Court Opinion

ID: 859063
Source: CourtListenerOpinion
Date Created: 2013-04-25 15:17:19.046955+00
Date Added: 2024-06-11T13:11:15.415256
License: Public Domain

IN THE SUPREME COURT, STATE OF WYOMING

                               2013 WY 48

                                            APRIL TERM, A.D. 2013

                                                 April 25, 2013

THE PUBLIC SERVICE COMMISSION
OF WYOMING,

Appellant
(Respondent),

v.                                 S-12-0119

QWEST CORPORATION,

Appellee
(Petitioner).

RANGE TELEPHONE COOPERATIVE,
INC., RT COMMUNICATIONS, INC.,
DUBOIS TELEPHONE EXCHANGE,
INC. AND ADVANCED
COMMUNICATIONS TECHNOLOGY,
INC.,

Appellants
(Intervenors-Petitioners),

v.                                 S-12-0120

QWEST CORPORATION,

Appellee
(Petitioner).

TRI COUNTY TELEPHONE
ASSOCIATION and TCT WEST, INC.,

Appellants
(Intervenors),
v.                                       S-12-0121

QWEST CORPORATION,

Appellee
(Petitioner).

THE OFFICE OF CONSUMER
ADVOCATE,

Appellant
(Petitioner),

v.                                       S-12-0122

THE PUBLIC SERVICE COMMISSION
OF WYOMING,

Appellee
(Respondent).

                  Appeal from the District Court of Laramie County
                      The Honorable Michael K. Davis, Judge

Representing the Public Service Commission of Wyoming:
      Gregory A. Phillips, Wyoming Attorney General; Martin L. Hardsocg, Deputy
      Attorney General; Ryan T. Schelhaas, Senior Assistant Attorney General; Michael
      M. Robinson, Senior Assistant Attorney General. Argument by Mr. Robinson.

Representing Qwest Corporation:
      Paul J. Hickey and O’Kelley H. Pearson of Hickey & Evans, LLP, Cheyenne,
      Wyoming. Argument by Mr. Pearson.

Representing Range Telephone Cooperative, Inc., RT Communications, Inc., Dubois
Telephone Exchange, Inc., and Advanced Communications Technology, Inc.:
      Elizabeth Zerga of Jubin & Zerga LLC, Cheyenne, Wyoming.

Representing Tri County Telephone Association and TCT West, Inc.:
     Michael B. Rosenthal and Marianne Kunz Shanor of Hathaway & Kunz, P.C.,
     Cheyenne, Wyoming. Argument by Ms. Shanor.
Representing the Office of Consumer Advocate:
      Alexander K. Davison of Patton & Davison, Cheyenne, Wyoming. Argument by
      Mr. Davison.

Before KITE, C.J., HILL, VOIGT, BURKE, J.J., and GOLDEN, J., Retired

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of typographical or other formal errors so correction may be made
before final publication in the permanent volume.
KITE, Chief Justice.

[¶1] The manager of the Wyoming Universal Service Fund (WUSF) filed confidential
reports with the Wyoming Public Service Commission (PSC) containing his
recommendations for the WUSF assessment level for fiscal years 2009-2010 and 2010-
2011. Upon notice from the PSC that public hearings would be held to consider the
manager’s reports, Qwest asked for contested case hearings. Qwest also asserted it did
not have sufficient information to allow it to determine whether the manager’s reports
were correct.

[¶2] The PSC denied Qwest’s requests for contested case hearings, concluding WUSF
proceedings are legislative in nature. It convened public hearings and subsequently
issued orders establishing the WUSF assessment levels as recommended by the manager.
The Office of Consumer Advocate (OCA) and Qwest filed petitions for review of the
PSC order in the district court.

[¶3] Before the district court, Qwest reiterated its argument that it could not address
whether the PSC’s orders were in error without seeing all of the information the PSC
relied upon. The PSC argued the telecommunications companies submitted the
information necessary to make the WUSF determination under the promise of
confidentiality. Range Telephone Cooperative, Inc. (Range), RT Communications, Inc.
(RT), Dubois Telephone Exchange, Inc. (Dubois), and Advanced Communications
Technology, Inc. (Advanced Communications) filed motions to intervene for the limited
purpose of protecting their confidential data.

