N. Cent. Elec. Coop., Inc. v. N. Dakota Pub. Serv. Comm'n

• Decision Date: 03 September 2013
• Docket Number: No. 20130075.,20130075.
• Citation: 837 N.W.2d 138,2013 ND 158
• Parties: NORTH CENTRAL ELECTRIC COOPERATIVE, INC., Appellant v. NORTH DAKOTA PUBLIC SERVICE COMMISSION, Otter Tail Power Company, and Turtle Mountain Band of Chippewa Indians, Appellees.
• Court: North Dakota Supreme Court

837 N.W.2d 138

2013 ND 158

NORTH CENTRAL ELECTRIC COOPERATIVE, INC., Appellant

v.NORTH DAKOTA PUBLIC SERVICE COMMISSION, Otter Tail Power Company, and Turtle Mountain Band of Chippewa Indians, Appellees.

No. 20130075.

Supreme Court of North Dakota.

Sept. 3, 2013.

Debra L. Hoffarth, Minot, N.D., for appellant.

Ryan M. Norrell, Special Assistant Attorney General, Bismarck, N.D., for appellee, North Dakota Public Service Commission.

Paul R. Sanderson, Bismarck, N.D., and Bruce G. Gerhardson (on brief), Fergus Falls, MN, for appellee, Otter Tail Power Company.

Tracy L. Vigness Kolb, Bismarck, N.D., and Richard A. Monette (on brief), Madison, WI, for appellee, Turtle Mountain Band of Chippewa Indians.

KAPSNER, Justice.

[¶ 1] North Central Electric Cooperative appeals from a district court judgment affirming a Public Service Commission order dismissing North Central's complaint against Otter Tail Power Company after the Commission decided it did not have regulatory authority over Otter Tail's extension of electric service to a facility owned by the Turtle Mountain Band of Chippewa Indians on tribal trust land within the Turtle Mountain Indian Reservation. North Central argues (1) the Commission's decision is not in accordance with the law because the Commission has jurisdiction under North Dakota law and (2) the Commission's findings are not supported by a preponderance of the evidence and do not sufficiently address North Central's evidence. We affirm, concluding the Commission did not err in deciding it lacked authority to regulate the Tribe's decision to have Otter Tail provide electric service to a tribal-owned facility on tribal-owned land within the reservation.

I

[¶ 2] After the governing body of the Turtle Mountain Band of Chippewa Indians passed a resolution designating Otter Tail as the electric service provider to the Sky Dancer Casino, a tribal-owned business located on tribal trust land within the Turtle Mountain Indian Reservation, North Central filed a formal complaint against Otter Tail with the Commission, alleging Otter Tail's extension of service to the Sky Dancer Casino without a certificate of public convenience and necessity violated N.D.C.C. ch. 49–03. North Central alleged it had been supplying electric service to the Sky Dancer Casino since December 1998, and North Central provided electric service for construction work at the Sky Dancer Casino after the casino requested electric service for that work in November 2011. North Central claimed it serves seven separately metered service entrances on the Sky Dancer Casino campus, Otter Tail's closest facility to the casino is a transmission line about 1,000 feet from the casino, Otter Tail's nearest retail customer is three miles from the casino, and Otter Tail began construction of an extension of its electric service to the casino on December 9, 2011, after the Tribe adopted a resolution requesting service from Otter Tail. North Central asserted Otter Tail's transmission lines would bore under State Highway 5 and cross North Central's distribution lines in the area. North Central alleged the Sky Dancer Casino was not located within the corporate limits of any municipality and Otter Tail's proposed service to the casino was a wasteful duplication and would unreasonably interfere with North Central's service system. North Central asked the Commission to enjoin Otter Tail from extending electric service to the Sky Dancer Casino.

[¶ 3] Otter Tail answered, admitting it had begun construction of a system to provide electric service to the Sky Dancer Casino and North Central had been providing electric service to the casino. Otter Tail claimed a certificate of public convenience and necessity under North Dakota law was not required because the Commission did not have regulatory authority over the Turtle Mountain Tribe's determination of the electric service provider for the tribal-owned facility on tribal land within the Turtle Mountain Indian Reservation. Otter Tail moved to dismiss North Central's complaint. North Central responded, claiming the Commission had authority to regulate electric service provided to the casino and seeking summary judgment because Otter Tail admitted beginning construction of facilities for service outside of a municipality without a certificate of public convenience and necessity as required by N.D.C.C. ch. 49–03.

