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First Quarter

Mazza v. Pa. PUC

No. 2606 C.D. 2010 (Pa. Cmwlth. 2012) (filed January 4, 2012).

In an unreported opinion, the Commonwealth Court affirmed the PUC’s order which adopted the decision of the ALJ to sustain in part and adopt in part complaints filed by Mark Mazza (Mazza) against PECO Energy Company (PECO). Mazza filed two complaints against PECO with the PUC, alleging that PECO attempted to terminate his service without prior notification and that he should be provided with a reasonable payment arrangement.

The ALJ determined that Mazza was entitled to a payment agreement but failed to meet his burden of proof on the notice issue. Mazza was directed to make monthly payments on his account; PECO would be allowed to terminate the service if Mazza failed to comply. The PUC then notified Mazza that exceptions could be filed if he disagreed with the decision. Mazza failed to file exceptions; therefore, on October 1, 2011, the PUC issued a final order and closed the case.

On November 1, 2011, Mazza appealed the PUC’s order and the court instructed Mazza to set forth reasons for his appeal within thirty days. Subsequently, on December 6, 2011, the PUC issued an opinion stating that since the final order was entered after the initial deadline for filing exceptions had passed, Mazza’s exceptions would be treated as a petition for reconsideration of the final order. The PUC then denied Mazza’s exceptions and adopted the ALJ’s initial decision.

Mazza then perfected his appeal and raised the following issues: (1) whether the PUC erred in failing to consider his exceptions to the ALJ’s decision, (2) whether the PUC’s order was supported by substantial evidence; and (3) whether his due process rights were violated by the ALJ’s request for a continuance in order to conduct discovery.

Under Pa. R.A.P. 1701(b)(3), a timely order granting reconsideration renders inoperative any petition for review filed or docketed with respect to the prior order. Therefore, the PUC argued that Mazza’s appeal should be quashed since he appealed the decision rendered on October 1, 2011, but not the decision rendered on December 6, 2011. The court disagreed with the PUC. Under Pa. R.A.P. 1701(b)(3)(ii), the PUC has 30 days to rule on a reconsideration request. The PUC ruled on the request for reconsideration after the 30-day period; therefore, the PUC was without jurisdiction to consider the request. Consequently, the October 1, 2011, order was the appealable order. However, the court found that there were no issues to review regarding the October 1, 2011 order because Mazza waived all issues for appeal by filing untimely exceptions to the ALJ’s decision. Therefore, the court affirmed the PUC’s order.

Bd. of Supervisors of Springfield Twp. v. Pa. PUC

41 A.3d 142 (Pa. Cmwlth. 2012) (filed January 13, 2012).

The Commonwealth Court affirmed a PUC order granting a certificate of public convenience to PPL Electric Utility Corporation (PPL) to construct a seven-mile high-voltage electric transmission line and substation using the “PPL Functional Configuration” rather than the “Springfield Configuration.”

PPL needed to upgrade its Lehigh Valley HV electric transmission network due to rapid growth in that region and to prevent loss of service to PPL customers in the area. PPL studied two functional configurations in order to upgrade its transmission network in the region; the options were the “Springfield Configuration” and “PPL Functional Configuration.” PPL chose the latter because it was less expensive and provided flexibility for predicted future expansion needs. This was then submitted to the siting team, which reviewed the relevant area and found that the PPL Functional Configuration would not have significant environmental or other relevant impacts. Therefore, the siting team identified possible routes for the HV transmission line that would be necessary to implement the selected PPL Functional Configuration. PPL analyzed three line route options and selected the Cross Country Corridor.

On February 14, 2008, PPL sought to construct a substation control building in Springfield Township. PPL also sought to acquire rights-of-way for the construction, use, operation, repair and maintenance of the route for the Cross Country Corridor. Springfield Township protested the application and petitioned to intervene due to environmental concerns. After four public hearings before an ALJ, PPL’s application was approved. The ALJ found it undeniable that PPL needed additional transformer capacity in the Lehigh region. Moreover, the ALJ also found PPL’s evidence to be persuasive that the cost of the PPL Functional Configuration at $51 million over 20 years would be less than the Springfield Configuration at $66 million over 20 years. Therefore, the ALJ approved PPL’s route choice for the PPL Functional Configuration.

Springfield Township filed exceptions to the ALJ’s decision and argued that PPL’s application should be denied and that the Springfield Configuration would meet PPL’s planning criteria without impacting the environment adversely. The Township argued that the PUC should address the environmental impacts of the Springfield Configuration (even though it was rejected) before it decided on a power line route. The court disagreed because none of the regulations, which dealt with HV transmission line application, required the PUC to consider alternative configurations. The court further noted that PPL was only required to present the PUC with an application for a proposed line and alternate route and not a rejected configuration. Therefore, the court found that the PUC properly followed its own regulations and did not err in granting a certificate of public convenience to PPL.

Dziadas v. Pa. PUC

No. 1951 C.D. 2010 (Pa. Cmwlth. 2012) (filed February 3, 2012).

In an unreported decision, the Commonwealth Court affirmed a PUC order, which denied Bozena Dziadas’ (Dziadas) exceptions and adopted the initial decision of the ALJ, which dismissed the formal complaint filed by Dziadas under the Public Utility Code.

Dziadas filed a complaint against PPL Electric Utilities Corporation (PPL) alleging that her household used less electricity than PPL’s meter and website indicated. Dziadas asked the PUC to direct PPL to charge her only for the energy used by her household. PPL then filed an answer, which denied the allegations and stated that a meter test showed that the meter was 99.86% accurate in recording the consumed electricity.

On September 28, 2009, a telephone hearing was conducted before a PUC ALJ where the testimonies of a customer representative, a customer contact representative and six exhibits were presented. On April 6, 2010, the case was transferred to another ALJ for disposition. On April 20, 2010, the new ALJ dismissed the complaint for the following two reasons: (1) there was not enough of an inconsistency over the four years of data in PPL’s exhibit to support a finding of inaccurate billing; and (2) Dziadas did not meet her burden of proving that she was improperly billed for electric service. The ALJ also concluded that there was no evidence which indicated that PPL provided inadequate service or violated the Code, the PUC’s regulations, or a PUC order.

