Title: South Florida Hospital And Healthcare Association, Et Al. v. Lila A. Jaber, Et Al

State: florida

Issuer: Florida Supreme Court

Document:

Supreme 
Court 
of 
Florida 
____________ 
No. SC02-1023 
____________ 
SOUTH FLORIDA HOSPITAL AND 
HEALTHCARE ASSOCIATION, et al., 
Appellants, 
vs. 
LILA A. JABER, et al., 
Appellees. 
 
[October 21, 2004] 
 
PER CURIAM. 
We have on appeal a decision of the Florida Public Service Commission 
(PSC) relating to rates or service of an electric utility.  We have jurisdiction.  See 
art. V, § 3(b)(2), Fla. Const.  For the foregoing reasons, we affirm the order of the 
PSC. 
The instant action arises from South Florida Hospital and Healthcare 
Association's (SFHHA) appeal of a PSC order approving a stipulation and 
settlement agreement entered into by Florida Power & Light (FPL) and certain 
classes of electricity customers.  The settlement at issue resulted from a proceeding 
initiated by the PSC in August 2000 to consider the effect on FPL's retail rates of 
 
 
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the formation of Florida's regional transmission organization and FPL's then-
planned merger with Entergy Corporation.  On June 19, 2001, the PSC issued an 
order expanding the scope of the proceeding to provide for a more thorough rate 
review, and ordering FPL to submit minimum filing requirements, which are 
comprised of documents, such as balance sheets and property and investment 
schedules, that provide historical and projected financial and operational data 
relevant to rate setting.  Prior to initiation of the proceeding below, FPL had been 
operating under a three-year stipulated revenue sharing plan that was approved by 
the PSC in March 1999. 
The parties to the proceeding below, including SFHHA, participated in 
discovery and submitted hundreds of pages of witness testimony regarding the 
appropriate level of FPL's retail electricity rates.  In October 2001, the PSC issued 
an order setting the matter for a hearing in April 2002.  In January 2002, the parties 
entered into settlement negotiations.  The settlement agreement at issue was 
approved in March 2002 by each of the parties to the proceeding, except SFHHA. 
The settlement agreement was reviewed by PSC staff and submitted for 
approval at an agenda conference held on March 22, 2002.  The PSC granted each 
of the parties to the settlement five minutes to present their views in support of the 
agreement.1  SFHHA was granted thirty minutes to present its views in opposition.  
                                                 
1.  Signatories to the settlement agreement include:  FPL, Office of Public 
Counsel, Florida Industrial Power Users Group, Florida Retail Federation, Lee 
 
 
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On April 11, 2002, the PSC issued the order approving the settlement agreement, 
which, in pertinent part, provides for a $250 million base rate reduction, and 
continuation of the existing revenue cap and revenue sharing plan through 2005.  
SFHHA subsequently filed a notice of administrative appeal. 
On appeal to this Court, SFHHA argues that the PSC's order approving the 
settlement in the absence of an evidentiary hearing violated its due process and 
statutory rights.  According to SFHHA, Florida law required the PSC to hold an 
evidentiary hearing in the matter because determining a reasonable level for FPL's 
rates necessitated resolution of numerous disputed issues of material fact.  In 
support of this argument, SFHHA claims that the evidence submitted during the 
proceeding below, which would have been further developed with additional 
discovery and a hearing, supported a rate reduction of $535 million, as opposed to 
just $250 million.  SFHHA further asserts that the PSC promised to hold an 
evidentiary hearing in the matter, and erred in approving a non-unanimous 
settlement agreement absent a hearing.  Finally, SFHHA urges that the PSC's order 
approving the settlement agreement was not based on competent, substantial 
evidence, and that the Commission failed to provide the requisite findings of fact.  
SFHHA requests that this Court remand the case to the PSC with instructions to 
complete the discovery process and afford the parties a hearing. 
                                                                                                                                                             
County, Publix Supermarkets, Thomas P. and Genevieve Twomey, and Dynegy 
Midstream Services. 
 
