Richmond v. Superior Court CA2/1 ( 2016 )

Filed 1/20/16 Richmond v. Superior Court CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
DANIEL RICHMOND et al., B260243
Petitioners, (Los Angeles County
Super. Ct. Nos. BC497689 &
v. YC066729)
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
SOUTHERN CALIFORNIA EDISON
COMPANY,
Real Party in Interest.
DANIEL RICHMOND et al., B260268
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC497689)
v.
SOUTHERN CALIFORNIA EDISON
COMPANY,
Defendant and Respondent.
LORI BARBER et al., B260268
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. YC066729)
v.
SOUTHERN CALIFORNIA EDISON
COMPANY,
Defendant and Respondent.
ORIGINAL PROCEEDING in mandate. Petition dismissed.
APPEAL from orders of the Superior Court of Los Angeles County. John Shepard
Wiley, Jr., Judge. Reversed with directions.
Law Offices of Martin N. Buchanan and Martin N. Buchanan for Petitioners,
Plaintiffs and Appellants.
Girardi & Keese, John Girardi; The Girardi Firm, Matthew D. Girardi; Peterson
Law Group and John S. Peterson for Petitioners, Plaintiffs and Appellants Daniel
Richmond et al.
Stolpman, Krissman, Elber & Silver, Thomas G. Stolpman, Donna Silver and
Dennis M. Elber for Petitioners, Plaintiffs and Appellants Lori Barber et al.
No appearance for Respondent Superior Court.
Munger, Tolles & Olson, Stephen M. Kristovich, Jeremy A. Lawrence, Ronald K.
Meyer; Patricia A. Cirucci; Brian A. Cardoza; Carla M. Blanc; Lim, Ruger & Kim,
Christopher Kim, Sandra Sakamoto and Arnold Barba for Real Party in Interest,
Defendant and Respondent Southern California Edison Company.
_________________________________
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Plaintiffs Daniel Richmond et al. filed a petition for writ of mandate and an appeal
after the trial court sustained demurrers to their third amended complaints without leave
to amend on the ground the Public Utilities Commission (PUC) had exclusive
jurisdiction, or alternatively primary jurisdiction, over their tort and inverse
condemnation claims against Southern California Edison (SCE). Plaintiffs contend the
PUC does not have exclusive jurisdiction over any of their claims and the trial court
abused its discretion in concluding, in the alternative, that the PUC had primary
jurisdiction over plaintiffs’ claims. We agree on both points and reverse the trial court’s
orders. We dismiss the writ petition as moot.
BACKGROUND
Plaintiffs are 102 residents of a neighborhood adjacent to SCE’s Topaz electrical
substation in Redondo Beach. The trial court consolidated for all purposes the actions
against SCE filed by Lori Barber and seven other plaintiffs and Daniel Richmond and 93
other plaintiffs alleging their properties had been invaded for decades by stray electrical
currents escaping from the Topaz substation.
1. Plaintiffs’ third amended complaints
The operative pleadings for each group of plaintiffs are the third amended
complaints, which are almost identical. The complaints allege SCE designed and
constructed the Topaz substation, and has owned, operated, inspected, tested, maintained,
and controlled it since the 1960’s. The complaints allege that since at least the early
1980’s, their properties have been invaded by “entirely avoidable, stray, uncontrolled,
manmade electric currents” escaping from the equipment at the Topaz substation.
Plaintiffs allege these electric currents are uncontrolled with respect to both “the amount
of current leaking and/or intentionally deposited into the earth/ground” and “where in the
earth/ground the leaking electric currents will go.” The complaints allege these stray
electric currents are caused by SCE’s unreasonable and unsafe design, operation,
installation, inspection, testing, maintenance, repair, replacement, management, coupling,
supervision, and control of its substation equipment, its electrical distribution system
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equipment, and its electrical service supply equipment, which “was, and is, leaky,
defective, and inadequate for its intended purpose.”
Plaintiffs allege SCE has been aware for many years that stray electric currents are
escaping from its Topaz substation and plaguing the nearby residents, but has failed to
correct the problem, even though SCE could prevent these escaping currents through the
exercise of reasonable care.
The complaints further allege SCE has deliberately allowed the currents to escape
from its equipment, which “is supposed to, but has not, and does not, have the functional
integrity to reasonably and safely contain said escaping electric currents, and/or to
provide adequate and normal means to carry SCE’s return electric currents back to their
source so that they can complete their circuit. Instead . . . SCE has unlawfully allowed,
and continues to allow, its electric currents to escape, to enter unsafely into residential
properties and premises, including those of Plaintiffs, and to stray uncontrollably . . .
across said properties and premises, using the earth/ground as it takes all paths . . . back
to the source.” Plaintiffs further allege the stray currents invading their properties result
from SCE’s use of “the earth/ground” as the “‘normal return’” path for the stray currents
to return to their source, the Topaz substation, in violation of PUC General Order 95, rule
33.2 (rule 33.2).
Plaintiffs allege they are constantly exposed to these stray currents, all day, every
day, in every season, but moisture in the ground and atmosphere exacerbate the problem.
The “sandy, salty, wet soil” in the area of their homes “conducts electric currents more
efficiently.” As a result of the stray electric currents, plaintiffs allege they have suffered
repeated unpleasant, disturbing, and offensive electric shocks and unpleasant tingling
sensations while inside and outside their residences; serious medical and health problems,
including headaches, bleeding, gastrointestinal problems, debilitating fatigue, joint pain,
abdominal inflammation, and elevated liver enzymes; and severe emotional distress and
anxiety. They have also experienced their household appliances burning out, exploding,
and catching fire. Circuit breakers frequently trip and light bulbs frequently burn out.
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The currents have also damaged plumbing, electrical service panels, and the buildings
themselves. The complaints also allege that the stray currents are potentially lethal “in
the event of an earthquake, a lightening [sic] strike, or power surge,” and they created a
further hazard by electrifying the gas line running down one neighborhood street,1 all of
which contribute to plaintiffs’ “severe emotional stress, distress and anxiety.”
The complaints also allege that the stray currents have so greatly diminished the
marketability and value of plaintiffs’ homes as to make them impossible to sell because
plaintiffs would be required to disclose the stray currents. Moreover, real estate brokers
and agents do not want to become involved in selling the affected homes. Plaintiffs
allege SCE’s stray electrical currents constitute a tangible physical invasion of plaintiffs’
properties, causing, inter alia, electric shocks and property damage, and resulting in a
taking of plaintiffs’ property for a public use without payment of just compensation.
The complaints distinguish the stray electric currents invading their properties
from electromagnetic fields (EMF’s). Stray electric currents cause a direct exposure to
currents conducted through the soil and other physical objects on the property, including
humans and animals. In contrast, EMF’s cause low-frequency, ambient exposures from
proximity to power lines or other electrically charged objects. EMF’s can be a normal
byproduct of electrification and emanate from appliances and mobile phones, not just
power lines. EMF’s do not “electrically ‘charge’ people and physical objects in the same
way” as SCE’s stray direct electric currents and do not have the same effects upon human
anatomy. EMF’s are “scientifically incapable of causing the perceptible, tangible, and
unpleasant shock incidents and sensations” plaintiffs experience from the stray currents
invading their properties. The complaints further distinguish the stray currents from
“‘neutral-to-earth’” voltage.
The complaints nonetheless refer to EMF’s, but allege that they do so “solely for
the purpose of proving diminished property values” because the high EMF levels on their
1
The complaints allege the gas company “attempt[ed] to effectively rectify” the
problem with the gas line by replacing its metal pipes with plastic ones.
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properties must be disclosed to potential purchasers. The complaints further allege that
“real estate brokers and agents do not want to become involved” in attempts to sell their
homes because of both the stray currents and “the high levels of EMFs.” Nevertheless,
plaintiffs allege in their fraud causes of action that SCE, which owned some of the
plaintiffs’ homes before 1994, not only concealed the stray current problem and
misrepresented the danger from stray currents, but also misrepresented the “health and
safety danger” of the high levels of EMF’s that SCE “disclosed the presence of . . . to
potential purchasers.”
The complaints set forth causes of action for intentional infliction of emotional
distress, negligence and negligence per se, nuisance, fraud and deceit, negligent
misrepresentation, trespass, inverse condemnation, and assault and battery. The
complaints seek monetary recovery only, either damages or, with respect to the inverse
condemnation claim, compensation for both the present fair market value of their homes
and the diminution in fair market value caused by SCE’s conduct.
2. SCE’s demurrers
SCE demurred to the third amended complaints on the grounds the trial court
lacked jurisdiction over every claim and every cause of action failed to state a cause of
action. With respect to jurisdiction, SCE argued the PUC has exclusive or primary
jurisdiction over plaintiffs’ claims under Public Utilities Code section 1759.2 With
respect to failure to state a cause of action, SCE argued only that the inverse
condemnation cause of action was inadequately pleaded and that plaintiffs were
precluded by San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 939
(Covalt), from basing their intentional infliction of emotional distress, fraud, and
negligent misrepresentations claims on the presence of EMF’s.
Plaintiffs filed a joint written opposition to the demurrers, and SCE filed a reply.
