Court Opinion

ID: 3997445
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:55:19.370906+00
Date Added: 2024-06-11T07:44:08.024375
License: Public Domain

Statutes imposing directly on public service corporations the cost of their regulation by the state are not of recent origin. As early as 1891, in the case of Charlotte, Columbia and AugustaR. Co. v. Gibbes, 142 U.S. 386, 12 S. Ct. 255, the supreme court of the United States said of such a statute:
"The mode or manner of regulation is a matter of legislative discretion. When exercised through commissioners, their services are for the benefit of the railroad corporations as well as of the public. Both are served by the required supervision over the roads and means of transportation, and there would seem *Page 193 
to be no sound reason why the compensation of the commissioners in such case should not be met by the corporations, the operation of whose roads and the exercise of whose franchises are supervised. In exacting this there is no encroachment upon the Fourteenth Amendment. Requiring that the burden of a service deemed essential to the public, in consequence of the existence of the corporations and the exercise of privileges obtained at their request, should be borne by the corporations in relation to whom the service is rendered, and to whom it is useful, is neither denying to the corporations the equal protection of the laws or making any unjust discrimination against them."
Of all the cases cited in the majority opinion, only three are concerned with the construction of legislative enactments of the character of § 12, chapter 165, Laws of 1933, p. 610 (Rem. 1934 Sup., § 10458-6 [P.C. § 5527-12]): Wisconsin Telephone Co. v.Public Service Commission, 206 Wis. 589, 240 N.W. 411; KingsCounty Lighting Co. v. Maltbie (App. Div), 280 N.Y. Supp. 560;Bronx Gas and Electric Co. v. Maltbie, 197 N.E. (N.Y.) 281.
The statute of New York is as follows:
"18-a. Costs and expenses of proceedings before thecommission. Whenever the public service commission in a proceeding upon its own motion, upon complaint, or upon application to it, shall deem it necessary in order to carry out its statutory duties, to investigate the operations, service, practices, accounting records, rates, charges, rules and regulations, or to make valuations or revaluations of the property of any public utility, such public utility shall be charged with and pay such portion of the compensation and expenses of the commission, its officers, agents and employees, including employees temporarily employed, as is reasonably attributable to such investigation, valuation or revaluation, provided an opportunity to be heard thereon shall first have been *Page 194 
granted to such public utility. The commission shall ascertain the costs, including the compensation and expenses of the commission, its officers, agents and employees, and shall determine the amount to be paid by the public utility and shall render a bill therefor by registered mail to the public utility. Such bill shall be rendered either at the conclusion of the investigation, valuation or revaluation, or from time to time during its progress, and the amount of such bill so rendered by the commission shall be paid by such public utility to the commission within thirty days from the date of its rendition. The total amount which may be charged by the commission to any public utility under authority of this section in any calendar year shall not exceed one-half of one per centum of such public utility's gross operating revenues derived from intrastate utility operations in the last preceding calendar year. The amount assessed against a public utility, not paid within thirty days after such determination, shall draw interest at the rate of six per centum per annum." Laws of New York, 1934, ch. 282 (Public Service Commissions Law, § 18-a).
It will be observed that the only essential differences between this statute and our own are: (1) The New York statute limits the charge that may be made against the corporation to one-half of one per cent of its operating revenues; our statute limits the charge to the reasonable cost of the services performed. (2) Our statute specifically provides for collection by a civil action; the New York statute does not. Since the majority hold that the absence of a limitation (such as one-half of one per cent of operating revenues) does not render the act unconstitutional, I venture the assertion that, in all essential respects, the New York statute is identical with ours. It is, therefore, of more than passing interest to know what the New York court of appeals thinks about it. In Bronx Gas and ElectricCo. v. Maltbie, supra, that court says: *Page 195 
"The full power of investigation to determine reasonable rates, either upon complaint or upon its own motion, rests with the Commission. The only subject dealt with by these additions of the Laws of 1934 relates to the costs and expenses of conducting such investigation. The Public Service Commission is not obliged to show in the first instance to any court the grounds or the reasons for its investigation. The duty rests upon it to make the investigation upon complaint or upon its own motion when it, and not the courts, deems it necessary. The purpose and the regulatory powers of the Commission would be nullified were it obliged in the first instance to show necessity for examination or investigation. The Legislature has given to the Commission, and not to the courts, the right to determine these matters.
"The determination of the question, viz.: should an investigation be made, rests solely in the discretion of the Commission, and in its exercise of this discretion the courts may not interfere. Martin v. Mott (12 Wheat. 19, 29, 33);Philadelphia  Trenton R.R. Co. v. Stimpson (14 Pet. 448, 458).