[¶4] After an initial hearing, the district court ordered portions of the 2009 data to be
provided to Qwest but denied the request for 2010 data. Subsequently, the district court
held that the PSC erred in denying Qwest’s requests for contested case hearings, reversed
the administrative orders and remanded the cases to the PSC for contested case hearings.

[¶5] Four notices of appeal from the district court’s order were filed. In case No. S-12-
0119, the PSC claims the district court erred in granting Qwest access to confidential
information and in holding that Qwest had a property interest and was entitled to a
contested case hearing. In case No. S-12-0120, Range, RT, Dubois and Advanced
Communications assert the district court erred in granting Qwest access to confidential
information. Tri County Telephone Association (Tri County) likewise challenges the
district court’s order releasing the information in case No. S-12-0121. In case No. S-12-
0122, the OCA asserts the PSC erred in concluding it was not required to hold contested
case hearings. We hold that the PSC was required to convene contested case hearings.
We remand the cases to the district court with directions to remand to the PSC for
contested case hearings.

                                           1
                                        ISSUE

[¶6] This Court granted motions to consolidate the four appeals. The determinative issue
for our consideration is whether Qwest was entitled to contested case hearings before the
PSC.

                                        FACTS

[¶7] The PSC is charged with administering the WUSF. Qwest is a Colorado
corporation authorized by the PSC to provide competitive and non-competitive services
to customers in Wyoming. Range, RT, Dubois, Advanced Communications, and Tri
County also provide telecommunications services to customers in Wyoming. The OCA
is a division of the PSC charged with representing the interests of Wyoming citizens and
utility customers in matters involving public utilities. Wyo. Stat. Ann. § 37-2-401
(LexisNexis 2011).

[¶8] The WUSF was created pursuant to Wyo. Stat. Ann. § 37-15-501 (LexisNexis 2011)
of the Wyoming Telecommunications Act. The objective of the fund is to assist
telecommunications customers located in areas of Wyoming where rates for essential
services are high by assuring that they pay no more than 130 percent of the statewide
average price for basic local exchange service. Section 37-15-501(c) and (d). To achieve
this result, telecommunications companies providing services in Wyoming are required to
contribute to the WUSF in accordance with the method designated by the PSC after
notice and an opportunity for hearing. Section 37-15-501(a) and (b). Once customers
who receive services in high rate areas of the state have paid for services up to the 130
percent benchmark, the WUSF distributes funds to the companies to the extent that their
essential local exchange services prices exceed the benchmark after taking into account
any contributions from the federal universal service fund (FUSF).

[¶9] Each year, the WUSF manager, a PSC employee, requires companies providing
local exchange services in Wyoming to submit confidential data from the previous year
including rates, essential services, number of lines, FUSF receipts and other information
required by PSC rule. The manager analyzes the data, formulates recommendations and
submits his findings and recommendations to the PSC. The PSC sets a hearing and
provides notice to the companies that they may appear and comment on the fund
manager’s findings and recommendations. The PSC then determines the amount the
companies must contribute to the fund and the amount to be distributed to them from the
fund.

[¶10] On April 1, 2009, the fund manager submitted his annual confidential report for
the 2009-2010 fiscal year to the PSC. Each telecommunications company received the
portions of the confidential report pertaining to them; they did not receive confidential

                                           2
information concerning other companies. The PSC then issued a notice of a public
hearing to receive comment on the fund manager’s report. Before the hearing, the OCA
requested access to the confidential data underlying the manager’s report. The PSC
allowed the OCA to review the data after imposing restrictions on its dissemination and
handling. The OCA also filed a motion to participate in the proceedings as a party.

