Court Opinion

ID: 7222520
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:51:01.923262+00
Date Added: 2024-06-11T16:17:18.548108
License: Public Domain

HAMILTON, District Judge
(dissenting in part).
I agree with the conclusion of the majority opinion because the Act of May 14, 1934, chapter 283, § 1, 48 Stat. 775, U.S.C.A. title 28, section 41 (1), withdraws from the jurisdiction of the District Courts of the United States suits enjoining the execution of orders of administrative boards or commissions where the laws of the state provide a plain, speedy, and efficient remedy for a judicial review.
The laws of the commonwealth of Kentucky provide for an adequate judicial review of the orders and findings of its Public Service Commission. Carroll’s Kerntucky Statutes, 1936 Edition, sections 3952-1 to 3952-61. The plaintiff alleges in its petition that it does not come within the term “utility or utilities” as defined under Carroll’s Kentucky Statutes, 1936 Edition, section 3952-1, and for that reason this case does not fall within the bar of the Act of May 14, 1934; but I am of the opinion that this act, being remedial in its nature, should be liberally construed in order that the courts of the states may be left free to interpret their own statutes. It may be said, however, that the Public Utilities Act of the commonwealth of Kentucky includes within its terms all persons, corporations, their lessees, trustees or receivers, producing, manufacturing, storing, distributing, or selling natural or artificial gas for public consumption. The Act of May 14, 1934, cannot be avoided so as to confer jurisdiction on this court by a naked allegation of the plaintiff that it is not one of the persons coming within the statutory law of the commonwealth of Kentucky regulating public utilities.
The commission, in its order, which the plaintiff seeks to enjoin in this action, found that the plaintiff was a public utility and had authority to fix its rates. The language of the act (48 Stat. 775) expressly prohibits District Courts from enjoining any order of a state rate-making body.
Lower federal courts are creatures of the Congress, and their powers are confined within the acts bringing them into existence, and, whatever may be their inherent power incident to jurisdiction, the Congress can take from them the authority to grant injunctions in rate making cases and confer such power on the courts of the state, even though a federal constitutional right is in-
volved. Ex parte Robinson, 19 Wall. 505, 510, 22 L.Ed. 205 ; Bessette v. Conkey Company, 194 U.S. 324, 24 S.Ct. 665, 48 L.Ed. 997; Michaelson v. United States, 266 U.S. 42, 66, 45 S.Ct. 18, 20, 69 L.Ed. 162, 35 A.L.R. 451; Gillis, Receiver, v. California, 293 U.S. 62, 67, 55 S.Ct. 4, 6, 79 L.Ed. 199.
If the majority opinion be correct, the Act of May 14, 1934, was wholly unnecessary, because in no event would the federal court enjoin the orders of a public utility rate-making body if the state law provided an adequate judicial review.
The case of State Corporation Commission of Kansas v. Wichita Gas Company, 290 U.S. 561, 570, 54 S.Ct. 321, 324, 78 L.Ed. 500, relied on in the opinion of the majority, has no application to the case at *258bar. In the cited case, the commission sought to compel certain , pipe line companies to disclose to it facts to be used in fixing the rates of the distributing companies. The order of the commission sought to be enjoined did not fix rates, nor was it contended as a basis for relief that the commission was without authority to inquire into the charges of the Wichita Company. The court said:
“The commission’s proceedings are to be regarded as having been taken to secure information later to be used for the ascertainment of reasonableness of rates. The order is therefore legislative in character. The commission’s decisions upon the matters covered by it cannot be res adjudicata when challenged in a confiscation case or other suit involving their validity or the validity of any rate depending upon them. Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 227, 29 S.Ct. 67, 53 L.Ed. 150; Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U.S. 418, 452, et seq., 10 S.Ct. 462, 702, 33 L.Ed. 970. But the decisions of state courts reviewing commission orders making rates are res adjudicata and can be so pleaded in suits subsequently brought in federal courts to enjoin their enforcement. Detroit & Mackinac Ry. Co. v. Michigan Railroad Comm., 235 U.S. 402, 405, 35 S.Ct. 126, 59 L.Ed. 288; Napa Valley Co. v. Railroad Comm., 251 U.S. 366, 373, 40 S.Ct. 174, 64 L.Ed. 310. The appellees were not obliged preliminarily to institute any action or proceeding in the Kansas court in order jo obtain in a federal court relief from an order of the commission on the ground that it is repugnant to the Federal Constitution. Bacon v. Rutland R. Co., 232 U.S. 134, 138, 34, S.Ct. 283, 58 L.Ed. 538. Missouri v. Chicago, B. & Q. R. Co., 241 U.S. 533, 542, 36 S.Ct. 715, 60 L.Ed. 1148. Ex parte Young, 209 U.S. 123, 166, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A.(N.S.) 932, 14 Ann. Cas. 764. And upon the issue of confiscation vel non they are entitled to the independent judgment of the courts as to both law and facts. Ohio Valley Co. v. Ben Avon Borough, 253 U.S. 287, 289, 40 S.Ct. 527, 64 L.Ed. 908; Bluefield Water Works & Improv. Co. v. Public Service Comm., 262 U.S. 679, 689, 43 S.Ct. 675, 67 L.Ed. 1176. United Railways & Electric Co. v. West, 280 U.S. 234, 251, 50 S.Ct. 123, 74 L.Ed. 390.”
