Wisconsin-Minnesota Light & Power Co. v. Railroad Commission of Wisconsin

267 F. 711, 1920 U.S. Dist. LEXIS 1000

• Court: District Court, W.D. Wisconsin
• Decided: July 21, 1920
• Status: Published

Opinion

GEIGER, District Judge

(after stating the facts as above).

[1] There are presented sharply contested questions, which the parties variously state as bearing upon the jurisdiction of the court, or upon the sufficiency of the bill in its disclosure of a cause of action, or upon the propriety of granting an injunction pendente lite, in view of certain issues of fact to be alluded to.

■ Speaking generally, the parties will agree that a cause of action to restrain an aggression by the state, through its tribunals or officials, upon the property or property rights of the plaintiff, in violation of the protection afforded by the Fourteenth Amendment, is within the general equitable cognizance of the court; and of course no other statutory requisite need be present than an appropriate disclosure of a case so arising in the plaintiff’s behalf under the Constitution or laws of the United States. The voluminous pleadings and record have necessitated such references thereto and excerpts therefrom as enable an understanding of the propositions deemed vital in the disposition of the pending motion. We feel that two questions must be answered, each of which is more or less dependent, in the facts out of which it arises and the answer to be given to it, upon the other. They are: First. What are the dominant facts, disclosed in the bill, respecting the plaintiff, its situation in its property and property rights, particularly in their relation to the state of Wisconsin, the defendant commission, and to proceedings pending before the latter ? Secondly. Can the court award a writ of injunction pendente lite, in view of the answer-to be given to the foregoing question, and, if so, should it exercise the power, in view of issues of fact tendered in this case?

In thejr consideration, the inquiry must proceed upon recognition of the plaintiff company as a creature of the state of Wisconsin, and, as such, subject generally to its laws and public policy respecting the conduct of its business as a public utility; that presumptively the acts of the state and its tribunal, the defendant commission, are valid, and not repugnant to any right or immunity guaranteed to the plaintiff by the Constitution of the United States; that likewise the defendant commission presumptively has full jurisdiction to function obediently to the state law, and hence the proceedings now pending before it at the plaintiff’s instance must be deemed to have been initiated, and to be pending, rightfully, to the end that the vested power of such commission may be exercised, not merely to bring about a result satisfactory to the plaintiff’s wishes or desires, but to determine the quantum of relief to which it is entitled, consistently with its obligations •to, and the rights of, the public, which are equally within the cognizance of the commission for protection. In other words, that the jurisdiction of the commission, to the extent that it has been invoked, be discharged.

We start, then, with the outstanding facts that in July, 1919, the plaintiff filed with the defendant commission its petition, asking for an increase of rates, in its entire service to 32 communities within the state of Wisconsin; that such proceeding is still pending and undetermined, except as to three communities heretofore referred to; that as to such communities the commission has acted, awarding an increase of rates, which, however, as appears from the bill, is not satisfactory to the plaintiff, but is charged to be nonremunerative and confiscatory, in view of its claims respecting the value and cost of operating its property in those communities. The petition — at least so it was conceded upon the argument before us — is as broad in its scope as is the activity of the plaintiff in its business as a public utility within the state of Wisconsin, and certainly aims at an objective in respect of reviewing its rates just as broad as the present bill.

Obviously, in so far as the commission has passed upon the rates in the three communities referred to, the present bill challenges its determination; but with respect to all of the other communities it can do no more than to ask the judgment of this court respecting the reasonableness of rates, upon the apprehension that the commission, if it continue in its consideration of the petition pending before it, is certain to fail in giving the measure of relief to which plaintiff insists it is entitled. In other words, there has been no determination by the commission upon the petition pending before it, except as to three communities, although concededly the plaintiff’s property situation— its plant, as it may be called — is in many respects unitary, necessitating, in considering the needs and obligations of any one community, a consideration of values and operating costs at central or outside sources of power, and the like.

