JACKSON v. METROPOLITAN EDISON CO.

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Argument of Mr. Chief Justice Burger

Mr. Chief Justice Burger: We'll hear arguments next in Number 73-5845, Jackson against the Metropolitan Edison Company.

Mr. Greenberg, you may proceed whenever you're ready.

Argument of Jack Greenberg

Mr. Jack Greenberg: Mr. Chief Justice and may it please the Court.

This case is here on a writ of certiorari to the United States Court of Appeals for the Third Circuit.

The case involves whether a public utility which provides electricity under a grant of monopoly conferred by the state which possesses under state law various and considerable powers and is regulated by the state pervasively may pursuant to state granted and approved crimination procedures cut off a consumer's power without notice and hearing for alleged nonpayment of a disputed bill.

Justice Potter Stewart: Consumer or customer?

Mr. Jack Greenberg: Customer.

Our answer to this question briefly is that a monopoly functioning under such state granted powers and regulations which supplies a necessity of life performed state action in the Fourteenth Amendment sense, and with respect to its crimination procedures must accord due process of law.

And in a case like this, due process of law requires some sort of fair notice and hearing procedures before termination.

To confront the petitioner's position more precisely, --

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: But Mr. Greenberg, what could be the scope in this particular case of the hearing?

What could be the -- what could be the issues?

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: Our suggestion on the hearing procedure, the hearing on crimination would be that we adopt the position of the brief amicus curiae of the New York State Public Utilities Commission.

And that is that the cause should be sent or should be reversed in fact of the District Court with an invitation -- the District Court extending an invitation or perhaps requiring the State Public Utilities Commission to come in and together fashioning a fair termination hearing procedure of the cases of this Court and elsewhere demonstrate that a large variety of procedures could possibly accord with the requirements of due process of law and we do not argue for any particular kind of procedure.

Once a procedure --

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: I'm not so concerned about the procedure, Mr. Greenberg.

What could be the issues in this particular case?

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: In this particular case would be whether or not the consumer was liable for the payment of this disputed bill and if so, how much?

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: No other issue, would there?

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: Not in this particular case, no.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: And as a generality would that not likely to be true?

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: That is again, I think the brief of the New York State Public Utilities Commission is very useful and that is typically the dispute -- the kind of dispute and frequently those kinds of disputes are resolved by sending out an independent meter reader but they sometimes may involve other kinds of issue that may have to be regarded in other way.

In this particular case that would be the only issue.

Justice William H. Rehnquist: When you use the term consumer, Mr. Greenberg, are using it in counter-distinction to customer?

Mr. Jack Greenberg: No, I'm not.

And I would confess.

I was slightly puzzled by Mr. Justice Stewart's question and I'm -- synonymously.

Justice Potter Stewart: Well, we're going to get on into this case and find that if I understand it, that your client is not a customer, in fact.

Mr. Jack Greenberg: Well, --

Justice Potter Stewart: That's from the -- that's the -- what you call it in this case.

Mr. Jack Greenberg: That is one of the issues that it's been raised by the respondent in this case.

However, we would submit that the petitioner in this case quite assuredly has standing to raise issues presented in this particular case.

Justice Potter Stewart: Well then, you did -- you meant any consumer than rather the --

Mr. Jack Greenberg: Well, this is service to her home.

Justice Potter Stewart: You've been advertently, I think, then gave from your point of view, the wrong answer to my question.

You said consumer and I said, you mean consumer or customer, and you said customer.

I think, this -- your client is not a customer.

Mr. Jack Greenberg: Well, Mr. Justice Stewart, the company in view to such.

They are --

Justice Potter Stewart: She's a former customer but she isn't that correct?

Mr. Jack Greenberg: No, they came to her and they asked her to get $30.00 by Monday because the power is going to her home and they're looking her as being responsible and liable for paying this bill.

So, perhaps that's why I view them synonymously because I think this implicates the standing issue.

They are looking to her for payment of the bill and for the first time in this Court, they're raising the issue that someone else really is responsible for it but both courts below and the respondent in this case have treated the case as if she owes the money.

Now, it may be that the money has been paid.

We haven't had a hearing, we don't know that maybe the money has not been paid and someone is liable for it and it may be that she indeed is liable for it.

There hasn't been a hearing and one can't tell.

But they've been treating her as the one who's responsible for the bills.

So that's what in my mind, consumer and customer were synonymous though in some cases, they might not be.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: I suppose from the utilities' point of view, they would be somewhat indifferent as to who paid the money if the amount due is paid.

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: Well, the amount due for all we know may have been paid.

I think as I have discussed the issues in this case with other lawyers and students and others.

I have not made a person to whom either I mistaken though as not been sent or who doesn't know someone to whom as mistaken though was sent and it's not an uncommon thing, it maybe the bill was paid.

There hasn't been a hearing.

No one has -- in fact, she has not yet received the bill in this case.

Justice William H. Rehnquist: But cutting off -- the cutting off of service to this particular home isn't the same thing as asserting of claim for the deficiency in the bill against Ms. Jackson, is it?

Mr. Jack Greenberg: Well, they did both.

An employee of the company came to her house in the Thursday and said, have $30.00 by Monday.

And on Monday, employees of the company came there and without anything being said, they terminated her power.

Justice William H. Rehnquist: But is that an ambiguous as to whether the threat was, “I'll cut off your power or I'll seek a judgment against you?”

Mr. Jack Greenberg: There was never any power for seeking a judgment against him.

Justice William H. Rehnquist: So, it's just basically cutting off the power.

Mr. Jack Greenberg: The cutting off of power but throughout this case, they maintained until now that they're cut it off because she has not paid the bill.

