Gosar's Unlimited Inc. v. The Wyoming Public Service Commission ( 2013 )

IN THE SUPREME COURT, STATE OF WYOMING
2013 WY 90APRIL TERM, A.D. 2013
July 19, 2013
GOSAR’S UNLIMITED INC.,
Appellant
(Petitioner),
v.
S-12-0194
THE WYOMING PUBLIC SERVICE
COMMISSION,
Appellee
(Respondent).
Appeal from the District Court of Laramie County
The Honorable Peter G. Arnold, Judge
Representing Appellant:
Bruce S. Asay of Associated Legal Group, LLC, Cheyenne, WY.
Representing Appellee:
Gregory A. Phillips, Wyoming Attorney General; Martin L. Hardsocg, Deputy
Attorney General; Ryan T. Schelhaas, Senior Assistant Attorney General; and
Michael M. Robinson, Senior Assistant Attorney General. Argument by Mr.
Robinson.
Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be
made before final publication in the permanent volume.
HILL, Justice.
[¶1] Gosar’s Unlimited, Inc. (“Gosar’s”) owns and operates two mobile home parks
where, historically, Gosar’s included in the rent it charged tenants the cost of water that it
purchased from the City of Rock Springs for the tenants’ use. However, in 2000, Gosar’s
installed water meters on each trailer lot and began charging tenants for their water usage
separately from their rent.
[¶2] In 2008, acting on a complaint from a former tenant, the Public Service
Commission (“PSC”) opened an investigation to determine whether Gosar’s was
operating as a public utility and therefore subject to regulation by the PSC. Following an
investigation and subsequent hearing, the PSC determined that Gosar’s was a public
utility subject to PSC regulation. The district court affirmed the PSC’s determination,
and this appeal followed.
ISSUES
[¶3] We rephrase Gosar’s issues as follows:
1. Whether Gosar’s is a public utility subject to regulation by
the PSC, given that Gosar’s operates a mobile home park
and installed water meters to allow it to bill tenants for
their water usage separately from their rent?
2. Whether the PSC’s regulation of Gosar’s has violated
Gosar’s right to equal protection because the PSC does not
regulate other similarly situated mobile home park
operators?
FACTS
[¶4] Gosar’s is a Wyoming statutory close corporation owned by Darla Gosar. Gosar’s
owns and operates two mobile home parks in Rock Springs: Mobile Corrals and Mobile
Stalls. Those mobile home parks are serviced by city meters and are billed for overall
usage. In May of 2000, Gosar’s installed water usage meters for each lot in each mobile
home park. Since then, Gosar’s has billed water and sewer usage for each lot occupant
separately from rent. Also, in order to track water payments to the City of Rock Springs
and water payments from tenants, Gosar’s created an informal business entity named
Gosar’s Unlimited Water Service.
[¶5] In December of 2008, the PSC, acting on a complaint from a former Gosar’s
mobile home park tenant, opened an investigation to determine whether Gosar’s was a
public utility subject to regulation under Wyoming Statutes. A public hearing was held,
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and after testimony and evidence were presented, and public deliberations occurred, the
PSC found that Gosar’s was a public utility.
[¶6] Gosar’s filed a petition for review in district court. The court issued an order
affirming the PSC’s decision and declined to find that Gosar’s was a public utility based
solely on the language in Wyo. Stat. Ann. § 37-1-101(a)(vi) but, instead, held that
Gosar’s was a public utility because it provided a regulated utility commodity (water) “to
or for the public” as that phrase has been defined in this Court’s precedent.
[¶7] This appeal followed, and more facts will be available hereinafter as necessary.
STANDARD OF REVIEW
[¶8] We review agency proceedings under the Wyoming Administrative Procedure Act
to determine if they are supported by substantial evidence. Dale v. S & S Builders, LLC,
2008 WY 84, ¶ 24, 188 P.3d 554, 561 (Wyo. 2008). Substantial evidence is relevant
evidence that a “reasonable mind might accept in support of the agency’s conclusion.”
Camilleri v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 2010 WY 156, ¶ 14, 244
P.3d 52, 58 (Wyo. 2010). Any questions of law are reviewed de novo. Id. at 59.
DISCUSSION
[¶9] Gosar’s contends on appeal that the PSC erroneously decided that Gosar’s is a
public utility subject to PSC regulation under Wyo. Stat. Ann. § 37-2-112. Gosar’s
contends that it is not a public utility and argues that Wyoming Statutes should be
interpreted in its favor because Gosar’s never served the public with its water. Instead,
Gosar’s argues that it only served private tenants in its own mobile home park. For its
part, the PSC argues that Gosar’s does not look at the statutes closely enough, and that if
examined properly, Wyoming Statutes define Gosar’s as a public utility, subject to
regulation under Wyoming law.
