In General
By virtue of the nature of the business they carry on and the public's interest in it, public utilities are subject, as to their local business, to State regulation exerted either directly by legislature or by duly authorized administrative bodies.[223] But inasmuch as their property remains under the full protection of the Constitution, it follows that whenever this power of regulation is exerted in what the Court considers to be an "arbitrary" or "unreasonable" way and to be in effect an infringement upon the right of ownership, such exertion of power is void as repugnant to the due process clause.[224] Thus, a city cannot take possession of the equipment of a street railway company, the franchise of which has expired,[225] although it may subject said company to the alternative of accepting an inadequate price for its property or of ceasing operations and removing its property from the streets.[226] Likewise, a city, which is desirous of establishing a lighting system of its own, may not remove, without compensation, the fixtures of a lighting company already occupying the streets under a franchise;[227] but in erecting its own waterworks in competition with that of a company which has no exclusive charter, a municipality inflicts no unconstitutional deprivation.[228] Nor is the property of a telegraph company illegally taken by a municipal ordinance which demands, as a condition of the establishment of poles and conduits in the city streets, that positions be reserved for the city's wires, which shall be carried free of charge, and which provides for the moving of the conduits, when necessary, at company expense.[229] And, the fact that a State, by mere legislative or administrative fiat, cannot convert a private carrier into a common carrier will not protect a foreign corporation which has elected to enter a State, the Constitution and laws of which require that it operate its local private pipe line as a common carrier. Such foreign corporation is viewed as having waived its constitutional right to be secure against imposition of conditions which amount to a taking of property without due process of law.[230]
Compulsory Expenditures
The enforcement of uncompensated obedience to a regulation for the public health and safety is not an unconstitutional taking of property without due process of law.[231] Thus, where the applicable rule so required at the time of the granting of its charter, a water company may be compelled to furnish connections at its own expense to one residing on an ungraded street in which it voluntarily laid its lines.[232] However, if pipe and telephone lines are located on a right of way owned by a pipe line company, the latter cannot, without a denial of due process, be required to relocate such equipment at its own expense;[233] but if its pipes are laid under city streets, a gas company validly may be obligated to assume the cost of moving them to accommodate a municipal drainage system.[234]
To require a turnpike company, as a condition of its taking tolls, to keep its road in repair and to suspend collection thereof, conformably to a State statute, until the road is put in good order, does not take property without due process of law, notwithstanding the fact that present patronage does not yield revenue sufficient to maintain the road in proper condition.[235] Nor is a railroad bridge company unconstitutionally deprived of its property when, in the absence of proof that the addition will not yield a reasonable return, it is ordered to widen its bridge by inclusion of a pathway for pedestrians and a roadway for vehicles.[236]
Grade Crossings and Other Expenditures by Railroads.—When railroads are required to repair a viaduct under which they operate,[237] or to reconstruct a bridge or provide means for passing water for drainage through their embankment,[238] or to sprinkle that part of the street occupied by them,[239] their property is not taken without due process of law. But if an underground cattle-pass is to be constructed, not as a safety measure but as a means of sparing the farmer the inconvenience attendant upon the use of an existing and adequate grade crossing, collection of any part of the cost thereof from a railroad is a prohibited taking for private use.[240] As to grade crossing elimination, the rule is well established that the State may exact from railroads the whole, or such part, of the cost thereof as it deems appropriate, even though commercial highway users, who make no contribution whatsoever, benefit from such improvements. But, the power of the State in this respect is not unlimited. If its imposition is "arbitrary" and "unreasonable" it may be set aside; but to reach that conclusion, it may become necessary to consider certain relevant facts; e.g., whether a new highway on which an underpass is to be constructed is essential to the transportation needs of a community already well served by a crossing equipped with devices which are adequate for safety and convenience of a local traffic; whether the underpass is prescribed as part of a national system of federal aid highways for the furtherance of motor vehicle traffic, much of which is in direct competition with the railroad; whether the increase in such traffic will greatly decrease rail traffic and hence the revenue of the railroad; whether the amount of taxes paid by the railroads of the State, part of which is devoted to the upkeep of public highways used by motor carriers, is disproportionately higher than the amount paid by motor carriers.[241]
Compellable Services
The primary duty of a public utility being to serve on reasonable terms all those who desire the service it renders, it follows that a company cannot pick and choose and elect to serve only those portions of its territory which it finds most profitable, leaving the remainder to get along without the service which it alone is in a position to give. Compelling a gas company to continue serving specified cities as long as it continues to do business in other parts of the State entails therefore no unconstitutional deprivation.[242] Likewise a railway may be compelled to continue the service of a branch or part of a line although the operation involves a loss.[243] But even though a utility, as a condition of enjoyment of powers and privileges granted by the State, is under a continuing obligation to provide reasonably adequate service, and even though that obligation cannot be avoided merely because performance occasions financial loss, yet if a company is at liberty to surrender its franchise and discontinue operations, it cannot be compelled to continue at a loss.[244]
Pursuant to the principle that the State may require railroads to provide adequate facilities suitable for the convenience of the communities served by them,[245] such carriers have been obligated to establish stations at proper places for the convenience of patrons,[246] to stop all their intrastate trains at county seats,[247] to run a regular passenger train instead of a mixed passenger and freight train,[248] to furnish passenger service on a branch line previously devoted exclusively to carrying freight,[249] to restore a siding used principally by a particular plant but available generally as a public track, and to continue, even though not profitable by itself, a sidetrack[250] as well as the upkeep of a switch-track leading from its main line to industrial plants.[251] However, a statute requiring a railroad without indemnification to install switches on the application of owners of grain elevators erected on its right of way was held void.[252] Whether a State order requiring transportation service is to be viewed as reasonable may necessitate consideration of such facts as the likelihood that pecuniary loss will result to the carrier, the nature, extent and productiveness of the carrier's intrastate business, the character of the service required, the public need for it, and its effect upon service already being rendered.[253] If the service required has no substantial relation to transportation, it will be deemed arbitrary and void, as in the case of an order requiring railroads to maintain cattle scales to facilitate trading in cattle,[254] and of a prohibition against letting down an unengaged upper berth while the lower berth was occupied.[255]
Intercompany Railway Service.—"Since the decision in Wisconsin M. & P.R. Co. v. Jacobson, 179 U.S. 287 (1900), there can be no doubt of the power of a State, acting through an administrative body, to require railroad companies to make track connections. But manifestly that does not mean that a Commission may compel them to build branch lines, so as to connect roads lying at a distance from each other; nor does it mean that they may be required to make connections at every point where their tracks come close together in city, town and country, regardless of the amount of business to be done, or the number of persons who may utilize the connection if built. The question in each case must be determined in the light of all the facts, and with a just regard to the advantage to be derived by the public and the expense to be incurred by the carrier. * * * If the order involves the use of property needed in the discharge of those duties which the carrier is bound to perform, then, upon proof of the necessity, the order will be granted, even though 'the furnishing of such necessary facilities may occasion an incidental pecuniary loss.' * * * Where, however, the proceeding is brought to compel a carrier to furnish a facility not included within its absolute duties, the question of expense is of more controlling importance. In determining the reasonableness of such an order the Court must consider all the facts—the places and persons interested, the volume of business to be affected, the saving in time and expense to the shipper, as against the cost and loss to the carrier."[256]