Case Title: McPherson v. PACIFIC P. & L. CO.

Citation: 207 Or. 433, 296 P.2d 932

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1956-05-02T00:00:00Z

Document:
Affirmed May 2, 1956.
Petition for rehearing denied May 29, 1956.
*434 Walter H. Evans, Portland, argued the cause for appellants. On the briefs were Husband, Fort & Johnson, Eugene, Krause, Evans & Lindsay, Portland, and Jack L. Kennedy, Portland.
Francis F. Hill, Portland, argued the cause for respondent. On the brief were Gerald J. Norville, Portland, and Smith, Gray, Hill & Rodgers, Portland.
*435 Before WARNER, Chief Justice, and ROSSMAN, LUSK, BRAND, LATOURETTE and PERRY, Justices.
AFFIRMED.
PERRY, J.
This is a class suit brought on behalf of approximately 50,000 electric power consumers in defendant's Willamette and Coos Bay Divisions against the Mountain States Power Company to recover the amount of a surcharge which was imposed and collected by the defendant utility during December of 1952 and the spring of 1953, and to restrain and enjoin defendant from collecting any further sums over and above its lawful rates and schedules. From an order of the trial court sustaining defendant's demurrer and dismissing the complaint, the plaintiffs now appeal.
Effective May 21, 1954, Mountain States Power Company was merged into and became a part of Pacific Power & Light Company, and thereafter its legal existence terminated. Based upon a stipulation of the parties this court on November 12, 1954, ordered that Pacific Power & Light Company be substituted as the party defendant herein. However, in order to avoid confusion we shall continue to refer to Mountain States Power Company as such rather than Pacific Power & Light Company wherever reference to such company appears.
At the time of the oral argument on the demurrer, the defendant requested the lower court to take judicial notice of certain records of the Public Utilities Commission. It is now agreed by the parties that these documents shall be considered as a part of the record. These records reveal that on September 5, 1951, defendant filed with the Public Utilities Commissioner (hereinafter referred to as Commissioner) an application *436 for authority to apply temporary and flexible rate surcharges to substantially all of its schedules. The application pointed out that current consideration indicated that adverse water conditions in the northwest would necessitate the purchase of an abnormally large quantity of steam-generated electric energy at a substantially higher cost than the hydro-generated energy available under normal conditions to maintain normal operations. The defendant company proposed that a surcharge be applied to bills each month to recover the estimated amount of such excess steam costs beginning with the October billings, to be adjusted from month to month thereafter as soon as the actual excess cost for such month became known. This schedule and application were suspended and a hearing was set for September 17, 1951, which resulted in the following PUC Oregon Order No. 28235 issued October 2, 1951:
In accordance with the above order, the defendant on October 5, 1951, filed with the Commissioner its First Revised Sheet No. 16 of its Tariff PUC Oregon 22:
Defendant also filed Original Sheet No. 16 of its Tariff PUC Oregon 23, which was almost identical.
Because water conditions improved during the fall of 1951, no surcharge was imposed during the winter water storage season of 1951-1952, and nothing further occurred with respect to the proposed surcharge until more than a year later. Due to the lack of rainfall and precipitation beginning in June, 1952, the situation again became critical, and on November 20, 1952, the defendant sent the following letter to the Commissioner:
*443 On November 24, 1952, the Commissioner replied to defendant's letter with the following:
In carrying out this plan, defendant assessed a surcharge to the bills of its consumers affected by this suit through April, 1953. The Commissioner made a continuing check of the charges made for excess steam costs and adjusted the surcharges so that the amount recovered would not exceed recovery of such excess costs. Finally, in a letter dated April 24, 1953, the Commissioner terminated all surcharges:
On March 31, 1953, Monroe and Lillie M. Sweetland, as users of electric energy, filed a complaint, individually and "on behalf of other consumers of electric energy in the State of Oregon," against Mountain States Power Company, Portland General Electric Co., and Pacific Power & Light Company before the Public Utilities Commissioner. This complaint charges that: (1) excess earnings acquired by the utilities during exceptionally good water years should be used to offset excessive costs in poor water years, rather than the use of a surcharge; (2) management decisions were responsible for inability of utilities to furnish adequate hydro-generated electricty, so stockholders should bear the loss; (3) if consumers are required to underwrite losses incurred by reason of water shortages, a rate of return of 6 per cent was unreasonable and should be reduced to *445 4 per cent in order to reflect such reduced risk; (4) the surcharge was unfair and discriminatory since a far greater proportion of excess steam costs must be paid by the smallest consumers of electrical energy; (5) the surcharge was unfair and discriminatory to consumers who used little or no electrical energy during period when excessive steam costs were incurred; (6) no lawful schedule had been filed by defendants specifying the amount, duration or mode of application of said surcharge; the only tariffs filed were in violation of §§ 112-429 to 112-431, OCLA (now ORS 757.220, 757.240 and 757.225); and that defendants were charging greater amounts than were specified in their regular lawful schedules on file with the Commissioner; (7) the rates of the utilities were excessive and unreasonable for various specified reasons. Complainants' prayer for relief asked that the collection of any surcharges be terminated, that all consumers be credited for all surcharges paid by each, that defendants cease all unfair, unjust, and discriminatory practices, and that the rates, schedules, and tariffs of defendants be reexamined by the Commissioner who should enter such further orders as should be necessary and proper to protect the consumers of the state of Oregon.
