Virgin Islands Hotel Association (u.s.), Inc., a Corporation v. Virgin Islands Water & Power Authority

ADAMS, Circuit Judge,

concurring

I concur in the result reached by the majority opinion in this case.

The appellant raises two contentions in this appeal: (1) that the procedures are inconsistent with the due procéss clause of the Constitution, and (2) that the procedure employed by the Virgin Islands Water & Power Authority contravenes the statute under which the rate increases were to be approved. .

The opinion in United States v. Florida East Coast Railway Co., 410 U.S. 224, 41 U.S.L.W. 4247 (U.S., Jan. 22, 1973) is the most recent pronouncement by the Supreme Court on the type of proceeding acceptable when an admim istrative agency promulgates a new rate schedule. The opinion makes clear that, at this time, there is no requirer ment of a traditional adversary hearing in a broad rate-making context; such a deficiency is not violative of due process.¹ ' ■ '

In the present case, we are dealing with rate-making proceedings conducted pursuant to a statutory plan of the legislature of the Virgin Islands, as interpreted by this Court. Virgin Islands Hotel Ass’n v. Virgin Islands Water & Power Authority, 465 F.2d 1272 (3d Cir. 1972). The import of our earlier decision was that in rate-making proceedings pursuant to the statute in question a “meaningful hearing”² must be afforded those who would challenge the proposed rates. The parameters of such a hearing have not yet been delineated in any particularity.

Although as stated above, the traditional adversary “trial-type” proceedings do not appear to be mandated by the Constitution, I believe that in matters as important as the establishment of'utility rates for large groups of citizens and businesses, a greater degree of precision. and equity can be established when those opposing the proposed rates have an adequate opportunity to review the proposal with its supporting data, and an occasion to test the proposed rate and its underlying bases through the medium of cross-examining those responsible for its promulgation. Perhaps in the context of utility rate-making these would be central ingredients of a truly “meaningful” hearing.³

The proper resolution of this case, however, does not require that we reach the more difficult question, i.e., were the proceedings in this case so deficient so as not to comport with the concept of “meaningful hearing.” As the majority opinion points out, counsel for the Hotel Association did not object to the amount of time allotted for study of the proposal at the time of its dissemination. In addition, counsel did not establish, certainly on the record, the various inquiries or lines of inquiry the Hotel Association would have propounded had they been given the opportunity to cross-examine the proponents of the rate, nor did counsel avail himself of what opportunity for questioning was afforded him.

For these reasons, I concur in the result reached in this case.

3 An impartial presiding officer at any proceeding would also appear to be an important element in insuring a “meaningful” hearing. In the present case the proceedings were chaired by the Vice-Chairman of the Water & Power Authority with the aid of an Assistant Attorney-General of the Virgin Islands. Although in view of the disposition of this case, this factor does not render these hearings other than a “meaningful hearing,” my concern with an arrangement that places the control of the meeting in the hands of the proponent of the rate increase, and the proponent’s counsel, must be noted.

1 In United States v. Florida East Coast Ry., supra, the railroad challenged the establishment by the Interstate Commerce Commission of incentive per diem rates on freight cars. These rates were promulgated after a hearing which did not include several of the elements of an adversary proceeding. Upholding the implementation of the rates, the Court stated that the Commission’s procedures satisfied the requirements of the Administrative Procedure Act, 5 U.S.C. § 551 et seq. and were “not inconsistent with prior decisions of this Court.” 41 U.S.L.W. at 4254. Several of these earlier decisions, e.g., Morgan v. United States, 304 U.S. 1 (1938); Ohio Bell Telephone Co. v. Public Utilities Commission, 301 U.S. 292 (1937); ICC v. Louisville & Nashville R. Co., 227 U.S. 88 (1913), had been thought by some to indicate that due process in ratemaking procedures included a requirement of “trial-type” hearings. Justice Douglas, dissenting in Florida East Coast Ry. Co. asserted:

“I do not believe it is within our traditional concepts of due process to allow an administrative agency to saddle anyone with a new rate, charge, or fee without a full hearing that includes the right to present oral testimony, cross-examine witnesses and to present oral argument.” 41 U.S.L.W. at 4254.

2 465 F.2d at 1275.