Case ID: so2d_539/html/0187-01.html
Source: Caselaw Access Project
Author: {"author": "ALMON, Justice. TORBERT, Chief Justice", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GREATER BIRMINGHAM MINISTRIES, et al. v. ALABAMA PUBLIC SERVICE COMMISSION, et al.
    87-21.
    Supreme Court of Alabama.
    Nov. 23, 1988.
    Rehearing Denied Jan. 13, 1989.
    
      Jay Smith of Cooper, Mitch, Crawford & Kuykendall, Birmingham, for appellants Greater Birmingham Ministries, Greater Birmingham Unemployed Committee, Alabama Interreligious Conference of Legislative Concerns, Rev. Michael Sexton, etc., and Presbyterian Community Ministry, Inc.
    Stanley Weissman of Alabama Consortium of Legal Services Programs, Montgomery, for appellants Charles Poster and Hellen Lily.
    Thomas L. ’Stewart and Michael G. Kendrick of Gorham, Waldrep, Stewart & Kendrick, Birmingham, and P. Michael Cole and Byrd R. Latham of Patton, Latham, Legge & Cole, Athens, and William J. Sam-ford, Jr., and Susan Shirock DePaola of Pappanastos & Samford, Montgomery, and Ronald L. Spratt, Birmingham, for appellee Alabama Public Service Com’n.
    James D. Brooks, Mobile, for appellee Alabama Industrial Group.
    S. Eason Balch, Jr., and Susan B. Bevill of Balch & Bingham, Birmingham, for ap-pellee Alabama Power Co.
    Dudley C. Reynolds and Amy Watson Stewart, Birmingham, for appellee Alabama Gas Corp.
   ALMON, Justice.

This is an appeal from an order of the Alabama Public Service Commission (“APSC”). On December 26, 1985, the Greater Birmingham Unemployed Committee (“GBUC”) filed a complaint pursuant to Ala.Code 1975, § 37-1-83, with the APSC against Alabama Gas Corporation (“Ala-gasco”) and Alabama Power Company (“APCo”), alleging that Alagasco’s and APCo’s “rates, service regulations, practices and classifications” were “unfair, unreasonable, unjust, inadequate, unjustly discriminatory and unduly preferential because low income customers cannot obtain a reasonable amount of utility services at affordable rates for essential needs.” The complaint sought a special scale for low income customers.

On January 13, 1986, Charles S. Foster and Helen V. Lilly, two low-income customers of Alagasco and APCo, moved to intervene in the proceedings begun by GBUC’s complaint. On February 7, 1986, Bishop Joseph G. Vath of the Roman Catholic Diocese of Birmingham moved to intervene in the GBUC complaint.

On February 3, 1986, Greater Birmingham Ministries (“GBM”) filed a complaint with the APSC that restated the allegations of the earlier complaint filed by GBUC.

Alagasco and APCo argued that GBUC and GBM lacked standing in this case. Because of this argument, Foster and Lilly recast their pleading into a complaint. GBUC, GBM, and Bishop Vath moved to intervene.

On March 25, 1986, the Alabama Interre-ligious Conference for Legislative Concerns (“AICLC”) and Presbyterian Community Ministry, Inc. (“PCM”), moved to intervene in the proceedings initiated by Foster and Lilly.

On July 29,1986, the Alabama Industrial Group petitioned the APSC for permission to intervene. A similar motion to intervene was filed by Mobile Gas Service Corporation on August 7, 1986. On September 12, 1986, the Alabama Council on Human Relations, Inc. (“ACHR”), moved to intervene, and the Alabama Farm Bureau Federation petitioned for leave to intervene on September 16, 1986.

Public hearings concerning this matter began on September 18, 1986, and were concluded on April 3, 1987. The hearings were held before the APSC, which consists of three members, and Chief Administrative Law Judge Carl Evans, who conducted the hearings. During this period a total of 15 hearings were held. On August 10, 1987, all of the parties filed briefs with the APSC.

