Summary
In City of Sun Prairie v. Pub. Serv. Comm'n, 37 Wis.2d 96, 154 N.W.2d 360, 361 (1967), the court was asked to determine whether the Public Service Commission ("PSC") was correct in determining that a landlord who furnished heat, light, water and power to its tenants under a private contract was a "public utility" producing, transmitting, delivering, or furnishing utility services "directly or indirectly to the public."
Summary of this case from BP Products North America, Inc. v. Indiana Office of Utility Consumer CounselorOpinion
November 2, 1967. —
November 28, 1967.
APPEAL from a judgment of the circuit court for Dane county: EDWIN M. WILKIE, Circuit Judge. Affirmed.
For the appellant there was a brief by Petersen, Sutherland, Axley Brynelson of Madison, and Wilmer E. Trodahl of Sun Prairie, city attorney, and oral argument by Eugene O. Gehl of Madison.
For the respondent Public Service Commission the cause was argued by Clarence B. Sorensen, attorney, with whom on the brief were Bronson C. La Follette, attorney general, and William E. Torkelson, chief counsel of the Public Service Commission.
For the respondents Lewis P. Brooks and Brooks Equipment Leasing, Inc., there was a brief by Stafford, Rosenbaum, Rieser Hansen of Madison, and oral argument by Willard S. Stafford.
For the respondent Wisconsin Gas Company there was a brief by Foley, Sammond Lardner, Vernon A. Swanson, and N. J. Lesselyoung, all of Milwaukee, and oral argument by Mr. Swanson.
Proceeding by plaintiff city of Sun Prairie to review a declaratory ruling of the Public Service Commission of Wisconsin that the project of defendant Brooks Equipment Leasing, Inc. (hereinafter "Brooks") in furnishing heat, power, light and water to its tenants in its multiple apartment complex does not bring Brooks within the definition of a "public utility" as defined by sec. 196.01 (1), Stats. Lewis P. Brooks, its president, was also joined as a party defendant. Because Brooks was not a public utility, the commission determined Brooks was not within its jurisdiction and did not require a certificate of convenience and necessity.
The city of Sun Prairie, which is a public utility operating under an indeterminate permit to furnish electric heat, light and power to the public within its boundaries, made application to the commission for such declaratory ruling on July 23, 1964. Brooks was then the owner of a 15-acre parcel of land in the city of Sun Prairie on which it proposed to construct a 240-unit apartment project housed in 15 buildings that will house up to 1,000 people. Heat, light, water and power will be supplied by Brooks to all tenants in the project. Natural gas will be purchased by it to operate engines which will drive four electrical generators with a total capacity of 500 kilowatts. Heat-recovery equipment will utilize waste heat from the engines to furnish low-pressure steam to heat and air condition all 240 apartment units. No water, electricity, or heat will be supplied to adjoining landowners or to the public generally. The rents paid by the tenants will cover the expense of the utility services, so that they will not be separately billed for same. Brooks will rent an apartment "to any responsible person" who is able to pay the rent.
After the commission made its declaratory ruling, the city of Sun Prairie petitioned the commission for a rehearing. Upon the denial of such petition, the city then instituted the instant review proceeding in circuit court.
By judgment entered February 13, 1967, the circuit court affirmed the declaratory ruling of the commission, and the city has appealed.
The Wisconsin Gas Company, which sells gas to Brooks for use in its project, appeared in the proceedings before the commission and in the review before the circuit court, and opposed the city's petition.
The issue on this appeal is whether the landlord of a large complex which furnishes heat, light, water and power to its tenants is a public utility within the definition of sec. 196.01 (1), Stats., so as to be under the jurisdiction of the Public Service Commission. This statute defines a public utility as follows:
"`Public utility' means and embraces every corporation, company, individual . . . town, village or city that may own, operate, manage or control . . . any part of a plant or equipment, within the state . . . for the production, transmission, delivery or furnishing of heat, light, water or power either directly or indirectly to or for the public."
We deem Cawker v. Meyer to be determinative of the result. In that case the landlord constructed a building in the city of Milwaukee to be rented for stores, offices, and light manufacturing purposes. A steam plant was installed therein to generate heat, electric light and power to be furnished to the tenants and occupants of the building who desired such utility service. Since the landlord was unable to dispose of all the heat and electricity to his tenants, he entered into contracts with three adjoining property owners to furnish them heat and power.
(1911), 147 Wis. 320, 133 N.W. 157.
The Wisconsin railroad commission, which had jurisdiction over public utilities at that time, contended that the landlord was a "public utility" as defined in sec. 1797m-1, Stats. (now sec. 196.01 (1)). The commission argued that the furnishing of heat, light, and power "to any one else than to one's self is furnishing it to the public within the meaning of the statute." This court stated:
Id. at page 324.
