Case Name: FLORIDA PUBLIC SERVICE COMMISSION, Appellant, v. CENTRAL CORPORATION, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1989-10-19
Citations: 551 So. 2d 568
Docket Number: No. 88-1889
Parties: FLORIDA PUBLIC SERVICE COMMISSION, Appellant, v. CENTRAL CORPORATION, Appellee.
Judges: SHIVERS, C.J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 551
Pages: 568–574

Head Matter:
FLORIDA PUBLIC SERVICE COMMISSION, Appellant, v. CENTRAL CORPORATION, Appellee.
No. 88-1889.
District Court of Appeal of Florida, First District.
Oct. 19, 1989.
David E. Smith, Public Service Com’n, Tallahassee, for appellant.
Wings S. Benton and Patrick K. Wiggins of Ransom & Wiggins, Tallahassee, for ap-pellee.

Opinion:
JOANOS, Judge.
The Florida Public Service Commission has appealed from a final administrative order declaring Paragraph 7 of Public Service Commission Order 19095 to be an invalidly promulgated rule pursuant to Chapter 120, Florida Statutes. Under the facts of this case, we affirm.
An alternative operator service (AOS) provides operator-assisted long distance telecommunications services. Appellee Central Corporation is a type of AOS denominated an interexehange carrier (IXC). In December 1987, after receiving numerous general complaints from AOS users of excessive rates, the Commission opened Docket No. 871394-TP for the purpose of reviewing the regulatory requirements appropriate for "an emerging telecommunications industry providing long distance telephone services."
The initial action in this docket was taken when the Commission voted in February 1988 to set an expedited hearing to determine whether the provision of AOS service was in the public interest. In March 1988, the Commission voted that AOS providers would be required to hold subject to refund all revenues collected by those providers which exceeded the most comparable local exchange rate. This decision was embodied in Paragraph 7 of Order 19095, issued April 4, 1988. The Commission explained that the revenues were being placed subject to refund pending the results of the hearing on whether AOS was in the public interest, in order that the excess monies could be returned if it was decided that they were generated from inappropriate charges.
After the Commission denied its request to hold an evidentiary hearing prior to effectuating Paragraph 7, Central petitioned for an administrative determination that Paragraph 7 was an invalidly promulgated rule. The gravamen of the Commission's argument in support of Paragraph 7 was that it constituted an "interim rate order" pursuant to Section 364.055, Florida Statutes, and thus was not subject to the requirements of the Administrative Procedure Act, Chapter 120, Florida Statutes.
The rates which may be charged by most telephone companies regulated by the Commission are set with reference to a "rate base," in order that a reasonable rate of return on equity may be calculated. The Commission acknowledges that rates which may be charged by an IXC are not set in consideration of such a base, but are set forth by the IXC as part of the "tariff" which it is required to maintain on file with the Commission. See Rule 25-24.485, Florida Administrative Code.
During any proceeding for a change of rates, the Commission may authorize the collection of "interim rates" until the entry of a final order with regard to the change. § 364.055(1), Fla.Stat. The difference between the interim rate and the previously authorized rates must be collected subject to refund in the event the final order does not authorize the rate change. § 364.055(2)(a), Fla.Stat.
However, the specifically prescribed method for calculation of interim rates as set forth in Section 364.055(4) and (5)(a-b), makes this section impracticable of application to telephone companies such as Central, whose rates are not established with regard to a rate base. Further, the instant "hold subject to refund" provision was not entered in a "proceeding for a change of rates," as authorized by Section 364.055(1), but rather in anticipation of a proceeding to determine whether AOS services were in the public interest. Therefore, we agree with the ruling of the hearing officer that Paragraph 7 cannot be classified as an interim rate order pursuant to Section 364.-055(1) so as to be exempt from the requirements of the APA. See § 120.72(3), Florida Statutes (1987) (notwithstanding any provision of this chapter, all public utilities and companies regulated by the Commission shall be entitled to proceed under the interim rate provisions of chapter 364).
