2013 Summaries of PUC Court Decisions

First Quarter


1-A Realty v. Pa PUC

No. 885 C.D. 2012; -- A.3d -- (Pa. Cmwlth. 2013) (Filed January 4, 2013)

The Commonwealth Court affirmed a PUC order finding that the phrase “not individually metered” in Section 1529.1(b) of the Public Utility Code, 66 Pa. C.S. § 1529.1(b), means that the utility meter for a particular dwelling unit has foreign wiring attached to the meter or is registering usage not exclusive to the dwelling unit, thereby requiring the utility to list the account of the dwelling unit in the owner’s name instead of the tenant’s name.

In order to avoid safety issues surrounding severed wiring that connected a mobile home park’s street lights to a central maintenance garage, the mobile home park owner (owner) rewired the communal street lights to the electric boxes of the dwelling units of the nearest residents.  The tenants were notified and were given a $10.00 monthly rental discount to compensate for any additional electric expenses, which ranged from $6.54 to $9.67 per month.  Upon learning of foreign wiring registered to the accounts of two tenants, PPL transferred the accounts of the affected tenants into the owner’s name.    

The owner filed complaints with the PUC regarding PPL’s transfer of the two accounts into the owner’s name.  In its order, the PUC denied the owner’s complaints and directed PPL to transfer the accounts for each of the park’s 21 residents with street lights attached to their electric boxes into the owner’s name until the owner safely corrected the foreign load at the park.  The owner appealed the PUC order to the Commonwealth Court.

The owner first argued that the PUC erred by finding that tenants are not permitted to accept utility service for communal street lights which are not part of their normal home usage.  The Court observed that the PUC consistently determined that “not individually metered” in Section 1529.1(b) means the meter is registering usage that is not exclusive to the dwelling unit.  In emphasizing the mandatory “shall” language, the Court held that Section 1529.1(b) means that the utility “shall” list the account in the owner’s name, thereby disallowing a tenant from accepting utility service that is not exclusive to the tenant’s account.

The owner then argued that the owner corrected the foreign load situation by turning off the power to the streetlights by switching off the breakers, thereby allowing for an account conversion back into tenants’ names.  However, the Court noted that the existence of foreign wiring still connected to the electric boxes of the tenants created the possibility of foreign load.  Therefore, the Court, in affirming the PUC’s determination, held that the existence of foreign wiring precludes a dwelling unit from being considered “individually metered” under Section 1529.1(b). 

The Court also held that the PUC could exercise jurisdiction over foreign loads at breaker boxes in a mobile-home park, upon learning of those foreign loads, even though those loads were not specified in complaints filed with the PUC.  


Germantown Cab Co. v. Philadelphia Parking Authority

No. 461 C.D. 2012 (Pa. Cmwlth. 2013) (filed January 22, 2013)

In an unreported memorandum opinion, the Commonwealth Court affirmed an order of the Philadelphia Parking Authority (Authority) that imposed a $500 penalty against Germantown Cab (Germantown) for operating outside of its authorized authority.

Germantown is a partial-rights motor carrier only authorized to provide taxi service within a limited territory in Philadelphia.  The Authority relied on hearing testimony in finding that Germantown operated outside its authorized geographical boundaries. 

Germantown appealed the Authority’s decision to the Commonwealth Court, arguing that Section 5714(d)(2) of Act 94 did not provide the Authority with jurisdiction to impose penalties against Germantown.  The Court rejected Germantown’s jurisdictional argument and held that Section 5714(d)(2) of Act 94 clearly and unambiguously empowered the Authority to regulate partial-rights taxicabs in Philadelphia at the time Germantown was cited. 

Germantown also argued that Section 5714(d)(2) is merely a statement as to the Authority’s power and not a binding restriction on a cab company’s operations under its certificate of public convenience.  The Court disagreed and held that a plain reading of Section 5714(d)(2) of Act 94 demonstrates that a carrier violates Section 5714(d)(2) when a carrier provides service outside of its designated areas. 


Commonwealth of Pennsylvania v. Donahue

59 A.3d 1165 (Pa. Cmwlth. 2013) (filed January 23, 2013)

The Commonwealth Court granted an application for summary relief filed by the Office of Governor and denied the cross-application for summary relief filed by the Office of Open Records.  

The Office of Open Records had issued a decision concluding that the five-day timeframe within which an agency is required to respond under Section 901 of the Right To Know Law (RTKL) begins on the day on which any agency employee receives a written request for records.  The Office of Governor sought a declaratory judgment with the Court that the five-day timeframe begins on the day on which an agency’s open-records officer receives the request. 

The Court stressed that an agency’s open-records officer is the only person authorized to handle requests made pursuant to RTKL.  The Court observed that under the literal, unambiguous language of Section 901 of the RTKL, “ shall not exceed five business days from the date the written request is received by the open-records officer for an agency” (emphasis added).  1 Pa. C.S. § 67.901.  Therefore, the Court held that the five-day timeframe under the RTKL begins once the open-records officer for an agency, not any agency employee, receives a written request for records.


Mapemawa v. Philadelphia Parking Authority

59 A.3d 1171 (Pa. Cmwlth. 2013) (filed January 24, 2013)

The Commonwealth Court reversed an order of the Philadelphia Parking Authority (Authority) that denied an application for a certificate of public convenience based on a finding that the carrier of the proposed service lacked a propensity to operate legally.

The Authority will grant a certificate of public convenience to a limousine company if the Authority determines that the “applicant is capable of providing…lawful…service.”  53 Pa. C.S. § 5741(a).  In order to evaluate an applicant’s capability to provide lawful service, the Authority uses the PUC’s regulation, 52 Pa. Code § 41.14(b), to evaluate whether an “applicant lacks a propensity to operate safely and legally.”  See 52 Pa. Code § 41.14(b).  