2 Undesignated statutory references pertain to the Public Utilities Code.
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3. PUC’s amicus brief
The trial court contacted the PUC and, in the presence of the parties’ counsel,
asked the PUC to file an amicus brief. The PUC did so. In its brief, the PUC asserted
that it had exclusive jurisdiction over plaintiffs’ claims. It argued: “If this Court were to
award damages based on a violation of GO [General Order] 95, Rule 33.2, it would not
be enforcing Commission standards and policies. The Court would instead be rendering
the underlying determination that the Rule had been violated. That is a factual
determination squarely within the Commission’s authority, competence, and expertise to
make. Thus, any determination by the Court would interfere with and prevent the
Commission from addressing the issue. It would also second-guess what conclusion the
Commission might reach based on the same facts. It is also possible that a Court
determination would unintentionally result in new or inconsistent requirements regarding
the design, construction, operation, maintenance, and safety of utility equipment and
facilities. Section 1759 bars such a result.”
Alternatively, the PUC argued it had primary jurisdiction over the claims and the
trial court should defer to its “unique subject matter and technical expertise in matters
concerning utility facilities and operations” and “whether GO 95 has been violated.”
The PUC’s brief also argued that, although it did not have exclusive jurisdiction
over EMF’s, the policy it had adopted regarding EMF’s barred plaintiffs’ claims.
The parties filed written responses to the PUC’s brief.
4. Trial court’s ruling
At the hearing on SCE’s demurrers, the trial court adopted its tentative ruling,
which is not part of the appellate record, but apparently sustained the demurrers without
leave to amend on the ground the PUC has exclusive jurisdiction over plaintiffs’ claims.
The court’s actual ruling on the demurrers is not reflected in the reporter’s transcript of
the hearing, the minute order for the hearing, or the notice of ruling SCE served.
The trial court explained its reasons for concluding that plaintiffs’ claims were
within the exclusive jurisdiction of the PUC: “I think the two things that are most
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important here is that the source of the liability rule is a PUC rule . . . .” “[W]hat the
plaintiffs are saying, the PUC created a rule and the defendants broke it.” “The second
point is the technical nature of that liability rule. This case is all about electrical circuits
and the proper way to close an electrical circuit. Were this matter to go further in this
court, I would immediately be thinking about appointing a court-appointed expert, an
electrical engineer . . . [b]ecause judges learn nothing about electrical circuitry in law
school . . . . And when judges are ignorant, courts are vulnerable. People who are
ignorant can make foolish decisions that when examined by those knowledgeable in the
field are sadly, merely laughable, laughably wrong. And it’s not good to have courts
making laughably incorrect decisions, so courts, in a technical area like this, would need
some help.” “So in sharp distinction to the court system, the PUC actually has on its staff
electrical engineers. They have pros who are technical experts. So for those two reasons,
the liability comes from the agency’s own rule, and two, the agency has technical
expertise and prowess unmatched by a trial court. I would rule . . . that there is both
exclusive and primary jurisdiction in the PUC, and I propose to stay this matter, for the
plaintiffs to proceed, I guess, in San Francisco before the PUC. I don’t think dismissing
is right if I’m ruling on primary jurisdiction grounds, and I am, in the alternative.”
Counsel for SCE argued that the court had no jurisdiction to stay the action if it
concluded the PUC had exclusive jurisdiction, and the court should instead dismiss it.
The court declined to do so. It then noted plaintiffs had “immediate appellate recourse”
and stated, “I certify the question” and “I am putting a stay on this case . . . immediately
with that certification ruling.”
The court then explained an additional rationale for its ruling: “Although
[plaintiffs’ counsel] says it’s not a grid reliability case, respectfully, I think it would be
possible for the PUC to take a different view. . . . [T]he PUC is in charge of ensuring . . .
the overall reliability and rationality of the electrical grid . . . . There may be costs and
benefits. There may be trade-offs that system engineers see and the PUC endorses that
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are different tha[n] the individual jury decides upon with a more in-depth but less
panoptic or synoptic view of the whole grid situation.”
5. Proceedings in this court
Plaintiffs were uncertain whether to challenge the rulings via a petition for writ of
mandate or an appeal, so they filed both. We consolidated the petition and appeal for all
purposes.
DISCUSSION
1. Appealability
The parties agree the trial court’s stay was a nullity and its ruling is appealable.
However, appellate jurisdiction cannot be conferred upon this court by the parties, and
we must independently assess appealability. (City of Gardena v. Rikuo Corp. (2011) 192
Cal.App.4th 595, 599, fn. 3, 605.)
The existence of either a final judgment or a statutorily appealable order is a
jurisdictional prerequisite to maintaining an appeal. (Jennings v. Marralle (1994)
8 Cal.4th 121, 126.) “It is the substance of a decree and not the form of a decree which
determines whether it is final and appealable, or interlocutory and nonappealable.
[Citation.] ‘“As a general test, which must be adapted to the particular circumstances of
the individual case, it may be said that where no issue is left for future consideration
except the fact of compliance or noncompliance with the terms of the first decree, that
decree is final, but where anything further in the nature of judicial action on the part of
the court is essential to a final determination of the rights of the parties, the decree is
interlocutory.” [Citations.]’” (Furtado v. Schriefer (1991) 228 Cal.App.3d 1608, 1613
(Furtado).)
Exclusive jurisdiction in a regulatory body is “jurisdictional in the sense that
courts are utterly without the power to decide.” (Krumme v. Mercury Ins. Co. (2004) 123
Cal.App.4th 924, 937.) Because the trial court’s principal ruling was that the PUC has
exclusive jurisdiction over plaintiffs’ claims, it should have dismissed the case, as did the
trial courts in Davis v. Southern California Edison Co. (2015) 236 Cal.App.4th 619, 622
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(Davis), and City of Anaheim v. Pacific Bell Telephone Co. (2004) 119 Cal.App.4th 838,
842, when they concluded the PUC had exclusive jurisdiction over the case pending
before them.
The trial court apparently stayed the action on the basis of its alternative ruling
that the PUC has primary jurisdiction of plaintiffs’ claims. The alternative ruling,
however, was a nullity and could not be given any effect. The case could not be
simultaneously or successively outside and within the scope of the trial court’s
jurisdiction. If the PUC had exclusive jurisdiction, the case would not spring back into
the trial court’s jurisdiction upon completion of whatever proceedings the PUC might
conduct.
Moreover, primary jurisdiction is not a ground for demurrer. “‘“‘Primary
jurisdiction’ . . . comes into play whenever enforcement of the claim requires the
resolution of issues which, under a regulatory scheme, have been placed within the
special competence of an administrative body; in such a case the judicial process is
suspended pending referral of such issues to the administrative body for its views.”’”
(Elder v. Pacific Bell Telephone Co. (2012) 205 Cal.App.4th 841, 854–855 (Elder),
italics added.) Such a referral is a discretionary decision by the trial court (id. at p. 855),
not an actual absence of jurisdiction to act.
Accordingly, the trial court’s ruling that the PUC had exclusive jurisdiction over
the case divested the trial court of jurisdiction and left no issue for further consideration
or action, not even compliance with the court’s order. The court’s order essentially
terminated the action. The attempt to retain jurisdiction by means of a stay was a nullity,
as was the court’s attempt to “certify” a question for appeal.
This posture of this case is thus comparable to that in Furtado, supra, 228
Cal.App.3d 1608, where the trial court concluded an injured painter was the employee of
the defendant, who had worker’s compensation insurance, then stayed the litigation for
the painter to pursue his remedies before the Workers’ Compensation Appeals Board.
(Id. at p. 1612.) The appellate court stated, “Had the trial court simply ruled Furtado was
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an employee and terminated its jurisdiction, there would be no question as to the finality
of its order, and no question that such an order would be appealable. The issue of
appealability arises only because the trial court has purported to retain jurisdiction,
apparently to preserve Furtado’s action in the trial court should another court or the
WCAB determine Furtado was not an employee.” (Id. at p. 1613.) “[T]he trial court’s
order was final as there was nothing left for it to determine. . . . The trial court’s stay of
the proceedings and its attempt to retain jurisdiction were a nullity, and have no effect on
the finality of the challenged order. As [the employer] argues, the order is appealable.”
(Id. at p. 1614.)
Accordingly, we conclude, based upon the substance of the trial court’s finding
and order, which left nothing for future determination and divested the trial court of
jurisdiction, that the order is appealable.
2. Review of trial court’s order sustaining a demurrer
“On appeal from a judgment after a demurrer is sustained without leave to amend,
we assume the truth of the properly pleaded factual allegations, facts that reasonably can
be inferred from those expressly pleaded, and facts of which judicial notice can be taken.
[Citation.] We construe the pleading in a reasonable manner and read the allegations in
context. [Citation.] We determine de novo whether the pleading alleges facts sufficient
to state a cause of action. [Citation.] We affirm the sustaining of the demurrer if the
pleading or matters that are judicially noticeable disclose a complete defense. [Citations.]
We affirm the judgment if it is correct on any ground stated in the demurrer, regardless of
the trial court’s stated reasons. [Citation.]” (Syngenta Crop Protection, Inc. v. Helliker
(2006) 138 Cal.App.4th 1135, 1181.)
