Case Title: Hull v. Columbia Gas of Ohio

Citation: 2006-Ohio-3666

Docket Number: 20051033

State: ohio

Court: Ohio Supreme Court

Date: 2006-08-02T00:00:00Z

Document:
[Cite as Hull v. Columbia Gas of Ohio, 110 Ohio St.3d 96, 2006-Ohio-3666.] 
 
 
 
HULL, APPELLEE, v. COLUMBIA GAS OF OHIO, APPELLANT, ET AL. 
[Cite as Hull v. Columbia Gas of Ohio, 110 Ohio St.3d 96, 2006-Ohio-3666.] 
Public utilities—Natural gas companies—Price dispute after default by 
competitive marketer within exclusive jurisdiction of Public Utilities 
Commission. 
(No. 2005-1033 — Submitted March 15, 2006 — Decided August 2, 2006.) 
APPEAL from the Court of Appeals for Lucas County,  
No. L-04-1149, 160 Ohio App.3d 695, 2005-Ohio-2089. 
__________________ 
 
O’CONNOR, J. 
{¶1} 
This is a discretionary appeal accepted as a case of public or great 
general interest pursuant to S.Ct.Prac.R. II(1)(A)(3).  The issue presented to this 
court is whether the Public Utilities Commission of Ohio (“PUCO”) has sole 
jurisdiction over Columbia Gas of Ohio (“Columbia”), as a public utility (a 
natural gas company), in a dispute over the price of gas that arose when a 
competing Customer Choice supplier of natural gas, which was not subject to 
PUCO jurisdiction and regulation, failed to meet its contractual supplier 
obligations to a customer. 
STATEMENT OF FACTS 
Overview and Procedural History 
{¶2} 
Appellant, Columbia, is a public utility that provides natural gas 
service in Ohio.  Appellee, Charles Hull, filed this action against both Columbia 
and codefendant Energy Max of N.E. Ohio, Inc., challenging the rate he was 
being charged by Columbia for providing natural gas to his home. Hull also 
claimed to represent a class of similarly situated individuals and requested class 
action status for the lawsuit. 
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{¶3} 
Columbia moved to dismiss Hull’s complaint under Civ.R. 
12(B)(1) for lack of subject-matter jurisdiction.  The Lucas County Common 
Pleas Court ruled that Hull’s claim against Columbia fell within the exclusive 
jurisdiction of the PUCO and dismissed the complaint against Columbia. 
{¶4} 
Following Columbia’s dismissal from the action, Hull pursued his 
claim against defendant Energy Max, which failed to appear to defend itself.  The 
trial court granted a default judgment against Energy Max in favor of Hull and the 
class.  In its April 29, 2004 final judgment entry, the trial court incorporated its 
prior dismissal of the complaint against Columbia. 
{¶5} 
Hull appealed the trial court’s dismissal of Columbia. On April 29, 
2005, the Sixth District Court of Appeals reversed the trial court in a two-to-one 
decision and held that the trial court had jurisdiction to adjudicate the dispute 
between Columbia and its customers. On October 5, 2005, this court accepted 
Columbia’s appeal. 
The PUCO’s Approval of Columbia’s Customer Choice Program 
{¶6} 
Columbia’s Customer Choice program has been in operation since 
1997. The tariffs on file with the PUCO detailing the specifics of the Customer 
Choice program and the accompanying rate schedules were approved by the 
PUCO and have been kept open to public inspection in accordance with R.C. 
4905.30. 
{¶7} 
Columbia implemented its Customer Choice program to provide 
customers with a choice of buying their natural gas from sources other than 
Columbia.  Under the program, a Columbia customer may select a supplier or 
marketer other than Columbia to supply the customer’s natural gas.  Columbia, 
however, remains responsible for transportation and delivery of the gas.  The 
marketer selected by the customer contracts directly with the customer to deliver 
the gas to Columbia Gas, and Columbia, in turn, delivers the gas to the customer. 
January Term, 2006 
3 
{¶8} 
To be eligible as a gas supplier in the Customer Choice program, a 
marketer must be approved in accordance with Columbia’s tariff on file with the 
PUCO.  In September 1999, Energy Max was approved to participate as a 
marketer in the Customer Choice program under Columbia’s tariff. 
Hull’s Contract with Energy Max 
{¶9} 
On February 28, 2000, Hull, a new customer of Columbia, 
received a letter from Energy Max offering to sell natural gas to him for one year 
at a fixed rate.  In its letter, Energy Max enclosed a “Columbia Gas of Ohio 
Customer Choice Enrollment Card & Gas Purchase Agreement,” which Hull 
completed, thereby accepting Energy Max’s offer to supply his natural gas. Hull 
acknowledged in his deposition that he had read the contract with Energy Max 
before he signed it.  He understood that the agreement was solely between himself 
and Energy Max and that Columbia was not a party to the contract.   
 
