Title: STATE EX REL. RIVERSIDE PIPELINE COMPANY, LP v. Public Service Com'n

State: missouri

Issuer: Missouri Supreme Court

Document:

215 S.W.3d 76 (2007)
STATE of Missouri ex rel. RIVERSIDE PIPELINE COMPANY, L.P., Mid-Kansas Partnership, and Missouri Gas Energy, Respondents,
v.
PUBLIC SERVICE COMMISSION OF the STATE of Missouri, Appellant.
No. SC 87495.

Supreme Court of Missouri, En Banc.
January 30, 2007.
*77 Thomas R. Schwarz, Jefferson City, for Appellant.
Richard M. Paul, III, Gregory L. Musil, Kansas City, Charles B. Stewart, Columbus, Brian T. McCartney, Gary W. Duffy, Jefferson City, for Respondents.
STEPHEN N. LIMBAUGH, JR., Judge.
This appeal is the continuation of a complicated jurisdictional dispute pertaining to the right to obtain judicial review from decisions of the Public Service Commission (PSC) and the procedures therefor. In particular, the PSC asks this Court to reconsider its earlier, unanimous holding in this same case as set out in State ex rel. Riverside Pipeline Co., L.P., et al. v. Pub. Serv. Comm'n, 165 S.W.3d 152 (Mo. banc 2005) (Riverside I). This Court introduced the case in Riverside I as follows:
Although this Court retransferred the case, the court of appeals again dismissed the appeal for lack of jurisdiction, and again, this Court granted transfer. The Court now reaffirms its holding in Riverside I on the appellate jurisdiction of the appeal and affirms the judgment of the circuit court on the merits of the appeal.
The facts and procedural posture of the case as set out in Riverside I require repetition here:
Riverside I, at 153-54.
On transfer in Riverside I, the PSC, taking the lead from the court of appeals, which had ruled the jurisdictional issue sua sponte, claimed that there was no jurisdiction on appeal because Riverside and MKP did not have standing to appeal. They explained that Riverside and MKP were not aggrieved parties; that is, they were not aggrieved by the decision of the PSC because the PSC ruled in their favor by denying the staff's claim for disallowances. In response, this Court held that,
Id. at 154-55.
Although the court of appeals acknowledged this holding on retransfer, it held, nonetheless, that it still had no jurisdiction to entertain the appeal because Riverside and MKP still were not "aggrieved" by the decision of the PSC. This is the issue on which the PSC seeks the Court's reconsideration. The court of appeals reasoning, which was tacitly, if not expressly, adopted by the PSC, is that:
The court of appeals then added that,
Finally, the court of appeals also maintained that this Court, in Riverside I,
In explanation, the court then stated,
The court of appeals then concluded, in dismissing the case for lack of jurisdiction, that,
To the contrary, this Court in Riverside I did indeed address the issues with which the court of appeals concerned itself, as follows:
With regard to Rule 84.05(e), this Court held that the reference to "the party aggrieved by the agency decision" refers solely to "the procedures for the filing of briefs when an appeal is taken from the circuit court's judgment" and that "[i]n the context of the rule, the party aggrieved by the agency decision refers simply to the party entitled to judicial review in the circuit court." Id. at 156. The full text of the rule states:
To reiterate, and as this Court held, "this rule pertains only to the determination of which party files its brief first and how the parties are designated." Id. at 155. Under the rule, then, a "party aggrieved by the agency decision" is simply an interested party whose application for rehearing was denied.
Again, there is simply no requirement under sections 386.500.1 and 386.510 and Rule 84.05(e) that the party contesting the decision of the PSC be "aggrieved" in the same way that a party would have to be aggrieved in order to bring an appeal in an ordinary civil case. In particular, there is no requirement to establish standing in the conventional sensethe party need only be "interested therein . . . with respect to any matter determined therein." Although the PSC, in requesting reconsideration of this holding, concedes that "the word `aggrieved' is not in the text of [section 386.500]," it maintains, nonetheless, that "[i]t cannot be that anyone `interested' in a PSC proceeding may wastefully consume judicial resources on the basis that they had merely applied to the PSC for a rehearing of a proceeding on an issue that did not harm that person's interest." But this argument does not adequately take into account that, by definition, an interested party's stake in the outcome of a case does not necessarily rise to the level of an aggrieved party's stake in the outcome. In the final analysis, the procedures for appeal of a decision by the PSC are truly sui generis. As this Court observed years ago in State ex rel. Consumers Pub. Serv. Co. v. Pub. Serv. Comm'n, 352 Mo. 905, 180 S.W.2d 40, 46 (1944),
