MR. JUSTICE POWELL delivered the opinion of the Court.
This is an action brought under 42 U. S. C. § 1983 by homeowners in Memphis, Tenn., seeking declaratory and injunctive relief and damages against a municipal utility and several of its officers and employees for termination of utility service allegedly without due process of law. The District Court determined that respondents' claim of entitlement to continued utility service did not implicate a "property" interest protected by the Fourteenth Amendment, and that, in any event, the utility's termination procedures comported with due process. The Court of Appeals reversed in part. We granted certiorari to consider this constitutional question of importance in the operation of municipal utilities throughout the Nation.
I
Memphis Light, Gas and Water Division (MLG&W)
Willie S. and Mary Craft, respondents here,
In 1973, the Crafts began receiving two bills: their regular bill, and a second bill with an account number in the name of Willie C. Craft, as opposed to Willie S. Craft. Separate monthly bills were received for each set of meters, with a city service fee
On several occasions, Mrs. Craft missed work and went to the MLG&W offices in order to resolve the "double billing" problem. As found by the District Court, Mrs. Craft sought in good faith to determine the cause of the "double billing," but was unable to obtain a satisfactory explanation or any suggestion for further recourse from MLG&W employees.
The court noted:
In February 1974, the Crafts and other MLG&W customers filed this action in the District Court for the Western District of Tennessee. After trial, the District Court refused to certify the plaintiffs' class and rendered judgment for the defendants. Although the court apparently was of the view that plaintiffs had no property interest in continued utility service while a disputed bill remained unpaid, it nevertheless addressed the procedural due process issue. It acknowledged that respondents had not been given adequate notice of a procedure for discussing the disputed bills with management, but concluded that "[n] one of the individual plaintiffs [was] deprived of [a] due process opportunity to be heard, nor did the circumstances indicate any substantial deprivation except in the possible instance of Mr. and Mrs. Craft." Id., at 45.
On appeal, the Court of Appeals for the Sixth Circuit affirmed the District Court's refusal to certify a class action, but held that the procedures accorded to the Crafts did not comport with due process. 534 F.2d 684 (1976).
On July 12, 1976, petitioners sought a writ of certiorari in this Court to determine (i) whether the termination policies of a municipal utility constitute "state action" under the Fourteenth Amendment; (ii) if so, whether a municipal utility's termination of service for nonpayment deprives a customer of "property" within the meaning of the Due Process Clause; and (iii) assuming "state action" and a "property" interest, whether MLG&W's procedures afforded due process of law in this case.
II
There is, at the outset, a question of mootness. Although the parties have not addressed this question in their briefs, "they may not by stipulation invoke the judicial power of the United States in litigation which does not present an actual
As the case comes to us, the only remaining plaintiffs are respondents Willie S. and Mary Craft. Since the Court of Appeals affirmed the District Court's refusal to certify a class, the existence of a continuing "case or controversy" depends entirely on the claims of respondents. Cf. Sosna v. Iowa, supra, at 399, 402. It appears that respondents no longer desire a hearing to resolve a continuing dispute over their bills, as the double-meter problem has been clarified during this litigation.
We need not decide whether this case falls within the special rule developed in Southern Pacific Terminal Co. v. ICC, 219 U.S. 498 (1911); see Moore v. Ogilvie, 394 U.S. 814, 816 (1969); Roe v. Wade, 410 U.S. 113, 125 (1973), to permit consideration of questions which, by their very nature, are not likely to survive the course of a normal litigation. Respondents' claim for actual and punitive damages arising from MLG&W's terminations of service saves this cause from the bar of mootness. Cf. Powell v. McCormack, 395 U.S. 486, 496-500 (1969). Although we express no opinion as to the
III
The Fourteenth Amendment places procedural constraints on the actions of government that work a deprivation of interests enjoying the stature of "property" within the meaning of the Due Process Clause. Although the underlying substantive interest is created by "an independent source such as state law," federal constitutional law determines whether that interest rises to the level of a "legitimate claim of entitlement" protected by the Due Process Clause. Board of Regents v. Roth, 408 U.S. 564, 577 (1972); Perry v. Sindermann, 408 U.S. 593, 602 (1972).
The outcome of that inquiry is clear in this case. In defining a public utility's privilege to terminate for nonpayment of proper charges, Tennessee decisional law draws a line between utility bills that are the subject of a bona fide dispute and those that are not.
