(40 Sup.Ct.)

In terms this is a "license," and in terms also it is subject to "conditions and limitations" to follow in the contract, which are found in the third and fifth paragraphs.

The third paragraph reads:

"The party of the second part [defendant] agrees to produce the play not later than Jan-do uary 1st, 1913, and to continue said play for at

first paragraph, that the license granted is | state court to the contrary, that neither mandasubject to the limitations which should follow, and which did follow in the third paragraph. It involves imposing, by judicial construction, heavy and unusual burdens upon the author of a successful dramatic composition in the interest of a commercial producer-a result which courts should not strain themselves to accomplish.

Mr. Justice PITNEY concurs in this opinion.

1. CONSTITUTIONAL LAW 298 (1)-LAUNDRY
COMPANY ENTITLED TO REVIEW IN COURTS OF
RATES PRESCRIBED BY CORPORATION COM-
MISSION.

5. PUBLIC SERVICE COMMISSIONS 21-COM

MISSION WILL NOT BE RESTRAINED FROM
INVESTIGATING RATES AND PRACTICES.

In a suit in a federal court to restrain a state Corporation Commission from enforcing an

(252 U. S. 331) OKLAHOMA OPERATING CO. v. LOVE order fixing maximum rates for laundry work et al. claimed to be confiscatory, the commission will not be restrained from proceeding with an in(Submitted Oct. 9, 1919. Decided March 22, vestigation of plaintiff's rates and practices, so 1920.) No. 129.

long as its findings and conclusions are subjected to the review of the federal District Court.

An order of a state Corporation Commission prohibiting a laundry company from charging, without its permission, rates higher than those prevailing in 1913, in effect prescribed maximum rates and was a legislative order, and under the Fourteenth Amendment plaintiff was entitled to an opportunity for a review in the courts of its contention that the rates were not compensatory.

2. MANDAMUS

73(1)—PROHIBITION

6(2) -IT MUST BE ASSUMED THAT NEITHER REMEDY WILL LIE TO REVIEW ORDERS OF CORPORATION COMMISSION FIXING RATES.

mus nor prohibition is available for review of an order alleged to be void, because confiscatory, notwithstanding the proviso that mandamus and prohibition shall lie from the Supreme Court to the commission in cases where such writs would lie to any inferior court or officer.

I

As Const. Okl. art. 9, § 20, has been construed by the state Supreme Court as not permitting a direct appeal from orders of the Corporation Commission fixing rates, it must be assumed, in the absence of a decision of the

3. CONSTITUTIONAL

LAW
303-ENforce-
MENT OF ORDERS OF CORPORATION COMMIS-
SION BY PENALTIES WITHOUT OPPORTUNITY
FOR REVIEW IS UNCONSTITUTIONAL.

the state court as authorizing no review of the
Rev. Laws Okl. 1910, § 8235, construed by
orders of the commission fixing rates, except
by an appeal in contempt proceedings for viola-
tion of the order, which violation may be pun-
ished by a penalty of $500 per day, is uncon-
stitutional, so far as it provides for the enforce-
ment of the prescribed rates by penalties, be-
cause of the absence of an opportunity for a
judicial review satisfying the constitutional re-
quirements.

4. PUBLIC SERVICE COMMISSIONS 24-JU

-RISDICTION WILL BE RETAINED TO GIVE COM-
PLETE RELIEF IN SUIT TO ENJOIN ENFORCE-
MENT OF ORDER FIXING RATES.

Where it was necessary to resort to a federal court of equity to restrain a Corporation Commission from enforcing an order fixing rates, because of the absence of any provision for a judicial review, the court will retain jurisdiction to determine whether the rates fixed are confiscatory, though pending the suit the Legislature has provided for a judicial review of such

orders.

Mr. Justice BRANDEIS delivered the opinion of the Court.

This suit was brought in the District Court of the United States for the Western Dis

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(40 Sup.Ct.)

trict of Oklahoma by the Oklahoma Operat- | of performing laundry service in Oklahoma ing Company against the Corporation Com-City and information in general to determine mission of that state to enjoin it from en- what may be reasonable rates for laundry tertaining complaints against the company service in that city. Upon these allegations for the violation of orders limiting the rates a preliminary injunction was sought below to restrain the Commission from entertainfor laundry work in Oklahoma City *there- ing complaints for violation of its order fixing tofore entered by the Commission, under section 82351 of the Revised Laws of Ok- the investigation regarding the cost of the rates and to enjoin it from proceeding with lahoma (1910); and from doing any other acts or things to enforce said orders. The

*333

service.

