Hoffman v. Northern States Power Co., No. A06-2275.

• Decision Date: 22 January 2008
• Docket Number: No. A06-2275.
• Citation: 743 N.W.2d 751
• Parties: Irene HOFFMAN, et al., Respondents, v. NORTHERN STATES POWER COMPANY, d/b/a Xcel Energy Appellant.
• Court: Minnesota Court of Appeals

743 N.W.2d 751

Irene HOFFMAN, et al., Respondents, v. NORTHERN STATES POWER COMPANY, d/b/a Xcel Energy Appellant.

No. A06-2275.

Court of Appeals of Minnesota.

January 22, 2008.

Vincent J. Esades, Lori A. Johnson, Scott W. Carlson, Heins Mills & Olson, P.L.C., Minneapolis, MN, Charles S. Siegel (pro hac vice), Waters & Kraus, LLP, Dallas, TX, for respondents.

Timothy R. Thornton, Thomas J. Basting, Jr., Briggs and Morgan, P.A., Minneapolis, MN, for appellant.

Considered and decided by HALBROOKS, Presiding Judge; STONEBURNER, Judge; and MINGE, Judge.

OPINION

HALBROOKS, Judge.

By certified question pursuant to Minn. R. Civ.App. P. 103.03(i), the district court asks (1) whether the filed-rate doctrine bars respondents' action and (2) whether the primary-jurisdiction doctrine requires the district court to defer resolution of the services required by the applicable tariffs to the responsible administrative agency. Because respondents' claim for damages, along with either specific performance or injunctive relief, amounts to an attack on tariffs filed with the appropriate regulatory entity, we answer the first certified question in the affirmative, reverse the district court's denial of a motion to dismiss on that ground, and remand to the district court for entry of judgment. Because our answer to the first certified question is dispositive, we do not reach the second certified question.

FACTS

Appellant Northern States Power Company, d/b/a Xcel Energy (NSP), provides electrical service to customers located in Minnesota, North Dakota, and South Dakota. The relationship between NSP and its customers is regulated by tariffs authorized by the utility regulatory agencies of the three states. The tariffs set forth the rates that NSP charges for services as well as the obligations of NSP and its customers to each other. All three states have identical tariffs.

In Minnesota, the legislature has established a comprehensive system for, the, regulation of utilities. Minn.Stat. §§ 21611.01-216B.82 (2006). Enforcement of the regulations prescribed therein is delegated to the Minnesota Public Utilities Commission (MPUC), which is charged with providing Minnesota consumers with reasonable energy rates. Minn. Stat. §§ 216B4.01, 216B.08. All public utilities must file their rates, tolls, tariffs, and charges, along with all rules and contracts that will affect those rates, tolls, tariffs, and charges, with the MPUC. Minn.Stat. § 216B.05. The MPUC is charged with setting rates that are reasonable and are not prejudicial or discriminatory. Minn. Stat. § 216B.03.

On March 15, 2006, respondents Irene and David Hoffman, Jerry Ustanko, and Mulungeta Endayehu filed a complaint in district court, individually and "on behalf of all of [NSP's] residential electric customers in Minnesota, North Dakota and South Dakota." Respondents alleged that NSP violated its contractual obligation to maintain "points of connection" between its wires and its customers' homes.

According to respondents, NSP initially connects a customer to its system by affixing wires to lugs within the customer's meter box. After securing this connection, NSP installs a seal on the meter box to prevent access by the customer, a measure provided for in the tariffs. Respondents contend, that over time, these connections can become corroded, loose, or both, causing a fire hazard. They argue that NSP is obligated under the tariffs to inspect and maintain its electrical wiring up through and including this connection point. The applicable tariffs provide:

The service conductors as installed by the Company from the distribution line to the point of connection with the customer's service entrance conductors will be the Company's property and will be maintained by the Company at its own expense.

The customer will provide for the safekeeping of the Company's meters

....

ALL WIRING AND EQUIPMENT ON CUSTOMER'S SIDE OF THE POINT OF CONNECTION, EXCEPT METERING EQUIPMENT, WILL BE FURNISHED, INSTALLED, AND MAINTAINED AT THE CUSTOMER'S EXPENSE

(Emphasis added.) Respondents argue that they pay for maintenance of the points of connection through a "basic service charge" included in the monthly bill that they receive from NSP. They seek damages equal to the value of the inspections and maintenance that they claim are required and also seek either injunctive relief or specific performance requiring NSP to maintain the points of connection going forward.