Now the defendants rest upon these outstanding facts as a sufficient basis for challenging the plaintiff’s attempt to resort to equity, in advance of a determination of the very matters comprehended within the bill by the tribunal which the state has constituted for that purpose, and whose jurisdiction the plaintiff has in fact invoked and concedes. We believe the challenge to be well founded, not only in reason and good sense, but rather clearly upon precedent, disclosed in cases like Prentis v. Atlantic Coast Line, 211 U. S. 210, 29 Sup. Ct. 67, 53 L. Ed. 150, and Bacon v. Rutland Railroad Co., 232 U. S. 134, 34 Sup. Ct. 283, 58 L. Ed. 538, and, as it is not claimed in the case before us that the delay in determining fully the pending petition before the commission is unreasonable, or that the conduct of the commission has been arbitrary or capricious, the authority of such cases is controlling, with respect to equitable interference pending legislative or administrative procedure by a duly constituted tribunal. In the Prentis Case, this view of the bills there tendered was expressed:

“It appears on their face that the appellees did not avail themselves of the right of appeal to the Court of Appeals of Virginia, which absolutely vested in them by the Constitution and laws of that commonwealth. Such an appeal would have brought up the question of the alleged unreasonableness of the designated rate, and appellees cannot assume that the decision of the commission would necessarily have been affirmed. If reversed or changed to meet appellees’ views, the whole ground of equity interposition would disappear. In such circumstances it is the settled rule that courts of equity will not interfere. The transaction must be complete, and jurisdiction cannot be rested on hypothesis. A fortiori, this must be so where federal courts are asked to interfere with the legislative, executive or judicial acts of a state, unless some exceptional and imperative necessity is shown to exist, which cannot be asserted here.”

And in the Rutland Case, the court, although distinguishing the Prentis Case, still points out that before a party may resort to equity the matter or case must have reached “the judicial stage.” See 232 U. S. 147, 34 Sup. Ct. 283, 58 L. Ed. 538.

If, therefore, we assume that -the plaintiff in this case invoked the-jurisdiction of the State Railroad Commission for the broad purpose of considering and revising its rates as disclosed by itself in the petition filed in July, 1919, it would be anomalous to recognize the constant alternative of resorting to equity merely if, because of delay, disappointment in partial determination, or for other considerations, the further prosecution, or the awaiting of the final result of, the commission proceedings, was no longer desirable. And it is equally true that,if, as suggested by plaintiff’s counsel upon the hearing of the present motion, a plaintiff may always resort to the federal equity courts for the mere purpose of challenging as confiscatory, a rate or rule established by a state commission, it must follow that preliminary injunctions, when having no other support than the claim made by a plaintiff in a case like this, will prove a means of perpetually tying up the functioning of the state laws.

The whole question arises, as we view it, not as, one of comity, but rather one of fact, in establishing the proposition that the state, through its tribunals, has committed, or is threatening to commit, aggression upon the complainant’s property or property rights. Taking the broad case made by the plaintiff’s bill, it is not that the rates originally fixed are now confiscatory, and that the state, through the defendant commission, adheres to them and refuses to give consideration to the facts recited in the bill; for the plaintiff has availed itself of the jurisdiction furnished by the state to conduct an inquiry into its rates and to award an increase. The plaintiff, except as to the three communities, does not pretend that the commission has denied or will deny all relief which it asks for in its petition. The most that it can claim, upon the broad aspect of its petition and the present bill, is that, if it ultimately prevails, or if it fails upon the issues presented to the commission, and the latter’s determination is ultimately condemned by the court, it will in either event sustain an interim loss. This seems to us to be purely a hypothetical, if not conjectural, basis for invoking the equity jurisdiction. Prentis v. Coast Line, supra.

[2] It clearly eliminates the necessity, ordinarily present in equity upon applications for a preliminary injunction, of a clear showing respecting not only the plaintiff’s right, but of the defendants’ wrong or aggression. It is one thing to make a clear prima facie showing, and quite another to merely set up the claim and ask that the injunction issue for interim protection'because the plaintiff may prevail.

The matter can be presented in another way, through the simple query: Is the plaintiff in the present case disclosing, or attempting to disclose, a denial of, or an aggression upon, its property or property rights by the state, upon the same facts disclosed before the commission or inhering necessarily in the rate complained of; and has the state finally denied the plaintiff’s right upon the facts so disclosed? This query, so it seems to us, is expressly answered in the negative by the plaintiff's bill, which, while complaining of the rates existent when its pefitiojt was filed in July, 1919, seeks not merely to present to this court the facts which then may have been pertinent, but other facts transpiring since the commencement of the proceedings before the commission upon which it lays, or seeks to lay, great emphasis.

