Court Opinion

ID: 5382768
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:09:29.394354+00
Date Added: 2024-06-11T08:30:09.927411
License: Public Domain

Foster, J. (dissenting).
The appellant in this case asserts that rates established by the Public Service Commission amount to confiscation, and seeks to enjoin their enforcement by a suit in equity. Its complaint has been dismissed, and this appeal from the order of dismissal presents the fundamental question of whether it may sue in equity for an injunction, or, whether its sole and exclusive remedy is a certiorari proceeding under article 78 of the Civil Practice Act.
*65Obviously this is an important • question in the field of public utility regulation. It is a simple matter to allege confiscation in any rate matter, and if such an allegation is sufficient to invoke the jurisdiction of equity then the way is open for separate trials of the same issues in every rate case; first before the commission, and later at an Equity Term of the Supreme Court. Something rather extraordinary is required to justify a procedure so protracted and cumbersome.
Appellant’s case is built on the major premise that a review in certiorari is too limited to give relief. On issues of fact a review of this character has been so limited by judicial decisions that a determination by the Public Service Commission must be confirmed if there is substantial evidence in the record to sustain it (People ex rel. Municipal Gas Co. v. P. S. Comm., 224 N. Y. 156; Municipal Gas Co. v. Public Service Comm., 225 N. Y. 89; Matter of New Rochelle Water Co. v. Maltbie, 248 App. Div. 66). Such a determination may not be set aside even though it is against the weight of evidence (People ex rel. N. Y. & Queens Gas Co. v. McCall, 219 N. Y. 84).
Curiously enough, the statute, supposed to provide a comprehensive scheme for review by certiorari, imposes no such limitation (Civ. Prac. Act, art. 78, § 1296, subds. 6, 7). Ordinarily when there has been a hearing pursuant to statutory direction, and such is the case here (Public Service Law, § 72), the reviewing court may not only determine whether there was competent proof of all the facts necessary to make the determination, but it may also set aside the determination if it finds that it was against the weight of evidence. These same provisions, in almost identical language, were a part of the Code of Civil Procedure (§ 2140, subds. 4, 5).
Equally curious is the fact that the courts of this State have never vouchsafed any full explanation of why the statute has been ignored. The precise point was raised in the McCall case {supra), but, beyond referring to some authorities which held generally that a reviewing court may not substitute its judgment for that of the quasi-judicial agency, the point was not fully discussed or explored, I assume that in all probability the complete explanation rests upon our divided system of governmental powers and responsibilities. The Public Service Commission is merely an arm of the Legislature, acting in a legislative capacity, and in this capacity it is the alter ego of the Legislature (Matter of Brooklyn Union Gas Co. v. Maltbie, 245 App. Div. 74; Matter of International Ry. Co. v. P. S. Comm., 226 N. Y. 474). The fact that it also acts in a judi*66cial manner in prescribing rates, and its decisions are therefore reviewable by certiorari, does not alter the fact that fundamentally its function is legislative. The courts have never assumed the power to set aside a legislative enactment on the ground it was against the weight of evidence. They have invariably applied a basic principle of constitutional law that an act of the Legislature, within its proper field, will not be invalidated if there are any reasonable grounds to support it. As applied to a legislative finding on a question of fact substantial evidence would furnish such reasonable grounds. This, I think, is the genesis of the substantial evidence rule as applied to administrative agencies exercising legislative functions. Nevertheless, in defining the scope of certiorari the Legislature, itself, has apparently waived the application of this constitutional principle, and had the courts assumed all of the powers granted by the Legislature under article 78 of the Civil Practice Act, a review of that character would be as broad as any litigant could desire. Doubtless they have not done so because to do so in many cases, where only debatable issues exist, would constitute an invasion of the legislative sphere.