[¶11] Also prior to the hearing, Qwest filed a motion to intervene and requested a
contested case hearing to address its WUSF distribution. Qwest claimed that the fund
manager had incorrectly calculated its distribution for the 2009-2010 fiscal year resulting
in a lower distribution than it should have received. Qwest also contended it did not have
sufficient information to determine whether the fund manager had correctly calculated
the 130 percent benchmark and assessment level. After a hearing on Qwest’s motion, the
PSC ruled that a contested case hearing was not required because the only facts to be
determined in a WUSF proceeding are legislative in nature.

[¶12] The matter proceeded to public hearing on the fund manager’s report. Following
the hearing, the PSC issued an order in which it adopted the report and determined the
OCA was not a party to the proceeding. The PSC also issued an order denying Qwest’s
motion to intervene and for a contested case hearing. Qwest and the OCA filed petitions
for rehearing which the PSC denied after another public hearing. The OCA filed a
petition for review of the PSC’s orders in the district court. Qwest and the other
companies filed motions to intervene which the district court granted.

[¶13] In the meantime, the fund manager submitted his confidential report for the 2010-
2011 fiscal year to the PSC. As it had done in 2009, the OCA moved to intervene and
requested portions of the report. The PSC denied the motion to intervene but granted
limited access to the confidential report. Qwest also asked to intervene and requested a
contested case hearing. The PSC denied both requests and subsequently entered an order
adopting the fund manager’s report.

[¶14] Qwest and the OCA filed petitions for review in the district court and the other
companies were allowed to intervene. Qwest sought access to the confidential
information the fund manager relied on in making his recommendations, arguing that it
could not address whether the PSC acted arbitrarily without seeing the information on
which it relied. The PSC and the other companies argued that the information was
submitted under the promise of confidentiality and disclosure might allow Qwest to
obtain an unfair competitive advantage. The OCA aligned itself with Qwest and asserted
much of the information could be acquired through the internet and was not particularly
sensitive. The district court directed the OCA, which already had at least some of the
information, to review the data and make a recommendation as to which portions, if any,
could be provided to Qwest without harming the other companies. Ultimately, the
district court granted Qwest access to the portions of the 2009 data the OCA
recommended be provided but denied the request for 2010 data.

                                            3
[¶15] After subsequent hearings, the district court issued an order holding that Qwest had
a property interest in its WUSF distribution and was entitled to contested case hearings.
The district court reversed the PSC’s orders and remanded the cases for contested case
hearings. As noted in paragraph 5 above, the parties appealed the district court order to
this Court.

                               STANDARD OF REVIEW

[¶16] The question of whether an agency must conduct a contested case hearing is one of
law which we review de novo. Sheridan County Comm’n v. V.O. Gold Properties, LLC,
2011 WY 16, ¶ 5, 247 P.3d 48, 50 (Wyo. 2011).

                                      DISCUSSION

[¶17] The district court concluded that Qwest has a property interest in its WUSF
distribution; therefore, it was denied due process when the PSC refused to convene
contested case hearings. We agree that Qwest was entitled to contested case hearings, but
reach that result through statutory interpretation. In doing so, we apply our usual rules of
statutory interpretation.

              [Our] paramount consideration is to determine the
              legislature’s intent, which must be ascertained initially and
              primarily from the words used in the statute. We look first to
              the plain and ordinary meaning of the words to determine if
              the statute is ambiguous. A statute is clear and unambiguous
              if its wording is such that reasonable persons are able to agree
              on its meaning with consistency and predictability.
              Conversely, a statute is ambiguous if it is found to be vague
              or uncertain and subject to varying interpretations.

Barlow Ranch, LP v. Greencore Pipeline Co., LLC, 2013 WY 34, ¶ 18, ___ P.3d ____,
____ (Wyo. 2013), citing Michael’s Constr., Inc. v. Am. Nat’l Bank, 2012 WY 76, ¶ 12,
278 P.3d 701, 705 (Wyo. 2012). The determination of whether a statute is clear or
ambiguous is a matter of law for the court. Id. When the language is clear, we give
effect to the ordinary and obvious meaning of the words employed by the legislature. Id.
In ascertaining the meaning of a statutory provision, all statutes relating to the same
subject or having the same general purpose must be considered in pari materia and
construed in harmony. Id. We do not apply our rules of statutory construction unless a
statute is ambiguous. Id., citing Vogel v. Onyx Acceptance Corp., 2011 WY 163, ¶ 24,
267 P.3d 1057, 1064 (Wyo. 2011).