In 2008, the Applicant was issued a citation pursuant to a 2005 regulation for using a company to book passenger trips involving point-to-point service in Philadelphia without a certificate from the PUC or the Authority.  The 2005 regulation was later nullified by the Commonwealth Court because the regulation had not been adopted in accordance with the terms of the Commonwealth Documents Law.  In October of 2009, the PUC granted the Applicant a certificate of public convenience to provide limousine service in Pennsylvania.  In January 2010, the Authority denied the Applicant a certificate to operate in Philadelphia based on that 2008 enforcement action against the Applicant under the since-nullified 2005 regulation. 

On appeal, the Applicant first argued that evidence of that 2008 enforcement action was inadequate to support the conclusion that Applicant lacked the propensity to operate legally.  The Applicant further argued that the Authority’s reliance on the 2008 enforcement action in denying Applicant a certificate of public convenience in January 2010 was illegal since it was based upon a 2005 regulation later that was later nullified. 

In applying the PUC’s regulation, the Court reiterated that the phrase “lacks a propensity to operate safely and legally” at 52 Pa. Code § 41.14(b) means that an applicant “must demonstrate a persistent disregard for, flouting or defiant attitude toward the law or agency orders before that applicant is  considered to have a propensity, i.e., a natural inclination or innate or inherent tendency, to operate outside of safety and the law.”  Mapemawa, 59 A.3d at 1176.  The Court noted that “an inadvertent or isolated violation of the law” does not disqualify an applicant from receiving a certificate of public convenience.   

The Court concluded that the Authority’s decision to deny an application solely based on a nullified regulation warrants reversal.  However, the also Court discussed the merits of the case and observed that the Applicant did not deliberately violate the law, settled the 2008 citation, and paid the fine in an effort to conform to the requirements of the law.  Therefore, the Court reversed the Authority’s decision and held that the single 2008 enforcement action was insufficient to find that Applicant lacked the propensity to operate legally. 


MCT Transportation v. Philadelphia Parking Authority

60 A.3d 899 (Pa. Cmwlth. 2013) (filed February 14, 2013) 

The Commonwealth Court granted summary relief in part to the taxicab companies and overruled the preliminary objections of the Philadelphia Parking Authority (Authority).

The taxicab companies asserted a facial constitutional challenge to Section 5707(b) of the Parking Authority Law, by which the Authority sets its annual budget and fee schedule to impose fees, fines, and sanctions against the companies.  See 53 Pa. C.S. § 5707(b).  The taxicab companies argued that Section 5707(b) is unconstitutional because (1) Section 5707(b) does not impose any limitations on the Authority’s discretion and (2) Section 5707(b) effects a taking without due process of law by depriving the companies of an opportunity for a hearing on the amount of operational licensing fees, which the companies claim to be excessive, arbitrary, and confiscatory.      

In seeking a declaration that Section 5707(b) is unconstitutional, the taxicab companies contended that the General Assembly improperly delegated legislative power to the Authority because Section 5707(b) lacks guidance, standards, and restrictions on the Authority’s power to formulate its annual budget and fee schedule.

After discussing the state agency budgetary process in Pennsylvania, specifically the PUC’s budgetary process, the Court observed that, unlike any other state agency, the Authority sets its annual budget without the oversight of either the Governor or the General Assembly as a body.  The Court determined that, unlike the oversight applicable to the PUC’s budgetary process, Section 5707(b) imposes no limits on the aggregate amount of fees paid by the utilities regulated by the Authority.  The Court reasoned that without definite statutory standards and limits, the Authority has the power to set a budget in any amount and allocate costs among the regulated utilities in any way the Authority pleases. 

Since the General Assembly failed to establish definite standards and policies to limit the Authority’s power to set its annual budget and fee schedule, the Court held that Section 5707(b) unconstitutionally delegated legislative authority to the Authority in violation of the separation of powers doctrine under the Pennsylvania Constitution.  

As to their second main argument, the taxi companies contended that Section 5707(b) unconstitutionally deprived them of due process because Section 5707(b) does not provide any procedure for challenging the Authority’s fee schedule, either before or after the fee schedule is adopted. 

The Court observed that the PUC’s powers to establish a fee schedule for its regulated utilities are limited by the notice, hearing, and adjudication provisions in Sections 510(c)-(d) of the Public Utility Code.  Section 5707(b), however, does not similarly limit the Authority.  

The Court observed that while a hearing is an essential element of due process, the mere absence of a hearing remedy in Section 5707(b) did not render Section 5707(b) unconstitutional.  Rather, the Court held that Section 5707(b)’s operational bar to any means of relief for a company to challenge the fee schedule renders Section 5707(b) unconstitutional.  Specifically, the Court reasoned that Section 5707(b)’s requirement that a fee schedule reside for a narrow timeframe with the Appropriations Committees, whose determination on the fee schedule is final, strips the Authority of any power to hold a hearing and adjudicate a correction to its own fee schedule.  The Court also observed that Section 5707(b)’s lack of standards for an annual fee schedule prevents the possibility of an effective hearing. Thus, the Court held that Section 5707(b) unconstitutionally violates due process by potentially imposing an excessive and confiscatory fee without any means for the companies to challenge the fee schedule. 

Second Quarter

Airlines Acquisition Co. et. al. v. Pa PUC

No. 1285 C.D. 2012; (Pa. Cmwlth. 2013) (Filed April 30, 2013)

The Commonwealth Court affirmed a PUC order that granted a certificate of public convenience to a licensed carrier to provide additional motor carrier
(taxicab) service.  The Applicant, (Cranberry Taxi d/b/a Veterans Taxi), filed an application with the PUC to expand its taxicab services to include service territory in downtown Pittsburgh and throughout Allegheny County. The Protestants, including Airlines Acquisition and Yellow Cab, filed a timely protest to the application with the Commission’s.  The Commission adopted the ALJ’s decision, which granted Cranberry Taxi’s application. The Protestants appealed the PUC order to the Commonwealth Court.

