Opinion
No. CV 09 5014189S
February 17, 2010
MEMORANDUM OF DECISION
The plaintiff, Connecticut Natural Gas Corporation (CNG), brings this appeal pursuant to General Statutes §§ 4-176 (h) and 4-183 from an August 12, 2009 declaratory ruling of the Department of Public Utility Control (DPUC) which was requested by the Office of Consumer Counsel (OCC). CNG claims that the DPUC should have denied OCC's request for a declaratory ruling sought and obtained pursuant to § 4-176(a).
CNG is aggrieved pursuant to § 4-183(a) because the DPUC has issued a declaratory ruling under § 4-176, when CNG contends that it legally should not have done so. OCC, a defendant in the CNG appeal, is the plaintiff in a separate action (Docket No. HHB CV 09 5014189) disputing the merits of the DPUC's declaratory ruling. Initially, the court granted the DPUC's motion to consolidate both appeals, but because an issue of notice under Practice Book § 17-56(b) arose at the February 2, 2010 oral argument, primarily in the OCC appeal, the court now rules on the CNG appeal alone. The ruling on the OCC appeal will follow after further oral argument is completed in that appeal. Subsequent to the February 2, 2010 oral argument, the court located in the pleading file a CNG affidavit that complies with § 4-183(d). The affidavit also indicates that the CNG complaint was served on the Connecticut Light and Power Company (CLP). For purposes of the CNG appeal only, the court concludes that the service of CLP satisfies the declaratory judgment notice requirement of Practice Book § 17-56(b).
The background to the issuance of the declaratory ruling is as follows. On August 6, 2008, the DPUC issued a ruling entitled "Investigation into [CLP's] Billing Issues." In this ruling, the DPUC "disallow[ed] recovery of all costs related" to a CLP billing error, through DPUC's interpretation of § 16-259a (the "billing statute"). On September 24, 2008, the DPUC issued a second ruling entitled "Petition of the [OCC] for DPUC Investigation into CNG Billing Issues" [hereinafter the September 24, 2008 CNG ruling]. In this ruling, the DPUC commented on a situation where four meter readers who had submitted false meter readings and CNG had subsequently re-billed customers under § 16-259a. The ruling allowed the re-billing by CNG, but required payback by CNG customers to extend over a period of at least twelve months, without assessing late fees, penalties or interest.
On October 24, 2008, OCC appealed from the September 24, 2008 CNG ruling. On January 14, 2009, this court granted the DPUC's and CNG's motions to dismiss OCC's administrative appeal. The court ruled that the appeal was not from a "final decision" as the three statutes on which jurisdiction was based (§§ 16-11, 16-20 and 16-259a) did not mandate a hearing to be held by the DPUC. See Dadiskos v. Connecticut Real Estate Commission, 37 Conn.App. 777, 782, 657 A.2d 717 (1995) ("[i]f a hearing is not statutorily mandated, even if one is gratuitously held, a contested case is not created"). OCC appealed from the court's decision, but later withdrew its appeal on May 7, 2009.
Subsequently on March 12, 2009, OCC filed a declaratory judgment action pursuant to § 4-175 raising issues regarding the September 24, 2008 CNG ruling. CNG and the DPUC moved to dismiss this suit and OCC withdrew it on May 7, 2009. On May 15, 2009, OCC filed a petition for a declaratory ruling with the DPUC. In its petition, OCC set forth the interpretation that it claimed the DPUC had given to § 16-259a prior to 2008. It then contended that in the August 6, 2008 decision involving CLP and in the September 24, 2008 CNG ruling, the DPUC had departed from prior rulings and had misconstrued § 16-259a.
The DPUC followed its regulations §§ 16-1-113, 16-1-115 — on requests for declaratory rulings. Pursuant to Regulation § 16-1-115(a), it gave notice to relevant utilities that they might submit "data, facts, arguments, and opinions." (Return of Record, ROR, June 11, 2009, Item V, 1.) Pursuant to Regulation § 16-1-115(b), it wrote to the OCC regarding the need for a hearing to determine the issues the OCC had raised. It stated: "The OCC's petition poses a purely legal question, thus there is no need for taking any factual evidence . . . If the OCC or any other party to this proceeding presents a need for submission of factual evidence, the Department will consider a request for a hearing at that time." (ROR, June 12, 2009, Item VII, 3.) On June 30, 2009, the DPUC, in a draft decision, "determine[d] that [a declaratory ruling] would not be rendered" pursuant to Regulation § 16-1-115(c). (ROR, Item III, 1). After OCC filed exceptions to the draft, a second draft setting forth a declaratory ruling was issued (ROR, Item III, 2) and was adopted as the final decision on August 12, 2009. (ROR, Decision, Item IV, 1.)