3. Exclusive jurisdiction
a. General principles regarding exclusive PUC jurisdiction
The PUC is a state agency of constitutional origin that possesses broad authority to
supervise and regulate every public utility in California and to “do all things, whether
specifically designated in [the Public Utilities Act] or in addition thereto, which are
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necessary and convenient in the exercise of such power and jurisdiction.” (§ 701.) Its
powers include setting rates, establishing rules, holding hearings, awarding reparation,
and establishing its own procedures. (Covalt, supra, 13 Cal.4th at p. 915.) “‘The
commission’s authority has been liberally construed’ [citation], and includes not only
administrative but also legislative and judicial powers.” (Ibid.)
The Legislature has acted to limit judicial review of PUC actions. Section 1759,
subdivision (a) provides: “No court of this state, except the Supreme Court and the court
of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse,
correct, or annul any order or decision of the commission or to suspend or delay the
execution or operation thereof, or to enjoin, restrain, or interfere with the commission in
the performance of its official duties, as provided by law and the rules of court.”
Section 1759, subdivision (a) “is not intended to, and does not, immunize or
insulate a public utility from any and all civil actions brought in superior court,” however.
(People ex rel. Orloff v. Pacific Bell (2003) 31 Cal.4th 1132, 1144 (Orloff).) The
Legislature “‘provided for a private right of action against utilities for unlawful activities
and conduct’” (Mata v. Pacific Gas & Electric Co. (2014) 224 Cal.App.4th 309, 315
(Mata)) by enacting section 2106: “Any public utility which does, causes to be done, or
permits any act, matter, or thing prohibited or declared unlawful, or which omits to do
any act, matter, or thing required to be done, either by the Constitution, any law of this
State, or any order or decision of the commission, shall be liable to the persons or
corporations affected thereby for all loss, damages, or injury caused thereby or resulting
therefrom. If the court finds that the act or omission was wilful, it may, in addition to the
actual damages, award exemplary damages. An action to recover for such loss, damage,
or injury may be brought in any court of competent jurisdiction by any corporation or
person. [¶] No recovery as provided in this section shall in any manner affect a recovery
by the State of the penalties provided in this part or the exercise by the commission of its
power to punish for contempt.”
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“Section 2106 and section 1759 address different things. Section 1759 defines and
limits the power of the courts to pass judgment on, or interfere with, what the
commission does. Section 2106, on the other hand, confirms the full power of the courts
to pass judgment on what utilities do.” (Cundiff v. GTE California, Inc. (2002) 101
Cal.App.4th 1395, 1405 (Cundiff).) Given “the potential conflict between sections 1759
and 2106, the latter section must be construed as limited to those situations in which an
award of damages would not hinder or frustrate the commission’s declared supervisory
and regulatory policies.” (Waters v. Pacific Telephone Co. (1974) 12 Cal.3d 1, 4
(Waters).) “[T]he two sections must be construed in a manner which harmonizes their
language and avoids unnecessary conflict. Section 2106 reasonably may be interpreted
as authorizing only those actions which would not interfere with or obstruct the
commission in carrying out its own policies.” (Waters, at p. 11.)
“In Covalt, the Supreme Court ‘“established a three-part test to determine whether
an action is barred by section 1759: (1) whether the commission had the authority to
adopt a regulatory policy; (2) whether the commission had exercised that authority; and
(3) whether the superior court action would hinder or interfere with the commission’s
exercise of regulatory authority.”’” (Sarale v. Pacific Gas & Electric Co. (2010) 189
Cal.App.4th 225, 236 (Sarale).) “Superior court jurisdiction is precluded only if all three
prongs of the Covalt test are answered affirmatively.” (PegaStaff v. Pacific Gas &
Electric Co. (2015) 239 Cal.App.4th 1303, 1315 (PegaStaff).)
“[A]pplication of the third prong of Covalt does not turn solely or primarily on
whether there is overlap between conduct regulated by the PUC and the conduct targeted
by the suit. The fact that the PUC has the power and has exercised the power to regulate
the subject at issue in the case establishes the first and second prongs of Covalt, but will
not alone establish the third. Instead, the third prong requires a careful assessment of the
scope of the PUC’s regulatory authority and evaluation of whether the suit would thwart
or advance enforcement of the PUC regulation. Also relevant to the analysis is the nature
of the relief sought—prospective relief, such as an injunction, may sometimes interfere
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with the PUC’s regulatory authority in ways that damages claims based on past harms
would not. Ultimately, if the nature of the relief sought or the parties against whom the
suit is brought fall outside the PUC’s constitutional and statutory powers, the claim will
not be barred by section 1759.” (PegaStaff, supra, 239 Cal.App.4th at p. 1318.)
“In short, an award of damages is barred by section 1759 if it would be contrary to
a policy adopted by the PUC and would interfere with its regulation of public utilities.”
(Hartwell Corp. v. Superior Court (2002) 27 Cal.4th 256, 275 (Hartwell).) “On the other
hand, superior courts are not precluded from acting in aid of, rather than in derogation of,
the PUC’s jurisdiction.” (Ibid.) “[T]rial courts have concurrent jurisdiction with the
commission ‘“over controversies between utilities and others not inimical to the purposes
of the Public Utility Act.” [Citation.]’” (Cundiff, supra, 101 Cal.App.4th at p. 1406.)
The remedies available to the PUC to address violations of its standards include
penalties, contempt, injunction, and mandamus. (Hartwell, supra, 27 Cal.4th at p. 277.)
They are prospective in nature and are designed to curtail utilities’ current and ongoing
violations, not to redress injuries for past wrongs. (Ibid.) The PUC has no power to
award damages to persons harmed by the conduct of a utility. (Ibid.; Davis, supra, 236
Cal.App.4th at p. 636.) It has authority to order reparations, but only “for rates that are
‘unreasonable, excessive, or discriminatory.’” (Davis, at p. 636.)
An assertion by the PUC that it has exclusive jurisdiction over a particular case is
neither binding nor entitled to deference; it is a legal issue to be decided by a court.
(Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 147, fn. 23
(Wilson); PG&E Corp. v. Public Utilities Com. (2004) 118 Cal.App.4th 1174, 1194–
1195.)
b. Plaintiffs’ claims do not fall within the PUC’s exclusive jurisdiction.
The parties dispute whether the PUC has exclusive jurisdiction over any or all of
plaintiffs’ claims. Plaintiffs contend the PUC does not have exclusive jurisdiction
because (1) their claims do not interfere with any supervisory or regulatory policy of the
PUC and are, instead, in aid of the PUC’s policies and standards because they allege,
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inter alia, that SCE knowingly and intentionally violated rule 33.2 by using ground or
earth as a normal return or circuit conductor; (2) plaintiffs seek a monetary recovery for
past violations, whereas the PUC has no authority to award damages or redress injuries
for past wrongs; and (3) the acts and omissions underlying plaintiffs’ fraud and deceit,
negligent misrepresentation, assault and battery, and inverse condemnation claims are
outside the scope of PUC regulation. Plaintiffs also cite the favorable appellate decision
in a case brought by one of their neighbors, Wilson, supra, 234 Cal.App.4th 123.
SCE attacks the validity and reasoning of Wilson, supra, 234 Cal.App.4th 123,
although it fails to mention that the California Supreme Court denied its petition for
review and request for depublication more than two weeks before SCE filed its
responsive brief in this case. SCE further contends that (1) all of plaintiffs’ claims
require interpretation of rule 33.2, and the PUC has exclusive jurisdiction to interpret its
own rules; and (2) “any determination by a superior court that SCE could be liable for
damages as a result of stray current allegedly emitted from an ‘unsafe’ and
‘unreasonable’ electrical distribution system ‘would interfere with the “broad and
continuing supervisory or regulatory program” of the PUC’ under which it regulates all
aspects of public utilities’ electrical distribution systems” because the PUC has exclusive
jurisdiction to determine “whether the alleged emission of stray current from SCE’s
system was improper.” SCE addresses both of these argument to plaintiffs’ tort claims,
only. SCE also argues that it is of no consequence to the jurisdictional issue that the
plaintiffs are only seeking damages.
(1) First and second Covalt factors
The parties do not contest the applicability of the first two Covalt factors, i.e.,
whether the PUC has authority to adopt a regulatory policy applicable to the conduct
upon which this action is based and whether it has exercised that authority. Indeed, as
plaintiffs point out in their reply brief, “all of their claims are premised on conduct by
SCE that violates Rule 33.2,” even though “only their negligence per se theory actually
requires proof of such a violation as an essential legal element.”