peal from an order denying a motion for a preliminary injunction heard before three judges. The appellant presents to this court the question whether section 8235 is void under the Fourteenth Amendment, contending that under the laws of the state there was no opportunity of reviewing judicially a legislative rate fixed pursuant to that section, except by way of defense to proceedings for contempt which might be instituted for violating the order, and that the possible penalties for such violation were so heavy as to prohibit resort to that remedy.

case comes here under section 266 of the Ju-ed course of proceedings thereunder, as conThe scope of section 8235 and the prescribdicial Code (Comp. St. § 1243) by direct ap- strued by the Supreme Court of the state (Harriss-Irby Cotton Co. v. State, 31 Okl. 603, 122 Pac. 163; Shawnee Gas & Electric Co. v. State, 31 Okl. 505, 122 Pac. 222; Oklahoma Gin Co. v. State [Okl.] 158 Pac. 629), in connection with other legislation (sections 1192 to 1207 of the Revised Code of 1910) and provisions of the state Constitution (article 9, sections 18 to 23), are, so far as here material, these: Whenever any business, by reason of its nature, extent, or the exercise of a virtual monopoly therein, is such that the public must use the same or its services, it is deemed a public business, and as such is subject to the duty to render its services upon reasonable terms without discrimination. If any public business violates such duty the Corporation Commission has power to regulate its rates and practices. Disobedience to an order establishing rates may be punished as a contempt and the Commission

The bill as amended makes the following allegations: In 1913 the Commission entered an order declaring the Oklahoma Operating Company a monopoly and its business a public one, and directed it not to increase the rates then being charged except upon application to and permission of the Commission. Since that time operating costs have risen

*334

greatly and rates for laundry work pre*vailing in 1913 have become noncompensatory. Accordingly in January, 1918, the company moved the Commission to set aside its order of 1913 on the ground that the laundry business was not within the purview of section 8235, that the company was not a monopoly within the meaning of that section, and that the section was void. The Commission denied this motion, and thereafter the company established rates higher than those prevailing in 1913. On account of this it is now threatened with proceedings for contempt. Since the establishment of these higher rates the company has been summoned before the Commission to give information as to the cost

1 8235.

Public Business Defined. Whenever any business by reason of its nature, extent, or the existence of a virtual monopoly therein, is such that the public must use the same, or its services, or the consideration by it given or taken or offered,

•

•

or the commodities bought or sold therein are offer-
ed or taken by purchase or sale in such a manner
as to make it of public consequence or to affect the
community at large as to supply, demand
or rate thereof, or said business is conducted in
violation of the first section of this article, said
business is a public business, and subject to be con-
trolled by the state, by the corporation commission
or by an action in any district court of the state,
as to all of its practices, prices, rates and charges.
And it is hereby declared to be the duty of any per-
son, firm or corporation engaged in any public busi-
ness to render its services and offer its commodi-

ties, or either, upon reasonable terms without dis-
crimination and adequately to the needs of the pub-
lic, considering the facilities of said business.

*335

has power, *sitting as a court, to impose a penalty therefor not exceeding $500 a day. Each day's continuance of failure or refusal to obey the order constitutes a separate offense. The original order may not be made nor any penalty imposed except upon due notice and hearing. No court of the state, except the Supreme Court by way of appeal, may review, correct or annul any action of the Commission within the scope of its authority or suspend the execution thereof; and the Supreme Court may not review an order fixing rates by direct appeal from such order. But in the proceedings for contempt the validity of the original order may be assailed; and for that purpose, among others, new evidence may be introduced. When a penalty for failure to obey an order has been imposed an appeal lies to the Supreme Court. On this appeal the validity of the original order may be reviewed; the appeal is allowed as of right upon filing a bond with sureties in double the amount of the fine imposed; the filing of the bond suspends the fine; and the period of suspension may not be computed against a concern in fixing the amount of liability for fines.

[1, 2] The order of the Commission prohibiting the company from charging, without its permission, rates higher than those prevailing in 1913, in effect prescribed maximum rates for the service. It was, therefore, a legislative order; and under the Fourteenth

Amendment plaintiff was entitled to an opportunity for a review in the courts of its contention that the rates were not compensatory. Chicago, etc., Railway Co. v. Minnesota, 134 U. S. 418, 456-458, 10 Sup. Ct. 462, 33 L. Ed. 970; Ex parte Young, 209 U. S. 123, 165, 166, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764. The Constitution of the state prohibited any of its courts from reviewing any action of the Commission within its authority except by way of appeal to the Supreme Court (article 9, section 20); and the Supreme Court had construed the Constitution and applicable provisions of the statutes as not permitting a

