State v. Northwestern Electric Co.

Tolman, J. These five cases were, in the court below, consolidated for trial, and after trial on the merits to the court, a judgment was entered in each cause against the defendant therein. Each defendant has appealed from the judgment against it. By stipulation, the five appeals have been consolidated in this court for all essential purposes. These actions were brought by the state as plaintiff under the provisions of § 12, chapter 165, Laws of 1933, p. 610, which reads: “Whenever the department in any proceeding upon its own motion or upon complaint shall deem it necessary in order to carry out the duties imposed upon it by law to investigate the books, accounts, practices *186 and activities of, or make any valuation or appraisal of the property of any public service company or to render any engineering or accounting service to or in connection with any public service company, such public service company shall pay the expenses reasonably attributable to such investigation, valuation, appraisal or services. The department shall ascertain such expenses, and after giving notice and an opportunity to be heard and due consideration to the amount paid by such public service company for regulation and supervision as otherwise provided by law, shall render a bill therefor, or for such part thereof as it may find necessary and reasonable, by registered mail, to the public service company either at the conclusion of- the investigation, valuation, appraisal or services or from time to time during its progress. Upon receipt of a bill so rendered such public service company shall within thirty days pay to the department the amount of the expense for which it is billed, and such payment shall be paid to the state treasurer and credited by him to the public service revolving fund. “Amounts so assessed against any public service company not paid within thirty days after the mailing of the registered letter notifying it of the amount assessed against it, shall draw interest at the rate of six per cent (6%) per annum. Upon failure to pay the same the attorney general shall proceed by civil action in the superior court for Thurston county against such public service company to collect the amount due, together with interest and costs of suit.” Rem. 1934 Sup., §10458-6 [P. C. §5527-12]. The appellants concede that the legislature may, by a proper statute, impose upon public utilities the cost of their regulation, but aside from that concession, they here urge every conceivable objection to the statute which we have quoted. The conclusions which we have reached upon one point obviate the necessity of setting forth and considering the other points presented. *187 If this statute had never been enacted, the department would, under prior statutes, have had the right, and it would have been its duty, to order and conduct special investigations of the public utilities, whenever in its judgment such a course was necessary to enable it to discharge its regulatory duties, but, of course, under the prior acts, the cost of such investigations would be borne by the general taxpavers and could not be charged to the utility investigated. Under such prior laws, in the absence of arbitrary or capricious action, a utility has no protection from repeated investigations, except that which may arise from the fact that the investigations must be carried on at the expense of the public treasury and- the probability that, under such conditions, the department would not heedlessly and recklessly expend the public money. Whatever that protection may have amounted to in the past, it' is entirely withdrawn by the act under consideration. With the power to charge the costs of the investigation to the utility, it is possible for one investigation to follow another without any limit until a particular utility is destroyed. The state relies upon similar statutes in other states which have been upheld, notably in New York and Wisconsin, but it appears that, in all such statutes, there is a limit fixed as to the amount of costs which may be imposed upon any utility in any one year; as, for instance, in the New York statute there is a provision which reads: “The total amount which may be charged by the commission to any public utility under authority of this section in any calendar year shall not exceed one-half of one per centum of such public utility’s gross operating revenues derived from intrastate utility operations in the last preceding calendar year.” Without such a limitation and perhaps an additional one permitting the utility to recover its costs *188 if the investigations prove to be unnecessary and unwarranted, we see no reasonable protection from persecution. Perhaps this omission does not render the statute unconstitutional, but certainly it destroys and denies the American idea of fair play which underlies our system of government. As there is some difference of opinion in the court upon this subject, we