Louisiana Power & Light Company v. City of Thibodaux

PETITIONER:Louisiana Power & Light Company
RESPONDENT:City of Thibodaux
LOCATION:United States Senate

DOCKET NO.: 398
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 360 US 25 (1959)
ARGUED: Apr 02, 1959
DECIDED: Jun 08, 1959

Facts of the case

Question

Audio Transcription for Oral Argument – April 02, 1959 in Louisiana Power & Light Company v. City of Thibodaux

Earl Warren:

Number 398 Louisiana Power & Light Company, petitioner versus City of Thibodaux.

MrMonroe.

J. Raburn Monroe:

Mr. Chief Justice may it please the Court.

This proceeding was commenced by the City of Thibodaux filing a suit in the District Court of Lafourche Parish state court, relying solely on the authority of Act 111 of 1900, an act which had never been interpreted by any state decision or state court decision and as far as we know had never been invoked before as a basis for a condemnation proceeding.

The defendant, the Louisiana Power & Light, removed the case to the Federal District Court.

After a — after removal, the defendant filed answer in which it raised about eight of ten questions under state law involving the interpretation of the state act, the application of the state act, validity of the state act and its — and several other questions of state law.

At the pre-trial conference, the District Judge concluded to hear the issues of law prior to going into the matter of compensation.

Argument was held at some great length in the District Court on these issues of law, and the District Court proceeded to exercise the questions of state law and grant a stay of proceedings until these questions should be decided by a Supreme Court of Louisiana interpretation.

His reasons for doing this is, he points out, that although the power of eminent domain is inhere in the sovereign, it is never delegated to subdivisions by implication and that it is a power that is brought with great peril, a possibility of abuse.

He then finds that there had been no state decisions interpreting this law, but that there has been an Attorney General’s opinion in 1951 which is to the effect that municipalities do not have the power to condemn utilities.

He, therefore, granted the stay, pending that proceeding.

William J. Brennan, Jr.:

(Inaudible)

J. Raburn Monroe:

That was — I was going to come to the specific answers, yes.

Well going — I’ll go back and fill in the facts.

Louisiana Power & Light Company operates in about 44 parishes in the Louisiana and the property here involved in this condemnation suit was a property in the suburbs of the City of Thibodaux.

Thibodaux which operates a municipal plant expanded its city limits and then sought to bring this condemnation proceeding.

As I say Louisiana Power & Light operates a general electric utility, it generates electricity at remote points from Thibodaux and Monroe, Louisiana and in New Orleans, Louisiana, transmits that by high power transmission lines and then distributes it in Thibodaux.

I bring this point out because part of the property involved here is not just a property within the city, new city limits of Thibodaux, but it is that portion that was built, that capacity that was built in all the way back to the power plant for the purpose of serving this area, which is one of the questions as to the applicability of this act.

Now this act of 1900 speaks of — says that municipality can condemn a plant and it goes on to say that if the person owning the plant owns two or more utility plants such as water plant, gas plant at the city condemning this, condemn all of the plants.

And so the question or one of the questions state law arising here is whether the city would be required in this case to condemn the entire property of the Louisiana Power & Light which would raise a question as to its state constitutionality, if it was so interpreted.

That is, courtesy of — in one parish operate a general utility system throughout the state of Louisiana.

Going on to the — I might add here also the city of, the city is seeking here also to condemn the right of the Louisiana Power & Light to operate in this section of the city, that is its franchise.

Now Louisiana Power & Light operates in that section by virtue of three franchises granted by the parish of Lafourche prior to the taking in of this territory by the city and the reason that the city wants to expropriate a portion of those franchise rights in this area is for the reason that the rates charged by the city to its inhabitants for residential service are approximately 55% higher than the rates charged by Louisiana Power & Light company, so that the city couldn’t — would not long-haul to any customers if they took the property, if we still had the right to operate in that territory.

So — and we — we say that a careful examination of the statute will show that they are not specifically granted a right to acquire a franchise or a portion of the franchise.

Well as I say we raise about eight or nine different questions of state law in this proceeding and unless the Court wants to me, I won’t go into them all, it took about an hour’s argument before the District Court.

When the order of — the sale order was entered by the District Court, the City of Thibodaux appealed and we filed a motion to dismiss the appeal on the ground that the order was an interlocutory order which is not appealable under the Judicial Code, Section 1291.

The Court of Appeal consolidated the appeal and the motion to dismiss, both argued the same time.

In argument on the – on the motion to dismiss, the City of Thibodaux argued that this was, this stay order was in effect an injunction setting the doctrine stemming from the (Inaudible) case.

In other words, that in granting a stay the District Court was acting as a chancellor in equity, staying a proceeding or enjoining a proceeding on the law side of the case — we — which if it was a in junction, would be one of the exceptions provided in Judicial Code Section 1292 Sub 1.

In the — this doctrine has been (Inaudible), but in practically all the cases citing this doctrine it has differentiated the action of a court in granting the stay, acting as a chancellor in equity, enjoining a different proceeding and the action of the judge in the orderly process of trying a case.

J. Raburn Monroe:

In all the cases, I admit that a judge trying a case where that law in equity has the inherent power and has discretion in handling the ordinary progress of the case to grant a stay.

We claim that this is what this is.

This is a exercise of the judge in orderly conduct of the case, granting a stay and we cite in our brief number of cases which have recognized specifically right of a court at law as distinguished from equity, court at law to grant a stay as a matter of its inherent power.

Now if — now in this particular case there was no equitable claim made.

