Peggy Zahn v. North American Power & Gas, LL , 815 F.3d 1082 ( 2016 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-2332
PEGGY ZAHN,
Plaintiff-Appellant,
v.
NORTH AMERICAN POWER & GAS, LLC,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division
No. 14 C 8370 — Virginia M. Kendall, Judge.
____________________
ARGUED DECEMBER 2, 2015 — DECIDED MARCH 4, 2016
____________________
Before KANNE and SYKES, Circuit Judges, and GILBERT, Dis-
trict Judge. ∗
KANNE, Circuit Judge. Prior to 1997, Illinois did not have a
competitive electricity market. Residents could only pur-
chase power from the local public utility, whose rates were
∗The Honorable J. Phil Gilbert, of the United States District Court for the
Southern District of Illinois, sitting by designation.
2 No. 15-2332
regulated by the Illinois Commerce Commission (“ICC”). If
a resident had a dispute regarding rates or charges and
wanted to recover damages, then the resident had to file a
claim against the public utility with the ICC because it had
exclusive jurisdiction to hear such claims under the Public
Utilities Act. Sheffler v. Commonwealth Edison Co., 955 N.E.2d
1110, 1122–23 (Ill. 2011). The Illinois Supreme Court’s histori-
cal justification for holding that the ICC has exclusive juris-
diction is the role it plays in reviewing and approving public
utilities’ rates. Id.In 1997, the Illinois General Assembly decided to create a
competitive electricity supply market. After the passage and
implementation of the Electric Service Customer Choice and
Rate Relief Law of 1997 (“Rate Relief Law”), residents could
choose to buy electricity from their local public utility, an
electric utility other than their local public utility, or an Al-
ternative Retail Electric Supplier (“ARES”). Because the Rate
Relief Law’s intended effect was to partially deregulate Illi-
nois’s electricity market, 1 the ICC was not given ratemaking
authority over ARESs. The law did, however, explicitly grant
the ICC certain oversight responsibilities over ARESs. See
220 ILCS 5/16-115A–115B. What the Rate Relief Law did not
do though was explicitly provide a mechanism by which res-
1 Prior to the enactment of the Rate Relief Law, consumers purchased a
“bundled” service from their local electric utility. Commonwealth Edison
Co. v. Ill. Commerce Comm’n, 767 N.E.2d 504, 506 (Ill. App. Ct. 2002). This
“bundled” service included: (1) electricity generation, i.e. supply, (2) dis-
tribution, and (3) delivery to a consumer’s home. Id. The Rate Relief Law
sought to “unbundle” these services. Id. Our concern here is only the first
component—electricity suppliers.
No. 15-2332 3
idents could file a claim to recover damages from an ARES
related to the rates it charged.
Plaintiff Peggy Zahn contends this omission was no acci-
dent. According to Zahn, Illinois lawmakers did not intend
to give the ICC exclusive jurisdiction over claims like hers,
i.e., statutory fraud, breach of contract, and unjust enrich-
ment claims due to overcharging by an ARES. Defendant
North American Power & Gas, LLC (“NAPG”), an ARES, ar-
gues that the Rate Relief Law does provide Zahn her cause
of action and remedy, and, therefore, the ICC has exclusive
jurisdiction to hear her claims. The district court below
agreed with NAPG and granted its motion to dismiss for
lack of subject-matter jurisdiction, as well as for failure to
state a claim.
The question of whether the ICC has exclusive jurisdic-
tion to hear Zahn’s claims presents an important question of
Illinois state law on which the Illinois appellate courts ap-
pear in conflict. It is a question that most certainly will occur
in future lawsuits unless resolved. Rather than decide it in
the absence of controlling Illinois Supreme Court precedent
and in the face of conflicting case law, we conclude the ques-
tion before us is a candidate for certification to the Illinois
Supreme Court.
Under Circuit Rule 52, we may sua sponte certify a ques-
tion to a state court if “the rules of the highest court of a state
provide for certification to that court by a federal court of
questions arising under the laws of that state which will con-
4 No. 15-2332
trol the outcome of a case pending in the federal court.”2 Il-
linois Supreme Court Rule 20 provides in relevant part that
certification to it is proper when “there are involved in any
proceeding before [the Seventh Circuit] questions as to the
law of this State, which may be determinative of the said
cause, and there are no controlling precedents in the deci-
sions of this court … .” Additionally, in evaluating whether a
case is appropriate for certification, we have looked at
whether the case “concerns a matter of vital public concern,”
involves an issue “likely [to] recur in other cases,” and
whether “the state supreme court has yet to have an oppor-
tunity [to] illuminate a clear path on the issue.” Plastics Eng’g
Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 659 (7th Cir. 2008)
(citation and quotation marks omitted). That is why ques-
tions tied to specific facts from a case are generally “not suit-
able for certification to a state's highest court.” State Farm
Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 672 (7th Cir. 2001)
(citation and quotation marks omitted).
All the requirements for certification are present here.