do not base .our judgment upon the omission just referred to, but only make the suggestion of unfairness as a possible guide to future legislatures. We pass from that subject to what we consider the vital defect in the law. It will be noted that the statute does not, by its terms, require a charge to the utility investigated of the expenses attributable to such investigation, but, on the contrary, the department is left practically uncontrolled and may charge all or only such part as it may consider necessary and reasonable. Clearly, here, there is no standard which can be applied alike to all similarly situated. In this respect, the statute, by its very terms, is an invitation to the department to indulge in discrimination and favoritism; and, in fact, though actuated by the best of intentions, the department has, as shown by the record, discriminated and in many cases made no attempt to collect any part of the costs of investigation. There is no such provision in either the Wisconsin or the New Tork statute so far as we are able to discover. Under the equal protection clauses of both the Federal and our state constitutions, the legislature may not itself place unequal burdens on those similarly situated, and what it may not itself do, -it cannot authorize others to do. In any event, the legislature may not abdicate its own power and authorize the department, without any fixed standard or guide, at its own pleasure or in its own discretion, to charge *189 one hundred per cent of the investigation costs to one and hut one per cent, or even less, to another. With no known rule as a guide, every utility subject to investigation must be utterly dependent upon the good will or the whim of the department. We do not charge the department, as at present constituted, with intentional unfairness, nor do we anticipate that the department, as it may in the future be constituted, would intentionally discriminate; and yet the act makes such favoritism and discrimination possible, and that possibility makes the act unconstitutional. We have examined with care the many authorities cited pro and con and find little that is helpful in any beyond the declaration of general principles which are not in doubt. In State ex rel. Chicago, Milwaukee & St. Paul R. Co. v. Public Service Commission, 94 Wash. 274, 162 Pac. 523, Chief Justice Ellis, speaking for this court, aptly said: “Touching the question of the delegation of legislative powers, the almost infinite variety of detail and circumstance, and of the laws intended to meet them, have led to an almost equal variety of judicial decision and utterance which, taken in the abstract, cannot be harmonized. A review in detail of the vast array of authorities cited is manifestly impracticable, and any notice not in detail would be wholly useless.” It must suffice to say that, in principle, the following of our eases, among others, support the views which we have here attempted to express: State ex rel. Makris v. Superior Court, 113 Wash. 296, 193 Pac. 845, 12 A. L. R. 1428; Vincent v. Seattle, 115 Wash. 475, 197 Pac. 618; Sumner v. Ward, 126 Wash. 75, 217 Pac. 502; Uhden v. Greenough, 181 Wash. 412, 43 P. (2d) 983; and Griffiths v. Robinson, 181 Wash. 438, 43 P. (2d) 977. *190 The subject is thoroughly discussed and the authorities are collated in an extensive note to be found in 12 A. L. R. 1435. See, also, Yick Wo v. Hopkins, 118 U. S. 356, 6 S. Ct. 1064, which is still to be regarded as a leading case on the subject of the right to equal protection under the law; and also, Panama Refining Co. v. Ryan, 293 U. S. 388, 55 S. Ct. 241; Schechter v. United States, 295 U. S. 495, 55 S. Ct. 837; People v. Federal Surety Co., 336 Ill. 472, 168 N. E. 401; People v. J. O. Beekman & Co., 347 Ill. 92, 179 N. E. 435; Klein v. Barry, 182 Wis. 255, 196 N. W. 457. The state relies chiefly upon the case of the Wisconsin Telephone Co. v. Public Service Commission, 206 Wis. 589, 240 N. W. 411, and upon two recent decisions by the courts of the state of New York, entitled Kings County Lighting Co. v. Maltbie (App. Div.), 280 N. Y. Supp. 560, and Bronx Gas and Electric Co. v. Maltbie, 197 N. E. (N. Y.) 281. We have studied these cases with care, and, as we read them, they announce no principle of law contrary to those upon which we here rely. The statutes considered in each of these cases differ vitally from our own statute in the matters which we have herein pointed out; and, as construed in the cases referred to, neither statute permits discrimination or favoritism. Therefore, the application of the general principles of law as made by the New York and Wisconsin courts is and can be no guide in applying those same principles to our own statute. A further discussion of these authorities would serve no good purpose. We conclude that the judgments appealed from must each be reversed, and the actions must each be dismissed. It is so ordered. Beals, Steinert, Main, and Mitchell, JJ., concur.