Georgia Power Co. v. Allied Chemical Corp.

212 S.E.2d 628, 233 Ga. 558, 8 P.U.R.4th 176, 1975 Ga. LEXIS 1375

• Court: Supreme Court of Georgia
• Decided: January 28, 1975
• Docket: 29180
• Status: Published

Opinions

Hall, Justice.

Eighteen corporate users of electrical power supplied by the Georgia Power Company filed an equitable suit in the Fulton Superior Court against the Georgia Public Service Commission and the Georgia Power Company. The complaint sought an injunction against orders of the commission on the grounds that the rate structure was unreasonable and the increase in the annual revenue which the utility was authorized to collect from its customers, that is, the rate level, was unreasonably high. The Georgia Power Project and the Atlanta Labor Council intervened as additional plaintiffs. The Georgia Power Company filed a motion to dismiss the complaints for failure to state a claim upon which relief could be granted. The trial court overruled the motion and certified the question for review. The issue here is whether consumers of electricity supplied by a public utility have standing to seek to enjoin the enforcement and collection of rates set by an order of the Georgia Public Service Commission on the ground that the level of these rates is unreasonably high. We answer this question "No.”

1. The Georgia Constitution and laws impose a duty on the Georgia Public Service Commission to make "just and reasonable rates,” and at the same time provide that the determination of "what are just and reasonable rates and charges is vested exclusively in the Public Service Commission.” Code § 93-309; see also Code Ann. § 2-2703. "Utility rate making is legislative in nature...” Southern Bell Tel. &c. Co. v. Georgia Pub. Serv. Commission, 203 Ga. 832 (5) (49 SE2d 38). "[WJhen the commission establishes a rate, such act is legislative in character, and binds all parties concerned in the same manner as if the rate had been fixed by an act of the General Assembly.” Georgia Pub. Serv. Commission v. Atlanta Gas Light Co., 205 Ga. (55 SE2d 618).

What is a "just and reasonable rate” is basically a matter of policy.¹ It involves an intelligent estimate of present and probable future values and is at best an approximation. Holmes has said that "All values are anticipations of the future.” Lincoln v. Commonwealth, 164 Mass. 368, 378.

Recognizing that rate-making is essentially a legislative function, we must determine to what extent judicial review of the legislative decision is available at the instance of the utility company or of the consumer.

A public utility has standing to challenge a rate schedule on the ground that the schedule is so low that it is confiscatory and denies the utility substantive due process. Southern Bell Tel. &c. Co. v. Georgia Pub. Serv. Commission, 203 Ga. 832, supra. The rate set must reach the point of confiscation for the utility to show a legally protected interest. St. Joseph Stock Yards Co. v. United States, 298 U. S. 38 (56 SC 720, 80 LE 1033); Georgia Power Co. v. Georgia Pub. Serv. Commission, 231 Ga. 339 (201 SE2d 423). On the other hand, a consumer has standing to challenge a rate schedule on the ground that the schedule discriminates against the consumer or a class of consumers in violation of the equal protection guarantees of the state and federal constitution. Gas Light Co. v. Georgia Power Co., 225 Ga. 851 (171 SE2d ).² But the consumer’s remedy against the general application of allegedly unreasonably high rates lies at the ballot box.

This follows from the fact that under our state law a consumer cannot establish standing to challenge the utility’s rates on the ground that they are generally too high. Professor Freund has said that the concept of standing is "among the most amorphous in the entire domain of public law.”³ Certainly it is inextricably related to the merits of the case. To have standing to institute a claim, the consumer must have a legally protected interest, or "legal interest standing.” "A litigant ordinarily has standing to challenge governmental action of a sort that, if taken by a private person, would create a right of action cognizable by the courts. . . Or standing may be based upon an interest created by the constitution or a statute. . . But if no comparable common-law right exists and no such constitutional or statutory interest has been created, relief is not available judicially.” Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U. S. 123, 152 (71 SC 624, 95 LE 817) (Frankfurter, J., concurring).

There is no statutory nor common law right in a Georgia consumer to obtain judicial review of the reasonableness of a rate order made by the Public Service Commission. The Georgia Administrative Procedure Act of 1964 contains a statutory judicial review procedure; however the legislature expressly exempted the Public Service Commission from the terms of the Act. Code Ann. §§ 3A-120 and 3A-102. Therefore, it follows that the consumer must have a legally protected interest under the Georgia or Federal Constitutions in order to have "legal interest standing” to challenge a rate order made by the commission. He certainly has an interest in escaping invidious discrimination, and thus he may bring a claim grounded in equal , protection, as we have seen above. Similarly, he may invoke his rights to procedural due process where appropriate.⁴ But an attack on rates solely because they are alleged to be too high is grounded in substantive due process. It is a claim that the consumer has been deprived of his "property” without due process of law. And such a claim must fall for the simple reason that the consumer has no "property” right in the rate he pays for utilities.⁵ Thus there cannot be general rate regulation by lawsuit.