The Trigg court also rejected the utility's argument that plaintiffs had agreed to be bound by the utility's rules and regulations, which required payment whether or not a bill is received. "A public utility should not be able to coerce a customer to pay a disputed claim." Ibid.
IV
In determining what process is "due" in this case, the extent of our inquiry is shaped by the ruling of the Court of Appeals. We need go no further in deciding this case than to ascertain whether the Court of Appeals properly read the Due Process Clause to require (i) notice informing the customer not only of the possibility of termination but also of a procedure for challenging a disputed bill, 534 F. 2d, at 688, and (ii) "`[an] established [procedure] for resolution of disputes'" or some specified avenue of relief for customers who "dispute the existence of the liability," id., at 689.
A
"An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314 (1950) (citations omitted). The issue here is whether due process requires that a municipal utility notify the customer of the availability of an avenue of redress within the organization should he wish to contest a particular charge.
The "final notice" contained in MLG&W's bills simply stated that payment was overdue and that service would be discontinued if payment was not made by a certain date. As the Court of Appeals determined, "the MLG&W notice only warn[ed] the customer to pay or face termination." 534 F. 2d, at 688-689. MLG&W also enclosed a "flyer" with the "final notice." One "flyer" was distributed to about 40% of the utility's customers, who resided in areas serviced by "credit counseling stations." It stated in part: "If you are having difficulty paying your utility bill, bring your bill to our neighborhood credit counselors for assistance. Your utility bills may be paid here also." No mention was made of a procedure for the disposition of a disputed claim. A different "flyer" went to customers in the remaining areas. It stated: "If you are having difficulty paying your utility bill and would like to discuss a utility payment plan, or if there is any dispute concerning the amount due, bring your bill to the office at . . ., or phone . . . ." Id., at 688 n. 4.
The Court of Appeals noted that "there is no assurance that the Crafts were mailed the just mentioned flyer," ibid., and implicitly affirmed the District Court's finding that Mrs. Craft was never apprised of the availability of a
Petitioners' notification procedure, while adequate to apprise the Crafts of the threat of termination of service, was not "reasonably calculated" to inform them of the availability of "an opportunity to present their objections" to their bills. Mullane v. Central Hanover Trust Co., supra, at 314. The purpose of notice under the Due Process Clause is to apprise the affected individual of, and permit adequate preparation for, an impending "hearing."
B
This Court consistently has held that "some kind of hearing is required at some time before a person is finally deprived of his property interests." Wolff v. McDonnell, 418 U.S. 539, 557-558 (1974). We agree with the Court of Appeals that due process requires the provision of an opportunity for the presentation to a designated employee of a customer's complaint that he is being overcharged or charged for services not rendered.
Under the balancing approach outlined in Mathews, some administrative procedure for entertaining customer complaints prior to termination is required to afford reasonable assurance against erroneous or arbitrary withholding of essential services. The customer's interest is self-evident. Utility service is a necessity of modern life; indeed, the discontinuance of water or heating for even short periods of time may threaten health and safety. And the risk of an erroneous deprivation, given the necessary reliance on computers,
The utility's interests are not incompatible with affording the notice and procedure described above. Quite apart from its duty as a public service company, a utility—in its own business interests—may be expected to make all reasonable efforts to minimize billing errors and the resulting customer dissatisfaction and possible injury. Cf. Goss v. Lopez, 419 U.S. 565, 583 (1975). Nor should "some kind of hearing" prove burdensome. The opportunity for a meeting with a responsible employee empowered to resolve the dispute could be afforded well in advance of the scheduled date of termination.
C
Petitioners contend that the available common-law remedies of a pretermination injunction, a post-termination suit for damages, and post-payment action for a refund are sufficient to cure any perceived inadequacy in MLG&W's procedures.
Ordinarily, due process of law requires an opportunity for "some kind of hearing" prior to the deprivation of a significant property interest. See Boddie v. Connecticut, 401 U.S. 371, 379 (1971). On occasion, this Court has recognized that where the potential length or severity of the deprivation does not indicate a likelihood of serious loss and where the procedures underlying the decision to act are sufficiently reliable to minimize the risk of erroneous determination, government may act without providing additional "advance procedural safeguards," Ingraham v. Wright, 430 U.S. 651, 680 (1977); see Mathews v. Eldridge, supra, at 339-349.
