IN THE SUPREME COURT OF THE STATE OF MONTANA
CAUSE NO. DA 11-0382
DR. PAUL WILLIAMSON, REV. DR. ‘fERN )KLINGMAN, PATRICIA KLINGMAN & )RUSSELL L. DOTY; JAMES T. &ELIZABETH GRUBA and LEO 0. & )JEANNE R. BARSANTI, )
)Appellants, )
)vs. )
)MONTANA PUBLIC SERVICE )COMMISSION and )NORTHWESTERN ENERGY, )
)Appellees. )
ANSWER BRIEF OF APPELLEEMONTANA PUBLIC SERVICE COMMISSION
ON APPEAL FROM THE THIRTEENTH JUDICIAL DISTRICT COURTYELLOWSTONE COUNTY, MONTANA
ATTORNEYS FOR APPELLEES ATTORNEY FOR APPELLANTSJames C. Paine Russell L. DotySpecial Assistant Attorney General 3878 N. Tanager LuP.O. Box 202601 Billings, MT 59102-5916Helena, MT 69620-2601 (406) 696-2842(406) 444-6377 Fax: (206) 984-4876Fax: (406) 444-7618 jwin4u~eaflhuink.netjpaine2(~mt.gov
Monica TranelTranel, McCarter & Morris, PLLPGreat Northern Town Center30 West 14th Street, Suite 204Helena, MT 59601(406) 513-1105MTranelØ~tranelfirm.com
FILEDOctober24 2011
SmithCLERK OFThE SUPREME COURT
STAlE UP MONTMA
TABLE OF CONTENTS
STATEMENT OF THE ISSUES 1
II. STATEMENT OF THE CASE 2
III. STATEMENT OF THE PACTS 4
IV. STM’IDAJU) OF REVIEW 7
V. ARGUMENT 8
1. The Commission’s denial of Appellants’ motion to amend Their complaintshould be affirmed 8
2. Appellants lack standing to bring a complaint contesting NWE’s street andarea lighting tariff as they are not “directly” affected by the tariff, as isrequiredunder § 69-3,321, MCA 12
A. Appellants are not “directly” affected by NWE’s street and area light rates,tolls, charges or schedules 13
B. Appellants are not directly affected by the regulations, measurements,practices ofNWE in its production, transmission, delivery or furnishing ofstreet lighting, or by Appellants’ right to a clean and healthfulenvironment 16
3. Appellants have not shown that Article II, § 16 of the Montana Constitution isapplicable to their described circumstances; i.e. Appellants have not shown thatthey have suffered property damage 20
4. Appellants’ theories of what “directly” means should be dismissed asAppellants use out-of-record materials to argue their case 21
5. Appellants provide no support for their contention that standing under the “legalequivalent of all standing provisions” doctrine affords them standing 21
6. Standing is not afforded simply because of asserted expertise by complainantsor plaintiffs 22
7. Appellants provide no explanation or supporting legal precedent for theirassertion that Appellants are directly affected due to the existence of a “jointrate.” 24
8. Appellants should not be found to have standing due to an alleged thirdparty beneficiary relationship to local government-NWE contracts 25
TABLE OF AUTHORITIES
Cases
Benjamin v. Anderson2005MT123,P31,327Mont. 173,P31,112P.3d1039,p31 8
Clark v. Eagle Systems, Inc.(1996), 279 Mont. 279, 927 P.2d 995,53 Mont. St Rep. 1150 9
Den/ce v. Shoemaker2008 MT 418, P39,447 Mont. 322, 198 P.3c1 284 7
Diamond et al v. Charles et aL(1976), 476 U.S. 54, atpp. 59-60, 106 S.Ct. 1697, atp. 1705,90 L.Ed.2d48, atp. 60 24
Farmers Alliance Miit. Ins. Co. v. Holeman(1996), 278 Mont. 274, 924 P.2d 1315 15
Giyczan v. State -
(1997),283 Mont.433,442-43, 942P.2d 112,118. l96Montpp.218-219 17,18
Hulse v. State Dept. ofJustice1998MT108,P15,2s9MontI,p15,961p2d75p15 9
In re Montana All-Alcoholic Beverages Resort License2008 Mt 165, P 26, 343 Mont. 331, P. 26, 184 P.3d 324, P26 8
Lohmeier v. Gallatjn County2006 MT 88, 332 Mont 39, 135 P.3d 775 18
Missoula City-County Air Pollution Control Bd. v. Bd. OfEnvt. Review(1997), 282 Mont 255, 937 P.2c1 463 18
Mont. EnvtL Info. Or. v. Dept ofEnvtl. Quality (infra) 18
Montana Environmental Information Center, et aL v. Dept. ofEnvironmental Quality1999 Mt 248, 196 Mont 207, 988 P.2d 1236 (1999) 17
Pannoni v. Board ofTrustees2004 MT 130, P 25, 321 Mont. 311,90 P.3d 438 7
Phillzps v City ofRillings(1988), 233 Mont 249,252, 758 P.2d 772, 774 9
Singleton v. Waif428 U.s. 106,96 S.Ct. 2868,49 L.Ed.2d 816 (1976) .23
Total Mechanical Heating v. UEF2002 MT 55, P23, 209 Mont 84, 50 P.3d 108 7
Statutes
Mont. Code An,~. § 2-4-70] 3 7
Mont. Code Ann. § 2-4-702 3
Mont. Code Ann. § 2-4-704 7,
21,22
Mont. Code Ann. § 69-3-30] 26
Mont. Code Ann. § 69-3-302 26
Mont. Code Ann. § 69-3-305 26
Mont Code Ann. §69-3-306 13
Mont Code Ann. § 69-3-32] 1,
3, 5, 6, 8, 9, 11, 12, 14, 15, 16 20
Administrative Rules
Admin K Mont. 3&2.]207
AdrninR. Mont. 38.2.4805 10
Admin 1?. Mont 38.2.4806 10
Constitutional Provisions
ArticlelL.f3
6, 16, 17,24
Artic1eJJ,,~’J6 1,
20
I. STATEMENT OF TIlE ISSUES
1. The District Court was correct in affirming the Montana Public
Service Commission’s (“Commission”) rejection of Appellants’ (or
“Complainants”) proposed amendment to their complaint despite the Court’s
mistaken belief that an administrative hearing had taken place before Appellants’
attempt to amend their complaint, and, before the complaint was dismissed for lack
of standing.
