Hempstead Cnty. Hunting Club, Inc. v. Sw. Elec. Power Co.

• Decision Date: 26 May 2011
• Docket Number: No. 10–1094.,10–1094.
• Citation: 2011 Ark. 234,385 S.W.3d 123
• Parties: HEMPSTEAD COUNTY HUNTING CLUB, INC., Petitioner v. SOUTHWESTERN ELECTRIC POWER COMPANY et al., Respondents.
• Court: Arkansas Supreme Court

2011 Ark. 234

385 S.W.3d 123

HEMPSTEAD COUNTY HUNTING CLUB, INC., Petitioner

v.SOUTHWESTERN ELECTRIC POWER COMPANY et al., Respondents.

No. 10–1094.

Supreme Court of Arkansas.

May 26, 2011.

Chisenhall, Nestrud & Julian, P.A., Little Rock, by: Charles R. Nestrud and Heather G. Moody; and Munsch, Hardt, Kopf & Harr, P.C., by: Frederick W. Addison, III, for petitioner.

Gill, Elrod, Ragon, Owen & Sherman, by: Kelly M. McQueen and Stephen K. Cuffman, Little Rock; and Matthews, Campbell, Rhoads, McClure, Thompson & Fryauf, P.A., Rogers, by: David R. Matthews, for respondent.

Kutak Rock LLP, Little Rock, by: David L. Williams; and Brickfield, Burchette, Ritts & Stone, P.C., by: John H. Conway, for amicus curiae East Texas Electric Cooperative, Inc.

Lori L. Burrows, Arkansas Pub. Serv. Comm'n, for amicus curiae Arkansas Public Service Commission.

KAREN R. BAKER, Associate Justice.

This case involves three questions of law certified to this court by the United States District Court for the Western District of Arkansas in accordance with our Supreme Court Rule 6–8 (2010). See Hempstead Cnty. Hunting Club, Inc. v. Southwestern Elec. Power Co., 2010 Ark. 438, 2010 WL 4524370 (per curiam). The certified questions arose from a complaint that petitioner Hempstead County Hunting Club, Inc. (“Hempstead”) filed in federal district court on July 13, 2010, asserting certain federal law claims,¹ as well as contending that by continuing construction of its plant (“Turk Plant”) in Hempstead County without a Certificate of Environmental Compatibility and Public Need (“CECPN”) or a Certificate of Convenience and Necessity (“CCN”), respondent Southwestern Electric Power Company, Inc. (“SWEPCO”) was violating Arkansas public-utility statutes. With respect to the state-law claims, Hempstead requested a declaratory judgment, stating that SWEPCO is required to obtain a CECPN or a CCN, and injunctive relief, enjoining SWEPCO from further construction on the Turk Plant until it obtains a CECPN or CCN. The district court certified the state-law questions on October 21, 2010, and this court accepted certification on November 11, 2010. The questions certified are as follows:

(1) If the state-law claims of the Hempstead County Hunting Club were not brought in the first instance before the Arkansas Public Service Commission (“PSC”), is court review of such claims precluded by Arkansas Code Annotated sections 23–1–108, 23–3–119, 23–3–206, 23–18–502(e), and 23–18–525 (Repl.2002), or by the common law of Arkansas concerning the exhaustion of administrative remedies?

(2) When a utility applies for, receives, and commences construction under a Certificate of Environmental Compatibility and Public Need (“CECPN”), has the utility voluntarily submitted to the jurisdiction of the PSC pursuant to Arkansas Code Annotated section 23–18–504(b) (Repl.2002) and thereby waived its right to claim exemption under section 23–18–504(a)(5)?

(3) Is a public utility seeking to build a major utility facility under the exemption set out in Arkansas Code Annotated section 23–18–504(a)(5) required to obtaina Certificate of Convenience and Necessity (“CCN”) under Arkansas Code Annotated section 23–3–201(a)?

As to the first question, we conclude that under Arkansas law, Hempstead was required to bring its claims before the PSC in the first instance; therefore, court review of the claims is precluded until Hempstead exhausts its administrative remedies. As a result of this conclusion, we do not reach the second and third certified questions, as reformulated.

In compliance with our per curiam order, Hempstead filed a brief in which it alleged that, under Arkansas law, (1) Arkansas courts have jurisdiction to declare that SWEPCO is required to obtain a CECPN or CCN; (2) SWEPCO waived the nonrate exemption from the CECPN requirement through its actions; and (3) even if SWEPCO is not required to obtain a CECPN, a CCN is still required. SWEPCO filed a brief in response.

I. Background

On May 13, 2010, this court handed down its decision in Hempstead Cnty. Hunting Club, Inc. v. Ark. Pub. Serv. Comm'n, 2010 Ark. 221, 384 S.W.3d 477. After granting the PSC's petition for review of the court of appeals' decision in Hempstead Cnty. Hunting Club, Inc. v. Ark. Pub. Serv. Comm'n, 2009 Ark. App. 511, 324 S.W.3d 697, we reversed and remanded the PSC's grant of a CECPN to SWEPCO for the construction, maintenance, and operation of the Turk Plant. The mandate issued June 24, 2010.