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(2) The third Covalt factor
The key issue for decision in this case is whether allowing the litigation to proceed
in the trial court would hinder or interfere with the PUC’s exercise of regulatory
authority. A review of the published decisions regarding utilities’ assertions of exclusive
PUC jurisdiction reveals that this third Covalt factor is almost always the only one of the
three factors in controversy, and the result in each case often depends upon whether the
PUC had taken, or was in the process of taking, action with respect to the particular
conduct or issue upon which the plaintiffs predicated their claims against the utility, such
that a judgment in favor of the plaintiffs would “pass judgment on, or interfere with, what
the commission does.” (Cundiff, supra, 101 Cal.App.4th at p. 1405.) Whether the PUC
has provided the utility with a “safe harbor,” whether the claims implicate ratemaking,
the remedies sought in the litigation, and whether the plaintiffs seek to redress past
wrongs are also often of critical importance. (Covalt, supra, 13 Cal.4th at pp. 948–949;
Hartwell, supra, 27 Cal.4th at p. 276–278; Pegastaff, supra, 239 Cal.App.4th at p. 1318;
Orloff, supra, 31 Cal.4th at p. 1155; Elder, supra, 205 Cal.App.4th at p. 853; Waters,
supra, 12 Cal.3d at pp. 10–11 [claim for damages for failure to furnish adequate
telephone service interfered with PUC’s ratemaking authority in that PUC had approved
utility’s tariff, which limited utility’s liability to customer to billing credit]; Koponen v.
Pacific Gas & Electric Co. (2008) 165 Cal.App.4th 345, 358 (Koponen) [award of
damages would not interfere with PUC’s authority, but disgorgement of profits for
utility’s allegedly wrongful conduct would interfere with PUC’s ratemaking jurisdiction];
Schell v. Southern Cal. Edison Co. (1988) 204 Cal.App.3d 1039, 1046 [claim that
recreational vehicle park should be billed at same rate as mobilehome parks “clearly
within the exclusive purview of the PUC as part of its continuing jurisdiction over
ratemaking and rate regulation in provision of baseline service to residential customers of
the electric and gas corporations”].)
16
(a) Covalt
Covalt involved an action to obtain both damages and injunctive relief for alleged
harm caused by EMF’s created by the defendant utility’s power transmission lines
running alongside the plaintiffs’ home. The plaintiffs alleged that dangerously high EMF
levels from the power lines constituted trespass and a nuisance, and established the basis
for inverse condemnation. (Covalt, supra, 13 Cal.4th at pp. 910–912.) The trial court
overruled the utility’s demurrer on the ground the court lacked subject matter jurisdiction
pursuant to section 1759. (Id. at p. 912.) The Supreme Court concluded the PUC had
exclusive jurisdiction over the nuisance claim, in large part because the PUC had made
findings that EMF’s did not pose a substantial risk of harm and that utilities therefore
need not take steps to reduce EMF’s. (Id. at pp. 926–934.) In a later opinion, the
Supreme Court summarized its application of the third factor in Covalt: “[A] civil action
seeking a determination that electromagnetic fields arising from utility powerlines caused
damage to the plaintiffs, or that the utility should be enjoined from locating its powerlines
in particular areas, would be inconsistent with the findings of the PUC. Those findings
included determinations that the available evidence did not support a reasonable belief or
conclusion that electromagnetic fields from powerlines posed a substantial risk of harm,
and that utilities need not take action to reduce field levels unless and until the evidence
supported such a conclusion. Therefore, our decision concluded, the civil action would
require an adjudication of issues previously considered by the PUC, and the resolution of
those issues by the PUC was reflected in its official policies. For these reasons, we held
that the action would interfere with and hinder the ongoing regulatory efforts undertaken
by the PUC in connection with this subject matter, and section 1759 thus precluded the
civil action.” (Orloff, supra, 31 Cal.4th at p. 1146.)
Thus, in Covalt, the plaintiffs sought a ruling directly contrary to the PUC’s
decision that had created a safe harbor for utilities regarding the same conduct or
condition that allegedly caused the harms for which the plaintiffs sought to recover.
Here, as far as SCE has demonstrated, the PUC has not, by any decision, finding, or
17
ruling, established a safe harbor permitting electrical utilities to allow their substations to
produce stray current that enters onto nearby private property. Indeed, plaintiffs allege
the stray current is caused by a violation of SCE’s rules. Accordingly, unlike the claims
in Covalt, a verdict in favor of plaintiffs and an award of damages upon such verdict
would not be inconsistent with any findings, decisions, or rulings of the PUC or interfere
with its jurisdiction.
(b) Hartwell
Since Covalt, the California Supreme Court has addressed claims of exclusive
PUC jurisdiction in several cases. The most significant of these cases for resolving the
jurisdictional issue presented here is Hartwell, supra, 27 Cal.4th 256. There, more than
400 plaintiffs filed four suits against several industrial polluters for contaminating
drinking water and numerous water utilities for supplying the plaintiffs with
contaminated drinking water. In addition to seeking damages for personal injuries,
wrongful death, trespass, nuisance, and fraudulent concealment, the plaintiffs sought to
enjoin the defendants from supplying contaminated water and engaging in unlawful
business practices, disgorgement of profits, and other remedies. (Id. at p. 261.) In
response to the lawsuits, the PUC instituted an investigation in which the plaintiffs from
all four cases intervened. (Id. at p. 262.) While the investigation was pending, the trial
courts stayed three of the actions pending outcome of the investigation and sustained the
regulated utilities’ demurrers without leave to amend in the fourth case. (Id. at pp. 263–
264.)
“After 31 months of investigation and study,” the PUC issued its report, which
“concluded that existing DHS [California Department of Health Services] drinking water
quality standards adequately protect the public health and safety and that, over the past 25
years, the regulated utilities, including defendants in these lawsuits, had provided water
that was ‘“in no way harmful or dangerous to health”’ and had satisfactorily complied
with DHS drinking water quality requirements. [Citation.] It also gave notice of its
18
intention to initiate a future investigation or rulemaking proceeding to investigate specific
water quality issues.” (Hartwell, supra, 27 Cal.4th at p. 263.)
Hartwell concluded that the first two Covalt factors were met (Hartwell, supra,27 Cal.4th at pp. 272, 274), but some of the plaintiffs’ claims for damages against the
regulated utilities “would not interfere with any ongoing PUC regulatory program,” while
other claims would interfere. (Id. at p. 266.) The court noted the plaintiffs “alleged water
contamination without regard to whether the water met drinking water standards . . . .
They also alleged water contamination that exceeded and violated federal and state
drinking water standards. In essence, plaintiffs challenged both the adequacy of the
standards and compliance with those standards.” (Id. at pp. 275–276, italics added.)
The court explained: “The first challenge, to the adequacy of the standards, is
barred. An award of damages on the theory that the public utilities provided unhealthy
water, even if that water actually met DHS and PUC standards, would interfere with a
‘broad and continuing supervisory or regulatory program’ of the PUC. [Citation.] In
order to perform its regulatory functions, such as ratemaking, the PUC must have certain
water quality benchmarks. . . . [T]he DHS standards serve as those benchmarks. A
superior court determination of the inadequacy of a DHS water quality standard applied
by the PUC would not only call DHS regulation into question, it would also undermine
the propriety of a PUC ratemaking determination. Moreover, the DHS standards have
been used by the PUC in its regulatory proceedings for many years as an integral part of
its broad and continuing program or policy of regulating water utilities. As part of that
regulatory program, the PUC has provided a safe harbor for public utilities if they comply
with the DHS standards. An award of damages on the theory that the public utilities
provided unhealthy water, even if the water met DHS standards, ‘would plainly
undermine the commission’s policy by holding the utility liable for not doing what the
commission has repeatedly determined that it and all similarly situated utilities were not
required to do.’ [Citing Covalt, supra, 13 Cal.4th at p. 950.] Thus, such damage actions
are barred.” (Hartwell, supra, 27 Cal.4th at p. 276.)
19
Similarly, Hartwell concluded that granting injunctive relief would interfere with
the PUC’s exclusive jurisdiction because “the PUC found that the regulated utility
defendants in this case were in compliance with DHS regulations and that ‘no further
inquiry or evidentiary hearings’ were required regarding compliance. [Citation.] Based
on that factual finding, the PUC impliedly determined it need not take any remedial
action against those regulated utilities. A court injunction, predicated on a contrary
finding of utility noncompliance, would clearly conflict with the PUC’s decision and
interfere with its regulatory functions in determining the need to establish prospective
remedial programs.” (Hartwell, supra, 27 Cal.4th at p. 278.)
In contrast, however, the plaintiffs’ “damage claims based on the theory that the
water failed to meet federal and state drinking water standards are not preempted by
section 1759. A jury award based on a finding that a public water utility violated DHS
standards would not interfere with the PUC regulatory policy requiring water utility
compliance with those standards.” (Hartwell, supra, 27 Cal.4th at p. 276, italics added.)
The court recognized that the PUC had concluded that the regulated water utility
defendants “had substantially complied with DHS drinking water standards for the past
25 years,” but noted that the PUC’s “factual finding was not part of an identifiable ‘broad
and continuing supervisory or regulatory program of the commission’ [citing Covalt,
supra, 13 Cal.4th at p. 919], related to such routine PUC proceedings as ratemaking
[citation] or approval of water quality treatment facilities. Nor was that finding part of a
broad and continuing program to regulate public utility water quality, a point the PUC
itself implicitly recognized during its investigation when it stated” that it was engaging in
an information gathering process, not a rulemaking proceeding or enforcement
proceeding. (Hartwell, at pp. 276–277.)
