Duke Power Co. v. Greenwood County

Background

Electric utility companies sued Greenwood County, South Carolina, and county officials to stop them from building and operating a local power plant and from issuing bonds and making contracts for that project. Harold L. Ickes, the Federal Emergency Administrator of Public Works, intervened and disclosed a government loan agreement first dated December 8, 1934, later replaced by a new contract dated November 30, 1935. The District Court had entered a final decree permanently enjoining the county and Mr. Ickes from carrying out the 1934 contract or receiving federal funds, and the defendants appealed.

Reasoning

The main question was how the lower courts should handle the case after the government’s contract changed. The Circuit Court of Appeals issued an ambiguous remand that did not clearly set aside the District Court’s decree. The District Court then limited evidence and refused to allow the parties to amend pleadings to reflect the new contract. The Supreme Court found both lower courts had mishandled procedure: an appellate court must either dismiss a moot controversy or vacate the lower decree and return full jurisdiction for a proper retrial when facts change. The Court reversed the Circuit Court of Appeals and ordered that the District Court’s decrees be set aside, the parties be allowed to amend their pleadings in light of existing facts, and the cause be retried.

Real world impact

This ruling does not decide whether the federal loan or the power project was lawful. Instead, it enforces proper procedure when new facts arise: it clears the way for a full, fair retrial where the parties can present evidence about the new government contract and related issues. Utilities, the county, and federal agencies will have to return to the lower court to litigate the merits under correct procedures.