Beaupre v. Green Mountain Power Corp.

Beaupre v. Green Mountain Power Corp. (99-415); 172 Vt. 583; 776 A.2d 424

[Filed 15-May-2001]



                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 1999-415

                            SEPTEMBER TERM, 2000


Darlene Beaupre, Anne Blair, 	       }	APPEALED FROM:
and Luanne Gallagher	               }
                                       }
     v.	                               }	Public Service Board
                                       }	
Green Mountain Power Corp., 	       }
Burlington Electric Dept., and	       }
Central Vermont Public Service Corp.   }	DOCKET NO. 5898

	

             In the above-entitled cause, the Clerk will enter:


       Tenants Darlene Beaupre, Anne Blair and Luanne Gallagher appeal an
  order of the Public  Service Board closing the docket in their contested
  case against utilities Green Mountain Power  Corp., Burlington Electric
  Dept., and Central Vermont Public Service Corp.  Tenants claim that (1) 
  the board was incorrect in concluding that its authority does not extend to
  the exercise of personal  jurisdiction over landlords and that it lacks
  authority to order utilities onto non-utility property to  conduct
  inspections of wiring to resolve monetary disputes between landlords and
  tenants, (2) the  board abused its discretion when it denied tenants'
  motion for certification of this action as a class  action, and (3) the
  board erred in concluding that it cannot acquire in personam jurisdiction
  over  classes of persons, such as landlords, merely by service of summons. 
  Because the underlying billing  dispute between tenants and utilities has
  been resolved by stipulation and a release from liability,  leaving no live
  controversy between the parties, we affirm.

       On August 7, 1996, tenants filed their complaint with the board. 
  Previously, tenants had been  residential electric customers living in
  rented apartments in Colchester, Burlington, and Rutland.   Each complained
  of high utility bills arising from electricity being diverted to others in
  their  apartment building after the electricity had passed through tenants'
  own meters.  To stop the ongoing  diversion and to confirm its magnitude,
  customers brought this action before the board, naming their  respective
  landlords and utility providers as defendants, seeking injunctive relief
  and requesting  rulemaking.  The injunctive relief sought to require
  utilities to (1) investigate the internal wiring of  tenants' rental
  residences, (2) estimate the amount of electricity for which they paid that
  should have  been the responsibility of the landlords or other tenants, and
  (3) bill such charges to the parties who  appear to have actually received
  the service and adjust tenants' accounts accordingly.  Tenants also  sought
  injunctive relief against their respective present and former landlords,
  requiring them to  provide utilities access as needed for the purpose of
  determining how much electricity is or was  being billed to tenants but is
  or was consumed by other users, and to install meters and rewire the 

 

  premises as necessary to remedy such diversion problem.

       The petition for rulemaking requested the board adopt a rule
  applicable to all regulated,  metered utility service in the state.  This
  rule would require such utilities to investigate all consumer  complaints
  of apparent utility diversion of service, and, where reasonable cause
  existed to believe  that diversion has taken place, to estimate the usage
  fairly chargeable to another party or parties, and  to pursue such other
  party or parties exclusively for payment for such service, removing such
  charges  from the account of the complaining consumer.  The petition also
  proposed the remedy of requiring  landlords of residential rental premises,
  at which metered utilities are not separately metered to  deliver service
  only to the customer receiving the bill, to assume sole financial
  responsibility for such  accounts both retroactively and prospectively. 
  The complaint also claimed to bring this petition on  behalf of a class of
  Vermont residential tenants who had in the two years preceding the
  complaint, or  will have in the future, reasonable cause to believe that
  their utility meter is metering service  consumed by persons other than
  themselves.

       After a hearing on the matter, the hearing officer entered an order on
  June 9, 1997, stating that  (1) board jurisdiction does not extend to
  landlords, nor does it provide authority for the board to  order utility
  companies onto non-company property to conduct inspection of wiring; (2)
  the board  does have authority to order utility companies to adjust
  customer bills; (3) it would be inappropriate  at that time for the board
  to deal generally with the issue of meter diversion through rulemaking or 
  generic investigation; and (4) an investigation into tenants' claims was
  necessary, and a date for a  status conference needed to be set.  Shortly
  thereafter, the defendant landlords were formally  dismissed from the
  action.

