Case Title: Haning v. Pub. Util. Comm.

Citation: 1999-Ohio-90

Docket Number: 19972267

State: ohio

Court: Ohio Supreme Court

Date: 1999-07-28T00:00:00Z

Document:
HANING ET AL., APPELLANTS, v. PUBLIC UTILITIES COMMISSION OF OHIO ET AL., 
APPELLEES. 
[Cite as Haning v. Pub. Util. Comm. (1999), 86 Ohio St.3d 121.] 
Public Utilities Commission — Suppliers of liquid petroleum gas are not public 
utilities subject to commission oversight and regulation under R.C. Title 49. 
(No. 97-2267 — Submitted April 20, 1999 — Decided July 28, 1999.) 
APPEAL from the Public Utilities Commission of Ohio, Nos. 97-32-GA-CSS, 97-
33-GA-CSS, 97-97-GA-CSS and 97-268-GA-CSS. 
 
This appeal involves orders of the Public Utilities Commission of Ohio 
(“commission”) in complaint cases brought by the appellants against two suppliers 
of liquid petroleum (“LP”) gas (“respondents”).  The orders complained of in the 
appeal dismissed the appellants’ complaints for lack of jurisdiction over the 
respondents on the ground that they were not public utilities subject to commission 
oversight and regulation under R.C. Title 49. The respondents below entered their 
appearances as appellees in this appeal, together with the commission. 
 
The causes are before this court upon an appeal as of right. 
__________________ 
 
Gary M. Smith, Robert R. Romaker, James Daniels and Kalpana 
Yalamanchili, for appellants Rebecca Haning, Melvina Stephenson, Bernard 
Marshall, Rodney Reisinger, Larry Mick, and Dorothy Mick. 
 
Betty D. Montgomery, Attorney General, Duane W. Luckey, Thomas W. 
McNamee and Tanisha L.  Lyon, Assistant Attorneys General, for appellee Public 
Utilities Commission of Ohio. 
 
J.B. Yanity, for appellee Rutland Furniture, Inc. 
 
Cavitch, Familo, Durkin & Frutkin and Karen L. Giffin, for appellee Level 
Propane Company, Inc. 
2 
 
John S. Marshall, urging reversal for amici curiae, Ohio Partners for 
Affordable Energy and Ohio Association of Community Action Agencies. 
 
Sowash, Carson & Ferrier and Jonathan B. Sowash, urging reversal for 
amici curiae, Rural Action, Inc. and Appalachian Peoples Action Coalition. 
 
Nancy Brockway, pro hac vice, urging reversal for amicus curiae, National 
Consumer Law Center. 
 
Means, Bichimer, Burkholder & Baker Co., L.P.A., Craig D. Leister and 
Matthew J. Markling, urging affirmance for amicus curiae, Ohio Propane Gas 
Association. 
__________________ 
 
LUNDBERG STRATTON, J.  Rebecca Haning and Melvina Stephenson 
brought suit against a supplier of LP gas in the Athens County Municipal Court for 
alleged violations of the Ohio Consumer Sales Practices Act (R.C. Chapter 1345).  
The municipal court entered summary judgment for the LP gas supplier, and 
Haning and Stephenson appealed to the Court of Appeals for Athens County. 
 
On September 30, 1996, the court of appeals affirmed the municipal court on 
the ground that the LP gas supplier, Rutland Furniture, Inc., d.b.a. Rutland Bottled 
Gas Service (“Rutland”), was a “natural gas company” under R.C. 4905.03(A)(6) 
and, therefore, the Ohio Consumer Sales Practices Act was not applicable.  The 
appellate court pointed out that the otherwise relevant provisions of the Ohio 
Consumer Sales Practices Act apply only to consumer transactions set forth in R.C. 
1345.01(A) and that that statutory provision contains the following exception:  “ 
‘[C]onsumer transaction’ does not include transactions between persons, defined in 
R.C. 4905.03 and their customers * * *.”  Haning v. Rutland Furniture, Inc. 
(1996), 115 Ohio App.3d 61, 63, 684 N.E.2d 713, 715.  The appellate court refused 
reconsideration on December 2, 1996.  Neither Haning nor Stephenson appealed 
the appellate court’s decisions. 
3 
 
Rather, on January 10, 1997, Hanning and Stephenson filed a complaint with 
the commission, alleging that Rutland had provided inadequate service and had 
engaged in various wrongful business practices in violation of R.C. 4905.22 and 
4905.30 (case No. 97-32-GA-CSS).  On July 17, 1997, the commission issued its 
entry, granting Rutland’s motion to dismiss the complaint on the grounds that 
Rutland was not a public utility and, therefore, the commission lacked subject 
matter jurisdiction in the complaint case. 
 
