more is advanced, the order of the commission, reinstating the former rate in whole or in part, may not be suspended pending the final determination of the matter by the courts according to the provisions of the statutes in Illinois 1 and in Washington.2 3 In Connecticut, however, appeals supersede the order or decision appealed from as a rule, although the court may order to the contrary if the appeal is for purposes of delay, or if justice, public safety or expediency may require; and this same provision is made by statute in Rhode Island; while in Tennessee the rate, rule, order or regulation is suspended only in case legal proceedings are instituted within ten days, and then only upon injunction issued after notice and subject to large penalties if procured in bad faith.5 As a general rule, in most jurisdictions having commissions, their orders and regulations may be enjoined by the courts, after a hearing and notice, upon good cause shown and the giving of sufficient bond to cover costs and damages resulting in case the action for injunction was not well founded and the order is finally sustained; but the fact that a writ of appeal or review is pending does not suspend the order or regulation. In addition to the ordinary cost bond which is generally required as a condition of granting an injunction and suspending the order of the commission, the statutes in a number of jurisdictions having commissions, provide for the giving of a supersedeas or suspending bond conditioned and sufficient in amount to insure the prompt and complete refunding to all parties entitled thereto of all charges or rates for service paid in excess of the rate fixed by the commission and sustained by the courts on review. Verified accounts showing the amount of such excess rates and from whom received and to whom payable are often required of all parties as a condition for the suspension of any order or rate regulation of the commission, as is expressly provided in California, Colorado, Idaho, Illinois, Missouri, 10 Nebraska, Ohio,12 Oklahoma,13 Oregon,14 Pennsylvania, South Dakota, 16 and Washington.17 In North Carolina the additional amount 11 1 Laws 1913, p. 459, Sect. 71. 2 Laws 1911, chapter 117, Sect. 82. 3 Pub. acts 1911, chapter 128, Sect. 33. 4 Laws 1912, chapter 795, Sect. 35. Acts 1913, chapter 32, Sect. 13. Stats. 1911, 1st ex. sess., chapter 14, Sect. 68. Laws 1913, chapter 127, Sect. 51. 8 Ibid. chapter 61, Sects. 63-64. Ibid. p. 459, Sect. 71. 10 Ibid. p. 556, Sect. 112. 11 Stats. 1911, Sect. 10655. 12 Laws 1913, p. 804, Sects. 37-41. 13 Const., Article 9, Section 21; Laws 1913, chapter 10, Sect. 3. 14 Laws 1911, chapter 279, Sect. 55. 15 Laws 1913, no. 854, Art. VI, Sect. 19. 16 Ibid. chapter 312, Sect. 5. 17 Laws 1911, chapter 117, Sect. 87. collected because of the excess rate being in effect must be paid to the state every three months.1 In New Hampshire the conditions for securing the repayment of the amounts received under the excessive rates to the parties originally paying the same are fixed by the court, and a failure to make such repayments promptly as provided by the court is punishable as a contempt of court.2 The effectiveness of the control of municipal public utilities by state commissions is largely determined by the attitude of the courts in their construction of the public utility acts and in their review of commission findings and orders on appeal. That public utility commissions are practical business necessities and entirely consistent with constitutional rights has been fully recognized by all the courts which have been called upon to construe these statutory enactments, and their decisions freely admit that such state commissions are necessary administrative agencies and furnish the most satisfactory solution of the many intricate and comprehensive business questions that are constantly arising in increasing numbers in connection with the regulation and control of public utilities which every one now regards as natural monopolies and every-day business necessities. The federal court in the case of Des Moines Gas Company vs. Des Moines frankly recognized the necessity and practical advantage of this method of regulation and control by conceding that: Much of this kind of litigation, and practically all of the expense, would be avoided if Iowa, like so many of the other, including some neighboring, states, had an impartial and city non-resident commission or tribunal, with power to fix these rates at a public hearing, all interested parties present, with the tribunal selecting its own engineers, auditors and accountants. The court of New York concurring with those of many other jurisdictions expressed unqualified approval of the plan of commission control in the case of Saratoga Springs vs. Saratoga Gas, etc., Company in saying: 4 That the most appropriate method (speaking from a practical, not necessarily constitutional, point of view) is the creation of a commission or body of experts to determine the particular rates, has been said several times in the opinions rendered by the supreme court of the United States in the various railroad commission cases and in those of state courts. And in the recent case of People ex rel. New York Edison Company vs. Willcox 5 this same court said: 1 Rev. 1905, Sect. 1082. 4 Laws 1013 chapter 145, Sect. 18; adding Sect. 22 to 1911, chapter 164. 3 199 Fed, 204. 190 N.Y. 562; 83 N.E. 693; 18 L. R. A. (N.S.) 713. 207 N.Y. 86; 100 N.E. 705. That law (i.e. public service commissions law) was enacted in response to a pronounced and insistent public opinion, and was a radical and important modification of the relations and policy of the people toward the corporations, which are its subjects. Its paramount purpose was to protect and enforce the rights of the public. It made the commission the guardians of the public by enabling them to prevent the issue of stock and bonds for other than statutory purposes, or in appreciable and unfair excess of the value of the assets securing them, and to prevent also unneeded or extortionate competition, or indifferent and unaccommodating methods of operation, or oppressive or discriminating charges or rates. It provides for a regulation and control which were intended to prevent, on the one hand, the evils of an unrestricted right of competition, and, on the other hand, the abuses of monopoly. The supreme court of Wisconsin has also fully sustained and very frankly approved the plan of commission control in the case of Calumet Service Company vs. Chilton,' where the court says: Control by the trained impartial state commission, so as to effect