Court Opinion

ID: 9458668
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:58:39.702595+00
Date Added: 2024-06-11T17:35:51.176692
License: Public Domain

SPRECHER, Circuit Judge,
dissenting, with whom SWYGERT, Chief Judge, joins.
I respectfully dissent. I definitely find the existence of state action and activity under color of state law, and I firmly believe that procedural due process was not accorded to the plaintiff.
I.
The interpretation of constitutional amendments1 and Congressional enactments 2 is necessarily influenced by the common law in effect at the time of their adoption or ratification. Congress passed the Fourteenth Amendment in 1866 and ratification was completed in 1868. The Ku Klux Act (42 U.S.C. § 1983) was enacted on April 20, 1871. What people understood about “state action” or “under color of any statute, ordinance, regulation, custom, or usage, of any State” as applied to public utilities in 1866-1871 was as much a part of the “original understanding” 3 of the Four*659teenth Amendment and the Ku Klux Act as “any action of a State * * * directed by way of discrimination against the negroes as a class.” 4
The original common law distinction between a public and a private business depended upon whether the enterprise was monopolistic or competitive.5 Whatever in medieval England was in short supply, such as doctors, became publicly regulated; an example is the regulation of doctor’s fees as early as 1359. The trade guilds fostered occupational monopolies. As population and resources increased, these artificial monopolies tended to disappear, leaving the natural monopolies, which by their nature would not admit of free competition, such as water, gas, telephone and electric companies. When these natural monopolies were given a franchise by the state to supply exclusive services, often along with the power of eminent domain and public easements, they assumed the correlative obligation of submitting to public regulation and of furnishing reasonably adequate service to all persons at reasonable prices.6
As early as 1670, ferryboat operators in England enraged the public by charging exorbitant tolls and providing poor service. Lord Chief Justice Matthew Hale wrote, “Each ferry ought to be under . a public regulation, to wit, that it give attendance at due time, a boat in due order and take but a reasonable toll.”7 Chief Justice Waite said in Munn v. Illinois, 94 U.S. 113, 125-126, 24 L.Ed. 77 (1877):
“Looking, then, to the common law, from whence came the [property] right which the Constitution protects, we find that when private property is ‘affected with a public interest, it ceases to be juris privati only.’ This was said by Lord Chief Justice Hale more than two hundred years ago, in his treatise De Portibus Maris, 1 Harg.Law Tracts, 78, and has been accepted without objection as an essential element in the law of property ever since. Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large.”
It is also clear what the common law was in Wisconsin prior to and during the 1866-1871 period. In Shepard v. Milwaukee Gas Light Co., 6 Wis. 526 [539] (1858), the Wisconsin Supreme Court said at pages 534-535 [546-547]:
“The very fact of this exclusive right conferred upon the company to manufacture and sell gas in the city, to be consumed therein by the citizens thereof, would imply an obligation on the part of the company to furnish the city and citizens with a reasonable supply on reasonable terms. Odius as were monopolies to the common law, they are still more repugnant to the genius and spirit of our *660republican institutions, and are only to be tolerated on the occasion of great public convenience or necessity; and they always imply a corresponding duty to the public to meet the convenience or necessity which tolerates their existence.”
And in 1874, the Supreme Court of Wisconsin, in granting to the state attorney general the remedy of restraining railroads from exacting rates in excess of the maximum fixed by the legislature, said in Attorney General v. Chicago & N.W.R.R., 35 Wis. 425, 530-531, 595:
“But such aggregations of capital and power, outside of the public control, are dangerous to public and private right; and are practically above many public restraints of the common law, and all ordinary remedies of the common law for private wrongs. Their influence is so large, their capacity of resistance so formidable, their powers of oppression so various, that few private persons could litigate with them; still fewer private persons would litigate with them, for the little rights or the little wrongs which go so far to make up the measure of average prosperity of life.
***** *
“And all England had occasion to bless the courage and integrity of her great judges, who used so ably and so freely and so beneficially the equity writ, and held great corporations to strict regard to public and private right. Every person suffering or about to suffer their oppression, by a disregard of corporate duty, may have his injunction. When their oppression becomes public, it is the duty of the attorney general to apply for the writ on behalf of the public.
******
“We have held that here is positive violation of positive public law to positive public injury, and that we have jurisdiction of this writ, as a prerogative writ, to restrain it.”
A recent exhaustive study of the background and history of Munn v. Illinois demonstrates that the case presented an accurate analysis of the common law treatment of the natural monopolies to which citizens were “compelled to resort” as it existed in the decades of the 1860’s and 1870’s.8 The public affectation doctrine of Munn v. Illinois was replaced in 1934 by Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, where the Court declared that the state could regulate and interfere, by virtue of its police powers, wherever the public needed protection. In 1933, the New York legislature had established a Milk Control Board with power to fix milk prices. In upholding the milk price system, the Court observed, “The phrase ‘affected with a public interest’ can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good.” Id. at 536, 54 S.Ct. at 515. The Court distinguished “public utilities”:
“We may as well say at once that the dairy industry is not, in the accepted sense of the phrase, a public utility. We think the appellant is also right in asserting that there is in this case no suggestion of any monopoly or monopolistic practice. It goes without saying that those engaged in the business are in no way dependent upon public grants or franchises for the privilege of conducting *661their activities.” Id. at 531, 54 S.Ct. at 513.9
The effect of Nebbia was to hold that, while “public utilities” are vitally and essentially “clothed with a public interest,” 10 the public also has some interest in a great variety of other businesses for a multitude of reasons such as the public health, welfare, morality, conservation of resources and fair competition.11
It very clearly appears that in the period 1866-1871 pervasive regulation by the state was limited to the natural monopolies, public utilities which enjoyed extensive public privileges and to which citizens were compelled to resort. It was only later that state police powers were extended to encompass the regulation of great varieties of other private endeavors. Thus, regardless of whether or to what extent the “original understanding” of the Fourteenth Amendment and the Ku Klux Act is deemed to limit their present application, that understanding most certainly included coverage of the state-like action then being exercised by public utilities under careful and detailed state control.
The common law emphasis on the monopolistic character of a public interest business has continued to pervade judicial analysis of what constitutes “state action” for purposes of the Fourteenth Amendment and the corresponding “under color” language of the Ku Klux Act. In Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), both the majority opinion and Mr. Justice Douglas in his dissent agreed that the Moose Lodge was not “a place of public accommodation” or a “public enterprise or undertaking.”12 Despite having distinguished a private club from a public enterprise, both opinions are concerned with the monopolistic aspects of the club’s liquor license.