The court continued: “Although a PUC factual finding of past compliance or
noncompliance may be part of a future remedial program, a lawsuit for damages based on
past violations of water quality standards would not interfere with such a prospective
regulatory program. As noted, the PUC can redress violations of the law or its orders by
20
suit (§ 2101), by mandamus or injunction (§§ 2102–2103), by actions to recover penalties
(§§ 2104, 2107), and by contempt proceedings (§ 2113), but these remedies are
essentially prospective in nature. They are designed to stop the utilities from engaging in
current and ongoing violations and do not redress injuries for past wrongs. (See Vila v.
Tahoe Southside Water Utility [(1965)] 233 Cal.App.2d [469,] 479 [the PUC has no
authority to award damages].) Here, plaintiffs alleged injuries caused by water that failed
to meet state and federal drinking water standards ‘for many years.’ Because the PUC
cannot provide for such relief for past violations, those damage actions would not
interfere with the PUC in implementing its supervisory and regulatory policies to prevent
future harm.” (Hartwell, supra, 27 Cal.4th at p. 277, italics added.) “Although a jury
award supported by a finding that a public water utility violated DHS and PUC standards
would be contrary to a single PUC decision, it would not hinder or frustrate the PUC’s
declared supervisory and regulatory policies, for the reasons discussed earlier. Under the
provisions of section 1759, it would also not constitute a direct review, reversal,
correction, or annulment of the decision itself. Accordingly, such a jury verdict would
not be barred by the statute.” (Id. at pp. 277–278.)
The claims of the plaintiffs in the present case are analogous to the Hartwell
plaintiffs’ claims for damages for personal injury resulting from the water utilities’ failure
to meet state and federal drinking water standards. Plaintiffs allege SCE has violated the
PUC’s standards regarding the use of earth or ground as the path for currents to return to
the Topaz substation, and they seek damages for the harm they allegedly have suffered as
a result of SCE’s violation. As in Hartwell, permitting a jury award based on a finding
that SCE violated the PUC’s standards would be in aid of, rather than interfere with, the
PUC regulatory policy requiring utility compliance with those standards. Plaintiffs do
not seek injunctive relief or challenge the adequacy of the PUC’s standards. Nor do they
seek to impose liability upon SCE “‘for not doing what the commission has repeatedly
determined that it and all similarly situated utilities were not required to do.’” (Hartwell,
supra, 27 Cal.4th at p. 276.) As in Hartwell, the PUC cannot provide plaintiffs with the
21
relief they seek, i.e., damages and just compensation for past violations. Moreover, the
mere speculative possibility that the PUC may someday institute an investigation or
enforcement action against SCE regarding the stray current problem in plaintiffs’
neighborhood and thereafter conclude that SCE was in full compliance with all PUC
requirements is insufficient to establish that judgments in favor of plaintiffs in the present
case would interfere with, hinder, or frustrate the PUC’s supervisory and regulatory
authority. Accordingly, Hartwell supports plaintiffs’ contention that the PUC lacks
exclusive jurisdiction over their claims.
(c) Other cases
In other cases seeking damages on the basis of a utility’s violation of PUC
requirements, courts have similarly found that litigation of the plaintiffs’ claims would be
in aid, not derogation, of the PUC’s rules and was therefore not barred by section 1759.
In Mata, supra, 224 Cal.App.4th 309, the heirs of a man electrocuted by a high voltage
power line while trimming a redwood tree sued Pacific Gas & Electric Co. (PG&E) on a
premises liability theory. (Id. at p. 312.) The plaintiffs alleged PG&E failed to inspect
the power lines and trees and to maintain an adequate clearance between them. (Ibid.)
The appellate court reversed the trial court’s dismissal of the action as barred by section
1759, explaining: “PUC rules and prior orders repeatedly make clear that while a utility
normally must maintain specified minimum clearances between its overhead electric lines
and adjacent trees, the commission leaves to the determination of the utility whether
greater clearances are necessary at particular locations to accomplish the purposes of rule
35, including to ‘secure safety . . . to the public in general.’ Nowhere in its rules or
orders does the commission suggest that in making such determinations, the utility is
relieved of its obligation to exercise reasonable care to avoid causing harm to others, or
relieved of its responsibility for failing to do so. PG&E does have ‘a duty to make the
wires safe under all the exigencies created by the surrounding circumstances.’ [Citation.]
Failure to satisfy that duty subjects the utility to liability in judicial proceedings for
damages to those harmed by its negligence.” (Id. at p. 318.)
22
Mata distinguished Sarale, supra, 189 Cal.App.4th 225, in which property owners
sought to prevent PG&E from trimming trees in excess of the minimum required by the
PUC: “[T]he PUC has made unmistakably clear that in some cases safety or other
considerations require more than minimum clearances and that the utility should use its
judgment to go beyond the minimum when necessary to ensure the reliability of service
or public safety. In the view of the [Sarale] majority, recognition of the landowners’
claims would have effectively countermanded the authorization that the PUC granted the
utility to make that determination and to extend clearance beyond the minimum when
necessary to ensure service reliability or public safety. Here, on the other hand,
plaintiffs’ claims do not conflict with the PUC rule authorizing the utility to make a
reasonable determination whether safety or other considerations require trimming beyond
the minimum clearance. Permitting plaintiffs to prosecute in superior court their claim
for having failed to use due care in making such a determination does not hinder or
interfere with the exercise of the PUC’s authority. To the contrary, awarding damages to
those injured by the utility’s failure to make such a reasonable determination as
anticipated by the PUC complements and reinforces rule 35. A superior court action for
such damages is ‘in aid of, rather than in derogation of, the PUC’s jurisdiction.’” (Mata,
supra, 224 Cal.App.4th at pp. 319–320.)
Similarly, in PegaStaff, supra, 239 Cal.App.4th 1303, the appellate court
concluded that section 1759 did not bar a suit against PG&E by a temporary staffing
agency based on PG&E’s adverse treatment of the plaintiff and preferential treatment of
competing staffing agencies, purportedly in order to comply with a PUC order to increase
minority staffing. (Id. at pp. 1311–1312, 1326–1331.) The court observed that, although
PegaStaff’s first amended complaint seemingly alleged that PG&E’s preferential tier
system was necessary to comply with a general order of the PUC, the order actually made
it clear that utilities were not authorized to achieve the goals set forth in the order by
establishing a preferential tier system. (Id. at pp. 1326–1328.) Accordingly, “Superior
court action on a claim based on a preferential system will not hinder or obstruct the
23
PUC’s exercise of regulatory authority. To the contrary, just as in Hartwell and Mata,
this suit will enforce, not obstruct, the PUC regulation.” (Id. at p. 1327.) The court
further found that, like the claims in Hartwell and Mata, PegaStaff’s action was a claim
for “damages . . . based on past conduct that was not approved by the PUC, even though
related to subject matter over which the PUC does exercise regulatory authority.” (Id. at
p. 1329.)
As in Mata and Pegastaff, plaintiffs here also seek damages based upon past
conduct that they allege violated a PUC rule. The PUC’s regulation of electrical utilities
with respect to grounding and other aspects of electrical distribution does not establish
the third factor under Covalt. (PegaStaff, supra, 239 Cal.App.4th at p. 1318.) Permitting
the litigation to proceed would be in aid, not in derogation, of the PUC’s jurisdiction.
In a somewhat similar vein, the court in Cundiff, supra, 101 Cal.App.4th 1395,
concluded that section 1759 did not bar the plaintiffs’ suit, which arguably furthered, not
interfered with, the PUC’s policies. (Id. at p. 1408.) There, the plaintiffs attempted to
certify a class action on behalf of telephone customers the defendants had allegedly billed
for decades to rent obsolete or nonexisting phone equipment, without the customers’
knowledge. (Id. at p. 1400.) The court viewed the complaint as challenging only “the
manner in which defendants billed them for rental of telephones, specifically, the alleged
lack of information given to plaintiffs about the rental charge made each month by
defendants. The gist of this suit is the alleged deception, intentional or negligent,
resulting in plaintiffs’ unknowingly paying rent month after month, year after year . . . .”
(Id. at pp. 1406.) The court took judicial notice of a “‘consumer advisory’” issued by the
PUC to inform telephone customers that they might still be paying rent on old phone
equipment they had replaced but failed to return to their telephone service provider, and
advising them to check their phone bills for such charges. (Id. at pp. 1403–1404.) In
light of that advisory, the court stated, “[P]laintiffs can reasonably argue that the suit
actually furthers policies of the commission because it seeks to force defendants to bill
24
their customers in such a way that the customers are fully informed of the nature of
defendants’ charges.” (Id. at p. 1408.)
The remedies sought were also a factor in Cundiff: “[D]efendants have not shown
that the commission has authority to give plaintiffs the relief that plaintiffs can obtain
under section 2106, that is, restitution or damages based on defendants’ alleged violations
of the aforecited provisions of the Business and Professions Code and the Civil Code,
including exemplary damages for willful wrongful acts.” (Cundiff, supra, 101
Cal.App.4th at pp. 1408–1409.)