On appeal, the Protestants claimed that substantial evidence did not support the Commission’s determinations (1) that Cranberry Taxi had proven public demand or need throughout the entire area for the proposed additional service and (2) that Cranberry Taxi was technically and financially fit to provide the proposed
service.  As a subsidiary issue, the Protestants argued that the Commission erred in failing to create a specific test for evaluating the financial fitness requirement of “sufficient capital” in the Commission’s evidentiary guidelines at 52 Pa. Code § 41.14(b).

As to public demand/need, the Court observed that the Applicant had presented testimony of 23 witnesses who described various difficulties with existing
service.  Noting that an applicant merely needs to show demand/need generally and not at every point in the proposed service territory, the Court held that substantial evidence supports the Commission’s finding of public demand/need.  

As to technical and financial fitness, the Court emphasized that an existing certificate holder is entitled to a presumption of fitness to serve.  Finding that the Protestants did not meet their burden in rebutting that presumption, the Court held that substantial evidence supports the Commission’s finding that the Applicant is technically and financially fit.  

As to Protestant’s argument that the Commission erred in not specifically defining “sufficient capital,” the Court stressed that the Court’s duty is to determine
whether substantial evidence in the record in each case supports the Commission’s determination, not to ensure that the Commission follows its
precedents regarding evidentiary sufficiency. Importantly, the Court found that the Commission has the authority and discretion to not further define “sufficient capital” and that its decision to use such evidentiary criteria on a case-by-case basis is not clearly erroneous and not a basis for reversal by the Commonwealth Court. 


Mazza v. Pa PUC

No. 1418 C.D. 2012; (Pa. Cmwlth. 2013) (Filed May 3, 2013)

In an unreported opinion, the Commonwealth Court affirmed a PUC final order that denied and dismissed a complaint filed by Mark Mazza (Mazza) against PECO
Energy Company.   In the complaint, Mazza alleged insufficient notice of termination of his utility service.

On appeal, Mazza argued that the PUC Final Order was in violation of PUC procedures and regulations because Mazza was not afforded the required twenty
days from the date of service of the April 23, 2012 ALJ Initial Decision to file exceptions to the Initial Decision before the Commission.  Mazza alleged he did not receive service of the Initial Decision on April 23, 2012 and therefore claimed that the PUC service procedures were defective or flawed. Based on this claim, Mazza argued that the PUC prematurely filed the PUC Final Order on June 1, 2012, nine days after Mazza alleged he first received service of the Initial Decision on May 23, 2012, thereby unfairly providing Mazza with less than twenty days to file exceptions. Accordingly, Mazza argued the PUC adjudication was unfair.

The Court agreed with the PUC that Mazza’s claim of improper service lacked merit.  The Court held that the twenty-day time period in which to file exceptions began on the April 23, 2012, the date of issuance of the Initial Decision, thereby requiring filing of exceptions by May 13, 2012.  

Based on Mazza’s history of filing numerous unmeritorious claims with the PUC, the PUC requested reasonable counsel fees and costs assessed against Mazza to deter future frivolous filings by Mazza.  In light of Mazza’s history and knowledge of PUC procedures and finding that Mazza’s brief and arguments lacked any basis in law or fact, the Court granted the PUC’s request for reasonable counsel fees and costs.   


In Re: Condemnation by PPL Electric Utilities Corp.

68 A.3d 15 (Pa. Cmwlth. 2013) (Filed May 8, 2013)

The Commonwealth Court reversed an order of the Court of Common Pleas of Schuylkill County.  The Court of Common Pleas had dismissed a landowner’s preliminary objections to an action by PPL Electric Utilities Corp. (PPL) to condemn land for a perpetual easement and right-of-way to construct, operate, and maintain lines and facilities for the distribution of electricity. 

On appeal, the landowner argued that PPL needed to seek approval from the Public Utility Commission (PUC) pursuant to the Associations Code, 15 Pa. C.S. § 1511, prior to condemning the landowner’s land.  PPL argued that PUC regulations and guidelines for approval of high voltage facilities indicate that PUC
approval is not required when the only purpose of the condemnation is to maintain distribution facilities. 

The Commonwealth Court observed that while the Associations Code expressly grants the right of eminent domain to public utilities, the power to condemn property must be strictly construed.  The Court found that Section 1511(c) of the Associations Code explicitly requires PUC approval for condemnations for the
purpose of erecting poles, running wires, or constructing other electrical facilities.  The Court noted and emphasized the breadth of PPL’s stated intent in its Declaration of Condemnation, where PPL asserted it “shall have, at all times in the future, the right to construct, operate and maintain, and…reconstruct additional
Electrical Facilities…within the property.” 

Given the breadth of PPL’s stated intent in its Declaration and the Court’s observance that eminent domain statutes must be construed narrowly, the Commonwealth Court held that PPL must seek approval from the PUC before condemning land for a perpetual easement and right-of-way to construct, operate, and maintain lines and facilities for the distribution of electricity. 

 

Bucks County Services, Inc. v. Philadelphia Parking Authority

71 A.3d 379 (Pa. Cmwlth. 2013) (Filed June 10, 2013)


The Commonwealth Court sustained in part and overruled in part the preliminary objections of the Philadelphia Parking Authority (PPA) and sustained
in whole the preliminary objections of the Public Utility Commission (PUC).

Non-medallion, partial-rights taxicab operators (Petitioners) filed an action against the PPA and the PUC seeking declaratory and injunctive relief to invalidate taxicab regulations and past fines.  The Petitioners filed an amended petition for review under the Commonwealth Court’s original jurisdiction.

Both the PUC and the PPA filed preliminary objections to the ten-count petition, of which interested the PUC objected to Counts III and IV.  In Count III, where the Petitioners asserted that the PPA did not have statutory authority to regulate partial-rights, non-medallion taxicab companies, the PUC argued that the Petitioners failed to join the PUC as a necessary party.  Since all parties agreed that the PUC should also be named as a respondent in Count III, the Court decided to add the PUC as a party to Count III and thereby sustained the PUC’s preliminary objection.

