Duff v. Public Utilities Commission, s. 77-919

• Decision Date: 07 December 1978
• Docket Number: 77-943 and 77-954,Nos. 77-919,77-927,s. 77-919
• Parties: , 10 O.O.3d 493 DUFF, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees. KELLNER, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees. CITY OF LIMA, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees. CARPENTER et al., D. B. A. Carpenter Radio Company, Appellant, v. PUBLIC UTILITIES COMMISSION et al., Appellees.
• Court: Ohio Supreme Court

Page 367

56 Ohio St.2d 367

384 N.E.2d 264, 10 O.O.3d 493

DUFF, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.

KELLNER, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.

CITY OF LIMA, Appellant, v. PUBLIC UTILITIES COMMISSION of Ohio et al., Appellees.

CARPENTER et al., D. B. A. Carpenter Radio Company, Appellant, v. PUBLIC UTILITIES COMMISSION et al., Appellees.

Nos. 77-919, 77-927, 77-943 and 77-954.

Supreme Court of Ohio.

Dec. 7, 1978.

These appeals arise from the November 23, 1976, opinion and order of the Public Utilities Commission (commission) in case no. 75-442-TP-AIR. They were consolidated on appeal for purposes of oral argument and review.

On June 13, 1975, United Telephone Company (UTC) filed an application with the commission in accordance with R.C. 4909.18 seeking permission to increase its rates and charges for telephone service. ¹ Pursuant to R.C. 4909.19, the commission ordered its staff to investigate the application.

In May of 1976, UTC published notices in newspapers within its service area, as required by R.C. 4909.19 announcing its application to the commission.

A staff report on investigative findings was completed and filed with the commission on September 22, 1976, and a public hearing was set for November 10, 1976, following UTC's objection to the staff report. Attorney-examiner Barth E. Royer was appointed to conduct the hearing.

Appearances were made at the hearing by counsel for the Board of Commissioners of Trumbull County and attorneys Philip S. Schaefer and Alan P. Buchmann on behalf of UTC. Attorney Schaefer had previously been employed by the commission and had served with attorney-examiner Royer as co-hearing officer in a prior rate case involving UTC.

A stipulation was entered into by the parties present at the hearing which authorized 94 percent of the increase originally requested by UTC. This stipulation was adopted by the commission in its opinion and order dated November 23, 1976. UTC subsequently filed new tariffs with the commission which were accepted on November 30, 1976, to become effective on December 30, 1976.

The commission also granted a petition to intervene by appellant H. Thompson Duff in the November 23 order.

Shortly thereafter (no specific date is given), appellant Edith C. Kellner brought to the attention of the commission the fact that the staff report had not been served upon the mayors of all municipalities in UTC's service area as required by R.C. 4909.19.

On December 15, 1976, the commission issued an entry which acknowledged the oversight, ordered the necessary service of copies of the report to those mayors not previously served, and set February 1, 1977, as the date for a new hearing. In the same entry the commission ordered the rates approved in the entry of November 23 to go into effect upon a temporary basis and subject to refund, as an exercise of its emergency powers under R.C. 4909.16.

At the opening of the February 1, 1977, hearing, the city of Lima, James M. and Miriam G. Carpenter, d. b. a Carpenter Radio Company, and Edith C. Kellner, among others, were permitted to intervene in the proceeding. Appellant city of Lima then moved for a continuation of the hearings until July 1, 1977, in order to investigate the business records of UTC. The motion was denied, but the hearing was continued until February 14 to allow all parties to study prefiled testimony submitted by UTC.

At the start of the February 14 hearing, the city of Lima unsuccessfully renewed its motion to continue the hearing. Appellants city of Lima and Edith C. Kellner then moved that attorney-examiner Royer disqualify himself from presiding over the case due to his prior association with attorney Schaefer. The motion was denied.

During the hearings, appellants Carpenter moved to have the commission's emergency order of December 15, 1976, vacated on the basis that the stipulation entered into by the parties present at the November 10, 1976, hearing was defective. This motion was apparently overruled after the close of the hearings.

Based upon the evidentiary hearings held between February 14 and March 4, 1977, the commission issued an opinion and order on May 4, 1977, upholding the emergency order of December 15 and granting 94 percent of UTC's requested rate increase.

Applications for rehearing filed by a number of intervenors were denied by the commission on June 23, 1977. Appellants in these consolidated cases have perfected their appeals to this court as a matter of right.

H. Thompson Duff, pro se.

Edith C. Kellner, pro se.

Allan D. Dobnicker, Director of Law, and Robert R. Cupp, Lima, for the city of Lima.

