Jackson v. Metropolitan Edison Company Brief for the Petitioner

    SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1974

No. 73-5845

CATHERINE JACKSON, On Behalf of Herself and 
All Others Similarly Situated,

Petitioner,
v.

METROPOLITAN EDISON COMPANY, 
a Pennsylvania Corporation,

Respondent.

ON WRIT OF CERTIORARI TO THE UNITED STATES 
COURT OF APPEALS FOR THE THIRD CIRCUIT

BRIEF FOR THE PETITIONER

ALAN LINDER, Esquire 
EUGENE F. ZENOBI, Esquire 
J. RICHARD GRAY, Esquire 

Tri-County Legal Services 
53 North Duke Street - Suite 457 
Lancaster, Pennsylvania 17602 
(717) 397-4236

Attorneys for Petitioner
Of Counsel:

JONATHAN M. STEIN, Esquire 
Community Legal Services 
313 South Juniper Street 
Philadelphia, Pennsylvania 19107

Washington, D C. •  C L 8  PUBLISHERS' » LAW  PR INTING  CO •  (2021 393 0625



TABLE OF CONTENTS

(i)

OPINIONS B E LO W .................................      j

JURISDICTION.................................................. .. . . . ..................2
STATUTES, REGULATIONS AND TARIFFS

INVOLVED ................................................................................. 2

QUESTIONS PRESENTED FOR REVIEW ..............................  3
STATEMENT OF THE C A S E ................................ ...................  4
SUMMARY OF ARGUMENT ...............      7
ARGUMENT

I. Respondent Acts Under Color of State Law 
When it Terminates Petitioner’s Electrical 
Services for Nonpayment of a Disputed Bill. . . . . . . .  1 2
A. Respondent is a state sanctioned mono­

poly which performs a public function 
and which acts in joint participation 
with the state under extensive state 
regulation....................... ................... .. 13

1. Respondent is a state sanctioned
monopoly, placed by the state in a 
position of favored economic pow­
er....... .................................................................. 13

2. Respondent performs an important 
public function, in the supplying of
essential electrical services............................... . 15

3. Respondent acts in joint participa­
tion with the state, under extensive 
state regulation, in pursuing mutual
goals under a statutory obligation 1
to furnish “reasonably continuous” 
electrical services, from which mu­
tual benefits are derived.............. ......................; 21

Page



(a)

B. The Commonwealth of Pennsylvania is 
directly involved in the Respondent’s 
termination activities because it has 
specifically authorized, encouraged and 
approved such activities, and because it 
has delegated its statutory responsibility 
to the Respondent to determine the 
lawfulness of its own challenged termin­
ation practices ........................................................... 27
1. The Commonwealth of Pennsyl­

vania has specifically authorized 
and approved the Respondent’s 
challenged termination action...........................   27

2. The Commonwealth of Pennsyl­
vania has specifically encouraged 
the Respondent’s termination prac­
tices. .........................    31

3. The Commonwealth of Pennsyl­
vania has delegated to Respondent 
the Public Utility Commission’s 
statutory responsibility to assure 
that customers are not arbitrarily 
and unlawfully deprived of “reason­
ably continuous” electrical services.................. 33

II. Due Process of Law Requires That Before 
Petitioner’s Essential Utility Services May 
be Terminated, Petitioner must be Provided 
with Adequate Prior Notice and Opportuni­
ty to be Heard. ...................................     36
A. Due process of law is necessary in order 

to prevent the arbitrary and erroneous 
deprivation of a statutorily conferred 
entitlement or property right essential 
to life and health.

Page

36



(Hi)

B. Due process of law for utility termina­
tions requires adequate prior notice of 
the nature and means of resolution of 
the dispute, and an opportunity for an 
oral hearing prior to the termination of 
essential utility services.................................. .. . . .  41

CONCLUSION ..............................     .47

APPENDIX

A. Statutes, Regulations and Tariffs Involved .................. la
B. Newspaper Articles

Boston Globe, February 9, 1974 ....... .........................lb
The New York Times, December 26, 1973 ................. 2b

TABLE OF AUTHORITIES

Cases:

Adickes v. S.H. Kress Co., 398 U.S. 144 (1970) ....................31
American Communications Ass’n v. Douds, 339 U.S.

382 (1950)  25
Armstrong v. Manzo, 380 U.S. 545 (1965) ....................... 36, 42

Baldwin v. Hale, 68 U.S. 233 (1863) ........................................36
Baldwin v. Morgan, 287 F.2d 750 (C.A. 5, 1961) ..................19
Bell v. Burson, 402 U.S. 535 (1971) ...........................11, 36, 37
Board of Regents v. Roth, 408 U.S. 564 (1972) . 11, 37,41,46
Boddie v. Connecticut, 401 U.S. 371 (1971) ...............21, 36, 42
Boman v. Birmingham Transit Co., 280 F.2d 531,

(C.A. 5, 1960) ..............................................................  16, 34
Bronson v. Consolidated Edison of New York, 350

F.Supp. 443 (S.D.N.Y., 1 9 7 2 ) ...........................
....................  12, 16, 20, 27, 32, 35, 37, 39, 40, 42, 43, 44, 45

Buffington v. Gas Service Co., -F.Supp.- (W.D., Mo.,
W.D., 1973) .................................................................... 27,32

Burton v. Wilmington Parking Authority, 365 U.S.
715 (1961) ................................  7, 9, 11, 12, 15, 21, 24, 34

Page



California Department of Human Resources v. Java,
402 U.S. 121 (1971) ............................................................41

Citizens Water Co. of Washington, Pa. v. Pa P.U.C.,
171 Pa. Super. 301, 124 A.2d 123 (1956) ____. . . . .  34

City of Pittsburgh v. Pa. P.U.C., 182 Pa. Super 551,
128 A.2d 372 (1957) .......... .................................. .. 24

Columbia Broadcasting System v. Democratic
National Committee, 36 L.Ed.2d 772 (1973) ..........  18, 24

Columbo v. Pa. P.U.C., 159 Pa. Super 483, 48 A.2d
59 (1946) . ...................................................................... . 18

Cooper v. Aaron, 358 U.S. 1 (1958) ................................. 19
Covey v. Town of Somers, 351 U.S. 141 (1956) ............. .. . 43
Cray v. Pa. Grayhound Lines, 177 Pa. Super. 275,

110 A.2d 892 (1955) .................... ........................  9 ,25,29
Crews v. Jacksonville Electric Authority, Poverty

Law Reporter, §13,647 (Fla Cir. Ct„ 1971) ............ .. . 40
Davis v. Weir, 328 F.Supp. 317, 359 F.Supp. 1023

(N.D., Ga., 1971, 1973) . ...........................16, 17, 20, 37,43
Dielen v. Levine, 344 F.Supp. 823 (D., Neb., 1972) ..........  20
Evans v. Newton, 382 U.S. 296 (1966) ..............................8, 19
Farmer v. Moses, 232 F.Supp. 154 (S.D.N.Y., 1964) .............19
Food Employees Local 590 v. Logan Valley Plaza,

391 U.S. 308 (1968) .................... .................................... .19
Fuentes v. Shevin, 407 U.S. 67 (1972) ....................

............... ............11,14, 20,35, 36, 37, 39, 40, 42, 43, 45, 46

Gas Light Co. of Columbus v. Georgia Power Co.,
440 F.2d 1135 (C.A. 5, 1971) cert, den., 405
U.S. 969 (1972) ................................ ..................................  14

Goldberg v. Kelly, 397 U.S. 254 (1970) . 11, 36, 37, 40, 41, 44
Grannis v. Ordean, 234 U.S. 385 (1914) ................................ 42
Griffins v. Illinois, 378 U.S. 1 (1 9 5 8 )......................... .. .41
Gross v. Fox, 349 F.Supp. 1164 (E.D. Pa., 1972) .......... .. . . 20

( i v )

Page



Hall v, Garson, 430 F.2d 430 (C.A. 5, 1970) ......................... 20

Hampton v. City of Jacksonville, 304 F.2d 320
(C.A, 5, 1962) .............................................................. . . . 1 9

Hattell v. Public Service Co. of Colorado, 350
F.Supp. 240 (D., Colo., 1972) ...........................................27

Hernandez v. European Auto Collision, Inc. 487
F.2d 378 (C.A. 2, 1973) ....................... ................... . . . . 2 0

Hill v. Toll, 320 F.Supp. 185 (E.D., Pa., 1970) . .................... 20
Ihrke v. Northern States Power Co., 459 F.2d 566 

(C.A. 8, 1972) cert, granted, vacated as moot,
34 L.Ed. 2d 72 (1972) . ............... .. 8, 9, 16, 20, 26, 27, 30

Jackson v. Metropolitan Edison Co., 348 F.Supp.
954 (M.D., Pa., 1972) affirmed 483 F.2d 754
(C.A. 3, 1973) ...........................................„ ...........................1

Jones v. City of Portland, 245 U.S. 217 (1917)
.................................................. .. 8, 13, 14, 15, 16, 37

Joint Anti-Fascist Refugee Committee v. McGrath,
341 U.S. 123 (1951) . .......................................... .. .42

Kadlec v. Illinois Bell Telephone Co., 407 F.2d 624
(C.A. 7, 1969) cert, den., 396 U.S. 846 (1969)..........  19, 24

Klim v. Jones, 315 F.Supp. 109 (N.D., Cal., 1 9 7 0 )................. 20
Lamb v. Hamblin, Util. L.Rep. (State) §21, 850 (D.

Minn., Nov. 30, 1972) ......................................................... 37
Lathrop v. Donohue, 367 U.S. 820 (1961) .........................  7, 15
Lavoi v. Bigwood, 457 F.2d 7 (C.A. 1, 1972) ...................... .15
Lucas v. Wisconsin Electric Power Co., 446 F.2d 

638 (C.A. 7, 1972) cert, den., 34 L.Ed. 2d 696 
(1 9 7 3 ) ................................................................... .. .19, 37, 45

Lynch v. Household Finance Corp., 405 U.S. 538
0 9 7 2 ) ................................ ................................................... 34

McCabe v. Atchison, Topeka and Santa Fe R. Co.,
235 U.S. 151 (1914)

(v)

Page

10, 31



(vi)

McQueen v. Drucker, 438 F.2d 781 (C.A. 1, 1971) ...............19
Marsh v. Alabama, 326 U.S. 501 (1946) .................... .. 8,19
Mason v. Garriss, 360 F.Supp. 420 (N.D., Ga.,

1973)   .20
Martin v. Pacific Northwest Bell Telephone Co,, 441

F.2d (C.A. 9, 1971)    19
Meredith v. Allen County War Memorial Hospital

Commission, 397 F.2d 33 (C.A. 6, 1968) .........................19

Moose Lodge 107 v, Irvis, 407 U.S. 163 (1972). 12, 16, 24, 27, 37
Morrissey v. Brewer, 408 U.S. 471 (1972) .............................. 44
Mullane v. Central Hanover Bank and Trust Co., 339

U.S. 306 (1950) ................................................................   .42
Munn v. Illinois, 94 U.S. 113 (1877) ............................  8, 14, 15
Nebbia v. New York, 291 U.S. 502 (1934) .............................. 14
New York Times v. Sullivan, 376 U.S. 245 (1 9 6 4 ) ................. 31
Nixon v. Condon, 286 U.S. 73 (1932) ..............................  19, 31
Palmer v. Columbia Gas of Ohio, 342 F.Supp. 241 

(N.D., Ohio, W.D., 1972) affirmed 479 F.2d
153 (C.A. 6, 1973) .............................................
. . 8, 10, 11,12, 16, 17, 20, 27, 30, 31, 37, 38, 39, 42, 43, 44

Particular Cleaners, Inc. v. Commonwealth Edison 
Co., 457 F.2d 189 (C.A. 7, 1972) cert, den., 34 
L.Ed. 2d 148 (1972) ............................................................19

Pendrell v. Chatham College, 42 L.W. 2429 (W.D.,
Pa., 1974) ........................... .................................................30

Perry v. Sindermann, 408 U.S. 593 (1972) ............... 37, 41
Public Utilities Commission v. Poliak 343 U.S. 451

(1952) ............................ ....................................  10, 24, 28, 29
Railway Employees Department v. Hanson, 351

U.S. 225 (1956)  ...............................................  7,15,31
Reitman v. Mulkey, 387 U.S. 369 (1967) .........................  10, 31

Page



Page
Ridley Township v. Pa. P.U.C., 172 Pa. Super. 472,

94 A.2d 168 (1953) ........................................................... 18
Salisbury v. New England Tel. and Tel. Co., 2 Pv.

Law Rep. §18, 546 (D., Conn., Nov. 7, 1 9 7 3 )..................27
Shepard v. Milwaukee Gas Light Co., 6 Wis. 526

(1 8 5 8 ) ................................................................................ . .14

Smith v. Allwright, 321 U.S. 649 (1944) .......... ..................... 19
Smith v. Holiday Inns of America, 336 F.2d 630

(C.A. 6, 1964) ............. ........................ .............................19
Southwestern Bell Telephone Co. v. Batesmar, 266

S.W.2d 289 (Ark., 1954) ___ _____ _ .................... . ,40
Stanford v. Gas Service Co., 346 F.Supp. 717 (D.,

Kan., 1972) ..........................................  16 ,17 ,20 ,23 ,32 ,37
Stanley v. Illinois, 405 U.S. 645 (1972) ...........................  12, 46
Taglianetti v. New England Tel. and Tel. Co., 81

R.I. 351, 103 A.2d 67 (1 9 5 4 ) ................. .......................... 19
Terry v. Adams, 345 U.S. 461 (1953) ......................... .. 19

Tyrone Gas and Water Co. v. Public Service
Commission, 77 Pa. Super 292 (1921) ................................... 40

United States v. Guest, 383 U.S. 745 (1966) ............................21
United States v. Price, 383 U.S. 787 (1966) .................... 21

United States v. Wiseman, 445 F.2d 792 (C.A. 2,
1971)  20

Washington Gas Light Co. v. Virginia Electric and
Power Co., 438 F.2d 248 (C.A. 4, 1971)............ .. . 10, 14, 30

Wood v. City of Auburn, 87 Me. 287, 32 A. 906
(1 8 9 5 ) ..........................................................................14,17,44

York Telephone and Telegraph Co. v. Pa. P.U.C.,
181 Pa. Super 11, 121 A.2d 605 (1956) ............................... 40

Constitution o f the United States:

Fourteenth Amendment (Due Process Clause) ...................... 4, 11



Statutes:
Federal Statutes

Civil Rights Act of 1871
42U.S.C. §1983 ............... ....................................... .2 ,4 , 31

United States Code
28 U.S.C. §1254(1) . .................. .......................................  2
28 U.S.C. §1343(3) and (4) .............................................  2
28 U.S.C. §2101 ( c ) ............................................................ 2

Pennsylvania Statutes 
Public Utility Law

66 Pa. Statutes Annotated

Page

§ 4 5 1 ............   2
§452 ................................................................................  18
§ 1 1 0 1 ...................................................................2, 18, 31
§ 1 1 2 1 ......................................................7, 9, 13,22, 24
§1122 .................................................. .. 2, 10, 13, 32, 33
§ 1 1 2 3 .........................................................................13,22
§ 1 1 2 4 .......................................................................... 9,25
§1141 . . .  ............................................. 9, 18,21,22, 24
§ 1 1 4 2 ..................................... ........................ . . . .  9, 22
§ 1 1 4 4 .........       22,37
§ 1 1 4 8 ..............................    10
§1171 . . .  2, 8, 9, 10, 18, 21, 22, 24, 25, 28, 33, 37, 41
§1172 ...................................................................   22
§1182 ....................................................    22,33
§1183 ......................................................................  22,33
§ 1 2 1 1 ............... ............................. ............................... 22
§ 1 2 1 7 ................................   22



§1241 ..................................   22
§1271 ..............................       .22
§1276 .............................................  22
§1341 ..........................................  2, 9, 18,23,28, 29,33

§1342 ...............................................     23, 28

§1343 .................... .........................................................28
§1345 .................     23
§1347 ............................................     23, 28

§1348 ...............................................................................29
§1360 ........................................................................  9, 23

§ 1 3 9 1 ..........    23
§1395 .............................................    23
§1398 ..................................      23

Utilities Gross Receipts Tax 
72 Pa. Stat. Annotated

§8101 .......................................................................... 9,26
Kansas Statutes Annotated

K.S.A. §66-101......................................................................... 23

Miscellaneous:
Regulations

Public Utility Commission Regulations 
P.U.C. Electric Regulations

Rule 14D . . . . .  .............................................. 3 ,9 ,25 ,32

P.U.C. Tariff Regulations
Section I I ............................................................2, 10, 29
Section VIII ......................................3, 10, 28, 29, 32, 33

Metropolitan Edison Electric Tariff
Electric Pa. P.U.C. No. 41, Rule 15 ...............3, 28, 29, 32

( i x )

Page



(X)

Law Review Articles
Arterburn, “The Origin and First Test of Public

Callings” , 75 U. Pa. L.Rev. 411 (1927) ............... ........... 14
Barnes, “Government Regulation of Public Service

Corporations” , 3 Marquette L.Rev. 65 (1919) ..................15
Burdick, “The Origin of the Peculiar Duties of 

Public Service Companies” , 11 Col. L.Rev. 514 
(1 9 1 1 ) ..................................................................................... 13, 17

“Constitutional Safeguards for Public Utility 
Customers: Power to the People” , 48 N.Y.U.
L.Rev.493 (1973) ..................................................  15,39,44

“Fourteenth Amendment Due Process in Termina­
tions of Utility Service for Nonpayment” , 86 
Harvard L.Rev. 1477 (1973) ........................... 25, 39,40, 46

“Public Utilities and the Poor, 78 Yale L.J. 48
(1 9 6 9 ) ................................................................................... 38

Shelton, “Shutoff of Utility Services for Non­
payment; A Plight of the Poor” , 46 Wash.
L.Rev. 745 (1971)  38,45

Wyman, “The Law of Public Callings as a Solution 
to the Trust Problem”, 17 Harvard L. Rev. 156 
(1904) ..................................................       14, 18

Books and Treatises
Hale, De Portibus Maris, 1 Harg. Law Tracts 78 ..................15
Moody’s Public Utility Manual, §38 (1972) .......................  15
Wyman, Public Service Corporations (1911)  15

Newspaper Articles
Tragedies: A Winter’s Tale, Newsweek, p. 28 (Jan.

8, 1974) ..............................................................

Page

17, 38



(xi)

Man, Seventy-one, Freezes to Death After Utility 
Shuts Off Gas, United Press International, 
appearing in Boston Globe, (Feb. 9, 1974), p. 
17 ........................................................................

Elderly Couple Found Frozen in Syracuse Home, 
The New York Times, Dec. 26, 1973..................

Publications

Report of the National Advisory Commission on 
Civil Disorders (1968) .................... ...................

Page

17,38

8,38

40



IN THE
SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1974

No. 73-5845

CATHERINE JACKSON, On Behalf of Herself and 
All Others Similarly Situated,

Petitioner,
v.

METROPOLITAN EDISON COMPANY, 
a Pennsylvania Corporation,

Respondent.

ON WRIT OF CERTIORARI TO THE UNITED STATES 
COURT OF APPEALS FOR THE THIRD CIRCUIT

BRIEF FOR THE PETITIONER

OPINIONS BELOW

The Memorandum and Order of the District Court, 
dated June 30, 1972, dismissing Petitioner’s Complaint, 
appears in the Appendix (A-64-73) and is reported at 
Jackson v. Metropolitan Edison Co., 348 F.Supp. 954 
(M.D., Pa., 1972). The Judgment and Opinion of the



2

Third Circuit Court of Appeals dated August 21, 1973, 
affirming the decision of the District Court, appears in 
the Appendix (A-76-92), and is reported at 483 F.2d 
754 (C.A. 3, 1973).

JURISDICTION

Jurisdiction of the Court below was invoked pursuant 
to 42 U.S.C. §1983 and 28 U.S.C. §1343(3) and (4). 
Petitioner’s petition for rehearing before the court en 
banc was denied by the Third Circuit Court of Appeals 
by Order dated October 25, 1973, without opinion, and 
appears in the Appendix (A-93). The petition for writ 
of certiorari was docketed on December 3, 1973 and 
was timely filed pursuant to 28 U.S.C. §2101(c). This 
Court’s jurisdiction is invoked pursuant to 28 U.S.C. 
§1254(1).

STATUTES, REGULATIONS AND 
TARIFFS INVOLVED

Pertinent sections of the Pennsylvania Public Utility 
Law, 66 Pa. Stat. Anno., §§451, et seq., 1101 et seq., 
are set forth verbatim in the attached Appendix. The 
following sections however, are of special import:

(a) §1171, establishing a duty of furnishing 
reasonably continuous service:
(b) §1341, conferring powers on the Pennsylvania 
Public Utility Commission over public utilities; and
(c) § 1122, delegating to utilities authority to 
terminate service without the prior approval of the 
Commission.
The following Public Utility Commission Tariff and 

Electric Regulations are also set forth verbatim:
(a) Section II. Public Notice of Tariff Changes;



3

(b) Section VIII. Discount for Prompt Payment 
and Penalties; and
(c) Rule 14D. Access to Meters.
The termination of service tariff of Metropolitan 

Edison Company Electric Tariff, Electric Pa. P.U.C., 
No. 41, Rule 15, is also set out in the attached 
Appendix.

