2003

First Quarter

Samall Associates Inc. v. Pa. PUC

No. 789 C.D. 2002 ( Pa. Cmwlth.) (filed Jan. 2, 2003 ). . 
In an unreported opinion, Commonwealth Court affirmed the PUC’s decision allowing a wastewater utility to require a capital contribution from the petitioner. The court initially stated that the main issue was whether the petitioner was entitled to the reserve capacity under an agreement between the utility, Delaware Valley Utilities Inc. (DVU), Wal-Mart and the Milford Group, as Milford Group’s successor, without having to pay an additional capital contribution. The court held that the Commission properly denied the petitioner’s appeal because it failed to prove any right to the reserve capacity or that it acted within the five-year time limit set forth in the agreement. The court noted that the Milford Group failed to exercise its option under the contract, and DVU’s sale of its assets to the Township, which was approved by the Commission and the Bankruptcy Court, as well as the contracts between Milford Group and DVU, occurred two years after the contract expired so that the petitioner did not even buy from Milford Group its option to receive the reserve allocation.

PPL Energyplus LLC v. Commonwealth

No. 525 M.D. 2001

Delmarva Power & Light Co. v. Commonwealth

No. 629 M.D. 2001, 814 A.2d 861 (Pa. Cmwlth. 2003) (filed Jan. 10, 2003).
Commonwealth Court grantedthe PUC’s application for summary relief with respect to the petitions for review filed by the electric generation suppliers (EGS). The EGS companies challenged the PUC’s decision to assess them their share of the cost of administering “public utilities” pursuant to section 510 of the Public Utility Code. The court specifically considered the petitioners’ argument that the legislature’s delegation of authority to the PUC to apply the Code to EGS companies was without guidelines and, thus, unconstitutional.

The court held that the discretion given to the PUC under of the Competition Act, particularly Section 2809(e), to apply other requirements of the Code to EGS companies was subject to definitive and reasonable standards and was, therefore, not unconstitutional. The court reasoned that the Commission did not have “unfettered” discretion, as the EGS companies contended, because the legislature required the Commission to consider the present quality of service, the protection of the public, and the safety and reliability of the system. The court further held that the PUC’s assessment of EGS companies for their share of administrative costs under section 510 was lawful and reasonable because EGS companies are “public utilities” subject to certain provisions of the Code and to the PUC’s administrative oversight.

Gassparro v. Pa. PUC

No. 1235 C.D. 2002, 814 A.2d 1282 (Pa. Cmwlth. 2003) (filed Jan. 15, 2003). 
Commonwealth Court affirmed the decision of the PUC that declined to order a payment plan on PECO Energy Company’s (PECO) judgment against a customer. PECO obtained a default judgment against the customer for an unpaid balance on electric utility services rendered to the customer’s building. The customer filed a complaint with the PUC, claiming that the company had failed to read his meters for over four years resulting in inflated electric bills. The court held that the PUC correctly determined that it did not have jurisdiction over the default judgment. The court stated that if the customer had raised its claims that PECO’s charges were based on estimated and not actual readings prior to the entry of the judgment, then the PUC could have reviewed the underlying facts to determine if over-billing occurred.

Dee-Dee Cab Inc. v. Pa. PUC

No. 1267 C.D. 2002, 817 A.2d 593 (Pa. Cmwlth 2003) (filed Feb. 25, 2003 ), petition for allowance of appeal deniedNov. 3, 2003. 
Commonwealth Court affirmed the decision of the PUC denying the taxicab company’s petition for reconsideration on the basis that the Medallion Act precluded the PUC from granting expanded authority in Philadelphia to a non-medallion taxicab company. The court held that the process the PUC used in reaching its decision afforded the taxicab company equal protection and procedural due process, and the PUC's conclusion that it did not have authority under the Medallion Act to approve the taxicab company's request to provide expanded service in Philadelphia was reasonable. The court stated that the Medallion Act’s language was sufficiently clear in that it does not grant the PUC the power to approve expanded authority for grandfathered, non-medallion taxicab companies operating under certificates of convenience that authorize less-than-citywide service.