The plaintiff’s suit here is based solely on the ground that the laws of the commonwealth of Kentucky do not make it subject to the jurisdiction of the Public Service Commission for any purpose. It therefore follows that, if plaintiff’s contention be sound, it does not have to await the outcome of administrative action before resort to the courts ,to determine its rights. The question in dispute is purely a legal one and is not affected by administrative decision. Gully v. Interstate Natural Gas Company (C.C.A.) 82 F.(2d) 145, 150.
Federal Trade Commission v. Claire Co., 274 U.S. 160, 174, 47 S.Ct. 553, 556, 71 L.Ed. 978, does not lend support to the conclusion of the majority. In that case, the Claire Company sought to enjoin an order of the Federal Trade Commission requiring it to submit reports concerning its business, under section 6 of the act creating it (15 U.S.C.A. § 46). The commission’s orders were enforceable only by requesting the Attorney General to institute mandamus proceedings against the recalcitrant, or by supplying him with facts necessary to enforce forfeitures. Any proceeding to compel compliance or to recover forfeitures could only be had in the United States District Court on the law side of the docket. The court refused to grant equitable relief on the ground it had adequate remedy at law in the federal courts by presenting its defense to the mandatory or penalty action when instituted.
I have always understood the rule to be that the adequate remedy at law which defeats equitable jurisdiction must be such remedy in the federal courts, and not in the state courts, and it must be a remedy which the federal courts can administer under the circumstances of the particular case, and any doubt as to the law remedy must be resolved in favor of the equitable.
The courts have universally held that federal equity jurisdiction is to be tested by those rules, principles, and usages as administered by the federal courts immediately after the adoption of the Constitution^ unaffected by state statutes or practices, regardless of the antiquity of the remedy at law in the state courts. In other words, a case cognizable by a federal court of equity for inadequacy of legal remedy is still such a case, regardless of state legislation or practice enlarging legal remedies, and continues thus until the Congress deprives the federal courts of jurisdiction.
The majority opinion, without stated legal justification, and misapplying the Claire Case, relegates the plaintiff for relief to the Franklin circuit court of the commonwealth of Kentucky, because of the provi*259sions of the Kentucky Statutes, 1936 Edition, § 3952-44.
In the case of Smyth v. Ames, 169 U.S. 466, 550, 18 S.Ct. 418, 422, 42 L.Ed. 819, the court said: “The adequacy or inadequacy of a remedy at law for the protection of the rights of one entitled upon any ground to invoke the powers of a federal court, is not to be conclusively determined by the statutes of the particular state in which suit may be brought. One who is entitled to sue in the federal circuit court may invoke its jurisdiction in equity whenever the established principles and rules of equity permit such a suit in that court; and he cannot be deprived of that right by reason of his being allowed to sue at law in a state court on the same cause of action.”
When the violator is an individual, the penalties for failure to comply with the orders of the Public Service Commission are not more than $1,000, or confinement in jail for not more than six months, or both, and, if a corporation, not less than $25 or more than $1,000 for each violation, the enforcement thereof to be by the Franklin circuit court of the commonwealth of Kentucky.
In the case of Western Union Telegraph Company v. Andrews, 216 U.S. 165, 167, 30 S.Ct. 286, 54 L.Ed. 430, the court quoting from Ex parte Young, 209 U.S. 123, 155, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A. (N.S.) 932, 14 Ann.Cas. 764, said: “The various authorities we have referred to furnish ample justification for the assertion that individuals who, as officers of the state, are clothed with some duty in regard to the enforcement of the laws of the state, and who threaten and are about to commence proceedings, either of a civil or a criminal nature, to enforce against parties affected an unconstitutional act, violating the Federal Constitution, may be enjoined by a Federal court of equity from such action.”
The case of New Hampshire Gas & Electric Company v. Morse (D.C.) 42 F.(2d) 490, 493, 495, is directly in point. In that case the court said: “It is.not reasonable to hold that a person must violate a law and subject himself to possible fines or imprisonment in order to contest the constitutionality of a statute authorizing the imposition of a penalty. Threats of the constituted authorities are sufficient to set in motion an action to contest such rights. Western Union Telegraph Company v. Andrews, 216 U.S. 165, 30 S.Ct. 286, 54 L.Ed. 430.” Compare also Risty v. Chicago, R. I. & Pacific Railway Company, 270 U.S. 378, 390, 46 S.Ct. 236, 241, 70 L.Ed. 641; City of Fort Worth v. Southwestern Bell Telephone Company (C.C.A.) 80 F.(2d) 972; DiGiovanni v. Camden Fire Insurance Association, 296 U.S. 64, 74, 56 S.Ct. 1, 6, 80 L.Ed. 47; Grandin Farmers’ Cooperative Elevator Company v. Langer (D.C.) 5 F.Supp. 425, affirmed 292 U.S. 605, 54 S.Ct. 772, 78 L.Ed. 1467; City of Commerce v. Southern Railway Company (C.C.A.) 35 F.(2d) 331; Los Angeles Railway Corporation v. Railroad Commission of California (D.C.) 29 F.(2d) 140.
For the reasons herein stated, I find myself unable to agree with the majority opinion.