Consumers' Co. v. Hatch

Background

A privately chartered water company operating under a 1903 franchise had laid a water main in an ungraded street and was supplying neighbors. A homeowner built a house, ran a pipe to the curb, and asked the company to connect his pipe so he could get regular water service. The company refused unless the homeowner paid $8.50 or followed alternative rules to cover the connection cost. The Idaho Supreme Court ordered the company to make the connection at its own expense and supply water for the regular monthly rate.

Reasoning

The core question was whether forcing the company to pay for the connection violated the Constitution by taking its property without due process or by impairing its contract rights. The U.S. Supreme Court, speaking through Chief Justice White, affirmed the Idaho court. The Court explained that the company’s charter, read with the state statutes and earlier decisions in effect when the charter was granted, imposed a duty to make service connections and supply water. Because the company had voluntarily laid the main and was serving residents, requiring it to pay for the connection did not amount to confiscation or an unconstitutional impairment of contract.

Real world impact

The decision upholds the Idaho court’s order that the company must connect and supply the homeowner without charging the $8.50 connection fee. The ruling rests on the company’s charter and state law as understood at the time the franchise was granted, and the federal Court rejected the homeowner’s constitutional claims.