Opinion ID: 73121
Heading Depth: 2
Heading Rank: 1

Heading: whether cpg properly raised

Text: ITS OBJECTIONS BEFORE THE SEC The arguments CPG makes to this Court are that the SEC: 1) misapplied its own Rule 53 by failing to consider each of Southern’s proposed investments on an individual basis; 2) acted in an arbitrary and capricious manner by failing to examine individually Southern’s proposed EWG and FUCO investments; 3) lacked a substantial evidentiary basis for approving Southern’s application because it did not consider each investment individually; and 4) lacked a substantial evidentiary basis for finding that Southern’s investments would not have a “substantial adverse impact” on the utilities Southern operates because those investments would result in an unavailability of capital for Southern’s 9 operations. CPG’s first three arguments are different facets of the same contention, which is that the SEC should have considered each of Southern’s EWG and FUCO investments on an individual basis instead of determining in advance that Southern could invest in any EWGs and FUCOs it chose. Accordingly, we will refer to those three arguments and the issue they address collectively as the “individual review” argument or issue. CPG did not raise the individual review issue in either its initial filing or its initial petition for rehearing with the commission. The first time it raised the issue with the SEC was in its supplemental motion for rehearing, which was filed six months after the SEC order and nearly a year after comments had been solicited on Southern’s application. As a result, the SEC contends that this Court lacks jurisdiction to decide the issue. CPG responds that it has satisfied the literal requirements of the judicial review provision contained in PUHCA § 24, and therefore this Court has jurisdiction to decide the individual review issue. CPG’s position is that § 24 requires nothing more than that the ground of objection or issue in question be raised before the SEC at some point, at any point, in the administrative process. Because it did make its individual review 10 arguments or objections known to the SEC in a supplemental motion for rehearing, that is enough, CPG contends. Section 24 of the PUHCA, 15 U.S.C. § 79(x)(a), provides that “[n]o objection to the order of the Commission shall be considered by [a Court of Appeals] unless such objection shall have been urged before the Commission or unless there were reasonable grounds for failure so to do.” (emphasis added) Section 24 is ambiguous, because it is not apparent from the language of that provision when an objection must have been made in order to have been “urged before the Commission.” That phrase might mean only those objections to the application that were urged prior to the SEC issuing an order deciding the matter. Or it might include all objections urged prior to the SEC’s denial of an initial rehearing petition. Or, at the extreme, the statutory phrase might include objections urged at any time whatever, no matter how late in the process, or even after the process has been completed. In order to decide this case, we need only decide this specific issue: Does “urged before the Commission” as used in § 24 of PUHCA, include an objection not raised until a supplemental motion for rehearing that was filed six months after the SEC had issued an order on the 11 application? For the following reasons, we hold that the answer to that question is “no.” An ambiguous statutory phrase should be construed in the context in which it is used, with the congressional intent in mind. See, e.g., Robinson v. Shell Oil Co., 519 U.S. 337, ___, 117 S. Ct. 843, 848 (1997). The manifest congressional intent behind the provision in question is to give the SEC a meaningful opportunity to rule on, make factfindings about, and apply its expertise to, any objections parties may have to a proposed administrative action. See McKart v. United States, 395 U.S. 185, 192-95, 89 S.Ct. 1657, 166263 (1969)(discussing the importance of administrative agency review in light of agency expertise and authority); See McCarthy v. Madigan, 503 U.S. 140, 145, 112 S.Ct. 1081, 1087 (1992) (discussing the importance of a record being developed before an administrative agency). Given the realities of the administrative process, in order for the SEC’s opportunity to consider objections to be meaningful, the objections must be made while the SEC has the application under consideration. Absent some reasonable ground for the delay – and here there is none – a supplemental motion for rehearing, filed six months after the SEC has decided the matter and 12 issued its order, and nearly a year after it had solicited comments, is too late to provide a meaningful opportunity for administrative review.3 In this case, for example, the SEC had approved Southern’s application and moved on to other matters, and Southern was acting on the SEC’s approval by the time CPG raised the objections it now advances before this Court. In the realm of regulatory proceedings, finality is important to agencies, to parties, and to the public. As the Supreme Court stated more than a halfcentury ago: If upon coming down of the [administrative] order litigants might demand rehearings as a matter of law because some new circumstance has arisen, some new trend has been observed, or some new fact discovered, there would be little hope that the administrative process could ever be consummated in an order that would not be subject to reopening. ICC v. Jersey City, 322 U.S. 503, 514-15, 64 S. Ct. 1129, 1134 (1944); see also Civil Aeronautics Bd. v. Delta Air Lines, 367 U.S. 316, 321-22, & 330-31, 81 3 CPG could have raised its individual review objection and arguments before the SEC ruled on Southern’s application, even though Southern did not select any particular EWG or FUCO investment until later. The thrust of the objection is that Rule 53 requires consideration of such investments on a case by case basis; therefore, if valid, the objection would have required denial of the application as filed by Southern, because it did not specify the companies in which the investments would be made. 13 S. Ct. 1611, 1617 & 1621-22 (1965)(discussing the interest of finality in administrative proceedings). The same reasoning applies to interpreting “urged before the Commission” as that language is used in § 24 of PUHCA. If all a party has to do in order to obtain judicial review of an objection to a SEC order is file a supplemental motion for rehearing with the Commission, the administrative process might never be completed, or a party could readily bypass any meaningful consideration by the Commission of its objections. For example, a party could file a supplemental motion for rehearing in the SEC the day prior to filing a petition for judicial review, and its belated objections would have been “urged before the Commission” -- if we adopt CPG’s interpretation of the statutory language. We decline to adopt that interpretation, because it would lead to lack of finality in the administrative process and to judicial review of objections that the SEC never had a meaningful opportunity to consider. Those are the very things we believe Congress meant to avoid when it adopted § 24 of PUHCA. We realize that the SEC sometimes entertains new objections on rehearing, and that one court of appeals, the D.C. Circuit, has agreed to hear objections that would otherwise have been barred where the SEC has actually 14 considered and decided the merits of those objections. See City of Lafayette v. SEC, 454 F.2d 941, 947 (D.C. Cir. 1971), aff’d sub nom, Gulf States Utilities v. FPC, 411 U.S. 747 (1973). We have no quarrel with such a holding, which is analogous to a well established doctrine involving federal habeas corpus review of procedurally barred issues where the state courts have not enforced the bar themselves. See, e.g., Wainwright v. Witt, 469 U.S. 412, 431 n.11, 105 S. Ct. 844, 855-56 n.11 (1985); Davis v. Singletary, 119 F.3d 1471, 1479 (11th Cir. 1997). Where the SEC has considered and ruled on the merits of an objection, the reviewing court will have the benefit of the Commission’s expertise, factfindings, and decision. Judicial review in such circumstances will not jeopardize finality or lead to inordinate delay. Seeking to rely on City of Lafayette, CPG suggests that the SEC actually discussed and decided the merits of its individual review objection and argument, therefore, this Court should as well. We disagree with CPG’s procedural premise. The SEC’s order denying CPG’s “supplemental motion for rehearing” specifically stated that “CPG has not demonstrated any reason for the [SEC] to take the extraordinary step of reopening this matter.” The SEC 15 declined to rule on the merits of CPG’s untimely objection and argument about individual review. It follows that the City of Lafayette exception is inapplicable.