Now, they claim, there are some standing issues that they might be in another way.

Justice Harry A. Blackmun: Because I understand that the service had been resumed under order of the Court.

Mr. Jack Greenberg: Under a temporary restraining order.

Justice Harry A. Blackmun: And has any payment by -- had been made by anybody for utility service rendered since it was restored?

Mr. Jack Greenberg: Mr. Justice Blackmun, they have not sent her any bills and I think that may perhaps be preserved some legal position they are asserting that they haven't said.

However, she's been budgeting and putting money away in savings account for the day when the bill arrives.

Justice Byron R. White: But you wouldn't -- I would suppose, you would have objected if the -- under the temporary restraining order, the Court could have ordered to pay currently quite for her power?

Mr. Jack Greenberg: Without a doubt and in fact, at a point of my argument when I discussed some of the issues that might arise under fair hearing procedures that certainly could be a condition precedent to a hearing.

That is the paying of some undisputed amount or some basic amount or something else so, without a doubt.

I'd like to define petitioner's position on the state action point little more precisely before proceeding with the rest of my argument.

And that is, it does not necessarily imply that a state action standard must be applied to any of the utilities action other than those involving the furnishing of electricity for which it was granted its monopoly powers.

For example, the right of the utility to have a religious display of its headquarters or to regulate the speech of its employees or to respect their privacy and so forth, it involves other factors which need not be considered here.

And we do not contend that a supplier who does not enjoy a state conferred monopoly of a necessity of life or anyone else is by the Due Process Clause required to grant notice in hearing before cutting off, for example, milk deliveries or gasoline or credit or so forth.

In those cases, the consumer can always turn to another source and such a case also could consider other factors.

Justice William H. Rehnquist: In your brief, you speak about the public function notion rely on Munn v. Illinois and you cite the Nebbia case.

Is this a part of the argument you're making to this Court?

Mr. Jack Greenberg: It is a part of the argument only in the sense that the Court of Appeals in the Third Circuit in deciding either the state action issue or the fair hearing issue or both would somewhat merge together in the Court of Appeals' opinion makes a point that the furnishing of electricity is not state action when the relationship to a subscriber is concerned.

And they note that if might be state action if a whole community were involved and they point out that the cessation of electricity wouldn't impute water purification, and hospitals, and communications, and so forth.

We submit that that's far to narrow a view that when a consumer's powers cut off when she has essentially cut off from the energy system that has neither heat nor light nor refrigeration.

The observation of the Court of Appeals that she can't operate her oil burner manually and used kerosene lamps and put ice in the refrigerator is you know, is ill taken that this really is the furnishing of necessity of life and that in a modern society, it would be infrastructure that we have that it is the furnishing of something as essential and vital to the community as the same Munn against Illinois.

Justice William H. Rehnquist: Well, that's really a narrower argument than you make in your brief, isn't it, because if you take that public function in effect and with the public interest doctrine in Munn and follow it through the Nebbia in our decision.

You find it that a grocery store in Rochester that sold a quarter of milk was affected with the public interest.

Mr. Jack Greenberg: We do not contend for that.

In this case, we condone -- contend only for a monopoly with regard to the service as the monopoly was going to its power so furnish when those services ours is typically the case when the state granted monopoly, a necessity of life and we would place in just the clearest category electricity and water and there might be several other functions as well.

But we would -- we assert the argument as narrow which I just stated.

Justice William H. Rehnquist: Hospital care would be included?

Mr. Jack Greenberg: Well, hospital care would involve questionable alternatives.

One, perhaps can go to a variety of hospitals in many communities but if your power is cut off, there's no place else you can go.

And if your water is cut off, there's no place else you can go.

If there are only one hospital in the community, it might be one case.

That is not always the situation.

I would guess that's rarely the situation.

Justice Potter Stewart: Why, Mr. Greenberg is the question whether the necessity of light fell none relevant to whether or not it's action of the state?

Mr. Jack Greenberg: It's not relevant to whether it's action of the state.

It's relevant as to whether --

Justice Potter Stewart: But that's the issue here.

Mr. Jack Greenberg: It's relevant to whether a due process hearing is required in these circumstances.

The action of the state obviously --

Justice Potter Stewart: Of course, there was no due process hearing required until unless it is action of the state please, that's a common ground, I suppose.

Mr. Jack Greenberg: Yes, the Court of Appeals and I find that others too sometimes tend to and perhaps the law merged to questions together.

The Court of Appeals certainly did.

Justice Potter Stewart: Well, that confuses everything, wouldn't you agree?

Mr. Jack Greenberg: Well, it does but I'm responding to --

Justice Potter Stewart: Well, --

Mr. Jack Greenberg: The decisions on which we're taking to this Court.

Certainly, they have first must be action of the state.

Justice Potter Stewart: Right.

Mr. Jack Greenberg: And there's action of the state whether it's a necessity of life or not.

Justice Potter Stewart: Right.

So, necessity of life fell none has nothing to do with whether or not it's action of the state in your submission, is that right?

Mr. Jack Greenberg: That's right but it has to do with whether or not a due process hearing is required.

This Court in --

Justice Potter Stewart: Well, of course to do -- if it is action of the state, then any state action that deprives anybody of liberty or property has to be taken within the meets and bounds of due process and the question is what does due process required in here in this situation?

Mr. Jack Greenberg: It doesn't require a hearing.

Obviously, in Roth against the University, the action of the state was involved but a hearing wasn't required because it was not that kind of a situation.

Justice Potter Stewart: But due process was required and the question is what does due process?

Mr. Jack Greenberg: That's correct.

