On certified appeal from the Law Division of the Superior Court to the Appellate Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling and Brennan. For reversal -- None. The opinion of the court was delivered by Heher, J.
[21 NJ Page 375] On June 3, 1953 the defendant public utility, New Jersey Power & Light Company, classified as such by R.S. 48:2-13, instituted a proceeding before the Board of Public Utility Commissioners for authority to increase the rates chargeable for its products supplied and services rendered within the State of New Jersey; and thereupon, pursuant to L. 1951, First Special Session, c. 357, p. 1474, section 1, N.J.S.A. 48:2-31.1, effective December 5, 1951, the Attorney-General employed Joseph Harrison and Wesley L. Lance, members of the New Jersey Bar, as rate counsel
to "protect the public interest in such proceeding." And now the question for decision is whether the cost of the services of the rate counsel rendered in judicial proceedings initiated by the Utility's appeal to the Appellate Division of the Superior Court from the Board's dismissal of the petition for the rate increase is assessable against the Utility under the provision of the cited statute, N.J.S.A. 48:2-31.1, that the Utility "shall pay to the State, in the manner" therein provided, "the reasonable compensation and expenses of such legal counsel * * *," provided that the "total amount which the Utility may be required to pay" "with respect to such proceeding" shall not exceed 1/10 of 1% of the revenues derived during the last preceding calendar year from its intrastate sales of its product supplied or intrastate service rendered, the rates, tolls, fares, or charges for which are the "subject matter of such proceeding"; and that such payments shall be "deemed to be operating expenses" of the Utility.
The Utility's appeal to the Appellate Division was certified here for decision on the motion of the Attorney-General; and the Board's order of dismissal was affirmed. In re New Jersey Power & Light Co., 15 N.J. 82 (1954). The Utility sought a surcharge of 5% on newly established rates to recoup a past deficiency in gross revenue. The rate counsel defended the Board's order in the judicial proceedings; Mr. Harrison made the oral argument; Mr. Lance and the Attorney-General joined in the brief and the oral presentation.
The Utility paid a charge of $6,601.50 made by the State for the services of the rate counsel in the proceeding before the Board; the controversy here concerns an additional charge of $3,600 for their services on the judicial review, and $83.52 for incidental expenses. Payment was refused on the asserted ground that the statute cited supra has reference to the services of rate counsel in the proceeding before the Board alone, and not on the judicial review of the Board's action. The State Treasurer brought this action in the Law Division of the Superior Court for a declaratory judgment. The late Judge Smalley awarded a summary
judgment to the plaintiff. He read the statute, N.J.S.A. 48:2-31.1 and 48:2-31.2, as placing the controverted obligation on the Utility.
The Utility argues for a strict construction of the statute, N.J.S.A. 48:2-31.1, as one ordaining an "obligation not recognized by common law." The act authorizes the Attorney-General to employ, "on a temporary basis," "such legal counsel, experts and assistants as in his judgment may be necessary to protect the public interest in such proceeding"; and it is urged that the words "in such proceeding," related to the context, signify the proceeding before the Board merely, for the "employment of 'experts and assistants'" would be "pertinent" to that proceeding only and "would not be required for judicial proceedings on review," since the "proceedings before the Board are separate and distinct from judicial proceedings." Invoking the basic doctrine that rate-making is "a legislative and not a judicial function," Atlantic City Sewerage Co. v. Board of Public Utility Commissioners, 128 N.J.L. 359 (Sup. Ct. 1942); Public Service Coordinated Transport v. State, 5 N.J. 196 (1950), it is said that we must "assume" that the "power to appoint 'legal counsel, experts and assistants'" in a "proceeding that is the exercise of a legislative function is not extended to proceedings which are solely judicial," and had the Legislature intended the broader coverage "clear language to that effect would have been used." Reference is made to the repeated use of the term "such proceeding" throughout the statute, all relating, it is insisted, "solely to a proceeding defined in Section 1 of the statute." And to the same end, it is contended that the act is a tax measure and is not to be extended beyond the clear import of the language used to express the legislative intention, citing Harper v. New Jersey Mfrs. Cas. Ins. Co., 1 N.J. 93 (1948); Public Service Co-ordinated Transport v. State Board of Tax Appeals, 115 N.J.L. 97 (Sup. Ct. 1935).
Recourse is also had to the provision, N.J.S.A. 48:2-31.2(a), for the submission at the "conclusion of any such proceeding, or, in the discretion of the Attorney-General,
from time to time during the progress thereof," of an "itemized statement," "as of the date of such statement," of the compensation and expenses of the counsel, experts and assistants so employed by the Attorney-General, and the further provision, N.J.S.A. 48:2-31.2(b), for a review by the Board, at the instance of the Utility, of the "reasonableness of the amount of any item or portion thereof set forth in any such statement," the determination thus made to be "subject to review in the same manner as any final decision or action of any State administrative agency." And it is suggested that the Board would not have jurisdiction "to determine the reasonableness of legal fees for services on appeal in another jurisdiction."
The statute is to receive a reasonable construction, to serve the apparent legislative purpose. The inquiry in the final analysis is the true intention of the law; and, in the quest for the intention, the letter gives way to the rationale of the expression. The words used may be expanded or limited according to the manifest reason and obvious purpose of the law. The spirit of the legislative direction prevails over the literal sense of the terms. The particular words are to be made responsive to the essential principle of the law. When the reason of the regulation is general, though the provision is special, it has a general acceptation. The language is not to be given a rigid interpretation when it is apparent that such meaning was not intended. The rule of strict construction cannot be allowed to defeat the evident legislative design. The will of the lawgiver is to be found, not by a mechanical use of particular words and phrases, according to their actual denotation, but by the exercise of reason and judgment in assessing the expression as a composite whole. The indubitable reason of the legislative terms in the aggregate is not to be sacrificed to ...