I have adverted to these fundamental, perhaps elementary matters, because in my opinion they have a decisive influence on the question before us. Bate making is an exercise of the police power and therefore a legislative function. An integral part of this function is the ascertainment of values. The Public Service Commission has made a decision on these matters relative to appellant’s case. This decision is entitled to exactly the same effect as an act of the Legislature (Matter of Helfrich v. Dahlstrom M. D. Co., 256 N. Y. 199). Under firmly accepted principles of constitutional law it may not be invalidated if there are reasonable grounds to support it. Or to put it another way, it may not be declared confiscatory if there is substantial evidence to sustain it. The logic of this view is inevitable because even if there is substantial evidence both ways then the issue is merely debatable, and the final choice must rest with the agency which exercises the legislative function.
Certiorari permits an independent review as to the only factual question a court may be concerned with when a legislative decision, arrived at in a quasi-judicial manner is challenged as being unconstitutional. I venture to say that equity could do no more. Of course if the decision was a direct act of the Legislature then it might be reviewed in equity, but since it is the result of a quasi-judicial proceeding then certiorari is the proper remedy, but in either instance the fundamental consti*67tutional issue is the same and must be met with the same test. The form of the complaint, or any rule of practice applied in construing a complaint in ordinary cases, cannot be used to evade those basic principles.
The Federal cases which have been cited to sustain the proposition that the State must provide a fair opportunity for submitting the issue of confiscation to a judicial tribunal for determination upon its own independent judgment are not inconsistent with this view (Ohio Valley Co. v. Ben Avon Borough, 253 U. S. 287; Bluefield Co. v. Pub. Serv. Comm., 262 U. S. 679). In these cases the court did not define the meaning of “ independent judgment ”, and it does not necessarily follow from the use of this expression that a trial de novo on the facts was meant. There is another construction, wholly plausible, to be drawn therefrom: That the court merely intended to hold the judicial power supreme in cases involving the constitutional issue of confiscation. But this issue does not. always take the same form, and this distinction makes a considerable difference as to the manner in which the judicial power shall be asserted. In .cases of the character before us the issue of confiscation is not an issue of opinion as to values so as to require a separate trial in another forum to see whether a different conclusion might be reached. It runs only to the question of whether the Legislature, or the legislative agency, as the case may be, had a reasonable basis to support its decision, and, as heretofore indicated, the substantial evidence rule is a sufficient test to apply to that question. Certainly this court in a review by certiorari has power to determine such an issue upon its own independent judgment. A review of this character does not violate the due process clause of the Federal Constitution, and in this State is the exclusive remedy for a review of quasi-judicial decisions (People ex rel. Consol. Water Co. v. Maltbie, 275 N. Y. 357). The fact that in other States, and under the Federal practice, a suit in equity might be resorted to for the same purpose is of no consequence here.
The contrary view must necessarily rest upon the theory that a court of equity has some infallible standard of accuracy as to values, a breach of which impairs appellant’s constitutional rights. I know of no such standard. Values are not absolute, and are notoriously matters of opinion, or conclusions to be drawn from competent testimony. One tribunal may differ with another on such an issue, but constitutional impairment does not rest in such a difference. It rests only in the question of whether the agency empowered in the first instance to deter*68mine the matter had a fair basis for. its decision, and a fair basis of course excludes prejudicial, arbitrary and capricious action. It is suggested in appellant’s brief that the commission may have assumed a fortiori the credibility of its own experts on values and gave credence only to their testimony. If this was intended to charge the commission with prejudicial conduct that issue may also be determined in certiorari. (Matter of Newbrand v. City of Yonkers, 285 N. Y. 164.)
The order should be aErmed.
Heffernan, J., and Hill, P, J., concur in decision with separate opinions; Lawrence, J., concurs with Heffernan, J.; Foster, J., dissents in an opinion in which Brewster, J., concurs.
Orders and judgment appealed from reversed on the law and facts, with costs to appellant, the four separate defenses contained in defendants’ answer are stricken out and plaintiff’s motion for a temporary injunction is granted on condition that plaintiff file an appropriate bond to protect all persons in the event that the relief sought in this action should be ultimately denied. The form and suficiency of the bond shall be approved by a justice of this court. [See post, p. 781.]