Now, omitting for the present reference to the facts transpiring during the current year, how idle would be attempts to regulate and enforce rates through a state tribunal, if concurrently with the prosecution of a remedy provided by the state law before the state tribunal the entire functions of the state law could be superseded by a federal (or state) court of equity, merely upon the hypothesis that the complaining party may ultimately prevail. In that event, the injunction pendente lite would, of course, be based upon no matter of: fact in issue 'between the parties, and yet it would effectually operate to condemn the regulation of the state tribunal and forbid the latter from functioning, pending the trial, except to such an end as may meet the concurrence of the equity court.

As already noted, the situation, as disclosed in the present bill, is far from that of merely complaining of the rales in effect in July, 1919, and averring that such rates were the last expression of the legislative or executive will of the state, from which plaintiff, notwithstanding due representation of all of the facts averred in the present bill, could not be released or relieved, to the end of getting an adequate return. In other words, the plaintiff, upon the record before us, cannot be heard to say that, upon the facts now presented as relevant to the question of a lawful and nonconfiscatory rate, the state has denied, and is denying, relief, leaving the plaintiff no alternative but to resort to equity to restrain an impending unconstitutional aggression.

These considerations are emphasized when once we reflect what must ensue upon an injunction pendente lite in the situation disclosed. The plaintiff must, of course, concede that, whether or not an injunction is issued, the commission will retain its power to inquire into and regulate the plaintiff’s rates. If the rates now under consideration by the commission are held preliminarily by this court to be confiscatory, will the parties proceed before the commission, or before this court, in further inquiry, to the end of fixing a constitutional rate ? If before the former, will the future functioning of the commission be freed from the surveillance of the preliminary injunction, and from the effectiveness of a preliminary adjudication of the court respecting values and the like?

Certainly the courts could not by preliminary injunction restrain enforcement of any rate, without fixing for the time being some of the elements upon which lawful or nonconfiscatory rates are based; that is to say, if an existent rate is to be condemned, it can only be upon recognition of some standard of value, of property, likewise of operating expenses. So that, if in the case before us the court should condemn the existing rates, with or without recognition of the tentative rates tendered by the complainant, it would seem idle to have the commission function further in the pending proceedings before it, because ultimately it would lead merely to the necessity of a recession by the court or the commission of either of their respective determinations, whether they be final or preliminary.

If, therefore, it be assumed that the equitable jurisdiction could ultimately prevail, there is none the less established a policy whereunder the system of regulating public utilities may be made nominal only; the real regulation being conducted in equity. We believe that the plaintiif’s bill discloses this very infirmity, and, if the jurisdiction were exercised, this result would follow in the particular case before us, and that regulation by the defendant tribunal would amount to nothing, because the proceedings pending before it could at all times be frustrated in the accomplishment of their object through the concurrent exercise of the equitable power, which latter, of course, if not resorted to for the purpose of dominating it, ought not to be resorted to at all until finality of action by the state can be ásserted.

This conclusion is reached upon consideration of the bill in its broader aspect and purposes, and is not limited to a consideration of the case which might be made upon the narrow facts pertaining to any one or all of the three communities concerning whose rates the commission has made an award. We are taking the situation in its entirety, as the plaintiff professed to present it, both in its application before the defendant commission and in its bill, which invokes the interference of the court as against the whole subject of rates rendered for service in the various communities referred to.

[3] Upon the view that the bill is fatally defective in the respects noted, wherefore the court, although, answer has been interposed, will decline to issue an injunction, a consideration of the subsidiary feature of the second question heretofore suggested, and any other question argued, is unnecessary. But, dealing with the bill as a whole, or segregating the allegations pertaining to the plaintiff’s properties, service and rates, at Ua Crosse, Eau Claire, and Chippewa Falls, the defendants have, upon either aspect, met the allegations so fully by direct denial of the material matters of fact, by counter allegations setting up affirmatively either countervailing facts or disputation of the claims on the part of the plaintiff that the defendant commission was proceeding erroneously, by refusing to apply proper standards of value, or of operating expenses, or of distribution of values, or operating expenses between different communities, as render it impossible preliminarily to accept plaintiff’s claim upon any of these matters, in satisfaction of the rule requiring a prima facie dear showing as a basis for an injunction pendente lite. The pleadings as they now stand, and the discussion by counsel upon argument, preclude the thought that any fact or facts could be seized upon by the court as sufficiently free from doubt and as sufficient basis in equity to justify the requisite preliminary conclusion. Therefore, even if the matters first herein considered could be .eliminated, the court could not with propriety award preliminary relief.

The conclusion is that the application for an injunction pendente lite will be denied, and an order may be entered accordingly.