QUESTIONS PRESENTED FOR REVIEW

I. Whether the Respondent public utility acts under 
color of state law when it terminates a customer’s 
electrical service for nonpayment of a disputed bill, 
where such utility has the following characteristics and 
the following relationship to the Commonwealth of 
Pennsylvania:

(a) It is a state sanctioned monopoly placed by 
the state in a position of favored economic power;
(b) It performs a public function in the supplying 
of essential electrical services;
(c) It acts in joint participation with the state, 
under extensive state regulation; in pursuing 
mutual goals, under a statutory obligation to 
furnish “reasonably continuous” electrical services, 
from which mutual benefits are derived;
(d) The state has specifically authorized, approved 
and encouraged the Respondent’s challenged 
termination practices;
(e) The state has delegated to the Respondent its 
statutory responsibility to assure that customers 
are not arbitrarily and unlawfully deprived of 
“resonably continuous” electrical services.
II. Whether due process of law requires that 

Petitioner must be provided with adequate notice and 
opportunity to be heard before her essential utility 
services, which constitute a statutorily conferred 
entitlement or property right, may be terminated by 
Respondent for nonpayment of a disputed bill.



4

STATEMENT OF THE CASE

This case was filed by Petitioner as a civil rights action, 
pursuant to 42 U.S.C. §1983, challenging the dis­
continuance of her electrical services by Respondent on 
October 11, 1971, in the absence of due process of law, 
for failure to pay a disputed bill.

Petitioner, a welfare recipient,1 had been a residential 
utility customer of Respondent Metropolitan Edison 
Company since March, 1969, when she moved into her 
home with her two minor children. (A-22). Although 
Mrs. Jackson was purchasing her home, she also shared 
some expenses with a co-occupant, one Dodson. 
(A-22,32). The electric bills were placed in Mrs. 
Jackson’s name until September 1970, after which time 
they came to Petitioner’s home in Dodson’s name 
(A-24), who had assumed full responsibility for 
payment. Petitioner had been informed by Dodson that 
he was paying the bills and she believed this to be the 
case. (A-31, 32). Mrs. Jackson was not informed either 
by Dodson or the company that the bills were not 
being paid. (A-24). Although Dodson moved from the 
premises in August 1971, no electric bills came to 
Petitioner’s home through October 11, 1971, the time 
of the termination of the services. (A-23, 33).

On Thursday, October 6, 1971, four days prior to 
the termination of her electric service, representatives of 
the Respondent company came to Petitioner’s home 
looking for Dodson (A-24). Mrs. Jackson was informed 
by one of the representatives that there was money 
owing and that he would return the following Monday 
to collect $30.00, although no mention was made of

1 See Plaintiffs In Forma Pauperis Petition and Affidavit filed 
with and granted by the District Court on October 18, 1971.



5

the total amount allegedly owing (A-25).2 However, on 
that Monday, this representative failed to come, and 
instead, company workmen came early in the morning 
to disconnect the electricity at the pole for nonpay­
ment of the bill. (A-25). Thus, Mrs. Jackson’s first 
notice of termination was when she walked out her 
front door and asked the utility workmen what they 
were doing. Id. Petitioner was not able to reach 
Respondent’s representatives whom she called at the 
company as well as at home in order to have the service 
reinstated. (A-25, 26).

Mrs. Jackson received no written or oral notice from 
the company prior to the termination of her service3 
(A-25, 26), informing her of the termination and 
reasons therefor, or of opportunities to contest the 
termination. Significantly, Mrs. Jackson was never even 
made aware of the exact amount allegedly owing. 
(A-25).

Petitioner and her children suffered substantial harm 
as a result of the unexpected termination of her 
electrical service (A-27). Mrs. Jackson’s electricity was 
shut off for eight days until the district court granted a 
temporary restraining order on October 18, 1971. 
(A-13, 14). During this eight day period, Mrs. Jackson

2 Although some mention of possible “tampering” was made by 
the company representative, the Court specifically found no 
evidence of its applicability to this case (A-89, n. 3).

3 The Court of Appeals noted that the termination of 
Petitioner’s service did not occur until after ~ she had been 
“contacted” by two representatives and had been made “aware” of 
“irregularities” in her account. 483 F.2d at 761. However, the 
representatives at no time informed her that she was in imminent 
danger of having her electricity terminated for nonpayment of a 
bill, the amount of which they never informed her.



6

and her children had no lighting, no heat4 and no hot 
water for bathing or cooking (A-27). As a result of the 
lack of heat, Mrs. Jackson’s children caught colds and 
had to be taken to the doctor (A-27).

Following the termination of Petitioner’s utility 
service on October 11, 1971, (A-26), and her
unsuccessful attempts at reinstatement of service, 
Petitioner filed suit against Respondent in the United 
States District Court for the Middle District of 
Pennsylvania, seeking damages, declaratory and in­
junctive relief to enjoin Respondent from terminating 
service for nonpayment of a disputed bill in the absence 
of notice and opportunity for a hearing concerning the 
merits of the claim. On October 18, 1971, the Court 
issued a Temporary Restraining Order, ordering Re­
spondent to reinstate Petitioner’s service. On October 
22, 1971, following a hearing on issuance of a
preliminary injunction, the parties stipulated to an 
extension of the restraining order pending the District 
Court’s decision (A-33, 34). On November 5, 1971, 
Respondent filed a Motion to Dismiss (A-64), and on 
June 30, 1972 the lower court issued its Memorandum 
and Order dismissing Petitioner’s Complaint for lack of 
subject matter jurisdiction, in that the Court held that 
the Respondent utility did not act under color of law 
(A-65, 66).

On July 13, 1972, Petitioner filed a Notice of Appeal 
to the United States Court of Appeals for the Third 
Circuit (A-74). The Attorney General of the Common­
wealth of Pennsylvania was granted leave to submit a 
brief amicus curiae in support of the Petitioner’s 
position (A-5). On August 7, 1973 the District Court

4 Mrs. Jackson used her oven to partially heat her home 
downstairs.



7

continued the Temporary Restraining Order pending 
determination of Petitioner’s appeal (A-75). The case 
was argued before the Court of Appeals on May 4, 
1973, and, on August 21, 1973, the Court handed down 
its Opinion and Judgment affirming the Order of the 
District Court (A-76, 77). Petitioner moved for a 
rehearing before the court en banc, and on October 25, 
1973, that petition was denied without opinion (A-93). 
A Petition for Writ of Certiorari was filed with and was 
then granted by this Court on February 19, 1974 and 
Petitioner was granted leave to proceed in forma 
pauperis (A-94).

SUMMARY OF ARGUMENT

I. State Action:
A sifting of the facts and a weighing of the 

circumstances, Burton v. Wilmington Parking Authority, 
365 U.S. 715 (1961), leads to the conclusion that the 
Respondent acted under color of state law when it 
terminated the Petitioner’s electrical services for non­
payment of a disputed bill.

Metropolitan Edison is a state sanctioned monopoly, 
permitted by the state to engage in the utility business 
in an exclusive geographical area, pursuant to a grant of 
a “certificate of public convenience” by the Common­
wealth of Pennsylvania. 66 Pa. Stat. Anno. §1121. As a 
result of the certificate, the Respondent is placed in a 
position of favored economic power. Consequently, 
since its customers have no alternative means of service, 
the Respondent has little incentive to refrain from 
arbitrarily terminating service for nonpayment of a 
disputed bill. Thus, state action has been found to exist 
when the government places monopoly power in private 
hands. Railway Employees Department v. Hanson, 351 
U.S. 225 (1956); Lathrop v. Donohue, 367 U.S. 820 
(1961).



8

The supplying of electrical services is traditionally a 
public function. Munri v. Illinois, 94 U.S. 113 (1877). 
Such electrical services unquestionably constitute a 
“necessity of life”, Jones v. City o f Portland, 245 U.S. 
217 (1917); Palmer v. Columbia Gas o f  Ohio, 479 F.2d 
153 (C.A. 6, 1973), as can be seen in the recent 
newspaper reports of the deaths of elderly persons 
resulting from the termination of such services. See The 
New York Times, Dec. 26, 1973.

The Public Utility Law establishes a duty upon 
utilities to provide “reasonably continuous” service in 
the public interest. 66 Pa. Stat. Anno. §1171. Quite 
often, the provision of such service is undertaken by 
governmental bodies directly.

A finding of state action has thus often resulted from 
the performance of a public function by a “private” 
entity. Marsh v. Alabama, 326 U.S. 501 (1946); Evans 
v. Newton, 382 U.S, 296 (1966). The furnishing of 
utility services is similarly a public function justifying a 
finding of state action. Ihrke v. Northern States Power 
Company, 459 F.2d 566, 569 (C.A. 8, 1972), cert, 
granted, vacated as moot, 34 L.Ed.2d 72 (1972).

In addition, the quasi-judicial function of determining 
the lawfulness of the deprivation of property under 
state authority, is another governmental function 
performed by Respondent, further justifying a finding 
of action under color of law herein.

Metropolitan Edison further acts in joint partici­
pation with the state, under extensive state regulation, 
in pursuing mutual goals, under a statutory obligation 
to furnish “reasonably continuous” service, from which 
mutual benefits are derived. In this regard, the 
Commonwealth of Pennsylvania is significantly involved 
in all areas of the Respondent’s operations, similar to



9

the relationship in Burton v. Wilmington Parking 
Authority1 supra. Hence, the Pennsylvania Public Utility 
Commission regulates the setting of utility rates and the 
furnishing of services; requires all utilities to file tariffs 
with the Commission and obtain approval thereon; and 
has general administrative powers and authority, similar 
to those of a principal to an agent, including the veto 
power over utility contract provisions. 66 Pa. Stat. 
Anno. §§1141, 1142, 1171, 1341, 1360.

In pursuing their mutual goals of furnishing “rea­
sonably continuous” electrical services, both the 
Respondent and the state derive mutual benefits 
therefrom. The Respondent receives monopoly status, a 
guaranteed fair rate of return, and rights of eminent 
domain and entry on private property. 66 Pa. Stat. 
Anno. §§1121, 1124, 1141, P.U.C. Elec. Reg., Rule 
14D. It is additionally granted power to promulgate its 
own regulations which have the effect of law. 66 Pa. 
Stat. Anno. §1171; Cray v. Pa. Grayhound Lines, 111 
Pa. Super 275, 110 A.2d 892 (1955).

In return, the Commonwealth of Pennsylvania is 
assured that its citizens receive necessary utility services 
at a reasonable cost. The state additionally benefits 
from summary terminations which reduce utility costs 
and hence rates. At the same time, the state benefits 
from threatened terminations, since disputed bills are 
then quickly paid, thereby increasing utility revenues in 
which the state shares. See Ihrke v. Northern States 
Power Company, 459 F.2d at 568. Finally, the 
Commonwealth of Pennsylvania directly benefits from 
the receipt of a fixed portion of the Respondent’s 
revenues, through collection of the Utilities Gross 
Receipts Tax, 72 Pa. Stat. Anno. §8101.

In addition to the above, the Commonwealth of 
Pennsylvania has specifically authorized and approved



10

Metropolitan Edison’s termination practices. Pursuant to 
statutory and regulatory authority, 66 Pa. Stat. Anno. 
§§1122, 1171, P.U.C. Tariff Reg. Section VIII, the 
Respondent’s constitutionally deficient termination 
tariff was filed with and was approved by the 
Commission, by becoming automatically effective sixty 
days after filing. 66 Pa. Stat. Anno. §1148, P.U.C. 
Tariff Reg., Section II. The Commission’s approval, 
in conjunction with its silence of Metropolitan Prison’s 
termination tariff, thus warrants a finding of state 
action similar to that in Public Utilities Commission v. 
Poliak, 343 U.S. 451 (1952); Palmer v. Columbia Gas 
o f Ohio, 479 F.2d 153 (C.A. 6, 1973); Washington Gas 
Light Co. v. Virginia Electric and Power Co., 438 F.2d 
248 (C.A. 4, 1971).

Furthermore, the Commonwealth of Pennsylvania has 
specifically “encouraged” Metropolitan Edison’s ter­
mination practices. See Reitman v. Mulkey, 387 U.S. 
369 (1967); McCabe v. Atchison Topeka and Santa Fe 
R. Co., 235 U.S. 151 (1914). In this case, the 
Pennsylvania Public Utility Law exempts utilities from 
the usual requirement of obtaining prior Commission 
approval for termination of services for nonpayment of 
a bill. 66 Pa. Stat. Anno. § 1122. In addition, the 
Commission authorizes utilities to promulgate their own 
termination tariffs, and grants them the right of entry 
onto customers’ premises, which does facilitate the 
termination procedure. Certainly, because the Respon­
dent has been granted monopoly power, it has little 
incentive to refrain from arbitrary termination practices.

Finally, the state has delegated to Metropolitan 
Edison its statutory obligation to assure the provision 
of “reasonably continuous” services, and has further 
delegated its responsibility to the public to determine 
whether termination of service for alleged nonpayment



11

of bills is in compliance with existing laws and 
constitutional requirements. This “abdication” of duty, 
through delegation of authority constitutes state action. 
Burton v. Wilmington Parking Authority, 365 U.S. at 
715; See Fuentes v. Shevin, 407 U.S. 67 (1972) at 93. 
II. Due Process of Law:

Due process of law is necessary to prevent arbitrary 
and erroneous deprivations of a statutorily conferred 
entitlement, which, in this case, consists of the 
Petitioner’s statutory right to “reasonably continuous” 
utility service. Once an entitlement is conferred by the 
government it cannot be taken away in the absence of 
due process of law, Fuentes v. Shevin, 407 U.S. 67 
(1972); Bell v. Burson, 402 U.S. 535 (1971); Goldberg 
v. Kelly, 397 U.S. 254 (1970), especially when such 
entitlement constitutes a necessity of life. Palmer v. 
Columbia Gas o f Ohio, supra.

In view of the numerous instances of utility company 
errors, employee indifference or hostility, arbitrary 
utility company termination practices, the availability 
of legitimate customer defenses and the lack of 
adequate administrative and legal remedies available to 
low income consumers, it is readily apparent that the 
protections of adequate prior notice and opportunity to 
be heard must be provided to a customer before being 
deprived of essential utility services. It is submitted that 
“the stakes are simply too high” to permit unfettered 
termination practices. Goldberg v. Kelly, 397 U.S. at 
266.

Since the receipt of continued utility service is a 
protected property interest, Board o f Regents v. Roth, 
408 U.S. 564 (1972), due process of law in utility 
termination situations requires adequate prior notice of 
the nature of the dispute, means of resolution of the 
dispute and of the right to an oral evidentiary hearing,



12

prior to the termination of utility services. Palmer v. 
Columbia Gas o f Ohio, 479 F.2d at 166; Bronson v. 
Consolidated Edison o f New York, 350 F.Supp. 443, 
450 (S.D.N.Y., 1972). The customer may be afforded 
the opportunity for a conference with a company 
representative and an informal agency hearing, prior to 
the opportunity for a formal oral hearing.

The remedy of “pay first and litigate later” , 
sanctioned by the Court of Appeals (A-91), is in 
actuality a “non-alternative”, Bronson, supra at 449, 
and is contrary to the teaching of this Court that a 
wrong will not be permitted to be done merely because 
it might be undone. Stanley v. Illinois, 405 U.S. 645, 
647 (1972).

ARGUMENT
I .

RESPONDENT ACTS UNDER COLOR OF STATE 
LAW WHEN IT TERMINATES PETITIONER’S 
ELECTRICAL SERVICES FOR NONPAYMENT OF 
A DISPUTED BILL.

A finding of action under color of state law requires 
a comprehensive analysis of the cumulative effects of 
the various state action indices that are involved in the 
facts of each particular case.

“Only by sifting facts and weighing circumstances 
can the nonobvious involvement of the State in 
private conduct be attributed its true significance.” 
Burton v. Wilmington Parking Authority, 365 U.S. 
715, 722 (1961).

See also Moose Lodge 107 v. Irvis, 407 U.S. 163 
(1972).

Petitioner submits that a sifting and weighing of the 
facts and circumstances in this case can lead only to the



13

conclusion that the Respondent did act under color of 
law when it terminated Petitioner’s electrical services.

A. Respondent is a state sanctioned monopoly 
which performs a public function and which 
acts in joint participation with the state 
under extensive state regulation.

1. Respondent is a state sanctioned monopoly, 
placed by the state in a position o f favored 
economic power.

In Pennsylvania, public utility companies may not 
engage in business unless a “certificate of public 
convenience” is conferred upon them by the Pa. Public 
Utility Commission. 66 Pa. Stat. Anno. §§1121, 1122. 
Such a certificate may be granted only following a 
determination by the Commission that the granting of 
same is necessary or proper for the service, accom­
modation, convenience or safety of the public. Id, 
§1123. The certificate of convenience sets forth the 
description of the service and the exclusive territorial 
limitations of such service. Id, §1121.

The granting of a certificate of convenience or 
exclusive franchise represents a fundamental re­
structuring of a private anti-competitive market to one 
under governmental control.5 * It is apparent that such 
state authorized monopoly status results in the

5 As commerce developed in medieval England, artificial 
monopolies tended to disappear, leaving only the “natural
monopolies”, which by their nature, would not admit of free 
competition, such as water, gas, telephone and electric companies.” 
Burdick, “The Origin of the Peculiar Duties of Public Service 
Companies” , 11 Columbia L.R. 514 (1911). Because people were 
“compelled” to resort to these natural monopolies, to obtain a 
“necessity” such as fuel, “which could otherwise be obtained with 
great difficulty and at times perhaps not at all” , Jones v. City o f



enjoyment by the utility of a favored economic 
position.6 As a result of the lack of competition, the 
utility customer is afforded little bargaining power,7 
and consequently the utility has little incentive to 
refrain from terminating service for nonpayment of a 
disputed bill.8 Thus, the utility company may elect to 
terminate a customer’s services knowing that the 
“power, property and prestige” of the state is behind

14

Portland, 245 U.S. 217, 224 (1917), the states found it necessary 
to control the potential evil of “odius” common law monopolies, 
Shepard v. Milwaukee Gas Light Co., 6 Wis. 526, 534 (1858), in 
the “public interest” , Munn v. Illinois, 94 U.S. 113 (1877fNebbia  
v. New York, 291 U.S. 502 (1934), Wyman, “The Law of Public 
Callings as a Solution to the Trust Problem”, 17 Harvard L.Rev. 
156 (1904); Arterburn, “The Origin and First Test of Public 
Callings,” 75 U. Pa. L.Rev. 411 (1927).

6 It is interesting to note that the successful attempts of public 
utilities to exclude themselves from the anti-trust laws have not 
been on the grounds that they are not monopolies, but rather on 
the basis that their monopoly activity constitutes “state action”. 
See Gas Light Co. o f  Columbus v. Georgia Power Vo., 440 F.2d 
1135 (CA. 5, 1971) cert, deri., 405 U.S. 969 (1972) (state action 
due to “intimate involvement” of state in defendant’s rate making 
process), and Washington Gas Light Co. v. Virginia Electric and 
Power Co., 438 F.2d 248 (C.A. 4 ,T97TJ(sfaFe silence constituting 
“approval” of utility’s activities).

7The dangers of unfettered termination are great, for as this 
court recently observed “ [if a creditor] knows that he is dealing 
with uneducated, uninformed consumers with little access to legal 
help and familiarity with legal procedures, there may be a 
substantial possibility that a summary seizure of property - 
however unwarranted - may go unchallenged and the [creditor] 
may feel that he may act with impunity.” Fuentes v. Shevin, 407 
U.S. 67(1972), at 83, n. 13.

8 Wood v. City o f  Auburn, 87 Me. 287, 32A. 906 (1895).



15

such action. Burton v. Wilmington Parking Authority, 
365 U.S. at 725.

It is not surprising therefore that state action has 
been found to exist in situations where the government 
places monopoly power in the private hands. Lathrop v. 
Donohue, 367 U.S. 820 (1961); Railway Employees 
Department v. Hanson, 351 U.S. 225 (1956); Lavoi v. 
Bigwood, 457 F.2d 7 (C.A. 1, 1972).

2. Respondent performs an important public func­
tion in supplying essential electrical services.

The supplying of electrical services, often undertaken 
directly by governmental bodies, is a public function, 
particularly in view of the fact that the provision of 
utility service has always been regarded as a “public 
calling.”9 Thus, as stated by one in its analysis of this 
issue:

“ It is, of course, fundamental that justification for
the grant by a state to a private corporation of a

9See Note: “Constitutional Safeguards for Public Utility 
Customers” , 48 NYU L.Rev. 493 (1973); Wyman, Public Service 
Corporations (1911). Thus, when private property is “affected 
with a public interest, it ceases to be juris privati only” and 
becomes clothed with a public interest when it is used in a 
manner to make it of “public consequence to the communitv at 
large.” M um v. Illinois, 94 U.S. at 126, quoting from Hale, De 
Portibus Maris, 1 Harg. Law Tracts 78. (emphasis original). 
However, when such functions are performed by private parties 
they become subject to governmental regulation. Barnes, “Govern­
mental Regulation of Public Service Corporations,” 3 Marquette L. 
Rev. 65 (1918). Furthermore, it is immaterial that the business was 
established prior to imposition of the state regulatory control. 
Munn v. Illinois, 94 U.S. at 133. The important issue is the “type” 
of service being provided, rather than whether a public or private 
entity actually furnishes the service. Jones v. City o f  Portland, 245 
U.S. at 233. See also Moody’s Public Utility Manual, §38(1972).