First, should the Illinois Supreme Court determine that the
ICC has exclusive jurisdiction over Zahn’s claims, then Zahn
has failed to state a claim in federal court. In other words, a
decision from the Illinois Supreme Court could be outcome
determinative. Second, the question at issue here requires
application and interpretation of state utility law, as well as a
determination on whether Illinois residents can bring claims
against an ARES in state court. Such questions are undoubt-
edly of vital public concern. Third, this issue—unless re-
2 Neither party at oral argument expressed any opposition to us certify-
ing this controlling question of law to the Illinois Supreme Court.
No. 15-2332 5
solved by the Illinois Supreme Court—will likely be raised
by other ARESs who are sued by Illinois residents in state
and federal court. Finally, as we discuss below, the Illinois
Supreme Court has not “illuminate[d] a clear path on the is-
sue.” Plastics Eng’g Co., 514 F.3d at 659.
In reaching our decision to utilize certification, we initial-
ly examined the issue presented as set forth below.
I. BACKGROUND
When reviewing a motion to dismiss, we must accept all
facts in Zahn’s complaint as true. Crenshaw v. Baynerd, 180
F.3d 866, 868 (7th Cir. 1999). In August 2012, Zahn decided
to purchase her electricity from NAPG, after receiving an
offer promising lower electricity rates. NAPG then sent Zahn
a letter in which it stated Zahn would receive its “New Cus-
tomer Rate” of $.0499 per kilowatt hour in her first month of
service. Thereafter, NAPG promised Zahn in the letter that
she would receive a “market based variable rate.”
NAPG also sent Zahn an “Electricity Sales Agreement
Customer Disclosure Statement.” NAPG stated that “[o]ther
than fixed and/or introductory/promotional rates, all rates
shall be calculated in response to market pricing, transporta-
tion, profit and other market price factors.” Also in the
statement, NAPG disclosed under the heading “Open Price”
that its prices were “variable” based on “market prices for
commodity, transportation, balancing fees, storage charges,
[NAPG] fees, profit, [and] line losses … . Your price may be
higher or lower than Your [local public utility] … .” The
agreement’s term was month-to-month.
Zahn never received NAPG’s “New Customer Rate” of
$.0499 per kilowatt hour. Instead, NAPG charged her $.0599
6 No. 15-2332
per kilowatt hour in September and October 2012. And after
those first two months of service, NAPG charged a rate
higher than Zahn’s local public utility, Commonwealth Edi-
son Company (“ComEd”), during the period from Novem-
ber 2012 through June 2014. At times, NAPG charged nearly
triple what ComEd would have charged Zahn.
Zahn filed a class-action complaint against NAPG in Oc-
tober 2014 in which she alleged violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act,
breach of contract, and unjust enrichment. According to
Zahn, NAPG engaged in a “classic bait-and-switch deceptive
marketing scheme,” luring customers with low teaser rates
and promises of “market pricing.” Those promises, Zahn
contended, are misleading because NAPG’s electricity rates
are “substantially higher than market rates.”
NAPG moved to dismiss Zahn’s complaint for lack of
subject-matter jurisdiction and failure to state a claim upon
which relief can be granted pursuant to Federal Rules of Civ-
il Procedure 12(b)(1) and (b)(6), respectively. The district
court granted NAPG’s motion to dismiss for lack of subject-
matter jurisdiction, and in the alternative, for failure to state
a claim. Zahn appealed.
II. ANALYSIS
The district court, Zahn, and NAPG have characterized
the question of whether the ICC enjoys exclusive jurisdiction
over Zahn’s claims as one of subject-matter jurisdiction. It is
not. States do not have the power “to enlarge or contract
federal jurisdiction.” Beach v. Owens-Corning Fiberglas Corp.,
No. 15-2332 7
728 F.2d 407, 409 (7th Cir. 1984). 3 Only Congress has the con-
stitutional authority to limit the district court’s jurisdiction,
which, in this case, would require the altering of 28 U.S.C.
§ 1332. See Begay v. Kerr-McGee Corp., 682 F.2d 1311, 1316 (9th
Cir. 1982); Markham v. City of Newport News, 292 F.2d 711, 713
(4th Cir. 1961).
States do, however, “have the power to prevent the fed-
eral court from granting relief in a diversity case by denying
the substantive right of action asserted.” Begay, 682 F.2d at
1315. That is because diversity actions “involve rights creat-
ed by a state, rights which are subject to definition, limita-
tion and, frequently, negation by the state.” Markham, 292
F.2d at 713.
NAPG’s argument that the district court lacked subject-
matter jurisdiction is miscast. Zahn properly invoked the
district court’s diversity jurisdiction pursuant to 28 U.S.C.
§ 1332(d). NAPG’s challenge is in fact one to the subject-
matter jurisdiction of an Illinois state court. If an Illinois state
court does not have jurisdiction to hear Zahn’s claim, then
Zahn has failed to state a claim upon which relief may be
granted in a federal court sitting in diversity. See Tacket v.
