Court Opinion

ID: 6477029
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:43:46.209136+00
Date Added: 2024-06-11T15:54:00.051712
License: Public Domain

WREN, Chief Judge,
dissenting.
I respectfully disagree. Admittedly the nature of the judgment which may be rendered on review in superior court is far more restrictive in “rate” cases than in “certificate” cases. However, the whole concept of the de novo review provided for in A.R.S. § 40-254 is the right to introduce new evidence before any determination is made by the court. How else, may I ask, can the burden of proof required in § 40-254(E) be met by the party seeking to va*261cate or set aside the order of the Commission without the introduction of new or additional evidence on the question of lawfulness? Moreover, subsection C. requires that the trial “conform, as nearly as possible ... to other trials in civil actions.”
In my opinion, the majority has rewritten the statute, and its decision is contra to previous interpretations by the Arizona Supreme Court on the subject. Admittedly, the true function of superior court review of Commission orders is far from clear. Certainly, the statement by the majority that the waters in this area are “murky” will get no argument from me. However, part of the confusion, I am certain, stems from the semantics of the standard of review reiterated in a long line of cases: that the question to be resolved is whether the Commission’s decision was unlawful or unreasonable. As stated in Arizona Corporation Commission v. Reliable Transportation Company, 86 Ariz. 363, 346 P.2d 1091 (1959):
The scope of judicial review of orders of the Commission is clearly set forth in our statutes and in the decisions of this Court.
Under A.R.S. § 40-254, review of an order of the Commission must be sought by commencement of a separate action, triable as other civil actions. In such action appellant has the burden “to show by clear and satisfactory evidence that it [the determination or order of the Commission] is unreasonable or unlawful.” This court has held that the trial of such action is de novo, in which new evidence may be received and considered, id. at 370, 346 P.2d at 1096.
This language apparently prompted Reliable Transportation to also state:
The fact that new evidence may be introduced at the trial qualifies to some extent the apparently strict rule that the order of the commission may be set aside only if it is “unreasonable or unlawful.” Thus, the superior court may properly hold an order unreasonable on the basis of the “clear and satisfactory evidence” presented to it, whereas it may be perfectly apparent that the Commission acted reasonably on the basis of the evidence which it had to consider, id. at 371, 346 P.2d at 1096. (emphasis added)
In my opinion, Simms v. Round Valley Light & Power Co. does not lend credence to the procedure which the majority has adopted; that the review statute be bifurcated to provide for presentation of new evidence only if the Commission’s decision in a rate case is first determined, solely on the record before the Commission, to be “unlawful.” In Simms, the superior court was reversed by the Supreme Court, not because the Supreme Court disagreed with the superior court’s consideration of additional evidence, but rather because the superior court had usurped the Commission’s legislative powers by making an independent determination of “fair value”. Simms stated:
In court the company submitted additional evidence presented in the form of an appraisement less observed depreciation plus working capital, etc., resulting in a current fair value of $206,338. The court weighed all this evidence and decided the fair value of the property was $205,070. 80 Ariz. at 154, 294 P.2d at 384.
After noting that the trial court could not weigh the evidence and make a finding of “fair value”, the Supreme Court went on to decide that:
The [trial] court may consider the evidence only for the purpose of determining whether the Commission in its finding of fair value acted unreasonably in that its finding has no substantial support in the evidence, is arbitrary or otherwise unlawful. 80 Ariz. at 155, 294 P.2d at 394.
In my opinion, the Supreme Court was referring to both the evidence before the Commission and the additional evidence introduced in superior court, and was clearly stating that the court must consider all the evidence for the purpose of determining whether or not the decision of the Commission was arbitrary or unlawful. The decision did not proscribe the consideration of new evidence offered in superior court on all issues held for review.
*262In Arizona Corporation Commission v. Citizens’ Utilities Co., 120 Ariz. 184, 584 P.2d 1175 (App.1978), this court concluded:
We start with the basic proposition that the Commission is constitutionally mandated to set fair rates of return on fair value base of public service utilities. Ariz.Const., art. 15, §§ 3, 14. This function cannot be performed by the judiciary and the judicial role is limited, albeit in a trial de novo situation, to determining whether the Commission’s decision was supported by substantial evidence, was not arbitrary and was not otherwise unlawful. Simms v. Round Valley Light and Power Co., 80 Ariz. 145, 294 P.2d 378 (1956). id. at 188, 584 P.2d at 1179.
While not an issue in the case, it is obvious from a reading of Citizens’ Utilities that new evidence was introduced at the very inception of the trial on review in superior court, and that the trial court even addressed the merits of its admissibility under such evidentiary concepts as “relevance” and “impeachment”. Also in State ex rel. Church v. Arizona Corporation Commission, 94 Ariz. 107, 382 P.2d 222 (1963) (a rate case) it was held that the reviewing court is free to consider evidence which was not brought before the Commission. See Gibbons v. Arizona Corporation Commission, 75 Ariz. 214, 254 P.2d 1024 (1953).
The entire gamut of judicial review of a rate proceeding is aptly expressed by Justice Holohan in Sun City Water Company v. Arizona Corporation Commission, 113 Ariz. 464, 556 P.2d 1126 (1976), where evidence introduced in superior court was used to determine that a Commission’s rate of return was “lawful”:
The Company contends that the rate of return established by the Commission is unreasonable, unlawful and confiscatory. The superior court, after hearing evidence at the de novo trial, found that the Company had not met the burden of proof necessary for a party to successfully challenge a Commission order. A.R.S. § 40-254(E) sets forth the required standard as follows:
“In all trials, actions and proceedings [in the superior court] the burden of proof shall be upon the party adverse to the commission or seeking to vacate or set aside any determination or order of the commission to show by clear and satisfactory evidence that it is unreasonable or unlawful.” (Emphasis supplied.)
The trial judge found that the Company had not shown by “clear and satisfactory evidence” that the Commission’s order regarding rate of return was “unreasonable or unlawful.” The lower court was aware that it could not substitute its own judgment for the Commission’s where the letter had not abused its range of legislative discretion. Arizona Corporation Commission v. Arizona Public Service Company, 113 Ariz. 368, 555 P.2d 326 (1976); Simms v. Round Valley Light & Power Co., 80 Ariz. 145, 294 P.2d 378 (1956). When reviewing a superior court’s de novo review of a Commission order this Court will not conduct a separate de novo trial but will uphold the trial court’s judgment if it is supported by any reasonable evidence. Corporation Commission of Arizona v. People’s Freight Line, Inc., 41 Ariz. 158, 16 P.2d 420 (1932). The superior court’s judgment regarding the Commission's rate of return was supported by such reasonable evidence. 113 Ariz. at 465, 556 P.2d at 1127. (emphasis added.)
There is no case law in existence to support the position adopted by the majority. I submit that this paucity results from the language of § 40-254 itself. Admittedly, the matter needs attention, but the ambiguity will not be resolved by judicial tampering with the statute and established case law. As to the merits of this appeal, I find reasonable evidence to support the trial court’s decision, and would therefore affirm the judgment setting aside the Commission’s order.