Court Opinion

ID: 9674015
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:21:46.19748+00
Date Added: 2024-06-11T18:14:05.620165
License: Public Domain

SEILER, Chief Justice
(dissenting).
After consideration of the motions for rehearing and the briefs, I have concluded to withdraw my original vote of dubitante and to file this dissent.
As I understand the principal opinion, it holds that the “file and suspend” method is proper for proposed rate changes by a utility, even where the commission has previously fixed reasonable rates, basing this largely on the conclusion that this method has been used for over sixty years without objection from the general assembly.1 However, as I understand the motion for rehearing, there seems considerable doubt whether the commission itself has accepted the “file and suspend” method as a proper method to seek a rate increase where the maximum rate had been fixed by statute or *34order of the commission. Respondent does not clearly assert to the contrary in its response. Relators cite the commission’s decision in Atchison, Topeka & Santa Fe Ry. Co., 3 Mo. PSC 75, 85 (1916) where the commission stated that “. . .a schedule or tariff can only be filed with this Commission as an exhibit as proposed rates not to be effective as lawful schedules or tariffs until after a hearing had and order has been issued by this Commission as provided in the Public Service Commission Law.” According to Marty v. Kansas City Light and Power Co., 303 Mo. 233, 259 S.W. 793 (1924), the utility in case No. 1615, 8 P.S.C. R. Mo. 293, used the complaint method to obtain an increase in rates. The briefs on rehearing point out other, instances where utilities have proceeded by filing applications for permission to put increased rates into effect, some as recent as 1968 and 1969. The rules of the commission provide for the filing of applications for authority to change rates. It would appear, therefore, that there is considerable support for the proposition that the “file” method has been used where the commission has not previously fixed rates and the “complaint” or application method has been used where it has previously fixed rates. If this is true, then it would appear that much of the historical underpinning on which the principal opinion relies is removed and that the position adopted by the New York court in construing statutes similar in relevant aspects to ours, In re Dry Dock, East Broadway & Battery R. Co., 254 N.Y. 305, 172 N.E. 516, 518 (1930) warrants serious consideration.2 In the New York Public Service Commission law, Sec. 29 corresponded to our “file” method, while Sec. 49 corresponded to our “complaint” method. The court of appeals of New York said as follows:
“. . . By section 49 of the law, machinery was created by which rates, which previously could be changed only by the action of the Legislature, might thereafter be changed by order of the commission as superintending agency of the state. To that agency the Legislature delegated the function of exercising the regulatory powers of the state systematically and in accordance with prescribed rules, and imposed the duty upon it of changing rates fixed by law when these rates are shown to be unjust and unreasonable. By section 29 the Legislature restricted the power of the carrier to fix its own rates in the field where previously the state had not chosen to exercise its regulatory power. Provision was made in that section intended to afford the agency of the state opportunity to interdict any change before it became effective if it appeared that the new rate was unreasonable. The two sections are intended to cover separate fields. In the field where change in rates can lawfully be effected only by affirmative action of the state, section 49 makes provisions for such action by its agency. In the field where change in rates may lawfully be effected unless the state interposes its veto, section 29 provides opportunity, before the change becomes effective, for determination whether such a veto would be reasonable. No other construction of the statute accords with either the letter or the spirit of the statute.”