Gen. Motors Corp., Delco Remy Div., 93 F.3d 332, 334 (7th Cir.
1996); Beach, 728 F.2d at 409.
3 The district court relied in part on Glebocki v. City of Chicago, 32 F. App’x
149, 154–55 (7th Cir. 2002), for the proposition that a federal court sitting
in diversity is without subject-matter jurisdiction if state law vests exclu-
sive jurisdiction over a state-law claim with a state agency. Glebocki is an
unpublished order that provides no precedential support for this conclu-
sion.
8 No. 15-2332
We review de novo a district court’s decision to dismiss
for failure to state a claim upon which relief may be granted.
Jackson v. Bank of Am. Corp., 711 F.3d 788, 791 (7th Cir. 2013).
In determining a complaint’s sufficiency, “we construe it in
the light most favorable to the nonmoving party, accept
well-pleaded facts as true, and draw all inferences in her fa-
vor.” Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th
Cir. 2010) (quotation marks omitted). To survive a motion to
dismiss, the plaintiff must allege “sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). We need
not, however, “accept as true any legal assertions or recital
of the elements of a cause of action supported by mere con-
clusory statements.” Vesely v. Armslist LLC, 762 F.3d 661,
664–65 (7th Cir. 2014) (quotation marks and citation omit-
ted).
Because this is a diversity case, state substantive law con-
trols, which means we will attempt to interpret and apply
Illinois law. Blood v. VH-1 Music First, 668 F.3d 543, 546 (7th
Cir. 2012). Because there is no Illinois Supreme Court deci-
sion on point, we must “use our own best judgment to esti-
mate how the [Illinois] Supreme Court would rule as to its
law.” Valerio v. Home Ins. Co., 80 F.3d 226, 228 (7th Cir. 1996).
While not bound by decisions of Illinois’s lower courts, we
must still “give great weight to the holdings of the state's in-
termediate appellate courts and ought to deviate from those
holdings only when there are persuasive indications that the
highest court of the state would decide the case differently.”
Allstate Ins. Co. v. Menards, Inc., 285 F.3d 630, 637 (7th Cir.
2002).
No. 15-2332 9
A. History of ICC’s Jurisdiction Over Reparation Claims
Illinois enacted the Public Utilities Act in 1921, which es-
tablished the ICC. 4 1921 Ill. Laws 702. The Illinois Supreme
Court has long recognized that the ICC “exists for the func-
tion of maintaining a balance between the rates charged by
utilities and the services performed.” Vill. of Apple River v. Ill.
Commerce Comm'n, 165 N.E.2d 329, 332 (Ill. 1960). The ICC’s
role was then and still is to ensure that those rates are “just
and reasonable.” 1921 Ill. Laws at 722; 220 ILCS 5/9-201(c).
To accomplish this goal, Illinois vested in the ICC “very
broad powers,” including the power to “approve rates” of
public utilities. Vill. of Apple River, 165 N.E.2d at 332. In de-
termining whether rates are “just and reasonable,” the ICC
employs “technical data and expert opinion, as well as com-
plex technological and scientific data, [which] make it essen-
tial that the matter be considered by a tribunal that is itself
capable of passing upon complex data.” Sheffler v. Common-
wealth Edison Co., 955 N.E.2d 1110, 1122 (Ill. 2011) (quotation
marks omitted).
Illinois also expressly granted the ICC the power to hold
hearings and decide complaints against a “public utility” al-
leged to have “charged an excessive or unjustly discrimina-
tory amount for its product, commodity or service.” 220
ILCS 5/9-252. Section 9-252 provides the ICC the authority to
4 The predecessor to the ICC was the Illinois Public Utilities Commis-
sion, which was created by statute in 1913. 1913 Ill. Laws 459; Valier Coal
Co. v. Dep't of Revenue, 143 N.E.2d 35, 36 (Ill. 1957) (“[T]he Illinois Public
Utilities Commission [was the] predecessor of the present Illinois Com-
merce Commission.”).
10 No. 15-2332
“order that the public utility make due reparation to the
complainant therefor, with interest at the legal rate from the
date of payment of such excessive or unjustly discriminatory
amount.” Id.The Illinois Supreme Court has relied upon Section 9-252
along with the ICC’s technical expertise in determining “just
and reasonable” rates as the basis for holding that the ICC
has “exclusive jurisdiction over rates” involving public utili-
ties. Sheffler, 955 N.E.2d at 1122. This conclusion that the ICC
has exclusive jurisdiction over reparation claims is not a new
invention. The Illinois Supreme Court has long “recognized
that the ‘evident intent and purpose of the legislature in
providing a method by which reparation may be recovered
and in requiring that an application therefor shall be first
made to the commission, precludes an action at law for such
reparation until the commission has heard a claim therefor.’”
Id. at 1123 (quoting Terminal R.R. Ass’n of St. Louis v. Pub.
