MCI Telecommunications Corp. v. Public Utilities Com'n of Ohio

• Decision Date: 31 August 1988
• Docket Number: No. 87-1087,87-1087
• Citation: 527 N.E.2d 777,38 Ohio St.3d 266
• Parties: MCI TELECOMMUNICATIONS CORPORATION, Appellant, v. PUBLIC UTILITIES COMMISSION OF OHIO, Appellee.
• Court: Ohio Supreme Court

Page 266

38 Ohio St.3d 266

527 N.E.2d 777

MCI TELECOMMUNICATIONS CORPORATION, Appellant, v. PUBLIC UTILITIES COMMISSION OF OHIO, Appellee.

No. 87-1087.

Supreme Court of Ohio.

Submitted May 25, 1988.

Decided Aug. 31, 1988.

Stephanie D. Pestello, Cleveland, Anne E. Johnston and Marcia C. Alterman, for appellant.

Anthony J. Celebrezze, Jr., Atty. Gen., Robert S. Tongren, Ann E. Henkener and James B. Gainer, Columbus, for appellee.

William A. Spratley, Consumers' Counsel, Bruce J. Weston and Barry Cohen, Columbus, for intervenor.

Mark H. Longenecker, Jr., Cincinnati, urging affirmance for amicus curiae, Cincinnati Bell Telephone Co.

Donald W. Morrison, M. Lee Graft and Charles S. Rawlings, Cleveland, urging affirmance for amicus curiae, Ohio Bell Telephone Co.

Bruce Kazee, Marion, urging affirmance for amicus curiae, GTE MTO, Inc.

Ellen A. D'Amato, Mansfield, urging affirmance for amicus curiae, United Telephone Co. of Ohio.

J. Raymond Prohaska, Columbus, urging affirmance for amicus curiae, Ohio Telephone Assn.

WRIGHT, Justice.

MCI has raised four issues in which it alleges that the PUCO's March 12, 1987 order (as clarified by the April 29, 1987 order) should be found unlawful and unreasonable:

A. The PUCO violated the Due Process Clauses of the Ohio and United States Constitutions and the statutes of Ohio by issuing the March 12, 1987 order without holding an evidentiary hearing.

B. The decisions made and actions taken by the PUCO were not adequately based upon findings of fact since the PUCO did not have a sufficient record to draw from.

C. The actions taken by the PUCO were not within its statutorily enacted authority.

D. The decision and action of the PUCO concerning the final transition rate restoral plan discriminated in favor of the local exchange companies and their customers.

In considering the allegations brought by MCI, the scope of judicial review of PUCO orders is set forth in R.C. 4903.13, which states in pertinent part:

"A final order made by the public utilities commission shall be reversed, vacated, or modified by the Supreme Court on appeal, if, upon consideration of the record, such court is of the opinion that such order was unlawful or unreasonable."

Under the "unlawful or unreasonable" standard specified in R.C. 4903.13, this court will not reverse or modify a PUCO decision as to questions of fact where the record contains sufficient probative evidence to show that the PUCO's determination is not manifestly against the weight of the evidence and is not so clearly unsupported by the record as to show misapprehension, mistake, or willful disregard of duty. Dayton Power & Light Co. v. Pub. Util. Comm. (1983), 4 Ohio St.3d 91, 4 OBR 341, 447 N.E.2d 733; Columbus v. Pub. Util. Comm. (1979), 58 Ohio St.2d 103, 12 O.O.3d 112, 388 N.E.2d 1237. This court does, however, have complete and independent power of review as to questions of law. Legal issues are, therefore, subjected to a more intensive examination than are factual questions. Consumers' Counsel v. Pub. Util. Comm. (1983), 4 Ohio St.3d 111, 4 OBR 358, 447 N.E.2d 749. We assess MCI's objections with these standards in mind. Armco, Inc. v. Pub. Util. Comm. (1982), 69 Ohio St.2d 401, 23 O.O.3d 361, 433 N.E.2d 923.

A

The first issue that MCI has raised is that the PUCO's failure to give notice of its intended actions and to hold a public hearing violated the due process requirements of the Ohio and United States Constitutions and applicable Ohio statutes, specifically R.C. 4905.26.

As discussed in MCI Telecommunications Corp. v. Pub. Util. Comm., supra (MCI-I), this court has repeatedly held that a utility ratepayer has no constitutional right to notice and a hearing in rate-related matters if no statutory right to a hearing exists. In this case, MCI and the OCC argue that a hearing is required by virtue of R.C. 4905.26.

