Court Opinion

ID: 2796143
Source: CourtListenerOpinion
Date Created: 2015-04-23 16:03:02.382933+00
Date Added: 2024-06-11T12:45:55.142590
License: Public Domain

Illinois Official Reports

                                          Appellate Court

                 Hawkins v. Commonwealth Edison Co., 2015 IL App (1st) 133678

Appellate Court              ROBIN HAWKINS, Both Individually and d/b/a Robin’s Nest, a sole
Caption                      proprietorship, ROBERT DILLON, an individual, and GOT IT
                             MAID, INC., an Illinois Business Corporation, on Behalf of
                             Themselves, and All Others Similarly Situated, Plaintiffs-Appellants,
                             v. COMMONWEALTH EDISON COMPANY, an Illinois
                             Corporation, Defendant-Appellee.

District & No.               First District, First Division
                             Docket No. 1-13-3678

Filed                        February 17, 2015

Held                         Plaintiffs’ class action alleging that defendant electric utility failed to
(Note: This syllabus         comply with an order of the Illinois Commerce Commission based on
constitutes no part of the   a revised timeline for the deployment of smart meters in the utility’s
opinion of the court but     transmission system pursuant to the act commonly known as the
has been prepared by the     Illinois Energy Infrastructure Modernization Act was properly
Reporter of Decisions        dismissed by the trial court on the ground that the complaint
for the convenience of       concerned the utility’s rates and infrastructure, which fell exclusively
the reader.)                 within the jurisdiction of the Commission pursuant to Sheffler.

Decision Under               Appeal from the Circuit Court of Cook County, No. 2013-CH-9126;
Review                       the Hon. Mary L. Mikva, Judge, presiding.

Judgment                     Affirmed.
     Counsel on               Law Offices of Paul G. Neilan, P.C. (Paul G. Neilan, of counsel), and
     Appeal                   Valorem Law Group (Stuart J. Chanen, of counsel), both of Chicago,
                              for appellants.

                              Commonwealth Edison Company (Thomas S. O’Neill, of counsel),
                              and Eimer Stahl LLP (David M. Stahl and David M. Simon, of
                              counsel), both of Chicago, for appellee.

     Panel                    JUSTICE HARRIS delivered the judgment of the court, with opinion.
                              Presiding Justice Delort and Justice Cunningham concurred in the
                              judgment and opinion.

                                               OPINION

¶1         Plaintiffs, Robin Hawkins, Robert Dillon, and Got It Maid, Inc., on behalf of themselves
       and all others similarly situated, appeal the order of the circuit court dismissing their
       complaint against defendant, Commonwealth Edison Company (ComEd), for lack of subject
       matter jurisdiction. The trial court relied on the supreme court’s holding in Sheffler v.
       Commonwealth Edison Co., 2011 IL 110166, and found that since plaintiffs’ complaint
       concerned the utility’s rates and infrastructure, the Illinois Commerce Commission
       (Commission) has exclusive jurisdiction over the action. On appeal, plaintiffs contend that
       the trial court erred in interpreting the holding of Sheffler and applying it to the case at bar.
       For the following reasons, we affirm.

¶2                                          JURISDICTION
¶3         The trial court granted ComEd’s motion to dismiss on November 1, 2013. Plaintiffs filed
       their notice of appeal on November 20, 2013. Accordingly, this court has jurisdiction
       pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final
       judgments entered below. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).

¶4                                         BACKGROUND
¶5         In 2011 the General Assembly enacted what is commonly known as the Illinois Energy
       Infrastructure Modernization Act (EIMA) in order to revitalize and improve the state’s
       energy infrastructure, create jobs, and promote economic growth. 220 ILCS 5/16-108.5
       (West 2012). The EIMA sets forth investment plans for participating utilities that require
       them to invest in “electric system upgrades, modernization projects, and training facilities,”
       as well as the modernization of their transmission and distribution infrastructures. 220 ILCS
       5/16-108.5(b)(1), (2) (West 2012). Participation in the investment plans is voluntary;
       however, the statute provides an incentive by allowing participating utilities to recover their
       “expenditures made under the infrastructure investment program through the ratemaking
       process.” 220 ILCS 5/16-108.5(b) (West 2012). ComEd elected to participate and agreed to

