In re Entergy Corp.

• Decision Date: 25 June 2004
• Docket Number: No. 03-0024.,03-0024.
• Citation: 142 S.W.3d 316
• Parties: In re ENTERGY CORPORATION, et al.
• Court: Texas Supreme Court

142 S.W.3d 316

In re ENTERGY CORPORATION, et al.

No. 03-0024.

Supreme Court of Texas.

Argued November 12, 2003.

Decided June 25, 2004.

Howard V. Fisher, Hunton & Williams, Dallas, Steven D. Arnold, Hensley, Shanor & Martin, L.L.P., Austin, John R. Hulme, for amicus curiae.

Lawrence L. Germer, Kelli Lynn Smith, Germer Gertz, L.L.P., Beaumont, Mark Held, Clark Thomas Winters, Austin, Paul A. Scheurich, Benckenstein Norvell & Nathan LLP, L. Richard Westerburg, Beaumont, John F. Williams, for relator.

Lindol Bruce Gregory, Daniel Joseph Lawton, Austin, H.P. Wright, for respondent.

Justice SMITH delivered the opinion of the Court.

This dispute arises from a private settlement agreement incorporated in a Public Utility Commission order. After the underlying lawsuit was filed, the trial court denied Entergy Corporation's¹ Motion to Transfer Venue, Motion to Dismiss for Want of Subject Matter Jurisdiction, and Motion to Abate. Entergy, having failed to secure relief from the court of appeals, now seeks a writ of mandamus from this Court on the basis that the Public Utility Commission has exclusive jurisdiction over the subject matter of this dispute. Because we agree, we conditionally grant the writ.

I. Background

In 1992, Entergy agreed to purchase Gulf States Utilities Company ("GSU"), an electric utility serving customers in eastern Texas and western Louisiana. In order to obtain the requisite regulatory approval for the transaction, Entergy and GSU filed an administrative proceeding, styled Docket No. 11292, with the Public Utility Commission of Texas ("PUC"). In 1993, Entergy, GSU, and various other parties² reached an agreement (the "Merger Agreement") which they filed with the PUC as a proposal for resolving Docket No. 11292. The Merger Agreement called for certain anticipated merger-related savings to be shared between rate-payers and shareholders. Nonfuel-related cost savings for the first eight years after the merger were to be divided equally between ratepayers and shareholders. After eight years, all savings were to be passed on to the ratepayers. The Merger Agreement stated that savings were to be reflected in the new entity's rates and would be implemented in three post-merger rate proceedings during the eight-year term of the agreement pursuant to either section 42 or 43 of the Public Utility Regulatory Act.³

The PUC adopted the Merger Agreement in its order approving the Entergy/GSU merger application. The order stated that "[a]pplicants [Entergy and GSU] SHALL comply with the terms and conditions set forth in the [Merger Agreement]" and that "GSU SHALL file PURA § 43 rate cases on the schedules and for the purposes established in [the Merger Agreement]." Entergy and GSU then completed the merger, resulting in a new entity known as Entergy Gulf States, Inc. ("EGSI"). Entergy Corporation is EGSI's sole shareholder.

EGSI filed and completed the first two rate cases contemplated by the Merger Agreement. While the second rate case was pending before the PUC, the Legislature passed Senate Bill 7, mandating retail electric deregulation in Texas. Act of May 27, 1999, 76th Leg., R.S., ch. 405, 1999 Tex. Gen. Laws 2543 (codified as Public Utility Regulatory Act (PURA), Tex. Util.Code §§ 39.001-41.104 (1998)). Senate Bill 7 dramatically altered the electric utility landscape in Texas by requiring the unbundling of generation, transmission, and distribution services. PURA § 39.051. Senate Bill 7 also froze electric utility rates through December 31, 2001 and called for retail competition to begin January 1, 2002. PURA § 39.052(a).

The passage of Senate Bill 7 raised the question of whether EGSI would be required to proceed with the third rate case contemplated by the Merger Agreement which was scheduled to be filed in November 2001. The PUC addressed the question in Docket No. 22356, an EGSI Senate Bill 7 implementation proceeding. A June, 2000 PUC preliminary order stated:

The Commission concludes that PURA § 39.201 is quite specific and does not contemplate an additional filing in 2001. Section 39.201(a) requires a utility to file its proposed rates for the transmission and distribution utility not later than April 1, 2001. Subsection (d) directs the Commission to hold hearings and approve or modify the proposed tariff and make the tariff effective January 1, 2002. The Commission intends to comply with this statutory scheme and set Entergy's transmission and distribution rates in this proceeding and will not require Entergy to file a rate case in November 2001.

