Mercury Trucking, Inc. v. Pa. Pub. Util. Comm'n

• Decision Date: 21 November 2012
• Citation: 55 A.3d 1056
• Parties: MERCURY TRUCKING, INC., Appellee, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Appellant.
• Court: Pennsylvania Supreme Court

55 A.3d 1056

MERCURY TRUCKING, INC., Appellee,

v.PENNSYLVANIA PUBLIC UTILITY COMMISSION, Appellant.

Supreme Court of Pennsylvania.

Argued March 8, 2011.

Decided Nov. 21, 2012.

Recognized as Repealed by Implication

66 Pa.C.S.A. § 510(d, e)Elizabeth A. Lion Januzzi, Bohdan R. Pankiw, Eric Albert Rohrbaugh, Harrisburg, PA Public Utility Commission, for Pennsylvania Public Utility Commission.

William A. Gray, William Howard Stewart, Vuono & Gray, L.L.C., Pittsburgh, for Mercury Trucking, Inc.

BEFORE: CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.

OPINION

Chief Justice CASTILLE.

The Pennsylvania Public Utility Commission (the “Commission”), a statutory regulatory authority, appeals the decision of the Commonwealth Court to vacate an operations fee assessed against a public utility, appellee Mercury Trucking, Inc. (“Mercury”), for the operating period of July 1, 2005, through June 30, 2006 (the “2005 annual assessment”). At this Court's request, the parties also address issues related to the appropriate process by which disputes of this nature should proceed in the courts of the Commonwealth.

For the reasons that follow, we hold that judicial review of a public utility's challenge to its annual assessment shall proceed in the courts of this Commonwealth in accordance with the procedures of the Administrative Agency Law, Chapter 7, Subchapter A. Accordingly, we must quash the Commission's direct appeal. However, given that the proper procedure was unclear, and that the underlying issue merits review, we will treat the Commission's notice of appeal as a petition for allowance of appeal, which we hereby grant. On the merits, we reverse the decision of the Commonwealth Court, vacate its judgment in favor of the public utility, and reinstate the Commission's adjudication.

Background

The Commission is the administrative agency which has the authority to oversee all public utilities doing business in the Commonwealth and which implements and enforces the Pennsylvania Public Utility Code by its regulations, orders, or otherwise. 66 Pa.C.S. § 501(a), (b); see, generally,66 Pa.C.S. § 101 et seq. Expenditures of administering the Code are borne in part by the public utilities that the Commission regulates. See66 Pa.C.S. § 510(a). That part of the Commission's budget collected from public utilities—the “total assessment”—is allocated among all Commission-regulated public utilities in the manner prescribed by Section 510(b) of the Code. See66 Pa.C.S. § 510(b)(1)-(4).

Each utility pays a share roughly proportional to its actual or estimated gross intrastate operating revenue. See66 Pa.C.S. § 510(b). The Section 510(b) statutory formula is a complex four-step calculation centered on the Commission's administrative expenditures and on gross intrastate operating revenues of all public utilities regulated by the Commission, during the calendar year preceding the relevant operating period. See id. The Commission receives necessary data relating to each public utility's actual gross operating revenue in Pennsylvania from the utilities (“actual revenue(s)”).

According to the Public Utility Code, each utility is required to file a statement under oath reporting the utility's actual revenue for the year preceding the assessment, on or before March 31 of the assessment year. See66 Pa.C.S. § 510(b). For any public utility that fails to file a timely actual revenue statement, the Commission is required to estimate the revenue, and the estimated gross operating revenue (“estimated revenue(s)”) is used to calculate that utility's assessment, along with the allocation of the total assessment among all public utilities operating in the Commonwealth.

Appellee Mercury Trucking, Inc. operates as a public utility under the Commission's authority. In 2005, Mercury failed to file by March 31 the statement of its actual revenue for 2004. On April 29, 2005, the Commission notified Mercury of its omission. Subsequently, the Commission estimated Mercury's revenue for 2004 at $8,492,767, equal to Mercury's actual revenue for 2003 of $7,582,828 plus twelve percent, and calculated Mercury's 2005 annual operations fee based on this estimated revenue.¹ On August 17, 2005, the Commission issued Mercury a Notice of Assessment and General Assessment Invoice for $32,210. Mercury paid the 2005 annual assessment in full.