16

right or franchise to perform such a public utility 
service, as furnishing transportation, gas, electricity 
or the like, on the public streets of the city, is 
that the grantee is about the public’s business. It 
is doing something the state deems useful for the 
public necessity or convenience.” Boman v. 
Birmingham Transit Co., 280 F.2d 531, 535 (C.A.
5, I960).10
There can be little doubt that in furnishing utility 

services, public utilities provide a “necessary service” 
that is beneficial to the public. Note, supra, 48 
N.Y.U.L.Rev. at 507. Thus, in Jones v. City o f 
Portland, 245 U.S. 217, (1917) at 223-225, this Court 
recognized that fuel constituted an “indispensible 
necessity of life” whose absence would endanger the 
community as a whole, because “heat is as indis­
pensible to the health and comfort of the people as is 
light or water.” Also see Moose Lodge 107 v. Irvis, 407 
U.S. at 173 in this regard.

Most courts that have addressed themselves to the 
issue have found continued utility services to constitute 
a necessity of life. Thus, in Bronson v. Consolidated 
Edison Co. o f New York, 350 F.Supp. 443 (S.D.N.Y.,
1972) at 447 the court found “beyond doubt” that 
electric service can become “vital to the existence” ,

10Courts have specifically noted that furnishing of utility 
service was a public function and therefore constituted an 
important index of state action. See Bronson v. Consolidated 
Edison o f New York, 350 F.Supp. 443 (S.D.N.Y., 1972); 
Stanford v. Gas Service Co., 346 F.Supp. 717 (D., Kan., 1972); 
Davis v. Weir, 328 F.Supp. 317, 359 F.Supp. 1023 (N.D., Ga., 
1971, 1973); Palmer v. Columbia Gas o f Ohio, Inc., 479 F.2d 
153 (C.A. 6, 1973); Ihrke v. Northern States Power Co., 459 
F.2d 566 (C.A. 8, 1972) cert, granted, vacated as moot, 34 L.Ed. 
2d 72 (1972).



17

while the court in Stanford v. Gas Service Co., 346 
F.Supp. 717 (D., Kan., 1972) at 720 noted that 
“unheated shelter affects life itself.” 11 Similarly, the 
district court in Palmer v. Columbia Gas o f Ohio, 342 
F.Supp. 241 (N.D., Ohio, W.D., 1972) at 247, stated 
that the lack of heat in the winter time has “very 
serious effects upon the physical health of human 
beings, and can easily be fatal.” In like manner the 
court in Davis v. Weir, 328 F.Supp. 317, 359 F.Supp. 
1023 (N.D., Ga., 1971, 1973) at 322, found that a 
tenant would “suffer a serious loss” without the benefit 
of water services which constituted a necessity. See also 
Palmer v. Columbia Gas o f Ohio, 479 F.2d 153 (C.A. 6,
1973) at 168, and Wood v. City o f Auburn, 87 Me. at 
292.11 12

The common law duty to furnish adequate utility 
service at a fair price was incorporated into state public 
utility laws.13 Thus, the Pennsylvania Public Utility

11 In this regard, in noting electrical service to be a necessity 
of life, one has to look no further than the evening newspaper 
for shocking articles reporting the deaths of families and of 
elderly persons whose utility services had been terminated during 
the Winter of 1973. See “Tragedies: A Winter’s Tale”, 
Newsweek, p. 28 (Jan. 8, 1974), and “Man, Seventy-one Freezes 
to Death After Utility Shuts Off Gas”, United Press Interna­
tional, appearing in Boston Globe, p. 17 (Feb. 9, 1974).

12The above characterizations of utility service as a necessity 
of life are . in sharp contrast to the casual observation of the 
Third Circuit that the absence of such service does not pose a 
“threat” to the life of the occupants, and that such service 
constitutes a convenience, rather than a necessity in urban life. 
(A-88).

13At common law, “a person by holding himself out to serve 
the public, generally assumed two obligations - to serve all who 
applied; and if he entered upon the performance of the service, 
to do it in a workmanlike manner.” Burdick, supra, note 5 at



18

Law, 66 Pa. Stat. Anno. § 1101, et seq., imposes a duty 
on all public utilities to provide “reasonably con­
tinuous” service at a fair price to all customers.14 Id, 
§§1141, 1171. Such an obligation is inherent in every 
certificate of public convenience, and hence, a public 
service corporation may not operate only “when the 
weather is pleasant” or when there is a “chance for 
profit.” Columbo v. Pa. P.U.C., 159 Pa. Super. 483, 48 
A.2d 59 (1946). Similarly, the Commonwealth of 
Pennsylvania, through its Public Utility Commission, has 
a statutory duty to assure that public utilities furnish 
“reasonably continuous” service, 66 Pa. Stat. Anno. 
§§452, 1171, 1341.15

It is precisely because a public utility acts in the 
public interest in supplying essential utility services

158. Also see Wyman, supra, note 5 at 166, where it is stated 
that “the situation demands this law, that all who apply shall be 
served, with adequate facilities for reasonable compensation and 
without discrimination; otherwise in crucial instances of 
oppression, inconvenience, extortion and injustice there will be 
no remedies for those industrial wrongs.”

14The statutory obligation to supply service to all applicants is 
one of the main factors to be considered in distinguishing this 
case from that of Columbia Broadcasting System v. Democratic 
National Committee, 36 L.Ed.2d 772 (1973). In the CBS case at 
least three members of this Court failed to find governmental 
action in the refusal of a broadcaster to accept a paid editorial 
advertisement, primarily because of the Congressional intent 
expressed in the Federal Communications Act that broadcast 
licensees were not to be treated as common carriers and were not 
obligated to accept whatever is tendered by members of the 
public.

15Such an obligation consists of the “primary duty” to 
protect the interests of utility customers, as the “primary object” 
of the public service laws is at all times to serve the public. 
Ridley Township v. Pa. P.U.C., 172 Pa. Super. 472, 94 A.2d 168 
(1953).



19

under the authority of the Public Utility Law, that it 
cannot be permitted to terminate such services without 
due process protections to the customer. Hence, the 
failure of certain courts to find state action primarily 
because the utility was deemed by them to be 
“motivated by purely private economic interests” and 
pursuant to its “own regulations” in terminating 
customers’ services,16 is based upon the erroneous 
premise that a public utility is legally permitted to act 
solely pursuant to its own private interests, as compared 
to also being required to act in the public interest. See 
Sprecher J., dissenting in Lucas v. Wisconsin Electric 
Power Co., 466 F.2d 63S (C.A. 7, 1972) cert. den. 34 
L.Ed.2d 696 (1973).

Since this Court has numerous times held that a 
private organization exercising significant control over 
the operation, management or supply of a governmental 
or public service acts under color of law,17 a finding of * 11

Kadlec v. Illinois Bell Telephone Co., 407 F.2d 624 (C.A. 7,
1969), cert. den. 396 U.S. 846 (1969); (however, see Kerner J. 
Concurring); Taglianetti v. New England Tel. and Tel Co., 81 
R L 351, 103 A.2d 67 (1954); Lucas v. Wisconsin Electric Power 
Co., 466 F.2d 638 (C.A. 7, 1972) cert. den. 34 L.Ed.2d 696 
(1973) (however, see Sprecher, J. dissenting); Particular Cleaners 
v. Commonwealth Edison Co., 457 F.2d 189 (C.A. 7, 1972) cert, 
den. 34 L.Ed.2d 148 (1972); Also see Martin v. Pacific 
Northwest Bell Tel. Co., 441 F.2d 116 (C.A. 9, 1971).

11Nixon v. Condon, 286 U.S. 73 (1932); Terry v. Adams, 345 
U.S. 461 (1953) (running of elections); Marsh v. Alabama, 326 
U.S. 501 (1946) (operating a company town); Evans v. Newton, 
382 U.S. 296 (1966) (maintaining a municipal park); Cooper v. 
Aaron, 358 U.S. 1 (1958) (providing free education); and Food 
Employees Local 590 v. Logan Valley Plaza, 391 U.S. 308 
(1968) (shopping center); Smith v. Allwright, 321 U.S. 649 
(1944). Also see Hampton v. City o f  Jacksonville, 304 F.2d 320 
(C.A. 5, 1962); Farmer v. Moses, 232 F.Supp. 154 (S.D.N.Y., 
1964) (state fair); Baldwin v. Morgan, 287 F.2d 750 (C.A. 5, 
1961); McQueen v. Drucker, 438 F.2d 781 (C.A. 1, 1971) (public 
housing); Meredith v. Allen County War Memorial Hospital 
Commission, 397 F.2d 33 (C.A. 6, 1968) (hospital); and Smith v. 
Holiday Inns o f  America, 336 F.2d 630 (C.A. 6, 1964) (hotel).



20

state action is similarly compelled in the instant case, 
where the Respondent is under a statutory obligation to 
furnish a service which is necessary to life.18 In 
performing this and other public functions,19 Metro­
politan Edison thus acts under color of state law.

18The performance of a public function in supplying necessary 
utility services was found to be an important index for a finding 
of state action in Bronson v. Consolidated Edison o f New York, 
supra; Stanford v. Gas Service Co., supra; Davis v. Weir, supra; 
Palmer v. Columbia Gas o f Ohio, supra; and Ihrke v. Northern 
States Power Co., supra.

19 In addition to the performance of a public function in sup­
plying utility service, the Respondent has also been authorized by 
the state to perform a governmental function in 
the adjudication of when private property is to be seized; and 
then itself is permitted to carry out that seizure and state 
sanctioned deprivation of property. Thus, courts have often held 
that statutorily authorized actions by a private person, resulting 
in the seizure or deprivation of property interests, which action 
possesses the characteristics of an act by the State, constitutes 
state action. Such action may take the form of entry onto 
private property, as the summary seizure of tenants’ property 
by landlord: Hall v. Garson, 430 F.2d 430 (C.A. 5, 1970); Dielen 
v. Levine, 344 F.Supp. 823 (D., Neb., 1972); Gross v. Fox, 349 
F.Supp. 1164 (E.D., Pa., 1972); or summary seizure of property 
by an innkeeper: Klim v. Jones, 315 F.Supp. 109 (N.D., Cal.,
1970); or detention of an automobile by a garageman: 
Hernandez v. European Auto Collision, Inc., 487 F.2d 378 (C.A. 
2, 1973); Mason v. Garris, 360 F.Supp. 420 (N.D., Ga., 1973), or 
service of court process by private persons: United States v. 
Wiseman, 445 F.2d 792 (C.A. 2, 1971); or the arrest of persons 
by a bail bondsman: Hill v. Toll, 320 F.Supp. 185 (E.D., Pa., 
1970). Hence, it is the delegation by the state to a private party 
of the decision making process to carry out the seizure of the 
property of another, following a contractual dispute, that has 
resulted in a finding of action under color of law. Fuentes v. 
Shevin, 407 U.S. 67 (1972). Thus, when a private party is



21

3. Respondent acts in joint participation with 
the state, under extensive state regulation, 
in pursuing mutual goals under a statutory 
obligation to furnish “reasonably continu­
ous’’ electrical services, from which mutual 
benefits are derived.

Since both the Respondent and the Commonwealth 
of Pennsylvania have the mutual goals and mutual 
obligations of furnishing “reasonably continuous” 
utility services at a fair price to the utility customers, 
66 Pa. Stat. Anno. §§1141, 1171, it is submitted that 
the Commonwealth of Pennsylvania is no less involved 
in Metropolitan Edison’s activities than was the State of 
Delaware, when it was held to be a joint participant for 
state action purposes in the restaurant business in 
Burton v. Wilmington Parking Authority, 365 U.S. at 
724.20

In pursuing their mutual goals, it is also apparent 
that the Commonwealth of Pennsylvania is “signifi­
cantly involved” in every aspect of Metropolitan 
Edison’s operations and activities. The Commonwealth 
of Pennsylvania, through its Public Utility Commission,

enabled by tire state to deprive others of due process of law, a 
finding of state action is compelled, since the state has provided 
that method for resolution of such disputes. Boddie v. 
Connecticut, 401 U.S. 371 (1971).

20In determining whether state action existed based in part 
upon joint participation in a particular activity, this Court has 
noted that the actor need not be an “officer” of the state, since 
it is enough if he is a “willful participant” with the state. United 
States v. Price, 383 U.S. 787 (1966) at 794. Furthermore, the 
involvement of the state need not be “either exclusive or direct” , 
since state action can be found even though the participation of 
the state is “peripheral” or its action is only one of “several 
cooperative forces” resulting in the constitutional violations. 
United States v. Guest, 383 U.S. 745 (1966).



22

extensively regulates and controls Metropolitan Edison 
by first granting it a “certificate of public convenience” 
in order for it to operate. 66 Pa. Stat. Anno. 
§§1121-1123. The Commission further controls the 
setting of rates by all utilities. Id, §1141. Every public 
utility must file its tariffs with the Commission. Id, 
§1142. Furthermore, no public utility may subject any 
customer to any “unreasonable prejudice or dis­
advantage” as to rates, Id, §1144. Of major importance 
is the fact that the Commission has complete power 
over the character of utility facilities and the furnishing 
of service by the utilities. Id, §1171. In addition, no 
public utility may subject any customer to any 
unreasonable prejudice or disadvantage in the furnishing 
of service. Id, §1172, and the Commission may further 
require reasonable standards for service. Id, §1182, 
upon its own motion or upon any complaint of 
“unreasonable, unsafe, inadequate, insufficient or un­
reasonably discriminatory” service. 66 Pa. Stat. Anno. 
§ 1183.21

The Commission has general administrative power 
and authority to “supervise and regulate” all public 
utilities doing business within the Commonwealth. 66

21 In addition to its regulatory control over rates and services, 
the Commission has extensive regulatory and supervisory powers 
over utility operations, accounting and budgetary matters, 66 Pa. 
Stat. Anno. §1211, and, at all times has access to and may 
inspect and examine all utility accounts, books, maps, inven­
tories, appraisals, valuations or other reports, documents and 
memoranda, and may require the filing of suchmaterial with the 
Commission. Id, §1217. The Commission also has supervision 
over utility securities and obligations. Id, §1241, and additional­
ly has power to control a utility’s relations with affiliated 
interests. Id, §§1271, 1276.



23

Pa. Stat. Anno. § 1342.22 In fact, the Commission’s 
relationship with and control over utility companies is 
strikingly similar to that of a principal and agent 
relationship.23

It is apparent from the above that Metropolitan 
Edison is not a typical private business entity, since, in 
addition to state licensing, every significant aspect of its 
operation is subject to comprehensive statutory and 
administrative regulation. This comprehensive regulatory 
scheme demonstrates the complete involvement of the 
state in and its joint participation with the Respondent

22ln this regard, it is interesting to note that the Court’s 
finding of state action in Stanford v. Gas Service Co., 346 
F.Supp. at 721, was based primarily on the fact the utility was 
subject to extensive regulatory control, based on a Kansas 
statute, pursuant to which the utility terminated its customer’s 
service. That statute was very similar to Section 1341 above, and 
provided:

Power, Authority and Jurisdiction. The state corporation 
commission is given full power, authority and jurisdiction 
to supervise and control the public utilities. . .  and is 
empowered to do all things necessary and convenient for 
the exercise of such power, authority and jurisdiction.” 
K.S.A. §66-101.
23The Commission is further vested with the power to enforce 

all of the provisions of the Act, including the “full intent 
thereof’, and to “rescind” or “modify” any regulations or 
orders. 66 Pa. Stat. Anno. §1342. The filing of reports may be 
required of utilities. Id, §1345, and they are likewise required to 
observe and obey all regulations and orders of the Commission. 
Id, §1347. Further, the Commission is empowered to “vary, 
reform or revise” the terms of any contract entered into by 
utilities which concerns the “public interest and the general well 
being” of the Commonwealth. Id, §1360. Finally, the 
Commission is empowered to hear, investigate and resolve all 
complaints on behalf of or against any public utility in violation 
of any law which the Commission has jurisdiction to administer. 
Id, §§1391, 1395, 1398.



24

in the supplying of electrical services.24 The Penn­
sylvania regulatory scheme thus goes far beyond the 
simple notice filing requirement which was found 
insufficient for state action purposes in Kadlec v. 
Illinois Bell Telephone Company, 407 F.2d 624 (C.A. 
7, 1969) cert. den. 396 U.S. 846 (1969).25

In addition to the partnership role of the Respondent 
and the state in the furnishing of essential electrical 
services, mutual benefits are conferred upon these joint 
venturers through the provision of such services. 
Similarly, the finding of state action through joint 
participation in Burton v. Wilmington Parking Author­
ity, supra, was based in part upon the fact that benefits 
were mutually conferred upon the state and the private 
entity in furnishing of the challenged service.

Metropolitan Edison receives distinct benefits from 
this arrangement since it is granted a certificate of 
convenience or franchise, and monopoly from the state. 
66 Pa. Stat. Anno. §1121, in an exclusive territory of 
service. Id, §1121, with a guaranteed fair rate of 
return, Id, §§1141, 1171; City o f Pittsburgh v. Pa. 
P.U.C., 182 Pa. Super. 551, 128 A.2d 372 (1957), and 
is further vested with the right of eminent domain, Id,

24While the concept of “pervasive state regulation” was not 
deemed to itself constitute the major indicia of state action by 
this Court in Public Utilities Commission v. Poliak, 343 U.S. 451 
(1952) and in Moose Lodge 107 v. Irvis, 407 U.S. 163 (1972), 
yet its significance apparently cannot be underestimated in light 
of this Court’s statement in Columbia Broadcasting System v. 
Democratic National Committee, 36 L.Ed.2d 772 (1973) at 793 
that Congress did not establish a regulatory scheme for broadcast 
licensees “as pervasive as the regulation of public transportation 
in Poliak. ”

25If the utility company is to be given extensive powers in 
conjunction with its public responsibilities, it must be remem­



25

§ 1124, and the right of entry onto customers’ private 
property for the purpose of maintenance and operation 
of its equipment, Pa. P.U.C. Electric Regulation, Rule 
I4D. Finally, the Respondent is authorized by statute 
to promulgate its own regulations whlcirhave the effect 
ofTaw ,̂ Cray v. Pa. "Greyhound Lines, i 77 Pa. Super. 275, 
110 A.2d 892 (1955), and which are subject only to the 
restraints of state laws. Id. §1171.

Likewise, certain substantial benefits are conferred 
upon the Commonwealth of Pennsylvania, through the 
furnishing of utility service by the Respondent. The 
state is assured that its citizens will receive reasonably 
continuous and necessary utility services at reasonable 
prices through provision of such services by public 
utility companies. Furthermore, the state has an interest 
in seeing to it that its citizens receive such services at 
the lowest possible rate, while still yielding a fair rate 
of return to the utility. Furthermore, the control of 
rates to the public is another major benefit derived by 
the state from utility regulation. Since relatively 
unfettered terminations reduce the utility’s operating 
costs, and since this reduction would be reflected in 
lower rates, the termination of services serves to further 
the state’s regulatory interests.26 The state thereby

bered that “Along with power, goes responsibility,” and thus, 
when the actor’s authority is derived in part from the 
“Government’s thumb on the scales” , the exercise of such 
authority and power becomes “closely akin to its exercise by the 
Government itself.” American Communications Ass’n v Douds 
339 U.S. 382 (1950).

26 See, Note: “Fourteenth Amendment Due Process in
Terminations of Utility Services for Nonpayment,” 86 Harvard 
L.Rev. 1477 (1973).



26

ironically receives a direct pecuniary benefit from the 
specific act complained of.

In addition, since the utility is a monopoly, its threat 
of termination for nonpayment of a bill has a 
tremendously coercive impact and often results in 
immediate payment of many disputed bills. Since the 
threatened terminations can result in an increase of 
revenue, and since the state receives a share of the 
utility’s gross revenues, pursuant to 72 Pa. Stat. Anno. 
§8101, such threatened terminations result in a direct 
benefit to the state.27

Finally, it is apparent that the Commonwealth of 
Pennsylvania has a direct financial interest in the 
revenue of the Respondent. Although the Respondent 
corporation pays corporate net income tax and capital 
or franchise tax and property taxes, as do other 
Pennsylvania corporations, it also pays an additional 
and unique tax, i.e., the Utilities Gross Receipts Tax, 
72 Pa. Stat. Anno. §8101, et seq. Every public utility, 
including Respondent, must pay to the Commonwealth 
of Pennsylvania, a tax of forty-five mills upon each 
dollar of its gross receipts from the sale of its utility 
services, including electricity. 72 Pa. Stat. Anno. 
§8101. It is submitted that the Utilities Gross Receipts 
Tax is no different than the five percent of gross profits 
paid to the City of St. Paul by the Northern States 
Power company in Ihrke v. Northern States Power Co., 
supra. As in Ihrke, such an “arrangement” makes the 
state a “direct beneficiary” of the utility’s business, 
especially since the state had the power to set the

27This rationale was specifically adopted by the Eighth Circuit 
as a basis for its finding of state action in Ihrke v. Northern States 
Power Co., supra, 459 F.2d at 568.



27

utility’s rates and to regulate its operations. Ihrke, 
supra, 459 F.2d at 57Q.28

Therefore, whether or not the Respondent intended 
to be a “partner” in furnishing utility services with the 
Commonwealth, is immaterial. It is sufficient for state 
action purposes that the two entities operate in a 
“symbiotic relationship” , Moose Lodge 107 v. Irvis, 407 
U.S. at 166, in the provision of such services.29

B. The Commonwealth of Pennsylvania is 
directly involved in the Respondent’s 
termination activities in that it has specifi­
cally authorized, encouraged and approved 
such activities, and it has delegated its 
statutory obligation to the Respondent to 
determine the lawfulness of its own chal­
lenged termination practices.

