United States v. San Francisco, 310 U.S. 16 (1940)
U.S. Supreme CourtUnited States v. San Francisco, 310 U.S. 16 (1940)
United States v. City and County of San Francisco
Argued March 28, 1940
Decided April 22, 1940
310 U.S. 16
1. Under the Raker Act of December 19, 1913, which granted to the City and County of San Francisco certain lands and rights of way in the Hetch-Hetchy Valley for use by the City in constructing and maintaining a means of supplying water for the domestic purposes of the City and other public bodies, and in establishing a system for generation and sale and distribution of electric energy, held:
That § 6 prohibits the City from transferring to a public utility the right to sell electric power produced by the City under the grant, in addition to forbidding sale of the power itself as a commodity for resale. P. 310 U. S. 20.
Congress clearly intended to require -- as a condition of its grant -- sale and distribution of power exclusively by San Francisco and other municipal agencies directly to consumers, in the belief that consumers would thus be afforded power at cheap rates in competition with private power companies. P. 310 U. S. 26.
2. The City, instead of selling the power produced under the grant directly to consumers at prices fixed by itself, delivered it under a contract, for a fixed compensation, to a public utility corporation, which, in turn, sold it to consumers in the City and elsewhere, along with power produced by itself at the rates fixed from time to time by the State Railroad Commission. Held, that the contract is in violation of the Act, and cannot be defended upon the ground that the City has a right to sell through the corporation as its agent. P. 310 U. S. 28.
3. The prohibitions of § 6 are not an unconstitutional invasion of the right of the California to regulate distribution of electricity, and are not mere covenants subject to alleged equitable defenses, but are conditions which Congress, in virtue of its power over the public domain, was authorized to attach to the grant. P 310 U. S. 28.
4. In disposing of rights to develop hydroelectric power in the public lands, Congress may impose limitations designed to avoid monopoly and to bring about a widespread distribution of benefits. P. 310 U. S. 30.
5. A suit brought by the Attorney General in the name of the United States, pursuant to the mandate of the granting Act, to enforce its provisions by an injunction is cognizable in equity. P. 310 U. S. 30.
6. In such a suit, the duty of the court to enjoin plain violations of the Act is not measured by a balancing of equities, but by the policy of the statute. P. 310 U. S. 31.
7. A former erroneous administrative construction of 6 of the Act (since abandoned) as forbidding no more than sale of power for resale held ineffectual. P. 310 U. S. 31.
8. The United States is not estopped by acts of its officers in sanctioning an agreement not permitted by law. P. 310 U. S. 32.
106 F.2d 569 reversed.
Certiorari, 309 U.S. 642, to review the reversal of a decree of injunction commanding the City and County of San Francisco to cease disposing of its electric power to a public utility corporation, or, in the alternative, to cease further use of lands and rights granted to it by an Act of Congress, for generation and transmission of electricity.