The court simply, in the same action before it, after the hearing the evidence on the argument and deciding that in view of the general law that the – following Erie v. Tompkins, that the state interpretation of state statutes should be followed by the federal court and finding no guide of any sort in the state jurisprudence, exercise his prerogative as a court at law in the control of proceedings to stay that particular segment.

Now he did not — he did not dismiss the suit and he still retained jurisdiction insofar as federal question is concerned, insofar as the compensation is concerned.

So we say if this is what it is, an exercise of indiscretion of the Court, by then this suit is not appealable, because it’s interlocutory order clearly.

Now we come to the second question which we raise, which is the question of abusive discretion and that is, was the Court — if the Court in granting the stay went so far beyond its discretion as a Court at law as to actually constitute this an injunction which makes the case appealable so that it gets here, then is his action nevertheless within his discretion as in granting such a injunction.

Now we rely principally in this connection on the case of Leiter Minerals, which we believe is the last pronouncement in this subject in controlling, and that was the case on which the District Court relied, that’s Leiter Minerals Inc., versus United States, 352 U.S. 220.

In that case, if I can recall fact to you, the Leiter filed a predatory action in the State Court seeking to establish title, the suit was against the mineral lessee of the United States government and he sought to establish title under an interpretation of a 1940 Louisiana statute.

The United States government and the lessee went into the Federal Court and brought a suit to quite title, and also asked for an injunction staying proceedings in the state court.

The Court below granted the injunction and the Court of Appeals affirmed this and directed the District Court to go ahead and decide the case.

This Court, however, affirmed the jurisdiction of the Federal Court, affirmed the issuing of the injunction staying state proceedings, but then directed the district judge to stay further proceedings in the District Court until such time as a determination could be made of the state law, of interpretation of state statute, by the state courts of Louisiana and we say that this is precisely the same situation as in that case.

Now we also cite and rely on the Spector case, Spector Motor Company case, which involved an injunction to enjoin the collection of a tax on the ground that it pins down the communist power.

In that case also, this Court held that a stay should be granted until such time as the case could be determined or the statute interpreted by a Connecticut Court.

There are two leading cases which might be considered in conflict with this.

One of them is the case of Meredith versus Winter Haven, involving a suit to enjoin — a suit involving a question of Florida law.

In that case the Federal District Court had decided the case under Florida law against the plaintiff.

The Court of Appeals decided, affirmed the dismissal, but made it without prejudice to the plaintiff proceeding in the Florida Court.

And the Supreme Court held that it was the — that this thing, the diversity citizenship case, that it could not — the Federal Court could not just relax all of its jurisdiction and dismiss a suit, it had — and that is a case that has very frequently cited.

I think there are two differences or distinctions with that case.

In the first place here the Court has retained jurisdiction, the District Court has, and as to the compensation question and as to the questions, federal questions and had just temporarily stayed proceedings.

And furthermore in the Florida case, the Meredith versus Winter Haven, the Supreme Court of Florida had passed on this very point, which was — which the Federal Court was asked to pass on.

The argument was simply that they would probably overrule this previous decision because a certain argument had not been made to them, so that there was a guide by which the Federal Court could go in an existing final interpretation of the law by Supreme Court of Florida.

Felix Frankfurter:

Although the – the one thing I am – would like you to enlighten me, — what questions there are in this litigation, that have any substantiality on which state law determinations become important.

J. Raburn Monroe:

Well —

Felix Frankfurter:

Other way around, if you dispel claim that there is nothing here on which the state court could shed light?

J. Raburn Monroe:

Yes —

Felix Frankfurter:

Isn’t that at the heart of this (Inaudible) in this case?

J. Raburn Monroe:

That’s right, in other words its —

Felix Frankfurter:

(Inaudible) is comparable —

J. Raburn Monroe:

There is — it begins with Act number 1011 of 1900.

That is the sole authority for this action.

Without that Act the city would have no authority per se.

Now we say that, that Act is deficient from several respects in authorizing the city to bring this suit.

Hugo L. Black:

Is that provision is set out in your brief, provision of the Act?

J. Raburn Monroe:

It’s quoted in the appendix to the —

Hugo L. Black:

(Inaudible) controversy is that whether that should be send back to the State Court to conclude?

J. Raburn Monroe:

Yeah, that’s the question.

Hugo L. Black:

(Inaudible)

J. Raburn Monroe:

The Act is printed in the appendix to the city’s briefs, the bound — Now we say this is an — we have raised quite a number of questions under this, because since 1900 there have been a number of accidents which apparently conflict with this — this Act.

For example there is an Act which says that no utility and utility is defined as any person, shall serve a customer of another utility without first obtaining permission of the Public Service Commission.

Now that apparently would — and it’s admitted here that they’ve got no permission, and there is another order of the Public Service Commission outstanding which is apparently valid, which says that no utility shall transfer any property which it owns, to another without getting its permission, so whether the necessary authority exists for the basis of this suit.

Now we also raise questions here considering obligation of contract.

The city of Thibodaux in 1948, this question arose with the City of Thibodaux.

The City of Thibodaux wanted an industrial customer, the Coca Cola Company and they wanted to serve a college was newly being built just outside their city limits and they proceeded to enter into a contract with Louisiana Power & Light company which is printed in I think page 36 in the record, in which they agreed that if we would transfer this industrial customer and this college to them for service that they would recognize our rights to continue indefinitely to serve in a territory which was then served, which is the territory here in question.

So we say that is a valid contract plus the city contested that contract, we say it’s a valid contract and reliance thereon we built (Inaudible) there and that any attempt to take our rights to serve in there would be a violation, particularly if we establish that it’s a valid contract.

Why did you remove this to federal court (Inaudible)?