*662Mr. Justice Rehnquist responded to the Douglas dissent by saying:
“The limited effect of the prohibition against obtaining additional club licenses when the maximum number of retail licenses allotted to a municipality has been issued, when considered together with the availability of liquor from hotel, restaurant, and retail licensees falls far short of conferring upon club licensees a monopoly in the dispensing of liquor in any given municipality or in the State as a whole.” Id. at 177, 92 S.Ct. at 1973.13
The successful attempts of public utilities to exclude themselves from the operation of the antitrust laws has not been on the ground that they are not monopolies, but rather on the basis that their activity is exempt as “state action.” In recent antitrust cases where gas companies have charged that practices of electric companies were conspiracies to eliminate natural gas as an energy source competitive with electricity (Gas Light Co. v. Georgia Power Co., 440 F.2d 1135 (5th Cir. 1971), cert. denied, 405 U.S. 969, 92 S.Ct. 1162, 31 L.Ed.2d 244 (1972)), or that offering free underground electric service lines to new home builders in return for “all electric” installations were invalid antitrust “tie-ins” (Washington Gas Light Co. v. Virginia Electric & Power Co., 438 F.2d 248 (4th Cir. 1971)), the electrie companies themselves have successfully urged that their acts, as “state action,” are excluded from the operation of the antitrust laws in accordance with Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943).
In Gas Light Co., the court concluded at 440 F.2d 1140:
“[T]he Commission here gave lengthy consideration to each of the practices and rates under attack, and after full adversary hearings ordered them into effect, some with major modifications. Defendants’ conduct cannot be characterized as individual action when we consider the state’s intimate involvement with the rate-making process. Though the rates and practices originated with the regulated utility, Georgia Power, the facts make it plain that they emerged from the Commission as products of the Commission.
* * * * * * “Our view is that the Parker exclusion applies to the rates and practices of public utilities enjoying monopoly status under state policy when their rates and practices are subjected to meaningful regulation and supervision by the state to the end that they are the result of the considered judgment of the state regulatory authority -* * * ” 14
*663II.
A Wisconsin public utility is as complete and fully interchangeable a government-substitute as the mind could conceive. A Wisconsin electric company enjoys a state-bestowed, state-protected and state-regulated natural monopoly to which every citizen is compelled to resort. In exchange for its monopoly market and its state-guaranteed return on its investment, it must furnish reasonably adequate service at a reasonable and just charge indiscriminately to all customers within its protected territory, and it must submit to full and complete government supervision both by the state through the Public Service Commission and by the municipality which it serves.
Under Wisconsin legislative enactments, no public utility may extend or render electric service to the premises of a person already receiving such service from another public utility; in other words, every utility operates under a state-fostered monopoly. Wis.Stat. Ann. § 196.495. No public utility shall commence rendering service unless it shall first obtain a certificate from the state Public Service Commission authorizing it to transact business. §§ 196.49, 196.50. Every license, permit or franchise granted by the Commission is an indeterminate permit. §§ 196.54, 196.-55, 196.56.
Every public utility is required to furnish reasonably adequate service and facilities at a reasonable and just charge. § 196.03. It is unlawful for any public utility to charge a greater or less compensation for any service performed by it. § 196.22. If any public utility discriminates by charging a greater or less compensation, it may be penalized not less than $100 nor more than $1,000 for each offense, and its agent or officer so offending shall be fined not less than $50 nor more than $100 for each offense. § 196.60. If any public utility shall give any unreasonable preference or advantage to any person or shall subject any person to an unreasonable prejudice or disadvantage, it may be penalized not less than $50 nor more than $1,000 for each offense. § 196.62. If any public utility shall do any prohibited act, it shall be liable to the person injured thereby in treble damages. § 196.-64.
The Commission is vested with power and jurisdiction to supervise and regulate every public utility and to do all things necessary and convenient in the exercise of such power and jurisdiction. § 196.02(1). It shall have authority to inquire into the management of all public utilities and keep itself informed as to the manner and method in which the business is conducted, and may obtain from any public utility all necessary information. § 196.02(4). The Commission has the right to inspect the books, accounts, papers, records and memoranda of any public utility, and to examine under oath any of its officers, agents or employees. § 196.02(5). The Commission can require a uniform system of accounting. § 196.06. Each public utility must furnish to the Commission reports covering in detail every aspect of its business. § 196.12. All reports and records pertaining to public utilities in the possession of the Commission are open to inspection by the public at all reasonable times. § 196.14. The Commission may value or revalue all the property of any public utility. § 196.05. If the Commission finds that the rates or charges are unjust, unreasonable, insufficient or unjustly discriminatory or preferential or otherwise unreasonable or unlawful, it shall determine and fix reasonable rates and charges. § 196.37 d).
In regard to the Commission’s power and jurisdiction over services, every pub-*664lie utility shall file with the Commission all rules and regulations which in any manner affect the service or product. § 196.19(2). No change in any utility rate which purports to curtail the obligation or undertaking of service of the utility shall be effective without the written approval of the Commission after hearing. § 196.20. Whenever the Commission finds that any regulations, measurements, practices, acts or services are unjust, unreasonable, insufficient, preferential, unjustly discriminatory or otherwise unreasonable or unlawful, or shall find that any service is inadequate, or any service which can be reasonably demanded cannot be obtained, the Commission shall determine and fix reasonable regulations in lieu thereof. § 196.37(2).
No public utility shall be dissolved, reorganized, consolidated, merged or abandoned without the consent and approval of the Commission. §§ 196.78, 196.79, 196.80, 196.81.
In addition, any public utility shall by the acceptance of an indeterminate permit be deemed to have consented to a future purchase of its property actually used and useful for the convenience of the public, by the municipality which it serves for the compensation and under terms and conditions determined by the Commission. § 196.57. While they remain under private ownership, however, all public utilities are subject to regulation by the municipality which they serve. The municipality has the power to determine the quality and character of each kind of product or service furnished or rendered and all other terms and conditions upon which the public utility may be permitted to occupy the streets, highways and other public places within the municipality. § 196.58(1). The Commission shall have original and concurrent jurisdiction with municipalities to require extensions of service and to regulate service of public utilities. § 196.58(5).
