Plan Forcing PG&E; to Carry Foes’ Views Voided

The Supreme Court on Tuesday struck down a precedent-setting attempt by California authorities to force a state-regulated private utility to include with its monthly bills fund-raising appeals from a consumer organization that opposes it.

In a 5-3 decision, the court ruled unconstitutional an order by the state Public Utilities Commission requiring Pacific Gas & Electric Co. to give the “extra space” in billing envelopes to a group known as Toward Utility Rate Normalization, a frequent opponent of PG&E; rate hike requests.

The case had been watched by utilities, consumer groups and state regulatory officials throughout the nation. Consumer organizations and their supporters saw the PUC order as an innovative way to convey divergent views to ratepayers. The utilities replied that such orders violated their constitutional right to select the contents of their own billing envelopes.

At least four other states--Illinois, New York, Oregon and Wisconsin--have imposed requirements similar to California, and proposals are pending in numerous other states.

There was no majority opinion in the case, but five justices agreed in separate opinions citing different reasons that the PUC order was unconstitutional.

Justice Lewis F. Powell Jr.--in a plurality opinion joined by Chief Justice Warren E. Burger and Justices William J. Brennan Jr. and Sandra Day O’Connor--found that the PUC order improperly gave access only to the utility’s opponents and forced the company to associate itself with an opposing viewpoint--such as the endorsement of legislation or political candidates. The company, the justices said, was faced with responding or appearing to agree.

“That kind of forced response is antithetical to the free discussion that the First Amendment seeks to foster,” Powell wrote. “For corporations, as for individuals, the choice to speak includes within it the choice of what not to say.”

Justice Thurgood Marshall agreed that the commission order should be overturned but issued a separate concurring opinion, basing his vote on the belief that the requirement interfered with PG&E;’s rights by curtailing its use of its own “forum” (its envelopes) in favor of a group selected by the state.

In dissent, Justice William H. Rehnquist, joined by Justices Byron R. White and John Paul Stevens, said there was little risk that the order would deter the utility from continuing, as it has in the past, to include its own material in the envelope containing its views. Justice Harry A. Blackmun did not participate in the case (PG&E; vs. PUC, 84-1044).

The case began in 1982, when Toward Utility Rate Normalization went to the PUC and accused PG&E; of violating federal laws by including political material in the billing envelopes that it sends to 3.7 million households throughout California. The PUC responded by ordering the utility to allow Toward Utility Rate Normalization to include its material in PG&E; envelopes four times a year for two years. The company did not own the “extra space” in its envelopes and ratepayers would benefit from exposure to views other than those of the utility, the commission said.

The order was delayed pending a subsequent court challenge by the utility. The California Supreme Court upheld the PUC, and the utility appealed to the Supreme Court.

The high court’s decision Tuesday was praised by PG&E; attorney Robert L. Harris as a “significant victory” for the free speech rights of corporations.

“It reaffirms the First Amendment principle that a corporation, like an individual, cannot be compelled to be the courier of someone else’s messages,” he said.

Mark Fogelman, a PUC staff attorney, said the court’s ruling will be studied to see whether it might still permit a revised plan for envelope inserts by outside groups.

The director of San Francisco-based Toward Utility Rate Normalization, Sylvia M. Siegel, expressed disappointment but vowed to continue the group’s fight against “outrageous” utility rates.