The court further determined that the PUC’s prior decisions in Pennsylvania Public Utility Commission v. Genco Services, Inc., 76 Pa. P.U.C. 174 (1992) and Application of Bucks County Services, No. A-00111913 (filed Feb. 17, 1999) did not support the taxicab company’s position, reasoning that an administrative agency is not subject to stare decisis to the same extent as an appellate court, except that an agency should distinguish or overrule its own inconsistent precedents.

Donald A. Fix v. Pa. PUC

No. 1519 C.D. 2002 ( Pa. Cmwlth.) (filed March 3, 2003 ). 
In an unreported memorandum opinion, Commonwealth Court vacatedthe decision of the PUC and remanded the matter to the PUC to determine if the petitioner had good cause for filing a late answer in response to a complaint instituted by the Commission’s Bureau of Transportation and Safety. In its order, the PUC sustained the complaint and the fine requested in the complaint because Fix failed to file an answer within 20 days of the date of service as directed in the notice attached to the complaint. In response to Fix’s appeal to the Commonwealth Court, the PUC averred that Fix’s petition was properly denied because he did not allege new evidence, changed circumstances, or previously unconsidered law, and he did not furnish the Commission with proof or documentation to support his contention that he filed a timely answer with the Commission.

The court found that the petitioner’s failure to allege new evidence on the merits of the complaint did not provide a basis for dismissal of his petition since section 703(g) of the Code does not require a petitioner to allege new evidence in order for the PUC to consider the petition. The court also determined that the Commission, in dismissing Fix’s petition, failed to consider its rules of practice and procedure, specifically 52 Pa. Code §1.2, which allow the Commission to disregard any procedural error or defect and to liberally construe its regulations.

Adams v. Pa. PUC

No. 1697 C.D. 2002, 819 A.2d 631 (Pa. Cmwlth. 2003) (filed Mar. 21, 2003). 
Commonwealth Court affirmed the decision of the PUC that dismissed Petitioners’ claim for declaratory relief and held that the PUC lacked jurisdiction because the dispute arose from a private contract to which neither party was a public utility subject to the PUC’s regulation. Petitioners owned a parcel of land that had been subject to several leases for oil and gas rights. Pursuant to a 1957 agreement, Petitioners were to receive 200,000 cubic feet of natural gas per annum, free of charge. A 1991 agreement also provided that Petitioners would be provided free gas from a specified well. When the well was plugged and abandoned, Petitioners sought continued delivery of natural gas from Columbia Transmission and Columbia Gas.

On appeal, Petitioners argued that the PUC erred in dismissing their claim because Columbia Transmission and Columbia Gas were obligated to provide continuous and safe service pursuant to Section 1501 of the Public Utility Code. Commonwealth Court held that the PUC correctly declined jurisdiction because Petitioners’ right to natural gas service was derived entirely from a private contract and not from a certificate of public convenience or a filed tariff, and the PUC lacks jurisdiction over private contractual disputes. Moreover, the 1957 agreement did not obligate the company holding the lease to provide natural gas to the public, which is the hallmark of a public utility. The Court reasoned that the reference in the agreement to rates charged to domestic customers did not change the private nature of the contract.

City of Philadelphia v. Pa. PUC

No. 1924 C.D. 2002

PECO Energy Co. v. Pa. PUC

No. 1977 C.D. 2002, 822 A.2d 94 (Pa. Cmwlth. 2003) (filed Mar. 31, 2003).
Commonwealth Court affirmed the decision of the Commission that adopted the recommended decision of the administrative law judge and allocated both the City and Philadelphia Gas Works (PGW) 100 percent of their relocation costs in relation to the reconstruction of the Holme Avenue Bridge . The City, PGW, and PECO alleged that the Commission erred by not considering all relevant factors when allocating relocation costs and in considering only one factor, the benefit to a utility and its ratepayers from locating within a public right-of-way.