Utils. Comm’n, 136 N.E. 797, 799 (Ill. 1922)). That “exclusive
jurisdiction over rates” also extends to complaints involving
a public utility’s “infrastructure and its provision of electri-
cal services” because “rates and service are inextricably tied
together.” Id. at 1126, 1125. 5
5 The ICC’s exclusive jurisdiction does not, however, extend to claims
“when the essence of the complaint is that the utility has done some-
thing” other than “charged too much for a service.” Sheffler v. Common-
wealth Edison Co., 955 N.E.2d 1110, 1123 (Ill. 2011). Illinois courts have
referred to such an action as one for “civil damages” rather than for rep-
arations. See, e.g., Flournoy v. Ameritech, 814 N.E.2d 585, 587 (Ill. App. Ct.
2004). On appeal, Zahn does not argue that her claims fall within the
“civil damages” category and therefore are exempt from the ICC’s exclu-
sive jurisdiction on those grounds.
No. 15-2332 11
B. Statutory Interpretation
Because the question before us involves the interpreta-
tion of an Illinois statute, we apply Illinois’s rules of statuto-
ry construction. Carter v. Tennant Co., 383 F.3d 673, 682 (7th
Cir. 2004). Illinois’s “primary rule of statutory construction is
to ascertain and give effect to the intent of the legislature.”
People v. Donoho, 788 N.E.2d 707, 715 (Ill. 2003). There is no
better indicator of that intent than the “clear language of the
statute.” People v. NL Indus., 604 N.E.2d 349, 355 (Ill. 1992).
Statutes must not be read in isolation but “as a whole; all
relevant parts of the statute must be considered when courts
attempt to divine the legislative intent underlying the stat-
ute.” Id. at 356.
1. Defining a “Public Utility” under the Public Utilities Act
We begin with the text of the Rate Relief Law and Public
Utilities Act. NAPG contends that it is a “public utility”
within the meaning of the Public Utilities Act, and therefore,
the ICC has exclusive jurisdiction over Zahn’s claims. The
ICC agrees with the conclusion that an ARES is a “public
utility.” See Chiku Enters. Inc. v. GDF Suez Energy Res. NA,
Inc., No. 10-0157, 2011 WL 1474049, at *8 (Ill. Commerce
Comm’n Apr. 12, 2011) (stating that an ARES “engaged in
furnishing utility services in Illinois” was “a public utility
within the meaning of Section 3-105 [of] the Illinois Public
Utilities Act”). So too does an Illinois appellate court, albeit
implicitly and in an unpublished decision. See SRT Enters,
Inc. v. Direct Energy Bus., LLC, No. 1-12-2760, 2013 WL
3379245, at *4–5 (Ill. App. Ct. June 28, 2013) (equating an
ARES with a “public utility” for the purposes of Section 9-
252).
12 No. 15-2332
Zahn has a different take and argues that a plain reading
of the Public Utilities Act and Rate Relief Law reveals that
the ICC has concurrent, not exclusive, jurisdiction over her
claims. The Public Utilities Act does explicitly exclude
ARESs from the definition of “public utility.” 220 ILCS 5/3-
105(b)(9)(“‘Public utility’ does not include … alternative re-
tail electric suppliers … .”). This particular revision to the
definition of “public utility” was made in the Rate Relief
Law, which created ARESs in the first instance. 1997 Ill.
Laws 6195, 6264–65. Thus, the legislature may have intended
to exclude ARESs from the ambit of other provisions apply-
ing to a “public utility” within the Public Utilities Act, in-
cluding Section 9-252. As noted earlier, Section 9-252 states
that the ICC has jurisdiction to hear reparation claims
against a “public utility.”
The Rate Relief Law’s definitions and applicability sec-
tion also suggest that Section 9-252 may not apply to ARESs.
First, the Rate Relief Law states that an “electric utility” is “a
public utility, as defined in Section 3–105 of this Act,” which,
as already discussed, specifically excludes an ARES from its
definition. 220 ILCS 5/16-102. The legislature then excluded
“electric utilities” from the definition of an ARES. Id. This
definition could be read as the legislature deliberately dis-
tinguishing between an “electric utility” and an ARES for the
purposes of the Rate Relief Law and the Public Utilities Act.
Second, the applicability section states, in relevant part,
that the Rate Relief Law “appl[ies] to electric utilities and al-
ternative retail electric suppliers as defined in this Article,”
that is, the Rate Relief Law. 220 ILCS 5/16-101(a) (emphasis
added). The next sentence provides:
No. 15-2332 13
Except to the extent modified or supplemented by
the provisions of this Article, or where the context
clearly renders such provisions inapplicable, the
other Articles of the Public Utilities Act pertaining
to public utilities, public utility rates and services
and the regulation thereof, are fully and equally
applicable to the tariffed services electric utilities
provide.