 
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We have carefully considered each argument presented by SFHHA, and 
determine that none have merit.  We hold that the PSC acted in accordance with 
Florida law and its own policies and procedures in approving the negotiated 
settlement without conducting an evidentiary hearing.  The PSC properly initiated 
the proceeding below on its own motion for the purpose of ensuring the 
reasonableness of FPL's rates.  See § 366.076(1), Fla. Stat. (2002) (providing that 
the PSC may, on its own motion, conduct "a limited proceeding to consider and act 
upon any matter within its jurisdiction, including any matter the resolution of 
which requires a public utility to adjust its rates").  At the commencement of the 
proceeding below, the PSC refused to speculate on the need for an evidentiary 
hearing to address the reasonableness of FPL's rates, and expressly recognized the 
possibility of a negotiated settlement as provided under Florida law.  See § 
120.57(4), Fla. Stat. (2002) ("Unless precluded by law, informal disposition may 
be made of any proceeding by stipulation, agreed settlement, or consent order."). 
Subsequently, the PSC expanded the scope of the proceeding to include a 
more detailed rate review, and ordered the submission of minimum filing 
requirements.  The PSC acted in accordance with the authority granted under 
section 366.076(1) of the Florida Statutes in broadening its review.  See § 
366.076(1), Fla. Stat. (2002) (vesting the PSC with the sole authority to determine 
the issues to be considered during a limited rate proceeding).  Its decision to do so 
did not, however, require the PSC to conduct a full evidentiary hearing in the 
 
 
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matter.  In the June 19 order initiating the more thorough rate review, the PSC 
expressly acknowledged the possibility of resolution through negotiated settlement. 
Ultimately, the parties entered into fruitful settlement negotiations.  SFHHA 
does not contend that it was denied notice regarding these negotiations, or was 
precluded from participating.  While SFHHA asserts that it was denied an 
opportunity to be heard in opposition to the settlement, the record shows that the 
appellant presented arguments in opposition to the settlement during the agenda 
conference held on May 22, 2002.  The assertions presented at that time tracked 
those expounded by SFHHA throughout the course of the proceeding below.  In 
sum, there is no basis upon which to conclude that the PSC's approval of the 
negotiated settlement violated SFHHA's due process or statutory rights. 
In rendering this holding, we emphasize that SFHHA is in the same posture 
as any other non-signatory to the settlement reached below, and may initiate a 
separate proceeding before the PSC to challenge FPL's rates.  In oral argument 
before this Court, FPL recognized SFHHA's capacity to initiate a separate rate 
proceeding.  The Office of Public Counsel acknowledged this fact before the PSC 
during the May 22 agenda conference. 
SFHHA contends, however, that it cannot commence a separate proceeding 
to challenge FPL's rates.  In support of this position, SFHHA argues that it filed a 
complaint for a rate reduction in 2001, but that its complaint was dismissed.  
According to SFHHA, it was precluded from challenging the rates in effect under 
 
 
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the then-operative 1999 stipulation, even though it was not a signatory to that 
agreement.  SFHHA posits that any petition it files challenging the rates set forth in 
the settlement agreement reached below will meet the same fate, and that SFHHA, 
once again, will be precluded from seeking a rate reduction. 
We determine that SFHHA misinterprets the basis upon which the PSC 
dismissed its complaint.  To fully understand the error in SFHHA's argument, we 
must briefly review the procedure below.  As previously stated, on June 19, 2001, 
the PSC issued an order initiating a more thorough rate review and ordering the 
submission of minimum filing requirements.  In that order, the PSC decided 
against holding FPL's revenues subject to a consumer refund, stating that the 1999 
stipulation still in effect "provides that the revenue sharing plan is to be the parties' 
'exclusive mechanism' to address any excessive earnings that might occur during 
the term of the stipulation. . . . [and] provides some measure of protection for the 
ratepayers."  In re Review of Fla. Power & Light Co.’s Proposed Merger with 
Entergy Corp, Order Requiring the Filing of Minimum Filing Requirements, 
Docket No. 001148-EI, Order No. PSC-01-1346-PCO-EI at 6 (June 19, 2001).  In 
response, SFHHA filed a request for clarification or reconsideration, urging the 
PSC to clarify that its decision did not limit the ability of entities not parties to the 
1999 stipulation to seek a reduction in FPL's base rates.  SFHHA also filed a 
separate complaint requesting that FPL's rates be reduced under the interim rate 
procedures set forth in section 366.071 of the Florida Statutes. 
 
 
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Noting that SFHHA's requests for relief were closely related, the PSC 
determined that, as a whole, the pleadings intended to effect an interim rate 
reduction.  The PSC acknowledged that Florida law permitted SFHHA to petition 
for interim rates during a rate proceeding, but determined that it had already 
declined to establish interim rates in its June 19 order by refusing to hold FPL 
revenues subject to a consumer refund.  On this basis, the PSC determined that 
SFHHA's complaint constituted an improper collateral attack on the PSC’s 
decision.  The PSC also denied SFHHA's request for clarification of the June 19 
order, determining that the pleading was either a request to commence the rate 
proceeding that had already begun, or a request to reduce FPL's rates with respect 
to SFHHA's members, which would create unduly discriminatory rates.2  The PSC 
                                                 
