Court Opinion

ID: 9574969
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:10:11.029183+00
Date Added: 2024-06-11T12:47:34.952648
License: Public Domain

*833STIENK, J.
I dissent.
Under the plenary power granted to the Legislature by section 22 of Article XII of the Constitution it was certainly competent by appropriate legislation to confer upon the commission the authority to supervise contractual relationships such as existed between the Pacific Telephone and Telegraph Company and its owner and corporate master, the American Telephone and Telegraph Company, especially insofar as contracts affecting rates are concerned. The Legislature has effectively conferred such power on the commission by section 32 of the Public Utilities Act. By that section the commission was expressly authorized to find any existing contract affecting rates to be unreasonable. This power could be exercised as to expenditures under existing contracts in excess of payments properly allowable as part of the rate base. But more pertinently, that section also expressly authorized the commission to determine the reasonableness of contracts affecting rates thereafter to be observed by the utilities under its jurisdiction. It is this power that the commission is seeking to exercise by the orders under review; and in this respect it is reinforced by the general provisions of section 31.
It may be assumed that the commission would be without power to prescribe in advance the terms and conditions of a contract and payments thereunder entered into between the petitioner and another in the normal course of business in which both parties are acting independently and at arm’s length. But the contract here required to be observed by the petitioner is not of that character. The independence of action which is essential in the execution of contracts known to the law is not present. The real question as I see it is whether the commission has exceeded its jurisdiction in making the particular orders and not, as petitioner contends, whether it was wholly without power to make them.
The facts do not show the exercise of broader regulatory power than the commission possesses. Nor is this a ease where the petitioner is deprived of the management and control of its property. We have here nothing more than a regulation guarding against future excessive payments affecting rates which could otherwise be imposed upon the petitioner without its voluntary bargaining participation. By its order the commission is not exceeding its jurisdiction but is merely making its jurisdiction effective. In my opinion the particular contract here ordered to be observed is just such a contract as *834is contemplated by onr law and sound public policy to be subject to supervision by the commission in the manner proposed. I would affirm the orders.