Fischer v. Iowa State Commerce Com'n

• Decision Date: 22 May 1985
• Docket Number: No. 84-279,84-279
• Citation: 368 N.W.2d 88
• Parties: H. William FISCHER, Appellant, v. IOWA STATE COMMERCE COMMISSION, Appellee, and Dairyland Power Cooperative, Appellee.
• Court: Iowa Supreme Court

Page 88

368 N.W.2d 88

H. William FISCHER, Appellant, v. IOWA STATE COMMERCE COMMISSION, Appellee and Dairyland Power Cooperative, Appellee.

No. 84-279.

Supreme Court of Iowa.

May 22, 1985.

Emil Trott, Jr. of Barrett & Trott, Des Moines, for appellant.

Philip E. Stoffregen, Gen. Counsel, Patrick J. Nugent, Deputy Counsel, and Diane Munns, Asst. Gen. Counsel, Des Moines, for appellee Iowa State Commerce Com'n.

Joseph Steele, Postville, and William D. Harvey and Thomas J. Zaremba of Wheeler, Van Sickle, Anderson, Norman & Harvey, P.C., Madison, Wisconsin, for appellee Dairyland Power Co-op.

Considered by UHLENHOPP, P.J., and McCORMICK, SCHULTZ, CARTER, and WOLLE, JJ.

CARTER, Justice.

Petitioner William H. Fischer has appealed from the denial of his petition for judicial review of the action of the Iowa State Commerce Commission (the commission) in granting a franchise to appellee Dairyland Power Cooperative (DPC) for the construction of an electrical transmission line in Clayton County, Iowa.

DPC is a generation and transmission co-operative which serves as a wholesale supplier of electrical energy to some twenty-nine distribution co-operatives in Wisconsin, Minnesota, Illinois and Iowa. One of these distribution co-operatives is the Allamakee-Clayton Electric Cooperative, which in turn serves customers in Northeast Iowa, including the area in question.

On July 9, 1981, DPC filed a petition for franchise pursuant to Iowa Code section 478.2, seeking permission to construct a 72,000 volt transmission line, 4.2 miles in length, between existing lines and a proposed substation in Clayton County. Pursuant to Iowa Code section 478.6, DPC also sought to obtain the power of eminent domain in order to obtain easements across the land of those property owners along the route of the proposed transmission line who did not voluntarily grant it such easements. Petitioner is one of the affected property owners.

More than two years before filing its petition, DPC gave notice of and held an informational public hearing in Clayton County, as required by Iowa Code section 478.2. As an affected property owner, petitioner was given notice of the filing of the petition on September 23, 1981 and of his right to make objections to the petition. He was further notified at this time that a hearing would be held on the petition commencing October 27, 1981.

Petitioner did file objections to the granting of the franchise in accordance with section 478.5. A hearing before a hearing officer of the commission was held on October 27, 1981. No discovery was requested by petitioner prior to the hearing date. At the hearing, petitioner orally moved to dismiss the petition for failure to provide the information and substantiation required by Iowa Code section 478.3. Ruling on this motion was deferred by the hearing officer, pending submission of evidence, but the motion was ultimately denied.

DPC presented testimony and exhibits at the October 27 hearing concerning the public need for and the planning background of the proposed transmission line. Petitioner cross-examined DPC's witnesses and testified in his own behalf. He offered economic data which he contended demonstrated that population loss and changes in the dairy industry would produce a decreased demand for power rather than an increased demand as contended by DPC. At the conclusion of the October 27 hearing, the hearing officer, at the request of the commission staff and without objection by petitioner, provided that additional information could be submitted by DPC at a later time in the form of exhibits. Such additional exhibits were filed with the commission by DPC between November 10 and December 7, 1981. Upon their filing, petitioner objected on the ground that the full text of these documents had been omitted. He also expressed the desire to cross-examine DPC employees and other knowledgeable persons concerning the contents of these documents. In apparent response to the latter request and also upon a request of the commission staff to reopen the hearing, the hearing officer ordered on February 26, 1982 that the hearing be reopened.

