Bell Telephone Company of Pennsylvania v. Driscoll

In Bell Telephone Company of Pennsylvania v. Driscoll, 343 Pa. 109, 115, 21 A.2d 912, 915 (1941), Bell Telephone Company of Pennsylvania (Bell) challenged a statute which provided, in relevant part, that "no public utility . . . shall, without the prior approval of the Public Utility Comission, make effective or modify any contract with an affiliated interest." Driscoll, 343 Pa. at 110 n., 21 A.2d at 913 n.(quoting the then-current provision of Section 702 of the Public Utility Law of 1937, as amended by the Act of September 28, 1938, P.L. 44, 66 P.S. 1272.) Bell argued that this provision was a standardless delegation of legislative authority to the Public Utility Commission (Commission). The Pennsylvania Supreme Court agreed, stating: There is no explicit standard set up in this section to guide the commission and we do not understand that the appellants contend that there is. They seek to find such guide by reference to the whole act. The appellants' argument becomes somewhat hard to follow at this point for they do not make clear whether the alleged implicit standard is merely public interest or something more definite. The form of this section would seem to indicate that the legislature did not intend to set up any standard for the commission in approving contracts, for its power to approve or disapprove is untrammeled by any conditions while the right of the commission to withdraw its approval previously given is conditioned on a finding of public interest. Even if we were to consider that public interest can be implied as the standard for approval, that term would not be a proper standard unless further defined or limited in its meaning. To hold otherwise would be to reject the rule that the legislature may not delegate its authority to legislate since in any such delegation there is an implication that the power will be exercised in the public interest. Before any commission can decide whether a contract is contrary to public interest, it is necessary to find what is or what is not in the public interest. The power to make such determination rests with the legislature and without such declaration the commission would be without a standard or criterion. The phrase "public interest" as used in this connection is "a concept without ascertainable criterion." Id. at 115-16, 21 A.2d at 915-16. The Supreme Court acknowledged that the approval of utilities' contracts by the Commission might further the Legislature's purpose of regulating rates and ensuring adequate service. However, the Court held that it was still necessary for the Legislature to provide standards to guide the Commission in approving or disapproving contracts in furtherance of this goal. Id. at 117-19, 21 A.2d at 916-17.