As to Count IV, the Petitioners sought to invalidate a 2005 Jurisdictional Agreement between the PUC and the PPA. The Parking Authorities Law, 53 Pa.C.S. §§ 5701 et seq., and the 2005 Jurisdictional Agreement provide enforcement responsibilities between PUC and PPA. The PUC argued that since Petitioners sought to invalidate the entire 2005 Jurisdictional Agreement, under which the rights of other carrier classes such as medallion taxicabs and limousines may be adversely impacted by this proceeding, failure to include these carriers as parties requires dismissal of Count IV.  The PUC also argued that Petitioners’ failure to exhaust an adequate remedy at law, namely appealing the order ratifying the 2005 Jurisdictional Agreement, deprives the Commonwealth Court of jurisdiction.  Finding that the Petitioners’ failure to join those indispensable parties was fatal to Count IV, the Court sustained the PUC’s preliminary injunction and struck Count IV
from the petition. 

As to the other counts more pertinent to the PPA, the Court sustained in part and overruled in part the preliminary objections of the PPA.  The Court also directed the PPA and the PUC to file an answer to the Petitioners’ amended petition.


United Transportation Union v. Pa. PUC

68 A.3d 1026 (Pa. Cmwlth. 2013) (Filed May 20, 2013)

The Commonwealth Court affirmed a PUC order finding that a 1975 PUC order requiring Norfolk Southern Railway Corporation (Norfolk Southern) to employ two brakemen around the clock to prevent “run outs” of rail cars at the Conway Yard (the Yard) was preempted by the Federal Railroad Safety Act of 1970 (FRSA), 49 U.S.C. §§ 20101–20167, and by Federal Railroad Administration (FRA) regulations.

In 2009, Norfolk Southern petitioned the PUC to amend the 1975 Order to: (1) eliminate portable skates and (2) eliminate the requirement to use skatemen for that job.  Alternatively, Norfolk Southern asked the PUC to amend the 1975 Order so it may direct any employee to apply or remove portable skates, and reassign the skatemen to other positions.  Norfolk Southern advised the Commission that the company has implemented engineering and safety improvements in the Yard
that have virtually eliminated run outs since the PUC last reviewed the 1975 Order.

The United Transportation Union (Union) contended portable skates remain necessary to prevent run outs.  In October 2011, the Union also filed a separate petition with the PUC seeking emergency relief (Emergency Petition) and alleging that a number of recent run out incidents in the Yard resulted in
collisions between rail cars and in employee injuries.

The PUC ultimately held that the 1975 Order was preempted as a matter of law after determining the 1975 Order pertained to an area of railroad safety preempted by the FRSA and its regulations addressing brake implementation for unmanned equipment.  The Union filed a petition for review with the Commonwealth Court from the PUC order.

The Union challenged the PUC decision for finding express preemption and comprehensive coverage by FRA regulation and criticized the PUC for construing the FRSA as prioritizing uniformity over safety, arguing that the 2007 amendments to the law deemphasize national uniformity.  The Union also asserted that the FRSA and FRA regulations did not comprehensively cover the field of railroad operations, and did not address the same subject matter as the 1975 Order.  Alternatively, the Union argued that the local hazard exemption applies at the Yard and, as such, the 1975 Order survives preemption because it meets the requirements of the savings clause, at 49 U.S.C § 20106(a).

The PUC and Norfolk Southern countered that the 1975 Order is squarely preempted because the FRSA expressly preempts laws in the field of railroad operation safety to ensure national uniformity.  Further, the PUC and Norfolk Southern argued that the 1975 Order covered the same subject matter addressed by
a FRA regulation pertaining to unmanned equipment in a hump yard.  Both these parties relied on an express preemption provision of the FRSA that regulates the same subject matter encompassed by FRA regulation.

The Commonwealth Court held that the FRSA, and its implementing regulations, expressly preempted state law to the extent the subject matter is federally regulated.  Specifically, the Court held that the FRA regulation applied to prevent run outs, the precise subject matter addressed in the 1975 Order.  Since the FRA regulation covered the field, the 1975 Order attempting to regulate the subject must be nullified.  The Court also held that the 1975 Order did not satisfy the savings clause that would have allowed the it to escape preemption because the Yard did not present a local safety hazard requiring a unique remedy that could not be addressed by uniform national regulation.  Therefore, the Court held the PUC properly granted summary judgment to Norfolk Southern and affirmed
the PUC's decision and order rescinding the 1975 Order.


Rosemont Taxi v. Philadelphia Parking Authority

68 A.3d 29 (Pa. Cmwlth. 2013) (Filed May 22, 2013)

The Commonwealth Court reversed and remanded an order of the Philadelphia Parking Authority (PPA).  The PPA had denied a request by Rosemont Taxicab Co., Inc. (Rosemont or Applicant) to acquire the license of Concord Coach USA t/a Bennett Taxicab (Bennett) to provide taxicab service in a part of Philadelphia. 

Bennett Taxicab is a partial rights taxicab company, having operated under a PUC certificate to operate in Delaware and Montgomery counties and a small service area in Philadelphia.  After filing an application with the PUC to acquire Bennett’s certificate, the PUC granted Rosemont’s transfer application with respect to Delaware and Montgomery counties, but determined it lacked jurisdiction to approve the transfer of Bennett’s Philadelphia area and directed Rosemont to file a request with the PPA.

The PPA denied Rosemont’s application, finding that the Applicant lacked (1) sufficient technical expertise and (2) a commitment to provide safe and lawful taxicab service.  The PPA will grant a certificate of authority if the PPA determines that the “applicant is capable of providing…lawful…service.”  53 Pa. C.S. § 5741(a).  In order to evaluate an applicant’s capability to provide lawful service, the PPA uses the PUC’s regulation, 52 Pa. Code § 41.14(b), to evaluate whether an applicant has sufficient “technical and financial ability” and the “propensity to operate safely and legally.”  See 52 Pa. Code § 41.14(b).  

