While every intendment is to be made in favor of the lawfulness
of the exercise of municipal power making regulations to promote
the public health, municipal bylaws and ordinances, and even
legislative enactments undertaking to regulate useful business
enterprises, are subject to investigation in the courts with a view
to determining whether the law or ordinance is a lawful exercise of
the police power, or whether, under the guise of enforcing police
regulations, there has been an unwarranted and arbitrary
interference with constitutional rights to carry on a lawful
business, make contracts, or use and enjoy property.
While the right to exercise the police power is a continuing one
and a business lawful today may in the future become a menace to
the public welfare and be required to yield to the public good, the
exercise of the police power is subject to judicial review, and
property rights cannot be wrongfully destroyed by arbitrary
enactment.
Although an ordinance may be lawful on its face and apparently
fair in its terms, yet if it is enforced in such a manner as to
work a discrimination against a part of a community for no lawful
reason, such exercise of power will be invalidated by the courts.
Yick Wo v. Hopkins, 118 U. S. 356.
A municipal ordinance was adopted in September fixing the limits
within which gas works might be erected. Thereafter, a permit was
granted for the erection of a plant; in November, another ordinance
was adopted amending the September ordinance, and by which
ordinance the territory on which the works were in course of
erection and purchased in reliance upon the September ordinance was
excluded. There had been
Page 195 U. S. 224
no change in the neighborhood or conditions.
Held to be
void as against the holder of the permit as an arbitrary and
discriminatory exercise of the police power which amounted to a
taking of property without due process of law and an impairment of
property rights protected by the Fourteenth Amendment.
Where property rights will be destroyed, unlawful interference
by criminal proceedings under a void law or ordinance may be
reached and controlled by a court of equity.
This is a writ of error to the Supreme Court of the State of
California, seeking a reversal of the judgment of that court
affirming the judgment of the superior court dismissing the
complaint of the plaintiff in error against the City of Los
Angeles.
Plaintiff in error filed a bill of complaint against the City of
Los Angeles seeking an injunction to restrain the enforcement of
certain ordinances prohibiting the erection or maintenance of gas
works except within prescribed limits in said city.
The case was decided upon demurrer to the bill. The complaint
sets forth, in substance, that on August 26, 1901, the City Council
of Los Angeles adopted an ordinance making it unlawful to erect and
maintain gas works outside of a certain district described in the
ordinance, and fixing penalties for the violation thereof. While
this ordinance was in force, the plaintiff in error made a contract
with the Valley Gas & Fuel Company for the erection of certain
gas works upon territory to be thereafter designated by her, and on
September 28, 1901, purchased lands within the limits of the
privileged district as fixed by the ordinance. That on the
November, 22, 1901, upon application to the Board of Fire
Commissioners of the City of Los Angeles, that body granted to the
plaintiff in error the privilege to erect the gas works upon the
territory aforesaid. Thereupon the plaintiff in error directed the
Valley Gas & Fuel Company to proceed with the erection of the
works upon the premises so purchased. That the foundations were
constructed at a cost of upwards of $2,500. After the foundations
had been nearly completed, the city council, on November 25,
Page 195 U. S. 225
1901, passed a second ordinance, amending the first ordinance
and thereby so limiting the boundaries of the territory within
which the erection of gas works was permitted in said city as to
include the premises of the plaintiff in error within the
prohibited territory. The work of constructing the works was
continuously prosecuted until the latter part of February, 1902,
when the plaintiff in error alleges that the City of Los Angeles,
combining and confederating with one James R. C. Burton and other
persons unknown, caused certain employees of the company engaged in
the erection of said works to be arrested, charged with the
violation of the said city ordinance. Other arrests were made on
the first and third of March, 1902. On the third of March, 1902,
the city council passed a third ordinance, amending the ordinance
of November 25, 1901, in respect to the description of the district
within which gas works could be erected. On March 6, 1902, the city
caused the arrest of certain persons employed by the company in
charge of the erection of the works, charged with the violation of
the amended city ordinance.