J. Raburn Monroe:

Well this has sort of the Gilbert and Sullivan looked to it.

I must admit the statute which, under which this suit was brought we considered, gave a very, a cause of remedy which we considered very prejudicial to ourselves.

For example, it provides for the appointment of six commissioners by the court and these six commissioners are to go and view the property, appraise it and make a report within 15 days.

Well, suffice it to say I don’t think you could possibly even inventory properly of this description of utility system within 15 days and of course these six commissioners, if you, the record will show, were appointed by the Judge the same day that the suit was filed, even before we were served.

The act makes no provision for giving evidence to these commissioners.

It makes no provision for hearings or for cross examining witnesses, it does say that after they have filed their report in the court that any party can object and the case will be tried out the usual manner.

But when you got – go into court and you have six so called impartial experts put in a testimony you then have a great burden if you are going to contest it.

And so — in addition to that the act provides for a summary appeal with no, we call it suspended deal no supercilious.

So we considered that this procedure and this act would be very prejudicial to us and so we removed as we of course had the right to do.

Hugo L. Black:

In what court did the state court send it back, rather the District Court sent it back?

J. Raburn Monroe:

Well we do not pray for that.

The District Court came to that conclusion itself.

J. Raburn Monroe:

Now why are we satisfied with that, we — that isn’t the, the interpretation of the state law isn’t the reason that we removed it, the legal crisis.

As a matter of fact as far as we have are concerned we think the District Court was right in the proper of working out of the two systems of law, harmonious working out, I think its correct since Erie versus Tompkins is the law and we are going to have to follow it state decision anyway, why make a preliminary guess about it.

Felix Frankfurter:

Is it entirely sua sponte by the District Court?

J. Raburn Monroe:

Yeah entirely following the Leiter case.

Felix Frankfurter:

It’s the same (Inaudible)

J. Raburn Monroe:

Yes it’s changed right, yes that’s right.

That’s right.

Felix Frankfurter:

Now you must told by us (Inaudible) state got instruction on what the state law is —

J. Raburn Monroe:

Yeah.

Felix Frankfurter:

(Inaudible) you ought to get state court instruction and the Court of Appeals no, you have no business as to that, is that it?

J. Raburn Monroe:

That’s right, that’s what it boils down to.

But I think a careful analysis will show that this is right within the, within the Leiter decision, because I think its —

Potter Stewart:

(Inaudible) The Leiter case was one within historical jurisdiction of equity, wasn’t an injunction being —

J. Raburn Monroe:

Well no, not exactly.

It was a suit to quite title and an injunction was asked to stay the proceedings in the court and that was granted.

Now and that was the way the case came to this Court.

But this Court also said we will stay the proceedings to quite title in the Federal Court and in a state proceeding.

Now proceedings of quite title in Louisiana — Louisiana — the distinction between — and as legal action is unknown and so it is a statutory proceeding and I would guess it was a legal proceeding and they still, they stayed in that Leiter case, in my opinion a legal proceeding.

Potter Stewart:

Now it is true isn’t it at least in opinion this court indicates that a federal constitutional question was involved in Leiter to the extent that one construction of that state statute would have raised federal constitutional questions that another construction would have not raised?

J. Raburn Monroe:

Majority opinion said that was and —

Potter Stewart:

The dissent.

J. Raburn Monroe:

The dissent said it was —

Potter Stewart:

Is there any — is there a federal constitutional question (Inaudible)

J. Raburn Monroe:

Well we think there is that, here so we think there is a federal constitutional question here of, in connection with the, violation obligation of contract, we have alleged that we have a contract here with the city, also alleged our franchise with the parish of constituted contract.

Now I say that in considering whether there is a substantial federal question you got to concede that all of these state questions that we have raised are decided in our favor that that contract is valid.

Potter Stewart:

(Inaudible) for information only because I don’t remember in that, in Meredith against Winter Haven, and in Propper against Clark, those are primarily the decisions relied upon by your opponent I think, did either of those involve the construction of state statute?

Do you remember?

It was a just a matter of a state common law, it’s a decisional law that’s my question?

J. Raburn Monroe:

Well the, I, in the Meredith case it was a question of whether the city could refund bonds without paying the deferred interest coupons.

However, at the best I’d imagine that would rest on its own —

Potter Stewart:

Probably statutory.

Felix Frankfurter:

(Inaudible) Propper the other way?

J. Raburn Monroe:

Propper and Clark I think the other way it was a question of the law of New York as to whether title vested when a moment they receiver was appointed.

Felix Frankfurter:

That — Mr. Monroe will you yield some of your time to ask what happened to the Leiter case after it went back to —

J. Raburn Monroe:

I am sorry I really don’t know where it is.

I would have liked to.

Felix Frankfurter:

Has nothing to do with your case just curiosity – and when disposed of cases here I want to know what happens to them.

J. Raburn Monroe:

Well I do know what happened to the Spector case, it was —

Felix Frankfurter:

That case came back to us –

J. Raburn Monroe:

I would say that the controlling thing in this matter, I would like to quote from Mr. Justice Frankfurter’s language, in the dissent in Propper versus Clark and that, because I think there is a issue in this case.

So here there are no constitutional issue is present with regard for the respective orbits of state and federal tribunal is the best of reasons as a matter of judicial administration for requiring a definitive adjudication in New York courts, rather than a proceeding in the basis of own counter guess.

I think the issue here in these various cases, various reasons have been assigned particularly for acquittal jurisdiction, diversity or something for either denying or granting.

But I think the overriding consideration here is the whether this thing should be decided in the state court or the federal court.