In applying the PUC’s regulation, the Commonwealth Court reiterated that the phrase “lacks a propensity to operate safely and legally” in means that an
applicant “must demonstrate a persistent disregard for, flouting or defiant attitude toward the law or agency orders before that applicant is considered to have a propensity, i.e., a natural inclination or innate or inherent tendency, to operate outside of safety and the law.”  (citing Mapemawa v. PPA, 59 A.3d 1171, 1176 (Pa. Cmwlth. 2013)).  The Court held that two adjudicated citations against the Applicant, which had resulted in a fine of $1,500, were inadequate to rebut the presumption that the Applicant has a commitment to operate in a safe and legal manner.   

Therefore, the Court reversed the PPA’s decision and held that the two adjudicated citations were insufficient to find that the Applicant lacked the propensity to
operate legally. 



Sawink v. Pa. PUC

No. 2005 C.D.2012 (Pa. Cmwlth. 2013) (Filed June 7, 2013)

In an unreported opinion, the Commonwealth Court affirmed the Pa PUC’s order that granted approval of a contested application for a certificate of public  onvenience to begin a taxicab service in Tinicum Township, Delaware County.  Sawink opposed the application claiming a competitive interest because its service area included the Applicant’s proposed service area.

On appeal, Sawink relied on 66 Pa. C.S. § 331(d)(8), which states that “officers presiding at hearing shall have authority…to…make decisions or recommend decisions…,” to claim that by specifying “officers presiding at hearings” the General Assembly intended to preclude other officers from rendering decisions.  Regarding the instant case, Sawink argued that ALJ Melillo lacked authority to issue an initial decision because ALJ Fordham presided at the hearing; the case was transferred to ALJ Melillo once ALJ Fordham became unavailable.

On review, the Court held that Sawink waived its objection to ALJ Melillo issuing the initial decision because the company did not timely object or challenge the transfer.  In the present case, the record remained open for more than two months following the transfer and the Court found that a party must raise an objection as the earliest possible stage of the adjudicatory process.  Alternatively, the Court stated that Sawink’s claim lacked merit because Section 334(a) of the
Public Utility Code specifically permits another officer to issue a decision when the presiding officer becomes unavailable.

Sawink also contended that the Pa PUC improperly shifted the burden of proof to Sawink before the Applicant established a prima facie by producing sufficient evidence to support his claims of financial and technical fitness.

However, the Court found that the Pa PUC correctly concluded that the Applicant established a prima facie case of public need in the proposed service area by presenting three credible hotel employees able to testify regarding the length of time it takes for taxicab service to arrive at their respective hotels and the negative impact of such waiting periods.  The Court also determined that the Applicant appropriately testified to both his technical fitness, having extensive experience in the taxicab industry, and financial fitness, having submitted a balance sheet and projected one-year income statement with his application.

Therefore, the Court concluded that the burden of proof properly shifted to Sawink, and that Sawink failed to offer any evidence to challenge Applicant’s technical and financial fitness.  Thus, Sawink’s claim lacked merit and the Pa PUC’s order was upheld.


Third Quarter
 

Ronald Cab, Inc., v. Pa. PUC

76 A.3d 74 (Pa. Cmwlth. 2013) (Filed July 12, 2013)

The Commonwealth Court vacated and remanded a Pa PUC order dismissing the complaint of Ronald Cab, Inc., and three other taxicab companies (collectively, Taxicab Companies) that alleged a competing company, OGED, Inc., was offering taxicab service without a certificate of public convenience.  Broadly, on remand the Pa PUC must answer what effect the Act of July 16, 2004 (Act 94, which transferred the responsibility for regulating taxicab service in Philadelphia from the Pa PUC to the Philadelphia Parking Authority), had on OGED’s ability to provide call and demand service both within Philadelphia and outside the city.  More specifically, the central question of the appeal is whether medallion taxicabs that operated in Philadelphia and outside the city under a single certificate of public convenience were permitted to transfer the non-Philadelphia service to a non-medallion cab without the Pa PUC’s approval.

53 Pa. C.S. §§ 5701-5745 (Chapter 57) repealed the Medallion Act and requires each taxicab with citywide rights to have a certificate of public convenience and a medallion attached to the vehicle.  The Taxicab Companies assert that OGED is providing service at the 69th Street Station (Station) in Upper Darby, Delaware County, without the requisite authority.  Prior to Act 94, OGED had one certificate that authorized call and demand service in a small area outside Philadelphia that included the Station.  OGED currently operated taxicabs (1) with medallions in Philadelphia and (2) without medallions outside.

At hearing in front of a Commission ALJ, the Taxicab Companies presented testimonial evidence that OGED’s 2007 Commission tariff specified that OGED was limited to operating one vehicle in the service area encompassing the Station, but that OGED’s 2009 tariff removed the one-vehicle restriction.  The Taxicab Companies argued that the OGED acted as though Act 94 effected a change in its operation and service area that did not require Pa PUC approval.  In response, the testimony of OGED acknowledged that its 2009 tariff removed reference to Philadelphia and that OGED currently operated four taxicabs at the station, pays assessments on those non-medallion cabs to the Pa PUC, and its taxis are inspected by Commission personnel.

The ALJ held that OGED improperly removed its one-vehicle restriction without following the procedures required for amending a certificate of public convenience and reinstated the previous one-vehicle registration.  The ALJ also found the record inadequate to prove that OGED was operating in the same service are for which the Taxicab Companies are licensed.  After both the Taxicab Companies and OGED filed exceptions, the Commission ultimately sustained the those OGED and held that the ALJ erred in holding that OGED violated the Public Utility Code because the statutory procedures cited by the ALJ did not apply to tariffs.

On appeal to the Commonwealth Court, the Taxicab Companies argued that (1) the Pa PUC does not regulate medallion taxicabs that hold certificates of public convenience that include an extra-Philadelphia service area; and (2) the record proved that OGED is offering call or demand service outside Philadelphia without a certificate of public convenience issued by the Pa PUC.

