Sutter Butte Canal Co. v. Railroad Commission, 279 U.S. 125 (1929)

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Sutter Butte Canal Co. v. Railroad Commission of California

No. 403

Argued March 6, 7, 1929
Decided April 8, 1929
279 U.S. 125

ERROR TO THE SUPREME COURT OF CALIFORNIA

Syllabus

1. The record does not disclose any substantial evidence that would impeach the findings of the Railroad Commission upon the subject of a fair rate-base and a proper return to the petitioner Company. P. 134.

2. Contracts between a public utility water company and its consumers are subject to modification in respect of their duration as well as their rates through a proper exercise of the state police power. P. 137.

3. A California corporation, which owned a water right dedicated to public use and, under the state constitution and laws, was a public utility whose rates and service were subject to regulation by the state Railroad Commission, served the water to two classes of consumers: (1) consumers who, in virtue of early contracts, were entitled to water in perpetuity for designated tracts and were under a continuing obligation to pay service and water charges each season on the acres for which they desired water and also to pay the service charges on the remaining acres for which, in any season, they did not desire it, and (2) consumers who obtained water at these same rates under periodical applications defining the lands to be served, but limiting the obligation to pay service charges on acres not irrigated to three years from date of application. For the purpose of preventing this discrimination against contract consumers and resulting difficulties of administration, the Commission made an order under which they might release themselves from the continuing obligation to pay charges on lands not irrigated and acquire a status like that of the consumers under applications. Held that the order did not deprive the water company of contract rights in violation of the Fourteenth Amendment. Pp. 134-137.

4. Upon review of a judgment of the Supreme Court of California upholding, on certiorari, an order of the state Railroad Commission affecting the rates and contracts of a water company, held that a construction of the order made by that court and which the counsel for the Commission, in the oral argument here, declared to be regarded by the Commission as binding, should not be given an independent construction by this Court. P. 139.

202 Cal. 179 affirmed.

Error to review a judgment of the Supreme Court of California affirming an order of the state Railroad Commission relating to the rates and contracts of the Canal Company, and the valuation of its property for rate-fixing purposes.