Washington Natural Gas Co. v. Public Utility Dist. No. 1 of Snohomish County

• Decision Date: 09 October 1969
• Docket Number: No. 40519,40519
• Citation: 459 P.2d 633,77 Wn.2d 94
• Parties: , 1970 Trade Cases P 73,083, 82 P.U.R.3d 44 WASHINGTON NATURAL GAS COMPANY, a Delaware corporation, Appellant, v. PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY, a municipal corporation, Respondent.
• Court: Washington Supreme Court

Page 94

77 Wn.2d 94

459 P.2d 633, 1970 Trade Cases P 73,083,

82 P.U.R.3d 44

WASHINGTON NATURAL GAS COMPANY, a Delaware corporation, Appellant, v. PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY, a municipal corporation, Respondent.

No. 40519.

Supreme Court of Washington, En Banc.

Oct. 9, 1969.

Cartano, Botzer & Chapman, John W. Chapman and Robert A. O'Neill, Seattle, for appellant.

Williams & Novack, by Parker Williams and Edward D. Hansen, Everett, for respondent.

HALE, Judge.

Public Utility District No. 1 of Snohomish County intends to establish underground electrical distribution systems in new housing development. To encourage land developers to install new underground systems and to persuade householders in the new housing developments to buy electrical energy and service, the PUD offers substantial inducements. Washington Natural Gas Company, on the asserted grounds that these inducements constitute gifts and loans of money and credit in violation of the state constitution and contravene the Unfair Business Practices--Consumer Protection Act, RCW 19.86, seeks an injunction to prevent the PUD from making the offer.

Washington Natural Gas Company now appeals from a summary judgment (1) dismissing its first cause of action on the ground that the Consumer Protection Act, RCW 19.86, is inapplicable to municipal corporations; (2) dismissing the second cause of action brought under the equal protection clause of the Washington State Constitution (Const. art. 1, § 12), on the ground that plaintiff gas company is not within the class claimed to be injured and lacks standing to seek the remedy asserted; (3) dismissing the second cause of action based on Const. art. 8, § 7 for the reason that the financial inducements are not gifts but are supported by valuable consideration; and (4) dismissing plaintiff's second cause of action brought under Const. art 8, § 7 for the reason that the financial inducements in the form of deferred payments do not constitute a lending of money or credit by a municipal corporation to a private corporation.

First, concerning the dismissal entered because of ostensible want of standing, we are of the opinion that the status of the gas company, solely as a customer of the PUD and one unlikely to receive the inducements it hopes to enjoin, did not give it an adequate basis upon which to claim standing. Its injuries suffered simply as a customer of the PUD would, we think, be too uncertain and nebulous to accord them justiciability. But overriding this doubtful position of mere customer and combining with it to warrant a conclusion in favor of the gas company's standing, however, is the admitted public importance of this action. Affecting as it does a substantial percentage of the population, the case is one of statewide importance. It directly involves the generation, sale and distribution of electrical energy within the state and will immediately affect the management and operation of public utility districts and other municipal corporations in this state. Additionally, a resolution of the issue here will have an indirect but, nevertheless, important consequence to agricultural, industrial, financial, commercial and labor-management activities throughout the state.

Where a controversy is of serious public importance and immediately affects substantial segments of the population and its outcome will have a direct bearing on the commerce, finance, labor, industry or agriculture generally, questions of standing to maintain an action should be given less rigid and more liberal answer. Therefore, when we consider the public importance of the issues presented and the direct effect their resolution will have on the people and the economy of the state and add these to the fact that plaintiff gas company is a substantial customer of the PUD, we think that the Washington Natural Gas Company can properly be said to have standing to maintain the action.

