Opinion ID: 1174031
Heading Depth: 1
Heading Rank: 5

Heading: finality of commission's order

Text: This issue is posed by the Shareholders Association. They argue that the paramount purpose of the parties' agreement and stipulation was to resolve the pending controversies with a finality that would permit MFS and its affiliates to raise the necessary investor capital and proceed with the exploration and development of the properties. They say this requires that the Commission order be res judicata; that is, that it be rendered in a fashion that it cannot be modified or repealed by the present Commission or future Commissions. Deeming the order deficient in that respect, the Shareholders Association asks this Court to set aside the Commission's order and remand the case with directions for the Commission to enter a new order approving the parties' settlement agreement with res judicata finality. At the opposite extreme, the Department argues that the Shareholders are seeking an advisory opinion, since this case poses no real and present controversy on the res judicata effect of the Commission's order. Consequently, the Department concludes, this Court cannot now provide a declaration that the order is res judicata and precludes a future Commission from redetermining the issues involved in this appeal. Between these two extremes, the parties to the settlement agreement, MFS, Wexpro, and the Division of Public Utilities, defend the Commission's findings and conclusion on this point, which they say guarantee an appropriate degree of finality without compromising the Commission's jurisdiction. The Commission's conclusion of law on this subject was as follows: 6. The Commission's findings and conclusions with regard to the transfer of properties and the allocation of benefits contemplated by the Settlement, including the findings and conclusions that the transfer of properties and the allocation of benefits are reasonable and for market value and are in the public interest, are intended by the Commission to be final and not subject to future change (except through an appropriate and timely petition for rehearing or judicial review). The Commission so concludes because to insure the proper development of said properties the parties must be able to rely on the finality of the findings and conclusions in regard to the transfer of properties and apportionment of benefits. The Commission [is] also entitled to rely on the finality of its order. [Emphasis added.] While endorsing the propriety of conclusion 6, the Shareholders object that earlier provisions of the Commission's order introduced such confusion and uncertainty on the res judicata effect of the order that they made conclusion 6 illusory. Specifically, they refer to the Commission's statements of philosophy (1) that it could review and modify any proposed company restructuring of MFS if found detrimental to its functions as a utility or injurious to the public interest, [30] and (2) that it could require continued scrutiny to, in effect, protect MFS's customers from the effects of conflict of interest or sweetheart relationship within the structure of MFS and all of its subsidiaries whether or not they are subject to a regulated rate of return. The Shareholders also complain of the Commission's conclusion of law (and related factual findings) that [b]y adopting and approving the Stipulation, the Commission does not relinquish or limit any jurisdiction or statutory authority it possesses, and the related conclusion that the Commission can require information from the parties and [can] investigate transactions under the Settlement in which the parties are involved. We find no error in the Commission's conclusions on finality and res judicata (Part IIA). In common with the Commission and the parties to the settlement, we see no inconsistencies in the provisions to which the Shareholders object, each of which is essential to the viability of the settlement and to the continued performance of the Commission's vital functions. [31] In contrast to the lack of finality that exists as to orders fixing public utility rates, [32] the principles of res judicata apply to enforce repose when an administrative agency has acted in a judicial capacity in an adversary proceeding to resolve a controversy over legal rights and to apply a remedy. United States v. Utah Construction & Mining Co., 384 U.S. 394, 421-22, 86 S.Ct. 1545, 1559-60, 16 L.Ed.2d 642 (1966); Bowen Trucking, Inc. v. Public Service Commission, Utah, 559 P.2d 954, 957 (1977) (Crockett, J., concurring); Mulcahy v. Public Service Commission, 101 Utah 245, 254-56, 117 P.2d 298, 302 (1941); Philadelphia Electric Co. v. Borough of Lansdale, 283 Pa.Super. 378, 424 A.2d 514, 521 (1981). See generally, 2 K. Davis, Administrative Law Treatise §§ 18.02, 18.08 (1958). Orders entered by consent or stipulation of the parties can be acts in a judicial capacity for this purpose. Pope v. United States, 323 U.S. 1, 12, 65 S.Ct. 16, 22, 89 L.Ed. 3 (1944). In this case, the principle of res judicata assures finality to those provisions of the Commission's order that allocate benefits and establish the parties' rights ( e.g., royalties and net profits interests and financial commitments for sale of gas and for development and rate-reduction payments) in the properties transferred under the order or designated for exploration or development under it. Specific findings on finality are unnecessary to that result. Conversely, the finality that is inherent in the Commission's performance of the judicial function in approving the settlement is not compromised by the Commission's simultaneous affirmance of the obvious principle that by doing so it is not relinquishing its regulatory authority over the parties in the performance of those functions that are subject to the jurisdiction of the Commission. [33] The Commission orders challenged in these petitions for review are all affirmed. HALL, C.J., HOWE and DURHAM, JJ., and BRYANT H. CROFT, District Judge, concur. STEWART, J., having disqualified himself, does not participate herein. CROFT, District Judge, sat.