Therefore, I believe the trial court was correct in the case before us when it declared: “The proceedings which resulted in the report and order under scrutiny were initiated by the filing by MPS of revised rate schedules. The exclusive procedures under See. 393.270, V.A.M.S. are respondent’s own motion or complaint of any interested party. It follows that the proceedings and resulting report and order were and are a nullity . . . ”
On the due process issues which are, in my opinion, directly involved in any rate increase case, I agree with Judge Bard-*35gett’s statement in his opinion concurring in result that a consumer does have the right not to be charged unreasonable rates and that those who will have to pay the increase are entitled to receive notice of the proposal and be afforded an opportunity to appear and be heard by the commission prior to the rates going into effect.
Under the “file” method of Sec. 393.-140(11), all the utility need do is to file the increased tariff and give thirty days notice to the commission. The commission may, but is not required to, order publication for thirty days. The utility does not contend the commission is required to give notice and, in fact, both the utility and the commission take the position that the “file” method of rate increase is valid without any requirement of notice or hearing. As I understand the facts in the case before us, there actually was no such order of notice made by the commission and the only public notice of the filing was whatever came about by reason of a newspaper story on the subject and whatever voluntary notice was given the parties concerned. This, of course, would not constitute a due process notice. Volunteered notice or notice by grace is not sufficient due process, Mullane v. Central Hanover Bank Tr. Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Harris v. Bates, 364 Mo. 1023, 270 S.W.2d 763 (1954); Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927); Wuchter v. Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 72 L.Ed. 446 (1928).
Under the principal opinion the commission when a tariff or increase of rates is filed might (as it legally could) do nothing and thirty days later the customers would be paying higher rates without knowing what happened to them. In fact, if the commission so decided for “good cause”, the increased rates could go into effect almost immediately, as the statute allows the commission under those circumstances to forego the thirty days notice. All this could be done without the utility making any actual showing whatever that its present rates were unreasonable, because the statute does not require the filing of anything more than whatever is contained in the tariff sheet and the tariff sheet is nothing more or less than a price list.
The principal opinion rejects the due process argument advanced by relators on the basis that there is no protected property interest in the present level of utility rates. It seems to me, however, that what the consumers are contending here is not that they have the property right in a specific fixed utility rate, but that they have a right to receive notice of any proposed rate increase and to be afforded an opportunity to be heard prior to an increase going into effect. They do not claim a right to a specific rate but they do claim the right to just and reasonable utility rates, which is what is required by the statute. Sec. 393.-130-1 requires that all charges made by a public utility “shall be just and reasonable.” Sec. 393.130-3 requires that the utility serve all alike and a consumer, therefore, cannot be denied service at the will of the utility. Sec. 393.280 provides that if the company charges more than the price fixed by the commission, no recovery can be had in an action to collect for the electrical service and the making of the excessive charges is a complete defense to the action. These statutory provisions establish a right of entitlement in the consumer to a “just and reasonable” rate, charge or price. It is part of the “spirit of the act” standard referred to in the principal opinion. In Ohio Bell Telephone Company v. Public Utilities Commission of Ohio, 301 U.S. 292, 304-5, 57 S.Ct. 724, 730, 81 L.Ed. 1093 (1937), the court talked about a fundamental right of due process in all persons affected by the actions of a utility regulatory commission as follows:

