Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Diggs v. Pennsylvania Public Utility Commission

UNITED STATES COURT OF APPEALS THIRD CIRCUIT.


decided.: March 2, 1950.

BESSLE DIGGS ET AL.
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION ET AL.

Author: Biggs

Before BIGGS, Chief Judge and MARIS and KALODNER, Circuit Judges.

BIGGS, Chief Judge.

The suit at bar is brought by Diggs, a judgment creditor of Pittsburgh Railways Company (the Company), as a class action on behalf of "all" creditors of the Company, against the Pennsylvania Public Utility Commission (the Commission), against the Company and against trustees appointed by the court below for the Company pursuant to Section 77B of the Bankruptcy Act, 11 U.S.C.A. ยง 207. The other plaintiffs, Wright and Lazeris, fare-paying patrons of the transportation system operated by the Company or its subsidiaries, have joined in the complaint and have filed a class suit on behalf of users of the transportation system maintained by the Company. Jurisdiction in the court below is alleged to exist under the provisions of Section 1331*fn1 of Title 28, United States Code Annotated and the Fourteenth Amendment, and also under Section 1343, the "Civil Rights" section of Title 28. The last ground for jurisdiction was not asserted in the court below and is urged for the first time before us.

Stripping the complaint of surplusage and dealing only with those allegations which tend to support the contention that the plaintiffs Wright and Lazeris are being deprived of property without due process of law - for there are none which demonstrate that Diggs is being thus endamaged - we find that it alleged that in the latter part of 1948 the Company by its trustees filed with the Commission new tariffs providing for increases in fares; that the Commission, following the filing of a complaint with it by the City of Pittsburgh, suspended the proposed increase for a period of six months and conducted hearings on the reasonableness and propriety of the proposed increase;*fn2 that by "further action" of the Commission the "increases were allowed to become effective" on June 20, 1949; that the City thereupon appealed to the Superior Court of Pennsylvania*fn3 and that the Superior Court ordered that the appeals should operate as a supersedeas; that the Superior Court concluded that there was insufficient evidence in the record before the Commission to sustain the Commission's action and indicated "* * * directly or indirectly that the said rates were discriminatory, excessive, unjust, illegal and void", and remitted the case and the record to the Commission for further hearings, entering an order setting aside its order of supersedeas, and "* * * indicated directly or indirectly that the Commission and the Company by appropriate action after proper findings, * * * [should] place into temporary effect the * * * rate increase * * *";*fn4,*fn5 and that new rates were actually put into effect by the Company on November 23, 1949. The complaint goes on to allege that while the new rates were put into effect no provision was made for the issuance of fare receipts or fare rebate slips. It is conceded that none of the plaintiffs has appeared before the Commission, has made any application to it, or has made any objection to the Commission's actions, or that the plaintiffs or any of them have taken part by way of intervention*fn6 or otherwise in any proceeding in a Pennsylvania State Court.*fn7

Motions to dismiss were filed by the Commission and the trustees.*fn8 After hearing the court below concluded*fn9 that no "constitutional question" was presented and dismissed the complaint. See Mayo v. Canning Co., 309 U.S. 310, 316, 60 S. Ct. 517, 84 L. Ed. 774. The plaintiffs appealed and made application to this court to advance the hearing date. At the hearing of this application, all of the parties consenting and the record being fully before us, we heard the appeal on the merits. We conclude that the judgment of the court below must be affirmed.