Concomitantly, Mercury objected to the assessment on the ground that the Commission's estimate of its 2004 revenue was excessive, and presented evidence that its actual revenue was $5,264,627—more than three million dollars less than the revenue estimated by the Commission. Mercury argued that it was entitled to a recalculation of its 2005 annual assessment, which it claimed should have been $19,967.02, and requested a partial refund of $12,242.98. The Commission responded that the 2004 revenue estimate was binding upon Mercury pursuant to Section 510(b) of the Code and, as a result, the 2005 operations fee was correctly assessed. The parties presented their arguments to an Administrative Law Judge (“ALJ”) for rulings on Mercury's objections and on the Commission's motion to dismiss the objections. The ALJ denied the Commission's motion and, ultimately, determined that the Commission's revenue estimate was excessive and a partial refund of Mercury's assessment payment was appropriate. On May 22, 2006, a five-member adjudicatory panel of the Commission reversed the decision of the ALJ and denied Mercury's request for a refund. Mercury filed a petition for review of the Commission's decision in the Commonwealth Court's appellate jurisdiction.

In May 2007, a Commonwealth Court panel determined that Mercury's challenge should have been filed as an action at law for a refund pursuant to Section 510(d) of the Public Utility Code, and not as an appeal. The panel transferred the matter to the court's original jurisdiction, vacated the Commission's order of May 22, 2006, and directed the Commission to file a responsive pleading to Mercury's challenge within twenty days. See Mercury Trucking, Inc. v. Pa. Pub. Utility Comm'n, 923 A.2d 1244, 1247 (Pa.Cmwlth.2007) (“Mercury Trucking I ”). Judge Hannah Leavitt dissented in part, noting that the majority was “announc[ing] a ground breaking decision” with respect to the jurisdictional issue, “without allowing the parties an opportunity to brief or argue the dispositive issues.” Id. at 1248.

The Commission filed a timely answer with new matter, in addition to preliminary objections to Mercury's petition for review. The court dismissed the answer and new matter as premature, and the Commission appealed the decision to this Court. We quashed the Commission's interlocutory appeal in October 2007. Subsequently, the Commonwealth Court held a hearing on the Commission's preliminary objections, which the court then overruled in March 2008. Cmwlth. Ct. Op., 3/7/2008, at 6 (“ Mercury Trucking II ”). The Commission filed a second appeal, which we also quashed.

The case remained dormant until March 2009, when the Commonwealth Court issued a rule for Mercury to show cause why the action should not be dismissed for failure to prosecute. Mercury responded; the court discharged the rule and directed the parties to file a stipulation of facts. In November 2009, a Commonwealth Court panel reviewed the evidence de novo and found that Mercury overpaid its 2005 annual assessment. The panel ordered the Commission to refund Mercury $12,242.98. Cmwlth. Ct. Op., 11/16/2009, at 6 (“ Mercury Trucking III ”). The Commission filed a direct appeal to this Court.

Upon reviewing the Commission's jurisdictional statement, we postponed decision of three issues related to jurisdiction, and directed briefing and argument on the following questions:

1. Whether a suit filed against the Commonwealth by a public utility under 66 Pa.C.S. § 510(d) from an order of the [Commission] is brought in the Commonwealth Court's original jurisdiction under 42 Pa.C.S. § 761 or in the Commonwealth Court's appellate jurisdiction under 42 Pa.C.S. § 763? Include a discussion of the [Commission]'s position in United Parcel Service, Inc. v. Pennsylvania Pub. Util. Comm'n, 789 A.2d 353 (Pa.CmwIth[Cmwlth].2001), vacated and remanded,, 830 A.2d 941 (Pa.2003), on this issue.

2. Whether this Court has jurisdiction under 42 Pa.C.S. § 723(a) or 42 Pa.C.S. § 724(a) to review a final order entered by the Commonwealth Court in a suit filed against the Commonwealth by a public utility under 66 Pa.C.S. § 510(d) from an order of the [Commission]?

3. Whether a suit that was filed in the Commonwealth Court's appellate jurisdiction by a public utility under 66 Pa.C.S. § 510(d) from an order of the [Commission] and thereafter transferred to and decided in the Commonwealth Court's original jurisdiction was “originally commenced” in the Commonwealth Court within the meaning of 42 Pa.C.S. § 723(a)?

4. Whether the Commonwealth Court erred as a matter of law by not finding that, pursuant to § 510(b) of the Public Utility Code, where the utility fails to supply its intrastate revenue report the Commission's revenue statement is “binding” for purposes of the assessmentcalculation and any subsequent assessment objection under § 510(d)?

The parties complied and filed their respective briefs. We address each issue in turn, developing the facts and arguments as necessary.

Judicial Review in Assessment Matters

A. Commonwealth Court Process: Original or Appellate Jurisdiction

I.

The Public Utility Code, Section 510(c)-(d), delineates the administrative process for collecting annual assessments from public utilities. Upon calculation of the assessments, the Commission notifies each public utility of the amount owed, and the public utility has the opportunity to file objections with the Commission within fifteen days of receiving the notice. Objections are cognizable on several enumerated grounds, and the Commission is required to hold a hearing concerning the...