Justice Potter Stewart: Mean or requiring in that -- in a particular circumstance.

Mr. Jack Greenberg: Well, I subscribe to announce Mr. Justice Stewart.

I was trying to speak in terms of how many of the decisions of free to the subject in a brief argument.

I thought I would speak in the language that a lot of the decisions used.

Obviously, first, there must be action of the state.

If there's action of the state, there must be due process.

Due process sometimes requires a hearing and sometimes does not require a hearing.

Sometimes due process can be satisfied by other procedures.

Justice Potter Stewart: But necessity of life or not does -- you're not arguing that hasn't anything to do whether or not this is state action --

Mr. Jack Greenberg: No, but it certainly does have to do with whether or not a hearing is required and I think the opinion speak of that does the petitioner --

Justice Potter Stewart: Well, your passing a wide state action at that point --

Mr. Jack Greenberg: Does he have an option.

If Roth can get a job in another university that's something to be taken into account, if one is limited to a particular situation that that's not --

Justice Potter Stewart: Right.

Justice Lewis F. Powell: Mr. Greenberg, would you have found state action in this case if no tariff had been filed with the State Utility Commission?

Suppose there had been no action expressed or implied by the State Utility Commission?

Mr. Jack Greenberg: Mr. Justice Powell, I believe I would.

However, I must say, that whether state action exist or not involves a mass of factors have to be put together in weight.

And I think even without the tariff being filed, and approved, and promulgated, and as a matter of state law.

I think the state granted monopoly powers and the various regulation and so forth would be sufficient.

Now, if you start chipping away one factor after another, at some point.

I would have to say, well that's not enough to make state action under let us say the burden asked that's to select that.

But I think if you took away only that, yes there would state action.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: Would your basic issue be any different if you were dealing with let us say cable television which had been licensed and was regulated?

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: Yes, it would be.

Yes, it would be.

We've just taken the cable television out of our apartment because children look at it too much and I think, everybody functions perfectly happily well, and they can look at the television that comes over the regular, regular antenna.

I do not -- we would not think that there would state action at all.

We would not think there would be a hearing, a hearing to be required by due process.

Now, this case involves a number of factors, some of which I have already eluded to.

A way by this Court in determining whether a notice and hearing are required before summary action maybe taken as in summary termination of employment or disposes or repossession or garnishee cases.

And briefly, those factors are and I will just refer to a number that I consider to be among the most important of them.

What is the expectation in the funds, service, jobs or so forth of the one claiming the hearing?

Justice William H. Rehnquist: You're now, you've know left the state action argument there?

Mr. Jack Greenberg: For the moment.

Second, what is the effect of summary termination on him?

Three, what alternatives does he have?

Four, what is the effect on the community in taking time for a hearing?

Five, what costs are involved? Six, what is the likelihood that the taking is wrongful?

And I would like to elaborate on these points somewhat.

The first is what is the expectation in the subject matter concerning which a hearing is claimed before termination?

If it is sufficient, it is deemed to be a property right, although, this case also can be viewed as involving liberty because when one's power is cut off, one is left in the dark and the cold.

It certainly is a circumscription of one's liberty.

The expectation in continuous service is one which subscribers to the utility have by virtue of statute.

Section 1171 of the Public Utilities Code requires reasonably continuous service without delays and unreasonable interruptions.

Decisions of the Public Utility Commission which are not cited in the briefs but they're published such as Westinghouse Club against Pennsylvania Water Company which is October 8, 1935;

Laffey against Manufacturers Light and Heat, August 27, 1934 and Pishnery versus Brownsville Water Company, June 12, 1928 and numerous other decisions.

These are only three out of several score hold its service may not be terminated for nonpayment of a disputed bill.

But there is no meaningful way to enforce this right because there was no right to a hearing before cut off.

Counsel in this very case, I might add, has petitioned the Public Utilities Commission on July 25th and 31st, 1973 on behalf of this petitioner and others, in a complaint alleging that they are subject to having their water service cut-off for nonpayment of bills without prior hearing.

And the commission on March 20th, 1974 dismissed the complaint as failing to state a cause of action.

It treated them as requesting a rule allowing installment payments to be made on bills but deferred action even on that until after this Court rules in this case.

Therefore, we submit that petitioner's expectation is sufficient to rise to the level of property and liberty protected by the Due Process Clause, although state procedures are inadequate to protect it.

Second factor, what is the effect of summary termination on the one whose property or liberty is taken?

The effect in this case, we submit, is as brutal, to use a term that appears in the cases about the determination of welfare as Goldberg against Kelly, garnishing of wages as in Sniadach which was said to drive a family to the wall or termination of a driver's license as in Bell against Burson which interfered with conduct of a ministry.

And despite the argument of the Court of Appeals that oil burners can be operated manually and ice can be used in refrigerators and kerosene lamps provide adequate illumination, that is just not so when you say it's common knowledge that it's not so in an urban society and I think we all recall the near catastrophe when the power grid failed in the northeast and that affect upon a single individual is proportionately the same.

Justice Lewis F. Powell: -- put this in your brief?

I don't find them, these points?

Mr. Jack Greenberg: These points are not treated in the brief as systematically as I'm trying to present them in the argument.

They are perhaps in one point or another in the brief.

One of the alternatives for the petitioner, petitioner cannot get electricity elsewhere.

Unlike the employee in Arnett who might get another job or the untenured professor in Roth, who might get employment elsewhere and respondent's monopoly assures that.

Another point which the decisions consider is what may be the effect on the community of taking time for notice and hearing.