The complaint in the suit before us alleges that the collection by the defendant of approximately $565,000 under the surcharge was unlawful and in violation of § 112-431, OCLA, (now ORS 757.225). The prayer for relief asks the court for a decree (1) temporarily and permanently enjoining the defendant from collecting any further sums as a surcharge; and (2) requiring the defendant to report to the court the amount of all sums collected under the surcharge, and directing the manner in which said sums shall be refunded or credited to plaintiffs and all others *446 similarly situated, or requiring the defendant to pay into court all sums collected under the surcharge and directing the manner in which it shall be returned to plaintiffs and others similarly situated; and further for the allowance of a reasonable attorneys' fee in accordance with § 112-467, OCLA, (now ORS 757.335).
The defendant's demurrer is based on the following grounds: (1) that the court is without jurisdiction of the subject of the suit; (2) that there is another proceeding pending involving the same subject matter and the same demand for relief; (3) that there is a defect of parties in that the Public Utilities Commissioner of Oregon is a necessary and indispensable party defendant; (4) that plaintiffs' complaint does not state facts sufficient to constitute a cause of suit; and (5) that plaintiffs' suit is not commenced within the time provided by law.
On November 18, 1953, the Commissioner entered an order dismissing the complaints pending before him against the utility companies, and on December 30, 1953, the trial court sustained the defendant's demurrer and ordered the complaint dismissed.
The question of jurisdiction of the courts, and of the public service commissioner was considered by this court in O.-W.R. & N. Co. v. McColloch, 153 Or 32, 55 P2d 1133. In that case a group of shippers, upon filing a complaint with the public service commission, secured an order from the commissioner requiring the defendant carriers to pay reparations to the shippers upon four classes of claims in which the commissioner found that the charges had been unjust, unreasonable, and unlawful. In a suit instituted by the carriers, the court was asked to set aside this order of the commissioner and to enjoin the defendant shippers from prosecuting actions to recover the *447 reparation awards contained in the order. From an order sustaining defendants' demurrer and dismissing the suit, plaintiffs appealed. We held that the Commissioner was without authority to entertain a complaint alleging that the charges collected were in excess of those based on published tariffs. On page 45 we said:
After quoting from Great Northern Railway v. Merchants' Elevator Company, 259 US 285, 291, 42 S Ct 477, 66 L ed 943, on page 48 we said:
We determined, p 52, that the Oregon law relating to reparation did not cover overcharges:
Turning to the statutes dealing with utilities, § 112, Chapters 1-4, OCLA (now ORS title 57, ch 757), we find that the Commissioner has no authority to award any reparations, either for unreasonable or unjustly discriminatory rates, or for overcharges, and that the Commissioner is granted jurisdiction to hear complaints based only on allegations that rates are unreasonable or unjustly discriminatory.
*450 Section 112-441, OCLA, (now ORS 757.505) describes the complaints that can be heard by the Commissioner:
Section 112-442, OCLA, (now ORS 757.510) makes provision for notification of the parties, place of hearing, rights of process, etc., and then § 112-443, OCLA, (now ORS 757.530) provides:
While it cannot be denied that charges in excess of those lawfully established are in violation of the provisions of this act, § 112-431, OCLA, (now ORS 757.225) it cannot be contended that this provision enlarges the jurisdiction of the Commissioner to hear complaints alleging mere overcharges, for the words "upon such investigation" limit the effect of this act to only such complaints as may be filed under § 112-441, OCLA, (now ORS 757.505); that is, those alleging rates to be "unreasonable or unjustly discriminatory." It may be argued that § 112-4,114, OCLA, (now ORS 756.520) under Article 3, Uniform Practice Act of Public Utilities Commissioner, grants jurisdiction to the Commissioner to entertain complaints alleging overcharges by public utilities. This act provides, in part:
This section not only mentions reparations, but also requires the complaint to state the violation of any law claimed to have been committed by the defendant.
