People's Gas Light & Coke Co. v. Chicago

Background

A private utility, the People’s Gas Light and Coke Company, sued to block a Chicago city ordinance that limited consumer gas prices to seventy-five cents per thousand cubic feet. The company relied on an 1865 amendment to its charter that allegedly barred the city from forcing rates below three dollars per thousand cubic feet, and on provisions in an 1897 state law governing mergers of gas companies. The company had consolidated several local gas firms and said those prior protections should extend to the whole, merged system.

Reasoning

The Court addressed whether the company had an enforceable right to fixed higher rates and whether any earlier exemptions passed to the consolidated business. The Court held that the 1897 law’s language did not freeze rates but only set an upper limit, and that consolidations did not carry forward special statutory exemptions unless the law said so. The Court also noted the state constitution’s ban on irrevocable special privileges. Because the bill sought relief for the entire consolidated system and did not plead alternate, divided relief, the trial court properly dismissed the complaint asserting impaired contract rights.

Real world impact

The result lets Chicago’s price cap stand against this particular challenge. The opinion says the asserted exemption did not extend across all merged plants, and the dismissal rested on how the bill was framed, leaving room for other suits about specific territories or contractual claims.