Even if a party must be "aggrieved" in order to have standing to file a petition for review, Riverside and MKP have made the requisite showing. A party is "aggrieved" within the meaning of section 512.020the general standing provision for civil appealswhere "the judgment operates prejudicially and directly on *82 his personal or property rights or interests and such effect is immediate and not merely a possible remote cause." Shelter Mutual Ins. Co. v. Briggs, 793 S.W.2d 862, 863 (Mo. banc 1990). Although at first glance it could be said that Riverside and MKP were not prejudiced because they prevailed on the merits of the ACA prudence review and were not required to indemnify MGE, they were aggrieved, nonetheless, by the fact that the PSC engaged in the prudence review in the first place, in purported violation of the stipulation and settlement agreement. Moreover, they presumably incurred substantial costs to litigate the merits of the prudence review, costs that would not have been incurred had the settlement agreement been enforced. Furthermore, the judgment of the circuit court did not constitute an impermissible advisory opinion because the judgment addressed an immediate deprivation of Riverside and MKP's rights under the settlement agreement. Nor is the judgment an impermissible advisory opinion as to prudence reviews that may or may not be undertaken by the PSC in the future. Suffice it to say that the PSC has now indeed undertaken prudence reviews for the additional years in question, and the issue presentedwhether the settlement agreement precludes those prudence reviewsis the same as that resolved here.
Yet another point of contention is that "the circuit court's judgment, `correcting the PSC's order,' from which this appeal was taken, was null and void, ab initio, in that it exceeded the court's jurisdiction." In fact, the circuit court not only "corrected" the PSC's decision "to reflect that the Stipulation (i) barred the Staff's proposed disallowance in this case and (ii) precludes any further ABA prudence review of the decisions associated with the execution of the `Missouri Agreements' and (iii) only permits review of compliance and operational matters," but also ordered the PSC "to limit any further proceedings to questions which have arisen or may arise regarding compliance and operational matters under the contracts and to not conduct any future proceedings which revisit issues resolved by the Stipulation as set forth herein." The circuit court exceeded its jurisdiction, it is argued, because ". . . section 386.510 expressly limits the circuit court's jurisdiction to either `affirming or setting aside the order of the commission under review' in that it does not expressly grant the circuit court any other authority to act with respect to PSC decisions or orders under review." The court of appeals dismissed the appeal for lack of jurisdiction on this additional ground.
As noted, section 386.510 states: "Within thirty days after the application for rehearing is denied . . . the applicant may apply to the circuit court . . . for the purpose of having the reasonableness or lawfulness of the original order or decision or the order of decision on rehearing inquired into or determined." The statute goes on to state, however, that,
The PSC now contends that the circuit court has authority only to "enter judgment either affirming or setting aside the order of the commission under review," and that no court has jurisdiction to review, reverse, correct or annul an order or decision of the commission. In explanation, the PSC states,
As the PSC further explains,