2. The District Court was correct in affirming the Commission’s
detem~inations that Appellants lacked standing because: (a) Appellants were not
directly affected by NorthWestern Energy’s (“NWE”) street and area lighting
tariffs as is required under § 69-3-321, MCA; and, (b) Appellants’ asserted
environmental injuries or harms are indistinguishable from that experienced by the
general public.
3. Appellants have failed to show that Article II, § 16 of the Montana
Constitution is applicable because Appellants have not shown that they suffered
property damage.
4. Appellants’ arguments addressing what “directly” affected means
should be dismissed as Appellants use out-of-record materials to argue their case.
Commission Answer Brief
5. Appellants provide no support for their contention that a “legal
equivalent of all standing provisions doctrine” affords them standing therefore
their contention should be ignored.
6. The asserted expertise of two of the Appellants does not afford
Appellants standing to bring the complaint.
7. Appellants’ assertion that they are directly affected by NWE’s street
and area lighting tariffs due to the existence of a so-called “joint-rate” should be
ignored for Appellants provide no explanation or legal precedent supporting for
their contention.
II. STATEMENT OF THE CASE
This matter was before the Commission as a result of the filing of a formal
complaint submitted by Dr. Paul Williamson (a Missoula, Montana resident), Rev..
Dr. Vern Klingman, Patricia Klingman and Russell Doty (all Billings, Montana
residents). Appellants alleged among other things, that the rates and charges
assessed under NWE’s Commission-approved street and area lighting tariffs are
excessive, unreasonable, and unjustly discriminatory; that the ownership charge,
one of the components ofNWE’s billings for the provision of street and area
lighting service, should cease when the cost of an installed NWE-owned street
light has been entirely defrayed; that the Commission should issue an order
Commission Answer Brief 2
causing an immediate write-down from NWE’s ratebase of any street lighting plant
that has been fully paid for through an ownership charge; that the Commission
should issue an order providing for a reftnd ofup to $7,278,976 in past ownership
charges; and that the Commission should issue an order directing NWE to drop all
Olauses in its street lightinjcontracts preventing action of third party beneficiaries
of those contracts from obtaining redress of grievances for contract violation.1
The matter was processed by the Commission as a formal complaint filed
under the provisions of § 69-3-321, MCA. The Commission determined that
Complainants did not have standing to bring the fonnal complaint under the
referenced statute.2
011 August 23, 2010, Appellants filed their Petition for Judicial Review with
the Yellowstone County District Court under the provisions of the Montana
Administrative Procedures Act, § § 2-4-701, et seq., MCA, specifically, § 2-4-702,
MCA.
On June 15, 2011, the District Court for Yellowstone County issued two
Orders granting both the Montana Public Service Commission and NWE’s Rule 12
(b)(6) Motions to Dismiss Appellants’ Petition for Judicial Review and Appellants
brought review of these decisions before the Montana Supreme Court.
Original complaint of Complainants, Doe. 5eq. 6.100, Item No. 2, Admin. Record2 See Order Nos. 7084a and 7084d, Doe. seq. 6.100, Item Nos. 14 and 23, Admin. Record
Commission Answer Brief 3
III. STATEMENT OF FACTS
1. At the time of the filing of the original complaint with the
Commission, Appellants-Klingmans and Williamson were residential customers of
NWE; i.e., were assessed bills based on the provisions of NWE Tariff Schedule
REDS-I. NWE’s street and area lighting tariff is Tariff Schedule ELDS-I. The
electric rates assessed each customer class vary and are based on general rate case
cost of service studies that result in assignment of a revenue requirement for each
customer class (reflected in different Tariff Schedules). Appellants, except for
Williamson, were Montana property owners at the time of the filing with the
Commission and, according to Appellants’ Commission pleadings, paid property
taxes to their local governments.
2. On February 11, 2010, the Commission received Appellants’ formal
complaint, Docketed as D20 10.2. 14.~
3. Defendant~NvsrE filed its Answer to the complaint on March 17,
2010,~
4. NWE filed a Motion to Dismiss and Brief in Support on March 22,
20i0.~ Among other reasons justif3ring dismissal, NWE contended that
Complainants lacked standing to bring this complaint against NWE.
Doe. Seq. 6.100, Item 2, Admin. Record‘ Doe. Seq. 6.100, Item 6, Admin. Record
Doe. Seq. 6.100, Item 7, Admin. Record
Commission Answer Brief 4
5. Complainants filed their Affidavit and Brief in Opposition to NWE’s
Motion to Dismiss on April 2, 2010.6
6. NWE filed its Reply Brief in Support of its Motion to Dismiss on
April 14,2O1O,~
7. On May 20,2010, the Commission issued Order No. 7084a8 which,’
among other things, dismissed the complaint due to Complainants’ lack of
standing to bring a formal complaint against NWE’s street lighting tariffs under §
69-3-321, MCA. The Commission’s detennination of the standards to use in
analyzing the standing issue is set forth in Order No. 7084a.9 The Commission’s
ruling on the standing issue is found in FOF Nos. 4 1-60 of Order No. 7084a. The
Commission’s essential ruling was that Complainants are not members ofNWE’s
street and area lighting class of customers and that Complainants failed to show
that they are “directly affected” by NWE’s Tariff Schedule ELDS-1, NWB’s street
and area lighting tariff. The Commission found that Complainants failed to meet
the requirements of Section 69-3-32 1, MCA which requires that complainants be
“directly affected” in order to process a formal complaint before the Commission.