1. The Commonwealth o f Pennsylvania has 
specifically authorized and approved the 
Respondent’s termination action.

A finding of state action is compelled when the state 
regulatory agency specifically approves the utility’s

28See also Hattell v. Public Service Co. o f  Colorado, 350 
F.Supp. 240 (D., Colo., 1972); Buffington v. Gas Service Co., 
-F.Supp.- (W.D., Mo., W.D. 1973); Salisbury v. New England Tel. 
and Tel. Col, 2 Poverty Law Rep. §18546 (D., Conn., 1973) 
where the states derived specific monetary benefits from the 
utility’s activities.

29States have been found to be joint participants for state 
action purposes in other utility termination cases. See Buffington 
v. Gas Service Co. - F.Supp. - (W.D., Mo., W.D., 1973) (City of 
Kansas shared “directly and proportionately” in the gross 
revenue of the defendant utility); Bronson v. Consolidated 
Edison o f  New York, 350 F.Supp. at 446 (the “utility is licensed 
to and does act as an agent of the state”); Palmer v. Columbia 
Gas o f Ohio, 479 F.2d at 165 (“the regulatory activities of the 
state have insinuated it into a position of interdependence with 
the company so that it must be recognized as a joint participant 
with the company”). Also see Ihrke v. Northern States Power 
Co., 459 F.2d at 569.



28

challenged conduct. Public Utilities Commission v. 
Poliak, 343 U.S. 451 (1952).

The Court of Appeals held that Metropolitan 
Edison’s termination procedure is merely the product of 
interna! corporate action without acquiescence of or 
authorization by the Commonwealth of Pennsylvania.30

However, Tariff Reg. No. VIII, is not the only state 
regulation to be considered here, for the Court has 
overlooked specific statutory authorization for the 
challenged practice. The Public Utility Code, 66 Pa. 
Stat. Anno. § 1 171 states inter alia:

“Subject to the provisions of this act and the 
regulations or orders of the [Public Utility] 
Commission, every public utility may have reason­
able rules and regulations governing the conditions 
under which it shall be required to render 
service . . .” (emphasis added).

Together with filing requirements of Tariff Reg. No. 
VIII, this statute subjects utility regulations governing 
conditions of service and termination to the regulatory 
authority of the Public Utility Commission. It requires 
the utility to adopt regulations acceptable to and to be 
approved by the Commission. It mandates a statutory 
standard of reasonableness. It subjects the corporation’s 
regulations to the enforcement and compliance author­
ity of the Commission. 66 Pa. Stat. Anno. §§1341, 
1342, 1343, 1347.

Pursuant to Section 1171, Metropolitan Edison has 
promulgated Electric Tariff No. 41 which provides

30The only state involvement found by the court was Public 
Utility Commission regulation, Tariff Reg. No. VIII, which 
requires utility corporations to set forth the conditions of service 
termination for non-payment of accounts. This requirement, the 
court ruled, is not sufficient state involvement to satisfy the state 
action requirement. 483 F,2d at 758 (A-85).



29

unchecked authority to terminate utility service for 
alleged nonpayment of a bill. This tariff has been 
formally presented to the Public Utility Commission 
under its requirements governing submission of pro­
posed tariffs. Tariff Reg. No. II. It has been accepted 
and approved by the Commission under its general 
regulatory authority. 66 Pa. Stat. Anno. §§1341, 1348. 
In the absence of Commission disapproval, the Public 
Utility Law provides that tariffs filed with the 
Commission will automatically become effective, upon 
notice, sixty days after filing. 66 Pa. Stat. Anno. 
§1348; Pa. P.U.C. Tariff Regulations, Section II, 
“Public Notice of Tariff Changes”. In the instant case, 
Metropolitan Edison filed its termination tariff on April 

73'0~'TWl, and it became effective on June 30, 1971. 
Metropolitan Edison Company Electric Tariff, Electric 
Pa. P.U.C. No. 4 L. Rule 1577“

It is evident that Seclion 1171 directly and 
significantly involves the Commonwealth with the 
challenged practices. The statutory provision goes far 
beyond the simple notice-filing requirement of Tariff 
Reg. No. VIII, cited by the Circuit Court. The Public 
Utility Commission is to define the standard of 
reasonableness; it is to review proposed regulations; it is 
to accept or reject those regulations. And having 
required, reviewed, accepted, and approved the chal­
lenged tariff, the Commission has vested Tariff No. 41 
with the apparent authority of the Commonwealth and 
clothed the termination practice with the legitimacy of 
law. In short, the state has directly approved 
Metropolitan Edison’s exercise of the tariff provisions. 
Public Utilities Commission v. Poliak, 343 U.S. at 462.

Moreover, Tariff No. 41 carries the force and effect 
of law. Cray v. Pa. Grayhound Lines, 111 Pa. Super. 
275, 110 A.2d 892 (1955). Having been submitted,



30

received and approved by the Commission, the tariff is 
clothed with an authority which could not otherwise be 
enforced.31 Therefore, Metropolitan Edison’s tariff is 
no less an index of specific authorization than was the 
termination statute in Palmer v. Columbia Gas o f Ohio, 
479 F.2d at 162.

The fact that the Commission may not have held 
formal hearings to approve or ratify the Respondent’s 
tariff is not material in view of the fact that such tariff 
was submitted as required by law and was not 
disapproved,32 even though the Commission had the 
power to do so.33 If Respondent’s tariff did not carry

3ISignificantly, although there was no statutory or regulatory 
authorization in Ihrke v. Northern States Power Co., 459 F.2d at 
570, the court found specific municipal authorization for such 
activity by the fact that the city had a right to “review and 
revise” all of the company’s proposed regulations.

32The Commission’s silence on the matter constitutes its 
consent. Hence, in Washington Gas Light Co. v. Virginia Electric 
and Power Co., the court stated that:

“The argument [lack of investigation or formal approval] is 
not without merit, but the conclusion is not inevitable 
unless one equates administrative silence with abandonment 
of administrative duty. It is just as sensible to infer that 
silence means consent, i.e., approval. Indeed the latter 
inference seems the more likely one when we remember 
that even the gas company concedes that the S.C.C. 
possessed adequate regulatory power to stop V.E.P.C.O. if 
it chose to do so . .  438 F.2d at 252.
33 Since the Commission had the “right to control” the 

Respondent’s challenged activity, its failure to exercise such 
power is immaterial for a finding of state action. Pendrell v. 
Chatham College, 42 L.W. 2429 (W.D., Pa., 1974). Such 
reservation of the power to control operations was specifically 
noted by the court in Palmer, supra, 479 F.2d at 164, as an 
important index of state action. Significantly, although no 
statutory or regulatory authorization for termination existed in 
Ihrke v. Northern States Power Co., supra, 459 F.2d at 570, the 
court found specific municipal authorization of such activity in



31

the approval and authority of the Commission, it would 
have no force and effect and could not serve as 
justificiation for Metropolitan Edison’s termination
practices.34

2. The Commonwealth o f  Pennsylvania has specifi­
cally encouraged the Respondent’s termination 
practices.

In Reitman v. Mulkey, 387 U.S. 369, 386 (1967), 
this Court concluded that prohibited state involvement 
could be found even where the state can be charged 
with only “encouraging”, rather than “commanding” 
discrimination. Thus, where the offending party can 
legitimately rely on a state statute which authorizes or 
permits the challenged conduct, whether or not such 
conduct could,have been engaged in prior to enactment 
of the statute, a finding of action under color of law is 
justified. See Railway Employees Department v. Han­
son, 351 U.S. 225 (1956); McCabe v. Atchison Topeka 
& Santa Fe R. Co., 235 U.S. 151 (1914); Nixon v. 
Condon, 286 U.S. 73 (1932).

the fact that while the company had the right to prepare its own 
regulations, the City had the right to review and revise all of the 
company’s regulations.

^Since Respondent operates solely under the authority of the 
Public Utility Law, 66 Pa. Stat. Anno. §1171 et seq, any 
argument that utilities could lawfully terminate services arbi­
trarily at common law is irrelevant and must be rejected. Palmer 
v. Columbia Gas Co. o f  Ohio, 479 F.2d at 162. Also see Reitman 
v. Mulkey, 387 U.S. 369 (1967); New York Times v. Sullivan, 
376 U.S. 245 (1964). Furthermore, any such historically state 
sanctioned activity would in itself be considered state action 
since it was undertaken pursuant to state “custom or usage” 
within the purview of 42 U.S.C. §1983. See Adickes v. S.H.Kress 
Co., 398 U.S. 144 (1970).



32

In addition to Commission approval of Metropolitan 
Edison’s termination practices, the Pennsylvania statu­
tory and regulatory scheme also encourages such 
termination action. The Legislature has thus provided 
that there be prior Commission approval, including a 
finding of “compliance with existing laws”, for a 
variety of utility actions, including abandonment or 
termination of services. 66 Pa. Stat. Anno. §1122. 
However, at the same time, the Legislature also 
specifically exempted termination for nonpayment of a 
bill from the requirement of obtaining prior Commis­
sion approval and finding of compliance with the law, 
needed for almost all other utility company activities 
Id, § 1122(d).

In further encouragement of Respondent’s termina­
tion practices, the Commission has promulgated several 
regulations regarding entry on private property and 
discontinuance of service. Thus, Pa. P.U.C. Electric 
Regulations, Rule 14D provides that utility personnel 
may have access to meters and equipment located in 
customers’ premises. In addition, Pa. P.U.C. Tariff 
Regulations, Section VIII, provides that all public 
utilities that “impose penalties upon its customers for 
failure to pay bills promptly shall provide in its posted 
and filed tariffs a rule setting forth clearly the 
circumstances and conditions in which the penalties are 
imposed.. .” Accordingly, the Respondent filed its 
tariff regarding termination of service with the 
Commission, as Metropolitan Edison Company Electric 
Tariff, Electric Pa. P.U.C. No. 41, Rule 15, pursuant to 
which it terminated Petitioner’s electrical service.35

3sCourts have found state action where public utilities were 
directly encouraged or authorized by state statutory or 
regulatory schemes to terminate utility services for nonpayment 
of bills. See Bronson v. Consolidated Edison Co, o f  New York, 
Inc., supra; Buffington y. Gas Service Co., supra; Stanford v. Gas 
Service Co., supra.



33

Thus, the state has specifically “fostered and encour­
aged” the activity challenged herein.

In addition to the specific authorization for and 
encouragement of Respondent’s practice challenged 
above, the Commonwealth has lent further affirmative 
support to Respondent’s activity by assuring Respond­
ent a monopoly in the provision of such services, 
thereby providing a further disincentive to Respondent 
to refrain from terminating services for nonpayment of 
a disputed bill.

3. The Commonwealth o f Pennsylvania has 
delegated to Respondent the Public Utility 
Commission’s statutory responsibility to 
assure that customers are not arbitrarily and 
unlawfully deprived o f “reasonably con­
tinuous” electrical services.

The Commission has the duty to see to it that utility 
customers receive reasonably continuous service, with­
out unreasonable interruptions or delay, 66 Pa. Stat. 
Anno. §§1171, 1182, 1183, 1341, as part of its 
primary obligation of protecting the rights and interests 
of the public. However, both the Legislature and the 
Commission have delegated such responsibility, by 
promulgation of Tariff VIII, and Section 1122, 66 Pa. 
Stat. Anno. § 1122, and have thereby transferred such 
responsibility to the Respondent.

Not only has the Commission delegated its statutory 
responsibility, but it has also specifically refused to 
promulgate additional rules and regulations regarding 
utility company collection and termination practices.36

36 The petitions of several low income consumers (including 
that of the Petitioner) filed with the Commission, requesting 
statewide rule making hearings on the issue of whether 
opportunity for a prior hearing should be required prior to 
termination of services for nonpayment of a disputed bid, were 
recently dismissed by the Commission on March 20, 1974, at 
Complaint Docket No. C.20089.



34

By thus approving the Respondent’s termination of 
service tariff, the Commission has authorized the 
Respondent to determine the reasonableness of its own 
termination actions. Such abdication of responsibility 
cannot conceivably be in furtherance of the Commis­
sion’s duty to “protect the public” . Citizens Water Co. 
o f Washington, Pa. v. Pa. P.U.C., 181 Pa. Super 301, 
124 A.2d 123 (1956).

It is submitted that the situation in the instant case 
is very similar to the situation in Boman v. Birmingham 
Transit Co., supra. It was held by the Fifth Circuit 
therein that:

“Where, as here, the City delegated to its franchise 
holder power to make rules for seating of 
passengers and made the violation of such rules 
criminal . . .  we conclude that the Bus Company to 
that extent became an agent for the State, and its 
actions in promulgating and enforcing the rule 
constitutes a denial of the Plaintiffs constitutional 
rights.” Id, 280 F.2d at 535.37
This Court has held that state “inaction” may be a 

significant indicia of state action. Hence, in Burton v. 
Wilmington Parking Authority, supra, this Court noted 
that:

“ . . . the Authority could have affirmatively requir­
ed Eagle to discharge the responsibilities under the

37It is apparent that the sole distinction between the instant 
case and Borrnn is that the Respondent’s termination rule is not 
enforceable by criminal sanctions. However, Petitioner submits 
that this is, in effect, a distinction without a difference, since the 
consequences of her failing to pay Respondent’s bill resulted in a 
penalty to her that was at least as severe as that of a conviction 
for breach of the peace. Property rights are no less deserving of 
constitutional protections than are personal rights. Lynch v. 
Household Finance Corp., 405 U.S. 538 (1972).



35

Fourteenth Amendment imposed upon the private 
enterprise as a consequence of state participation. 
But no state may effectively abdicate its responsi­
bilities by either ignoring them or by merely 
failing to discharge them whatever the motive may 
be . . .  By its inaction the Authority, and through 
it the state, has not only made itself a party to the 
refusal of service, but has elected to place its 
power, property and prestige behind the admitted 
discrimination.” 365 U.S. at 725.
Similarly, in failing to impose due process require­

ments on Metropolitan Edison’s tariffs the state has 
effectively abdicated its responsibility in this area.38 See 
Fuentes v. Shevin, 407 U.S. 67, 93 (1972) in this 
regard.

In conclusion, whether the above state action 
theories are applied separately or cumulatively to 
Metropolitan Edison, they show a picture of state 
involvement that has a significant effect on a customer’s 
relations with a public utility. Mrs. Jackson and her 
family were in no position to bargain with Metropolitan 
Edison for a delay or reconsideration in the termination 
decision; they could seek electricity from no one else in 
their area when their service was terminated. The 
utility’s regulations, which have the effect of law, and 
which were approved by the Commission, provided her 
in theory with nothing more than some notice. When 
no such notice was provided to Petitioner, she had no 
redress. The state had specifically exempted from the

38In this regard, it may be noted that state action, based in 
part upon state “inaction” was found in other utility termination 
cases. For example, see Bronson v. Consolidated Edison o f New 
York, Inc., 350 F.Supp. at 447, where the court noted that the 
statute authorizing termination of service did not go “far 
enough”, since it failed to also provide for due process 
protections.



36

requirement of prior Commission approval, the termina­
tion of service for nonpayment of bills. Finally, the 
company was legally empowered to enter Mrs. Jackson’s 
home to shut-off electricity at her meter. The end 
result is a denial of fundamental fairness to Mrs. 
Jackson and to other utility customers, and both 
Metropolitan Edison and the state must jointly bear a 
direct responsibility for this result.

DUE PROCESS OF LAW REQUIRES THAT BEFORE 
PETITIONER S ESSENTIAL UTILITY SERVICES 
MAY BE TERMINATED, PETITIONER MUST BE 
PROVIDED WITH ADEQUATE PRIOR NOTICE 
AND OPPORTUNITY TO BE HEARD.

A. Due process of law is necessary in order to 
prevent the arbitrary and erroneous depriva­
tion of a statutorily conferred entitlement or 
property right essential to life and health.

This Court has repeatedly reaffirmed the principle 
that, “Parties whose rights are to be affected are entitled 
to be heard; and in order that they may enjoy the right 
they must first be notified.” Baldwin v. Hale, 68 U.S. 
223, 233 (1863), as cited in Fuentes v. Shevin, 407 
U.S. 67, 80 (1972). Additionally, for those rights to be 
effective they “must be granted at a meaningful time 
and in a meaningful manner.” Armstrong v. Manzo, 380 
U.S. 545, 552 (1965). A deprivation of a property 
interest or entitlement requires that the opportunity to 
be heard and to contest the deprivation be provided 
before the loss of the property or benefit. Fuentes v. 
Shevin, 407 U.S. 67 (1972); Bell v. Burson, 402 U.S. 
535 (1971); Goldberg v. Kelly, 397 U.S. 254 (1970); 
Boddie v, Connecticut, 401 U.S. 371 (1971).



37

The Pennsylvania Public Utility Law, by mandating 
that “reasonably continuous” utility service be provided 
on a non-discriminatory basis, 66 Pa. Stat. Anno. 
§§1171, 1144, confers by statute a benefit or
entitlement to utility customers no less important, than 
other property interests or personal rights heretofore 
afforded due process protection by this Court. Fuentes 
v. Shevin, supra, (household goods); Bell v. Burson, 
supra (driver’s license); Goldberg v. Kelly, supra 
(welfare benefits).39 See also Board o f Regents v. Roth, 
408 U.S. 564 (1972); Perry v. Sindermann, 408 U.S. 
593 (1972).

Electricity services, as with other utility services, have 
been described by this Court and lower courts as 
“necessities of life” .40 One lower federal court, in 
explaining the greater threat to life and health that 
arises from termination of heat or electricity as 
compared with the termination of welfare benefits 
considered in Goldberg v. Kelly, observed that “A 
person can freeze to death or die of pneumonia much 
more quickly than he can starve to death.”41 This

39 The great majority of lower courts considering the issue 
have held that utility customers possess a constitutionally 
protected interest not to have their utility service arbitrarily 
terminated. See, e.g., Palmer v. Columbia Gas Co., 342 F.Supp. 
241, 244 (N.D., Ohio, 1972) affd, 479 F.2d 153 (6th Cir., 
1973); Bronson v. Consolidated Edison Co., 350 F.Supp. at 447; 
Stanford v. Gas Service Co. 346 F.Supp. 717, 719-21 (D.Kan. 
1972); Lamb v. Hamblin, Util. L.Rep. (State) §21, 850 (D., 
Minn., Nov. 30, 1972); Davis v. Weir, 328 F.Supp. 317, 321-22 
(N.D., Ga., 1971); c f Lucas v. Wisconsin Electric Power Co., 438 
F.2d 248, 646 n. 13 (7th Cir., 1972) cert. den. 409 U.S. 1114 
(1973).

40Moose Lodge 107 v. Irvis, 407 U.S. 163, 173 (1972); Jones 
v. City o f Portland, 245 U.S. 217, 223 (1917); Stanford v. Gas 
Service Co., supra, 346 F.Supp. at 720; Davis v. Weir, supra, 328 
F.Supp. at 321; Bronson v. Consolidated Edison Co. o f New 
York, Inc., 350 F.Supp. at 447. Also see infra, pp. 16-17.

41 Palmer v. Columbia Gas Co. o f  Ohio, 342 F.Supp. 241, 244 
(N.D., Ohio, 1972), affd. 479 F.2d 153.



38

observation became a tragic reality this year when the 
media reported the deaths of utility customers whose 
services were summarily terminated.42 Such utility 
terminations most often cause their greatest hardship on 
the poor and elderly.43 See Palmer v. Columbia Gas o f  
Ohio, supra, 479 F.2d at 169; Shelton, “The Shutoff of 
Utility Services for Non-payment: A Plight of the 
Poor,” 46 Washington L.Rev. 745 (1971); Note, “Public 
Utilities and the Poor” , 78 Yale L.J. 448 (1969).44

Certainly the facts in this case show the suffering 
experienced by a low income mother living alone with 
two minor children all of whom had to live in their 
home for eight days and nights without lighting, 
adequate heat, or hot water for cooking or hygienic 
purposes. The temporary judicial relief obtained may 
well have prevented the colds experienced by the two 
children in this period from becoming more serious 
threats to their health.

The current situation involving unfettered termina­
tion power leads to erroneous terminations and 
constitutes an additional reason to apply due process 
protections in utility termination situations. Thus, one 
federal court was moved to comment on the “Orwellian 
nightmare of computer control which breaks down

“Elderly Couple Found Frozen in Syracuse Home”, The 
New York Times, Dec. 26, 1973 (electricity termination making 
gas furnace inoperative); “Man, Seventy-one, Freezes to Death 
After Utility Shuts Off Gas”, Boston Globe, p. 17 (Feb. 9, 
1974); “Tragedies: A Winter’s Tale”, Newsweek, p. 28 (Jan. 8*
1974).

43See also Amicus Brief of the National Consumer Law Center.
44The casual observation of the Court of Appeals that there is 

no threat to life from utility termination is thus contradicted 
by real events. (A-88).



39

through mechanical and programmers’ failures and 
errors. 5

The monopoly nature of the utility service further 
gives little incentive to qualify the unrestricted use of 
the termination power in order to be competitive or to 
retain good will from such customers. See Note, 86 
Harv. L.Rev. at 1477. Abuse of the termination power 
is common with utility employees evoking a “shocking­
ly callous and impersonal attitude” toward customers.* 46 
The irresponsible conduct of the Metropolitan Edison 
representative in this case is apparent when he indicated 
to Mrs. Jackson that a $30.00 payment would be 
required and would be accepted four days later, and, 
instead of returning to collect it, sent or allowed other 
company representatives to come and cut-off the 
electricity on that day.