       On July 9, tenants responded to a July 7 status conference memorandum
  by filing with the  Board a motion for class certification, and by
  withdrawing their earlier motion for preliminary  injunctive relief. 
  Tenants informed the hearing officer that none of the customers were still
  residing  in the rental units where the utility diversion giving rise to
  the complaint occurred. (FN1)  Tenants  also requested that the board
  review the hearing officer's June 9 order. 

       In its August 27 order on the motion to review the hearing officer's
  order, the board agreed  with the hearing officer that the board's
  authority does not extend to the exercise of personal  jurisdiction over
  landlords, nor does Vermont law give it authority to order utility
  companies onto  non-company property, over the objection of the property
  owner, to conduct inspection of wiring to  resolve monetary disputes
  between landlords and tenants.  It also agreed that the board has explicit 
  authority to hear and adjudicate matters arising between customers and
  their utilities, and this  jurisdiction includes the manner of operating
  and conducting utility-related business, including the  billing of
  customers.  

 

       Tenants appealed the board's ruling to this Court.  We dismissed the
  appeal as premature  because tenants still had avenues for relief
  available, such as the possibility of board resolution of  customer billing
  disputes or rulemaking after further evidence was presented, and the
  petition for  class action was still pending.  Beaupre v. Green Mountain
  Power Corp., 168 Vt. 596, 597, 715 A.2d 1292, 1293-94 (1998) (mem.).

       On April 1, 1999, the hearing officer denied tenants' request for
  class certification, leaving the  billing disputes to be resolved on an
  individual basis.  He also dismissed Burlington Electric Dept.  from the
  case as the billing dispute between it and tenant Blair had been resolved. 
  On April 15, at a  status conference, the remaining utilities agreed to
  release Beaupre and Gallagher from liability for  the unpaid utility bills
  at the core of this dispute.  Tenants agreed to prepare a stipulation 
  acknowledging this release of liability and withdrawing their claims
  against utilities.

       In May, the parties stipulated to the withdrawal of tenants' request
  that their utility bills be  adjusted.  The parties further stipulated that
  a proposed final order be entered by the hearing officer  and ordered by
  the board as the final judgment on the matter.  This proposed final order
  recognized  that tenants had withdrawn their claims for adjustment of their
  respective utility bills, that the board  denied tenants' requests for
  injunctive relief based on lack of personal jurisdiction over the landlords 
  (specifically referring to the hearing officer's order of June 6, 1997, and
  the board's order of August  27, 1997, to that effect), that the request to
  enjoin utilities to inspect the wiring in tenants' residences  had become
  moot over time and in light of intervening events, and that the motion to
  certify the  action as a class action had been denied in the hearing
  officer's procedural order dated April 1, 1999.  The proposed final order
  dismissed the complaint for injunctive relief, and ordered that the 
  proceeding be continued solely as a request for rulemaking.

       The hearing officer subsequently prepared a proposed order closing the
  docket, in which he  recognized that the parties had settled their dispute. 
  He recommended the board approve the  stipulation, approve the settlement
  between Blair and Burlington Electric Dept., "convene a  workshop to
  discuss informational and reporting issues . . . associated with
  allegations of utility  service diversion" and consider promulgation of a
  rule to resolve such issues.  He also recommended  that the docket not be
  kept open for the purpose of rulemaking, contrary to the position the
  parties  advocated, reasoning that the prior order on jurisdictional issues
  precluded the specific rulemaking  sought by tenants, and that rulemaking
  usually proceeds outside the context of a contested case  docket. 

       Notwithstanding their stipulation to the entry of the proposed final
  order by the hearing officer  as the final judgment on the matter, on June
  21 tenants made comments to the board about the  proposed order closing the
  docket.  See 3 V.S.A. § 811 (if decision in contested case is adverse to a 
  party, adversely affected party is afforded opportunity to file briefs and
  make oral argument to  officials who are to render final judgment). 
  Tenants claimed that, contrary to the conclusion made by  the hearing
  officer, all disputes between the parties had not been resolved-the only
  portion which  had been resolved was the request that utilities adjust
  tenants' disputed outstanding utility bills.  They  stated that tenants did
  not withdraw their claim for final injunctive relief-only the motion for 

 

  a preliminary injunction had been withdrawn.  They also objected to the
  closure of the docket,  claiming that they had properly sought rulemaking
  in this proceeding and did not consent to its  termination.

