State ex rel. LaClede Gas Co. v. Public Service Commission

392 S.W.3d 24, 2012 WL 6129787, 2012 Mo. App. LEXIS 1574
CourtMissouri Court of Appeals
DecidedDecember 11, 2012
DocketNo. WD 74852
StatusPublished
Cited by4 cases

This text of 392 S.W.3d 24 (State ex rel. LaClede Gas Co. v. Public Service Commission) 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
State ex rel. LaClede Gas Co. v. Public Service Commission, 392 S.W.3d 24, 2012 WL 6129787, 2012 Mo. App. LEXIS 1574 (Mo. Ct. App. 2012).

Opinion

JAMES EDWARD WELSH, Chief Judge.

This appeal involves a dispute over whether the Public Service Commission unlawfully and unreasonably issued two orders against Laclede Gas Company — one being a summary determination finding that Laclede violated a Stipulation and Agreement approved by the Commission in 2001 (the 2001 Agreement) by refusing to provide certain documents requested by the Commission’s Staff and the other being a dismissal of Laclede’s counterclaim against the Commission’s Staff. Laclede filed a petition for writ of review of the [28]*28Commission’s orders with the circuit court, and the circuit court reversed the Commission’s orders and set them aside as unlawful. The Commission, thereafter, filed this appeal. We review the decision of the Commission rather than the decision of the circuit court. State ex rel. Mo. Gas Energy v. Pub. Serv. Comm’n, 210 S.W.3d 330, 334 (Mo.App.2006). Rule 84.05(e) requires that the party aggrieved by the agency decision file the appellant’s brief and that the party aggrieved by the circuit court’s decision file the respondent’s brief. Thus, Laclede filed the appellant’s brief in this case, and the Commission filed the respondent’s brief.

In this appeal, Laclede contends the Commission erred in issuing a summary determination because: (1) the Commission’s order was unlawful in that genuine issues of material fact were in dispute, (2) the Commission’s order was unlawful in that the Commission ruled against Laclede without affording Laclede a hearing as required by law, (3) the Commission’s order was not supported by competent and substantial evidence and was arbitrary, capricious, and unreasonable in that the evidence did not support the Commission’s findings regarding the 2001 Agreement and whether Laclede objected to the discovery request, (4) the Commission’s order was arbitrary, capricious, and unreasonable and was an abuse of discretion in that the Commission found that Laclede violated the 2001 Agreement even though the Commission repeatedly stated that the Staffs discovery request was governed by the Rules of Civil Procedure and not by the 2001 Agreement, and (5) the Commission’s order was unlawful in that the Commission violated the law of the case by requiring Laclede to produce information under terms that directly conflicted with a previous judgment from the circuit court. Finally, Laclede asserts the Commission’s order dismissing Laclede’s counterclaim for failing to state a claim upon which relief could be granted was unlawful in that Laclede pled facts that stated a claim for relief under Regulation 4 CSR 240-2.080(6). We find the Commission’s orders to be lawful and reasonable and affirm the orders of the Commission.

FACTS

On December 1, 2000, Laclede applied to the Commission for approval to restructure itself as a holding company with subsidiaries (Case No. GM-2001-342). The case was resolved through a stipulation and agreement, which the Commission approved by an order dated August 14, 2001 (2001 Agreement). The Commission issued its order authorizing Laclede’s reorganization into a holding company, a regulated utility company, and unregulated subsidiaries “subject to the conditions contained in the Unanimous Stipulation and Agreement[.]” The 2001 Agreement required Laclede to account for transactions it entered into with its affiliated companies in accordance with the provisions of a Cost Allocation Manual (CAM). Accordingly, Section VI.l of the 2001 Agreement stated:

Upon implementation of the Proposed Restructuring, transactions involving transfers of goods or services between Laclede Gas Company and one or more of the Company’s affiliated entities shall be conducted and accounted for in compliance with the provisions of a Cost Allocation Manual (“CAM”).

Section IV of the 2001 Agreement prescribed the obligations of Laclede and its affiliates to provide the Commission’s Staff and others access to information. Section IV.2 said:

Upon request, Laclede Gas Company and The Laclede Group, Inc. agree to make available to Staff ... upon written notice during normal working hours and [29]*29subject to appropriate confidentiality and discovery procedures, all books, records and employees of The Laclede Group, Inc., Laclede Gas Company and its affiliates as may be reasonably required to verify compliance with the CAM and the conditions set forth in this Stipulation and Agreement.... Laclede Gas Company and The Laclede Group, Inc. shall also provide Staff and Public Counsel any other such information (including access to employees) relevant to the Commission’s ratemaking, financing, safety, quality of service and other regulatory authority over Laclede Gas Company; provided that Laclede Gas Company and any affiliate or subsidiary of The Laclede Group, Inc. shall have the right to object to such production of records or personnel on any basis under applicable law and Commission rules, excluding any objection that such records and personnel of affiliates or subsidiaries: (a) are not within the possession or control of Laclede Gas Company; or (b) are either not relevant or are not subject to the Commission’s jurisdiction and statutory authority by virtue of or as a result of the implementation of the Proposed Restructuring.

As part of its regulatory duty, the Commission examines a gas corporation’s actual costs for procuring gas supplies. For the 2004-2005 and 2005-2006 periods, Lac-lede had two actual cost adjustments (ACA) cases pending before the Commission. A discovery dispute arose between the Staff and Laclede regarding information relating to Laclede’s purchase of gas supplies from its affiliate, Laclede Energy Resources, Inc. (LER).1 The Staff sent a discovery request to Laclede essentially seeking information on LER’s cost to procure gas.

Laclede objected to the Staffs discovery request arguing that, pursuant to the 2001 Agreement, Laclede was obligated to provide the Staff only such information as was necessary for the Staff to verify Laclede’s compliance with the CAM and that the information the Staff sought was not reasonably calculated to lead to the discovery of admissible evidence. The Staff replied that its discovery request was not being made pursuant to the CAM or the Commission’s affiliate transaction rules. Rather, the Staff said that its request was made to determine whether Laclede paid too much for the gas it bought from LER.

The Commission supported the Staffs view that the discovery requests were not made pursuant to the 2001 Agreement, the CAM, or the Commission’s affiliate transaction rules. The Commission granted the Staffs motion to compel and ordered Lac-lede to produce the information in accordance with the rules of discovery. On January 21, 2009, the Commission clarified its order compelling Laclede to produce documents by stating:

The Commission has ordered Laclede to produce information about its affiliate according to the rules of discovery [and] not under the Commission’s Affiliate Transaction Rule. Although it is true that by granting Staffs motion, Staff is permitted to investigate Laclede’s affiliate transactions, such investigation is limited to information that may lead to evidence that is relevant to these [actual cost adjustment (ACA) ] cases. To the extent that Laclede is in possession of the information, the Commission clarifies its order compelling Laclede to produce the information requested by Staff.

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Bluebook (online)
392 S.W.3d 24, 2012 WL 6129787, 2012 Mo. App. LEXIS 1574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-laclede-gas-co-v-public-service-commission-moctapp-2012.