Appellants also maintain that they have standing to bring the formal complaint
under Article II, § 3 of the Montana Constitution which affords Montana citizens a
6Doc. Seq. 6.100, Item 8, Admin. Record‘ Doe. Seq. 6.100, Item 11, Admin. Record
Doe. Seq. 6.100, Item Nos. 14 and 16, Admin. Record.9J4~, FOFNos.21-40.
Commission Answer Brief 5
Thndamental right to a clean and healthful environment. The Commission found
that~~Eftd injury to
the public at large. The Commission determined that such a showing was a
necessary element to prove standing under Article II, § 3 of the Montana
Constitution.1°
8. On June 2, 2010, Complainants filed their Request for
Reconsideration11 and an Amended Complaint.12
9. On June 14, 2010, NWE filed its Opposition to Complainants’
Request for Reconsideration.13
10. On June 25, 2010, Complainants filed their Response to NWE’s
Opposition to Complainants’ Request for Reconsideration.14
11. On July 27,2010, the Commission issued its Order No. 7084cV5 which
granted in part and denied in part, Complainants’ reconsideration request. The
Commission granted Complainants’ reconsideration request to the extent that
Order No. 7O84a, p. 17 used the word “customer” when § 69-3-32 1, MCA used
the words “person, firm, or corporation. . .“ The Commission therefore changed
the wording to eliminate “customer” and utilized the statute’s wording. In all
other substantive aspects, Order No. 7084d affirmed the Commission’s dismissal
‘°Doe. Seq. 6.100, Item No. 23, Order No. 7084d, FOF Nos. 26-27.~‘ Doe. Seq. 6.100, ItemNo. 17, Admin. Record
‘2Doc. Seq. 6.100, Item No. 16, Admin. Record‘~ Doe. Seq. 6.100, Item No. 19, Admin. Record‘~ Doe. Seq. 6.100, Item No. 22, Adnain. Record~ Doe. Seq. 6.100, Item No. 23, Admin. Record
Commission Answer Brief 6
of the complaint due to lack of standing ofAppellants’ as was determined in its
May 20, 2010, Order No. 7084a.
IV. STANDARD OF REVIEW
The standards for reviewing a final decision of the Commisäion are whether
the agency’s findings of fact are clearly erroneous and whether its interpretation
and application of law are correct. Section 2-4-704(a)(a,), MCA; Denice v.
Shoemaker, 2008 MT 418, P 39, 447 Mont. 322, 198 P.3d 284. Review of the
decision is confined to the record. § 2-4-704(1), MCA, and the reviewing court
may not substitute its judgment for that of the agency as to the weight of the
evidence on questions of fact. § 2-4-704(2), MCA. That was the standard
applicable to the Yellowstone County District Court’s review of the Commission
decisions. The Montana Supreme Court employs these same standards when
reviewing the district court’s order affirming or reversing the agency’s decision.
Denke, P39. This Court reviews the whole record to determine whether the
administrative findings are clearly erroneous and whether the agency correctly
interpreted the law. §2-4-704(2)(a), MCA, Total Mechanical Heating v. UEF,
2002 MT 55, P23, 209 Mont. 84, 50 P.3d 108; Pànnonj v. Board ofTrustees 2004
MT 130, P 25, 321 Mont. 311, 90 P.3d 438. A factual finding is clearly erroneous
if it is not supported by substantial evidence in the record,if the fact-finder
Commission Answer Brief 7
misapprehended the effect of the evidence, or if a review of the record leaves the
Court with a definite and firm conviction that a mistake has been made. See
Benjamin v. Anderson, 2005 MT 123, P 31, 327 Mont. 173, P 31, 112 P.3d 1039, P
31; In re Montana All-Alcoholic Beverages Resort License, 2008 Mt 165, P 26,
343 Mont. 331, P. 26, 184 P.3d 324, P 26.
V. ARGUMENT
1. The Commission’s denial of Appellants’ motion to amend theircomplaint should be affirmed.
Appellants’ first three arguments focus on the Complainants’ attempt to
amend their complaint at the administrative level.’6 The Commission readily
acknowledges that the following District Court’s finding is inaccurate:.
“The record reveals that the amended complaint was not merely flIed afiernotice of the hearing, but filed after the hearing was held and Order No.7084a was issued.”7
There was, in fact, no hearing at the administrative agency level; rather, the
Commission dismissed the formal complaint due to lack of standing of the
Appellants to bring a complaint under § 69-3-321, MCA, in Order No. 7084a
(Service Date—May 20, 2010).
‘6See Table ofContents, p. I, ofAppellants’ Opening Briefandpp. 14-2 7.‘~ Dist. Court’s Order aiid Memorandum Granting NorthWestern Energy’s Rule I 2(b)(6) Motion to Dismiss, Doe.
Seq. 17.
Commission Answer Brief . 8
Nevertheless, the District Court’s mistake in assuming that the Commission
held a hearing prior to dismissing for lack of standing is not fatal to the
Commission’s ruling denying Appellants’ motion to amend their complaint, nor to•
the District Court’s decision dismissing the Petition for Judicial Review. The
Montana Supreme Court affirms district court deci~ions which are correct
regardless of the lower court’s reasoning in reaching its decision. Phillips v City of
Billings (1988), 233 Mont. 249,252, 758 P.2d 772, 774; Clark v. Eagle Systems,
Inc. (1996), 279 Mont. 279, 927 P.2d 995, 53 Mont. St. Rep. 1150; Hulse v. State
Dept. ofJustice, 1998 MT 108, P 15, 289 Mont 1, P 15, 961 P.2d 75, P 15. The
Commission contends that its decision denying Appellants’ request to amend its
complaint before the Commission was correct.
