When the Exclusive Jurisdiction of the Public Utilities Commission Trumps a State Court Ruling

Utility companies are well-aware that state laws create their Utility Commissions, which provide a comprehensive scheme governing public utilities. For example, in Ohio, Title 49 of the Ohio Revised Code creates the Public Utilities Commission of Ohio.¹   These state statutes place regulations of rates, charges, classifications and service within the jurisdiction of the Commissions.²  

The Ohio Supreme Court has repeatedly confirmed that a “Court of Common Pleas is without jurisdiction to hear a claim alleging that a utility has violated R.C. 4905.22 by charging an unjust and unreasonable rate and wrongfully terminating service since such matters are within the exclusive jurisdiction of the Public Utilities Commission.”³  The Court looks to (1) whether the commission’s administrative expertise is required to resolve the disputed issue and (2) whether the act complained of constitutes a practice normally authorized by the utility.⁴   Both must be met to determine that the PUCO has exclusive jurisdiction.⁵  

Similarly, the Pennsylvania PUC has exclusive jurisdiction over any matter including among other things, any rate charged by a public utility.⁶   The policy behind this widely accepted policy is stated in Pettko v. Pennsylvania-American Water Co. as follows:

The doctrine of primary jurisdiction requires judicial abstention in cases where protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme. Our Supreme Court stated in Elkin that the doctrine serves several purposes, chief of which are the benefits to be derived by making use of the agency's special experience and expertise in complex areas with which judges and juries have little familiarity. Another important consideration is the need to promote consistency and uniformity in certain areas of administrative policy. Once the administrative tribunal has determined the issues within its then the temporarily suspended civil litigation may continue, guided in scope and direction by the nature and outcome of the agency determination. (citations in footnote).⁷

So when does this become important?  Overzealous attorneys and overreaching court orders may seek to include a utility company in a order, for example in a receivership, ordering a utility to keep the power and gas on during the receivership despite the past due bill, or ordering the utility not to require a deposit from the receiver. Likewise, what the utility sees as a routine collection lawsuit on an unpaid account for utility service may draw a counterclaim governed exclusively by the state’s utility commission. 

An example of this occurred when the utility company was required to apply to Ohio Supreme Court for a writ of prohibition after it brought a routine suit against its customer in state court for failure to pay its utility bill.⁸   The customer in turn filed a complaint with the PUCO alleging issues will the rates, and billing procedures of the utility.  The customer then brought a counterclaim in the state court action with the same allegations.  Although the utility filed a motion to dismiss the counterclaim citing the exclusive jurisdiction of the PUCO, the state court refused to dismiss the counterclaim.   The customer then dismissed its PUCO complaint and sought to proceed with these allegations in state court only.  The utility was required to seek a writ of prohibition in the Ohio Supreme Court, which held that any allegation that a utility has violated O.R.C. 4905.22, and all claims predicated on that violation, must be decided by the PUCO.⁹  

There are, however, exceptions to PUCO'S exclusive jurisdiction over utility complaints. Contract and pure common-law tort claims may be brought in a court of common pleas, rather than submitted to PUCO.¹⁰  Also, depending on the state, the utility commission’s jurisdiction may not be exclusive if the agency cannot award adequate damages.¹¹ 

These examples demonstrate that all claims regarding rates, shutoffs, deposits and classifications of accounts, cannot be brought in state court.  When a utility is involved with any case where a Defendant asks a state court seeks to make a ruling on these issues, the utility should seek to have the matter referred to the PUCO.   

1  Kazmaier Spermarket, Inc. v. Toledo Edison, 61 Ohio St. 3d 147.
2  State ex rel. Cleveland Elec. Illum. Co. v. Cuyahoga Cty. Court of Common Pleas (2000), 88 Ohio St. 3d 447, 450, 727 N.E.2d 900
3  Milligan v. Ohio Bell Tel. Co. (1978), 56 Ohio St. 2d 191.
4  Corrigan v. Illum Co. (2009), 122 Ohio St.3d 265, 2009 Ohio 2524.
5  Allstate Ins. Co. v. Cleveland Elec. Illum. Co. (2008) 119 Ohio St.3d 301, 2008 Ohio 3917. 
6  Pettko v. Pennslyvania-American Water Co.,  15 Pa. D.&C.5th 565 (2010)
7  Poorbaugh v. Pennsylvania Public Utility Comm'n, 666 A.2d 744, 749 (Pa.Cmwlth. 1995); (citing Elkin v. Bell Telephone Company, 491 Pa. 123, 420 A.2d 371, 376-77 (Pa. 1980))
8  State ex rel. Illuminating Co. v. Cuyahoga County Common Pleas (2002), 97 Ohio St. 3d 69, 2002 Ohio 5312
9  Id.
10  Miles Mgmt. Corp. v. FirstEnergy Corp (March 31, 2005), Eighth Dist CA No. 84197, 2005 Ohio 1496. 
11  Di Santo v. Dauphin Consol. Water Supply Co., 436 A.2d 197, 202 (Pa. Super. Ct. 1981)