R.C. 4905.26 states, in pertinent part:

"Upon complaint in writing against any public utility by any person, firm, or corporation, or upon the initiative or complaint of the public utilities commission, that any rate, fare, charge, toll, rental, schedule, classification, or service, or any joint rate, fare, charge, toll, rental, schedule, classification, or service rendered, charged, demanded, exacted, or proposed to be rendered, charged, demanded, or exacted, is in any respect unjust, unreasonable, unjustly discriminatory, unjustly preferential, or in violation of law, or that any regulation, measurement, or practice affecting or relating to any service furnished by said public utility, or in connection with such service, is, or will be, in any respect unreasonable, unjust, insufficient, unjustly discriminatory, or unjustly preferential, or that any service is, or will be, inadequate or cannot be obtained, and, upon complaint of a public utility as to any matter affecting its own product or service, if it appears that reasonable grounds for complaint are stated, the commission shall fix a time for hearing and shall notify complainants and the public utility thereof, and shall publish notice thereof in a newspaper of general circulation in each county in which complaint has arisen. * * *"

The language of this statute obviously requires the PUCO to give notice and conduct a hearing before ordering a change in utility rates. This, of course, is precisely what the PUCO did. Prior to the adoption of the May 21, 1984 order, the PUCO held a lengthy public hearing in which MCI and several other interested parties participated. If MCI had objections to the actions that were about to be implemented, it should have made its objections within that time frame and preferably in that forum. Nothing in the record indicates that MCI was denied its right to be heard at these hearings, nor does MCI raise the allegation now. PUCO's May 21, 1984 order established the basic mechanism for determining access charges for intrastate interexchange service in Ohio. Included in this plan were the "mirroring of the FCC's rates" provision, the pro rata distribution of any excess funds, and the supervision of the excess fund pool. Nothing in this order was hidden or misleading. The PUCO's intended plan was made plain for all to see and the hearing gave all parties a chance to voice objections. If MCI or anyone else had an objection to this order, an appeal from this order was the appropriate method by which to contest the action. However, no appeals were taken from the order.

Since the May 21, 1984 order, all subsequent PUCO actions in PUCO No. 83-464-TP-COI have occurred under a notice and comment procedure. MCI has had ample opportunity to advocate its position regarding its entitlement to surplus funds by submitting comments and replies to the submissions of other parties. Nowhere in the statutes is the PUCO required to give a public hearing to each and every objection that is raised to its proposed actions. Such a requirement would literally hamstring the PUCO. The broad authority of the PUCO in matters such as this is well-established. See MCI-I, supra. We hold that MCI had no constitutional right to a public hearing in this matter under the facts of this case. The system adopted by the PUCO, i.e., submitting comments and replies to the submissions of the parties, adequately protected the rights of MCI in this generic rate-making process.

B

The second issue raised by MCI is that the PUCO's decision was not adequately based upon findings of fact because the PUCO did not have an adequate record from which to draw. The main contention of MCI is that R.C. 4903.09 has been violated. R.C. 4903.09 states:

"In all contested cases heard by the public utilities commission, a complete record of all of the proceedings shall be made, including a transcript of all testimony and of all exhibits, and the commission shall file, with the records of such cases, findings of fact and written opinions setting forth the reasons prompting the decision arrived at, based upon said findings of fact."

The purpose of R.C. 4903.09 is to enable this court to review the action of the commission without reading the voluminous records in Public Utilities Commission cases. See Commercial Motor Freight, Inc. v. Pub. Util. Comm. (1951), 156 Ohio St. 360, 46 O.O. 210, 102 N.E.2d 842. Previous cases have found that the requirements of R.C. 4903.09 have been satisfied by orders which incorporated attorney examiner reports, commission secretary reports, or testimony from the proceeding. In fact, where enough evidence and discussion are found in an order to enable the PUCO's reasoning to be readily discerned, this court has found substantial compliance with R.C. 4903.09 and held that the lack of specific findings may be simply a technical defect that would not result in invalidation of the order. Consumers' Counsel v. Pub. Util. Comm., supra; Braddock Motor Freight, Inc. v. Pub. Util. Comm. (1963), 174 Ohio St. 203, 22 O.O.2d 173, 188 N.E.2d 162.

In the case at bar, the PUCO order clearly stated the facts and findings on which it based its decision. In deciding that the intrastate access rates should be capped at present levels or reduced, the PUCO's order expressly considered the original access charge proceedings, all interim orders, proposals, and comments, including the February 11, 1986 order affirmed by this court, the fact that interexchange carriers have consistently benefited by steadily decreasing access charges since 1983, and the specific proposals, comments and reply comments submitted in this case. PUCO No. 83-464-TP-COI (subfiles A, B and C); MCI-I, supra. These factors--plus the commission's unsuccessful effort to obtain information needed to establish company-specific, cost-based access charges--adequately specify the commission's basis for its ruling and give this court more than adequate notice of its reasoning. As such, the requirements of R.C. 4903.09 are satisfied and MCI's allegation is without merit.

C

MCI's third contention is...