The court held that the Commission did not abuse its discretion because it considered the detriment to the utilities as well as the benefits received by the utilities in relocating their facilities; the availability of state and federal funding; placement of costs upon the party responsible for the reconstruction; and the equities of the situation. The Commission did not abuse its discretion in determining that the benefits of reconstructing the bridge and relocation of the utilities' facilities overrode the detriment to the utilities. The court stated that merely because the Commission did not decide certain factors in favor of the utilities, did not mean that the Commission did not consider these factors in making its cost allocation determination. Moreover, the court rejected the City's argument that the Commission erred in concluding that the sanitary sewer lay within a public right-of-way because there was no evidence to prove that the city's sanitary sewer lay within a private right-of-way.

Second Quarter

Chester Water Authority v. Pa. PUC

No. 2967 C.D. 2001, 822 A.2d 146 (Pa. Cmwlth. 2003) (filed Apr. 28, 2003 ), petition for allowance of appeal grantedAug. 4, 2004 . 
Commonwealth Court vacated the order of the PUC to the extent that it granted Philadelphia Suburban Water Company’s (PSW) motion for judgment on the pleadings. The court also vacated the PUC’s order to the extent that it granted PSW’s application for a certificate of public convenience and remanded the matter to the PUC for a public hearing. Chester Water Authority alleged that its rates were lower than those of PSW and that it had a water main adjacent to the tract to be served. The court determined that factual disputes existed and a hearing was necessary to determine whether PSW satisfied the statutory requirements to obtain a certificate of public convenience. Accordingly, the court held that the PUC erred in granting judgment on the pleadings.

Further, the court determined that the PUC abused its discretion by looking beyond the pleadings to support its determination because it relied on a letter in which the developer stated its preference for PSW’s service and on PSW’s existing tariff rates. The court also rejected the contention that a public hearing was unnecessary because the water authority failed to aver facts relevant to Section 1103(a) of Public Utility Code. The water authority's allegations challenging the water company's ability to meet public need and contending that the water authority could provide lower rates were material to determining whether the certificate should be issued to the water company. The court held that the PUC erred by failing to hold a hearing to ensure that the statutory criteria were met. The water authority raised issues of material fact as to whether the water company satisfied Section 1103(a), and a hearing was required.

The dissenting opinion filed by President Judge Collins argued that PSW’s application for a certificate of public convenience should be granted without a remand to the PUC for a public hearing. The opinion stated that the PUC properly granted PSW’s certificate because Chester Water Authority’s protest failed to raise any legally material issues that would have prevented the PUC from denying PSW’s application and to allege that PSW was unfit to provide water service to the proposed tract. Moreover, a hearing should not be required because the water authority unsatisfactorily challenged and PSW sufficiently demonstrated a demand and need for service, the inadequacy of the existing facilities, and technical, financial, and legal fitness in its application.

MCI Worldcom Communications Inc. v. Pa. PUC

No. 2282 C.D. 2002, 826 A.2d 919 (Pa. Cmwlth. 2003) (filed May 29, 2003 ), petition for allowance of appeal grantedApr. 26, 2004. 
Commonwealth Court vacated the decisions of the PUC and remanded the case to the PUC for an evidentiary hearing. The PUC determined that due to a Federal Communications Commission (FCC) order, a “change-in-law” provision in an Interconnection Agreement between MCI and Verizon allowed for an amendment to their rate schedule. Under the Interconnection Agreement, MCI and Verizon agreed to bill and pay invoices for reciprocal compensation for calls to Internet Service Providers (ISP) pursuant to the rate schedule agreed upon by the parties. The Interconnection Agreement also contained a change-of-law provision addressing when the rate schedule was to be amended to account for changes in the law. The FCC determined that ISP calls were expressly excluded from the reciprocal compensation obligations of the Telecommunications Act of 1996, 47 U.S.C. § 251 et seq. The FCC stated that this altered existing agreements if parties were entitled to invoke contractual change-of-law provisions.