The injunction remedy referred to by petitioners would not be an adequate substitute for a pretermination review of the disputed bill with a designated employee. Many of the Court's decisions in this area have required additional procedures to further due process, notwithstanding the apparent availability of injunctive relief or recovery provisions. It was thought that such remedies were likely to be too bounded by procedural constraints and too susceptible of delay to provide an effective safeguard against an erroneous deprivation.
V
Because of the failure to provide notice reasonably calculated to apprise respondents of the availability of an administrative procedure to consider their complaint of erroneous billing, and the failure to afford them an opportunity to present their complaint to a designated employee empowered to review disputed bills and rectify error, petitioners deprived respondents of an interest in property without due process of law.
The judgment of the Court of Appeals is
Affirmed.
MR. JUSTICE STEVENS, with whom THE CHIEF JUSTICE and MR. JUSTICE REHNQUIST join, dissenting.
In my judgment, the Court's holding confuses and trivializes the principle that the State may not deprive any person of life, liberty, or property without due process of law. I have no quarrel with the Court's conclusion that as a matter of Tennessee law a customer has a legitimate claim of entitlement to continued utility services as long as the undisputed portions of his utility bills are paid. For that reason, a municipality may not terminate utility service without giving the customer a fair opportunity to avoid termination either by paying the bill or questioning its accuracy. I do not agree, however, that this record discloses any constitutional defect in the termination procedures employed by the Light, Gas and Water Division of the city of Memphis (Division).
The Court focuses on two aspects of the Division's collection procedures. First, according to the Court, the Division's standard form of termination notice did not adequately inform the customer of the availability of a procedure for protesting a proposed termination of service as unjustified. Ante, at 15. Second, the Division did not afford its customers an adequate
Although the details of the dispute between the Crafts and the Division are obscure, the record describes the Division's customary practices in some detail. Each month the Division terminates the service of about 2,000 customers.
"PHONE 523-0711 INFORMATION CENTER"
Calls to the listed phone number are answered by 30 or 40 Division employees, all of whom are empowered to delay cutoffs for three days based on representations made by customers over the phone. These employees also direct callers to credit counselors who are authorized to resolve disputes on a more permanent basis and who can set up extended payment plans for customers in financial difficulty.
The District Court did not find that Mrs. Craft was unable to meet with credit department personnel possessing adequate authority to make an adjustment in her bill.
I
The Court's constitutional objection to the Division's notice rests entirely on the classic statement from Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314:
That statement identifies the two essential characteristics of adequate notice: It must inform the recipient of the impending loss; and it must be given in time to afford the recipient an opportunity to defend. These essentials must, of course, be expressed in terms which the layman can understand. The Division's notice unquestionably satisfied these two basic requirements.
No doubt there may be situations in which these two essentials
The Division must "advise the customer of the availability of a procedure for protesting a proposed termination of utility service as unjustified." Ante, at 15. That advice is much less valuable to the customer than an explanation of the legal remedies that are available if a wrongful termination should occur. Yet the Court wisely avoids holding that the customer must be given that sort of legal advice. The advice the Court does require is wholly unnecessary in all but the most unusual situations. For a homeowner surely need not be told how to complain about an error in a utility bill; it is, of course, helpful to include the telephone number and office address in the termination notice, but our democratic government would cease to function if, as the Court seems to assume, our citizenry were unable to find such information on their own initiative. The Court's holding that the Division's notice was constitutionally defective rests on a paternalistic predicate that I cannot accept.
Even accepting the Court's predicate, a notice which advises customers to call the "information center" should be adequate; if not, it seems clear that advising customers to call, during normal business hours, a "dispute resolution center" manned by the same personnel would cure the constitutional
II
The Court's pronouncement "that due process requires the provision of an opportunity for the presentation to a designated employee of a customer's complaint that he is being overcharged or charged for services not rendered," ante, at 16, is equally divorced from the facts of this case. The Division processes more than 30,000 complaints of excess charges each year, and it has designated scores of employees to hear and investigate those complaints. Except for the Crafts' troubles, there is nothing in the record to suggest that the Division's customers are denied access to these employees, or that the employees lack the power to deal appropriately with meritorious complaints. Indeed, as already noted, there is no finding by either of the courts below that the Crafts themselves did not meet with responsible officials empowered to resolve their dispute.
Although the Court's pronouncement in this case is therefore gratuitous, it cannot be dismissed as harmless. For it warns municipal utilities that unless they provide "some kind of hearing," ibid., they may be acting unconstitutionally. Just what, or why, additional procedural safeguards are constitutionally required is most difficult to discern.