It is averred that the adoption by the city council of the
ordinances aforesaid, and the attempted enforcement thereof, were
instigated by officers and agents of the Los Angeles Lighting
Company, a corporation engaged in manufacturing and supplying gas
in said city, and having a monopoly of said business therein. It is
further averred that the action of the municipal authorities
complained of was taken for the purpose of protecting the said Los
Angeles Lighting Company in the enjoyment of its monopoly. It is
also claimed that the territory surrounding the premises of the
plaintiff in error, and within which, under the ordinance of August
26, in force when the complainant made her purchase and located and
began the erection of the gas works, it was lawful so to do, and
which, by the amending ordinances, was added to the prohibited
territory, was and is a district devoted almost exclusively to
manufacturing enterprises. Within its boundaries there is a large
amount of vacant and unoccupied land which is and
Page 195 U. S. 226
will continue to be useless except for the erection of
manufacturing establishments, within which were located at that
time a soap factory, a wool-pulling factory, three wineries,
numerous oil wells in operation, iron foundry, brass foundry, oil
refinery; immediately east of said tract, railroads and an
extensive tannery; immediately north, the oil tanks and refinery of
the Standard Oil Company. That the works being constructed for the
plaintiff in error are to be built upon concrete foundations with a
superstructure of noncombustible material, so that there can be no
danger from explosion, bursting, or leaking. The machinery is to be
of the most approved pattern, and that there can be no leakage or
escape of odors or any interference with the health, comfort, or
safety of the inhabitants of the city.
The plaintiff in error, relying upon the protection of the
Fourteenth Amendment to the Constitution of the United States,
prays that the permit granted by the board of fire commissioners be
declared to be a valid and subsisting contract between the City of
Los Angeles and herself, and that all ordinances passed by the city
council in contravention thereof be declared void; that the
defendant be enjoined from enforcing said ordinances against the
plaintiff, from delaying or interfering with the action of the
plaintiff in erecting the said works, from interfering with the
maintenance and operation of the same, and for general relief.
Page 195 U. S. 234
MR. JUSTICE DAY delivered the opinion of the Court.
As this case was decided upon demurrer to the complaint, the
allegations thereof must be taken as true. The question presented
involves the right of the plaintiff in error to invoke the
protection of the Fourteenth Amendment against alleged infraction
of her rights by the action of the city council in passing and
enforcing the ordinances which prevent the carrying on of the
business of making and selling gas to the people of the city.
Before entering upon a consideration of the case, it is
essential to examine briefly the extent to which constitutional and
legislative control have been exercised by authority of the State
of California in reference to the erection and maintenance of gas
works in cities. The constitution of the state, Section 19, Article
XI, provides that
"in any city where there are no public works owned and
controlled by the municipality for supplying the same with water or
artificial light, any individual, or any company duly incorporated
for such purpose under and by authority of the laws of this state,
shall, under the direction of the superintendent of streets or
other officer in control thereof, and under such general
regulations as the municipality may prescribe for damages and
indemnity for damages, have the privilege of using the public
streets and thoroughfares thereof, and of laying down pipes and
conduits therein, and connections therewith, so far as may be
necessary for introducing into and supplying such city and its
inhabitants either with gas light or other illuminating light, or
with fresh water for domestic and all other purposes, upon the
condition that the municipal government shall have the right to
regulate the charges thereof."
By the Act of the state legislature of April 4, 1870, Stats. of
1869-1870, 815, it was provided that cities may control the
location and construction of works so that they may be erected in
suitable localities to give the least discomfiture or annoyance to
the public. By the Constitution
Page 195 U. S. 235
of the State of California it is provided, Art. XII, sec. 11,
that any county, city, town, or township may make and enforce
within its limits all such local, police, sanitary, or other
regulations as are not in conflict with the general laws. In these
provisions may be found a grant of power to the City of Los Angeles
to control the location and erection of gas works within the city
limits. In the grant of such control, the fact is recognized that,
while the erection and maintenance of such works is a lawful
business pursuit, and one essential to the welfare and comfort of
the community, its prosecution requires the use of materials of
such a character, and such construction and maintenance of the
works, as not to be dangerous or offensive when carried on within
thickly populated parts of the city, and such rights are
consequently justly subject to regulation in such manner as to
protect the public health and safety. The Supreme Court of
California, as may be gathered from its opinion in this case, based
its decision upon the proposition that, as the exercise of the
right to control the location and construction of gas works is
within the power conferred by the legislature upon the city, the
act of the municipality in question cannot be reviewed, because so
to do would be a substitution of the judgment of the court for that
of the council upon a matter left within the exclusive control of
the legislative body. To support this conclusion, a citation is
made from the opinion of this Court in the case of
Munn v.
