Full opinion text
MARIS, Judge. Complainant conducts the business of a public warehouse in the City of Los Angeles, California. Its business is declared by both constitution and statute of California to be that of a public utility subject to regulation by the railroad commission of the state. That regulation includes the fixing of rates and charges of the complainant. Pursuant to the California statute the railroad commission on May 12, 1942 authorized complainant to make an increase in its existing rates, effective May 22, 1942. On April 28, 1942 the Price Administrator acting under the authority conferred upon him by the Emergency Price Control Act of 1942 issued a General Maximum Price Regulation which fixed as seller’s maximum prices for any commodity or service the highest price charged by him during the month of March, 1942. Section 10 of the regulation, as amended, provided that it should not apply to such services as might be specified by supplementary regulations or amendments thereto. Section 302(c) (2) of the Emergency Price Control Act of 1942, 50 U.S.C.A. Appendix § 942(c) (2), provides: “(c) The term ‘commodity’ * * * includes services rendered * * * in connection with the * * * storage * * * of a commodity, or in connection with the operation of any service establishment for the servicing of a commodity: Provided, That nothing in this Act shall be construed to authorize the regulation of * * * (2) rates charged by any common carrier or other public utility * * On June 18, 1942 the Price Administrator issued Supplementary Regulation No. 11 by which it was declared that the General Maximum Price Regulation would not apply to certain services until July 1, 1942. Among the services thus treated were “(2) Commercial Storage and warehousing and services incident thereto.” On June 25, 1942 the Price Administrator issued Amendment No. 1 to Supplementary Regulation No. 11 providing for the exception of certain services from the operation of the General Maximum Price Regulation, effective July 1, 1942. Of the services thus excepted the only ones partaking of the nature of a common carrier or other public utility were the following: “(21) Electricity (companies furnishing as public utilities), rates charged by * ******. (25) Express companies and freight forwarders offering their services to the general public as common carriers, rates charged by ******* (30) Gas (companies supplying, as public utilities through mains), rates charged by ****** * (38) Light, heat, or power (companies furnishing, as public utilities), rates charged by * * * * * * * (61) Telephone services, rates charged for (62) Telegraph service, rates charged for ******* (68) Transportation of commodities by persons offering their services to the general public as common carriers by rail, water, motor, pipe line, or other means of conveyances, rates charged for: Provided, however, that charges for storage and warehousing and all other services incident thereto by any person shall not be excluded from the General Maximum Price Regulation. (69) Transportation of persons, rates charged for ******* (73) Water (companies supplying, to urban areas as public utilities), rates charged by.” The effect of the General Maximum Price Regulation, the Supplementary Regulation and the amendment, as applied to the complainant, was to prohibit it after July 1, 1942 from taking advantage of the rate increase which had been allowed to it by the California Railroad Commission two months previously. Asserting itself to be a public utility within the meaning of the exemption of “any common carrier or other public utility” set forth in Section 302(c) (2) of the act and therefore aggrieved by the failure of the ,Price Administrator to exempt its business from the General Maximum Price Regulation, the complainant filed a timely protest with the Price Administrator. The Price Administrator denied the protest and the complainant filed the present complaint asking this court to set aside the General Maximum Price Regulation, Supplementary Regulation No. Í1 and Amendment No. 1 thereto insofar as they purport to regulate the charges of the complainant. It is the contention of the complainant that the words “any common carrier or other public utility” as used in the exemption clause of section 302(c) (2) of the act mean any common carrier or other public utility which is designated as such by existing law and regulated as to its rates by existing federal, state or municipal authority. The Price Administrator contends, on the other hand, that the interpretation of these words is not dependent on state law, but that they must be given a uniform effect throughout the United States and must therefore be deemed to refer to all common carriers and other public utilities generally and traditionally recognized as such without regard to whether in a particular state they are or are not subject to rate regulation by statutory authority. It is the Price Administrator’s further contention that the business of a public warehouseman is not a public utility in this sense, even though in California it is by statute described and regulated as such. Consequently, he says, the complainant is not entitled to exemption from his price regulation as a public utility and its complaint should be dismissed. The question thus presented for our decision is as to the meaning to be given to the words “any common carrier or other public utility” in the exemption clause of the act. Are these words to be given their natural and ordinary meaning and applied uniformly throughout the nation or are they to be deemed to refer only to those businesses which have been designated as common carriers or public utilities by some other law and which have been made subject to rate regulation by existing federal, state or local authorities ? If the former, do they include the business of a public warehouseman? It will first be observed that neither “common carrier” nor “public utility” is defined by the act. There is no contention that the complainant is a common carrier. Consequently that phrase need concern us no further. Accordingly we must proceed to ascertain the concept which the Congress had in mind in using the phrase “public utility” in the exemption clause of the act. It need hardly be pointed out that the act was passed in the emergency of war to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices. The threatened danger of disastrous inflation was and is nationwide and not local in character and the evident purpose of the act was to empower the Price Administrator to take needed action to combat it on a national scale. In this setting there is especially cogent reason for the application of the well established rule that descriptive terms used in a federal statute will, in the absence of language in the statute indicating a contrary intent, be given a general and uniform interpretation throughout the country. The same considerations make equally applicable the rule that exceptions to a general policy embodied in a law should be strictly construed. Here there is no indication that the Congress intended that the Price Administrator’s power to fix the prices charged by a business should be dependent upon whether or not in the state in which the business was carried on it was described as a public utility and regulated as such. Particularly in the light of the wide variety of businesses which have been designated and regulated as public utilities