For instance in Propper versus Clark there is a significant statement by Justice Reed.

He says the congressional purpose to control of foreign assets in the hands of the President through the custodian so there might be a uniform national policy in the administration of the act edges strongly for federal determination of issues of rights in black assets.

In other words he felt that way that a consideration was the federal policy interest in that alien — that — trading with enemy act.

I will save a minute if I have it.

Hugo L. Black:

One other question?

J. Raburn Monroe:

Yes.

Hugo L. Black:

Are you claiming in this (Inaudible) I have just read it and I don’t see any ambiguity.

J. Raburn Monroe:

Well we —

Hugo L. Black:

What does it mean to be construed for?

J. Raburn Monroe:

We claim number one, well in our answer set out all of our claims, but one of the things, it never mentions the word franchise for example, in authorizing the construction.

Number two it says when you acquire a plant you should acquire the whole plant.

Now this was — well this Act was written in 1900 when electric utility systems consisted of one plant in one city, they were not integrated service from central station.

The answer is yes, we have a number of contentions with regard to the Act, also contentions that it’s been superseded by other acts in certain respects.

Earl Warren:

Mr. Claiborne.

Louis Fenner Claiborne:

Mr. Chief Justice may it please the Court.

The first question raised by the granting of the writ here, was the one of the power of the District Court to issue the stay order.

The question of appealability of that stay order, which has been discussed by opposing counsel, was expressly eliminated by the order of granting the writ, the order of this Court granting the writ.

Louis Fenner Claiborne:

As to the question whether the District Court had a right as a matter of power to grant the stay of proceedings before it, we had not anticipated that question.

In fact, we had conceded it before the District Court and before the Court of Appeal and only took it up at the invitation of this Court.

However, having once investigated it, we found that it was very doubtful, though not at all definite, whether this type of order, in this type of case was authorized, as distinct from the question of whether it was an abuse of discretion or not.

The jurisprudence of this Court, and that’s all we’ve dealt with on this question, is to the effect that a court in an equitable proceeding, a court appealed to on the equity side, may grant such as a stay order.

It has been allowed also in cases involving admiralty, bankruptcy and even in a couple a law cases, strictly law cases as distinguished from admiralty or bankruptcy.

However, in those two cases, the only two law cases involved, the stay was found necessary only because of a necessary preliminary administrative ruling or because the statute involved directed that the preliminary determination be made by another agency before the question came before a court.

There is no ordinary civil case in which this Court has either authorized or directed a stay of proceedings.

There is, however, language in two cases to the affect that stay orders are authorized because of the inherent power of all courts to conduct their proceedings in orderly manner.

We invite this Court to a distinction here.

We grant the fact that every court is entitled to control the proceedings before it, whether it’s sitting in law or sitting in equity, and of course to grant continues — continuances to delay its decision in any case, for a reasonable time, for a proper cause.

And we don’t think it makes any difference whether it delays its decision because it’s curious to know what another tribunal in a similar case is going to do.

We think it would have been perfectly proper in this case, for the District Court to say there is another case pending in the Louisiana Supreme Court, which is going to pass on this question, it is only proper that we await that determination, which will not control ours, but which may guide ours and which may under the Erie versus Tompkins case, insofar as it’s applicable to this case, even control this case.

But that is a very different thing from telling parties properly before the Court, we refuse to decide your case, go back to the State Court.

We’ll leave it up to the State Court to decide this issue at least in your controversy.

Felix Frankfurter:

First thing is the disposition that was made by the District Judge, what you denominate a refusal to decide or does he just stays his hand and wait determination by the state court of these supposedly state issues.

Louis Fenner Claiborne:

Your Honor —

Felix Frankfurter:

(Inaudible)

Louis Fenner Claiborne:

No Your Honor that’s correct and he presumably would eventually pass on the federal issues involved if there are any and he would eventually pass on the question of a quantum, the amount of the award for condemnation.

But he — because there is no State Court action pending and no prospect of any, he presumably does intend to defer to the State Court decision on the interpretation of this Louisiana Act.

Felix Frankfurter:

Would he have to defer to State Court’s decisions on those issues, if in fact they had been in existence through decisions of your Supreme Court.

Louis Fenner Claiborne:

Under Erie versus Tompkins Your Honor I think he would have to follow them and apply them, yes.

Hugo L. Black:

Well you, as I gather from what you said, you agree that there are circumstances, exceptional circumstances on which the court should stay the issues and hand such state issues back for determination (Inaudible)

Louis Fenner Claiborne:

That’s correct You Honor, provided that it is done either in suit in equity, that is a refusal to enjoin state action, that I think a court of equity has the power to do.

Hugo L. Black:

Is that (Inaudible)

Louis Fenner Claiborne:

No it go further, it admits these exceptional cases in bankruptcy, admiralty and the cases where the preliminary agency determination, whether it’s a state agency or a federal agency is necessary to the District Court’s decision.

Hugo L. Black:

(Inaudible) the case has indicated that if there are issues to be decided, there is a (Inaudible) consideration that the court does now refer those issues to state —

Louis Fenner Claiborne:

Well Your Honor, there is no decision by this Court in which this type of case, that is an ordinary law case has — and in which there is no statute involved which requires a preliminary determination, there is no decision by this Court authorizing such as stay of proceedings in this certain case.

Hugo L. Black:

Very close to it is of course is the bankruptcy case if you can —

Louis Fenner Claiborne:

That’s correct.

Hugo L. Black:

(Inaudible) I mean in (Inaudible)

Louis Fenner Claiborne:

Yes which is essentially equitable.

Hugo L. Black:

And I hope you will discuss, before you sit down (Inaudible) as suit, the court does have that power, why should they not do it?

