Court Opinion

ID: 8180506
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:34:43.771245+00
Date Added: 2024-06-11T16:40:10.035281
License: Public Domain

Miller, Justice,

concurring:

While I concur in the result in this case, I differ to some extent on the method used to reach it.
I have no quarrel with the majority’s position that W. Va. Code, 24-2-4, does not violate constitutional requirements of substantive due process. This section relates purely to procedural aspects of administrative determination of rates by the Public Service Commission. The general power to regulate public utilities is covered in W.Va. Code, 24-2-2, -3, and we are cited no case holding that legislative enactments regulating public utilities violate constitutional substantive due process concepts.
We recognized in State ex rel. Harris v. Calendine, W. Va., 233 S.E.2d 318, 324 (1977), that the principle of substantive due process is contained in Article III, Section 10 of the West Virginia Constitution.
I would make the same distinction as the United States Supreme Court in cases where a substantive due process attack has been made on legislative acts which primarily deal with economic matters, that the Court should rarely intervene unless the Legislature has acted in a wholly arbitrary and irrational way. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 49 L. Ed. 2d 752, 96 S.Ct. 2882 (1976); Ferguson v. Skrupa, 372 U.S. 726, 10 L. Ed. 2d 93, 83 S.Ct. 1028 (1963). On the other hand, where sensitive and fundamental rights are directly circumscribed by legislation, the substantive due process scrutiny will be more penetrating. See Moore v. City of East Cleveland, 431 U.S. 494, 52 L. Ed. 2d 531, 97 S.Ct. 1932 (1977), and cases cited therein.
Tested by this standard, the involved statutes granting regulatory powers to the Public Service Commission do not violate substantive due process. The legislative purpose of the statutes is primarily economic and they evidence a reasonable attempt to balance the competing economic interests of the affected parties.
The crux of relator’s complaint is the lack of adequate procedural due process protection in permitting the pre*466liminary rate to go into effect under bond as required by W. Va. Code, 24-2-4. The majority’s conclusion that a rate payer has a property interest arising out of an entitlement to just and reasonable rates is undoubtedly correct, although I am not certain the common law makes it so. Interstate Commerce Commission v. B & O Railroad, 145 U.S. 263, 36 L. Ed. 699, 12 S.Ct. 844 (1892). Certainly, there is a statutory entitlement under Code 24-2-3, and this suffices under Waite v. Civil Service Commission, W.Va. 241 S.E.2d 164 (1977); see Memphis Light, Gas & Water Div. v. Craft, No. 76-39, U.S., L. Ed. 2d, S. Ct. (May 1, 1978).
I would have preferred that the Court follow the procedural due process analysis set out in Waite. There we held that only when a protected property interest is found must we begin an inquiry as to the measure of procedural due process required. Such inquiry proceeds according to the three standards as set out in the Fifth Syllabus of Waite:
“The extent of due process protection affordable for a property interest requires consideration of three distinct factors: first, the private interests that will be affected by the official action; second, the risk of an erroneous deprivation of a property interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.”
Considering the first of the three factors, the private interests that will be affected, it is clear that during the period that preliminary tariff is in under bond, and assuming there will be a final reduction in the tariff by the Public Service Commission, the rate payer will pay a higher rate than the final tariff rate. However, it is equally clear that he will be entitled to repayment with interest for the amount of the tariff denied. It has been recognized that the length of deprivation is a matter to *467be considered in assessing the effect of the deprivation on the private interest. Fusari v. Steinberg, 419 U.S. 379, 389, 42 L. Ed. 2d 521, 529, 95 S.Ct. 533 (1975); North v. Board of Regents, W. Va., 233 S.E.2d 411 (1977).
Of importance in this stage of the analysis is that the return of the property is automatic and does not require the rate payer to expend time or funds to regain it. Furthermore, the statutory scheme weighs against the utility by providing that the interest repaid on refunds cannot be charged in the future as part of the cost of doing business. W.Va. Code, 24-2-4. Cast in its most favorable light, the private interest harmed is the temporary deprivation of a sum of money that ultimately will be returned with interest.
The second factor, the risk of erroneous deprivation under the present statutory scheme, presents several considerations. First, the statute permits any interested person to intervene in the administrative rate filing procedure. Obviously this means any rate payer has standing to object to a rate filing. Wingrove v. Public Service Commission, 74 W. Va. 190, 81 S.E. 734 (1914); Delardas v. Morgantown Water Commission, 148 W. Va. 776, 137 S.E.2d 426 (1964).
The right to place a new tariff rate into effect becomes absolute if the Commission has not acted within the 120-day suspension period. W.Va. Code, 24-2-4. To this extent, the possibility of an erroneous deprivation is not entirely hypothetical. Balanced against this possibility is the fact that an erroneous deprivation may not be ultimately found, and if found, the overcharge will be refunded with interest. No doubt there is a risk of erroneous deprivation over the short term. However, this deprivation is mitigated to the extent that the amount involved is normally not large for the individual, and is to be distinguishable from those situations where the benefit deprived may constitute all or substantially all of an individual’s income. Goldberg v. Kelly, 397 U.S. 254, 25 L. Ed. 2d 287, 90 S.Ct. 1011 (1970).
*468We are not furnished with sufficient factual information as to the amount or frequency of refund by public utilities in this State which would reflect the risk degree of erroneous deprivation. See Mathews v. Eldridge, 424 U.S. 319 at 346, n. 29, 47 L. Ed. 2d 18, 96 S.Ct. 893 (1976).
