Public Utilities Bd. of City of Brownsville v. Central Power & Light Co.

• Decision Date: 13 September 1979
• Docket Number: No. 1440,1440
• Citation: 587 S.W.2d 782
• Parties: The PUBLIC UTILITIES BOARD OF the CITY OF BROWNSVILLE, Appellant, v. CENTRAL POWER & LIGHT COMPANY and Magic Valley Electric Cooperative, Inc., Appellees.
• Court: Texas Court of Appeals

Page 782

587 S.W.2d 782

The PUBLIC UTILITIES BOARD OF the CITY OF BROWNSVILLE, Appellant, v. CENTRAL POWER & LIGHT COMPANY and Magic Valley Electric Cooperative, Inc., Appellees.

No. 1440.

Court of Civil Appeals of Texas, Corpus Christi.

Sept. 13, 1979.

John A. Heller, Russell S. Johnson, Sawtelle, Goode, Davidson & Troilo, San Antonio, for appellant.

James F. McKibben, Jr., Dyer & Redford, Corpus Christi, for appellees.

OPINION

YOUNG, Justice.

This appeal arose from a territorial dispute between three utility systems all of which were retail suppliers of electrical energy. Plaintiffs, Central Power and Light Company (CPL) and Magic Valley Electric Cooperative, Inc. (MVEC), sought and were granted a temporary injunction preventing the Public Utilities Board of the City of Brownsville (PUB) from "extending, constructing or erecting any electrical facilities or furnishing any electrical service" to two residential subdivisions located near, but outside of, the north limits of the city of Brownsville. PUB appeals. We affirm.

PUB attacks the granting of the temporary injunction by the trial court on these grounds: lack of jurisdiction of the trial court; lack of justiciable interest of the petitioners CPL and MVEC; absence of the Attorney General as an indispensable party; failure of the petitioners to exhaust their administrative remedies; and abuse of discretion by the trial court.

In 1975, the Public Utility Regulatory Act (PURA) ¹ was enacted and codified as Tex.Rev.Civ.Stat.Ann. art. 1446c (Supp.1978). Under the PURA the Public Utility Commission (Commission) was established. Section 2 thereof sets out the purpose of the PURA as an Act, among other things, to establish a comprehensive system which is adequate to the task of regulating public utilities as defined by the Act. The effect of the enactment of the PURA upon the parties here underlies their dispute.

Soon after the PURA was enacted in 1975, the Commission asked all utilities in Texas to meet and decide which areas they would claim for certificates of convenience and necessity (authority to provide service). Compare Southwestern Public Service Company v. Public Utility Commission, 578 S.W.2d 507, 509 (Tex.Civ.App. Austin 1979, writ ref'd n. r. e.). The evidence reflects that the meetings involved all aspects of negotiation. For example, one utility might give up a particular area or right in return for another area or right.

As a result of these meetings, appellees CPL and MVEC and appellant (PUB) agreed that all potential customers within the city limits of Brownsville would be served by the PUB. They also agreed that in most, but not all, cases property to the north of the city limits would be dually certificated to CPL and MVEC. These certification agreements were reflected by lines drawn on a large map of Texas and several county wide maps, including a map of Cameron County. The Commission then entered a certification order (entitled Docket No. 29), which adopted the map of Cameron County as agreed on by appellees and appellant. The agreement as to exactly where PUB's service would end and CPL's and MVEC's would begin to the north of the Brownsville city limits was unclear, however, in that the only memorial of their agreement and the Commission's order was the above mentioned county map with a scale of one inch to a mile, and the dividing lines were drawn with a wide felt marker pencil. Consequently, the parties in the present case all assert the right to provide service to the area within the width of the marker line.

Sometime in late July or early August of 1978 the PUB started setting its service poles into a new housing development immediately to the north of the Brownsville city limits. In doing so, the PUB removed one MVEC pole and disrupted service to some of its customers.

As a result, on August 17, 1978, CPL and MVEC brought this action in the 197th District Court of Cameron County seeking a temporary restraining order, temporary injunction and permanent injunction to enjoin the PUB from extending its service poles and lines into an area dually certificated to CPL and MVEC under the PURA. There is no copy of a temporary restraining order in the record, but apparently one was issued.