At some time prior to September 8,1987, Judge Evans and Special Assistant Attorney General Ronald Spratt submitted a proposed order and written recommendations, respectively, to the APSC. Appellants were not notified of the existence of these documents, nor were they given copies of the proposed order and recommendations.

On September 8, 1987, the APSC voted unanimously at its regular monthly meeting to accept the proposed order of Judge Evans, holding that the plaintiffs had failed to establish that rates, service regulations, and disconnect practices of APCo and Ala-gasco are “unfair, unreasonable, unjust, inadequate, unjustly discriminatory, or unduly preferential.” Plaintiffs (Foster, Lilly, GBUC, GBM, Sexton, AICLC, PCM, and ACHR) appeal from the order of the APSC.

Appellants first argue that the APSC erred to the prejudice of appellants’ substantial rights by failing to allow them to file exceptions to Judge Evans’s order, such failure, they say, being a violation of Rule 20 of the APSC’s Rules of Practice.

Judge Evans presided over the hearings held before the APSC from September 1986 until April 1987. After the hearings were completed, Judge Evans drafted a proposed order that was ultimately adopted by the APSC. Appellants argue that they were entitled to a copy of the proposed order to enable them to file exceptions to the proposed order. Appellants claim that the failure of the APSC to provide them a copy of the proposed order is a violation of Rule 20, which states:

“Except as otherwise provided by law, when the Commission deems it proper in any proceeding to have a report made of the facts and law involved together with recommendations thereon by any Commissioner or Examiner, the parties will be notified and an opportunity to file exceptions to such report will be given. The time for filing such exceptions will be within twenty (20) days from the date of service shown on such report and recommended order unless otherwise directed by the Commission. Such report will be served upon each party of record. Exceptions shall be filed in writing and set forth specifically any alleged errors in fact or in law or any erroneous conclusions therefrom. Replies to such exceptions may be filed by any interested party within ten (10) days from the filing of the exceptions unless otherwise directed by the Commission. The original and three copies of all exceptions and replies shall be filed with the Commission.”

Appellees assert that Rule 20 derives from Ala.Code 1975, § 37-3-9, which is a statute directed at motor carrier cases. Appellees argue that because § 37-3-9 applies only to motor carrier cases, Rule 20 also applies only to motor carrier cases.

Rule 1 of the APSC’s Rules of Practice states:

“These rules shall govern all proceedings before the Alabama Public Service Commission except rulemaking proceedings and shall supersede any and all rules of practice previously adopted or effective.” (Emphasis added.)

In addition, in its order of April 15, 1980, adopting the Rules of Practice, the APSC ordered that the Rules “shall govern all pending and future proceedings before the Commission.” (Emphasis added.)

It is clear from Rule 1 and the order of April 15, 1980, that the Rules of Practice, including Rule 20, apply to all proceedings before the APSC.

Having determined that Rule 20 applies to utilities cases by virtue of the language of the rules, we next address the issue of whether the APSC violated Rule 20 by not giving the parties a copy of Judge Evans’s proposed order.

Rule 20 contemplates a case where a hearing examiner is appointed by the APSC to hear the evidence, or where only one commissioner hears all of the evidence and then drafts a report to the entire APSC. In such cases the APSC is not afforded an opportunity to hear the evidence personally, nor are the commissioners able to hear arguments of counsel. In cases of that type, the only way that the APSC can be informed of arguments of counsel is through exceptions to the report of the examiner or commissioner. The above described procedure has been recognized and approved by the U.S. Supreme Court. See Ramspeck v. Federal Trial Examiners Conference, 345 U.S. 128, 73 S.Ct. 570, 97 L.Ed. 872 (1953).

The present case, however, presents a different situation. In the present case, Judge Evans did not serve as a hearing officer, making findings after hearing the evidence ore tenus, but simply presided over the hearings. In the present case, the APSC members heard the evidence and arguments of counsel in person. Because of this, the APSC members knew what appellants’ arguments were when they met to reach a decision on the merits of appellants’ proposals. Written exceptions to Judge Evans’s proposed order would not have benefited the APSC members, because they were already aware of appellants’ arguments.