The Commission’s May 20, 2010 Order No. 7084a,’8 among other things,
analyzed Complainants’ standing to bring the formal complaint19 and determined
that Complainants (Appellants) did not have standing to initiate a formal complaint
under § 69-3-321, MCA.2° Complainants filed their Motion for Reconsideration
and amendment to complaint on June 2, 2010. The Commission denied their
attempt to amend and Motion for Reconsideration in Order No. 7084d21 (Service
~ Doc. Seq. 6.100, Item , Item Nos. 14 and 16 in Admin. Record19See Order Na. 79&4a, FOFNos. 21-60201d FOF Nag. 59-60.21 Doc. 5eq. 6.100,ItemNo. 23 inAdmin. Record
Commission Answer Brief 9
Date July 27, 2010). With regards to the attempted amendment to their complaint,
the Commission held as follows:
“30. The Commission readily acknowledges that ARM 38.2.1207 allowsamendments to any pleading or document prior to issuance of notice ofhearing, but also finds that such rule is necessarily affected by the issuanceof Order No. 7084a, an order that dismissed the cause of action. This is anissue of first impression before the Commission, but the Commissiondetermines that once a complaint or an application has been dismissed, theonly logical appropriate remedy left for the complainant or applicant is topursue one or more of the post order remedies set forth in ARM 3 8.2.4805(rehearing) or ARM 38.2.4806 (reconsideration). The dismissal of theformal cOmplaint is akin to a judgment against complainants and theCommission finds that the better rule under such circumstances is thatcomplainants no longer have a right to amend but retain a right to seekmodification of the order dismissing the filing.”22
After dismissal of a complaint, an application, or other filing, there is no
longer a hearing contemplated. If the Commission erred in dismissing the
complaint, the appropriate remedy for Appellants was to seek reconsideration or
rehearing of the dismissal. Appellants did, in fact, seek rehearing which resulted in
Commission Order No. 7084d. Petitioners, applicants and complainants should not
be afforded the ability to amend their petitions, applications or complaints after an
order summarily dismisses their filing; rather, the party should argue why the
dismissal was in error through a reconsideration or rehearing request. The
Commission asks the Court to find that this was an appropriate Commission ruling
~ Id., FOFNo. 30.
Commission Answer Brief 10
interpreting the existing agency administrative rule, in a case in which an order
dismissing the complaint had been issued.
Moreover, the Commission pointed out to Appellants in Order No. 7084d
that, even if the amended complaint had been allowed, the amended complaint did
not address the merits of the standing issue, nor did it eliminate the shortcomings
the Conmfission found with Appellants’ standing to bring the complaint.
“31. Even if the Commission authorized the amendment, the onlysignificant modifications to the original complaint consisted ofmodifyingcertain dollar amounts from the original complaint and adding additionalnamed complainants. Complainants aver that the newly-namedComplainants are residential customers who are also property taxpayersassessed fees as mómbers of a SILMD and ‘all of which have a small portionof their property taxes go to defraying the city’s prorate share of streetlighting costs.’ Complainants’ June 25, 2010 Response to NWE’s Oppositionto Reconsideration, p. 3. The added complainants may very well pay streetlighting district fees assessed by local city or county governments, but suchcircumstances do not present a persuasive, compelling reason to reconsiderthe Commission’s findings that Complainants do not possess standing tocontest NWE’s street lighting rates as they are not ‘directly’ affected byNWE Street lighting rates. See FOF Nos. 21,23 and 25 above and OrderNo. 7084a.”23
The Commission found that Appellants lacked standing to bring a formal
complaint contesting NWE’s street lighting rates and street lighting services. The
Commission’s holding was based on a determination that Appellants were not
“directly” affected by NWE’s Street lighting rates and services, as was required
under § 69-3-321, MCA. If, as is urged by the Commission, the Court affirms the
23 Order No. 7084c3, FOF No. 31, Doe. Seq. 6.100, Item No. 23 in Admin. Record
Commission Answer Brief 11
Commission’s rationale on Appellants’ standing issue, then Appellants’ proposed
amendment to its complaint does not overcome their lack of standing.
2. Appellants lack standing to bring a complaint contesting NWE’sstreet and area lighting tariff as they are not “directly” affected bythe tariff, as is required under § 69-3-321, MCA.
The Commission determined that the standing principles generally relied
upon for causes of action initiated in Montana courts can be distinguished from
standing principles applicable to cases initiated in administrative agencies.24 The
Commission detennined that the specific statute, statutes, or constitutional
provisions under which a complaint was filed determines complainants’ standing.25
Appellants’ filing with the Commission was processed as a formal complaint under
Section 69-3-321(1), MCA, which provides, in relevant part, as follows:
“U) The commission shall proceed, with or without notice, to make such• investigation as it may deem necessary upon a complaint made against any
• public utility by ...; or by any person, firm, or corporation, provided suchperson, firm, or corporation is directly affected thereby, that:
• (a) Any of the rates, tolls, charges, or schedules or any joint rate or rates arein anyway unreasonable or unjustly discriminatory;(b) any regulations, measurements, practices, or acts whatsoever affecting orrelating to the production, transmission, delivery, or furnishing of heat, light,water, power, or regulated telecommunications service, or any service inconnection therewith is in any respect unreasonable, insufficient, or unjustlydiscriminatory; or(c) any sewic~ is inadequate.” (emphasis added).
