Opinion
No. WD 63093
December 13, 2005
Appeal from the Circuit Court of Cole County, Missouri, The Honorable Thomas J. Brown, III, Judge.
Before: Ulrich, P.J., and Lowenstein, J., and Smith, C.J.
Introduction
Pursuant to § 386.540.1, the Missouri Public Service Commission (PSC) appeals from the judgment of the Circuit Court of Cole County "correcting" the decision of the PSC, in Case No. GR-96-450, in which it denied the recommendation of the PSC Staff (Staff) to disallow recovery by Missouri Gas Energy (MGE) of a portion of the costs associated with a transportation agreement (Agreement), entered into between MGE and Mid-Kansas Partnership (MKP). In the Agreement, MKP agreed, inter alia, to indemnify MGE for any costs, associated with the Agreement, that were disallowed by the PSC. In "correcting" the decision of the PSC, the circuit court found and concluded, inter alia, that the PSC, pursuant to the "Stipulation and Agreement" (the Stipulation) entered into between Riverside Pipeline Company, L.P. (Riverside), MKP, MGE, Western Resources, Inc. (Western), the Staff, and the Office of Public Counsel (OPC), "along with others," and approved by the PSC, acted unlawfully and in excess of its jurisdiction, in Case No. GR-96-450, in conducting a "prudence review" and in rendering a decision on the merits.
All statutory references are to RSMo, 2000, unless otherwise indicated.
In the "Brief of Appellants," filed by Riverside and MKP, they state in their jurisdictional statement: "Even though the Commission filed this appeal, Riverside Pipeline Company, L.P. and Mid-Kansas Partnership are deemed the appellants under Rule 84.05(e)." (Emphasis added.) In that regard, Rule 84.05(e) provides: "If the circuit court reverses a decision of an administrative agency and the appellate court reviews the decision of the agency rather than of the circuit court, the party aggrieved by the agency decision shall file the appellant's brief. . . ." Despite Riverside and MKP's assertion in their brief that they are the appellants with respect to this appeal, the Missouri Supreme Court, on transfer of this case in State ex rel. Riverside Pipeline Co. v. Pub. Serv. Comm'n , 165 S.W.3d 152, 155 (Mo. banc 2005) ( Riverside III ), held:
All rule references are to Missouri Rules of Civil Procedure, 2005, unless otherwise indicated.
The appeal at issue, however, is not the 'appeal' of the decision of the PSC to the circuit court by way of petition for review, and the appellants are not Riverside and MKP. Instead the appeal is from the judgment of the circuit court to the court of appeals and this Court, and the appellant is the PSC.
(Emphasis added.) Thus, it would seem, at first blush, that in referencing the parties, we should not refer to Riverside and MKP as the appellants, but should refer to the PSC as the appellant. However, the Court went on to say, with respect to Rule 84.05(e):
But this rule pertains only to the determination of which party files its brief first and how the parties are designated. It is a procedural rule that provides a more logical order for filing briefs, but it does not affect the designation of which party must establish standing in order to appeal.
Id. (emphasis added). This language, especially the highlighted language, would support the fact that Riverside and MKP are the designated "appellants," under Rule 84.05(e), for the purpose of filing briefs, but with respect to the "designation of which party must establish standing in order to appeal," the PSC is the appellant. So, depending on the context, Riverside and MKP may or may not be the "appellants." Given this fact, to prevent confusion, we will refer to the parties by name rather than by party designation.
Riverside and MKP raise one point on appeal. They claim that the PSC acted unlawfully and in excess of its jurisdiction in conducting a prudence review in Case No. GR-96-450 and entering its decision on the merits, because, pursuant to the Stipulation, the PSC was barred from conducting such a review and entering a decision on the merits. Specifically, they claim that the PSC failed to correctly interpret the Stipulation as barring a prudence review, in Case No. GR-96-450, of not only the Agreement, but of all the Missouri Agreements, which we discuss, infra. Because we find that Riverside and MKP were not "aggrieved" by the decision of the PSC, they were prohibited, pursuant to the express language of Rule 84.05(e), from filing the "appellant's brief" in this case, claiming error and seeking relief thereon, such that there is nothing before this court to review, requiring us to dismiss.