Appellants further argue that Rule 20 applies because, they say, the APSC members were not continuously present. No record was made of any exits or entries by the APSC members during the hearings; therefore, this argument presents nothing for review. In the absence of proof in the record to the contrary, we must presume that at least a majority of the APSC members were present during the hearings. See Glen McClendon Trucking Co. v. Hall Motor Express, Inc., 285 Ala. 98, 229 So.2d 488 (1969). Therefore, Judge Evans’s draft order is more like an internal working document than a report as contemplated by Rule 20.

Appellants contend that the APSC erred to the prejudice of their substantial rights in failing to allow them to file exceptions or counter-arguments to the recommendations of Special Assistant Attorney General Ronald Spratt. Appellants claim that this failure violates Rule 20.

Spratt was hired by the APSC to provide it with legal guidance on issues arising during proceedings, pursuant to Ala.Code 1975, § 37-1-12, which states:

“The commission, under the provisions of the merit system, shall have the authority to appoint or employ attorneys, officers, and such accountants, engineers, experts, inspectors, clerks and other employees as are necessary or expedient to carry out the duties conferred by law upon the commission, and the salaries therefore shall be fixed according to the provisions of the merit system. The commission shall also, by and with the approval of the governor, have authority to employ and discharge special counsel or attorneys as it may be deemed necessary for such purpose.”

Spratt was neither an examiner nor a commissioner, but was an employee of the APSC. Therefore, his recommendations were not subject to the provisions of Rule 20.

In addition to the Rule 20 challenges regarding Judge Evans’s proposed order and Mr. Spratt’s recommendations, appellants contend that the APSC’s failure to give them copies of these documents before issuing its final order violated their right to due process of law. Because these were internal working documents, appellants had no right to respond to them separately from the final order, and no due process violation occurred.

Appellants contend that the APSC failed to hear the evidence and instead deferred to the proposed order of a hearing examiner who was not appointed to hear the evidence in compliance with Ala.Code 1975, § 37-l-89(b), and that their substantial rights were thereby prejudiced. Section 37-l-89(b) states that the APSC “by appropriate order in any case, may appoint or designate a special examiner” to take evidence at the hearings. In the present case, the APSC opted to hear the evidence itself instead of appointing an examiner. Judge Evans simply presided over the hearing. Therefore, an order appointing him pursuant to § 37-l-89(b) was not required.

Appellants also argue that error occurred from Commissioner Martin’s soliciting the opinion of an attorney personal friend regarding this case and relying on that person’s opinion in deciding how to vote. The discussion with that person occurred outside the formal hearing process, and the appellants contend that they were denied an opportunity to rebut his opinion and any arguments he may have made. Thus, they say, the APSC erred to the prejudice of their substantial rights.

During the September 8, 1987, meeting of the APSC, Commissioner Martin made the following comments:

“I looked at Judge Evans’ order and I can think of a number of reasons philosophically, emotionally that I could vote no. But in the end when I reviewed Attorney Spratt’s report, Judge Evans’ recommendations and ask[ed] an outside attorney friend of mine to sit down over this Labor Day weekend with me and go over it, from standpoints of point of law, I can see where I can only vote one way.”

Appellants argue that Commissioner Martin’s discussion with his unnamed attorney friend violated Rule 17(D) of the APSC’s Rules of Practice, which states:

“No person will be permitted to make a statement of fact or present any argument pro or con in a formal hearing before the Commission, unless the person will submit to an oath or affirmation and unless that person is agreeable to submitting himself to cross-examination. The foregoing, of course, does not apply to duly authorized attorneys-at-law in presenting arguments to the Commission.”

Rule 17(D) prohibits statements of fact and arguments in a formal hearing unless the person takes an oath and submits himself to cross-examination. The discussion between Commissioner Martin and his attorney friend occurred outside of the formal hearing. In addition, the APSC exercises legislative authority when it hears rate cases.