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       invest approximately $1.3 billion to modernize its transmission and distribution
       infrastructure, including the installation of smart meter technology.
¶6          Pursuant to the statute, ComEd filed its smart meter deployment plan with the
       Commission. The Commission approved the plan with modifications on June 22, 2012, and
       ordered that ComEd’s smart meter deployment begin in September 2012. On July 6, 2012,
       ComEd petitioned for a rehearing, and to stay the Commission’s June 2012 order, arguing
       that ComEd would experience a $100 million annual revenue shortfall under the deployment
       schedule. The Commission granted the rehearing but did not issue a stay of the June 2012
       order, which remained enforceable. It did, however, adopt a revised timeline for the
       deployment of smart meters in recognition of the fact that ComEd’s noncompliance with the
       June 2012 order made deployment under the initial timeline infeasible.
¶7          On April 4, 2013, plaintiffs filed their class action complaint alleging that ComEd’s
       noncompliance with the Commission’s June 2012 order was a violation of the Illinois Public
       Utilities Act (Act) (220 ILCS 5/1-101 et seq. (West 2012)). They further alleged that as a
       result, ComEd’s smart meter deployment will be delayed more than two years. According to
       ComEd’s expert witness, the delay will reduce the net present value to customers of the
       benefits from using smart meter technology by $182 million. Plaintiffs also contended that
       ComEd’s violation of the June 2012 order was willful and sought punitive damages.
¶8          ComEd filed a motion to dismiss plaintiffs’ complaint pursuant to section 2-619.1 of the
       Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2012)). In its motion,
       ComEd argued four grounds for dismissal: (1) the trial court lacks subject matter jurisdiction
       because the Commission has exclusive jurisdiction over matters involving rates and
       infrastructure; (2) recently passed legislation eliminates any basis for the complaint; (3)
       plaintiffs lack standing because they failed to allege a direct personal interest in the matter;
       and (4) the damages sought by plaintiffs are too speculative. The trial court granted
       dismissal, finding that the Commission has exclusive jurisdiction over the action. It reasoned
       that plaintiffs’ complaint “concerns a delay in infrastructure that clearly impacts rates” and
       therefore it “must defer to the [Commission’s] expertise to determine the extent to which the
       delay in smart grid infrastructure will adversely impact ComEd’s customers’ rates and future
       service, and what remedy, if any, should be employed.” Plaintiffs filed this timely appeal.

¶9                                            ANALYSIS
¶ 10       On appeal, plaintiffs challenge the trial court’s section 2-619 dismissal of their claim for
       lack of subject matter jurisdiction. Section 2-619 provides for involuntary dismissal of a
       claim based on certain defects and defenses, including lack of subject matter jurisdiction. 735
       ILCS 5/2-619(a) (West 2012). Whether the trial court has subject matter jurisdiction over a
       claim is a question of law we review de novo. Millennium Park Joint Venture, LLC v.
       Houlihan, 241 Ill. 2d 281, 294 (2010).
¶ 11       Our courts have long recognized that the Commission is the body most capable of
       determining whether a utility’s rates are reasonable and its services adequate, given its
       expertise in the complex data inherent in rate and service issues. Sheffler, 2011 IL 110166,
       ¶ 40. Accordingly, the legislature has granted the Commission broad powers to “promulgate
       orders, rules or regulations fixing adequate service standards.” Id. (citing Village of Apple
       River v. Illinois Commerce Comm’n, 18 Ill. 2d 518, 523 (1960)). Section 9-252 of the Act
       provides that the Commission may order a utility to “make due reparation to the