Facts
On January 15, 1990, Western entered into two separate contracts with Riverside and MKP to supply and transport natural gas to the Kansas City, Missouri, metropolitan area and other locations in Missouri. In July of 1993, Western agreed to sell its Missouri natural gas properties to Southern Union Company (Southern Union). MGE, a division of Southern Union, took over operations of the distribution system on February 1, 1994. Along with the other assets and liabilities of Western, the agreements with Riverside and MKP were assigned to Southern Union as part of the sale. On February 24, 1995, MGE entered into new contracts with Riverside and MKP to continue supplying and transporting natural gas to the Kansas City, Missouri, metropolitan area and other locations in Missouri. These agreements and the two agreements, which Western entered into with Riverside and MKP and assigned to Southern Union, are referred to by the parties as the "Missouri Agreements."
Western and MGE are both public utilities regulated by the PSC. On June 25, 1996, the PSC, as part of its Actual Cost Adjustment (ACA) process, established Case No. GR-96-450 to determine whether MGE had over-recovered or under-recovered its allowable costs for obtaining natural gas from its suppliers for the ACA period of July 1, 1996, through June 30, 1997. Natural gas distribution companies, such as MGE, as part of their rates, are allowed by the PSC to recoup from their customers the reasonable costs associated with obtaining natural gas from their suppliers. State ex rel. Associated Natural Gas Co. v. Pub. Serv. Comm'n , 954 S.W.2d 520, 523 (Mo.App. 1997). The adjustment of rates, based on the costs incurred in obtaining natural gas, is done pursuant to a two-step process. Id. In the first step, pursuant to an automatic rate adjustment clause in the PSC-approved rate schedule, a regulated company is allowed to automatically pass on to its customers the wholesale cost of gas. Id. This adjustment is known as a purchased gas adjustment (PGA), which is required to be reported annually to the PSC. In the second step of the ACA, the PSC reviews the required ACA filings of the company, including its PGA filings, to determine: (1) the actual costs that the company should be allowed to recoup; and, (2) based on that determination, whether it has over-recovered or under-recovered its allowable costs for the ACA period under review. Id. In determining what costs of a company can be recouped from its customers as reasonable, the PSC employs a "prudence" standard. Id. Hence, the PSC, as part of its ACA process, conducts a "prudence review" of the company's contracts with its suppliers to determine whether it was prudent for the company to enter into the contracts and based thereon, whether the costs associated with the contracts should be disallowed in whole or part.
In addition to establishing Case No. GR-96-450, the PSC had previously established cases for the ACA periods of July 1, 1992 — June 30, 1993; July 1, 1993 — June 30, 1994; July 1, 1994 — June 30, 1995; and July 1, 1995 — June 30, 1995. On June 1, 1998, the Staff, as part of the ACA review in Case No. GR-96-450, challenged the prudence of the Agreement, the new MKP transportation agreement, recommending that $4,532,449.60 of the costs associated therewith, for the ACA period under review, be disallowed. That recommended amount was later lowered to $3,490,082.81. The Staff had previously challenged the prudence of the Missouri Agreements in the other cases, recommending the disallowance of certain costs associated with the agreements for the ACA periods under review. Given their financial interest in Case No. GR-96-450, MKP and Riverside were allowed to intervene in the case as suppliers of natural gas and natural gas transportation. They had a financial interest in the outcome of the prudence review in Case No. GR-96-450 inasmuch as they had agreed in their respective sales and transportation agreements with MGE that they would reimburse it for any amounts that it paid to Riverside and MKP under the agreements that were ultimately disallowed by the PSC in MGE's recovery of costs as part of the PSC's ACA process.
