DocketNumber: No. 16–0301
Citation Numbers: 546 S.W.3d 133
Judges: Boyd
Filed Date: 4/27/2018
Status: Precedential
Modified Date: 10/19/2024
The question in this case is whether the Texas Public Utility Regulatory Act grants the Texas Public Utility Commission (the PUC) exclusive jurisdiction to resolve issues underlying a customer's claim that a PUC-regulated utility breached a contract by failing to timely provide electricity services. We hold that it does, so we reverse the court of appeals' judgment and render judgment dismissing this case without prejudice.
I.
Background
In 2007, Chaparral Energy, LLC, requested that Oncor Electric Delivery Co. provide electricity to two wells Chaparral had recently drilled in Loving County. Oncor agreed, although it would have to construct new facilities to deliver electricity from its existing facilities to a "tie-in" point from which Chaparral could construct facilities to transmit the electricity to the wells. Oncor allegedly represented that it could complete its work within about ninety days, possibly even sooner. In late September 2007, Oncor delivered a proposed written agreement (the Service Agreement) to Chaparral. The Service Agreement required Chaparral to pay $22,327 as its share of Oncor's costs to construct the new facilities. The agreement provided that "the start date of this project will be no earlier than two weeks preceding the execution of this agreement" and that Oncor would provide a "more definitive installation schedule" upon Chaparral's delivery of the executed agreement and required payment. Chaparral delivered the signed Service Agreement and *137the $22,327 payment to Oncor by the end of November.
Oncor never provided Chaparral a "more definitive installation schedule." Several weeks later, when Chaparral inquired about the project's status, Oncor explained that it was having difficulty obtaining easements it needed to construct the new facilities across privately owned land. Chaparral alleges that these representations were false and that Oncor did not even attempt to obtain all of the necessary easements until several months later. In any event, Oncor did not obtain the easements until December 2008. According to Chaparral, Oncor then finished constructing the new facilities in two days. Meanwhile, Chaparral allegedly spent over $300,000 to rent generators and purchase diesel fuel to provide the necessary power to the wells.
Chaparral sued Oncor in district court for breach of contract, seeking actual damages, additional damages, interest, attorney's fees, expenses, taxable costs, "and any further legal or equitable relief to which Chaparral may be entitled." Chaparral alleged that "Oncor did not cooperate in good faith to fulfill its duties and obligations" under the Service Agreement, that "Oncor did not use reasonable diligence, nor did Oncor act in a manner consistent with good business practices, reliability, safety, and expedition," and that Oncor "engaged in intentional misconduct" and was grossly negligent.
A jury found that Oncor failed to comply with the Service Agreement. Based on the jury's findings, the trial court awarded Chaparral $186,000 in actual damages, nearly $30,000 in prejudgment interest, $200,000 for attorney's fees, and taxable court costs. Oncor appealed. While the appeal was pending, the Fort Worth Court of Appeals issued its decision in Oncor Electric Delivery Company, LLC v. Giovanni Homes Corporation ,
II.
Jurisdiction
Oncor argues that the court of appeals erred by denying Oncor's dismissal motion because the PUC has exclusive jurisdiction over Chaparral's claims. Chaparral disagrees, of course, and also argues that even if the PUC might otherwise have exclusive jurisdiction, Chaparral did not have to exhaust administrative remedies because (1) the PUC has no authority to resolve a breach-of-contract claim or award damages as a remedy for a breach, and (2) forcing Chaparral to pursue its claim before the PUC would deny Chaparral its constitutional rights to open courts and to a jury trial. We address each issue in turn.
*138A. Exclusive jurisdiction
A state agency "has exclusive jurisdiction when the Legislature has granted that agency the sole authority to make an initial determination in a dispute." In re Entergy Corp. ,
We begin with the presumption that district courts are constitutionally authorized to resolve legal disputes. Entergy ,
A statute grants an agency exclusive jurisdiction when its "language clearly expresses the Legislature's intent for the [agency] to have exclusive jurisdiction over matters the [statute] governs." David McDavid Nissan ,
Oncor is a public transmission-and-distribution utility regulated by the PUC. See Oncor Elec. Delivery Co. LLC v. Pub. Util. Comm'n ,
Oncor argues that PURA grants the PUC exclusive jurisdiction over Chaparral's claim both expressly and by creating a pervasive regulatory scheme. In support of an express grant, Oncor points to section 32.001, which grants the PUC "exclusive original jurisdiction over the rates, operations, and services of an electric utility."
Oncor also relies on Entergy to argue that PURA's comprehensive regulatory scheme confirms that the PUC has exclusive jurisdiction over Chaparral's claims. We noted in Entergy that "the statutory description of PURA as 'comprehensive' demonstrates the Legislature's belief that PURA would comprehend all or virtually all pertinent considerations involving electric utilities operating in Texas."
