Austin v. Centerpoint Energy Arkla

Decision Date02 February 2006
Docket NumberNo. 05-72.,05-72.
Citation226 S.W.3d 814
PartiesFern AUSTIN, Appellant, v. CENTERPOINT ENERGY ARKLA, Wayne D. Stinnett, President; Arkansas Oklahoma Gas Corporation, Michael C. Carter, President; Arkansas Western Gas Company, Charles V. Stevens, Vice-President; Arkansas Public Service Commission, Sandra Hochstetter, Chairman, Appellees.
CourtArkansas Supreme Court

Roberts Law Firm, P.A., by: Michael L. Roberts, Richard Quintas, Paul M. Gehring, and Caroline L. Curry, Little Rock, for appellant.

Friday, Eldredge & Clark, LLP, by: James M. Simpson and Seth M. Haines; and Jones Day, by: David A. Kutik, Little Rock, for appellees CenterPoint Energy Arkla, Wayne D. Stinnett, Arkansas Western Gas Company, and Charles. V. Stevens.

Chisenhall, Nestrud & Julian, P.A., by: Lawrence E. Chisenhall, Jr., Jim L. Julian, and Mark Hodge, for appellee Arkansas Oklahoma Gas Corporation.

Valerie F. Boyce, Little. Rock, for appellees Arkansas Public Service Commission and Sandra Hochstetter.

TOM GLAZE, Justice.

This appeal flows from our court's decision in Arkansas Gas Consumers, Inc. v. Arkansas Public Service Commission, 354 Ark. 37, 118 S.W.3d 109 (2003). In October of 2001, in recognition of the fact that the winter of 2000-2001 had been exceptionally harsh, the PSC published Order No. 1 in which it proposed a "Temporary Low Income Customer Gas Reconnection Policy" ("the Policy"). According to the Order, over 30,000 Arkansas gas customers had been disconnected for nonpayment of gas bills since the previous winter, with 29,500 still disconnected. The PSC stated that these customers owed past-due bills generally ranging between $260 and $350, but some customers owed in excess of $1000. Under existing regulations, those customers would have to make arrangements for all past-due amounts, and would also have to pay a reconnection fee and possibly a new service deposit. The PSC recognized that many of the disconnected customers were low-income families, and that, without assistance, they would face the winter of 2001-2002 without heat. The PSC's proposed Policy allowed qualifying customers to reconnect their natural gas service under certain conditions. In addition, the Policy permitted gas companies to recover their total bad-debt write-off for Policy participants by imposing a surcharge on all of the utilities' customers statewide for a twelve-month period. See Arkansas Gas Consumers, 354 Ark. at 43-44, 118 S.W.3d 109.

Arkansas Gas Consumers, Inc. (Gas Consumers), a collection of non-residential gas utility customers, challenged the Policy, alleging that the PSC had exceeded its legislative authority by mandating the Policy. The PSC rejected Gas Consumers' challenge, and Gas Consumers appealed the PSC's decision to the court of appeals, which affirmed the PSC. Gas Consumers then petitioned this court for review. Upon that review, this court held in a 4-3 decision that the PSC had exceeded its authority. Arkansas Gas Consumers, 354 Ark. at 60, 118 S.W.3d 109. This court agreed with Gas Consumers' argument that the PSC's general authority to supervise and regulate public utilities does not include the authority to make public policy regarding low-income assistance or the authority to provide funds for such assistance by assessing all ratepayers for the bad-debt expense. Id. at 49, 118 S.W.3d 109. In short, this court held that the PSC did not have the legislative authority to establish the Policy. Id.

Shortly after this court's opinion in Arkansas Gas Consumers was handed down, appellant Fern Austin filed a class-action complaint, naming the PSC and three natural gas utility companies—appellees Centerpoint Energy Arkla (Arkla), Arkansas Oklahoma Gas Corp. (AOG), and Arkansas Western Gas Co. (AWG)—and alleging that she had paid the surcharge pursuant to the Policy. Austin brought her suit as one for an illegal exaction, contending that PSC and the gas companies had charged "an illegal tax on their paying customers in the form of a surcharge." In addition, Austin alleged that the PSC and the gas companies had violated the Arkansas Civil Rights Act, Ark.Code Ann. § 16-123-105 (Supp.2003), by "wrongfully violat[ing] Plaintiffs' due process property rights by taking money from Plaintiffs, in the form of a government mandated tax[.]" Austin's complaint sought restitution of the amounts paid, in the form of "a refund for the amount of the surcharge, with interest."