Illinois, 94 U. S. 113, to
the effect that the legislature is the exclusive judge of the
propriety of police regulation when the matter is within the scope
of its power. The observations of Mr. Chief Justice Waite in that
connection had reference to the facts of the particular case, and
were certainly not intended to declare the right of either the
legislature or a city council to arbitrarily deprive the citizen of
rights protected by the Constitution, under the guise of exercising
the police powers reserved to the states. It may be admitted that
every intendment is to be made in favor of the lawfulness of the
exercise of municipal power, making regulations to promote the
public health and
Page 195 U. S. 236
safety, and that it is not the province of courts, except in
clear cases, to interfere with the exercise of the power reposed by
law in municipal corporations for the protection of local rights
and the health and welfare of the people in the community. But,
notwithstanding this general rule of the law, it is now thoroughly
well settled by decisions of this Court that municipal bylaws and
ordinances, and even legislative enactments undertaking to regulate
useful business enterprises, are subject to investigation in the
courts with a view to determining whether the law or ordinance is a
lawful exercise of the police power or whether, under the guise of
enforcing police regulations, there has been unwarranted and
arbitrary interference with the constitutional rights to carry on a
lawful business, to make contracts, or to use and enjoy property.
In
Lawton v. Steele, 152 U. S. 133,
152 U. S. 137,
MR. JUSTICE BROWN, speaking for the Court, said upon this
subject:
"To justify the state in thus interposing its authority in
behalf of the public, it must appear first that the interests of
the public generally, as distinguished from those of a particular
class, require such interference, and second that the means are
reasonably necessary for the accomplishment of the purpose, and not
unduly oppressive upon individuals. The legislature may not, under
the guise of protecting the public interests, arbitrarily interfere
with private business or impose unusual and unnecessary
restrictions upon lawful occupations. In other words, its
determination as to what is a proper exercise of its police powers
is not final or conclusive, but is subject to the supervision of
the courts."
And again, in
Holden v. Hardy, 169 U.
S. 366, the same Justice, again speaking for the Court,
said:
"The question in each case is whether the legislature has
adopted the statute in exercise of a reasonable discretion, or
whether its action be a mere excuse for an unjust discrimination,
or the oppression or spoliation of a particular class."
And in
Connolly v. Union Sewer Pipe Co., 184 U.
S. 540,
184 U. S. 558,
MR. JUSTICE HARLAN, delivering the opinion of the Court, said:
Page 195 U. S. 237
"The question of constitutional law to which we have referred
[the equal protection of the laws] cannot be disposed of by saying
that the statute in question may be referred to what are called the
police powers of the state, which, as often stated by this Court,
were not included in the grants of power to the general government,
and therefore were reserved to the states when the Constitution was
ordained. But, as the Constitution of the United States is the
supreme law of the land, anything in the Constitution or statutes
of the states to the contrary notwithstanding, a statute of a
state, even when avowedly enacted in the exercise of its police
powers, must yield to that law. No right granted or secured by the
Constitution of the United States can be impaired or destroyed by a
state enactment, whatever may be the source from which the power to
pass such enactment may have been derived. 'The nullity of any act
inconsistent with the Constitution is produced by the declaration
that the Constitution is the supreme law.' The state has
undoubtedly the power, by appropriate legislation, to protect the
public morals, the public health, and the public safety; but if, by
their necessary operation, its regulations looking to either of
those ends amount to a denial to persons within its jurisdiction of
the equal protection of the laws, they must be deemed
unconstitutional and void.