The August 12, 2009 decision stated nothing more than that the DPUC was "[p]ursuant to Conn. Gen. Stat. § 4-176(e)" issuing a declaratory ruling, affirming "the analysis, interpretation and application of section 16-259a that the Department articulated in the CLP Decision and CNG Decision." These prior rulings were attached to the declaratory ruling "as Exhibits A and B, respectively." (ROR, Decision, Item IV, 1, p. 2.) As indicated, CNG has appealed from the declaratory ruling claiming that the DPUC erroneously issued a declaratory ruling and should have declined to issue such a ruling, as it had done in the first draft opinion.
The court reviews the DPUC's granting of OCC's § 4-176 declaratory ruling to determine whether it acted "unreasonably, arbitrarily, illegally or in abuse of its discretion." Connecticut Ass'n. of Not-for-Profit Providers for the Aging v. Dept. of Social Services, 244 Conn. 378, 390, 709 A.2d 1116 (1998); Autotote Enterprises, Inc. v. State, 278 Conn. 150, 154, 898 A.2d 141 (2006).
Turning to the contentions raised by CNG, the court sets forth certain general principles that arise from §§ 4-166(2) and 4-166(3). A plaintiff may take an appeal to the Superior Court under § 4-183(a) only from a "final decision." The case of Summit Hydropower Partnership v. Commr. Of Environmental Protection, 226 Conn. 792, 629 A.2d 367 (1993), holds that a statute must provide for a hearing for a matter to be considered a contested case, as defined in § 4-166(2). This is one of three ways to obtain a final decision, as defined in § 4-166(3). See also Middlebury v. Dept. of Environmental Protection, 283 Conn. 156, 927 A.2d 793 (2007).
Now § 4-166(2) also provides that a "contested case" exists where a regulation requires a hearing.
However, when a plaintiff lacks a contested case, because there is no right to a hearing, there are other avenues set forth in § 4-166(3) to obtain a final decision and to have an appeal to Superior Court. "`Final decision' [also] means . . . (B) a declaratory ruling issued by an agency pursuant to section 4-176." Indeed, Summit declared at 118, note 18: "Although the plaintiff cannot appeal to the Superior Court from the administrative decision denying its § 401 certification request under the UAPA, it is not without recourse. It may still petition the commissioner for a declaratory ruling pursuant to General Statutes § 4-176 as to whether the state's water quality standards were properly applied to the plaintiff's proposed project."
In Southern New England Telephone Co. v. Dept. of Public Utility Control, 64 Conn.App. 134, 779 A.2d 817 (2001), appeal dismissed, 260 Conn. 180, 799 A.2d 294 (2002), the Appellate Court refused to find that a letter sent by the DPUC to SNET constituted a declaratory ruling, and therefore the § 4-183 appeal lacked subject matter jurisdiction. "There is no evidence in the record that a party initiated a declaratory ruling proceeding by filing a petition . . . Furthermore, the record does not contain any evidence that the department followed any of the declaratory ruling procedures required pursuant to § 4-176. On the basis of the evidence contained in the record, we cannot conclude that the April letter constitutes a declaratory ruling." Had SNET properly satisfied the declaratory ruling provisions, the Superior Court would have had subject matter jurisdiction over a subsequent appeal.
In Hill v. State Employees Retirement Commission, 83 Conn.App. 599, 851 A.2d 320, cert. denied, 271 Conn. 909, 859 A.2d 561 (2004), the plaintiff had a hearing before a medical board that concluded that he was not entitled to service-connected disability retirement. He then proceeded to bring an administrative appeal to the Superior Court, but the appeal was dismissed under the Summit rule summarized above. He did not appeal to the Appellate Court from this ruling, but instead petitioned the defendant retirement commission for a declaratory ruling. From an adverse ruling, "[t]he plaintiff then returned to the Superior Court, in the case that is presently before us, to challenge the validity of the commission's declaratory ruling. This time, the trial court had jurisdiction to entertain the appeal because a declaratory ruling is appealable whether or not it arises in a contested case. General Statutes §§ 4-176(h) and 4-183." Id., 605.
