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MISSISSIPPI POWER COMPANY & SOUTH CENTRAL BELL TELEPHONE COMPANY v. ALVIRENA GOUDY

OCTOBER 10, 1984

MISSISSIPPI POWER COMPANY & SOUTH CENTRAL BELL TELEPHONE COMPANY
v.
ALVIRENA GOUDY, et al.



EN BANC.

ROY NOBLE LEE, PRESIDING JUSTICE, FOR THE COURT:

Mississippi Power Company [MPCo] and South Central Bell Telephone Company [South Central Bell] have appealed from a final decree of the Chancery Court, Forrest County, Mississippi, dated March 18, 1982. The final decree (1) declared unconstitutional all parts of the Mississippi Utility Act, Mississippi Code Annotated 77-3-1, et seq. (1972), which authorized public utility rates to be placed in effect subject to refund under bond, pending final administrative or judicial determination, (2) enjoined MPCo and South Central Bell from further availing themselves of the provisions of said statutes, and (3) treated

the action as a class action, ordering MPCo and South Central Bell to make monetary refunds to Mrs. Goudy and all other customers, amounting to almost $200,000,000. Following entry of the final decree, the chancellor declined to grant supersedeas. The appellants perfected their appeals here and, on April 5, 1983, this Court, acting through the Chief Justice, granted supersedeas of the said judgments.

 Question Presented

 The parties have conceded that the sole issue on this appeal is the constitutionality of Section 77-3-39, purely a legal issue. However, contained in that principal issue are the sub-issues of (a) no notice of hearing, which denies appellee due process, (b) unlawful delegation of legislative power to appellants, and (c) absence of a property right in appellee. The constitutional attack is upon Section 77-3-39 for the above reasons and appellee rests upon the contention that the provisions of Mississippi Constitution of 1890 are more restrictive than those of the United States Constitution.

 Discussion of Issue(s)

 Those sections of the Mississippi Constitution relied upon by appellee follow:

 No person shall be deprived of life, liberty, or property except by due process of law. Art. 3, 14. Also, the pleadings bring into play Sections 1 and 2, Art. 1, and Section 33, Art. 4, Miss. Const. 1890, which vests government powers into the three distinct departments - the legislative, the judicial and the executive. The corresponding section of the United States Constitution, comparable to Art. 3, Sec. 14, Miss. Const. 1890, is Sec. 1, Amend. XIV, which states:

 Section 1. . . . No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

 Appellants first argue on this question of constitutionality that the appellee had no property interest in existing rates, and, therefore, had no standing to bring the present action. They cite authority for that position.

 The appellee admits that she has no property interest in existing utility rates, but contends that under Section

 77-3-33 she has a property right in just and reasonable rates, which authorizes the action. Sub-section 1 of that section follows:

 (1) No rate made, deposit or service charge demanded or received by any public utility shall exceed that which is just and reasonable. Such public utility, the rates of which are subject to regulation under the provisions of this article, may demand, collect and receive fair, just and reasonable rates for the services rendered or to be rendered by it to any person. Rates prescribed by the commission shall be such as to yield a fair rate of return to the utility furnishing service, upon the reasonable value of the property of the utility used or useful in furnishing service.

 The above section is not a specific grant of a property right in reasonable rates to customers of a utility. Rather, it constitutes a regulation of the rate to be fixed by the public utility and provides that the rate shall be just and reasonable and that the public utility may collect and receive just and reasonable rates for the services rendered by it to any person. Situations may arise where public utility existing rates in which the customer has no property interest, might become unjust and unreasonable on account of the economy, increased wealth of the utility, or other reasons. Then, it would become the duty of the PSC to regulate those rates under the above section and require them to be just and reasonable.

 The section under attack, as stated, is Section 77-3-39, which appellee contends is unconstitutional because it does not provide for notice and due process of law to the customer before rates are put into effect by the utility. The section follows:

 Whenever there is filed with the commission by any public utility any schedule or notice stating a rate or rates differing from the rate or rates theretofore in effect, the commission may, either upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness of such rate or rates.

