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Adler v. Northern Illinois Gas Co.

MARCH 15, 1965.

GERALD R. ADLER, PLAINTIFF-APPELLANT,

v.

NORTHERN ILLINOIS GAS COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Affirmed.

MR. JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.

Rehearing denied April 26, 1965.

This is a class action, in which plaintiff, a customer of defendant, Northern Illinois Gas Company, brought an action on behalf of all customers of defendant in the Circuit Court of Cook County, seeking (1) a declaratory judgment determining the rights of defendant's customers under the Natural Gas Act (Title 15 U.S.C. § 717ff) and the public utility laws of Illinois; and (2) an accounting for a large sum of money by which, plaintiff alleges, defendant fraudulently enriched itself through the sale of natural gas to its customers. The trial court dismissed the action for want of jurisdiction over the subject matter of the action and denied leave to amend the complaint. Plaintiff appeals.

Plaintiff's complaint, in substance, contains allegations grounded on plaintiff's basic theory of the instant action, which is:

(1) Congress, by the enactment in 1938 of the Natural Gas Act, providing for the regulation of natural gas, intended the ultimate gas consumers of the nation to be the primary beneficiaries of "a dual system of regulation of the natural gas industry which would protect the consumers against exploitation and windfall profits arising out of the sale of such gas to ultimate users."

(2) Defendant's business is devoted almost entirely to the purchase and resale of natural gas to ultimate consumers in Illinois.

(3) Defendant's sworn statements disclose returns from 9% to over 10%, whereas "the FPC [Federal Power Commission], in carrying out the program of Congress under the Natural Gas Act has repeatedly held interstate natural gas companies shall not make large windfall profits or exploit the consumers, by limiting their return to 6% or 6 1/2%. Since Northern resells such natural gas, it has no greater right to windfall profits than have pipeline companies." Defendant's profits are "tantamount to a fraud upon its customers."

(4) The Natural Gas Act is in pari materia with the Illinois utility laws. Northern's duties to its customers and their rights depend upon the provisions and purposes of both statutes. The mandate to carry out the common purposes of federal and state laws does not rest only with administrative agencies, but it is also imposed upon the courts. Equity courts in Illinois should entertain plaintiff's complaint because "they are the only agency which can prohibit Northern from retaining its windfall profits."

(5) Plaintiff properly filed no complaint with the Illinois Commerce Commission because "50 years of history of Illinois utility regulation apparently discloses no precedent for lower rates obtained by individual consumers against large utilities. Such remedy has become largely a fiction or illusion."

Defendant's motion to dismiss, filed pursuant to section 48 of the Illinois Civil Practice Act, alleges the court does not have jurisdiction of the subject matter of the action because it "is one over which the Illinois Commerce Commission has exclusive jurisdiction by reason of `An Act Concerning Public Utilities' (Ill. Rev Stats 1961, c 111 2/3, § 1 et seq.), and plaintiff has not utilized or exhausted his remedies before the Illinois Commerce Commission. Said jurisdictional defect cannot be removed by transfer of the case to any other court."

An affidavit in support of defendant's motion to dismiss alleges that on January 16, 1954, after notice and hearing in an adversary proceeding, the Illinois Commerce Commission entered an order "approving the rates to be charged by Northern Illinois from and after February 1, 1954," and also approved a "purchased gas cost adjustment clause" under which the rates of defendant "are automatically increased or lowered as prices paid by Northern Illinois to interstate pipeline suppliers for natural gas are raised or lowered."

The supporting affidavit also includes a certified copy of a "Declaration of Exemption," entered on July 25, 1956, by the Federal Power Commission, which administers the Natural Gas Act. This "Declaration" shows that "upon the basis of the application filed, the exhibits appended thereto, and the files of the Commission, it appears that" defendant purchases interstate natural gas at points within the State of Illinois, and all natural gas received by defendant is ultimately consumed within the State of Illinois, and that "the Illinois Commerce Commission has certified to the Federal Power Commission that it has and is exercising regulatory jurisdiction over the rates, service and facilities of Applicant."

By reason of the foregoing, the Federal Power Commission declared, "Northern Illinois Gas Company is exempt from the provisions of the Natural Gas Act, and the orders, rules and regulation of this Commission issued pursuant thereto."

The order of the trial court recites that the court considered the complaint, the motion to dismiss and affidavit in support, plaintiff's counteraffidavit, interrogatories and answers, briefs from both parties, heard an oral argument, and, being fully advised in the premises, ordered "that this action be . . . dismissed for want of jurisdiction of the Court over the subject matter of the action, and that no declaratory judgment, as prayed for in the Complaint, be granted because of the want of jurisdiction of the Court over the subject matter of the action." The order also denied leave to amend the ...


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