Id. (emphasis added). The legislature appears to have made
a decision to not only refer to “electric utilities” and ARESs
separately but also to exclude ARESs from the sentence stat-
ing that the remainder of the Public Utilities Act would ap-
ply to “electric utilities.” Such an omission suggests that the
legislature may have intended for the remainder of the Pub-
lic Utilities Act to apply only to “electric utilities” and not
ARESs. See Solich v. George & Anna Portes Cancer Prevention
Ctr. of Chi., Inc., 630 N.E.2d 820, 822 (Ill. 1994) (“Where, as
here, a statute lists the things to which it refers, there is an
inference that all omissions should be understood as exclu-
sions, despite the lack of any negative words of limitation.”).
2. The Legislature’s Stated and Implied Intent
Beyond the text, the parties argue the purpose for enact-
ing this complicated deregulatory scheme supports their in-
terpretation of the statute.
Zahn contends that the legislature’s decision to forego
providing a “comprehensive regulatory scheme to regulate
ARESs,” including a provision granting the ICC exclusive
jurisdiction over reparation claims, makes sense given the
reason for enacting the Rate Relief Law in the first place.
(Appellant’s Br. at 13.) According to Zahn, the legislature’s
14 No. 15-2332
purpose in passing the Rate Relief Law was “to deregulate
the electricity market to allow for competition.” (Id.)
Zahn’s interpretation of the legislature’s intent here is
plausible. In enacting the Rate Relief Law, the legislature
stated that it wanted to allow Illinois consumers the choice
to purchase their electricity from suppliers in a competitive
market while assuring that they could still buy power from a
traditional utility offering regulated rates. See 220 ILCS 5/16-
101A(a)–(c); 220 ILCS 5/16-103. To do so, the legislature al-
lowed traditional public utilities, referred to as “electric
utilit[ies],” the opportunity to offer deregulated rates, so
long as they continued to offer regulated rates within their
previous service area. 220 ILCS 5/16-113 (process by which
an “electric utility” has its service determined to be a “com-
petitive”); 220 ILCS 5/16-103 (requiring an “electric utility”
to offer regulated rates to its service area). It then allowed
other market entrants, called ARESs, the chance to supply
and sell electricity on the partially deregulated supply mar-
ket. See, e.g., 220 ILCS 5/16-115 (ARES certification process).
The legislature also appears to have wanted to spare ARESs
from the Public Utilities Act’s provisions regulating utilities’
rates. No party disputes that an ARES does not have to
submit its rates to the ICC for approval under the “just and
reasonable” standard. Yet, if the entirety of the Public Utili-
ties Act applied to ARESs, an ARES like NAPG would be so
required.
Also plausible is NAPG’s position that the legislature
wanted the ICC to have exclusive jurisdiction over repara-
tion claims involving ARESs to assure that certain “safe-
guards” were in place to protect the “public’s interest” as
Illinois’s competitive electricity market developed. See 220
No. 15-2332 15
ILCS 5/16-101A(c). In the Rate Relief Law’s legislative find-
ings, the legislature stated it wanted “[c]onsumer protec-
tions … in place to ensure that all customers continue to re-
ceive safe, reliable, affordable, and environmentally safe
electric service” and for the ICC to “promote the develop-
ment of an effectively competitive electricity market that op-
erates efficiently and is equitable to all consumers.” Id. at
5/16-101A(d). From this stated intent, NAPG concludes the
ICC has the power to “govern ARESs and public utilities
alike,” and therefore, has exclusive jurisdiction to hear repa-
ration claims. (Appellee’s Br. at 7–8.)
3. Safeguards, Consumer Protections, and Remedies
The safeguards and consumer protections to which
NAPG refers can be found in Sections 16-115A and 115B. 220
ILCS 5/16-115A–115B. Section 16-115A requires an ARES to,
amongst other obligations, comply with requirements relat-
ing to adequate disclosure of pricing and terms and condi-
tions of service in marketing materials and billing state-
ments. And Section 16-115B(a) grants the ICC power to en-
force violations of Section 16-115A while also providing that
the ICC “shall have jurisdiction … to entertain and dispose
of any complaint against any [ARES] alleging … that an
[ARES] serving retail customers … has failed to provide ser-
vice in accordance with the terms of its contract or contracts
with such customer or customers.” 6 Zahn’s claims appear to
6 As an aside, it should be noted that we are unsure if “retail customer”
means a residential consumer like Zahn. The Rate Relief Law defines
“retail customer” in relevant part to be:
a single entity using electric power or energy at a single
premises and that (A) either (i) is receiving or is eligible
(continued…)
16 No. 15-2332
fit into these categories, as her claims turn on whether
NAPG falsely represented the rates it would offer consumers
like her.
It is much less certain though whether the ICC has au-
thority to order NAPG to pay reparations to Zahn for violat-
ing Section 16-115A or breaching its contract. To enforce vio-
lations of Section 16-115B and/or breaches of service con-
tracts involving a “retail customer,” the legislature gave the
ICC the power to enjoin and/or fine an ARES. 220 ILCS 5/16-
115B(b). The legislature did not, however, give the ICC ex-
plicit authority to order that financial remedies be made to
consumers for such violations or breaches. Failure to provide
a financial remedy for consumers may suggest that the ICC
does not have exclusive jurisdiction over such claims. See
Getto v. City of Chicago, 396 N.E.2d 544, 549 (Ill. 1979) (hold-
ing that where the ICC’s jurisdiction was lacking in provid-
ing a consumer complete relief in its claim involving a tele-
phone utility, the circuit court had jurisdiction).