Energy Max’s Breach of Its Contract with Hull 
{¶10} Beginning on August 5, 2000, Energy Max breached its supply 
contract by failing to deliver natural gas to Columbia Gas for Energy Max’s 
customers as required under the Customer Choice program. 
{¶11} Under its tariff on file with the PUCO, Columbia has the right to 
terminate a marketer’s participation in the Customer Choice program if the 
marketer fails to deliver natural gas for the marketer’s customers. When a 
marketer is terminated, the tariff further provides that customers in the terminated 
marketer’s group shall revert to Columbia’s sales and service, unless the customer 
joins another marketer’s customer group. 
{¶12} Columbia notified Hull in writing that effective August 30, 2000, 
Energy Max’s participation in the Customer Choice program was terminated 
because Energy Max had failed to deliver natural gas for its customers’ use.  
Columbia’s August 30, 2000 letter stated, “You will continue to receive gas 
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service from Columbia unless you select another supplier,” and “You may 
contract with another supplier at any time.” 
{¶13} Hull complained to the PUCO about Energy Max’s breach of 
contract.  The PUCO responded that it did “not have clear jurisdiction over 
marketers” and that “[c]ustomers may sue Energy Max for breach of contract.”  
Hull then filed a formal complaint with the PUCO but withdrew it after initiating 
this litigation in the Lucas County Common Pleas Court against both Energy Max 
and Columbia. 
A QUESTION OF LAW 
Kazmaier and the R.C. Title 49 Regime 
{¶14} The question of law presented by these undisputed facts is whether 
the PUCO has sole subject-matter jurisdiction over Columbia as to the rates it 
charges. Columbia argues that the PUCO indeed has exclusive jurisdiction, citing 
Kazmaier Supermarket, Inc. v. Toledo Edison Co. (1991), 61 Ohio St.3d 147, 
150-153, 573 N.E.2d 655.  Kazmaier is particularly instructive with respect to its 
examination of the public policy embodied in the General Assembly’s enactments 
of the statutory regime dealing with public utilities: 
{¶15} “The General Assembly has created a broad and comprehensive 
statutory scheme for regulating the business activities of public utilities.  R.C. 
Title 49 sets forth a detailed statutory framework for the regulation of utility 
service and the fixation of rates charged by public utilities to their customers.  As 
part of that scheme, the legislature created the Public Utilities Commission and 
empowered it with broad authority to administer and enforce the provisions of 
Title 49.  The commission may fix, amend, alter or suspend rates charged by 
public utilities to their customers.  R.C. 4909.15 and 4909.16.  Every public utility 
in Ohio is required to file, for commission review and approval, tariff schedules 
that detail rates, charges and classifications for every service offered.  R.C. 
January Term, 2006 
5 
4905.30.  And a utility must charge rates that are in accordance with tariffs 
approved by, and on file with, the commission.  R.C. 4905.22. 
{¶16} “The General Assembly has by statute pronounced the public 
policy of the state that the broad and complete control of public utilities shall be 
within the administrative agency, the Public Utilities Commission.  This court has 
recognized this legislative mandate. 
{¶17} “ ‘There is perhaps no field of business subject to greater statutory 
and governmental control than that of the public utility.  This is particularly true 
of the rates of a public utility.  Such rates are set and regulated by a general 
statutory plan in which the Public Utilities Commission is vested with the 
authority to determine rates in the first instance, and in which the authority to 
review such rates is vested exclusively in the Supreme Court by Section 4903.12, 
Revised Code. * * *’ Keco Industries, Inc. v. Cincinnati & Suburban Bell Tel. Co. 
(1957), 166 Ohio St. 254, 256, 2 O.O.2d 85, 86, 141 N.E.2d 465, 467; see, also, 
Inland Steel Dev. Corp. v. Pub. Util. Comm. (1977), 49 Ohio St.2d 284, 288-289, 
3 O.O.3d 435, 437-438, 361 N.E.2d 240, 243-244; Akron v. Pub. Util. Comm. 
(1948), 149 Ohio St. 347, 359, 37 O.O. 39, 44, 78 N.E.2d 890, 897. 
{¶18} “The General Assembly has provided a rather specific procedure 
by which customers may challenge rates or charges of a public utility that are ‘in 
any respect’ unjust, unreasonable, or unlawful, and has designated the 
commission as the appropriate forum before which such claims are to be heard.  
R.C. 4905.26 * * *. 
 