24 See Order No. 7O&4a, FOFNos. 41-45, Doe seq. 6.100, Item No. 14 Admin. Record
25See also, Order No. 7084d, FOFNo. 17, Doe. Seq. 6.100, Item No.23 Admin. Record.
Commission Answer Brief 12
A. Appellants are not “directly” affected by NWE’s street and arealight rates, tolls, charges or schedules.
Appellants’ formal complaint to the Commission alleged that NWE’s street
and area lighting tariff ownership charges were “excessive, unreasonable, and
unjustly discriminatory.”26
The Commission has statutory authority to establish “classifications of
service” through § 69-3-306, MCA. Pursuant to this statute, the Commission has
approved a number of customer classes for NWE. The electric rates assessed each
customer class vary and are based on general rate case27 cost of service studies that
result in assignment of a revenue requirement for each customer class. Rates are
then designed to generate sufficient monies to meet the class revenue
requirement.28
The Conmilssion determined that clearly, any member ofNWE’s street and
area lighting class such as the cities of Missoula or Billings, or Missoula or
Yellowstone County, would have standing to ~process a complaint asserting that
street lighting rates were excessive, unreasonable and/or unjustly discriminatory.29
These entities are NWE customers and are members of the NWE street and area
26 Original complaint, Doe. Seq. 6.100, Item 2, pp.2 & 6; See also Doe. Seq. 6.lOO,Item No. 14 Adinin, Record,
Order No. 7084a, FOP No.46.27 See, e.g.. minimum rate casefiling requirementsfor utilities, ARM §~ 38.4.101 et seq.28 Order No. 7084a, FOP No. 53, Doe. Seq. 6.100, Item 14 Admin. Record
291d., Order No. 7084a, FOP No. 57
Commission Answer Brief . 13
lighting customer class (Tariff Schedule ELDS-135; they are directly and legally
responsible for paying their individual NWE street lighting bill. Appellants are,
however, members of the residential class ofNWE customers and their electric
rates are governed by NW.E Tariff Schedule REDS-I ,31 In other words, Appellants
did not pay NWE provision of street lighting service, nor did they show that they
were “directly affected” by the NWE street lighting rates and charges:
“57 However, the Commission finds that Complainants have notshown that they are directly affected by NWE street lighting bills to thecities as is required by § 69-3-321, MCA. Complainants have not shownthat they are directly harmed or affected by NW]3 billings to the cities. Ithas not been sufficiently explained how the cities generate monies td payStreet lighting bills; whether Complainants themselves pay lighting districtfees in a district with NWE-owned streetlights; how the cities or countiescalculate lighting district fees to districts where NWE owns the street lightsas distinguIshed from districts in which the city or county owns the streetlights; whether lighting district fees are the only source of revenues for thecities or counties to pay their street lighting bills; how the city or countycalculates lighting fees in areas where there are no street lighting districts,but where there are Street lights; why Complainant-Wjl1iarnso~ would havestanding as a renter, not a property owner or property tax paying or lightingdistrict paying resident of Missoula.”32
In ruling on Appellants’ reconsideration request, the Commission held:
“23. .. .The members of the street lighting class are primarily and legallyresponsible for billings from NWE for the provision of street lightingservices. The residents of the city or county are not primarily or legallyresponsible to NWE for the provision of street lighting services; theresidents are primarily and legally responsible to their respective cities orcounties for taxes levied or street lighting district fees assessed. TheCommission disagrees with Complainants’ conclusion that the taxpayer,
‘°Id., FOF No. 53.31Id.321d., FOF No. 57. See also, Order No. 7084d, FOFNos. 15-25, Doe. Seq. 6.100, Rem Nos. 14 and 23 respectively.
Commission Answer Brief 14
renter or fee payer is primarily liable for a city or county Street lighting bill(Mot. For Reconsid., p. 6), but does agree with Complainants’ assertion thatthey may be “ultimately” (Id.) responsible. “Ultimately responsible” doesnot mean that persons so situated are directly affected. The Commissionalso disagrees with Complainants’ portrayal at page 7 of their Motion forReconsideration when it claims that there exists a statutory partnership inwhich the city pays the bills for the street light and thus performs theunreimbursed billing service for the utility. This does not accurately portraythe legal obligations of the city residents; the city is legally liable to NWEfor street lighting billings, not city residents.”33
If the Commission approves an increase in street lighting rates and charges,
members of the street lighting class of customers immediately pay that rate change
in the NWE billing cycle following the effective date of the Commission order.
That is not the case with residents that pay municipal street lighting district fees
assessed by the City. Changes to those fee assessments are calculated annually
and, presumably, a city considers a number of variables, including the total
projected street lighting charges to be assessed by NWE, any surplus or deficit in
previous years’ collections, and changes in number ofproperty owners in
determining such fees. Like Montana courts, the Commission, in interpreting § 69-
3-321, MCA, had to ascertain and declare what is in terms or in substance
contained therein, not to insert what has been omitted or to omit what has been
inserted. Farmers Alliance Mitt. Ins. Co. v. Holeman (1996), 278 Mont. 274, 924
P.2d 1315. The Commission found that as to NWE street lighting rates and
charges, Appellants were not directly affected under § 69-3-321, MCA. Indirectly,
“Orderi’jo. 7084d, FOF No.23, Doe. Seq. 6.100, Admin. Item No. 23.
Commission Answer Brief 15
or ultimately affected by NWE street lighting charges, is not directly affected by
such charges.
B. Appellants are not directly affected by the regulations,measurements, practices of NWE in its production, transmission,delivery or furnishing of street lighting, or by Appellants’ right toa clean and healthful environment.
Appellants argue that they have standing under the right to a clean and
healthfUl environment set forth in Article II, § 3 of the Montana State Constitution.
