Source: https://www.legalcrystal.com/case/96382/northwestern-bell-tel-co-vs-nebraska-state
Timestamp: 2019-04-25 04:21:10+00:00

Document:
Appellant Northwestern Bell Tel. Co.
1. The record failing to disclose what, if any, federal questions were presented to the state supreme court, review here is accordingly confined to those which are discussed in the opinion of that court. P. 297 U. S. 473 .
(1) Assuming, without deciding, that due process requires that the commission's order be upon notice to the company and opportunity to be heard, the procedure followed by the commission in this case satisfied that requirement. P. 297 U. S. 473 .
Act, it was within the authority of the state commission to prescribe such rates. P. 297 U. S. 477 .
(3) The estimated composite rate determined and used by the company, pursuant to the direction of the Interstate Commerce Commission that such rate be used until rates prescribed by that Commission should become effective, cannot be taken as a rate prescribed under § 20(5). P. 297 U. S. 479 .
(4) Section 20(5) cannot be construed as authorizing the Interstate Commerce Commission to supplant state power to regulate depreciation rates of telephone companies otherwise than by prescribing a rate administratively determined by the Commission itself. P. 297 U. S. 480 .
3. Statutes should be so construed as to avoid doubts of their constitutionality. P. 297 U. S. 480 .
128 Neb. 447, 259 N.W. 362, affirmed.
Appeal from a judgment affirming an order of the state commission relating to the accounting of the telephone company.
appellant telephone company to use, for purposes of accounting and reporting to the commission, for the year 1934, a composite depreciation rate of 3 1/2 percent upon all its depreciable property in Nebraska.
Appellant now assails the order on three grounds: (1) that it was made without such notice and hearing as due process requires; (2) that it is invalid because the Interstate Commerce Commission, pursuant to Congressional legislation, has occupied the field of regulation of telephone company accounting, and has made valid orders conflicting with that of the State Commission, and (3) that it infringes due process because it is unsupported by evidence and deprives appellant of the right to keep accurate books of account.
The record does not disclose what, if any, federal questions were presented to the state supreme court. Its opinion discusses only the first two contentions made here, and we accordingly confine our review to them. See Miedreich v. Lauenstein, 232 U. S. 236 ; Cissna v. Tennessee, 246 U. S. 289 ; Saltonstall v. Saltonstall, 276 U. S. 260 .
1. Assuming, without deciding, that due process requires that the commission's order be upon notice to appellant and opportunity to be heard, we think that requirement was satisfied by the procedure followed by the commission. The challenged order was made at the conclusion of proceedings initiated by the state commission by its General Order No. 59, directing Class A telephone companies, to which class appellant belongs, to file with the commission specified schedules of depreciation rates. The order was prefaced by an opinion of the commission.
the order of that commission of July 28, 1931, In Depreciation Charges of Telephone Companies, docket No. 14700, 177 I.C.C. 351, which, for the assistance of the commission in prescribing depreciation charges, required class A telephone companies to file with their respective state commissions by September 1, 1932, their estimates of composite annual percentage depreciation rates applicable to each class of depreciable property owned or used by them, with supporting data. The order provided for the adoption of a depreciation rate by the commission, to be effective January 1, 1933. The opinion of the state commission points out that, by later order of the Interstate Commerce Commission the filing date was postponed to August 1, 1934, and the date for the prescribed rate to January 1, 1935.
The opinion also refers to the Depreciation Section Service Circular 7, issued by the Interstate Commerce Commission Bureau of Accounts, which requested that schedules of depreciation rates and statements of estimated service lives and salvage values of telephone property be submitted not later than March 1, 1934, "in order that he Commission may be informed as to the rates contemplated for use" by the telephone companies for the year 1934. The opinion states that it is the view of the State Commission that it has not been deprived of jurisdiction to fix rates for intrastate telephone service and that, while Congress has given the Interstate Commerce Commission authority to prescribe a uniform system of accounting and rates of depreciation for purposes of accounting to it, the state commissions are not deprived of their authority to fix rates of depreciation so far as their own accounting and reporting system is concerned.
"[i]t reserves the right to review the findings and conclusions of the Interstate Commerce Commission and enter a final order thereon as to the depreciation rate for accounting purposes to this commission."