in some of the states there is compelling force in the Price Administrator’s argument that under such an interpretation of the act unjustified economic preferences, regional competition and other evils might well result. Likewise we find no indication that the Price Administrator was intended, as the complainant argues, to fix the rates of all common carriers and other public utilities whose rates are not otherwise regulated. We find in the act other indications of the Congressional intent that its application should be uniform throughout the country. Thus we observe that the exceptions to the broad sweep of the coverage of the act which appear in the proviso to Section 302(c) are very few in number. Then also the act expressly deprives all existing courts, federal and state, of jurisdiction to review the Price Administrator’s regulations and confers sole jurisdiction in that field upon this court; a plain indication that Congress intended that a single standard of review of price regulations should be applied uniformly throughout the nation. But even more persuasive is the fact that the exemption clause is wholly devoid of any qualifying language which would indicate that the Congress intended it to have a varying local application. The Congress did not, as it might have done, say that the public utilities which were to be exempt from the operation of the act should be those businesses, and those alone, which were deemed to be public utilities and subj ect to rate regulation as such under existing federal or state law. Furthermore we think that such a definition of the term “public utility” would have extended its meaning far beyond anything that the Congress could have had in mind. For the use of the term by some of the states has been so broadened that in one of them, to cite an extreme case, it is defined to include “every corporation, or person now or hereafter declared by law to be affected with a public interest.” But it is settled that the mere exercise of a state’s power to regulate the rates and charges of a particular business which the state deems to be affected with a public interest does not constitute such a business “in the accepted sense of the phrase, a public utility.” Nebbia v. New York, 1934, 291 U.S. 502, 531, 54 S.Ct. 505, 513, 78 L.Ed. 940, 89 A.L.R. 1469. The legislative history of the act also lends support to the view that the Congress intended to exempt from the operation of the act all public utilities even though not subject to other existing regulation. Thus in the hearings before the House Committee on Banking and Currency the following testimony was given by Leon Henderson, then acting as Administrator of the Office of Price Administration and Civilian Supply under Executive Order: “Mr. Henderson. * * * Now, as to the utilities. There is, as the members are aware, an adequate set of regulations as to the charges which .utility companies can make. These, again, are based upon a long series of judicial determinations, of State regulations, and of State laws. It seemed to those drafting the bill that this was an area which was not likely to give difficulty or to cause, so far as they could see at that time, any inflationary trend. The bill is designed to control an emergency inflationary situation and has left them out, just as it has transportation rates. There are questions peculiar to utilities and none of them, so far as I see at the present time, would make necessary further regulation by means of a price-control bill.” * * * * * * * “Mr. Patman. I do not care for an extended answer, unless you think it is necessary to give it. “You include in this bill metals, chemicals, durable goods, and agricultural products, and you also include services in the bill except, of course, that it does not apply to wages and salaries paid by an employer to an employee; but otherwise services are included. But it does not include transportation or utility rates. “Mr. Henderson. No. “Mr. Patman. That is quite a large item, and you said, as I understood you, that you were satisfied with the rate-making bodies in the States, and that that was the reason you did not ask that utility and transportation rates be included. “Do I understand that correctly? “Mr. Plenderson. I did not mean to limit it to existing regulatory mechanisms both in transportation and utilities. “What I said was that the transportation rates themselves were already under regulation by Federal and State agencies, and I also feel that that is not an item, even in the absence of that regulation, to be brought under commodity price regulation.” In the House of Representatives Representative Steagall, the Chairman of the Committee on Banking and Currency, who was in charge of the bill on the floor, said : “Mr. Steagall. The bill also provides explicitly in section 302(c) that nothing in the act is to be construed to authorize the regulation of compensation paid by an employer to any of his employees, or the regulation of rates charged by any common carrier, or other public utility, which are usually subject to adequate control by State or other Federal agencies. In cases of conflict between State regulation of enterprise of a non-public-utility character and Federal regulation under this bill, the Federal regulation would, of course prevail.” We think these statements indicate that what the Congress had in mind was the exemption of all public utilities as ordinarily understood. From the statements of both Mr. Henderson and Mr. Steagall it is evident that they contemplated that some of the public utilities which they proposed to exempt might not be presently subjected to other rate regulation. Nevertheless it was thought that the public utilities did not present a serious price control problem “even in the absence of that regulation.” In reaching this conclusion the Congress may well have had in mind what Mr. Henderson’s testimony suggested, namely, that public utility rates “are based upon a long series of judicial determinations” even though not subject to statutory regulation. For it is well established that at common law a business of a public nature and invested with a monopoly was under the duty of furnishing its service to the public at reasonable rates. And this duty has been enforced in equity. Consequently it was entirely reasonable to leave out of the price fixing procedure set up by the statute the whole area of public utility rates, since most of them were already subject to statutory regulation and the remainder were limited by fixed principles of law. Finally we cannot overlook the fact that by Amendment No. 1 to Supplemental Regulation No. 11, the Price Administrator granted complete exemption to nine classes of common carriers and other public utilities without any regard to their status as to existing rate regulation. This contemporaneous administrative construction of the scope of the exemption appears to have met with the approval of the Congress, for in Section 1 of the amendatory act of October 2, 1942, Chap. 578, 2d Sess. 77th Cong., 50 U.S.C.A.Appendix, § 961, the words “common carrier or other public utility” are again used without qualifying language. It is true, as the complainant says, that these words were used in connection with a provision requiring a public utility making a general increase in rates to give notice to a federal agency and to consent to the intervention of the agency “before the Federal, State, or municipal authority