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Essex County Welfare Board v. New Jersey Bell Telephone Co.

Decided: January 31, 1974.


Lynch, Mehler and Michels. The opinion of the court was delivered by Michels, J.s.c., Temporarily Assigned.


[126 NJSuper Page 419] In mid-1968 petitioner applied to Bell Telephone for a charitable discount in connection with the 701 dial telephone system it was using, and Bell Telephone granted the application, allowing a charitable discount of 25% in the charge for local telephone service. Thereafter, in 1969 Bell Telephone's communications consultant approached the Essex County Freeholders for the purpose of discussing Bell Telephone's ability to supply more effective telephone service. Discussions of the advantages and costs of replacing the old 701 dial system with the modern Centrex telephone system were held. In August 1969 an oral presentation by Bell Telephone of the advantages and costs of the Centrex system was made to petitioner. In September 1969 petitioner and Bell Telephone entered into an agreement providing for installation in petitioner's offices of a Centrex telephone system which was completed in November 1970. Bell Telephone's regular bill to petitioner the following month for the new Centrex system did not reflect any charitable discount.

Bell Telephone's predecessor companies began the practice of affording charitable discounts to qualified telephone customers in 1913. These discounts applied and apparently are still extended by Bell Telephone to certain charities using "plain old black telephone service." In 1960, however, Bell Telephone decided not to provide charitable discounts on any new services it introduced. Centrex was one of these new services. An application on rates and regulations for Centrex service was submitted by Bell Telephone to the New Jersey Board of Public Utility Commissioners (Board), indicating that the charitable discount would not be applicable to rates for the Centrex system. The application was approved by the Board, and the Tariff P.U.C. -- N.J. No. 1, Part 1 -- General, Section 32, which contained the exemption, became effective in 1962. Hence, qualified charities who purchased Centrex service after that year were not entitled to the traditional charitable discount.

Petitioner welfare board filed a petition with the Board of Public Utilities Commissioners alleging that it was never informed that installation of a Centrex telephone system would result in termination of the charitable discount, and therefore argued that Bell Telephone was estopped from depriving it of the 25% discount on this service. It also insisted there was no justification for allowing the discount to qualified charities using one telephone system and not allowing the discount to qualified charities using another telephone system. Petitioner asked the Board to amend Tariff P.U.C. -- N.J. No. 1, Part 1 -- General, Section 32, to permit the charitable discount for Centrex users and to rule that it was entitled to the traditional 25% reduction on its local service telephone bill from the date of installation of the new Centrex system.

A hearing was held before a Board hearing examiner, who filed a detailed report and recommendations denying petitioner the relief sought. The Board adopted that report and recommendations as its decision from which this appeal was taken.


Petitioner contends that the Board's decision which adopted the report and recommendation of the hearing examiner was substantively defective because a specific finding was not made on the issue of whether petitioner was informed by Bell Telephone that it would lose its charitable discount in changing over to a Centrex system. The examiner did not make this specific finding in spite of the fact that there was a sharp conflict in the evidence whether Bell Telephone so informed petitioner. However, since petitioner was charged with knowledge of the tariff and bound by it, this finding was not essential to the decision below.

N.J.S.A. 48:2-21(a) provides that "the board may require every public utility to file with it complete schedules of * * * every * * * rate, toll, fare or charge made, charged or exacted by it for any product supplied or service rendered within this State, as specified in the requirement." The Board, by virtue of this authority, and pursuant to Administrative Order 14:280, has set forth the following requirement:

Every public utility shall file with the Board and keep open to public inspection in each office where applications for service may be made, tariffs applicable to its affected service area, showing all rates and charges made, established, or enforced, or to be charged or enforced, all rules and regulations relating to rates and charges or services used or to be used, anl all general privileges and facilities granted or allowed. The same shall be readily accessible to the public at all times during office hours, and on demand by any person shall be produced for examination immediately. [ N.J.A.C. 14:11-7.2(a)]

It is well established that a tariff required by law to be filed by a telephone company is not a mere contract; it is the law. Carter v. American Tel. & Tel. Co., 365 F. 2d 486, 496 (5 Cir. 1966), cert. den. 385 U.S. 1008, 87 S. Ct. 714, 17 L. Ed. 2d 546 (1967); Shehi v. Southwestern Bell Tel. Co., 382 F. 2d 627, 629 (10 Cir. 1967). As such, it is binding upon subscribers whether the customer actually knows of the

regulation or not. Warner v. Southwestern Bell Tel. Co., 428 S.W. 2d 596 (Mo. Sup. Ct. 1968); Alcazar v. Southwestern Bell Tel. Co., 353 ...

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