In the meantime, four other individuals filed complaints with the 
commission against another LP gas supplier, Level Propane Co., Inc. (“Level”), 
alleging that Level had provided inadequate service and had engaged in wrongful 
business practices in violation of R.C. 4905.22, R.C. 4933.122(A) and (B), and 
R.C. 4905.30 (case Nos. 97-33-GA-CSS, 97-97-GA-CSS, and 97-268-GA-CSS, 
collectively “97-33-GA-CSS”).  On August 14, 1997, the commission issued its 
entry in the consolidated case, No. 97-33-GA-CSS, dismissing the complaints 
against Level on the same jurisdictional ground as was advanced for the dismissal 
of the complaint against Rutland in commission case No. 97-32-GA-CSS. 
 
Pursuant to R.C. 4903.10, on August 15, 1997, the complainants timely filed 
a consolidated application for rehearing, directed against the dismissal entries in 
the complaint cases.  On September 4, 1997, the commission issued its entry on 
rehearing, denying the complainants’ application.  Pursuant to R.C. 4903.11 and 
4903.13, on October 31, 1997, the complainants filed their notice of appeal herein 
from the commission’s orders. 
 
The first issue we address is whether Rutland and Level are “gas 
compan[ies]” under R.C. 4905.03(A)(5) or “natural gas compan[ies]” under R.C. 
4905.03(A)(6).  If so, they are “public utilit[ies]” under R.C. 4905.02, which are 
subject to the regulatory jurisdiction of the commission under R.C. 4905.04 and 
Title 49. 
4 
 
With four stated exceptions, R.C. 4905.02 provides that a “ ‘public utility’ 
includes every * * * [entity] * * * defined in section 4905.03 of the Revised Code 
* * * .”  (Emphasis added.)  R.C. 4905.03 lists and describes the characteristics of 
fourteen different public utility businesses.  Only two of the fourteen businesses 
described in R.C. 4905.03 could be considered to have characteristics in common 
with the businesses of Rutland and Level.  Those two are a “gas company,” 
characterized in R.C. 4905.03(A)(5), and a “natural gas company,” characterized in 
R.C. 4905.03(A)(6): 
 
“(5)  A gas company, when engaged in the business of supplying artificial 
gas for lighting, power, or heating purposes to consumers within this state * * *. 
 
“(6) A natural gas company, when engaged in the business of supplying 
natural gas for lighting, power, or heating purposes to consumers within this state. 
* * * “ 
 
Both Rutland and Level are in the business of supplying LP gas to 
consumers.  LP gas in common parlance has been called “propane,” but LP gas is 
not purely propane.  In LP gas, propane is merely one, albeit the dominant, of 
several hydrocarbon compounds in a mixture that includes propylene, n-butane, 
and i-butane.  In contrast, natural gas often contains no propane.  Even when it 
contains a trace amount of propane, its dominant hydrocarbon compound is 
methane. 
 
Natural gas is “produced” by withdrawing it from the ground.  It is then 
delivered to customers through pipes without further processing.  It is delivered in 
its natural state.  On the other hand, there is no natural state for LP gas, because it 
is a product manufactured in the process of refining crude oil.  Thus, LP gas is a 
manufactured rather than a “natural” gas. 
 
Based on the foregoing, the court of appeals was in error in finding that 
“propane is a ‘natural gas’ and that Rutland is a ‘natural gas company’ as used in 
5 
R.C. 4905.03(A)(6).”  Haning, 115 Ohio App.3d at 64, 684 N.E.2d at 715.1  It 
would likewise be error for us to find that Rutland and Level are in the business of 
supplying “natural gas” under R.C. 4905.03(A)(6) and, therefore, are “natural gas 
compan[ies].” 
 
Having determined that Rutland and Level are not “natural gas compan[ies]” 
under R.C. 4905.03(A)(6), it is necessary to consider whether Rutland and Level 
qualify as “gas compan[ies]” under R.C. 4905.03(A)(5) by virtue of their 
“engag[ing] in the business of supplying artificial gas for lighting, power or 
heating purposes to consumers * * *.”  (Emphasis added.) 
 