the one supreme purpose, i.e., the best service practicable at reasonable cost to consumers in all cases and as near a uniform rate for service as varying circumstances and conditions would permit [is] a condition as near the ideal probably as could be attained. This uniformly favorable attitude of our courts towards the principle of commission control is pertinent and deserves consideration in connection with their holding that the right of appeal and judicial review is statutory and therefore subject to the will of the legislature within the constitutional limitations of due process and equal protection of the law with respect to the preservation of property and contract rights. The nature and extent of the right to appeal from the commission's action, together with the reason for the rule, are well expressed in the case of Minneapolis, etc., Company vs. Railroad Commissioners 2 where the court said: Being purely the creature of statute, the right of appeal from the decision of the commission to the district court, if it exists, must be found in express provisions of the act. . . . But it is not to be presumed that the legislature intended to turn the courts into appellate railroad commissions, which should retry the facts, and pass upon matters of a purely administrative nature, relating to the maintenance and operation of railways, and involving merely questions of policy affecting the security or convenience of the public. Indeed, if the act assumed to confer upon the courts jurisdiction over matters so entirely foreign to the judicial function, it would be of doubtful validity to say the least of it. There being no inherent right of appeal, the nature and extent of the power and authority of such commissions to issue orders, from 1148 Wis. 334; 135 N.W. 131. 2 44 Minn. 336; 46 N.W. 559. which there is actually no such right, are concisely stated in the case of Interstate Commerce Commission vs. Union Pacific Railway Company 1as follows: The orders of the commission are final unless (1) beyond the power which it could constitutionally exercise, or (2) beyond its statutory power, or (3) based upon a mistake of law. But questions of fact may be involved in the determination of questions of law, so that an order, regular on its face, may be set aside if it appears that (4) the rate is so low as to be confiscatory and in violation of the constitutional prohibition against taking property without due process of law, or (5) if the commission acted so arbitrarily and unjustly as to fix rates contrary to evidence, or without evidence to support it, or (6) if the authority therein involved has been exercised in such an unreasonable manner as to cause it to be within the elementary rule that the substance, and not the shadow, determines the validity of the exercise of the power... "The findings of the commission are made by law prima facie true and this court has ascribed to them the strength due to the judgments of a tribunal appointed by law and informed by experience. Its conclusion of course is subject to review, but, when supported by evidence, is accepted as final." JUDICIAL REVIEW OF PUBLIC REGULATION 2 BY MILO R. MALTBIE, PUBLIC SERVICE COMMISSIONER, FIRST DISTRICT, NEW YORK (From the Journal of Political Economy, May, 1912) In the discussion of government regulation of public service corporations, attention has been centered upon the organization, powers, and duties of administrative commissions. Many have forgotten that the success of government regulation depends in large measure upon the attitude of the courts and the scope of judicial review. No matter how perfect the plan enacted by the legislature, it may soon resemble a toothless invertebrate if judicial review is unlimited; and excellent results may be obtained under an inferior plan, if the courts support and strengthen it. It is generally admitted that there should be some method whereby the acts of a commission may be reviewed by the courts. The theories upon which our political system is based require that it shall be possible for a person injuriously affected by a decision of an administrative body to appeal to the courts at some stage of the proceeding. The question is not, therefore, whether there should be any judicial 1 222 U.S. 541. This article embodies the substance of an address before the Western Economic Society, at Chicago, March 1, 1912. control, but rather how far that control should extend, and upon what grounds the courts may set aside the decisions of coördinate branches of the government. JUDICIAL QUESTIONS Probably all will agree that the courts should decide whether an act of an administrative body violates a constitutional provision of the state or of the United States. The right to a decision upon this point is unquestioned. The finding of the court may be wrong, but it is the law until the constitution is changed or the court reverses its opinion. This principle is of general application, for an act of the legislature may be declared unconstitutional just as effectually as an administrative order. It is likewise clear that the courts should determine whether the regulative body is acting within the authority delegated to it by the legislature or by the constitution. Any order that is issued without such authority is illegal, and the determination of the question of authority is a judicial function. If authority may be exercised under certain conditions, the courts will determine whether those conditions have been met.1 In the third place, it is proper that the courts should have the right to review the procedure leading up to the issuance of an order or the performance of an act by a regulative authority, so that they may determine whether the course followed was regular in every way. In every one of these cases, the courts are called upon to apply a law already existing to a specific instance. But in no case are the courts supposed to enact a new law, or substitute a perfect order for an imperfect one, or declare a statute or order illegal merely because in their opinion it is unwise or inexpedient. They may not add one jot or one tittle on their own initiative. As the United States Supreme Court has said (Prentiss et al. vs. Atlantic Coast Line Co., 211 U.S. 210, 226): A judicial inquiry investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. Litigation cannot arise until the moment of legislation is past. SCOPE OF COURT REVIEW We have now reached the point of divergence. There are those who claim that the courts are fully competent to regulate public 1 Interstate Commerce Commission vs. N. Pacific Ry. Co., 216 U.S. 538. |