Baltimore Steam Co. v. Baltimore Gas & Elec. Co.

• Citation: 716 A.2d 1042,123 Md.App. 1
• Decision Date: 01 September 1997
• Docket Number: No. 1534,1534
• Parties: BALTIMORE STEAM COMPANY t/a Trigen-Baltimore Energy Corporation v. BALTIMORE GAS & ELECTRIC COMPANY, et al. ,
• Court: Court of Special Appeals of Maryland

Page 1

123 Md.App. 1

716 A.2d 1042

BALTIMORE STEAM COMPANY t/a Trigen-Baltimore Energy Corporation v. BALTIMORE GAS & ELECTRIC COMPANY, et al.

No. 1534, Sept. Term, 1997.

Court of Special Appeals of Maryland.

Aug. 31, 1998.

John T. Prisbe (Thomas P. Perkins, III, Emried D. Cole, Jr., Venable, Baetjer and Howard, LLP on the brief) Baltimore, for appellant.

Marc K. Sloane (Ronald D. Byrd, David M. Perlman and Paul W. Davis on the brief) Baltimore, for appellees, BG&E and Comfort Link.

Otho M. Thompson, City Solicitor and Burton H. Levin, Principal Counsel on the brief, Baltimore, for appellee, Mayor and City Council of Baltimore.

Before HOLLANDER, THIEME and KENNEY, JJ.

THIEME, Judge.

Appellant Baltimore Steam Company, doing business as Trigen-Baltimore Energy Corporation (hereinafter referred to as "Trigen"), appeals from an order of the Circuit Court for Baltimore City dismissing Trigen's declaratory judgment action for lack of standing. Trigen's complaint requested injunctive relief and a declaration (1) that the franchise granted by Baltimore City (the City) to the Baltimore Gas & Electric Company (BGE) was invalid or in the alternative (2) that this franchise could not be exercised until its use was authorized by the Maryland Public Service Commission (PSC). The action was primarily directed against BGE and its affiliate, the District Chilled Water Limited Partnership (hereinafter referred to by its commercial name, "Comfort Link"), but because the complaint necessarily called into question the validity of the city ordinance that purported to grant BGE a franchise, the City was also made a party as required by Md.Code Ann., Cts. & Jud. Proc. § 3-405(b) (1995 Repl.Vol.). BGE, the City, and Comfort Link, appellees, all moved to dismiss the action, arguing inter alia that Trigen lacked standing. After a hearing, the court dismissed the complaint on standing grounds and denied Trigen leave to amend. Within ten days, Trigen moved for clarification and reconsideration, which motion was denied. Trigen timely filed its notice of appeal within thirty days after the docketing of that denial. We have recast the question presented as follows:

Does appellant, as holder of a non-exclusive franchise, have standing to challenge the validity of a competitor's non-exclusive franchise or to force such a competitor to comply with the preauthorization requirements of the Maryland Public Service Commission Law?

I.

Trigen operates a steam heating business in Baltimore City, and this enterprise involves transmitting steam through pipelines under the city streets. Trigen has obtained from the City a franchise granting Trigen the City's permission "to construct, lay, operate and maintain" an underground pipeline system within a designated portion of the downtown area "for the purpose of transmitting heat or refrigeration, or both." Trigen's franchise additionally authorizes use of public streets for connecting any building within the designated area to this pipeline system. This franchise was granted via City Ordinance No. 171, approved on 29 June 1984. As a matter of purely historical interest, this grant roughly coincides with Trigen's purchase of an existing underground steam pipeline system from BGE, Trigen's present rival. There is no dispute that Trigen's franchise is non-exclusive, i.e., it does not purport to prevent the City from granting similar franchises to other entities. In fact, the ordinance states:

[N]othing in this ordinance shall be construed to give to the said Grantee, its successors and assigns, an exclusive right to occupy any of the streets, lanes or alleys embraced in and covered by the terms of this ordinance, nor to prevent the Mayor and City Council of Baltimore from granting similar privileges to any other person or company, nor to prevent the Mayor and City Council of Baltimore from granting to such other person or company the privilege of laying subways, pipe lines, ducts or conduits in juxtaposition to those embraced in this ordinance.

In 1984, BGE ceased operations of its steam heating business and consequently forfeited the franchise under which it had previously enjoyed the right to transmit steam beneath the city streets. In 1995, BGE decided to reenter this heating market and incorporated Comfort Link for that purpose. ¹ BGE applied for a new franchise, and the proposed franchise was introduced before the City Council as Council Bill 1295. Trigen addressed the City Council at a hearing on the bill and requested certain amendments and deletions. Bill 1295 was eventually passed and became Ordinance No. 624, signed by the Mayor on 29 November 1995.