On May 8, 2010, Dziadas filed exceptions. On August 3, 2010, the PUC rejected the exceptions and determined that Dziadas had failed to sustain her initial burden of proving overbilling under Waldron v. Philadelphia Electric Co., 54 Pa. PUC 98 (1980). Therefore, the PUC dismissed Dziadas’ exceptions, adopted the ALJ’s initial decision and dismissed Dziadas’ complaint.

On appeal, Dziadas alleged that the PUC erred in dismissing the complaint and presented the same arguments raised before the PUC. The court relied on Waldron, Burleson v. Pa. PUC, 461 A.2d 1234 (Pa. 1983) and Milkie v. Pa. PUC, 768 A.2d 1217 (Pa. Cmwlth. 2001), which set forth that a complainant may establish a prima facie case by proving that the debated bill was unusually high when matched against previous bills although usage remained unchanged. The burden then shifts to the utility to rebut the complainant’s evidence. A complainant fails to meet her burden of proof if the utility offers evidence of equal or greater weight. Therefore, the court based its review on whether the PUC’s decision was supported by substantial evidence. The court determined that the testimonies and exhibits presented during the telephone hearing before the ALJ provided sufficient evidence to explain why Dziadas’ meter showed a higher usage in the winter than summer and the uniformity of usage over those times.

Pettko v. Pa. American Water Co.

No.1061 C.D. 2011 (Pa. Cmwlth. 2012) (filed January 13, 2012; amended March 12, 2012 (order only)).

The Commonwealth Court affirmed the trial court’s order, which transferred Pettko’s class action claim against Pennsylvania American Water Company (PAWC) to the PUC, and concluded that the PUC had jurisdiction over the matter. However, the court concluded that Pettko had a right to seek relief under the Unfair Trade Practices and Consumer Protection Law (UTPCPL). Pettko filed its class action claim challenging PAWC’s billing practices, including practices relating to certain rate increases approved by the PUC and PAWC’s practice of rounding up, instead of rounding down amounts for various components of its bills. Pettko claimed that PAWC’s practices: (1) violated section 2(4)(xxi) of the UTPCPL; (2) constituted a conversion; and (3)was a breach of contract.

PAWC then filed preliminary objections to Pettko’s complaint stating that the PUC instead of the trial court had primary and exclusive jurisdiction over Pettko’s complaints. PAWC also stated that Pettko did not exhaust an available statutory remedy (an action before the PUC) and that the complaint failed to comply with Pennsylvania Rule of Civil Procedure No. 1028(a)(2). Pettko responded and asserted that his claims for relief were recognized by law in addition to whatever relief he may be entitled to receive from the PUC. The trial court determined that the PUC had both primary and exclusive jurisdiction over Pettko’s claims, dismissed the matter and transferred it to the PUC.

Pettko appealed and raised the following two issues: (1) whether the trial court erred in concluding that the PUC had primary and/or exclusive jurisdiction over Pettko’s claim where section 103(c) of the Public Utility Code provides that remedies available from the PUC are cumulative and in addition to common law and statutory remedies; and (2) whether the trial court erred in concluding that it lacks jurisdiction to render a determination on the merits of Pettko’s claims.

Pettko argued that its claims under the UTPCPL and common law claims were not within the PUC’s subject matter jurisdiction and that its claims were tort, contract and statutory in nature since PAWC’s failure to pro-rate its charges was dishonest behavior. Pettko relied on Byer v. People’s Natural Gas Co., 380 A.2d 383 (Pa. Super 1977), in supporting its argument. The Commonwealth Court found that the trial court was correct in deciding that the PUC had primary jurisdiction on the question of whether the tariff supported Pettko’s or PAWC’s position. The court reasoned that aspects of the tariff provided a PUC-approved method for establishing charges related to Distribution System Improvement Charges (DSIC) and State Tax Adjustment Charges (STAC), which was the subject of Pettko’s claims. The court further concluded that the statutory refund remedy available through the PUC was not enough to afford Pettko with a remedy for PAWC’s acts of overcharging. However, the court found that the PUC could not afford Pettko with relief for its UTPCPL claim pertaining to the PAWC’s dishonest trade practices since there is no remedy accessible through the PUC for such issue.

Pettko also argued that section 103(c) of the Public Utility Code permits it to pursue its claim under the UTPCPL. However, the PAWC asserted that section 1312(c) of the Code limits a consumer’s right to seek relief for over-billing. The court disagreed with PAWC and found that section 1312(c) relates only to refund actions and that the UTPCPL offers a separate remedy for deceptive behavior. Moreover, the court noted that the UTPCPL offers exemplary or treble damages in order to penalize or discourage deceptive behavior; the General Assembly provides through the UTPCPL remedies that are greater than those offered under the Code. Therefore, the court held that the PUC had primary and exclusive jurisdiction over the claims based on the overpayment under the tariffs, but Pettko maintained a right to seek relief under the UTPCPL. The Commonwealth Court further held that the trial court correctly transferred the matter to the PUC.

Municipal Auth. of the Borough of West View v. Pa. PUC

No. 1581 C.D. 2010 (Pa. Cmwlth. 2012) (filed March 22, 2012).

The Commonwealth Court affirmed the PUC’s order which dismissed the complaint of the Municipal Authority of the Borough of West View (Authority). However, the court vacated the portion of the PUC’s order which granted the Authority’s motion for judgment on the pleadings. The Authority’s complaint challenged the rate that Pennsylvania American Water Company (PAWC) used in order to obtain business from the Evans City Water and Sewer Authority (Evans City). The Authority maintained that the rates offered by PAWC were much lower than they should have been. PAWC filed an answer to the complaint as well as motions to dismiss the complaint due to lack of standing and/or for judgment on the pleadings.

The PUC denied the Authority’s exceptions and adopted the ALJ’s initial decision. The ALJ found that the Authority lacked standing because it failed to state an immediate interest in the litigation; instead, the Authority only stated the interests of Cranberry Township or Adams Township. In addition, the ALJ concluded that the Authority lacked standing because it was not part of a regulatory system which forbids the competitive injury alleged. Regarding judgment on the pleadings, the ALJ concluded that it was acceptable for PAWC to use the Rider DRS in order to obtain a new water service customer.

