Court Opinion

ID: 9636385
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:26:32.542918+00
Date Added: 2024-06-11T18:09:44.921596
License: Public Domain

EDGERTON, Associate Justice
(dissenting)-
I think it follows from my opinion in Potomac Electric Power Co. v. Public Utilities Commission, - U.S.App.D.C. -, 158 F.2d 521, that the District Court erred in dismissing the appeal of the United States.
Though the excessive rates of the past 20 years do not require and would not justify unfairly low rates for the future, history has an important bearing on what is presently fair. The doctrine of Board of Public Utility Commissioners v. New York Telephone Co., 271 U.S. 23, 31, 46 S.Ct. 363, 366, 70 L.Ed. 808, that rates must provide a return on the “value of the property” even when the property is derived from excessive rates, obviously is not law today, since rates need not now provide a return on the “value of the property” even when the property is not derived from excessive rates.
The Washington Railway and Electric Company has always owned the entire common stock of the Company. The excessive rates of the past have enabled the Company to pay to the holding company dividends which have repaid many times over the entire investment in this stock. It does not necessarily follow that all earnings on this stock should cease. That question' is for the Commission.1 The statute we are interpreting limits judicial review to “questions of law” and provides that “findings of fact by the Commission shall be conclusive unless it shall appear that such findings of the Commission are unreasonable, arbitrary, or capricious.” (Par. 66) It might be neither arbitrary nor legally erroneous for the Commission in its discretion to fix rates which would produce some return on this stock. But the Commission’s discretion has a ceiling as well as a floor. Since rates which produce excessive profits are excessive rates2 it is arbitrary to find that, despite the Company’s financial history, rates are just and reasonable which will allow it to earn in a single year a return upon its common stock equal to more than one-third of the par value of the stock and more than one-half the amount which it received for the stock and invested in plant. Since the Company’s surplus is a surplus of excessive returns over excessive dividends it is arbitrary to include this surplus, or any amount beyond what the Company obtained from investors and invested in plant, in a base on which any return is to be allowed. It is an error of law to hold, as the Commission appears to have held, that this must be done. It is an error of law to suppose, as the Commission appears to have supposed, that the Company’s rates are approximately low enough because they are lower than they once were and lower than rates still are-in many cities. It is an error of law to-ignore the interest of the public in low rates. “The rate-making process under the Act, i. e., the fixing of ‘just and reasonable’ *539rates, involves a balancing of the investor and the consumer interests.” 3 The Commission’s order does not balance these interests.
Par. 65 of the statute provides that the District Court, at the conclusion of its hearing of the appeal from the Commission’s order, shall either dismiss the appeal and affirm the order or sustain the appeal and vacate the order. But Par. 69 authorizes the Commission to amend its order pending the hearing of the appeal. In my opinion the case should be remanded to the District Court with instructions to hold it until the Commission shall file an amended order within the authority given it by Congress.4

 “Regulation does not insure that the business shall produce net revenues.” Federal Power Commission v. Natural Gas Pipeline Co., 315, U.S. 575, 590, 62 S.Ct. 736, 86 L.Ed. 1037; Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 603, 64 S.Ct. 281, 88 L.Ed. 333. Special circumstances may “warrant the rate-making body in concluding that a return on historical cost or prudent investment, though fair to investors, would be grossly unfair to the consumers.” But “judicial review * * * should be as confined and restricted as the review, under similar statutes, of orders of other administrative agencies.” Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 608, 62 S.Ct. 736, 753, 86 L.Ed. 1037 (Black, Douglas, and Murphy, J.T., concurring) .

 Dayton-Goose Creek R. Co. v. United States, 263 U.S. 456, 483, 44 S.Ct. 169, 68 L.Ed. 388, 33 A.L.R. 472.

 Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 603, 64 S.Ct. 281, 88 L.Ed. 333.

 Addison v. Holly Hill Fruit Products, Inc., 322 U.S. 607, 619-623, 64 S.Ct. 1215, 88 L.Ed. 1488, 153 A.L.R. 1007.