The commission argues that the LP gas product supplied by Rutland and 
Level is not an “artificial gas” because it is a liquid when it is supplied to 
customers.  LP gas can be either in the form of a gas or a liquid.  When it is 
manufactured by an oil refiner in the cracking process and when it is consumed by 
a customer to produce a flame, it is in the form of a gas.  However, when 
possession of LP gas is delivered to an LP gas supplier, it is under pressure and is 
in the form of a liquid and remains a liquid at all times while the supplier 
transports it, stores it, and ultimately transfers possession and ownership of it to 
consumers. 
 
Upon delivery into their customers’ bulk tanks, the product which has been 
“supplied” by Rutland and Level is a liquid.  It is only upon removal of the product 
from the bulk tanks by their customers that it is transformed into a gaseous state to 
be combined with oxygen for the purpose of combustion. 
 
The appellees point out that there are a number of products that are sold and 
delivered in the liquid state and consumed by customers in a gaseous state to 
produce heat or light.  Among them are gasoline, diesel fuel, fuel oil, methanol, 
ethanol, kerosene, acetylene (in tanks used for welding), and butane (in cigarette 
lighters).  The fact that these liquids are consumed in their gaseous forms to 
6 
produce heat or light does not make their suppliers “gas compan[ies]” under R.C. 
4905.04(A)(5). 
 
The appellants argue that it is irrelevant that the product delivered by 
Rutland and Level to their customers is a liquid, because it is a gas when it is 
consumed by them.  However, R.C. 4905.03(A)(5) refers to the “supplying” of a 
product, not to the “consuming” of that product, and appellants’ argument ignores 
the fact that the product “supplied” by Rutland and Level is a liquid when 
possession and ownership of the product are transferred to the consumer. 
 
The appellants and the amici curiae in support of reversal argue that, even 
though Rutland and Level supply their product in liquid form, it is commonly 
thought of as a gas, and not being a “natural gas” under R.C. 4505.03(A)(6), it 
should be considered an “artificial gas” under R.C. 4905.03(A)(5).  Even if we 
accept arguendo that the LP gas product is referred to as a “gas” in common 
parlance, it does not fall within the category of “artificial gas” as that term is used 
in the statute. 
 
In the first place, appellants’ argument leads to an absurd result.  If all 
products other than “natural gas” that are consumed in gaseous form to supply 
heat, light or power are included in the term “artificial gas,” then R.C. Chapter 
4905 would require that we consider their suppliers to be “public utilities.”  This 
would mean that suppliers of acetylene used by welders, neon used in tubes for 
advertising signs, and krypton, halogen, and mercury vapor used in light bulbs 
would all be regulated public utilities, as well as the suppliers of gasoline, fuel oil, 
kerosene, methanol, and butane. 
 
Second, we must interpret the meaning of the statute as it was intended by 
the legislature.  The term “gas,” as used in the statute, is not to be interpreted in its 
present-day sense.  As we said in Circleville Light & Power Co. v. Buckeye Gas 
Co. (1903), 69 Ohio St. 259, 270, 69 N.E. 436, 439, “[w]hile the word ‘gas’ may 
7 
be in one sense a generic term, it is quite plain that, as used in the statute, it does 
not embrace every species of gas discovered or manufactured in modern times.  
There are numerous gases, manufactured or generated, which are used in art and 
manufacturing, none of which was contemplated in the enactment of [General 
Code] section 3551.”2  (Emphasis sic.) 
 
As used in R.C. 4905.03, “artificial gas” and “natural gas” are terms of art.  
When the predecessor of the Public Utilities Commission3 was created by the 
Utilities Act of 1911 (G.C. 614-1) and the predecessor of R.C. 4905.03 was 
enacted (G.C. 614-2), the General Assembly meant to regulate suppliers of specific 
products, “natural gas” and “artificial gas,” as the General Assembly knew those 
products to be at that time.  102 Ohio Laws 549, 550-551.  The General Assembly 
could not have contemplated that LP gas would be embraced by either the term 
“natural gas” or the term “artificial gas” because LP gas did not then exist as a 
substance used in commerce.4  We look to the circumstances existing at the time of 
the legislative enactment that first employed those terms, as we did in State ex rel. 
Toledo Edison Co. v. Clyde (1996), 76 Ohio St.3d 508, 512, 668 N.E.2d 498, 503. 
 