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       complainant” if it finds that the utility “has charged an excessive or unjustly discriminatory
       amount for its product, commodity or service.” 220 ILCS 5/9-252 (West 2012). The statute
       also requires that all claims for such damages “shall be filed with the Commission within 2
       years from the time the produce, commodity or service as to which complaint is made was
       furnished or performed.” Id. Courts have found that in enacting these provisions, the
       legislature intended to “preclude[ ] an action at law for such reparation until the commission
       has heard a claim therefor.’ ” Sheffler, 2011 IL 110166, ¶ 41 (quoting Terminal R.R. Ass’n of
       St. Louis v. Public Utilities Comm’n, 304 Ill. 312, 317 (1922)).
¶ 12       In contrast, section 5-201 sets forth circuit court jurisdiction for violations of the Act.
       This section provides:
               “In case any public utility shall do, cause to be done or permit to be done any act,
               matter or thing prohibited, forbidden or declared to be unlawful, or shall omit to do
               any act, matter or thing required to be done either by any provisions of this Act or any
               rule, regulation, order or decision of the Commission, issued under authority of this
               Act, the public utility shall be liable to the persons or corporations affected thereby
               for all loss, damages or injury caused thereby or resulting therefrom ***. An action to
               recover for such loss, damage or injury may be brought in the circuit court by any
               person or corporation.” 220 ILCS 5/5-201 (West 2012).
¶ 13       Taken together, the Act provides that a claim for reparations is within the jurisdiction of
       the Commission, while a claim for civil damages lies within the circuit court’s jurisdiction.
       Sheffler, 2011 IL 110166, ¶ 42. Generally, “a claim is for reparations when the essence of the
       claim is that a utility has charged too much for a service, while a claim is for civil damages
       when the essence of the complaint is that the utility has done something else to wrong the
       plaintiff.” Id. (citing Flournoy v. Ameritech, 351 Ill. App. 3d 583, 585 (2004)).
¶ 14       In Sheffler, our supreme court provided guidance to courts in determining whether a
       claim is for reparations or for civil damages. The plaintiffs in Sheffler filed a class action
       complaint against ComEd seeking compensatory damages from power outages that occurred
       following severe storms on August 23, 2007. Sheffler, 2011 IL 110166, ¶ 4. Their third
       amended complaint contained five counts, including allegations of negligence, breach of
       contract, and a violation of the Act. Id. ¶ 15. Count I alleged that ComEd had a duty to
       provide adequate service and breached its duty during the August 2007 storms, causing
       plaintiffs to sustain “damages in the form of spoiled food, water damage to walls, furniture,
       fixtures, appliances, furnace and water heaters, medical and electrical equipment, and repair
       costs.” Id. ¶ 11. ComEd filed a motion to dismiss pursuant to sections 2-619 and 2-615 of the
       Code. The trial court dismissed the complaint with prejudice and the appellate court affirmed
       the dismissal. Id. ¶¶ 16-17. The appellate court reasoned that the relief sought by plaintiffs
       implicated rates and was based on allegations that ComEd provided inadequate service,
       issues within the exclusive jurisdiction of the Commission. Id. ¶ 18. Therefore, the trial court
       did not have jurisdiction of the complaint, and dismissal was proper pursuant to section
       2-619(a)(1) of the Code. Id.
¶ 15       The supreme court in Sheffler agreed with the appellate court. It noted that the plaintiffs
       characterized their complaint as a claim for negligence and compensatory damages, which,
       plaintiffs argued, should put the complaint within the trial court’s jurisdiction. Id. ¶ 50.
       However, the supreme court reasoned that in determining whether the Commission has
       jurisdiction, the proper focus should be “on the nature of the relief sought rather than the