[¶10] In our evaluation of this case, we begin with the question of statutory
interpretation.
Our paramount consideration is the legislature’s intent as
reflected in the plain and ordinary meaning of the words used
in the statute. Initially, we determine whether the statute is
clear or ambiguous.
A statute is clear and unambiguous if its wording is such
that reasonable persons are able to agree on its meaning
with consistency and predictability. Conversely, a
statute is ambiguous if it is found to be vague or
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uncertain and subject to varying interpretations. If we
determine that a statute is clear and unambiguous, we
give effect to the plain language of the statute.
[Krenning v. Heart Mt. Irrigation Dist., 2009 WY 11, ¶ 9,
200 P.3d 774, 778 (Wyo. 2009)], quoting RK v. State ex rel.
Natrona Cty. Child Support Enforcement Dep’t, 2008 WY 1,
¶ 10, 174 P.3d 166, 169 (Wyo. 2008). In interpreting a
statute, we will not ignore other statutory provisions
pertaining to the same subject but will, instead, consider all
such provisions in pari materia. Qwest Corp. v. Pub. Serv.
Comm’n of Wyo., 2007 WY 97, ¶ 22, 161 P.3d 495, 501
(Wyo. 2007).
Horse Creek Conservation Dist. v. State ex rel. Wyo. AG, 2009 WY 143 ¶ 14, 221 P.3d
306, 312 (Wyo. 2009). “The commission shall have general and exclusive power to
regulate and supervise every public utility within the state in accordance with the
provisions of this act.” Wyo. Stat. Ann. § 37-2-112 (LexisNexis 2013).
[¶11] The term “public utility” is defined in multiple subsections by Wyo. Stat. Ann. §
37-1-101.1 To be a public utility, generally, each statutory subsection requires “any
plant, property, or facility” be used to generate, manufacture, distribute, sell or furnish a
utility commodity “to or for the public.” Wyo. Stat. Ann. § 37-1-101(a)(VI)(A), (C)-(G)
(LexisNexis 2011). Regarding water, the statute defines public utility as follows:
(vi) “Public utility” means and includes every person
that owns, operates, leases, controls or has power to operate,
lease or control:
....
(E) Any plant, property or facility for the
supply, storage, distribution or furnishing to or for the
public of water for manufacturing, municipal,
agriculture or domestic uses except and excluding any
such plant, property or facility owned by a
municipality[.]
Wyo. Stat. Ann. § 37-1-101(a)(vi)(E) (LexisNexis 2013).
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Seven subsections exist. Subsection (B) had been repealed at the time of these proceedings before the
PSC, and in 2012, subsections (A) and (F) were repealed. Wyo. Stat. Ann. §§ 37-1-101(a)(vi)(B)
(repealed in 1995); 37-1-101(a)(vi)(A) and (F) (repealed in 2012).
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[¶12] Moving further down the statute, to subsection (H), the statute delineates six types
of entities or specified activities that “none of the provisions of this chapter shall apply to,
including (I) interstate commerce, (II) municipal utilities, and (III) farmers’ mutual
telephone associations with no capital stock who furnish telephone service only to
members and without tolls except as specifically provided by law. Clearly, the
legislature’s intent as to these activities and entities was to make them exempt from the
definition of “public utilities” and thus, the jurisdiction of the PSC. Regarding water,
however, subsection (H) continues:
(H) None of the provisions of this chapter shall apply
to:
....
(VI) … the generation, transmission, or
distribution of electricity, or to the manufacture or
distribution of gas, or to the furnishing or distribution
of water, nor to the production, delivery or furnishing
of steam or any other substance, by a producer or other
person, for the sole use of a producer or other person,
or for the use of tenants of a producer or other person
and not for sale to others. Such exemptions shall not
apply to metered or direct sales of a utility commodity
by a producer or other person to his tenants.
Wyo. Stat. Ann. § 37-1-101(a)(vi)(H)(VI) (LexisNexis 2013) (emphasis added).
Subsection H sets out the exemption from the definition of a public utility, specifying that
the “furnishing or distribution of [water by a person for the use of tenants of a person and
not for sale to others]” is not a public utility under the provisions of Chapter 1 of Title 37.
