Court Opinion

ID: 9796475
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:58:16.797967+00
Date Added: 2024-06-11T08:50:23.136540
License: Public Domain

KAUGER, J.,
with whom WATT, J. joins, concurring in part/dissenting in part:
T1 I do not agree that the proceeding at issue is "more akin to legislation than to adjudication." Nearly 100 years ago, the United States Supreme Court in Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 29 S.Ct. 67, 58 L.Ed. 150 (1908) discussed the proceedings of the Virginia State Corporation Commission and its attempt to enforce orders fixing passenger rates. The Court noted that the corporation commission has been clothed with legislative, judicial, and executive powers.
€ 2 The Court described a judicial inquiry as one that investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. In contrast, legislation looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. The Court determined that the ratemaking involved in Prentis was a legislative proceeding and reviewed the proceeding as such.
T3 The Court in Southwestern Bell Telephone Co. v. Oklahoma Corp. Com'n, 1994 OK 38, ¶ 9, 873 P.2d 1001, cert. denied, 513 U.S. 869, 115 S.Ct. 191, 130 L.Ed.2d 123 (1994) adopted the Prentis definition of legislative and judicial proceedings when we ree-ognized that due process requirements for ratemaking decisions differ significantly from due process attached to judicial proceedings. The Court noted that when the Commission sits and decides matters in its adjudicative capacity, it exercises the power of a court of *173record, but it determined that ratemaking is a legislative function.1
1 4 We have long recognized that the Commission itself, when exercising its adjudicative authority, is the functional analogue of a court of record with dispute resolution authority conferred by Constitutional grant.2 In Monson v. State ex. rel. Okla. Corp. Com'n, 1983 OK 115, ¶¶ 4-5, 678 P.2d 839 we described the Corporation Commission's adjudicative powers as:
While Art. 7 § 1, Ok. Const., creates courts and invests them with judicial power, the Corporation Commission stands established and governed by the provisions of Art. 9 §§ 15-84, Ok. Const. Within the limits of authority conferred on it by constitutional provisions as well as by statutory enactments, the Commission may exercise legislative, judicial and executive power. There can be absolutely no doubt of the Commission's legitimate claim to possession - of - adjudicative - authority. When in individual proceedings it sits to hear and decide the issues before it, it acts, pursuant to Art. 9 § 19, Okl. Const., in the exercise of 'powers and authority of a court of record'. The role so constitutionally assigned to the Commission is entirely consistent both with Art. 4 § 1, OK. Const., that provides for the separation of powers, as well as with Art. 7 § 1, OK. Const., that vests judicial power in certain constitutionally-created or statutorily-established courts and tribunals.
In some of our past decisions we did refer to the Commission's adjudicative power as 'quasi-judicial'. We did this in order to distinguish it from pure judicial adjudication. The legal foundation for the Commission's dispute-settling function is different in character from that of other administrative agencies. The latter bodies derive their adjudicative authority not from a direct constitutional grant but rather from statutory delegation. The Commission's dispute-settling power clearly stands reposed in it by virtue of a direct constitutional mandate. Our fundamental law explicitly charges that body with the responsibility of a 'court of record'. In short, the Constitution's command is that, when acting in an adjudicative capacity, the Commission is to be treated as the functional analogue of a court of record. [citations omitted.]
4 5 The question becomes whether the reclassification sought here falls within the gamut of legislative ratemaking or requires a decision more akin to a judicial inquiry-one that investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. Rate regulation is prospective and future rates are set on the basis of forecasting of income, expenses, and profits; the focus of ratemaking is on whether the proposed rates are just and reasonable.3
