Court Opinion

ID: 6256901
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:45:20.101198+00
Date Added: 2024-06-11T08:59:34.633624
License: Public Domain

Opinion by
Mr. Justice Musmanno,
Concurring in Part and Dissenting in Part :
I concur with the majority opinion in the matter of Cash Working Capital, but dissent from the view expressed on the subject of pensions.
I, of course, unreservedly and enthusiastically support pensions for employes. Pensions as a factor in employment are as vital to the welfare of the employe and the stability of the business as proper wages, proper working conditions, proper working hours and proper return of investment. All pensions are salutary just as all life insurance is good, but the premiums and the *324method of paying for them are items that depend on the circumstances of each case.
The Pennsylvania Utility Commission in this case allowed the Bell Telephone Company $6,000,000 for pension purposes but it develops that much of this large sum is to be applied to unpaid pension debts incurred many years ago. It is not clear how and why the company failed to provide for this so obvious a burden in the operation of its far-flung enterprise, and why it did not begin the “freezing payments” in 1927 when it knew or should have known that its then pension system was actuarially unsound.
Regardless, however, as to whether the company’s failure to install in the past a pension system with costs currently met was due to managerial dereliction or to unavoidable and unforseeable economic conditions, there is no justification for saddling upon the telephone users of today a cost burden which is attributable to past services. If the company overlooked an operation cost of decades ago, the resulting penalty should not be visited upon the customers of today. When any business fails to make as much profit as it should like to make, it is the investors who lose, not the customers. Why should it be any different where the customers, because of the monopoly of the service, are forced to be customers of that particular firm or business?
It was pointed out by the City of Pittsburgh that the Modified Remaining Cost Plan advocated by the Bell Telephone Company places upon the telephone users of today the tremendous load that consumers in the past should have borne from 1928 to 1941. This is an observation of far-reaching import. To require the present and future telephone consumer to pay for the past errors of the company is like requiring passengers on an ocean voyage to pay for damages done *325the ship years before, when the vessel struck rocks because of the unskillful navigation of its master.
The majority opinion states that the proposition of placing the back pension costs on the Bell Company stockholders is not supported by any precedent in other States. But as to this I cannot agree that the Superior Court of Pennsylvania should abdicate its judgment because courts in other states have reasoned and decided differently. With all due respect to those courts the facts in their cases may have been sufficiently different to explain their particular approach to the problem, or they could even be in error.
Able counsel for the City of Pittsburgh well expressed the crux of this entire pension matter when she said in her brief that the City of Pittsburgh has taken “vigorous exception to the imposition on present ratepayers of an annual charge of six million dollars for pension reserves when the actual yearly cost for pensions was not even one-fifth of that amount. Every one of the two million telephone users in Pennsylvania is now paying over $2.25 per year per telephone for pension reserves alone . . . Pension costs which should have been paid by past telephone users are being imposed as an operating cost on present telephone users.”
I see no reason why the telephone user of today should pay a toll on conversations which have passed away into the mists of yesteryear, together with the anonymous talkers now also lost in the unrecorded annals of the past.
Increased rates may or may not be necessary, but it does not follow they are mathematically inevitable on account of the high cost of living. There are other things also, to consider in meeting this problem. While the costs for materials and for operation have increased, the company’s revenues have also increased in geometric proportions. There is no reason why the five cent coin *326should vanish with the buffalo it has immortalized, simply because of the bombardment being levelled against all monetary values.
The City of Pittsburgh contends that the basic figures on which the telephone company builds its pension reserves are not supportable in objective fact, and that, because of this improper foundation, a superstructure of over-accruals has been built up. The City of Pittsburgh should be allowed to present evidence in this regard, and, it may be, upon that showing, that the $6,000,000 allocated for pension purposes can be drastically reduced. And any reduction in the operating-cost of a public utility will enure to the benefit of the public. At the same time it will impart encouragement to those who are fighting the battle and building the dikes against the ruinous and ruthless floods of inflation.
There is no danger of injustice being done the telephone company by a resubmission of this question to the Pennsylvania Utility Commission where the company will have full opportunity to support its position, and, at the same time, the telephone user of today will also be protected from the onus of paying for an obligation which he never assumed, for which he was awarded no benefits and for which he receives no credit.
The Pennsylvania Utility Commission should be required to take additional testimony and make additional findings on this subject of pension costs.