having jurisdiction to consider such increase.” But this clause must be considered in the light of the fact that the provision was intended to give to the federal authorities an opportunity to prevent undue increases in utility rates in cases in which no such opportunity was afforded by the original act. The provision was substituted in conference for an amendment by Senator Norris which would have given the President veto power over such increases. In view of its purpose to extend the area of federal action it can hardly be construed as at the same time intended to restrict that area by enlarging the original exemption of public utilities so as to include in the exempt class all those businesses which are described and regulated as public utilities under the statutes of any state. The act must rather be considered in the light of the fact that the traditional public utilities are almost universally subject to statutory rate regulation and if not are subject to a common law duty to maintain reasonable rates which duty is enforceable by the courts. Indeed the courts may well be included among the state authorities having jurisdiction to consider rate increases before which the act provided that the federal agency should be given the right to intervene. We conclude, therefore, that the exemption of public utilities by Section 302(c) (2) was intended to have a uniform meaning and effect throughout the United States without regard to the provisions of state law, and that the fact that the complainant is designated as a public utility by the constitution and laws of California is not determinative of its right to the exemption. The question remains whether a public warehouseman, such as the complainant, is a public utility within the uniform nationwide meaning which is to be given to that term as it is used in the Emergency Price Control Act. Our investigation indicates that the use of the phrase “public utility” in the sense in which we are now considering it is of comparatively recent origin. The data which we have considered do not disclose any clear criteria from which a precise definition of the phrase “public utility” may be constructed. It is suggested that one of the elements is the enjoyment of a public franchise to carry on the business in question. It is clear, however, that public franchises may also be held by those whose activities are public utilities solely in the sense that they are state regulated. Certainly any person who is by statute authorized to operate his business only upon receipt of a state issued certificate of convenience and necessity may be said to have a franchise from the state. Then again it is urged that monopoly and its attendant lack of competition are essential marks of a public utility. But while monopoly and lack of competition are present in the case of some undoubted public utilities, there are others, carriers by motor vehicle for example, whose business is highly competitive. Finally it is suggested that the legal duty to serve without discrimination all those who desire the service is the unmistakable badge of a public utility. While all public utilities doubtless have such a duty it is by no means confined to them. Thus innkeepers, who have nowhere been described as public utilities, have from early times been subject to the obligation to receive and afford proper entertainment to every one who offers himself as a guest, if there be sufficient room for him in the inn, and no good reason for refusing him. Nor is the concept of one engaged in a public employment of assistance. At common law the surgeon, the tailor, the smith, the victualer, the baker, the miller, the innkeeper, the carrier, the ferryman and the wharfinger were considered to be engaged in public employment yet the first seven of these have never been suggested as coming within the definition of public utility. Some light is thrown upon the question whether a public warehouseman is a public utility within the meaning of the act by the language of the act itself. As we have seen, the very section which contains-the proviso exempting public utilities states that the term “commodity” as used in the act “includes services rendered * * * in connection with the * * * storage * * * of a commodity.” Here is definite indication that storage of commodities, the business of a public warehouseman, is intended to be covered by the act. In the hearings upon the bill and in its consideration upon the floor of the Senate the public utilities referred to as involved in the proposed exemption included electric, gas, water and. telephone companies but no mention was made of public warehousemen. It is a fundamental rule of statutory construction that in the absence of a statutory definition words used in the statute are to be given their natural and ordinary meaning. Among the data to be considered in determining the natural and ordinary meaning of “public utility” is the manner in which the term has been used in state legislation. Electric, gas, light, heat, power, water, telephone and telegraph compañíes which the Price Administrator has treated as exempt public utilities are enterprises of the types which are now almost universally treated as public utilities for the purpose of regulation under state statutes. They are generally classified as public utilities in the manuals used by the financial community. On the other hand only three states include all warehouses in their statutory definition of public utilities, while seven others include limited types of warehouses. Thirty-eight states and the District of Columbia do not define warehouses of any kind as public utilities. In the financial manuals warehouse companies are classified as industrials. Complainant points to the decision of the Supreme Court in Munn v. Illinois, 1876, 94 U.S. 113, 126, 24 L.Ed. 77, which held that the rates of a public warehouseman were subject to regulation by a state and it argues that its business was thereby adjudicated to be a public utility. The decision in the Munn case was based upon the proposition that such a business was “affected with a public interest” and consequently its charges might be regulated by the state under the police power without violation of the Fourteenth Amendment, The court did not discuss the question as to whether the business was a public utility. Indeed that term was not used in the opinion. We need not here enter the interesting controversy as to whether the use in that decision of Sir Matthew Hale’s concept of a business “affected with a public interest” was appropriate, for the concept has subsequently been broadened by the Supreme Court to be the equivalent of “subject to the exercise of the police power.” It follows that today a purely private business which has no franchise from the state and enj-oys no monopoly may be subject to price regulation as a business affected with a public interest if a reasonable basis for such action can be shown. As the court said in the Nebbia case, 291 U.S. at page 536, 54 S.Ct. at page 515, 78 L.Ed. 940, 89 A.L.R. 1469. “The phrase ‘affected with a public interest’ can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good.” Pursuant to this broader concept of the police power many of the states have in recent years widely extended the area of price regulation. In so doing, as in the case . of California with public warehousemen, they have frequently described the businesses thus regulated- as public utilities. Whether