                                             4
[¶18] Article 5 of the Wyoming Telecommunications Act contains the following
provision:

           § 3 7-15-501. Universal service              fund     created;
           contributions; administration.

                  (a) There is hereby established the universal service
           fund to be administered in accordance with this section. The
           fund shall be administered by the commission.               All
           telecommunications companies shall contribute to the
           universal service fund. The dates for contributions to the
           fund and disbursements from the fund shall be set by the
           commission, after notice and opportunity for hearing, as
           necessary to accomplish the objectives of the fund as
           specified in subsections (c) and (d) of this section. The costs
           of administering the fund may be included in determining
           required contributions.

                  (b) The commission shall after notice and opportunity
           for hearing, designate the method by which the contributions
           shall be calculated, collected and distributed.            The
           commission shall authorize an additional monthly charge to
           customers, in the amount specified by the commission, to
           recover each contributor’s required payment to the universal
           service fund. Any charge related to mobile
           telecommunications service shall only apply if the customer’s
           place of primary use is in this state as provided by the Mobile
           Telecommunications Sourcing Act, 4 U.S.C. §§ 116 to 126.
           The provisions of the Mobile Telecommunications Sourcing
           Act shall apply to this subsection.

                  (c) The commission shall administer the monies in the
           universal service fund to assist only those customers of
           telecommunications companies located in areas of this state
           with relatively high rates for essential services.       The
           commission, after notice and opportunity for hearing, shall
           determine a reasonable amount and a fair method of
           distributing monies. The commission may authorize a credit
           to customer bills, in the amount specified by the commission,
           to reflect distributions received by the local exchange
           company from the universal service fund. The commission
           shall ensure that the method shall promote the emergence of
           competition in providing local exchange service.

                                         5
                      (d) In accordance with the method of distribution
              determined by the commission, a telecommunications
              company shall receive funds under this section to the extent
              that its essential local exchange service prices, after
              consideration of any contributions from the federal universal
              service fund, exceed one hundred thirty percent (130%) of the
              weighted statewide average essential local exchange service
              prices.

                     (e) The operation of the universal service fund may be
              suspended by the commission, based upon a public interest
              finding, after notice and an opportunity for a hearing, that
              the fund is not then serving its intended purpose.

                    (f) The commission’s decisions under this section shall
              be subject to the provisions of the Wyoming Administrative
              Procedure Act.

(Emphasis added.)

[¶19] Pursuant to this provision, the PSC is required to provide notice and opportunity
for hearing before: 1) setting dates for contributions to and distributions from the WUSF;
2) designating the method by which contributions are calculated, collected and
distributed; 3) determining the amount and method of distributing monies from the
WUSF; and 4) suspending the operation of the WUSF. The question is what type of
hearing the PSC is required to provide. We begin our analysis by determining whether
there is any law that requires the PSC to hold a particular type of hearing before it makes
the above determinations with respect to the WUSF. Sheridan County Comm’n, ¶ 12,
247 P.3d at 52.

[¶20] Section 37-15-501 itself is silent as to the type of hearing the PSC is required to
provide. Article 4 of the Wyoming Telecommunications Act, however, contains the
following provision:

              § 37-15-401. Commission powers.

              (a) . . . the commission has the power to:
                  ....
                (v) Hold hearings on complaints, or for good cause, upon
              notice and subject to the provisions of the Wyoming
              Administrative Procedure Act.

                                            6
Pursuant to this provision, the PSC’s power to hold hearings is subject to the WAPA.

[¶21] Under the WAPA, hearings take one of two forms. Wyo. Stat. Ann. § 16-3-103
(LexisNexis 2011) provides for public hearings in the rule-making context. The term
“rule” is defined as:

               each agency statement of general applicability that
               implements, interprets and prescribes law, policy or
               ordinances of cities and towns, or describes the organization,
               procedures, or practice requirements of any agency.