It is clear that the plaintiff Diggs does not possess the capacity to maintain the instant suit. She sues merely as a judgment creditor, not as a fare-paying passenger and though she purports to represent as a class "all other creditors" of the Company, she and they are in fact represented by the trustees appointed for the Company by the court below.We will assume arguendo that Wright and Lazeris possess the capacity to maintain the suit*fn10 and that jurisdiction is or may be bottomed on Section 1343 of Title 28, United States Code Annotated.*fn11

The rates here questioned were promulgated voluntarily by the Company pursuant to Section 308(a)*fn12 of the Pennsylvania Public Utility Law and thereafter were suspended by the Commission pending investigation pursuant to Section 308(b).*fn13 The Commission found that the proposed rates would not produce an excessive return and terminated its investigation, dismissing the City's complaint. Pursuant to Section 1101*fn14 the City then appealed to the Superior Court of Pennsylvania which granted the supersedeas but after hearing vacated its stay and ordered the new tariffs "or such rates as the Commission may legally prescribe" to become effective pending further action by the Commission and the ultimate determination of a proper rate schedule by it.*fn15

What the Superior Court of Pennsylvania apparently did was to treat the rates promulgated by the Company and found by the Commission as not producing an excessive return as "temporary rates". See Section 310(a)*fn16 which would permit the Commission to fix a temporary rate based on the single factor of original cost less depreciation. In this connection see Section 310(e),*fn17 which authorizes recoupment by the Company. See Beaver Valley Water Co. v. Driscoll, D.C., 28 F.Supp. 722, a decision of a three judge court sitting in the Western District of Pennsylvania pursuant to Section 266 of the olf Judicial Code.*fn17a The recoupment provision of Section 310(e) was held by the court to render a temporary rate based on the formula of Section 310(a) constitutional within the purview of the XIV Amendment. Cf. Prendergast v. New York Telephone Company, 262 U.S. 43, 43 S. Ct. 466, 67 L. Ed. 853. It may be argued that the power to fix rates lies only in the Commission and that the Superior Court transcended its authority by transmuting rates promulgated by the Company as new permanent rates, and approved by the Commission to the extent indicated as new permanent rates, into "temporary" ones and then ordering them into effect. But even if we assume that the Superior Court in doing this erred as a matter of law, as to which we need not express an opinion, nonetheless no question was presented with which the court below could properly concern itself. A mere error of law does not deprive the individual of property without due process of law or raise a constitutional issue if adequate provision for the review of the offending judicial decision is available. This principle, so long recognized by both Congress and the courts, is presently embodied in Section 1342 of Title 28, United States Code Annotated.*fn18 The statute provides that a district court of the United States shall not enjoin or restrain the operation of any order affecting rates chargeable by a public utility and made by a State administrative agency where a plain, speedy and efficient remedy may be had in the courts of such State. Such a remedy was available to the plaintiffs Wright and Lazeris.

Section 1001*fn19 gave Wright and Lazeris the right to appear before the Commission and to complain of the rates promulgated by the trustees of the Company. They did not do so. They could have had the opportunity under Section 1101*fn20 to appeal to the Superior Court from the order of the Commission finding the new rate not to be excessive and terminating its investigation. They did not do this. The City of Pittsburgh, however, appearing as it were, parens patriae, did file a complaint with the Commission and did appeal to the Superior Court from the Commission's decision.*fn21 Under Section 1104*fn22 Wright and Lazeris could have been permitted to intervene in the appeal to the Superior Court and had they intervened, with the City of Pittsburgh, they could have made application for allocatur to the Supreme Court of Pennsylvania under Section 1109*fn23 and for certiorari to the Supreme Court of the United States. But Wright and Lazeris made no application for intervention.

Section 1111*fn24 permitted the City of Pittsburgh or Wright or Lazeris to make an application to the Dauphin County Court for an injunction to modify, stay or suspend the order of the Commission finding that the proposed rates would not produce an excessive return and dismissing the investigation. No application was made to the Dauphin County Court. Nor does question remain that the Dauphin County Court would have had the power to stay the order of the Commission. The word "jurisdiction" in Section 1111*fn25 has now been so enlarged by judicial decision by the Supreme Court of Pennsylvania and by the Dauphin County Court that no doubt remains that the Johnson Act is satisfied.*fn26