Petitioners also argue that the Commission has placed too much emphasis on
subparagraph (a) while ignoring the other subparagraphs of § 69-3-321, MCA.34 in
their District Court Brief Opposing the Commission and NWE Motions to Dismiss,
the Appellants asserted they were “directly affected” under § 69-3-321, MCA and
Article II, § 3 of the Montana State Constitution in the following manner:
“1) the HPS [high pressure sodium] luminaires use approximately twice asmuch energy as LEDs;2) Quality LED lumnaires last 3 to 5 times longer than HPS fixtures andtherefore require less maintenance;3) LED luminaires can be controlled by motion sensors to shut them offwhen not needed to minimize adverse health effects of stray night light inthe spectrum emitted by HPS, a technology that requires a ‘strike zone’ toturn them on and off, preventing use ofmotion sensors.4) HPS luminaires produce light in a spectrum that does not show color asadequately as LEDs;5) TIPS luminaires project light more unevenly onto the pavement than LEDluminaires;”35
~ Appellants’ Opening Brief, pp. 30-31~ Dcc. Seq. 10.000. p. 6.
Commission Answer Brief 16
The Commission recognizes that the right to a clean and healththl
environment is a fundamental right because it is guaranteed by the Declaration of
Rights found at Article IT, Section 3 of Montana’s State Constitution. In Montana
Environmental Information Center, et aL v. Dept. ofEnvironmental Quality,, 1999
Mt 248, 196 Mbnt. 207, 988 P.2d 1236 (1999), this Court held that the following
test bears on standing under the clean and healthful environment provision of the
State Constitution:
“(I) the complaining party must clearly allege past, present, or threatenedinjury to a property or civil right; and (2) the alleged injury must bedistinguishable from the injury to the public generally, but the injury neednot be exclusive to the complaining party.” Citing Gtyczan v. State (1997),283 Mont. 433, 442-43, 942 P.2d 112, 118. 196 Mont. pp. 218-2 19.
Complainants allege that past, present, or threatened injury to their right to a
clean and healthful environment has occurred in that they assert that LED Street
lighting consumes less energy than the currently-deployed high-pressure sodium
vapor street lights. The Commission does not, however, perceive an injury that is
distinguishable from the injury to the public generally. All members of the
Montana public appear to be similarly situated with regard to any consequences of
high-pressure sodium vapor streetlights’ electricity consumption as compared to
LED street lights’ electricity consumption; i.e., all Montanans breathe air that is
affected by electricity generation, much of which is located in Montana, which
NWE owns or purchases to meet its load obligations. All night-driving members
Commission Answer Brief 17
of the public are affected by the asserted worse color rendering of TIPS lights, by
the asserted uneven light associated with HPS, and by the inability to distinguish
objects as easily with LED lights.36
The Commission also determined that Appellants’ allegations in their
complaint did not show a reduàtion in NWE electiicityproduction if TIPS lights
were replaced with LED street lights. The Conunission stated:
“27 Moreover, the alleged reduction in street light consumption clearlywould occur at night when electric load is met primarily through base loadgenerating units as opposed to peaking units. There is no reason to assumethat these base load units would be backed off due to less street lightingconsumption. First, base load generators are more difficult to back off thanpeaking generating units. Second, utilities, including NWE, would seek tosell night-time base load generation clsewhere in order to maximize theefficient use of a sunken resource. See also, Lohmeier v. Gallatin County,2006 MT 88, 332 Mont. 39, 135 P.3d 775—(distinguishing the Lohmeierdecision from both Missoula City-County Air Pollution Control Bc!, v. Bd.OfEnvt. Review (1997), 282 Mont. 255, 937 P.2d 463, and Mont. Envtl.Info. Or. v. Dept ofEnvtl. Quality (infra) on the basis that the two citedcases involved possible increases in the amount ofpollution while Lohmeier,as is the case with this Complaint, does not allege increases in the amount ofpollution, but possible decreases in existing pollution). The Commissionfinds that Complainants have failed to show that.their request for reliefwould result in a cleaner and more healthful environment; and theCommission is not persuaded that Complainants have met the second prongof the standing test set forth in Giyczan and supported in the Mont. Envil.Info. Ctr. cited above as the asserted injury is indistinguishable from thealleged injury to the public generally.37
36 See Order No. 7084d, FOFNo. 27, Doe. Seq. 6.100, Adniin. Jtem 23
‘71d.
Commission Answer Brief 18
Appellants alleged “inadequate” service ofNWE was not, based on
Appellants’ assertions about LED street lighting, shown to be service that is
inadequate.
Appellants also appear to contend that standing is not lacking due to
Appellantsornbas lIPS Street light shining into their bedroom windo~v all night.
Appellants contend that LED motion sensing or dimming capability would make
service more adequate, a definite improvement in areas where there is little foot or
auto traffic and thus no need for continuous light.38
Motion sensing has characteristics that undermine Appellants’
characterization of LED street lighting as providing “more adequate” service.
“NWE street lights are unmetered. The utility’s Street lighting customers arebilled on the basis of the number of hours of darkness experienced on anannual basis, which in turn depends on the latitude of the Street lightlocations. For example, street lights in Havre, Montana are billed for more
• use/consumption than streetlights in Billings because Havre is north ofBillings and will experience more hours of darkness/year than Billings. Thenumber of hours of darkness for streetlights in a particular locale are
• multiplied by the known kilowatt/hour consumption rating of the streetlights in that locale. This methodology will not be available if, as Petitionerspromote, LED street lights with motion sensors should be installed. SeePetitioners’ Opposing Briet pp. 7 & 8. Motion sensors would mean that theLED street light consumption would notbe known without the individuallight being metered. Adoption of Petitioners’ proposal to replace all currentlIPS streetlights with LED street lights would require, if motion sensorswere also included, metering the new LED street lights. Metering thethousands of NWE street lights would add another substantial cost to theinitial cost ofLED luminaire installation.”39
38 Appellants’ Opening Brief, p.31.~ Commission’s Reply Brief to Petitioners’ Brief Opposing Motion to Dismiss, Doc. Seq. 12.