What are they arguing?

What is the injury that would occur?

Are you arguing that the statutory questions are so simple and so plain that they should be sent back because this is peculiarly a matter of state law I should think as to the powers (Inaudible) What I’d like you to do is discuss it on practical basis rather than on the legal basis of whether one case is (Inaudible)

Louis Fenner Claiborne:

Well Your Honor, pre-emitting the question of power and getting simply to the second question presented, which is whether the Court in this particular instance abused, the District Court abused its discretion or not?

Hugo L. Black:

(Inaudible) those words.

What I would like to know is why shouldn’t it have done it according to your view?

Louis Fenner Claiborne:

Well for several reasons.

First this suite unlike most of the suites in which this has — this procedure has been authorized, does not in any way interfere with the administration of its own laws by the state.

This is not a proceeding to enjoin a state official from doing something.

It’s not a proceeding to stop a pending state action.

It’s not a proceeding to enjoin the collection of a tax.

There is no state action which is effected by this — by a decision of the Federal District Court.

It’s simply one of applying a local law to local circumstances, which is that —

Hugo L. Black:

Do you have a question of construction?

Louis Fenner Claiborne:

Well, as to whether or not its difficult to apply this law, it’s alleged that this is an old law since 1900 and that it has never been interpreted in the last 59 years, that appears to be true, though no one knows whether the District Courts of Louisiana have applied this law many times or few times, it has never been appealed, that’s all we can say.

However, it does not follow that because a law has not been interpreted, it’s unclear.

We see nothing and clear about the law.

Furthermore we think it’s easier for a court to determine the state law when there are no decisions then when there is a conflict, the confusion of decisions.

Here we have a law which as Your Honor said on its face is quite clear.

It reads very simply, the only pertinent thought of it is the first section which is quoted on Page 23 and 24 of the brief.

There are no serious questions that arise under it.

A lot has been manufactured as in every law case because they will be found or attempted to be found gaps, loopholes in the law.

All of those attacks on this, on the application of this particular law to the particular facts of this case were answered by memorandum filed in the District Court.

If this court is interested in the substance of those arguments, we’ll be glad to furnish the court with copies.

Hugo L. Black:

What are the practical injuries that will occur to the city of – here if this is sent back to state to interpret its law —

Louis Fenner Claiborne:

Your Honor the — now I have to go somewhere out of the record, well this much is in the record here the city files its suit in State Court expecting to have the matter determined there.

The suit is removed to Federal Court, already one delay.

This is a condemnation suit, one that normally is handled speedily, concluded quickly.

Louis Fenner Claiborne:

It goes to the Federal Court, the judge takes a long time to decide whether he is going to decide it or not and finally decides that he is not going to decide which — and tells us to go back to the State court and he tells us that we must obtain an interpretation by the Supreme Court of Louisiana of this particular statute before he will do another thing in the case.

Hugo L. Black:

(Inaudible)

Louis Fenner Claiborne:

Well, it’s — first it’s time consuming.

Secondly, it might be impossible because of this situation.

If we can obtained a declaratory judgment, which is what the District Judge suggest in the State court, suppose the declaration is in our favor, we can’t appeal from the favorable ruling the company’s attitudes throughout this whole proceeding, and I don’t blame them for it, is to delay this expropriation as long as possible.

They quite legitimately would refuse to appeal it.

This Louisiana Supreme Court would have no occasion to pass on it.

Now this is what we would anticipate, this is what we would expect to happen since we have confidence in our courts.

Felix Frankfurter:

(Inaudible) stand for that?

Louis Fenner Claiborne:

No, but we would have to then go back to Judge Wright and ask him now is this sufficient for the judging this particular parish.

Hugo L. Black:

Have you suggested to the opposing counsel at any time since they moved the case in there and they want federal judges instead of the State Court to pass on that case (Inaudible)

Louis Fenner Claiborne:

No, Your Honor we have not, we —

Hugo L. Black:

The reason, would it be much delay if they were demanded?

Louis Fenner Claiborne:

Yes Your Honor because the question is now ripe for decision in the District Court assuming that the judgment of the Court of Appeal were (Inaudible).

If we had to (Inaudible) remand the case back to the State Court, we have to go through the procedure of the appointment of viewers and then finally have an appeal to Louisiana Supreme Court.

Felix Frankfurter:

May I ask you on the assumption that this came as a surprise to both sides that you are right – decide to have a State Court interpretation after he directed — suggested or directed I suppose that State Court interpretation be sought, did your parish make the representations you now make here or the suggestions of all the difficulties in carrying out his — desire to be informed rather than grope in the dark?

Louis Fenner Claiborne:

No, Your Honor we —

Felix Frankfurter:

This did come as a surprise to both of you? —

Louis Fenner Claiborne:

It did, it did and —

Felix Frankfurter:

And this came as an exercise of judicial discretion by a judge who is not I believe notorious (Inaudible)

Louis Fenner Claiborne:

No, Your Honor, you are right.

Hugo L. Black:

Who appealed?

Louis Fenner Claiborne:

We appealed, the city appealed Your Honor, I believe simply on the question of whether the stay order was proper enough.

Now to get back to the practical considerations Your Honor the city has had to float a bond issue anticipating this expropriation.

It had to make commitments.

Now I am going outside of the record in this respect, but it is understandable that this would be involved in an expropriation by a municipality necessarily involved.

All of that has had to wait for over two years since this action was filed and the only reason for that delay has been because of the stay order entered in the District Court proceedings.