The various defendants all filed motions to dismiss, contending, among other things, that the circuit court did not have subject-matter jurisdiction over Austin's complaint, that Austin was required to exhaust her administrative remedies before proceeding in circuit court, and that Austin had failed to state facts upon which relief could be granted.1 After a hearing on September 8, 2004, the circuit court entered an order granting the defendants' motions to dismiss, finding that the assessment at issue was a rate, and not a tax; therefore, the PSC had exclusive jurisdiction to hear the matter. All other claims were dismissed for failure to state facts upon which relief could be granted.

Austin filed a timely notice of appeal, and now argues that the circuit court erred in three respects: 1) in finding that the PSC had jurisdiction to resolve Austin's claims; 2) in finding that Austin was required to exhaust her administrative remedies before initiating an action in circuit court; and 3) in determining that the filed rate and primary jurisdiction doctrines are applicable to this case.

In reviewing a circuit court's decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff. Hames v. Cravens, 332 Ark. 437, 966 S.W.2d 244 (1998). In testing the sufficiency of the complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and the pleadings are to be liberally construed. Clayborn v. Bankers Standard Ins. Co., 348 Ark. 557, 75 S.W.3d 174 (2002). Further, a trial judge must look only to the allegations in the complaint to decide a motion to dismiss. Deitsch v. Tillery, 309 Ark. 401, 833 S.W.2d 760 (1992).

In her first point on appeal, Austin argues that the PSC had no authority to resolve the claims she brought in her complaint. She raises three subpoints under this heading, arguing that the PSC had no authority to 1) resolve her "public rights" claim; 2) resolve her "private rights" claims; and 3) hear illegal exaction claims. None of her arguments has merit. This court and the court of appeals have recognized that the legislature intended to place primary jurisdiction over consumer disputes in the PSC. See Ozarks Electric Cooperative Corp. v. Harrelson, 301 Ark 123, 782 S.W.2d 570 (1990); Brandon v. Arkansas Pub. Serv. Comm'n, 67 Ark.App. 140, 992 S.W.2d 834 (1999). In addition, the PSC is a creature of the legislature and must act within the power conferred on it by legislative act. See Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980). The PSC's jurisdiction and adjudicative authority are established in Ark. Code Ann. § 23-3-119 (Repl.2002), which provides in relevant part as follows:

(a)(1) Any . . . customer of a public utility [or] any person unlawfully treated by a public utility . . . may complain to the commission in writing. The complaint shall set forth any act or thing done or omitted to be done by any public utility or customer in violation, or claimed violation, of any order, law, or regulation which the commission has jurisdiction to administer.

* * * *

(d) The commission shall then have the authority, upon timely notice, to conduct investigations and public hearings, to mandate monetary refunds and billing credits, or to order appropriate prospective relief as authorized or required by law, rule, regulation, or order. The jurisdiction of the commission in such disputes is primary and shall be exhausted before a court of law or equity may assume jurisdiction. However, the commission shall not have the authority to order payment of damages or to adjudicate disputes in which the right asserted is a private right found in the common law of contracts, torts, or property.

* * * *

(f)(1) It is the specific intent of the General Assembly . . . to vest in the Arkansas Public Service Commission the authority to adjudicate individual disputes between consumers and the public utilities which serve them when those disputes involve public rights which the commission is charged by law to administer.

(2) Public rights which the commission may adjudicate are those arising from the public utility statutes enacted by the General Assembly and the lawful rules, regulations, and orders entered by the commission in the execution of the statutes. The commission's jurisdiction to adjudicate public rights does not and cannot, however, extend to disputes in which the right asserted is a private right found in the common law of contracts, torts, or property.

§ 23-3-119 (emphasis added).

However, the legislature has chosen not to limit the PSC's jurisdiction to the powers expressly set out in these statutes. See, e. g., Brandon, supra (holding that the PSC had the authority to hear a class action involving allegations of violating the "least-cost gas purchasing statute," although such a power is not specifically enumerated in § 23-3-119, because such a claim would necessarily affect numerous ratepayers, and it was "logical" to conclude that the legislature intended for the Commission to have the authority to hear such actions).

Austin argues that her complaint alleges wrongdoing on the part of both the gas companies and the PSC. In addition, she contends that her complaint did not allege that the gas companies had violated "any order, law, or regulation which the commission has jurisdiction to administer"; rather, the wrong of which she complained was the PSC's unauthorized promulgation of the Policy...

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