This is unlike the case of poisoned food which must be seized before distribution or narcotics which must be seized before they work the way and have their effect or the situation of a bank which is about to fail and then we'll bring financial failure to large parts of the community.

It's not a case like that at all.

It might be argued that taking time for notice and hearing entails costs.

Hearings may indeed cost something.

Petitioner in theory may run off the pressure of unpaid bills but fair hearing rule should, could and as in New York and as has been suggested by, I believe it was Mr. Justice Blackmun, a requirement that the temporary restraining order might have been continuation of payment of bills.

Petitioner might even be required to pay weekly a variety of measures can be taken to assure the security of the company.

The passed bill is owed.

The question is what's going to be happening in the future?

Certainly, this is not a case in which leaving time for hearing permits a petitioner to abscond with property as in some of the cases this Court has treated.

Now, another --

Justice Byron R. White: Isn't the only thing at issue is $30.00, do you concede the -- that if the company was to continue service, there should be current payment.

Mr. Jack Greenberg: Oh, without a doubt.

Justice Byron R. White: And also if it's found -- if it's found that that she really doesn't know that $30.00 if she goes ahead and pays it as the odds are she's going to get it back.

Mr. Jack Greenberg: Oh sure, certainly.

Justice Byron R. White: So, that there's no risk of loss on her part and the real question is whether $30.00, whether it‘s without notice or anything, without a hearing, she should be required to put up $30.00 pending a hearing on the matter.

Mr. Jack Greenberg: Well, she was agreeable for doing that.

And I think that case wouldn't be here if they've taken the $30.00 and restore, you know, and allow her electricity to continue.

Justice Byron R. White: Well, I don't understand that.

Was she was willing to pay the -- to put up the $30.00 and litigate about it?

Mr. Jack Greenberg: Well, the --

Justice Byron R. White: Do you think that --

Mr. Jack Greenberg: The record says, they said, “Have $30.00 by Monday” and she said, “Okay.”

That's all the record says.

Justice William H. Rehnquist: Was there any tender?

Mr. Jack Greenberg: No, because when they came on Monday morning, they just cut off the electricity and wouldn't talk to her.

Justice Byron R. White: You don't suggest, you don't suggest that the company would have turn it off if she have paid for $30.00 and told them, “Look, I don't know that $30.00 and I'm going to try to get it back, huh!”

Mr. Jack Greenberg: Well, I think they would have in this case because the only thing -- the only thing that we know is that they came on Thursday and said, “Have $30.00 by Monday” and they came on Monday and they wouldn't talk to her.

They cut her off.

She called them several times and the office --

Justice Byron R. White: Let me get it clear.

Do you say that if the Due Process Clause that had been satisfied if the company said, “Look, pay us by Monday or we're going to turn your power off.”

And she said, “Well, I don't pay Monday and the only thing is I'm going to litigate with it and try to get it back.”

Mr. Jack Greenberg: Oh, I think the Due Process Clause would have been satisfied.

I just said, I don't think we'd have a case here.

They just would have settled it between the due process --

Justice Byron R. White: Alright.

Do you agree that the $30.00 is all that's at issue?

Mr. Jack Greenberg: No, no Mr. Justice White because while she's not received the bill, her counsel had been, I mean, the company's counsel have informed her counsel as set forth in the complaint that she owns a $110.00.

Justice Byron R. White: -- but you concede Mr. Greenberg that she had to pay currently?

Mr. Jack Greenberg: Oh, yes.

Yes, Your Honor.

Justice Byron R. White: Well, alright.

Now --

Mr. Jack Greenberg: So, the $110.00 is for past due date, at least that's what they told her lawyer.

They going to sent her bill.

Justice Byron R. White: You mean, the -- of her own past due bill?

Mr. Jack Greenberg: Yes, yes.

Justice Byron R. White: Not the $30.00.

Mr. Jack Greenberg: That's right.

They claimed the -- one can interpret the $30.00 episode as saying, “Give us a $30.00 down payment on the $110.00 that you owe us past due.”

Justice Byron R. White: Well, I'll put it to you again.

The only thing at issue is her back -- is her past due bills.

Mr. Jack Greenberg: Yes.

Justice Byron R. White: And whether or not she is fair to say, you put up the money now and we'll keep your power going.

That's really the only issue.

Mr. Jack Greenberg: No.

Justice Byron R. White: Because she's finally getting her money back if she wins.

Mr. Jack Greenberg: Well, the issue in the case, is she entitled to notice in hearing before cut off?

That's the issue in the case.

Justice Byron R. White: Before paying $30.00 or before paying the bills?

Mr. Jack Greenberg: Well, she claims that she doesn't owe anything.

Justice Byron R. White: I understand that Mr. Greenberg but the question is who has to take the risk?

Mr. Jack Greenberg: That's right.

Justice Byron R. White: Whose money is going to be up meanwhile?

Mr. Jack Greenberg: Right.

Justice Byron R. White: Who's losing it if he's talking about meanwhile.

Mr. Jack Greenberg: Right.

We would submit in this case that she is required to notice and hearing before she's required to pay any money on the past bill.

Justice Byron R. White: I understand your submission.

I just want to know what really the risk is to her.

Risk is to her is that --is that she really doesn't have the $30.00 to put up.

Mr. Jack Greenberg: Well, she didn't at that time.

She was in welfare at that time, she's employed now.

Justice Byron R. White: If she had the $30.00 to put up, why she -- she put and the power would stay on and if she wins, she'd get it back.

Mr. Jack Greenberg: Well, presumably, yes.

She would have, you know, as I said pay the $2.00 even though she wasn't -- she wasn't liable for it.

I mean, her submission is that she is entitled to notice in a hearing before cut off.