Now whether we could go back to State Court itself is a question, quite outside of getting to Louisiana Supreme Court to pass on it, there is a question whether the District Court would accept the case.

Our Declaratory Judgment Act which is quoted in appendix —

Hugo L. Black:

Suppose you tried and they wouldn’t do it, then you could go back to —

Louis Fenner Claiborne:

Well, I suppose we have no alternative what to ask Judge Wright for a modification of his ruling or a withdrawal of it, I don’t know how you can modify it to help us.

Hugo L. Black:

I presume if you took it back there and the other side objected, go to the State Court, Federal Court wouldn’t hesitate very long, and go ahead and try the case.

Felix Frankfurter:

I suppose Mr. Monroe (Inaudible) we have more confidence than the average judge in the parish could (Inaudible)

Louis Fenner Claiborne:

And quite understandably the company was delighted with the delay produced by the ruling.

They have been fighting an expropriation.

They are trying to say that the statute doesn’t provide for it.

There’s no argument about the amount of money involved here.

It’s a question of whether the city is going to be able to take this property or not.

Now I want to stress the distinction between —

Hugo L. Black:

Is there any question about the ability of the city to pay?

Louis Fenner Claiborne:

No Your Honor the money has already been appropriated through a bond issue and is set aside and is —

Felix Frankfurter:

Then it’s a question of power, isn’t it?

Louis Fenner Claiborne:

It’s completely a question of power.

Hugo L. Black:

Anything been said about a bond or an injunction?

Louis Fenner Claiborne:

In –

Hugo L. Black:

In (Inaudible) the city is being held up in gravy I should suppose the city might have raised some question about applying a bond, but (Inaudible)

Louis Fenner Claiborne:

Well, yes the judge himself is responsible for the stay orders, the company is not.

Hugo L. Black:

Well, that wouldn’t have prevented you asking the judge —

Louis Fenner Claiborne:

Well, it’s not so much a matter of the bond, Your Honor.

Here — the situation is this in Thibodaux.

We have a municipality which has extended its boundaries.

In this new — it furnishes electricity to the people in the old area.

It naturally wants to extend its municipal system to the new area.

It attempted to purchase and was unsuccessful.

The only solution is to expropriate.

In the meantime it’s giving all the benefits of the city to these new residents and not getting it back from them the high electric rates which go to pay for the city service, so the city (Inaudible) money.

On the other hand the money that it got from its residents through the bond issue has been accruing interest, but they built a substation which they can’t use until such time this matter is decided.

Now I wish to emphasize if I may the difference between this case and the two cases which have preceeded it on at least two grounds.

First here there is no as distinguished in the first case, no constitutional issue involved.

Any constitutional — federal constitutional question, the only one that has been raised is the question of impairment of contract.

Louis Fenner Claiborne:

Well now that question was decided by this court in 1848 in the West River Bridge versus Dix case.

It was very clearly decided that a franchise was property and was subject to expropriation.

A few years later in the Water-Supply Company it was decided that a contract between the city and a company to furnish all power — or water in that case was likewise property subject to expropriation.

There is no bonafide substantial federal constitutional question here.

So that there is no excuse to saying we will differ passing on the constitutional question because it maybe eliminated by a State Court interpretation of its own law.

Felix Frankfurter:

But in gamut of obligation (Inaudible) depends so much on the conception of allegedly conflicting state laws and it’s the state law (Inaudible)

Louis Fenner Claiborne:

Well, Your Honor —

Felix Frankfurter:

— strange, from my point of view, very strange construction as to what the state committed itself and they have got (Inaudible)

Louis Fenner Claiborne:

Well, Your Honor here the only admitted claim of the company is a franchise which is a perfectly ordinary limited franchise to operate over the roads of the parish and put up their telephone poles and lines.

Now there is no question whatever in the jurisprudence of this Court but that that type of franchise even in this case, a limited franchise not an exclusive one, is subject to expropriation.

It was granted subject to the inherent right of the state and its municipality that delves into it to withdraw it and to inject that and say there’s a constitutional question is possible in any case, but that is no excuse here for the refusal to decide the case.

Now also as distinguished for most of the cases and as distinguished from the two cases previously argued, there is here no conflict between state action and federal action.

This is not a suit to enjoin state officials of state action.

It is not a proceeding in equity.

It’s a proceeding at law.

It is not — the jurisdiction of the court is based on diversity.

Now, I know that federal jurisdiction should be a strong — whether it’s based on diversity or whether it’s based on the existence of a federal question, but in a federal question case there is always the possibility that an interpretation of the state law involved will eliminate the federal question and therefore eliminate the federal jurisdiction while in a diversity case that possibility is impossible.

It doesn’t exist for the reason that diversity jurisdiction was granted to federal courts after all to decide state law questions not federal questions.

Otherwise it would be unnecessary.

Potter Stewart:

May I ask you and your Louisiana jurisprudence have a — have the distinction between law and equity and suppose you don’t, do you, it is not based on —

Louis Fenner Claiborne:

No, we do not.

Potter Stewart:

— this law?

Louis Fenner Claiborne:

I think Your Honor asked the question in connection with the Leiter case.

Potter Stewart:

In the Leiter case and many of these cases where this whole doctrine has generally been referred to accurately or inaccurately as one of equitable abstention.

There is no distinction in Louisiana between law and equity.

Louis Fenner Claiborne:

Well I don’t know that the distinction would have to be recognized by Louisiana law.

This Court in applying the doctrine of abstention in the Leiter case certainly recognized that the suit involved equitable relief at least insofar has it enjoined the state court proceeding then in progress.