In May of 1996, Riverside, MKP, MGE, Western, the Staff, and the OPC, "along with others," entered into the Stipulation, to "resolve certain disputes [then pending] between the parties." The disputes included all "pending administrative and judicial proceeding between the parties." These disputes involved actual and potential disallowances by the PSC for the ACA periods from July 1, 1992, to June 30, 1996, concerning the Missouri Agreements. The Stipulation provided, inter alia, that pursuant to an agreed-upon schedule set forth therein, Riverside, MKP, and Western would pay $3,992,500 to MGE, $2,842,500 of which was to be paid by MKP and Riverside. In accordance with the reimbursement provisions of the Missouri Agreements, these payments were intended to indemnify MGE for credits that would be due its ratepayers as a result of the PSC's disallowing costs associated with MGE's agreements with MKP and Riverside, pursuant to a prudence review of the execution of the agreements done in conjunction with its ACA process. As the Stipulation provided, MGE was "simply [a] conduit for the delivery of these funds to [its] ratepayers." In return for the payments by Riverside, MKP, and Western, Riverside and MKP contend that it was agreed that the Missouri Agreements would not be subject to any further ACA prudence reviews by the PSC. The Stipulation was approved by the PSC on June 11, 1996.
In order to short-circuit the PSC's ACA prudence review in Case No. GR-96-450 and avoid any possible resulting disallowance, Riverside and MKP filed two motions to dismiss, one on July 1, 1998, and one on August 27, 1998, alleging that the review was precluded by the Stipulation. Both motions were denied by the PSC on September 29, 1998. In response, Riverside and MKP filed applications for rehearing with the Commission. They also filed a petition for a writ of prohibition in the Cole County Circuit Court, seeking to prevent the PSC from conducting the prudence review in Case No. GR-96-450. The circuit court granted a preliminary writ, which the PSC moved to quash on the ground that it should be given the opportunity to rule in the first instance on the meaning of the Stipulation. On December 2, 1998, the circuit court sustained the PSC's motion to quash the preliminary injunction, finding that the PSC "should, in the first instance, determine it has jurisdiction of the cause after hearing evidence and argument of the parties before it." On December 22, 1998, the PSC denied Riverside and MKP's applications for rehearing without any further evidence or argument.
On January 15, 1999, Riverside and MKP, in accordance with § 386.510, filed a petition for a writ of review in the circuit court, seeking review of the PSC's order of September 29, 1998, denying its motion to dismiss or limit the proceedings. On July 26, 1999, the court reversed the PSC's decision, finding that the PSC had "acted unlawfully and/or unreasonably when it failed to make any finding that the 1996 Stipulation and Agreement was ambiguous, yet interpreted the Stipulation and Agreement without hearing any testimony or otherwise receiving any evidence to determine the intent of the parties to the Stipulation and Agreement." The circuit court remanded the case to the PSC for further action in accordance with its order, "including the interpretation of the 1996 Stipulation and Agreement in accordance with the rules of construction and the need for a sufficient and appropriate evidentiary basis for resolution of any language found to be ambiguous."
Although the circuit court reversed the decision of the PSC and remanded the case for further proceedings to, inter alia, interpret the Stipulation and determine whether it barred the prudence review in Case No. GR-96-450, Riverside and MKP, nonetheless, filed a notice of appeal in this court, pursuant to § 386.540, challenging the PSC's decision denying Riverside and MKP's motions to dismiss or limit the proceedings. In State ex rel. Riverside Pipeline Co., L.P. v. Pub. Serv. Comm'n ( Riverside I ), this court found that the PSC's decision denying the motions to dismiss or limit was not a final decision subject to judicial review by the circuit court, in accordance with § 386.510, such that it and, consequently, this court lacked jurisdiction to review. 26 S.W.3d 396, 400 (Mo.App. 2000).
Although this court indicated that it was reversing and remanding to the PSC for further proceedings, Riverside , 26 S.W.3d at 401, the proper course of action was to dismiss for a lack of jurisdiction in keeping with its holding that the circuit court, and, thus, this court lacked jurisdiction to review.
