Court Opinion

ID: 9542930
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:40:28.676201+00
Date Added: 2024-06-11T15:09:18.833471
License: Public Domain

Quirico, J.
(dissenting). For the reasons which follow, I dissent from the denial of the motions to dismiss the actions brought by the Attorney General against the two public utility companies, Lowell Gas Company (Lowell Gas) and Cape Cod Gas Company (Cape Cod Gas) for recovery of damages for alleged common law fraud and for violation of G. L. c. 93A.
On January 19, 1977, each of the two companies filed with the Department of Public Utilities (department) proposed rate schedules which would increase charges to its customers. The department held a series of hearings thereon and then rendered a separate decision as to each company on August 1,1977. The Attorney General, acting for himself and for the Massachusetts Consumers’ *55Council, petitioned for and was allowed full intervention in the proceeding. The portions of the decisions pertinent to this dissent are the following. Lowell Gas, between 1972 and 1976, and Cape Cod Gas, between 1973 and 1976, wrongfully inflated their cost of gas by including therein the amount of interest for short term debt related to the purchase of the gas. Interest on the gas inventory was excluded from the rate base used in computing future rates for the test year involved in the department’s decision. The department’s discussion of this particular subject concluded with the following statements: "Because interest has been charged to inventory for five years, the Commonwealth Intervenors [Attorney General and the Massachusetts Consumers’ Council] have requested in their Brief that the matter be referred to the Attorney General for remedial action. As a party to the case, the Attorney General is acquainted with the facts and he may initiate whatever action, if any, he deems appropriate.” The department made no finding of the amount by which the companies’ interest allocation practice had resulted in increased rates paid by their customers.
On August 12, 1977, the Attorney General, acting under G. L. c. 25, § 5, appealed from both decisions of the department, and the appeals are still pending before this court for Suffolk County. Each appeal states that the Attorney General is a party in interest and is aggrieved by the department’s decision, and it alleges a number of errors in the decision including the following: "The Department’s failure to make a finding that the ... Gas Company has overcharged its customers $ ... through the company’s Purchased Gas Adjustment Clause is based upon errors of law, is unwarranted by the facts on the record, is unsupported by substantial evidence, is arbitrary and capricious, and is an abuse of discretion.” As to Lowell Gas the appeal states that the overcharge was $1,175,545, and as to Cape Cod Gas that it was $503,576.
The actions which are the subject of the motions to dismiss being decided by the court today were com*56menced by the Attorney General on September 12, 1977. The motions are addressed to amended complaints dated April 26, 1978, alleging damages "of approximately $1,-175,000” to customers of Lowell Gas and "of approximately $500,000” to customers of Cape Cod Gas. Thus the Attorney General is pursuing his claims against the two companies along two routes. The first is by his intervention in the administrative proceedings before the department, followed by his appeals which are pending in this court for Suffolk County. The second is by the actions at law originally entered in the Superior Court.
1. The Legislature has enacted a comprehensive statutory scheme for the regulation of public utilities. As a part of that scheme it has delegated to the department the responsibility for initially finding facts, making rulings, and rendering decisions in all proceedings concerning the rates which such companies may charge their customers. G. L. c. 164. As another part of that scheme it has delegated to the Supreme Judicial Court the responsibility for judicial review on "appeal as to matters of law from any final decision, order or ruling of the commission [of the department].” G. L. c. 25, § 5, as appearing in St. 1953, c. 575, § 1. G. L. c. 30A, § 14. New England Tel. & Tel. Co. v. Department of Pub. Utils., 372 Mass. 678, 682, 685 (1977). Fitchburg Gas & Elec. Light Co. v. Department of Pub. Utils., 371 Mass. 881, 884-885 (1977). Newton v. Department of Pub. Utils., 367 Mass. 667, 673-674 (1975). Cambridge Elec. Light Co. v. Department of Pub. Utils., 363 Mass. 474, 502-504 (1973).