On appeal, the Authority raised the following issues: (1) whether the PUC erred in concluding that the Authority lacks standing in the matter; (2) if the PUC did not err, was the Authority deprived of due process; and (3) is the Authority, by law, limited to charging municipalities reasonable, uniform rates, and therefore, cannot offer lower rates to attract new customers.

On the first issue, the court found that the PUC did not err in concluding that the Authority lacked standing in the matter. The court relied on Waddington v. Pa.PUC, 670 A. 2d 199, 202 (Pa. Cmwlth. 1995), which held that, “In order to have standing to pursue a formal complaint before the PUC, the complainant must have a direct, immediate and substantial interest in the subject matter of the controversy.” Here, the court focused on the immediacy prong and found that the loss of business that the Authority would have obtained if Cranberry Township or Adams Township had been selected was not an immediate consequence of PAWC’s use of its Rider DRS.

On the second issue, the court concluded that the Authority was not deprived of due process. The court relied on the holding in Davenport v. Reed, 785 A.2d 1058, 1062 (Pa. Cmwlth. 2001), which stated that procedural due process attaches only where there is an alleged deprivation of property or liberty interest. In this case, the court determined that the Authority did not have a protected property interest in competing with PUC-regulated water utilities on a particular rate basis.

The court handled the third issue as a challenge to the PUC’s decision, which granted judgment on the pleadings in PAWC’s favor. The court determined that since the PUC granted the motion to dismiss the claim for lack of standing, it no longer had jurisdiction to rule on the merits. In addition, the court affirmed the PUC’s decision; therefore, the court vacated the grant of judgment on the pleadings in favor of PAWC.

Pa. PUC v. Gilbert, et al

No. 1381 C.D. 2011 (Pa. Cmwlth. 2012) (filed March 24, 2012).

The Commonwealth Court reversed the order of the Office of Open Records (OOR), which determined that the records requested from the PUC by a reporter of the Wall Street Journal, (Gilbert), were “public records” pursuant to the Right-to-Know Law. Gilbert requested access to records of underground natural gas pipelines from the PUC and was denied access to three of four items. The PUC denied access to the items under 65 P.S. § 67.708(b)(17), which provides exemptions for noncriminal investigative records. In addition, the PUC relied on 65 P.S. § 67.708(b)(10)(i)(A), which provides exemptions for internal pre-decisional deliberations.

Gilbert and the Wall Street Journal (Respondents) appealed the PUC’s decision and challenged the PUC’s claims of exemptions for gas safety records related to noncriminal decisional deliberations of the PUC and records, which reflected internal pre-decisional deliberations of the PUC. Respondents asserted that the records were not “public records.” The OOR concluded that the PUC failed to prove, as requested, that the records were protected by either exemption mentioned above. Therefore, the OOR instructed the PUC to provide records requested by Respondents within thirty days.

On review, the PUC argued that pursuant to 65 P.S. § 67.708(b)(17), the records were exempt because they were records of an agency, which related to “noncriminal investigations.” The court agreed with the PUC and held that the investigations conducted by the PUC constituted “noncriminal investigations” for the purposes of 65 P.S. § 67.708(b)(17). The court relied on Dep’t of Health v. Office of Open Records, 4 A.3d 803, 811 (Pa. Cmwlth. 2010), which determined that the term “investigation” pursuant to section 708(b)(17) means “a systematic or searching inquiry, a detailed examination, or an official probe.” The court determined that Respondents’ request was too broad since it included the investigative materials, notes, correspondences and reports gathered by the investigation and enforcement gas safety inspectors. In addition, the court noted that access to materials which may contain statements and allegation about an owner, employee or utility would be problematic since the owner, employee or utility would not be given the opportunity to respond. Moreover, the court presented a public policy argument which asserted that if the types of investigative material presented above were disclosed, owners and employees would be less inclined to provide significant information due to fear of retaliation or public humiliation.

Second Quarter

Regency Transp. Grp. Ltd. v. Pa. PUC

No. 233 C.D. 2011 (Pa. Cmwlth. 2012) (filed May 16, 2012).

The Commonwealth Court affirmed a PUC order which denied the exceptions and objections of Regency Transportation Group, Ltd. (Regency). The order also adopted the initial decision and order of an ALJ, which determined that the PUC was not prevented by federal law from collecting the Fiscal Year (FY) 2009-2010 assessment from Regency for intrastate passenger service.

The PUC assessed Regency for FY 2009-2010 pursuant to 66 Pa. C.S § 510, which allows the PUC to collect an annual fee from public utilities operating and engaging in business within the Commonwealth. The assessment of $20,170 was based on the gross intrastate revenues reported by Regency for intrastate passenger service. Regency objected to the assessment alleging that 49 U.S.C § 14504a (UCR Act) prohibited the assessment. After a hearing, the ALJ denied Regency’s objection and determined that the UCR Act only applied to charter bus service. The ALJ also rejected Regency’s argument that its limousine service qualified as “charter bus transportation” under 49 U.S.C. § 14501(a)(1)(C). Exceptions were filed, which the PUC denied, and the PUC adopted the ALJ’s opinion.

On appeal, Regency argued that the PUC erred because it did not determine that it was prohibited from assessing Regency under 49 U.S.C. §14501(a)(1)(C) and the UCR Act. The court agreed with the PUC’s interpretation of “charter bus transportation” under 49 U.S.C § 14504(a)(1)(C); the PUC had determined that vehicles that seated fifteen or less passengers, including limousines used by Regency did not fit within the definition of “charter bus transportation.” Therefore, the limousine service that Regency offered was not immune from assessment under the UCR Act. In making its determination, the PUC relied on federal court cases and previous precedent from the PUC, which held that “charter bus transportation” refers only to vehicles which seat sixteen or more passengers.