this was in the mistaken belief fhat it was necessary to so designate them in order to bring them within the police power is not material, for it is obvious that this greatly widened field of regulated business could not have been intended by Congress to be comprehended within the meaning of the phrase “public utility” as used in the act. Such a construction .would remove from the jurisdiction of the Price Administrator a major portion of the field of price regulation and make the exemption clause the rule rather than the exception. Indeed, it may be said that the Emergency Price Control Act itself is a Congressional determination that, at least in wartime, every business in the country is so affected with a public interest as to require statutory control of its prices. Professor (now Justice) Frankfurter in his book “The Public and its Government” (1930) p. 81, lists as typical public utilities those enterprises “which furnish, light, heat, power, water, transportation, and communication.” These, as we have seen are the types of business which the Price Administrator has exempted as public utilities. We think that the Congress intended by the phrase “public utility” to comprehend enterprises of these general types. We are not called upon, however, to delimit the entire area which the term was intended to cover, but merely to decide whether a public warehouseman is within it. After consideration of all the relevant data we conclude that a public warehouseman operating under the California law is not a “public utility” within the meaning of Section 302(c) (2) and as such exempt from the General Maximum Price Regulation promulgated by the Price Administrator. It follows that the latter committed no error in denying the complainant’s protest. The complaint is dismissed. Constitution of California, Art. IV, § 33, Art. XII, § 23. Public Utilities Act of California, Gen. Laws Art. 6386, §§ 2(aa), 2(dd), 2%> 14, 15, 63(a). 7 F.R. 3153. 7 F.R. 4738. 7 F.R. 4543. 7 F.R. 4738. Lyeth v. Hoey, 1938, 305 U.S. 188, 194, 59 S.Ct. 155, 83 L.Ed. 119, 119 A.L.R. 410. The rule has been quite recently reiterated by the Supreme Court, speaking through Justice Douglas, in Jerome v. United States, 1943, 318 U.S. 101, 63 S.Ct. 483, 485, 87 L.Ed. —, as follows: “But we must generally assume, in the absence of a plain indication to the contrary, that Congress when it enacts a statute is not making the application of the federal act dependent on state law. That assumption is based on the fact that the application of federal legislation is nation wide (United States v. Pelzer, 312 U.S. 399, 402, 61 S.Ct. 659, 85 L.Ed. 913) and at times on the fact that the federal program would be impaired if state law were to control.” Spokane & I. E. R. Co. v. United States, 1916, 241 U.S. 344, 350, 36 S.Ct. 668, 60 L.Ed. 1037. Among the businesses which have been designated by state statutes as public utilities and regulated as such are the following: abbatoirs — N.C.Code of 1939, § 2832; airports — Fla.Stat.1941, § 180.07, F.S.A. § 180.07; armories — N.C.Code of 1939, § 2832; auditoriums — N.C.Code of 1939, § 2832; cemeteries — N.C.Code of 1939, § 2832; collecting systems — Fla. Stat.1941, § 180.07, F.S.A. § 180.07; cotton gins — Okla.Stat. Title 17, § 41; ereosoting and other paving works — Minn. Mason’s Stat.1927 § 1786; disposal works — Fla.Stat.1941, § 180.07, F.S.A. § 180.07; distribution systems — Fla.Stat. 1941, § 180.07, F.S.A. § 180.07; docks (public) Ala.Code of 1940, Title 48, § 302; garbage and sewage disposal plants —N.C.Code of 1939, § 2832; golf courses —Fla.Stat.1941, § 180.07, F.S.A. § 180.07; hospitals — Fla.Stat.1941, § 180.07, F.S.A. § 180.07; ice plants — Minn.Mason’s Stat. 1927, § 1786; intakes — Fla.Stat.1941, § 180.07, F.S.A. § 180.07; jails — Fla.Stat. 1941, § 180.07, F.S.A. § 180.07; libraries — N.C.Code of 1939, § 2832; market houses — N.C.Code of 1939, § 2832; markets (public) Minn.Mason’s Stat.1927, § 1786; parks — N.C.Code of 1939 § 2832; play or recreation grounds — N.C.Code of 1939, § 2832; pipe lines — Fla.Stat.1941, § 180.07, F.S.A. § 180.07; pumping station —Fla.Stat.1941, § 180.07, F.S.A. § 180.07; purification works — Fla.Stat.1941, § 180.-07, F.S.A. § 180.07; reservoirs — Fla.Stat. 1941, § 180.07, F.S.A. § 180.07; schools— N.C.Code of 1939, § 2832; sewerage— Fla. (sewerage systems and intercepting sewers), Stat.1941, § 180.07, F.S.A. § 180.07, —Minn, (sewer systems) Mason’s Stat.1927, § 1786, — N.C. (sewer systems) Code of 1939, § 2832; slaughtering establishments — Minn.Mason’s Stat.1927, § 1786, — N.C. (slaughter houses) Code of 1939, § 2832; stone quarries and crushing works — Minn.Mason’s Stat.1927 § 1786; toll bridge or road — Ala.Code of 1940, Title 48, § 302(8); terminal (public) — Ala.Code of 1940, Title 48, § 302 (7) ; wharves — Ala. (public wharves) Code of 1940, Title 48, § 302(7) — N.C. Code of 1939, § 2832; wells — Fla.Stat. 1941, § 180.07, F.S.A. § 180.07. The acceptance of this view would in effect make of the Price Administrator a public utility commission for the State of Delaware in which state there is now no state regulation of the rates of common carriers or other public utilities. Cf. Keifer & Keifer v. R. F. C., 1939, 306 U.S. 381, 395, 59 S.Ct. 516, 83 L.Ed. 784. Colorado, Stat.Ann. (1935), Ch. 137 § 3. Excerpts from transcript of hearings before the Committee on Banking and Currency of the House of Representatives held on August 6 and 15, 1941, pp. 54, 55, 626, on H.R.5479 (superseded by H.R.5990) 77th Cong. 1st. Sess. Congressional Record, Vol. 87, p. 9308. Allnutt v. Inglis, 1810, 12 East. 527, 104 Eng.Reprint 206. For an illuminating discussion of this common law duty see McCurdy, The Power of a Public Utility to fix its Rates and Charges in the absence of Regulatory Legislation, 38 Harv.L.Rev. 202 (1924), especially pp. 206, 207 and note 12, in which the cases are collected. City of Madison v. Madison Gas & Electric Co., 1906, 129 Wis. 249, 108 N.W. 65, 8 L.R.A.,N.S., 529, 116 Am.St.Rep. 944, 9 Ann.Cas. 819, and cases therein cited. “The President may, except as otherwise provided in this Act, thereafter provide for making adjustments with respect to prices, wages, and salaries, to the extent that he finds necessary to aid in the effective prosecution of the war or to correct gross inequities: Provided, That no common carrier or other public utility shall make any general increase in its rates or charges which were in effect on September 15, 1942, unless it first gives thirty days notice to the President, or such agency as he may designate, and consents to the timely intervention by such agency before the Federal, State, or municipal authority having jurisdiction to consider such increase.” See Statements of Senator Norris, Cong.Record, Vol. 88, pp. 7343-7346 and of Senator Brown, Cong.Record, Vol. 88, pp. 7970, 7971. See Goddard, The Evolution and Devolution of Public Utility Law, 32 Mich.L.Rev. 577, 578 (1934). Hawthorn v. Hammond, 1844, 1 C. & K. 404; Rex v. Ivens, 1835, 7 Car. & P. 213; Gordon v. Silber, 1890, 25 Q.B.D. 491; 28 Am.Jur., Innkeepers, § 46; 32 C.J., Innkeepers § 28. Wyman, Public Service Corporations §§ 6-16, incl. Ozawa v. United States, 1922, 260 U.S. 178, 194, 43 S.Ct. 65, 67 L.Ed. 199. Cf. Eagan v. Commissioner of Internal Revenue, 5 Cir., 1930, 43 F.2d 881, 883, 71 A.L.R. 863. Cf. Moody’s Manual of Public Utilities (1942 Ed.) p. a3. California — Gen.Laws (Deeringy 1937), Act 6386, § 2(dd); Indiana — Stat. Ann. (1933, Burns), §§ 67-501, 67-201, 67-202; South Dakota — Code (1939), § 52.0201. Idaho — Code Ann. (1932), §§ 59-128, 59-129; Illinois — Stat.Ann. (Jones), §§ 141.010(1), 141.011, Smith-Hurd Stats. IH. c. 111%, § 119; c. 114, § 189; Maine— Rev.Stat. (1930) Ch. 62, § 15, p. 1031; Nevada — Comp.Laws (1929), § 6106; North Dakota — Comp.Laws (Supp.1913-1925), § 4609c2; Utah — Rev.Stat. (1933), § 76 — 2—1; Washington — Rev.Stat.Ann. (Rem.), § 10344. Cf. Moody’s Manual of Industrials (1942 Ed.) pp. a83, a91. See the discussion of this question by McAllister, Lord Hale and Business Affected with a Public Interest, 43 Harv.L.Rev. 759 (1930) and by Hamilton, Affectation With Public Interest, 39 Yale L.J. 1089 (1930). Nebbia v. New York, 1934, 291 U.S. 502, 533, 54 S.Ct. 505, 514, 78 L.Ed. 940, 89 A.L.R. 1469.