She's a continuing subscriber to the company while one hopes, one cannot exclude the possibility that something like this will happen again.

Justice Byron R. White: I just take it, there's no issue that the hearing available sometime in real place. It is whether the before --

Mr. Jack Greenberg: That's right.

Justice Byron R. White: -- put up the $30.00.

Mr. Jack Greenberg: That's right and the issue is this sufficient property right of some of the cases referred to it, so that there has to be notice in hearing before her -- before her right of is set before the property's cut off.

Justice Byron R. White: But the burden on her is having to put up $30.00 pending litigation?

Mr. Jack Greenberg: Or maybe more.

Maybe the entire (voice overlap) they first have $30.00 -- they first have $30.00 then they told her lawyer $110.00.

Justice Byron R. White: Mr. Greenberg, whatever the sum is, that's what we're talking about is the burden on her of having to put up what her unpaid bill is pending litigation?

Mr. Jack Greenberg: Well, that may not be --

Justice Byron R. White: I don't know why you don't say yes.

I mean, that certainly get to the issue.

Mr. Jack Greenberg: Well, because I'm not certain that that's the fact because she has -- she has made some tenders of partial payment and they haven't wanted to take it.

So, it's not known what it is they want from her.

They haven't submitted a bill to her.

Justice William H. Rehnquist: What tenders of partial payment has she made?

Is the record clear --

Mr. Jack Greenberg: The record only -- the records in some of the opinions refer and except the fact that she made some efforts to make partial payment --

Justice Byron R. White: And that even makes -- that even makes my question more an element.

The only asked her for $30.00.

The only issue -- the only burden on her then was putting up the $30.00 pending litigation.

Mr. Jack Greenberg: Well, was the some of the -- or the only burden on the person whose garnishing is --

Justice Byron R. White: -- Due Process Clause doesn't require a hearing.

I'm just trying to --

Mr. Jack Greenberg: She could've -- she could've --

Justice Byron R. White: put all the burdens on the --

Mr. Jack Greenberg: Yes, she could've put up the money first, in what amount one does not know because the linemen said have $30.00 but she has never received the bill.

It is without a doubt who she might have done something which might have satisfied them.

Without a hearing, we can't tell what that is so, without a bill or without some representation.

Justice Byron R. White: Well, you say we shouldn't look this case as the one involved -- this necessity of putting up $30.00 pending litigation?

Mr. Jack Greenberg: I think it might -- it might involve very much more.

Justice Byron R. White: Now, when you cut off the same way though, it was only $30.00, wouldn't it?

Mr. Jack Greenberg: I would come up the same way, yes.

But I think it says -- but I think it may involve very much more.

I'd like to reserve the balance of my time.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: Very well, Mr. Greenberg.

Mr. Debevoise.

Argument of Thomas M. Debevoise

Mr. Thomas M. Debevoise: Mr. Chief Justice, may it please the Court.

I do think it is important to the case to take just a minute to go back to the facts and whether this is a termination case or not.

This 28-year old woman bought a house in '69.

A year later, her electricity was terminated for nonpayment of bills.

45 minutes later, in some manner, it was reconnected and thereafter, bills did not come to her.

It came to a man who was staying at her house.

A year following that, --

Justice Byron R. White: Does the record show why not change in billing occurred?

Mr. Thomas M. Debevoise: No.

The only witness was the petitioner and she says, that she has no idea how it came about.

But after that, and for a period of 13 months, bills came to a man staying in her house.

Justice Potter Stewart: And not to her?

Mr. Thomas M. Debevoise: And not to her and during that period, she made no effort to pay the bill that was outstanding for the service prior to that termination.

Then, an employee came on a Wednesday looking for the man in the house and was inform that he had left some month and a half, previously.

He also looked at the meter.

The next day, another man came to the house and discussed the situation with the petitioner and then, it must had have some discussion about who the customer was and termination and all of that, because she testifies that she told this man to put the electric service in the name of Robert Jackson to give me time to get the rest of the money to pay the old bill.

Robert Jackson was her 12-year old son.

Three days later, a man came and disconnected the service.

She then telephoned the company man who had been there the preceding Thursday, found he was not in the office but he had left word for her to be given his home number, so that she could call him at home which she did.

He then told her according to her testimony.

Who was responsible for the matter now?

Another employee of the company, she testified, she never called them.

Now, it's our position under those facts that she was not a customer who was terminated nor did she apply for service.

She could still apply for service.

The company in view of the past history under the tariff would have the right to require reasonable deposit.

Justice Thurgood Marshall: Did somebody tell her to pay $30.00?

Mr. Thomas M. Debevoise: That is her testimony and --

Justice Thurgood Marshall: And it is uncontradicted.

Mr. Thomas M. Debevoise: And it is uncontradicted.

And if it was $30.00 I'm sure --

Justice Thurgood Marshall: What didn't they recognize her as a customer?

Mr. Thomas M. Debevoise: No, it recognized that she was a former customer as counsel with an outstanding bill of over a hundred dollars.

Justice Thurgood Marshall: Did they tell her anything about $110.00 then?

Mr. Thomas M. Debevoise: There is nothing at this time in here on the 100 --

Justice Thurgood Marshall: Because the only thing in the record is that somebody said, “Lady, give me $30.00 or I will cut, it's your guess or electric down?”

Mr. Thomas M. Debevoise: No, Your Honor.

It isn't tied together in that fashion.

There is mentioned of the $30.00.

There is her straightforward admission that she still owed the bill that was over a year old.

Justice Thurgood Marshall: And what -- all I'm dealing along now is whether you would treat her as a customer or not?