Later, we recognized that Cincinnati Gas & Electric Company provided 
“artificial gas” service between 1837 and 1905, under several franchises from the 
city of Cincinnati,5 a fact doubtless known to the General Assembly in 1911.  
Cincinnati v. Pub. Util. Comm. (1940), 137 Ohio St. 437, 439, 19 O.O. 143, 144, 
30 N.E.2d 797, 798.  This “artificial gas” was known as “illuminating gas” and 
was used in gas lamps.  It was made by heating coal in retorts and sometimes was a 
byproduct of the production of coke.  See Cincinnati Gas Light & Coke Co. v. 
Ohio (1868), 18 Ohio St. 237, 1868 WL 22; Cincinnati Gas & Elec. Co. v. 
Johnston (1907), 76 Ohio St. 119, 81 N.E. 155; Cincinnati, 137 Ohio St. at 439-
440, 19 O.O. at 144, 30 N.E.2d at 798; and Indianapolis v. Domhoff & Joyce Co. 
(1941), 69 Ohio App. 109, 23 O.O. 547, 36 N.E.2d 153. 
8 
 
The illuminating gas known as “artificial gas” to the General Assembly in 
1911 preceded “natural gas” as a commercially viable product.  For example, in 
1901, this court observed in a discussion of an ordinance that became effective 
February 11, 1895, that the ordinance “was enacted long before natural gas became 
an article of commerce * * *.”  Logan Natural Gas & Fuel Co. v. Chillicothe 
(1901), 65 Ohio St. 186, 208, 62 N.E. 122, 124.  In 1903, this court remarked that 
natural gas “was not known as an article of commercial use in Ohio * * * in 1874 * 
* *.”  Circleville Light & Power Co., 69 Ohio St. at 269, 69 N.E. at 438.  In 1907, 
the court noted that natural gas was neither used, nor believed to be suitable, for 
lighting and did not become available for such use until 1896 or 1897.  Columbus 
v. Columbus Gas Co. (1907), 76 Ohio St. 309, 81 N.E. 440. 
 
Therefore, from a historical perspective, it is evident that the General 
Assembly in 1911 intended that its newly established Public Service Commission 
would regulate providers of the already familiar illuminating gas, as well as the 
newcomer, natural gas.  Both were delivered to consumers through pipes.  LP gas, 
which is delivered to consumers by tank truck, could not have been included; it did 
not yet exist as a product of commerce. 
 
The General Assembly has taken no action since 1911 to include LP gas in 
the “artificial gas” coverage of R.C. 4905.03(A)(5), and it has consistently 
distinguished LP gas (or propane) from “natural gas,” which is covered by R.C. 
4905.03(A)(6).  While the statutes have been recodified several times, R.C. 
4905.03(A)(5) and (6) and their predecessors still employ substantially the same 
language and terminology as the 1911 enactment, codified at a time when LP gas 
did not exist as a commercial product. 
 
On the other hand, after LP gas was developed into a commercial product, 
the General Assembly enacted legislation referring to “[l]iquefied petroleum gas” 
and “propane” in a number of  statutory provisions or schemes that contain one or 
9 
both of those terms.  See, e.g., R.C. 4104.41, 5117.01, and 5709.45.  Those 
provisions or schemes distinguish between LP gas/propane and natural gas or 
distinguish between a supplier of LP gas/propane and a gas company or a natural 
gas company. 
 
While the General Assembly has not amended R.C. 4905.03(A)(5) to 
indicate that “artificial” gas includes LP gas/propane, neither has it amended R.C. 
4905.03 to add suppliers of LP gas/propane to the list of “compan[ies]” set forth in 
R.C. 4905.03 that are considered to be public utilities under R.C. 4905.02.  We 
agree with the commission that the General Assembly’s failure to act in connection 
with LP gas/propane suppliers under R.C. 4905.03 indicates that it has intended 
that LP gas/propane suppliers not be regulated as public utilities under R.C. Title 
49. 
 
LP gas/propane is not a “natural gas” under R.C. 4905.03(A)(6).  Nor is it an 
“artificial gas” under R.C. 4905.03(A)(5), because it is a liquid when delivered to 
suppliers and when possession and ownership of it are transferred to customers. 
 