T6 This application is a request for reclassification of an Intrastate Retail Telecommunications Service as Basket 4 Services pursuant to Oklahoma Administrative Code 165:55-5-66(4) and 165:55-5-10.1.4 Under *174these provisions of the code, a regulated telecommunications service can be reclassified as competitive which will allow pricing flexibility without having to seek the Commission's approval.
(I 7 While the net effect of the re-classification may result in changes to the rates the company charges, the re-classification is not "ratemaking." A proceeding which merely involves rates or affects rates is not automatically "akin to legislation." For instance, in Barker v. Bond, 1941 OK 85, ¶ 0, 188 Okla. 559, 111 P.2d 507, the Court determined that, when in the course of a proceeding an adjustment of rates were impounded and refunded to patrons, the impounding and disbursing of the funds were judicial in nature. Similarly, in St. Louis & S.F. Railroad Co. v. State of Oklahoma, 1925 OK 541, ¶ 0, 116 Okla. 95, 244 P. 440, the Court noted that when a claim for a refund of an illegal transportation charge is based on an application of a wrong rate, the determination of whether a different rate from that charge is a legal rate is judicial not legislative.
T8 What is relevant is the nature of what is being decided. Here, the re-classification does not seek to establish new rules, develop new rate structures or change the rates allowed under Basket 4. What it does seek is a determination based on the presented facts as to whether the telecommunications company has met the qualifications under the existing rules to transfer services to a Basket 4. In other words, has the company met the competitive requirements to be classified as *175competitive and therefore eligible for treatment under an existing, alternative rate structure?
T 9 The factors include, but are not limited to: 1) the number and size of alternative providers of comparable services; 2) the extent to which comparable services are available from alternative provides in the market; 3) the ability of alternative providers to make functionally equivalent services readily available at competitive rates, terms and conditions; 4) public interest considerations; and 5) other indicators of market power with respect to a service, which may include market share, growth in market share and whether the alternative providers of comparable services are affiliated with the telecommunications service provider.5 The application of the facts to the five factors for the purpose of determining the existence of effective competition does not resemble rate-making. Consequently, it is "more akin to adjudication rather than legislation."
CONCLUSION
10 The majority refuses to view the proceeding as judicial rather than legislative. However, the Commission proceeded in an adjudicative capacity when it provided the explanation for waiving the five-year rule because "judicial economy would be best served." 6 When addressing the issue of the Commission's refusal to dismiss the application as premature, the majority approves the Commission's waiver of its rules under the guise that "the preservation of judicial resources constitutes good cause to waive the rule" and that strict adherence to the rule would be a "waste of judicial resources." Interestingly, the majority will not label the proceedings as judicial, but clings to the fact that the Commission acted in a judicial capacity to resolve the remainder of the issues.
T 11 As an adjudication which is judicial in character this proceeding is subject to the due process requirements of a judicial proceeding. When the Commission sits and decides matters in its adjudicative capacity, it exercises the power of a court of record pursuant to the Okla. Const. Art. 9, § 19 and the Commission should be treated as the "functional analogue of a court of record." 7 The majority opinion recognizes that some *176due process protections associated with a judicial proceeding such as notice and an opportunity to be heard, the right to present witnesses, and the right to cross examine were afforded the parties. Nevertheless, the majority stops short of a full review of due process and whether any irregularities may have resulted in its deprivation. I would not do so.

