which the arguments of the counsel for the Water Company might be heard, before the issuance of the temporary rate order. See Morgan v. United States and the Secretary of Agriculture, 58 S. Ct. 773, 82 L. Ed. , decided April 25, 1938, by the Supreme Court of the United States.
As that value has been fixed by the testimony given before the Commission's Examiner, and as in the preliminary injunction affidavits, it appears that the temporary rate ordered by the Commission would return about 4 per cent. upon the actual value of the plaintiff's property. In the opinion of the court the amount to be derived from the rate, as founded upon the present testimony, would not give the Water Company that fair and reasonable return which is necessary in order to prevent the rate being confiscatory.
That Section 310 of the Public Utility Act, 66 P.S.Pa. § 1150, authorizes a temporarily larger rate than the final rate determined to recompense the utility for losses occasioned it by the establishment of a temporary rate less than the final, does not, we think, alter the confiscatory nature of the order. No assurance exists as to the length of time the temporary rate will be in effect, or that the present water consumers will remain such. See Prendergast v. New York Telephone Co., 262 U.S. 43, 43 S. Ct. 466, 67 L. Ed. 853.
The plaintiff, upon hearing, has contended that Section 310 of the Utility Act, 66 P.S.Pa. § 1150, is inherently unconstitutional, and thus incapable of sustaining any temporary rate. Decision as to this contention being unnecessary in the instant case, none is made.
The court, being of opinion that the temporary rate order is confiscatory, and that due process was not used in its establishment, a preliminary injunction will be granted. It is to be hoped no undue delay will be occasioned thereby, but that the Public Utility Commission will proceed with its hearings and establish a final rate. In that event the plaintiff, if aggrieved, may seek its remedy in the State Courts.
And now, to wit, June 23, 1938, the above entitled case having come on for hearing on application of plaintiff for a Preliminary Injunction before a Federal Court convened pursuant to Section 266 of the United States Judicial Code, 28 U.S. C.A. § 380, and said hearing having been held with the defendants represented by counsel, and after notice to the Attorney General of the Commonwealth of Pennsylvania, and the Governor of the Commonwealth of Pennsylvania; and it appearing that the issues involved herein concern important questions of constitutional law, to wit, the constitutionality of Section 310 of the Public Utility Law of the Commonwealth of Pennsylvania, 66 P.S.Pa. § 1150, not as yet passed on by the courts of said Commonwealth; and that the enforcement of the so-called Temporary Rate Order made by the defendants, constituting the Pennsylvania Public Utility Commission, dated March 15, 1938 (a copy whereof, marked Exhibit "A", is attached to the Bill of Complaint herein) will reduce plaintiff's annual gross operating revenue approximately $29,500 per year and by reason thereof may deprive plaintiff of its property, rights and privileges without due process of law, in violation of the Constitution of the United States of America and the Fourteenth Amendment thereto, U.S.C.A. Const. Amend. 14; and that, unless the defendants are enjoined from enforcing or attempting to enforce the said Temporary Rate Order, the plaintiff may suffer grave and irreparable injury and damage; and that, unless the defendants are enjoined from enforcing or attempting to enforce the said Temporary Rate Order, the plaintiff will be required to put into effect the rates therein specified under threat of severe pains and penalties; and that the said Temporary Rate Order may have been made without the plaintiff being accorded a fair and open hearing and in violation of the rudimentary requirements of fair play: and that plaintiff has no plain, speedy, efficient or adequate remedy at law or in equity in the Courts of the Commonwealth of Pennsylvania; after due deliberation having been had and sufficient reason appearing for the granting of this order, it is now, on motion of solicitors for plaintiff, hereby ordered and decreed as follows:
1. That the defendants in the above entitled case and each of them individually in their own respective rights and in their official capacities as members of the Pennsylvania Public Utility Commission and their respective successors in office, and all of those acting or claiming to act under their authority or in aid or assistance of them be and they hereby are restrained tmporarily from in any manner enforcing or attempting to enforce the Order of said Commission made in the rate proceedings now pending before it at Complaint Docket No. 11409 under date of March 15, 1938, prescribing purportedly under and pursuant to Section 310 of the Public Utility Law of the Commonwealth of Pennsylvania temporary rates to be embodied in a tariff, replacing the present metered service rates of plaintiff now contained in its tariff, P.U.C. No. 5, to be filed by plaintiff with said commission on or before March 24, 1938, and to become effective April 1, 1938, which said Order is contained in Exhibit "A", attached to and made a part of the Bill of Complaint herein; and from instituting or threatening to institute against plaintiff or any of its officers, directors, servants, agents or employees any civil or criminal proceedings in any manner or form before any judge or court of any jurisdiction based upon any claimed violation of or noncompliance with said Order by plaintiff; and from imposing or attempting to impose upon plaintiff or any of its officers, directors, servants, agents or employees any penalty for plaintiff's purported noncompliance with or violation of said Order.
2. That the plaintiff in the above entitled case file a bond, with sufficient surety to be approved by this Court, in the sum of $20,000, conditioned upon the prompt repayment by the plaintiff to its customers, in the event the prayers of its Bill of Complaint are finally refused, of the sums of money received by it from its customers for water service supplied on and after April 1, 1938, under its rate schedule or tariff now in force and effect, in excess of the sums which would have been received by it from its customers if such water service had been supplied, billed and collected for at the rates and charges ordered and required by the defendants in and by their said Temporary Rate Order, together with interest at the rate of six per cent. per annum upon any and all amounts so collected and to be repaid, and upon the payment of such costs and damages as may be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained hereby, and that upon such bond being filed with and approved by this court, the bond of plaintiff hereinbefore filed be cancelled.
3. That service of a conformed copy of this order upon the solicitors for the defendants herein shall be deemed sufficient service and notice of this Preliminary Injunction.
4. This order shall remain in force and effect until this cause comes on for final hearing and a final decree be made.
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