On August 16, 2006, NSP moved for judgment on the pleadings, arguing that two principles of regulatory law, the filedrate doctrine and the primary-jurisdiction doctrine, required the district court to decline jurisdiction over the case. The district court denied this motion on November 1, 2006. But on November 18, 2006, the district court certified two questions to this court: (1) whether the filed-rate doctrine bar respondents' claims and (2) whether the primary-jurisdiction doctrine requires the court to defer resolution of the services required by the applicable tariffs to the responsible administrative agency. This certified appeal follows.

ISSUES

I. Did the district court properly certify the application of the filed-rate doctrine as an important and doubtful question?

II. Does the filed-rate doctrine bar respondents' claim?

ANALYSIS

I.

Before addressing the merits of the parties' arguments, we must determine whether there is proper jurisdiction for this appeal. Respondents argue that the applicability of the filed-rate doctrine is not an issue that is appropriate for certification under Minn. R. Civ.App. P. 103.03(i), which allows an appeal from the denial of a motion to dismiss upon the district court's certification of questions as "important and doubtful." See In re Welfare of Child of L.M.L., 730 N.W.2d 316, 319 (Minn.App.2007). This court independently reviews whether a certified question is important and doubtful. Id.

A question is important if "(1) it will have statewide impact, (2) it is, likely to be reversed, (3) it will terminate lengthy proceedings, and (4) the harm inflicted on the parties by a wrong ruling by the district court is substantial." Jostens, Inc. v. Federated Mut. Ins. Co., 612 N.W.2d 878, 884 (Minn.2000). "[A] great deal of importance should be placed on whether reversal of the question will terminate the proceedings." Id.

"A question is `doubtful' only if there is no controlling precedent. That the question is one of first impression is not, however, of itself sufficient to justify certification ... there [must be] substantial ground for a difference of opinion." Emme v. C.O.M.B., Inc., 418 N.W.2d 176, 179-80 (Minn.1988). Parties may not use the certification process as a substitute for the normal appellate process or to secure an advisory opinion. Jacka v. Coca-Cola Bottling Co., 580 N.W.2d 27, 30 (Minn. 1998).

Whether the filed-rate doctrine bars respondents' claim is important. The district court properly determined that certification could terminate potentially lengthy proceedings, a factor of primary importance under Jostens. See Jostens, 612 N.W.2d at 884. This is particularly true here, because uncertainty in the law makes any decision of the district court subject to reversal. In addition, because respondents are attempting to certify a class, if allowed to proceed this case could have impact throughout Minnesota and beyond into North and South Dakota.

The question is also doubtful. Minnesota courts have only held that one prior action was barred based on the filed-rate doctrine. Schermer v. State Farm Fire & Cas. Co., 721 N.W.2d 307 (Minn.2006). No Minnesota appellate court has addressed the filed-rate doctrine in the context of the utility rates at issue here. Further, there appears to be a among federal authorities as to whether the doctrine precludes claims that are seeking no more than interpretation and enforcement of the terms of a tariff. Compare H.J. Inc. v. Nw. Bell Tel. Co., 954 F.2d 485, 488 (8th Cir.1992), with Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d 1166, 1166 (9th Cir.2002).

Because whether the filed-rate doctrine bars respondents' claim is an important and doubtful question, we hold that certification is appropriate under rule 103.03(i). It is therefore unnecessary to reach NSP's argument that immediate review is also appropriate under rule 103.03(j). A certified question is a question of law, which we review de novo. B.M.B. v. State Farm Fire & Cas. Co., 664 N.W.2d 817, 821 (Minn.2003).

II.

The filed-rate doctrine, as applied by the United States Supreme Court for more than a century, forbids a regulated entity from charging its customers a rate other than the one duly filed with the appropriate regulatory authority. See H.J. Inc., 954 F.2d at 488 (citing Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577, 101 S.Ct. 2925, 2930, 69 L.Ed.2d 856 (1981)); see also Tex. & Pac. R.R. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907). As a necessary corollary to this rule, customers are precluded from challenging in court the reasonableness of a filed rate. See Keogh v. Chicago & Nw. R.R., 260 U.S. 156, 165, 43 S.Ct. 47, 50, 67 L.Ed. 183 (1922) (holding that filedrate doctrine precluded antitrust claim by shipper against carrier seeking to recover a portion of the filed rate). This preclusion against suit extends to claims challenging the services provided in exchange for a filed rate. See AT & T Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 223, 118 S.Ct. 1956, 1963, 141 L.Ed.2d 222 (1998). As the United States. Supreme Court has explained, "Rates ... do not exist in isolation. They have meaning only when one knows the services to which they are attached. Any claim for excessive rates can be couched as a claim for inadequate services and vice versa." Id.

The Minnesota Supreme Court adopted the filed-rate doctrine in Schermer, 721 N.W.2d at 319. In Schemer, the appellant-insureds brought suit against the providers of their...