Barker v. Utah Public Service Com'n

• Decision Date: 03 March 1998
• Docket Number: No. 960080,960080
• Citation: 970 P.2d 702
• Parties: 338 Utah Adv. Rep. 3 James L. BARKER, Jr., and John J. Flynn, Petitioners, v. UTAH PUBLIC SERVICE COMMISSION and U.S. West Communications, Inc., Respondents. Division of Public Utilities and Committee of Consumer Services, Intervenors.
• Court: Utah Supreme Court

Page 702

970 P.2d 702

338 Utah Adv. Rep. 3

James L. BARKER, Jr., and John J. Flynn, Petitioners, v. UTAH PUBLIC SERVICE COMMISSION and U.S. West Communications Inc., Respondents Division of Public Utilities and Committee of Consumer Services, Intervenors.

No. 960080.

Supreme Court of Utah.

March 3, 1998.

Rehearing Denied April 23, 1998.

Robert A. Peterson, Salt Lake City, for petitioners.

Jan Graham, Attorney General, Annina M. Mitchell, Assistant Attorney General, Salt Lake City, for Public Service Commission.

Gregory B. Monson, John M. Eriksson, Salt Lake City, and Molly Hastings, Douglas N. Owens, Seattle, WA, for U.S. West.

Michael L. Ginsberg, Phillip C. Pugsley, Kent Walgren, Assistant Attorneys General, Salt Lake City, for intervenors.

DURHAM, Justice:

We hear this case on petition for review of a final agency action by the Public Service Commission (the Commission) determining the amount of reasonable attorney fees to be awarded to petitioners John J. Flynn and James L. Barker, Jr. See Utah Code Ann. § 63-46b-16(1). We modify the Commission's decision as described below.

I. FACTS AND PROCEDURAL HISTORY

In 1994, we held that the Commission could not increase U.S. West Communications, Inc.'s (USWC) authorized rate of return on equity above a reasonable rate of return, that the statute permitting a public utility to veto a Commission decision constituted an unconstitutional delegation of power, and that the incentive rate regulation plan presented by the Commission was "arbitrary, capricious, and unlawful." Stewart v. Utah Pub. Serv. Comm'n, 885 P.2d 759, 773, 779, 781 (Utah 1994). The petitioning ratepayers were represented by attorneys Flynn and Barker. Given the important public interests vindicated by petitioners, we awarded them attorney fees, although not statutorily authorized, under two alternative theories--private attorney general or common fund. Id. at 783. This case was the first in which we awarded attorney fees not authorized by a contract or statute. Id. We remanded two issues to the Commission for decision: (1) the lawful rate of return on equity permitted to USWC and (2) the amount of reasonable attorney fees. Id. at 773, 783.

In September 1995, the parties executed and filed a stipulation with the Commission requiring USWC to refund its ratepayers $3,212,852 plus interest, settling all issues on remand except attorney fees. In December, the Commission issued an order on refund which differed from the initial stipulation. In mid-January 1996, petitioners requested a rehearing on the refund order. The Commission granted this request and heard petitioners on January 31, 1996. On February 22, 1996, the Commission issued its "Order on Reconsideration of Order on Refund," dealing with the rate of return issues.

Prior to its final resolution of the refund issues, on December 20, 1995, the Commission issued an order of attorney fees, reducing the reported hours spent on the case by twenty-five percent, compensating Flynn at $250 an hour and Barker at $175 an hour, rejecting application of a multiplier or an award of a percentage of the common fund, allowing payment of copying, postage, and other expenses, reducing paralegal compensation from the requested $50 to $25 per hour, denying compensation for secretarial work, and refusing to award any attorney fees related to the adjudication of the attorney fees themselves. The order further stated that attorney fees not in dispute that are "authorized by this order" should be paid "forthwith." Because the Commission found that USWC had to disgorge overcharges to its ratepayers, thus creating a common fund, the attorney fees awarded will come out of that fund. See Stewart, 885 P.2d at 783.

In early January, believing that the Commission had unreasonably reduced their compensation, petitioners requested a rehearing on the attorney fees order. The Commission constructively rejected this request by failing to respond within twenty days. See Utah Code Ann. § 63-46b-13(3)(b). Petitioners subsequently petitioned this court for a writ of review on the attorney fees order, and we granted the writ.

II. JURISDICTION

This court has jurisdiction to review "final agency action resulting from formal adjudicative proceedings." Utah Code Ann. § 63-46b-16(1). The Commission argues that this court lacks jurisdiction to review the attorney fees order because it does not represent a final agency action. We conclude that the record established that the order was final and that all parties viewed it as such until review.

