Greenlining Institute v. Public Utilities Commision

• Decision Date: 27 November 2002
• Docket Number: No. A098037.,A098037.
• Citation: 127 Cal.Rptr.2d 736,103 Cal.App.4th 1324
• Court: California Court of Appeals Court of Appeals
• Parties: The GREENLINING INSTITUTE et al., Petitioners, v. The PUBLIC UTILITIES COMMISION of the State of California, Respondent; Pacific Bell Telephone Company, Real Party in Interest.

127 Cal.Rptr.2d 736

103 Cal.App.4th 1324

The GREENLINING INSTITUTE et al., Petitioners, v. The PUBLIC UTILITIES COMMISION of the State of California, Respondent; Pacific Bell Telephone Company, Real Party in Interest.

No. A098037.

Court of Appeal, First District, Division 3.

November 27, 2002.

Review Denied February 19, 2003.

Robert Gnaizda, San Francisco, Itzel Berrio, The Greenlining Institute, Terry J. Houlihan, Thomas S. Hixon, Randall Hegarty, McCutchen, Doyle, Brown & Enersen, San Francisco, Susan E. Brown, Latino Issues Forum, for Petitioner.

Gary M. Cohen, Mary F. McKenzie, San Francisco, Judith Allen, for Respondent.

James B. Young, David A. Discher, Robert A. Mittelstaedt, Craig E. Stewart, Patrick S. Thompson, Pillsbury, Winthrop, San Francisco, for Real Party in Interest.

PARRILLI, J.

This petition for writ of review arises out of proceedings brought before the Public Utilities Commission (PUC) by several consumer groups and individual consumers against Pacific Bell (Pacific), alleging that Pacific engaged in deceptive marketing of its optional telephone services. The PUC determined that certain of Pacific's practices were unlawful and ordered prospective and retrospective relief.¹

The Greenlining Institute, the Latino Issues Forum, and 17 individuals identified as California residents and customers of Pacific (collectively, Greenlining) seek review of the PUC's decision not to adjudicate Greenlining's claims that Pacific's conduct violated the Unfair Business Practices Act (Bus. & Prof.Code, § 17200 et seq.)² and the False Advertising Act (§ 17500 et seq.), together, the Unfair Competition Law (UCL). We conclude Greenlining's arguments lack merit.

Ordinarily, we would issue a summary denial of a petition found to lack merit. However, we take the somewhat unusual step of writing to express our reasoning for denying Greenlining's petition because of the importance of the legal issue presented.³

I. Factual and Procedural History

In 1998, the Utility Consumers' Action Network (UCAN), Greenlining, and the Telecommunications Union, California Local 103, International Federation of Professional and Technical Engineers, AFCIO (TIU) filed complaints against Pacific with the PUC. The complaints alleged that Pacific was using a variety of misleading and deceptive marketing practices to sell optional services to customers in violation of various laws and PUC orders. All the allegations relate to marketing practices on incoming calls to Pacific's service representatives from residential customers.

Greenlining's complaint alleged violation of Public Utilities Code sections 451, 2893 and 2896, subdivision (a) and tariff rule 12. Greenlining also alleged that Pacific's conduct constituted unfair competition in violation of section 17200 et seq. and false and deceptive advertising in violation of section 17500 et seq.

In June 1998, the administrative law judge consolidated the complaints into one adjudicatory proceeding and included a petition filed by the PUC's Office of Ratepayer Advocates that raised similar issues. The Utility Reform Network (TURN) and the Communications Workers of America (CWA) were allowed to intervene.

On September 20, 2001, the PUC ruled by a three- to two-margin in favor of Pacific on some issues, but also found that Pacific had engaged in misleading or potentially misleading marketing practices. (TURN v. Pacific Bell (2001) Cal. P.U.C. Dec. No. 01-09-058, 2001 WL 1530161 (hereafter Final Opinion).) It declined to rule on the UCL claims.

The PUC ordered various remedies, including that Pacific must provide certain notices and disclosures to customers and must file an advice letter modifying tariff rule 12, which deals with disclosures of rates and information to the public. It also ordered changes to the manner in which service representatives handle customer calls and capped sales-based incentive compensation. Pursuant to Public Utilities Code section 2107, the PUC assessed a fine for two violations, Pacific's marketing of caller ID blocking options and its sequential marketing of optional services. Finding that the violations were continuing, the PUC imposed per-day penalties totaling $25.55 million.