Although the Division's terminations number about 2,000 each month, the record does not reveal any actual case of harm to health or safety. The District Court found that the Division does not discontinue service when there is illness in a home. Since a customer can always avoid termination by the simple expedient of paying the disputed bill and claiming a refund,
Even if the customer does not consult counsel in a specific case, the potential damages remedy nevertheless provides far more significant protection against an unjustified termination than does the vague requirement of "some kind of hearing." Without the threat of damages liability for mistakes, the informal procedures required today would neither qualify the utility's ultimate power to enforce collection by terminating service nor deter the exercise of that power. On the other hand, even without specific informal procedures, the danger of substantial liability will by itself ensure careful attention to genuine customer disputes. The utility's potential liability therefore provides customers with real pretermination protection even though damages may not be recovered until later.
The need for a procedural innovation is not demonstrated
It is an unfortunate fact that when the State assesses taxes or operates a utility, it occasionally overcharges the citizen. It is also unfortunate that effective collection procedures sometimes require the citizen to pay an unjust charge in order to forestall a serious deprivation of property. But if the State has given the citizen fair notice and afforded him procedural redress which is entirely adequate when invoked by his lawyer, the demands of the Due Process Clause are satisfied. I do not believe the Constitution requires the State to employ procedures that are so simple that every lay person can always act effectively without the assistance of counsel.
I respectfully dissent.
FootNotes
(i) Approximately four days after a meter reading date, a bill is mailed to the service location or other address designated by the customer. The last day to pay the net amount would be approximately 20 days after the meter reading date. (ii) Approximately 24 days after the meters are read, a "final notice" is mailed stating that services will be disconnected within four days if no payment is received or other provision for payment is made. (iii) Electric service is then terminated by the meter reader, unless the customer assures him that payment is in the mail, shows a paid receipt, or explains that nonpayment was due to illness. If there is no communication prior to termination, the meter reader or serviceman is instructed to leave a cutoff notice giving information about restoration of service. (iv) Approximately five days after the electric service cutoff, the remaining services are terminated if the customer has not paid the bill or made other arrangements for payment. Pet. for Cert. 34-35.
The court also noted that on or about March 1, 1973, MLG&W instituted an "extended payment plan." This generous program allows customers able to demonstrate financial hardship to pay only one-half of a past due bill with the balance to be paid in equal installments over the next three bills. The plaintiffs in this action were participants in the plan. Id., at 36.
Finally, the court observed that MLG&W provided a procedure for resolution of disputed bills:
"Credit counselors assist customers who have difficulty with payments or disputes concerning their bills with MLG&W. If those counselors cannot satisfy the customer, then the customer is referred to management personnel; generally the chief clerk in the department; then the supervisor in credit and collection. In addition, a dissatisfied customer may appeal to the Board of Commissioners of MLG&W as to complaints regarding bills, service, termination of service or any other matter relating to the operation of the Division. A customer may, if he so desires, be accompanied by an appropriate representative. The billing of customers, the determination as to when a final notice is sent, and the termination of service [are] governed by policies, rules and regulations adopted and approved by the Board of Commissioners of MLG&W." Id., at 36-37.
While not urging mootness, petitioners assert that their compliance with the District Court's recommendation that a $35 credit be issued to the Crafts removes any claim for damages from this case. We do not understand the District Court's suggestion to have been an award of damages. The validity of the damages claim is a matter for initial determination by the courts below.
Petitioners also rely on Lindsey v. Normet, 405 U.S. 56 (1972). There, the Court upheld an Oregon statute that required a tenant seeking a continuance of an eviction hearing to post security for accruing rent during the continuance, and limited the issues triable in an eviction proceeding to the questions of physical possession, forcible withholding, and legal right to possession. This reliance is misplaced. First, the Court merely held that the Oregon procedures comported with due process, without intimating that a tenant's claim to continued possession during a rent dispute failed to implicate a "property" interest. Second, "[t]he tenant did not have to post security in order to remain in possession before a hearing; rather, he had to post security only in order to obtain a continuance of the hearing. . . . [T]he tenant was not deprived of his possessory interest even for one day without opportunity for a hearing." Fuentes v. Shevin, 407 U.S. 67, 85 n. 15 (1972) (emphasis in original).