These cases establish that the OCC had available to it a request for a declaratory ruling from the DPUC, after the court dismissed the administrative appeal that it brought from the September 24, 2008 CNG ruling on jurisdictional grounds in January 2009. The request for and issuance of the declaratory ruling was a proper predicate for the OCC's pending declaratory judgment action.
OCC did not seek its declaratory ruling in the "guise" of obtaining a new hearing before the DPUC. Cf. Bloom v. Dept. of Labor, 93 Conn.App. 37, 888 A.2d 115, cert. denied, 277 Conn. 912, 894 A.2d 992 (2006).
The court has previously permitted declaratory judgment actions to proceed under similar circumstances. For example in Office of Consumer Counsel v. Dept. of Public Utility Control, Superior Court, judicial district of New Britain, Docket No. CV 09 4019608 (July 10, 2009, Cohn, J.), the OCC had, in a prior case, brought a declaratory judgment action under § 4-175 to test the legitimacy of a state monetary award by the DPUC to a private company, Rand Whitney, to upgrade its power plant. The court dismissed this suit for lack of subject matter jurisdiction as the OCC had not complied with § 4-176. Following the court's opinion, the OCC returned to the DPUC, petitioned for a declaratory ruling and returned to court in Docket No. HHB CV 09 4019608.
CNG objects to the court's analysis for two reasons. First, it argues that while certain DPUC rulings (like the April letter in SNET if the correct procedure had been followed) could serve as a basis for a declaratory ruling, the proceedings of the DPUC that are specifically not appealable should not be eligible for a § 4-176 declaratory ruling. The DPUC should decline to give a declaratory ruling after making a full, agency-deliberated decision, such as was made in the September 24, 2008 CNG ruling. These cases should never be subject to further argument to the DPUC and then serve as an avenue of appeal to the Superior Court through § 4-176(h) and § 4-183(a). According to CNG, the correct procedure should have been for the DPUC to decline to give the declaratory ruling to the OCC; then the OCC would have been able to bring a declaratory judgment under § 4-175.
On the other hand, the appellate cases summarized above make no distinction between types of cases where a court has concluded that a "contested case" does not exist and there is a subsequent application for a declaratory ruling. The public policy is to require that the agency receive a petition under § 4-176 so that it would have the opportunity to review the claims being made before a court case proceeds. See Housing Authority v. Papandrea, 222 Conn. 414, 610 A.2d 637 (1992), requiring the use of § 4-176, even though, in the dissent's words, "the plaintiff [would have to] return to the administrative level, appear before the commissioner, and argue the very point that the commissioner has already decided." Id., 439. This public policy on exhaustion of administrative remedies would not be satisfied by the DPUC denying a declaratory ruling, only to be followed by the OCC filing with the court a declaratory judgment action under § 4-175.
In May 2009, the very basis that CNG opposed OCC's proceeding under § 4-175 was that OCC did not exhaust its administrative remedies. See CNG's brief, p. 8.
Secondly, CNG argues that OCC's petition was defective, because it made argument about the DPUC's interpretation of § 16-259a without setting forth "specific circumstances" as required by § 4-176(a). The short answer to this argument is that the DPUC has the discretion under its regulations to decide if it wants to consider the OCC's petition. See Regulation § 16-1-113. It decided to do so in this instance.
The OCC petition (ROR, Item I) is a multi-numbered document that satisfies the court that it indicated "specific circumstances" to the DPUC.
In addition, the Supreme Court has specifically stated that "an agency may properly issue declaratory rulings, pursuant to § 4-176, predicated on its interpretation of statutes made for its guidance and which it is charged with administering." State Medical Society v. Board of Examiners in Podiatry, 208 Conn. 709, 714, 546 A.2d 830 (1988). Here, the DPUC notified the OCC in its June 12, 2009 letter (ROR, Item VII, 3) that it was treating its petition as a request for a statutory interpretation of § 16-259a. See Singh v. Dept. of Public Health, 45 Conn.App. 83, 694 A.2d 806, cert. denied, 241 Conn. 925, 696 A.2d 1266 (1997) (under § 4-176(g), even if requested, an agency may proceed to consider a declaratory ruling without a hearing).
The court concludes that the DPUC did not err in accepting the OCC's petition for a declaratory ruling under § 4-176, and following the issuance of the declaratory ruling, the OCC was permitted to appeal under § 4-176(h) to appeal to the Superior Court. Therefore, CNG's appeal is dismissed.
In light of this ruling, the OCC appeal continues separately in this court.