Rainville v. Lakes Region Water Co.

• Citation: 37 A.3d 403
• Decision Date: 10 February 2012
• Docket Number: No. 2011–028.,2011–028.
• Parties: Jo Anne RAINVILLE and another v. LAKES REGION WATER COMPANY, INC. and another.
• Court: New Hampshire Supreme Court

37 A.3d 403

Jo Anne RAINVILLE and another

v.LAKES REGION WATER COMPANY, INC. and another.

No. 2011–028.

Supreme Court of New Hampshire.

Argued: Oct. 19, 2011.Opinion Issued: Feb. 10, 2012.

Cooper Cargill Chant, P.A., of North Conway (Christopher T. Meier on the brief and orally), for the plaintiffs.

Nelson, Kinder, Mosseau & Saturley, PC, of Manchester (Richard C. Nelson and Adam J. Chandler on the brief, and Mr. Nelson orally), for the defendants.

DALIANIS, C.J.

This is an interlocutory appeal from an order of the Superior Court ( Houran, J.) partially granting and partially denying the summary judgment motion filed by the defendants, Lakes Region Water Company and Thomas Mason (collectively, LRWC). See Sup.Ct. R. 8. The superior court transferred a single question for our review:

Did the superior court err in concluding that the defendants are not exempt from the Consumer Protection Act pursuant to RSA 358–A:3 to the extent the defendants allegedly misrepresented that the water they provided was safe for use and consumption?

We answer this question in the affirmative and reverse the trial court's denial of partial summary judgment as to the claims of the plaintiffs, Jo Anne Rainville, Carl Beher, Lisa Mullins d/b/a The Olde Village Store, and approximately fifty others, under the Consumer Protection Act (CPA) seeking damages for alleged misrepresentations about the quality of water provided. We remand for further proceedings consistent with this opinion.

We accept the statement of the case and facts as presented in the interlocutory appeal statement and rely upon the record for additional facts as necessary. See State v. Hess Corp., 159 N.H. 256, 258, 982 A.2d 388 (2009). Defendant LRWC is a small, privately-owned water company based in Moultonborough, which owns and operates several public water systems in New Hampshire. Its sole shareholders are defendant Mason and his wife. LRWC is a public utility regulated by the New Hampshire Public Utilities Commission (PUC).

In 1995, LRWC purchased the Tamworth Water Works, which supplies water to Tamworth residents and businesses. In 1998, LRWC installed a bedrock well to service the Tamworth Water Works system. In 2004, this well, Well 004, was shut down because its water contained levels of uranium above the maximum allowed by the New Hampshire Department of Environmental Services (DES). Subsequently, LRWC replaced Well 004 with a new well, Well 005.

In August 2007, DES employees discovered that Well 004 was active, and a subsequent test of water from the Tamworth Water Works found uranium levels greater than those allowed by DES. In September 2007, LRWC severed the water lines and electrical connections to Well 004. Thereafter, the uranium levels of the water from the Tamworth Water Works returned to levels that met DES requirements.

Also in September 2007, PUC staff requested the PUC to formally investigate, among other things, whether LRWC had the “managerial and financial capacity to provide safe and adequate service to its customers.” As part of its investigation, the PUC observed that the New Hampshire Attorney General was investigating the allegation that LRWC had reconnected Well 004. Because of the pending investigation by the attorney general, the PUC kept its investigation open so as to continue to monitor LRWC and protect the interests of its customers.

In August 2008, the plaintiffs brought suit against LRWC alleging violations of the CPA, breach of contract and other claims. In August 2009, the defendants moved for partial summary judgment as to the plaintiffs' CPA claims, arguing that because they are involved in a “trade or commerce” that falls within the jurisdiction of the PUC, their conduct is exempt from the CPA. See RSA 358–A:3, I (2009). The trial court granted the motion as it pertained to claims that the defendants overcharged for contaminated water because it found that these claims were related to the PUC's exclusive jurisdiction over ratemaking. The trial court denied the motion as to claims that, by failing to disclose the level of uranium in the water, the defendants misrepresented that the water was safe for consumption and free from contamination, reasoning that these claims were not part of the PUC's exclusive jurisdiction over ratemaking and, thus, not exempt from the CPA.

The sole issue for our review is whether the plaintiffs' claim that the defendants misrepresented that the water was safe for consumption is exempt from the CPA. Resolving this issue requires statutory construction. The interpretation of a statute is a question of law, which we review de novo. Billewicz v. Ransmeier, 161 N.H. 145, 151, 13 A.3d 116 (2010). We determine the intent of the legislature as expressed in the words of the statute considered as a whole. Id. When the language of a statute is clear on its face, its meaning is not subject to modification. Id. Further, we will neither consider what the legislature might have said nor add words that it did not see fit to include. Id.