There being no reversible error presented for review, the order of the APSC is affirmed.

AFFIRMED.

MADDOX, SHORES, BEATTY, HOUSTON and STEAGALL, JJ., concur.

TORBERT, C.J., and JONES, J., dissent.

TORBERT, Chief Justice

(dissenting).

Appellants were denied a fair hearing before the Alabama Public Service Commission (APSC); therefore, I would reverse the order of the APSC.

The technical reading and application of the individual rules in the Rules of Practice of the Alabama Public Service Commission (“RPAPSC”) given them in the majority opinion may support the majority’s holding affirming the order. However, that result flies in the face of the spirit of those rules.

The provisions of the Alabama Administrative Procedure Act (“AAPA”), Code 1975, § 41-22-1 et seq., do not apply to proceedings before the APSC. Code 1975, § 41-22-3(1). The reason for the exclusion is apparently because the APSC had preexisting statutory authority to promulgate rules to govern its proceedings. Code 1975, § 37-1-38. The APSC has promulgated the RPAPSC. The application of those rules is at issue in this case.

Having said that, I would note that the general philosophy behind the adoption of the AAPA is applicable to the rules of the APSC; that general philosophy is that entities affected by actions of an administrative agency have certain procedural rights in order to ensure that they get a fair decision from the agency’s quasi-judicial proceeding. Code 1975, §§ .41-22-2, 41-22-25. Continental Telephone Company of the South v. Alabama Public Service Commission, 427 So.2d 981 (Ala.1982).

It is evident from even a quick examination of the applicable statutes and rules that the procedure set up contemplates that there will be a hearing (Code 1975, § 37-1-85; Rule 15), at which all affected persons will be heard (Code 1975, § 37-1-88; Rules 8, 15) and that the decision should be based upon the evidence presented (Code 1975, § 37-1-89; Rule 17).

The majority concludes that the requirements of Rule 20 need not be met in this case because Judge Evans was not appointed as a hearing examiner and the commissioners were present; the majority says that the requirements of Rule 20 did not come into play. While it is true that Judge Evans was not expressly appointed as a hearing examiner, he was apparently a de facto hearing examiner. He heard all the evidence and issued a report that at least one commissioner sought to adopt. The majority opinion’s rationale for sanctioning noncompliance with Rule 20 would be valid if in fact the commissioners had attended all the hearings . Under these circumstances, the majority’s rationale is inapplicable, and the failure to give the parties notice of the recommendations and an opportunity to file exceptions violates the spirit, if not the letter, of the rules.

In concluding that no violation of Rule 17(D) took place, the majority opinion correctly notes that the oath or affirmation need be given only to a witness who speaks at a “formal hearing.” Because the statements, advice, or counsel of Commissioner Martin’s friend took place outside of a formal hearing, the majority concludes that no violation took place. To reach this conclusion, one must ignore the general focus of not only Rule 17, but also Rule 25, and Code 1975, §§ 37-1-83 and 37-1-89. Of course, Rule 17(D) puts the requirement of submitting to an oath or affirmation only on those speaking in a formal hearing because no one conceived that statements relied upon by the commission to reach a decision would be received outside of a formal hearing. Rule 25 specifically prohibits ex parte communications. While the party who had the conversation with Commissioner Martin may not technically fall within Rule 25’s prohibition because he apparently was not a party or a representative of a party, it is clear, once again, that a violation of at least the spirit of the rules occurred.

In conclusion, considering all of the violations that took place, I am of the opinion that the appellants did not get the full and fair hearing that is contemplated. Therefore, I would reverse the order of the APSC.

JONES, J., concurs. 
      
      . The Reverend Michael Sexton has replaced Bishop Vath in this action due to the death of Bishop Vath.
     
      
      . The record does not reflect the actual attendance, but no one disputes the fact that they did not attend all the hearings.