“All the more insistent is the need, when power has been bestowed so freely [referring to the broad powers with which a public service commission has invested], that the ‘inexorable safeguard’ . of a fair and open hearing be *36maintained in its integrity . . . The right to such a hearing is one of the ‘rudiments of fair play’ ... assured to every litigant by the Fourteenth Amendment as a minimal requirement
If more is needed, we can properly look to the substantial investment which electric utility consumers have in their electrical appliances and systems. As pointed out in the briefs, the utility has invested approximately $1,945 worth of capital for each of its 110,000 customers and now has $1,709 worth of facilities (original cost) for each of these customers. A customer who has invested in the cost of the electrical system in his residence or business and then further invested in the cost of various electrical appliances (e. g., refrigerator, lighting fixtures, television set, range and oven, washer and dryer, radio, dishwasher, freezer, vacuum sweeper, sewing machine, furnace, air conditioner, and dehumidifier) has much more at stake on an individual and collective basis than does the company. It is common knowledge the electric companies advertise and promote such investments. The property rights of the customers in terms of their investment are many times greater than those of the utility. Who of us these days has any real choice in deciding whether or not to use electricity in his home or business? It is not realistic to say that electric consumers do not have a direct property interest in, and right to, just and reasonable electric rates. Both the Missouri statutes and their property investment give consumers sufficient entitlement to bring them under Fourteenth Amendment protection.
The principal opinion relies to some extent upon Sellers v. Iowa Power & Light Company, 372 F.Supp. 1169 (S.D.Iowa 1974), but in Iowa the statute extended to the consumer in lieu of a procedural due process safeguard, a comparable safeguard guaranteeing his right to a just and reasonable rate in the form of a right to a refund for any payments for utility services in excess of the rate finally approved by the commission. The Iowa statutes provide both for a refund bond and a hearing before rates can be charged which are not subject to refund. There is no such protection in Missouri. The Missouri commission has no power to promulgate an order requiring a pecuniary reparation or refund, Straube v. Bowling Green Gas Company, 360 Mo. 132, 227 S.W.2d 666, 668 (1950) and once the utility collects in accordance with rate schedules, the amount so collected cannot be taken away, Lightfoot v. City of Springfield, 361 Mo. 659, 236 S.W.2d 348, 354 (1951), nor under the “file” method available henceforth to the utilities is there any guarantee of an opportunity to be heard before the rates are increased.
It is true that consumers in Missouri could file a complaint after the rate had been increased under the “file” method, but then the burden of proof is on the consumer and it is impossible for the average consumer to do anything effective about making such a complaint or investigation. It would take thousands of dollars in fees and expenses for the expert testimony and services of counsel required to carry such a burden.
It seems to me that the result of the principal opinion in holding that there is no need to afford procedural due process to the consumer means that as a practical matter a consumer has no way to insist on his right to “just and reasonable” electrical rates. Under the principal opinion electric rates can be raised without any notice or hearing for consumers, without any evidence of reasonableness whatsoever, and despite the fact that such an increase in rates means that the substantial investment of the individual consumer in his electrical system and appliances is diminished without his having any alternative source of electrical service since the utility has a state protected monopoly.
Even if we were to say the consumer has only a privilege to obtain electricity at the current price, it is a most valuable privilege and “Valuable privileges . . . are also *37entitled to the protection of law.” Alpert v. Board of Governors of City Hospital, 286 App.Div. 542, 145 N.Y.S.2d 534, 538 (1955), where the court held that despite the fact there is no constitutional right to practice medicine in a public hospital, any more than there is an absolute right to sell liquor or drive an automobile, it is a valuable privilege and therefore it was illegal to exclude petitioner, a qualified physician, without notice and an opportunity to be heard.
Additionally, it seems to me that under the law laid down by the principal opinion there is a vast inequality of protection between the rights of the consumer to have rates which are not unreasonably high and the rights of the utility to have rates which are not unreasonably low. As has earlier been stated, under the “file” method the utility need give no notice and if the commission so decides the rates can go into effect immediately. If a consumer makes a complaint, however, he must set forth allegations of fact which if proven will entitle him to relief and there is an express requirement that notice be given the utility, see Sec. 386.390 and Sec. 393.260, and then the consumer must carry the burden of convincing the commission in the course of a long and expensive hearing. In Kansas City v. Webb, 484 S.W.2d 817, 825 (Mo. banc 1972), the court was faced with a constitutional challenge to a city ordinance which limited individual condemnees to a trial by jury by six freeholders while providing a corporate condemnee the option of choosing either a common law jury or a jury of six freeholders. In respect to this unequal treatment, the court said as follows:
“. . . Granting to a corporate owner of land the right to elect between a trial by common law jury or a freeholders’ jury but denying the same right to an individual landowner similarly situated clearly discriminates between the two types of owners without any rational basis for differentiation. It creates an artificial classification bearing no reasonable, just or proper relation to the object of the legislation . .”
So it is, it seems to me, in the present case. There is no rational basis for creating two sets of remedies, one significantly more favorable than the other. This is particularly true in light of the clear expression of legislative intent that there be only one remedy common to all who challenge the validity of the commission’s order.
I would affirm the judgment of the trial court and respectfully dissent from the principal opinion.

. There is nothing to indicate prior general assemblies were ever made aware that the “file” method could be used by a utility to raise previously established rates without notice or hearing, or that such an intent was being ascribed to the legislature. The present case seems to be the first time the issue has been squarely presented to a Missouri court, so this is not a situation where the legislature has been put on notice by virtue of prior judicial declarations so holding.

. It is of interest and relevance that the Missouri Public Service Commission Act was based upon the 1907 New York Act. Annual Report, Mo.P.S.C., Fiscal year 1971-72, p. 4.