Finally, the Wisconsin statutes provide that “Any officer or agent of any public utility furnishing or transmitting gas or electric current or both or water to the public or for public purposes * * * may enter any dwelling, store, building, room or place supplied with gas, electricity or water by such utility, for the purpose of inspecting, examining, repairing, installing or removing the meters, pipes, fittings, wires and works for supplying or regulating the supply of gas, electricity or water and of ascertaining the quantity of gas, electricity or water supplied.” § 196.171.
This summary demonstrates the intertwining of public regulation with private ownership and, further, the identity of function between a municipality and a public utility.
Where the government places monopoly power in private hands, even in cases where the recipient of the power is not a public utility or a “government-substitute,” the Supreme Court has found “state action” (or the concomitant “federal governmental action”). In Railway Employes’ Department v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L. Ed. 1112 (1956), the enactment of the federal statute (Railway Labor Act) authorizing union shop agreements was the “governmental action,” since it gave unions monopolistic power over the supply of railroad employees. In Lathrop v. Donohue, 367 U.S. 820, 81 S.Ct. 1826, 6 L.Ed.2d 1191 (1961), the Court found state action in the Wisconsin Supreme Court’s requirement that an attorney must be a member of the integrated bar association if he wishes to practice law, because a monopoly supply of lawyers was created.15
State action is also carried on by private parties who perform a public function ordinarily performed by a govern*665mental agency. In Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276, 90 L.Ed. 265 (1946), a prívate corporation which owned a “company town” was held to carry on state action. (“In short the town and its shopping district are accessible to and freely used by the public in general and there is nothing to distinguish them from any other town and shopping center except the fact that the title to the property belongs to a private corporation.” Id. at 503, 66 S.Ct. at 277.)
Where a state delegates an aspect of the elective process to private groups, they become subject to the same restraints as the state. Terry v. Adams, 345 U.S. 461, 73 S.Ct. 809, 97 L.Ed. 1152 (1953).
In Evans v. Newton, 382 U.S. 296, 86 S.Ct. 486, 15 L.Ed.2d 373 (1966), a United States senator had willed a tract of land to the city of Macon, Georgia, to be used as a park for white people only. The city kept the park segregated for some years, but in time let blacks use it also. Suit was brought to remove the city as trustee. The city resigned, its resignation was accepted, and the Georgia Supreme Court held that the senator had the right to bequeath his property to a limited class. In reversing, the Supreme Court said at 301-302, 86 S.Ct. at 490:
“The service rendered even by a private park of this character is municipal in nature. It is open to every white person, there being no selective element other than race. * * * A park * * * is more like a fire department or police department that traditionally serves the community. Mass recreation through the use of parks is plainly in the public domain * * *. Like the streets of the company town in Marsh v. Alabama, supra, the elective process of Terry v. Adams, supra, and the transit system of Public Utilities Comm’n v. Pollak, supra [343 U.S. 451, 72 S.Ct. 813, 96 L.Ed. 1068 (1952)], the predominant character and purpose of this park are municipal.”
Restrictive' covenants founded in private action serve the same function and have the same effect as zoning ordinances promulgated through governmental sanction and therefore constitute state action. Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948).
Not only is the defendant electric company in this ease “accessible to and freely used by the public in general;” not only are its “predominant character and purpose . . . municipal.” Wisconsin citizens are actually compelled to use its facilities. And the municipalities which it serves could take over those facilities, if they so desired, and operate them directly. It is difficult to imagine a more thoroughly state-integrated government-substitute than a public utility; the one involved here is a particularly eminent example.
The defendant utility operates as an agent of the state under the supervision and regulation of the defendant Public Service Commissioners, who are jointly responsible for its acts, in satisfaction of the requirements of “state action” and “under color” of state law.16 It remains to be determined whether the act involved here was an integral part of such state action or was merely a private act by the utility disassociated from its public business.17
*666III.
The district court dismissed the plaintiff’s cause of action upon the motion of the defendant Public Service Commissioners (in which motion the defendant Wisconsin Electric Power Company joined) to dismiss the action for failure of the amended complaint to state a claim upon which relief could be granted and for failure to state a substantial federal question. Therefore the plaintiff’s allegations must be taken as true that: (1) on December 23, 1969, he personally went to the defendant utility’s office at 231 West Michigan Street, Milwaukee, and made a payment in cash for his current electrical service charge for his residence located at 2714 West Clybourn Street, Milwaukee; (2) his receipt was not stamped for the payment; (3) the plaintiff continued to make current payments for utilities but refused to pay for the one disputed arrearage; and (4) the utility notified the plaintiff that his electrical service would be discontinued on July 6, 1970.
Although the record here is sparse, it does contain some affidavits and some answers by the defendants to interrogatories. From these it appears that the disputed payment was in the amount of $9.89; that a subsequent charge was made for the premises at 2714 West Clybourn Street and was paid by the plaintiff; that the plaintiff then moved to 3328 West St. Paul Street, where he was charged and he paid at least four monthly statements prior to being notified of the threatened disconnection of his West St. Paul service for failure to pay the one disputed item of $9.89 at West Clybourn.
It has been generally acknowledged judicially that a public utility company or a municipality engaged in supplying gas or electricity to the public has the right to cut off service to a customer for nonpayment by him of a just service bill, and may adopt and enforce, as a reasonable regulation for the conduct of its business, a rule that service supplied to a customer may be cut off because of his default in payment. Annotation, 112 A.L.R. 237 (1938).18 A reason for the rule “is that to limit the remedy for collection of compensation for the service to actions at law would be impracticable, as leading to an infinite number of actions to collect very small bills against scattered consumers, many of them mere renters and financially irresponsible.” Steele v. Clinton Electric Light & Power Co., 123 Conn. 180, 193 A. 613, 615 (1937).
But the present case does not involve nonpayment of undisputed accounts. As *667the record now stands, the plaintiff’s account was paid in full. The defendant utility has threatened to discontinue service if the same account is not paid a second time, which is clearly a discriminatory practice under Wisconsin statutes. Wis.Stat.Ann. §§ 196.60, 196.62. Even assuming that the order to dismiss was vacated and the case remanded for further proceedings, the utility, which contended in its answer that the $9.89 account was not paid,19 merely created a bona fide dispute as to payment. Neither situation calls into operation the “general rule” regarding discontinuance of service. In fact either situation calls into effect an entirely different rule: “[B]ecause the consumer’s dependence on the utility provides it with an overwhelming bargaining advantage, discontinuance can not be used to coerce a customer into paying a bill when there is a bona fide dispute concerning its validity.” Note, “The Duty of a Public Utility To Render Adequate Service: Its Scope and Enforcement,” 62 Col.L.Rev. 312, 326 (1962). See Steele v. Clinton Electric Light & Power Co., supra, 193 A. at 615; Annotation, 112 A.L.R. at 241. Additional reasons for this rule are that the alternative enables the utility to pass judgment on its own case20 and encourages fraudulent tactics.21