James M. Carpenter, pro se.

William J. Brown, Atty. Gen., Marvin I. Resnik and Judith B. Sanders, Columbus, for appellee.

Squire, Sanders & Dempsey, Alan P. Buchmann and Kevin T. Duffy, Cleveland, for intervening appellee The United Telephone Co. of Ohio.

PER CURIAM.

I. (Case No. 77-919.)

The first appeal is presented by H. Thompson Duff. Appellant Duff basically advances three arguments, the first of which is that the commission abused its discretion by not including all elements of depreciation in its valuation of UTC's property. ² Specifically, he alleges that obsolescence was ignored as a depreciating factor, which, according to R.C. 4909.05(E), must be included in the depreciation calculation. The problem arises because the different classes of depreciation were not detailed by the commission in its staff report. There is testimony in the record, however, that the method employed by the commission to compute depreciation did in fact reflect all causes of depreciation, including obsolescence. Where, as here, there is evidence to support a finding of the commission, this court will not disturb the finding absent a showing of "misapprehension or mistake or willful disregard of duty." Cleveland v. Pub. Util. Comm. (1965), 3 Ohio St.2d 82, 84, 209 N.E.2d 424, 426. As appellant has failed to make such showing, his argument is not well taken.

Appellant Duff alleges next that the commission erred by failing to separately state the percentage and amount of each of the various classes of depreciation, in accordance with R.C. 4909.05(E).

R.C. 4909.05 provides, in relevant part: "In ascertaining such value (the value of the applicant's property), the commission may ascertain and report In such detail as it deems necessary * * * the following facts." (Emphasis added.) "Following facts" refers to elements set forth in subsequent subsections, including the subsection in question, R.C. 4909.05(E). This is a clear grant of discretion to the commission to report in such detail as the commission determines is proper, and this court has so held in Ohio Edison Co. v. Pub. Util. Comm. (1962), 173 Ohio St. 478 at page 481, 184 N.E.2d 70 at page 73, as follows:

" * * * the commission is not required by that statute (R.C. 4909.05(E)) to state separately the 'percentage and amount of each class of depreciation' as long as it properly determines an amount for 'depreciation from the new reproductive cost, as of' the 'date certain.' "

Appellant Duff focuses on the word "properly" in the above language and contends that the depreciation was not "properly" determined so as to justify the commission's method of reporting its findings. To support this contention, appellant relies on the testimony of UTC's depreciation witness, arguing that reliance on this witness' method of depreciation leads to an improper final determination. Whether such contention is true is irrelevant, however, because the commission followed the methodology of the commission staff, not UTC's witness. Appellant Duff's second argument is without merit.

Finally, appellant Duff proposes that the rate increases adopted by the commission in this cause are discriminatory in that they are higher than those charged in other areas of the state. Specifically, appellant compared the rates charges by UTC with those charged by Ohio Bell.

Under the rate setting procedures established in Cleveland v. Pub. Util. Comm. (1956), 164 Ohio St. 442, 132 N.E.2d 216, comparing the rates charged by one utility with another is not a proper standard to determine their reasonableness. In addition, there is no statutory basis for such a procedure. Accordingly, the order of the commission as to appellant Duff is affirmed.

II. (Case No. 77-927.)

Appellant Edith C. Kellner's allegations of error are directed to the conduct of the commission's hearings. Appellant cites specifically as error the refusal of attorney-examiner Barth E. Royer to disqualify himself from the February 14 hearing. The charge is based on an alleged conflict of interest arising from the prior association of Philip S. Schaefer, counsel for UTC at the November 10 1976, hearing, with the attorney-examiner, as co-hearing officers in a previous rate case involving UTC. Appellant relies upon EC 9-3 of the Code of Professional Responsibility and Canon 3C of the Code of Judicial Conduct as authority for her position.

EC 9-3 of the Code of Professional Responsibility reads as follows:

"After a lawyer leaves judicial office or other public employment, he should not accept employment in connection with any matter in which he had substantial responsibility prior to his leaving, since to accept employment would give the appearance of impropriety even if none exists."

This does not describe the situation of attorney-examiner Royer, who is not the attorney that left the employ of the commission. Whether attorney Schaefer should have made an appearance in this cause for UTC has not been placed in issue before this court.

Canon 3C of the Code of Judicial Conduct states, in pertinent part:

"(1) A judge should disqualify himself in a proceeding in which his Impartiality might reasonably be questioned including but not limited to instances where:

" * * *udg

"(b) he served as a lawyer In the matter in controversy,...