Feingold v. Bell of Pennsylvania

383 A.2d 791, 477 Pa. 1, 1977 Pa. LEXIS 957

• Court: Supreme Court of Pennsylvania
• Decided: December 1, 1977
• Docket: 144
• Status: Published

Opinions

OPINION

NIX, Justice.

Appellants, Allen L. Feingold, individually and A. L. Feingold Associates, commenced an action in Equity in the Common Pleas Court of Philadelphia County against the Bell Telephone Company of Pennsylvania, seeking, inter alia, injunctive relief and compensatory and punitive damages. Bell Telephone responded by filing preliminary objections to the complaint. After argument, the court dismissed the complaint with prejudice finding that the appellants had failed to exhaust their administrative remedies. Hence this appeal.¹

In considering whether the lower court properly sustained appellee’s preliminary objections, this Court must assume the truth of the factual averments in appellant’s complaint, as summarized below. Allstate v. Fioravanti, 451 Pa. 108, 299 A.2d 585 (1973); Eden Roc Country Club v. Mullhauser, 416 Pa. 61, 204 A.2d 465 (1964).

On June 1,1970, appellant moved his office from 1313 One East Penn Square to 506 East Penn Square in Philadelphia. He was given a new telephone number at that time. Since the Philadelphia directories listed his office under the old number, appellee provided a tape recorded referral giving the new number to anyone calling the original listing. The referral operated properly for about two months, at which time, appellant alleged it was disconnected by appellee, so that callers heard a ring, indicating that the telephone was functional but simply was not being answered. Appellant alleged that as a result clients and colleagues were unable to reach him by telephone. The problem was allegedly aggravated when new directories were issued by appellee still containing appellant’s original number while the referral recording still remained inoperative. Appellant further alleged that repeated requests and demands to appellee to correct the referral or to assign the old number to another subscriber went unheeded. Appellant alleged that as a result of this problem his business declined.

Appellant also complained that appellee disconnected his telephone service on or about March 20 and March 21, 1974, because appellant attached a privately maintained answering device to his new telephone. Telephone service was reconnected, but it is alleged that appellee still threatens discontinuance of service if the answering device is used.

Finally, appellant complains of appellee’s refusal to provide him with mobile telephone service. Appellant applied to appellee for a mobile unit in 1969 and was told at that time of the existence of a waiting list of approximately two years for such service. Appellant checked on the status of the application in 1972 and was informed by appellee that the application was cancelled or destroyed because appellee was unable to contact appellant to verify the application. Appellant alleged that appellee was unable to contact them due to the difficulties with the tape-recorded referral system described above.

The question presented by this case is whether appellant, seeking both legal and equitable relief against a public utility, should have first exhausted his administrative remedies under the Public Utility Law, Act of May 28, 1937, P.L. 1053, 66 P.S. § 1101 et seq. (1959 & Supp.1977-78), before seeking a judicial remedy.²

The lower court answered this question in the affirmative. For the reasons that follow, we disagree.

This Court has long recognized and applied the general rule requiring a petitioner to exhaust all available administrative remedies before seeking judicial redress for an alleged wrongdoing by a public utility. See, e. g., Commonwealth v. Glen Alden Corp., 418 Pa. 57, 210 A.2d 256 (1965); Collegeville Borough v. Philadelphia Suburban Water Co., 377 Pa. 636, 105 A.2d 722 (1954). The rationale behind this rule is clear. When the Legislature has seen fit to enact a pervasive regulatory scheme and to establish a governmental agency possessing expertise and broad regulatory and remedial powers to administer that statutory scheme, a court should be reluctant to interfere in those matters and disputes which were intended by the Legislature to be considered, at least initially, by the administrative agency. Full utilization of the expertise derived from the development of various administrative bodies would be frustrated by indiscriminate judicial intrusions into matters within the various agencies’ respective domains.³ See Colteryahn Sanitary Dairy v. Milk Control Commission, 332 Pa. 15, 1 A.2d 775 (1938), construing, Act of March 21, 1806, P.L. 558, 46 P.S. § 156, consolidated by, Act of Nov. 2, 1970, P.L. 707, No. 230, 1 Pa.C.S. § 1504 (Supp.1977-78); Commonwealth v. Glen Alden Corp., supra.

As with all legal rules, the exhaustion of administrative remedies rule is neither inflexible nor absolute, and this Court has established exceptions to the rule. Thus, a court may exercise jurisdiction where the administrative remedy is inadequate. Borough of Green Tree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974); Philadelphia Life Ins. Co. v. Commonwealth, 410 Pa. 571, 190 A.2d 111 (1963). The mere existence of a remedy does not dispose of the question of its adequacy; the administrative remedy must be “adequate and complete.” Philadelphia Life Ins. Co. v. Commonwealth, supra 410 Pa. at 580, 190 A.2d at 116. In the case now before us, we must determine the narrower issue of whether appellant had adequate administrative remedies available under the Public Utility Law.

