Court Opinion

ID: 6346579
Source: CourtListenerOpinion
Date Created: 2022-06-03 14:08:54.819978+00
Date Added: 2024-06-11T09:18:12.094524
License: Public Domain

RENDERED: MAY 27, 2022; 10:00 A.M.
                     TO BE PUBLISHED

           Commonwealth of Kentucky
                   Court of Appeals

                      NO. 2019-CA-0542-MR

PUBLIC SERVICE COMMISSION OF
KENTUCKY, AN INDEPENDENT
AGENCY OF THE
COMMONWEALTH                                          APPELLANT

          APPEAL FROM FRANKLIN CIRCUIT COURT
v.        HONORABLE PHILLIP J. SHEPHERD, JUDGE
      ACTION NOS. 18-CI-01115, 18-CI-01117, AND 18-CI-01129

METROPOLITAN HOUSING
COALITION; ASSOCIATION OF
COMMUNITY MINISTRIES;
CHARTER COMMUNICATIONS
OPERATIONS, LLC; COMMUNITY
ACTION COUNCIL FOR
LEXINGTON-FAYETTE, BOURBON,
HARRISON, AND NICHOLAS
COUNTIES; KENTUCKY
INDUSTRIAL UTILITY
CUSTOMERS; KENTUCKY
UTILITIES COMPANY; LEXINGTON-
FAYETTE URBAN COUNTY
GOVERNMENT; LOUISVILLE GAS
AND ELECTRIC COMPANY;
LOUISVILLE/JEFFERSON COUNTY
METRO GOVERNMENT; SIERRA
CLUB AND ITS INDIVIDUAL
MEMBERS; THE ATTORNEY
GENERAL OF KENTUCKY; THE
KENTUCKY SCHOOL BOARDS
ASSOCIATION; THE KROGER
COMPANY; THE UNITED STATES
DEPARTMENT OF DEFENSE; AND
WALMART, INC.                                                            APPELLEES

                                     OPINION
                                    REVERSING

                                    ** ** ** ** **

BEFORE: ACREE, DIXON, AND MCNEILL, JUDGES.

MCNEILL, JUDGE: This consolidated case arises from two administrative utility

rate adjustment applications pending before the Public Service Commission (PSC).

Appellees include several entities representing the interests of individuals and

communities impacted by the potential rate adjustments as well as other entities

with interests in the underlying action. The present issue concerns Appellees’

petitions to intervene in the underlying administrative cases denied by the PSC and

then reversed by the Franklin Circuit Court which, in an order entered on March 5,

2019, granted Appellees’ request for declaratory and injunctive relief. PSC now

appeals to this Court as a matter of right arguing that there is no right of an appeal

from a denial of intervention of a non-utility before the PSC and, assuming

arguendo, that there is a right to appeal of a denial of intervention, there is no

                                          -2-
interlocutory appeal of a denial of permissive intervention. For the following

reasons, we reverse the circuit court’s order.

                            STANDARD OF REVIEW

             The standard of review on appeal from a declaratory judgment is

whether the judgment was clearly erroneous. American Interinsurance Exchange

v. Norton, 631 S.W.2d 851, 852 (Ky. App. 1982). We review a circuit court’s

ruling on a request for injunctive relief for an abuse of discretion. Reynolds

Enterprises, Inc. v. Kentucky Bd. of Embalmers & Funeral Directors, 382 S.W.3d

47, 49-50 (Ky. App. 2012) (citing Price v. Paintsville Tourism Comm’n, 261

S.W.3d 482, 484 (Ky. 2008)). We also review the PSC’s denial of a motion to

intervene for an abuse of discretion. Inter-County Rural Elec. Co-op. Corp. v.

Public Service Commission, 407 S.W.2d 127, 130 (Ky. 1966).

                                    ANALYSIS

             The present case has an extensive appellate record that is necessary to

cite at length in order to appropriately convey the factual and procedural

foundation previously memorialized by our Supreme Court:

             In the underlying case, Louisville Gas & Electric
             Company (LG&E) and Kentucky Utilities Company
             (KU) had each filed an application with the Kentucky
             Public Service Commission to raise their base rates.
             These applications triggered administrative proceedings
             before the Commission pursuant to Kentucky Revised
             Statutes (KRS) Chapter 278. Since LG&E and KU are
             under common ownership, the cases were heard together.