Therefore, whether the plaintiff’s account was paid or payment was in dispute, the threatened cut-off of service by the utility was contrary to the general legal principles governing such conduct. The critical problem, however, is the extent to which the state has insinuated itself into the problems of discontinuance of service where payment is in dispute.
“The city, as a water company, cannot do as it will with its water. It owes a duty to each consumer. The consumer, once taken on to the system, becomes dependent on that system for a prime necessity of business, comfort, health, and even life. He must have the pure water daily and hourly. To suddenly deprive him of this water, in order to force him to pay an old bill claimed to be unjust, puts him at an enormous disadvantage. He cannot wait for the water. He must surrender, and swallow his choking sense of injustice. Such a power in a water company or municipality places the consumer at its mercy. It can always claim that some old bill is unpaid. The receipt may have been lost, the collector may have embezzled the money yet the consumer must pay it again, and perhaps still again. He cannot resist, lest he lose the water.”
On September 27, 1932, the Wisconsin Public Service Commission, upon prior notice, held a hearing and investigation relative to proposed standard guaranty and deposit rules and disconnect procedure. At the hearing one public utility contested the Commission’s authority to establish any rules on the subject on the ground that such rules governed a purely managerial function and were equivalent to confiscation of the company’s property. The Commission found that position “untenable.” On November 27, 1935, the Commission issued its order effective January 1, 1936, entitled “Re Guarantee and Deposit Rules and Disconnect Procedure,” 11 Public Utilities Rep. (New Series) 439 (1935). The Commission said at 443-44:
“The subject which has been the chief bone of contention between the Commission and the utilities is the legal limitations which attach to the privilege of disconnection or refusal of service. Our approach to the subject has been that, under modern conditions, light, heat, power, water, and communication service are prime necessities of life, any one of which may vitally affect the health, business, or *668comfort of the customer. Certainly no one should be deprived of such services except for just and sufficient cause. As has been frequently pointed out by the courts, a customer after having subscribed to any of the above services becomes wholly dependent upon the utility and thereby places himself at an enormous disadvantage. Since the parties are not on an equal footing, the privilege of disconnecting or refusing service constitutes a powerful weapon which, if arbitrarily or capriciously exercised, may be used to coerce a customer unduly. In short, it is a privilege which should be exercised with extreme caution and only to insure compliance with requirements which are both equitable and enforceable at law.
“In connection with this principle, the supreme judicial court of Maine in Wood v. Auburn (1895) 87 Me. 287, 293, 32 Atl. 906, 29 L.R.A. 376, one of the leading cases on the subject of disconnection, said in answer to the contention that the customer may apply to the courts to recover any sum he was compelled to pay under threat of disconnection: ‘To oblige a person to follow such a course would be a violation of the fundamental juristic principle of procedure . . . that he who asserts something to be due him, not he who denies a debt, shall have the burden of judicial action and proof.’
“It is our belief that the primary function of a disconnect rule is to assist utilities in collecting legitimate bills for utility service without resorting to a court of law. Various utility representatives have pointed out, and the Commission concedes that the cost of attempting to collect small accounts in the courts is prohibitive. Furthermore, such suits may put customers to undue expense. We are of the opinion, therefore, that the privilege of disconnection should be considered as a technically extra-legal remedy to be invoked by the utility only to enforce its legal rights without resort to a court of law. It should not be used, as it has been too frequently in the past, to compel a customer to pay up a delinquent account within an unreasonable period or to impose other unreasonable or burdensome conditions which are not warranted by the facts in the ease.”
The Commission then proceeded to set forth nine “principles and interpretations” including the following:
“6. Service may not be denied at one location because of the customer’s failure to pay a bill at a previous location.
“7. Service may not be denied at the same location to a customer who has paid the current bill but who has some old delinquent bills still owing to the company. . . .” (Id. at 445.)
Each of the “principles,” including the above two, was supported in the order by the citation of numerous cases. The Commission concluded, “With the foregoing principles and interpretations in mind we believe that the following rules should be adopted as a guide for future action along these lines.” Id. at 446. A separate rule was set forth for deposits, guarantee and disconnect. The presently existing rule covering these subjects is substantially the same as the one in the 1935 order of the Commission; apparently it has been modified slightly from time to time by subsequent Commission orders. 6 Wis.Adm.Code, ch. PSC § 113.13.22
It is beyond dispute that the state through the Commission has insinuated itself into the entire problem of dis*669connection by virtue of its 1935 order. In addition, the Wisconsin legislature, by investing the defendant utility with the power and authority to enter into the plaintiff’s dwelling to remove the “meters, pipes, fittings, wires and works for supplying or regulating the supply” of electricity has become a joint party with the utility in resorting to self-help procedures which are subject, as in this case, to abuse and to the opportunity for unlawful trespass. Whether it is possible for the utility to accomplish the discontinuance of service by throwing a switch before or after the self-help trespass is not a detail which would affect the impact of the state’s activity in permitting it.
I would hold that there is sufficient state action to give the federal court jurisdiction under the Fourteenth Amendment and that all the defendants acted under color of state law for purposes of jurisdiction under section 1 of the Civil Rights Act of 1871 (Ku Klux Act, 42 U. S.C. § 1983).23
IV.
The next question is whether the rules governing disconnection of electric service promulgated by the defendant utility with the tacit approval of the defendant Commissioners resulted in a deprivation of plaintiff’s liberty or property without due process of law in contravention of the Fourteenth Amendment and 42 U.S. C. § 1983.
It has now been established that 42 U.S.C. § 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343(3), apply to property rights as well as does the Fourteenth Amendment by its terms. Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972). Although such items as a stove, a stereophonic phonograph, a table and a bed are “deserving of due process protection,” Fuentes v. Shevin, 407 U.S. 67, 88, 92 S.Ct. 1983, 1998, 32 L.Ed.2d 556 (1972), “the requirements of due process should be more embracing” when an absolute necessity of modern life such as electricity is involved.24 See Lindsey v. Normet, 405 U.S. 56, 89, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972) (Douglas, J., dissenting in part).
“For more than a century the central meaning of procedural due process has been clear: ‘Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must be notified.’ Baldwin v. Hale, 1 Wall. 223, 68 U.S. 223, 17 L.Ed. 531, * * * It is equally fundamental that the right to notice and an opportunity to be heard ‘must be granted at a meaningful time and in a meaningful manner.’ Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62.” Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 1994, 32 L.Ed.2d 556 (1972).