The Public Utility Law placed a broad range of subject matters under the control of the Public Utility Commission (PUC), making that agency responsible for ensuring the adequacy, efficiency, safety, and reasonableness of public utility services. Act of May 28, 1937, P.L. 1053, art. IV, as amended, Act of October 7, 1976, P.L. 1057, No. 215, 66 P.S. § 1171 (Supp.1977-78). It can be conceded that the subject matter of appellant’s complaint is encompassed by Section 401 of the Public Utility Law. The enforcement and remedial powers of the PUC, although formidable, are not those of a court. The PUC is empowered to correct, by regulation or order, abuses in the provision of service. Act of May 28,1937, P.L. 1053, § 413, 66 P.S. § 1183 (1959). The PUC has the power to impose fines upon a public utility for violation of the Public Utility Law. Act of May 28, 1937, P.L. 1053, art. XIII, § 1301, as amended, Act of October 7, 1976, P.L. 1057, No. 215, § 25, 66 P.S. § 1491 (Supp.1977-78). If the PUC determines that the Public Utility Law, a regulation or order has been or is about to be violated, the PUC may petition the Court of Common Pleas of Dauphin County for appropriate judicial enforcement. Act of May 28,1937, P.L. 1053, art. IX, § 903, as amended, Act of June 3, 1971, P.L. 137, No. 6, § 1, 66 P.S. § 1343 (Supp.1977-78). Alternatively, the PUC may request that the Attorney General initiate legal proceedings to obtain judicial enforcement of the Public Utility Law or a PUC order or regulation. Act of May 28, 1937, P.L. 1053, art. IX, § 904, 66 P.S. § 1344 (1959). Since the PUC is a creature of statute, it has only those powers which are expressly conferred upon it by the Legislature and those powers which arise by necessary implication. Allegheny County Port Authority v. Pa. P. U. C., 427 Pa. 562, 237 A.2d 602 (1967); Delaware River Port Authority v. Pa. P. U. C., 393 Pa. 639, 145 A.2d 172 (1958).

It is relevant to the case now before us that the statutory array of PUC remedial and enforcement powers does not include the power to award damages to a private litigant for breach of contract by a public utility. Nor can we find an express grant of power from which the power to award such damages can be fairly implied. Thus, it can be concluded that the Legislature did not intend for the PUC to have such a power. This conclusion finds further support in Sections 917 and 1310 of the Public Utility Law. Section 917 states in pertinent part:

“Except as otherwise expressly provided, none of the powers or duties conferred or imposed by this act upon the commission . . . shall be construed in anywise to abridge or impair any of the obligations, duties or liabilities of any public utility . . . And except as otherwise provided, nothing in this act contained shall in any way abridge or alter the existing rights of action or remedies in equity or under the common or statutory law of the Commonwealth, it being the intention that the provisions of this act shall be cumulative and in addition to such rights of action and remedies.”

Act of May 28, 1937, P.L. 1053, art. IX, § 917, 66 P.S. § 1357 (1959) (emphasis added). Section 1310 contains similar language:

If any person or corporation shall do or cause to be done any act, matter, or thing prohibited or declared to be unlawful by this act, or shall refuse, neglect, or omit to do any act, matter, or thing enjoined or required to be done by this act, such person or corporation shall be liable to the person or corporation injured thereby in the full amount of damages sustained in consequence thereof: Provided, That the liability of public utilities, contract carriers by motor vehicles, and brokers for negligence, as heretofore established by statute or by common law, shall not be held or construed to be altered or repealed by any of the provisions of this act: And provided further, That the recovery in this section authorized shall in no manner affect a recovery by the Commonwealth of the penalty prescribed in section one thousand three hundred one of this act1 for such violations of this act.

Act of May 28, 1937, P.L. 1053, art. XIII, § 1310, 66 P.S. § 1500 (1959) (emphasis added). These preservation of remedies clauses, by leaving traditional judicial remedies, such as damages in the hands of the courts, make comprehensible the Legislature’s failure to grant to the PUC the power to award damages.⁴ In the instant case, appellant’s complaint, while seeking injunctive relief, also asks for compensatory and punitive damages in every count.⁵ Although the lower court accurately noted that the Public Utility Law provides that any person may complain to the PUC about the actions of a public utility, quoting the Act of May 28, 1937, as amended, Act of October 7, 1976, P.L. 1057, No. 215, § 19, P.L. 1053, art. X, 1001, 66 P.S. § 1391 (Supp.1977-78), a complaint by appellant to the PUC seeking damages could not have resulted in an award by the PUC even if that agency had determined the complaint to be meritorious. It is clear that the remedial and enforcement powers vested in the PUC by the Public Utility Law were designed to allow the PUC to enforce its orders and regulations but not to empower the PUC to award damages or to litigate a private action for damages on behalf of a complainant.⁶ The rule requiring exhaustion of administrative remedies is not intended to set up a procedural obstacle to recovery; the rule should be applied only where the available administrative remedies are adequate with respect to the alleged injury sustained and the relief requested.⁷ Philadelphia Life Insurance Co. v. Commonwealth, supra. In the instant case, appellant could not have been made whole by the PUC, thus the administrative remedy was not “adequate and complete.” Id.⁸