Entergy does not necessarily end our analysis, however. All regulatory schemes have limitations. See, e.g. , Clint Indep. Sch. Dist. v. Marquez ,
We are not convinced. As we have noted, PURA expressly grants the PUC "exclusive original jurisdiction over the rates, operations, and services of an electric utility." TEX. UTIL. CODE § 32.001(a). PURA defines the term "service" to have "its broadest and most inclusive meaning."
Two Texas courts of appeals have confronted this same issue. In City of Houston v. CenterPoint Energy Houston Electric, LLC , the City of Houston sued an electric utility for breach of contract, alleging that the utility had overcharged the City for streetlight services in violation of the utility's tariff. No. 01-11-00885-CV,
Chaparral argues, however, that in addition to section 32.001, we must also consider PURA's section 17.157, which provides that the PUC "may resolve disputes between a retail customer and a billing utility, service provider, telecommunications utility, retail electric provider, or electric utility." TEX. UTIL. CODE § 17.157(a) (emphasis added). This section also requires the PUC to "adopt procedures for the resolution of disputes in a timely manner" and authorizes the PUC to "investigate an alleged violation" and to resolve such disputes by awarding a variety of relief.
Oncor argues that the court of appeals erred by relying on section 17.157 because it relates only to "billing disputes," and not to disputes involving a utility's rates, operations, or services. Oncor relies on our decision in In re Southwestern Bell Telephone , in which we relied on section 17.157 to conclude that, "[f]or billing disputes , the PUC's authority is even more comprehensive" than for other types of disputes.
*141itself has concluded that "the disputes that the [PUC] may resolve under PURA 17.157 are limited to those related to charges that are billed to the customer for products and services." Compl. of Centerpoint Energy, Inc. and Tex. Genco, LP Against Util. Choice LLC , PUC Docket No. 27745, Prelim. Order at 6 (Aug. 18, 2003).
On the other hand, we did not expressly hold in In re Southwestern Bell Telephone that section 17.157only addresses billing disputes, and the section itself refers more broadly to "disputes." And section 17.001 also more broadly states that chapter 17 "establish[es] retail customer protection standards and confer[s] on the [PUC] authority to adopt and enforce rules to protect retail customers from fraudulent, unfair, misleading, deceptive, or anticompetitive practices." TEX. UTIL. CODE § 17.001(b). It may be that, properly construed within the context of chapter 17, section 17.157 addresses only billing disputes, but we need not decide that issue here. Even if the section addresses all disputes, including those involving a utility's rates, operations, and services, we cannot read it to negate the broad scope of the "exclusive original jurisdiction" section 32.001 expressly grants the PUC. Reading section 17.157 together with section 32.001, we conclude that-even if section 17.157 addresses all disputes-it merely describes various actions the PUC "may" take when exercising its "exclusive original jurisdiction over the rates, operations, and services of an electric utility."
In light of section 32.001(a)'s express language and the comprehensive regulatory scheme PURA creates, we conclude that PURA grants the PUC exclusive jurisdiction over all matters involving an electric utility's rates, operations, and services. And because Chaparral's breach-of-contract claim in this case complains of Oncor's services, we conclude that the scope of the PUC's exclusive jurisdiction encompasses that claim. Accordingly, Chaparral was required to exhaust its administrative remedies before the PUC before seeking relief in district court.
B. The PUC's power to remedy
Chaparral argues that, even if this case would otherwise fall within the PUC's exclusive jurisdiction, the "inadequate-remedy exception" to the exhaustion-of-remedies requirement applies. The inadequate-remedy exception applies when the claimant cannot obtain an adequate remedy through the administrative process and requiring the claimant to go through the process would cause the claimant irreparable harm. See Hous. Fed'n of Teachers, Local 2415 v. Hous. Indep. Sch. Dist. ,
We conclude that the inadequate-remedy exception does not apply in this case *142because PURA does not prevent Chaparral from obtaining the damages it seeks in the district court after the PUC has exercised its exclusive jurisdiction. We described this two-step process in David McDavid Nissan , in which we held that the former Texas Motor Vehicle Commission Code granted exclusive jurisdiction to the former Texas Motor Vehicle Board to resolve claims and issues that the Code governed.
We agree with Oncor that the same two-step process applies to Chaparral's claim under PURA. As a PUC-regulated utility, Oncor is required to file a tariff with the PUC describing its rates, operations, and services.
- requires Oncor to "use reasonable diligence to comply with the operational and transactional requirements and timelines for provision of Delivery Service";
- requires the parties to "cooperate in good faith to fulfill all duties, obligations, and rights set forth in [the tariff]";
- provides that Oncor "will not be liable for any damages ... occasioned by fluctuations or interruptions" in the delivery of electricity;
- provides that, unless "mutually agreed to by [Oncor] and [its] Retail Customer," Oncor must provide an "entity requesting Construction Service an estimated completion date and an estimated cost for all charges to be assessed" within "ten Business Days of [Oncor's] receipt of a detailed request" for such information;
- describes the form of the easement Oncor is entitled to receive for the facilities it constructs; and
- states that the tariff's provisions "shall" govern all requests for construction services.
