Louisville Gas And Electric Co. v. Hardin & Meade County Prop. Owners For Co-location

Decision Date26 August 2010
Docket NumberNo. 2008-SC-000348-DG,2008-SC-000354-DG.,2008-SC-000348-DG
Citation319 S.W.3d 397
PartiesLOUISVILLE GAS AND ELECTRIC COMPANY, et al., Appellants,v.HARDIN & MEADE COUNTY PROPERTY OWNERS FOR CO-LOCATION, et al., Appellees.Kentucky Public Service Commission, Appellant,v.Hardin & Meade County Property Owners for Co-Location, et al., Appellees.
CourtSupreme Court of Kentucky

Allyson Kay Sturgeon, E.ON U.S. LLC, Louisville, KY, Robert M. Watt III, David T. Royse, Stoll Keenon Ogden PLLC, Lexington, KY, Sheryl G. Snyder, Griffin Terry Sumner, Frost Brown Todd LLC, Louisville, KY, John Gregory Cornett, E.ON U.S. Services, Louisville, KY, Counsel for Appellants/Appellees Louisville Gas and Electric Company and Kentucky Utilities Company.

Allyson Kay Sturgeon, E.ON U.S. LLC, Louisville, KY, John Gregory Cornett, E.ON U.S. Services, Louisville, KY, Counsel for Appellant/Appellee E.ON U.S. LLC.

Robert M. Watt III, David T. Royse, Stoll Keenon Ogden PLLC, Lexington, KY, Sheryl G. Snyder, Griffin Terry Sumner, Frost Brown Todd LLC, Louisville, KY, Counsel for Appellee E.ON U.S. LLC.

Richard W. Bertelson III, Helen C. Helton, Gerald Edward Wuetcher, David Shawn Samford, Kentucky Public Service Commission, Frankfort, KY, Counsel for Appellee/Appellant Public Service Commission of Kentucky.

Robert Withers Griffith, Stites & Harbison, PLLC, Louisville, KY, W. Henry Graddy IV, Randal Alan Strobo, W.H. Graddy & Associates, Midway, KY, Counsel for Appellees CDH Preserve, LLC and Hardin & Meade County Property Owners for Co-Location, et al.

Opinion of the Court by Justice SCHRODER.

Before us are appeals from a decision of the Court of Appeals reversing the Franklin Circuit Court's dismissal of an administrative appeal of a Public Service Commission order. Because Appellees failed to designate the record or move for enlargement of time to designate the record within the ten-day period in KRS 278.420(2), the circuit court did not have jurisdiction to adjudicate the claim. Hence, the opinion of the Court of Appeals is reversed and the cause remanded for proceedings consistent with this opinion.

On December 22, 2005, Louisville Gas and Electric Company (LG & E) and Kentucky Utility Company (“KUC”), collectively “the utilities”, submitted a joint application to the Kentucky Public Service Commission (“the Commission”) for a certificate of public convenience and necessity for construction of a 42.03-mile electric power transmission line running from Jefferson County to Hardin County. As an alternative, the utilities also submitted a joint application for construction of a transmission line along a 44-mile route through Jefferson, Bullitt, Meade, and Hardin Counties. The Commission consolidated the applications for consideration.

A public hearing was held on March 6, 2006, and an evidentiary hearing followed on March 28-30, 2006. The Commission granted the utility companies' joint application for their preferred 42.03-mile route by order of May 26, 2006.

On June 16, 2006, several aggrieved property owners filed an application with the Commission seeking a rehearing or, in the alternative, a stay pending their appeal to the Franklin Circuit Court. The Commission denied the request for a rehearing or stay by order dated July 6, 2006.

On July 26, 2006, the property owners filed an action in the Franklin Circuit Court seeking judicial review of the Commission's order granting the utilities' application and the order denying the property owners' request for a rehearing. The utilities thereafter filed a joint motion on August 14, 2006 to dismiss the action pursuant to CR 12 because it did not comply with the requirements of KRS 278.420 by failing to designate those portions of the record necessary to resolve the issues raised in the action within ten days after the action was filed. Nineteen days after the action was filed, the property owners filed a motion requesting that they be permitted to belatedly designate the entire administrative record pursuant to KRS 278.420(2), which permits the court to enlarge the ten-day period where cause is shown. In support of the motion, counsel submitted affidavits attesting to a highly demanding schedule and reflecting that there had been some confusion as to whether local counsel would continue on the appeal.

Pursuant to the utilities' motion, the circuit court dismissed the action. In its order, the court concluded that counsel had failed to show sufficient cause for failure to designate the record within the ten-day period. The court also found that counsel improperly designated the entire record because it failed to provide notice to the court and the opposing parties of the issues on appeal. The property owners appealed, and the Commission cross-appealed.

The property owners argued that substantial compliance should apply to administrative appeals and that their counsel demonstrated good cause for an extension of time to designate the record. The utilities and the Commission argued that the circuit court did not abuse its discretion in ruling that plaintiffs' counsel had not demonstrated good cause to warrant an enlargement of time for designating the record. In the alternative, they argued that Kentucky law requires strict compliance with statutory prerequisites for seeking review of an administrative decision, and that failure to timely designate the record pursuant to KRS 278.420(2) is a jurisdictional defect under Forest Hills Developers, Inc. v. Public Service Commission, 936 S.W.2d 94 (Ky.App.1996).

In a 2-1 opinion, the Court of Appeals cited Forest Hills Developers, Inc., favorably for the proposition that the failure of a party to designate the record deprived the court of subject matter jurisdiction to adjudicate the action. The court went on to find that the circuit court nevertheless could, in its discretion, enlarge the ten-day period for designation of the record pursuant to KRS 278.420(2). The court then looked to the courts' interpretation of “excusable neglect” in CR 6.02 to construe what constituted “cause” in KRS 278.420(2). The court concluded that [e]xcusable neglect occurred and was shown”, and thus the circuit court erred in finding otherwise. This Court thereafter granted both the utilities' and the Commission's motions for discretionary review.

KRS 278.420(2) provides:

Unless an agreed statement of the record is filed with the court, the filing party shall designate, within ten (10) days after an action is filed, the portions of the record necessary to determine the issues raised in the action. Within ten (10) days after the service of the designation or within ten (10) days after the court enters an order permitting any other party to intervene in the action, whichever occurs last, any other party to the action may designate additional portions for filing. The court may enlarge the ten (10) day period where cause is shown. Additionally, the court may require or permit subsequent corrections or additions to the record.

The primary argument of both the utilities and the Commission is that under the strict compliance doctrine, which applies in administrative appeals, the ten-day period for designation of the record set out in KRS 278.420(2) is jurisdictional. Therefore, the circuit court lost jurisdiction in the case when the property owners did not file their designation of the record or their motion to enlarge the ten-day period for designation of the record within ten days after the action was...

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