       On July 14, the board accepted the hearing officer's recommendations
  and entered the order  closing the docket as its final judgment in the
  matter.  The board responded to tenants' comments on  the proposed order
  closing the docket, agreeing with the hearing officer that the contested
  case  docket was not the proper place to initiate rulemaking, and that a
  rulemaking procedure was an  appropriate approach to take in this case, due
  to its general applicability.  It noted that, unlike a  contested case
  which is limited to the parties present, a rulemaking procedure could
  include utilities  that were not parties to this case, would be a more
  administratively efficient approach and could also  result in a broader
  application of the relief sought by tenants.  Furthermore, it stated that,
  since  tenants' billing disputes had been resolved, there was no need for
  the contested case docket to remain  open.  Tenants appealed the board's
  order closing docket to this Court. 

       We first note that, at oral argument, the utilities argued that the
  case was not properly before  this Court because tenants had failed to
  exhaust all their administrative remedies as to the hearing  officer's
  decision denying tenants' request for class certification.  See 3 V.S.A. §
  815(a) ("A person  who has exhausted all administrative remedies available
  within the agency and who is aggrieved by a  final decision in any
  contested case may appeal that decision to the supreme court . . . ."). 
  For  tenants to have exhausted all their legal remedies in this contested
  case, the hearing officer must have  presented his findings of fact in
  writing to the board in the form of a proposal for decision, with a 
  majority of board members rendering judgment on that proposal.  See 30
  V.S.A. § 8(c).  Here, the  hearing officer presented a proposal for
  decision to the board, and the full board rendered judgment  on the
  proposal.

       Included in the stipulation and proposed final order was the
  acknowledgment by all the parties  that class status had been denied. 
  Tenants made no comment on or objection to this ruling when they 
  submitted, pursuant to 3 V.S.A. § 811, their comments on the proposed order
  closing the docket.   Therefore, they waived any challenge before the board
  from this adverse ruling.  This inaction also  waived their right to appeal
  to this Court the decision to deny class certification.  Passion v. Dep't
  of  Soc. & Rehab. Svcs., 166 Vt. 596, 598, 689 A.2d 459, 462 (1997) (mem.)
  (because of failure to  object before the board, claim will not be heard on
  appeal).

       Furthermore, notwithstanding tenant's claim in their § 811 comments
  regarding their earlier  request for final injunctive relief, after the May
  1999 stipulation there remained no case or  controversy.  In the
  stipulation, tenants agreed to withdraw their claims against utilities. 
  Utilities  have released tenants from liability for unpaid electric bills. 
  This leaves no actual case or  controversy between the parties, and no
  injury redressable by a decision of this Court.   Neither party  has
  challenged the validity of the stipulation, and neither party has been
  aggrieved by its approval by  the board.  As tenants no longer have any
  personal stake in the outcome of this case, they at best  retain only a
  speculative interest in the impact of their generalized grievance.  As a
  result, tenants  have no standing to raise these questions on appeal, and
  this Court has no power to hear the 

 

  challenges.  See Parker v. Town of Milton, 169 Vt. 74, 77, 726 A.2d 477,
  480 (1998) (Court may  only resolve actual controversies between adverse
  litigants).

       The only issue properly before this Court is the board's refusal to
  continue tenants' case as a  request for rulemaking.  We apply a
  deferential standard of review in appeals from the public service  board. 
  In re Tariff Filing of Cent. Vt. Pub. Svc. Corp., 167 Vt. 626, 626, 711 A.2d 1158, 1159  (1998) (mem.) (citing In re Green Mountain Power Corp.,
  162 Vt. 378, 380, 648 A.2d 374, 376  (1994)).  "Orders issued by the Board
  enjoy a strong presumption of validity . . . . [and] [w]e accept  the
  Board's findings and conclusions unless . . . they are clearly erroneous." 
  Id.; see also 30 V.S.A.  § 11(b) (board findings of fact are upheld unless
  clearly erroneous).     

