Ag Processing v. Public Service Com'n

• Citation: 276 S.W.3d 303
• Decision Date: 12 November 2008
• Docket Number: No. WD 68727.,WD 68727.
• Parties: STATE ex rel. AG PROCESSING, INC., et al., Appellants, v. PUBLIC SERVICE COMMISSION of the State of Missouri, Respondent.
• Court: Court of Appeal of Missouri (US)

276 S.W.3d 303

STATE ex rel. AG PROCESSING, INC., et al., Appellants, v. PUBLIC SERVICE COMMISSION of the State of Missouri, Respondent.

No. WD 68727.

Missouri Court of Appeals, Western District.

November 12, 2008.

Motion for Rehearing and/or Transfer to Supreme Court Denied December 23, 2008.

Application for Transfer Denied February 24, 2009.

David Woodsmall, Kansas City, MO, for appellants.

J. Dale Youngs, Kansas City, MO; Renee Parsons, Kansas City, MO; and Kevin A. Thompson, Jefferson City, MO, for respondent.

Before JAMES M. SMART, JR., P.J., THOMAS H. NEWTON and RONALD R. HOLLIGER, JJ.

JAMES M. SMART, JR., Judge.

AG Processing, Inc. and Sedalia Industrial Energy Users Association were the relators seeking judicial review of a PSC ruling in the circuit court in this case. The relators below (hereafter often collectively referred to as "the Consumers") appeal the circuit court's judgment dismissing their petition for judicial review of the PSC's order of May 25, 2007, for lack of jurisdiction due to lack of finality. Finding no error, we affirm.

Background

Aquila has approximately 301,000 customers in the affected service territories. In July 2006, Aquila filed proposed tariffs with the PSC designed to implement a general rate increase for retail electrical service in some of its service territories. The proposed tariffs would have increased revenues by approximately $119 million per year, a twenty-two percent increase. Following an evidentiary hearing, the PSC issued a Report and Order on May 17, 2007, with an effective date of May 27. It rejected the proposed tariffs but authorized a rate increase of approximately $53 million annually, which was less than half the increase sought by Aquila. The Consumers filed an application for rehearing as to the Report and Order on May 23.

Aquila then filed revised tariff sheets in order to comply with the PSC's Report and Order. It also filed a motion for expedited consideration.¹ On May 25, 2007, the PSC issued its Order granting expedited treatment, approving certain tariff sheets and rejecting others, with the Order to be effective May 31. The PSC also on May 25 denied all pending motions concerning the tariff sheets.

Thereafter, the Public Counsel and an intervenor each filed an application for rehearing as to the May 17 Report and Order. Aquila also filed an application for rehearing. On May 30, 2007, the Consumers filed an application for rehearing as to the May 25 Order. The Consumers also filed a motion requesting that the PSC stay the effectiveness of the rates. The next day, May 31, the approved tariff sheets went into effect. Aquila began to charge the higher rates for electric service while the applications for rehearing remained pending.

Two weeks later, on June 14, the Consumers filed their petition in circuit court for a writ of review pursuant to section 386.510.² The circuit court ordered the PSC to certify its record and ordered a stay of the PSC proceedings. The circuit court's order for the PSC to "take no further action" in the case did not have the effect of staying or suspending the rate increase itself. The court can, under the terms of section 386.520, stay a rate change on certain conditions, but only when the PSC decision is final and a petition for writ of review has been filed. On June 28, 2007, after briefing and argument, the court issued its judgment dissolving the writ of review and dismissing the Consumers' petition for lack of jurisdiction. Thereafter, the PSC denied all applications for rehearing on July 10, 2007. This was one month and ten days after the new rates had gone into effect.

The Consumers appeal the circuit court's dismissal of their petition.

Aquila's Motion to Dismiss

Following the PSC's denial of the applications for rehearing, the Consumers filed a new petition for writ of review on August 8, 2007. That petition is currently pending before the circuit court. Respondent Aquila contends that the claims in the new petition are nearly identical to those in the dismissed petition that is the subject of this appeal. They argue that as a result of that filing, the issues raised in this appeal are moot, and they move that the appeal be dismissed.

