Court Opinion

ID: 9479808
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:29:30.994523+00
Date Added: 2024-06-11T17:47:17.548186
License: Public Domain

HEANEY, Senior Circuit Judge,
concurring in part and dissenting in part.
I concur in Parts I, III and IV of the majority opinion as far as it is necessary to reach those issues. I dissent from Part II.
While I accept that the Power District may have breached its duty to charge fair, reasonable and nondiscriminatory rates, I believe that it was error for the district court to submit the question of damages to the jury. Damages are too speculative.
This Court lacks both the wherewithal and the legislative authority to determine damages in this instance because more than one fair, reasonable and nondiscriminatory rate schedule may exist. Courts do not have the expertise or resources necessary to determine proper rate schedules or to permit an integrated approach to rate regulation. Moreover, the power of a Nebraska court is limited to determining only whether the rate schedule in question is fair, reasonable and nondiscriminatory. See, e.g., McGinley v. Wheat Belt Public Power District, 214 Neb. 178, 332 N.W.2d 915 (1983).
Fixing a compensation which public service corporations may charge for services to be rendered by them is legislating; it is lawmaking. The power of the courts is limited to declaring what the law is, and they are precluded by the Constitution from legislative functions; ... [W]e know of no court which has ever claimed it had the authority to determine what compensation would be a reasonable one for a service to be performed by such a corporation.
Nebraska Telephone Co. v. State, 55 Neb. 627, 76 N.W. 171, 174 (1898). See also, Metropolitan Utilities Dist. v. City of Omaha, 171 Neb. 609, 107 N.W.2d 397 (1961) (“It would appear there are several formulas, under approved accounting methods, by which the board of directors of the [sewage] district could determine the cost_ However, it should be remembered that it is not for the city or the courts to determine what the formula is to be, but it is a matter for the board of directors of the district to decide_”). Thus, I am unwilling to accept, as the majority appears to have done, that Nucor’s cost allocation methodology is the only fair, reasonable and nondiscriminatory method.
The remedy of damages is not supported by Nebraska case law. McGinley v. Wheat Belt Public Power District, 214 Neb. 178, 332 N.W.2d 915 (1983); York County Rural Public Power District v. O’Connor, 172 Neb. 602, 111 N.W.2d 376 (1961);
In York County, the Nebraska Supreme Court held that the plaintiff power district could recover in damages the difference between amount paid to the plaintiff by the defendant consumer and amount required by a new rate schedule adopted by the plaintiff power district that the court held *1353to be fair, reasonable and nondiscriminatory.
In McGinley, the Nebraska Supreme Court denied damages even though it found the rate charged to plaintiffs unfair, unreasonable and discriminatory. McGinley v. Wheat Belt Public Power District, 332 N.W.2d at 921.
Having therefore found the rate invalid, we are now confronted with determining the proper relief to be granted. Members of Rate Class 766 have asked this court to render judgment for the members of Rate Class 76 in an amount equal to the difference between what members of the Rate 75 paid and what members of Rate 76 paid. Were we to do that, we would be in effect granting to members of Rate Class 76 the same unjust and arbitrary rate which was granted to members of Rate Class 75 and which we have now declared invalid. Such relief is not appropriate in a case of this nature....
While there are cases to be found where damages such as requested by the plaintiffs herein have been awarded, they are cases generally where both a statute authorizes such damages and the evidence supports such damages.

Id.

The majority argues that the instant case is distinguishable from McGinley because “specific evidence of individual damages” exists. Ante at 1349 (quoting McGinley, 332 N.W.2d at 921). I disagree. First, even though the rate charged by the Power District was unfair, unreasonable and discriminatory, there exists no basis upon which a court could determine the fair, reasonable and nondiscriminatory cost allocation methodology that the Power District will ultimately choose. Second, the practical effect of granting damages in the instant case is similar to the practical effect of granting damages in McGinley. In both cases, the validity of amount paid is questionable. See Federal Power Commission v. Texaco, Inc., 417 U.S. 380, 387, 94 S.Ct. 2315, 2321, 41 L.Ed.2d 141 (1974) (“To declare that a particular method of rate regulation is so sanctified as to make it highly unlikely that any other method could be sustained” is inconsistent with clearly articulated Supreme Court precedent). Thus, damages are speculative.
The fact that a written contract exists between Nucor and the Power District does not expand the scope of judicial review, since the contract terms, “fair, reasonable and nondiscriminatory,” are subject to the provisions of Neb.Rev.Stat. § 70-655. The contract language is entirely consistent with the statutory language, and the meaning of each is the same, controlled by the statute. A holding that the Power District . breached its contract with Nucor by charging an unfair, unreasonable and discriminatory rate schedule is nothing more or nothing less than a holding that the Power District breached its statutory duty. The distinction between an action for a breach of contract and an action for a breach of statutory duty, whatever that may be in this instance, has no relevance as to the question of whether damages can be awarded or calculated.
The appropriate remedy in this circumstance is to remand the matter to the Board of Directors of the Power District and order it to hold a prompt hearing as to rates for the years in question. All classes of consumers, including Nucor, the farmers who use power for irrigation, and the homeowners who use power for air conditioning, must be given adequate notice and opportunity to participate at this hearing. Once this is done, the Power District can determine the fair, reasonable and nondiscriminatory rates it intends to charge all consumers. From that determination, the Power District must, at that time, rebate all overcharges that have resulted.

. McGinley involved different rates charged to consumers who used energy in exactly the same manner but for the date they signed on as customers of the Power District. Rate Class 75 included all customers receiving service before a certain date in 1975. Rate Class 76 included all customers receiving service after that date in 1975.