Riverside and MKP having been unsuccessful in their attempt to have this court interpret the Stipulation in an effort to block the prudence review in Case No. GR-96-450, the case, on remand from the circuit court, proceeded to a five-day evidentiary hearing before the PSC in September of 2001. On March 12, 2002, the PSC issued its report and decision, in which it declared that the Stipulation was ambiguous to such an extent that it could not determine whether it barred the prudence review in Case No. GR-96-450, as contended by Riverside and MKP. As to the merits, however, it rejected the Staff's recommendation to disallow a portion of the costs associated with MGE's transportation agreement with MKP for the ACA period under review, such that MKP was not required, pursuant to the Agreement, to reimburse MGE for any amounts disallowed for the ACA period of July 1, 1996, to June 30, 1997. Although prevailing on the merits of the prudence review in Case No. GR-96-450, MKP, along with Riverside, filed an application for rehearing, which was denied by the PSC. On June 14, 2002, they filed a petition for a writ of review in the Circuit Court of Cole County, seeking review of the PSC's decision.
On June 9, 2003, the circuit court entered its judgment, "correct[ing] the Commission's decision to reflect that the Stipulation (i) barred the Staff's proposed disallowance in this case and (ii) preclude[d] any further ACA prudence review of the decisions associated with the execution of the 'Missouri Agreements' and (iii) only permits review of compliance and operational matters." The PSC appealed the judgment to this court. In their sole point on appeal, Riverside and MKP claimed that the PSC erred in "reaching the merits of the Staff's proposed disallowance review because further prudence review of the decisions associated with the execution of the Missouri Agreements was precluded" by the Stipulation. In State ex. rel. Riverside Pipeline Co. v. Pub. Serv. Comm'n , No. WD 63093, 2004 WL 2339843, at* 4 (Mo.App. October 19, 2004) ( Riverside II ), this court dismissed the appeal due to a lack of jurisdiction on the basis that neither Riverside nor MKP, the designated appellants for briefing, pursuant to Rule 84.05(e), were "aggrieved" parties so as to have standing to appeal the PSC's decision because it had not disallowed any of MGE's costs attributable to the Missouri Agreements for the period covered by the prudence review in Case No. GR-96-450, and, therefore, had ruled in favor of Riverside and MKP on the merits. Riverside II was transferred to the Missouri Supreme Court. The Court, in Riverside III , held that jurisdiction was proper in this court and re-transferred the appeal back to this court for determination, finding that the PSC, not Riverside and MKP, was appealing the circuit court's judgment and that the PSC was an "interested" party, giving it standing to appeal, pursuant to § 386.500.1.165 S.W.3d at 155-56.
Appellate Jurisdiction
In every case, we are required to determine our jurisdiction, sua sponte. Lane v. Lensmeyer , 158 S.W.3d 218, 222 (Mo. banc 2005). In that regard, we first note that it is obvious that Riverside and MKP are not attacking, on appeal, the PSC's decision on the merits in the prudence review in Case No. GR-96-450 because they were "aggrieved" thereby. This is so in that, as we note in the facts, supra, the PSC's decision on the merits in Case No. GR-96-450 favored Riverside and MKP in that it denied the Staff's recommendation to disallow a portion of the costs associated with the Agreement between MGE and MKP and did not disallow any other costs associated with the Missouri Agreements so as to require Riverside and MKP to indemnify MGE for the portion of the costs MGE was not allowed to recover from its customers. Thus, it is clear that the attack in this appeal, by Riverside and MKP, has nothing to do with the PSC's decision on the merits in the present case. Rather, it is designed to prevent "future" prudence reviews by the PSC of any of the Missouri Agreements that "might" occur and to avoid the potential costs they "may" have to pay MGE, pursuant thereto, by seeking an interpretation of the Stipulation that the intent of the parties to the Stipulation was to preclude all further prudence reviews by the PSC of the Missouri Agreements, including the prudence review in this case.
