Lincoln v. Arkansas Public Service Com'n

• Decision Date: 18 November 1992
• Docket Number: No. CA,CA
• Citation: 40 Ark.App. 27,842 S.W.2d 51
• Parties: Ivy LINCOLN and Arkansas Power & Light Co., Appellants, v. ARKANSAS PUBLIC SERVICE COMMISSION, Appellee. 91-489.
• Court: Arkansas Court of Appeals

Page 51

842 S.W.2d 51

40 Ark.App. 27

Ivy LINCOLN and Arkansas Power & Light Co., Appellants, v. ARKANSAS PUBLIC SERVICE COMMISSION, Appellee.

No. CA 91-489.

Court of Appeals of Arkansas En Banc.

Nov. 18, 1992.

Ivy Lincoln, Edward B. Dillon, Little Rock, for appellants.

Paul J. Ward, Lawrence E. Chisenhall, Jr., Little Rock, for appellee.

MAYFIELD, Judge.

The sole issue involved in this appeal is whether the Arkansas Public Service Commission erred in dismissing appellant Ivy Lincoln's complaint after it found that it was without jurisdiction to grant Lincoln the relief he is seeking. Appellant Ivy Lincoln and appellant Arkansas Power & Light Company (AP & L) separately petitioned for rehearing, contending that Lincoln's petition was within the Commission's jurisdiction. Both petitions were denied, and their separate appeals from those denials have been consolidated in this appeal.

On July 3, 1991, Ivy Lincoln filed a complaint with the Arkansas Public Service Commission, naming as defendants AP & L and "all other public utilities and electric cooperative corporations furnishing electric service in the state of Arkansas." Lincoln requested that the Commission order AP & L and the other defendants to cease their maintenance of exclusive service territories by offering service without regard to any electric service territory boundaries. Lincoln acknowledged that maintenance of exclusive service territories was required by Ark.Code Ann. § 23-18-101 (1987), which provides:

Notwithstanding any provisions of law or the terms of any certificate of convenience and necessity, franchise, permit, license, or other authority granted to a public utility or electric cooperative corporation by the state or a municipality, no public utility or electric cooperative corporation shall furnish, or offer to furnish, electric service at retail and not for resale in any area allocated by the Arkansas Public Service Commission to another electric cooperative corporation or public utility.

Lincoln argued, however, that this statute should be declared unconstitutional because it creates monopolies, which are disallowed by the Arkansas Constitution.

Lincoln asserted that he has a public right to freedom from state-imposed restrictions on electric service offerings pursuant to Ark.Code Ann. § 23-3-114(a)(1) (1987), which provides that "[a]s to rates or services, no public utility shall make or grant any unreasonable preference or advantage to any corporation or person or subject any corporation or person to any unreasonable prejudice or disadvantage." The defendants' refusal to offer electric service to prospective customers outside their allocated territories, Lincoln argued, creates an unreasonable disadvantage and unfair prejudice to the consumer. Lincoln's complaint requested:

(1) that the APSC convene a hearing and hear oral argument within 60 days after the filing of this complaint;

(2) that the APSC find A.C.A. Sec. 23-18-101 unconstitutional under ARK. CONST. art. II, Secs. 19 and 29;

(3) that the APSC enter an order which abolishes exclusive electric service territories and which frees AP & L, et al, to offer electric service without regard to whether a potential customer is located within the service territory previously allocated to AP & L, et al; and

(4) all other appropriate relief.

Because Lincoln's complaint questioned the constitutionality of a state statute, defendant and appellee Ozarks Electrical Cooperative Corporation ("OECC") denied that the Commission had jurisdiction of Lincoln's cause of action. OECC and the other defendants also denied that Lincoln's complaint stated a cause of action and prayed that his complaint be dismissed.

An extensive answer was filed by appellant AP & L, which denied all of the allegations of law and fact upon which Lincoln's complaint was based. AP & L asserted that Lincoln had misinterpreted the word "monopoly" as it is used in the Arkansas Constitution and that the Commission's policies do not result in a "monopoly" within the meaning of the Constitution.

In October 1991, the Commission entered Order No. 1, which dismissed Lincoln's complaint for lack of jurisdiction. The Commission determined that Lincoln's complaint sought an order declaring § 23-18-101 void and unconstitutional, which exceeds the Commission's authority. The Commission stated:

Complainant asserts that the exclusive service territories created pursuant to this provision are "monopolies" prohibited by the Constitution of the State of Arkansas and that such service territories should be eliminated immediately. It is alleged in the Complaint that if these service territories were eliminated, that Complainant would have available competitive electric utility service at competitive rates. Complainant asserts that pursuant to the Commission's quasi-judicial authority under Ark. Code Ann. § 23-3-119, the Commission "is required, as well as empowered, to decide the constitutionality of utility and co-op practices in light of Complainant's asserted right to a competitive market for electric service."

