Consumers Lobby Against Monopolies v. Public Utilities Com.

• Decision Date: 06 December 1979
• Docket Number: S.F. 23863,S
• Court: California Supreme Court
• Parties: , 603 P.2d 41, 33 P.U.R.4th 148 CONSUMERS LOBBY AGAINST MONOPOLIES et al., Petitioners, v. PUBLIC UTILITIES COMMISSION, Respondent; PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Real Party in Interest. TOWARD UTILITY RATE NORMALIZATION, Petitioner, v. PUBLIC UTILITIES COMMISSION, Respondent; PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Real Party in Interest. F. 23868.

Page 124

160 Cal.Rptr. 124

25 Cal.3d 891, 603 P.2d 41, 33 P.U.R.4th 148

CONSUMERS LOBBY AGAINST MONOPOLIES et al., Petitioners, v. PUBLIC UTILITIES COMMISSION, Respondent;

PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Real Party in Interest.

TOWARD UTILITY RATE NORMALIZATION, Petitioner, v. PUBLIC UTILITIES COMMISSION, Respondent;

PACIFIC TELEPHONE AND TELEGRAPH COMPANY, Real Party in Interest.

S.F. 23863, S.F. 23868.

Supreme Court of California.

Dec. 6, 1979.

Rehearing Denied Jan. 3, 1980.

David L. Wilner, in pro. per.

Ann Murphy and Glen L. Moss, Hayward, for petitioners.

Janice E. Kerr, Hector Anninos and Anne K. Mester, San Francisco, for respondent.

C. H. McCrea, Las Vegas, Nev., as amicus curiae on behalf of respondent.

Robert V. R. Dalenberg, Margaret deB. Brown, Stanley J. Moore and Christopher Lee Rasmussen, San Francisco, for real party in interest.

MOSK, Justice.

The primary issue in these two consolidated proceedings is whether the Public Utilities Commission (commission) has authority to award attorney fees and costs to public interest participants in its proceedings.

Consumers Lobby Against Monopolies (CLAM) v. Public Utilities Commission (S.F. 23863) presents two questions: first, does the commission possess the power to award attorney fees and costs in quasi-judicial reparation proceedings; and second, may a nonattorney be awarded fees and costs when he serves in a representative capacity in such proceedings. Toward Utility Rate Normalization (TURN) v. Public Utilities Commission (S.F. 23868) raises the issue whether the commission has authority to award attorney fees and costs in quasi-legislative ratemaking proceedings.

The commission held in both cases that it lacked the power to award such fees and costs under any statute or equitable theory. ¹ We conclude that the commission has jurisdiction to award attorney fees and costs pursuant to the equitable "common fund" doctrine in quasi-judicial reparation proceedings, but not in quasi-legislative ratemaking proceedings. We further conclude that in the former proceedings nonattorneys may be awarded fees and costs for their services in a representative capacity.

S.F. 23863

David L. Wilner, a nonattorney representing CLAM, ² investigated the alleged failure of Pacific Telephone and Telegraph Company (Pacific) to collect required tariff charges for the removal and replacement of certain equipment on the premises of commercial customers. He asked the commission staff to take action against Pacific; the staff declined to do so, explaining that he is "free to develop the record and seek appropriate remedies for (Pacific's) alleged wrongdoing," but that "the staff simply lacks the manpower to investigate . . .."

On behalf of CLAM, Wilner then filed a complaint with the commission alleging that Pacific's failure to collect the tariff charges shifted the burden of disconnection costs, amounting to several million dollars, from the equipment users to the general ratepayers. The allegations were never tested in a formal hearing, however, because Pacific negotiated a settlement of the controversy. The settlement required Pacific to pay $400,000 from its earned surplus account, and to use the funds for a "public benefit" to be approved by the commission.

Wilner now seeks to recover costs and representative fees for the reasonable value of his efforts, relying on the equitable common fund, substantial benefit and private attorney general theories.

S.F. 23868

On February 13, 1975, Pacific filed a general rate application with the commission asking, inter alia, for the right to impose on its customers the procedure entitled "single message rate timing" (SMRT), a usage-sensitive technique whereby local calls are timed and charged by periodic intervals (e. g., five minutes). Thus began long and complex rate proceedings entailing numerous public hearings throughout the state, at which the commission took testimony prepared by its staff, Pacific, TURN, and several other interested parties. The hearings resulted in the issuance of several commission decisions, the filing of a number of petitions for writ of review in this court, and a decision by us concerning SMRT and "60-unit measured rate service." (Toward Utility Rate Normalization v. Public Utilities Com. (1978) 22 Cal.3d 529, 149 Cal.Rptr. 692, 585 P.2d 491.) At issue in the present case is TURN's right to an award of attorney fees and costs for certain of its efforts relating to SMRT and "30-unit measured rate service" (lifeline).