Therefore, we rule today that plaintiffs’ attempt to prosecute this suit must fail because their challenge to the rate structure is not that it is discriminatory, but merely that it is too high — a challenge which presents an issue which is non-justiciable because it has been entrusted solely to the legislature, a co-ordinate branch of government.

The non-justiciability of this issue was well expressed in a 1915 opinion of the Supreme Court of Minnesota: "Whether done by the nation, state or municipality, it [rate-making] is by representatives elected by the people and accountable to them. Such being the case, there is little danger of excessive rates being fixed. But if, perchance, it should happen, the remedy of the public is by appeal to the rate-fixing body, or, if necessary, by a change in its membership.” St. Paul Book & Stationery Co. v. St. Paul Gas Light Co., 130 Minn. 71 (153 NW 262).⁶ The pertinence of this statement has been reinforced by the institutionalization of majoritarianism through the one-person, one-vote rule of the apportionment cases. It is said that Public Service Commissions and legislatures should be "collectively responsive to the popular will.” Reynolds v. Sims, 377 U. S. 533, 567 (84 SC 1362, 12 LE2d 506). That is what representative government is all about.⁷

In a recent decision, the Supreme Court of the United States has said that "Lack of standing . . . does not impair the right to assert his views in the political forum or at the polls. Slow, cumbersome and unresponsive though the traditional electoral process may be thought at times, our system provides for changing members of the political branches when dissatisfied citizens convince a sufficient number of their fellow electors that elected representatives are delinquent in performing duties committed to them.” United States v. Richardson, 418 U. S. 166 (94 SC 2940, 41 LE2d 678). It is inescapable that "unrestricted tax payer or citizen standing” to air generalized grievances about the conduct of legislative matters "would significantly alter the allocation of power” and result in "a shift away from a democratic form of government.” Id., p. 188. To hold otherwise "would create the potential for abuse of the judicial process, distort the role of the Judiciary in its relationship to the Executive and the Legislative and open the Judiciary to an arguable charge of providing 'government by injunction’ ”. Schlesinger v. Reservists Committee to Stop the War, 418 U. S. 208 (94 SC 2925, 41 LE2d 707). It would also imply a lack of trust on the part of the Judiciary in the political process. It should be noted that the "political question doctrine” is alive and well as illustrated by a recent decision of the Supreme Court of the United States: "The voting rights cases, indeed, have represented the Court’s effort to strengthen the political system by assuring a higher degree of fairness and responsiveness to the political processes, not the assumption of a continuing judicial review of substantive political judgment entrusted expressly to the coordinate branches of government.” Gilligan v. Morgan, 413 U. S. 1, 11 (93 SE 2440, 37 LE2d 409). The latter approach would " 'involve a serious conflict with a "coordinate political department;... a lack of judicially discoverable and manageable standards for resolving [the question]; . .. the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; ... the impossibility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government;... unusual need for unquestioning adherence to a political decision already made; [and] the potentiality of embarrassment from multifarious pronouncements by various departments on one question.” Baker v. Carr, supra, 369 U. S. p. 217.’ ” Id., p. 8-9.

In summary, the courts have no jurisdiction over utility rates in the absence of a statutory remedy unless some specific constitutional right other than an asserted "substantive due process right of a consumer” is involved.⁸

2. It is also contended that irrespective of the substantive due process and equal protection provisions of the federal and Georgia Constitutions, the right to and standard for judicial review are found in the section of the Georgia Constitution which provides that "The power and authority of regulating railroad freight and passenger tariffs and of charges of public utilities for their services, of preventing unjust discriminations, and requiring reasonable and just rates of freight and passenger tariffs and of charges of public utilities, are hereby conferred upon the General Assembly, whose duty it shall be to pass laws from time to time, to regulate such tariffs and charges, to prohibit unjust discriminations by the various railroad and public utilities of this state, and to prohibit said railroads and public utilities from charging other than just and reasonable rates and to enforce the same by adequate penalties, provided, nevertheless, that such power and authority shall never be exercised in any way to regulate or fix charges of such public utilities as are or may be owned or operated by any county or municipality of this State; except as provided in this Constitution.” Code Ann. § 2-2401. In other words the contention is that any utility rate order is subject to generalized grievances and can be tested in the courts as to its general justness and general unreasonableness by the utility or by a consumer. This novel contention would in effect turn the judiciary into a general oversight committee on utility rates, and we decline to adopt it.