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       basis for seeking relief.” Id. The plaintiffs sought relief based on ComEd’s provision of
       inadequate service. Id. Therefore, since “the relief sought by plaintiffs goes directly to
       ComEd’s service and infrastructure,” the court determined that their complaint falls within
       the Commission’s original jurisdiction. Id.
¶ 16       In so holding, the supreme court noted the decision in Village of Deerfield v.
       Commonwealth Edison Co., 399 Ill. App. 3d 84, 89 (2009), which interpreted reparations
       narrowly as claims involving only excessive or discriminatory rates. Sheffler, 2011 IL
110166, ¶¶ 54-56. It found that the Village of Deerfield court erred in “narrowly interpreting
       reparations as excluding any claims concerning service.” Id. ¶ 55. It reasoned that “rates and
       service are inextricably tied together” and therefore, “complaints concerning the adequacy of
       ComEd’s services” are reparations “fall[ing] within the jurisdiction of the Commission.” Id.
       ¶¶ 53, 55.
¶ 17       Here, plaintiffs filed a breach of contract complaint seeking damages for ComEd’s
       violation of the Commission’s June 2012 order requiring it to deploy smart meters by
       September 2012. Plaintiffs alleged that as a result of the violation, ComEd’s smart meter
       deployment will be delayed more than two years. They sought damages of at least $182
       million, which represented the reduced amount of net present benefit to customers caused by
       the delay.
¶ 18       ComEd entered the agreement to deploy smart meter technology pursuant to the EIMA,
       which the legislature enacted in part to revitalize and improve the state’s energy
       infrastructure. Participating utilities must invest in “electric system upgrades, modernization
       projects, and training facilities,” as well as the modernization of their transmission and
       distribution infrastructures. 220 ILCS 5/16-108.5(b)(1), (2) (West 2012). Although
       participation in the investment plans is voluntary, the statute provides an incentive by
       allowing participating utilities to recover their “expenditures made under the infrastructure
       investment program through the ratemaking process.” 220 ILCS 5/16-108.5(b) (West 2012).
       Although the complaint seeks compensatory damages for ComEd’s violation of the June
       2012 order, the focus of our analysis must be “on the nature of the relief sought rather than
       the basis for seeking relief.” Sheffler, 2011 IL 110166, ¶ 50. Here, plaintiffs seek relief for
       damages they suffered when ComEd failed to deploy its smart meters by September 2012.
       According to the EIMA, the deployment of smart meters is an improvement of infrastructure,
       and utilities making such improvements may recover expenditures “through the ratemaking
       process.” 220 ILCS 5/16-108.5(b) (West 2012). Since the nature of relief sought by plaintiffs
       goes directly to ComEd’s infrastructure and service, their complaint is within the exclusive
       jurisdiction of the Commission. See Sheffler, 2011 IL 110166, ¶ 50.
¶ 19       Plaintiffs disagree, arguing that the holding in Sheffler does not apply here. They contend
       that their complaint does not allege inadequate service, as in Sheffler, but rather alleges that
       ComEd has “done something else to wrong” them when it violated the June 2012 order. As
       support, plaintiffs cite Thomas v. Peoples Gas Light & Coke Co., 2011 IL App (1st) 102868,
       Flournoy v. Ameritech, 351 Ill. App. 3d 583 (2004), Sutherland v. Illinois Bell, 254 Ill. App.
3d 983 (1993), and Gowdey v. Commonwealth Edison Co., 37 Ill. App. 3d 140 (1976).
¶ 20       In these cases, however, the wrong alleged to have harmed the plaintiffs involved
       fraudulent conduct by the utility. In Thomas, the plaintiff claimed that the utility attempted to
       collect a debt that had already been discharged in federal bankruptcy proceedings. Thomas,
       2011 IL App (1st) 102868, ¶ 22. As the court in Thomas reasoned, the plaintiff did not

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       “allege an overcharge; she alleges an unlawful charge.” Id. This “unlawful attempt to collect
       a debt *** has nothing to do with the utility’s infrastructure, adequacy of service, or rate
       structure.” Id. Flournoy concerned a claim that the utility fraudulently charged for multiple
       initial calling fees when it repeatedly cut off the plaintiff’s collect calls. Flournoy, 351 Ill.
       App. 3d at 585. In Sutherland, the plaintiff claimed that she was charged for services that
       were either “ ‘unordered, inadequate or ambiguously billed.’ ” Sutherland, 254 Ill. App. 3d at
       993. Gowdey involved ComEd’s administration of a light bulb service for customers. The
       complaint alleged that ComEd assumed its customers opted to purchase the light bulb service
       without any affirmative indication that they had actually done so and charged their customers
       accordingly. Gowdey, 37 Ill. App. 3d at 148-49. The complaint simply alleged “that plaintiffs
       were charged for a service which they did not contract to purchase.” Id. at 149.
¶ 21        None of these cases involved claims disputing the rates charged by the utilities or their
       infrastructure. Unlike Thomas, Flournoy, Sutherland, and Gowdey, the plaintiffs here alleged
       damages based on ComEd’s failure to deploy smart meters by September 2012, conduct that
       involves issues of ComEd’s infrastructure and rates. We are not persuaded by plaintiffs’
       argument.
¶ 22        Plaintiffs also contend that it is error to apply Sheffler here because the supreme court’s
       discussion on the Commission’s exclusive jurisdiction over rate and service issues was dicta.
       They argue that the court’s holding focused primarily on the fact that a tariff applied barring
       all of the plaintiffs’ claims, and therefore the jurisdiction analysis was unnecessary to the
       disposition of the case. See Sheffler, 2011 IL 110166, ¶ 38. Although Sheffler’s jurisdiction
       analysis was not necessary to its decision, it does not follow that the supreme court’s opinion
       on the jurisdiction issue was mere dictum. There are two types of dictum: obiter dictum and
       judicial dictum. People v. Williams, 204 Ill. 2d 191, 206 (2003). Obiter dictum, which refers
       to a court’s remark or opinion uttered as an aside, is neither integral to the opinion nor
       considered binding authority or precedent. Exelon Corp. v. Department of Revenue, 234 Ill.
2d 266, 277 (2009). However, the court’s “expression of opinion upon a point in a case
       argued by counsel and deliberately passed upon by the court, though not essential to the
       disposition of the cause, if dictum, is a judicial dictum. [Citations.] *** [A] judicial dictum is
       entitled to much weight, and should be followed unless found to be erroneous.” (Emphasis
       and internal quotation marks omitted.) Id. at 277-78. In Sheffler, the jurisdiction issue was
       clearly argued by counsel and the supreme court’s analysis was detailed and thorough. If it is
       dictum, it is a judicial dictum that should be followed by courts as they would follow the
       primary holding of the case. See Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217,
       236-37 (2010).
¶ 23        This determination is further supported by the recent case of State of Illinois ex rel.
       Pusateri v. Peoples Gas Light & Coke Co., 2014 IL 116844, in which our supreme court
       cited Sheffler for the proposition that the Commission has exclusive jurisdiction over rate and
       service issues. In Pusateri, our supreme court noted that in the Sheffler case, it had “recently
       examined which causes of action against a regulated utility are subject to the exclusive
       jurisdiction of the Commission” and found that “[c]laims for reparations are subject to the
       exclusive jurisdiction of the Commission.” Id. ¶ 18. The court quoted its finding in Sheffler
       that “ ‘a claim is for reparations when the essence of the claim is that a utility has charged too
       much for a service.’ ” Id. (quoting Sheffler, 2011 IL 110166, ¶ 42). Returning to the case
       before it, our supreme court found that “[a]t its heart, Pusateri’s complaint alleges PG used