Arbitrariness and unfairness further results from 
questionable billing practices and erroneous termina­
tions despite full payment of the bill. See Note, 48 
N.Y.U. L.Rev. supra at 515. Further, the unequal 
bargaining position of the consumer, particularly the 
low income consumer, makes it unlikely for him or her 
either to be familiar with or able to afford litigation 
remedies for a utility dispute.47 cf., Fuentes v. Shevin,

Bronson v. Consolidated Edison Co. o f  New York, supra, 
350 F.Supp. at 444.

46Palmer v. Columbia Gas o f Ohio, supra, 342 F.Supp. at 243, 
affd 479 F.2d 153. An employee’s response to a customer who 
claimed he paid a bill was “Tough. Pay the bill again.” 479 F.2d 
at 158. Another advised a cut-off victim, “Run around to keep 
warm.” Id. at 168.

47Palmer v. Columbia Gas o f  Ohio, 479 F.2d at 748-52. Other 
limitations on tort remedies include the delay and burden­
someness to a customer who would pay an unjust bill to avoid 
loss of service and expenses of litigation. See Note, 86 Harv. 
L.Rev. at 1477, n. 26.



40

407 U.S. at 83 n. 13 (1972). Finally, customers often 
have valid defenses and bases for contesting bills for the 
above and other reasons.48 Mrs. Jackson herself 
questioned, to no avail, whether she was legally liable 
for the utility services for which she claimed Dodson 
had contracted.

It is apparent that “unjust terminations exact a high 
personal and societal cost, as measured in demoraliza­
tion and frustration, and are offensive to our society’s 
basic notions of fairness.”49 It was this kind of 
frustration caused by a “lack of accessible and visible 
means of establishing the merits of grievances” that was 
highlighted as a key factor in the civil disorders of the 
1960’s.50

It is submitted that this Court’s rationale for 
applying due process protection in Goldberg v. Kelly, is 
certainly as applicable to the case of utility termina­
tions. Thus:

“ [T]he stakes are simply too high . . . and the
possibility for honest error or irritable misjudg-

48 Recognized customer claims and defenses which could be 
raised at prior hearings if the opportunity were provided include: 
overcharging mistakes and failure to record full payment or 
outstanding bills, Bronson, 350 F.Supp. at 445, supra, 342 
F.Supp. at 243; inaccurate or inoperative meter, Crews v. 
Jacksonville Elec. Authority, Pov. L.Rep. §13,647 (Fla. Cir. Ct.,
1971); inadequacy of service due to faulty utility equipment, 
York Tel. and Tel. Co. v. Pa. P.U.C., 181 Pa. Super. 11, 121 
A.2d 605 (1956); customer’s refusal to pay debt of prior owner 
or tenant, Tyrone Gas and Water Co. v. P.S.C., 77 Pa. Super. 292 
(1921); denial of service to wife upon husband’s refusal to pay 
his bill, Southwestern Bell Tel. Co. v. Batesmar, 266 S.W.2d 289 
(Ark. 1954) See also Shelton, 46 Wash. L.Rev. at 763-64.

49Note, supra, 86 Harv. L.Rev. at 1482.
50 See Report of the Nat’l Advisory Comm’n on Civil 

Disorders, 291 (1968). See also Amicus Brief of National 
Consumer Law Center, page 9, quote from “Mark Twain’s 
Notebook.”



41

ment too great, to allow termination . . . without 
giving . . .  the recipient a chance . . .  to be fully 
informed of the case against him so that he may 
contest its basis and produce evidence in rebuttal.” 
397 U.S. 254 at 266 (1970).

B. Due process for utility termination situa­
tions requires adequate prior notice of the 
nature and means of resolution of the 
dispute, and an opportunity for an oral 
hearing, prior to the termination of essential 
utility services.

While “due process is perhaps the least frozen 
concept of our law”, Griffin v. Illinois, 378 U.S. 1 
(1958) (Frankfurter J/concurring), it is apparent that 
when “protected interests” are at stake, the right to 
some kind of prior hearing is required. Perry v. 
Sindermann, 408 U.S. 593 (1972); Board o f Regents v. 
Roth, 408 U.S. 564, 569-70 (1972).

In this case, the Petitioner had a statutory 
entitlement to the continued receipt of electrical 
services to the extent that such services could not be 
terminated in the absence of due process of law. 66 Pa. 
Stat. Anno. §1171. In this regard, it has been held by 
this Court that property interests requiring constitu­
tional protection “extend well beyond the actual 
ownership of real estate, chattels or money” , Roth, 
supra at 572. They extend as well to “safeguard . . . the 
security of interests that a person has acquired in 
specific benefits.” Id. See also California Department o f  
Human Resources v. Java, 402 U.S. 121 (1971); 
Goldberg v. Kelly, supra. Thus, to have a property interest 
in a benefit, a person must have a legitimate claim of 
entitlement to it. Since protection must be afforded to 
“those claims upon which people rely in their daily 
lives,” such reliance must not be “arbitrarily under­



42

mined.” Roth, supra at 576-577. It cannot be doubted 
in this case that Mrs. Jackson and her children were 
arbitrarily deprived of an entitlement upon which they 
relied as a necessity of life.

Due process requires minimally that prior notice be 
provided that is “reasonably calculated, under all 
circumstances, to apprise interested parties of the 
pendency of the action and afford them an opportunity 
to present their objections,” Grannis v. Ordean, 234 
U.S. 385 (1914); Mullane v. Central Hanover Bank and 
Trust Co., 339 U.S. 306, 314 (1950); Fuentes v. 
Shevin, 407 U.S. 67, 80 (1972), at a hearing at a 
meaningful time and in a meaningful manner, Arm­
strong v. Manzo, 380 U.S. 545 (1965); Boddie v. 
Connecticut, 401 U.S. 371 (1971). Such hearing must 
take place before the utility customer is condemned to 
suffer a “grievous loss” . Joint Anti-Fascist Refugee 
Committee v. McGrath, 341 U.S. 123, 168 (1951) 
(Frankfurter, J., concuring). No state interest is present 
herein which warrants a deprivation prior to the 
hearing. Fuentes v. Shevin, 407 U.S. 67 (1972). The 
grievous loss to the customer outweighs any competing 
state interest, as Mrs. Jackson and her children can 
readily affirm.

A utility customer must be given a notice suffici­
ently in advance to permit adequate opportunity to 
prepare for and be present at the hearing. Mullane v. 
Central Hanover Bank and Trust Co., supra. The notice 
must provide the customer with the information he 
needs to quickly and intelligently take available steps to 
prevent the threatened termination of service. Palmer, 
479 F,2d at 166; Bronson, 350 F.Supp. at 450. Thus, 
the customer should be advised of the possibility of 
resolution of the dispute by contacting a particular 
company representative. Palmer, supra at 166. Further­



43

more, the notice should advise of the right to either 
appeal to the state regulatory commission or to have a 
de novo formal or informal hearing before the 
regulatory commission. Bronson, supra at 449. Of 
course, the customer must be advised of the right to 
continued utility service in the event that the dispute 
resolution procedure is invoked. Palmer, supra, 166. 
While the reasonableness of any notice procedure must 
be considered in the light of the circumstances of each 
particular case, Covey v. Town o f Somers, 351 U.S. 
141 (1956), it is submitted that the above notice 
requirements are the very rudiments of a fair warning 
procedure.51

There is currently insufficient or no notice to the 
consumer before termination despite requirements of 
some notice. Notwithstanding Metropolitan Edison’s 
tariff approved by the Commission, providing for 
“reasonable notice”, no notice whatsoever was provided 
to Mrs. Jackson prior to or on the Monday she was 
expecting a company representative to receive a $30.00 
payment; she made fruitless phone calls to company 
employees, even to the home of one of the employees, 
to protest and seek some redress. This case is illustrative 
of a pattern which has emerged from other federal 
utility termination cases.52 In addition, this case and

51 This Court has stressed the fact that particularly the 
uneducated, uninformed consumer cannot be presumed to know 
his legal rights or how to seek redress for them. Fuentes v. Shevin, 
407 U.S. at 83 n.13.

52 In Palmer “shut-offs [were] sometimes being made without 
warning . . . [W] hen the collectors went out to shut-off gas, they 
frequently did so without any announcement whatever to the 
consumer, even though the consumer was sitting right in his 
house, so that the first notice he would have of the shut-off was 
that his house got cold, or his kitchen range would not light. . .” 
342 F.Supp. at 243. Ohio law requires 24 hours’ notice before 
workmen could enter the home and disconnect the meter. Id. at 
245. In Davis v. Weir, absolutely no notice was provided the 
consumer-tenant before water service was shut-off. 328 F.Supp. 
at 320.



44

others attest to the inadequacy of notice when and if it 
does come. Although Mrs. Jackson was told that money 
was owing she was never even presented with any bills 
or explanation why she, rather than Dodson, should pay 
the entire sum allegedly owing.53 Nor was she warned 
that her electricity would be discontinued for failure to 
pay the bill.

Due process also requires an opportunity to be heard 
in a manner appropriate to the nature of the case. The 
hearing must naturally take place before an impartial 
third party. Morrissey v. Brewer, 408 U.S. 471 (1972); 
Goldberg v. Kelly, 397 U.S. at 267-71. The burden of 
proof should be placed on the utility company to prove 
that the bill is due. Wood v. City o f Auburn, 87 Me. at 
293. In addition, the utility customer must be 
permitted to examine the company’s records in 
advance, cross examine adverse witnesses and present 
his or her own case, with the assistance of a 
representative, if necessary. Goldberg v. Kelly, supra, at 
267-271.

The experience with utilities has shown that their 
shut-off and complaint procedures are grossly inade­
quate with “unresponsiveness or ‘runarounds’ the only 
answer to [the customer’s] inquiries.” Bronson, supra, 
350 F. Supp. at 448.54 No hearings are provided and

53In Bronson the consumer merely received a 3" x 8" slip of 
paper with a bare one sentence “we are sorry” notice that the 
court found constitutionally inadequate. 350 F.Supp. at 450. See 
also Palmer, supra, 342 F.Supp. at 242-44.

54See also, e.g., Palmer v. Columbia Gas Co., 342 F.Supp. at 
243-44; Note, supra, 48 N.Y.U. L.Rev. supra, at 517,



45

recourse to regulatory commissions for hearings have 
been generally fruitless.55 In addition, the alternative Qf 
“pay first and litigate later” as sanctioned by the Court 
of Appeals at (A-91) is simply a “non-alternative”56 
Bronson v. Consolidated Edison Co. o f  New York, 350 
F. Supp. at 449, for poor persons. Recourse to other 
formal or informal remedies are equally inadequate.57

It should be noted that a formal adjudicatory 
hearing, which the state regulatory agency could 
schedule and conduct, need not be the first or sole 
method of dispute resolution. Utilities may wish to 
establish complaint bureaus, under state regulation, 
before formal hearings are scheduled. These proceedings 
will undoubtedly lead to the prompt and low-cost 
resolution of most termination disputes, leaving the 
more protracted or complex disputes for the formal 
adjudicatory hearing. The experience in New York 
State, where the dual conference-type hearing and

55 The Petitioner herself filed a complaint with the Pa. Public 
Utility Commission to seek rulemaking hearings to establish rules 
for hearings prior to termination of service but the complaint, 
deemed a petition, was summarily dismissed. See footnote No. 
36 supra.

56 See Shelton, “The Shutoff of Utility Services for Nonpay­
ment: A Plight of the Poor.” 46 Wash. L.Rev. 745, 748-52 
(1971). The Third Circuit’s reference below to small claims 
courts 438 F.2d at 760 n. 11. entirely ignores the fact that these 
bodies have no equity powers and cannot restore terminated 
service, and further, that consumers are never given notice and 
do not otherwise know that these bodies exist to deal post-facto 
with billing disputes. See also Fuentes v. Shevin, 407 U.S. 67, 
83, n. 13 (1972).

57 See contra, Lucas v. Wisconsin Electric Power Co., 466 F.2d 
at 649, where the court held that adequate administrative 
remedies in fact existed in that case.



46

formal evidentiary-type hearing system utilizing impar­
tial Public Service Commission officers has been in use 
for some time, concretely demonstrates the workability 
and effectiveness of the due process procedures 
suggested above.58

The decision below relies heavily on the view that 
utility service is not so important as to warrant due 
process protection. This is refuted by this Court’s 
decisions above protecting similar interests or property 
entitlements. Board o f  Regents v. Roth, 408 U.S. 564 
(1972). This Court has further rejected as constitu­
tionally deficient, the procedures allowing for the 
taking of property pending a final judgment and those 
allowing for posting of a bond or security to regain 
property. Fuentes v. Shevin, 407 U.S. at 72-73.

The Court below also accepted the premise that 
utility service could be arbitrarily or wrongfully 
terminated and the wrong remedied by full payment of 
the disputed bill followed by a claim for a refund, in 
court if necessary. 483 F.2d at 760-61. (A-89). Even 
assuming the validity of the assumption that claiming 
and suing for a refund are available remedies, this 
premise ignores the recent holding of this Court that:

“ [N]o later hearing and no damage award can 
undo the fact that the arbitrary taking that was 
subject to the right of procedural due process has 
already occurred. ‘This Court has not embraced 
the general proposition that a wrong may be done 
if it can be undone.’ Stanley v. Illinois, 405 U.S. 
645, 647 . . .”

58See Amicus Brief of the Public Service Comm’n of the State 
of New York; see also Note, supra, 86 Harv. L.Rev. at 1503.



47

CONCLUSION

For the foregoing reasons, Petitioner respectfully 
requests that this Court reverse the Judgment and Order 
of the Third Circuit Court of Appeals, and hold that 
Respondent did act under color of law in terminating 
Petitioner’s electrical sendees without the adequate 
prior notice and opportunity to be heard required by 
due process of law. Petitioner requests that this case be 
remanded to the district court for a determination and 
further proceedings in accordance with the opinion 
herein.

Respectfully submitted:

ALAN LINDER, Esquire 
EUGENE F. ZENOBI, Esquire 
J. RICHARD GRAY, Esquire

TRI-COUNTY LEGAL SERVICES 
53 North Duke Street, Suite 457 
Lancaster, Pennsylvania 17602 
(717) 397-4236 

Attorneys for Petitioner

Of Counsel:
JONATHAN M. STEIN, Esquire

April 26, 1974



la

APPENDIX A

STATUTES , REGULATIONS AND TARIFFS

A. P en n sy lv an ia  Public  U tility Code

P enn sy lv an ia  S ta tu tes A nnotated , T itle  66 , Sections: .

a . 1452. Commission estab lish ed ; term s of office; qualifica tions 
of m em bers; chairm an; com pensation; quorum

(a) A comm ission to be  known as the P enn sy lv an ia  Public  Utility 
Commission is  h e reb y  c re a te d . The comm ission sh a ll consist of five 
m em bers who sh a ll be appoin ted  by  the  G o v ern o r, by  and w ith the  advice 
and consent of tw o -th ird s  of a ll the  m em bers of the S enate . The comm ission­
e rs  f irs t  appoin ted  u n d e r th is  a c t, sh a ll continue in  office for term s of two, 
fo u r , s i x , e ig h t , and  ten  y e a rs  , r e sp e c tiv e ly , from the effective date of
th is  ac t, bu t th e ir  su c c esso rs  sh a ll each be appointed  for a term  of ten  y e a rs . 
No com m issioner, upon the  ex p ira tio n  of h is term  as a fo re sa id , sh a ll con­
tin u e  to hold office u n til h is su ccesso r sha ll be duly appointed  or sha ll be 
q u alified . Each com m issioner, at the  time of h is appointm ent and qualific- 
c a tio n , sha ll be  a re s id en t of the  Commonwealth of P e n n sy lv a n ia , and sha ll 
have been  a qualified  e lector th e re in  for a p e rio d  of at least one y e a r  next 
preceeding h is  appointm ent, and sha ll also be not less  th an  th ir ty  y e a rs  of 
age.

(b) A mem ber d esig n ated  by  the G overnor sha ll be th e  chairm an of 
the  comm ission d u rin g  such  m em ber's term  of office. When p re se n t , the 
chairm an  sh a ll p re s id e  at all m eetings , bu t in  h is  absence a m em ber, d e s ig n ­
ated by  the  ch airm an , sha ll p re s id e  and sha ll e x e rc is e , for the time b e in g , 
a ll the pow ers of the  ch a irm a n .

(c) Each of the  com m issioners sha ll rece iv e  an annual sa la ry  of n in e ­
teen  th o u san d  d o lla rs ($19,000,00), except the  chairm an , who sha ll rece iv e  
an annual sa la ry  of tw enty  thousand  d o lla rs ($20,000.00) .

(d) T h ree  m em bers of the  comm ission sha ll constitu te  a quorum  who, 
for a ll p u rp o s e s , in c lu d in g  the m aking of any o rd e r o r the  ra tifica tio n  of any 
act done or o rd e r made by one or more of the co m m issioners, m ust act 
unanim ously . 1937, M arch 31, P .L . 160, §1; 1943, M arch 31, P .L . 32, §1;
1949, M arch 31, P .L . 369, No. 32, 81, 1957, Ju ly  16, P .L . 949, No. 408, §1.

b .  §461. Pow ers and du ties of com m ission.

The P ennsy lvan ia  Public  U tility Commission sh a ll ex erc ise  the pow ers and 
perform  the d u ties e x erc ised  and perform ed p r io r  to the effective date of th is 
act by  the  Public  Serv ice  Commission of the  Commonwealth of P en n sy lv an ia , 
and  any pow ers and du ties subseq u en tly  vested  in  and im posed upon the P enn sy lv an ia  
Public  U tility Commission by  law . 1937, M arch 31, P .L . 160, §10.

c . §462. A dditional pow ers and  du ties

The P ennsy lvan ia  Public  U tility Commission sha ll have the pow er and its 
du ties sha ll be  -

(a) To ad m in ister and enforce the ac t, app roved  the tw en ty -e ig h th  day of 
May, one th o u san d  n ine  h u n d re d  th ir ty -se v e n  (Pam phlet Law s, one thousand  
f if ty - th re e ) , desig n ated  as the "Public  U tility Law" , as am ended and su p p le ­
m ented , o r any law h e rea fte r  enacted  for the reg u la tio n  of p u b lic  u tilitie s .



2a

(b) To certify  to  the  D epartm ent of H ealth any qu estio n  of fact re g a rd in g  
the  p u rity  of w ater su p p lied  to the p u b lic  by  any p u b lic  se rv ice  company or . 
p ub lic  u tility  over w hich it has ju r is d ic t io n , when any such  question  a r is e s  
in  any co n tro v ersy  or o th er p ro ceed in g  befo re  i t , and  upon the  determ ination  
of su ch  question  b y  the  D epartm ent of H ealth , to in co rpora te  the  find ings of 
the b o a rd  th e reo n  in  i ts  decision  upon the co n tro v ersy  or o ther p ro ceed in g  
out of w hich the  qu estio n  a ro s e . 1937, M arch 31, P .L . 160, §11; 1941, Ju ly  8, 
P .L . 284, §1.

d . §1101 Short title

T h is act sha ll be k n o w n , and may be c ite d , as the "Public  U tility L aw ". 
1937, May 28, P .L . 1053, a r t .  I , §1.

e. §1121 O rganization  of p u b lic  u tilitie s  and b eg in n in g  of se rv ice .

Upon the ap proval of the  com m ission, ev idenced  b y  its  certificate  of 
p ub lic  convenience f irs t  had  and o b ta in e d , and not o th e rw ise , it sha ll be 
lawful for any p roposed  p u b lic  u t i l i ty .

(a) To be in c o rp o ra te d , o rg an ized , or created ; P ro v id e d , T hat ex is tin g  
law s re la tiv e  to the in co rp o ra tio n , o rg an izatio n , and c rea tion  of such  p ub lic  
u tilitie s sha ll f irs t  have been  com plied w ith , p r io r  to  the app lication  to the 
commission for its  certifica te  of p u b lic  co n v en ien ce .

(b) To beg in  to o ffe r , r e n d e r , fu rn ish , o r su p p ly  se rv ice  w ith in  th is  
Commonwealth, 1937, May 28, P .L . 1053, a r t . I I , §201. (em phasis added)

f. §1122. Enum eration of facts re q u ir in g  certificate

Upon ap proval of the  com m ission, ev idenced  by its  certifica te  of pub lic  con­
ven ience f irs t  had and o b ta in e d , and upon com pliance w ith ex is tin g  la w s , and 
not o therw ise  , it sha ll be lawful:

(a) For a fo reign  p ub lic  u tility  to ob tain  the r ig h t to do b u s in e ss  w ith in  th is 
Commonwealth, if ex is tin g  law s perm it such  foreign  p u b lic  u tility  to ex erc ise  its 
pow ers and fran ch ise s  w ith in  th is  Commonwealth.

(b) For any p ub lic  u tility  to renew  its  c h a r te r , o r obtain any additional r i g h t , 
p o w e r, fran ch ise  , o r p r iv ile g e , by  any amendm ent o r supplem ent to i ts  c h a r te r , 
or o th e rw ise .

(o) For any p ub lic  u tility  to beg in  the ex erc ise  of any additional r i g h t , pow er, 
f ra n c h ise , o r p r iv ile g e .

(d) For any p u b lic  u tility  to d isso lv e , or to abandon or s u r r e n d e r , in  whole 
o r in  p a r t ,  any s e rv ic e , r i g h t , p o w e r, fran ch ise  , or p riv ileg e : P ro v id e d ,
T hat the  p ro v isio n s of th is  p a rag ra p h  sha ll not app ly  to d iscontinuance of se rv ice  
to a p a tro n  for nonpaym ent of a b i l l ,  o r upon re q u est of a p a tro n ■ (em phasis a d d e d ) .