Our analysis starts with the plain meaning of the relevant statutes. See State v. Empire Automotive Group, 163 N.H. 144, 145, 35 A.3d 515, 516 (2011). Under the CPA, it is “unlawful for any person to use any unfair method of competition or any unfair or deceptive act or practice in the conduct of any trade or commerce within this state.” RSA 358–A:2 (2009). “Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another,” is a form of unfair competition specifically prohibited by the CPA. RSA 358–A:2, VII. The plaintiffs have alleged that the defendants violated this provision of the CPA by knowingly misrepresenting that the water was safe and met DES standards for uranium.

RSA 358–A:3, I, exempts from the CPA:

Trade or commerce that is subject to the jurisdiction of the bank commissioner, the director of securities regulation, the insurance commissioner, the public utilities commission, the financial institutions and insurance regulators of other states, or federal banking or securities regulators who possess the authority to regulate unfair or deceptive trade practices. This paragraph includes trade or commerce under the jurisdiction of, and regulated by, the bank commissioner pursuant to RSA 361–A, relative to retail installment sales of motor vehicles.

(Emphases added.) RSA 358–A:1, II (2009) defines “ ‘[t]rade’ ” and “ ‘commerce’ ” to “include the advertising, offering for sale, sale, or distribution of any services and property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and shall include any trade or commerce directly or indirectly affecting the people of this state.” Thus, the CPA does not apply to claims of unfair competition or deceptive practices in selling or distributing a service that is subject to the PUC's jurisdiction.

The term “jurisdiction” is not defined in the CPA, but its plain meaning is: “the legal power, right, or authority to hear and determine a cause,” “legal power to interpret and administer the law,” or “[the] power or right to exercise authority: CONTROL.” Webster's Third New International Dictionary 1227 (unabridged ed.2002). Accordingly, to determine when offering for sale or distributing a service is “subject to the jurisdiction of” the PUC, we examine the statutes that define the PUC's powers and authority.

The PUC has “general supervision of all public utilities and the plants owned, operated or controlled by the same.” RSA 374:3 (2009); see Appeal of Pennichuck Water Works, 160 N.H. 18, 33, 992 A.2d 740 (2010). Generally, any entity that owns or operates a water system or part thereof is deemed a “public utility.” Appeal of Pennichuck Water Works, 160 N.H. at 33, 992 A.2d 740 (quotation omitted); see RSA 362:2, I (2009) (defining “public utilities” generally); RSA 362:4 (2009) (explaining when water company is public utility). Here, it is undisputed that LRWC, which sells and distributes water to the public, is a “public utility” subject to the PUC's jurisdiction. Thus, the trade or commerce in which LRWC is engaged—selling and distributing water to the public—is subject to the jurisdiction of the PUC.

Moreover, the plaintiffs have alleged that the defendants engaged in deceptive practices in conducting this very trade or commerce. They allege that the water LRWC sold and distributed to the public was unsafe, and that LRWC misrepresented that the water was, in fact, safe. These allegations concern the very trade or commerce that is subject to the PUC's jurisdiction—selling and distributing water. See Empire Automotive Group, 163 N.H. at 145, 35 A.3d 515. Accordingly, the plaintiffs' claim may not be brought under the CPA because it concerns trade or commerce that is subject to the PUC's jurisdiction and is exempt from the CPA.

The plaintiffs argue, and the trial court ruled, that the CPA exempts only trade or commerce related to the PUC's jurisdiction over public utility rate-setting. See Bacher v. Public Serv. Co. of N.H., 119 N.H. 356, 357, 402 A.2d 642 (1979) (“Except in narrowly defined instances, the ratemaking power of the [PUC] is plenary.”). This interpretation of RSA 358–A:3, I, reads into the statute a limitation that does not exist. The CPA exempts any “[t]rade or commerce” that is subject to the PUC's jurisdiction. RSA 358–A:3, I. It does not exempt only that which involves setting consumer rates. We will not read a limitation into the statute that the legislature did not see fit to include. See Ransmeier, 161 N.H. at 151, 13 A.3d 116.

The plaintiffs also argue that the PUC's jurisdiction does not extend to deceptive practices related to water quality. This frames the issue incorrectly. The issue is not whether a party's deceptive practice is subject to the PUC's jurisdiction, but whether the practice occurred in the conduct of “ [t]rade or...