[¶ 4] The parties stipulated that the Sky Dancer Casino is a tribal-owned facility located on tribal trust property, that the Turtle Mountain Tribe passed a November 23, 2011, resolution requesting Otter Tail to provide electric service to the Sky Dancer Casino, that the Tribe has a long-standing tribal utility code, and that the Tribe informed the Commission “the Tribe is aware of this proceeding and ... ‘confirms that it is exercising its inherent sovereignty to determine which utility will provide electric service to Sky Dancer Casino’ ” under Devils Lake Sioux Indian Tribe v. North Dakota Pub. Serv. Comm'n, 896 F.Supp. 955 (D.N.D.1995). The Tribe thereafter intervened for the limited purpose of objecting to the Commission's jurisdiction, asserting the Tribe's inherent sovereignty to determine which utility would provide electric service to the Sky Dancer Casino.

[¶ 5] After hearing oral arguments on the motions, the Commission concluded it lacked regulatory authority over the Tribe's decision to authorize Otter Tail to provide electric service to the tribal-owned casino on tribal trust land within the Turtle Mountain Indian Reservation. The Commission denied North Central's motion for summary judgment and dismissed North Central's complaint. The district court affirmed the Commission's decision.

II

[¶ 6] An appeal from a Commission decision is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28–32. Capital Elec. Coop., Inc. v. City of Bismarck, 2007 ND 128, ¶ 30, 736 N.W.2d 788. As relevant to this appeal, a district court must affirm a Commission order under N.D.C.C. § 28–32–46, unless:

1. The order is not in accordance with the law.

....

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

[¶ 7] In an appeal to this Court from a district court's decision on an appeal from a Commission decision, we review the Commission's order in the same manner as the district court. SeeN.D.C.C. § 28–32–49. The Commission's decision on questions of law is fully reviewable. Capital Elec. Coop., 2007 ND 128, ¶ 31, 736 N.W.2d 788. In reviewing the Commission's findings of fact, however, we do not substitute our judgment for that of the Commission or make independent findings. Id. See Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979). Rather, in reviewing the Commission's findings of fact, “ ‘[w]e determine only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record.’ ” Capital Elec. Coop., at ¶ 31 (quoting Power Fuels, at 220).

III

[¶ 8] North Central argues the Commission's decision is not in accordance with the law, because the Commission has regulatory authority and jurisdiction over Otter Tail's activities under the Territorial Integrity Act, N.D.C.C. ch. 49–03. North Central argues the Commission erred in relying on Devils Lake Sioux Indian Tribe, 896 F.Supp. at 961, which held that the Devils Lake Sioux Tribe may by resolution or contract determine which utility may supply electrical service to a tribal-owned business on Indian owned or trust lands within its reservation without regard to the rate structure or other regulations of the Commission. North Central asserts the federal district court's decision represents a misapplication of the overwhelming weight of authority on an Indian tribe's sovereign authority under Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981) and subsequent cases. North Central argues the correct application of Montana requires a showing that a non-Indian's conduct would not merely injure but would imperil the subsistence of the tribal community, which was not shown in this case.

[¶ 9] The appellees argue the Commission properly decided it lacked authority over the Tribe's decision to have Otter Tail provide electric service to the tribal-owned casino on tribal trust land within the reservation, because tribal authority to regulate electric service to tribal trust land is an inherent and essential part of the sovereign authority of the Turtle Mountain Band of Chippewa Indians. Otter Tail argues the Commission's decision is consistent with Devils Lake Sioux Indian Tribe, which recognizes a narrow exception to state regulatory jurisdiction when regulation would interfere with a tribe's inherent authority to determine the electric service provider to a tribal-owned business on tribal trust land within a reservation. Otter Tail claims the Tribe's adoption of a utility code demonstrates the Tribe's inherent sovereignty to regulate activities affecting the Tribe's interests. Otter Tail asserts the Commission's decision is consistent with controlling precedent recognizing an Indian tribe's right to self-government and the inherent authority to govern activities on tribal land.

[¶ 10] Under N.D.C.C. §§ 49–03–01 and 49–03–01.1, an electric public utility such as Otter Tail must obtain a certificate of public convenience and necessity from the Commission before extending electric service outside a municipality. See Capital Elec. Coop., Inc. v. Public Serv. Comm'n, 534 N.W.2d 587, 590 (N.D.1995); Northern States Power Co. v. Public Serv. Comm'n, 452 N.W.2d 340, 344 (N.D.1990). This case, however, involves the extension of electric service to a facility on an Indian...