....

Complainant invokes the Commission's jurisdiction as primary pursuant to Ark. Code Ann. § 23-3-119(d) which provides:

(d) The commission shall then have the authority, upon timely notice, to conduct investigations and public hearings, to mandate monetary refunds and billing credits, or to order appropriate prospective relief as authorized or required by law, rule, regulation, or order. The jurisdiction of the commission in such disputes is primary and shall be exhausted before a court of law or equity may assume jurisdiction. However, the commission shall not have the authority to order payment of damages or to adjudicate disputes in which the right asserted is a private right found in the common law of contracts, torts, or property.

It is the specific intent of this section to authorize the Commission to adjudicate individual disputes between consumers and the public utilities serving those consumers. In addition to the Commission's quasi-legislative authority, the General Assembly extended the Commission's quasi-judicial authority to adjudicate complaints arising from the public utility statutes, rules and regulations and orders of the Commission. Ark. Code Ann. § 23-3-119(f).

Were the relief requested of a different nature, the Commission might agree that our jurisdiction over this Complaint is primary. However, the relief which Complainant seeks is to have the Commission declare a statute invalid and this relief exceeds the Commission's authority. The Public Service Commission is a creature of the legislature which acts within the powers conferred upon it by legislative act. Southwestern Bell Telephone Company v. Arkansas Public Service Commission, 267 Ark. 550, 593 SW2d 434 (1980). As a "creature of the legislature", the Commission's power and authority is confined to that which the legislature confers upon it. The Commission is empowered, in some instances, to interpret the public utility statutes of the state but the General Assembly has not conferred upon the Commission the authority to overrule the General Assembly and act as a super legislature of three. It is not within the jurisdiction of this Commission to declare a properly enacted statute to be invalid and to declare that the Commission will hereinafter ignore the provisions of that statute.

The relief which Complainant seeks can only be obtained through legislative action repealing or amending Ark. Code Ann. § 23-18-101 or through a court with the authority to declare the statute unconstitutional. Therefore, the Commission finds that the Complaint filed in this Docket on July 3, 1991, should be and hereby is dismissed for lack of jurisdiction. ¹ In response to Order No. 1, Lincoln and AP & L separately petitioned for rehearing. Lincoln contended Ark.Code Ann. § 23-2-423(c)(4) (1991) requires that the Commission first determine whether an order or decision of the Commission violates any laws of the Arkansas Constitution or the Constitution of the United States and, after that determination is made, the Commission's decision is then appealable to the courts.

Although it urged that Lincoln's request for rehearing be denied, AP & L also requested rehearing of Commission Order No. 1. AP & L contended that the Commission's order erroneously focused on the constitutionality of § 23-18-101 in finding it did not have jurisdiction to hear Lincoln's complaint. AP & L argued that, because the major thrust of Lincoln's complaint is an attack on the allocation of electric service areas, which is exclusively within the Commission's jurisdiction, the Commission should have rendered a decision on this issue and then addressed the issue of the constitutionality of § 23-18-101 as incidental to its basic regulatory jurisdiction.

The Commission in Order No. 2 held that neither Lincoln's nor AP & L's arguments were persuasive and denied their petitions. Both parties now appeal the Commission's denial of jurisdiction. We find no error and affirm.

It is well established that courts, and not administrative agencies, are the final arbiters of agency authority. West Helena Sav. & Loan Ass'n v. Federal Home Loan Bank Bd., 417 F.Supp. 220, 223 (E.D.Ark.1976), aff'd, 553 F.2d 1175 (8th Cir.1977). The courts have recognized that administrative agencies, because of their specialization, experience, and greater flexibility of procedure, are better equipped than courts to analyze legal issues dealing with their agencies, and this accounts for the limited scope of review of administrative action and the reluctance of a court to substitute its judgment for that of the agency. Clinton v. Bonds, 306 Ark. 554, 557, 816 S.W.2d 169, 171 (1991).

In denying Lincoln's rehearing petition, the Commission stated that, although the General Assembly has given the Commission broad authority to carry out its rules and regulations, it must conform its policies to that leg...