In addition, Regency’s brief attempted to include limousine service within the definition of “bus” in 49 C.F.R § 390.5. The court disagreed and concluded that although the definition included taxicabs, it did not include limousines. The court also found that adoption of Regency’s interpretation would render the term “bus” under 49 U.S.C. § 14501(a)(1)(C) to be meaningless because all “charter transportation” would be eligible as “charter bus transportation.” In addition, the court held that adoption of Regency’s interpretation would exempt all motor carriers that hold intrastate and interstate passenger operating authority from assessment under the UCR Act.

Regency also noted in its brief that the PUC failed to assess it in 2007 and 2008 and failed to give notice of its 2009 assessment changes. However, the court determined that 49 U.S.C. § 14501a(c)(2) was amended to allow the assessment of intrastate operations of interstate carriers up to the level of those carriers engaged in intrastate operations only. Therefore, the court concluded that the PUC’s change in position in regards to assessment was due to a change in the law and Regency was given adequate notification of the change.

Verizon Pennsylvania, Inc. v. Pa. PUC

No. 11-2712, 2012 U.S. App. LEXIS 11292 (3d Cir. June 5, 2012).

The U.S. Court of Appeals for the Third Circuit affirmed the District Court for the Eastern District of Pennsylvania’s grant of summary judgment in favor of Verizon Pennsylvania Inc. and Verizon North LLC (collectively, “Verizon”).

As a result of Verizon listing certain wire centers in Pennsylvania as exempt from the unbundling requirement, counting both competitive fiber providers (CFPs) and competitive local exchange carriers (CLECs) as “fiber-based collocators,” a group of CLECs petitioned PUC to review whether CFPs or CLECs qualify as “fiber-based collocators.” The CLECs requested that PUC find that neither CFPs nor CLECs leasing their dark fiber strands qualify as “fiber-based collocators.” The PUC determined that CFPs qualified, but that CLECs did not qualify. Verizon filed a complaint against the PUC in the District Court for the Eastern District of Pennsylvania asserting that the PUC erroneously determined that CLECs that lease dark fiber strands from CFPs through Competitive Alternative Transport (CAT) Terminals do not qualify as “fiber-based collocators”. The district court agreed.

The PUC appealed the district court’s decision and the Federal Communications Commission (FCC), which is responsible for determining when ILECs must provide particular network elements on an unbundled basis, submitted an amicus brief. The issue on appeal was whether a particular type of collocation arrangement satisfies the definition and may therefore be included in the “fiber-based collocator” count that determines if an ILEC is relieved of its unbundling obligation.

The PUC argued, for the purpose of satisfying the definition of “fiber-based collocator” under 47 C.F.R. § 51.5, that dark fiber strands are neither a fiber-optic cable nor a comparable transmission facility. The court relied on the FCC’s interpretation of fiber optic cables and transmission facilities. The FCC stated that under certain circumstances, dark fiber is equivalent to fiber-optic. The FCC also stated that when a company has obtained dark fiber from another carrier on a long-term IRU basis and activated that fiber with its own Optronics, that facility should be counted as a separate unaffiliated facility. The court also relied on the text of section 51.5, which provides that “dark fiber obtained from an incumbent LEC on an indefeasible right of use basis shall be treated as a non-incumbent LEC fiber optic cable.”

The PUC also argued that CLECs that lease dark fiber strands from CFPs do not operate as fiberoptic cable or comparable transmission facilities and that section 51.5 requires that “fiber-based collocators” exercise a greater level of control. The court disagreed and relied on the FCC’s determination that a CLEC operates a fiberoptic cable or comparable transmission facility by activating dark fiber with its own Optronics equipment.

The court noted that the FCC’s interpretation of section 51.5 was consistent with the regulatory scheme and was entitled to deference. Therefore, the court concluded that the district court correctly determined that a CLEC, which leases dark fiber strands from a CFP on an IRU basis through a Verizon CAT Terminal, qualifies as a “fiber-based collocator.”

Third Quarter

Robinson Twp., et al. v. Pa. PUC, et al.

No. 284 M.D. 2012 (Pa. Cmwlth. 2012) (filed July 26, 2012).

The Commonwealth Court sustained the preliminary objections filed by the Commonwealth of Pennsylvania, PUC, et al., (collectively, “the Commonwealth”) to Counts IV, V, VI, VII, X, XI and XII and dismissed the Counts. In addition, the court overruled the preliminary objections to Counts I, II, III and VIII. The court also granted to Robinson Township, et al., (collectively, “Petitioners”) their motion for summary relief as to Counts I, II, Ill and VIII and declared 58 Pa. C.S. § 3304 unconstitutional and null and void. In addition, the court enjoined the Commonwealth from enforcing its provisions as well as the remaining provisions of Chapter 33 that enforce 58 Pa. C.S. § 3304, excluding sections 3301-3303. Furthermore, the court granted Petitioners’ motion for summary relief as to Count VIII and declared sections 3215(b)(4) as null and void. The court also denied the cross-motion for summary relief filed by the PUC and the Pennsylvania Department of Environmental Protection (collectively, “Respondents”).

Petitioners filed a 12-count petition for review as a complaint for declaratory judgment and injunctive relief, which contested the constitutionality of Act 13 pertaining to Oil and Gas- Marcellus Shale. Petitioners alleged the existence of approximately 150 unconventional Marcellus Shale wells drilled within their borders. Petitioners also asserted that Act 13 precluded them from satisfying their constitutional and statutory obligations “to protect health, safety and welfare of their citizens as well as public natural resources from the industrial activity of oil and gas drilling.” In addition, Petitioners alleged that they are compelled to change many of their zoning laws due to Act 13. The Commonwealth filed preliminary objections and alleged the following: (1) Petitioners lacked standing to file their action; (2) Petitioners’ claims are barred because they involve non-justiciable political questions; and (3) Counts I and XII fail to state claims upon which relief may be granted. Concerning Counts XIII and XIV, the Commonwealth contended that Petitioners had stated a separate cause of action for relief and also failed to state claims upon which summary relief may have been granted. The Commonwealth requested that the court disregard the petition for review and the motion for summary relief. The Commonwealth also filed a cross application for summary relief.

