Montana-Dakota Utilities Co. v. Johanneson

153 N.W.2d 414, 1967 WL 157857
CourtNorth Dakota Supreme Court
DecidedAugust 23, 1967
DocketCiv. 8355
StatusPublished
Cited by61 cases

This text of 153 N.W.2d 414 (Montana-Dakota Utilities Co. v. Johanneson) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montana-Dakota Utilities Co. v. Johanneson, 153 N.W.2d 414, 1967 WL 157857 (N.D. 1967).

Opinions

STRUTZ, Chief Justice (on reassignment) .

Three investor-owned public utilities, Montana-Dakota Utilities Company, Northern States Power Company, and Otter Tail Power Company, doing business in the State of North Dakota, bring this action for a declaratory judgment against twenty-one rural electric co-operatives, joining the Attorney General of the State and members of the Public Service Commission of the State of North Dakota who, by the law which is being challenged, are required to administer its provisions. This action is brought to test the validity of Chapter 319 of the Session Laws of 1965, and to seek an injunction against its enforcement.

After issue was joined, both the plaintiffs and the defendants moved for summary judgment. By moving for summary judgment, all parties concede that there is no genuine issue as to any material facts to be determined in the action, and they seek to have the court enter a declaratory judgment under Rule 56, North Dakota Rules of Civil Procedure.

In passing on the motion for summary judgment, the trial court held that a portion of Section 3 of the Act was unconstitutional. It further held that the portion found to be invalid was severable from the balance of the law, and that the balance of the Act was valid. Judgment was entered accordingly.

The defendant co-operatives appealed from such summary judgment, and from the whole thereof, demanding trial de novo in this court. The plaintiff public utilities cross-appealed from that portion of the summary judgment which held a portion of the Act constitutional and from the finding of the trial court that the portion held unconstitutional was severable from the rest of the Act.

The Act in question is generally referred to as the “Territorial Integrity Law.’' Its purpose was to amend Sections 49-03-01 and 49-03-05 of the North Dakota Century Code which required a public utility, before beginning construction or operation of a public utility plant or system, or an extension thereof, to obtain from the Public Service Commission a certificate of public convenience and necessity. Section 2 of the Act provides that no electric public utility shall begin construction or operation of its public utility plant or system, or extension thereof, without first obtaining from the Public Service Commission such certificate of public convenience and necessity, and then goes on to provide:

“ * * * nor shall such public utility henceforth extend its electric transmission or distribution lines beyond or outside of the corporate limits of any municipality, nor shall it serve any customer where the place to be served is not located within the corporate limits of a municipality, unless and until, after application, such electric public utility has obtained an order from the public service commission of the state of North Dakota authorizing such extension and service and a certificate that public convenience and necessity require that permission be given to extend such lines and to serve such customer.”

[419]*419Section 3 of Chapter 319, the law being attacked, reads as follows:

“The public service commission of the state of North Dakota shall not issue its order or a certificate of public convenience and necessity to any electric public utility to extend its electric distribution lines beyond the corporate limits of a municipality or to serve a customer whose place to be served is located outside the corporate limits of a municipality unless the electric co-operative corporation with lines or facilities nearest the place where service is required shall consent in writing to such extension by such electric public utility, or unless, upon hearing before the commission, called upon notice, it shall be shown that the service required cannot be provided by an electric co-operative corporation. Such certificate shall not be necessary if the public service commission approves an agreement between a public utility and the rural electric co-operative serving the area which includes the station to be served and which agreement designates said station to be in an area to be served by the public utility.”

Section 4 of the law provides for certain exclusions from the provisions of the Act.

The plaintiff public utilities contend that the law is unconstitutional for a number of reasons. They contend that a public utility is required to make application for a certificate of public convenience and necessity to extend its service to a new customer outside of a municipality, while cooperatives are not required to make such application to serve new rural customers. They further contend that co-operatives are given a monopoly in rural areas and are allowed to operate without supervision or regulation by the Public Service Commission, while public utilities are regulated in all aspects of their operations. They say that co-operatives, under this law, can infringe upon an area now served by a public utility if it is outside of the corporate limits of the municipality, without any regulation by the Public Service Commission. The public utilities further allege that a public utility can have new customers within the corporate limits of a municipality only if this does not interfere with the co-operative services already provided in the municipality; that co-operatives have the right to complain against a public utility, but that the public utility has no right to complain against co-operatives for interfering with customers or encroaching upon the territory of the public utility. They assert that the law gives electric co-operatives certain rights as utilities, and yet specifically provides that they shall not be deemed public utilities.

Finally, the public utilities contend that the law disregards customer preference, and the user of electric energy is compelled to be an unwilling subscriber of a co-operative in order to get service from such co-operative.

Thus the argument of the public utilities is that Chapter 319 of the Session Laws of 1965 is unfair, arbitrary, unreasonable, and discriminatory in favor of one group providing electrical services at the expense and prejudice of electric public utilities and at the expense of the public.

The trial court held that Section 3 of the Act, with the exception of the last sentence thereof, was unconstitutional in that it prohibits the Public Service Commission “from exercising its legislatively delegated power of protecting the public in determining ‘public convenience and necessity.’ ”

The trial court held that Section 3 delegated such power to a nonregulated competitive class of citizens or corporations, without providing adequate safeguards or standards for the promulgation of rules and regulations to protect the public interest, and that it was an unconstitutional delegation of legislative power and was in violation of the due-process clauses of the State and Federal constitutions. The trial court, however, did find that such portion of the law which it found to be unconstitu[420]*420tional was severable from the balance of the Act, and that the balance of the law was valid and in full force and effect.

The appeal by the defendant cooperatives in an action tried to the court, from a summary judgment, and from the whole thereof, demanding trial de novo in this court, raises all of the issues in the case on appeal, those that are favorable as well as those which are unfavorable to the appellants. No additional issues are raised, therefore, by the cross-appeal of the public utilities.

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Cite This Page — Counsel Stack

Bluebook (online)
153 N.W.2d 414, 1967 WL 157857, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montana-dakota-utilities-co-v-johanneson-nd-1967.