Id. Thus, in general, when a person “furnishes or distributes” water to tenants, that
person is not acting as a public utility. However, subsection (H)(VI) then states that
“Such exemptions shall not apply to metered or other direct sales of a utility commodity
by a producer or other person to his tenants.” Id. (emphasis added). In other words,
when a person meters or directly sells the utility commodity to his tenants, the exemption
does not apply. The legislature has created, intentionally or not, an exception to the
exemption under subsection (H). From this reading, we conclude that the statute is
explicit and states that the exception is not included in the exemption from the definition
of a public utility; therefore, under the legislature’s clear parameters, Gosar’s is a public
utility under the statute.
[¶13] Gosar’s disagrees, and compares this case to Krenning v. Heart Mt. Irr. Dist., 200
P.3d 774, 781-82 (Wyo. 2009), where this Court held that the Heart Mountain Irrigation
District was not a public utility. However, as the PSC points out, there are significant
differences between Krenning and this set of facts. Fundamentally, there is a difference
between an irrigation district and a private entity or person providing water service. An
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irrigation district, like in Krenning, is a governmental entity that does not provide water
service to each person within its territorial boundary -- rather, being a landowner is a
prerequisite to being included in the district and tenants, as non-landowners, are not
members of an irrigation district. See Wyo. Stat. Ann. § 41-10-102 (LexisNexis 2013).
Gosar’s is not a governmental entity and does furnish water to every person within its
operating territory -- the mobile home park. The record clearly states that Gosar’s
provides metered water to its tenants. If reading this statute as we are required by our
precedent -- in pari materia -- we cannot avoid this result. If a person meters or directly
sells a commodity utility, such as water, to his tenants, then according to the Wyoming
Statutes, that person is a public utility.
Equal Protection
[¶14] Having determined that Gosar’s is a public utility subject to regulation by the PSC,
we move forward to consider Gosar’s next argument that it has been treated differently
from other similarly situated entities. This being an equal protection issue, we look to
our established precedent:
The principles of equal protection analysis are well
established. Greenwalt, ¶ 39, 71 P.3d at 730-31. Claims of
unconstitutional classification are analyzed under two levels
of scrutiny. If the class is suspect or if a fundamental right is
involved, a strict scrutiny standard is applied that requires a
demonstration that the classification is necessary to achieve a
compelling state interest. In re Honeycutt, 908 P.2d 976, 979
(Wyo. 1995); Allhusen v. State by and through Wyo. Mental
Health Professions Licensing Bd., 898 P.2d 878, 885 (Wyo.
1995); Washakie County School Dist. No. One v. Herschler,
606 P.2d 310, 333 (Wyo. 1980). If a suspect class or a
fundamental right is not involved, a rational relationship test
is used to determine if the classification has a rational
relationship to a legitimate state interest. Honeycutt, 908 P.2d
at 979 (citing Meyer v. Kendig, 641 P.2d 1235, 1239 (Wyo.
1982)). A party attacking the rationality of the legislative
classification has the heavy burden of demonstrating the
unconstitutionality of a statute beyond a reasonable doubt.
Greenwalt, ¶ 30, 71 P.3d at 730 (citing FCC v. Beach
Communications, Inc., 508 U.S. 307, 315, 113 S. Ct. 2096,
2102, 124 L.Ed. 2d 211 (1993); Small v. State, 689 P.2d 420,
426 (Wyo. 1984); Nehring v. Russell, 582 P.2d 67, 74 (Wyo.
1978)).
Newport Int’l Univ., Inc. v. State, 2008 WY 72, ¶ 16, 186 P.3d 382, 387 (Wyo. 2008).
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[¶15] Like the district court, we cannot conclude that Gosar’s meets the heavy burden
required to demonstrate that it is being treated differently than other similarly situated
entities. The evidence presented by Gosar’s does not address how exactly individual
mobile home parks handle the billing of their tenants. This distinction is critical. If the
charge is passed through and included in rent, the entity is not a utility. However, if the
tenant is separately metered, the entity is a utility. The PSC is “required to give
paramount consideration to the public interest in exercising its statutory powers to
regulate and supervise public utilities. The desires of the utility are secondary.”
PacifiCorp v. Public Service Comm’n of Wyo., 2004 WY 164, ¶ 13, 103 P.3d 862, 867
(Wyo. 2004).
[¶16] Lastly, and given our result, we likewise cannot conclude that the action of the
PSC was arbitrary, capricious, an abuse of discretion contrary to the statute, or not
supported by substantial evidence.
CONCLUSION
[¶17] The PSC’s conclusion and the district court’s order affirming that Gosar’s is a
public utility under Wyoming law is affirmed.
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