Greenlining, CWA and Pacific filed applications for rehearing. Greenlining contended that it was error for the PUC to decline to rule on its Business and Professions Code claims and that the fines assessed against Pacific were too low. The PUC granted limited rehearing to (1) change the ending date for the penalty period, which reduced the amount of penalties to $15,225 million, (2) eliminate the cap on incentive compensation, and (3) correct errors and insert additional language. (Order Granting Limited Rehearing and Modifying Dec. No. 01-09-058 (2002) Cal. P.U.C. Dec. No. 02-02-027 (hereafter Rehearing Order).) In rejecting Greenlining's claim that the PUC was required to adjudicate its UCL claims, the Rehearing Order indicated that "the Commission has discretion to leave enforcement of certain claims to the courts." The PUC concluded that it had "resolved the issues presented in this case" and that it "did not have to rely on Business and Professions Code sections to fashion a remedy to dispose of the complaints."

Greenlining timely petitioned this court for review.

II. Discussion

Greenlining makes a number of arguments that the PUC erred in declining to rule on its UCL claims and that this court should remand to the PUC for appropriate determinations. But the threshold issue the petition presents is the purely legal question whether the PUC has jurisdiction over such claims in the first place. Because we conclude it does not, Greenlining's other arguments are moot.

Greenlining bases its argument that the PUC has jurisdiction over UCL claims on the Legislature's broad grant of authority to the PUC to adjudicate complaints. Public Utilities Code section 1702 provides that the PUC has adjudicatory power over complaints "made by the commission of its own motion or by any [person] by written petition or complaint, setting forth any act or thing done or omitted to be done by any public utility ... in violation or claimed to be in violation, of any provision of law or of any order or rule of the commission." According to Greenlining, because Pacific is a public utility and sections 17200 et seq. and 17500 et seq. are provisions of law, "[i]t follows that the Commission has jurisdiction over Greenlining's claims under those provisions."

A. Section 17200⁴

Our analysis of whether the PUC has jurisdiction over unfair business practices claims must begin with section 17204. Section 17204 provides, in relevant part: "Actions for any relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or any district attorney ... or by any person acting for the interests of itself, its members or the general public." Respondent PUC and real party in interest Pacific contend this provision is dispositive against Greenlining.

In stating that it would not rule on the UCL claims, the PUC cited section 17204: "Our disposition of the instant complaint rests on Public Utilities] Code issues, and we do not adjudicate the Unfair Competition Law claims. (See Business and Professions] Code § 17204.)" (Final Opinion at p. 9.) Despite its obvious relevance, Greenlining did not even mention this section in its petition. In fact, Greenlining went so far as to quote from the Final Opinion in its petition, including the same sentence quoted above but omitted the PUC's citation to section 17204, noting only "(citations omitted)."⁵

The statutory language is clear. Actions seeking any relief under section 17200 et seq. "shall," i.e., must, be brought in court. If the words of a statute are reasonably free of ambiguity and uncertainty, we look no further than those words to determine the meaning of that language. (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1503, 82 Cal.Rptr.2d 368; see also Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 443, 261 Cal.Rptr. 574, 777 P.2d 610 [noting the "well-settled principle of statutory construction that the word `may' is ordinarily construed as permissive, whereas `shall' is ordinarily construed as mandatory, particularly when both terms are used in the same statute"].)

Moreover, the 1993 amendment to section 17204 leaves no doubt as to the appropriate forum for section 17200 actions. The amendment substituted "shall be brought exclusively in a court of competent jurisdiction" for "may be prosecuted." (Historical and Statutory Notes, 5 West's Ann. Bus. & Prof.Code (1997 ed.) foll. § 17204, p. 173, emphasis added.) The legislative history, although sparse, is clear. Entitled "Clarifying Proper Forum for Unfair Competition Actions," the proposal's analysis stated, "[t]his proposal would clarify that actions for remedies under the unfair competition statute should be filed with and adjudicated by the `court of competent jurisdiction,' generally the Superior Court in the county in which the unfair acts or practices took place." (Assem. Com. on Judiciary, corns, on Sen. Bill No. 2205 (1993-1994 Reg. Sess.) for hearing of July 13, 1993 [proposal of Thomas A. Papageorge, Head Deputy District Attorney, Consumer Protection Division, Los Angeles District Attorney's Office].)

Greenlining does not dispute the clarity of the statutory language or that actions for relief under section 17200 must be brought in the courts. Rather, Greenlining argues that section 17204 is "irrelevant" and inapplicable to its proceeding because it filed an administrative complaint before the PUC, not an action before a court.

Greenlining contends that the word "action" as used in section 17204 has a limited meaning and refers only to court proceedings, exempting its administrative complaint to the PUC. Greenlining constructs this argument by noting that Code of Civil Procedure section 22 defines "action" as "an...