The Commonwealth argued that the seven municipalities, two council members, a physician, and an environmental association had no standing to contest Act 13’s constitutionality. Concerning the seven municipalities who brought the action, the Commonwealth asserted that their petition for review asserts that Act 13 is unconstitutional due to its effect on the rights of citizens. The Commission then argued that the municipalities lacked standing to bring their citizen’s claims against the Commonwealth because Act 13 caused no injury to the municipalities. Therefore, the Commonwealth argued that the citizens and not the municipalities had standing to bring the claims. The court disagreed and found that the municipalities possessed standing to bring the action for two reasons. First, Act 13 enforced “a direct, substantial and immediate obligation” on the municipalities which has an impact on their government functions. Second, Act 13 compels the municipalities to change their zoning laws in order to conform to Act 13.

In addition, the Commonwealth argued that the two persons who sued as council members of their municipalities and as citizens of the Commonwealth did not assert any interest or injury to themselves. The court found that the two council members possessed standing to sue because they had a duty to vote for zoning changes and were “elected officials acting in their official capacities for their individual municipalities.” 

Further, the court held that the Delaware Riverkeeper Network lacked standing because it was unable to show that “at least one member suffered or was threatened with suffering a direct, immediate and substantial injury to an interest as a result of the challenged action.” The court relied on Energy Conservation Council of Pa. v. Pa. PUC, 995 A.2d 465, 476 (Pa. Cmwlth. 2010). The court also found that the Delaware Riverkeeper had no standing to bring suit because she failed to meet the “direct, immediate and substantial injury” test when she alleged that the truck traffic and air pollution would disturb her enjoyment of the river or her job as ombudsman.

Petitioners argued that Dr. Khan had a “direct, substantial and immediate interest” in the controversy because he treats patients in an area that may be affected by oil and gas operations; therefore, he would be unable to treat his patients effectively. Petitioners further argued that health professionals’ capability to reveal serious diagnostic information when handling information deemed proprietary by the natural gas industry is limited by 58 Pa. C.S.§ 3222.1(b)(10) and (b)(11). The court held that just the likelihood that Dr. Khan cannot provide his patients with appropriate care is inadequate to confer standing. The court relied on Nat’l Rifle Ass’n v. City of Philadelphia, 977 A.2d 78 (Pa. Cmwlth. 2009). Consequently, the court found that there was no standing under Counts Xl and XII-of the petition for review; therefore, they were dismissed.

The Commonwealth’s preliminary objection to the petition for review stated that Petitioner’s claims were forbidden since they implicated non-justiciable political questions. The court held that whether Act 13 is in violation of the Pennsylvania Constitution is a justiciable question for the court to decide.

Concerning Counts I-Ill, the Commonwealth argued that Act 13’s requirement that municipal zoning ordinances be changed to embrace oil and gas operations in all zoning districts does not violate the principles of due process under Pa. Const. art. 1, § 1 and the Fourteenth Amendment of the United States Constitution for two reasons. First, there exists a rational basis; second, the requirement is an appropriate exercise of the Commonwealth’s police powers. The court relied on Hopewell Twp. Bd. of Supervisors v. Golla, 452 A.2d 1337, 1341-42 (1982), and held that to determine whether a zoning ordinance is unconstitutional under Pa. Const. art. 1, § 1 and the Fourteenth Amendment of the United States Constitution, a substantive due process inquiry must take place. In addition, the rights of all property owners subject to zoning and the public interests to be protected should be considered. The court determined that 58 Pa. C.S. § 3304, which permits the taking of property for oil and gas operations, violates substantive due process because it fails to safeguard the interests of nearby property owners from harm, modifies the character of neighborhoods and makes unreasonable classifications. Therefore, the court found that since Act 13 is consistent with 58 Pa. C.S. § 3304, it would violate substantive due process. Subsequently, the court overruled the Commonwealth’s preliminary objections to Counts I, II and Ill. As a result, the court granted Petitioner’s motion for summary relief, declared 58 Pa. C.S. § 3304 unconstitutional and null and void, and permanently enjoined the Commonwealth from enforcing it. The court also enjoined the remaining provisions of Chapter 33 that enforce 58 Pa. C.S. § 3304 with the exception of sections 3301- 3303.

Concerning Count IV, Petitioners argued that Pa. Const. art. III, § 32 was violated because Act 13 treats the oil and gas industry differently from other energy extraction and production industries in two ways. First, the oil and gas industry is the only industry allowed to avoid the statutory baselines underlying the constitutionality of zoning. Second, the favorable treatment afforded the oil and gas industry includes them in all zones. Petitioners also argued that Act 13 creates an unconstitutional distinction between densely populated and sparsely populated communities because densely populated communities and their residents are given greater protection under Act 13 due to setback requirements. The court held that even though Act 13 treats oil and gas industries differently from the other extraction industries, it is constitutional because the distinction is based on real differences that justify varied classifications for zoning purposes. Therefore, the court sustained the Commonwealth’s preliminary objection to Count IV.

Pertaining to Count V, Petitioners contended that section 3241(a) of Act 13 is unconstitutional under the United States and Pennsylvania Constitutions because it allows on behalf of a private person the taking of property for storage reservoirs and protective areas around reservoirs. The Commonwealth argued that the Petitioners failed to state a claim upon which relief could be granted because there was no evidence to prove that any of Petitioners’ property had been taken or was in danger of being taken. The court found that it could not consider the challenge in its original jurisdiction, even if an interest was in danger of being taken, because Petitioner’s challenge required the filing of preliminary objections to a declaration of taking. Therefore, the court sustained the Commonwealth’s preliminary objection to Count V and dismissed Count V.

Pertaining to Count VI, Petitioners contend that chapter 33 of Act 13 violates Pa. Const. art. I, § 27 because it removes their capability to balance oil and gas development and the “preservation of natural, scenic, historic and esthetic values of the environment.” Petitioners argued that this ability has been removed because municipalities are required to allow industrial uses in non-industrial areas with slight capability to safeguard surrounding resources and community. The court found that under 301(a)(6) of the MPC, Petitioners no longer had a duty to balance oil and gas development and environmental concerns. Therefore, the court found that Petitioners did not sustain a cause of action under Pa. Const. art. I, § 27. Subsequently, the court sustained the Commonwealth’s preliminary objection to Count VI and dismissed that Count.