The Commission divided the questions presented by this court's remand in Stewart, 885 P.2d 759, into two parts: one addressing attorney fees, the other addressing the appropriate rate of return and customer reimbursement. The Commission issued the attorney fees order first and the refund order second. The refund order does not change any aspect of the attorney fees order.

The Utah Administrative Procedures Act does not specifically define "final agency action." However, it does say that an agency will contemplate reconsideration of an order only "if the order would otherwise constitute final agency action." Utah Code Ann. § 63-46b-13. We can thus assume the Commission considered the attorney fees order to be a final agency action by virtue of its failure to indicate that the action was not final at the time of the rehearing request. The Commission merely denied the request for rehearing by nonaction instead of notifying petitioners that they would have to apply for rehearing at a later date.

Moreover, the reconsideration of the refund order undertaken thereafter does not address the attorney fees order except to acknowledge it as final and appealable. The refund order specifically discusses what will happen if either party appeals the attorney fees order. ¹ It never suggests that it supersedes or somehow subsumes the attorney fees order; it purports to modify only the earlier order and stipulation regarding the refund. Thus quite clearly, at the time of appeal, all parties understood the order on attorney fees to constitute an appealable final agency action. We see no reason to regard it differently.

Because of the nature of agency proceedings, final actions often take place seriatim, disposing completely of discrete issues in one order while leaving other issues for later orders. Such orders will be final as to any issue fully decided by that order and appealable any time from the date of that order to the last day to appeal the last final agency action in the case.

For assistance in defining "final agency action" more explicitly, we look to other state and federal laws which employ the term. The U.S. Supreme Court has held, with regard to the Administrative Orders Review Act, 28 U.S.C. § 2342 (1988):

[T]he relevant considerations in determining finality are whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication and whether rights or obligations have been determined or legal consequences will flow from the agency action.

Port of Boston Marine Terminal Ass'n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 209, 27 L.Ed.2d 203 (1970); see also Franklin v. Massachusetts, 505 U.S. 788, 797, 112 S.Ct. 2767, 2773-74, 120 L.Ed.2d 636 (1992) (interpreting Administrative Procedure Act, 5 U.S.C. § 704 (1988)). Similarly, the Model State Administrative Procedure Act defines final agency action negatively as "the whole or a part" of any action which is not "preliminary, preparatory, procedural, or intermediate with regard to subsequent agency action of that agency or another agency." 1981 Model State Admin. P. Act § 5-102(b)(2).

The attorney fees order in this case meets both of these definitions. When the Commission failed to grant a rehearing on the order, it reached the end of its decision-making process on this issue. Hence judicial review at this point will not interfere with the Commission's proceedings. Moreover, the language of the order makes clear that the Commission determined obligations of the parties with which the parties must immediately comply. In addition, this order clearly falls under the Model Act's definition of "final" because it is not even arguably preliminary, preparatory, procedural, or intermediate.

This ruling is consistent with prior Utah cases. The Utah cases on finality found no final order in the following circumstances: (1) a remand for further proceedings, Sloan v. Board of Review, 781 P.2d 463, 464 (Utah Ct.App.1989); (2) an order converting informal proceedings into formal ones, Merit Elec. & Instrumentation v. Department of Commerce, 902 P.2d 151, 153 (Utah Ct.App.1995); and (3) a denial of a motion to dismiss, Barney v. Division of Occupational & Professional Licensing, 828 P.2d 542, 544 (Utah Ct.App.1992). These cases do not involve actions in the nature of a seriatim final order; they all involve preliminary, preparatory, procedural, or intermediate decisions. Thus our holding today merely clarifies the definition of "final agency action" rather than changing it.

We emphasize, however, that this rule applies only to administrative determinations. It does not in any way affect the rules of appealability governing cases from the district court and the court of appeals.

III. STANDARD OF REVIEW

Ordinarily, we review attorney fee awards under an abuse of discretion standard. Salmon v. Davis County, 916 P.2d 890, 897 (Utah 1996) (Russon, J., dissenting) (stating standard of review in which three justices concur). However, in a case such as this, where the trier of fact is one of the parties whose actions we adjudicated prior to remand, we believe that fairness requires review of the Commission's findings on attorney fees under an intermediate standard, affording the Commission some discretion, as in mixed fact and law determination. See State v. Pena, 869 P.2d 932, 938 (Utah 1994) (stating ...