NAPG insists, however, that the Rate Relief Law does
provide a financial remedy for consumers—albeit implied.
NAPG finds support for its contention in Section 16-115B’s
incorporation of Article X, which includes provisions “ad-
(…continued)
to receive tariffed services from an electric utility, or (ii)
that is served by a municipal system or electric coopera-
tive within any area in which the municipal system or
electric cooperative is or would be entitled to provide
service under the law in effect immediately prior to the
effective date of this amendatory Act of 1997.
220 ILCS 5/16-102.
No. 15-2332 17
dress[ing] the ICC’s jurisdiction to issue orders granting or
denying a consumer’s rate relief.” (Appellee’s Br. at 12.) And
NAPG contends that nothing in Section 16-115B states that
financial penalties paid by an ARES for violating Section
115A or breaching its contract with a “retail customer” must
go into the state coffers. The implication of these assertions is
that Zahn could be the recipient of part or all of the proceeds
from such a fine.
In contrast, Zahn sees Sections 16-115A–115B as support-
ing her position. As Zahn notes, Sections 16-115A and 115B
specifically incorporate “Sections 8-201 through 8-207, 8-301,
8-505, or 8-507” of the Public Utilities Act, sections that ad-
dress service obligations. 220 ILCS 5/16-115B(a)(iv). Through
Sections 16-115A and 115B, the ICC has authority to hear
complaints regarding failure to comply with those obliga-
tions and enjoin and or order financial penalties if a violation
occurred. But, as Zahn points out, none of these sections ad-
dress reparations for overcharging. The implication of
Zahn’s argument here and elsewhere in her briefs is that leg-
islature intended the Rate Relief Law to be the sole source of
law regulating ARESs, absent a specific incorporation by ref-
erence of other provisions from the Public Utilities Act. Such
an argument has persuasive value because otherwise the leg-
islature’s specific incorporation of “Sections 8-201 through 8-
207, 8-301, 8-505, or 8-507” would be redundant. See Balmoral
Racing Club, Inc. v. Topinka, 778 N.E.2d 239, 243 (Ill. App. Ct.
2002) (“We will not interpret the statute in a manner that
creates a redundancy.”)
As for Article X, it appears to be, as Zahn suggests, “ad-
ministrative in nature.” (Appellant’s Reply Br. at 12). Indeed,
NAPG described Article X as “set[ting] out the procedure of
18 No. 15-2332
the ICC for hearing complaints by outlining its investigative
powers, case management conferences, [and] hearing proce-
dures.” (Appellee’s Br. at 12.) According to Zahn, NAPG’s
reliance on the provision in Article X stating that the ICC
may issue orders “granting or denying interim rate relief” is
misplaced. See 220 ILCS 5/10-201(a). Zahn views this provi-
sion “not [as] an independent grant of authority allowing the
ICC to order rate relief in any instance,” but instead as a
“provision that allows for an appeal of a rate relief order in
those circumstances in which the ICC is authorized to issue
such an order.” (Appellant’s Reply Br. at 12.) No other pro-
visions in Article X appear to vest substantive authority in
the ICC to hear reparation claims.
In response to NAPG’s assertion that Section 16-115B did
not prohibit the ICC from ordering an ARES to make repara-
tions to consumers for violating Section 16-115A or breach-
ing its contract, Zahn directs us to 220 ILCS 5/4-203(d). That
provision states, in relevant part, that “all other fines and
civil penalties” other than those relating to “late filing of re-
ports, taxes, or other filings,” are to “be paid into the State
treasury to the credit of the General Revenue Fund.” Id. Such
a statement by the legislature, according to Zahn, suggests
that if the legislature wanted to allow the ICC to order repa-
rations, it needed to do so explicitly in order to modify this
general rule. 7
7 NAPG also appears to suggest both in its brief and at oral argument
that because the ICC has resolved reparation claims against other ARESs,
it has exclusive jurisdiction to do so here. (Appellee’s Br. at 17 n.2.) Be-
cause this argument appears in a footnote and is underdeveloped, it is
difficult to determine with precision what point it is trying to make. We
(continued…)
No. 15-2332 19
The foregoing statutory analysis does not resolve the
question regarding whether the ICC has exclusive jurisdic-
tion over Zahn’s claims. While it appears the ICC has juris-
diction to hear complaints similar to Zahn’s, it is by no
means clear that it has exclusive jurisdiction over them. Nor
does our analysis of the parties’ arguments lead us to con-
clude that the ICC’s jurisdiction is only concurrent with a
state court’s. We turn then to Illinois state precedent to see
what, if any, light it may shed on this question.