I agree with Judge Stevens’ approach that due process must be assessed only after a consideration of the remedies currently available to the plaintiff, but I disagree that what is available satisfies due process or even remotely approaches it. The majority opinion suggests three possible judicial remedies, all of which require the customer to take the initiative: (1) equitable remedy of injunction; (2) payment under protest and suit for refund; and (3) remedy at law for damages.
In regard to equitable relief, it has been noted above that the Wisconsin Supreme Court held as early as 1874 that *670the state attorney general could procure an injunction against an offending public utility since private persons could and would not do so as individuals “for . the little wrongs which go so far to make up the measure of average prosperity of life.” Attorney General v. Chicago & N. W. R. R., 35 Wis. 425, 530-531 (1874). In the present case, the attorney general has not come to the plaintiff’s aid.
Later the Wisconsin Supreme Court said in Pabst Corp. v. City of Milwaukee, 193 Wis. 522, 527, 213 N.W. 888, 890 (1927):
“For the small consumer the cost of such a proceeding in equity [for an injunction] would be so out of proportion to the amount involved to be prohibitive. To hold that a public utility supplying an absolute necessity of modern urban life can compel a consumer to pay excessive and illegal rates under a threat of depriving the consumer of the service and then defeat recovery for the excess illegally collected because the consumer has not resorted to a suit in equity ‘would be a violation of the fundamental juristic principle of procedure. That principle is that the claimant, not the defendant, shall resort to a judicial process ; that he who asserts something to be due him, not he who denies a debt, shall have the burden of judicial action and proof. It is only in the case of dues to the state that this principle is suspended.’ Wood v. Auburn, 87 Me. 287, 293, 32 A. 906, 908, 29 L.R.A. 376-378.”
Not only did the Wisconsin Supreme Court in its opinion in Pabst discuss the unequal battle between utility and customer, which renders it inequitable to place the burden on the individual to initiate court action at law or equity. It also, as noted in the quotation from Wood, concluded that the requirement of payment under protest is limited to payment of revenue to the state.
The authority that a public utility has no lawful right to discontinue service for nonpayment of a disputed account, or an account for a different location or an older account when a current account has been paid, lends no support to a theory that a public utility has the right to reverse the principles of burden of judicial action, whether at law25 or in equity.
In Fuentes v. Shevin, 407 U.S. 67, 81, 92 S.Ct. 1983, 1994, 32 L.Ed.2d 556 (1972), the Court discussed the seizure of goods without notice or hearing, which is no different than the seizure of electric power:
“At a later hearing, an individual’s possessions can be returned to him if *671it was unfairly or mistakenly taken in the first place. Damages may even be awarded to him for the wrongful deprivation. But no later hearing and no damage award can undo the fact that the arbitrary taking that was subject to the right of procedural due process has already occurred.”
The only complaint provided against public utilities by consumers at the administrative level must be initiated by at least 25 persons. Wis.Stat.Ann. § 196.26. This is comparable to the administrative remedy held inadequate in McNeese v. Board of Education, 373 U. S. 668, 83 S.Ct. 1433, 10 L.Ed.2d 622 (1963), where 50 residents of a school district or 10 percent, whichever was less, could file a segregation complaint with the state superintendent of public instruction. Certainly, the investigation the Commission “may on its own motion” make (§ 196.28) or the defendant utility’s informal procedures for dealing with complaints cannot be said to satisfy procedural due process. The right to an impartial judge — one who has no interest in the outcome of a case before him —is required to meet the minimum standards of due process. In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942 (1955); Tumey v. Ohio, 273 U.S. 510, 523, 47 S.Ct. 437, 71 L.Ed. 749 (1927).
In Shepard v. Milwaukee Gas Light Co., 6 Wis. 526, 537 [539] (1858), the Wisconsin Supreme Court in determining the invalidity of a gas company’s regulation said:
“Another regulation ... reserves to the company the right at any time to cut off communication of the service pipe, if they shall find it necessary to do so, to protect the works against abuse or fraud, either in fact or in anticipation, without notice, without trial, of their own mere motion. This summary jurisdiction would not be given to any of the judicial courts in any case, but upon the most urgent emergency. Much less could it have been the intention to confer such power upon one of the parties to a contract of such vital importance. It is no hardship for the company to resort to the same tribunals, upon like process, for protection against fraud, as the law provides for individuals.”
Due process tolerates variances in the form of a hearing “appropriate to the nature of the case,” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950), and “depending upon the importance of the interests involved,” Boddie v. Connecticut, 401 U.S. 371, 378, 91 S. Ct. 780, 786, 28 L.Ed.2d 113 (1971). I would hold that, prior to the discontinuance of power because of a disputed account, the disputant is entitled to some kind of hearing before an impartial arbiter other than representatives of the public utility.
I would also hold that some notice reasonable in time and adequate in content must clearly advise the customer that he has the right to such a hearing if he disputes the charges leading to the threatened disconnection.26 If he indicates his desire for the hearing, obviously he would be entitled to further reasonable notice as to the time and place of the hearing.
The defendant utility is not infallible. It admitted to 646 errors during a recent calendar year. There is no reason why the present preliminary informal negotiations between utility and customer which unearthed these errors would *672not continue if notice and hearing were required prior to threatened disconnection. Despite the 10,000 service disconnections by defendant utility each year, in a recent calendar year only 71 persons went so far with their disputes as to contact the Public Service Commission, the Better Business Bureau, a newspaper or a public utility officer. It is not likely that a much larger number would take advantage of a proffered hearing. In those eases, perhaps everyone would benefit from the uniform procedure.27
On the other hand, the small amount involved and the relatively small number of persons who may be confronted with a situation similar to plaintiff's does not cause the problem to disappear. The likelihood of error in complex operations,28 the increasing probability that a letter containing a check to pay a bill may be lost or stolen, the venality of employees and even honest differences of opinion make this not only a very real problem29 but one with which greater numbers of persons are unable intelligently to cope.30 See Ihrke v. Northern States Power Co., 459 F.2d 566 (8th Cir. 1972); Palmer v. Columbia Gas Co., 342 F.Supp. 241 (N.D.Ohio 1972).
Finally, I believe that this is a proper class action 31 and that it is not barred by the Johnson Act, 28 U.S.C. § 1342, since its possible effect on public utility rates is purely incidental to the constitutional issues involved.
In conclusion, I would reverse the district court and enjoin this and similar disconnections or threatened disconnections based upon disputed accounts, unless and until the customer was provided with adequate and reasonable notice and a hearing before an impartial arbiter.