Gibbons v. Ogden, 9 Wheat. 1,
22 U. S. 210;
Sinnot v.
Davenport, 22 How. 227,
63 U. S.
243;
Missouri, Kansas & Texas Ry. v. Haber,
169 U. S.
613,
169 U. S. 626."
This principle was recognized and applied in the Supreme Court
of California in a case decided later than the one under
consideration.
In re Smith, decided May 31, 1904, 143 Cal.
368, in which it was held that a county ordinance making it a
misdemeanor to maintain a gas works within a sparsely settled
district was unreasonable and void. In that case, the court, after
again quoting from
Munn v. Illinois to the effect that the
courts will not interfere with laws which are within the scope of
legislative power, well said:
"But running current with this principle, and to be read with
it, is one of equal importance -- namely that, when the
Page 195 U. S. 238
police power is exerted to regulate a useful business or
occupation, the legislature is not the exclusive judge as to what
is a reasonable and just restraint upon the constitutional right of
the citizen to pursue any trade, business, or vocation which in
itself is recognized as innocent and useful to the community. It is
always a judicial question if any particular regulation of such
right is a valid exercise of police power, though the authority of
the courts to declare such regulation invalid will be exercised
with the utmost caution, and only when it is clear that the
ordinance or law declared void passes the limits of the police
power and infringes upon rights guaranteed by the
Constitution."
Applying the principles settled by these decisions to the
allegations of the bill, admitted by the demurrer, we think a case
is made which called for the protection of the courts against
arbitrary interference with the rights of the plaintiff in error.
Complying with the terms of the ordinance which was in force when
the plaintiff in error was about to begin the erection of the gas
works in controversy, a tract of land was purchased within the
district wherein the erection of such works was permitted, a
contract was entered into for the construction of the works, a
considerable sum of money was expended. It may be admitted as being
a correct statement of the law as held by the California Supreme
Court that, notwithstanding the grant of the permit, and even after
the erection of the works, the city might still, for the protection
of the public health and safety, prohibit the further maintenance
and continuance of such works, and the prosecution of the business,
originally harmless, may become, by reason of the manner of its
prosecution or a changed condition of the community, a menace to
the public health and safety. In other words, the right to exercise
the police power is a continuing one, and a business lawful today
may, in the future, because of the changed situation, the growth of
population, or other causes, become a menace to the public health
and welfare, and be required to yield to the public good.
Fertilizing Co. v.
Hyde
Page 195 U. S. 239
Park, 97 U. S. 659;
New Orleans Gas Light Co. v. Louisiana Light Co.,
115 U. S. 672.
But the exercise of the police power is subject to judicial review,
and property rights cannot be wrongfully destroyed by arbitrary
enactment. It was averred that the works would be so constructed as
not to interfere with the health or safety of the people. No
reasonable explanation for the arbitrary exercise of power in the
case is suggested. The narrowing of the limits within which the
plaintiff in error, in compliance with the ordinance of the city
and the permit of the board of fire commissioners, was proceeding
to erect the gas works, to the smaller and more limited section,
was not demanded by the public welfare, and, taking the facts as
alleged in the bill, seems rather to have been actuated by the
purpose to exclude the plaintiff in error from further prosecution
of the enterprise. The limits of the privileged district were fixed
late in August. In September, the complainant began the
construction of the works. In November, without changed conditions
or adequate reason, the council, by an amended ordinance, drew a
line embracing a part of the district including the complainant's
property, and declared that too shall be prohibited territory. This
action is strongly corroborative of the allegations of the bill
that the purpose was not police regulation in the interest of the
public, but the destruction of the plaintiff's rights and the
building up of another company still within the privileged district
after the passage of the amendment. Being the owner of the land,
and having partially erected the works, the plaintiff in error had
acquired property rights, and was entitled to protection against
unconstitutional encroachments which would have the effect to
deprive her of her property without due process of law. It is
averred in the bill of complaint that the district within which the
works were being erected was one given over to manufacturing
enterprises, some of which were fully as obnoxious as gas works
possibly could be; that it contained large spaces of unoccupied
lands, worthless except for manufacturing purposes, and, by clear
inference, that there was
Page 195 U. S. 240
nothing in the situation which rendered it necessary, in order
to protect the city from a noisome and unhealthy business, to
decrease the area within which gas works could lawfully be
erected.