Section 16-3-101(a)(ix). Wyo. Stat. Ann. §§ 16-3-107 through 16-3-112 (LexisNexis
2011) provide for contested case hearings. 1 “Contested case” is defined as a “proceeding
including but not restricted to ratemaking, price fixing and licensing, in which legal
rights, duties or privileges of a party are required by law to be determined by an agency
after an opportunity for hearing.” Section 16-3-101(b)(ii) (emphasis added). Section
37-15-501 of the Telecommunications Act clearly provides that the duty of
telecommunications companies to contribute to, and their right to distributions from, the
WUSF are to be determined by the PSC after “opportunity for hearing.” Because the
“rights [and] duties” of such companies “are required by law to be determined” by the
PSC “after an opportunity for hearing” the proceedings meet the definition of a contested
case under the WAPA and, pursuant to § 37-15-401, the PSC was required to follow the
dictates of §§ 16-3-107 through 16-3-112 for contested cases prior to entering orders
setting the WUSF assessment levels and distributions in 2009 and 2010.

[¶22] Arguing otherwise, the PSC contends public rather than contested case hearings
are consistent with its historical practice in making WUSF determinations. The PSC
asserts that since the inception of the WUSF in 1995, it has made such determinations
eighteen times, fifteen at regular open meetings, three at legislative type hearings, and
never in a contested case hearing. Citing State ex rel. Sublette County Bd. of County
Comm’rs v. State, 2001 WY 91, ¶¶ 16-17, 33 P.3d 107, 113-14 (Wyo. 2001), the PSC
urges this Court to defer to its interpretation of § 37-15-501 as giving it broad discretion
to administer, operate and decide matters concerning the WUSF by way of public, rather
than contested case, hearings.

[¶23] There is no question that one measure of a statute’s meaning is the interpretation
placed on it by the agency charged with its administration. Id. at 113. This Court will
defer to that interpretation when it does not conflict with legislative intent. Id. The
difficulty here is that the PSC’s interpretation of § 37-15-501, and its historical use of

1
  There are actually three types of hearings identified in the WAPA. Wyo. Stat. Ann. § 16-3-113
(LexisNexis 2011) addresses license hearings but subsection (a) makes clear that the contested case
provisions apply in that context.

                                                7
public hearings to decide the matters set forth therein, conflicts with the express
legislative directive found in §§ 37-15-401 and 37-15-501. When those provisions are
read together with § 16-3-101(b)(ii), there simply is no question that a contested case
hearing is required.

[¶24] The PSC also argues that if the legislature intended to require contested case
hearings for setting the parameters of the WUSF it would have said so in § 37-15-501.
The PSC asserts the omission of the words “contested case” in that statutory provision
shows that the legislature meant something other than a contested case hearing when it
used the phrase “after notice and opportunity for hearing.” The PSC also points to other
language found in § 37-15-501 as demonstrating the legislature’s intent to allow it to
exercise its discretion in selecting the method best suited to achieving the goals and
objectives of the WUSF. The PSC references, for example, the language in § 37-15-
501(a) authorizing it to set the dates for contributions and disbursements, after notice and
opportunity for hearing, “as necessary to accomplish the objectives of the fund” and the
language in § 37-15-501(c) requiring it to determine, after notice and opportunity for
hearing, a reasonable amount and fair method of distributing monies by a method that
ensures competition. The PSC contends this statutory language is consistent with the
kind of language required for rulemaking under the WAPA. The PSC also directs our
attention to § 37-15-501(f), which states that the PSC’s “decisions” concerning the
WUSF are subject to the provisions of the WAPA. Because subsection (f) does not state
that the PSC’s “proceedings” are subject to the WAPA, the PSC argues, contested case
hearings are not required. Citing Northfork Citizens for Responsible Dev. v. Bd. of
County Comm’rs of Park County, 2010 WY 41, ¶ 51, 228 P.3d 838, 855 (Wyo. 2010) and
Carlson v. Bratton, 681 P.2d 1333, 1338 (Wyo. 1984), the PSC argues that since § 37-15-
501 does not mandate a contested case hearing in WUSF proceedings, no such hearing is
required.