. Southwestern Bell Telephone Co. v. Oklahoma Corp. Com'n, 1994 OK 38, ¶ 13, 873 P.2d 1001; Wiley v. Oklahoma Natural Gas, 1967 OK 152, ¶ 3, 429 P.2d 957.

. Southwestern Bell Telephone Co. v. Oklahoma Corp. Com'n. see note 1, supra; Van Horn Oil Co. v. Oklahoma Corp. Com'n, 1988 OK 42 ¶ 12, 753 P.2d 1359.

. Turpen v. Oklahoma Corp. Com'n, 1988 OK 126, ¶ 26, 769 P.2d 1309.

. Oklahoma Administrative Code 165:55-5-66 involves Pricing and it provides in pertinent part:
The prices for services provided by an ILEC once the ILEC has implemented the Oklahoma Plan shall be determined according to the level of competition for each service. At the time of election into the Plan, services will be priced according to the current existing tariff prices as approved by the Corporation Commission....
(4) Basket 4-Competitive Services.
(A) Services which are competitive, pursuant to OAC 165:55-5-10.1, and for which functionally equivalent and substitute services are available will be placed in Basket 4.
(B) The price floor for all services in this Basket will be the greater of the LRIC of the service under consideration or a price which is arrived at by applying imputation where appropriate.
(C) Price revisions to the tariffs for services in Basket 4 shall become effective on the date specified on the revised tariff sheets after the provider has delivered 3 copies of the revised tariff sheets to the Director of the Public Utility *174Division. The effective date shall be no earlier than the date the revised tariff pages are delivered.
The Oklahoma Administrative Code 165:55-5-10.1 provides:
(a) A - telecommunications service provider may file an application to have the Commission determine that a regulated telecommu-pications service, other than local directory assistance or operator services is subject to effective competition and is therefore competitive for the applicant and/or the applicant class.
(b) In determining whether a service is competitive, factors the Commission will consider include, but are not limited to:
(1) The number and size of alternative providers of comparable services;
(2) The extent to which comparable services are available from alternative providers in the relevant market;
(3) The ability of alternative providers to make functionally equivalent or substitute services readily available at competitive rates and terms and conditions;
(4) Public interest considerations; and,
(5) Other indicators of market power with respect to a service, which may include market share, growth in market share and whether the alternative provider(s) of comparable services are affiliated with the telecommunications service provider.
(c) In considering these and other factors, the Commission is not required to give equal weight to each factor in subsection (b) of this Section, but has discretion to give more weight to a particular factor or factors, based on the evidence.
(d) As part of its order determining a service to be competitive, the Commission may require the passage of a transitional period, not to exceed two (2) years. During such transitional period, proposed tariff changes of all providers shall be deemed lawful and effective thirty (30) days after filing, unless the Commission suspends the proposed tariff change before the end of the 30-day period. If suspended, the provisions of OAC 165:55-5-13 shall apply.
(e) Following any transitional period ordered by the Commission pursuant to subsection (d) the rates charged by a TSP for a service determined to be competitive shall become effective on the date specified on the revised tariff sheets, after the provider has delivered three
(3) copies of the revised tariff sheets to the Director of the Public Utility Division. The effective date shall be no earlier than the date the revised tariff pages are delivered to the Director of the Public Utility Division.
(f) Following any transitional period, ordered by the Commission pursuant to subsection (d), the terms and conditions under which competitive services are offered shall be submitted to the Director of the Public Utility Division and made available for public inspection. Changes in terms and conditions, and any combination of price and non-price components, shall be submitted at least thirty (30) days prior to when such changes shall be implemented by the provider.
(g) Notwithstanding the provisions of this Section, the Commission may, at any time, revoke the competitive designation of a service, after notice and hearing, if the Commission determines that the service is no longer a competitive service. If the competitive designation of a service is revoked by the Commission, changes in the rates of the service or services affected shall be regulated pursuant to the provisions of OAC 165:55-5-10.
(h) Any revised tariff for a service which has been determined to be competitive by the Commission, pursuant to this Section, shall identify the cause and order number making such designation of competitiveness.

. Oklahoma Administrative Code 165:55-5-10.1, see note 4, supra.

. Majority Opinion page 159.

. Southwestern Bell Telephone Co. v. Oklahoma Corp. Com'n, see note 1, supra at 117. The Oklahoma Const. Art. 9, § 19 provides:
In all matters pertaining to the public visitation, regulation, or control of corporations, and within the jurisdiction of the Commission, it shall have the powers and authority of a court of record, to administer oaths, to compel the attendance of witnesses, and the production of papers, to punish for contempt any person guilty of disrespeciful or disorderly conduct in the presence of the Commission while in session, and to enforce compliance with any of its lawful orders or requirements by adjudging, and by enforcing its own appropriate process, against the delinquent or offending party or company (after it shall have been first duly cited, proceeded against by due process of law before the Commission sitting as a court, and afforded opportunity to introduce evidence and to be heard, as well against the validity, justness, or reasonableness of the order or requirement alleged to have been violated, as against the liability of the company for the alleged violation), such fines or other penalties as may be prescribed or authorized by this Constitution or by law. The Commission may be vested with such additional powers, and charged with such other duties (not inconsistent with this Constitution) as may be prescribed by law, in connection with the visitation, regulation, or control of corporations, or with the prescribing and enforcing of rates and charges to be observed in the conduct of any business where the State has the right to prescribe the rates and charges in connection therewith, or with the assessment of the property of corporations, or the appraisement of their franchises, for taxation, or with the investigation of the subject of taxation generally. Any corporation failing or refusing to obey any valid order or requirement of the Commission, within reasonable time, not less than ten days, as shall be fixed in the order, may be fined by the Commission (proceeding by due process of law as aforesaid) such sum, not exceeding five hundred dollars, as the Commission may deem proper, or such sum, in excess of five hundred dollars, as may be prescribed or authorized by law; and each day's continuance of such failure or refusal, after due service upon such corporation of the order or requirement of the Commission, shall be a separate offense: Provided, That should the operation of such order or requirement be suspended, pending any appeal therefrom, the period of such suspension shall not be computed against the company in the matter of its liability to fines or penalties.