As the statutory start date for retail competition approached, EGSI requested that the PUC, as authorized by section 39.103 of PURA, postpone the start of retail competition in EGSI's service area. In late 2001, in Docket No. 24469, EGSI, the staff of the PUC, and various other signatories⁴ entered into an agreement (the "Settlement Agreement") whereby retail competition in EGSI's service territory would be postponed until September 15, 2002, or later if necessary. The Settlement Agreement was adopted in a December, 2001 PUC order. During the interim, EGSI would continue to charge its customers the rates frozen by Senate Bill 7.

In February 2002, Dale Shearer and several other EGSI ratepayers, the plaintiffs in the underlying case, brought suit in district court alleging that Entergy and EGSI breached the Merger Agreement when they entered into the Settlement Agreement because the two agreements' terms are inconsistent. That is, Shearer alleges that the Settlement Agreement conflicts with the Merger Agreement's requirement that a third proceeding be filed with the PUC and that certain merger-related savings inure to the ratepayers.

In the trial court, Entergy filed a Motion to Transfer Venue, a Motion to Dismiss for Want of Subject Matter Jurisdiction, and a Motion to Abate. After conducting multiple hearings, the trial court denied Entergy's motions. Entergy then sought a writ of mandamus from the court of appeals on the same motions, but was again denied. We agreed to consider Entergy's petition for writ of mandamus to determine if the trial court had subject matter jurisdiction over the lawsuit.

II. Mandamus

Mandamus relief is appropriate only if the court clearly abused its discretion and the relator has no adequate remedy by appeal. In re Southwestern Bell Tel. Co., 35 S.W.3d 602, 605 (Tex.2000). As a general rule, mandamus does not lie to correct incidental trial court rulings when there is a remedy by appeal. Bell Helicopter Textron, Inc. v. Walker, 787 S.W.2d 954, 955 (Tex.1990) (concluding that mandamus was not appropriate to review trial court's ruling on plea to the jurisdiction).

The reluctance to issue extraordinary writs to correct incidental trial court rulings can be traced to a desire to prevent parties from attempting to use the writ as a substitute for an authorized appeal. See, e.g., United States Alkali Export Ass'n v. United States, 325 U.S. 196, 202-03, 65 S.Ct. 1120, 89 L.Ed. 1554 (1945) (recognizing that "hardship is imposed on parties who are compelled to await the correction of an alleged error at an interlocutory stage by an appeal from final judgment"). This Court has long held that the mere cost and delay of pursuing an appeal will not, in themselves, render appeal an inadequate alternative to mandamus review. See Iley v. Hughes, 158 Tex. 362, 311 S.W.2d 648, 652 (1958) ("[T]hat there may be some delay in getting questions decided through the appellate process, or that court costs may thereby be increased, will not justify intervention by appellate courts through the extraordinary writ of mandamus.").

In certain circumstances, we have recognized that incidental trial court rulings can be corrected by writ of mandamus. See, e.g., Geary v. Peavy, 878 S.W.2d 602, 603 (Tex.1994) (concluding that mandamus was appropriate to resolve jurisdictional dispute between Texas and Minnesota courts that led to conflicting child custody orders); State Bar of Tex. v. Jefferson, 942 S.W.2d 575, 575-76 (Tex. 1997) (granting mandamus relief after concluding that trial court was without jurisdiction to issue temporary restraining order staying administrative grievance proceeding).

In each of these instances, the Court exercised its jurisdiction not merely because inaction would have caused hardship to the parties, but because special, unique circumstances mandated the Court's intervention. Here, the possibility that Entergy will be forced to endure the "hardship" of a full-blown trial if we decline to issue a writ of mandamus is, in itself, not sufficient to dictate mandamus relief. But Entergy's hardship is not the only factor we consider in deciding whether mandamus is appropriate. We must also consider that if Entergy is correct in its assertion that the PUC has exclusive jurisdiction, permitting a trial to go forward would interfere with the important legislatively mandated function and purpose of the PUC. Cf. State v. Sewell, 487 S.W.2d 716, 719 (Tex.1972) (granting mandamus to vacate injunction barring Grievance Committee proceedings because injunction was "an interference with the grievance procedures authorized by ... the State Bar Act" and restating that mandamus may be appropriate when "the orderly processes of government" are disturbed); U.S. Alkali, 325 U.S. at 203-04, 65 S.Ct. 1120 (concluding that extraordinary writ would be appropriate to correct federal district court's denial of motion to dismiss complaint if Federal Trade Commission had jurisdiction). In short, if the PUC has exclusive jurisdiction in this dispute, the judicial appropriation of state agency authority would be a clear disruption of the "orderly processes of government." This disruption, coupled with the hardship imposed on Entergy by a postponed appellate review, warrants an exception to our general proscription against using mandamus to correct incidental trial court rulings.

III. Applicable Law

Entergy asserts that the PUC has...