[¶25] Again, the difficulty with the PSC’s arguments is that they do not take into account
§ 37-15-401(a)(v) which expressly states that the PSC’s power to hold hearings is
“subject to the provisions of the Wyoming Administrative Procedure Act.” The
argument also does not account for the language in § 37-15-501 stating that the “rights
[and] duties” of such companies “are required by law to be determined” by the PSC
“after an opportunity for hearing.” That language, read in harmony with the language in
§ 16-3-101(b)(ii) defining a “contested case” as a proceeding in which legal rights and
duties of a party “are required by law to be determined by an agency after an
opportunity for hearing” places WUSF proceedings squarely within the class of cases in
which an underlying statute, in this case § 37-15-501, requires a contested case hearing.
Thus, this case is distinguishable from cases where the underlying statutes at issue
contained no requirement that the legal rights and duties of a party be determined at a
trial type hearing and this Court concluded contested case hearings were not required.
Giving the language in §§ 37-15-401(a)(v), 37-15-501 and 16-3-101(b)(ii) its plain and
ordinary meaning, the legislature has mandated contested case hearings in WUSF

                                             8
proceedings where the legal rights and duties of parties are to be determined after
opportunity for hearing.

[¶26] The PSC argues that practical considerations must be taken into account in
determining whether a contested case hearing is required for making determinations
involving the WUSF. The PSC asserts that a contested case hearing requires adverse
parties, a requirement that is lacking in WUSF proceedings. The PSC also contends
contested case hearings in the context of setting WUSF contributions and distributions
simply is not workable because so many companies and consumers are involved, and
requiring contested case hearings would make it impossible to resolve the issues in a
quick and efficient manner, would consume significant administrative resources and
would result in uncertainty, confusion and delay.

[¶27] We find no merit in the PSC’s assertion that its hearings lack adverse parties. In
PSC hearings, like many other administrative proceedings, agency staff appears and
presents the agency’s position while members of the public appear and present their
positions. In WUSF hearings specifically, the fund manager presents his
recommendations and representatives of the telecommunications companies present their
positions. This process is adversarial and satisfies the requirement for a contested case
hearing.

[¶28] While there may be merit to the PSC’s other concerns, this Court’s task is to
interpret statutory language as written unless it is ambiguous. Here, the language is clear
– the PSC is authorized to conduct hearings in accordance with the WAPA; the rights and
duties of telecommunications companies under the WUSF are to be determined “after an
opportunity for hearing;” therefore, a contested case hearing is required as set forth in §§
16-3-107 through 16-3-112. If this result is not what the legislature intended, and it
agrees with the PSC’s position that contested cases are not workable in the context of the
WUSF, it is up to the legislature to amend the statutes. It may be that in some cases,
where the facts are not in dispute or the factual findings apply broadly to all
telecommunications companies, contested case hearings are not an effective way of
resolving the issues. However, where particular companies are uniquely situated such
that adjudicative facts apply individually to them, due process concerns arise and
contested case hearings are necessary. Clearly, these due process concerns are the basis
for the legislature’s decision to make the PSC’s power to hold hearings “subject to the
provisions of the Wyoming Administrative Procedure Act.”

[¶29] Given our holding that Qwest was entitled to a contested case hearing before the
PSC, there is no need for this Court to address the district court’s decision to grant Qwest
access to the confidential data of other telecommunications companies. On remand, prior
to the contested case hearing, the PSC will need to decide that issue in accordance with
its own rules and in light of the WAPA statutes and rules governing contested case
hearings.

                                             9
[¶30] We affirm on different grounds the district court’s holding that the PSC was
required to convene contested case hearings and remand these cases to the district court
with directions to remand to the PSC for proceedings consistent with this opinion.

                                          10