Court Opinion

ID: 9419030
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:45:04.188511+00
Date Added: 2024-06-11T17:22:14.532062
License: Public Domain

Me. Justice Frankfurter,
concurring.
The decree below was clearly wrong. But in reversing it, the Court’s opinion appears to give new vitality needlessly to the mischievous formula for fixing utility rates in Smyth v. Ames, 169 U. S. 466. The force of reason, confirmed by events, has gradually been rendering that formula moribund by revealing it to be useless as a guide for adjudication. Experience has made it overwhelmingly clear that Smyth v. Ames and the uses to which it has been put represented an attempt to erect temporary facts into legal absolutes. The determination of utility rates — what may fairly be exacted from the public and what is adequate to enlist enterprise — does not present questions of an essentially legal nature in the sense that legal education and lawyers’ learning afford peculiar competence for their adjustment. These are matters for the application of whatever knowledge economics and finance may bring to the practicalities of business enterprise. The only relevant function of law in dealing with this intersection -of government and enterprise is to secure observance of those procedural safeguards in the exercise of legislative powers which are the historic foundations of due process.
Mr. Justice Bradley nearly fifty years ago made it clear that the real issue is whether courts or commissions and legislatures are the ultimate arbiters of utility rates, (dissenting, in Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 418, 461). Whatever may be thought of the wisdom of a broader judicial role in the controversies between public utilities and the public, there can be no *123doubt that the tendency, for a time at least, to draw fixed rules of law out of Smyth v. Ames has met the rebuff of facts. At least one important state has for decades gone on its way unmindful of Smyth v. Ames, and other states have by various proposals sought to escape the fog into which speculations based on Smyth v. Ames have enveloped the practical' task of administering systems of utility regulation.
Smyth v. Ames should certainly not be invoked when it is not necessary to do so. The statute under which the present case arose represents an effort to escape Smyth v. Ames at least as to temporary rates. It is the result of a conscientious and informed endeavor to meet difficulties engendered by legal doctrines which have been widely rejected by the great weight of economics opinion,1 by authoritative legislative investigations,2 by utility commissions throughout the country,3 and by impressive judicial dissents.4 As a result of this long process of experience and reflection, the two states in which utilities play the biggest financial part — New York and Pennsylvania — . have evolved the so-called recoupment scheme for temporary rate-fixing (thereby avoiding some of the most *124wasteful aspects of rate litigation) as a fair means of accommodating public and private interests. It is a carefully guarded device for securing “a judgment from experience as against a judgment from speculation,” Tanner v. Little, 240 U. S. 369, 386, in dealing with a problem of such elusive economic complexity as the determination of what return will be sufficient to attract capital in the special setting of a particular industry and at the same time be fair to the public dependent on such enterprise.
That this Court should not “decide an issue of constitutionality if the -case may justly and reasonably be decided under a construction of the statute under which the act is clearly constitutional” is, as an abstract proposition, basic to our judicial obligation. But this is not a formal doctrine of self-restraint. Its rationale is avoidance of conflict with the legislature. The opinion from which the preceding quotation is taken and the decisions to which it refers are all cases in which constitutionality was in obvious jeopardy. It is one thing to avoid unconstitutionally even at the cost of a tortured statutory construction. It is quite another to recognize the validity of a statute directed expressly to the situation in hand and so employed by the state authorities, when constitutionality of that statute is as incontestably clear as the decision of the New York Court of Appeals has demonstrated it to- be in sustaining the sister statute of the Pennsylvania Act, In the Matter of Bronx Gas & Electric Co. v. Maltbie, 271 N. Y. 364; 3 N. E. 2d 512. The Court’s opinion in the present case does not avoid issues of constitutionality. It accepts the much more dubious constitutional doctrines of Smyth v. Ames and its successors to solve the very easy constitutional issues raised by the Pennsylvania Act.
Mr. Justice Black concurs in the above views.

 See 2 Bonbright, The Valuation of Property, 1Ó81-1086, 109R-1102; 3A Sharfman, The Interstate Commerce Commission, 121-137.

 N. Y. State Commission on Revision of the Public Service Commission Law, Report of Commissioners, passim (1930).

 Proceedings of the Forty-Seventh Annual' Convention of the National-Association of Railroad and Utilities Commissioners, 232 et seq.; Proceedings of the Forty-Eighth Annual Convention of the National Association of Railroad and Utilities Commissioners, 115 et seq., 289 et seq.; Proceedings of the Forty-Ninth Annual Convention of the National' Association of Railroad and Utilities Commissioners, 159 et seq.

 See, e. g., Brandeis, J., concurring, in Missouri ex rel. Southwestern Bell Telephone Co. v. Public Service Comm’n, 262 U. S. 276. 289, and bibliography therein contained.