(e) For any pub lic  u t i l i ty , excep t a common c a r r ie r  by  ra ilro ad  subject
to the  In ters ta te  Commerce A ct, to acq u ire  from , o r to tra n s fe r  to , any p e rso n  or 
co rp o ra tio n , in c lu d in g  a m unicipal co rpora tion , by  any method or device w hatso­
e v e r ,  in c lu d in g  a conso lida tion , m e rg e r , sale  o r le a se , the title  to , or the 
p o ssessio n  or use  of, any tang ib le  o r in tan g ib le  p ro p e rty  u sed  or u sefu l in  the 
public  se rv ice : P ro v id e d , h o w ev er, That such  ap proval sha ll not be re q u ire d  - 
(1) if the  undep rec ia ted  book value of the p ro p e rty  to be acq u ired  or t ra n s fe rre d  
does not exceed one thousand  d o lla rs; or (2) if the u n d ep rec ia ted  book va lue  of the 
p ro p e rty  to be  acq u ired  or t ra n s fe r re d  does not exceed the le s se r  of -  (a) two 
p e r  centum  of the u n d ep rec ia ted  book value of a ll of the fixed a sse ts  of 
such  public  u t i l i ty , o r (b) five thousand  d o lla rs in  the  case of p e rso n ality  or



3a

fifty tho u san d  d o lla rs in  the  case of rea lty ; o r (3) if  the p ro p e rty  to be acq u ired  
is  to be in s ta lled  new as a p a r t  of o r consum ed in  the operation  of the used  and u se - 

'fu l  p ro p e rty  of su ch  p u b lic  u tility ; o r (4) if  the p ro p e rty  to be  tra n s fe r re d  by  such 
pub lic  u tility  is  o b so le te , w orn  out o r o therw ise  u n se rv ic e a b le .

But excep tions (1) , (2) , (3 ) , and  (4) sha ll not be  a p p lic ab le , and ap p ro v al of 
the  comm ission ev idenced  b y  a certifica te  of p u b lic  convenience sha ll be  r e q u ir e d , 
if any such  acqu isition  or tra n s fe r  of p ro p e rty  involves a t ra n s fe r  of p a tro n s .

(f) For any  p u b lic  u tility  to a cq u ire  five p e r  centum  or m ore of the voting  
cap ita l stock  of any c o rp o ra tio n .

(g) For any m unicipal co rpora tion  to a c q u ire , c o n s tru c t, o r b eg in  to operate  
any p la n t , eq u ip m en t, o r o th er fac ilities for the re n d e rin g  or fu rn ish in g  to the 
p ub lic  of any p u b lic  u tility  se rv ice  beyond  its  co rp o ra te  lim its , 1937, May
28, P .L . 1053, a r t .  II, §202; 1938, Sp . S e s s . ,  Sep t. 28, P .L . 44, §1; 1939, June  
19, P .L . 419, §1.

g . §1123 P ro ced u re  to  obtain c ertific a tes  of p u b lic  convenience

(a) E very  app lication  for a certifica te  of p u b lic  convenience sh a ll be made 
to the  com m ission, in  w r i t in g , be  v e rif ied  by  oath o r  a ffirm ation , and be in 
such  fo rm , an d  contain su ch  in fo rm ation , as the commission may re q u ire  by 
its r e g u la tio n s . A certifica te  of p ub lic  convenience sh a ll be g ra n te d  b y  o rd e r 
of th e  com m ission , only if and when the  commission sha ll find or determ ine 
that the  g ran tin g  of such  certifica te  is  n ece ssa ry  or p ro p e r for the  se rv ice  
accom odation, co n v en ien ce , o r safety of the p u b lic ; and the commission
in  g ra n tin g  such  c e r tif ic a te , may impose such  conditions as it may deem 
to be  ju s t  and re a so n a b le . In ev ery  ca se , the comm ission sha ll make a finding 
or determ ination  in  w r i t in g , sta tin g  w h e th er o r not its  approval is  g ra n te d . 
Any ho ld er of a certifica te  of p u b lic  convenience, e x e rc is in g  the  au th o rity  
con ferred  by  such  c e r tif ic a te , sha ll be deem ed to have w aived any and all 
objections to th e  term s and conditions of such  c e r tif ic a te .

(b) For the  p u rp o se  of en ab ling  the  commission to make such  find ing  or 
determ ination , it sha ll hold such  h e a r in g s , w hich sh a ll be p u b lic , an d , before  
or a fte r h e a r in g , it may make such  in q u ir ie s ,  p h y sica l ex am inations, v a lu a ­
tions , and  in v estig a tio n s , and may re q u ire  such  p la n s , sp ec if ica tio n s , and 
estim ates of co s t, as it may deem n ece ssa ry  or p ro p e r in  en ab ling  it to reach
a find ing  or de te rm in a tio n . 1937, May 28, P .L . 1053, a r t .  II, §203. (em phasis 
a d d e d ) .

h . §1124. C ertain  ap p ro p ria tio n s by  the r ig h t of em inent domain p ro h ib ited

N either a p roposed  dom estic p ub lic  u tility  h e rea fte r  in co rp o ra ted  nor 
a  fo re ign  pub lic  u tility  h e rea fte r au tho rized  to do b u s in e ss  in  th is  Commonwealth 
sha ll ex erc ise  any pow er of em inent domain w ith in  th is  Commonwealth u n til it 
sha ll have rece iv ed  the certifica te  of p u b lic  convenience re q u ire d  by section  201 
of th is  a c t. 1937, May 28, P .L . 1053, a r t .  II, §204, ad d ed , 1963, A ug. 28, P .L . 
1225, §3. 1

1. §1141. R ates to be  ju s t  and  re a so n a b le .

E very  ra te  m ad e , dem an d ed , o r rece iv ed  by  any p ub lic  u t i l i ty , o r by  any two 
or more p u b lic  u tilitie s  jo in tly , sha ll be ju s t  and re aso n a b le , and in conform ity 
w ith reg u la tio n s  o r o rd e rs  of the  commission; P ro v id e d , T hat only pub lic  u tility  
se rv ice  b e in g  fu rn ish e d  or re n d e re d  by  a  m unicipal co rp o ra tio n , o r by  the operating  
agencies of any m unicipal c o rp o ra tio n , beyond  its  corpora te  lim its , sha ll be sub ject 
to reg u la tio n  and contro l by  the comm ission as to  r a te s , w ith the same fo rc e , and in  like!



4a

m an n e r, as if su ch  se rv ice  w e re  re n d e re d  by  a  p u b lic  u tility . 1937, May 28, P .L . 
1953, a r t .  I l l ,  §301; 1939, M arch 21, P .L . 10, No. 11, §2.

j . §1142. T ariffs; filing  and  inspection

U nder su ch  reg u la tio n s  as the  comm ission may p r e s c r ib e , ev e ry  p ub lic  
u tility  sha ll file w ith  the  com m ission, w ith in  such  time and  in  such  form as the 
commission may d e s ig n a te , ta riffs  show ing a ll ra te s  estab lish ed  by  it and collected 
or en fo rc e d , o r to b e  co llected  or en fo rc e d , w ith in  the  ju risd ic tio n  of the com m ission. 
The ta riffs  of any  pub lic  u tility  a lso sub ject to the ju risd ic tio n  of a  Federal 
reg u la to ry  body sh a ll c o rre sp o n d , so fa r as p ra c tic a b le , to the  form of those p re sc r ib e d  
b y  such  F ed eral re g u la to ry  b o d y . E very  p u b lic  u tility  sh a ll keep copies of such 
ta riffs  open to p u b lic  inspection  u n d e r such  ru le s  and reg u la tio n s as the commission 
may p re s c r ib e .  1937, May 28, P .L . 1053, a r t .  III, §302.

k .  §1144. D iscrim ination in  ra te s

No p u b lic  u tility  s h a l l , as to r a te s , make or g ran t any un reaso n ab le  p re fe ren ce  
or advantage to  any p e rs o n , co rp o ra tio n , o r m unicipal co rp o ra tio n , o r sub ject any 
p e rso n , co rp o ra tio n , o r m unicipal corpora tion  to any un reaso n ab le  p re ju d ice  
o r d isad v an tag e . No p ub lic  u tility  sha ll e s tab lish  o r m aintain  any u n reasonab le  
d ifference as to  r a te s , e ith e r  as betw een localities o r as betw een c lasses  of 
s e rv ic e . U nless spec ia lly  au th o rized  by  th e  com m ission, no p ub lic  u tility  shall 
m ak e , d em and , or rece iv e  any g re a te r  ra te  in  th e  ag g reg a te  for the tran sp o rta tio n  
of p a sse n g e rs  o r p ro p e rty  of th e  same c la s s , o r for the  tran sm iss io n  of any m essage or 
conversa tion  for a sh o rte r  th an  for a longer d istance over the same line  o r route 
in  the  same d irec tio n , the  sh o r te r  b e in g  in c luded  w ith in  the  longer d is ta n c e , or any 
g re a te r  ra te  as a  th ro u g h  ra te  th an  the  ag g reg a te  of the  in term ediate  r a te s .
Nothing h e re in  contained sh a ll b e  deem ed to  p ro h ib it the  estab lishm ent of reasonab le  
zone o r g roup  system s , o r c lassifica tions of ra te s  o r , in the  case of common c a r r ie r s  , 
the  issu an ce  of e x cu rs io n , com m utation, o r o th er spec ia l t ic k e ts , at specia l r a te s , or 
the  g ra n tin g  of n o n tran sferab le  free  p a s s e s , o r p a sse s  at a d iscount to any o ffice r , 
em ployee, o r pen sio n er of su ch  common c a r r i e r . No ra te  ch arg ed  by a m unicipality  for 
any pub lic  u tility  se rv ice  re n d e re d  o r fu rn ish e d  beyond its  co rpora te  lim its shall 
be  co n sid ered  un ju stly  d isc rim inato ry  so le ly  by  reaso n  of the fact that a d ifferent 
ra te  is  ch arg ed  for a sim ilar se rv ice  w ith in  i ts  corpora te  l im its . 1937, May 28,
P .L . 1053, a r t .  I ll, §304. 1

1. §1148. V oluntary changes in  ra te s

(a) U nless the  comm ission o therw ise  o r d e r s , no p ub lic  u tility  sh a ll make 
any change in  any ex is tin g  and duly e s tab lish ed  r a te , excep t after six ty  days' 
notice to the  com m ission, w hich notice sha ll p la in ly  sta te  the changes p roposed  to 
be  made in  the  ra te s  th en  in  fo rc e , and the  time w hen the changed ra te s  w ill go into 
effec t. The p u b lic  u tility  sha ll also  g ive  su ch  notice of the p ro p o sed  changes
to o th er in te re s ted  p e rso n s as the comm ission in  its  d isc re tio n  may d i r e c t . All 
p roposed  changes sh a ll be show n by  filing  new ta r i f f s , o r supplem ents to ex is tin g  
ta riffs filed and  in  force  at the  tim e . The com m ission, for good cause show n, may 
allow changes in  r a te s , w ithout re q u ir in g  the s ix ty  d ay s ' n o tice , u n d e r such 
conditions as it may p re s c r ib e .

(b) W henever th e re  is  filed  w ith  th e  comm ission b y  any pub lic  u tility  any ta riff  
sta tin g  a new r a te , the comm ission m ay , e ith e r upon com plaint o r upon its  own 
m otion, upon reasonab le  n o tic e , e n te r  upon a h ea rin g  concern ing  the law fulness of 
such  r a te ,  and  p end ing  such  h earin g  and the  decision  th e re o n , the  com m ission,



5a

upon filing  w ith such  ta riff  and  d e liv e rin g  to the pub lic  u tility  affected th e reb y  
a statem ent in  w ritin g  of its  reaso n s  th e re fo r , m ay , at any time befo re  it becom es 
effective , su sp en d  the operation  of such  ra te  for a p eriod  not longer than  six  
months from the  tim e such  ra te  w ould o therw ise  become e ffec tive , and  an add itional 
period  of not m ore than  th ree  m onths p en d in g  such  d e c is io n . The ra te  in force 
when the ta r if f  s ta tin g  the new ra te  was filed sh a ll continue in  force  d u rin g  the 
p e rio d  of su sp e n s io n , u n less  the  comm ission sha ll e s tab lish  a tem porary  ra te  as 
au tho rized  in  section  th ree  h u n d re d  ten  of th is  act. The comm ission sh a ll con­
s id e r the  effect of such  su sp en sio n  in  finally  determ in ing  and p re sc r ib in g  the 
ra te s  to be th e re a fte r  ch arg ed  and collected by  such  p ub lic  u t i l i ty .

(c) If, a fte r such  h e a r in g , the comm ission finds any such  ra te  to be  u n ju s t, 
or u n re aso n a b le , o r in  anyw ise in  v io lation  of law , the  comm ission sha ll d e te r­
mine the ju s t  and reasonab le  ra te  to be  ch arg ed  or app lied  by  the pub lic  u tility  
for the se rv ice  in  q u estio n , and  sh a ll fix the  same by  o rd e r to be se rv ed  upon the 
p ub lic  u tility ; and  such  ra te  sh a ll th e re a fte r  be o b se rv ed  u n til changed as p ro ­
v ided  by th is  act. 1937, May 28 P .L . 1053, a r t .  I ll, §308.

m. §1149. Rates fixed on com plaint.

W henever the  com m ission, a fte r reasonab le  notice and h e a r in g , upon its  own 
motion or upon com plaint, finds that the ex is tin g  ra te s  of any p u b lic  u tility  for 
any se rv ice  a re  u n ju s t, u n reaso n ab le , o r in  anyw ise in  v io lation  of any 
p ro v isio n  of la w , the comm ission sh a ll determ ine the ju s t  and reasonab le  ra te s  
(includ ing  maximum o r minimum ra te s )  to be th e re a fte r  o b se rv ed  and in  force 
and sha ll fix the same by  o rd e r  to be se rv ed  upon the  pub lic  u t i l i ty , and such  
ra te s  sha ll constitu te  the  legal ra te s  of the p u b lic  u tility  u n til changed  as p ro ­
v ided  in  th is  a c t. W henever a p u b lic  u tility  does not itse lf p roduce  or genera te  
that w hich it d is tr ib u te s  , tran sm its  , o r fu rn ish es  to the pub lic  for com pensation , 
bu t ob tains the  same from ano ther s o u rc e , the commission sh a ll have the pow er 
and au tho rity  to in v estig a te  the  cost of such  p roduction  or g enera tion  in  any 
in v estiga tion  of the  reaso n ab len ess of the  ra te s  of such  p u b lic  u tility . 1937,
May 28, P . L .  1053, a r t .  I ll, §309.

n . §1171. C h arac te r of se rv ice  and fa c ilitie s .

E very  pub lic  u tility  sh a ll fu rn ish  and m aintain ad eq u a te , e ffic ien t, s a fe , and 
reasonab le  se rv ice  and  fa c ili t ie s , and sha ll make all such  r e p a i r s , c h a n g e s , 
a lte ra tio n s , su b s ti tu tio n s , ex tensions , and  im provem ents in  o r to such  se rv ice  
and facilities as sha ll be n ecessa ry  or p ro p e r for the accom odation, convenience 
and safety of its  p a tro n s , em ployees, and the p u b lic . Such se rv ice  also shall 
be  reaso n ab ly  continuous and w ithout un reaso n ab le  in te rru p tio n s  or d e la y .
Such se rv ic e  and facilities sha ll be  in  conform ity w ith  the reg u la tio n s and 
o rd e rs  of the com m ission. Subject to the p ro v isio n s of th is  act and the reg u la tio n s oi* 
o rd e rs  of the  com m ission, ev ery  pub lic  u tility  may have reaso n ab le  ru le s  and re g u la ­
tions govern ing  the  conditions u n d e r w hich it sh a ll be re q u ire d  to re n d e r  se rv ice . 
Any pub lic  u tility  se rv ice  b e in g  fu rn ish e d  o r re n d e re d  by  a m unicipal co rporation  
beyond its  corpora te  lim its sha ll be sub ject to reg u la tio n  and contro l b y  the 
commission as to se rv ice  and ex tensions w ith the  same force  and in  like m anner 
as if  such  se rv ice  w ere re n d e re d  by  a p u b lic  u tility . 1937, May 28, P . L .  1053, 
a r t .  IV, §401.

0. §1172. D iscrim ination in  se rv ice

No p ub lic  u tility  sh a ll, as to se rv ic e , make or g ran t any un reaso n ab le  p re fe r -



6a

ence o r advan tage  to any p e rso n , co rp o ra tio n , o r m unicipal co rp o ra tio n , o r 
sub ject any  p e rso n , co rp o ra tio n , o r m unicipal co rpora tion  to  any u n reasonab le  
p re ju d ice  o r d isad v an tag e . No p u b lic  u tility  sh a ll e s tab lish  o r m aintain any 
unreasonab le  d ifference  as to se rv ic e , e ith e r as betw een localities o r as betw een 
c lasses  of s e rv ic e , bu t no th ing  h e re in  contained sha ll be deem ed to p ro h ib it the 
estab lishm ent of reaso n ab le  c lassifica tions of se rv ic e . 1937, May 28 P L 1053 
a r t .  IV, 8402.

p .  §1182, S tandards of se rv ice  and facilities

The comm ission m ay , afte r reaso n ab le  notice and  h e a r in g , upon its  own motion 
or upon com plaint, p re sc r ib e  as to se rv ice  and fa c ilitie s , in c lud ing  the c ro ss in g  
of fac ilitie s , ju s t  and reaso n ab le  s ta n d a rd s , c la ss ifica tio n s , reg u la tio n s and 
p rac tice s  to be  fu rn ish e d , im posed, o b se rv ed , and followed by  any or a ll pub lic  
u tilitie s; p re sc r ib e  adequate  and reaso n ab le  s tan d ard s  for the m easurem ent of 
q u a n tity , q u a lity , p r e s s u re ,  in itia l vo ltag e , o r o ther condition p e rta in in g  
to the  su p p ly  of the  se rv ice  of any and  all p u b lic  u tilitie s; p re sc r ib e  reasonab le  
reg u la tio n s for th e  exam ination and te s tin g  of such  se rv ic e , and for the  m easurem ent 
thereof; p re sc r ib e  o r approve  reaso n ab le  r u l e s , r e g u la tio n s , sp ec ifica tio n s , and 
s ta n d a rd s  to  se c u re  the  accu racy  of all m eters and ap p liances for m easurem ent; and 
p ro v id e  for the  exam ination and tes tin g  of any and all app liances used  for the measurie 
ment of any se rv ice  of any p u b lic  u tility . 1937, May 28, P .L . 1053, a r t .  IV, §412; 193? 
Sp . S e s s . , Sept. 28, P .L . 44, §1.

q . §1183. R egulation of Serv ice

W henever the com m ission, afte r reaso n ab le  notice and h e a r in g , upon its  own 
motion o r upon com plaint, finds that the  se rv ice  or facilities of any pub lic  
u tility  a re  u n reaso n ab le , u n sa fe , in ad eq u ate , insufficien t o r un reaso n ab ly  d is ­
crim inatory  , o r o therw ise  in v io lation  of th is  a c t , the comm ission sha ll d e te r­
mine and p re sc r ib e  , by  reg u la tio n  or o r d e r , the reasonab le  , s a fe , ad eq u a te , 
su ffic ien t, se rv ice  o r facilities to be  o b se rv ed , fu rn ish e d , en fo rced , o r em ployed 
in c lu d in g  a ll such  r e p a i r s , c h a n g e s , a lte ra tio n s , e x te n s io n s , su b s ti tu tio n s , or 
im provem ents in  facilities as sha ll be reaso n ab ly  n ecessa ry  and p ro p e r  for the 
sa fe ty , accom odation, and convenience of the  p u b lic , and sha ll fix the same by 
its  o rd e r o r re g u la tio n . 1337, May 28, P .L . 1053, a r t .  IV, §413.

r .  §1211. M andatory system s of accounts

The comm ission m ay, afte r reaso n ab le  notice and h e a r in g , e s tab lish  system s 
of accounts (includ ing  cost find ing  p ro c ed u re s)  to be kept by  pub lic  u tilitie s , 
o r may c lassify  pub lic  u tilitie s  and  estab lish  a system  of accounts for each 
c la s s , and p re sc r ib e  the m anner and form in  w hich such  accounts sha ll be k e p t . 
E very  pub lic  u tility  sha ll e s tab lish  such  system s of accoun ting , and sha ll keep 
such  accounts in  the  m anner and form re q u ire d  by  the com m ission. The account­
in g  system  of any pub lic  u tility  also sub ject to  the ju risd ic tio n  of a Federal 
re g u la to ry  body sha ll c o rre sp o n d , as fa r as p ra c tic a b le , to the system  p re ­
sc rib ed  by  such  Federal re g u la to ry  body. P ro v id e d , That the commission may 
re q u ire  any su ch  p ub lic  u tility  to keep and m aintain supplem ental o r additional 
accounts to those  re q u ire d  by  any su ch  reg u la to ry  body . 1937, May 28, P .L . 
1053, a r t .  V, §501.



7 a

s .  §1217. Inspection  of books and  re co rd s  by  com m ission.