Mr. Thomas M. Debevoise: I believe Your Honor that it was not -- there was a discussion about new service that had to be because she testified.

She said, put in the name of Robert Jackson.

Now, in that conversation, there were some evidently some mentioned of $30.00.

Justice Thurgood Marshall: Do you did change service if somebody comes in the house?

I thought you're doing all of these?

It is you're different for me to place us.

You would negotiate to something there, what were you doing?

Mr. Thomas M. Debevoise: Well, Your Honor, maybe it would be a help if I took just a minute before getting the state action to tell you the company's procedures in regard to delinquent accounts.

In '73, 1973, there were 217,000 notices of delinquent accounts that went out.

Justice Byron R. White: How many notices went out?

Mr. Thomas M. Debevoise: 217,000.

Justice William H. Rehnquist: Is this in the record, Mr. Debevoise?

Mr. Thomas M. Debevoise: It isn't, Your Honor.

There are very similar figures in the city of Philadelphia's brief.

Justice Thurgood Marshall: Is 217,000 in New York?

Mr. Thomas M. Debevoise: In the service area of Metropolitan Edison which includes more than New York.

It includes --

Justice Thurgood Marshall: And you have many more --

Mr. Thomas M. Debevoise: Somewhat less than --

Justice Thurgood Marshall: 17,000 customers in New York, do you?

Mr. Thomas M. Debevoise: I don't believe we do, Your Honor, no.

Justice Thurgood Marshall: No, I believe after all.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: That suggested some customers may have received multiple notices, is it not?2

Rebuttal of Thomas M. Debevoise

Mr. Thomas M. Debevoise: Now, that goes out after 30 days after the bill, and when no response is heard to from that, and there 129,000 such cases, those cases were referred to the credit managers.

And the credit managers then either in person, as in this case, where they went out looking for the customer or by phone or by mail, try to contact the customer and there were in 1973 only 4,390 terminations.

There was not a procedure whereby, if a bill is not immediately paid, the switch is pulled.

Similarly, this is a matter in which the public has tremendous interest.

For instance, Fortune reported in September that in March of 1974, when four went its dividend of 28 million, consolidated Edison had outstanding bills of $367,151,000.00 with an average life of 59 days, those bills.

The amount of the dividend forgone was $28 million.

It lost $24.5 million in uncollectible accounts in 1973.

So, these procedures on collection are extremely important to the public.

Last Saturday, the papers carried the account of the tremendous cut back in electric utility construction that has been caused a gain by a lack of cash in these times of inflation.

I'd like to turn to the question of state action.

I think it's maybe posed most directly by the California amici when they present the issue that state action is present where a significant governmental interest are promoted by a pattern of regulation delegating state power to a extensively private persons who then act with the force of law.

That is similar to what counsel said and repeated about this graft of monopoly power.

It didn't work that way.

In 1913, when the Public Utility Law of Pennsylvania was passed and the set forth regulation over not only electric utilities but of course, worth companies, grain elevator companies, telephone companies, pipeline corporations, ferries and all the other things.

Met Ed -- and the service of electricity by Met Ed's predecessors had been going on for a substantial time.

Met Ed is still subject to a 99-year lease under then to 1894 and has a contract in perpetuity with the town of Middleton to sell them electricity at a standard kilowatt hour in perpetuity that was entered into in 1906.

So, it was not a grant of state power that resulted in the regulated utility system we have today.

Instead, it was a recognition that many businesses are affected with the public interest and the desire to protect consumer -- consumer led to their regulation that being true in Justice Brandeis' concurring opinion on South Western Bell and goes into this subjected to the link.

That being true, all acts of a public utility are not actions of the State.

Now, where the State has particularly ordered the electric utility to do something and the utility then goes out under color of not order and does something, certainly, that would be a type of action that would receive the protection with that the petitioner here seeks.

On the other hand, the filing of its practices, so that it's customers will have knowledge of its practices.

Practices which are not acted on by the State with the tariff being filed because the State requires you, for the protection of your customers, to let your customers know how you're going to operate?1

Justice William H. Rehnquist: First, the petitioner contends, I guess that the inaction of the commission after the filing was tantamount to affirmative approval.

Mr. Thomas M. Debevoise: I think that is the issue.

It's whether inaction can be equated with action.

Now, I have no question that an electric utility operating under the new public -- New York public service termination procedures would then be acting -- it would be state action.

But where there has been no action, we do not believe it should be extended.

It's mentioned in the briefs that Vermont instituted termination procedures.

Last week, --

Justice Byron R. White: You say, that you stated if the commission had entered an affirmative order of proving the tariff.

Mr. Thomas M. Debevoise: In saying, you do it this way.

Justice Byron R. White: Well no, it didn't say, you do it this way just to prove it.

Mr. Thomas M. Debevoise: It accepted a for filing, I believe this is --

Justice Byron R. White: Well, I know but let's assume they had entered an order of proving.

Let's assume there had been litigation -- to say that tariff had been a tax and the -- a tax entered strictly on the rule and the commission said, this is quite illegal under state law and we have proven, we have no grounds to discipline them and we have proof.

Mr. Thomas M. Debevoise: I think in that case, that the company acting under it would get support and encouragement from state action and a suit against those procedures rely.

So it's strictly a question of whether no action is equivalent to this type of approval.

Justice Potter Stewart: Well, we assumed against those procedures would lie in fact my brother White's hypothetical, he assumed that there was a suit brought against those procedures and they were unsuccessful, as I understood his question.

Mr. Thomas M. Debevoise: Right, but then the utility went out --

Justice Potter Stewart: But the --

Justice Byron R. White: submission turns the power off without a hearing.