MAGRUDER, Judge (concurring). With some hesitation, I concur in the result reached by Judge Maris. This is one of those unfortunate cases where doubts would remain whichever way the case was decided. Judge Vinson in his dissenting opinion has amply demonstrated that complainant has the characteristics of a “public utility” within the connotation of that phrase in widespread usage. He treats the phrase as one of art, and so treating it, he is sure only of this, if I understand him correctly: that a business is a “public utility” if it has all four of the characteristics mentioned, and if, in addition, its rates are actually being regulated by some administrative agency. He does not decide whether a business would be exempt within the meaning of § 302(c) if its rates were not in fact being regulated by some governmental agency, even though it had the four described characteristics. And he suggests the possibility that a business might be deemed a “public utility” even though not possessing one or another of the four characteristics — for instance, i-f the business, though possessing the other earmarks, did not bear an intimate connection with the process of transportation and distribution, or was not required to obtain a certificate of convenience or necessity before entering the field. If Judge Vinson’s view were accepted, the Price Administrator would have a formidable preliminary task before issuing price regulations applicable to a great variety of businesses. He would have to decide what are the indispensable characteristics of a “public utility” — a phrase which Judge Vinson, after exhaustive research, concedes to be “freighted with refinements” and “not susceptible of a precise definition.” Then the Administrator would have to scrutinize the statutes of the forty-eight states to see what businesses have had impressed upon them by local law the characteristic obligations of a public utility. Nor would his investigation end there; Judge Vinson points out that the due process clause limits “the power of the states to create public utilities,” and the Administrator would have to wrestle with the application of the Supreme Court’s decision in New State Ice Co. v. Liebmann, 285 U.S. 262, 52 S.Ct. 371, 76 L.Ed. 747. But I think a candid examination of the legislative history indicates that Congress in § 302(c) was probably not using “public utility” as a term of art; if it had been, Congress would hardly have left without precise definition so elusive a phrase. Congress was, I am inclined to think, using the term loosely and somewhat vaguely as comprehending the familiar and garden variety businesses which would immediately suggest themselves to the lay mind when the phrase “public utility” is used, and which universally, or almost universally, are under existing federal, state or municipal rate regulation. In these circumstances we should attach persuasive weight to the official interpretation of the exemption in § 302(c) made shortly after the passage of the Act by the administrative official who sponsored the legislation and upon whom Congress imposed the duty of carrying it out. It is significant in this connection, as pointed out by Judge Maris, that after the Administrator made his contemporaneous interpretation of the scope of the exemption, Congress in § 1 of the amending act of October 2, 1942, 56 Stat. 765, again used the words “common carrier or other public utility” without qualifying language. Judge MARIS concurs in the foregoing views.
VINSON, Chief Judge (dissenting). The Emergency Price Control Act of 1942, as amended (the Price Act), contains a provision which specifically exempts the rates charged by "cmy coimnon ca/rrier or other public utility” from regulation by respondent, the Price Administrator. The term, “public utility” is not defined or otherwise explained in the Act. The hearings and debates in Congress have not provided specific guidance as to the comprehensiveness with which the term was employed. In the present controversy the complainant, which conducts the business of a public warehouse in the City of Los Angeles, California, contends that it is a “public utility,” and, therefore, entitled to exemption from rate control under the terms of the Act. The relevant portions of the Price Act are Section 2(a), which authorizes the respondent to issue price regulations for conumodities whose price has arisen or threatens to rise in a manner inconsistent with the purposes enumerated in Section 1(a) of the Act, together with Section 302(c) (2) which provides that “ * * * The term ‘commodity’ * * * includes services rendered * * * in connection with the processing, distribution, storage * * * of a commodity: Provided, That nothing in this Act shall be construed to authorize the regulation of * * * (2) rates charged by any common carrier or other public utility * * (Italics supplied) By virtue of the aforesaid authorization, the Price Administrator on April 28, 1942, issued a General Maximum Price Regulation which fixed as a seller’s maximum price the highest price charged by him during the month of March, 1942. Section 10 of the Regulation provided that it should not apply to such services as might be specified by supplementary regulations or amendments thereto. On June 18, 1942, the Price Administrator issued Supplementary Regulation No. 11, by which it was declared that the General Maximum Price Regulation (issued in April) would not apply to certain services until July 1, 1942. Among the services thus treated were “(2) Commercial storage and warehousing and services incident thereto.” On June 23, 1942, the Price Administrator issued Amendment No. 1 to Supplemental Regulation No. 11, providing for the exception of certain services from the operation thereof. Among the services thus excepted were all electricity, gas, light, heat, power, and water companies which were furnishing or supplying “as public utilities,” In addition, the Amendment provided the following exemption: “(68) Transportation of commodities by * * * common carriers by rail, water, motor, pipe line, or other means of conveyances, rates charged for: Provided, however, That charges for storage and warehousing and all other services incident thereto by any person shall not be excluded from the General Maximum Price Regulation.” (Italics supplied.) The upshot of this series of regulations was to place complainant in a position wherein it would be prohibited after July 1, 1942, from taking advantage of a rate increase for its warehousing services which had been allowed by the California Railroad Commission two months previously. Asserting itself