Section 386.540.1 provides that an appeal from the judgment of the circuit court, reviewing a decision of the PSC, "shall be prosecuted as appeals from judgment of the circuit court in civil cases except as otherwise provided in this chapter." Section 386.540.4 provides that: "The general laws relating to appeals to the supreme court and the court of appeals in this state shall, so far as applicable and not in conflict with the provisions of this chapter, apply to appeals taken under the provisions of this chapter." In that regard, § 512.020 authorizes an appeal to the appropriate appellate court by any party "aggrieved" by a judgment of the trial court. Thus, "[u]nder the statute, a party must be 'aggrieved' by the judgment below to have any right to appeal. An aggrieved party is one who suffers from an infringement or denial of legal rights." Parker v. Swope , 157 S.W.3d 350, 352 (Mo.App. 2005) (citation omitted). However, the "judgment in question must operate directly and prejudicially on the party's personal or property rights or interests and such effect must be immediate and not merely a possible remote consequence." Id. (emphasis added). Here, Riverside and MKP did not suffer any "immediate" prejudice as a direct result of the decision of the PSC from which it seeks appellate review and relief. In fact, the direct result of the decision favored them. What they are attacking is not the decision itself, but the PSC's determination that it had the authority to rule on the merits of the case; as such, they are not "aggrieved" in the generally accepted concept of the term for purposes of appeal.
The fact that Riverside and MKP are not aggrieved by the PSC's decision in the context of the instant proceeding matters not, however, to our jurisdiction, according to Riverside III. Rather, the Court there held that even though Riverside and MKP were designated as appellants for purposes of briefing, because this appeal is by the PSC from the judgment of the circuit court, the relevant question in determining our jurisdiction, based on standing to bring this appeal, is not whether Riverside and MKP were aggrieved by the PSC's decision in Case No. GR-96-450, but whether the PSC, the "appellant" for purposes of standing, was aggrieved by the judgment of the circuit court, which it clearly was. 165 S.W.3d at 155.
While resolving the question of standing to bring this appeal, the Court's holding in Riverside III raises the additional question of whether in interpreting the Stipulation, pursuant to the claim of error raised by Riverside and MKP, we would be giving them what amounts to an advisory opinion on that issue inasmuch as they were clearly not aggrieved by the decision they attack on appeal. As a general rule, we are not allowed to give advisory opinions. Block v. Gallagher , 71 S.W.3d 682, 685 (Mo.App. 2002). The question, concerning the giving of an advisory opinion, arises from the fact that although the PSC is considered, according to Riverside III , the "appellant" for purposes of standing to bring this appeal, pursuant to Rule 84.05(e), Riverside and MKP are still considered the "appellants" for purposes of briefing, and as such have the burden of persuasion on appeal as to their claim of error with respect to the PSC's decision in Case No. GR-96-450, by which they are not aggrieved. Stacy v. Dep't of Soc. Servs., Div. of Med. Servs. , 147 S.W.3d 846, 850 (Mo.App. 2005). Given the fact that the "appellant," for purposes of briefing, as opposed to standing, is the party that actually raises claims of error with respect to the PSC decision in question and has the burden of persuasion on appeal as to those claims, it seems only logical that that party would have to be aggrieved by the decision of the PSC being attacked. Otherwise, what results, as in this case, is appellate review of claims of error as to a PSC decision by which the briefing appellants, Riverside and MKP, are not aggrieved, allowing them to obtain what amounts to an advisory opinion of this court, which is generally prohibited.
Here, we are not called upon to review any claims of error asserted by the PSC, the appellant as to standing, that the circuit court erred in ruling against it. Rather, pursuant to Rule 84.05(e), we are called upon to review the error raised by Riverside and MKP, in their attempt to prevent possible "future" PSC prudence reviews of the Missouri Agreements that "possibly" could result in significant cost to them, including litigation expenses. This, of course, given the procedural posture of the case, as dictated to us by the parties, the PSC, and the circuit court, clearly smacks of Riverside and MKP attempting to receive what amounts to nothing more than an advisory opinion of this court as to the authority of the PSC, under the Stipulation, to conduct future hypothetical prudence reviews of the Missouri Agreements by the PSC, by asserting error as to an underlying legal issue, rather than asserting error as to the actual decision on the merits of the PSC, by which they are obviously not aggrieved. To put this in perspective, this is the equivalent of a party to a civil action requesting and being allowed to appeal an evidentiary ruling, on which the party did not prevail at trial, although obtaining a favorable judgment, simply because this same legal issue might be raised in subsequent cases and the party wants an appellate opinion to finally resolve this underlying issue. This would not be allowed as being an advisory opinion. Block , 71 S.W.3d at 685.