As the following discussion will show, the inherent power of the legislature to regulate is sufficiently broad that the above-quoted language adds nothing of benefit to plaintiffs; it certainly cannot be read as the source of the judicial review they seek. It must be remembered that the "inherent powers of our State General Assembly are awesome. Unlike the United States Congress, which has only delegated powers ... typically the state legislatures are given by the people the full lawmaking powers; . . . [and are] 'intrusted [sic] with the general authority to make laws at discretion’.. . The legislature is absolutely unrestricted in its power to legislate, so long as it does not undertake to enact measures prohibited by the State or Federal Constitution.” Sears v. State of Georgia, 232 Ga. 547, 553-554 (208 SE2d 93); Code Ann. § 2-1920. The applicability of this principle to rate-making is demonstrated by the holding of this Court that "Independently of this provision [Code Ann. § 2-2401] of the constitution, the General Assembly possesses the inherent power to regulate public utilities . . . The legislative power of the State is vested in the General Assembly, which has power to make all laws and ordinances consistent with the Constitution of this State, and not repugnant to the Constitution of the United States, which they shall deem necessary and proper for the welfare of the State.” Atlanta Terminal Co. v. Georgia Public Service Commission, 163 Ga. 897, 898 (137 SE 556). This principle that rate-making is a matter of policy has historical support in the debates on the Constitutional Convention of 1877. The rate-making provision ("just and reasonable”) of our Constitution, Code Ann. § 2-2401, was sponsored by the populist protagonist of the railroads, Robert Toombs, who said in support of the provision: "Let the legislature be left free to change the details of these restrictions as times change and as the necessities of the people change.” Small’s Debates, Constitutional Convention of 1877, p. 409. It was repeated again in 1944 when Attorney General Head pointed out that the 1877 provision only meant that "Public Utility service and transportation shall be regulated by the General Assembly.” 1, Records of Constitutional Convention, 1943-44, p. 221. Finally, the latest decision of this Court holds that "unreasonableness” of a rate order challenged by the utility is not reviewable but that the test is whether it is "confiscatory and violative of substantive due process of law”; it also held that "This Court is not in the rate-making business.” Georgia Power Co. v. Georgia Pub. Serv. Commission, 231 Ga. 339, 341, 344, 345 (201 SE2d 423).

The trial court and the appellees rely upon City of Atlanta v. Atlanta Gas Light Co., 149 Ga. 405 (100 SE 439). There is dictum in that case indicating that courts may inquire whether a rate order is "just and reasonable”; however, the holding denied the consumers any relief and the issue of consumer standing was never raised nor decided. Furthermore, City of Atlanta quoted and grounded its decision upon Smyth v. Ames, 169 U. S. 466, which was a confiscation case based upon the substantive due process right of the utility. The fact that review of a rate order rests upon the due process or equal protection clauses and not upon "just and reasonable” provisions is stated in Federal Power Commission v. Natural Gas Pipe Line Co., 315 U. S. 575 (62 SC 736, 86 LE 1037). The Natural Gas Act of 1938 commands that the rates of natural gas companies subject to it "shall be just and reasonable.” The Court held that this statutory standard coincides with that of the Federal Constitution and "the courts are without authority ... to set aside . . . [a rate] which is consistent with constitutional requirements. The Constitution does not bind rate-making bodies to the service of any single formula or combination of formulas ... If the Commission’s order ... produces no arbitrary result, our inquiry is at an end.” 315 U. S. p. 586. Acceptance of judicial review of justness and reasonableness of rate orders "is historically unjustified” and would "transfer to courts powers which, under the Constitution, belong to the legislative branch of government.” 315 U. S. p. 601 (Black, Douglas, and Murphy, JJ., concurring). [I]f "courts have nothing to do with rate-making because that task was committed exclusively to the Commission, surely it is a usurpation of the Commission’s function to tell it how it should discharge this task and how it should protect the various interests that are deemed to be in its, and not in our, keeping.” 315 U. S. at 610 (Frankfurter, J., concurring). The dictum in City of Atlanta is in conflict with the uniform holdings of this Court,⁹ the Supreme Court of the United States, and of most other states¹⁰ that courts will not review the question of "unreasonableness” of a rate order unless it deprives the plaintiff of a legally protected interest¹¹ under the Georgia or Federal Constitution, and such language is hereby disapproved and will not hereafter be followed.

Argued September 13, 1974 — Decided January 28, 1975 Rehearing denied February 18, 1975. Troutman, Sanders, Lockerman & Ashmore, Carl E. Sanders, Tench C. Coxe, Norman L. Underwood, David W. Pollard, for appellant. Sutherland, Asbill & Brennan, James P. Groton, Edward J. Grenier, Jr., Alfred C. Aman, Jr., Larry W. Thomason, David Schlissel, Robert J. Castellani, for appellees.

The trial court erred in overruling appellant’s motion to dismiss.

Judgment reversed.

Nichols, C. J., Undercofler, P. J., and Judge Hugh D. Sosebee, concur. Hill, J., concurs specially. Gunter and Ingram, JJ., dissent. Jordan, J., disqualified.