to be a public utility within the meaning of the exemption set forth in Section 302(c) of the Act, and therefore aggrieved by the failure of the Price Administrator to exempt its business from the General Maximum Price Regulation, the complainant filed a timely protest with the Price Administrator. The Price Administrator denied the protest, and the complainant filed the present complaint asking this court to set aside the General Maximum Price Regulation. Supplementary Regulation No. 11, and Amendment No. 1 thereto, insofar as they purport to regulate the charges of the complainant. The parties agree that, in the absence of statutory definition or other means of attaining the legislative intention, the term “public utility,” as used in the Act, must be given its natural and customary significance. We are obliged to determine, in a measure, this connotation. The term “public utility” is not susceptible of a precise definition. It is a concept of comprehensive content, freighted with refinements, and one whose determination for general application is beyond the scope of this opinion. Fixing its formula has been frequently dodged. It is not our purpose or need, however, to develop the definition to a conclusion — to present a workable formula or pattern by which any business may be gauged and labeled. I do not regard a public utility as having any tangible existence; it is like a corporation in that respect. The concept “public utility” is, as I see it, merely a bundle of attributes or characteristics, and our problem, here, simply stated is first to consider some of the fundamental attributes which comprise that bundle and, then, to see if these attributes have been applied, affixed, or adopted as regards the complainant’s public warehouse. I. A Public Utility is, at the least, a Business Affected with a Public Interest. In the narrowing process of determining which of the countless enterprises extant are public utilities, I think that the most appropriate spring board is that principle contained in the landmark case of Munn v. Illinois. A public utility is, at the least, a business affected with a public interest. A “business affected with a public interest,” however, is a concept no more concise than the one with which we are concerned. It has been described as a business which bears such a peculiarly close relation to the public that there arises an affirmative obligation upon the part of the operators to be reasonable in dealing with their customers. It has been designated as a business wherein exist peculiar conditions bearing such a substantial and definite relation to the public interest as to justify an indulgence of the legal fiction of a grant by the owner to the public of an interest in the use, and permitting the imposition of governmental regulation. Thus although the property continues to be private, the public has attained an interest. It has been observed that there is perhaps not a single business which may not be subjected to some measure of public regulation. It is simply a question of the character and degree of the control, and an activity properly designated as “affected with a public interest” is subject to more extensive regulation. The mere declaration by the legislature, however, that a business is affected with a public interest is not conclusive; the attempted regulation is always a subject of judicial inquiry, the due process clause being the staying hand. Some clarification of the concept is found in Wolff Packing Co. v. Court of Industrial Relations, wherein the Supreme Court said: “It is very difficult under the cases to lay down a working rule by which readily to determine when a business has become ‘clothed with a public interest.’ All business is subject to some kinds of public regulation, but when the public becomes so peculiarly dependent upon a particular business that one engaging therein subjects himself to a more intimate public regulation is only to be determined by the process of exclusion and inclusion and to gradual establishment of a line of distinction. * * * To say that a business is clothed with a public interest is not to determine what regulation may be permissible in view of the private rights of the owner. The extent to which an inn or a cab system may be regulated may differ widely from that allowable as to a railroad or other common carrier. It is not a matter of legislative discretion solely. It depends on the nature of the business, on the feature which touches the public, and on the abuses reasonably to be feared. To say that a business is clothed with a public interest is not to import that the public may take over its entire management and run it at the expense of the owner. The extent to which regulation may reasonably go varies with different kinds of business. The regulation of rates to avoid monopoly is one thing. The regulation of wages is another. A business may be of such character that only the first is permissible, while another may involve such a possible danger of monopoly on the one hand, and such disaster from stoppage on the other, that both come within the public concern and power of regulation.” No particular manner of operation or form of state control seems to be a requisite characteristic of a business affected with a public interest. It has been held that a business was impressed with a public interest even though the public might not have the right to demand and receive service. The enjoyment of a monopolistic status is clearly not necessary. Similarly it has been held that a business need not be dependent upon a franchise, certificate of public convenience and necessity, or other form of grant, in order to be clothed with a public interest. What, then, is it which distinguishes a public utility from a mere business affected with a public interest? The informing opinion of Wolff Packing Company v. Court of Industrial Relations has drawn a formal comparison and distinction which divides public businesses into three classes: “(1) Those which are carried on under the authority of a public grant of privileges which either expressly or impliedly imposes the affirmative duty of rendering a public service demanded by any member of the public. Such are the railroads, other common carriers and public utilities. “(2) Certain occupations, regarded as exceptional, the public interest attaching to which, recognized from earliest times, has survived the period of arbitrary laws by Parliament or Colonial Legislatures for regulating all trades and callings. Such are those of the keepers of inns, cabs and grist mills. * * * “(3) Businesses which, though not public at their inception, may be fairly said to have risen to be such and have become subject in consequence to some government regulation. They have come to hold such a peculiar relation to the public that this is superimposed upon them. In the language of the cases, the owner by devoting his business to the public use, in effect grants the public an interest in that use and subjects himself to public regulation to the extent of that interest although the property continues to belong to its private owner and to be entitled to protection accordingly. * * * ” (Italics supplied) This oft-cited passage from the Wolff case purports to do no more than outline some of the fundamental distinctions between a public utility and a business affected with a public interest. It is necessary to develop those fundamental differences in order to