disclosed that the plaintiff is authorized to engage in the generation and distribution and sale of electric energy and power to cities in Idaho, and by ordinance of the City, was granted a franchise for furnishing to the inhabitants thereof electricity for lighting and other purposes. In November 1933 the City enacted an ordinance calling a special election for the purpose of submitting to its voters the proposition for incurring an indebtedness of $300,000 by the issuance of municipal bonds to pay the costs and expenses of the acquisition by purchase or by construction of an adequate light and power plant and distribution system to serve all sections of the City and which was in December 1933 approved by more than two-thirds vote of the voters. Thereafter, and after the proposal was made to the City by the Administrator, to grant and loan funds of the United States to defray the costs of the system, an application was made to the Federal Emergency Administration of Public Works for funds to construct the system wherein a loan was requested and the total cost of the power plant and electric distribution system was estimated to be $337,580 of which the cost of labor and materials was estimated at $276,512.91 and the contractor's profit thereon at $27,578.09 and other costs and expenses of construction at $33,480. The application was approved by the Federal Emergency Administrator. Prior to the City election a report was made by the engineer employed by it, and which was made public, outlining a plan and the feasibility and cost of building the system for service throughout the City, and in it two sections of the City were omitted from any distribution service, of which the voters were not advised. Considerable evidence was introduced as to the original proposal of the administrator, the contract and the cost of the contemplated system and its adequacy to serve all sections of the city and the Court made findings and entered a decree which are now final, as appeal therefrom was, at the request of the defendants, dismissed by the Circuit Court of Appeals.

The present petitions filed on August 22, 1938, urge that the original decree be modified by permitting the defendants to enter into a new agreement allowing the United States to aid the City in financing the construction of the electric and water systems and by making a grant. The new proposed contract eliminates from the original one which was submitted to the Court at the trial, the right or power of the administrator with respect to rates to be fixed or charged for the service and facilities afforded by the project. On October 22, 1938, the plaintiff filed its objections to the petitions and asserts that they are based upon the records of the case, testimony introduced at the trial and five affidavits, the objections urge:

(1) The Court is without jurisdiction or power to modify the decree as requested.

(2) There has been no change in the facts and the law which would authorize a modification of the decree.

(3) That the only change in conditions is that the power load in the City has so increased since the date of the trial that the amount of money which was found necessary for the construction of an adequate plant at that time would be insufficient to construct an adequate plant at the present time.

(4) That no claim of change of conditions resulting from the decisions of the Supreme Court of the United States where an error in the decree, if any, could have been corrected on appeal for the reason: (a) That on October 7, 1935, the Administrator made and executed a unilateral contract or offer to the City under which earlier requirements with respect to the regulation of rates by the Administrator was omitted as a matter of policy, (b) that the new contract and change of policy was not called to the attention of this Court before the terms at which the decree was entered but on December 5, 1935, the defendants appealed from the final decree to the Circuit Court of Appeals and thereafter the City declined to execute the new contract until the injunction had been vacated and the appeal was dismissed on the motion of the defendants.

(5) That the proposed contract and the Act of Congress authorizing the loan and grant by the Administrator violated the Constitution of the United States because the expenditure proposed was not national but local in character.

(6) That the proposed contract violated the 10th amendment to the Federal Constitution, U.S.C.A.Const. Amend. 10, and that the acts of the Administrator and the proposed contract involved an effort on the part of a Federal officer to regulate rates for electrical power of the plaintiff in the City, as well also as the rates of the municipal utility, if established, which was a usurpation of the functions of government belonging to the State of Idaho, and to enable the City to construct a plant or require the plaintiff to reduce its rates twenty per cent lower than fixed by the Public Utilities Commission of Idaho.

(7) That the contract and proposed electric power generation and distribution system which the City proposed, involved the expenditure and incurring of a liability in violation of section 3, article 8 of the Constitution of the State of Idaho, as the ordinance submitting to the tax-payers of the City the proposal for the issuance of general obligation bonds for the construction of the electric power generating and distributing system contemplated an adequate system which would serve all of the City and that such a system could not be built for the amount of the bonds plus the amount of the gift and grant proposed to be made to the City or the maximum amount allowed by the Act under which the grant was proposed to be made and for that reason the proceedings for the installation of the plant and distribution system were illegal.

(8) That the decree was based, not alone upon the construction of the Federal Constitution but upon a construction of the Constitution of Idaho, upon the adjudicated facts with reference to the submission to the electors of the proposed bond issue, the character of the system which was to be constructed and the cost thereof, and that an adequate system such as was authorized by the electors could not be constructed for the amount of the bonds plus the gift or grant, and the decree having become final, the matter is res judicata.

There can be no doubt of the power of a Court of equity to modify an...