*336

direct appeal from *orders fixing rates. Harriss-Irby Cotton Co. v. State, supra. On behalf of the Commission it was urged at the oral argument that a judicial review of the order fixing rates might have been had also by writ of mandamus or of prohibition issuing out of the Supreme Court of the state. But, in view of the provision of the state Constitution just referred to, it must be assumed, in the absence of a decision of a state court to the contrary, that neither remedy, even if otherwise available, could be used to review an order alleged to be void because confiscatory. The proviso "that the writs of mandamus and prohibition shall lie from the Supreme Court to the Commission in all cases where such writs, respectively, would lie to any inferior court or officer," appears to have no application here. The challenge of a prescribed rate as being confiscatory raises a question, not as to the scope of the Commission's authority, but of the correctness of the exercise of its judgment. Compare Hirsh v. Twyford, 40 Okl. 220, 230, 139 Pac. 313.

der. In Oklahoma Gin Co. v. State, 252 U. S. 339, 40 Sup. Ct. 341, 64 L. Ed. —, decided this day, it appears that the full penalty of $500, with the provision for the like penalty for each subsequent day's violation of the order, was imposed in each of three complaints there involved, although they were merely different instances of charges in excess of a single prescribed rate. Obviously a judicial review beset by such deterrents does not satisfy the constitutional requirements, even if otherwise adequate, and therefore the provisions of the acts relating to the enforcement of the rates by penalties are unconstitutional without regard to the question of the insufficiency of those rates. Ex parte Young, 209 U. S. 123, 147, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Missouri Pacific Railway Co. v. Tucker, 230 U. S. 340, 349, 33 Sup. Ct. 961, 57 L. Ed. 1507; Wadley Southern Railway v. Georgia, 235 U. S. 651, 662, 35 Sup. Ct. 214, 59 L. Ed. 405.

[4] The plaintiff is entitled to a temporary injunction restraining the Corporation Commission from enforcing the penalties. Since this suit was commenced, the Legislature has provided by chapter 52, section 3, of the Laws of 1919 (Sess. Laws Oklahoma 1919, p. 87) that in actions arising before the Commission under section 8235 there shall be the Court of the state as had theretofore exsame right of direct appeal to the Supreme isted in the case of transportation and transmission companies under article 9, section 20, of the Constitution. But as plaintiff was obliged to resort to a federal court of equity for relief it ought to retain jurisdiction of the cause in order to make that relief as full and complete as the circumstances of

[3] So it appears that the only judicial re

view of an order fixing rates possible under

the case and the nature of the proofs may re

quire.

*338

the laws of the state was that arising in proThe suit should, therefore, proceed ceedings to punish for contempt. The Con- for the purpose of determining whether the stitution endows the Commission with the maximum rates fixed by the Commission are, powers of a court to enforce its orders by under present conditions, confiscatory. If such proceedings. Article 9, sections 18, 19. they are found to be so, a permanent injuncBy boldly violating an order a party against tion should issue to restrain their *enforcewhom it was directed may provoke a complaint; and if the complaint results in a cita-wise, as through an assertion by customers ment either by means of penalties or othertion to show cause why he should not be of alleged rights arising out of the Commispunished for contempt, he may justify before sion's orders. Missouri v. Chicago, Burlingthe Commission by showing that the order ton & Quincy R. R., 241 U. S. 533, 538, 36 violated was invalid, unjust or unreasonable. If he fails to satisfy the Commission that it Sup. Ct. 715, 60 L. Ed. 1148. If upon final erred in this respect, a judicial review is hearing the maximum rates fixed should be opened to him by way of appeal on the found not to be confiscatory, a permanent whole record to the Supreme Court. But the injunction should, nevertheless, issue to repenalties, which may possibly be imposed, dente lite, provided that it also be found that strain enforcement of penalties accrued penif he pursues this course without success, are such as might well deter even the boldest the plaintiff had reasonable ground to contest and most confident. The penalty for refusal them as being confiscatory.

#337

[5] It does not follow that the Commission need be restrained from proceeding with an investigation of plaintiff's rates and practices, so long as its findings and conclusions are subjected to the review of the District Court herein. Indeed, such investigation and

to *obey an order may be $500; and each day's continuance of the refusal after service of the order it is declared "shall be a separate offense." The penalty may apparently be imposed for each instance of violation of the or

(40 Sup.Ct.)

the results of it might with appropriateness be made a part of the final proofs in the

cause.2

These conclusions require that the decree of the District Court be reversed and that the case be remanded for further proceedings in conformity with this opinion. Reversed.