                                         -3-
       [Appellees] (real parties in interest below,
Metropolitan Housing Coalition; Association of
Community Ministries; Community Action
Council for Lexington-Fayette, Bourbon, Harrison,
and Nicholas Counties, Inc.; and Sierra Club and
its members, Alice Howell, Carl Vogel, Amy
Waters, and Joe Dutkiewicz) sought to intervene in
the hearings before the Commission. Though the
Commission allowed several other entities to
intervene, it denied [Appellees’] request.
[Appellees] sought review of the Commission’s
order denying intervention in Franklin Circuit
Court.

       On November 21, 2018, the Franklin Circuit
Court issued a temporary injunction enjoining the
Commission from preventing Appellants’ full
participation in the rate cases as intervening
parties. On December 17, 2018, the Commission
filed a petition for a writ of prohibition with the
Court of Appeals, seeking the appellate court to
prohibit the Franklin Circuit Court from acting in
the case. The Commission did not ask the Court of
Appeals to issue an order staying the Franklin
Circuit Court proceedings. While the writ was
pending before the Court of Appeals, both the
underlying rate cases before the Commission and
the circuit court case proceeded. On March 5,
2019, two significant events occurred: (1) the
Commission convened the first day of a two-day
hearing in the rate cases, with [Appellees] fully
participating as intervening parties; and (2) the
Franklin Circuit Court entered its final opinion and
order in the case before it – issuing a permanent
injunction enjoining the Commission from
preventing Appellants’ intervention in the rate
cases. The very next day, March 6, 2019, the
Court of Appeals issued an opinion and order
granting the Commission’s writ petition to prohibit
the Franklin Circuit Court from taking further

                           -4-
              action in the case.[1] After finding out about the Court of
              Appeals’ order, the Commission immediately dismissed
              [Appellees] as intervening parties and they were not
              allowed to present or cross-examine witnesses on the
              second day of hearings on the rate cases.

                    Because the Court of Appeals issued its order a
              day after the Franklin Circuit Court issued its order fully
              disposing of the case and remanding to the Commission,
              [Appellees] filed a joint motion asking the Court of
              Appeals to reconsider its order. The Court of Appeals
              denied that motion and this appeal followed.

Metro. Hous. Coal. v. Shepherd, Nos. 2019-SC-000195-MR and 2019-SC-000196-

MR, 2020 WL 2831838, at *1 (Ky. May 28, 2020) (Shepherd II). The Kentucky

Supreme Court ultimately reversed the Court of Appeals’ order granting a writ of

prohibition on the basis that the issue was moot. The Court specifically reasoned

as follows:

              The Franklin Circuit Court’s final opinion and order had
              disposed of all issues regarding all parties and granted a
              permanent injunction. That final order has been appealed
              to the Court of Appeals, where it is currently held in
              abeyance pending the outcome of the present cases. The
              order was effective upon entry and was appealable at that
              time. Since the Franklin Circuit Court’s order was
              appealable at that time, “there [was a] remedy through an
              application to an intermediate court.” Therefore, the
              Commission cannot meet the second hurdle for a first-
              class writ: that “there [was] no remedy through an
              application to an intermediate court.”

1
  That Court of Appeals decision is officially cited as Pub. Serv. Comm’n of Kentucky v.
Shepherd, No. 2018-CA-001859-OA, 2019 WL 1087266, at *1-11 (Ky. App. Mar. 6, 2019). It
will hereafter be referred to as Shepherd I.

                                           -5-
Id. at *3 (citation omitted). The present appeal is now ripe for a decision on the

merits. First, Appellees, Kentucky Utilities Company and Louisville Gas and

Electric Company, argue that because the substantive issues presented have already

been decided by the Court of Appeals in the original action Shepherd I, we are

bound to that decision based on the law of the case doctrine. See Brooks v.

Lexington-Fayette Urban Cty. Hous. Auth., 244 S.W.3d 747, 751 (Ky. App. 2007).

Therein, the Court observed that the law of the case doctrine is “an iron rule,

universally recognized, that an opinion or decision of an appellate court in the

same cause is the law of the case for a subsequent trial or appeal however

erroneous the opinion or decision may have been.” Id. (quoting Union Light, Heat

& Power Co. v. Blackwell’s Adm’r, 291 S.W.2d 539, 542 (Ky. 1956)). Critically,

however, the law of the case doctrine is “predicated upon the principle of finality.”

Id. at 751. We conclude that the law of the case doctrine does not apply here. See

Shepherd II, 2020 WL 2831838, at *4 (emphasis in original) (“Since the matter

was moot and the Court of Appeals erred in its application of our writ standard, we

will not delve into the important substantive issues this case presents.”). We

further conclude that the principle of stare decisis does not bind this Court to our

decision in Shepherd I, which was an original action subsequently reversed by our

Supreme Court. Therefore, it lacks the precedential value necessary to invoke

stare decisis.

                                         -6-
              We now turn to the primary statute at issue here – KRS 278.410. It

provides in relevant part as follows:

              Any party to a commission proceeding or any utility
              affected by an order of the commission may, within thirty
              (30) days after service of the order, or within twenty (20)
              days after its application for rehearing has been denied by
              failure of the commission to act, or within twenty (20)
              days after service of the final order on rehearing, when a
              rehearing has been granted, bring an action against the
              commission in the Franklin Circuit Court to vacate or set
              aside the order or determination on the ground that it is
              unlawful or unreasonable.

KRS 278.410(1). Recently, a panel of this Court issued a published opinion that

addressed this provision in a case very similar to the present. See Biddle v. Public

Service Commission of Kentucky, 643 S.W.3d 83 (Ky. App. 2021).2 Therein, the

Court held that the prospective intervenor was a “party” with a right to seek

judicial review of the PSC’s denial of intervention and that remand was necessary

for the PSC to consider whether adjoining landowners had a special interest in the

action. Id. In so holding, the Court opined:

              in Inter-County Rural Electric Cooperative Corporation,
              the Court considered the import of the, then current, 1952
              version of KRS 278.410(1). This version was
              substantively the same as the current version of this
              statute and contained the same “[a]ny party” language.
              The Court believed KRS 278.410(1) provided a sufficient
              basis for allowing judicial review of the denial of the

2
  The Court denied a petition for rehearing in Biddle on November 22, 2021. A motion for
discretionary review was filed in the Kentucky Supreme Court on December 22, 2021, and was
denied on April 20, 2022.

                                            -7-
             motion to intervene “on the ground that [the
             Commission’s action] is unlawful or unreasonable.”
             Inter-County Rural Elec. Coop. Corp., 407 S.W.2d at
             129.

Id. at 89. The Court also provided the following notation that is particularly useful

in resolving the present issues:

             A trio of unpublished Court of Appeals cases also
             support our conclusion that Biddle and Potts have an
             undeniable right to judicial review of the denial of their
             motions to intervene. In Karem v. Kentucky Public
             Service Commission, No. 2017-CA-001697-MR, 2019
             WL 1579653, at *3 (Ky. App. Apr. 12, 2019), the Court
             unequivocally declared that the person seeking review of
             the denial of his motion to intervene in a Commission
             action regarding placement of a solar facility “had
             standing . . . to contest the [Commission’s] denial of his
             motion to intervene.” In Young v. Public Service
             Commission of Kentucky, No. 2009-CA-000292-MR,
             2010 WL 4739964, at *2 (Ky. App. Nov. 24, 2010),
             while the Court held that the appeal of a denial of a
             motion for intervention before the final matter was
             concluded was interlocutory and, accordingly, the circuit
             court did not err in denying it, noting “any appeal of the
             denial must occur after final adjudication in the
             underlying case[,]” the Court did not question the right of
             the would-be intervenors to bring such an action
             challenging the denial of their motion to intervene after
             the underlying commission action was final. Similarly,
             while standing was not directly addressed in
             EnviroPower, LLC v. Public Service Commission of
             Kentucky, No. 2005-CA-001792-MR, 2007 WL 289328,
             at *3-5 (Ky. App. Feb. 2, 2007), the Court in reviewing
             the denial of a motion to intervene did not question the
             propriety of the action or the appeal of it.