In the Court’s words, “The Taxicab Companies assert that OGED lacks authority to provide service outside Philadelphia on a stand-alone basis under a certificate of public convenience issued by the Commission before Act 94.  They claim that OGED’s medallion taxicabs may provide this service only when it is ancillary to their Philadelphia service.  contend that OGED’s pre-Act 94 medallion taxicabs did not divide like an amoeba into two companies: a medallion company offering service exclusively in Philadelphia and a second, non-medallion company offering service outside Philadphia.”  The Taxicab Companies also noted that policy considerations are different when the two services are split apart and that the Pa PUC never found a need for additional non-medallion cabs at the Station.

The Court vacated the Commission’s decision because the Pa PUC did not decide all issues presented.  On remand, the Commission is tasked with determining whether Act 94 bifurcated OGED’s original Commission-issued certificate of public convenience into two certificates, and whether OGED is a medallion company subject only to the regulation of the Parking Authority but with the ability to have a service area that includes the Station.  Finally, the Pa PUC must decide whether OGED was required to obtain Commission approval to amend its tariff and removed Philadelphia from its service area.

 

Popowsky v. Pa. PUC

71 A.3d 1112 (Pa. Cmwlth. 2013) (Filed July 26, 2013)

The Commonwealth Court affirmed a Pa PUC order that approved of Pike County Light & Power Company’s (Pike) default service plan, which proposed to obtain all electricity for customers who had not chosen another electric generation provider from purchases on the spot market.  The Consumer Advocate contended that Pike’s plan violates Section 2807(e)(3.2) of the Electricity Generation Customer Choice and Competition Act (Competition Act) which requires a default service plan to consist of a “prudent mix” of spot market purchases, short-term contracts, and long-term contracts (the enumerated sources).

In the Commission’s opinion, the Pa PUC amended the ALJ’s Recommended Decision which endorsed including a short-term hedging contract proposed by the Office of Consumer Advocate (OCA) as a method of introducing greater price stability into Pike’s default service pricing.  The Pa PUC stated that the ALJ relied too heavily on the Preamble to Act 129 and placed too much emphasis on price stability at the expense of lower customer costs.  Thus, the Pa PUC approved Pike’s plan to continue with spot market pricing as the method that would result in the least customer cost over time.

On appeal, the Consumer Advocate argued that: (1) the Pa PUC’s concerns regarding a fixed-price hedge are not supported by substantial evidence; and (2) that the Pa PUC erred as a matter of law in approving Pike’s plan when it included only one of the sources for electricity listed in Section 2807(e)(3.2) of the Competition Act, spot market purchases.

On review, the Commonwealth Court first held that testimony offered supported the Pa PUC’s determination that customer costs would likely be higher if Pike were forced to hedge its costs with a short-term contract.  Therefore, the Court held that the Pa PUC’s findings were supported by substantial evidence. 

With respect to the Consumer Advocate’s second argument, the Court noted that it owes deference to the Pa PUC’s interpretation of the statutes it is charged to enforce, especially where, as here, “the statutory scheme is technically complex.”  The Court held that the current case reveals a latent ambiguity in Section 2807(e)(3.2) where, in the technical judgment of the Pa PUC, prudence precludes a combination of more than one of the enumerated sources and dictates that only a single source be used, spot market purchases here.  The Court stated that: (1) the Pa PUC did consider price stability when making its decision to approve Pike’s plan; and (2) the Pa PUC’s determination that the additional benefits of a financial hedge did not justify the additional costs was within its discretion.

In a dissenting opinion, President Judge Pellegrini contended that Pike’s default service plan is at variance with the Competition Act, which requires a prudent mix of the enumerated sources to obtain electricity.  The Dissent stated that the phrase “shall include a prudent mix” is unambiguous and requires that all three of the enumerated sources must be included in a default plan.

 

Bowling v. Office of Open Records

75 A.3d 453 (Pa. 2013) (Filed August 20, 2013)

The Supreme Court affirmed the decision of the Commonwealth Court and held that under the Right-to-Know Law (RTK Law) statutory scheme the Commonwealth Court is the ultimate fact finder and should de novo reviews regarding appeals of determinations made by the Office of Open Records (OOR) appeals officers.

The Bowling case stems from the request of an employee of the Pittsburgh Tribune Review (requester) who requested access to certain records from the Pennsylvania Emergency Management Agency (PEMA).  When PEMA provided only partial access to the records and redacted some information pursuant to the exemptions at 65 P.S. § 67.708(b), the requester appealed to the OOR appeals officer who subsequently determined, without a hearing, that the redaction was proper.

On appeal before the Commonwealth Court, the court concluded it must conduct a de novo review, independently review of the OOR’s order, and substitute its findings of fact for those made by the OOR.  With respect to the court’s scope of review, the Commonwealth Court determined that it could consider information and evidence beyond the record below through either (1) a hearing; or (2) remanding the case to ensure that a record sufficient for judicial review existed.

On review, the Supreme Court first investigated whether the Commonwealth Court properly determined that de novo review applies to the court’s review of an OOR appeals officer’s determination.  Importantly, the Supreme Court stressed that the RTK Law does not articulate a standard or focus of review in these instances.  In upholding the Commonwealth Court’s decision, the majority opinion reasoned that the RTK Law does not provide discretion to OOR determinations made my appeals officers concerning access to records and that the General Assembly likely intended the Commonwealth Court to be the statutory fact-finder in RTK Law appeals.  The Court held that due process protections (notice and a hearing) were not guaranteed under the current process leading to an appeals officer’s determination.

Additionally, the Supreme Court investigated the proper scope of review of an OOR determination.  While the OOR contended that Section 1303(b) of the RTK Law limits the scope by providing that the “record before a court shall consist of the request, the agency’s response, the appeal filed …, the hearing transcript, if any, and the final written determination of the appeals officer,” the Court concluded that the scope of review depends on the nature of the task assigned to the reviewing court and the standard of review.  Thus, the Court held that Chapter 13 courts (e.g., the Commonwealth Court) have the authority to expand their record to meet their statutory role under a plenary or broad scope of review.