Regarding Count VII, petitioners argued that 58 Pa. C.S. § 3305(a) violates the separation of powers doctrine because it allows the Commission to execute both legislative and judicial functions. The court found that 58 Pa. C.S. § 3305(a) does not give the Commission any authority over the court to make decisions regarding the constitutionality of legislative enactments; instead, section 3305(a) only permits the Commission to give a non-binding advisory opinion. In addition, the court has de novo review of a Commission’s final order so there was no violation of the separation of powers doctrine. Therefore, the court sustained the Commonwealth’s preliminary objection as to Count VII.

Regarding Count VIII, Petitioners argued that Act 13 violates Pa. Const. art. 2, § 1, because it provides inadequate guidance to waive setback requirements established by the General Assembly for oil and gas wells from waters of the Commonwealth. The court agreed with the Petitioners and found section 3215(b)(4) unconstitutional under Pa. Const. art. 2, § 1. Therefore, the court overruled the Commonwealth’s preliminary objection and entered summary relief in favor of Petitioners on Count VIII.

Petitioners argued that Act 13 is ambiguous because under section 3304(b), the Act mandates distance requirements for municipalities requiring that any local zoning ordinance governing oil and gas operations strictly comply with the same requirements. Therefore, Petitioners alleged that section 3304 does not provide direction with respect to when to grant a waiver or variance of the distance requirements pursuant to sections 3215(a) and (b). The court found that both sections 3304 and 3215 provided specific information regarding the local ordinance requirements. Further, the court concluded that even though section 3304(b)(4) does not provide for sufficient standards, section 3304 is not unconstitutionally ambiguous. Therefore, the court sustained the Commonwealth’s preliminary objections to Counts IX and X.

Judge Brobson dissented and agreed with the majority on the issues of standing and justiciability. Brobson also concurred with the majority in sustaining the preliminary objections of the Commonwealth pertaining to Counts IV-VII and IX-XII and dismissing the same Counts on review. In addition, Brobson agreed with the majority in granting Petitioner’s motion for summary relief pertaining to Count VIII. However, Brobson disagreed with the majority regarding Counts I-III of the petition for review. Brobson concluded that Petitioners failed to make out a constitutional challenge to section 3304 of Act 13; therefore, he supported the Commonwealth’s preliminary objections pertaining to Counts I-III of the petition for review and would deny Petitioner’s motion for summary relief targeted to those Counts.

Verizon Pennsylvania Inc., et al v. Pa. PUC

No. 1353 C.D. 2011 (Pa. Cmwlth. 2012) (filed August 8, 2012).

In an unreported memorandum opinion, the Commonwealth Court affirmed the PUC’s order, which suspended for no more than six months the revisions filed by Verizon Pennsylvania, Inc. and Verizon North LLC (collectively, “Verizon”), that would have resulted in the withdrawal of Verizon’s informational tariffs for competitive services. In addition, the court affirmed the part of the order, which instructed Verizon to restore their original tariffs; treated the proposed revisions as letter petitions to change Verizon’s Chapter 30 alternative regulation and network modernization plans (NMPs); and provided for a comment period for the proposed revisions.

Verizon had originally elected to file tariffs for competitive services authorized by 66 Pa. C.S. § 3016(d)(3). Subsequently, Verizon informed the PUC that they intended to revoke their informational tariffs and alternatively make all rates, terms and conditions related to their competitive products and services available in a “Price List and Product Guide” on its website. However, the PUC instructed the revisions to be suspended for no more than six months because Verizon’s revisions were “in potential violation” of its amended Chapter 30 alternative regulation and network modernization plan.” The PUC also instructed Verizon to restore their original informational tariffs until the matter could be decided. 

The PUC reasoned that Verizon had previously committed to upholding their informational tariffs and that the suggested revisions were not the proper channel for elimination of the tariffs; the PUC suggested that Verizon’s changes were material and that a petition for modification of the NMPs should have been submitted. Subsequently, the PUC determined that it needed to review the issue more extensively in order to make a determination. Verizon then filed a petition for review. The PUC filed a motion to suppress Verizon’s petition. The court denied the PUC’s motion. In a subsequent order, the PUC allowed Verizon to revoke their informational tariffs and instructed Verizon to maintain price lists for their competitive services.

On appeal, Verizon argued that the PUC did not have authority to suspend and investigate tariff revisions for their competitive services because the PUC improperly relied on 66 Pa. C.S. § 1308(b). In addition, Verizon argued that its due process rights were violated because the PUC did not provide notice and an opportunity to be heard. Also, Verizon indicated that their due process rights were violated because the PUC developed an insufficient factual record before it issued its suspension order. The court found that the PUC placed no reliance on section 1308(b) in suspending Verizon’s tariff revisions. The court reasoned that the PUC derived its authority from various sections of the Code. 66 Pa. C.S. § 3013(a) states that any NMPs approved by the PUC as of December 31, 2003, “ shall remain valid and effective except as may be amended at the election of the local exchange telecommunications company as authorized by this chapter.” Sections 3013(b) and 3013(d) provides that no change may be made to an NMP without the express agreement of the PUC and the telecommunications company. In addition, section 3014(b)(6) states that a telecommunication company may petition the PUC for further modification of its MNP, which the PUC “may grant on the showing of good cause.” 

The court determined that Verizon’s due process rights were not violated. The court reasoned that the PUC issued its suspension order because of Verizon’s proposed changes to their NMPs and not because tariffs were involved. The court further indicated that the PUC’s order did not prevent Verizon from executing a change in their rates and services; but; the order, which suspended Verizon’s proposed revisions, was needed to ensure compliance with the NMP’s amendment process, including the requirement that all interested parties be provided with notice and an opportunity to be heard.

Fourth Quarter

Keystone Cab Serv. Inc. v. Pa. PUC

No. 1097 C.D. 2011 (Pa. Cmwlth. 2012) (filed October 1, 2012).