appreciate fully the multiple refinements of the former concept. II. The Nature of the Enterprises in the Public Utility Family. The concept “public utility,” contemplates more than a business affected with a public interest. To the date of my observation, at least, it has been limited in its application to only a particular class of public businesses. Because the explanation of this limitation is of historical origin, perhaps the best insight is afforded by referring, in brief, to the emergence and expansion of the public utility family. It is clear that the common carrier, by virtue of what was accepted as its duties and obligations to the public at common law, was the Adam of this family, and that the members thereof grew as the common carrier concept was extended. Transportation thus furnished the point of departure, and the list grew by analogy. Congress may have recognized this intimate connection when it grouped “common carrier[s] and other public utilitie[s]” (italics supplied) into a single exemption in Section 302(c). The participation by a business in activities intimately connected with the processes of transportation and distribution, therefore, was the characteristic which caused it to be subjected to the impositions implicit in public utility regulation. A somewhat exhaustive enumeration of the businesses which frequently have been designated, operated, and regulated as public utilities illustrates that the gradual growth of the family has involved no departure from the initial concept, but merely reflected scientific progress in the facilities, auxiliaries, and varieties of transportation and distribution: viz., bridges, buses, canals, cotton gins, docks, electric companies, elevators, express companies, ferries, gas companies, heating companies, pipe lines, public warehouses, railroads, stockyards, truck lines, telegraphs, telephones, water companies, wharfingers, vessels, etc. As supplying Supreme Court recognition of this approach, the language of Lamar, J., dissenting in the Supreme Court decision of German Alliance Ins. Co. v. Superintendent of Ins. of State of Kansas, is significant: “* * * And as further pointing out the characteristics of the public use justifying the fixing of prices, it will be noted that * * * they all have direct relation to the business or facilities of transportation or distribution — to transportation by carriers of passengers, goods, or intelligence by vehicle or wire; to distribution of water, gas, or electricity through ditch, pipe, or wire; to wharfage, storage, or accommodation of property before the journey begins, when it ends, or along the way. “When thus enumerated, they appear to be grouped around the common carrier as the typical public business, and all employing in some way property devoted to a public use.” (Italics supplied) On the other hand, such decisions of the Supreme Court as those holding the business of selling milk and insuring against fire losses to be affected with a public interest illustrate the proposition that, as regards a mere business affected with a public interest, the traditionally close association with transportation and distribution service is not a necessary characteristic. III. For an Enterprise to be Constituted a Public Utility, Its Services Must be Made Available Upon Demand at Reasonable and Non-Discriminatory Rates. An examination of numerous decisions wherein Federal and State courts have had occasion to consider the nature and the characteristics of public utility enterprises reveals that a distinguishing feature of that class of businesses is considered to be the presence of an obligation to serve the public upon demand at reasonable and non-discriminatory rates. In considering a particular business, the greatest emphasis is repeatedly placed upon these characteristics. In Parsons v. Detroit & Canada Tunnel Co., to select one of the many expressions, a Federal court said: “A public utility is generally known in the law as a business organization which regularly supplies the public with some commodity or service. The distinguishing characteristic of a public utility is the devotion of private property by the owner * * * to such- a use that the public generally, or that part of the public which has been served and has accepted the service, has the right to demand that the use or service, so long as it is continued, shall be furnished without unreasonable discrimination with reasonable efficiency and under proper and reasonable charges.” (Italics supplied) In Nebbia v. New York, in denying that a dairy was a public utility “in the accepted sense,” the Supreme Court spoke of a public utility as “* * * a business * * * in which property is devoted to an enterprise of a sort which the public itself might appropriately undertake, or one whose owner relies on a public grant or franchise for the right to conduct the business, or in which he is bound to serve all who apply * * *.” (Italics supplied) In Pulitzer Pub. Co. v. Federal Communications Commission, the United States Court of Appeals for the District of Columbia denied public utility status to radio broadcasting companies, observing that “* * * we have never said that a radio broadcasting station is a public utility in the sense in which a railroad is a public utility. Generally speaking, that term comprehends any facility employed in rendering quasi public service such as waterworks, gas works, railroads, telephones, telegraphs, etc. The use and enjoyment of such facilities the public has the legal right to demand; but its right to the use and enjoyment of the facilities of a privately owned radio station is of a much more limited character. * * * The licensee of a radio station chooses its own advertisers and its own program.” (Italics supplied) In the California decision of Allen v. Railroad Commission, the court, in discussing the public utility concept, dealt, for purposes of illustration, with the business; of a butcher, excluding that business from the contested class on the following basis: «* * * jje (a butcher) still has the unquestioned right to fix his prices; he still has the unquestioned right to say that he-will or will not contract with any member of the public. What differentiates all such activities from a true public utility is this, and this only: That the devotion to public use must be of such character that the public generally, or that part of it which has been served and which has accepted the service, has the right to demand that that service shall be conducted, so long as it is continued, with reasonable efficiency under reasonable charges. Public use, then, means the use by the public and by every individual member of it, as a legal' right. Such is not only the accepted significance of' the phrase by the great weight of authority as expounded by Mr. Lewis (Eminent Domain, sec. 164 et seq.), but is the definition repeatedly announced by this court. * * * ” In Terminal Taxicab Co. v. Kutz et al., Public Utilities Comm. of District of Columbia, the Supreme Court refused to consider garage call service in connection with taxicabs as a public utility, stating: “* * * But, however it may have been in earlier days as to the common callings, it is assumed in our time that an invitation to the public to buy does not necessarily entail an obligation to sell. It is assumed that an ordinary shopkeeper may refuse his wares arbitrarily to a customer whom he dislikes, and although that consideration