The hearing officer's order provided that the purpose of the reopened hearing was to allow petitioner to cross-examine witnesses with respect to those exhibits submitted subsequent to the October hearing and to present any rebuttal evidence he might have to such exhibits. The order fixed the time of the reopened hearing for April 20, 1982 and, in addition, provided:

On or before March 22, 1982, all parties shall file and serve prepared direct testimony, which testimony shall set out all additional facts which the parties consider necessary to a final decision in this matter. The parties shall be limited to cross-examination of such prepared direct testimony but may present additional testimony rebutting the prepared testimony of the opposing party.

DPC filed the proposed direct testimony of its witnesses prior to the reopened hearing, and petitioner filed his own proposed direct testimony. The testimony of petitioner's expert witnesses was treated as rebuttal evidence under the foregoing order, and, therefore, the prepared testimony of those witnesses was not filed.

On March 9, 1982, petitioner filed and served on DPC discovery interrogatories. These interrogatories were answered by DPC on April 5, 1982. A subsequent motion by petitioner to compel DPC to file more complete answers to these interrogatories was denied by the hearing officer on the morning of the reopened hearing. On March 25, 1982, the hearing officer permitted DPC to amend its petition so as to allege those matters specified in subsection 2 of Iowa Code section 478.3.

Following consideration of the dispute concerning the adequacy of DPC's responses to the interrogatories, the hearing was reopened and evidence presented by the parties. The hearing officer denied petitioner's renewed challenge to the sufficiency of the petition, both as initially filed and as amended. The hearing officer further found that the proposed transmission line was necessary to serve a public use and reasonably related to an overall plan of transmitting electricity in the public interest.

Petitioner appealed the hearing officer's decision to the commission which, in a separate opinion, affirmed that ruling. In dealing with the hearing officer's rulings on Fischer's motions to dismiss, the commission noted that its previous practice in considering franchise petitions was to order amendment of the petition upon proper challenge thereto rather than dismissing the proceedings.

Following the final agency action, petitioner timely sought judicial review of the commission's order pursuant to section 17A.19. DPC intervened in the proceeding. The district court upheld the commission's ruling with respect to the claimed inadequacy of DPC's petition. Petitioner also challenged on judicial review the matter of whether there was substantial evidence in the record, considered as a whole to uphold the granting of the franchise. The district court determined that there was. The district court affirmed the commission's ruling in all respects, and this appeal ensued. Other factual matters not previously detailed will be considered in connection with our discussion of the legal issues which are presented on the appeal.

I. Scope of Review.

Our review, like that of the district court, is to correct errors of law made by the agency. In so doing, we apply the standards of section 17A.19(8) to the agency action. Northwestern Bell Telephone Co. v. Iowa State Commerce Commission, 359 N.W.2d 491, 495 (Iowa 1984); Lefebure Corp. v. Iowa Department of Job Service, 341 N.W.2d 768, 770 (Iowa 1983). In this case, relief is sought in part because of an alleged failure of the commission to require DPA to comply with the statutory conditions for granting a franchise as well as a lack of substantial evidence in the record to factually satisfy the statutory requirements. Thus, subsections (a), (d), and (e) of section 17A.19(8) are involved in our review as well as subsection (f) thereof.

II. Effect of DPC's Failure to Include All Statutory Allegations in the Petition Filed with the Commission.

The first issue on appeal centers around petitioner's claim that the proceedings before the commission were invalid as a result of the DPC's failure to set forth in its petition all of the allegations required by Iowa Code section 478.3 (1981). He filed a motion to dismiss DPC's petition and amended petition on this ground. Section 478.3 provides:

1. All petitions shall set forth:

a. The name of the individual, company, or corporation asking for the franchise.

b. The principal office or place of business.

c. The starting points, routes, and termini of the proposed lines, accompanied with a map or plat showing such details.

d. A general description of the public or private lands, highways, and streams over, across, or along which any proposed line will pass.

e. General specifications as to materials and manner of construction.

f. The maximum voltage to be carried over each line g. Whether or not the exercise of the right of eminent domain will be used and, if so, a specific reference to the lands described in paragraph "d" which are sought to be subject thereto.

h. An allegation that the proposed construction is necessary to serve a public use.

2. Petitions for transmission lines carrying thirty-four point five kilovolts or more and extending a distance of not less than one mile across privately owned real estate shall also set forth an allegation that the proposed construction represents a reasonable relationship to an overall plan of transmitting electricity in the public interest and substantiation of such allegations, including but not limited to, a showing of the following:

a. The relationship of the proposed project to present and future economic development of the area.

b. The relationship of the proposed project...