The court examined whether PUC’s interpretation of the Interconnection Agreement that allowed Verizon to implement new rates as a result of the FCC’s Order was proper. In making its decision, the court analyzed whether the PUC’s decision was in accordance with the standard set forth in Drummond v. University of Pennsylvania for reviewing an interpretation of a contract provision. In that case, the court stated, “ is ambiguous. If it is clear, it is a question of law. If it is ambiguous, however, what the agreement means is determined by the surrounding facts and circumstances and that is a decision for the trier of fact.” Applying this standard, the court held that, based upon its review of the Interconnection Agreement and the different interpretations that the Administrative Law Judge and the Commission placed upon the language in the Agreement, the language was ambiguous. The court further determined that the PUC did not engage in proper fact-finding because it failed to hold hearings and take evidence, but, instead, treated the question of interpreting the language in the Agreement as solely a matter of law.

Borough of Olyphant v. Pennsylvania Power & Light Co.

No. 3:01cv2308, 269 F.Supp.2d 601 (M.D. Pa. 2003) (filed June 27, 2003).
In a memorandum opinion, the U.S. District Court for the Middle District of Pennsylvania granted PPL’s motion to strike the Borough’s notice of removal and denied its motion for costs. Pursuant to 28 U.S.C. §§1441(b) and 1446 and Rule 11 of the Federal Rules of Civil Procedure, the Borough filed a notice of removal of a declaratory judgment action that PPL filed with the PUC. Pursuant to 28 U.S.C. §1447(c), PPL filed a motion to strike the notice of removal and/or to remand the case to the PUC for an award of costs, arguing that cases from state agencies, such as the PUC, may not be removed to federal court.

The court held that section 1441 did not permit the case before the PUC to be removed to federal court because the PUC is not a state court. The court rejected the Borough’s argument that the PUC is the “functional equivalent” of a state court and should be treated as such for removal purposes. The court reasoned that the PUC has regulatory powers that state courts do not possess, and the PUC does not have the remedial powers of a court. Therefore, the PUC was not “vested with judicial power.” The court additionally found that the interests of Pennsylvania, particularly the interest in resolving matters before the PUC that are clearly within the PUC’s jurisdiction without interference from the federal courts, substantially outweighed any federal interests.

Third Quarter

Level 3 Communications LLC v. Marianna and Scenery Hill Tel. Co.

No. 1:CV-03-0239 (M.D. Pa. 2003) (filed July 16, 2003 ). 
In an unreported memorandum opinion, the U.S. District Court for the Middle District of Pennsylvania granted the PUC’s motion to dismiss. Level 3 Communications (Level 3) filed a formal complaint with the Commission in order to prevent Mariana and Scenery Hill Telephone Company (Mariana) from rerouting the calls placed by Mariana customers to Level 3 customers. The Commission dismissed Level 3’s complaint for lack of subject matter jurisdiction because Level 3’s calls were interstate in nature and Level 3 did not follow the proper procedures to bring a claim with the Commission under Section 252 of the Telecommunications Act of 1996 (TA-96). Level 3 then filed the instant complaint for judicial review of the Commission’s dismissal of its administrative complaint, alleging that the Commission’s determination violated TA-96.

The court held that the Commission did not violate federal law by finding that it lacked subject matter jurisdiction. The court noted that the Commission does have jurisdiction to arbitrate interconnection disputes pursuant to Section 252(b) and to approve or reject interconnection agreements under Section 252(e), but that Level 3 and Mariana did not have an interconnection agreement. Thus, the court found that the matter was not properly before the Commission and the Commission did not have authority to rule on the merits of Level 3’s complaint. The court further stated that even when subject matter jurisdiction does exist, Level 3 does not have the right to have the Commission address the merits of its claim under Section 251. Accordingly, the court determined that the allegations in Level 3’s complaint failed to establish an ongoing violation of federal law in order for the Ex Parte Young, 209 U.S. 123, 28 (1908), exception to the PUC’s Eleventh Amendment immunity to apply.