While Justice Saylor concurred in the majority’s holding, he noted that he would give greater deference to OOR determinations than the majority.  In a dissenting opinion, Chief Justice Castille stressed that reviewing courts should defer to the OOR’s role an initial fact-finder, but may remand for additional findings if necessary.  The Chief Justice added that the Commonwealth Court’s de novo review will add delays and increase expenses to parties requesting access to public records, and called for significant legislative revision to the RTK Law.  In a separate dissent, Justice Todd submitted that the General Assembly intended procedures for accessing public records to be conducted expeditiously and efficiently and, therefore, did not intend the Commonwealth Court’s review to be a prolonged de novo review.  Thus, Justice Todd also observed that an OOR appeals officer’s determination should be reviewed under a more deferential, abuse of discretion standard.

 

MetEd & Penelec v. PUC

11-CV-04474, 2013 WL 5429291 (E.D. Pa. Sep. 30, 2013)

The District Court in the Eastern District of Pennsylvania granted the PUC’s motion to dismiss on the grounds of issue preclusion. 

This case originated in 2008 when Met Ed and Penelec (the Companies) attempted to recover line loss costs charged by PJM, the interstate transmission grid operator, in their Transmission Service Charge riders filed with the PUC.  “Line losses” represent the amount of energy lost between the generation facility and the delivery of that energy at its endpoint.  To compensate for line losses, PJM must purchase energy from generation suppliers to make up those line losses and complete the transaction.  While the Companies maintained that line losses were recoverable as federally-approved transmission costs, the PUC determined that, under the Companies’ restructuring agreements filed with the PUC, line losses were characterized as generation costs and, thus, subject to the Companies’ generation caps, which expired on December 31, 2010.  The Companies appealed to the Commonwealth Court on statutory construction and constitutional preemption grounds, among others.  In a unanimous en banc decision, the Commonwealth Court affirmed the PUC’s determination that classified line losses as generation costs. 

The Companies filed petitions for review before the Supreme Court of Pennsylvania and the United States Supreme Court, both of which declined to hear the matter.  While those appeals were pending, the Companies also filed a complaint in federal district court, alleging substantially the same constitutional violations and preemption claims as the ones before the Commonwealth Court.  After briefing and oral argument, the District Court granted the PUC’s motion to dismiss the Amended Complaint on issue preclusion grounds. 

The District Court found that all of the Companies’ claims raised in the Amended Complaint were identical to or premised upon the issues reviewed by the Commonwealth Court, which was jurisdictionally competent to rule on constitutional preemption issues.  The Companies had argued that the Commonwealth Court decision was an extension of the legislative ratemaking process and should not be afforded preclusive effect.  The District Court disagreed and found that the Commonwealth Court acted in a judicial capacity when reviewing the PUC Order.  Therefore, the Commonwealth Court’s decision is afforded preclusive effect and is a final judgment on the merits. 

The District Court also found that the Companies were afforded a full and fair opportunity to litigate their claims surrounding the Filed Rate Doctrine, trapped costs, and preemption issues before the Commonwealth Court.  Accordingly, the District Court held that the Full Faith and Credit Act, 28 U.S.C. §1738, as applied through the common law principle of issue preclusion (formerly known as collateral estoppel), barred all of the issues raised in the Companies’ Amended Complaint. 

Since the District Court determined that issue preclusion was dispositive of all of the Companies’ claims, the court did not rule on the alternative defenses raised by the PUC – claim preclusion, Burford abstention, and judicial estoppel. 

Met Ed and Penelec appealed the District Court decision, which is currently pending before the Third Circuit Court of Appeals.

 

Fourth Quarter

Norfolk Southern Railway Co. v. Pa. PUC

77 A.3d 619 (Pa. 2013) (Filed October 2, 2013)

The Pennsylvania Supreme Court vacated the holding of the Commonwealth Court that the Pa PUC may not allocate costs to a transportation utility which regularly uses a crossing site in railroad operations but does not own real property or facilities there.  The Court remanded the case for consideration of issues that were forestalled by the Commonwealth Court’s adoption of an ownership prerequisite to liability.

In 2003, the Pa PUC directed East Hempfield Township (Township) to remove a deteriorated bridge that carried a local road above train tracks owned and used by Amtrak.  Norfolk Southern Railway Company (Norfolk) has an easement and operating agreement with Amtrak that allows Norfolk to operate freight trains on the same tracks.  Norfolk, the Township, the County, PennDOT, and Amtrak participated in a subsequent cost allocation proceeding, pursuant to 66 Pa. C.S. § 2704(a).

Norfolk cited City of Chester v. Pa PUC, and argued that because it owned no property or facilities at the crossing site and paid Amtrak for the privilege of operating on Amtrak’s line, the Pa PUC lacked authority to allocate costs to Norfolk which had no ownership interest associated with the crossing.  See 798 A.2d 288 (Pa. Cmwlth. 2002). 

However, the ALJ found Norfolk’s argument unpersuasive and allocated fifteen percent ($78,816) of the primary disputed amount of allocable costs ($525,441) to Norfolk.  The ALJ reasoned that (1) the Pa PUC generally is not limited to any fixed rule or formula in cost apportionment, but takes all relevant circumstances into account; (2) City of Chester does not discuss, distinguish, explain or overrule the many decisions encapsulating the Pa PUC’s broad, discretionary authority; and (3) the statutory framework for Pa PUC cost allocations draws no distinction based on ownership, but invests the Pa PUC with authority to allocate costs among “concerned” parties.

Once the Pa PUC adopted the ALJ’s proposed findings and conclusions, Norfolk sought to have the Commonwealth Court reverse the Pa PUC’s memorandum opinion.  The Commonwealth Court, citing City of Chester, reversed the Pa PUC’s opinion by holding that “it is the ownership of the rail line involved that places liability on the railroad for costs associated with repair, replacement or removal of a crossing.”