Mr. Thomas M. Debevoise: Right.

Justice Byron R. White: And the issue is whether the act of turning the power off without a hearing is action of the State.

Justice Potter Stewart: Right.

Mr. Thomas M. Debevoise: Right.

Justice Byron R. White: And you would say it would be?

Mr. Thomas M. Debevoise: Yes.

Justice Potter Stewart: Alright.

You need to concede that.

Mr. Thomas M. Debevoise: Well, --

Justice Potter Stewart: You can say safely in this case maybe but that's pretty big concession to say.

Mr. Thomas M. Debevoise: Well, it is for the purposes of this case that I am conceding it, Your Honor.

Justice William H. Rehnquist: Do you feel bound by the Pollak case in that regard?

Mr. Thomas M. Debevoise: The reasoning behind conceding for this case is we are a very heavily regulated industry.

We do have a very important role to play.

We do take our orders from the State, the state courts, the federal agencies, this Court and we try to do things correctly.

Our image before the public as Justice Brandeis pointed out is all important.

We have only one way of making money, that's to sell electricity.

We don't cut anybody off unreasonably if we can help it.

On the other hand, we get absolutely no assistance from any State or governmental agency in raising the funds necessary to carry on this business.

Either Court or State tells us, this is how you do it.

Once we have exhausted our protection, we will do it that way.

Justice William H. Rehnquist: But of course, that was Justice White's -- what you thought to be Justice White's hypothetical but what I understood him to say was not his hypothetical situation A, whether utility says, you do it that's whether Utility Commission says, you do it this way.

You don't give any hearings and collect that back bills, you have no choice.

And the second one, which was his hypothetical as where the Utility Commission basically leaves it up to the utility.

It says one is permissible or maybe the other, it may be two.

Mr. Thomas M. Debevoise: Well, that -- that to me is not action and I'm sorry if I misunderstood.

Justice Potter Stewart: Actually, this case isn't it.

Mr. Thomas M. Debevoise: It is.

Justice Byron R. White: Right therefore my examples simply meant that if the Court -- if they make -- if they filed a tariff and there is litigation of -- about the validity of the termination rule and the commission says, this is perfectly consistent with state law.

We don't require you to do it this way but you may.

We approve the tariff.

Mr. Thomas M. Debevoise: I think that still is non-action, Justice White.

Excuse me, I thought that they were directing it.

Justice Byron R. White: No, no, just to prove it, but they did it, but there was affirmative proof of the tariff.

Mr. Thomas M. Debevoise: But not saying that this is the way you have to do.

Justice Byron R. White: But you could file another tariff, you wanted to.

And of course, they say which is now that you have filed it, you must follow it.

I mean, that's what a tariff is, isn't it?

Mr. Thomas M. Debevoise: Right.

Right.

But, excuse me, I missed the innuendo.

And in Vermont, I think the Vermont case last week is interesting.

The Supreme Court reversed the Public Utility Commission where they have set up procedures.

Justice Thurgood Marshall: Could you reading from a newspaper?

Mr. Thomas M. Debevoise: Unfortunately, Your Honor, it was late last week in Manhattan.

Justice Thurgood Marshall: But was it a hearsay or what?

Justice Potter Stewart: It was a Court decision in Vermont.

Mr. Thomas M. Debevoise: It's a Court decision.

Justice Thurgood Marshall: It's reported out on a newspaper.

And I think you should say this reported out on a newspaper.

Mr. Thomas M. Debevoise: It is the Rutland Herald of last week, Your Honor, reporting the motion by Vermont Welfare Rights Organization asking the Supreme Court to reconsider its decision voiding the policy of the Public Service Board in connection with termination procedures.

And the only reason that the Court voided was because the Public Service Commission had proceeded without any factual basis in the record.

It had not held hearings to determine the circumstances and therefore had no findings in support of their order.

There's no question that the Public Service Commission can direct these things after hearings like the New York Public Service Commission's stand.

That is the utility's protection.

If they are told to do something this way, the regulatory agency has to have support and a basis because the utility is entitled to due process too.

So in this case, our position is that there has to be affirmative action directing.

Then, if we act under color of that directive, we are subjected.

In connection with this grant --

Justice Lewis F. Powell: Mr. Debevoise, before you move on, I want to be clear.

Do I understand that you draw a distinction between ordering and approving?

Now, Justice White suggested approval could indicate that this procedure is alright and some other procedure also may be alright.

In that circumstance, you would say, no state action?

Mr. Thomas M. Debevoise: In the case that I can visualize at the moment, Justice Powell, I would, yes.

I mean, if it's a question of a -- and a tariff, once accepted or approved, your description of service is in there.

The office at which you collect your bills and just lots and lots of material that is in this category that would subject to change by filing a new tariff and it would only be if you were doing something unreasonable that a commission would then come along and say, you must change the tariff and do it this way and then I say, there would be the director.

So, just there, acceptance for filing or approval, I would if they could not act.

Justice Byron R. White: Otherwise, any private act is consistent with state law and then in one sense would have the approval of state law would be state action?

Mr. Thomas M. Debevoise: Exactly, exactly, in all of the regulated businesses and there are very, very few businesses that are not regulated in some degree today.

Whether there are corporations or individuals.

Now, I believe, I covered our main points that we unfortunately don't believe this is a termination case because the petitioner was not our customer.

She didn't apply for new service herself, so it's not an equal protection case.

Justice Lewis F. Powell: What do you say Mr. Debevoise about the order is if the state has ordered the companies that furnish electricity?

