Court Opinion

ID: 9642983
Source: CourtListenerOpinion
Date Created: 2023-08-22 18:14:24.111458+00
Date Added: 2024-06-11T18:10:55.859852
License: Public Domain

Kern, Associate Judge,
concurring in part and dissenting in part: Although I agree with the majority’s affirmance generally, I am unable to accept its conclusion that the Office of People’s Counsel (OPC) may hire independent attorneys to carry out OPC’s duties and then bill the utilities and their customers for such costs.
*1111The late Adlai E. Stevenson in one of the pearls of speeches he cast before the electorate in his memorable 1952 campaign for President recounted — in order to make a point — an anecdote involving the Duke of Wellington. The Iron Duke, according to the Governor, commented to a companion after inspecting his troops in full array:
They may not frighten the enemy, by gad sir, they frighten me.1
So it is that the OPC has hired a remarkable array of Washington law firms to do legal battle with the Public Service Commission (PSC) and the local utilities on behalf of the utilities’ customers. While the former may not be frightened by the legions of lawyers thus assembled by OPC, the latter — the utilities’ customers who will ultimately pay the legal bills in the form of higher rates — certainly should be frightened. The bills recently presented by OPC’s legal shock troops for services rendered are electrifying: For example, Pepeo, alone, received bills for the services of independent attorneys retained by OPC, and related expenses, in the amount of more than $1,000,000 in less than three months of 1981. As stated, these bills are made a part of the rate base and passed on to the consumer in the form of higher rates.
The Public Service Commission (PSC), in its Order No. 7243, ruled that the utilities are “required to pay the fees of independent attorneys engaged by People’s Counsel to perform legal services.” PSC’s reason for so ordering was “because the Congress meant them to be.” However, there is nothing in the statute or its legislative history that bespeaks an intent on the part of Congress to authorize OPC to retain independent legal counsel to carry out its duties. Rather, Congress authorized People’s Counsel to hire his own legal staff with appropriations obtained in the usual budgetary way which every publicly-founded agency is required to follow.
PSC was in large measure impelled to its surprising conclusion by what it characterized as its own “longstanding practice” to engage for substantial fees independent attorneys to carry out its statutory duties. Proceeding from this premise PSC found “no basis” to conclude that Congress, when creating OPC, meant to deny OPC what PSC, in its own view, already had: authority to hire independent attorneys and bill the utilities and ultimately their customers — which is to say the residents of the District of Columbia.2
In this time of tight government budgets and declining appropriations it is easy to see why PSC would express concern, as it did in Order No. 7243, over the “difficulties inherent in a system for engaging lawyers that depended solely upon appropriations.” In short, PSC perceives that obtaining appropriations for lawyers for itself and for OPC by the traditional budgetary process through the Council and then the Congress is far more arduous than simply billing the utilities and its customers. No reasonable man could disagree with this perception. However, as is inevitable under our form of government, Congress made the ultimate decision that OPC must rely for the funding of its legal operations upon appropriation — the course normally followed by publicly funded agencies such as OPC.
The legislative history of OPC’s creation demonstrates the inaccuracy of PSC’s premise in its opinion under review here that *1112Congress “well knew” of the practice of PSC to hire for fee attorneys and then assess the utilities and their customers for the legal bills rendered.
PSC’s testimony concerning its own practice at the hearing on the proposal in 1974 to create OPC is most revealing. The then Chairman of PSC testified with precision as to the size of the PSC staff as follows (App. at 147):
[F]ive ... people are in our securities division, which regulates the brokerage industry here in Washington; three ... are engaged in the testing and calibration of meters; there is an engineer ...
We have a person ... handling consumer complaints. We have ... six or seven people in ... stenography, filing, keeping the records appropriately maintained.
We have two [full time] attorneys who are delegated to us from the corporation counsel’s office.
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And then we have an accounting bureau, of whom four members are paid through funds that we raise by assessment against the utilities. We keep a resident ... accountant in each utility, insuring ... a uniform system of accounting.
We have a chief accountant who is a GS-15.
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And then the array of six accountants who work for him. (Emphasis added.)
It may be seen that PSC Chairman Strat-ton made no reference at all in his detailed description of the PSC staff to any practice of retaining independent lawyers and assessing their cost to the utilities. In answer to the question whether PSC had an adequate staff, he replied (App. at 147):
I think some modest increases in staffing are in order, and we are going to recommend them ... in the budget process this year. (Emphasis added.)
Congressman Breckinridge then asked the PSC Chairman: to whom did PSC look “for advice in the area of economics in the industry”? The Chairman responded (App. at 147):
[T]here we engage outside experts. It is usually in the context of a rate case.... [I]n recent years we have always had rate cases from just about every utility, so we have had an expert available to us within that context to look into ... allocation factors ... among the jurisdictions, rate of return questions, rate of design questions. That kind of stuff. (Emphasis added.)
There ensued the following colloquy (App. at 147):
MR. BRECKINRIDGE. You suffer from no financial limitations or inhibitions in regard to the acquisition of those expert services?
MR. STRATTON. No, sir; because we do that in the context of a rate case by assessment against the utility.
There is a limitation in the statute as to how much to assess over the years, but we haven’t reached that.
MR. BRECKINRIDGE. That is a routine part of your practice in any rate case?
MR. STRATTON. Absolutely. (Emphasis added.)
Thus, the PSC practice at the time Congress created OPC was to use the assessment process to "engage outside experts ... to look into ... allocation factors, ... rate of return [and] rate of design questions.” Not a word was said by the PSC Chairman in his painstaking description of PSC’s assessment practice about retaining independent attorneys for legal work and then billing the utilities thereafter3