No. 32.

Mr. C. B. Ames, of Oklahoma City, Okl. for plaintiff in error.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The Corporation Commission of Oklahoma having found under section 8235 of the Revised Laws of 1910 that the Oklahoma Gin Company and four other concerns in the

(252 U. S. 339)

OKLAHOMA GIN CO. v. STATE OF OKLA- town of Chandler had combined and raised the charges for ginning cotton, and on October 17, 1913, fixed a schedule of rates

HOMA.

(Submitted Oct. 9, 1919. Decided March 22, lower than those then in force. The company 1920.) thereafter charged rates in excess of those so fixed, and three separate complaints against it alleging violation of the order were filed with the Commission. Being summoned

*340

CONSTITUTIONAL LAW 303-PUBLIC SERV-*to show cause why it should not be punished
ICE COMMISSIONS 2-STATUTE IMPOSING
PENALTIES FOR VIOLATION OF ORDERS OF
CORPORATION COMMISSION VOID FOR LACK OF
JUDICIAL REVIEW.

Rev. Laws Okl. 1910, § 8235, so far as it provides penalties for disobedience of orders of the Corporation Commission fixing rates, violates the Fourteenth Amendment, because of the lack of any opportunity for a judicial review of such orders.

for contempt the company admitted violation of the order, but alleged that it was void, among other reasons, because section 8235 was in conflict with the Fourteenth Amendment. After a full hearing, at which new evidence was introduced, the Commission affirmed, on October 10, 1914, the rates fixed, made a finding that the violation of the order was willful, imposed on the company a fine of $500 and costs under each of the

In Error to the Supreme Court of the State three separate complaints, directed refund of Oklahoma. of all amounts collected in excess of prescribed rates, and declared also:

Messrs. S. P. Freeling and Paul A. Walker, both of Oklahoma City, Okl., for the State of Oklahoma.

In Ex parte Young, 209 U. S. 123, 133, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14

Ann. Cas. 764, the District Court appears to have
considered whether the rates were reasonable al-
though the penal features of the act were declared
void. Missouri Pac. Ry. Co. v. Tucker, 230 U. S.
340, 33 Sup. Ct. 961, 57 L. Ed. 1507, was an action
for the penalty; and the question here raised was
not involved. That it is the penalty provision and
not the rate provision which is void appears from
the cases in which the validity of statutes was sus-
tained because the objectionable penalty provisions
were severable and there was no attempt to enforce
the penalties. Willcox v. Consolidated Gas Co., 212
U. S. 19, 53, 29 Sup. Ct. 192, 53 L. Ed. 382, 15 Ann.
Cas. 1034, 48 L. R. A. (N. S.) 1134; United States

v. Delaware & Hudson Co., 213 U. S. 366, 417, 29
Sup. Ct. 527, 53 L. Ed. 836; Grenada Lumber Co. v.
Mississippi, 217 U. S. 433, 443, 30 Sup. Ct. 535, 54
L. Ed. 826; Atchison, etc., Ry. Co. v. O'Connor, 223
U. S. 280, 286, 32 Sup. Ct. 216, 56 L. Ed. 436, Ann. Cas.

1913C, 1050; Wadley Southern Ry. v. Georgia, 235 U.

S. 651, 662, 35 Sup. Ct. 214, 59 L. Ed. 405.

"A fine will be imposed for each day the order has been violated, and the matter as to the num

Proceeding before the Corporation Commission of Oklahoma by the State of Oklahoma against the Oklahoma Gin Company. ber of days and the amounts of fines to be imThe order of the Commission imposing a posed upon defendant, other than those menfine, etc., was affirmed by the Oklahoma Su- tioned in the information, will be left open for preme Court (158 Pac. 629), and the Gin Com-adjustment upon taking of evidence as to the pany brings error. Reversed. number of days violated."

See, also, 39 Sup. Ct. 387, 40 Sup. Ct. 338.

An appeal was taken by the company to the Supreme Court of the state, which affirmed the order, and thereafter denied two petitions for rehearing. The case comes here on writ of error under section 237 of the Judicial Code as amended (Comp. St. § 1214).

This case was argued and submitted with Oklahoma Operating Co. v. Love et al., 252 U. S. 331, 40 Sup. Ct. 338, 64 L. Ed.

set

decided this day. For the reasons forth in the opinion in that case, the provision concerning penalties for disobedience to an order of the Commission was void, because it deprived the company of the opportunity of a judicial review. The judgment must therefore be reversed. It is unnecessary to consider other contentions of plaintiff in error.

Reversed.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes