Public Utilities Commission of California v. United States

PETITIONER: Public Utilities Commission of California
RESPONDENT: United States
LOCATION: Wolverine Tube, Inc.

DOCKET NO.: 23
DECIDED BY: Warren Court (1957-1958)
LOWER COURT:

CITATION: 355 US 534 (1958)
ARGUED: Jan 07, 1958
DECIDED: Mar 03, 1958

Facts of the case

Question

Media for Public Utilities Commission of California v. United States

Audio Transcription for Oral Argument - January 07, 1958 in Public Utilities Commission of California v. United States

J. Thomason Phelps:

Mr. Chief Justice, may it please the Court?

With the Court's permission I should like to take approximately half of the appellant's time to open and my colleague Judge McKeage would like to have the remaining time for rebuttal.

This is an appeal from a judgment of a three-judge district court for the Northern District of California.

That judgment declared unconstitutional a statute of the State of California and permanently enjoined the Public Utilities Commission, the appellant here, from taking any action to carry out the terms of that statute.

This case presents two major aspects.

The first is one I may call a preliminary or threshold or jurisdictional question, involving the question of whether or not the district court should have entertained the complaint and then second is what I may call the ultimate question, which is whether or not the State of California, through the commission, had the power to regulate the rates of commercial carriers for the transpiration of property of the United States.

This matter had its inception in 1954.

In order to make clear a number of questions that arise under this preliminary aspect of the case, I should like to describe as briefly as I can the statutory and administrative framework under which commercial carriers are regulated by the commission in California.

For our present purposes and in order to simplify the matter, I think we may consider carriers in California as in two categories.

In the one, we have the rails and the so called certificated motor carriers which are operating under certificates of public convenience and necessity issued by the commission and we can call these the public utility carriers, because under California law they are public utilities for all purposes of that law.

They are required to file tariffs and with certain exceptions they are required to assess and collect no other than that tariff rate.

In the other category, there are, what you may call permit carriers, they are so called in California.

There are thousands of them.

They operate under mere permits issued by the commission and their rates are regulated in California by certain minimum rate orders promulgated by the commission from time to time.

So that these permit carriers are required to assess no less than these minimum rates.

Now although we have these categories of carrier, and they are regulated somewhat differently, they compete with each other vigorously for all kinds of traffic, including the traffic of the United States government.

For many years it's been the commission's policy to equalize the conditions under which these two classes of carriers compete with one another.

For many years prior to 1955, Section 530 of the Public Utilities Code, any provision the effect of which was to grant to these public utility carriers an unlimited right to transport property of the United States and other governments, free or at reduced rates, a provision comparable to Section 22 of the Interstate Commerce Act.

Now in order to give the permit carrier the same privilege the commission, a number of years ago, incorporated in certain of its minimum rate orders, a provision authorizing these permit carriers to deviate from the minimum rates, for the transportation of property for the armed forces, that's very important, to bear in mind that limitation.

That provision was Item 20 in Minimum Rate Tariff number 2, promulgated by the commission applicable to general commodities, not all but so called general commodities.

Now in 1954, a group of carriers, who had been transporting large quantities of property for the United States government, filed with the commission a petition and that is where this matter had its inception.

That petition alleged that due to the intense competition of carriers for government business, the rates for that business had deteriorated to the point where the revenues of the carriers were depressed to unreasonably low levels and there was a threat of a burden upon other traffic, that petitioner requested the commission to take appropriate action.

The action that these carriers requested of the commission was the cancellation of that Item 20 provision.

Later by amendment that request was modified into a request merely that the commission authorized permit carriers to deviate from the minimum rates only to meet the rate of a public utility carrier that had been filed with the -- some agency of the United States government in order to give the permit carriers the benefit of knowledge of what these other rates were.

The commission found as facts substantially all of the allegations of the petitioner.

The remedy which the commission sought to accomplish, however, was a remedy which required the cooperation of the United States government and by cooperation I mean the commission's order contemplated that the United States government would require these public utility carriers to file with the commission, simply for the sake of giving publicity these reduced rate tenders which they had filed with various agencies of the United States government.

So the commission's action and its proposed remedy was conditioned upon that action by the government.

Later on the commission was formally advised that the United States government had declined to require the publishing and the filing of these reduced rate tenders with the commission.

The commission's attempt to remedy therefore became a futility.

In the middle of 1955, therefore, the California legislature enacted an amendment to Section 530 of Public Utilities Code, the effect of which was to withdraw from the public utility carriers, this previously enjoyed unlimited right to transport for the government free or at reduced rates and empowered the commission to permit such transportation, upon such terms and conditions as it saw fit.