The decree of the Common Pleas Court dismissing appellant’s complaint with prejudice is reversed and vacated and the cause is remanded for further proceedings consistent herewith.

Each party to bear own costs.

JONES, former C. J., did not participate in the consideration or decision of this case. ROBERTS and POMEROY, JJ., filed dissenting opinions.

1 . Final orders of a lower court are appealable, and the test for finality is whether the order appealed from “terminate[s] the litigation between the parties or effectively deprive[s] the litigant of his day in Court.” Safety Tire Corp. v. Hoffman Tire Co., 458 Pa. 102, 103, 329 A.2d 834, 835 (1974); see, James Banda, Inc. v. Virginia Manor Apts., Inc., 451 Pa. 408, 303 A.2d 925 (1973); Ventura v. Skylark Motel, Inc., 431 Pa. 459, 246 A.2d 353 (1968). An order sustaining preliminary objections and dismissing a complaint, as in the instant case, is a final order and is, therefore, appealable. Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975); Free v. Lebowitz, 463 Pa. 387, 344 A.2d 886 (1975); DeAngeli v. Fitzgerald, 433 Pa. 529, 252 A.2d 706 (1969). The appeal in the instant case was taken pursuant to the Appellate Court Jurisdiction Act of 1970, July 31, 1970, P.L. 673, No. 223, art. II, § 202(4), 17 P.S. § 211.202(4) (Supp. 1977-78). Since this appeal was taken, this Court has adopted and promulgated Pennsylvania Rule of Appellate Procedure 702, thereby vesting appellate jurisdiction in cases such as this in the Superior Court.

2 . For the purposes of this appeal, this Court may assume, without deciding, that the factual allegations in appellant’s complaint would, if proven, constitute an actionable claim. Whether these allegations are legally sufficient to state a cause of action is an issue that the court below did not reach, because the court based its dismissal of appellant’s complaint upon his failure to exhaust administrative remedies. The preliminary objections filed to this complaint assigned only three objections: 1) exclusive jurisdiction of subject matter in the PUC; 2) exhaustion of appropriate administrative remedies; and 3) adequacy of the remedy at law.

3 . One of the leading authorities on the subject of administrative law has stated the purpose of the exhaustion of remedies rule: “Administrative autonomy is desirable when administrative discretion or expertise is required.” K. Davis, Administrative Law Treatise, § 20.01, at 642^13 (Supp.1970). This Court long ago articulated the rationale underlying the rule. In T. Mendelson Co., Inc. v. Pennsylvania R. R. Co., 332 Pa. 470, 2 A.2d 820 (1938), we stated: “The technical nature of the subject, and the peculiar ability of an administrative body to examine it, suffice as a matter of public policy to displace preliminary court action.” Id. 332 Pa. at 474, 2 A.2d at 822.

4 . This Court, in construing Section 917, has concluded that any administrative remedies available under the Public Utility Law are available in addition to common law remedies. Emerald Coal & Coke Co. v. Equitable Gas Co., 378 Pa. 591, 107 A.2d 734 (1954).

5 . Had appellant sought only equitable relief, in the form of an injunction, the lower court’s dismissal would have found more support in prior case law. This Court has repeatedly declined to allow equitable relief or relief in the nature of equitable relief in disputes involving matters within the purview of the PUC. Behrend v. Philadelphia Electric Co., 431 Pa. 63, 243 A.2d 346 (1968) (injunction); Chester County v. Philadelphia Electric Company, 420 Pa. 422, 218 A.2d 331 (1966) (injunction); Lansdale Borough v. Philadelphia Electric Co., 403 Pa. 647, 170 A.2d 565 (1961) (Declaratory Judgment); Midland Borough v. Steubenville Traction Co., 300 Pa. 134, 150 A. 300 (1930) (injunction); New Brighton Borough v. New Brighton Water Co., 247 Pa. 232, 93 A. 327 (1915) (Mandamus). This judicial deference to the PUC in cases seeking only equitable relief is understandable. These decisions show an implicit recognition by this Court that a judicial order commanding or prohibiting certain actions constitutes a much more serious infringement upon the powers of the PUC than does an award of damages. In spite of this deference, this Court has approved grants of equitable relief in cases where the disputed issue is beyond the competence of the PUC, Rogoff v. Buncher Co., 395 Pa. 477, 151 A.2d 83 (1959) (interpretation of an easement), or where equitable relief will protect the jurisdiction of the PUC. York Water Co. v. York, 250 Pa. 115, 95 A. 396 (1915). Requiring the appellant to split his action and take his equity claim before the PUC would only manifest a slavish adherence to the presumption of PUC jurisdiction in cases seeking equitable relief. Furthermore, such a requirement would result in multiplicity of litigation before courts and administrative agencies.

