City of Newton v. Department of Public Utilities

• Decision Date: 07 May 1975
• Citation: 367 Mass. 667,328 N.E.2d 885
• Parties: , 9 P.U.R.4th 344 CITY OF NEWTON et al. v. DEPARTMENT OF PUBLIC UTILITIES et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 885

328 N.E.2d 885

367 Mass. 667, 9 P.U.R.4th 344

CITY OF NEWTON et al. v. DEPARTMENT OF PUBLIC UTILITIES et al. ¹

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 6, 1975.

Decided May 7, 1975.

Sanford A. Kowal, Boston (Jason A. Rosenberg, Asst. City Sol. with him) for the City of Newton and another.

Jeffrey J. Binder, Asst. Atty. Gen., for the Dept. of Public Utilities.

Paul B. Galvani, Boston (John H. Mason, Boston, with him) for New England Tel. and Tel. Co.

Before TAURO, C.J., and REARDON, QUIRICO, HENNESSEY and WILKINS, JJ. HENNESSEY, Justice.

This case is before the court on a petition for judicial review pursuant to G.L. c. 25, § 5, of a final decision of the Department of Public Utilities (Department). The appeals were filed in the county court; the single justice granted New England Telephone and Telegraph Company (Company) leave to intervene on the ground that the Department's decision was directed to the Company. Subsequently the single justice reserved and reported all issues arising under the appeal for determination by the court on the pleadings and the record before the Department.

As will be seen, the principal issue raised in this case is whether the Department is vested with authority to order rate rebates for inadequate telephone service. The Company argues that the Department has no such power; further, the Company says that the issue is not properly before this court in this case. The Department and the city of Newton urge that the issue is properly before this court, and that we should resolve the issue. The Department states, however, that it believes it has no power to order such rebates.

We have concluded herein that the Department does not have the authority to order rate rebates for past inadequate telephone service. In reaching that conclusion, we have first determined that the city of Newton had standing to raise the issue, and that the issue is an appealable question in this case. We add that, even if we were to determine that the issue of rate rebates is not properly before us in this appeal, we would nevertheless be inclined to declare the rights of the parties as to that issue. See Wellesley College v. Attorney Gen., 313 Mass. 722, 731, 49 N.E.2d 220 (1943). The question is an important one to consumers, to the Company, and to the Department, and it will remain a continuing controversy. The Department has sponsored legislation (see 1973 House Doc. No. 205) which would confer such authority on the Department. All parties have fully briefed the issue. In our view, all concerned are entitled at this time to our ruling on the issue whether the Department presently has such power.

The decision of the Department was issued on June 12, 1973, following lengthy statewide hearings initiated by the Department on its own motion to investigate whether 'the regulations, practices, equipment, applicances or service' of the Company were unjust, unreasonable, unsafe, improper or inadequate.' See G.L. c. 159, § 16. Pursuant to its remedial powers under § 16, the Department had drafted a 'Proposed Service Order' to the Company. The order was based on information, analysis and recommendations contained in a consultant's report. ²

The proceeding before the Department commenced by the drafting of an order to the Company directing it to appear and show cause why the Department should not formally adopt the Proposed Service Order. The order to show cause, dated September 25, 1972, announced that public hearings would be held in seven locations throughout the State from November 1, 1972 through January 10, 1973. Prompted by certain findings in the ADL report relative to the deterioration of service in Newton, on October 8, 1972, the mayor of Newton wrote to the chairman of the Department in complaint of the service deficiencies affecting the city and requested that his city be added to the list of municipalities initially selected as public hearing sites.

In his letter the mayor further requested that the issues to be considered include, inter alia, whether there should be a reduction in the telephone rates whenever the level of service offered to the subscribers in the city of Newton was substandard. The chairman of the Department granted the request, stating in a reply letter that '(p)ursuant to Section 24 of Chapter 159 ³ of the General Laws, the Department will conduct the hearing which you have requested in the near future.' Thereafter, on October 24, 1972, the Department issued a second order in which the Company was notified that additional public hearings would be held in Newton relative to the adoption fo the Proposed Service Order. The October 24 order was substantively identical to that of September 25. Both announced that the proceedings were to be held pursuant to the authority vested in the Department by virtue of G.L. c. 159, § 16. ⁴

The public was given due notice of the hearings. Approximately fifteen public officials and eighty-five members of the public testified at the hearings, which consumed fifteen days and generated 2244 pages of testimony.