{¶19} “* * * 
{¶20} “Accordingly, it is readily apparent that the General Assembly has 
provided for commission oversight of filed tariffs, including the right to 
adjudicate complaints involving customer rates and services.  This court has 
previously had occasion to discuss such authority of the commission.  In State, ex 
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rel. Northern Ohio Tel. Co., v. Winter (1970), 23 Ohio St.2d 6, 9, 52 O.O.2d 29, 
31, 260 N.E.2d 827, 829, it was stated: 
{¶21} “ ‘* * * The General Assembly has enacted an entire chapter of the 
Revised Code dealing with public utilities, requiring, inter alia, adequate service, 
and providing for permissible rates and review procedure.  E.g., R.C. 4905.04, 
4905.06, 4905.22, 4905.231 and 4905.381.  Further, R.C. 4905.26 provides a 
detailed procedure for filing service complaints.  This comprehensive scheme 
expresses the intention of the General Assembly that such powers were to be 
vested solely in the Commission.  As this court said in State, ex rel. Ohio Bell 
Telephone Co., v. Court of Common Pleas (1934), 128 Ohio St. 553 at 557 [1 
O.O. 99 at 100-101, 192 N.E. 787 at 788-789]: 
{¶22} “ ‘The jurisdiction specifically conferred by statute upon the Public 
Utilities Commission over public utilities of the state, including the regulation of 
rates and the enforcement of repayment of money collected * * * during the 
pendency of the proceeding * * * is so complete, comprehensive and adequate as 
to warrant the conclusion that it is likewise exclusive.’  (Emphasis added.) 
{¶23} “* * * 
{¶24} “In regard to administrative agency exclusivity, generally, this 
court has recognized that where the General Assembly has enacted a complete 
and comprehensive statutory scheme governing review by an administrative 
agency, exclusive jurisdiction is vested within such agency.”  (Citation omitted.) 
{¶25} Kazmaier and the authorities it cites establish the following: (1) 
Every public utility in Ohio, including Columbia, is required to file with the 
PUCO, for its review and approval, tariff schedules that detail rates, charges, and 
classifications for every service offered, and (2) the public utility must charge the 
rates that are approved by and on file with the PUCO. All Columbia rates charged 
to Hull for residential gas service were approved by the PUCO as contained in 
Columbia’s tariff on file with the PUCO. 
January Term, 2006 
7 
{¶26} Hull does not dispute these determinations or the conclusion to be 
drawn from them that the PUCO has exclusive jurisdiction to oversee filed tariffs 
and to adjudicate complaints concerning rates to be charged to its customers.  
Indeed, Hull’s complaint filed in the trial court initially contained three counts.  
The third count was explicitly based on “public utility law,” and Hull later 
voluntarily dismissed it. 
{¶27} Hull distinguishes his claim from those considered by the 
Kazmaier court by characterizing it as a pure contract claim rather than a 
challenge of an approved tariff rate.  He concedes that if he were attacking the 
rates established by the Customer Choice program, he would be within the 
PUCO’s exclusive jurisdiction.  He says: “In the case at bar, Mr. Hull did not 
challenge the rate he contracted to pay the defendants pursuant to the Columbia 
Customer Choice Program embedded in Columbia’s tariff with the PUCO.  Quite 
the contrary, he wishes to enforce the contract price established by that approved 
rate.” (Emphasis sic.) 
Harnishfeger and the “Pure Contract/Tort Claim” 
{¶28} Hull seems to be saying that he agrees that after Energy Max’s 
default, he was required to pay Columbia its approved tariff rate for the gas 
supplied to him by Columbia but that on a pure contract theory of recovery, he is 
entitled to recovery from Columbia and Energy Max jointly for the difference 
between Columbia’s tariff rate of $.63 per ccf (hundred cubic feet) of gas and 
Energy Max’s lower contract rate of $.36 per ccf of gas. 
{¶29} In support of his argument that there is an exception to the general 
rule of exclusivity of PUCO jurisdiction based on a pure contract claim, Hull cites 
State ex rel. Ohio Power Co. v. Harnishfeger (1980), 64 Ohio St.2d 9, 10, 18 
O.O.3d 130, 412 N.E.2d 395. There, this court said:  
{¶30} “Admittedly, the power of the Public Utilities Commission under 
the legislative scheme of R.C. Title 49 is comprehensive and plenary.  (See, 
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especially, R.C. 4905.26 and 4905.61.)  However, this does not mean that 
exclusive original jurisdiction over all complaints of individuals against public 
utilities is lodged in the commission. 
{¶31} “ ‘* * * [C]ourts of this state are available to supplicants who have 
claims sounding in contract against a corporation coming under the authority of 
the Public Utilities Commission.  New Bremen v. Pub. Util. Comm. (1921), 103 
Ohio St. 23 [132 N.E. 162]; Southgate Development Corp. v. Columbia Gas 
Transmission Corp. (1976), 48 Ohio St.2d 211 [2 O.O.3d 393, 358 N.E.2d 526].’  
State, ex rel. Dayton Power & Light Co., v. Riley (1978), 53 Ohio St.2d 168, 169 
[7 O.O.3d 317, 373 N.E.2d 385].  As noted in New Bremen, supra, at pages 30-
31, 132 N.E. 162, ‘[t]he public utilities commission is in no sense a court.  It has 
no power to judicially ascertain and determine legal rights and liabilities, or 
adjudicate controversies between parties as to contract rights or property rights.’  
This court, also stated in Milligan v. Ohio Bell Tel. Co. (1978), 56 Ohio St.2d 191, 
at page 195 [10 O.O.3d 352, 383 N.E.2d 575], that ‘claims sounding in contract or 
tort have been regarded as reviewable in the Court of Common Pleas, although 
brought against corporations subject to the authority of the commission. * * *’  
See, also, Richard A. Berjian, D.O., Inc., v. Ohio Bell Tel. Co (1978), 54 Ohio 