is not conclusive * * * it is assumed that such a calling is not public as the word is used.” The Restatement of Torts adopts this classification: "Sec. 191. Comment: “a. What constitutes a public utility. What amounts to such a holding out to the public as to make an enterprise a public utility is beyond the scope of the Restatement of this Subject. The phrase public utility is used in the Restatement of this Subject to describe a person, corporation or other association carrying on an enterprise for the accommodation of the public, the members of which as such are entitled as of right to use its facilities. Usual instances of a public utility are common carriers, common innkeepers, telegraph and telephone companies and gas and electric companies. (Italics supplied) “b. A patron of a public utility is one who is exercising his right as a member of the public to make use of services of a public utility. * * *” The obligation to the public is restated in virtually every decision dealing with the subject matter. Unquestionably Congress was informed as to this criterion. Generally speaking, its members are as familiar with general substantive legal principles as are the courts — often they are better informed as to basic economic and business concepts. This imputation is more than a presumption. An excellant illustration of what Congress intends in its use and understanding of the term “public utility” is illustrated by a passage from the Foreign Trade Zones Act of 1934: "Operation of zone as public utility; cost of customs service. Each zone shall be operated as a public utility, and all rates and charges for all services or privileges within the zone shall be fair and reasonable, and the grantee shall afford to all who may apply for the use of the zone and its facilities and appurtenances uniform treatment under like conditions * * *.” I conclude, then, that a public utility is uniformly understood, aside from a particular statutory classification, to be, at least, a business affected with a public interest, closely associated with transportation or distribution, and under an obligation to afford its services to the public generally at reasonable and non-discriminatory rates. At this stage of the discussion, therefore, we are, in our quest for the concept in question, at these relative positions: We have removed public utilities at least two steps from the broader category of “business affected with a public interest.” and at least three steps from the still broader category of “business in general.” IV. Franchise and Monopoly. In the distinguished array of decisions wherein the concept has been defined, it has uniformly been considered one of the fundamental characteristics of a public utility that it be a business so constituted as to enjoy comparative freedom from commercial competition. This status is attained in two ways: (1) A business may practically succeed in eliminating its competitors, squeezing them out of the field or reducing their activities below the level of serious competition. Sometimes by preempting the field and by the exertion of economic pressure, a business may preclude the emergence of a serious competitor. (2) The state, itself, may place an enterprise in this status. The legislature may feel that the economic interests of the general public will be better served by curtailing the right to enter a particular calling, that the conduct of a particular activity is so packed with social and economic ramifications as to require its operations to be limited to a small or controlled number of companies. The State, therefore, exercises its power to exclude or prohibit unconditionally the establishment of such an enterprise. The discretionary grant of a franchise or certificate of public convenience and necessity, is the device by which the State effects this policy. Then exists a monopoly or quasi-monopoly, which is state-created and state-sanctioned. But the State may be very generous with its grant of privileges. It may grant concurrent franchises, depending upon the nature of the business and the public interest to, be served, to two or even more businesses. Exclusiveness is clearly not an essential feature of a franchise; in fact, there are presumptions against the creation of an absolutely monopolistic status. This control by franchise is to be distinguished, however, from the lesser right of the state, generally, to condition the establishment or continuance of a business upon the maintenance of certain sanitary, safety, or similar supervisory standards, or upon the maintenance of maximum seller’s prices. The Price Administrator has submitted a definition of the concept public utility, as he believes the term should be interpreted, which recognizes the franchise or monopoly characteristic. On page 31 of his brief he says: “ * * * at the time Congress enacted the Emergency Price Control Act the term “public utility” had a general significance with respect to a particular group of businesses. If those businesses have a common characteristic, it is that their importance to the economic life of the community has been generally recognized as being so great as to warrant the community in according them monopoly status [which he admits is customarily accorded by a certificate of convenience and necessity] in exchange for the obligation to provide continuing service to all at reasonable rates. * * * ” Aside from the Price Administrator’s agreement that this attribute is part of the public utility parcel, there is an imposing amount of case authority in support. In Frost v. Corporation Commission, the Supreme Court listed a few familiar instances of businesses which are generally treated as public utilities. It did not include public warehouses, but it went on to say that those enumerated were merely “illustrations of a more comprehensive list” concerning which it stated: “ * * * it is difficult, upon any conceivable ground, to exclude a cotton gin, declared by statute to be a public utility engaged in a public business, the operation of which is precluded without a permit from a state governmental agency, and which is subject to the same authority as that exercised over transportation and transmission companies in respect of rates, charges and regulations.. Under these conditions, to engage in the-business is not a matter of common right,, but a privilege, the exercise of which, except in virtue of a public grant, would be-in derogation of the state’s power. Such, a privilege, by every legitimate test, is a. franchise.” (Italics' supplied.) In Southern Ohio Power Co. v. Public Utilities Comm., the Ohio Court, in denying an electric company public utility status,, said: “The Southern Ohio Power Company claims * * * that it has not at-any time received any public franchise; and that it has never held itself out to the-public as willing to serve the public generally; and that it never intended to nor did' it in fact dedicate its property to public-utility service * * In his dissent in New State Ice Co. v. Liebmann, Justice Brandéis said flatly:“If the business is, or cm be made, a public-utility, it must be possible to make the issue-of a certificate a prerequisite to engaging in it.” (Italics supplied) The majority in the New State Ice Co. case in effect denied public utility status to* an ice producing plant, declared by Oklahoma statute to be a public utility subject to license or permit from the Corporationi Counsel of Oklahom