Costello v. Tanner Electric Cooperative

Decision Date07 March 2016
Docket Number73060-6-I
CourtCourt of Appeals of Washington



No. 73060-6-I

Court of Appeals of Washington, Division 1

March 7, 2016



The Costellos, who are members of Tanner Electric Cooperative (Tanner), appeal the dismissal of their action against Tanner for allegedly withholding Cooperative records and imposing an unlawful monthly fee on members who opt out of its "smart meter" program. They also appeal orders granting Tanner summary judgment on its counterclaim for unpaid charges and penalties, and awarding attorney fees and costs. We affirm in part and reverse in part.

Tanner is a cooperative electrical utility organized under RCW 24.06. In 2009, Tanner decided to replace its members' electricity meters with "smart meters" that eliminate the need for meter reading. Because smart meters generate detailed information about members' electricity use, several Tanner members, including appellants Larry and Christy Costello, expressed privacy concerns. In response, Tanner created an opt-out policy allowing members to keep their old meters if they paid a $23.33 monthly fee covering the cost of reading their meter.

The Costellos declined to participate in the smart meter program but refused to pay the opt-out fee between February 1, 2013 and October 15, 2013.

In May 2013, the Costellos filed this action, alleging that the opt-out fee unlawfully burdened their state constitutional right to privacy, [1] violated the Consumer Protection Act, [2] and violated a statutory prohibition on discrimination in the provision of utility services.[3] The complaint further alleged that, as members of Tanner, the Costellos were entitled to inspect books and records relating to the smart meter program. Tanner counterclaimed for unpaid charges, penalties, and interest. It also sought attorney fees and costs.

In October 2013, the Costellos paid all of their outstanding opt-out fees. A notice accompanying their payment stated that they did not concede the fee's validity and reserved the right to challenge it in this action.

In February 2014, Tanner moved for a protective order restricting the Costellos' access to certain information. In particular, Tanner sought to limit access to information protected by a confidentiality agreement between Tanner and the smart-meter vendor, Aclara Technologies, LLC. Supporting declarations and pleadings described the confidential information as "Aclara engineering and design data and information, drawings, security features, technical specifications and other proprietary information about Aclara's . . . metering equipment and communications software."[4] The information included Aclara's "research, development, trade secrets . . . and intellectual property" as well as information about Tanner's smart meter system and business that allegedly could adversely affect "Tanner's ability to protect member power usage data and personally identifying information" from disclosure.[5] Tanner argued that the proprietary nature of the information and the confidentiality agreement established the "good cause" necessary for a protective order under CR 26(c) and justified limiting disclosure to counsel and/or an independent expert. The Costellos argued that Tanner failed to demonstrate good cause and that any language restricting access to their attorney or expert should be removed so they could inspect the documents themselves.

The Costellos then moved for partial summary judgment on their claim for access to Tanner's books and records. Tanner moved for partial summary judgment on the Costellos other three claims under CR 12(c) and/or CR 56.

On March 21, 2014, the court granted partial summary judgment dismissing the Costellos' constitutional, discrimination, and CPA claims. The court dismissed the first two claims under CR 12 and the CPA claim under CR 56 and Haberman v. Washington Pub. Power Supply Sys., 109Wn.2d 107, 171-72, 744 P.2d 1032 (1987), amended. 109 Wn.2d 107, 750 P.2d 254 (1988). The court denied the Costellos' motion for summary judgment on their access to records claim.

The court also granted Tanner a protective order restricting access to confidential information. The order states in pertinent part:

a receiving Party may disclose Highly Confidential Documents or the information contained in such Documents only to the receiving Party's counsel of record in this Litigation and/or to independent experts or consultants for the receiving Party who have signed the "Acknowledgment and Agreement to Be Bound."[6] The order defines "Attorneys" as "counsel of record."

The order further provides that "[a]ny party may apply ... for a modification of the Protective Order." After the court entered the protective order, the Costellos' counsel withdrew and they proceeded pro se.

