Opinion ID: 367218
Heading Depth: 2
Heading Rank: 1

Heading: Application of Res Judicata in California Rate Cases: The

Text: Napa Valley Decision 12 The United States Supreme Court and this court have acknowledged that, under California law, the California Supreme Court's denial of writs of review of rate decisions constitutes a denial on the merits and have held that such denials are entitled to res judicata effect in federal courts. In Napa Valley Electric Co. v. Railroad Commission, 251 U.S. 366, 40 S.Ct. 174, 64 L.Ed. 310 (1920), a California electric company filed suit in federal district court seeking an injunction against a rate order of the California Railroad Commission, a forerunner of the present PUC. After the Commission had issued its rate order, the utility unsuccessfully sought a rehearing. The California Supreme Court later denied the utilities' petition for a writ of review. The federal suit was thereupon filed. 13 The district court denied the injunction and dismissed the federal suit because the Electric Company filed in the (California) Supreme Court a petition for a review of the decision and order of the Commission and for their annulment, and . . . the Supreme Court denied the petition. Id. at 370, 40 S.Ct. at 175. 14 The United States Supreme Court held that the district court had properly invoked the doctrine of res judicata. See id. at 367, 40 S.Ct. 174. The Court wrote: 15 Whether . . . the (California) court was required to pursue the details of the section or decide upon the petition was a matter of the construction of the (California statutory) section and the procedure under it. And the (California) Supreme Court has so decided. (Citations omitted.) In those cases the applications for writs of certiorari were denied, which was tantamount to a decision of the (California) court that the orders and decisions of the Commission did not exceed its authority or violate any right of the several petitioners under the Constitution of the United States or of the State of California. . . . And we agree with the District Court that the denial of the petition was necessarily a final judicial determination . . . . And . . . Such a determination is as effectual as an estoppel as would have been a formal judgment upon issues of fact. (Citations omitted.) 16 The (district) court held, and we concur, that absence of an opinion by the (California) Supreme Court did not affect the quality of its decision or detract from its efficacy as a judgment upon the questions presented, and Its subsequent conclusive effect upon the rights of the Electric Company. 17 Id. at 372-73, 40 S.Ct. at 176 (emphasis added). 6 This Circuit has subsequently embraced the Napa Valley doctrine. See Southern Pacific Co. v. Van Hoosear, 72 F.2d 903, 905 (9th Cir. 1934); Wallace Ranch Water Co. v. Railroad Commission, 47 F.2d 8, 9 (9th Cir. 1931).