The day this court's mandate issued, SWEPCO filed a notice of exemption (“Notice”) with the PSC stating that the construction and operation of the Turk Plant would proceed under the exemption from the CECPN requirement pursuant to Ark.Code Ann. § 23–18–504(a)(5). SWEPCO elected not to recover the costs of the facility through rates that are subject to regulation by the PSC and instead planned to use capacity in the Turk Plant to provide retail electric services to consumers in Texas and Louisiana, which is regulated by the Texas and Louisiana utility commissions, and wholesale services subject to federal jurisdiction. Hempstead was served with a copy of the Notice but filed no response with the PSC, nor did it file any other claim for relief concerning the construction or operation of the Turk Plant with the PSC. The PSC issued an order on August 5, 2010, directing the secretary of the PSC to close the docket on this matter, “there being no further action to be taken in this matter at this time.”

II. Certified Questions

Under the first question, Hempstead raises three points. First, it alleges that the Utility Facility and Economic Protection Act, Ark.Code Ann. §§ 23–18–501 to –530 (Repl.2002 & Supp.2009) (“Utility Act”), unambiguously grants courts the authority to enforce the Utility Act. Second, Hempstead states that Ark.Code Ann. §§ 23–3–201 to –206 (Repl.2002 & Supp.2009) (“CCN Statute”) grants courts concurrent authority to enforce the CCN statute. Finally, it asserts that prior decisions of this court support the authority of the district court to resolve Hempstead's state-law claims, which are not excluded by the common-law doctrine of exhaustion of remedies.

Hempstead states that the federal district court has jurisdiction pursuant to Ark.Code Ann. § 23–18–525 (Repl.2002) to enforce compliance with the Utility Act by requiring SWEPCO to obtain a CECPN permit. The statute provides as follows:

Except as expressly set forth in §§ 23–18–505, 23–18–506, and 23–18–524, no court of this state shall have jurisdiction to hear or determine any issue, case, or controversy concerning any matter which was or could have been determined in a proceeding before the Arkansas Public Service Commission under this subchapter or to stop or delay the financing, construction, operation, or maintenance of a major utility facility except to enforce compliance with this subchapter or the provisions of a certificate issued under this subchapter.

Ark.Code Ann. § 23–18–525.

Hempstead asserts that the PSC's jurisdiction is exclusive “except to enforce compliance with this subchapter.” Hempstead focuses on this phrase in arguing that the federal district court has jurisdiction to compel SWEPCO to comply with the CECPN requirements. Hempstead acknowledges that the legislature granted the authority to administer the Utility Act to the PSC. It attempts to distinguish the present state-law claims as ones over which the court must interpret and enforce the Utility Act, rather than ones upon which the PSC must administer the CECPN law.

This argument is unpersuasive. We have not previously had cause to interpret section 23–18–525. The first rule in considering the meaning and effect of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language; when the language is plain and unambiguous, there is no need to resort to rules of statutory construction. Kesai v. Almand, 2011 Ark. 207, 382 S.W.3d 669.Section 23–18–525 plainly confers jurisdiction upon the PSC, and not the courts, to hear a controversy arising under the Utility Act. The exception relates to actions to enforce compliance with the Utility Act or a certificate issued under the Utility Act. Here, SWEPCO provided notice to the PSC that it claimed an exemption to the application of the CECPN requirement. Hempstead asserts that SWEPCO had waived its right to claim exemption. The place for Hempstead to seek relief from this action was before the PSC.

Hempstead next alleges that the district court has concurrent authority to enforce the CCN Statute. It states that if the court determines that SWEPCO is not required to obtain a CECPN, the court may exercise its authority to “enforce the CCN statute” by requiring that SWEPCO obtain a CCN. Hempstead concedes that the CCN Statute does not contain the express grant of jurisdiction to the courts to enforce the CCN Statute, but instead states that where the legislature gave the PSC the authority in Ark.Code Ann. § 23–3–206(a) (Repl.2002) to act on a complaint alleging that a public utility is constructing or operating a facility in violation of the statute, the legislature did not intend to grant exclusive authority to the PSC. Hempstead relies on the following statutory language to illustrate the legislature's intent not to give the PSC exclusive jurisdiction under section 23–3–206: “Nothing in this act shall be construed to in any way restrict the jurisdiction of any court of equity.” Ark.Code Ann. § 23–1–108(a) (Repl.2002).

We have held that a court of equity does not have concurrent jurisdiction with the PSC in public-utility litigation where there is a clear, adequate, and complete remedy by an application to the PSC. See Okla. Gas & Elec. Co. v. Lankford, 278 Ark. 595, 648 S.W.2d 65 (1983). Here, Hempstead had a clear, adequate, and complete remedy by filing a complaint under section 23–3–119. Providing the PSC the opportunity in the first instance to decide the...