Pennsylvania Indus. for the Blind and Handicapped v. Pa. PUC

No. 121 MAP 2002 ( Pa. 2003).
The Pennsylvania Supreme Court reversed the order of Commonwealth Court , finding that PIBH’s claims arising out of its call center contract with the PUC were within the exclusive jurisdiction of the Board of Claims. Accordingly, the Commonwealth Court ’s assertion of jurisdiction over the matter was in error.

United Parcel Service v. Pa. PUC

No. 85 MAP 2002, 574 Pa. 304, 830 A.2d 941 ( Pa. 2003) (decided July 23, 2003 ), application for reargument deniedSept. 16, 2003.
The Supreme Court of Pennsylvania vacated Commonwealth Court ’s order pertaining to the enforcement phase of the proceedings and remanded the case to the PUC for recalculations of UPS’ assessment under the Public Utility Code. United Parcel Service, Inc. (UPS) initially objected to the PUC’s allocation of indirect expenses under Section 510(b)(2) among several subcategories. On remand, the PUC recalculated the assessment using a different methodology than that reviewed by Commonwealth Court.

The Supreme Court held that Commonwealth Court ’s initial decision mandated the recalculation of assessments to UPS. The Supreme Court found that Commonwealth Court ’s opinion required both the elimination of indirect expense subcategories and the reallocation of gross indirect expenses among the 12 utility groups used previously. The Supreme Court acknowledged that Commonwealth Court ’s decision was ambiguous but found that, when read in context, it clarified that the PUC’s obligation on remand was to allocate a single, revenue-based share of its gross indirect expenses to the motor carriers of property group. The Supreme Court directed the PUC to restore the direct expenses categories to their original form and to allocate the indirect expenses among the same utility groups. However, the court noted that it did not offer an opinion as to whether the categories of direct expenses could be altered on a prospective basis. Chief Justice Cappy filed a dissenting opinion, arguing that the majority decided the appeal on issues that were not raised by UPS and granted UPS relief that it did not request.

City of Philadelphia v. Pa. PUC

No. 19 C.D. 2002

PhiladelphiaGas Works v. Pa. PUC

No. 20 C.D. 2002, 829 A.2d 1241 (Pa. Cmwlth. 2003) (filed Aug. 13, 2003).
Commonwealth Court affirmed the decision of the PUC that, under the Natural Gas Choice and Competition Act (the Act), the PUC can increase Philadelphia Gas Works’ (PGW) municipal service rates without approval from the Philadelphia City Council. The court held that the PUC did not fail to follow prior ratemaking methodology as mandated in the Gas Choice Act. The court stated that the requirements under the Act referred to the method of evaluating revenue requirements and that the Act did not preserve the legal procedure for City Council approval of rates for the municipal service class. The court reasoned that the language of the Act does not suggest a legislative intent to burden rate-making with non-financial considerations, and the Act does not reference ratemaking among the powers preserved for cities that own gas distribution operations.

The court also held that neither the Constitution nor the Home Rule Act preserve the right of local self-government in the operation of a gas system or any other proprietary or private business. The court stated that it was not required to depart from the uniform ratemaking procedure under the Act in order to accommodate concerns raised by one class of gas customer. The court further found that because imputation of the charges to the municipal class was just and reasonable, PGW could collect it and there was no reason to assume that any portion of the charge would not be realized.

Dianese Inc. v. Commonwealth

No. 3:CV-03-0145 (M.D. Pa. 2003) (filed Aug. 21, 2003 ).
In an unpublished order, the U.S. District Court for the Middle District of Pennsylvania granted PUC’s Motion to Intervene and Motion to Remand the plaintiffs’ administrative agency complaints to the PUC. The plaintiffs filed a Notice of Removal to remove five complaints filed against utilities concerning termination of services, reinstatement, and payment procedures to federal court. The court held that the action should be remanded because the complainants were not the defendants in the action below and the PUC does not constitute a state court. The court noted that pursuant to 28 U.S.C. §1441, removal is permitted only by defendants in civil actions in state court where the district court would have original jurisdiction because a federal question was involved. The court reasoned that complainants in an administrative agency proceeding are considered more akin to a plaintiff than a defendant. The court further determined that the PUC is an administrative agency and not a state court, and that even under a “functional test,” its conclusion would remain the same since the PUC has limited enforcement and remedial powers in comparison to a state court.