"Neither is there any discretion given to the courts to determine when or how the expenses shall be charged to the investigated corporation. Section 18-a distinctly states that whenever the Public Service Commission shall deem it necessary to investigate the rates of any public utility, such public utility shall be charged with and pay such portion of the compensation and expenses of the Commission as is reasonably attributable to such investigation. The respondents and the courts below have read this section as though the expenses can only be charged to the utility when the investigation appears to be necessary, and that, to establish such necessity, the Commission, after a hearing, must make findings of fact based upon evidence showing such necessity. This statute will bear no such interpretation. The previous law has not been modified: the Commission may investigate whenever it shall deem necessary; the public utility shall be charged with the reasonable expenses. The hearing provided for in Section 18-a is on the cost and expenses, not on the necessity for the examination. *Page 196 
This is the way the section reads; this is the interpretation we must give it. To hold otherwise cripples the whole proceeding and renders the Commission almost powerless. The words, `provided an opportunity to be heard thereon shall first have been granted to such public utility' apply to the preceding clause, `such portion of the compensation and expenses of the commission, its officers, agents and employees, including employees temporarily employed, as is reasonably attributable to such investigation, valuation or revaluation.' . . .
"We therefore hold that the rulings below are erroneous, and that the petitioner is to be charged with the costs and expenses reasonably attributable to this investigation without previous findings of necessity."
Our statute is obviously patterned after the Wisconsin statute. That statute is of especial interest to us, since ours was adopted after that act had been construed by the supreme court of Wisconsin. For it is an elementary rule of statutory construction that a statute taken from a sister state is adopted with the construction placed upon it by the court of last resort of such state. In re Westlake Avenue, 40 Wash. 144,82 P. 279; Bickford v. Eschbach, 167 Wash. 357, 9 P.2d 376. The Wisconsin statute is as follows:
"196.85. Payment of Commission's Expenditures by Utilities.
(1) Whenever the commission in a proceeding upon its own motion, or complaint, or upon an application to it shall deem it necessary to investigate the books, accounts, practices and activities of, or make appraisals of the property of any public utility, power district or railroad, or to render any engineering or accounting services to any public utility, power district or railroad, such public utility, power district or railroad shall pay the expenses reasonably attributable to such investigation, appraisal or service; provided, however, that the commission mayexempt and relieve such public utility, power district, orrailroad from the duty of paying such expenses, or a portionthereof, but only upon a finding *Page 197 that the public interest requires that such public utility,power district, or railroad be thus exempted and relieved, inwhich event such expenses shall not be chargeable as a part ofthe remainder described in subsection (2) of this section. The commission shall ascertain such expenses and render a bill therefor, by registered mail, to the public utility, power district or railroad, either at the conclusion of the investigation, appraisal or services, or from time to time during its progress. Upon bill so rendered such public utility, power district or railroad shall, within thirty days pay to the commission the amount of the special expense for which it is billed, and such payment when made shall be credited to the appropriation to the commission in subsection (4) of section 20.51. . . ." Laws of Wisconsin, 1931.
I have italicized the proviso, because it is in this respect only that the statute can be differentiated from ours. It is to be observed that this proviso expressly delegates to the public service commission the power which the majority attributes, by implication, to ours, and which they hold to be an unlawful delegation of legislative power. In the first place, the implication that our statute places such power in the hands of the director is unwarranted. The duty of the director is in all cases mandatory. Our statute says:
"The department shall ascertain such expenses, and . . .shall render a bill therefor . . ." Laws of 1933, ch. 165, § 12, p. 610 (Rem. 1934 Sup., § 10458-6 [P.C. § 5527-12]).
I see no room for favoritism or discrimination under this statute. Surely, if the director has failed to perform the duties imposed upon him, there is some remedy other than holding the act unconstitutional.
But, assuming the implication of power attributed to the statute by the majority, let us see what the supreme *Page 198 
court of Wisconsin says about the express delegation of such power under their statute. In Wisconsin Telephone Co. v. PublicService Commission, supra, it is said:
"Does it not appear from this act that the Legislature has declared what the law shall be? Tersely stated, it declares that the public utilities shall pay the expenses of investigations of their affairs unless in the judgment of the commission public interest requires that they be exempt from such burden. It was not the legislative intent to confer upon the Public Service Commission the arbitrary power which resides in the Legislature itself to determine what constitutes public interest. The Legislature possesses arbitrary power in such matters, and may determine that to be in the public interest which the great majority of the people believe otherwise. When they so determine, there can be no appeal. This is not the kind of power which the Legislature committed to the Public Service Commission. While it may be that what constitutes the public interest is at times somewhat intangible in character, yet the Public Service Commission may pass reasonable judgment upon the facts and circumstances under consideration and come to a reasonable conclusion as to what the public interest requires under the circumstances, and its conclusion is subject to judicial review under the express provisions of the law which makes all determinations of the commission subject to judicial review. Section 196.41, Stats. This falls far short of the arbitrary power which resides in the Legislature itself. The Legislature realizes the impossibility of anticipating and providing for every special situation involved in the question of what the public interest requires, and, instead of attempting the impossible, it gives flexibility and efficiency to the law by providing that the commission shall first exercise its reasonable judgment as to what shall constitute public interest in the multiplicity of circumstances arising and then making its judgment subject to the judicial test of reasonableness, a test which cannot *Page 199 
be applied to the legislative exercise of power, in the same manner at least."
In face of this decision and that of the court of appeals of New York, in Bronx Gas and Electric Co. v. Maltbie, supra, I cannot bring myself to believe that this court is warranted in holding § 12, chapter 165, Laws of 1933, p. 610, unconstitutional. I therefore dissent.