The Fifth Appellate District annulled a decision of the Public Utilities Commission and remanded the action with instructions. The court held that the Public Utilities Commission illegally appropriated rural telephone providers’ property and engaged in unlawful retroactive ratemaking when it allocated purchased share and patronage share proceeds to telephone companies’ ratepayers after dissolution of the Rural Telephone Bank.
In 1971, Congress created the Rural Telephone Bank (RTB) to make capital available to rural telephone providers at reasonable costs for investment in infrastructure. The RTB was financed in part by Class B stock. As a condition of obtaining a loan, RTB customers had to purchase Class B stock in an amount equal to 5 percent of the RTB loan. Class B shares had a par value of $1, were not transferable, and paid no dividends.