The intervention of a three-judge Section 2281 court is not authorized. No serious or substantial constitutional question was or could be presented to the court below. The "temporary" rates now in effect pursuant to the order of the Superior Court were arrived at, even if arrived at erroneously, by due process of law as provided by the Pennsylvania statutes and decisions. Errors committed by courts and commissions, subject to review by duly constituted tribunals, do not constitute deprivation of property without due process of law. We have stated this before but we repeat by way of emphasis. Moreover, Wright and Lazeris stood aloof from the Commission and from the Pennsylvania State courts and did not seek aid in a single remedy or a tribunal made available to them by the Public Utility Law. When the struggle conducted by the City of Pittsburgh for the benefit of fare-paying passengers turned out unfavorably, as Wright and Lazeris allege, they attempt by invoking the aid of a Section 2281 court and the Section 2284 procedure*fn27 to retry the issues in the court below. They must fail.

One remaining point raised by Wright and Lazeris should perhaps be discussed though its disposition is not essential to decision of the instant case. The plaintiffs allege, as we have said, that the continuance of the temporary rates without the issuance of fare receipts or rebate slips deprives them of property without due process of law since they will not be able to recover any amounts which may be paid by them for fares in excess, if any, of the permanent rates to be found in the future by the Commission. We point out that Section 313*fn28 of the Public Utility Law provides a method for obtaining refunds "in any proceeding involving rates" when the Commission or a Pennsylvania court determines that a rate is unjust or unreasonable. Cf. Peoples Natural Gas Co. v. Pennsylvania P. Utility Comm., 153 Pa.Super. 475, 501, 34 A.2d 375, 387-388. To make the section effective receipts or rebate slips would have to be given to the fare-paying passengers who are now paying the "temporary" rates put into effect under the order of the Superior Court. This involves no practical impossibility. We may take judicial notice that the employment of such a technique to avoid losses to fare-paying passengers has been adopted frequently. But Wright and Lazeris have made no application to the Commission for an order requiring the Company to issue rebate slips or receipts. If they make such an application it may be granted by the Commission. If it should be refused the plaintiffs may apply to the Dauphin County Court for injunctive relief under Section 1111. In short, Wright and Lazeris have not exhausted their administrative remedies and therefore are not entitled to the relief to be afforded by Sections 2281 and 2284 of Title 28 United States Code Annotated. Natural Gas Pipeline Co. of America v. Slattery, 302 U.S. 300, 310, 311, 58 S. Ct. 199, 82 L. Ed. 276.

The plaintiffs also seek relief by way of a declaratory judgment. In respect to this issue we need state only that relief under the Declaratory Judgments Act, Section 2201, Title 28 United States Code Annotated, may be granted only in those cases which would fall within the jurisdiction of a United States district court if affirmative relief were sought. The fact that a declaratory judgment is prayed for by a plaintiff does not in itself supply ground for federal jurisdiction. Southern Pacific Co. v. McAdoo, 9 Cir., 82 F.2d 121; Putnam v. Ickes, 64 App.D.C. 339, 78 F.2d 223, 226. Consequently this phase of the plaintiffs' case fails also.

Some of the defendants have taken the position that this court is without the power to entertain the appeal and that it should be dismissed for that reason. We cannot agree. We have held, as did the court below, that no serious or substantial claim of unconstitutionality has been presented. The court below was justified in dismissing the complaint. Mayo v. Canning Co., 309 U.S. 310, 316-318, 60 S. Ct. 517, 84 L. Ed. 774. The appeal from the order of dismissal could not be properly taken to the Supreme Court of the United States for Section 1253 of Title 28 United States Code Annotated, provides, "Except as otherwise provided by law, any party may appeal to the Supreme Court from an order granting or denying, after notice and hearing, an interlocutory or permanent injunction in any civil action, suit or proceeding required by any Act of Congress to be heard and determined by a district court of three judges." Since this case was not heard or required to be heard by a district court of three judges the appeal from the order of dismissal is to this court by virtue of Section 1291 of Title 28 United States Code Annotated. This view is, we believe, in accord with that of the Supreme Court. Stainback v. Mo. Hock Ke Lok Po, 336 U.S. 368, 69 S. Ct. 606.

The judgment of the court below will be affirmed.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.