The Commonwealth Court affirmed the PUC’s order which denied Keystone’s petition for appeal. The PUC’s Bureau of Transportation & Safety approved only nine of twelve of Keystone’s vehicles for inspection. The Bureau denied Keystone’s request for inspections of the other three vehicles because the vehicles were not within the eight-year limit established by 52 Pa. Code § 29.314(d). Keystone appealed to the PUC to reverse the Bureau’s determination and allow inspection of the three vehicles. The request was denied by the PUC.

On appeal, Keystone argued that the PUC went beyond its statutory authority when it determined that Keystone’s vehicles were not safe for use based on the age, odometer reading and cost of repairs made to the vehicle. The court disagreed with Keystone and determined that the PUC did not go beyond its statutory authority when it implemented the eight-year age limit on vehicles. The court reasoned that 66 Pa. C.S. § 501 and § 1501 provides the PUC with broad authority to enforce the Code. The court also found that the PUC, in enacting the regulation in question, considered comments from the industry during the rulemaking process and found them reasonable.

Keystone also argued that, pursuant to the legislature, the determination of whether a privately-owned vehicle is safe should be made by the Department of Transportation, which physically inspects the vehicle. The court concluded that the PUC retains its authority to regulate vehicles used for taxicab service regardless of the Department of Transportation’s authority to regulate privately-owned vehicles for safety.

Keystone further argued that the record lacked evidence, such as research studies or expert opinion, to establish that older vehicles with high mileage are not as safe. The court disagreed and concluded that an expert opinion was not required because establishing that an older vehicle with high mileage is not as safe as a newer vehicle with lower mileage, can be easily determined by experience and common sense.

Lehigh Valley Transp. Inc. v. Pa. PUC

No. 19 C.D. 2011 (Pa. Cmwlth. 2012) (filed October 10, 2012; amended October 11, 2012 (order only)).

The Commonwealth Court affirmed the PUC’s decision which permitted J & J Leasing & Rentals, Inc., d/b/a Anytime Airport Taxi by J & J Luxury Transportation (J &J), to add “call and demand taxi services” to its existing services and denied the exceptions of Lehigh Valley Transportation Services, Inc. (Lehigh) and Quick Service Taxi Company, Inc. (Quick Service), (collectively, “Protestors”). 

J&J had filed an application with the PUC in order to add “call and demand taxi services” to its services and the Protestors opposed the application. A hearing was held where the ALJ concluded that J&J met its burden of showing that the public currently needed J&J’s services and that the witnesses who testified, embodied a sector of the public to whom the services would be offered. In addition, the ALJ concluded that presumption of J&J’s continuing fitness to operate was not rebutted; therefore; the ALJ recommended that the PUC grant the application. Lehigh filed exceptions; Quick Service joined and asserted that the ALJ erred in its decision. The PUC reviewed the record, adopted the ALJ’s decision and denied the Protestors’ exceptions.

On review, the issues were: (1) whether J&J initially met its burden of proving that the public had a present need for its services, pursuant to 66 Pa. C.S. § 1103(a); and (2) whether the protestors met their burden of proving that J&J lacked propensity to operate safely and legally, pursuant to 52 Pa. Code § 41.14. 

Lehigh argued that the testimonies presented by J&J’s witnesses failed to prove that the public had a current need for J&J’s services. First, Lehigh asserted that the testimonies only stated that the witnesses would be referring J&J’s services to others and were therefore speculative. The court disagreed and noted that the witnesses did not testify that they would refer J&J to others but that they would use J&J’s services for themselves and their family members to whom they were responsible for securing transportation. Second, Lehigh argued that the witnesses failed to articulate a past need for the service; therefore, a future need could not be shown. The court disagreed and found that J&J established that there was a current need for the proposed “call and demand taxi services” because the witnesses’ testimonies of their current and future needs supported the PUC’s determination that there was a current need for the services. In making this determination, the court relied on Highway Express Line, Inc. v. Pa. PUC, 169 A.2d 798, 803 (Pa. Super. 1961), which held that, “in determining the present need for service, the PUC must determine not what the needs were, but . . . will be. Looking at past need is only one way of estimating future needs.” 

Furthermore, Lehigh argued that the PUC erred in holding that J&J had the propensity to operate safely and legally as required by section 41.14(b) The court found that J&J, a current certificate holder, was entitled to an ongoing presumption regarding its suitability to operate and that the Protestors bore the burden of rebutting the presumption. In addition, Lehigh argued that the PUC was not authorized to give its own interpretation to “lacks a propensity to operate safely and legally.” The PUC interpreted the preceding phrase to mean a “persistent disregard for, flouting or defiant attitude toward the orders and regulations of the PUC.” The PUC elied on Application of Cent. Trans., Inc., Docket No. A-00108155 (Order entered June 26, 1992). The court found that the PUC’s interpretation was entitled to deference; therefore, an applicant must display a “persistent disregard, flouting or defiant attitude toward the orders and regulation of the PUC” before it is considered to have a lack of propensity to operate safely and legally.

Furthermore, Lehigh argued that there was an adequate showing that J&J did not have the propensity to operate safely and legally and the PUC failed to give sufficient consideration to its allegations of J&J’s behavior. Lehigh asserted that J&J failed to comply with its tariffs and present certificate and that J&J promoted services beyond the scope of its authority. However, the court disagreed with Lehigh and explained that the PUC failed to give much consideration to the purported tariff violations because J&J’s witnesses only thought that they were charged a flat rate. In so holding, the court also found that the PUC considered other factors such as J&J’s 25 years of experience and the testimony given by Lehigh’s general manager concerning solicitations from J&J’s drivers. Subsequently, the court agreed with the PUC when it concluded that, “unaccredited allegations of isolated incidents of misconduct were insufficient to ascertain that J&J lacked the propensity to operate legally and safely.”

Mercury Trucking Inc. v. Pa. PUC

55 A.3d 1056 (Pa. 2012).

The Pennsylvania Supreme Court quashed the PUC’s direct appeal from the decision of the Commonwealth Court to vacate the 2005 annual assessment that it charged against Mercury Trucking, Inc. (Mercury) for fiscal year July 1, 2005, through June 30, 2006 (FY 2005-2006), and determined that a public utility’s challenge to its annual assessment is reviewable in the Commonwealth Court. Consequently, the Supreme Court considered the PUC’s notice of appeal as a petition for allowance of appeal and granted the allowance. In addition, on the merits, the Supreme Court reversed the Commonwealth Court’s decision, vacated its judgment in favor of Mercury and restored the PUC’s adjudication.