Finally, consideration must be given to the State’s interest, including any additional burdens that may be imposed by the procedural safeguards which relator here seeks. From arguments of the parties, we are informed that small utility rate applications are generally handled within the 120-day suspension period, and that the bond provision of W.Va. Code, 24-2-4, is seldom utilized. As might be expected, it is in the large utility rate application that the bond provision is most often invoked.
The respondent Commission urges a number of considerations in opposition to any additional procedural safeguards on the imposition of the requested tariff under bond. While the pivotal question before the Commission is whether a proposed tariff provides a reasonable return, the answer can be determined only in an examination of a mass of accounting data which must be sifted through complex accounting, tax and allocation formulas. It is this process that consumes the suspension period.
The Commission asserts it is not feasible to compress a complex rate case to the point where a meaningful preliminary hearing can be held to determine an appropriate interim rate level pending final determination.
The proceedings and issues involved here differ substantially from those found in the ordinary property deprivation case which involves procedural due process claims, a field that began to be fully explored in Sniadach v. Family Finance Corp., 395 U.S. 337, 23 L. Ed. 2d 349, 89 S.Ct. 1820 (1969). In Sniadach and those cases which followed, a certain type of possessory action, by virtue of some statutory authorization, is taken against a person’s property with no opportunity to be heard prior to the actual seizure. See, e.g., Dixon v. Love, 431 U.S. 105, 52 L. Ed. 2d 172, 97 S.Ct. 1723 (1977); North *469Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 42 L. Ed 2d 751, 95 S.Ct. 719 (1975); Mitchell v. W. T. Grant Co., 416 U.S. 600, 40 L. Ed. 2d 406, 94 S.Ct. 1895 (1974); Fuentes v. Shevin, 407 U.S. 67, 32 L. Ed 2d 556, 92 S.Ct. 1983 (1972).
In a companion category are those cases where, under a statutory or regulatory provision, a property interest is granted and its subsequent removal by the State necessitates some type of due process procedures. Exemplifying cases in this category are our cases of Waite, supra, and Beverlin v. Board of Education, W. Va., 216 S.E.2d 554 (1975), and on the federal level, Memphis Light, Gas & Water Div. v. Craft, supra; Mathews v. Eldridge, supra; Arnett v. Kennedy, 416 U.S. 134, 40 L. Ed. 2d 15, 94 S.Ct 1633 (1974); Goldberg v. Kelly, supra.
The common nexus between these cases is that the property right deprived was capable of fitting within the traditional judicial framework. Generally, the property right or entitlement withdrawn arose out of some activity or condition personal to the possessor and therefore within his knowledge. As a result, it was no insurmountable task for the Court to formulate appropriate procedural safeguards that would provide the individual with an opportunity to present his version of the disputed issue before the deprivation occurred.
Here, we are not confronted with such a condition. The right of relator to just and reasonable utility rates is not individualized. Moreover, the deprivation arises not because of any activity or condition personal to relator, but from complex economic conditions over which he has no control and little knowledge. Consequently, he possesses no facts that bear in any significant manner on the resolution of the disputed issue.
The origin of the right to just and reasonable rates, insofar as that right relates to intervention in the setting of the rates, arises by virtue of our statutes. As this Court decided in Delardas v. Morgantown Water Commission, supra, the rate payer cannot seek to enforce the substantive right by a direct action in the courts, but *470must contest the reasonableness of the rate through the Public Service Commission. The whole fabric of the proceeding is peculiarly suited to the administrative forum, such that engrafting the adversary legal system into it seems ill advised. See Dixon v. Love, supra; FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 84 L. Ed. 656, 60 S.Ct. 437 (1940).
The complexity of a major rate case does not lend itself to a preliminary review prior to invocation of the rate under bond. Not only is there the risk of needless redundancy for the Commission staff, but there is the very real possibility that such a preliminary hearing would not substantially reduce the margin of possible error inherent in any rate application.
In applying the three factors outlined in Waite, it seems to me the scale clearly tips in favor of the State, and as such, the procedural safeguards sought by relator cannot be properly imposed. The relator’s deprivation cannot be given additional due process protection, as fundamentally the procedure is peculiar within the administrative forum. There are certain corrective steps that could be accomplished legislatively to improve the process, but they involve primarily a restructuring of the Commission’s internal make-up and cannot be thrust judicially on the administrative process.1 From a constitutional procedural due process standpoint, the statutory requirement of refund with interest is an adequate safeguard.

 There has been a significant increase in the number of rate filings in the past several years due to the energy crisis, and at the same time additional duties have been placed on the Commission. See, e.g., W.Va. Code, 24-2-ll(a) and -14. The obvious result is a substantially increased work load. The State of North Carolina, confronted by the same problems, has attempted to solve them by increasing the number of the Commission to seven members and permitting a panel of three to act for the full Commission. It also authorizes an indefinite suspension period on new rates in cases where the utility has not filed all the information needed for a decision. Finally, it has provided a more accelerated hearing procedure. See 1975 North Carolina General Assembly Session Laws, Chapters 48, 184, 243, 510 and 867.