6 . The Pennsylvania Superior Court, in a recent case involving a claim for damages against a public utility, correctly concluded that the remedial and enforcement powers of the PUC were intended to be used to govern public utility policy and matters essential to utility service. Behrend v. Bell Telephone Co., 242 Pa.Super. 47, 363 A.2d 1152 (1976), vacated and remanded on other grounds, 473 Pa. 320, 374 A.2d 536 (1977). In so holding, the court in Behrend stated:

“The courts retain jurisdiction of a suit for damages based on negligence or breach of contract wherein a utility’s performance of its legally imposed and contractually adopted obligations are examined and applied to a given set of facts.”

Behrend v. Bell Telephone Co., supra, 242 Pa.Super. at 59, 363 A.2d at 1158. See Nemitz v. Bell Telephone Co., 225 Pa.Super. 202, 310 A.2d 376 (1973); Kilbourne v. Denver and Ephrata T. & T. Co., 26 D. & C.2d 441 (C.P. Lancaster Co. 1962).

7 . This Court, in Borough of Green Tree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974) adopted the approach of Professor Jaffe who stated:

“Where the administrative process has nothing to contribute to the decision of the issue and there are no special reasons for postponing its immediate decision, exhaustion should not be required.” L. Jaffe, Judicial Control of Administrative Action 440 (1965). The appellant’s complaint in the instant case merely raises the question of whether appellant’s alleged damages were proximately caused by a breach of a legal duty owed appellant by appellee. This issue is of the type traditionally disposed of by courts of law, and we do not see how the “administrative expertise” of the PUC would contribute to the resolution of this issue. See note 3 supra.

Implicit in the dissenting opinions of Mr. Justice ROBERTS and Mr. Justice POMEROY is the proposition that due to the technical nature of the subject matter of contract or negligence disputes between customers and public utilities, the judiciary is somehow incompetent to resolve such disputes. Such a view ignores the reality that courts daily resolve medical malpractice and products liability disputes, as two examples, which involve equally technical and complex subject matter. Moreover, as Mr. Justice POMEROY notes, appellant could obtain appellate review by the Commonwealth Court of an adverse PUC determination. Appellate Court Jurisdiction Act, Act of July 31, 1970, P.L. 673, No. 223, art. V, § 508, 17 P.S. § 211.508(e) (Supp. 1977-78). Thus, the supposedly complex issues lurking beneath appellant’s complaint may ultimately be required to be resolved by a court in any event.

Finally, it should be reiterated that appellant’s claims in the lower court merely raised questions involving the contractual or tort law obligations owed by appellee to appellant. The cases relied upon by Mr. Justice POMEROY did not involve such narrow questions but rather raised issues involving the provision of utility service to an entire borough. See Duquesne Light Co. v. Monroeville Borough, 449 Pa. 573, 298 A.2d 252 (1972); Lansdale Borough v. Philadelphia Electric Co., supra. We concede that cases raising questions of the adequacy of utility service to an entire geographic area may present problems which should be addressed initially by the PUC. See note 6 supra. However, such problems are not presented in the case now before us, and those types of cases are easily distinguishable from the instant case.

8 . We hold only that the statutory administrative remedies are inadequate. Since the lower court did not reach the question of whether appellant had adequate nonstatutory remedies at law, as appellee contends, this issue is open on remand. However, the availability of adequate nonstatutory legal remedies is not a jurisdictional defect. Devlin v. Osser, 434 Pa. 408, 411, 254 A.2d 303, 304 (1969); Carelli v. Lyter, 430 Pa. 543, 244 A.2d 6 (1968). Thus, if the lower court, on remand, finds that legal remedies are adequate, it should proceed in accordance with Pennsylvania Rule of Civil Procedure 1509(c). See W. Homestead Borough Sch. Dist. v. Allegheny Co. Bd. of Sch. Dir., 440 Pa. 113, 117, 269 A.2d 904, 906 (1970).