U.S. Steel Corp. v. Northern Indiana Public Service Co., Inc.

• Decision Date: 11 September 1985
• Docket Number: No. 2-385A80,2-385A80
• Citation: 482 N.E.2d 501
• Parties: UNITED STATES STEEL CORPORATION, Appellant (Plaintiff Below), v. NORTHERN INDIANA PUBLIC SERVICE COMPANY, INC.; Public Service Commission of the State of Indiana; and the State of Indiana, Appellees (Defendants Below), and Office of the Utility Consumer Counselor, Appellee (Intervenor-Defendant Below).
• Court: Indiana Appellate Court

Page 501

482 N.E.2d 501

UNITED STATES STEEL CORPORATION, Appellant (Plaintiff Below), v. NORTHERN INDIANA PUBLIC SERVICE COMPANY, INC.; Public Service Commission of the State of Indiana; and the State of Indiana, Appellees (Defendants Below) and Office of the Utility Consumer Counselor, Appellee (Intervenor-Defendant Below).

No. 2-385A80.

Court of Appeals of Indiana Fourth District.

Sept. 11, 1985.

John F. Wickes, Jr., Lynne D. Lidke, Scopelitis & Garvin, Indianapolis, Wayne L. Emery, Rafael Caminero, U.S. Steel Corp., Pittsburgh, Pa., for appellant.

Linley E. Pearson, Atty. Gen., Robert K. Johnson, Deputy Atty. Gen., Indianapolis, for appellee Public Service Com'n of Indiana.

Frederick F. Eichhorn, Jr., David C. Jensen, James K. Morse, Eichhorn, Eichhorn & Link, Hammond, for appellee Northern Indiana Public Service Co.

CONOVER, Judge.

United States Steel Corporation (U.S. Steel) appeals the Marion Superior Court's dismissal of its complaint for declaratory judgment.

Reversed.

ISSUES

This appeal presents a single issue:

whether the trial court has subject matter jurisdiction of this action.

FACTS

U.S. Steel, a Delaware Corporation, owns two steel production facilities of interest here, Gary Works located in Gary, Indiana, and South Works in Chicago, Illinois. Northern Indiana Public Service Company (NIPSCO), an Indiana public utility, furnishes electric power to Gary Works, and Commonwealth Edison Company (Commonwealth), an Illinois public utility, furnishes electric power to South Works.

U.S. Steel also owns electric transmission facilities and transmission lines which are located on a right-of-way it leases between these two steel plants. Currently, however, NIPSCO supplies all the electric power for Gary Works, and Commonwealth the power for South Works. U.S. Steel proposes to transmit and "mix" some of the electric power it purchases from each of these public utilities for use at these plants, that is, power purchased from Commonwealth will be transmitted and mixed with NIPSCO's for use at Gary Works, and vice-versa. To do so, however, U.S. Steel must install a "phase shift transformer" (transformer) to bring "out of phase" electricity generated by one utility "in phase" with the electricity generated by the other. ¹ The electric power thus mixed and transmitted would be used solely by U.S. Steel at its two plants. None would be distributed by it to other users or the general public.

U.S. Steel has expended substantial sums of money conducting a feasibility study and preparing to receive and transmit electricity to and from its proposed transformer and plants. It filed a two-count complaint in the court below for declaratory judgment under the Declaratory Judgments Act, IND.CODE 34-4-10-1 to 16. Count I sought a declaration the proposed sale of electricity by Commonwealth to South Works and the transmission thereof through its own transmission facilities to Gary Works would not violate the Indiana Service Area Assignment Statute. Count II sought a declaration

(a) determining the rights and obligations of the parties,

(b) neither U.S. Steel nor Commonwealth would become public utilities under Indiana law,

(c) the Public Service Commission of Indiana (PSCI) would have no jurisdiction, right, power or interest over the transmission of electricity in such fashion, and

(d) use of the transformer would not violate the Public Service Commission Act, I.C. 8-1-2-1, et seq.

After appearances were entered and the Office of the Utility Consumer Counselor permitted to intervene, Ind. Rules of Procedure, Trial Rule 12(B)(1) motions to dismiss ² challenging the trial court's subject matter jurisdiction were filed by the PSCI and the Consumer Counselor. They were granted by the trial court, but it assigned no reasons for its action.

These 12(B)(1) motions, in essence, asserted the trial court lacked subject matter jurisdiction because

(a) the PSCI had exclusive jurisdiction of this claim,

(b) U.S. Steel had failed to exhaust its administrative remedies, and

(c) had such remedies been exhausted, jurisdiction thereof would lay with the Indiana Court of Appeals under I.C. 8-1-3-1 et seq., not the trial court. This is a case of first impression.