The preamble to this act, Oregon Laws 1939, ch 320, p. 602, states:
This act, however, is only a uniform practice act which defines the rules for all proceedings over which jurisdiction has been conferred upon the commissioner in respect to the various businesses within his jurisdiction. The railroad statutes confer jurisdiction upon the commissioner to award reparation. No such provision is found in the public utility statutes. To determine the jurisdiction of the commissioner over a particular business, one must refer to the substantive statutes governing that business.
In respect to power companies, we find that the statutes declare every unjust or unreasonable charge (§ 112-407, OCLA, now ORS 757.020), every unjustly *453 discriminatory charge (§ 112-463, OCLA, now ORS 757.310), and every charge in excess of the lawfully filed schedule of rates (§ 112-431, OCLA, now ORS 757.225) to be unlawful. Section 112-467, OCLA, now ORS 757.335, grants to a patron of a public utility, guilty of doing any act declared to be unlawful, a cause of action before a court for treble damages.
1, 2. The case of O.-W.R. & N. v. McColloch, supra, has determined the law of this jurisdiction. A patron must first submit the question of the lawfulness of rates alleged to be unreasonable or unjustly discriminatory to the Commissioner, by a complaint filed under authority of § 112-441, OCLA, now ORS 757.505, before availing himself of his rights under § 112-467, OCLA, now ORS 757.335. But where the only allegation of the patron is that the charges were in excess of the lawfully filed schedule of rates (§ 112-431, OCLA, now ORS 757.225), the patron must seek redress by proceeding directly in the courts for the relief provided in § 112-467, OCLA, now ORS 757.335, or in an action for money had and received. Service Lumber Co. v. Sumpter Valley Railway Co., 67 Or 63, 135 P 539. See, also, Lee, Inc. v. Pac. Tel. & Tel. Co., 154 Or 272, 59 P2d 683, and Railway Exch. Bldg. v. Light & Development Co., 341 Mo 334, 107 SW 2d 59.
3. At the time of the commencement of this action, the billing and collecting of a surcharge had ceased, and, therefore, the case at bar is an action for money had and received, arising from the collection of charges in excess of the lawfully established rates. The only question, therefore, is one of law; that is, whether the schedules filed by the defendant purporting to authorize the surcharge were filed in accordance with *454 the prescribed statutory procedure, and are, therefore, lawfully established rates. We may not consider the unreasonableness or unjust discrimination of rates, since this demands the exercise of a quasi-legislative or administrative function of the Commissioner.
While we have examined each issue raised and argued by counsel, it will be necessary, for the determination of this case, to set out only our findings on the question of whether plaintiffs' complaint states facts sufficient to constitute a cause of suit.
The plaintiffs argue that the surcharge collected was unlawful for the following reasons: (1) it was unjustly discriminatory in that it was not applied in the Springfield area; (2) it was not lawfully established either as a permanent rate change under § 112-429, OCLA, now ORS 757.220, or as an emergency rate change under § 112-471, OCLA, now ORS 757.235.
As we have stated, the issue of unjust discrimination cannot be raised under this complaint. The problem before this court is well-stated in appellants' opening brief:
The order of the Commissioner entered October 2, 1951, and the tariffs filed by the defendant on October 5, 1951, cannot be used to justify the surcharge collected in December, 1952, and the spring of 1953. They were limited to the duration of the emergency *455 then confronting the defendant by the language of the October 2nd order:
Both parties admit in their briefs that water conditions improved soon after these tariffs were filed and that no surcharge was required at that time. When the water conditions improved the "emergency deficiency period" terminated, along with the effectiveness of these tariffs. The lawfulness of the surcharge as an established rate, therefore, must depend upon defendant's letter of November 20, 1952, and the Commissioner's letter of November 24, 1952.