Even if LP gas/propane is considered arguendo to be a gas, there is no 
indication that the General Assembly in 1911 or thereafter intended it to be within 
the comprehension of “artificial gas” under R.C. 4905.03(A)(5).  Suppliers of LP 
gas/propane are not included under either R.C. 4905.03(A)(5) or 4905.03(A)(6).  
Thus, they are not “public utilit[ies]” by statutory definition under R.C. 4905.02, 
which are subject to the jurisdiction of the commission under R.C. 4905.04. 
 
The appellants concede that a business enterprise must be a public utility 
under R.C. 4905.02 in order for the commission to have jurisdiction over it and to 
regulate it under R.C. Title 49.  They argue that, while R.C. 4905.02 refers to R.C. 
4905.03 as including various listed entities, it does not limit that status to just those 
entities.  They go on to argue that alternative to and independent from inclusion in 
the R.C. 4905.03 listing of entities that are deemed to be public utilities, under case 
10 
law, a company is a public utility subject to the commission’s jurisdiction if it 
satisfies a two-part test: (1) the business is reasonably and indiscriminately made 
available to the public, and (2) the nature of the business is a matter of public 
concern. 
 
As authority for their claimed common-law determination of public utility 
status, the appellants cite our decisions in Marano v. Gibbs (1989), 45 Ohio St.3d 
310, 544 N.E.2d 635, Ohio Power Co. v. Attica (1970), 23 Ohio St.2d 37, 52 
O.O.2d 90, 261 N.E.2d 123, and Indus. Gas Co. v. Pub. Util. Comm. (1939), 135 
Ohio St. 408, 14 O.O. 290, 21 N.E.2d 166. 
 
However, none of the cited cases supports the appellants’ argument. None of 
them stands for the proposition that, alternatively to and independently from 
qualifying as a statutory public utility, a business enterprise will be considered a 
public utility for the purpose of application of R.C. Title 49 if it satisfies the 
appellants’ two-part test.  However, it should be noted that if this two-part test has 
significance to this appeal, the commission specifically found on rehearing that the 
businesses of Rutland and Level fail to meet one of the tests:  “[N]either 
company’s business is a matter of public concern.” 
 
Both the appellants and the appellees have identified the common-law 
characteristics of business enterprises that have been determined to be public 
utilities by this and other Ohio courts for purposes other than regulation under R.C. 
Title 49.6  However, neither the appellants nor the appellees have pointed to a 
single decision of the commission or this court wherein a business enterprise was 
determined to be a public utility for purposes of application of R.C. Title 49 by 
reference to common-law, public-utility characteristics to the exclusion of 
consideration of the statutory characteristics described in R.C. 4905.03. 
 
Case law authority does not support a finding that an LP gas/propane 
supplier is a “public utility” under R.C. 4905.02 by virtue of consideration of the 
11 
common-law characteristics of a public utility to the exclusion of consideration of 
the statutory characteristics of a public utility. 
 
There is neither statutory nor case law authority that would support a finding 
that Rutland and Level are “public utilities” under R.C. 4905.02.  Therefore, the 
commission properly dismissed the complaints for lack of jurisdiction over them 
under R.C. Title 49.  We affirm the commission’s orders. 
Orders affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER and COOK, JJ., 
concur. 
FOOTNOTES: 
1. 
The complainants argued to the commission that Haning controlled with 
respect to its “natural gas company” determination and that relitigation of that 
issue before the commission was precluded by the doctrines of res judicata and 
collateral estoppel.  The commission properly rejected that argument in its July 17, 
1997 entry. 
2. 
Section 3551, referred to by the court, was a section of the Revised Statutes 
of the state of Ohio that was a predecessor of R.C. 4933.04.  71 Ohio Laws 93. 
3. 
The Utilities Act of 1911 established the Public Service Commission of 
Ohio, which was the successor of the Railroad Commission and the predecessor of 
the commission. 
4. 
“Although liquefied petroleum gas was discovered by chemists about 1910, 
it remained a waste product at the oil wells until the mid-1920s.  Then, with the 
discovery of a more economical and convenient method for the capture and 
compression of the gas, the oil companies began to ship the new product in 
cylinders to individual customers.”  Annotation (1972), 41 A.L.R.3d 782, 787. 
12 
5. 
For a discussion of legislation about municipal regulation of artificial gas 
companies in the last century, see State ex rel. Hamilton Gas & Coke Co. v. 
Hamilton (1890), 47 Ohio St. 52, 23 N.E. 935. 
6. 
Examples of other purposes include taxation and zoning.