TURN has assumed an active and substantial role in the lifeline proceedings since their inception. It claims to be wholly or primarily responsible for prompting the commission to confer three pecuniary and nonpecuniary benefits on the ratepayers.

First, during the course of the rate hearings TURN was the only party to question the constitutionality of Pacific's "wiretapping/monitoring" of certain customer telephone conversations. After considering the matter, the commission issued two decisions acknowledging the legitimacy of TURN's complaints and the constitutional infirmities of Pacific's practices. (Dec. No. 86594, 80 Cal. P.U.C. 621; Dec. No. 88232, 83 Cal. P.U.C. 149.)

Second, TURN significantly contributed to other commission decisions eliminating SMRT and related regrade charges on lifeline service. (Dec. No. 86594, 80 Cal. P.U.C. 621; Dec. No. 87584, 82 Cal. P.U.C. 162.) As a result, Pacific was ordered to remit to lifeline customers $1,085,526.06 in regrade charges and interest collected by Pacific between the effective dates of the original elimination decision and the order reinstating that decision.

Third, TURN was the only party to formally challenge the commission's unlawful modification of its original decision eliminating SMRT. The commission modified that decision in a closed executive session held after the effective date thereof. Largely as a result of TURN's efforts, the commission later recognized the illegality of its action and ruled the modification order void. (Dec. No. 87584, supra, 82 Cal. P.U.C. 162.)

TURN seeks attorney fees and costs under several theories. First, it argues that certain constitutional provisions empower the commission to include "public participation costs" in setting rates. Second, TURN contends the commission is a "court" within the meaning of Code of Civil Procedure section 1021.5, and hence may award attorney fees pursuant to that section. Finally, TURN, like CLAM, claims the commission has the power to award attorney fees under traditional equitable doctrines.

I

At the outset we address a contention that is often presented to us in response to a petition for writ of review, but nevertheless misapplies the authority on which it relies and ignores the realities of our rulings on such petitions. Both the commission and Pacific assert that we have previously decided the issue now before us i. e., the commission's authority to award attorney fees and costs to public interest participants in its proceedings and imply that we should follow those decisions under the doctrine of stare decisis. The decisions in question, however, are not embodied in published opinions of this court, but rather in minute orders in which we denied without opinion petitions for writs of review on two occasions several years ago. (Citizens to Save Fallbrook's Environment v. Public Utilities Com. (July 31, 1974) S.F. 23067; Toward Utility Rate Normalization v. Public Utilities Com. (Oct. 27, 1976) S.F. 23395.) In support of their contention the commission and Pacific then quote the following language of People v. Western Air Lines, Inc. (1954) 42 Cal.2d 621, 630-631, 268 P.2d 723, 728: "It is established . . . that the denial by this court of a petition for review of an order of the commission is a decision on the merits both as to the law and the facts presented in the review proceedings. (Citation.) This is so even though the order of this court is without opinion."

The reliance is misplaced: Western Air Lines is not a stare decisis case but a res judicata case, and hence is governed by very different considerations. Western Air Lines arose because the commission decided in a proceeding before it that it had jurisdiction over the defendant's intrastate air route, and fixed the rates to be collected for such service; the defendant petitioned this court for writ of review; we denied the petition without opinion, and the United States Supreme Court dismissed the appeal for want of a federal question. The commission then filed a superior court action in the name of the People to recover statutory penalties from the defendant for its prior collection of unauthorized rates. (Pub. Util. Code, §§ 2104, 2107.) The action was dismissed on demurrer, and we reversed the judgment on the commission's appeal.

Our opinion began by addressing the commission's contention that "the prior decision of the commission followed by the order of this court denying a writ of review and the dismissal of the defendant's appeal by the Supreme Court of the United States has resulted in res judicata as to certain issues involved in the present action," i. e., the commission's jurisdiction to regulate the defendant's intrastate fares. (42 Cal.2d at p. 629, 268 P.2d at pp. 727-728.) We recognized that the commission is empowered to make determinations of a judicial nature, and reasoned (at p. 630, 268 P.2d at p. 728) that "where those determinations have been appropriately and unsuccessfully challenged, as here, by direct attack and have run the gamut of approval by the highest courts, state and federal, they should have the conclusive effect of res judicata as to the issues involved where they are again brought into question in subsequent proceedings between the same parties." Because the questions relating to the commission's jurisdiction had been resolved in the prior proceeding and the parties in each were essentially the same, we held that the earlier...