       We concur with the board that initiating a separate rulemaking
  procedure is the proper method  of addressing the petition for rulemaking
  filed in these proceedings, rather than continuing with a  contested case. 
  Contested cases are by definition proceedings in which the legal rights,
  duties, or  privileges of a party are required by law to be determined by
  an agency after an opportunity for a  hearing.  3 V.S.A. § 801(b)(2). 
  Because they relate only to the legal rights, duties, or privileges of  the
  specific parties to the contested case, they are inappropriate for the
  creation of the type of broad,  general procedures sought by customers for
  governing statewide utility diversion issues. 

       By contrast, rulemaking involves the creation of an agency statement
  of general applicability  which implements, interprets, or prescribes law
  or policy.  Id. § 801(b)(9).  Because of the general  applicability of a
  rulemaking proceeding, it can have a broader effect, beyond the named
  parties.  The  board committed no error in closing the contested case
  docket in this case.  In fact, maintaining a  contested case docket for the
  purpose of initiating rulemaking in this case would exceed the authority 
  of the board, as a contested case may only address the legal rights,
  duties, or privileges of a party to  the contested case, such as the named
  utilities present in this action, and not to all Vermont utilities  as
  tenants request.  


       Affirmed.




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                                 Concurring



       DAVENPORT, Supr. J., concurring.  While I concur with the outcome in
  this particular  case, it is difficult to see how rulemaking can provide an
  effective procedure for resolving diversion  disputes given the board's
  limited view of its jurisdiction under 30 V.S.A. § 209(b)(3).  In its
  review  of the hearing officer's 1997 decision, the board affirmed the
  hearing officer's conclusion that the  board's statutory authority under 30
  V.S.A. § 209(b)(3) to "[r]egulate and prescribe reasonable  procedures used
  by companies in . . . billing customers" did not give the board
  jurisdiction over  landlords or the authority to order utility companies
  onto non-company property to conduct  inspection of wiring.  Because the
  May 1999 stipulation leaves no case or controversy for this Court  to
  decide, our decision today does not reach this critical jurisdictional
  issue.  

       In a diversion case a tenant is billed by the utility for electricity
  that is actually being used by  someone other than the tenant.  In the case
  of one of the tenants involved in this appeal, the tenant 

 

  was charged for the electricity used by the landlord's coin-operated
  laundromat located in the  basement of the apartment building.   It is hard
  to imagine a rulemaking scheme for complaints of  this nature that does not
  include the authority to inspect the wiring in the building in which the 
  tenant's apartment is located.  Further, even if the tenant is able to
  establish a diversion, the only  remedy available to the board is a
  short-term fix that may resolve the issue for the current tenant, but 
  provides no relief for future tenants.  Absent authority to order a
  landlord to change the wiring so that  the tenant's meter only measures
  electricity actually used by the tenant, the board is limited to simply 
  ordering that the utility adjust the tenant's bill.  When the tenant moves
  out, the next tenant has to  start the process all over again.  

       Because of the parties' stipulation to a dismissal of the pending
  cases, the issue of whether the  board properly construed its authority
  over billing practices under 30 V.S.A. § 209(b)(3) remains  unresolved. 
  Absent resolution of this issue by this Court in some future case or new
  legislation that  specifically expands the board's jurisdiction in
  diversion cases to include appropriate investigatory  and enforcement
  tools, rulemaking will have little impact in landlord-tenant disputes over
  utility  diversion.  In short, the issue of utility diversion stands in
  pretty much the same place that it stood in  August of 1996 when Darlene
  Beaupre, Anne Blair and Luanne Gallagher filed their petition with  the
  Public Service Board.    




                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Amy M. Davenport, Superior Court Judge,
                                       Specially Assigned



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                                  Footnotes


FN1.  At the time the complaint was filed, only Beaupre and Blair still
  resided in the housing  where their respective utility diversion problems
  arose.