Commission Answer Brief 19
Appellants’ allegations do not persuasively show that HPS street lights
provide unreasonable, insufficient, unjustly discriminatory or inadequate service in
violation of* 69-3-321(1)(b) or (c), MCA.
3. Appellants have not shown that Article 11, § 16 of the MontanaCon~titution is applicable to Iheir described circumstances; i.e.Appellants have not shown that they have suffered property damage.
Appellants allege that they have standing under Article IT, § 16 of the
Montana Constitution4° which provides in relevant part, as follows:
“Section 16. The administration ofjustice. Courts of justice shall be opento every per~pp, and speedy remedy afforded for every injury of person,property, or character. . . .Right and justice shall be administered withoutsale, denial, or delay. [Emphasis added by Appellants]
Appellants apparently believe that damage to their property has occurred,
thus supporting their contention that Section 16 of the Montana State Constitution
affords them standing before the Commission. The alleged property damage is
described as follows:
“There is a definite injury to property here. Property of appellants and thosein their class are being commandeered unjustly to the tune of $61,000 amonth in Billings—triple that in NorthWestern’s system.41
Appellants allege “property” damage, but their pleading alleges only that
NWE is overcharging for the provision of street and area lighting services.
Appellants do not explain, nor do they provide any legal precedent supporting the
~° Appellants’ Opening Brief, p. 35.~ Id.
Commission Answer Brief 20
contention that payment of duly levied property taxes and street lighting district
assessments to local governments results in Appellants suffering damage to their
property. It is not the Commission’s nor is it this Court’s duty to guess what
Appellant property has been damaged nor to search for legal precedent supporting
Appellants’ conclusion that paying property taxes and lighting district fees inflicts
damage to Appellants’ property. This argument of Appellants should be dismissed
by the Court.
4. Appellants’ theories of what “directly” means should be dismissed asAppellants use out-of-record materials to argue their case.
Appellants’ attempted explanation ofwhat “directly” affected means is
solely supported by a written transcript ofAppellants’ counsel’s argument before
the Yellowstone County District Court.42 That quoted material is subject to a
Motion to Strike previously submitted to this Court by Appellees-NWp and the
Commission. The Court must ignore the out-of-record materials submitted by
Appellants as this Court review is confined to the record. § 2-4-704, MCA.
5. Appellants provide no support for their contention that standingunder the “legal equivalent of all standing provisions” doctrineaffords them standing.
42 Appellants’ Opening Brief, pp. 32-34.
Commission Answer Brief 21
Appellants’ argue that they have standing under the so-called “legal
equivalent of all standing provisions doctrine.”43 Appellants assert that energy
waste is “of overriding public moment” as to provide a basis for standing because it
meets the legal equivalent of all the standing tests. Appellants, however, rely on
•out-of-record materials/siatements to support their contention. At page 36 of their
Opening Brief, Appellants rely on “pled facts as outlined in Statement ofFacts ¶
23” as the underlying support for their contention that energy waste is of such an
overriding public moment as to provide the basis for standing. However,
Statement of Facts ¶ 23 is the subject of the Motion to Strike filed by NWE and the
Conimission referenced in Argument 4 immediately above. The purportedly
factual assertions in Appellants’ Opening Brief at ¶ 23 were not presented to the
Commission at the administrative level; rather, these allegations make their first
appearance in Appellants’ Opening Brief before this Court. The Court must ignore
the out-of-record materials submitted by Appellants as this Court review is
confined to the record. § 2-4-704, MCA.
6. Standing is not afforded simply because of asserted expertise bycomplainants.
Appellants claim standing to bring the formal complaint because two of the
Complainants, Dr. Williamson and counsel for Appellants, Mt Doty:
pp. 36~37.
Commi~sion Answer Brief 22
“have special expertise to challenge state regulation that allows utilityovercharges to fund excess use of fossil fuel when viable, cost-effective,more energy efficient alternatives are available.~~M
Appellants cite Singleton v. WuIff 428 U.S. 106, 96 S.Ct. 2868, 49 L.Ed.2d
816 (1976) as the lone support for Appellants’ contention. The Commission
contends that the holding in Singleton iá not support for Appellan±s’ standing
argument.
First, the holding that the physicians in Singleton would have standing based
upon the rights of their patients was supported by only four of the five U.S.
Supreme Court Justices.45 Justice Stevens expressed the view that the physicians
had standing to bring the action since they had a financial stake in the outcome of
the litigation and they claimed that the statute impaired their own constitutional
rights, but stated his doubt whether, apart from such two factors, there would be an
adequate basis for a federal court’s consMeration of the physicians’ arguments
based on the effect of the statute on the constitutional rights of their patients.
Justices Powell, Burger Stewart and Rehnquist dissented on the grounds that
physicians could not assert, in addition to their own rights, the constitutional rights
of their patients.
Second, the Singleton holding has been described as follows:
~ Appellants’ Opening Brief, p. 37.~ The Opinion author, Justice Blackman, was joinedin this holding by Justices Brennan, White, and Marshall.
Commission Answer Brief 23
“In addition, a physician who demonstrates that abortion finding regulationshave a direct financial impact on his practice may assert the constitutionalrights of other individuals who are unable to assert those rights themselves.(emphasis added). Diamond et a? v. Charles et aL, (1976), 476 U.S. 54, atpp. 59-60, 106 S.Ct. 1697, at p. 1705, 90 L.Ed.2d 48, at p. 60.