The franchise that was granted to BGE is similar to the one previously granted to Trigen. It authorizes BGE "to construct, lay, operate and maintain subways and pipe lines ... for the purpose of transmitting heat or refrigeration, or both." BGE's franchise, like Trigen's, is also indisputably non-exclusive. The geographical boundaries of the two franchises differ somewhat, but they basically cover the same areas of downtown Baltimore. BGE formally accepted its franchise in a letter of 12 April 1996.

The catalyst for the instant suit was a steam heating bid request issued by the University of Maryland Medical System. The Medical System published a "Request for Proposal to Provide Steam and Chilled Water" in 1996, and Comfort Link submitted a proposal for such services in late March 1997. Trigen responded swiftly by filing this four-count declaratory judgment action on 24 March 1997.

In Count One, Trigen sought a declaration that Ordinance No. 624 was invalid for failure to comply with two different procedural requirements of Article VIII (governing franchise grants) of the Baltimore City Charter. Specifically, Trigen alleged that the City Council had failed to advertise the proposed franchise grant for three days in a daily newspaper, Baltimore City, Md. Charter, art VIII, § 6, and that the proposed franchise had not been valued by the Board of Estimates for purposes of obtaining maximum compensation from the franchisee. Id. at § 2. Count Two sought a declaration that the franchise granted by Ordinance No. 624 cannot be exercised or otherwise acted upon without first obtaining authorization from the PSC, as required both by § 13 of the Ordinance and by the Maryland Public Service Commission Law (MPSCL). Section 13 of the Ordinance authorized BGE to charge such sums for its services "as may be established by, and subject to the jurisdiction of, the Public Service Commission, if any." The MPSCL requires all "public service companies" to obtain prior authorization from the PSC before exercising, assigning, or transferring any franchise. Md. Ann.Code art. 78, § 24 (1998 Repl.Vol.). (Trigen alleged that since Comfort Link was purporting to exercise a franchise that was granted solely to BGE, an assignment or transfer must have occurred.) Count Three sought a declaration of the invalidity of Ordinance No. 624 on the alternate rationale that, assuming that PSC authorization is not required, then the ordinance is invalid for failure to set forth the rates at which customers will be charged, a mandatory term according to the Charter, art. VIII, § 2. Count Four requested an injunction against any competition from BGE/Comfort Link and other relief based on all of the foregoing counts.

Appellees moved the circuit court to dismiss the case on several grounds, one of which was that Trigen lacked standing to bring the action. At the conclusion of the hearing on the issue of standing on 18 June 1997, the court ruled that Trigen lacked standing and ordered the entire case dismissed.

II.

Some preliminary matters must be resolved before addressing the central issues. To begin with, appellees BGE and Comfort Link have moved to dismiss this appeal on the grounds that Trigen has previously taken a position that is inconsistent with its right to appeal. The motion is premised on the principle that "[t]he right to appeal may be lost by acquiescence in, or recognition of, the validity of the decision below from which the appeal is taken or by otherwise taking a position which is inconsistent with the right of appeal." Banegura v. Taylor, 312 Md. 609, 615, 541 A.2d 969, 972 (1988) (quoting Rocks v. Brosius, 241 Md. 612, 630, 217 A.2d 531, 541 (1966)). Stated another way, "[A] voluntary act of a party which is inconsistent with the assignment of errors on appeal normally precludes that party from obtaining appellate review." Id. (quoting Franzen v. Dubinok, 290 Md. 65, 69, 427 A.2d 1002, 1004 (1981)).

At the hearing before the circuit court, the arguments focused mostly on standing to challenge the validity of the franchise ordinance and much less so on standing to enjoin a violation of the MPSCL. The court orally ruled that Trigen had no standing to challenge the validity of the ordinance. As previously noted, the court then dismissed the complaint and denied leave to amend, and Trigen responded with a Motion for Clarification and Reconsideration. The desired clarification pertained to whether the court had also ruled on standing to enforce the MPSCL. The request for reconsideration concerned the court's denial of leave to amend, as Trigen argued that it could assert other bases for standing which would not call into question the validity of Ordinance No. 624. In reply to the City's response to this motion, counsel for Trigen filed a letter pleading dated 8 July 1997. The letter stated:

The City's Opposition asserts and is premised upon the mischaracterization that "[Trigen] challenges the validity of a franchise ordinance enacted by the City." This is patently wrong. For purposes of amending its complaint, Trigen would assume that the enactment of Ordinance No. 624 is valid. Trigen still has legal claims that can be asserted based on BGE's failure to comply with the ordinance.

(Emphasis in original.) (Citation omitted.) BGE and Comfort Link now allege...