Thereafter, on August 21, 1978, CPL and MVEC filed a complaint against the PUB with the Commission alleging the same wrongdoing that was alleged in the district court and asked that the Commission issue a cease and desist order against the PUB, similar to a cease and desist order the Commission had previously issued against the PUB in Docket No. 533 of the Commission. Evidently, Docket No. 533 involved a similar dispute between the PUB and MVEC regarding other land just outside the Brownsville city limits. Following the August 21 filing, the Commission ordered that a hearing be held on August 31, 1978, to "take evidence on the allegations and consider interim relief, if necessary." Soon thereafter, the Commission continued the hearing to September 7, 1978, because the PUB had not received adequate notice of the first hearing. The PUB then filed a motion to dismiss the action before the Commission alleging that the Commission lacked jurisdiction to enforce its orders against municipally owned utilities, citing Sections 3(c), 3(c)(4), and 71. In short, it contended that it was not a "public utility" and that the Commission had no jurisdiction over the subject matter of the suit or relief requested. The PUB also defensively asserted that it possessed "grandfather rights" pursuant to Commission Rule 052.02.05.056(b)(6)(B) ² to serve part of the disputed area because it was serving that area prior to September 1, 1975.

On September 7 and 8, 1978, the parties herein participated in a two day hearing before the Commission concerning the issues addressed in this case; that is, what area was certificated to the PUB following the negotiations. Or, in other words, what was the agreement of the utilities as manifested by the map and what part did the grandfathering rule play in this agreement. The Commission's hearing examiner then took the matter under advisement.

On September 15, 1978, the parties appeared in the district court (trial court here) for the instant temporary injunction hearing. The court heard evidence on the same issues which were before the Commission and granted relief to CPL and MVEC temporarily enjoining the PUB from extending any further service to the areas to the north of the Brownsville city limits other than the area which the utilities apparently agreed would be governed by their understanding of the grandfather rule.

No findings of fact or conclusions of law were filed. Thus, the trial court judgment must be upheld on any legal theory supported by the record. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.Sup.1978).

Appellant PUB brings seven points of error. Points 2 and 3 contend the trial court erred in granting the temporary injunction in this case because CPL and MVEC lacked a justiciable interest in the litigation and because the State of Texas, through the Attorney General, was not joined as an indispensable party.

Appellant here contends that the petitioners are, in effect, attempting to protect the interests of the public in general, rather than their own private interest. In doing so, appellant contends that the petitioners have no greater right than a private citizen, who under the facts of this case, would not have a justiciable interest sufficient to bring this cause. Thus, appellant alleges that the Attorney General is the proper party to enforce this public right. We disagree.

One of the cases appellant cites in support of its argument is Southwestern Gas & Electric Co. v. City of Gilmer, Tex., 123 F.Supp. 11 (E.D.Tex.1954), Aff'd 224 F.2d 794 (5th Cir. 1955). In Gilmer, the Court held that a utility serving the city of Gilmer, Texas, did not have a justiciable interest sufficient to bring suit to enjoin the Upsher Rural Electric Cooperative from providing electrical service to cooperative members within the city limits of Gilmer. Evidently, the Texas statute allowing the creation of rural cooperative companies stated that one of the purposes for which cooperatives could be organized under the act was the furnishing of electric energy to persons in rural as opposed to municipal areas. The Court's holding was based upon the idea that a utility may not seek injunctive relief against a competitor who is merely following a course of conduct which is ultra vires. Appellant claims that the facts in Gilmer are similar to those in the instant case and that the court herein should have dismissed this case because the appellees lacked a justiciable interest.

On the contrary, though, the holding and the language of Gilmer supports the result in this case. More specifically, the Court in Gilmer distinguished between the acts of a corporation which are merely without authority and those acts which are illegal. The Court explained that the cooperative's acts were ultra vires; i. e., without authority, but that there was no provision in the Texas law requiring either an individual or corporation to obtain a license or certificate of convenience for the sale and distribution of electricity within the limits of the city. Southwestern Gas & Electric Co. v. City of Gilmer, Tex., supra at 19. The Court then explained that the acts of the cooperative were not illegal in that Southwestern had no exclusive franchise to serve Gilmer and consequently none of its legal or equitable rights were being violated. Southwestern was only being damaged by lawful competition, although the competition was being conducted as an ultra vires act. The Court then concluded that the competition itself must be illegal in order for a competitor utility to have standing, or a justiciable interest, to seek injunctive relief against the illegal competition. In making this assertion the Court cited Frost v. Corporation Commission, 278 U.S. 515, 49 S.Ct....