Following completion of the hearings scheduled in all the proposed locations including Newton, the Department issued its opinion in which it held that in view of the substantial improvements to the service deficiencies described in the ADL report, including improvements to telephone facilities in Newton, the service measures set out in the Proposed Service Order were not necessary. However, the final decision did direct the Company to comply with an extensive monitoring process by which the Company was to report to the Department information as to various service levels on a continuing basis; relative to this end, the Department ordered that the proceedings below were to remain open pending any further order during the continuing surveillance.

With respect to Newton's request that a rate rebate system to compensate for deficient service be implemented, the Department stated in its decision that it was of the opinion that it lacked statutory authority to order rebates; denied the city's motion that the Proposed Service Order be adopted as amended to include an 'index system plan'; ⁵ and denied the city's requested ruling that as a matter of law the Department has the power under c. 159 to implement the index system plan as a remedy for inadequate service. The city of Newton and its mayor base their appeal inter alia, on the denial of the motions and request for rulings.

Following the decree of the single justice granting it leave to intervene, the Company in due course filed a plea in bar and an answer. The plea in bar in substance alleged that the Company had not been notified that rates would be an issue; that the question of rate rebates, under an index system plan, had been expressly excluded from the proceedings before the Department; and that therefore the Department's refusal to adopt the city's proposal for rate rebates was not an appealable question under G.L. c. 25, § 5. The single justice abstained from decision on the plea for the reason that the rate rebate issue would remain a continuing controversy between the city and the Department. The Department took no position on the Company's plea before the single justice but argues before this court that the plea in bar should be denied and urges that we decide the issue whether the Department has authority to order rate rebates for substandard service.

Thus, the respondent Department and the intervener Company offer differing and opposite legal theories as to how this case should be decided. Moreover, in addition to the grounds set forth in its plea in bar, the Company argues before this court that the city and its mayor lack standing to bring this appeal. The Department apparently takes the position that the city has standing and, in any event, urges that we resolve the legal issues.

Taking into account the arguments presented by the intervener, as we feel is proper in this case since the order is in fact directed to the Company, ⁶ the issues raised by this appeal are (1) whether the city of Newton and its mayor have standing as aggrieved parties under G.L. c. 25, § 5; (2) whether the question of rate rebates was or should have been considered and decided by the Department in the proceeding held below and is therefore an appealable question before this court and, if we should decide the above two questions in the affirmative; (3) whether the Department is vested with authority to order rate rebates and implement a basic index system to effect this remedy for past inadequate telephone service.

We conclude that the city does have standing to bring this appeal and that review as to the Department's authority to implement a rate rebate system is properly before this court.

We have had occasion quite recently to state the general principles for standing under G.L. c. 25, § 5, and to examine the relationship between the State Administrative Procedure Act, G.L. c. 30A, and appeal under § 5, and we shall not repeat here what is stated at some length in SAVE THE BAY, INC. V. DEPARTMENT OF PUB. UTIL., --- MASS. --- , 322 N.E.2D 742 (1975)^A. However, we are required to apply those general principles to this case to determine whether Newton was a party before the Department and is aggrieved by a ruling of that agency. In so doing, we conclude that Newton did have a statutory right to participate in the proceedings, did so appear in accordance with G.L. c. 30A, § 1(3)(b), and therefore, in this respect, had standing to bring this appeal.

We note that G.L. c. 159, § 24, provides that on written complaint relative to the service or charges for service, made by the mayor of a city or the board of selectmen of a town, or by twenty customers, the Department 'shall grant a public hearing' relative to this complaint (emphasis added). See n. 3, supra. It is of course true, as the Company suggests, that the statutory right to a § 24 hearing does...