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December 7, 1971


Richey, District Judge.

The opinion of the court was delivered by: RICHEY

RICHEY, District Judge.

"Any such appeal shall be heard upon the record before the Commission, and no new or additional evidence shall be received by the said court. * * * Upon the conclusion of its hearing of any such appeal the court shall either dismiss the said appeal and affirm the order or decision of the Commission or sustain the appeal and vacate the Commission's order or decision. In either event the court shall accompany its order by a statement of its reasons for its action, and in the case of the vacation of an order or decision of the Commission the statement shall relate the particulars in and the extent to which such order or decision was defective."

 Upon the consideration of all the documents, including the transcripts of the hearings before the PSC and miscellaneous correspondence, the hearing memoranda, and the arguments of counsel for the respective parties, the Court concludes that said appeal should be dismissed, and that the order of the PSC should be affirmed.

 Basically, the appeal raises two primary issues for this Court's consideration:

 1. Whether the Commission's Order No. 5420 was issued as a result of a proceeding that was without due process of law and in violation of the Commission's own rules because of alleged lack of notice with respect to an initial no deposit requirement contained in said order?

 2. Whether the Commission's Order No. 5420 was unreasonable, arbitrary and capricious?


 In order to resolve the first issue involving proper notice, the Court believes it necessary to trace the order of events leading up to the Commission's Order No. 5420. On February 29, 1968, the Neighborhood Advisory Council and Consumer Action Committee of the Washington Urban League filed a complaint before the Public Service Commission, which set forth various allegations concerning the credit and deposit policies of WGLCO. This case was designated Formal Case No. 533. Subsequently, PSC on June 28, 1968, issued Order No. 5178 directing that a hearing be held and that the Company present evidence on the following issues:

 1. A description of its credit and deposit policies and practices, particularly as they would affect low-income customers.

 2. A discussion of WGLCO's views as to why the policies and practices are in the public interest.

 3. A discussion of whether a deposit should be required at all or whether a minimum uniform deposit would suffice. See PSC Order No. 5178 at 3.

 On July 9, 1968, three days of hearing commenced and upon their conclusion, WGLCO renewed a previous motion it had made to dismiss the complaint. On December 20, 1968, PSC issued Order No. 5198 dismissing the complaint, but stating emphatically that it was not terminating its inquiry relative to the policies of WGLCO concerning deposits. The reason for continuing its inquiry regarding deposits was stated as follows:

"Our overriding responsibility is the protection of the public interest. We cannot simply regard this as an adversary proceeding in which our sole function is to determine whether a specific factual allegation has been proven. We must examine the record as a whole to determine whether any action in the public interest is called for by the evidence before us. Scenic Hudson Preservation Conf. v. FPC, 354 F.2d 608, 620 (2d Cir. 1965), cert. denied [Consolidated Edison Co. of New York, Inc. v. Scenic Hudson Preservation Conference], 384 U.S. 941 [86 S. Ct. 1462, 16 L. Ed. 2d 540] (1966)." PSC Order No. 5198 at 3.

 The PSC Order No. 5198 then stated:

"We should perhaps begin our discussion of these policies and practices with the very broadest question which could be raised: Is it just and reasonable to have any requirement whatever for deposits? On this question, the answer is abundantly clear. Deposits can reasonably be required in appropriate cases by the Company." PSC Order No. 5198 at 3.

 On the next several pages of the Order the PSC discussed the deposit practices of WGLCO, and it noted that the deposits were required in two situations: (1) in some cases upon initial request for service; and (2) for continuation of service where problems of non-payment arose. The PSC agreed with WGLCO's requirement of a deposit in the second instance, i.e. where the customer maintained a faulty payment record, and it concluded that deposits could and should be required based on WGLCO's credit experience with its customers. See PSC Order No. 5198 at 4. The PSC then considered the circumstances in which WGLCO required a deposit from a residential customer upon an initial request for service. The PSC states in its Order:

"We see nothing basically objectionable about establishing categories of customers in which the establishment of credit is presumed. The Company receives a very large number of initial requests for service annually, and a requirement that an individual credit check be made for each and every one would be burdensome and unnecessary. Exempted categories must, of course, have a reasonable relationship to the criterion in question, i.e., the satisfactory establishment of credit. This would mean that the Company must have a justifiable expectation that persons falling into these categories will pay their debts to the Company. We see nothing inherently wrong with the categories described above. They are tied in some measure to indicia of financial responsibility and ...

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