A case is moot if the decision would have "no practical effect upon an existent controversy." State ex rel. County of Jackson v. Mo. Pub. Serv. Comm'n, 985 S.W.2d 400, 403 (Mo.App.1999). When an event occurs that makes a court's decision unnecessary or makes it impossible for the court to grant effectual relief, the case is moot and generally should be dismissed. State ex rel. Chastain v. City of Kansas City, 968 S.W.2d 232, 237 (Mo. App.1998). Aquila says the Consumers' filing of the new petition in the circuit court following the PSC's denial of the rehearing applications is such an event. They claim that a ruling by this court is unnecessary, because "the circuit court is already doing ... that which it would be compelled to do if appellants are successful in this appeal," i.e., determining whether the PSC's orders are "lawful and reasonable." See section 386.510.

The Consumers say the appeal is not moot, but that even if it is, this court should exercise its discretion to review the matter under an exception to the mootness doctrine. Such an exception exists "[w]here the issue raised is one of general public interest and importance, recurring in nature and will otherwise evade appellate review unless the court exercises its discretionary jurisdiction." Mo. Cable Television Ass'n v. Mo. Pub. Serv. Comm'n, 917 S.W.2d 650, 652 (Mo.App. 1996). This narrow exception does not apply if the issue "is likely to be present in a future live controversy practically capable of review." County of Jackson, 985 S.W.2d at 403.

Aquila does not dispute that the appeal pertains to a question of general public interest or importance. All parties agree that the issues raised in this appeal will likely be raised again. The question, then, is whether the issue "will otherwise evade appellate review" if we do not exercise our discretion to review it in this case. We believe that it will.

The issue, in a nutshell, is whether the PSC, by refusing to grant a stay of the effectiveness of its decision, and by delaying its ruling on an application for rehearing, can lawfully, under the Missouri Constitution, deprive utility customers of their property without any hope of refund in the event of an ultimate reversal of the PSC decision. Even though the Consumers filed another petition for writ of review after the denial of the application for rehearing, the discrete issue presented here, but not by the later petition, is the availability of judicial review while an application for rehearing remains pending before the PSC. This is an issue that is subject to repetition while evading review. Because the statutes require a party to file an application for rehearing, and the PSC to rule on it, before that party can seek review by the circuit court, no case involving this particular issue will ever be ripe for judicial review unless we grant review under the "capable of repetition, yet evading review" exception. For these reasons, we exercise our discretion to examine the issue. The motion to dismiss is denied.

Standard of Review

We are in this case reviewing the actions of the circuit court, not the merits of the decision of the PSC. As in any court-tried case, our standard of review is dictated by Murphy v. Carron, and our focus, in this case, is on whether the trial court erroneously declared or applied the law. 536 S.W.2d 30, 32 (Mo.banc 1976). Whenever it appears, by suggestion of the parties or otherwise, that the court is without jurisdiction, dismissal for lack of subject matter jurisdiction is proper. Powell v. State Farm Mut. Auto. Ins. Co., 245 S.W.3d 864, 865 (Mo.App.2008) (citing Rule 55.27(g)(3)). Where, as here, the facts are uncontested, a question as to the court's subject matter jurisdiction is purely a question of law, which we review de novo. Id.; Parker v. City of Saint Joseph, 167 S.W.3d 219, 221 (Mo.App.2005). Consequently, we review the ruling to determine whether the circuit court correctly applied the law. City of Park Hills Mo. v. Pub. Serv. Comm'n, 26 S.W.3d 401, 403 (Mo.App.2000).

Discussion and Analysis

The Consumers raise three points of error with regard to the trial court's dismissal of their petition for judicial review. Because the points raised overlap, they will be discussed together.

I. Arguments of the Parties

In their first point, the Consumers contend that the court erred in dismissing their petition, because the PSC's order was ripe for judicial review even though the PSC had not yet ruled on the application for rehearing, as required by statute. The Consumers say that the order became de facto "final" when the new, non-refundable rates went into effect. This is because, due to a bar on retroactive ratemaking, there is no means to recover any overcharges should the new rates eventually be found to be improper.

"Sections 386.500 and 386.510 govern procedures concerning applications for rehearing before the PSC and writs of review before the circuit court." State ex rel. County of Jackson v. Pub. Serv. Comm'n, 14 S.W.3d 99, 101 (Mo.App.2000). Section 386.500.1 provides that "[a]fter an order or decision has been made by the commission, [any of the parties] interested therein shall have the right to apply for a rehearing in respect to any matter determined therein[.]" Section 386.500.2 requires a party to file an application for rehearing with the PSC before seeking a writ of review in the circuit court. It states:

No cause or action arising out of any order or decision of the commission shall accrue in any court to any corporation or the public counsel or person or public utility unless that party shall have made, before the effective date of such order or decision, application to the commission for a rehearing.

Section 386.500.2.

Section...