Agnew v. Mo.-Am. Water Co.

567 S.W.3d 652
CourtMissouri Court of Appeals
DecidedNovember 6, 2018
DocketNo. ED 106470
StatusPublished
Cited by3 cases

This text of 567 S.W.3d 652 (Agnew v. Mo.-Am. Water Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Agnew v. Mo.-Am. Water Co., 567 S.W.3d 652 (Mo. Ct. App. 2018).

Opinion

SHERRI B. SULLIVAN, P.J.

Introduction

John Agnew and Mary Emke (Appellants) appeal from the trial court's January 29, 2018 Order and Judgment (judgment) granting the respective Motions to Dismiss (motions to dismiss) of Missouri-American Water Company (MAWC) and Missouri Public Service Commission (PSC) and dismissing Appellants' Amended Class Action Petition. We affirm.

I. Factual and Procedural Background

In 2003, the General Assembly passed legislation that permitted water corporations, as defined in Section 393.1000,1 serving counties with more than one million inhabitants, Section 393.1003, to establish an infrastructure system replacement surcharge (ISRS) to recover costs associated with eligible system replacement projects by applying to the PSC for the implementation of the surcharge. Sections 393.1003.1, 393.1006. Those statutes provide a method, outside of a formal rate case, for a water corporation to recover the cost of certain government-mandated infrastructure system replacement projects via a petition to establish or change an ISRS. The PSC may hold a hearing on the petition and any associated rate schedules, and shall issue an order to become effective not later than 120 days after the petition is filed. Section 393.1006(3) ("Documentation to be submitted--notice to be *656published--examination of proposal--authorization of commission, when--pretax revenues, factors to be considered--revised rate schedule, filed when--rulemaking authority").

After the PSC's initial approval of an ISRS, the water corporation can file for permission to make periodic adjustments to the ISRS to update the amount of the surcharge being collected. Section 393.1006.5(2).

MAWC is a water corporation subject to the jurisdiction and supervision of the PSC. MAWC serves St. Louis County. St. Louis County's population fell to under one million inhabitants in the 2010 decennial census. The ISRSs being challenged in the case sub judice were approved by orders of the PSC in 2011, 2012, 2013, 2014, and 2015. Appellants did not challenge the ISRS amounts in any of the respective years they were filed, considered, approved, or approved as adjusted by the PSC, and implemented by incorporation into the MAWC's general rate base.

The Office of Public Counsel (OPC) represents and protects the interests of the public in any proceeding before or appeal from the PSC. The OPC is served with all proposed tariffs, initial pleadings, and applications in all proceedings before the PSC, as well as a copy of all orders of the PSC. The OPC by motion challenged the PSC's decision approving the 2015 ISRS because, among other reasons not pertinent to the instant appeal, the OPC alleged St. Louis County did not meet the one-million population requirement established for application of the ISRS statutes as of the effective date of the results of the 2010 U.S. Census. The PSC denied the OPC's challenge and found in favor of MAWC. The OPC filed an application for rehearing with the PSC, which was denied.

After the PSC denied its application for rehearing, the OPC appealed to the Missouri Court of Appeals, Western District. On appeal from the denial of its application for rehearing at the PSC, the OPC contended that, as of the effective date of the 2010 U.S. Census results, St. Louis County did not meet the population requirements established for application of the ISRS statutes. As such, the OPC maintained the PSC lacked authority to grant the ISRS relief that MAWC requested in 2015.

The Western District found in favor of the OPC and reversed the PSC's order, finding a county whose population had fallen below one million was not subject to increase in its ISRS. Matter of Missouri-American Water Co., 2016 WL 873409 (Mo. App. W.D. March 8, 2016) (vacated by Matter of Missouri-American Water Co., 516 S.W.3d 823 (Mo. banc 2017) ). However, the Western District's opinion was vacated when the Missouri Supreme Court took transfer of the case and held the issue of whether MAWC could charge the 2015 ISRS in light of reduction in population of its customers' county to fewer than one million inhabitants was rendered moot once the ISRS was incorporated into MAWC's general rate base during the pendency of appeal before the Court. Matter of Missouri-American Water Co., 516 S.W.3d at 823.

After the Western District opinion was issued but prior to the transfer of the case to the Supreme Court, Appellants filed the instant case in the trial court as a class action against MAWC, seeking reimbursement of all the purported overpayments MAWC customers in St. Louis County paid in 2011, 2012, 2013, 2014, and 2015 for the ISRSs which, applying the Western District's reasoning and holding with regard to the 2015 ISRS, would have rendered invalid those ISRSs as well. The PSC moved to intervene in the case and Appellants filed an amended class action petition adding the PSC as a defendant.

*657The petition seeks damages in the form of overpaid ISRS payments from consumers under six theories, each set forth in a separate count: Count I - Violation of Sections 393.1003 and 393.130; Count II - Unjust Enrichment; Count III - Money Had and Received; Count IV - Violation of the Missouri Merchandising Practices Act (MMPA); Count V - Declaratory Judgment, against MAWC and the PSC; and Count VI - Injunctive Relief.

Appellants' Amended Class Action Petition Allegations

In their amended class action petition, Appellants allege the following: State law authorizes the PSC to approve a water ISRS application in counties with a charter form of government and more than one million inhabitants. Section 393.1003.1. However, St. Louis County did not have a population of at least one million inhabitants at any time relevant to this case. In 2011, MAWC petitioned the PSC for authority to collect an ISRS from St. Louis County customers. In its ISRS petition, MAWC made the representation that "St. Louis County, Missouri has a charter form of government and is inhabited by more than one million people," with that representation sworn via affidavit by MAWC's then-President. The PSC approved MAWC's petition and authorized the ISRS. In its Order authorizing the ISRS, the PSC cited only to MAWC's petition for the proposition that St. Louis County was "a charter county with a population of more than one million." The tariff became effective October 16, 2011, pursuant to which MAWC collected ISRS charges from customers in St. Louis County, Missouri. The petition alleges essentially the same scenario for years 2012 through 2015.

Appellants asserted that, according to the 2010 decennial census, St. Louis County possessed 998,954 inhabitants. They maintained MAWC is the only water service provider in St. Louis County, Missouri, other than the City of Eureka's municipal system, leaving Appellants dependent on MAWC for service with no alternative service provider available.

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Bluebook (online)
567 S.W.3d 652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agnew-v-mo-am-water-co-moctapp-2018.