This argument is based on an incorrect interpretation of the statute that takes a single sentence out of the context of the statute as a whole. That sentence"No court in this state, except the circuit courts to the extent herein specified and the supreme court or the court of appeals on appeal, shall have jurisdiction to revise, reverse, correct, or annul any order or decision of the commission . . . or to enjoin, restrain or interfere with the commission in the performance of its official duties."appears to be a broad prohibition against court review of PSC actions. But it is expressly qualified by the words "except the circuit courts to the extent herein specified. . . ." The "extent herein specified" is that the applicant "may apply to the circuit court . . . for the purpose of having the reasonableness or lawfulness of the original order or decision or the order of decision on rehearing inquired into or determined." In addition, the statute specifies that "[t]he circuit courts shall always be deemed open for the trial of suits brought to review the orders and decisions of the commission. . . ." The broad prohibition against court review, then, is simply a limitation on the procedures that may be employed to challenge the actions of the PSC, State ex rel. and to Use of Pub. Serv. Comm'n v. Blair, 347 Mo. 220, 146 S.W.2d 865, 868 (1941), but it does not dilute the power of the courts to determine the reasonableness or lawfulness of PSC orders and decisions.
That said, however, the jurisdiction of the circuit court is indeed restricted to "affirming or setting aside the order of the commission under review," State ex rel. Chicago, Rock Island & Pac. R. Co. v. Pub. Serv. Comm'n, 312 S.W.2d 791, 793 (Mo. banc 1958), and that part of the judgment in which the circuit court purported *84 to "correct" the decision of the PSC and enjoin the PSC from further proceedings must be stricken as surplusage. Nonetheless, the clear import of the judgment was to set aside and reverse the decision of the PSC, and the court's judgment to that effect was ultimately a determination of the lawfulness of the decision of the PSC. And although the PSC complains that "the disallowance issue was not challenged on review" so that the court cannot be said to have reversed the decision of the PSC, the lawfulness of the decision was still at issue if, because of the stipulation, the PSC should have disallowed the ACA prudence reviews in the first place. Accordingly, this Court holds that under section 386.510, the circuit court had jurisdiction to enter a judgment setting aside and reversing the decision of the PSC on the basis that the PSC acted unlawfully.
It must next be determined whether the stipulation does in fact preclude the PSC from undertaking those ACA reviews. In determining whether the PSC's order is lawful, the court must exercise "unrestricted, independent judgment" and "correct erroneous interpretations" of the law. Burlington N.R.R. v. Dir. of Revenue, 785 S.W.2d 272, 273 (Mo. banc 1990). The stipulation provided, in pertinent part:
A stipulation, like any other settlement agreement, must be construed using ordinary rules of contract construction. Andes v. Albano, 853 S.W.2d 936, 941 (Mo. banc 1993). A contract must be construed as a whole so as to not render any terms meaningless, and a construction that gives a reasonable meaning to each phrase and clause and harmonizes all provisions is preferred over a construction that leaves some of the provisions without function or sense. Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428 (Mo. banc 2003).
The first sentence of paragraph 5 of the stipulation expressly provides that the PSC may not conduct "any further ACA prudence review" on the "decisions associated with the execution of the Missouri *85 Agreements." Any perceived ambiguity that arises as a result of any apparent qualification in the second sentence of paragraph 5 is resolved by reference to a footnote, which provides that "any issues related to gas costs associated with the Missouri Agreements will be subject to the provision that unless MGE's costs subject to the Incentive PGA provisions to be filed rise to the level where a prudence review is triggered, there will be no prudence review of the Missouri Agreements." Because the prudence review at issue in this case was not triggered by MGE's costs subject to MGE's Incentive PGA, it did not fall within the qualification in the second sentence. Furthermore, by expressly providing that the stipulation does not preclude the PSC from conducting "compliance and operation review" of the Missouri agreements, the stipulation necessarily implies that the PSC is precluded from conducting a prudence review of such agreements. There is no ambiguity. The contract speaks for itself and precludes any further ACA prudence reviews of the Missouri Agreements. As such, the PSC acted unlawfully in failing to disallow the ACA prudence reviews altogether and, thus, further acted unlawfully in conducting its own review of those prudence reviews.
For the foregoing reasons, this Court affirms the circuit court judgment, as modified, setting aside the decision of the PSC.
All concur.