 Pending such hearing and the decision thereon the commission, upon delivering to the utility affected thereby a statement in writing of its reasons therefor, may, at any time before they become effective, suspend the operation of such rate or rates, but not for a longer period than ninety days beyond the time when

 such rate or rates would otherwise go into effect. However, if the commission shall find that a longer time will be required for its determinations, the commission may extend the period for not to exceed six months from the date of filing such schedule or notice. Notwithstanding any such order of suspension, the public utility may put such suspended rate or rates into effect on the date when it or they would have become effective if not so suspended, by filing with the commission a bond in a reasonable amount approved by the commission, with sureties approved by the commission, conditioned upon the refund, in a manner and to the parties to be prescribed by order of the commission, of the amount of the excess, with lawful interest thereon, if the rate or rates so put into effect are finally determined to be excessive. There may be substituted for such bond other arrangements satisfactory to the commission for the protection of the parties interested. During any such period when suspended rates are in effect under bond or other arrangement the commission may, in its discretion, require that the public utility involved shall keep an accurate account of payments made under the rate or rates which the public utility has put into operation in excess of the rate or rates in effect immediately prior thereto.

 If, after such hearing, the commission shall find any such rate or rates to be unjust, unreasonable or unreasonably discriminatory, or in anywise in violation of the law, the same shall be set aside and the commission shall determine and fix by order such rate or rates as will yield a fair rate of return to the public utility for furnishing service to the public and shall make and file its conclusions and findings of fact supporting such order. A copy of such order shall be served upon the utility in the manner provided in this article, and the rates fixed by the commission shall be the legal rates until changed as prescribed by this article. Rates in effect under bond, or other arrangements satisfactory to the commission, may be continued in effect by the utility under the terms and conditions of said bond or other arrangement Pending final determination of any appeal. [Emphasis added].

 The appellants point out that statutes similar to the above almost universally have been upheld and no statute in the United States involving placing rates in effect under bond have been declared unconstitutional either by State or Federal Courts, and many decisions are cited, among them, Arizona Grocery Company

 v. Atchison, Topeka & Santa Fe Railroad Company, 284 U.S. 370, 76 L.Ed. 348 (1932); Sellers v. Iowa Power & Light Co., 372 F.Supp 1169 (S.D. Iowa 1974); United Gas Pipeline Co. v. Memphis Light, Gas and Water Division, 358 U.S. 103, 79 S. Ct. 194, 3 L.Ed.2d 153 (1958); NCAA v. Gillard, 352 So.2d 1072 (Miss. 1977); Holt v Yonce, 370 F. Supp. 374 (D.S.C. 1973), aff'd 415 U.S. 969, 94 S. Ct. 1553, 39 L.Ed.2d 867 (1974); Walters v. Blackledge, 220 Miss. 485, 71 So.2d 433 (1954); and Oklahoma Gas & Electric Co. v. Lankford, 278 Ark. 595, 648 S.W.2d 65 (1983).

 Appellee distinguishes the cases cited by appellants and argues that they are not authority on the present issue, since there are no state constitutions with exact language of the Mississippi Constitution and that the United States Constitution is likewise different in language from the Mississippi Constitution. Appellee cites and relies upon numerous authorities, including Tatum v. Wheeless, 180 Miss. 800, 178 So. 95 (1938), to the effect that Mississippi law governs whether or not a Mississippi statute violates the Mississippi Constitution. See also Memphis Light Gas & Water Division v. Craft, 436 U.S. 1, 98 S. Ct. 1554, 56 L.Ed.2d 30 (1978); Board of Regents v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L.Ed.2d 548 (1972); Bishop v. Wood, 426 U.S. 341, 96 S. Ct. 2074, 48 L.Ed.2d 684 (1976); and Oregon v. Hass, 420 U.S. 714, 43 L.Ed.2d 570, 95 S. Ct. 1215 (1975).

 Resolution of the constitutional issue depends upon whether or not the pertinent sections of the Miss. Const. 1890 and the United States Constitution, both set forth above, are identical and mean the same thing. In NCAA v. Gillard, supra, which involved the constitutional right of a Mississippi State University football player to play football and avoid a suspension by the NCAA, the Court, speaking through Justice Bowling, said:

 The basic decision of the case then is the simple statement that Gillard's" right "to engage in intercollegiate football is not a" property "right that falls within the due process clause of either section 14 of the Mississippi Constitution or the Fourteenth Amendment to the United States Constitution, both of which are identical. (Emphasis supplied) [352 So.2d at 1081].