St.2d 147 [8 O.O.3d 149, 375 N.E.2d 410].” 
{¶32} While acknowledging the existence of the contract-claim exception 
carved out in Harnishfeger, Columbia points out that none of the cases cited by 
Hull involved an alleged breach of contract by conduct that was, as here, 
expressly approved by the PUCO under the terms of a tariff filed with the PUCO.  
Hull argues that State ex rel. Dayton Power & Light Co. v. Riley (1978), 53 Ohio 
St.2d 168, 373 N.E.2d 385, is factually similar to this case.  In Riley, the Dayton 
Power & Light Company was accused of breaching a contract by converting a 
customer’s propane to its own use.  Conversion of propane is not authorized by 
the PUCO. 
January Term, 2006 
9 
{¶33} In another case cited by Hull, Southgate Dev. Corp. v. Columbia 
Gas Transm. Corp. (1976) 48 Ohio St.2d 211, 2 O.O.3d 393, 358 N.E.2d 526, the 
defendant in the alleged contract action, unlike Columbia in this case, was not 
even subject to regulation by the PUCO.  It is undisputed that Columbia is subject 
to regulation by the PUCO, and the Southgate decision is therefore inapplicable. 
{¶34} This court recently confirmed its earlier holding that “ ‘[c]asting 
the allegations in the complaint to sound in tort or contract is not sufficient to 
confer jurisdiction upon a trial court’ when the basic claim is one that the 
commission has exclusive jurisdiction to resolve.”  State ex rel. Illum. Co. v. 
Cuyahoga Cty. Court of Common Pleas, 97 Ohio St.3d 69, 2002-Ohio-5312, 776 
N.E.2d 92, ¶ 21, quoting Higgins v. Columbia Gas of Ohio, Inc. (2000), 136 Ohio 
App.3d 198, 202, 736 N.E.2d 92.  Hull refers to the claim that in his view gives 
rise to common pleas court jurisdiction as a pure contract claim.  The court of 
appeals agreed.  However, the dispute in this case is the antithesis of the pure 
contract case envisioned by the exception to the PUCO’s jurisdiction.  A pure 
contract case is one having nothing to do with the utility’s service or rates – such 
as perhaps a dispute between a public utility and one of its employees or a dispute 
between a public utility and its uniform supplier.  This case involves only the 
rates charged by Columbia for natural gas. 
Significance of the Enactment of R.C. 4929.20 through 4929.30 
{¶35} The General Assembly enacted R.C. 4929.20 through R.C. 
4929.30, effective June 26, 2001.  These statutory provisions gave the PUCO 
certain authority and regulatory jurisdiction over governmental aggregators and 
retail natural gas suppliers and marketers, such as Energy Max, that did not 
unquestionably exist prior to their effective date.  Hull argues that because the 
acts he complains of occurred before the effective date of the new statutory 
scheme, the PUCO had no jurisdiction over those acts.  Thus, implicitly, the 
common pleas court did have jurisdiction. 
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{¶36} Whether Hull is correct is of no consequence in this appeal.  The 
acts about which he complains involved Energy Max’s breach of its natural gas 
supply contract, over which the Lucas County Court of Common Pleas assumed 
jurisdiction without objection from Columbia.  Whether the PUCO had any 
jurisdiction over retail gas suppliers such as Energy Max prior to June 26, 2001, is 
of no importance when it is considered that Hull is seeking compensation from 
Columbia, which is a statutory public utility over which the PUCO had exclusive 
jurisdiction both before and after June 26, 2001. 
{¶37} The fact that the PUCO may have lacked jurisdiction over 
marketers like Energy Max when Hull contracted with Energy Max does not alter 
Ohio law that the PUCO has exclusive jurisdiction over public utilities like 
Columbia to adjudicate rate or service disputes. 
{¶38} The PUCO has always had exclusive jurisdiction to adjudicate rate 
disputes involving public utilities like Columbia.  And here, the entirety of Hull’s 
complaint against Columbia is the rate he believes he should have been charged 
for his natural gas service.  This matter falls squarely within the PUCO’s 
exclusive jurisdiction, subject to review only by this court. 
CONCLUSION 
{¶39} We conclude that the appellate court erred in holding that Hull’s 
claim against Columbia was a pure contract claim over which the common pleas 
court had jurisdiction. 
{¶40} Despite Hull’s attempts to characterize it otherwise, his claim 
against Columbia was that Columbia should have charged for the natural gas 
supplied to Hull at the Energy Max contract rate, which was lower than the 
Columbia tariff rate that Columbia in fact charged.  Although Energy Max 
defaulted on its gas supply contract, Columbia did nothing wrong.  Columbia is a 
public utility, which Energy Max was not.  As such, Columbia was and is subject 
to the regulatory jurisdiction of the PUCO.  That regulation required Columbia to 
January Term, 2006 
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file PUCO-approved tariffs containing rate schedules, obtain approval of its 
Customer Choice program, and abide by the terms and conditions of its tariffs and 
the Customer Choice program, all of which Columbia did.  It could not legally 
have provided service to Hull or charged for that service other than it did. 
{¶41} While Hull characterizes his complaint against Columbia as a pure 
contract claim, it is not.  His complaint against Columbia is that the rate he was 
charged exceeded the Energy Max contract rate and, thus, that he was 
overcharged.  A dispute so founded is squarely within the exclusive jurisdiction of 
the PUCO. 
{¶42} Thus, we reiterate our conclusion that the appellate court erred in 
its reversal of the trial court’s dismissal of Hull’s claims against Columbia for 
lack of subject-matter jurisdiction and reverse the judgment of the Sixth District 
Court of Appeals. 
 