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       fraudulent means to get the State (and others) to pay too much for natural gas.” The court
       reasoned that “[t]hough the remedy Pusateri seeks is a mix of penalty and damages, the sole
       reason the alleged falsehoods might be actionable under the False Claims Act is that they
       would have induced the State to pay too much for PG’s natural gas.” Id. ¶ 19. Our supreme
       court held that since “Pusateri’s complaint is one for reparations,” it is subject to the
       exclusive jurisdiction of the Commission. Id.
¶ 24       Plaintiffs’ final argument is that the trial court erred in failing to address the
       constitutionality of the amendment to the EIMA, which states that a participating utility
       “shall be deemed to have been in full compliance with *** all Commission orders entered
       pursuant to [the EIMA], up to and including the effective date” of the amendment. Pub. Act
       98-15, § 5 (eff. May 22, 2013) (amending 220 ILCS 5/16-108.5). Plaintiffs contend that “the
       legislative language declaring that ComEd is in compliance with prior orders is an
       unconstitutional, retroactive statute that violates constitutional principles of due process and
       separation of powers.” However, since we have determined that the trial court lacks subject
       matter jurisdiction to hear plaintiffs’ claim, and plaintiffs presented no independent count in
       their complaint raising constitutionality, we need not consider the merits of plaintiffs’ other
       arguments on appeal. People v. Flowers, 208 Ill. 2d 291, 307 (2003) (where the trial court
       lacks jurisdiction to consider the claim, the appellate court has no authority to consider the
       merits of the appeal).
¶ 25       Plaintiffs contend that the challenged amendment strips the Commission “of all authority
       to undertake any investigation or take any adverse action regarding ComEd’s noncompliance
       with” the Commission’s orders. They argue that the amendment, combined with the cases of
       Sheffler and Pusateri, leaves them without a forum in which to address their claims and seek
       damages. We acknowledge and share plaintiffs’ concerns. It is repugnant to our
       understanding of due process of law and justice that a wronged party be required to proceed
       exclusively in a forum that lacks the authority to investigate and take action against the
       wrong-doing entity. This clearly allows the wrongdoer to act with impunity and makes a
       mockery of the established principle that there should be a remedy for every wrong.
       However, we are bound to follow Sheffler and Pusateri, in which our supreme court
       determined that if the nature of relief sought by plaintiffs goes directly to ComEd’s
       infrastructure and service, their complaint is within the exclusive jurisdiction of the
       Commission. Any changes to address plaintiffs’ concerns must be made by the legislature or
       by our supreme court.
¶ 26       In its brief, ComEd argues that the trial court’s dismissal of plaintiffs’ complaint may be
       affirmed on the grounds that plaintiffs lacked standing to bring their claim and that a
       subsequent amendment to the Act effectively eliminates the basis for plaintiffs’ claims. Due
       to our disposition of the matter, we need not consider these issues here.
¶ 27       For the foregoing reasons, the judgment of the circuit court is affirmed.

¶ 28      Affirmed.

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