. Ex Parte Grossman, 267 U.S. 87, 108-109, 45 S.Ct. 332, 333, 69 L.Ed. 527 (1925) : “The language of the Constitution cannot be interpreted safely except by reference to the common law and to British institutions as they were when the instrument was framed and adopted.” The Fourteenth Amendment should be construed in the light of conditions existing when it was adopted and ratified. See In re Humason, 46 F. 388 (E.D. Wash. 1891).

. Moragne v. States Marine Lines, Inc., 398 U.S. 375, 392, 90 S.Ct. 1772, 1783, 26 L.Ed.2d 339 (1970) : “It lias always been the duty of the common-law court to perceive the impact of major legislative innovations and to interweave the new legislative policies with the inherited body of common-law principles — many of them deriving from earlier legislative exertions.”

. See Frank and Munro, “The Original Understanding of ‘Equal Protection of the Laws,’ ” 50 Col.L.Rev. 131 (1950) ; Bickel, “The Original Understanding and the Segregation Decision,” 69 Harv.L. Rev. 1 (1955).

. Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 81, 21 L.Ed. 394 (1873), quoted in Mr. Justice Rehnquist’s dissent in Weber v. Aetna Casualty & Surety Co., 406 U.S. 164, 178, 92 C.Ct. 1400, 1408, 31 L.Ed.2d 768 (1972).

. The statements in this paragraph are distilled from Wyman, “The Law of the Public Callings as a Solution of the Trust Problem,” 17 Harv.L.Rev. 156-73, 217-47 (1904) ; Burdick, “The Origin of the Peculiar Duties of Public Service Companies,” 11 Col.L.Rev. 514-31, 616-38, 743-64 (1911) ; Barnes, “Government Regulation of Public Service Corporations,” 3 Marquette L.Rev. 65 (1918).

. Burdick, supra note 5, at 518: “A person, by holding himself out to serve the public generally, assumed two obligations —to serve all who applied; and, if he entered upon the performance of his service, to do it in a ‘workmanlike manner’.” Wyman, sxipra note 5, at 166 : “Wherever virtual monopoly is found the situation demands this law that all who apply shall be served, with adequate facilities, for reasonable compensation and without discrimination ; otherwise in crucial instances of oppression, inconvenience, extortion and injustice there will be no remedies for these industrial wrongs.”