Judgment reversed. 
 
MOYER, C.J., RESNICK, LUNDBERG STRATTON, O’DONNELL and 
LANZINGER, JJ., concur. 
 
PFEIFER, J., dissents. 
__________________ 
 
PFEIFER, J., dissenting. 
{¶43} To put it charitably, the plaintiff’s cause of action is problematic.  
Under the plaintiff’s theory, incumbent public utilities take on financial 
responsibility for independent marketers that fail to live up to the contracts that 
the marketers entered into with consumers.  Although his claims are questionable 
legally, the plaintiff brings causes of action sounding in contract and agency.  As 
this court held in State ex rel. Illum. Co. v. Cuyahoga Cty. Court of Common 
Pleas, 97 Ohio St.3d 69, 2002-Ohio-5312, 776 N.E.2d 92, at ¶ 20, “courts retain 
limited subject-matter jurisdiction over pure common-law tort and certain contract 
actions involving utilities regulated by the commission.”  This is not a case about 
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the appropriateness of the rate charged by Columbia; it is about whether 
Columbia, because of the nature of its relationship with Energy Max, must be 
held to the contract entered into by Energy Max and the plaintiff.  The appropriate 
place to resolve that legal issue, an issue not dependent on knowledge of the 
intricacies of the commission’s tariff structure, is in the common pleas court.  I 
would affirm the judgment of the appellate court. 
__________________ 
 
Albrechta & Coble, John A. Coble, and Joseph F. Albrechta, for appellee.  
 
Cooper & Walinski, L.P.A., David Rodman Cooper, and Cary Rodman 
Cooper; and Rodney W. Anderson, for appellant. 
______________________