National R.R. Passenger Corp. v. Pa. PUC

No. 02-3047

Southeastern Pennsylvania Transp. Auth. v. Pa. PUC

No. 02-3148, 342 F.3d 242 (3d Cir. 2003) (filed Aug. 27, 2003).
The U.S. Court of Appeals for the Third Circuit affirmed the decision of the U. S. District Court for the Eastern District of Pennsylvania that denied the PUC’s motion to dismiss Amtrak’s complaint and granted SEPTA’s motion to enforce the consent decree it previously entered into with the PUC in federal court. The dispute involved the PUC’s assignment of costs for the maintenance and repair of the Lloyd Street Bridge.

The court held that the District Court did not err in finding that the PUC was collaterally estopped from claiming Eleventh Amendment sovereign immunity, reasoning that collateral estoppel was appropriate due to the fact that the case involved the assessment of costs against Amtrak for the maintenance of railroad crossings. Accordingly, it was unnecessary for the court to reach the PUC’s arguments challenging the application of Ex parte Young. The court additionally held that Amtrak had standing to sue Commissioner Wilson despite the fact that he recused himself from the PUC’s proceedings. The court stated that in order for Amtrak to have effective relief and prevent a repetition of the assessments against it for highway bridge maintenance, the court had to have the ability to enjoin the Commissioners in their individual capacities from assessing costs to Amtrak. Moreover, the court determined that neither the full faith and credit doctrine claim nor the Rooker Feldman doctrine applied because Amtrak was not a party to the state court proceedings and, thus, the PUC could not use those proceedings as a conclusive disposition of Amtrak’s claims. Finally, the court held that the District Court’s order satisfied the requirements of the Declaratory Judgment Act.

Many of the Commission’s arguments regarding SEPTA were rejected for the same reasons they were rejected as against Amtrak. As to SEPTA’s claim seeking enforcement of the consent degree prohibiting the PUC from assessing maintenance costs against SEPTA, the court found that it had full authority to enforce the consent degree it previously approved notwithstanding the Commonwealth Court ’s decision.

Cramer v. Pa. PUC

No. 2750 C.D. 2002 (Pa. Cmwlth. 2002) (filed Sept. 5, 2003). 
In an unreported memorandum opinion, Commonwealth Court reversed the PUC’s decision that denied Petitioner’s request for damages pursuant to Section 2704 of the Public Utility Code and remanded the case to the PUC for further proceedings. Petitioner’s claim with the PUC alleged that the actions of Conrail, the Township, and DOT in demolishing a bridge leading to his property constituted a taking of his property and that he was entitled to damages. The court examined whether a protected property interest was taken from the petitioner and, if so, whether any action was time barred or procedurally improper.

The court initially stated that the Code provides the following: “The compensation for damages which the owners of adjacent property taken, injured or destroyed may sustain in the construction, relocation, alteration, protection, or abolition of any crossing under the provisions of the part, shall, after due notice and hearing, be ascertained and determined by the commission.” 66 Pa.C.S. §2704(a). The court then held that the PUC’s failure to follow these procedures and to deny the petition without holding a hearing constituted a violation of the petitioner’s due process rights. The court rejected the PUC’s argument that compensation was not due absent a formal appropriation of property under Section 2702(b) and found that the petitioner was entitled to compensation because the action resulted in a diminution of property value.

