Opinion
[Copyrighted Material Omitted] H. D. Pillsbury, of San Francisco, Cal., and Carey & Kerr, of Portland, Or., for plaintiff.
Wood, Montague & Hunt, of Portland, Or. (Clyde B. Aitchison, of Portland, Or., of counsel), for defendants Home Telephone & Telegraph Co. and Railroad Commission of Oregon.
Joseph & Haney, of Portland, Or., for defendants Wright-Dickinson Hotel Co., Charles Wright, and M. C. Dickinson.
E. E. Coovert, of Portland, Or., for defendant Benson Hotel Co.
Before GILBERT, Circuit Judge, and WOLVERTON and BEAN, District judges.
WOLVERTON, District Judge (after stating the facts as above).
Two questions of vital concern are presented by the controversy. The first is whether the Oregon Railroad Commission is authorized and empowered to impose regulation upon telephone and telegraph utilities in the way of requiring physical connection between two or more competing lines, and an exchange of service over such lines; and the second, whether such requirement is the exercise of eminent domain and the taking of property without just compensation, or the taking of property without due process of law, contrary to the inhibition of the federal Constitution.
The first question is adequately answered by the provisions of the Public Utilities Act, passed by the Legislative Assembly of the state of Oregon and afterwards ratified by a referendum to the electorate. Sess. Laws 1911, p. 483. This act has for its purpose the regulation of the public utilities of the state, and the conferring of power and jurisdiction upon the Railroad Commission of the State to supervise and regulate such utilities. The first section defines the term 'public utility,' which definition embraces, among others:
'Any plant or equipment or part of a plant or equipment in this state for the conveyance of telegraph or telephone messages, with or without wires, * * * whether said plant or equipment or part thereof is wholly within any town or city, or not.'
By the fourth section the term 'service' is taken to be used 'in its broadest and most inclusive sense, and includes equipment and facilities. ' By section 6: 'The Railroad Commission of Oregon is vested with power and jurisdiction to supervise and regulate every public utility in this state, and to do all things necessary and convenient in the exercise of such power and jurisdiction'-- a power and jurisdiction very broad and very comprehensive.
The eighth section, which, among other things, relates to common user of facilities, contains this explicit and pertinent provision:
'All public utilities shall afford all reasonable facilities and make all necessary regulations for the interchange of business, or traffic carried or their product between them, when ordered by the Commission so to do.'
Sections 41, 42, and 43 provide the mode or manner by which the commission acquires jurisdiction to act in the premises, and by the latter clause of section 43 the commission is specifically empowered, if upon investigation it shall be found that any regulation, measurement, practice, act, or service complained of is unjust, unreasonable, insufficient, preferential, unjustly discriminatory, or otherwise in violation of any of the provisions of the act, or if it be found that any service cannot be obtained or is not afforded, to substitute therefor such other regulations, measurements, practices, service, or acts, and to make such order respecting, and such changes in such regulations, measurements, practices, service, or acts as shall be just and reasonable.
Considering the explicit purpose of the act, and these ample provisions, it would seem that nothing further is needed or requisite for conferring upon the commission adequate power and authority for the regulation of interchange of business between telegraph and telephone companies, which, by the very nature of things, comprises and includes the power to require physical connection between competing utilities for facilitating such interchange of business. In other words, the power to regulate within the purpose and spirit of the act includes the power to require physical connection; otherwise regulation would prove largely ineffectual in practical application.
We are not impressed with the suggestion that this power of regulation must be specifically conferred by constitutional authority.
This disposes of the first question.
As to the second question, we are impressed that it is controlled by the authority of Wisconsin, M. & P. Railroad v. Jacobson, 179 U.S. 287, 21 Sup.Ct. 115, 45 L.Ed. 194, and afterwards reaffirmed in Grand Trunk Ry. v. Michigan Ry. Comm., 231 U.S. 457, 34 Sup.Ct. 152, 58 L.Ed. 310. See, also, Jacobson v. W.M. & P.R.R. Co., 71 Minn. 519, 74 N.W. 893, 40 L.R.A. 389, 70 Am.St.Rep. 358. In the first case it is said that:
'If power were granted by the Legislature, and it amounted in the particular case simply to a fair, reasonable, and appropriate regulation of the business of the corporation, when considered with regard to the interests both of the company and of the public, the legislation would be valid, and would furnish, therefore, ample authority for the courts to enforce it.'
These cases, it is true, relate to a physical connection required by a local commission to be made between railroads, but the analogy to a case where a physical connection is required to be made between telegraph and telephone utilities is patent and obvious. The Pacific
Page 670.
Company is required to accept the messages from the hotels and transmit them, for which service the commission awards it a compensation of 3 1/3 cents for each call going out from the hotels and transferred from the switchboard of the Home Company to that of the Pacific Company. For any transmission of messages it may make over its long distance lines it receives its own charges, and for local messages its tolls for instruments installed, in addition to the compensation allowed for the call, and the compensation stipulated for under its contract with the Hotel Company for putting in and maintaining trunk lines, switchboards, and booths is not interfered with.
The commission has said that the charge of 3 1/3 cents is reasonable for each call going out of the hotels, and with this we are not now concerned.
Now can it be said that the requirement that the Pacific Company shall accept the messages from the hotels and transmit them, it receiving a reasonable consideration for each call, is an exercise of eminent domain and a taking of the plaintiff's property without just compensation?
It is not a new or different use or burden that is required by the service, nor does another or different person, corporation, or entity occupy or utilize the lines or system of the plaintiff company. It is still left in the full and unrestricted occupancy and operation of its own lines or system, except that it is required to observe and comply with a regulation that the commission has deemed proper to impose upon it, namely, that it transmit also the messages coming from the hotels which originate on the wires of the Home Company. This is not a taking of the plaintiff's property in any sense. It is but a reasonable regulation which is properly referable to the police power of the state. See Pioneer Telephone & T. Co. v. Grant County Rural T. Co., 119 P. 968; Pioneer Telephone & Telegraph Co. v. State, 38 Okl. 554, 134 P. 398.
The opposite view is entertained in an exhaustive and ably considered case from California (Pacific Telephone & Telegraph Co. v. Eshleman, 137 P. 1119) but we are unable to give assent thereto.
We come all the more readily to our conclusion in view of the decree recently rendered in the District Court in the case of United States v. American Telephone & Telegraph Co. et al. (no opinion filed), and in which the plaintiff herein was a party defendant, whereby, upon assent of the parties defendant, various telephone and telegraph companies were ordered and directed to make physical connection of their systems and accept interchange of business and communication. Thus the plaintiff has in effect conceded the principle we announce.
It follows furthermore that there has been no taking of property without due process of law; nor has there been a violation of the interstate commerce clause of the Constitution. See Jacobson v. W.M. & P.R.R. Co., supra.
These considerations lead to a denial of an interlocutory injunction, and such will be the order of the court.