. “De Jure Maris,” 1 Collection of Tracts Relative to the Law of England 6 (Hargrave ed. 1787).

. Scheiber, “The Road To Munn: Eminent Domain and the Concept of Public Purpose in the State Courts,” in Fleming and Bailyn, Law In American History 329 at 330-31 (1971). Scheiber notes:
“That certain types of property even if private in their ownership were public in their use, i. e., ‘affected with a public interest,’ and thus no longer juris privati only, was a concept embedded in common-law doctrines and kept alive in the American courts by a line of cases — many of them, relying heavily on Hale’s tracts as the fountain of apposite doctrine — that dealt with riparian and admiralty law, tlie limits of the police power, and the constitutional conditions surrounding the exercise of eminent domain.” Id. at 354-55.

. The Court in effect found that the grain elevators in Munn were not “public utilities” : “Munn and Scott held no franchise from the state. They owned the property upon which their elevator was situated and conducted their business as private citizens. No doubt they felt at liberty to deal with whom they pleased and on such terms as they might deem just to themselves. Their enterprise could not fairly be called a monopoly, although it was referred to in the decision as a ‘virtual monopoly.’ This meant only that their elevator was strategically situated and that a large portion of the public found it highly inconvenient to deal with others.” Id. at 532, 54 S.Ct. at 514.

. “Plainly the activities of railroads, their charges and practices, so nearly touch the vital economic interests of society that the police power may be invoked to regulate their charges, and no additional formula of affection or clothing with a public interest is needed to justify the regulation. And this is evidently true of all business units supplying transportation, light, heat, power and water to communities, irrespective of how they obtain their powers.” Id. at 534, 54 S.Ct. at 515 (emphasis added).

. The Court cites scores of such instances of public interest in various businesses, virtually all occurring subsequent to the 1877 Munn decision.

. Mr. Justice Rehnquist in the majority opinion said:
“Far from apparently holding itself out as a place of public accommodation. Moose Lodge quite ostentatiously proclaims the fact that it is not open to the public at large. Nor is it located and operated in such surroundings that although private in name, it discharges a function or performs a service that would otherwise in all likelihood be performed by the State.” Id. at 175, 92 S.Ct. at 1972.
Mr. Justice Douglas noted it was stipulated that Moose Lodge “does not appear to have any public characteristics,” and that its “role as a center of community activity” remains an open question.
He stated:
“[A] private club, by definition, is not in the public domain. And the fact that a private club gets some kind of permit from the State or municipality does not make it ipso facto a public enterprise of undertaking, any more than the grant to a householder of a permit to operate an incinerator puts the householder in the public domain.” Id. at 180, 92 S.Ct. at 1975.

. In Public Utilities Commission v. Pollak, 343 U.S. 451, 72 S.Ct. 813, 96 L.Ed. 1068 (1952), the Court relied upon the approval by the regulatory commission after a full investigation, of the practice of piping radio programs into buses, as providing the necessary governmental action. The Court said it did not rely on the fact that the bus company operated a public utility on the streets or that it enjoyed a substanial monopoly. By its mention of these factors, however, the Court indicated their importance in a case where the regulatory agency does not make an affirmative approval.

. The court in Washington Gas Light Co. went even further and held that administrative “silence” constituted “state action,” saying at 438 F.2d 252:
“There can be no doubt, and in fact Washington Gas Light does not argue to the contrary, that the SCO is a regulatory arm of the state, possessing both the authority and powers necessary to qualify under Parker. Instead, the gas company argues that even though the SCO was aware of VEPGO’s [“underground residential distribution”] activities before 1966, it made no investigations and gave no affirmative approval (or disapproval) of the VEPCO plans, and that VEPCO’s conduct was therefore ‘individual’ and not ‘state’ action. The argument is not without merit but the conclusion is not inevitable unless one equates administrative silence with abandonment of administrative duty. It is just as sensible to infer that silence means consent, i. e., *663approval. Indeed, the latter inference seems the more likely one when we remember that even the gas company concedes that the SCO possessed adequate regulatory powers to stop VEPCO if it chose to do so, and that eventually SCO spoke affirmatively and first modified and finally ended the promotional practices upon which the suit was based.”

. See also, Lavoie v. Bigwood, 457 F.2d 7, 14 (1st Cir. 1972) : “[W]e find that appellant has adequately alleged ‘state action’ in asserting a town purpose to restrict sites for mobile homes and a concomitant private monopoly over the allocation of those sites.”

. Black, “The Supreme Court 1966 Term: Forward: ‘State Action,’ Equal Protection, and California’s Proposition 14,” 81 Harv.L.Rev. 69 (1967) ; Williams, “The Twilight of State Action,” 41 Tex.L. Rev. 347 (1963) ; Van Alstyne & Karst, “State Action,” 14 Stan.L.Rev. 3 (1961) ; Lewis, “The Meaning of State Action,” 60 Col.L.Rev. 1083 (1960) ; Horowitz, “The Misleading Search for ‘State Action’ Under The Fourteenth Amendment,” 30 S.Cal.L.Rev. 208 (1957).

