Los Angeles herald., 1910-06-28
SUNSET PHONE CO.
SUES To PREVENT
RATE REDUCTION
Asks Court to Restrain City from
Enforcing Ordinance Low
ering Charges
HEARING ORDERED FOR FRIDAY
Mayor, CounClImen and Munich
paIity Named as Respondents.
Federal Question Involved

Inc BaEtuC 1elcpuOue anu AoAcBAsNph WIN
pany locally called the Sunset company
yesterday fled In the United States circuit
court an application for an injunction to
restrain tho city of Los Angeles from put
ting into effect the telephone rate Ordi-
nance recently passed, which reduces the
company's rates to a parity with those Of
the Homo company. The ordinance Is de-
clared unreasonable, conHscatory and un-
constitutional and In contravention OF the
fourteenth amendment to the federal con-
stitutiOn. Filing of the suit in the federal
court is based on this latter contention.
Tho Los Angeles Gas and Electric cor
pOratlon fled with the city clerk yesterday
O referendum petition said to contain the
eienatures of 10000 qualified electors. 1t
demands that the ordinance recently passed,
reducing tho electric light rate from to
cents per Eilowatt hour, be repealed, or
that the ordinance be submitted to the
voters Of the city. This ordinance is to be
submitted on a referendum initiated through
Mayor Alexander and the Municipal league.
1t L. asserted that the corporations pur-
pose in fling its petition is to cloud the
issue and lay the foundation for litigation
II the voters of the city declare for the
7-cent rate.
The city OF Los Angeles, the MEM
bers of the city council and Mayor
George Alexander are named as ro-
spondents in the complaint filed by the
Pacific Telephone and Telegraph COM
pany. Judge Wellborn will have
served on the city, the members of Its
council and the mayor this morning
an order for them to appear before
him Friday, July 1. to show cause why
a preliminary injunction restraining
the enforcement of the low telephone
rate ordinance, No. 20331, new series,
passed May 81. 1910, should not be
issued.
The ordinance and the rates which 1t
specifies are described in the complaint
as unjust, unreasonable, oppressive,
confiscatory, unconstitutional and void.
The complainant AYERS that the action
is a case in equity and involves fed
eral questions.
ASK FAIR COMPENSATION
The chief plea of the telephone COM
pany is made in section of the COM
plant. 1t is argued that the complain
ant is, first, entitled to have rates
which will yield a reasonable and just
compensation and a fair remuneration
for service rendered; compensation
which will also pay for necessary ad-
ditions, operations, allowance for de-
probation of its plant, taxes and at
least per cent on the valuation of
the company's property, amounting to
$685. 900, from July /, 1910, to June 30,
1911.
The property valuation of the COM
pany's plant is given as S6,7S6, ,14707 on
May 81, 1910.
1t is alleged in the complaint that
the board of public works in it's report
to the council which resulted in the
passage of the ordinance in question
reduced this valuation to $4,39S,9 9S3 and
rejected the item of $1,101, ,345 for value
of the company's franchise, which is
assessed by the assessor of Los An
geles at $44S,485, and which is worth
the former figure. according to the
company.
CLAIM LOSS OF INCOME
It is stated that the council did not
hear adequate or competent testimony
to enable 1t to determine whether the
value of the company's property is as
is stated by the company itself or as
was stated by the board of public
works in its report.
That the company's income for the
coming year will be $50,000 less than
the revenue which would be yielded by
the rates now in force is another of
the corporations allegations. 1t is
pointed out that under the present
rates the company operated at a loss
of $49, ,S40.6S in 1909. The company in
sists that If the ordinance passed by
the council is enforced 1t will not be
able to render service or to meet it's
obligations. N Al
BY failure to comply with the or
dinance. which is looked on as an inn
possibility by the company, the COM
pany says 1t will be compelled to for
felt its franchise.
WILLING TO CONTINUE
Although 1t is asserted the old rates
of April, 1909, caused the company to
do business last year at a great loss,
the company expresses it's willingness,
in the complaint filed last night, to
continue operations for another year
pending litigation. Such rates. the
company claims, are more than just
to the city.
The prayer of the complainant is
that the ordinance be pronounced null
and void and that it's enforcement be
prevented. The complaint Is based on
the presumption that the ordinance is
in contravention to the fourteenth
amendment of the constitution of the
United States. For that reason the
complaint is filed in q federal court.
The complaint covers twenty-five
pages. Mott and Dillon are the local
attorneys for the complainant. Pills
bury, Madison and Sutro of San Fran
cisco are also representing the COM
pany
The company wishes the injunction
issued before the July telephone bills
are sent out.