C. Illinois Court and ICC Application of Deregulatory Statutes
We are unaware of any Illinois Supreme Court precedent
directly addressing the question before us, and the parties
do not direct us to such a decision. So, we turn to other Illi-
nois precedent to see if it can guide our way.
NAPG relies principally on SRT Enterprises, Inc. v. Direct
Energy Business, LLC, No. 1-12-2760, 2013 WL 3379245 (Ill
App. Ct. June 28, 2013) and Chiku Enterprises Inc. v. GDF Suez
Energy Resources NA, Inc., No. 10-0157, 2011 WL 1474049 (Ill.
Commerce Comm’n. Apr. 12, 2011) to support its contention
that the ICC has exclusive jurisdiction here. SRT Enterprises
appears to be the only Illinois appellate court to address the
(…continued)
hazard to guess that NAPG may be attempting to advance a legislative
acquiescence argument. See People ex rel. Birkett v. City of Chi., 779 N.E.2d
875, 881, 885 (Ill. 2002) (describing and applying the doctrine). Though it
is not uncommon for an agency to exceed its statutory authority, see, e.g.,
Weingart v. Department of Labor, 521 N.E.2d 913, 920 (Ill. 1988) (finding
agency exceeded its statutory authority to hear a claim), we need not
resolve NAPG’s underdeveloped argument here, as the Illinois Supreme
Court would be better positioned to evaluate this argument.
20 No. 15-2332
question before us. There, the appellate court assumed that
Section 9-252 applied to ARESs in holding that the ICC has
exclusive jurisdiction over consumer reparation claims
against an ARES. SRT Enters., 2013 WL 3379245, at *3.8 It did
so without reference to or consideration of the definition of
“public utility” within the Public Utilities Act. Relying on
this assumption, the court then cited to opinions applying
Section 9-252 to conclude that “Sections 16–115A and 16–
115B of the Act provide specific causes of action and reme-
dies for plaintiff's claims. As a result, the statutory claim su-
persedes any common law claim based on the same facts.”
Id. at *6.
We are uncertain if the Illinois Supreme Court would fol-
low the SRT Enterprises decision. The court did not discuss
or consider that the legislature excluded an ARES from the
definition of “public utility.” It is possible that there is a pol-
icy justification for this decision, but the Illinois appellate
court did not provide it or so indicate. We are unable to fol-
low then how it determined an ARES was a “public utility”
under Section 9-252 or how the consumer company was enti-
tled to a remedy. Also giving us pause is that the consumer
company in SRT Enterprises did not appear to raise the issue
that the ICC did not have exclusive jurisdiction over claims
involving ARESs in the first instance. Instead, it elected to
argue that its claims were for civil damages—not repara-
8 While NAPG relies on the unpublished district court decision in SRT
Enterprises v. Direct Energy Business, LLC, No. 11 CV 4933, 2011 U.S. Dist.
LEXIS 145999 (N.D. Ill. Dec. 20, 2011), for support, we do not view it as
persuasive in light of the Illinois appellate court’s decision on the same
facts and issues.
No. 15-2332 21
tions—and thus not within the ICC’s exclusive jurisdiction.
Id. at *3. Therefore, the precise question before us was not
presented to the appellate court. Finally, the decision is un-
published, meaning it is afforded less weight than a pub-
lished decision. See Ill. Sup. Ct. Rule 23(e) (prohibiting par-
ties from citing unpublished appellate decisions as “prece-
dential”); Osman v. Ford Motor Co., 833 N.E.2d 1011, 1016–17
(Ill. App. Ct. 2005) (recognizing that while Rule 23(e) prohib-
its parties from citing unpublished opinions as authority, it
“does not bar the parties from using the reasoning and logic
that an Illinois appellate court used in its unpublished deci-
sion.”).
For similar reasons, we are also uncertain how the Illinois
Supreme Court would view Chiku Enterprises Inc. v. GDF Su-
ez Energy Resources NA, Inc., No. 10-0157, 2011 WL 1474049(Ill. Commerce Comm’n. Apr. 12, 2011). There, the ICC held
in an interim order that it had jurisdiction to hear a dispute
between an ARES and a commercial customer regarding its
rates. Id. at *8. In so holding, the ICC found without any ex-
planation that an ARES was a “public utility” under 220
ILCS 5/3-105, even though that exact provision excludes
ARESs.
Like the SRT Enterprises court, it did not explain its rea-
soning for why an ARES was a “public utility” under Section
3-105, despite statutory language excluding it from the defi-
nition. And the parties in Chiku Enterprises did not argue that
the ICC had exclusive jurisdiction over the claim, just that it
had jurisdiction to hear the claim. We do not know then how
much weight, if any, the Illinois Supreme Court would af-
ford this decision.
22 No. 15-2332
Zahn asserts that Wernikoff v. RCN Telecom Services of Illi-
nois, Inc., 791 N.E.2d 1195 (Ill. App. Ct. 2003), is the more
compelling appellate decision. There, the question was
whether the ICC had exclusive jurisdiction over reparation
claims between consumers and telecommunications carriers
offering competitive services after the legislature partially
deregulated the market. Id. at 1197. The court held that the
ICC did not have exclusive jurisdiction over such claims. Id.
at 1205.