Appellants have not shown that others that do have standing, e.g., cities,
counties ~nd other members of NWE’s street and area lighting class, are unable to
assert their rights themselves.
Lastly, Appellants have not shown, as argued in Section V. 2. B. above, that
their alleged injury is distinguishable from the alleged injury to the public
generally. The Commission maintains that such a showing is necessary under an
assertion that Appellants have standing under the right to a clean and healthful
environment provided in Article II, § 3 of the Montana State Constitution.
Assuming (for argument purposes) the asserted degree of expertise
possessed.by two of the Complainants to be true, this does not afford Appellants
standing to file a complaint before the Commission.
7. Appellants provide no explanation or supporting legal precedentfor their assertion that Appellants are directly affected due to theexistence of a “joint rate.”
Without benefit of an explanation, or the inclusion of any supporting legal
precedent, Appellants assert that the NWB’s street lighting bill to members of the
NWE street and area lighting customer class, becomes a “joint rate” when the local
Commission Answer Brief 24
government assesses its tax statements.46 Appellants submit an additional
unsupported statement:
“Creation of a statutory partnership in which the city pays the bills for Streetlights and thus performs the unreimbursed billing service for the utility doesnot limit the right of a person affected by the bill to seek relief if the bill paidwas for an overcharge.”47
It is difficult to contest formation of a so-called “statutory partnership” when
no statute is referenced. Moreover, there is nothing in the record below to support
the assumption that when a local government assesses property taxes and lighting
district fees, it is performing a “billing service” for a utility; rather, the record
pleadings below support the conclusion that members of the NWE street and area
lighting customer class are legally responsible for the payment of street lighting
bills from NWE for the rendering of street lighting service by the utility.
The Commission respectfully asks this Court to afford no credence to
Appellants’ “joint rate,” “billing service” argument.
8. Appellants should not be found to have standing due to an allegedthird party beneficiary relationship to local government-NWEcontracts.
Appellants contend that they are third party beneficiaries of various local
government contracts with NWE.48 The Commission has addressed this issue in
Order No. 7084a:
46 Appellants’ Opening Brief, p. 32.47
481d.,p.39.
Commission Answer Brief 25
“56. Complainants also contend that they are third party beneficiaries undercity-NWE street lighting contracts. Brief in Opposition, p. Ii. NWEmaintains that~a party that is neither a party to a contract nor a third partybeneficiary of the contract lacks standing to challenge the contract. WhileMontana public utilities do execute agreements with municipalities thataddress the provision of street lighting service, all such contracts are subjectto the jurisdiction of the Commission. Moreover, no contract governs therates or charges for the provision of such service. Section 69-3-301, MCArequires any and all such rates or charges to be filed with the Commission;these filed documents are the tariff schedules referenced in FOF 53 above.Utilities cannot change the rates in the filed schedules without Commissionapproval. § 69-3-302, MCA. Public utility deviation or departure from theCommission-approved schedules is prohibited by statute. § 69-3-305, MCA.The Commission therefore concludes that any NWE contracts with the citiesof Billings or Missoula do not afford anyone as an alleged third partybeneficiary of such contracts, standing to contest NWE street lighting ratesfor such contracts do not establish the-rates and charges for the service.”
Appellants, therefore, are not third party beneficiaries of any utility-local
govermnent contract that is at issue herein, i.e., that governs the conditions of the
provision of service or the rates or charges assessed by the utility and the Court
should mie that no standing is afforded Appellants under this theory.
CONCLUSION -
The District Court’s Order and Memorandum Granting the Commission’s
Rule l2(b)(6) Motion to Dismiss and Order and Memorandum granting NWE’s
Rule I 2(b)(6) Motion to Dismiss should be affirmed. Appellants have failed to
show that they are directly affected by NWB’s street and area lighting tariff rates,
terms and conditions or that they are directly affected by any alleged inadequacies
Commission Answer Brief 26
of the tariff. Appellants must be directly affected to have standing to process a
Street lighting complaint under § 69-3-321, MCA.
Appellants have failed to show that their alleged injuries are distinguishable
from alleged injuries to the public at large and therefore do not have standing
under Article U, § 3 of the Montana Constitution.
The findings of the Commission are not clearly erroneous and are supported
by substantial evidence of record. The Commission’s interpretation and application
of laws are correct.
Dated this 2~r’ day of October, 2011.
Montana Public Service Commission
Jame(9’PaineSpecial Assistant Attorney GeneralMontana Public Service Commission1701 Prospect AvenueP.O. Box 202601Helena, MT 59620-2601
Commission Answer Brief 27
CERTIFICATE OF COMPLIANCE
I HEREBY CERTIFY that this Answer Brief of the Appellee-Montana
Public Service Commission complies with the requirements of Rule 27,
M.R.App.Pro (Form of Briefs and Other Papers), as amended. The lines in this
document are double spaced, except for indented material and footnotes, ai)d the
document is proportionately spaced with typeface Times New Roman, point size
14. The total word count is less than 10,000 words, as calculated by Microsoft
Word, excluding the table of contents, table of authorities, date and signature lines,
certificate of compliance, and certificate of mailing.
James QjaineSpecial Assistant Attorney GeneralMontana Public Service Commission
Commission Answer Brief 28
CERTIFICATE OF SERVICE
I hereby certifS’ that a true and correct copy of the foregoing Answer Brief of
Appellee-Montana Public Service Commission was duly served by mail, postage
prepaid, upon the following this 2~~day of October, 2011.
Russell L. Doty Monica Tranel3878 N. Tanager Ln. Tranel, McCarter & Morris, PLLPBillings, MT 59102-59 16 Great Northern Town Center
30 West 14th Street, Suite 204Helena, MT 59601
Jamáj. PaineSpecial Assistant Attorney GeneralMontana Public Service Commission
Commission Answer Brief 29