Zucker v. Bell Telephone Company of Pennsylvania

• Decision Date: 29 March 1974
• Docket Number: Civ. A. No. 72-2460.
• Citation: 373 F. Supp. 748
• Parties: F. Donald ZUCKER and Harry J. Barton, Individually and on behalf of all members of a class of customers similarly situated v. The BELL TELEPHONE COMPANY OF PENNSYLVANIA and The Pennsylvania Public Utility Commission.
• Court: U.S. District Court — Eastern District of Pennsylvania

373 F. Supp. 748

F. Donald ZUCKER and Harry J. Barton, Individually and on behalf of all members of a class of customers similarly situated v. The BELL TELEPHONE COMPANY OF PENNSYLVANIA and The Pennsylvania Public Utility Commission.

Civ. A. No. 72-2460.

United States District Court, E. D. Pennsylvania.

March 29, 1974.

Arnold Levin, Freedman, Borowsky & Lorry, Philadelphia, Pa., Lawrence Sager, Sager & Sager, Pottstown, Pa., for plaintiffs.

Jerome J. Shestack, Michael J. Mangan, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., Philip P. Kalodner, Albert W. Johnson, III, Pennsylvania Public Utility Commission, Harrisburg, Pa., for defendant.

MEMORANDUM AND ORDER

CLIFFORD SCOTT GREEN, District Judge.

I BACKGROUND

Plaintiffs, F. Donald Zucker and Harry J. Barton, seek to bring this action against defendant, Bell Telephone Company of Pennsylvania (hereinafter referred to as "Bell"), and defendant, Pennsylvania Public Utility Commission (hereinafter referred to as the "Commission"), on behalf of themselves and purportedly as representatives of a class comprised of all rate payers of Bell. Plaintiffs summarily assert that this court has jurisdiction pursuant to "the Civil Rights Acts, the United States Constitution, particularly the First, Fifth and Fourteenth Amendments, and the equity powers of the Federal Courts."

On December 3, 1970, Bell, pursuant to Section 308 of the Pennsylvania Public Utility Law, 66 P.S. § 1148, filed with the Commission new tariff sheets and a multipage "Notice" stating the revisions proposed to be made in the rates then in force and the time when the changed rates would go into effect. The tariffs contained a $1.00 per month charge for private number service. In order to determine the reasonableness of the proposed new rates, and in accordance with the Pennsylvania Public Utility Law and the Commission's practice, the Commission suspended the operation of the new rates, and instituted an investigation of them, consolidating therewith for hearing a number of complaints which had been filed with respect to them. Hearings before the Commission required fifteen days, producing 2,683 pages of testimony and 154 exhibits. After this investigation and hearings, the Commission, inter alia, expressly rejected the proposed $1.00 per month charge for private number service and indicated that it would accept a charge of 50 cents per month instead. Therefore, Bell's tariffs filed in conformity with the Commission's December 14, 1971 order, contained private number service at 50 cents per month.

In their complaint, plaintiffs claim that the Commission's order of December 14, 1971, accepting a private number surcharge at a rate of 50 cents per month for each customer is discriminatory against telephone subscribers who do not want their telephone numbers made public. Plaintiffs insist that the aforesaid order denies them equal protection of the laws, invades their constitutional right to privacy, and was made without affording them due process of law. Thus, plaintiffs, in substance, seek an order "permanently enjoining defendants from continuing to violate plaintiffs' rights" and "a refund . . . . for all monies . . . . paid pursuant to the order of the Commission effective December 14, 1971 . . . ."

Defendants Bell and Commission have moved, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, to dismiss the complaint in this action for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. In support of their motions, both defendants advance the following independent grounds allegedly requiring dismissal of this action: (1) the Johnson Act, 28 U.S.C. § 1342; (2) the exclusive original and primary jurisdiction of the Pennsylvania Public Utility Commission; (3) the doctrine of federal-state comity; and (4) the lack of state action.

For reasons hereinafter set forth, we dismiss plaintiffs' action on the grounds that the court is without jurisdiction over the subject matter by virtue of the provisions of the Johnson Act, 28 U.S.C. § 1342, which limits its federal equity jurisdiction in the area of state rate orders, and on the basis that even assuming the Johnson Act to be inapplicable to this action and jurisdiction otherwise to exist, in its technical sense, pursuant to allegations set forth in plaintiffs' complaint, the court should, in conformity with the doctrine of federal-state comity, decline to exercise its jurisdiction.