It is my opinion that under our statutory scheme the route to relief for customers of a public utility company under facts such as those alleged by the Attorney General in the actions at law must start with administrative proceedings before the department, and that parties aggrieved by the results at that level may then obtain judicial review on questions of law. Indeed the Attorney General started out by intervening in the department’s proceedings and seeking relief at that level, and followed *57that by seeking judicial review of alleged errors in the administrative process. However, while the judicial review proceedings were pending but not yet heard or decided, the Attorney General sought direct judicial relief by the actions at law which he entered in the Superior Court. This court should not sanction the attempted departure from the route prescribed by the Legislature.
I would apply the doctrine requiring the exhaustion of statutorily prescribed administrative remedies before allowing resort to the courts in this situation. The doctrine has been applied to controversies in which the department had power to act but the parties sought relief from the courts instead. Holyoke Water Power Co. v. Holyoke, 349 Mass. 442 (1965). It has also been applied where the Commissioner of Insurance had power to act with reference to insurance premiums but the parties resorted to the courts instead. Gordon v. Hardware Mut. Cas. Co., 361 Mass. 582 (1972). I would enforce the doctrine strictly in this case and in all other cases to which it is applicable. Only by doing so can our courts avoid being inundated by litigation involving controversies reserved for initial fact finding in administrative proceedings. East Chop Tennis Club v. Massachusetts Comm’n Against Discrimination, 364 Mass. 444 (1973).
The court in this case, in concluding that a Superior Court action is appropriate and that exhaustion of remedies from the department is unnecessary, relies in large part on our prior decisions holding that the department cannot order reimbursement of charges previously paid by customers under approved rates. Fryer v. Department of Pub. Utils., 374 Mass. 685, 690 (1978). Newton v. Department of Pub. Utils., 367 Mass. 667 (1975). While our prior decisions contain language which appears to leave the department totally without power to order such reimbursements, I would note that the question has never arisen under precisely the kind of allegations made here of fraud by the companies. In any event, I believe it is appropriate to consider the exact boundaries of the de*58partment’s power to order relief of the type the Attorney General now seeks in his actions at law. His appeals of the 1977 rate cases furnish a singularly appropriate vehicle for addressing and deciding this question. This court could decide in these appeals whether deliberate misrepresentations of the type alleged by the Attorney General to have been made by the companies to the department provide the appropriate circumstance for a corrective order by the department for the payment of refunds to the customers. See Daaleman v. Elizabethtown Gas Co., 77 N.J. 267 (1978).1
Resolution of the allegations of fraud and deception made by the Attorney General in the actions at law, and the computation of damages, if any, will of necessity involve technical questions of utility accounting practices and rate calculation procedures. The Attorney General has already presented these questions to the forum best equipped to handle them, that is, the department. Further relief may be forthcoming from the department as a consequence of the pending appeals of the Attorney General. I would foreclose the proliferation of parallel actions at law on these issues until all available administrative remedies and the judicial review thereof are exhausted. I would thus conserve our overtaxed judicial capability for the adjudication of legal questions after completion of the administrative process. East Chop Tennis Club v. Massachusetts Comm’n Against Discrimination, supra.
2. In my opinion, the comprehensive statutory scheme for the regulation of public utility rates applies equally to bar recovery by the Attorney General from the companies on the count under G. L. c. 93A, as it does on the count for common law fraud. It is true that we held in *59Dodd v. Commercial Union Ins. Co., 373 Mass. 72 (1977), that the statutes regulating the insurance industry did not bar an action under c. 93A for damages from alleged unfair and deceptive practices in the handling of claims against the insurer. However, it is also true that in Gordon v. Hardware Mut. Cas. Co., supra, we held that relief under c. 93A was not available as to premium rates because of the failure to exhaust administrative remedies provided by a statute relating to such rates.

The Nebraska Supreme Court, rejecting the argument that its Public Service Commission could not order rate rebates without explicit statutory authority to do so, stated its belief that as a corollary of the Commission’s regulatory power it must have the right to order rebates in appropriate circumstances. Myers v. Blair Tel. Co., 194 Neb. 55 (1975).