OTTINGER, ATTORNEY GENERAL OF NEW YORK,
v.
BROOKLYN UNION GAS COMPANY; OTTINGER, ATTORNEY GENERAL OF NEW YORK, V. KINGS COUNTY LIGHTING COMPANY
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New York enacted a statute requiring gas companies to sell gas at a maximum rate of one dollar per thousand feet, a significant reduction from the rates previously charged under Public Service Commission orders. The Supreme Court affirmed the District Court's invalidation of the statute on the grounds that the prescribed rate was confiscatory, yielding less than five percent return on the fair value of the companies' property devoted to public use, thereby violating the Fourteenth Amendment. The Court declined to address other constitutional objections, holding that the confiscatory nature of the rate alone was sufficient to invalidate the statute.
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Mr. Justice McReynolds delivered the opinion of the Court.
Separate suits were begun by appellees in the United States District Court, Eastern District of New York, against the Public Service Commission and the Attorney General of that State. They sought injunctions against enforcement of the Act of June 2,-1923, c. 899, Laws of New York 1923, by which the Legislature directed that gas of six hundred and fifty British thermal units should be sold at not more than one dollar per thousand feet. Prior to June 2, 1923, under orders of the Commission, the Brooklyn Union Gas Company had been charging one dollar and fifteen cents and the Kings County Lighting Company one dollar and thirty cents per thousand feet for gas of five hundred and thirty-seven British thermal units.
The causes were referred to different masters. They took much evidence, and each reported that the rate pre scribed by the Legislature would yield less than five pe centum upon the fair value of the complainants’ property devoted to public use. With some exceptions, not now important, these reports were approved and the court adjudged the statute confiscatory and therefore invalid. Also, that it was unreasonable and invalid in respect of the standard of six hundred and fifty British thermal units. 7 Fed. (2d) 192, 628.
The Commission declined to ask for an appeal to this court. The Attorney General, upon petitions which allege “ that in substance the decree restrains the defendants from enforcing in any way Chapter 899 of the Laws of 1923 of the State of New York and declares that said statute violates or is in contravention of Section 10 of Article I and of the Fourteenth Amendment of the Constitution of the United States,” sued out broad appeals and has presented many assignments of error — one hundred and seven in No. 358, and twenty-one in No. 365. But we find no reason whatever advanced by him in brief or oral argument which would justify reversal of either decree.
The statute was clearly confiscatory in effect and there was no necessity for the District Court to consider any other objection thereto. We have not done so.
The decrees will be modified by excluding therefrom such parts as adjudge the statute invalid for any reason except conflict with the Fourteenth Amendment because confiscatory in effect. Thus modified, both are affirmed. All costs will be taxed against appellant.
Affirmed as modified.
Mr. Justice Brandéis concurs in the result.
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Brooklyn Borough Gas Co. v. Prendergast (E.D.N.Y. 1926)…628; Consolidated Gas Company v. Prendergast (D. C.) 6 F.(2d) 243; New York & Queens Gas Company v. Prendergast (D. C.) 1 F.(2d) 351. This result has been affirmed by the Supreme Court of the United States in Ottinger v. Brooklyn Union Gas Company, 47 S. Ct. 199, 71 L. Ed. -; Ottinger v. Kings County Lighting Company, 47 S. Ct. 199, 71 L. Ed.-; and Ottinger v. Consolidated Gas Company, 47 S. Ct. 198, 71 L. Ed. - (decided November 29, 1926). [2] The valuations in the present case justify the same holding…1 / 2
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- Kings Cnty. Lighting Co. v. Prendergast (E.D.N.Y. 1925)