1 The comm ission sha ll at a ll tim es have access t o , and may designate  any of 
its  em ployees to in sp ec t and ex am ine , any and all accounts , re co rd s  , b o o k s , 
m aps, inv en to ries  , a p p ra isa ls  , va lua tions , o r o th er r e p o r t s , docum en ts, and 
m em oranda kep t by  p u b lic  u t i l i t ie s , o r p re p a re d  or kep t for them by  o thers; 
and the  comm ission may re q u ire  any p u b lic  u tility  to  file w ith the commission 
copies of any o r all of su ch  a cc o u n ts , r e c o r d s , b o o k s , m ap s , in v e n to r ie s , 
a p p ra is a ls , v a lu a tio n s , o r o th e r r e p o r t s , docum ents and m em oranda. 1937, 
May 28, P .L . 1053, a r t .  V, §507.

t .  §1241. R eg istra tion  of se c u ritie s  to be  issu e d  o r assum ed.

(a) U nder such  reg u la tio n s as the  commission may p r e s c r ib e , ev ery  public  
u t il i ty , before  it sha ll e x ec u te , cause  to be au th e n tic a te d , d e liv e r , o r make 
any change o r ex tension  in  any te rm , condition , o r date of, any stock c e rtif i­
cate o r o th er ev idence of equ itab le  in te re s t  in  i ts e lf , o r any b o n d , no te , t ru s t  
c e rtif ic a te , o r o th er ev idence of in d eb ted n ess of itse lf , any or all of w hich acts 
a re  h e re in a fte r  in cluded  in  the  term  "issu an ce  of s e c u r i t ie s " , sha ll have
filed with the  com m ission, and  sha ll have rece iv ed  from the  com m ission, notice 
of re g is tra tio n  of a document to be  known as a se c u ritie s  certificate: P ro v id ed , 
T hat n e ith e r (1) the  ex ecu tio n , au th en tica tio n , o r d e liv e ry  of se c u ritie s  to 
rep lace  id en tica l se c u ritie s  lo s t , m u tila ted , o r destro y ed  w hile in  the  ow nersh ip  
of a bona fide h o ld e r- fo r -v a lu e , who p ro p e rly  indem nifies the p u b lic  u t i l i ty , 
th e re fo r , nor (2) the  ex ecu tio n , au th en tica tio n , o r  d e liv e ry  of se c u ritie s  in 
exchange for the  su r re n d e r  of iden tica l s e c u r i t ie s , so le ly  for the  pu rp o se  
of re g is te r in g  or facilita ting  changes in  the  ow nersh ip  thereo f betw een 
bona fide h o ld e rs - fo r -v a lu e , w hich su rre n d e re d  se cu ritie s  a re  thereupon  
c an ce lled , no r (3) the d e liv e ry  from the tre a su ry  of the p ub lic  u tility  of 
se c u ritie s  p rev io u s ly  re ac q u ire d  from bona fide h o ld e rs -fo r-v a lu e  and held  
a liv e , sh a ll be deem ed an issu an ce  of se c u ritie s  u n d e r th is  subsection:
And p ro v id ed  f u r th e r , That the req u irem en ts  of th is  p a ra g ra p h  sha ll not 
app ly  to th e  issu an ce  of -  (1) any ev idence of in d e b te d n e ss , the  date of m aturity  , 
o r w hich is  at a p e rio d  of le s s  than  one y e a r  from the date of its  execu tion , (2) 
any ev idence of in d eb ted n ess for w hich no date of m atu rity  is  f ix e d , bu t w hich 
m atures upon dem and of the h o ld e r, (3) any ev idence of in d eb ted n ess in the 
n a tu re  of a con tract betw een a p u b lic  u tility  and a vendor of equipm ent w herein  the 
pub lic  u tility  p rom ises to pay installm ents upon the  p u rch ase  p rice  of equipm ent 
a cq u ired , and w hich is not in  the  form of an equipm ent t ru s t  certifica te  or 
sim ilar in stru m en t read ily  m arketab le  to the g en era l p u b lic .

(b) U nder such  reg u la tio n s as the comm ission may p re s c r ib e ,  ev e ry  p ub lic  
u t i l i ty , before  it sha ll assum e p rim ary  o r contingent liab ility  for the  paym ent
of any d iv idends upon any s to c k s , o r of any p rin c ip a l o r in te re s t of any in d eb ted ­
n e s s , c rea ted  or in c u rre d  by  any o th er p e rso n  o r co rp o ra tio n , any or all of 
w hich acts a re  h e re in a fte r  in cluded  in  the  term  "assum ption  of secu ritie s"  , 
sha ll have filed  w ith the com m ission, and sha ll have rece ived  from the  com m ission, 
notice of re g is tra tio n  of a document to be known as a  S ecu rities  C ertificate: 
P rov id ed , how ever, T hat the  req u irem en ts  of th is  p a ra g ra p h  sha ll not app ly  to 
an assum ption  of se c u ritie s  if  th e  comm ission sha ll have approved  the acquisition  
of a ll of th e  p ro p e rty  of th e  is su in g  company b y  the assum ing com pany, as p ro ­
v ided  in  p a ra g ra p h  (e) of section  two h u n d red  two of th is  a c t. 1937, May 28,
P .L . 1053, a r t .  VI, §601; 1938, Sp . S e s s . , Sep t. 28, P .L . 44, §1.

u . §1271. C ontracts for se rv ic e s .

(a) Within th ir ty  days a fte r the  effective date of th is  a c t , ev ery  p ub lic  
u tility  hav in g  in  force any contract w ith an  affiliated  in te re s t for the fu rn ish in g



8a

to su ch  p ub lic  u tility  of any m anagem ent, s u p e rv is o ry , p u rc h a s in g , co n stru c ­
tion  , e n g in e e r in g , f in an c in g , o r  o th er s e rv ic e s , sha ll file a  copy of such  con­
tra c t , o r  if  o ra l, a  complete statem ent of the  term s and conditions th e reo f, w ith 
the com m ission.

(b) E very  pub lic  u tility  w hich sha ll h e rea fte r  en te r in to  any such  con­
trac t , o r  w hich sha ll change any su ch  ex is tin g  c o n tra c t, sha ll file a copy of 
such  con tract w ith the  comm ission w ith in  ten  days a fte r i ts  execution  or c h a rg e .

(c) The commission sha ll have au th o rity  at any time to in v estig a te  ev ery  such  
contract filed  in  accordance w ith th is  sec tion , a n d , if  after reasonab le  notice and 
h e a r in g , it sh a ll determ ine th a t the  am ounts p a id  o r p ayab le  th e re u n d e r  a re  in  
excess of th e  reasonab le  cost of fu rn ish in g  the  se rv ice s  p ro v id ed  for in  the 
c o n tra c t, o r th a t such  se rv ice s  a re  not reaso n ab ly  n e ce ssa ry  and p r o p e r , it sha ll 
o rd e r su ch  am o u n ts, in  so fa r as found e x cess iv e , to be  s tr ick e n  from the  books 
of account of th e  p u b lic  u tility  as ch arg es  to fixed  cap ita l, o r o p era tin g  
e x p en ses , as th e  case  may b e ,  and sh a ll not co n sid er such  am ounts in  any p ro ­
ceed ing  . In any p ro ceed in g  in v o lv ing  such  am oun ts, the b u rd e n  of p roof to 
show th a t su ch  amounts a re  not in  ex cess  of the reaso n ab le  cost of fu rn ish in g  
such  s e rv ic e , and  th a t such  se rv ice s  a re  reaso n ab le  and p r o p e r , sha ll be on
the p ub lic  u t i l i ty . 1937, May 28, P .L . 1053, a r t .  VII, §701.

v . §1276. C ontracts in  v io lation  of act void

E very  con tract w ith an affiliated in te r e s t , made effective o r modified in  
v iolation of any p ro v isio n  of th is  a c t , o r of any reg u la tio n  or o rd e r  of the 
comm ission made u n d e r th is  a c t , sh a ll be void; and any p u rc h a s e , s a le , pay ­
ment , le a s e , loan o r exchange of any s e rv ic e , p ro p e r ty , m oney , s e c u r i ty , 
r ig h t , o r  th in g  u n d e r such  c o n tra c t, o r u n d e r any contract w ith an affiliated in te re s t , 
the  term s of w hich sha ll have been  b reach ed  by  the affiliated  in te r e s t , sh a ll be 
unlaw ful. 1937, May 28, P .L . 1053, a r t .  VII, §706.

w . §1341. A dm inistra tive  au th o rity  of commission; reg u la tio n s

The comm ission sh a ll have g en era l adm in istra tive  pow er and au thority  
to su p e rv ise  and reg u la te  a ll p u b lic  u tilitie s  doing b u s in e ss  w ith in  th is  
Commonwealth. The comm ission may make such  re g u la tio n s , not inconsis ten t 
w ith the  la w , as may be n ece ssa ry  or p ro p e r  in  the ex erc ise  of its  pow ers or 
for the  perform ance of i ts  du ties u n d e r th is  act. 1937, May 28, P .L . 1053, 
a r t .  IX, §901.

x . §1342. Commission to enforce act

In addition  to  any pow ers he re in b efo re  ex p re ss ly  enum erated  in th is  a c t , 
the comm ission sha ll have fu ll pow er and a u th o rity , and it sha ll be i ts  d u ty , 
to e n fo rc e , e x ec u te , and c a r ry  o u t , by  its  re g u la tio n s , o r d e r s , o r o th e rw ise , 
all and s in g u la r  the  p rov isions of th is  a c t , and the fu ll in ten t thereof; and sha ll 
have the  pow er to re sc in d  or modify any such  reg u la tio n s or o r d e r s . The ex p ress  
enum eration  of the  pow ers of the  comm ission in  th is  act sha ll not exclude 
any pow er w hich the  comm ission w ould o therw ise  have u n d e r any of the 
p ro v isio n s of th is  act. 1937, May 28, P .L . 1053, a r t .  IX, §902.

y .  §1343. Enforcem ent p ro ceed in g s by  commission

W henever the  comm ission sha ll be  of opinion that any p e rso n  o r corporation  
in clud ing  a m unicipal c o rp o ra tio n , is  v io la tin g , o r is  about to v io la te , any



9a

p ro v isio n s of th is  act; o r  has d o n e , o r is  about to do, any a c t , m a tte r , or 
th in g  h e re in  p ro h ib ited  o r d ec lared  to be unlaw ful; o r has fa ile d , om itted , 
•neglected, o r re fu sed , o r  is  about to fa il, om it, n eg lec t, o r re fu se , to perform  
any du ty  enjo ined upon it by  th is  act; o r has fa iled , om itted , neg lected  or re fu sed  
or is  about to fa il, om it, n eg lec t, o r re fu se  to obey any law ful req u ire m e n t, r e ­
gu la tion , o r o rd e r  made by the commission; or any final ju d g m en t, o rd e r ,  or 
decree  made b y  any c o u rt, th en  and  in  ev ery  case the  comm ission may 
in stitu te  in  the  court of common p leas of D auphin C o u n ty , in ju n c tio n , m andam us, oi( 
o th er a p p ro p ria te  lega l p ro ceed in g s , to re s tra in  such  v io la tions of the  p ro ­
v is io n s of th is  a c t , o r  of the reg u la tio n s , o r o rd e rs  of the com m ission, and to 
enforce obedience th ere to ; and such  court of common p leas is  h e reb y  clothed 
w ith ex clusive  ju r isd ic tio n  th ro ughou t the Commonwealth to h ear and determ ine 
a ll su ch  a c tio n s . No in junction  bond sh a ll be  re q u ire d  to be filed  by  the 
com m ission. Such p e rso n s  , co rpora tions , o r m unicipal corpora tions as the 
court may deem n e ce ssa ry  o r p ro p e r  to be  jo in ed  as p a r t i e s , in  o rd e r  to make its  
ju dgm en t, o rd e r o r w rit e ffec tiv e , may be jo ined  as p a r t i e s . The final 
judgm ent in  any such  action or p ro ceed in g  sha ll e ith e r d ism iss the action or 
p ro ceed in g , o r d irec t th a t th e  w rit of m andam us or in junction  issu e  o r be made 
perm anent as p ra y ed  for in  th e  p e tit io n , o r in  such  m odified or o ther form as w ill 
afford a p p ro p ria te  re lie f . 1937, May 28, P .L . 1053, a r t .  IX, §903, as am ended ,
1971 Ju n e  3, P .L . No. 6, §1 (§509 (a) (115)).

z. §1345. R eports b y  p ub lic  u tilitie s

The comm ission may re q u ire  any p u b lic  u tility  to file p e rio d ica l re p o rts  
at su ch  tim es and in  such  fo rm , and of such  c o n te n t, as the  comm ission may 
p r e s c r ib e , and spec ia l re p o rts  co n cern ing  any m atter w hatsoever about w hich 
the comm ission is au tho rized  to in q u ire  , o r  to keep its e lf  in fo rm ed , o r w hich 
it is  re q u ire d  to en fo rc e . The comm ission may re q u ire  any p u b lic  u tility  to 
file w ith it a copy of any re p o rt  filed  by  such  p u b lic  u tility  w ith any Federal 
departm ent o r re g u la to ry  b o d y . All re p o rts  sha ll be  u n d e r oath or affirm ation 
when re q u ire d  by  the  com m ission. 1937, May 28, P .L . 1053, a r t .  IX, §905.

aa . §1347. A dherence to reg u la tio n s and o rd e rs  of comm ission and co u rts .

E very  p ub lic  u t i l i ty , its  o ff ice rs , a g e n ts , and em ployees , and ev ery  o ther 
p e rso n  or corpora tion  sub ject to the  p ro v isio n s of th is  ac t, affected by  or sub ject to 
any reg u la tio n s or o rd e rs  of the  com m ission , o r of any c o u r t , m ad e , i s s u e d , or 
en tered  u n d e r the  p ro v isio n s of th is  ac t, sha ll o b se rv e , obey and comply w ith 
such  reg u la tio n s o r o rd e rs ,  and the term s and condition th e reo f, so long as the 
same sha ll rem ain  in fo rce . 1937, May 28, P .L . 1053, a r t .  IX, §907.

b b . §1348. Inspection  of, and access to , facilities and re co rd s  of public  u tilitie s

The comm ission sha ll have full pow er and a u th o r ity , e ith e r by  or th ro u g h  its  
m em bers, o r du ly  au th o rized  re p re se n ta tiv e s , w henever it sha ll deem it n ecessa ry io r 
p r o p e r , in  c a rry in g  out any of the  p rov isio n s of th is  a c t , o r its  d u ties u n d e r th is  a i t , 
to en te r upon the  p rem ises , b u ild in g s , m achinery  sy s te m , p la n t , and equipm ent 
and make any in sp ec tio n , va lu a tio n , p h y sica l exam ination , in q u iry , or in v es tig a ­
tion of any and  all p lan t and equipm ent, fac ilitie s , p ro p e rty , and p e rtin en t recordsl, 
boo k s, p a p e rs ,  m em oranda, docum ents, o r effects w h a tso ev er, of any public  
u t i l i ty , and  to hold any h earin g  for such  p u rp o se s . In the perform ance of such  
d u tie s , the comm ission may have access to , and use  any boo k s, r e c o rd s , o r docu­
m ents in  the  po ssessio n  of, any d ep artm en t, b o a rd , or comm ission of the Common­



10a

w ealth , o r any po litica l su b d iv is io n  th ereo f. 1937, May 28, P .L . 1053, a r t .  IX,
§908.

cc . §1360. C ontracts; pow er of th e  comm ission to v a ry ,  reform  or re v ise

The comm ission sha ll have pow er and  au th o rity  to v a ry  , re fo rm , o r r e v is e , 
upon a fa ir ,  re aso n a b le , and equ itab le  b a s is ,  any ob lig a tio n s , te rm s , o r conditions 
of any con tract hereto fo re  o r  h e rea fte r  e n te red  in to  betw een  any p ub lic  u tility  and 
any p e r s o n , c o rp o ra tio n , o r m unicipal co rpora tion  w hich em brace or concern  
a p ub lic  r i g h t , b e n e fit , p r iv ile g e , d u ty , o r f ra n c h is e , o r the g ran t th e re o f , or 
a re  o therw ise  affected o r concerned  w ith th e  p u b lic  in te re s t and the  g en era l well 
b e in g  of the  Commonwealth.

W henever the  comm ission sh a ll d e te rm in e , after reaso n ab le  notice and h e a r in g , 
upon its  own motion or upon com pla in t, th a t any su ch  o b lig a tio n s , te rm s , o r 
conditions a re  u n ju s t,  u n re a so n a b le , in e q u itab le , o r  o therw ise  co n tra ry  or 
ad v erse  to the  p u b lic  in te re s t  and  the  g en era l w ell b e in g  of the Com monwealth, the
comm ission sha ll determ ine and p re sc r ib e  by  fin d in g s and o r d e r , the ju s t ,  re aso n ­
ab le , and  equ itab le  o b lig a tio n s , term s and  conditions of such  c o n tra c t. Such con­
tr a c t ,  as m odified b y  th e  o rd e r  of the  com m ission, sha ll become effective th ir ty  
days a fte r th e  se rv ice  of su ch  o rd e r  upon the  p a r tie s  to such  c o n tra c t. 1937,
May 28, P .L . 1053, a r t .  IX, §920.

d d . §1391. Com plaints

The com m ission, o r any p e rso n , co rp o ra tio n , o r m unicipal co rporation  hav ing  
an in te re s t  in  the  sub jec t m a tte r , o r any p ub lic  u tility  c o n ce rn ed , may complain 
in  w r i t in g , se ttin g  fo rth  any act o r  th in g  done or om itted to  be done by  any pub lic  
u tility  in  v io la tio n , o r  claim ed v io la tio n , of any law w hich the  comm ission has ju r is  
diction to a d m in is te r , o r of any reg u la tio n  o r o rd e r  of th e  com m ission. Any public  
u tility , o r o th er p e r s o n , o r c o rp o ra tio n , sub ject to  th is  a c t, likew ise  may complain 
of any re g u la tio n  or o rd e r  of the  com m ission, w hich th e  com plainant is  o r has been 
re q u ire d  by  the  comm ission to o b se rv e  o r c a r ry  into e ffec t. T he com m ission , by 
re g u la tio n , may p re sc r ib e  the  form of com plaints filed  u n d e r th is  se c tio n . 1937, 
May 28, P .L . 1053, a r t .  X, §1001.

ee. §1395. D ecisions by  comm ission

After the  conclusion  of the  h e a r in g , the  comm ission sha ll make and file its 
find ings and  o rd e r w ith i ts  o p in io n , if  a n y . Its  find ings sha ll be in  sufficient 
deta il to enable the  co u rt on a p p e a l, to determ ine the con tro v erted  question  
p re sen ted  by  th e  p ro c e e d in g , and  w hether p ro p e r w eight was g iven  to the  ev id ­
ence . A copy of such  o r d e r , c ertified  u n d e r the  seal of the com m ission, shall 
be  se rv e d  by  re g is te re d  mail upon th e  p e r s o n , corpora tion  or m unicipal corporation  
ag a in st whom it r u n s , o r  h is  a tto rn e y , and notice th e reo f sha ll be g iven  to the 
o th er p a r tie s  to the p ro c e e d in g s , o r th e ir  a tto rn e y . Such o rd e r sh a ll take 
effect and become op erativ e  as d esig n ated  th e re in , and sha ll continue in  force 
e ith e r for a p e rio d  w hich may b e  desig n ated  th e re in , or u n til changed or revoked  
by  th e  com m ission. If an  o rd e r  c an n o t, in  the  judgm ent of the  com m ission, be 
com plied w ith  w ith in  the tim e d esignated  th e re in , the  comm ission may g ran t and 
p re sc r ib e  su ch  additional time , a s ,  in  i ts  ju d g m e n t, is  reaso n ab ly  n ece ssa ry  to 
comply w ith  the  o r d e r , and m ay , on app lication  and for good cause sh o w n , 
ex tend  the time for com pliance fixed  in  its  o r d e r . 1937, May 28, P .L . 1053, a r t .
X, §1005.