Insofar as further more as Your Honor pointed out in the Leiter case there was a constitutional question which could be avoided under one interpretation of the statute and therefore it was appropriate to leave it to state courts to interpret it first.

William J. Brennan, Jr.:

Well I gather that — the key problem here is the power of the municipality under these several Louisiana statutes to do this, that is whether that has been delegated to the municipality this power —

Louis Fenner Claiborne:

That is the problem Your Honor before the District Court.

William J. Brennan, Jr.:

That’s really the basic one, isn’t it?

Louis Fenner Claiborne:

That’s right.

William J. Brennan, Jr.:

Well now do you can consider it’d be pretty difficult job for the District Court to decide what the Louisiana law is in that regard?

Louis Fenner Claiborne:

We have argued in our brief and I think I tried to explain that there is no real difficult problem of interpretation here.

We have a Louisiana statute.

The petition —

William J. Brennan, Jr.:

What about the conflicts with later statutes which Mr. Monroe —

Louis Fenner Claiborne:

They were — there are no conflicts with later statutes.

They were all arguments based on the Louisiana constitution.

Now those are arguments all soft edged.

They can be answered very readily.

These constitutional provisions are not before this Court.

The petitioner did not bother to bring them here.

Felix Frankfurter:

(Inaudible)

Louis Fenner Claiborne:

Judge Wright did not seem to find any difficulty with any question except this one which is that in 1900 so the Judge (Inaudible) without any evidence, the municipality — the electric and other public utilities were largely located within the boundaries of the municipality and that therefore what this statute contemplated was the taking of that property within the city limits and that it was difficult to apply that old statute in visiting that situation to the modern situation where you have an electric company operating throughout the state.

Felix Frankfurter:

(Inaudible)

Louis Fenner Claiborne:

Unless we could find a – well, I think it would be safe to say that the city would have no claim to condemn the property if it goes, it must rely on statutory authority not being sovereign itself.

Potter Stewart:

Is there any case in which, that you know of, that you run into in which the district judge on his own motion did what this judge did?

Louis Fenner Claiborne:

Well Your Honor it’s difficult to tell from the — some of the decisions whether the judge did it on his own motion or not but I had found none in which it is clear that the judge did on his own motion and I am persuaded that Judge Wright did it in this case because he had been reversed – finally reversed in the Leiter case.

In conclusion —

Hugo L. Black:

I thought that the question really should be decided by the state Supreme Court.

I would think that would be most likely (Inaudible) so I doubt if people decide (Inaudible)

Louis Fenner Claiborne:

Well I think the judge was somewhat taken aback by the Leiter decision and quite understandably became less hesitant to decide state law questions thereafter.

Felix Frankfurter:

(Inaudible) I inferred what you said that he was — that there was question in his mind in the construction —

Louis Fenner Claiborne:

Well —

Felix Frankfurter:

— a statute.

Louis Fenner Claiborne:

Let me say this also, the judge’s doubt was based partly on the opinion of the Attorney General which has been referred to, Louisiana Attorney General, which is cited in appendix in the brief of the petitioner.

Now the judge, and that was our fault in argument for the District Court, did not see the clear flaw in that opinion, that opinion makes no reference whatever to this particular act.

It is only to be assumed that the Attorney General or the Assistant Attorney General who signed the opinion did not find the statute when he advised another municipality in a similar case that it could not do what we are trying to do.

Felix Frankfurter:

So he might, it is conceivable that even your Supreme Court might find might describe (Inaudible) that is conceivable isn’t it?

Louis Fenner Claiborne:

It is always conceivable, Your Honor but not very likely.

Felix Frankfurter:

You mean you would never find a flaw in the decisions of lower court?

Louis Fenner Claiborne:

I wouldn’t say that Your Honor, but in the opinion goes far beyond any flaw that our Supreme Court (Inaudible) If I may conclude with this quotation from public utilities commission of Ohio versus United Fuel Gas company an opinion written for a unanimous — for the majority by Mr. Justice Frankfurter pointing out the times when you do, when the times when you don’t issue these stay orders.

And in concluding in this particular case, Justice Frankfurter says the situation here is quite different from Railroad Commission versus Pullman Company, 312 U.S. 496, where the disposition of a doubtful question of local law might terminate the entire controversy and thus make it unnecessary to decide a substantial constitutional question considerations of equity justify a rule of abstention, but when as here, the litigation has already been in the Federal Court an inordinately long time which parenthetically is our situation, considerations of equity require that the litigation be brought to an end as quickly as possible.

Decree in this case —

Hugo L. Black:

We dissented in that case, but I assume what you are saying is I am bound by that now.

Louis Fenner Claiborne:

(Inaudible)

Felix Frankfurter:

— I think the demand, I think your litigation is a model of these compared to that Ohio case.

Louis Fenner Claiborne:

Well that was on the —

Felix Frankfurter:

I forgotten (Inaudible)

Louis Fenner Claiborne:

It is only —

Felix Frankfurter:

If I remember that that really was a snail like process, wasn’t it?

Louis Fenner Claiborne:

Well it was only two years, Your Honor in the quotation I just read, it says more than two years but in our case it’s also more than two years, that was all.

But here we have a condemnation proceeding and none of the delay is our fault.

Felix Frankfurter:

Neither is the other side, neither is the judge Wright, is it?

Louis Fenner Claiborne:

No.

Felix Frankfurter:

Except that — except that they availed themselves of removal to which you know like the whole of (Inaudible) removal I take it properly from my point of view and now you are holding to it and they remove, and now they want to get the benefit of the state law —

Louis Fenner Claiborne:

Your Honor —

Felix Frankfurter:

(Inaudible)

Louis Fenner Claiborne:

One last thought is that in considering this stay order, I think the Court should consider the reasonableness, assuming that it was proper at all in any sense to issue a stay order in such case.