Mercury had failed to report its actual revenue for 2004 by the March 31, 2005 deadline, pursuant to 66 Pa. C.S. § 510(b). As a result, the PUC approximated Mercury’s 2004 revenue and calculated Mercury’s 2005 annual assessment for FY 2005-2006, based on the estimated revenue. Mercury was issued a notice of assessment which it paid in full. Subsequently, Mercury objected to the assessment on the grounds that it was excessive and that the actual revenue was $5,264,627, which was more than three million dollars less than the amount that the PUC assessed. Consequently, Mercury requested a partial refund. The PUC filed a motion to dismiss the objections. The motion was denied by the ALJ who determined that the PUC’s revenue assessment to Mercury was excessive and ordered the PUC to issue to Mercury a partial refund. Subsequently, the PUC, sitting in a five-member adjudicatory panel, reversed the ALJ’s decision and denied Mercury’s request for a partial refund. Mercury then filed a petition for review in the appellate jurisdiction of the Commonwealth Court.

The Commonwealth Court originally found that Mercury should not have filed an appeal but an action at law for a refund. Subsequently, the court transferred the matter to the court’s original jurisdiction, vacated the PUC’s order and instructed the PUC to file an answer. The PUC then filed an answer and preliminary objections to Mercury’s petition for review. The Commonwealth Court dismissed the answer and preliminary objections, and the PUC appealed to the Pennsylvania Supreme Court. The Court denied the appeal. The Commonwealth Court held a hearing on the PUC’s preliminary objections and overruled the objections. The PUC then filed another appeal which was denied by the Supreme Court. Later, a Commonwealth Court reviewed the matter de novo and instructed the PUC to issue to Mercury a refund of $12,242.98. Subsequently, the PUC appealed directly to the Supreme Court.

On review, the Supreme Court addressed the following issues: (1) whether a suit filed against the Commonwealth by a public utility under 66 Pa. C.S. § 510(d) from an order of the PUC is brought in the Commonwealth Court’s original jurisdiction under 42 Pa. C.S § 761 or in the Commonwealth Court’s appellate jurisdiction under 42 Pa. C.S § 763; (2) whether a suit that was filed in the Commonwealth Court’s appellate jurisdiction by a public utility under 66 Pa. C.S. § 510(d) from an order of the PUC and thereafter transferred to and decided in the Commonwealth Court’s original jurisdiction was originally commenced in the Commonwealth Court; (3) whether the Supreme Court has jurisdiction under 42 Pa. C.S. §723(a) or 724(a) to review a final order entered by the Commonwealth Court in a suit filed against the Commonwealth by a public utility; and (4) whether the Commonwealth Court erred as a matter of law by not finding that, pursuant to section 510(b) of the Public Utility Code, where the utility fails to supply an intrastate revenue report, the PUC’s revenue statement is binding for assessment calculation purposes and subsequent assessment objections.

On the first issue, the Supreme Court decided that section 510(c) adjudications of the PUC are appealable as of right to the Commonwealth Court, despite the original jurisdiction procedure outlined in section 510(d). In effect, the Supreme Court held that the Commonwealth Court could review Mercury’s petition in its appellate jurisdiction only. The Supreme Court relied on Pa. Dep’t of Aging v. Lindberg, 469 A.2d 1017 (Pa. 1983), which asserted that, “where an appeal is available and adequate, resort to original jurisdiction is not available.”

On the second issue, the Supreme Court decided that section 510(d)-(e), which requires a utility to file an action at law for a refund as the only means of relief following the PUC’s adjudication, is outdated. The Supreme Court reasoned that assessment matters begin with objections to the annual assessment filed with the PUC; the PUC’s decision is then appealable in the Commonwealth Court, by either party. The Supreme Court also relied on Lindberg and O’Brien v. Commonwealth State Employee’s Ret. Sys., 469 A.2d 1008 (Pa. 1983), and noted that further judicial review was not available as of right, but at the Supreme Court’s discretion.

On the third issue, the PUC’s direct appeal to the Supreme Court was quashed because the Court found that a subsequent appeal from the Commonwealth Court’s adjudication was not available as of right. The Supreme Court relied on Lindberg in making its decision. The Supreme Court further noted that the appeal was improperly brought under section 723 and the appropriate method of review is by petition for allowance of appeal. Therefore, the Supreme Court regarded the direct appeal as a petition for allowance of appeal, pursuant to 42 Pa. C.S. § 724(b), and granted the petition. On the fourth issue, the PUC argued that its initial assessment on Mercury was valid as a matter of law. The PUC interpreted section 510(b) to clearly mean that the PUC’s revenue approximation, in situations where the utility does not timely account for its prior year’s revenue, is binding even though the PUC’s approximation is incorrect. Therefore, the PUC argued that the Commonwealth Court incorrectly issued Mercury a refund. Mercury argued that it challenged the “non-binding assessment” and not the “binding revenue estimate” and that the assessment rate was “excessive, erroneous, unlawful, or invalid” pursuant to 66 Pa. C.S. § 510(d). However, the Supreme Court agreed with the PUC’s interpretation and found that Mercury was not entitled to a refund. The Supreme Court reasoned that a utility may bring a challenge under section 510(d), for instance, if the PUC used an incorrect formula to calculate the annual assessment rate. The Supreme Court also found that a utility cannot object on the premise that the PUC did not use the actual late-filed revenue figures, especially in a situation where it failed to file its revenue statement on time and the PUC calculated its revenue as authorized by section 510(b). The Supreme Court also noted that section 510(b) gives the PUC’s estimate a binding effect.

Justice Saylor dissented and disagreed with the majority’s analysis of the fourth issue. Saylor explained that the PUC collects revenues from the utilities to pay its expenses and that the other utility companies could try to decrease their assessment since the utilities issue their own annual reports. Saylor reasoned that the assessed utility could become concerned with self-interest on the part of the PUC and other utilities, and, consequently, original jurisdiction review would protect utilities from this potential bias.

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