Respondents do request certain additional procedures: "an impartial decision maker," who may be a responsible company official; "the opportunity to present information and rebut the records presented"; and "a written decision," which apparently can be rendered after termination or payment. Tr. of Oral Arg. 28, 31; Brief for Respondents 31. As respondents have not cross-petitioned, cf. Strunk v. United States, 412 U.S. 434, 437 (1973), we do not decide whether—or under what circumstances—any of these additional procedures may be appropriate. We do note that the magnitude of the numbers of complaints of overcharge would be a relevant factor in determining the appropriateness of more formal procedures than we approve in this case. The resolution of a disputed bill normally presents a limited factual issue susceptible of informal resolution.
The dissenting opinion of MR. JUSTICE STEVENS asserts that the Court's decision "trivializes" procedural due process. Post, at 22. While recognizing that other information would be "helpful," the dissent would hold that "a homeowner surely need not be told how to complain about an error in a utility bill . . . ." Post, at 26. In a different context a person threatened with the deprivation of a protected interest need not be told "how to complain." But the prior decisions of this Court make clear that "[d]ue process is flexible and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, supra, at 481; Mathews v. Eldridge, 424 U.S. 319, 334 (1976). In the particular circumstances of a threat to discontinue utility service, the homeowner should not be left in the plight described by the District Court in this case. Indeed, the dissent's view identifies the constitutional flaw in petitioners' notice procedure. The Crafts were told that unless the double bills were paid by a certain date their electricity would be cut off. But—as the Court of Appeals held—this skeletal notice did not advise them of a procedure for challenging the disputed bills. Such notice may well have been adequate under different circumstances. Here, however, the notice is given to thousands of customers of various levels of education, experience, and resources. Lay consumers of electric service, the uninterrupted continuity of which is essential to health and safety, should be informed clearly of the availability of an opportunity to present their complaint. In essence, recipients of a cutoff notice should be told where, during which hours of the day, and before whom disputed bills appropriately may be considered. The dissent's restrictive view of the process due in the context of this case would erect an artificial barrier between the notice and hearing components of the constitutional guarantee of due process.
We also note that Tennessee law requires that the board of supervisors of each independent utility district, as opposed to a utility division of a municipality, "maintain a set of rules and regulations regarding the adjustment of all complaints which may be made to the district concerning . . . the adjustment of bills," and that such rules "be posted or otherwise available for convenient inspection by customers and members of the public in the offices of the district . . . ." Tenn. Code Ann. § 6-2618 (b) (Supp. 1977).
These findings are not undermined, as the dissent suggests, by Mrs. Craft's ability ultimately to glean some understanding of her billing problem after several, time-consuming trips to MLG&W's office—in the District Court's words, after "she repeatedly tried to get some explanation for the problems of two bills and possible duplicate charges." Nor are they placed in question by the fact that an employee of uncertain authority told Mrs. Craft, apparently without explanation or attempt at investigation, "[w]ell, you have to pay on the other" bill. App. 91. Fundamental fairness, not simply considerations of "courteous" treatment of customers, post, at 25 n. 7, informs the constitutional requirement of notice and the actual provision of a timely opportunity to meet with designated personnel who are duly authorized to review disputed bills and to correct any errors.
It is far from clear that any material delay in payment will occur from an informal conference that can be scheduled well in advance of the date of termination, see n. 22, supra. In any event, as is demonstrated by MLG&W's credit plan, see n. 4, supra, delayed payment is not nonpayment, and there are means available to MLG&W to recover at least some of the costs of a hearing, see, e. g., App. 114, 117 (imposition of gross, rather than net, charges for late payment).
The dissent intimates that due process was satisfied in this case because "a customer can always avoid termination by the simple expedient of paying the disputed bill and claiming a refund . . . ." Post, at 28. This point ignores the predicament confronting many individuals who lack the means to pay additional, unanticipated utility expenses. Even under MLG&W's admirable credit procedures, the customer must make immediate payment of one-half of a disputed past due bill, with the balance to be paid in three equal installments, in addition to current charges. Contrary to the dissent's suggestion, this Court's decision in Lindsey v. Normet, 405 U.S. 56 (1972), did not uphold a procedure that conditioned a tenant's continued possession on payment of "the back rent, an obligation which he disputed." Post, at 29 n. 11. Under the procedure upheld in Lindsey, certain tenant defenses were excluded, but the landlord still had to prove nonpayment of rent due or a holding contrary to some covenant in the lease before the tenant could be deprived of possession. See 405 U. S., at 65; n. 10, supra.
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