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u » v 4m HI: I & S DOCKET 12? - LTLMICo. W M - R-OCT 3 195’ Los Angeles, October 3, 1951 To: Mr. £• 1. Bennett Fran: Edward 0. Renwick I called Arthur George, attorney for the pacific Telephone Company, who referred me to his associate Francis Marshall of Pillsbury, Madison and Sutro who with Sam Platt, attorney at Reno, is handling the Pacific Telephone Company suit to set aside the order of the Nevada Public Service Commission denying the Telephone Company rate increase. The Telephone suit was filed in the District Court of Ormsby County and involves the State-wide rates of the Telephone Company. The Telephone attorneys say that is the proper Jurisdiction in a suit involving litigation in several counties. In 1950 the Telephone Company filed an Increased schedule of rates which were suspended. In January of 1951 the Commission after hearing denied any increase. A petition for rehearing was filed which was set for hearing in April after the 90-day period for filing Court action would have expired. Therefore the Telephone Company to protect its rights filed a suit in the District Court to set aside the January order and by stipulation no proceedings were had in the case until after the decision on the second hearing. This decision was unfavorable and a supplemental complaint in the same Court action was filed. The Telephone Company have an interesting theory which I had given some thought to but which I have not yet been able to find any legal support for. Their theory is that since the Commission unlawfully set aside their filed rates, the Telephone Company is entitled to an order of the Court decreeing that the filed rates are in effect. Mr. Marshall admitted that he had no specific legal precedent for this contention but he believes that it is sound and I believe that there Is a great deal of merit in this view. Mr. Marshall also pointed out that because of the inflationary spiral, the rates filed by the Telephone Company will no longer be sufficient. Therefore in their Court action they are seeking two types,of relief. First, that the filed rates are In effect, and secondly, an order determining that additional relief of a stated amount is required in order to enable the Telephone Company to earn a fair return. With such a decree they OCT 4 1951 L. C. C.