It is urged that, where the exercise of legislative or municipal
power is clearly within constitutional limits, the courts will not
inquire into the motives which may have actuated the legislative
body in passing the law or ordinance in question. Whether, when it
appears that the facts would authorize the exercise of the power,
the courts will restrain its exercise because of alleged wrongful
motives inducing the passage of an ordinance is not a question
necessary to be determined in this case, but where the facts as to
the situation and conditions are such as to establish the exercise
of the police power in such manner as to oppress or discriminate
against a class or an individual, the courts may consider and give
weight to such purpose in considering the validity of the
ordinance. This Court, in the case of
Yick Wo v. Hopkins,
118 U. S. 356,
held that, although an ordinance might be lawful upon its face, and
apparently fair in its terms, yet if it was enforced in such a
manner as to work a discrimination against a part of the community
for no lawful reason, such exercise of power would be invalidated
by the courts.
In some of the states, perhaps in most, the right to build and
maintain gas works is derived from the state, but subject to
municipal control as to the use of the streets and the prices to be
charged to consumers. In Ohio, this price is regulated for stated
periods. Could it be successfully maintained that, after the
erection of the works and the fixing of prices for a term of ten
years at the expiration thereof, and exercising the right to fix
prices for a new term, the council could arbitrarily, and with a
view of compelling the sale of the works to the municipality or a
rival company, fix the rate at a price below the cost of gas to the
producer, and at such a rate as to be ruinous to the business? In
State ex Rel. Atty.Gen. v. Cincinnati Gas Light & Coke
Co., 18 Ohio St. 262, it was
Page 195 U. S. 241
held to be the legislative intention, in empowering city
councils to regulate the price of gas, to limit such companies to
fair and reasonable prices, and if, in the colorable exercise of
this power, a majority of the members of the council, for a
fraudulent purpose, combine to pass an ordinance fixing the price
of gas at a rate at which they well know it cannot be manufactured
and sold without loss, such an ordinance would impose no obligation
on the company. This case was cited with apparent approval by Mr.
Justice Matthews in delivering the opinion of this Court in
Yick Wo v. Hopkins, supra, and see Dillon Mun.Corp., 4th
ed. § 311.
In this case, we think the allegations of the bill disclose such
character of territory, such sudden and unexplained change of its
limits after the plaintiff in error had purchased the property and
gone forward with the erection of the works, as to bring it within
that class of cases wherein the court may restrain the arbitrary
and discriminatory exercise of the police power which amounts to a
taking of property without due process of law and an impairment of
property rights protected by the Fourteenth Amendment to the
federal Constitution.
It is also urged by the defendants in error that a court of
equity will not enjoin prosecution of a criminal case; but, as we
have seen, the plaintiff in error in this case had acquired
property rights which, by the enforcement of the ordinances in
question, would be destroyed and rendered worthless. If the
allegations of the bill be taken as true, she had the right to
proceed with the prosecution of the work without interference by
the city authorities in the form of arrest and prosecution of those
in her employ.
It is well settled that, where property rights will be
destroyed, unlawful interference by criminal proceedings under a
void law or ordinance may be reached and controlled by a decree of
a court of equity.
Davis & Farnum Mfg. Co. v. Los
Angeles, 189 U. S. 207,
189 U. S. 218,
and cases therein cited.
Upon the whole case, we are of opinion that the demurrer
Page 195 U. S. 242
should have been overruled and the City of Los Angeles put upon
its answer.
For the reasons herein stated, the judgment of the Supreme
Court of California is reversed, and the cause remanded to that
court for further proceedings not in conflict with this
opinion.