Oncor relies on these types of tariff provisions to defend against Chaparral's claim, and Chaparral relies on others to *143support its claim. The Service Agreement, in fact, required Chaparral to pay $22,327 "[p]ursuant to" Oncor's tariff, and in its district-court petition, Chaparral sought "additional damages recoverable pursuant to Oncor's Tariff." Oncor argued in the court of appeals that the PUC has exclusive jurisdiction "because the claim's resolution requires the Tariff's interpretation." The court addressed and rejected Oncor's tariff-based arguments and defenses on their merits.
We also conclude that the inadequate-remedy exception does not apply because Chaparral has not demonstrated that exhausting its administrative remedies will cause it to suffer irreparable harm. Chaparral relies on our plurality opinion in Houston Federation of Teachers in which we held that teachers subject to a new school-district policy that extended their work hours beyond the 7-½ hours of the prior policy did not have to exhaust their administrative remedies because "an award of damages months later will not provide adequate compensation" for the lost time.
C. Chaparral's constitutional rights
Finally, we consider Chaparral's argument that requiring it to exhaust administrative remedies deprives it of its constitutional rights to a jury trial and to open courts. We disagree.
The Texas Constitution provides: "All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law." TEX. CONST. art. I, § 13. We have explained that, among other protections, this provision mandates "that the legislature may not abrogate the right to assert a well-established common law cause of action unless the reason for its action outweighs the litigants' constitutional right of redress." Trinity River Auth. v. URS Consultants, Inc. ,
*144Our Constitution also guarantees the right to a jury trial in both the Bill of Rights and the Judiciary Article. TEX. CONST. art. I, § 15 ("The right of trial by jury shall remain inviolate. The Legislature shall pass such laws as may be needed to regulate the same, and to maintain its purity and efficiency ...."), art. V, § 10 ("In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury ...."). The Bill of Rights "maintains a right to trial by jury for those actions, or analogous actions, tried by jury when the Constitution was adopted in 1876." Tex. Workers' Comp. Com'n v. Garcia ,
For over one hundred years, we have noted that "in certain types of adversary proceedings the constitutional right to a jury trial does not attach" and that included in those types of proceedings are "appeals from administrative decisions." Tex. Ass'n of Bus. ,
Oncor must use reasonable diligence to comply with the Tariff's requirements and timelines for providing delivery service.... Oncor must cooperate in good-faith [sic] with Chaparral ... to fulfill all of its duties, obligations and rights set forth in the Tariff.
....
Extending the Oncor delivery system to the point of delivery required "construction services" (as defined in the Tariff). Oncor Tariff Section 5.3.1.2 provides that Tariff Section governs construction services requests.
The aspects of Oncor's performance of which Chaparral complains are those governed by PURA and the PUC rules, neither of which is analogous to any action tried to a jury in 1876. Thus, "no right to a jury trial attaches to appeals from administrative adjudications under the ... statutes and regulations at issue here." Id. at 451.
It is also true that access to a jury need not be provided at the initial adjudication, so long as "the right to appeal and the jury trial on appeal are secured." Cockrill v. Cox ,
III.
Conclusion
When the Legislature creates a pervasive regulatory scheme, it intends for the agency with the appropriate expertise to make important determinations before the parties take their claim to the judicial system. As we explained recently:
The requirement that parties exhaust administrative remedies does not deprive parties of their legal rights. Instead, it honors the Legislature's intent that "the appropriate body adjudicates the dispute" first and thereby "ensure[s] an orderly procedure to enforce those rights." By requiring the agency to address the complaints first, the law permits the agency to apply its expertise and exercise its discretion to resolve the issue and to develop a complete factual record if the courts later get involved. A party who obtains relief through the administrative process avoids the expense and delay of litigation. And if the outcome of the administrative process leaves the party dissatisfied, it may file suit and have the courts review the agency's decision.
Clint Indep. Sch. Dist. ,
Chaparral did not plead a separate cause of action for negligence or gross negligence.
See, e.g. , Tex. Util. Code §§ 17.151 ("Requirements for Submitting Charges"), .152 ("Responsibilities of Billing Utility"), .153 ("Records of Disputed Charges"), .154(a) ("A billing utility shall provide notice of a customer's rights under this section in the manner prescribed by the commission."), .155 ("A billing utility shall provide a copy of records maintained under Sections 17.151(c), 17.152, and 17.154 to the commission staff on request."), .156 ("If the commission finds that a billing utility violated this subchapter, the commission may implement penalties and other enforcement actions under Chapter 15.").
All utilities must make their tariffs available to the public.
The court of appeals also concluded that this case "turns" on the "filed-rate doctrine," which "prohibits courts from awarding relief against a utility that contradicts, expands, or varies from the terms of the utility's filed tariff."