Opinion ID: 894901
Heading Depth: 1
Heading Rank: 8

Heading: The PUC's Jurisdiction

Text: Now we must decide whether the core claims fall within the PUC's exclusive jurisdiction. SWBT argues that the PUC should resolve this dispute because chapter 56 creates a comprehensive regulatory scheme for universal service in Texas, giving the PUC exclusive original jurisdiction. Plaintiffs argue that because SWBT elected incentive regulation, section 58.025 prohibits the PUC from hearing this dispute. See TEX. UTIL.CODE § 58.025(a)(1). We presume that district courts are authorized to resolve disputes unless the Constitution or other law conveys exclusive jurisdiction on another court or administrative agency. Entergy, 142 S.W.3d at 322. An agency has exclusive jurisdiction when a pervasive regulatory scheme indicates that the Legislature intended for the regulatory process to be the exclusive means of remedying the problem to which the regulation is addressed. Subaru of America, Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002). Whether an agency has exclusive jurisdiction is a matter of law that we review de novo. Id. at 222. If an agency has exclusive jurisdiction to resolve a dispute, a party must first exhaust administrative remedies before a trial court has subject matter jurisdiction. Id. We recently held that PURA is intended to serve as a `pervasive regulatory scheme' of the kind contemplated in David McDavid Nissan.  Entergy, 142 S.W.3d at 323 (concluding that the PUC has exclusive jurisdiction to hear a dispute between two electric companies). The same reasoning applies to this dispute. In section 52.002(a), the Legislature specifically granted the PUC exclusive original jurisdiction over the business and property of a telecommunications utility. TEX. UTIL.CODE § 52.002(a). In addition to this explicit grant of exclusive original jurisdiction, chapter 56 constitutes a comprehensive regulatory scheme for a Texas Universal Service Fund administered by the PUC. Section 56.021 directs the PUC to adopt and enforce rules requiring local exchange companies to establish a universal service fund. Id. § 56.021. Section 56.022 provides that the universal service fund shall be funded by a uniform statewide charge paid in accordance with procedures approved by the commission. Id. § 56.022. Section 56.023 directs the PUC to adopt eligibility criteria and review procedures, including a method for administrative review . . . to fund the universal service fund and make distributions from that fund. Id. § 56.023(a)(1). Thus, PURA is intended to serve as a pervasive regulatory scheme that governs the Texas Universal Service Fund. Plaintiffs argue that the PUC does not have jurisdiction because it cannot grant the relief they request. A close inspection of Plaintiffs' claims, however, reveals that the Legislature intended that the PUC determine this type of dispute and gave it the power to grant the relief requested. Plaintiffs' first amended petition, the live pleading when the trial court heard SWBT's jurisdictional plea, asserts various claims [7] that, in substance, asked the trial court to (1) declare that the TUSF surcharge violates PURA; and (2) order SWBT to return the surcharge (including accrued interest) to its customers. The PUC, as the administrator of the TUSF, has the authority to grant such relief and has the expertise to decide this matter. The Legislature granted the PUC the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction. TEX. UTIL.CODE § 14.001. With regard to the TUSF specifically, the Legislature directed the PUC to adopt eligibility criteria and review procedures, including a method for administrative review, the commission finds necessary to fund the universal service fund  and the PUC shall adopt rules for the administration of the universal service fund . . . and may act as necessary and convenient to administer the fund.  Id. § 56.023(a)(1), (d) (emphasis added). For billing disputes, the PUC's authority is even more comprehensive, as it may resolve disputes between a retail customer and a billing utility, service provider, [or] telecommunications utility. Id. § 17.157(a). In exercising its authority in resolving disputes, the PUC may investigate an alleged violation, order a service provider to produce information or records, and require a service provider to refund or credit overcharges or unauthorized charges with interest. Id. § 17.157(b)(1), (3), and (6). The PUC also has the authority to seek to enjoin a utility from engaging in acts that violate PURA, and it can assess administrative penalties against that utility. Id. § 15.021, .023. These provisions, along with the Legislature's grant to the PUC of exclusive original jurisdiction over the business and property of a telecommunications utility, id. § 52.002(a), establish that the Legislature granted the PUC the authority to approve a TUSF surcharge, regulate a service provider's collection of the surcharge, hear disputes between customers and service providers concerning the TUSF, and grant refunds where appropriate. Moreover, plaintiffs' request for core-claim attorney's fees, presumably pursuant to the declaratory judgment act, TEX. CIV. PRAC. & REM.CODE § 37.009, cannot operate to vest the trial court with jurisdiction where there was none before. Cf. Utica Lloyd's of Texas v. Mitchell, 138 F.3d 208, 210 (5th Cir.1998) (noting that, [a]lthough the Texas [Declaratory Judgment Act] expressly provides for attorney's fees, it functions solely as a procedural mechanism for resolving substantive `controversies which are already within the jurisdiction of the courts') (quoting Housing Authority v. Valdez, 841 S.W.2d 860, 864 (Tex.App.-Corpus Christi 1992, writ denied)). As we explained in Entergy, the specific grant to the PUC of `exclusive original jurisdiction' makes it clear that the Legislature intended this dispute . . . to begin its journey toward resolution at the PUC. Entergy, 142 S.W.3d at 323. Accordingly, we conclude that the PUC has exclusive jurisdiction over the core claims. Plaintiffs attempt to cast some of their claims as a violation of chapter 58's rate caps (over which they assert the PUC lacks jurisdiction), but the pleadings demonstrate that their real point of contention is with the TUSF surcharge. Even if chapter 58 were implicated, two statutory provisions indicate that chapter 56the TUSF chaptercontrols over chapter 58. First, section 56.002 provides that if chapter 56 conflicts with another provision, chapter 56 prevails. TEX. UTIL.CODE § 56.002. Second, section 58.061 states that [t]his subchapter [chapter 58] does not affect a charge permitted under . . . Subchapter B, Chapter 56. Id. § 58.061. Thus, the PUC's exclusive jurisdiction over the TUSF surcharge is not affected by the chapter 58's rate cap provisions. Our recent decision in AT & T Communications of Texas v. Southwestern Bell Telephone, 186 S.W.3d 517 (Tex.2006), also supports this conclusion. In AT & T, we determined that while the PUC cannot reduce switched access rates or determine their reasonableness, it is obligated to uphold duties listed in other provisions. Id. at 531-32. We specifically noted that [t]he Commission's lack of authority to reduce switched access rates does not preclude it from determining that they have an anticompetitive effect and attempting to fashion an appropriate remedy within its power. Id. at 531. Likewise, in this case, while the PUC cannot determine the reasonableness of switched access rates under chapter 58, see TEX. UTIL.CODE § 58.025(a), it must nonetheless carry out its duties pursuant to chapter 56's regulatory scheme. See, e.g., TEX. UTIL.CODE § 56.021-.023.