Tanner then moved for summary judgment on the Costellos' access to records claim. At the hearing on the motion, the Costellos argued that they were entitled to view the "highly confidential" documents under RCW 24.06.160, the corporate books and records statute. They further argued that Tanner had not shown good cause for the protective order and was abusing the "confidential" designation permitted by the order. Tanner's counsel responded that the Costellos' access to records claim was moot because Tanner had either provided, or stood ready to provide to counsel or an expert, the requested records. When the court asked what effect the Costellos' current pro se status had under the protective order, Tanner's counsel replied:

Well, it's very clear that the order was intended to allow access only to counsel, independent counsel and expert We think you would have to revise it at your discretion, if you believe that it should be revised. . . . But we would - we don't think that they can make an end [run] around your order simply to allow Mr. Costello access to these records."[7]

The Costellos did not ask the court to modify the protective order. Instead, they argued that "in the plain language of the protective order, there are no specific constraints on us as the receiving party from having the highly confidential information."[8] The court then asked the Costellos whether they had an expert or legal training. The Costellos stated they had neither. When the court asked whether a consultant would be necessary to "effectuate the terms of the protective order, "[9] the Costellos argued that the expense of a consultant "would impose ... an unfair financial burden" and that they were "well qualified to evaluate" the confidential information themselves.[10]

The court granted summary judgment dismissing the Costellos' access to records claim, stating in part:

there is no disputed issue of material fact as to the first cause of action set forth in the plaintiffs' Complaint that the documents plaintiffs seek are outside the scope of those required to be allowed inspection under RCW 24.06.160 and under Tanner's Member Access to Information Policy that defendant has already allowed plaintiffs inspection of the requested documents under this Court's terms (i.e., the Protective Order entered in this matter), and that the defendant is entitled to judgment dismissing that claim as a matter of law.[11]

The Costellos moved to dismiss Tanner's counterclaims, but the court denied the motion and ultimately granted summary judgment for Tanner in the amount of $45.70.

On April 24, 2015, the court entered an order awarding Tanner attorney fees and costs. The order states in pertinent part:

a. Plaintiffs entered into a Membership Agreement contract with Defendant. The Membership Agreement contained a provision which provided that reasonable attorney fees would be paid to Defendant in the event it was necessary an attorney needed to be retained to collect on amounts that were due to Defendant. As Plaintiffs would not pay Defendant the amount they owed, claiming that the outstanding amounts were based on charges that were against the law, Defendant incurred attorney fees in disproving Plaintiffs' reasons for not paying the charges and in collection of the charges. As a result, Plaintiffs are to be made to pay Defendant's attorney fees incurred in opposing Plaintiffs' Counts II, III and IV of the complaint and are to be made to pay Defendant's attorney fees incurred in bringing counterclaims for payment of amounts due.
b. Plaintiffs' complaint contained three separate causes of action which were not well grounded in fact and/or not warranted by existing law. Count II of Plaintiffs' complaint alleged that Defendant's smart meters invaded Plaintiffs' privacy. However, as Plaintiffs' never had a smart meter installed, it was factually impossible for the smart meters to invade Plaintiffs' privacy. Count III of Plaintiffs' complaint was wholly baseless as it alleged that Defendant violated Washington's law against discrimination; Plaintiffs claim that they are members of a protected class by virtue of their legal claim and ideology against smart meters was tautologically self-serving. Plaintiffs' claim IV that Defendant violated Washington Consumer Protection Law was unsupportable under the law.
c. Defendant was the prevailing party in this matter which contained monetary claims for less than $10, 000. Defendant properly provided a written settlement letter to Plaintiffs which was rejected. Defendant later was awarded judgment in an amount that exceeded the amount Defendant offered to settle this dispute. Accordingly, pursuant to RCW 4.84.250, attorney fees and costs in defense of Plaintiffs claims seeking monetary relief (i.e. Counts II, III, and IV) and associated with their affirmative counterclaims are mandated. The purpose of this statute involves penalizing parties who unjustifiably bring or resist small claims.
d. Tanner is also entitled to statutory fees and

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