However, the Commission does have the statutory authority to take action upon receipt of consumer complaints of excessive rates. Section 364.14(1), Florida Statutes (1987), provides that
[wjhenever the Commission finds, . upon complaint, that the rates, charges, tolls, or rentals demanded, exacted, charged, or collected by any telephone company . are unjust, unreasonable, unjustly discriminatory, unduly preferential, or in anywise in violation of law . the Commission shall determine the just and reasonable rates, charges, tolls or rentals to be thereafter observed and in force and fix the same by order.
Therefore, the Commission may act by order to fix "just and reasonable rates" upon complaints that existing rates are unjust and unreasonable. The crux of this appeal therefore becomes whether Paragraph 7 as enacted and implemented in this case was an "order," that is, a final agency decision which does not have the effect of a rule, Section 120.52(11), Florida Statutes, or a "rule," an agency statement of general applicability which prescribes law or policy, including any form which imposes any requirement not specifically required by statute or an existing rule. § 120.52(16), Fla. Stat.
The hearing officer determined that Paragraph 7 had the effect of a rule in that: 1) it was of general applicability, i.e., it affected all Florida AOS providers, and 2) it imposed an immediate requirement not otherwise required by statute or existing rule, that is, in light of the "hold subject to refund" language, AOS providers either had to change previously approved rates to match those charged by local exchange companies, or set monies aside to cover the potential refund obligation. We agree.
The Commission argued below, and before this court, that the temporary nature of Paragraph 7, that is, its applicability only until the August 1988 proceeding, precluded its classification as a rule. However, a temporally limited agency action is properly denominated a rule if it has the consistent effect of law, that is, is consistently applicable throughout its existence to an entire group rather than to one member of that group. Balsam v. Department of Health and Rehabilitative Services, 452 So.2d 976 (Fla. 1st DCA 1984). Paragraph 7 is by its terms applicable to every AOS provider in Florida, regardless of the actual rates being charged by individual providers, for the entire duration of its applicability.
The Commission further argues that Paragraph 7 does not explicitly require AOS providers to take any previously unre-quired action. It merely notifies them that they might be required to meet a contingent liability in the future, leaving it to their sole discretion how to meet that contingency. We find that this contention ignores reality, in that some action, of whatever nature, must be taken by these companies to meet the liability for these rate differentials in the event it is imposed.
We are not unmindful of the principle that rulemaking cannot be forced upon an agency and that policy may be developed through the adjudication of individual cases. See McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977) (while the Florida Administrative Procedure Act requires rulemaking for policy statements of general applicability, it also recognizes the inevitability and desirability of refining incipient agency policy through adjudication of individual cases).
However, both rulemaking and the adjudication of individual cases fulfill administrative due process requirements of notice, hearing and judicial review. Here, the PSC followed neither path. There was no rulemaking as envisioned by Section 120.54, Florida Statutes, nor was there a proceeding as envisioned by Section 120.57, Florida Statutes. Interested and affected persons had no forum in which to challenge the PSC's imposition of a new requirement, and there was no record to review to determine if the basis for the action was supported. Thus, the instant agency action is not the type of order agencies are required to utilize when making decisions affecting substantial interests on a case-by-ease basis.
Therefore, because Paragraph 7 of PSC Order 19095 is consistently applicable throughout its existence to every Florida AOS provider, and because its effect is to impose requirements on these companies previously unimposed by statute or pre-ex-isting rule, we find that the hearing officer was correct in her classification of this provision as a rule subject to the requirements of Section 120.54, Florida Statutes. Because those requirements were admittedly not followed by the Commission in this case, the provisions of Paragraph 7 cannot be enforced.
We do not by this opinion hold that the Commission cannot, by order, fix reasonable rates for a telephone company against whom complaints of excessive rates have been filed, pursuant to the authority granted by Section 364.14, Florida Statutes. It simply cannot do so in the form of a rule without following the statutory procedures for the promulgation of such rules.
The order of the hearing officer is affirmed.
SHIVERS, C.J., concurs.
ERVIN, J., dissents with opinion.