*1113Neither the Senate nor the House Report (App. at 92-3; 114-15) accompanying the proposed legislation to create an Office of People’s Counsel ever mentioned any practice by PSC of hiring attorneys and then assessing their fees to the utilities. Rather, the Reports noted the “[pjresent law ... that the expenses of the Public Service Commission itself for investigations, valuations, revaluations or other proceedings of utilities shall be assessed against the utility involved. These include the costs of expert witnesses, special accountants, or other extra costs incurred as a result of that particular proceeding or investigation. The basic salaries and expenses of the Public Service Commission are paid through the standard appropriations process.” It is worthy of note that the congressional reference to PSC’s practice of assessing for “expert witnesses” and “special accountants” simply tracked the testimony of the then PSC Chairman that the use of assessment was for “outside experts” on allocation, rate of return and rate design questions and for the special accountants resident in each of utilities.
The congressional committees went on to note in their reports (App. at 92-3; 114-15) that under the Act creating OPC “these same type of costs incurred by the People’s Counsel as a result of investigative or rate casework could be assessed against the utility. The basic salaries and expenses of the Office of People’s Counsel would be covered by the current authorization for the appropriations for the Public Service Commission.” (Emphasis added.)
The majority’s explanation for the reference in the Committee Reports to the as-sessability of expenses only for “expert witnesses” and “special accountants” is that such reference was “illustrative, not exclusive.” But, the majority’s conclusion to ignore what the Committee Reports say ascribes a considerable ignorance of the real world to the principal sponsors of the OPC legislation — Senator Eagleton, Senator Mathias, Congressman Adams and Congressman Breckinridge. These legislators were all experienced attorneys and were well aware of the fees of Washington law firms. Were the cost of such legal fees to be assessed in addition to expert witnesses and the accountants residing in the utilities, they never would have estimated in their reports to the Congress that “People’s Counsel would incur only $25,000 to $50,000 in assessments per year.” (App. at 96; 119.) 4
On the floor of the House Mr. Adams, the manager of the Bill, explained (App. at 121):
I do not believe it [the bill creating OPC] is controversial. Any sections that were controversial were removed by the Committee during its deliberations.
Had this legislation been intended to enable OPC to inflict upon the consumers of the District a million dollars worth of legal fees in three months by assessing that amount *1114to a utility and the'reby increasing its rate base, the sponsors would have made at least a single solitary reference to attorney fees as an assessable cost.
The ever-watchful Congressman Gross queried Congressman Adams (App. at 123) in floor debate as to the extent of any assessment against a utility company possible under the bill. Mr. Adams, in response, distinguished between “expenses” and “salaries in a rate case.” He stated (App. at 123):
We have estimated that if the expenses were paid in any case it would not exceed the largest amount ... in recent years which was between $75,000 and $100,000. This amounts to about 50 cents per residential user, if such expert witnesses are necessary to testify. (Emphasis added.)
He went on to explain that the People’s Counsel “has a regular salary and appears before the Commission ... [N]ow we cannot use the Corporation Counsel’s office because the Corporation Counsel represents the Public Service Commission ... [t]he cost of such counsel is the same as though they were going to hire a lawyer. We are not talking about the expenses that may be incurred for the various cases such as for expert witnesses, court costs and so forth, but the cost of an individual who is going to represent the people.... ”
After the Senate added a proviso to the Bill which established a three-year term for the People’s Counsel and fixed the maximum of a GS-16 for the salary of his office, House District Committee Chairman Diggs explained (App. at 128) that People’s Counsel “would be responsible for representing the people of the District of Columbia at hearings of the Commission and in judicial proceedings involving the interest of consumers regarding public utility services.” Again, not a single mention was made to the House that OPC was authorized to engage outside attorneys. However, Chairman Diggs did point out (App. at 128) that People’s Counsel “was authorized to employ and fix compensation of employees necessary to perform the functions vested in him.” An authorization of $100,000 was fixed for the fiscal year 1976.
The pernicious effect of the majority’s decision is to transmogrify the People’s Counsel from “a [legal] representative of the people,” as envisioned by the congressional creators of the Office, into the paymaster of law firms and private attorneys within the District. According to the briefs, OPC is participating in many different proceedings and has retained by fee arrangement scores of lawyers to participate in such proceedings. Even given the concededly considerable ability of the People’s Counsel, he cannot at one and the same time hire and oversee the legal work in so many different cases of so many different attorneys who are not on his staff and also represent “the people of the District of Columbia at hearings of the Commission and in judicial proceedings”— to use Chairman Diggs’ phrase of explanation to the House of the function of People’s Counsel. Since the Congress clearly did not intend such a result, I respectfully dissent.5
*1115DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 81-302, 81-303, and 81-305
Washington Gas Light Company,
Office of People’s Counsel,
Potomac ElectRic Power Company, PETITIONERS,
V.
Public Service Commission of the
District of Columbia, respondent.
Chesapeake & Potomac Telephone
Company, intervenor.
ON PETITIONS FOR REHEARING EN BANC
(Argued March 14, 1983 Decided September 30, 1983)
Before Newman, Chief Judge, Kern,* Ne-beker, Mack, Ferren, Pryor, Belson, and Terry, Associate Judges, and ** Kelly, Associate Judge, Retired.
JUDGMENT
The petitions of appeal from an order of the Public Service Commission of the District of Columbia (the “Commission”) came before the court sitting en banc upon the certified administrative record and the pleadings and briefs of the parties and were argued by counsel. On consideration thereof, it is
ORDERED and ADJUDGED that Order 7211 of the Commission is affirmed by an equally-divided court.
For the Court:
/s/ Alan I. Herman
Alan I. Herman
Clerk

