GPO-CONAN-2017-10-15.pdf

187 ohio valley water co v ben avon borough 253 us

Info icon This preview shows pages 45–47. Sign up to view the full content.

187 Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S. 287 (1920). 188 In FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 599 (1942), Justices Black, Douglas, and Murphy, in a concurring opinion, proposed to travel the road all the way back to Munn v. Illinois, and deprive courts of the power to void rates simply because they deem the latter to be unreasonable. In a concurring opinion, in Driscoll v. Edison Co., 307 U.S. 104, 122 (1939), Justice Frankfurter temporarily adopted a similar position; he declared that “[t]he only relevant function of law [in rate contro- 1877 AMENDMENT 14—RIGHTS GUARANTEED
Image of page 45

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

not overturn a result it deemed to be just simply because “the method employed [by a commission] to reach that result may contain infir- mities . . . . [A] Commission’s order does not become suspect by rea- son of the fact that it is challenged. It is the product of expert judg- ment which carries a presumption of validity. And he who would upset the rate order . . . carries the heavy burden of making a con- vincing showing that it is invalid because it is unjust and unreason- able in its consequences.” 189 In dispensing with the necessity of observing the old formulas for rate computation, the Court did not articulate any substitute guidance for ascertaining whether a so-called end result is unrea- sonable. It did intimate that rate-making “involves a balancing of the investor and consumer interests,” which does not, however, “‘in- sure that the business shall produce net revenues.’ . . . From the investor or company point of view it is important that there be enough revenue not only for operating expenses but also for the capital costs of the business. These include service on the debt and dividends on the stock . . . . By that standard the return to the equity owner should be commensurate with returns on investments in other enterprises having corresponding risks. That return, moreover, should be suffi- cient to assure confidence in the financial integrity of the enter- prise, so as to maintain its credit and to attract capital.” 190 versies] . . . is to secure observance of those procedural safeguards in the exercise of legislative powers which are the historic foundations of due process.” However, in his dissent in FPC v. Hope Natural Gas Co., 320 U.S. 591, 625 (1944), he disassoci- ated himself from this proposal, and asserted that “it was decided more than fifty years ago that the final say under the Constitution lies with the judiciary and not the legislature. Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U.S. 418 [1890].” 189 FPC v. Hope Natural Gas Co., 320 U.S. 591, 602 (1944). See also Wisconsin v. FPC, 373 U.S. 294, 299, 317, 326 (1963), in which the Court tentatively approved an “area rate approach,” that is “the determination of fair prices for gas, based on reasonable financial requirements of the industry, for . . . the various producing ar- eas of the country,” and with rates being established on an area basis rather than on an individual company basis. Four dissenters, Justices Clark, Black, Brennan, and Chief Justice Warren, labeled area pricing a “wild goose chase,” and stated that
Image of page 46
Image of page 47
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern