Court Opinion

ID: 4509942
Source: CourtListenerOpinion
Date Created: 2020-02-24 21:03:00.679874+00
Date Added: 2024-06-11T12:13:09.117806
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

STATE OF DELAWARE,
DEPARTMENT OF NATURAL
RESOURCES AND ENVIRONMENTAL
CONTROL

Plaintiff,
C.A. No. N18C-12-260 FWW
V.

DELAWARE PUBLIC SERVICE
COMISSION,

el el el al el el el a a el a li al

Defendant.

Submitted: November 12, 2019
Decided: February 24, 2020

Upon Defendant the Delaware Public Service Commission’s Motion to Dismiss
GRANTED.

Upon Intervenor the Delaware Division of the Public Advocate’s Motion to
Dismiss
GRANTED.

Upon Plaintiff the State of Delaware Department of Natural Resources and
Environmental Control’s Motion for Stay of Enforcement
MOOT.

MEMORANDUM OPINION

Devera B. Scott, Esquire, Jameson A.L. Tweedie, Esquire, Deputy Attorneys
General, 102 West Water Street, Dover, DE 19904, Attorneys for Plaintiff.

Regina A. Iorii, Esquire, Deputy Attorney General, 820 N. French Street, 4" Floor,
Wilmington, DE 19801, Attorney for Intervenor.
Thomas D. Walsh, Esquire, Deputy Attorney General, 820 N. French Street, 6"
Floor, Wilmington, DE 19801, Attorney for Defendant.

WHARTON, J.
Before the Court is a declaratory judgment action brought by one state agency,
the Delaware Department of Natural Resources and Environmental Control
(“DNREC”), against another state agency, the Delaware Public Service Commission
(“PSC”). Yet a third state agency, the Delaware Division of the Public Advocate
(“DPA”), sought and received permission to intervene. In this action, DNREC
challenges the lawfulness of certain regulations issued by PSC and seeks declaratory
relief.'| Those regulations relate to public utilities, including Delmarva Power &
Light (“Delmarva”), subject to the Renewable Energy Portfolio Standards Act
(“RESPA”).2- DNREC claims that the regulations and their effects improperly
encroach upon the DNREC Secretary’s authority. DPA sides with PSC. It may be
fair to ask why the Judicial Branch is asked resolve this inter-agency turf dispute,
rather than the Executive or Legislative Branches, but it appears that neither party is
asking that question.?> So, the Court address the three motions before it.

Upon carefully considering those three motions: Defendant PSC’s Motion to
Dismiss on standing grounds; Intervener DPA’s Motion to Dismiss on standing

grounds; and Plaintiff DNREC’s Motion to Stay enforcement of PSC’s regulations,

 

' Compl., D.I. 1.

2 Td.

In fairness, DNREC did seek a stay in order to pursue a legislative fix, but PSC
opposed that effort.

3
both PSC’s and DPA’s Motions to Dismiss are GRANTED. Consequently,
DNREC’s Motion for Stay is MOOT.

I. Facts and Procedural History

In 2005, the General Assembly enacted REPSA, requiring all Delaware
regulated utilities to purchase a percentage of their electric supply from renewable
and solar energy sources.t In 2010, the General Assembly amended REPSA°
permitting DNREC and PSC “in consultation with each other” to “freeze” the
minimum percentage requirement when the cost of compliance exceeds certain
markers.® At the same time, the General Assembly added a provision, 26 Del. C.
§ 362(b),’ authorizing the PSC to specify the procedures for freezing the minimum
requirement.®

In May 2011, in compliance with the new provision, the PSC promulgated

regulations purporting to create procedures for freezing the minimum percentage

 

4 The Delaware Div. of the Pub. Advocate v. The Delaware Pub. Serv. Comm'n, 2016
WL 7494899, at *1 (Del. Super. Ct. Dec. 30, 2016).

> 26 Del. C. §§ 354(i) and (j).

® The Delaware Div. of the Pub. Advocate v. The Delaware Pub. Serv. Comm'n, 2016
WL 7494899, at *1

7 “For regulated utilities, the Commission shall further adopt rules and regulations
to specify the procedures for freezing the minimum cumulative solar photovoltaic
requirement as authorized under § 354(1) and (j) of this title ....” 26 Del. C. § 362(b).
8 The Delaware Div. of the Pub. Advocate v. The Delaware Pub. Serv. Comm'n, 2016
WL 7494899, at *2.

4
requirement.’ In October 2015, DPA filed a petition to reopen the rulemaking
seeking more detail in the regulations.!° Specifically, DPA sought more detailed
regulations setting out how and when costs were to be calculated under sections
354(i) and (j).!! In November 2015, PSC denied the petition, interpreting sections
354(i) and (j) as granting DNREC the primary responsibility for promulgating
regulations determining when a freeze may occur.'* DPA appealed the order to this
Court. This Court ruled that the General Assembly granted PSC, not DNREC, the
authority to promulgate regulations regarding freezing and reversed and remanded
for proceedings consistent with its order.'?

In February 2017, PSC reopened the regulation docket for the limited purpose
of amending its sections 354 (i) and (j) regulations to comply with this Court’s
ruling.'* After receiving comments and conducting extensive hearings, PSC adopted

the regulations at issue here.

 

? Id.

'0 The Delaware Div. of the Pub. Advocate v. The Delaware Pub. Serv. Comm'n,
2016 WL 7494899, at *3.

" Td.

12 Td.

'3 Td. at *5,

14 Tn the Matter of the Adoption of Rules & Procedures to Implement the Renewable
Energy Portfolio Standards Act, 26 Del. C. $§ 351-363, As Applied to Retail Elec.
Suppliers (Opened Aug. 23, 2005); Reopened Sept. 4, 2007; Aug. 5, 2008; Sept. 22,
2009; Aug. 17, 2010; Sept. 6, 2011; Sept. 18, 2012; Feb, 2, 2017), 2017 WL
10543178, at *3 (Feb. 2, 2017).

5
On December 28, 2018, DNREC initiated this action seeking to invalidate the
regulations entirely by asking the Court to declare the PSC regulations unlawful.»
DNREC also requested a stay of the enforcement of the regulations until the end of
the litigation.'° DNREC claims that PSC promulgated unlawful regulations which
effectively: (1) usurp the agency’s authority conferred to it by the General Assembly;
(2) create a right of judicial review, unsanctioned by the General Assembly, of
DNREC’s right to freeze renewable portfolio standards; and (3) are inconsistent with
the express purpose of REPSA.'’ PSC answered the complaint on March 5, 2019."
On July 11", the Court granted DPA’s Motion to Intervene.!”

On September 6, 2019, the parties submitted three motions: PSC filed a
Motion to Dismiss claiming DNREC lacked standing to bring the claim;?? DNREC

filed a Motion to Stay the enforcement of the regulations for the length of the

litigation;?! and DPA also moved to dismiss on standing grounds.” On October

 

'S Compl., D.I. 1.

'6 Compl., D.I. 1.

'7 DNREC’s Motion for Stay at §9 4-6., D.I. 21.

'8 PSC’s Ans. to Compl., D.I. 11.

'9 Delaware Dep't of Nat. Res. & Envtl. Control v. Delaware Pub. Serv. Comm’n.,
Del. Super., C.A. No.: N18C-12-260, Wharton, J. July 11, 2019) (Letter Op.).

20 PSC’s Mot. to Dismiss, D.I. 20.

21 DNREC’s Motion for Stay, D. I. 21.

22 DPA’s Mot. to Dismiss, D.I. 23.
7th, the Court heard oral arguments addressing the motions. On November 12",
after hearing argument, the Court denied DNREC’s request for a limited stay.”
If. The Motions to Dismiss

A. The Parties’ Contentions

PSC argues that DNREC lacks standing to bring this action. Under 29 Del.
C. § 10141, any “person aggrieved by and claiming the unlawfulness of any
regulation” may bring a declaratory relief action in this court. PSC argues that
DNREC is neither a “person,” nor “aggrieved.””4 It claims support for this position
in 29 Del. C. § 10102(6), which defines “party” as “[a] person or agency named or
admitted in an agency proceeding as a party, or properly seeking and entitled as of
right to be admitted as a party to an agency proceeding.” PSC asserts that the
Administrative Procedures Act (“APA”), by disjunctively listing “person” and
“agency,” distinguishes between “person” and “agency” in the definition of
“party.””° Since DNREC is an agency, it follows then that it is not a “person.” That
distinction, PSC contends, is evidence that the General Assembly intentionally

excluded administrative agencies from the definition of “person.””’ Further, the

 

3 DI. 40.

4 PSC’s Mot. to Dismiss at 2.

5 29 Del. C. § 10102(6).

26 Td.

27 Td. at 2-3; PSC also asserts that the Court should consider Dir., Office of Workers’
Comp. Programs v. Newport News where the United States Supreme Court held that

7
definition of “person” found in 1 Del. C. § 302(15) does not include state agencies.
Moreover, PSC argues that DNREC is not “aggrieved” because the common
definition of “aggrieved” is to be “deprived of legal nghts or claims” and DNREC
has not been deprived of any legal rights or claims.”* For its part, DPA agrees with
PSC that DNREC lacks standing, since DNREC is neither a “person,” nor
“agorieved.’”””?

In response, DNREC argues that the proper meaning of “aggrieved” is not
found in the dictionary, but rather in relevant Delaware case law.*? According to
DNREC to be “aggrieved” for purposes of contesting regulations, a person or entity
must be subject to the regulations.*! Further, suffering an injury in fact is not
precondition for challenging a regulation? DNREC maintains that it is subject to
the regulations, and thus, “aggrieved.’”*? DNREC also disputes that what it terms

the “default definition of ‘person’ from 1 Del. C. § 302(15)” applies to the APA as

 

“when an agency in its governmental capacity is meant to have standing, Congress
says so.” Dir., Office of Workers’ Comp. Programs v. Newport News, 514 U.S. 122,
129 (1995).

28 Td.

29 DPA’s Mot. to Dismiss, D.I. 23.

30 DNREC’s Resp. to Mot. to Dismiss at 3.

3! Td., citing Baker v. DNREC, 2015 WL 5971784, at *10 (Del. Super. Oct. 7,
2015), aff'd 137 A.3d 122 (Del. 2016); Del. State Sportsmen's Ass’n v. Garvin,

196 A.3d 1254, 1263 (Del. Super. 2018)

32 Td.

33 Td.
PSC argues.** Instead, DNREC contends that the “default” definition does not apply
where it is inconsistent with the intent of the Legislature, statutory context, or the
Code as a whole.*> In DNREC’s view, both RESPA and statutes detailing DNREC’s
authority make it clear that the “default” definition would be inconsistent with both
the intent of the Legislature and the context of the Code. Additionally, since
DNREC is seeking declaratory judgment, it relies on the separate definition of
“person” found in the statute authorizing declaratory judgment actions — 10 Del. C.
§ 6513.°° Alternatively, DNREC requests leave to amend the Complaint to add the
Secretary, who obviously is a “person” to the complaint individually.

B. Standard and Scope of Review

Standing—in its procedural sense—tefers to the right of a party to invoke the
jurisdiction of the Court to enforce a claim or redress a grievance.*’ The party
invoking jurisdiction bears the burden of establishing standing grounds.** The
question of standing is concerned only with who is entitled to mount a legal

challenge and not with the merits of the subject matter of the controversy.*? In order

 

34 Id.

35 Id., citing | Del. C. §§ 301, 302.

36 Td. at 4.

37 Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del.1991) (citations
omitted).

38 Dover Historical Soc. v. City of Dover Planning Comm'n, 838 A.2d 1103, 1109
(Del. 2003).

39 Td.
to establish standing, a plaintiff must have an interest distinguishable from the
greater public.*?

In Gannett Co., Inc. v. State, the Delaware Supreme Court articulated the
general test for standing as whether: (1) there is a claim of injury-in fact; and (2) the
interest sought to be protected is arguably within the zone of interest to be protected
or regulated by the statute or constitutional guarantee in question.*! Thus, the test
for standing applies to both statutory and constitutional inquiries.”

While the general principals of standing serve to guide this Court, the
determinant here is the statutory language itself, because “no party has a right to
[commence an action] unless the statute governing the matter has conferred a right
to do so.”*8_ This limitation is particularly pertinent where the party instituting the
action is an administrative agency, since agency authority is exclusively statutory.“

Thus, DNREC lacks authority to initiate this action for declaratory relief unless

 

4° Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 900 (Del.
1994),

4! Gannett Co., Inc. v. State, 565 A.2d 895, 897 (Del. 1989) (citing Association of
Data Processing Serv. Org., Inc. v. Camp, 397 U.S. 150, 153-54 (1970)).

*2 Oceanport Indus., Inc., 636 A.2d at 900.

‘3 Td.

“4 Office of the Comm'r, Delaware Alcoholic Beverage Control v. Appeals Comm'n,
Delaware Alcoholic Beverage Control, 116 A.3d 1221, 1226 (Del. 2015) (“it is well
established that administrative agencies . . . derive their powers and authority solely
from the statute creating such agencies and which define their powers and
authority.”) (citation omitted).

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either the APA,*® which governs judicial review of regulations promulgated by
administrative agencies, or DNREC’s enabling statutes in Titles 7 and 29*° grant it
the right to do so.

C. Discussion

The optics of this case are not attractive. The case was brought by DNREC.
DNREC is an agency of the State of Delaware. The General Assembly created it.
The Governor appoints its Secretary. The Senate confirms the Secretary. The
Department of Justice represents DNREC. Defendant PSC is an agency of the State
of Delaware. The General Assembly created it. The Governor appoints its
Commissioners. The Senate confirms the Commissioners. The Department of
Justice represents the PSC. Intervenor DPA is an agency of the State of Delaware.
The General Assembly created it. The Governor appoints the Public Advocate. The
Senate confirms the Public Advocate. The Department of Justice represents the
DPA. The taxpaying citizens of the State might fairly ask, “What is going on here?
Is the State suing itself? Is this how our government is supposed to work? Did the
General Assembly really intend this?” Needless to say, these questions have crossed

the Court’s mind as well.

 

45 29 Del. C. § 10141.
46 29 Del. C. 8§ 8001-8031 et seq.

11
Turning to the APA, 29 Del. C. § 10141(a) provides that “[a]ny person
aggrieved by and claiming the unlawfulness of any regulation may bring an action
in the Court for declaratory relief.”4” The question is whether DNREC, as an
administrative agency, is both (1) a “person” and (2) “aggrieved.” The APA does
not define “person,” but the General Provisions of the Delaware Code, in Chapter 3,
Interpretation of Statutes, do. The definitions in that chapter “shall be observed in
the construction of this Code and all other statutes, unless such construction would
be inconsistent with the manifest intent of the General Assembly, or repugnant to

the Code or to the context of the same statute.’’*®

Similarly, unless the context
requires a different meaning, “person” “include[s] corporations, companies,
associations, firms, partnerships, societies and joint stock companies, as well as
individuals.””? Notably, the definition does not include agencies of the state.

The Court agrees with PSC and DPA that DNREC is not a “person” permitted
by the APA to bring this action. It is clear by § 10102’s definition of “party” that
the General Assembly intended to distinguish a “person” and an “agency”. Further,
the Court finds no statute under Title 7 or chapter 80 of Title 29, DNREC’s enabling

statutes, permitting it to bring this action either. The Court rejects DNREC’s

contention that context dictates a need to define “person” to include an agency. The

 

4799 Del. C. § 10141 (a).
481 Del. C. § 301.
491 Del. C. § 302(15).

12
General Provisions defined by section 302 extend across the breath of the Code.
Perhaps, the context would dictate a need to require an agency to be considered a
“person” if the agency’s enabling statute authorized the action explicitly and thus
conflicted with the APA. However, no such context exists here. Finally, the Court
finds no evidence that the General assembly intended DNREC to sue PSC in this
context. Rather, the General Assembly directed the two agencies to act “in
consultation” with each other.°° In the Court’s view, the General Assembly
contemplated cooperation between the two agencies, not contentious litigation.
Thus, the Court concludes DNREC lacks standing because it is not a “person.”
Even if DNREC were a person, the Court finds that DNREC is not
“agerieved” as is required under the APA. While the Court agrees that Baker v.
DNREC’s*' definition of “aggrieved” is more applicable than the Webster definition
cited by PSC, Baker stands for the proposition that “‘a person or entity subject to the
regulations” is aggrieved.» DNREC alleges frustration of its agency purpose to
support why it believes it is aggrieved, but that claimed frustration of purpose does
not make DNREC subject the regulations. It simply makes it not the regulator. The

regulated utilities are the entities subject to the regulations. Without more, the Court

 

50 26 Del. C. §§ 354(i) and (j).

51 2015 WL5971784, at *10 (Del. Super. Ct. Oct. 7, 20150, aff'd 137 A.3d 122
(Del. 2016).

21d.

13
finds this is not enough to be “aggrieved” for the purposes of the APA. Thus,
DNREC is neither a “person” nor “aggrieved.”

The Court now turns to DNREC’s request for leave to amend the complaint
and add its Secretary, Shawn Garvin, as plaintiff. Neither in its brief nor at oral
argument does DNREC claim that the Secretary is “aggrieved” in any capacity other
than in his administrative capacity.*? In fact, in its brief, DNREC argues that both
the Secretary and the Director of the agency are “aggrieved” because the PSC
regulations require them to act’ The Court disagrees and finds that an
administrative officer is not a party for the purposes of seeking a review in this
context.°> Apart from their status with DNREC, they are no different from members
of the general public. Therefore, the Court hereby denies the request.

Ill. Delaware Department of Natural Resources and Environmental
Control’s Motion for Stay of Enforcement of Regulations

 

°3 DNREC also asserts that Director Dayna Cobb would have standing to pursue this
action. Resp. to Motion to Dismiss at { 8.

4 Td.

°> See Office of the Comm'r, Delaware Alcoholic Beverage Control v. Appeals
Comm'n, Delaware Alcoholic Beverage Control, 116 A.3d 1221, 1228 (Del. 2015)
(citing Mortensen v. Pyramid Sav. & Loan Ass'n of Milwaukee, 53 Wis. 2d 81, 191
N.W.2d 730, 731 (1971) (‘An administrative officer is not a party for the purposes
of seeking a review of a reversal of his determination by a board of appeals.”’)); Ropp
v. King, 2007 WL 2198771, at *5 (Del. Ch. July 25, 2007) (holding that Ropp, the
Securities Commissioner of the State of Delaware, could not be “aggrieved” by his
own order and thus lacked standing to appeal the order.).

14
Because the Court concludes that DNREC lacks standing, it is unnecessary to
decide DNREC’s motion for stay. Under the mootness doctrine, Delaware courts
will decline to decide moot issues.°° That is, although there may have been a
justiciable controversy when the litigation was commenced, a proceeding may
become moot if the legal issue in dispute is no longer amenable to judicial
resolution.°’ Since the Court has determined that DNREC lacks standing to bring
this action, DNREC’s motion for stay is MOOT.

IV. Conclusion

For the foregoing reasons, the Motions to Dismiss of the Delaware Public
Service Commission and the Delaware Division of the Public Advocate are
GRANTED, and the Delaware Department of Natural Resources and
Environmental Control’s request for leave to amend is DENIED. The Delaware
Department of Natural Resources and Environmental Control’s Motion to Stay

Enforcement is MOOT.

IT IS SO ORDERED. Lyd

FemrisfW . Whitton My.

 

°° Am. Littoral Soc., Inc. v. Bernie's Conchs, LLC, 954 A.2d 909, 909 (Del. 2008).
=ill Tl.

15