Bulldog's Enters., Inc. v. Duke Energy

• Decision Date: 27 September 2013
• Docket Number: No. 2012–CA–001388–MR.,2012–CA–001388–MR.
• Citation: 412 S.W.3d 210
• Parties: BULLDOG'S ENTERPRISES, INC., d/b/a Bulldog's Roadhouse, Appellant v. DUKE ENERGY, d/b/a Duke Energy of Kentucky, Inc., Appellee.
• Court: Kentucky Court of Appeals

412 S.W.3d 210

BULLDOG'S ENTERPRISES, INC., d/b/a Bulldog's Roadhouse, Appellant

v.DUKE ENERGY, d/b/a Duke Energy of Kentucky, Inc., Appellee.

No. 2012–CA–001388–MR.

Court of Appeals of Kentucky.

Sept. 27, 2013.

Eric C. Deters, Independence, KY, for appellant.

Gary J. Sergent, Covington, KY, for appellee.

Before LAMBERT, TAYLOR, and VANMETER, Judges.

OPINION

LAMBERT, Judge:

Bulldog's Enterprises, Inc., d/b/a Bulldog's Roadhouse (hereinafter “Bulldog's”), appeals from the July 9, 2012, order of the Kenton Circuit Court that dismissed its case for lack of subject matter jurisdiction, holding that the Public Service Commission (hereinafter “PSC”) has exclusive jurisdiction over the issue central to each of the claims raised by Bulldog's and that Bulldog's failed to exhaust its administrative remedies. We have carefully considered the record and the parties' arguments, and finding no error as a matter of law, we affirm the circuit court's decision.

On October 15, 2010, Bulldog's filed a complaint with the PSC alleging fraud, breach of contract, breach of good faith and fair dealing, unjust enrichment, and violations of the Consumer Protection Act by Duke Energy. ¹ Each claim rested on the assertion that Duke Energy had engaged in improper billing practices that led to Bulldog's, and potential class members, being overcharged for service. The complaint sought class action certification, a jury trial, and damages. The PSC, in an order dated November 15, 2010, instructed that it had exclusive jurisdiction over the “underlying claim of improper billing,” but did not have the authority to certify the class, hold a jury trial, or award damages.

On February 1, 2011, while the matter was still pending before the PSC, Bulldog's filed a second action in Kenton Circuit Court. Meanwhile, Bulldog's filed a motion to dismiss the PSC action. On June 17, 2011, the PSC declined to dismiss the case and determined, once again, that it had jurisdiction over the underlying issue of the case. Duke Energy then filed a motion to dismiss the circuit court case for lack of jurisdiction, but the case was ordered to be held in abeyance. On March 20, 2012, the PSC dismissed the case because Bulldog's failed to prosecute its claim and comply with the PSC's discovery order. The circuit court case, no longer in abeyance, was ultimately dismissed for lack of subject matter jurisdiction. This appeal follows.

On appeal, Bulldog's contends that it exhausted its administrative remedies and that the PSC did not have jurisdiction over its causes of action for fraud, breach of contract, breach of the covenant of good faith and fair dealing, violations of the Kentucky Consumer Protection Act, and unjust enrichment. Our review of a circuit court's determination regarding jurisdiction is de novo. Uninsured Employers' Fund v. Bradley, 244 S.W.3d 741, 744 (Ky.App.2007), citing Grange Mut. Ins. Co. v. Trude, 151 S.W.3d 803, 810 (Ky.2004).

The PSC has exclusive jurisdiction “over the regulation of rates and services of utilities[.]” Kentucky Revised Statute (KRS) 278.040(2). The PSC also has original jurisdiction “over complaints as to rates or service of any utility[.]” KRS 278.260(1). When determining whether the PSC has exclusive jurisdiction over an issue, it is helpful to consider why the legislature chose to grant the PSC jurisdiction over this area. In Smith v. Southern Bell Tel. & Tel. Co., 268 Ky. 421, 104 S.W.2d 961, 962 (1937), the former Court of Appeals explained:

The Public Service Commission is an administrative agency set up and appointed by law for the purpose of hearing the facts and establishing reasonable rules, rates, and services to the public in order to secure conformity of services and rates affecting all classes of customers, because for this burden to fall exclusively on the courts and to give the courts the primary and exclusive jurisdiction to pass upon the reasonableness of the rules, services, rates, schedules, practices, etc., of [utility] companies would lead to confusion and uncertainty, because the result might be that one court would say that certain rules and regulations are unreasonable, and another court might regard the same rules as reasonable; consequently, a subscriber of the same class in one locality might obtain one kind of service and the same service be denied a subscriber in another place.

Only “where a matter complained of is one of purely private concern between the utilityand one of its patrons, [do] courts have jurisdiction to hear and determine the controversy.” Bee's Old Reliable Shows, Inc. v. Kentucky Power Co., 334 S.W.2d 765, 766 (Ky.1960), citing Louisville Gas & Elec. Co. v. Dulworth, 279 Ky. 309, 130 S.W.2d 753, 755 (1939), and Central States Power & Light Corp. v. Thompson, 177 Okla. 310, 58 P.2d 868, 869 (1936). The distinction lies in the nature of the claim itself. Bee's Old Reliable Shows, 334 S.W.2d at 767. Questions...