Mr. Thomas M. Debevoise: I believe that there is no right to receive electric service except under --

Justice Byron R. White: -- is not a statutory obligation for the companies that take part in the electricity --

Mr. Thomas M. Debevoise: There is a statutory --

Justice Byron R. White: Without discrimination?

Mr. Thomas M. Debevoise: Without -- exactly, I was going to say except under the Equal Protection Clause.

Now, if we discriminate it against her, as oppose to any other person who acquired for service, I believe that there would be a cause under the Equal Protect Clause as the day of this beware case was holding this summer.

But there's --

Justice Potter Stewart: But again, it would be if only if you were a state.

The Equal Protection Clause doesn't apply to private action,

Mr. Thomas M. Debevoise: Excuse me --

Justice Potter Stewart: Private individuals as --

Mr. Thomas M. Debevoise: There, we were dealing with a municipal company.

But there's no right, and there was nothing to force the company to extend electric service except within the bounds of its term.

Justice Byron R. White: But if a -- alright, but if a person is willing to leave up to the rules of the company without this tariff, there's a statutory obligation to furnish service.

Mr. Thomas M. Debevoise: Once -- once we have hooked somebody else, accepted somebody as a customer, there's a statutory obligation for reasonably continuous service, I think it is.

That is correct.

Now that obligation, however, is subject determination if when we supply service, we have not been paid for it.

Justice Byron R. White: But you're saying that a State may order a company to furnish electricity.

And the company can go ahead then the hearing out of statutory obligation to furnish electricity and then the state may permit that -- may permit the termination without notice?

Mr. Thomas M. Debevoise: I believe that's correct, Your Honor, because the state can only order as to supply electricity within the context of the rights of the utilities.

It cannot order us to supply electricity to customers and receive no compensation for it.

Justice Byron R. White: Well, it could, I suppose, in order to get a hearing before a termination.

Mr. Thomas M. Debevoise: I believe that the Public Service Commission could --

Justice Byron R. White: Yes.

Mr. Thomas M. Debevoise: Direct that.

Justice Byron R. White: So, that they wouldn't made -- they wouldn't be violating any rights of yours if they ordered it?

Mr. Thomas M. Debevoise: As long as we have an opportunity to receive payment.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: Since that would that just be one of the conditions of your franchise than in effect, would it not?

Rebuttal of Thomas M. Debevoise

Mr. Thomas M. Debevoise: We would have an opportunity to build before the commission a record of on which they would base a decision as to any deviation from our present practices.

I believe that I've given you our position.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: Thank you, Mr. Debevoise.

Mr. Greenberg, you have about three minutes.

Rebuttal of Jack Greenberg

Mr. Jack Greenberg: (Voice overlap) I would submit that the state action issue in the case is really no issue at all.

I can't imagine for a moment that anyone would say that it is not state action if this electric company decided that it was not going to furnish electricity to black people or it not going to furnish electricity to Mexicans.

I think the state action question is manifest but issue is what happens upon a finding and a recognition of the obvious existence of state action in this case.

Now, there has been some talk about Public Utilities Commission against Pollak and how this case is different because --

Justice Byron R. White: You would say the -- the utility refused to furnish electricity in Negroes that it could be sued for damages under 1983?

Mr. Jack Greenberg: Yes.

Justice Byron R. White: Because?

Mr. Jack Greenberg: It had denied equal protection of law.

The State had denied as the same basis as the --

Justice Byron R. White: The state action but the question is whether the State denied equal protection of law, that's the Fourteenth Amendment.

The State had been denied protection of the law.

Is it just in state action?

Mr. Jack Greenberg: It was -- it is state action and equal protection.

Justice Byron R. White: The State never indicated as a matter of fact, the State said to serve everybody equally and this company disobeys the statute and refuses to serve Negroes.

Mr. Jack Greenberg: Well, the -- in the Schools against the United States, the state law said, the sheriff wasn't allowed to beat people up.

But if this utility had as part of its tariffs, the right to use force and violence to go and read the meter and collect the bill.

I would assume that that utility meter reader and collect acting pursuant to a tariff would be engage in state action and utility would be liable for -- under the Civil Rights Act.

Justice William H. Rehnquist: Then Schools you're talking about a Government official by definition of sheriff.

Mr. Jack Greenberg: Yes, but he was acting contrary to state law.

That now I assume that was the --

Justice Byron R. White: You said the meter reader beat up the householder liable to 1983.

Mr. Jack Greenberg: If you're doing it pursuant to a tariff approved by the Public Utilities Commission saying that that's something to be --

Justice Byron R. White: -- contrary to tariff.

Mr. Jack Greenberg: Well, the tariff authorizes into use force --

Justice Byron R. White: -- meter reader is agent of the state in your book?

Mr. Jack Greenberg: No, I am assuming a tariff which authorize a meter reader to use self-help in order to carry out the policies and the --

Justice Byron R. White: The argument in this clause it would be through even if he was ordered not to and he nevertheless did.

Mr. Jack Greenberg: Yes, but I was responding to the -- to the suggestion that he might be acting contrary to state law.

Well, turning to the Pollak case for a moment, this case is indeed quite like the Pollak case because the respondent's brief demonstrates 1971 and 1972 tariffs including this particular regulation promulgated.

After a hearing addressed to the question of rights but the rights and the termination procedures were part of the same regulations which were promulgated.

And the company makes a point, and I think correct me so, saying that its termination procedures and its rights are inextricably into client.

Termination procedures determine its cost of collection and the -- its credit practices and so forth.

Rebuttal of Mr. Chief Justice Burger

Mr. Chief Justice Burger: Thank you, Mr. Greenberg.

Thank you, Mr. Debevoise.

The case is submitted.