                                         -8-
Id. at n.6. In the same vein as these cases, it is clear that the provision permitting

Appellees to intervene, 807 KAR3 5:001 Section 4(11), is permissive, not

mandatory. See also Inter-County Rural Elec. Co-op. Corp., 407 S.W.2d at 130

(“Intervention as a matter of right is not specifically defined in the [intervention]

regulation” that was operative at that time.). It appears that the only mandatory

right of intervention in PSC cases is that of the Attorney General. See KRS

367.150(8)(b). Therefore, we conclude that based on the foregoing, Appellees

have a right to appeal the PSC’s denial of their motion to intervene. However, the

issue still remains whether an interlocutory appeal from that order is an available

option. We conclude that it is not.

                KRS 278.410 omits any mention of finality concerning appealable

orders. As previously discussed, however, our recent Biddle decision noted two

unpublished cases that are particularly persuasive here. In Young, the Court

observed that:

                       Clearly precedent supports the trial court’s
                conclusion that the denial of Young’s motion to intervene
                was interlocutory and that any appeal of the denial must
                occur after final adjudication in the underlying case.
                In Inter-County Rural Elec. Co-op. Corp. v. Public
                Service Commission, 407 S.W.2d 127, 130 (Ky. 1966),
                the Court held that 807 KAR 5:001 Section 3(8) “reposes
                in the Commission the responsibility for the exercise of a
                sound discretion in the matter of affording permission to

3
    Kentucky Administrative Regulations.

                                           -9-
             intervene. Intervention as a matter of right is not
             specifically defined in the regulation.”

2010 WL 4739964, at *2 (emphasis added). This echoed the sentiment found in

EnviroPower, LLC:

                    EnviroPower then filed on April 19, 2005,
             an action in the Franklin Circuit Court requesting
             injunctive and declaratory relief. The Court held a
             brief hearing that same day and issued a restraining
             order which among other things, prohibited the
             PSC from holding its scheduled hearing.
             Subsequently, the Court issued its May 6, 2005,
             Order, which among other things, dissolved the
             restraining order, rejected all of EnviroPower’s
             challenges to the PSC’s denial of intervention, and
             denied a temporary injunction to prohibit a PSC
             hearing in the CON Case. EnviroPower
             requested interlocutory relief in the Court of
             Appeals, which was denied by Order entered May
             31, 2005, and then interlocutory relief in the
             Kentucky Supreme Court, which was denied by
             Order entered June 7, 2005.

2007 WL 289328, at *2. Although these decisions are unpublished, we consider

them to be highly instructive as they have been cited by this Court in Biddle and

throughout the underlying litigation in the present case. Moreover, there appears

to be no binding authority to the contrary. Having considered the relevant record

and the law, we find the reasoning advanced by the Franklin Circuit Court in its

March 5, 2019, order to be contrary to this Court’s most recent decisions, or

otherwise unconvincing as a matter of law. Therefore, we need not address these

issues further.

                                        -10-
                                CONCLUSION

            For the foregoing reasons, we hereby reverse the Franklin Circuit

Court’s order entered on March 5, 2019.

            ALL CONCUR.

BRIEFS FOR APPELLANT:                     BRIEFS FOR APPELLEE
                                          ASSOCIATION OF COMMUNITY
John E.B. Pinney                          MINISTRIES:
Nancy J. Vinsel
Frankfort, Kentucky                       Lisa Kilkelly
                                          Eileen Ordover
                                          Louisville, Kentucky

                                          BRIEF FOR APPELLEE SIERRA
                                          CLUB AND ITS INDIVIDUAL
                                          MEMBERS:

                                          Joe F. Childers
                                          Lexington, Kentucky

                                          BRIEFS FOR APPELLEES
                                          METROPOLITAN HOUSING
                                          COALITION AND COMMUNITY
                                          ACTION COUNCIL FOR
                                          LEXINGTON-FAYETTE,
                                          BOURBON, HARRISON, AND
                                          NICHOLAS COUNTIES:

                                          Tom FitzGerald
                                          Iris Skidmore
                                          Frankfort, Kentucky

                                      -11-
  BRIEF FOR APPELLEES KENTUCKY
  UTILITIES COMPANY AND
  LOUISVILLE GAS AND ELECTRIC
  COMPANY:

  Kendrick R. Riggs
  Steven B. Loy
  Monica H. Braun
  Mary Ellen Wimberly
  Lexington, Kentucky

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