The plaintiffs attack the lawfulness of the surcharge, because, they say, (1) the documents filed included only a statement of a method of arriving at the rates and do not specify the actual rate to be charged, and (2) that neither tariffs nor orders of the Commissioner may be filed or issued in letter form.
While the first attack might be worthy of consideration when directed at defendant's tariff of October 5, 1951, it lacks merit when directed at the letters of defendant and the Commissioner written on November 20 and 24, 1952. The term "rate" is defined in 43 Am Jur 624, Public Utilities and Services § 82, as follows:
Both the defendant's letter and the Commissioner's letter specified the exact amount of the surcharge to be collected.
4, 5. Plaintiffs' contention that neither tariffs nor orders may be filed or issued in letter form is also without merit. The reason for requiring schedules of rates to be filed with the Commissioner is treated in Re Portland Gas Light Company, 69 PUR NS 154, 157:
Our statutes do not prescribe the form in which schedules of rates or orders shall be filed. In fact, § 112-432, OCLA (now ORS 757.230), provides:
Plaintiffs argue that there is no evidence to show the Commissioner ever prescribed a change in the form of schedules. We feel that the act of the Commissioner in accepting defendant's November 20, 1952, letter, coupled with his statutory authority to permit changes in the form of schedules, was sufficient to establish the letter as a valid supplement to defendant's schedule of rates.
The importance of the formality of documents of this type was treated in C. & E.R. Co. v. Berwind-White Coal Min. Co., 171 Ill App 302 (affirmed in *457 Berwind-White C.M. Co. v. Chicago & E.R. Co., 235 US 371, 35 S Ct 131, 59 L ed 275). A railroad company recovered a judgment for demurrage charges against a shipper; the railroad had filed with the Commissioner a book of rules of the Chicago Car Service Association relating to liability for demurrage, and, a few days later, sent a letter to the Commissioner advising him that the charge would be $1.00 per day. The Illinois court held:
In affirming the judgment, the United States Supreme Court held at page 132:
In the case before us, copies of both letters were on file with the Commissioner. Any consumer of defendant's electric energy, upon inquiring at the Commissioner's office after November 24, 1952, could discover the exact amount required to be paid for electrical energy from the documents on file.
Section 112-474, OCLA, now ORS 757.025, provides:
Since the two letters provide for adequate notice to the consumers, and thereby fulfill the purpose intended by the statutory requirements, we feel that "substantial justice between patrons and public utilities" may be done only by holding that the letters fulfilled the requirements of a valid schedule and order.
Next, we must consider whether the procedure employed by the defendant and the Commissioner to change defendant's rates so as to permit collection of the surcharge was authorized by statute.
*459 Provisions for emergency rate changes are found in § 112-471, OCLA, now ORS 757.235:
Plaintiffs contend that this section requires the Commissioner to hold a hearing and investigation before making any emergency rate changes, and that any such changes ordered by the Commissioner without a hearing are invalid.
We do not feel that the legislature so intended to restrict the Commissioner's emergency powers. This is not an appeal from the Commissioner's order declaring an emergency and establishing emergency rates. If it was, the question of whether a hearing was held might be important in considering whether there was sufficient evidence before the Commissioner to enable him to find that an emergency existed, or whether the Commissioner had abused his discretion. The only question, therefore, is whether or not the legislature intended to permit the Commissioner to find summarily that an emergency existed.
*460 In City of La Crosse v. Railroad Commission, 172 Wis 233, 236, 178 NW 867, 869, the Wisconsin court treated a statute similar to § 112-471, OCLA, now ORS 757.235, saying:
An indication of the intent of the legislature, as expressed in § 112-471, OCLA, now ORS 757.235, may be gained by a consideration of the 1953 amendment *461 to this section, ORS 757.235. The new statute adds to the former provision the following:
6. It seems clear that the legislature by this amendment recognized that § 112-471, OCLA, now ORS 757.235, did not require the Commissioner to hold a hearing before ordering an emergency rate adjustment. The amendment was designed to increase the protection of the consumer public and to restrict the power of the Commissioner.
We conclude that the charges collected by defendant under the surcharge, as ordered by the Commissioner, were established as lawful rates under § 112-471, OCLA, now ORS 757.235.
Plaintiffs' complaint fails to state facts sufficient to constitute a cause of suit; therefore, the order of the trial court sustaining defendant's demurrer and dismissing the complaint is affirmed.
Neither party shall recover costs in this court.
Mr. Justice LATOURETTE did not participate in this opinion.