2.  Some of SFHHA's confusion regarding the interpretation of the PSC's 
order can be attributed to the discussion on page 11 of the order where the PSC 
reviews SFHHA's request for clarification that non-signatories were not bound by 
the 1999 stipulation, and states: "Presumably, the interpretation of the Order 
sought by SFHHA (either through clarification or reconsideration) would pave the 
way for SFHHA's amended petition [for interim rates].  Because we have 
dismissed SFHHA's amended petition, as discussed above, the requested 
interpretation is of no benefit to SFHHA."  In re Complaint of South Fla. Hosp. 
and Healthcare Ass’n, Order Granting Motion to Dismiss, Granting Motion to 
Strike, and Denying Request for Clarification, Docket No. 001148-EI, Order No. 
PSC-01-1930-PCO-EI at 11 (Sept. 25, 2001).  While the excerpted passage is 
somewhat cryptic, we cannot subscribe to SFHHA's interpretation that the PSC 
effectively barred non-signatories to the 1999 stipulation from petitioning for 
reduced rates.  Indeed, in the context of the same discussion, the PSC states that its 
June 19 order did not modify or interpret the terms of the 1999 stipulation, and that 
it had cited the stipulation only as a basis for declining to hold money subject to a 
refund.  See id. at 12.  The PSC further stated, "By denying SFHHA's request for 
 
 
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did not, as SFHHA contends, determine that SFHHA was bound by the 1999 
stipulation, or otherwise precluded from petitioning for reduced rates. 
Similarly, we determine that in the instant context, SFHHA should not be 
precluded or estopped from seeking a reduction in the rates provided for in the 
settlement agreement approved in April 2002.  SFHHA is not a signatory to the 
settlement agreement, has no rights or liabilities thereunder, and cannot be 
precluded by its terms from petitioning for an even greater rate reduction.  
Moreover, we resolve that in any such proceeding, SFHHA and the PSC may 
presumptively access and rely on the evidence and testimony compiled in the 
proceeding below, subject to any confidentiality or use restrictions governing the 
initial introduction of that evidence. 
It is so ordered. 
PARIENTE, C.J., and WELLS, ANSTEAD, LEWIS, QUINCE, CANTERO and 
BELL, JJ., concur. 
 
 
An Appeal from the Florida Public Service Commission 
 
 
Mark F. Sundback and Kenneth L. Wiseman of Andrews and Kurth, LLP, 
Washington, D.C.; and Miriam O. Victorian of Andrews, Kurth, Mayor, Day, 
Caldwell and Keeton, LLP, Houston, Texas, 
 
 
for Appellants 
 
                                                                                                                                                             
clarification/reconsideration, we make no finding with respect to SFHHA's rights 
under the [1999] stipulation."  Id. 
 
 
 
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Harold McLean, General Counsel and David E. Smith, Attorney Supervisor, 
Tallahassee, Florida on behalf of Florida Public Service Commission; Alvin B. 
Davis and John T. Butler of Steel Hector and Davis LLP, Miami, Florida on behalf 
of Florida Power and Light Company; Jack Shreve, Public Counsel and John 
Roger Howe, Deputy Counsel, Office of Public Counsel, The Florida Legislature, 
Tallahassee, Florida on behalf of the Citizens of the State of Florida; Robert 
Scheffel Wright and John Thomas LaVia, III, Tallahassee, Florida and David M. 
Owen, Chief Assistant County Attorney, Ft. Myers, Florida on behalf of Lee 
County, Florida 
 
 
for Appellees 
 
Timothy J. Perry and Vicki Gordon Kaufman of McWhirter, Reeves, McGlothlin, 
Davidson, Decker, Kaufman and Arnold, P.A., Tallahassee, Florida and John W. 
McWhirter, Jr., of McWhirter, Reeves, McGlothlin, Davidson, Decker, Kaufman 
and Arnold, P.A. on behalf of Florida Industrial Power Users Group’s; Michael B. 
Twomey, Tallahassee, Florida on behalf of Thomas P. and Genevieve E. Twomey; 
Ronald C. LaFace and Seann M. Frazier of Greenberg Traurig, P.A. on behalf of 
Florida Retail Federation; Charles J. Beck, Deputy Public Counsel and Stephen C. 
Burgess, Deputy Public Counsel, Office of Public Counsel, Tallahassee, Florida on 
behalf of the Citizens of the State of Florida; Robert Scheffel Wright and John 
Thomas LaVia, III of Landers & Parsons, P.A., Tallahassee, Florida; and David M. 
Owen, Chief Assistant County Attorney, Office of the Lee County Attorney, Ft. 
Myers, Florida on behalf of Lee County, Florida, 
 
 
as Intervenors