Similarly, the court in Elder, supra 205 Cal.App.4th 841, concluded that section
1759 did not bar a class action seeking damages and declaratory and injunctive relief for
“cramming,” i.e., charging customers for optional services to which they had not agreed,
by Pacific Bell. (Id. at pp. 845, 854.) Even though a PUC general order addressed
cramming, it had “not approved ‘a general policy of limiting the liability’ of telephone
companies and billing agents for cramming” nor established “‘a safe harbor’ against
liability for entities that are found to engage in the illegal practice of cramming.” (Id. at
p. 853.) In addition, the PUC had no power to provide the plaintiffs with relief for past
violations. (Id. at pp. 853–854.)
Here, as in Cundiff and Elder, plaintiffs seek damages and compensation for past
violations that the PUC has no power to award, the PUC apparently has not established a
“safe harbor” permitting electric utilities to emit stray current onto the property of others,
and plaintiffs’ attempt to hold SCE liable for violating rule 33.2 is in aid, not in
derogation, of the PUC’s jurisdiction.
The California Supreme Court’s decision in Orloff, supra, 31 Cal.4th 1132, is also
somewhat instructive, although it concerned an action instituted by the district attorneys
of several counties to challenge Pacific Bell’s marketing practices as false advertising and
unfair business practices. The PUC was investigating some of the very same practices at
the time the prosecutors filed suit. (Id. at p. 1137.) The district attorneys sought
injunctive relief, civil penalties, and restitution. (Id. at p. 1141.) The trial and appellate
25
courts concluded that section 1759 barred the litigation because it might result in a ruling
that would conflict with the parallel PUC proceedings. (Id. at pp. 1137–1138.) The
Supreme Court disagreed: “[P]ast decisions of this court recognize that the PUC does not
have exclusive jurisdiction over all actions against a public utility, and that the mere
possibility of, or potential for, conflict with the PUC is, in general, insufficient in itself to
establish that a civil action against a public utility is precluded by section 1759. . . .
Nothing in the present action brought by public prosecutors inevitably would lead to
conflicting rulings that would interfere with or undermine the regulatory authority of the
PUC . . . .” (Id. at p. 1138, italics added.)
While Orloff was pending in the Supreme Court, the PUC issued its decision,
which found Pacific Bell had violated the Public Utilities Code, but did not address
Unfair Competition Law violations alleged by the district attorneys. The PUC fined the
utility, but did not order restitution. (Orloff, supra, 31 Cal.4th at p. 1143.) Although the
status of the plaintiffs as district attorneys was a crucial factor in the Orloff decision, the
decision is nonetheless instructive because it chided the appellate court for “relying solely
upon the circumstance that the allegations of the complaint in the present action were the
same as the allegations in the PUC proceeding, rather than considering the extent to
which the remedies in the two proceedings were likely to be inconsistent and thus were
likely to undermine any ongoing authority or regulatory program of the PUC.” (Id. at
p. 1155, italics added.) The court also noted that the district attorneys’ claims did not
“involve ratemaking or any other matter assigned to the exclusive jurisdiction of the
PUC.” (Ibid.)
As in Orloff, the claims of plaintiffs here do not involve ratemaking and do not
seek a remedy that would be inconsistent with any remedy the PUC might impose if it
were to address the stray current issue upon which plaintiffs’ claims are based. Mere
potential for conflict with the PUC––which depends upon speculation that the PUC will
instigate action against SCE based upon the stray current issue and that it will conclude
26
SCE is in full compliance with all applicable PUC standards––is insufficient to establish
that section 1759 bars litigation of plaintiffs’ actions.
With respect to plaintiffs’ inverse condemnation claims, Koponen, supra, 165
Cal.App.4th 345, is also instructive. There, property owners sued PG&E, alleging it had
made unauthorized use of the easements it held on plaintiffs’ property by leasing or
licensing rights in those easements to telecommunications and Internet companies for the
purpose of installing and using fiber optic lines. (Id. at p. 348.) The PUC had granted
PG&E’s applications to enter into such leases and licenses (id. at p. 351), but the
appellate court noted “there is no evidence the commission has considered the extent of
PG&E’s property interests in its rights-of-way, or that it has adopted any policy limiting a
utility’s liability for invading the property interests of private parties.” (Id.at p. 354.)
Moreover, “the commission has no authority to determine the property dispute between
plaintiffs and PG&E.” (Id. at p. 355.) “An award of damages for past invasions of
plaintiffs’ property rights would not interfere with the commission’s authority to
implement supervisory or regulatory policies to prevent future harm. And finally, a
finding PG&E was violating plaintiffs’ property rights would not interfere with the
PUC’s declared policy of encouraging joint use of PG&E facilities even if such finding
would be contrary to or inconsistent with a PUC order, and would not constitute a review,
reversal, correction, or annulment of the order itself.” (Id. at p. 358.)
Plaintiffs in this case allege that the utility has “taken” their property through the
invasion of stray currents from the substation. This is, in essence, a property dispute that
the PUC has neither the authority to determine nor the power to remedy. In addition,
SCE has not demonstrated that the PUC has established a “policy limiting a utility’s
liability for invading the property interests of private parties.” (Koponen, supra, 165
Cal.App.4th at p. 354.)
SCE relies upon a different group of cases, including In re Groundwater Cases
(2007) 154 Cal.App.4th 659, 666, which addressed the same actions as Hartwell, supra,27 Cal.4th 256. It did not address any issue of jurisdiction, which was, of course,
27
resolved by the Supreme Court in Hartwell. Instead, in the portion of the opinion cited
by SCE, the appellate court rejected the plaintiffs’ claim that the trial court improperly
defined the “‘state and federal drinking water standards’” to which Hartwell referred as
the “‘numerical standards’” “adopted by the Department of Health Services (DHS),” and
not “‘non-numerical qualitative public health standards’” such as “‘“pure, wholesome
and potable.”’” (Groundwater Cases, supra, 154 Cal.App.4th at pp. 673–674, 679-681.)
Adopting the plaintiffs’ definition would “run afoul of Hartwell” because it inevitably
challenged the adequacy of the standards adopted by the DHS and PUC, which was
specifically prohibited by Hartwell. (Groundwater Cases, at pp. 680–681.)
Here, unlike in the Groundwater Cases, plaintiffs’ allegations neither expressly
nor implicitly challenge the adequacy of the PUC’s standards. They instead allege SCE
violated at least one of those standards, rule 33.2, and, in doing so, harmed plaintiffs.
SCE also relies upon Southern Cal. Gas Co. v. City of Vernon (1995) 41
Cal.App.4th 209, in which the City of Vernon sought “to regulate the design and
construction of a proposed gas pipeline” by denying the utility’s applications for
encroachment permits. (Id. at pp. 211–213.) The utility sought a writ of mandate. The
appellate court concluded: “[U]nder the Constitution a city may not regulate matters over
which the PUC has been granted regulatory power, the Legislature has granted regulatory
power to the PUC over the safety of gas pipelines, and the PUC in fact has promulgated
rules on this subject. Therefore, Vernon cannot purport to regulate the design or
construction of the proposed pipeline under the guise of ensuring the pipeline’s safety.”
(Id. at p. 217.) Trial court jurisdiction was not an issue. No one claimed to have been
damaged by a utility’s misconduct or negligence. The case is inapposite. Moreover,
plaintiffs in this case do not seek to regulate the design of SCE’s substation or prevent
SCE from operating it, but merely to recover damages and compensation for harm caused
by stray currents from that substation.
SCE also argues that the PUC has exclusive jurisdiction to interpret its rules. This
premise assumes that rule 33.2 is ambiguous and requires interpretation. The PUC’s
28
amicus brief never asserted that the rule was ambiguous or required interpretation.
Although rule 33.2 is technical, it does not appear to be ambiguous: “Ground or earth
shall not be used as a normal return or circuit conductor. In direct current supply systems
or in single phase or polyphase supply systems, a neutral or any other conductor shall be
used under normal use as a return or circuit conductor; however, the grounding of the
neutral or any other conductor is not permitted as a normal return or circuit conductor.
The neutral or any other conductor is permitted to be grounded only for the purposes of
stabilization and protection.” SCE argues that differing phrasings used by plaintiffs in
their opposition to SCE’s demurrers demonstrate the rule is ambiguous. These appear to
be nothing more than paraphrasing or attempts to describe violations of the rule and in no
way establish it is ambiguous. They are simply argument. Ultimately, SCE’s brief
reveals that by “interpretation,” it chiefly refers to a finding or conclusion that SCE
violated the rule: “[A]ny interpretation by a superior court whether SCE violated Rule
33.2 would interfere with the PUC’s jurisdiction to interpret and apply its own rules,
regulations and order.” (Italics added.) Absent any ambiguity in the rule, the
determination of whether SCE violated it is a factual determination. No interpretation
appears to be required.
Moreover, even if we were to conclude there is some ambiguity in the rule, SCE
has not established that the PUC always has exclusive jurisdiction to interpret its own
rules. The cases SCE cites do not establish this proposition. For example, in Davis,
supra, 236 Cal.App.4th 619, the plaintiff alleged that SCE breached a PUC rule that
provided, in pertinent part, “The Commission shall have initial jurisdiction to interpret
. . . any provision of this Rule or of any agreements ” for connecting solar panels to the
electricity grid “and to resolve disputes regarding [a utility’s] performance of its
obligations” under PUC tariffs and rules. (Id. at p. 624.) SCE has not identified any
comparable reservation by the PUC of either initial or exclusive jurisdiction to interpret
General Order 95 or rule 33.2. Also, the plaintiff in Davis had already filed complaints
against SCE with the PUC for the same acts and omissions that were the subject of the
29
litigation, and proceedings before the PUC were still pending at the time of the appellate
decision. (Id. at pp. 634–635, 642.) The appellate court concluded each of Davis’s
claims required interpretation of PUC rules and would not be ripe until the PUC had
rendered a ruling in his favor. (Id. at pp. 644–645.)