The Wernikoff court observed that the legislature’s dereg-
ulation efforts included “removing telecommunications
companies from the Act’s definition of ‘public utility.’” Id. at
1198. That decision meant that the Public Utilities Act “was
no longer generally applicable to telephone companies.” Id.Instead, the legislature “selectively chose which provisions
of the [Public Utilities Act] would still be applicable.” Id. Al-
so persuasive to the Wernikoff court was that “nearly all of
Article IX of the [Public Utilities] Act, which deals with rates
was not made applicable,” thereby relieving the ICC of re-
sponsibility for determining whether the competitive tele-
phone companies’ rates were “just and reasonable.” Id. at
1199. Finally, the court thought the legislature’s decision to
create “different regulatory schemes for competitive and
noncompetitive telephone companies” also suggested that it
did not intend for the ICC to have exclusive jurisdiction over
reparation claims involving competitive providers. Id. at
1204.
What the Wernikoff court found persuasive about the leg-
islature’s intent to throw open the Illinois circuit court doors
for reparation claims against competitive telephone compa-
nies also appears present with respect to ARESs. The legisla-
No. 15-2332 23
ture here excluded ARESs from the definition of “public util-
ity” and selectively made applicable other portions of the
Public Utilities Act to ARESs, just as it did with telecommu-
nications companies. The legislature also did not apply any
of Article IX—the article that deals with rate approval and
reparations—to ARESs, just as it did not apply most of that
article to competitive telecommunication services. And, the
legislature created a different regulatory scheme for an
ARES and a non-competitive electric utility in the Rate Relief
Law, just as it did with telecommunication companies. See
220 ILCS 5/16-115–115B (detailing the obligations of an
ARES and the ICC’s oversight of an ARES).
There is, however, a critical difference between the legis-
lative scheme at issue in Wernikoff and the Rate Relief Law—
the type of utility being regulated. Electricity is more a basic
necessity than telephone service. As such, electricity gets dif-
ferent treatment. That is apparent from reviewing Article
VIII of the Public Utilities Act relating to service obligations
where several sections address and impose specific service
obligations on electricity (and natural gas) suppliers, includ-
ing additional requirements during the winter months. See,
e.g., 220 ILCS 5/8-202, 220 ILCS 5/8-203.
Perhaps, just as important for our purposes though is
that Wernikoff is an Illinois appellate court decision. It has
not been reviewed by the Illinois Supreme Court, nor has its
holding been relied upon or even addressed by other Illinois
appellate courts. So, the Illinois Supreme Court may view
Wernikoff as limited by its facts or reject its holding outright.
We are wary of deciding such a vital question of state law
based on this decision, especially in light of the Illinois Su-
preme Court’s longstanding recognition of the ICC’s exclu-
24 No. 15-2332
sive jurisdiction over reparation claims. 9 See Sheffler v. Com-
monwealth Edison Co., 955 N.E.2d 1110, 1123 (Ill. 2011) (citing
Terminal R.R. Ass’n of St. Louis v. Pub. Utils. Comm’n, 136 N.E.
797, 799 (Ill. 1922)).
III. CONCLUSION
Based on the foregoing, we respectfully request the Illi-
nois Supreme Court to answer the following controlling
question of law:
Does the ICC have exclusive jurisdiction over a
reparation claim, as defined by the Illinois Su-
preme Court in Sheffler v. Commonwealth Edison
Company, 955 N.E.2d 1110 (Ill. 2011), brought
by a residential consumer against an Alterna-
tive Retail Electric Supplier, as defined by 220
ILCS 5/16-102?
We invite the justices of the Illinois Supreme Court to re-
formulate this question should they find it necessary. Of
course, nothing in this certification opinion can or would
seek to limit the scope of the Illinois Supreme Court’s in-
quiry.
9 As an alternative argument, NAPG contends that the ICC has “primary
jurisdiction” because of its “special expertise to analyze, investigate, and,
if necessary, prescribe the ‘just and reasonable’ rates that must be
charged by an ARES.” (Appellee’s Br. at 24–25.) Therefore, according to
NAPG, the district court should “refrain from adjudicating a case until
an administrative agency that has special competence in a regulated in-
dustry … has first reviewed the matter.” (Id. at 24.) We need not resolve
this question today, as we do not yet know if Zahn has even stated a
claim. Should the Illinois Supreme Court decide to resolve the question
on this prudential basis, then we will apply its decision.
No. 15-2332 25
The Clerk of this Court will transmit the briefs and ap-
pendices in this case to the Illinois Supreme Court, together
with this opinion. Upon the request of the Illinois Supreme
Court, the Clerk will transmit all or any part of the record as
that Court so desires. Further proceedings in this Court are
stayed while this matter is under consideration by the Su-
preme Court of Illinois.
QUESTION CERTIFIED