. While I conclude in Part III that the state was substantially involved in the disconnect action, an opposite conclusion would not necessitate a holding that the diconnection was a private act. Mr. Justice Rehnquist in Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.*666Ed.2d 627 (1972), in his discussion of Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961), does not mention any direct connection between the Authority and the restaurant’s racial discrimination. Instead, he properly emphasizes the Court’s reliance on the multiple links between the government and the restaurant. That discussion and the concern with the monopoly aspects of liquor licensing seem to indicate a recognition that the extent of state involvement might be so great that state action would exist despite only a minimal nexus between the act complained of and the state regulation.
There is substantial authority for such a view. Burton v. Wilmington Parking Authority, supra; Lavoie v. Bigwood, 457 F.2d 7 (1st Cir. 1972) ; McQueen v. Druker, 438 F.2d 781 (1st Cir. 1971) ; Washington Gas Light Co. v. Virginia Electric & Power Co., 438 F.2d 248 (4th Cir. 1971) ; Smith v. Holiday Inns of America, Inc., 336 F.2d 630 (6th Cir. 1964) ; Colon v. Tompkins Square Neighbors, Inc., 294 F.Supp. 134 (S.D.N.Y. 1968) ; Anderson v. Moses, 185 F.Supp. 727 (S.D.N.Y.1960).

. If this were not an established rule, it could well be contested on the ground that it gives a highly favored monopoly another advantage over the ordinary merchant who, when his debtor fails to make payment, must initiate court action to collect. The merchant’s threat to stop dealing has no coercive effect since the consumer need only find the next merchant. The public utility’s threat to discontinue vital services not available elsewhere is highly effective coercion and totally discourages litigation. Bee Note, “Public Utilities and the Poor: The Requirement of Cash Deposits From Domestic Consumers,” 78 Yale L.J. 448 (1969).

. The district court in its opinion said:
“In effect, the plaintiff complains of the refusal of the Wisconsin Electric Power Company to extend credit.” Lucas v. Wisconsin Electric Power Co., 322 P. Supp. 337, 339 (E.D.Wis.1970). This is not what the plaintiff complains of at all. One who contends that he has paid all his bills is not seeking credit.

. Steele v. Clinton Electric Light & Power Co., 123 Conn. 180, 193 A. 613 (1937).

. In Wood v. City of Auburn, 87 Me. 287, 32 A. 906, 908 (1895), the Supreme Judicial Court of Maine, in enjoining the shutting off of water because of a disputed bill, said:

. The present codification of the rule does not expressly include the nine “principles and interpretationspresumably they remain in effect as guidelines. Therefore, even if the plaintiff did not pay the disputed account, guidelines 6 and 7 dictate that the defendant utility should not threaten to discontinue service. Whatever the facts are, the utility’s threat to discontinue his electric service is unlawful because it is based on an old account at a different location.

. However, inasmuch as a “note” to PSC § 113.13(4) provides, “Some utilities have rules or practices that are more liberal to customers in some particulars than the rules enumerated above,” I would agree with Judge Stevens that the rules at issue here are not of state-wide application. Hence a three-judge court was not required to be convened. Board of Regents v. New Left Education Project, 404 U.S. 541, 92 S.Ct. 652, 30 L.Ed.2d 697 (1972).

. In 1935, the Wisconsin Public Service Commission described electricity as a “prime necessity of life.” Re Guarantee and Deposit Rules and Disconnect Procedure, 11 Public Utilities Rep. (New Series) 439, 443 (1935).

. As an examide of an aggrieved customer’s remedy in tort for damages, Judge Stevens has cited the last Shepard case in Wisconsin (footnote 23 of majority opinion). Shepard was a hardware merchant in Milwaukee who in December, 1856, caused his shop to be fitted with gas apparatus and fixtures. He demanded to be supplied with gas but was denied service because he refused to sign a contract containing the gas company’s regulations, to some of which he objected. Shepard sued the gas company and recovered a judgment for $100 and costs. The gas company appealed to the Wisconsin Supreme Court, which agreed with Shepard that several of the regulations were improper and affirmed. Shepard v. Milwaukee Gas Light Co., 6 Wis. 526 [539] (1858). The company continued to deny Shepard service, however, and he brought another suit for damages. The lower court nonsuited him for failure to file a written application (which contained the invalid regulations). He then appealed to the Wisconsin Supreme Court, which reaffirmed the invalidity of the regulations, held that under the circumstances a written application had been waived, set aside the nonsuit and ordered a trial. Shepherd [sic] v. Milwaukee Gas Light Co., 11 Wis. 243 [234] (1860). Trial was had and Shepard recovered judgment on a jury verdict for $1500, which was appealed by the gas company. The Supreme Court affirmed in Shepard v. Milwaukee Gas Light Co., 15 Wis. 349 (1862). In 1862 he recovered damages for 1857 and 1858 in the total amount of $1600 after three appeals to the Wisconsin Supreme Court, during which time Shepard’s customers hunted for nuts and bolts by candlelight.

. The five-day “notice of disconnection” in the present case did not, in my opinion, serve any meaningful notice requirement. Notice must be of a hearing, not of disconnection. Nor would I require that the customer “be presumed to know the law.” The notice should tell him what the pertinent law is. Recently the Supreme Court looked with disfavor upon taking advantage of “an uneducated, uninformed consumer with little access to legal help and little familiarity with legal procedures.” Fuentes v. Shevin, 407 U.S. 67, 83, 92 S.Ct. 1983, 1995, 32 L.Ed.2d 556 n. 13 (1972).

. There is no reason why the daily newspaper “action” columns and the few selected readers whom they serve should have a monopoly on prompt, fair treatment.

. The defendant utility disavowed any “computer error” among its 646 annual errors “due to human agency.” Of course from one viewpoint, a computer is incapable of error; only the computer operator makes errors. Nor can anyone know how many errors go undetected in the course of a year.

. See, e. g., the New York Times, June 28, 1972, page 33, article entitled “Phone Deposit and Cancellation Policies Are Scored at Hearing.”

. In contrast to the pleasant treatment impliedly reflected by the description of the theoretical method of handling complaints within the utility and Commission, there are almost daily items recounting slightly more abrasive handling of actual complaints. See, e. g., Chicago Today, May 2, 1972, page 4.

. Miller, “Problems in Administering Judicial Relief in Class Actions under Federal Rule 23(b)(3),” 54 F.R.D. 501, 504-505 (1972).