Dominion Retail v. Pa. PUC

No. 1676 C.D. 2002, 831 A.2d 810 (Pa. Cmwlth. 2003) (filed Sept. 10, 2003). 
Commonwealth Court affirmed the order of the PUC approving the fixed sales service rate (rate FSS) proposed by Equitable, a natural gas distribution company (NGDC). The PUC determined that rate FSS does not have to be reconciled under Section 1307(f) of the Public Utility Code and is not subject to the standards of conduct for affiliated natural gas suppliers under Section 2209 of the Code. The court held that Equitable’s rate FSS offering was not required to be reconciled. The court reasoned that the PUC reasonably interpreted the provisions of the Code and that none of the Commission’s statutory or regulatory provisions mandated the reconciliation of all purchased gas costs incurred by a NGDC.

The court further held that the PUC did not abuse its discretion by applying different standards of conduct to Equitable’s provision of FSS in accordance with Section 2209(h). The court reasoned that FSS was “significantly different from the usual ‘affiliated natural gas supplier’ and we believe the PUC appropriately addressed the competitive concerns of Dominion without unduly restricting an innovative program consistent with the spirit of the Act.”

Fourth Quarter

Armstrong Telecomm. Inc. v. Pa. PUC

No. 362 C.D. 2003, 835 A.2d 409 (Pa. Cmwlth. 2003) (filed Nov. 10, 2003).
Commonwealth Court vacated a portion of the PUC’s order that reinstated Citizens Telephone Company of Kecksburg’s (Citizens) exemption from competition that was previously terminated by the PUC. The court held that the PUC abused its discretion and committed an error of law by reversing or amending its prior order and reinstating Citizens’ Section 251(f)(1) rural exemption without providing notice and an opportunity to be heard as required under section 703(g). The court stated that while the PUC can amend a prior order, the notice and hearing requirements under section 703(g) require that the PUC do so in a proceeding that relates back to the proceeding in which the original order was issued. The court found that the PUC failed to follow the notice and hearing requirements under section 703(g) in this case because the PUC attempted to amend its previous order terminating Citizens’ exemption in a separate and unrelated proceeding that denied a request by rural incumbent local exchange carriers for a 36-month suspension extension of a five-year suspension that was previously granted.

Luzerne County Redev. Auth. v. Pa. PUC

No. 668 C.D. 2003 (Pa. Cmwlth. 2003) (filed Nov. 14, 2003).
In an unreported opinion, Commonwealth Court affirmed the decision of the PUC that allocated costs for remediation of a railroad crossing owned by Luzerne County Redevelopment Authority. The PUC allocated 75 percent of the costs to the Authority and 25 percent of the costs to the Department of Transportation (DOT). The Authority asserted that substantial evidence did not support the PUC’s decision because the Authority was not responsible for the pooling of stagnant water beneath the Borough’s South Main Street Bridge . The Authority contended that the PUC should have made additional findings regarding the sources of the pooling water and the availability of funding to the parties who may be allocated costs to remedy the problem.

The court held that because there was no testimony presented relating to the cause of the pooling, the PUC reasonably concluded that the Authority, as the owner of the line and the party responsible for maintenance of the line, should be allocated a commensurate share of the costs. The court noted that there was testimony in the record to support that the PUC additionally considered that both DOT and the Authority would benefit from the repairs, the safety of DOT’s bridge would be ensured, and the Authority could use the rail line for profit.

1 to 1 Contact Ctr. Inc. v. Pa. PUC

No. 1461 C.D. 2002 (Pa. Cmwlth. 2003) (filed Nov. 26, 2003). 
In an unreported memorandum opinion, Commonwealth Court dismissed the appeal of 1 to 1 Contact Centers, Inc. (Contact Centers) as moot. Contact Centers appealed from the PUC’s decision denying its bid protest filed under the Commonwealth Procurement Code. The PUC rejected the protest without a hearing, finding that Contact Centers lacked standing, Pennsylvania Industries for the Blind and Handicapped (PIBH) was ready to perform the contract, and the award of the contract without delay was necessary to protect the Commonwealth’s interests. Contact Centers contended that the PUC erred in rejecting its protest and by failing to hold a hearing because, as a prospective bidder, it had standing to appeal the contract award. In the interim, the PUC advised PIBH that it was terminating the contract. Accordingly, the court held that if Contact Centers was given a hearing, the only relief it could receive as the prevailing party would be for the PUC to cancel PIBH’s contract, which it had already done.

