Peoples Gas System, Inc. v. Mason

• Decision Date: 01 June 1966
• Docket Number: No. 34691,34691
• Citation: 187 So.2d 335
• Parties: PEOPLES GAS SYSTEM, INC., Petitioner, v. Edwin L. MASON, Jerry W. Carter and William T. Mayo, as members of and constituting the Florida Public Service Commission, Respondents.
• Court: Florida Supreme Court

Page 335

187 So.2d 335

PEOPLES GAS SYSTEM, INC., Petitioner, v. Edwin L. MASON, Jerry W. Carter and William T. Mayo, as members of and constituting the Florida Public Service Commission, Respondents.

No. 34691.

Supreme Court of Florida.

June 1, 1966.

McClain, Thompson, Turbiville, White & Davis, J. A. McClain, Jr., Tampa, Scott, McCarthy, Preston & Steel and George W. Wright, Jr., Miami, for petitioner.

Lewis W. Petteway and James L. Graham, Jr., Tallahassee, for respondents.

O'CONNELL, Justice.

By certiorari to the Florida Public Service Commission, we have for review that commission's Order No. 3835 by which it purports to abrogate in part its earlier approval of a territorial service agreement. The essential facts are these: On September 9th, 1960, petitioner and the City Gas Company, both distributors of natural gas in Dade and Broward Counties, entered into a territorial service area agreement. This agreement provided that neither would extend its service across an agreed-upon line running east and west across Dade and Broward Counties into the territory reserved to the other by the agreement. On November 9, 1960, the commission approved this agreement, which had been jointly submitted for such approval by both parties thereto.

On May 7th, 1962, petitioner filed a complaint seeking specific performance of the agreement and an injunction against its continued violation by City Gas. The alleged violation consisted of the acquisition by City Gas of gas distribution facilities in the City of Pompano Beach. The chancellor first dismissed the complaint on the ground that Pompano Beach did not fall within the area reserved to petitioner by the agreement. However, the District Court of Appeal, Third District, reversed in a decision published in Peoples Gas System, Inc. v. City Gas Co., 147 So.2d 334. The chancellor thereupon again dismissed the complaint, this time holding that it violated Ch. 542, F.S.A., the State anti-monopoly statute, and that the commission lacked statutory authority to validate such agreement by its approval. The District Court of Appeal, Third District, again reversed, Peoples Gas System, Inc. v. City Gas Co., Fla.App.1964, 167 So.2d 577, and we denied certiorari and petition for rehearing. Fla., 182 So.2d 429.

On January 8, 1965, while the validity of the agreement was thus being litigated between the parties, the commission, on its own motion, entered its Order No. 3736 directing the petitioner and City Gas to show cause why the commission should not wholly withdraw or limit in part its approval of the territorial service agreement between them. The only ground offered in the show cause order for the proposed action was that of changed circumstances. At the hearing on the show cause order, petitioner argued: (1) that the commission lacked authority to modify its earlier order while litigation to determine its validity was still in progress; and (2) that the only changed circumstances were those resulting from the wilful violation of the agreement by City Gas and that such changes did not, therefore, constitute a legitimate ground for the proposed action.

On June 24, 1965, the commission, one member dissenting, entered its Order No. 3835, rescinding and withdrawing the approval previously given to the territorial service agreement 'to the extent that it applies to the area lying within the City limits of Pompano Beach, Florida.' It is important to note, however, that the commission's order was not based upon the ground offered in the show cause order--i.e., changed circumstances--but, rather, on the ground that the earlier order had exceeded the commission's authority. The following appears to be the significant language in the order:

'* * * the absence of express statutory authority to award service areas leaves us with only an implied power to do so, and it is founded primarily in the imminence of destructive competition between neighboring utilities. Patently, with such a basis for our authority, we should not approve an agreement which awards to a utility territory with respect to which there is no reasonably immediate possibility of duplicating service by one or the other of the parties to the agreement. In truth, what we call 'territorial agreements' are more aptly described in most cases as a boundary agreement and the extent of the boundary line should bear a reasonable relationship to the area in which competition may be expected.

'In the case at hand we have such a boundary drawn across two counties, providing a line of demarcation beyond which neither utility may extend its facilities. While the contractual agreement between the parties went much farther and purported to secure to each company, inviolate from any competition by the other, all that part of the two counties on its side of the line, we do not think that we have the authority to grant our approval to this extent. Rather, our approval should be limited to the establishing of a line beyond which the utilities will not extend their service facilities, and the extent of such line should be limited to the area in which possible encroachment is threatened.'

Any doubt that the commission acted on the sole ground that its earlier approval of the agreement was in excess of its proper authority is entirely dispelled by its brief and oral argument before us.

Superficially, it might appear, as suggested by petitioner, that the decisions of the District Court, reported at 147 So.2d 334 and at167 So.2d 577, and our opinion reported at 182 So.2d 429, were determinative of this cause. Study of the issues presented and decided in those opinions reveals, however, that the principal issues now presented were neither discussed nor decided in those cases. Further, it must be remembered that the commission was not a party to those proceedings.

Among the points presented by the petitioner, we settle on one question which is basic and decisive of this cause. It is simply whether the commission may, some four and one-half years after entry of an order approving a service area agreement, modify that order on the ground that it initially lacked the power to enter such an order. We find the answer to be in the negative, which makes answered to the other questions presented unnecessary.

The power of the commission to modify its orders must be either that given by statute or that which is inherent by reason of the nature of the agency and the functions it is empowered to perform. We find no specific statutory authority for the commission to reach back and modify an earlier order. Moreover, the rules of procedure adopted by the commission pursuant to Section 366.05(1), F.S.A., do not permit what the commission has here attempted. Rule 3.10-2.59 authorizes rehearing on petition filed within 15 days after service of an order. Rule 3.10-2.994 permits filing of extraordinary petitions for reconsideration by persons other than parties, and such petitions must be filed within 60 days of the order asked to be reconsidered. Neither of these rules is applicable here.

We go then to a consideration of the inherent power of the commission to reopen or modify a final order after it has become final by the passage of time. Some jurisdictions hold...