The comm ission m ay , on its  own motion and w henever it may be n ece ssa ry  in  
the perform ance of its  d u t ie s , in v estig a te  and exam ine the  condition and m anage­
ment of any p u b lic  u tility  o r any o th er p e rso n  o r corpora tion  sub ject to th is  act.
In conducting  such  in v estig a tio n s the comm ission may p ro c e e d , e ith e r w ith or 
w ithout a h e a rin g , as it may deem b e s t,  bu t it sh a ll make no o rd e r  w ithout afford­
in g  the  p a r tie s  affected th e re b y  a h e a rin g . 1937, May 28, P .L . 1053, a r t .  X, §1008

ff. §1398. Investigations

B . U tilities G ross R eceip ts Tax

72 P .S . §8101

E very  ra ilro a d  com pany , p ipeline  com pany , conduit com pany, steam boat 
company , canal com pany , slack  w ater nav igation  com pany , tran sp o rta tio n  
com pany, and  ev ery  o th er com pany, assoc ia tion , jo in t-s to ck  asso c ia tio n , o r 
lim ited p a r tn e r s h ip , now o r h e rea fte r  in co rp o ra ted  or o rgan ized  by or u n d e r any 
law of th is  Commonwealth, o r now or h e rea fte r  o rgan ized  or in co rp o ra ted  by  any oth|er 
sta te  o r by  the United States o r any foreign  go v ern m en t, and doing b u s in e ss  in 
th is  Commonwealth, and ev ery  c o p a r tn e rs h ip , p e rso n  or p e rso n s  o w n in g , o p e ra t­
ing  o r leasin g  to o r from ano th er co rp o ra tio n , com pany, a sso c ia tion , jo in t-s to ck  
a sso c ia tio n , lim ited p a r tn e r s h ip , c o p a r tn e rs h ip , p e rso n  or p e r s o n s , any r a i l ­
ro a d , p ip e lin e , condu it, steam boat, c an a l, slack  w ater n av iga tion , o r o th er device 
for the  tran sp o rta tio n  of f re ig h t , p a s s e n g e r s , b a g g a g e , o r o i l , except ta x ic a b s , 
motor b u se s  and motor o m n ib u ses, and ev ery  lim ited p a r tn e r s h ip , a sso c ia tio n , 
jo in t-s to ck  assoc ia tion , corpora tion  or company engaged  in ,  o r  h e rea fte r  engaged 
in ,  the  tran sp o rta tio n  of f re ig h t o r oil w ith in  th is  S ta te , and ev ery  telephone 
com pany, te leg rap h  com pany, e x p re ss  com pany, e lec tric  ligh t com pany, w a te r­
pow er com pany , h y d ro e lec tric  com pany , gas com pany, palace  car company and 
s leep in g  c a r  com pany , how or h e rea fte r  in co rp o ra ted  or o rg an ized  by  or u n d e r any 
law of th is  Commonwealth, o r now or h e rea fte r  o rgan ized  or in co rp o ra ted  by  any 
o th er sta te  o r by  the United S ta tes o r any foreign  governm ent and doing b u s in e ss  in 
th is  Commonwealth, and ev ery  lim ited p a r tn e rsh ip , assoc ia tion , jo in t-s to ck  assoc ia tion , 
co p a rtn e rsh ip , p e rso n  o r p e rso n s , engaged  in telephone, te le g ra p h , e x p re s s ,  e lectric  
ligh t an d  p o w e r, w a terp o w er, h y d ro -e le c tr ic , g a s , pa lace  c a r  o r sleep in g  car b u sin ess  
in  th is  Commonwealth, sha ll pay  the the  State T re a s u re r ,  th ro u g h  the Departm ent of 
R ev en u e , a tax  of fo rty -fiv e  m ills upon each do llar of the g ro ss  re ce ip ts  of the c o rp o ra ­
tio n , company or a sso c ia tion , lim ited p a r tn e rsh ip , jo in t-s to ck  asso c ia tio n , c o p a rtn e r­
sh ip  , p e rso n  or p e r s o n s , rece iv ed  from p a s s e n g e r s , b a g g a g e , and fre ig h t tran sp o rte d  
w holly w ith in  th is  S ta te , from e x p re s s , palace c a r  o r sleep ing  car b u s in e ss  done 
wholly w ith in  th is  S ta te , o r from the sa les  of e lec tric  en erg y  o r g a s , excep t g ross 
re ce ip ts  d e riv ed  from sa les  of gas to any m unicipality  owned o r operated  p ub lic  u tility  
and excep t g ro ss  re ce ip ts  d e riv ed  from the sa les  o r re sa le  of e lec tric  en ergy  or g a s , to 
p e rso n s , p a r tn e rsh ip s , asso c ia tio n s, corpora tions o r po litica l su b d iv isio n s sub ject 
to the  tax  im posed by  th is  act upon g ro ss  re ce ip ts  d e riv ed  from such  re sa le  and 
from the tran sp o rta tio n  of oil done wholly w ith in  th is  S ta te . The g ro ss  re ce ip ts  of 
gas com panies sha ll include  the g ro ss  re ce ip ts  from the  sa le  of a rtific ia l and n a tu ra l 
g a s , b u t sha ll not include g ro ss  re ce ip ts  from the sale of liquefied  petro leum  g a s .
The sa id  tax  sha ll be paid  w ith in  the time p re sc r ib e d  by  law , and for the p u rpose  
of a sc e rta in in g  the amount of the sam e , it sha ll be  the du ty  of the t re a s u re r  o r  o ther 
p ro p e r officer of the said  com pany , c o p a r tn e rs h ip , lim ited p a r tn e r s h ip , a sso c ia tio n , 
jo in t-s to ck  association  o r co rp o ra tio n , o r p e rso n  or p e rso n s , d e riv ed  from all sou rces 
and  of g ro ss  re ce ip ts  from b u s in e ss  done w holly w ith in  th is  S ta te , d u rin g  the  p e rio d  
of tw elve m onths im m ediately p reced in g  Ja n u a ry  1 of each y e a r . It sh a ll be the fu r th e r  
du ty  of the tr e a s u re r  o r o th er p ro p e r officer of ev ery  such  co rporation  or association  and 
ev ery  in d iv id u a l liab le  by  law to re p o rt  o r pay sa id  t a x , excep t m u n ic ip a litie s , to



12a

tran sm it to the  D epartm ent of R evenue on or before  A pril 30 of each y e a r , a 
ten ta tiv e  re p o rt  in  like  form and  m anner for each tw elve month p e rio d  b eg in n in g  
Ja n u a ry  1, of each y e a r .  The ten ta tiv e  re p o rt sh a ll set fo rth  (i) the  amount of 
g ro ss  re ce ip t rece iv ed  in  the p e rio d  of tw elve m onths next p reced in g  and rep o rted  
in  th e  annual re p o rt; o r (ii) the  g ro ss  re ce ip ts  rece iv ed  in  the  f irs t th re e  m onths 
of the  c u r re n t  p e rio d  of tw elve m onths; and  (iii) such  o th er inform ation as the 
D epartm ent of R evenue may r e q u ir e .

Upon th e  date its  ten ta tiv e  re p o rt is  re q u ire d  to be  m ade , the c o rp o ra tio n , 
association  or in d iv id u a l m aking the  re p o rt sha ll compute and  pay to the D ep art­
ment of R evenue on account of the  tax  due for the  c u rre n t  p e rio d  of tw elve m onths 
at i ts  election  (i) for the  y e a r  1971 not le s s  th an  tw en ty -n in e  and  o n e -th ird  m ills 
of the  do lla r amount of its  g ro ss  re ce ip ts  re p o rte d  for the e n tire  p reced in g  p e rio d  of 
tw elve m onths; o r (ii) for the  y e a r  1971 not le s s  than  one h u n d re d  and seven teen  and 
o n e -th ird  m ills of the d o lla r amount of its  g ro ss  rece ip t rece iv ed  w ith in  the  f irs t 
th ree  m onths of the  c u rre n t  p e rio d  of tw elve m o n th s. N otw ithstanding any o th er 
p ro v isio n  in  th is  section  to the  c o n tra ry , for the  y e a r  1972 and each y e a r  th e re a fte r  
the  c o rp o ra tio n , association  or in d iv id u a l m aking a ten ta tive  re p o rt sha ll tran sm it 
such  re p o rt  to the  D epartm ent of R evenue on account of the tax  due for the  c u rre n t 
p e rio d  of tw elve m onths and compute and  make paym ent w ith such  re p o rt p u rsu a n t 
to the p ro v isio n s of the  act of M arch 16, 1970 (P .L . 180) .

The time for filing  re p o rts  may be e x te n d e d , estim ated  se ttlem ents may be made 
by the  D epartm ent of R evenue if  re p o rts  a re  not f i le d , and the pen altie s  for fa il­
ing  to file re p o rts  and  pay the  tax  sha ll be  as p re sc r ib e d  by the  laws defin ing  the  
pow ers and d u ties of the  D epartm ent of R ev en u e . In any case w here  the  w orks of ahy 
c o rp o ra tio n , com pany , c o p a r tn e rs h ip , a sso c ia tio n , jo in t-s to ck  asso c ia tio n , lim ited 
p a r tn e r s h ip , p e rso n  or p e r s o n s , the  taxes im posed by  th is  section  sha ll be ap p o r­
tioned  betw een the co rpora tions , co m pan ies, c o p a r tn e rs h ip s , a sso c ia tio n s , jo in t- 
stock  a sso c ia tio n s , lim ited p a r tn e r s h ip s , p e rso n  or p e rso n s  in  accordance with 
the  term s of th e ir  re sp ec tiv e  leases o r ag reem en t, bu t for the  paym ent of the  said  
tax es th e  Commonwealth sh a ll f irs t  look to the  c o rp o ra tio n , com pany , c o p a rtn e r­
sh ip , a sso c ia tion , jo in t-s to ck  asso c ia tio n , lim ited p a r tn e r s h ip , p e rso n  or p e rso n s  
o p era tin g  the w o rk s , and upon paym ent by  the sa id  com pany , c o rp o ra tio n , co­
p a r tn e rsh ip  , assoc ia tion , jo in t-s to ck  asso c ia tio n , lim ited p a r tn e r s h ip , p e rso n  or 
p e rso n s  of a tax  upon the  r e c e ip ts , as h e re in  p ro v id e d , d e riv ed  from the o p e ra ­
tion th e reo f, no o th er c o rp o ra tio n , com pany , c o p a r tn e rs h ip , a sso c ia tio n , jo in t- 
stock asso c ia tio n , lim ited p a r tn e r s h ip , p e rso n  or p e rso n s  sha ll be held  liab le  undej- 
th is  section  for any tax  upon the p ro p o rtio n  of sa id  re ce ip ts  rece iv ed  by  said 
co rp o ra tio n , com pany , c o p a r tn e rs h ip , a sso c ia tio n , jo in t-s to ck  asso c ia tion , 
lim ited p a r tn e rsh ip  , p e rso n  o r p e rso n s  for the use  of sa id  w o rk s .

T h is a rtic le  sha ll be  co n stru ed  to  app ly  to m u n ic ip a litie s , and to impose a 
tax  upon the  g ro ss  re ce ip ts  d e riv ed  from any m unicipality  owned or o p erated  public  
u tility  o r from any p ub lic  u tility  se rv ice  fu rn ish e d  by  any m u n ic ip a lity , except 
that g ro ss  re ce ip ts  sha ll be  exem pt from the  ta x , to the ex ten t that such  g ro ss  
re ce ip ts  a re  d e riv ed  from b u s in e ss  done in s id e  the lim its of the m u n ic ip a lity , 
ow ning or op eratin g  the  p u b lic  u tility  o r fu rn ish in g  the  p u b lic  u tility  se rv ice .
1971, M arch 4, P .L . - ,  No. 2, a r t .  X I, §1101, as am ended 1971, Aug. 31, P .L . - ,
No. 93, §7.

C . Pa , P .U .C . - T ariff R egulations 

a . Section II. PUBLIC NOTICE OF TARIFF CHANGES

1. U nless the  Commission o therw ise  o rd e rs ,  no p ub lic  u tility  to w hich these  
ru le s  app ly  sha ll make any change in any ex is tin g  and duly e stab lish ed  ta riff  
except a fte r six ty  (60) d ay s ' notice to the p u b lic .



13a

2. Each notice sh a ll p la in ly  sta te  the changes p ro p o sed  in  the  ta riff  
then  in  fo rc e , and  the  date on w hich the  changes w ill become e ffec tiv e .
(See Section I I I ) .

b . Section VIII. DISCOUNT FOR PROMPT PAYMENT AND PENALTIES FOR DELAYER! 
PAYMENT OF BILLS

E very  p ub lic  u tility  th a t im poses p en altie s  upon its  custom ers for fa ilu re  to 
pay b ills  p ro m p tly , o r allows its  custom ers d iscoun ts for p rom pt paym ent of 
b i l l s , sh a ll p ro v id e  in  its  posted  and filed  ta riffs  a ru le  se ttin g  forth  c learly  the 
exact c ircum stances an d  conditions in  w hich th e  pen altie s  a re  im posed o r d is ­
counts are. allow ed. The ta r if f  sh a ll also in d ica te  c learly  w h e th e r , if  b ills  a re  
paid  by  m ail, the  date of the postm ark  w ill be co n sid ered  the  date of p ay m en t.

D . P a . P .U .C . -  E lectric  R egulations

Rule 14 -  ADJUSTMENT OF BILLS FOR AVERAGE METER ERROR

D . ACCESS TO METERS -  The p u b lic  u tility  sh a ll at all reaso n ab le  tim es have 
access to m e te rs , se rv ice  lin es and o th er p ro p e rty  owned by it on cu sto m er's  
p re m ise s , for p u rp o ses  of m aintenance and o p eratio n . N eglect o r re fu sa l on the 
p a r t  of custom ers to p ro v id e  reaasonab le  access to th e ir  p rem ises for the above 
p u rp o ses  sh a ll be deem ed to be  suffic ient cause  for d iscontinuance  of s e rv ic e .

E . M etropolitan Edison Company E lectric  T ariff 
E lectric  Pa. P .U .C . No. 41

Rule 15. Cause for d iscontinuance  of serv ice :

Company re se rv e s  the  r ig h t to d iscontinue its  s e rv ice  on reaso n ab le  notice 
and to rem ove its  equipm ent in'Cfise of nonpaym ent of b ill  o r violation  of the 

' P enn sy lv an ia  Public  U tility Com m ission's o r C om pany's R ules and R eg u la tio n s, 
o r , w ithout n o tic e , for a b u s e , f r a u d , o r tam pering  w ith the  co n n ec tio n s, m eters 
o r o th er equipm ent of Com pany. F a ilu re  by  Company to ex erc ise  th is  r ig h t 
sh a ll not be deem ed a w aiver th ereo f.

Should the  Com pany's se rv ice  b e  term inated  for any cause a fo resa id , the 
minimum ch arg e  for the  u n ex p ired  p o rtion  of the  term  sh a ll become due and p ay ­
able im m ediately , p ro v id e d , h o w ev er, th a t if sa tisfac to ry  arran g em en ts  a re  
sub seq u en tly  made by  Custom er for reconnection  of the se rv ice  (in w hich e v e n t , 
a reconnection  ch arg e  of not le s s  than  $1.00 m ust be p a id ) the  immediate paym ent 
of the minimum ch arg e  for the  u n ex p ired  portion  of the con tract term  may be 
w aived or m odified as the  c ircum stances ind ica te  would be ju s t  and re a so n a b le .

Company may re fu se  its  se rv ice  to , o r  rem ove its  se rv ice  from , any 
in sta lla tion  w h ic h , in  the judgm ent of Com pany, w ill in ju rio u sly  affect the 
operation  of Com pany's system  or i ts  se rv ice  to o th er C u sto m ers.
Issued  A pril 30, 1971. Effective Ju n e  30, 1971

F. K ansas S ta tu tes Annotated 

K .S .A . §66-101

Pow er, au th o rity  and ju r isd ic tio n . The sta te  corpora tion  commission is 
g iven fu ll p o w e r, au th o rity  and  ju risd ic tio n  to su p e rv ise  and contro l the



14a

p ub lic  u t i l i t ie s , inc lu d in g  rad io  common c a r r i e r s , and a ll common c a r r i e r s , 
as h e re in a fte r  defin ed , doing b u s in e ss  in  the  sta te  of K ansas, and is  em pow ered to 
do a ll th in g s  n ecessa ry  and convenient for th e  ex erc ise  of su ch  p o w e r, au tho rity  
and j u risd ic tio n .

G. Federal S tatutes

a . 42 U .S .C . §1983 Civil action for d ep riva tion  of r ig h ts

E very  p e rso n  who, u n d e r color of any s ta tu te , o rd in an ce , re g u la tio n , custom 
or u sa g e , of any State or T e r r i to ry , su b je c ts , o r causes to be su b jec ted , any 
c itizen  of the  United S tates o r o th er p e rso n  w ith in  the ju risd ic tio n  th ereo f to 
th e  dep riv a tio n  of any r i g h ts , p r iv i le g e s , o r  im m unities secu red  by the  Con­
stitu tion  and  la w s , sha ll be  liab le  to the p a rty  in ju re d  in  an action at law , su it 
in  e q u ity , o r  o th er p ro p e r p ro ceed in g  for r e d r e s s .

b . 28 U .S .C . 81343 Civil r ig h ts  and e lective  fran ch ise

The d is tr ic t  co u rts  sha ll have o rig in a l ju risd ic tio n  of any c iv il action 
au thorized  by law to be  commenced by  any person :

(1) To reco v er dam ages for in ju ry  to h is  p e rso n  or p ro p e r ty , o r because  
of the  d ep riva tion  of any r ig h t o r  p riv ile g e  of a c itizen  of the U nited S ta tes, 
by  any act done in  fu rth e ran ce  of any co n sp iracy  m entioned in  section  1985 
of T itle  42;

(2) To reco v e r dam ages from any p e rso n  who fails to  p rev en t o r to aid  in 
p re v en tin g  any w rongs m entioned in  section  1985 of T itle  42 w hich he had 
know ledge w ere about to occur and pow er to p reven t;

(3) To re d re s s  th e  d e p riv a tio n , u n d e r color of any S tate law , s ta tu te , 
o rd in a n c e , re g u la tio n , custom o r u sag e , of any r ig h t,  p riv ile g e  or immunity 
secu red  by  th e  C onstitution of the  United S tates o r by  any Act of C ongress 
p ro v id in g  for equal r ig h ts  of c itizen s o r of all p e rso n s  w ith in  the ju risd ic tio n  of 
the United S ta te s .

(4) To reco v e r dam ages or to sec u re  equ itab le  o r  o th er re lie f  u n d e r any Act 
of C ongress p ro v id in g  for the  p ro tec tion  of c iv il r i g h ts , includ ing  the r ig h t to 
v o te . Ju n e  25, 1948, c . 646, 62 S ta t. 932; Sep t. 3, 1954, c . 1263, §42, 68 Stat. 
1241; Sept. 9, 1957, P ub . L. 85-315, P a rt III, §121, 71 S ta t. 637.

H. United S tates C onstitution

F ourteen th  Amendment 
Section 1
Due P rocess C lause

. • • nor sha ll any sta te  d ep riv e  any p e rso n  of l if e , lib e rty  o r p ro p e rty  
w ithout due p ro cess  of law . . .



lb

APPENDIX B

Man, S ev en ty -o n e , F reezes to Death 
A fter U tility S hu ts Off G as, United 
P re ss  In te rn a tio n a l, ap p earin g  in  
Boston G lobe, (Feb. 9, 1974), p .  17

Man, 71, frernes to death 
after utility cuts off gas
United Press International

MILWAUKEE — Every­
body is sorry 'about what 
happened to H a r o l d  
Radtke.

The Wisconsin Public 
Service Corp. (PSC) turn­
ed off the gas at Radtke’* 
been* in Peshtigo Jan. 28 
igacause he had not paid his 
gas bill for three months.

The 71-year-old bache­
lor’s frozen body was found 
Tuesday, lying face up on 
the floor of his home, 
dressed in five shirts. There

wen* several blankets m  
his sleeping couch. Radtke 
had apparently been trying; 
to get warmth from a; 
vacuum cleaner motor «»$ 
an electric heating piste,

The temperature outsujtei 
was 1 degree above zero. 
Inside it was 20. Pans ot 
water on the stov® were, 
frozen. So were the toilet 
and the kitchen sink.

A spokesman for f?»e 
PSC said yesterday it was 
“a horrible tragedy.” Bui} 
he denied the company had 
done anything wrong.

The trouble was that 
Radtke had not paid a $138t 
gas bill in three months, 
He had been warned and 
had indicated he would 
pay. But he didn’t.

The last time Radtke’s 
heat was turned off in 
June, his brother, Wilbert, 
of Lewiston, Idaho, psad* 
the bill. The brother says 
he told the PSC if thers 
was ever any trouble agftirt 
to let him know. The PSC 
said it has no record of 
that.



2b

E ld erly  Couple Found Frozen  in 
S y racu se  Home, T he New York 
T im es, Dec. 26, 1973.

, T H E  N E W  Y O R K  T I M E S ,  W E D N E S D A Y ,  D E C E M B E R  16, 1 ) 7 3 __________ _

Elderly Couple Found Frozen in Syracuse Home1
SCHENBCTADY, N.Y., Dec. ©flm fom Dhcoo, rs 

25 (UP1) — A man and his
wife,. both in their 90’s were 
found dead yesterday,, appar­
ently frozen to death in their 
unheated home.

Basil Heise, a serviceman on nonpayment of 
holiday leave, discovered the i old $202 bill, 
bodies of Ms grandparents The elderly coupel refused to

Utility Had Cut Off Power 
for Nonpayment of Bill

pany several times about their 
bill, the Bakers refused to dis­
cuss it, a* power' company 
spokesman said.
.. Last week, the telephone 

---------------1 company cut off service,, aisoi
five-mn*th-■ or ^ p a y m e n t  of bills, ai nve-mcutft- |spoke2 rir<n S5id> . f

when he went - to their home 
to take them, to a Christmas 
Eve dinner. The couple - — 
Frank Baker, 93 years old, and

allow a utility man into the 
home to shut off the gas, and it 
was still orf at the ti~ ;• of their 
deaths, he said.

The utility spokesman said

the home would have made” any 
gas furnace inoperative, but 
would not have .-lfee :1 the use 
cf a gas cooking s tov \ which 
could have provided some 1. ;.,t.

The utilities wore cut off six-

his wife, Katherine, 91 — were (turning off the electricity to 
found huddled together on their • - - • * ■
living room floor by Mr. Heise, 
who called the police.

A deputy county medical
examiner, Dr. John Shields, said The utilities were cut off six 
the couple had apparently been months ego, he said, but were 
dead for about two days.- He|reinstated when a church paid
tentatively listed death as .due ' **’ ” * " ........
to natural causes brought on by 
exposure, but said he would 
have an official ruling follow- 

A spokesman for the Niagara 
Mohawk Power Corporation, 
which provides the area with: 
electricity and natural gas, said j 
power to the home had been 
turned off last Thursday for

h. If the delinquent bill. 
Contacted ' y the power com-