SCE also relies upon City of Anaheim, supra, 119 Cal.App.4th 838, in which
Anaheim sought to force Pacific Bell to reimburse it for the cost of moving “overhead
facilities” underground pursuant to a city ordinance. (Id. at pp. 841–842.) The appellate
court noted, “The PUC ‘“has been held to have paramount jurisdiction in cases where it
has exercised its authority, and its authority is pitted against that of a local government
involving a matter of statewide concern,”’” such as “‘“construction and maintenance of
telephone lines within a city.”’” (Id. at p. 845.) The appellate court specifically rejected
the proposition that the PUC had exclusive jurisdiction to decide every issue arising
under the applicable PUC rule, but concluded there was “an ‘existing policy or ongoing
regulatory effort by the PUC that would be frustrated by the present action,’” namely,
“the equitable determination of the order in which communities throughout the state
should have their overhead facilities moved underground, a matter of statewide concern
over which the PUC has jurisdiction.” (Id. at p. 846.) Thus, the case does not support
SCE’s position that the PUC always has exclusive jurisdiction to interpret its own rules.
SCE also relies upon Sarale, supra, 189 Cal.App.4th 225, in which walnut
growers sought damages and declaratory and injunctive relief for PG&E’s conduct in
trimming their walnut trees growing beneath power lines to a height precluding nut
production. (Id. at pp. 232–234.) The relevant PUC rule mandated specific minimum
clearances between vegetation and power lines, but did not establish maximum limits.
(Id. at pp. 238–239.) The appellate court concluded section 1759 barred the litigation. It
explained, “Allowing owners of land containing overhead power lines to seek
individualized judicial determinations of what might be ‘necessary’ or ‘proper’
vegetation would cause a regulatory nightmare for the commission that section 1759 was
intended to prevent.” (Id. at p. 242.) “The commission’s adoption of a minimum
30
trimming standard reflects its determination that, in every situation, trimming clearance
must meet the minimum standard in order to sufficiently ensure the safety of the electric
system, surrounding property, and the public. Such a standard necessarily recognizes
that, in certain situations, safety considerations will demand that trimming exceed the
minimum. The question of whether trimming must exceed the minimum standards on
any particular section of an overhead powerline is a factual issue that is within the
exclusive jurisdiction of the commission to decide.” (Id. at pp. 242–243, italics added.)
Thus, the court concluded the PUC had exclusive jurisdiction to prevent a “regulatory
nightmare,” not because there was a rule to interpret. Indeed, the issue for the PUC to
determine was factual, not the meaning of its own rule.
Accordingly, we reject SCE’s contentions that the PUC has exclusive jurisdiction
to interpret its own rules and that interpretation of a rule is required in this case.
(d) Wilson
Jurisdiction in the trial court is also supported by a recent decision involving the
same stray currents from the Topaz substation, in which SCE raised essentially the same
argument for PUC exclusive jurisdiction as in the present case. (Wilson, supra, 234
Cal.App.4th 123.) Wilson was an appeal from a jury verdict awarding substantial
damages to a woman who lived next to the Topaz substation on claims of intentional
infliction of emotional distress, negligence, and nuisance, all based upon SCE’s failure to
properly supervise, secure, operate, maintain, or control its electrical substation, allowing
stray electrical currents to enter Wilson’s home, which SCE had owned until 1999. (Id.
at pp. 129, 132.) After the verdict, SCE unsuccessfully argued that the PUC had
exclusive jurisdiction over Wilson’s claims. (Id. at p. 140.) SCE appealed and contended
that Wilson’s claims fell within the PUC’s “exclusive jurisdiction over the design, siting,
operation, and safety of Edison’s electrical distribution system.” (Id. at p. 141.) Division
Four of this court rejected this contention after concluding the case did not satisfy the
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third Covalt factor.3 The Wilson court stated, “[W]e also disagree with Edison’s (and the
PUC’s) assertion that the commission’s adoption of various policies governing the
design, construction, maintenance, operation, and safety of electrical distribution
facilities is sufficient to establish the PUC’s exclusive jurisdiction over the claims in this
case.” (Id. at p. 148.)
The court continued: “As Wilson correctly points out, it is not sufficient that the
PUC issued general regulations requiring that electrical distribution systems be operated
and maintained in a manner to ensure safety and service, and setting forth certain design
requirements. Indeed, the Supreme Court in Covalt cited with approval Pierce v. Pacific
Gas & Electric Co. (1985) 166 Cal.App.3d 68 [212 Cal.Rptr. 283], in which the appellate
court held that section 1759 did not bar the plaintiff’s action for damages caused by a
defective transformer that exploded and sent 7,000 volts of electricity into house wiring
designed to carry 120 volts. The Supreme Court noted the appellate court properly
rejected ‘a contention that the superior court lacked jurisdiction under the Waters rule
simply because a general regulation (Gen. Order No. 95) provides that electric supply
systems shall be maintained in such a condition as to give “safe” service and utilities
shall “exercise due care to reduce to a minimum” the hazards from overhead wires.’
(Covalt, supra, 13 Cal.4th at p. 945.)” (Wilson, supra, 234 Cal.App.4th at p. 149.)
SCE also cited particular PUC rules within General Order 95 that address
“grounding requirements for common neutral systems like the Topaz system,” not
including rule 33.2, and argued it could not meet Wilson’s demand to eliminate stray
voltage on her property while still complying with the PUC’s regulations. (Wilson,
supra, 234 Cal.App.4th at p 149.) The Wilson court rejected SCE’s argument that this
demonstrated satisfaction of the third Covalt factor: “First, although there is no doubt
that the general orders require grounding of substations, it may be that Edison could
3 Notably, at SCE’s request, the Wilson court took judicial notice of the amicus
brief the PUC filed in the trial court in this case. (Wilson, supra, 234 Cal.App.4th at
p. 147, fn. 22.)
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comply with the regulations and still mitigate the stray voltage that results from
grounding. Although that is an issue that is more appropriately submitted to the PUC
under the primary jurisdiction doctrine [citation], it does not mean that Wilson’s claims
are barred under the Covalt test.” (Id. at pp 149–150.)
The court continued: “Second, when the PUC adopted G.O. 174, entitled ‘Rules
for Electric Utility Substations,’ the commission explained why it was needed: ‘The
Commission’s current General Orders 95, 128, and 165 are already designed to promote
safe operation of electric utility and communications infrastructure facilities, and provide
minimum safety requirements which the utilities are to supplement with additional safety
precautions when local conditions warrant. However, these General Orders do not give
guidance as to how utilities operate and maintain their substations, and there are no
specific regulations governing substation operation.’ (Order Instituting Rulemaking to
Implement Com. Regulations Relating to the Safety of Electric Utility Substations
(Oct. 25, 2012) Cal. P.U.C. Dec. No. 12-10-0292 [2012 Cal. PUC LEXIS 470, p. *2],
italics added.) G.O. 174 does not, however, contain any such regulations. Instead, the
general order requires each electric utility to establish and update an inspection program
for its substations, maintain records of its inspections, and submit annual inspection
program summaries and reports summarizing completed inspections to the Utilities
Safety and Reliability Branch of the PUC. (G.O. 174, rules 30, 31, 32, 33, 40.) And
although the PUC ordered the utilities to meet annually to share their newly developed
practices and review their own practices in light of other utilities’ practices, with the
expectation that ‘a “best practice” will evolve that shows how to most effectively operate
and safely control the electric systems in California . . . even as these practices continue
to reflect the unique elements of each system’ (Cal. P.U.C. Dec. No. 12-10-029, supra,
2012 Cal. PUC LEXIS 470, at p. *10), it is unclear whether this ‘best practice’ will
address stray voltage issues. Therefore, we cannot say with any certainty that litigation
of Wilson’s claims would hinder or interfere with the PUC’s regulatory policy.
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“Finally, the purported exercise of authority that Edison relies upon is of a vastly
different character than the kinds of exercise of authority found in cases in which courts
applied the Waters rule and found that section 1759 bars the plaintiff’s action. In most of
those cases, the PUC conducted (or was in the process of conducting) investigations into
or adopted regulations on the specific issue alleged in the plaintiffs’ lawsuit. (See, e.g.,
Covalt, supra, 13 Cal.4th 893 [plaintiffs alleged damages due to defendant’s powerlines
emitting EMF radiation on plaintiffs’ property; PUC conducted research projects on and
investigations into the potential health effects of EMF]; Sarale v. Pacific Gas & Electric
Co.[, supra,] 189 Cal.App.4th 225 [117 Cal.Rptr.3d 24] [plaintiffs sought damages and
injunctive relief based on a utility’s alleged excessive trimming of commercially
productive walnut trees located under the utility’s power lines; the commission had
adopted a regulation mandating minimum distances that must be maintained between
conductors and vegetation, expressly declined to mandate the maximum limits of tree
trimming, and left to the determination of the utility whether greater clearances were
necessary under the circumstances to accomplish the purposes of the regulation]; Brian T.
v. Pacific Bell (1989) 210 Cal.App.3d 894 [258 Cal.Rptr. 707] [plaintiffs sought damages
and injunction to compel utility to restrict access of sexually explicit materials to adults
through certain methods; commission had conducted investigation and hearings on how
to restrict access and adopted a different method]; Schell v. Southern Cal. Edison Co.