The Court in Riverside III , in holding that, because the PSC brought this appeal from the decision of the circuit court and it was "interested" in the PSC decision that was being judicially reviewed, it had standing, in accordance with § 386.500.1, to bring this appeal, did not address the issue which we raise here: Whether Riverside and MKP, as the appellants for purposes of briefing, pursuant to Rule 84.05(e), with the burden of persuasion on appeal, had to be "aggrieved" by the PSC decision, which they attack on appeal, so as to avoid our giving an advisory opinion. The answer to the question is found in the rule itself. Rule 84.05(e) reads, in pertinent part: "If the circuit court reverses a decision of an administrative agency and the appellate court reviews the decision of the agency rather than of the circuit court, the party aggrieved by the agency decision shall file the appellant's brief and reply brief[.]" (Emphasis added.) Thus, the Court's own rule clearly anticipates and requires that the briefing appellant be aggrieved by the agency decision, in this case a decision of the PSC, in order for it to file an appellant's brief. In other words, the party that is claiming error and is seeking review of that error, pursuant to an appellant's brief, must be aggrieved by the PSC's decision. "Aggrieved" is not defined in the rule, but common sense and logic would dictate that it has the same meaning as "aggrieved" in § 512.020, in that they both deal with appeals. Hence, it appears that the Court, in its wisdom, in requiring in Rule 84.05(e) that the appellant's brief, as to a review of an agency decision, be filed by a party aggrieved by that decision, was clearly attempting to avoid the untenable situation we discuss, supra, of this court being required to give what amounts to an advisory opinion to a party on an issue as to a decision of the agency by which it is not aggrieved.
Riverside and MKP, although not aggrieved by the decision of the PSC in Case No. GR-96-450, filed the appellants' brief, claiming error as to the authority of the PSC to enter that decision on the merits. This violated Rule 84.05(e) in that they were not aggrieved by the PSC's decision and were without authority to file an appellant's brief seeking review of any claims of error, rendering their brief, denominated "appellants' brief," a nullity. The Court in Riverside III never addressed this issue, and the Court's decision there cannot act to contravene the rule's requirement as to standing to file the appellant's brief. It simply ruled on whether there was a party with standing to bring the appeal, deciding that the PSC had such standing. Thus, inasmuch as this court does not have a valid appellant's brief before it, setting forth any claims of error by an aggrieved party for our review, there is nothing for us to review, requiring us to dismiss.
Even if we were not dismissing for the foregoing reason, we would still be compelled to dismiss. This is so in that the circuit court's judgment, "correcting the PSC's order," from which this appeal was taken, was null and void, ab initio, in that it exceeded the court's jurisdiction. In that regard, § 386.510 expressly limits the circuit court's jurisdiction to either "affirming or setting aside the order of the commission under review" in that it does not expressly grant the circuit court any other authority to act with respect to PSC decisions or orders under review. See State ex rel. A G Commercial Trucking, Inc. v. Dir. of Manufactured Housing and Modular Units Program of the PSC , 168 S.W.3d 680, 684 (Mo.App. 2005) (holding that the circuit court only has that jurisdiction to review PSC decisions as expressly granted by § 385.510). Inasmuch as the circuit court's judgment "correcting" the order of the PSC was void, we lack jurisdiction to review it on the merits and must dismiss for a lack of appellate jurisdiction. Brock v. Blackwood , 143 S.W.3d 47, 55 (Mo.App. 2004).
Conclusion
For the reasons discussed, supra, the appeal of the PSC from the decision of the circuit court, reversing the decision of the PSC in Case No. GR-96-450, is dismissed for a lack of jurisdiction.