The Vertis Group Inc. v. Pa. PUC

No. 693 C.D. 2003, 840 A.2d 390 (Pa. Cmwlth. 2003) (filed Dec. 5, 2003 ), review denied, 859 A.2d 770 ( Pa. 2004).
Commonwealth Court affirmed the decision of the PUC that dismissed the Vertis Group’s complaint because it failed to show, by a preponderance of the evidence, that fluctuations in Duquesne Light’s electrical service caused corrupted data or damage to its computer equipment. After the petitioner sued Duquesne Light, the trial court bifurcated the case and referred a determination of liability to the PUC, which dismissed the petitioner’s complaint. The Vertis Group appealed, and the PUC filed a motion to quash the petition for review insofar as it sought to appeal the trial court’s bifurcation order.

The court held that the trial court did not err as a matter of law in bifurcating the case. The court noted that bifurcation is appropriate “where the subject matter is within an agency’s jurisdiction and where it is a complex matter requiring special competence, with which the judge or jury would not or could not be familiar.” The court reasoned that the allegations in the Vertis Group’s complaint addressed subject matter of a complex nature and issues within the exclusive jurisdiction of the PUC, such as Duquesne Light’s published tariffs, legal voltage range and the reasonableness, safety, and quality of the electrical power. The court held that this did not preclude the Vertis Group’s right to a jury trial. The court reasoned that because the Public Utility Code does not require a jury trial and regulated public utility service did not exist when the Pennsylvania Constitution was adopted, the Vertis Group had no right to a jury trial under Section 901 of the Public Utility Code. Moreover, the PUC did not exceed its statutory jurisdiction or jurisdictional authority because it did not rule on the Vertis Group’s common law claims.

The dissenting opinion filed by Judge Friedman stated that, to the extent the complaint filed by the Vertis Group implied a violation of Section 1501 of the Code, the trial court should have transferred the case to the PUC to address that specific issue. The judge also notably argued that the PUC exceeded its jurisdiction by deciding common law liability issues set forth in the Vertis Group’s complaint.

Bell Atlantic-Pennsylvania Inc. v. Pa. PUC

No. 99-5391

MCI Telecomm. Corp. v. Bell Atlantic-Pennsylvania

No. 03-685, 295 F. Supp.2d 529 (E.D. Pa. 2003) (filed Dec. 12, 2003).
The U.S. District Court for the Eastern District of Pennsylvania denied the PUC’s Motion for Summary Judgment. In consolidated actions, plaintiff telecommunication companies sued the PUC, alleging that the rates established by the Commission for unbundled network elements in an interconnection agreement violated the Telecommunications Act of 1996 (TA-96), 47 U.S.C. §251 et seq. In its motion, the PUC argued that (1) the court lacked jurisdiction because it must give full faith and credit to the Commonwealth Court’s decision that upheld the Global Order; (2) even if the court had jurisdiction under TA-96, the provision of TA-96 granting such jurisdiction is unconstitutional because it exceeds Congress’ authority under the Commerce Clause; and (3) even if the court had jurisdiction under TA-96 to enjoin it from enforcing the Global Order rates, that jurisdiction did not include the power to compel the PUC to calculate new rates.

The court held that the Commonwealth Court’s prior decision was not binding because Congress vested exclusive jurisdiction in the federal courts to decide appeals from state commission determinations on interconnection agreements under TA-96, and, thus, the Commonwealth Court did not have jurisdiction to decide the controversy in the first instance. Further, federal regulation of local telephone markets fell squarely within the broad federal power to regulate interstate commerce, and exclusive federal jurisdiction was a necessary and proper exercise of such power as plainly adapted to developing competitive local telephone markets and achieving uniformity in regulation. Finally, the court found that it had the authority not only to enjoin the PUC’s enforcement of rates that violated federal law, but also to order the PUC to establish new, legally compliant rates.