On review, the Supreme Court reversed the Commonwealth Court’s finding and held that a transportation utility need not own facilities at a rail-highway crossing to be a “concerned” party for purposes of the Pa PUC’s cost allocation jurisdiction and authority, at least where the utility conducts regular operations at the crossing and may enforce an easement-based right of way.  The Court held that the Legislature provided, at most, implicit guidance concerning the range of utilities which may be “concerned” parties with respect to rail-highway crossings and delegated the cost allocation responsibility to the Pa PUC.  The Court continued that the overarching intent of the Legislature relative to administrative cost allocation was to bring before the Pa PUC, for an equitable allocation of costs, all parties having a substantial interest in crossing sites and projects.

However, while the Pa PUC contended that its broad discretion invested it with authority not only to determine the allocation costs to “concerned” parties, but also which parties are “concerned” in the first instance, the Court concluded that what the Legislature meant by the phrase “public utilities concerned…” is a matter of a statutory concern.  Thus, the Pa PUC has discretion to determine the proper portions of costs to be allocated to concerned parties, but not to select the parties who will be subject to allocation on a discretionary basis.

 

Robinson Tp., Washington County, et al. v. Com. of Pa

Pa. PUC, et. al 83 A.3d 901 (Pa. 2013) (Filed  December 19, 2013)

The Pennsylvania Supreme Court held that the primary zoning provisions of Act 13 of 2012, which amended the Pennsylvania Oil and Gas Act (Act 13), are unconstitutional.  A plurality of the Court held that Section 3215(b)(4) (regarding waiver of minimum setback distances for oil and gas wells), Section 3215(d) (regarding the right of appeal from DEPs consideration of comments submitted under Section 3212.1 by either municipalities or storage operators),
Section 3303 (regarding preemption of local ordinances relating to oil and gas operations),
and Section 3304 (regarding uniformity of local ordinances to allow for reasonable development of oil and gas) violate the Environmental Rights Amendment of the Pennsylvania Constitution (Pa Constitution), at Article I, Section 27. 

Additionally, the Court held that the following provisions of Act 13 are not severable:  (1) the remaining parts of Section 3215(b) (regarding well location limitations) are enjoined entirely because these parts, without 3215(b)(4) are incomplete and incapable of execution in accordance with legislative intent; and (2) Sections 3215(c) and (e), as well as Sections 3305 through 3309, to the extent these provisions implement or enforce the aforementioned Sections of Act 13. 

The en banc panel of the Commonwealth Court originally enjoined enforcement of Sections 3215(b)(4) and 3304 of Act 13 and of provisions of Chapter 33 that enforced Section 3304.  Notably, the Commonwealth Court sustained the Commonwealth’s preliminary objections to the following claims:  (1) that provisions of Act 13 violated the Environmental Rights Amendment of the Pa Constitution; (2) that Act 13 is a “special law” for its treatment of the oil and gas industry; (3) that 3241(a) permits a private taking of property in violation of the Pa Constitution; (4) that Section 3305(a)-(b) delegates judicial and legislative authority powers to the Pa PUC in violation of the separation of powers doctrine; and (5) that provisions of Act 13 are unconstitutionally vague.

In its review, the Court decided the case on the grounds that that Act 13 was unconstitutional because it violated Environmental Rights Amendment and reversed the Commonwealth Court’s ruling insomuch as it sustained the Commonwealth’s preliminary objections regarding Act 13 being a “special law” and constituting a private taking.  The Court remanded the case to the Commonwealth Court to decide these issues on the merits as well as to address whether any remaining provisions of Act 13, to the extent they are valid, are severable.

With respect to Section 3305(a)-(b) delegating certain judicial and legislative authority to the Pa PUC, the Court affirmed the Commonwealth Court’s determination that Section 3305 of Act 13 (relating to the Pa PUC’s review of local ordinances) is not an unconstitutional delegation of powers to the Pa PUC.  In upholding Section 3305(b) (regarding the Pa PUC issuing orders that determine whether local ordinances violate Chapters 32 and 33 of Act 13 or provisions of the MPC), the Court held that the General Assembly may assign an administrative agency the task of deciding disputes regarding the application or enforcement of a particular statute, subject to appellate review of right in a court of record.  Similarly, the Court upheld Section 3305(a) (regarding municipalities’ abilities to request from the Pa PUC a written advisory opinion about whether a proposed local ordinance would violate Act 13 or the MPC), stating that, “under the Act 13 construct, local governments retain the power to frame local ordinances as they see fit, within the limitations of their delegated powers.”  Act 13 does not require municipalities to submit to pre-enactment review by the Pa PUC and the Pa PUC has no power to enforce an opinion.

In support of its use of the Environmental Rights Amendment, the Court found that “imposing statewide environmental and habitability standards appropriate for the heaviest of industrial areas in sensitive zoning districts lowers environmental and habitability protections for affected residents and property owners below the existing threshold and permits significant degradation of public natural resources.”  The Court noted that the zoning requirements in Chapter 33 essentially reduce the local government’s zoning role to “pro forma” accommodation of industry and development.  Additionally, the Court stated that there is no controlling guidance or precedence with the respect to the issues presented in this case regarding Act 13, but acknowledged “an obligation to vindicate the rights of its citizens where the circumstances require it and in accordance with the plain language of the Pa Constitution.

The Court also found that all named petitioners have standing and that the substantive claims of these Petitioners are remanded to the Commonwealth Court for a decision on the merits.  This includes Dr. Khan’s Chapter 32 “gag order” claims.

While concurring in the Court’s holding, Justice Baer found the main zoning provisions of Act 13 unconstitutional based on substantive due process because Act 13 “sets absolute standards rather than minimal guidelines that all municipalities and residents must abide by, without providing for any remedy when the inevitable damage to the enjoyment of private property occurs.” 

The dissenting opinions of Justices Saylor and Eakin found Act 13 to be constitutional as a valid exercise of the General Assembly’s police powers.