(1988) 204 Cal.App.3d 1039 [251 Cal.Rptr. 667] [owner of an RV park filed action
alleging his RV park was entitled to residential baseline gas and electricity allocations;
proceedings were pending before the commission on whether RV parks should come
under a special rate schedule for provision of baseline service].)
“In light of the absence of any indication that the PUC has investigated or
regulated the issue of stray voltage, and without any evidence that stray voltage cannot be
mitigated without violating the PUC’s regulation requiring grounding, we cannot say that
Wilson’s lawsuit would interfere with or hinder any supervisory or regulatory policy of
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the PUC. Therefore, we hold that Wilson’s claims are not within the exclusive authority
of the PUC under section 1759.” (Wilson, supra, 234 Cal.App.4th at pp. 150–151.)
SCE argues Wilson was wrongly decided. We disagree. Although Wilson is
somewhat distinguishable from this case, not only based upon its posture, but also upon
the claims asserted, it is nonetheless supportive of our conclusion that allowing plaintiffs
to litigate this case in the trial court would not hinder or interfere with the PUC’s exercise
of regulatory authority.
(e) Conclusion
We sympathize with the trial court’s concerns about the technical complexity of
the present case, but neither its complexity nor the PUC’s technical expertise divest the
trial court of jurisdiction. Triers of fact are often called upon to resolve highly technical
disputes and conflicting testimony by opposing experts. It will fall upon the parties to
educate the trier of fact on the technical aspects of this case when it is time to adjudicate
the issues. The trial court erred by sustaining SCE’s demurrer to the plaintiffs’ third
amended complaints on the ground of exclusive PUC jurisdiction.
4. Primary jurisdiction
The parties also dispute whether the trial court abused its jurisdiction by sustaining
the demurrers on the alternative ground that the PUC had primary jurisdiction over the
case. We conclude the trial court erred.
a. The primary jurisdiction doctrine
“The doctrine of primary jurisdiction of regulatory agencies . . . is concerned with
situations where an issue should be addressed by an administrative agency for its initial
determination because there is a need for (1) uniformity of application of administrative
regulations and uniformity of answers to administrative questions, and (2) the expert and
specialized knowledge of the relevant agency, i.e., the expertise that a regulatory agency
can bring to a conflict.” (Cundiff, supra, 101 Cal.App.4th at p. 1412.) “‘[T]he primary
jurisdiction doctrine advances two related policies: it enhances court decisionmaking and
efficiency by allowing courts to take advantage of administrative expertise, and it helps
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assure uniform application of regulatory laws. [Citations.]’ [Citation.] There is no rigid
formula for when the doctrine is applied. ‘Instead, resolution generally hinges on a
court’s determination of the extent to which the policies . . . are implicated in a given case
[Citations.].” [Citation.] Courts will also consider whether applying the doctrine
presents an inadequate remedy to litigants, such as whether there would be an
unreasonable expense and delay.” (Ibid.) The determination is a discretionary one for
the trial court. (Id. at p. 1413.)
b. A demurrer cannot be sustained on the basis of primary jurisdiction.
Primary jurisdiction is not a lack of actual jurisdiction, but a discretionary deferral
to administrative process. While a demurrer may be based upon the theory that “[t]he
court has no jurisdiction of the subject of the cause of action alleged in the pleading”
(Code Civ. Proc. § 430.10 subd. (a)), the doctrine of primary jurisdiction is not a proper
basis for a demurrer, and a trial court errs by sustaining a demurrer on that ground.
(AICCO, Inc. v. Insurance Co. of North America (2001) 90 Cal.App.4th 579, 594.)
As far as the record reveals, the only motions pending before the trial court on the
day it ruled that the PUC had exclusive or, in the alternative, primary, jurisdiction were
SCE’s demurrers and motions to strike. Thus, the trial court’s alternative ruling, based
on primary jurisdiction, appears to have been a rationale for sustaining the demurrer.
This was error.
c. The trial court abused its discretion by deferring to the PUC under the
primary jurisdiction doctrine.
The court’s remarks during the hearing on SCE’s demurrers reveal that the court’s
principal ground for deferring to the PUC under a primary jurisdiction theory was the
technical complexity of the ultimate question for the trier of fact—whether SCE was
violating rule 33.2—and the PUC’s employment of “experts” in the field. However, any
finding by the PUC on this point, whether in favor of plaintiffs or of SCE, would not
resolve plaintiffs’ claims because the PUC has no power to award plaintiffs damages and,
while such a finding might have evidentiary use, it would not necessarily preclude the
36
trier of fact from reaching a different conclusion. (Hartwell, supra, 27 Cal.4th at
pp. 276–277.) Thus, the ultimate effect of deferring to the PUC would merely be to
increase the parties’ expenses and unreasonably delay resolution of the case, all to obtain
what may amount to nothing more than an advisory opinion, as far as plaintiffs’ claims
are concerned.
Moreover, there has been no showing, and there is no reason to conclude, that the
PUC has either expertise or the power to adjudicate fraud, negligent misrepresentation,
intentional infliction of emotional distress, negligence, assault, battery, nuisance,
trespass, and inverse condemnation claims. Nor has there been a showing that plaintiffs’
claims implicate “the uniformity of application of administrative regulations and
uniformity of answers to administrative questions.” After all, plaintiffs allege SCE
violated the PUC’s rule, they do not argue, for example, that SCE was required to do
something different or more extensive than rule 33.2 requires.
Accordingly, we conclude that, even apart from the error of sustaining a demurrer
on the basis of primary jurisdiction, the trial court abused its discretion by concluding the
action should be stayed under the doctrine of primary jurisdiction.
5. Sufficiency of pleading of inverse condemnation cause of action
Although the trial court did not address the sufficiency of the pleading of any
particular cause of action in its ruling on SCE’s demurrers, SCE argues on appeal that the
inverse condemnation claim fails to state a cause of action. Because the pertinent rules of
review require affirmance of the judgment if it is correct on any ground stated in the
demurrer, we must address this contention.
a. Inverse condemnation
“Property is ‘taken or damaged’ within the meaning of article I, section 19 of the
California Constitution, so as to give rise to a claim for inverse condemnation, when:
(1) the property has been physically invaded in a tangible manner; (2) no physical
invasion has occurred, but the property has been physically damaged; or (3) an intangible
intrusion onto the property has occurred which has caused no damage to the property but
37
places a burden on the property that is direct, substantial, and peculiar to the property
itself.” (Oliver v. AT & T Wireless Services (1999) 76 Cal.App.4th 521, 530, citing
Covalt, supra, 13 Cal.4th at p. 940.)
b. The complaints sufficiently allege inverse condemnation claims.
Plaintiffs’ third amended complaints allege a physical invasion of their properties
by the stray currents and physical manifestations of such invasions, including electrical
shocks and destruction of, or damage to, appliances, electrical panels, plumbing, and the
building themselves. Although the currents are not visible, they are nonetheless quite
tangible in that they can be felt by the sense of touch. SCE argues the stray currents are
analogous to noise, odor, light, or the EMF’s at issue in Covalt, supra, 13 Cal.4th at
page 940. The Supreme Court in Covalt characterized the EMF’s as “wholly intangible
phenomena that, like television and radio waves, ‘occupy’ no ‘space’ at all and cannot
even be perceived by the senses.” (Ibid.) The court therefore concluded the EMF’s did
not constitute a physical intrusion upon the Covalts’ property, but “an intangible intrusion
that does not physically damage the property.” (Id. at pp. 941–942.) Plaintiffs here do
not base their claims upon EMF’s, but stray currents that physically invade their property,
currents they feel through shocks, and currents that cause physical damage to their
property. These currents are also distinguishable from noise, odor, or light, which are not
perceptible to the touch and do not cause physical damage.
SCE argues that the Richmond plaintiffs’ complaint fails to sufficiently allege
property damage because it does not identify which of plaintiffs’ 23 properties have been
damaged. We disagree. The complaints allege the properties of all plaintiffs have been
damaged by the invading stray currents. For pleading purposes, this is sufficient. SCE
will no doubt propound discovery to determine each plaintiff’s particular damage claims.
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DISPOSITION
The orders sustaining SCE’s demurrers to the third amended complaints are
reversed and the cause is remanded to the trial court with directions to vacate its orders
sustaining the demurrers and enter new orders overruling the demurrers. The writ
petition is dismissed as moot. Plaintiffs/petitioners are awarded their costs on appeal and
with respect to their writ petition.
NOT TO BE PUBLISHED.
LUI, J.
We concur:
ROTHSCHILD, P. J.
CHANEY, J.
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