In compliance with this order, appellant, on March 1, 1934, filed schedules classifying its depreciable property in twelve accounts, with estimated rates of depreciation of each class for 1934, and showing a composite estimated rate of depreciation on all accounts of 4.48 percent.
"for hearing for oral examination of the members of respondent's staff, who had prepared said schedules, and for the introduction of such evidence as the Commission may desire to submit with opportunity of objections and cross-examination by respondent."
accounting. One was the gathering of data with respect to the proposed rates of depreciation for 1935, which the order of the Interstate Commerce Commission had directed should be filed with the state commissions, and as to which the latter had been requested to submit their recommendations. The other related to the state commission's asserted authority to fix depreciation rates, its rejection of the proposed rates for 1934 as unsatisfactory, and its direction that hearings be had on them. That the primary purpose of the hearing was to aid the commission in its ratemaking, rather than its advisory function, seems apparent, the more so as the order for the hearing refers only to the 1934 rates, and as the date set for it was in March, four months before August 1, 1934, the date fixed for filing data for the 1935 rate, with respect to which alone the commission had been asked to exercise its advisory function. Because of subsequent postponements, the date for submitting the data for 1935 never arrived.
a full hearing upon adequate notice that the commission proposed to fix a depreciation rate for 1934, and that the requirements of due process were satisfied.
2. The remaining question is whether the jurisdiction conferred by Congress upon the Interstate Commerce Commission over accounts and depreciation rates of telephone companies, and the exercise of that jurisdiction by the commission, have operated to curtail state authority over depreciation rates for 1934.
The Interstate Commerce Commission was given no jurisdiction over telephone service rates, but §§ 1(1), 20(1)(5) of the Interstate Commerce Act, as amended by Act of June 29, 1906, 34 Stat. 584, 593, see 36 Stat. 555, 556, conferred on the commission authority, in its discretion, to prescribe a uniform system of accounts for telephone companies, and made it unlawful for them to keep any accounts other than those prescribed or approved by the commission. Such a system of accounts was required by the commission February 1, 1913. Effective January 1, 1933, it prescribed a revised system of accounts for class A and class B telephone companies, and directed that they keep all accounts in conformity to it.
"for which depreciation charges may properly be included under operating expenses and the percentages of depreciation which shall be charged with respect to each of such classes of property."
preparatory to the establishment of rates of depreciation for telephone companies, some of which we have mentioned. The adoption of rates has been postponed from time to time, and has now been indefinitely postponed by order of the Communications Commission of May 1, 1935, to which the authority of the Interstate Commerce Commission over telephone companies was transferred by Act of Congress of June 19, 1934, 48 Stat. 1064.
could act administratively to prescribe rates. See Illinois Central R. Co. v. Public Utilities Comm'n, 245 U. S. 493 , 245 U. S. 510 ; Board of Railroad Commissioners v. Great Northern Ry. Co., 281 U. S. 412 , 281 U. S. 430 . In Smith v. Illinois Bell Tel. Co., 282 U. S. 133 , 139, this Court pointed out that, until the Interstate Commerce Commission has prescribed depreciation rates, the prerogative of the state to regulate such rates cannot be gainsaid. See also Missouri Pacific R. Co. v. Larabee Flour Mills Co., 211 U. S. 612 , 211 U. S. 623 .
When respondent fixed the composite rate of depreciation applicable to all classes of appellant's property for 1934, the Interstate Commerce Commission had prescribed no rate. It had given directions for filing data with state commissions preparatory to establishing a rate for the year 1935, and, by the revised uniform system of accounts for telephone companies, effective in 1933, it had prescribed, Instruction 81(A)(C), the method by which depreciation accounts should be kept, directing that there be a composite annual percentage rate of depreciation for each account covering depreciable property, and that, until rates "prescribed by this Commission become effective," the company's estimated composite rate be used.
Commerce Commission was concerned, to use their own depreciation rates for purposes of the required accounting, until the commission performed the duty to establish rates imposed upon it by Congress.
In any event, we think that § 20(5) cannot be read as authorizing the Interstate Commerce Commission to supplant state power to regulate depreciation rates of telephone companies except by prescribing a rate administratively determined by the commission itself. A direction that the commission, as soon as practicable, prescribe depreciation rates is hardly to be read as authority to permit the telephone companies to fix the rates for themselves in defiance of state power. The doubtful constitutionality of the statute, if so construed, precludes our acceptance of such a construction.

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