This brings us to the other conclusions given by the trial court in its summary judgment ordering dismissal. The scheme under attack here was devised by the PUD to induce real-estate housing developers to accommodate their tracts to underground wiring and to encourage the purchase of electricity from the PUD for household purposes, largely to the exclusion of other forms of energy. Underground wiring, in the opinion of the PUD, is safer, more efficient and, of course, possesses aesthetic values lacking in conventional systems. The proposed systems would also help to bring new housing developments into conformance with standards of construction required by the Federal Housing Administration enabling them to qualify for FHA insured loans in financing the sale and purchase of houses. Federal Housing Administration financing directly benfits the PUD, for in stimulating the building and sale of housing the FHA will provide new customers for the PUD. Underground wiring provides another boon in that it aids in generating a spirit of good will within the district to be served. A majority of private and governmental organizations having to do with housing have openly advocated and educated the public to the installation of underground electric wiring systems for reasons of aesthetics, safety and efficiency.

Plaintiff, conceding that the PUD is a municipal corporation, first contends that the Consumer Protection Act (RCW 19.86), bars the kind of contracts offered by the PUD because, as a public utility, the PUD is exempt from state and governmental regulation. Public utility districts, under the constitution and statutes of the State of Washington, are municipal corporations. RCW 54.04.020. Plaintiff contends that, since the PUD as a municipal corporation distributes and sells electricity free from regulation by any regulatory body maintained by the state, it is in law a monopoly and in the public interest ought to be subject to the Consumer Protection Act. Since that act specifically exempts from its operation actions and transactions otherwise subject to regulation by the Washington Utilities and Transportation Commission, the Federal Power Commission, or other regulatory body of this state or the United States, and the PUD is not regulated by any one of them, plaintiff argues that by necessary implication it was intended to come under the Consumer Protection Act.

Despite the persuasiveness of this argument and the hazards to the public welfare historically apparent from business, commercial and public utility monopolies, we think that the legislature intended to exempt municipal corporations from the operation but not the benefits of the Consumer Protection Act. By its very terms, that act, RCW 19.86, includes only 'natural persons, corporations, trusts, unincorporated associations and partnerships.' RCW 19.86.010. Nowhere does its language imply that municipal corporations or political subdivisions of the state are within the definition of persons and entities made subject to it. Thus, the legislature did not employ language designed to bring public utility districts within the operation of the statute nor leave room to include them within it by construction. Where a statute specifically designates the things or classes of things upon which it operates, an inference arises in law that all things or classes of things omitted from it were intentionally omitted by the legislature under the maxim expressio unius est exclusio alterius--specific inclusions exclude implication. State v. Roadhs, 71 Wash.2d 705, 707, 430 P.2d 586 (1967).

Although the Consumer Protection Act does not designate public utility districts among the class of persons and entities subject to it, they are expressly included among its beneficiaries. The statute says that municipalities and political subdivisions are among those which may assert remedies provided by the statute, declaring: 'For the purpose of this section 'person' shall include the counties, municipalities, and all political subdivisions of this state.' RCW 19.86.090. The language of the act excluding as it does public utility districts among the classes of entities subject to it but expressly including it as one of a class protected by it means, we think, that the legislature, while affording public utility districts the protection of the statute, did not intend that they be subject to it. This view is supported by our holding in Williamson v. Grant County Pub. Hosp. Dist. No 1, 65 Wash.2d 245, 251, 396 P.2d 879 (1964), where, in considering the application of the Consumer Protection Act to a public hospital district, we said:

Defendant Grant County Public Hospital District No. 1 is a municipal corporation created by state statute. Its powers are vested in its duly elected officials and medical staff and regulated by statute.

RCW 19.86.170 (Consumer Protection Act) provides:

'Nothing in this chapter shall apply to actions or transactions otherwise permitted, prohibited or regulated under laws administered by the insurance commissioner of this state, the Washington public service commission, the federal power commission or Any other regulatory body or officer acting under statutory authority of this state or the United States. * * *' (Italics ours.)

Hence, the Consumer Protection does not apply to the instant case.

Therefore, although defendant PUD is not subject to the Consumer Protection Act,...