It was clearly improper to do so at the time and to the extent allowed.

It should have been —

Hugo L. Black:

You mean it did not require an action within a reasonable time?

Louis Fenner Claiborne:

That is correct Your Honor, it’s an indefinite order.

Hugo L. Black:

What did it require?

Louis Fenner Claiborne:

It doesn’t.

It leaves it up to the parties to wait 100 years.

Thank you.

Earl Warren:

Mr. Monroe we took your last minute or so, if you want a minute or so to —

J. Raburn Monroe:

Thank you (Inaudible)

Earl Warren:

— you may do so.

J. Raburn Monroe:

First about the Declaratory Judgment Act, this Court held in the Leiter case that the Declaratory Judgment Act was an adequate remedy and I think a fair reading of it will show that it is, it’s a model to the Declaratory Judgment Act.

The city cites a section which has to do with moot cases where the case is moot and the Court doesn’t have to decide, well that’s a usual rule, but I think a consideration of it will show that it’s adequate.

Hugo L. Black:

Have you asked for one yet?

J. Raburn Monroe:

No, we have not.

Hugo L. Black:

(Inaudible)

J. Raburn Monroe:

The city has not asked for one, we are satisfied —

Hugo L. Black:

(Inaudible)

J. Raburn Monroe:

Well, I think it’s rather up to the city, because they are bringing this condemnation to the city.

Hugo L. Black:

Yes, but you are one that sent back to the same court —

J. Raburn Monroe:

No, said Court, we didn’t ask for that.

Hugo L. Black:

Well you are the one (Inaudible)

J. Raburn Monroe:

Well we are finally interested in having the Act construed by the state court.

We are in that position now, yeah.

Felix Frankfurter:

Could you bring a (Inaudible)

J. Raburn Monroe:

I don’t know whether we have right to bring it or not, because we are not offering to sell a property.

Tom C. Clark:

Do you have a controversy?

J. Raburn Monroe:

Well —

Tom C. Clark:

There is a controversy and they are trying to condemn.

You claim they can’t (Inaudible) I should think on any declaratory judgment (Inaudible)

J. Raburn Monroe:

Well, maybe we could file but I don’t see any necessity for us filing and I —

Tom C. Clark:

Well it seems to me like (Inaudible) and we got to pass under the circumstance of this case whether this should be done, and it is going to be more (Inaudible)

J. Raburn Monroe:

Well, it was not our intention to make any delay in this case Mr. Justice Clark.

Felix Frankfurter:

(Inaudible) It is your affirmative position that you will not.

J. Raburn Monroe:

That’s right it will —

Felix Frankfurter:

You will not —

J. Raburn Monroe:

We will state to the Court that —

Felix Frankfurter:

You will delay the promotion of the earlier possible compliance that Judge Wright desire (Inaudible) what is controlling law.

J. Raburn Monroe:

I will make that firm statement to this entire Court, yes.

Tom C. Clark:

Does that go far enough to say that you will join (Inaudible) declaratory judgment.

J. Raburn Monroe:

I don’t see that the burden is on us Your Honor, but that —

Tom C. Clark:

It’s not a question on who the burden is on, it raises a quite different question.

J. Raburn Monroe:

Well, the city is a moving party in this, but answering another question, if the lower court should decide in favor of the city we would appeal or the city would always have its remedy of going back to Judge Wright and say, the company will not appeal.

Felix Frankfurter:

But here under the (Inaudible) judgment law, you couldn’t go to the Supreme Court in the first instance?

J. Raburn Monroe:

No it would have to go to the —

Felix Frankfurter:

Therefore judge Wright said he would like know what the Supreme Court of Louisiana (Inaudible)

J. Raburn Monroe:

Right.

Felix Frankfurter:

Therefore, speaking for myself, (Inaudible) the decision of the Supreme Court (Inaudible)

J. Raburn Monroe:

Yeah right.

Felix Frankfurter:

On the other hand (Inaudible) in getting this rule which you did not solicit (Inaudible) In order to expose the state of the litigation, which is in the face where it is (Inaudible)

J. Raburn Monroe:

I don’t want to give the impression that I have any objection to starting a declaratory judgment.

It never occurred to me to do so, because after all I have been in position of defendants (Inaudible)

Tom C. Clark:

(Inaudible)

J. Raburn Monroe:

– that’s right.

Tom C. Clark:

(Inaudible) this is merely a question of judgment, it seems to me like this time why the state court pass such construction, but unless you are willing to tell us you are going to (Inaudible)

J. Raburn Monroe:

Well, I think I have stated my position, I am entirely willing to proceed in the state court, I am simply not going to delay on any proceedings, but I think it’s in —

Tom C. Clark:

What I understand by that, that you are not going to initiate in a state court (Inaudible)

J. Raburn Monroe:

Well, I think I would do so if this Court said that was essential.

Felix Frankfurter:

Is there any evidence controvert with the state, the Judge Wright was within administrative judicial discretion so (Inaudible) would the state have any reason for not — for blocking this?

J. Raburn Monroe:

I wouldn’t think so, I would think if the city of Thibodaux would proceed immediately and I would —

Felix Frankfurter:

I should think —

Tom C. Clark:

(Inaudible) since do not know as I understand it, what the law applies (Inaudible)

Felix Frankfurter:

That’s right.

Tom C. Clark:

And if you do not know which one they take up it for (Inaudible) and if it is to be sent back (Inaudible) I should think (Inaudible) should take steps immediately (Inaudible)