Keller v. Potomac Electric Power Co.

Background

A private electricity company (the Potomac Electric Power Company) disputed a valuation the District’s Public Utilities Commission set after a public hearing. The company sued in the local equity court, arguing the Commission used the wrong valuation date and ignored a rise in value. The local Supreme Court upheld the Commission, but the Court of Appeals reversed and ordered further proceedings, raising broader questions about which courts may review Commission decisions.

Reasoning

The Court asked whether Congress could give the District courts power to review and revise Commission orders and whether Congress could allow direct appeals to the U.S. Supreme Court. Finding Congress has broad authority over the District, the Court said it could vest the local courts with power like a state’s courts to review evidence and enter the orders they think proper. But the Constitution limits the federal judicial power; Congress cannot give this Court legislative or advisory authority by authorizing direct appeals here to rewrite administrative decisions. Citing precedent, the Court held the appeal provision to the Supreme Court was invalid.

Real world impact

The ruling means District courts may continue to hear and, where appropriate, change utility valuations and orders under local law. At the same time, direct review of those legislative-style revisions by the U.S. Supreme Court is not allowed, narrowing national oversight. Other contested time limits and burden-of-proof rules in the law were noted but left for future cases.