1 The judicial process is too principle-prone and principle-bound — it has to be, there is no other justification or explanation for the role it plays. It is also too remote from conditions, and deals, case by case, with too narrow a slice of reality. It is not accessible to all the varied interests that are in play in any decision of great consequence. It is, very properly, independent. It is passive. It has difficulty controlling the stages by which it approaches a problem. It rushs forward too fast, or it lags; its pace hardly ever seems just right. For all these reasons, it is, in a vast, complex, changeable society, a most unsuitable instrument for the formation of policy.” Bickel, The Supreme Court and the Idea of Progress, 175 (1970).

2 "Public policy prohibits a public utility from enforcing any contract or agreement repugnant to its public duty to serve all persons similarly situated impartially, uniformly and without discrimination.” 225 Ga. 851 (headnote).

3 Quoted in Albert, Standing to Challenge Administrative Action, 83 Yale L. J. 425 n. 1 (1974).

4 There being no adequate remedy at law, any judicial remedy must be in equity. McIntyre v. Harrison, 172 Ga. 65 (157 SE 499). Venue for a suit against the commission is Fulton County. Code § 93-211. "The establishment of a rate is the making of a rule for the future, and therefore is an act legislative not judicial in kind.” Georgia Pub. Serv. Commission v. AtlantaGasLight Co., 205 Ga. 863, 875, supra. The suit for injunction in the Superior Court is therefore a "de novo proceedings.” Georgia Pub. Serv. Commission v. General Telephone Co. of Ga., 227 Ga. 727 (182 SE2d 793). On the other hand, where an administrative body acts in a judicial capacity there is a review of the record by the writ of certiorari. Southeastern Greyhound Lines v. Georgia Public Service Commission, 181 Ga. 75 (181 SE 834). But as to the former (legislative rate-making), "neither the trial court, nor this Court on review will substitute its own discretion and judgment for that of the Public Service Commission, where it has exercised its discretion in a matter over which it has jurisdiction.” Georgia Pub. Serv. Commission v. Smith Transfer Co., Inc., 207 Ga. 658, 659 (63 SE2d 653).

5 See note 6, infra.

6 The organic law of Minnesota provided that the rates set must be "just and reasonable.” This same requirement is found in Alabama (Code of 1958, Title 48, § 52), Kentucky (Kentucky Revised Statutes Ann. § 278.270) and New Mexico (New Mexico Statutes 1953 Ann. § 68-6-1). The highest courts of these states followed the reasoning of the Minnesota opinion that a consumer has no property right in the reasonableness of the rate, that rate-making is a legislative function and that his remedy lies in the political process. City of Birmingham v. Southern Bell Tel. & Tel. Co., 234 Ala. 526 (176 S 301); City of Middlesboro v. Louisville & Nashville R. Co., 252 SW2d 680; State v. Mountain States Tel. & Tel. Co., 54 N. M. 315 (224 P2d 155).

7 Any member of the public has a right to intervene and appear in hearings before the Public Service Commission. See Code Ann. §§ 93-307 and 93-307.1. Rule 14.1 and 15, General Rules of the Commission.

8 "The constitutional provision against taking property for public use without just compensation prevents the enforcement against a public service corporation of a confiscatory rate, and the question whether or not the rate is confiscatory is always a question which the public service corporation can have determined in the courts. Because of the right of the corporation to resort to the courts, it has, in some instances, been assumed that the consumer had a right, also, to resort to the courts if the rate was unreasonably high. But the courts have not admitted such right. The courts have no jurisdiction over rates as such, and unless some constitutional right is involved so as to give them jurisdiction, the courts have no power to interfere with a rate which is, in fact, sanctioned by the legislature. There has been some contention that a rate which is unreasonably high interferes with the constitutional rights of the consumer, the same as one unreasonably low interferes with those of the corporation, but this contention has not been accepted.” Annot. Public Utility — Legislative Rate, 12 ALR 404-405.

9 Southern R. Co. v. Georgia Public Service Commission, 218 Ga. 157, 158 (127 SE2d 12); J. & M. Transportation Co. v. Georgia Public Service Commission, 217 Ga. 296, 298 (122 SE2d 227); Atlanta Motor Lines v. Georgia Public Service Commission, 211 Ga. 698 (88 SE2d 387); Georgia Public Service Commission v. Atlanta Gas Light Co., 205 Ga. 863, 883 (55 SE2d 618); Southern Bell Tel. & Tel. Co. v. Georgia Public Service Commission, 203 Ga. 832 (5) (49 SE2d 38); Georgia Public Service Commission v. Georgia Power Co., 182 Ga. 706, 715 (186 SE 839); Hudspeth v. Hall, 113 Ga. 4 (38 SE 358). See also note 4, supra.

10 See note 6, supra.

11 We rule here, of course, that there is no substantive due process claim in the consumer.