. Stevenson had been chided by various Republican speakers campaigning on behalf of General Eisenhower for “bad judgment” in testifying as to the reputation of Alger Hiss in the latter’s sensational trial for perjury. In the Governor's October 23rd speech in Cleveland he recalled the anecdote and observed “to the General [Eisenhower] that although his troops do not frighten us they ought to frighten him [Eisenhower]." Major Campaign Speeches of Adlai B. Stevenson (Random House 1952) p. 274.

. PSC has indeed billed significant sums to the utilities and their customers for the attorneys it has retained on a fee basis to carry out its own duties. For example, during an 11-month period, PSC billed the utilities and their customers slightly less than $1,000,000 for services rendered by almost 15 different lawyers and law firms and similar entities.

. In Order No. 7211, PSC acknowledged that the statute authorizing OPC to assess against the utilities "certain” of its expenses "does not specifically refer to fees for independent attorneys as an assessable expense.” However, PSC went on to opine that the authority to so assess is "a reasonable reading of the statute" since "the sheer volume of legal work necessary to represent adequately the public interest may be be*1113yond the capabilities of the People’s Counsel and the OPC staff attorneys.”
While it has been said that necessity is the mother of invention, this innovative reading of the statute conflicts with the legislative history of OPC’s creation. The Senate Committee recognized (App. at 91) that "People’s Counsel ... will not be able to represent all interests of all consumers.” (Emphasis added.) People’s Counsel was expected to use some selectivity in the exercise of his responsibility on behalf of consumers; as the then PSC Chairman commented in a statement affixed to the Senate Report (App. at 110):
There will be cases, and they will come very early in the career of the People’s Counsel, in which a selection will have to be made from among the many causes who seek his representation. He will have to make choices, not only because he can’t represent every interest no matter how vast his resources, but because these interests are often themselves in conflict.

. This estimate was predicated on the cost of the PSC practice, which as noted, was to engage and then assess for (1) outside expert witnesses for ratc cases and (2) the four resident accountants. "Normally,” according to these sponsors of OPC legislation (App. at 96, 119), assessments by PSC "are under $100,000” and the "highest amount the PSC has ever assessed was $224,500.”

. Moreover, I note that the legislative history (App. at 94) indicates that "[t]he basic expenses of the Office of People’s Counsel, including salaries, rent, supplies, telephones, and equipment” will be covered by appropriations. Thus, I disagree with the conclusion of the majority in Part IV.B of its opinion also that utilities and their customers must pay “extraordinary incremental expenses” of a pending proceeding when they are "episodic” expenses. Apparently, we must rely upon the ability of PSC to employ the same kind of instinctive test Mr. Justice Stewart suggested in Jacobellis v. Ohio, 378 U.S. 184, 194, 84 S.Ct. 1676, 1681, 12 L.Ed.2d 793 (1964) (concurring), for determining what is pornography: PSC will know an extraordinary incremental expense when it sees it. Needless to say, Congress, in appropriating public monies for operating PSC and OPC and all other governmental agencies, never intended that PSC could determine so casually what expenses OPC may inflict upon District consumers.

 Judge Nebeker did not participate in the decision of these cases.

Judge Kelly was an Associate Judge of the court at the time of oral argument. Her status changed to Associate Judge, Retired, on March 31, 1983.