Opinion ID: 1428299
Heading Depth: 3
Heading Rank: 5

Heading: Due Process Requirements for Interim Rate Changes

Text: {24} Our conclusion that the Commission has the power to grant interim rate relief does not mean that the Commission may exercise this power without affording due process to U S West. See Virginia Elec. & Power Co. v. State Corp. Comm'n, 226 Va. 541, 312 S.E.2d 25, 28-30 (1984) (finding a violation of due process when a utility was unaware that summary action was under consideration and had no opportunity to be heard). In particular, the fact that the deprivation of property occasioned by the Commission's order may be only interim or temporary in nature does not provide a justification for bypassing the Due Process Clause. See Fuentes v. Shevin, 407 U.S. 67, 84-85, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972); see also Montoya v. Blackhurst, 84 N.M. 91, 93, 500 P.2d 176, 178 (1972). Thus, the Commission has ... to temper the laudable objective of prompt and uncomplicated resolution of rate cases with a healthy concern for the protection of the rights of participants to a full and proper hearing. Virginia Elec. & Power Co., 101 Pub. Util. Rep. 4th (PUR) 41, 44 (Va. State Corp. Comm'n 1988); cf. Santa Fe Exploration Co. v. Oil Conservation Comm'n, 114 N.M. 103, 109, 835 P.2d 819, 825 (1992) (noting that [d]ue process safeguards are particularly important in administrative agency proceedings because `many of the customary safeguards affiliated with court proceedings have, in the interest of expedition and a supposed administrative efficiency, been relaxed' (quoting Reid v. New Mexico Bd. of Exam'rs in Optometry, 92 N.M. 414, 416, 589 P.2d 198, 200 (1979))). {25} Our prior decisions have recognized that [i]n administrative proceedings due process is flexible in nature and may adhere to such requisite procedural protections as the particular situation demands. State ex rel. Battershell v. City of Albuquerque, 108 N.M. 658, 662, 777 P.2d 386, 390 (Ct.App.1989) (citing Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972)); accord Mathews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (`[D]ue process ... is not a technical conception with a fixed content unrelated to time, place and circumstances.' (citation omitted)); Mills v. New Mexico State Bd. of Psychologist Exam'rs, 1997-NMSC-028, ¶ 19, 123 N.M. 421, 941 P.2d 502 (Procedural due process requirements are not static, and the extent of the hearing required is determined on a case by case basis.); New Mexico Indus. Energy Consumers v. New Mexico Pub. Serv. Comm'n, 104 N.M. 565, 568, 725 P.2d 244, 247 (1986) ([D]ue process is a flexible concept whose essence is the right to be heard at a meaningful time and in a meaningful manner.). We take this flexible approach because interests must be balanced to determine what notice is required in a particular situation, Farmland Indus., Inc., 943 P.2d at 479 (citing Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950)), and because we recognize that an administrative body may carry out executive or legislative functions in addition to its quasi-judicial role, see Board of Educ. v. New Mexico State Bd. of Educ., 106 N.M. 129, 132, 740 P.2d 123, 126 (Ct.App.1987); Krieger, supra, at 1036-37. {26} Our determination of what process is due in an administrative proceeding results from a balancing of (1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the [g]overnment's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Mathews, 424 U.S. at 335, 96 S.Ct. 893. In balancing these factors, we consider the proceedings as a whole. Chavez, 1998-NMSC-033, ¶ 14, 125 N.M. 809, 965 P.2d 928; see also Mitchell v. W.T. Grant Co., 416 U.S. 600, 610, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974). {27} Viewed from this perspective, we find it significant that U S West's property interest in a ratemaking proceeding has been characterized as a right to assess rates that provide a reasonable rate of return, Mountain States 1977, 90 N.M. at 334, 563 P.2d at 597, and in this case the Commission employed the rate of return that was previously established as a result of a full-blown rate case in 1992. In addition, U S West was afforded the opportunity to seek modification of the Commission's May 29 order within sixty days, and to impose a surcharge to recoup any losses that were later determined to be unjustified. Cf. GTE Sprint Communications Corp. v. AT & T Communications, 230 Va. 295, 337 S.E.2d 702, 707 (1985) (concluding that a full and fair hearing on all issues relevant to a permanent compensation plan has not been denied but has merely been deferred by an order granting interim relief). This special opportunity for modification of the Commission's order differs from the more general opportunity to file a rate case at any time because only the former includes the possibility of imposing a surcharge to recoup unjustified past losses. Compare Mountain States 1977, 90 N.M. at 341, 563 P.2d at 604 (suggesting that the Commission ordinarily cannot order [r]etroactive remedies in a general rate case), with Friends of the Earth v. Public Serv. Comm'n, 78 Wis.2d 388, 254 N.W.2d 299, 309 (1977) (concluding that when an interim order is conditioned on the possibility that a refund [or surcharge] may be required, the [commission] may be deemed to have retained with the consent of the utility the power to issue an order relating back to the interim order) (footnote omitted). See generally Krieger, supra, at 1012-15 (discussing different approaches to making interim rates subject to refund or surcharge). Also, under the terms of Article XI, Section 7 of the New Mexico Constitution, U S West has not been required to comply with the rate reduction ordered by the Commission while its removal action has been pending in this Court. These provisions for modification and further review of the Commission's order prior to the enforcement of the rate reduction decrease the risk of an erroneous deprivation of U S West's constitutionally protected property interests. See GTE Sprint Communications Corp., 337 S.E.2d at 707-08. {28} Moreover, the alternative procedural requirement suggested by U S West, namely the completion of a general rate case before any type of rate reduction can be ordered, would impose a significant fiscal and administrative burden on the Commission. Such a burden could impair the Commission's ability to carry out its constitutionally mandated function of ensuring that telephone rates are reasonable and just. N.M. Const. art. XI, § 7. `A construction of the Due Process Clause which would place impossible or impractical obstacles in the way [of the State reaching a final decision] could not be justified.' Farmland Indus., Inc., 943 P.2d at 479 (quoting Mullane, 339 U.S. at 313-14, 70 S.Ct. 652) (alteration in original). For these reasons, we determine that the Commission did not violate U S West's constitutional right to due process by granting interim rate relief without all the trappings of a general rate case.