DISCUSSION AND DECISION

I. Standard of Review

The trial court made its ruling based upon the complaint's allegations, its prayers for relief, and the law applicable thereto. No fact-sensitive supporting materials were filed, cf. Cooper v. County Board of Review of Grant County (1971), 150 Ind.App. 232, 276 N.E.2d 533, 536. On appeal in T.R. 12(B)(1) cases so postured, we accept the facts as alleged in the complaint as true, as in T.R. 12(B)(6) cases, cf. Iglesias v. Wells (1982), Ind.App., 441 N.E.2d 1017, 1018. The defense of lack of jurisdiction of the subject matter cannot be waived, and may be raised by the parties or the court at anytime including appeal. Cooper, 276 N.E.2d at 536. Because the facts are not in dispute and we sua sponte could have raised the subject matter jurisdiction question ourselves, we are in as good a position as the trial court to determine it.

The simple question we must answer is whether jurisdiction of this declaratory judgment action lies with the trial court under the terms of the Declaratory Judgments Act, IND. CODE 34-4-10-1 et seq., or with appellee PSCI under the terms of the Public Service Commission Acts of 1913 and 1941, I.C. 8-1-2-1 et seq., and I.C. 8-1-1-1 et seq.

II.

The Declaratory Judgment Act

I.C. 34-4-10-1 reads

Courts of record within their respective jurisdiction shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declaration shall have the force and effect of a final judgment or decree.

See, also, T.R. 57. Regarding persons who may obtain declaratory judgments, I.C. 34-4-10-2 reads in part

Any person ... whose rights, status or other legal relations are affected by a statute, ..., may have determined any question of construction or validity arising under the ... statute, ... and obtain a declaration of rights, status or other legal relations thereunder. (Emphasis supplied).

Discussing the purpose for enactment of the Declaratory Judgments Act, our First District, speaking through Robertson, J., recently said

The purpose of a declaratory judgment action and a declaratory judgment statute is to quiet and stabilize legal relations and thereby provide a remedy in a case or controversy when there is still an opportunity for peaceable judicial settlement. 1 W. Anderson, Actions for Declaratory Judgments Sec. 187 (2d ed. 1951). The Uniform Declaratory Judgment Act, found at Ind.Code 34-4-10-1, et seq., is remedial in nature, affording relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and is to be liberally construed and administered. IC 34-4-10-12; Owen v. Fletcher Savings & Trust Bldg. Co., (1934) 99 Ind.App. 365, 189 N.E. 173. The declaratory judgment statute was not intended to eliminate well-known causes of action nor to substitute an appellate court for a tribunal of original jurisdiction, where the issues are ripe for litigation through the usual processes. Brindley et al. v. Meara et al., (1935) 209 Ind. 144, 198 N.E. 301. Such statute was intended to furnish a full and adequate remedy where none existed before and it should not be resorted to where there is no necessity for such a judgment. Rainwater v. Merriman, (1957) 127 Ind.App. 520, 142 N.E.2d 467; Bryarly v. State, (1953) 232 Ind. 47, 111 N.E.2d 277. The use of a declaratory judgment is discretionary with the court and is usually unnecessary where a full and adequate remedy is already provided by another form of action. Brindley, supra. However, according to T.R. 57 on Declaratory Judgments, "The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate."

In determining the propriety of declaratory relief, the test to be applied is whether the issuance of a declaratory judgment will effectively solve the problem, whether it will serve a useful purpose, and whether or not another remedy is more effective or efficient. Smith v. Vowell, 379 F.Supp. 139 (W.D.Tex.1974). ... The determinative factor is whether the declaratory action will result in a just and more expeditious and economical determination of the entire controversy. Fireman's Insurance Company of Newark, N.J. v. Riley, 322 F.Supp. 349 (W.D.Ky.1971).

Volkswagenwerk, A.G. v. Watson (1979), 181 Ind.App. 155, 390 N.E.2d 1082, 1084-85. Applying the propriety test it is apparent a declaratory judgment in this case would be appropriate because it will determine whether U.S. Steel and Commonwealth would become public utilities under Indiana law upon completion of the project, and subject to the PSCI's jurisdiction under our various statutes regulating public utilities. Such judgment would solve U.S. Steel's problem (whether to proceed further with its costly project) by declaring its rights and status as an Indiana public utility. It appears U.S. Steel is hesitant to expend further funds on this project if it or Commonwealth will become subject to PSCI regulation or Indiana's regulatory statutes in this area.

No other action concerning this subject matter is pending. If no other remedy is available, and the trial court has subject matter jurisdiction, entry of a declaratory judgment, subject to exercise of the trial court's sound discretion, ³ seems appropriate in this case. We have combined our discussion of whether another remedy is available with our discussion of subject matter jurisdiction.

III. PSCI Does Not Have Jurisdiction of Subject Matter

The PSCI would not acquire jurisdiction of U.S. Steel or...