". . . It was not the furnishing of heat, light, or power to tenants or, incidentally, to a few neighbors that the legislature sought to regulate, but the furnishing of those commodities to the public, that is, to whoever might require the same. Wis. River Imp. Co. v. Pier, 137 Wis. 325, 118 N.W. 857. The use to which the plant, equipment, or some portion thereof is put must be for the public in order to constitute it a public utility. But whether or not the use is for the public does not necessarily depend upon the number of consumers; for there may be only one . . . On the other hand, a landlord may furnish it to a hundred tenants or, incidentally, to a few neighbors, without coming either under the letter or the intent of the law. In the instant case the purpose of the plant was to serve the tenants of the owners, a restricted class, standing in a certain contract relation with them, and not the public. . . .
". . . The tenants of a landlord are not the public, neither are a few of his neighbors or a few isolated individuals with whom he may choose to deal, though they are a part of the public. The word `public' must be construed to mean more than a limited class defined by the relation of landlord and tenant, or by nearness of location, as neighbors, or more than a few who by reason of any peculiar relation to the owner of the plant can be served by him.
". . . [The statute] was not intended to affect the relation of the landlord and tenant, or to abridge the right to contract with a few neighbors for a strictly incidental purpose, though relating to a service covered by it."
Id. at pages 324-326.
Ch. 499, Laws of 1907, which provided for the regulation of public utilities and contained the definition of "public utility" found in sec. 1797m-1, Stats. (now sec. 196.01 (1)), had become generally known as the Public Utilities Law. The commission to which this regulation had been entrusted was the then recently created Wisconsin railroad commission. John Barnes was the first chairman of this regulatory commission. It is noteworthy that when the Cawker Case reached the court in 1911, Barnes was then a member of this tribunal and concurred in the decision.
See Crow, Legislative Control of Public Utilities in Wisconsin, 18 Marq. L. Rev. (1933), 80.
The statutory definition of "public utility" in sec. 1797m-1, Stats. has not been amended in any relevant portion since this court's decision in Cawker, and the same definition may be found today in sec. 196.01 (1). This court has long been committed to the principle that a construction given to a statute by the court becomes a part thereof, unless the legislature subsequently amends the statute to effect a change.
Moran v. Quality Aluminum Casting Co. (1967), 34 Wis.2d 542, 556, 150 N.W.2d 137; Mednis v. Industrial Comm. (1965), 27 Wis.2d 439, 444, 134 N.W.2d 416; Hahn v. Walworth County (1961), 14 Wis.2d 147, 154, 109 N.W.2d 653, 94 A.L.R. 2d 618; Meyer v. Industrial Comm. (1961), 13 Wis.2d 377, 382, 108 N.W.2d 556; Thomas v. Industrial Comm. (1943), 243 Wis. 231, 240, 10 N.W.2d 206; Milwaukee County v. City of Milwaukee (1933), 210 Wis. 336, 341, 246 N.W. 447; Eau Claire Nat. Bank v. Benson (1900), 106 Wis. 624, 627, 628, 82 N.W. 604.
The courts of California, Missouri, Ohio, and Pennsylvania have similarly held that a landlord who furnishes utility service to his tenants is not a public utility within the definition thereof contained in the applicable state law. Appellant has been unable to cite a single authority to the contrary.
Story v. Richardson (1921), 186 Cal. 162, 198 P. 1057, 18 A.L.R. 750.
State v. Public Service Comm. of Missouri (Kan. City Ct. 1944), 178 S.W.2d 788.
Jonas v. Swetland Co. (1928), 119 Ohio St. 12, 162 N.E. 45.
Drexelbrook Associates v. Pennsylvania Public Utility Comm. (1965), 418 Pa. 430, 212 A.2d 237.
We consider the Pennsylvania court's recent decision in Drexelbrook Associates v. Pennsylvania Public Utility Comm. to be highly significant in view of appellant's argument that the rule announced in Cawker should not be extended to a large apartment complex such as the instant one. Drexelbrook Associates is the owner of a real estate development known as Drexelbrook. It is a garden-type apartment village with 90 buildings containing 1,223 residential units, nine retail stores, and a club with a dining room, swimming pool, skating rink and tennis courts. The Pennsylvania Supreme Court held that the tenants of a landlord, although many in number, do not constitute "the public" within the meaning of Pennsylvania's Public Utility Law, but constitute rather a defined, privileged and limited group. The court held that the proposed service of electricity to them thus would be private in nature.
Supra, footnote 9.
As in the instant appeal, it was argued in the Drexelbrook Associates Case that regulation was desirable to protect the interest of the tenants in so large an apartment complex. In disposing of this argument the Pennsylvania court stated:
"The controlling consideration is not whether regulation is desirable, but whether appellant [Drexelbrook Associates] is subject to regulation under the Public Utility Law." By the Court. — Judgment affirmed.
Id. at pages 441, 442.
WILKIE, J., took no part.