 Likewise, in Walters v. Blackledge, supra, the Court said:

 The due process required by the Federal Constituion is the same" due process of law "which is required by Section 14 of the Constitution of the State

 of Mississippi; . . . . [220 Miss. at 515, 71 So.2d at 444].

 Appellee contends that the Miss. Const. of 1890 is more restrictive than the United States Constitution because the latter simply provides that no state shall deprive any person of life, liberty or property without due process of law, while under the Mississippi Constitution, no person shall be deprived of life, liberty, or property except by due process of law.

 Appellee's analysis of the United States and Mississippi constitutions presents a fine line of distinction, viz, the United States Constitution deals only with protecting the citizen in his rights from a violation by the state, while the state had the citizen to protect from all persons and all governments. The State of Mississippi, in enacting the Regulation of Public Utilities Act, provided the law and machinery which formed the basis of this suit. The appellant utilities, pursuant to that statute, put into effect their rates under bond. Therefore, the responsibility for the situation which now presents itself, results from the action of the state and the implementation of such action by utilities. Keeping in mind the argument of appellee that neither the United States Constitution nor any state constitution where the present issue has been addressed, is identical with the Miss. Const. of 1890, it is obvious that the Federal cases and the state cases addressing the question would hold the statute to be constitutional.

 Appellants urge that the case of Holt v. Yonce, 370 F. Supp. 374 (D.S.C. 1973), summarily aff'd 415 U.S. 969, 94 S. Ct. 1553, 39 L.Ed.2d 867 (1974), is authority for their position. That case was decided by a three-judge Federal panel and involved a South Carolina statute similar to that of Mississippi. The statute was alleged to be unconstitutional under the Federal constitution and the three-judge panel held that it did not violate the Federal constitution. The panel said:

 The single issue of consequence presented to this court by the present case is whether these plaintiffs are entitled to a hearing prior to the implementation of the rate increase. It is on this basis that the plaintiffs press for a holding by this court that Sections 24-38 and 58-115 are unconstitutional because the procedure for a prior hearing which would fulfill due process requirements is not provided therein. The plaintiffs cite a number of recent cases which have extended the constitutional perimeter of the due process clause. . . . What the plaintiffs seek would require that this court analogize an increase in utility rates without a prior hearing to a termination

 of utility services without a prior hearing and, thus, hold that such increase constitutes a deprivation of property within the concept of the Fuentes-Sniadach *fn1 line of cases noted above. To so hold would necessitate that this court extend Sniadach and its progeny to an uncharted point not supported by any cited authority. We refuse to sanction such an extension. Instead, we conclude that the instant case is controlled by the holding of the United States Supreme Court in the case of United Gas Pipeline Co. v. Memphis Light, Gas and Water Division, 358 U.S. 103, 79 S. Ct. 194, 3 L.Ed.2d 153 (1958). In that case, the United States Supreme Court upheld provisions of the Natural Gas Act which allow for temporary rate increases without a prior hearing, and which provisions are substantially similar to the challenged parts of the South Carolina statutes. . . . In the United States Gas Co. case, supra, the United States Supreme Court in affirming the right of an interstate gas utility to raise its rates ex parte in conformity with the Natural Gas Act, made the following apposite comments, starting at page 113 of 358 U.S., at page 200 of 79 S. Ct.:

 Congress, . . . was also manifesting its concern for the legitimate interest of natural gas companies in whose financial stability the gas-consuming public has a vital stake. Business reality demands that natural gas companies should not be precluded by law from increasing the prices of their product whenever that is the economically necessary means of keeping the intake and outgo of their revenues in proper balance; otherwise procurement of the vast sums necessary for the maintenance and expansion of their systems through equity and debt financing would become most difficult, if not impossible. . . . [370 F. Supp. at 376-379].

 The case was affirmed by the United States Supreme Court without an opinion. Appellee argues that the case is no authority for the question here, which deals solely with the Mississippi Constitution, and, further, that the opinion was written by a three-judge Federal panel, and did not amount to precedent, since the United States Supreme Court did not address the question in its own language. In Fusari v. Steinberg, 419 U.S. 379, 95 S. Ct. 533, 42 L.Ed.2d 521 (1975), the Court said that, in affirming an opinion, it did not ...


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