II THE JOHNSON ACT

The Supreme Court has admonished against federal equity interference in rate-making cases. Public Utilities Com. v. United Fuel Gas Co., 317 U.S. 456, 63 S.Ct. 369, 87 L.Ed. 396 (1943); Petroleum Exploration v. Public Service Comm'n, 304 U.S. 209, 58 S.Ct. 834, 82 L. Ed. 1294 (1938). See, Tri-State Gen. & Transm. Ass'n v. Public Serv. Comm'n of Wyo., 412 F.2d 115, 119 (10th Cir. 1969), cert. denied, 397 U.S. 1043, 90 S. Ct. 1348, 25 L.Ed.2d 654 (1970). The Johnson Act of 1934, 28 U.S.C. § 1342, is a restrictive statute and manifests a Congressional intent that federal jurisdiction should be seriously curtailed with regard to rate orders of State and local regulatory bodies. City of Meridian, Miss. v. Mississippi Valley Gas Co., 214 F.2d 525 (5th Cir. 1954); DeKalb County v. Southern Bell Tel. & Tel. Company, 358 F.Supp. 498 (N.D.Ga. 1972) aff'd, 478 F.2d 700 (5th Cir. 1973). See 1-A J. Moore, Federal Practice, ¶¶ 0.206, 0.207, pp. 2281-2283.

The Act provides that the district court 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 ratemaking body of a State political subdivision where:

"(1) Jurisdiction is based solely on diversity of citizenship or repugnance of the order to the Federal Constitution; and (2) The order does not interfere with interstate commerce; and,

(3) The order has been made after reasonable notice and hearing; and,

(4) A plain, speedy and efficient remedy may be had in the courts of such State."

Since the conjunction "and" is used as the connecting word between the conditions, it is the general view that all four of the numbered contingencies must be found to exist before the Johnson Act can apply and thereby preclude the court's jurisdiction. The existence of one or more but less than all of the conditions is not sufficient. David v. New York Telephone Company, 341 F.Supp. 944, 947 (S.D.N.Y.1972); United States v. Public Utilities Commission of Cal., 141 F.Supp. 168, 183 (N.D.Cal.1956), aff'd, 355 U.S. 534, 78 S.Ct. 446, 2 L. Ed.2d 470 (1958).

It is clear that the Commission's December 14, 1971 order herein challenged is one affecting rates chargeable by a public utility, Bell. On page 17 of their brief, plaintiffs acknowledge that "judicial interference with rate orders promulgated by state agencies is concededly precluded by the Johnson Act, 28 U.S.C. § 1342." However, plaintiffs insist that the order of the Commission interferes with interstate commerce, and was not made after reasonable notice and hearing. It is further urged that a plain, speedy and efficient remedy may not be had in the Pennsylvania courts.

It appropriate for the court to consider separately the four statutory conditions to the operation of 28 U.S.C. § 1342.

(1) Basis for Jurisdiction

The complaint alleges that jurisdiction arises under "The Civil Rights Acts and the United States Constitution." Plaintiff apparently is asserting jurisdiction pursuant to 28 U.S.C. § 1343(3), and 42 U.S.C. § 1983. The aforesaid statutes require the presence of an act or action which is repugnant to the Federal Constitution before federal court jurisdiction will attach. Here, the first condition is satisfied since jurisdiction is premised on the Constitutional repugnance of the Commission's order authorizing the 50 cent private number surcharge.

(2) No Interstate Commerce Interference

The courts have found that state agency orders applicable to intrastate telephone rates do not interfere with interstate commerce, and that the Johnson Act applies. Preston County Light & P. Co. v. Public Serv. Com'n of W. Va., 297 F.Supp. 759 (S.D.W.Va.1969); General Telephone Company of Southwest v. Robinson, 132 F.Supp. 39 (E.D.Ark. 1955); See, Public Utilities Com. v. United Fuel Gas Co., supra, 317 U.S. at 469, 63 S.Ct. 369, 87 L.Ed. 396; and Kansas-Nebraska Nat. Gas Co. v. City of St. Edward, Neb., 234 F.2d 436, 440 (8th Cir. 1956).

Under the particular facts and circumstances of the instant case, involving private number regulation, which is a matter of local concern, we find that in the context of the Johnson Act, the Commission's order of December 14, 1971, with respect to the challenged 50 cents per month private number surcharge, does not interfere with interstate commerce. Accordingly, we conclude that the second condition of the Johnson Act is satisfied.

(3) Reasonable Notice and Hearing

Plaintiffs argue that the December 14, 1971, rate-making order of the Commission has not been made after reasonable notice and hearing and therefore is not subject to the Johnson Act. Plaintiffs insist in paragraph 24 of their complaint that "no individual notice of the filing of said tariff was made, nor were plaintiffs given an opportunity to protest or to be heard prior to the imposition of the Private Number Surcharge."

In his affidavit, plaintiff, F. Donald Zucker, affirms, inter alia: "the first time I was aware that Bell Telephone Company of Pennsylvania . . . . intended to charge me for having an unlisted telephone number was when I received the first bill levying a charge of 50 cents a month for my unlisted telephone number. At that time, the Pennsylvania Public Utility Commission had already approved the new charge. I did not know that Bell had applied to the Utility Commission for the new rate." Plaintiff Zucker further declares: "I did not read in any newspaper account...