{ "id": 11914647, "name": "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; and CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant, Appellees v. PUBLIC STAFF-NORTH CAROLINA UTILITIES COMMISSION, Intervenor, Appellant", "name_abbreviation": "State v. Public Staff", "decision_date": "1996-08-20", "docket_number": "No. COA95-609", "first_page": "623", "last_page": "628", "citations": [ { "type": "official", "cite": "123 N.C. App. 623" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "299 S.E.2d 763", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "765", "parenthetical": "pursuant to N.C. Gen. Stat. \u00a762-30, \"legislature has granted the Commission 'such general power and authority to supervise and control public utilities of the State as may be necessary. . . .' \"" } ], "opinion_index": 0 }, { "cite": "307 N.C. 541", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564118 ], "year": 1983, "pin_cites": [ { "page": "545", "parenthetical": "pursuant to N.C. Gen. Stat. \u00a762-30, \"legislature has granted the Commission 'such general power and authority to supervise and control public utilities of the State as may be necessary. . . .' \"" } ], "opinion_index": 0, "case_paths": [ "/nc/307/0541-01" ] }, { "cite": "222 S.E.2d 474", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "page": "477", "parenthetical": "\"[a] litigant may not remain mute in an administrative hearing, await the outcome of the agency decision, and, if it is unfavorable, then attack it on the ground of asserted procedural defects not called to the agency's attention... .\"" } ], "opinion_index": 0 }, { "cite": "28 N.C. App. 626", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551430 ], "year": 1976, "pin_cites": [ { "page": "630", "parenthetical": "\"[a] litigant may not remain mute in an administrative hearing, await the outcome of the agency decision, and, if it is unfavorable, then attack it on the ground of asserted procedural defects not called to the agency's attention... .\"" } ], "opinion_index": 0, "case_paths": [ "/nc-app/28/0626-01" ] }, { "cite": "476 U.S. 953", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 12862 ], "weight": 2, "year": 1986, "pin_cites": [ { "parenthetical": "N.C.G.S. \u00a7 62-79 requires Commission to \"consider and determine [only] controverted questions\" (emphasis added)" }, { "parenthetical": "N.C.G.S. \u00a7 62-79 requires Commission to \"consider and determine [only] controverted questions\" (emphasis added)" } ], "opinion_index": 0, "case_paths": [ "/us/476/0953-01" ] }, { "cite": "332 S.E.2d 397", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "474" } ], "opinion_index": 0 }, { "cite": "313 N.C. 614", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4719032 ], "year": 1985, "pin_cites": [ { "page": "745" } ], "opinion_index": 0, "case_paths": [ "/nc/313/0614-01" ] }, { "cite": "134 S.E.2d 689", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1964, "pin_cites": [ { "page": "695", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "261 N.C. 384", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573631 ], "year": 1964, "pin_cites": [ { "page": "391", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/261/0384-01" ] }, { "cite": "332 U.S. 194", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 365064 ], "weight": 2, "year": 1947, "pin_cites": [ { "page": "207" }, { "page": "2004-05" } ], "opinion_index": 0, "case_paths": [ "/us/332/0194-01" ] }, { "cite": "269 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1980, "pin_cites": [ { "page": "569" }, { "page": "569" }, { "page": "569", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "weight": 3, "year": 1980, "pin_cites": [ { "page": "413" }, { "page": "413" }, { "page": "413" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0381-01" ] }, { "cite": "53 N.C.L. Rev. 833", "category": "journals:journal", "reporter": "N.C. L. Rev.", "year": 1975, "pin_cites": [ { "page": "868" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 62-60", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1989, "pin_cites": [ { "parenthetical": "Power to \"act[] in a judicial capacity\"" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 62-31", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1989, "pin_cites": [ { "parenthetical": "\"Power to make and enforce rules\"" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 62-23", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1989, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a762-30", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "338 S.E.2d 888", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "897", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "79 N.C. App. 19", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8519302 ], "year": 1986, "pin_cites": [ { "page": "32", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/79/0019-01" ] }, { "cite": "472 S.E.2d 193", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1996, "pin_cites": [ { "page": "196", "parenthetical": "No. COA95-27, filed 2 July 1996" }, { "page": "199" }, { "page": "196", "parenthetical": "role of this Court \"is not and should not be ... to determine the merits of policy positions adopted or rejected by the Commission\"" }, { "page": "196" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 43", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11911587 ], "year": 1996, "pin_cites": [ { "page": "46", "parenthetical": "No. COA95-27, filed 2 July 1996" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0043-01" ] } ], "analysis": { "cardinality": 641, "char_count": 12909, "ocr_confidence": 0.747, "pagerank": { "raw": 5.12982294956584e-08, "percentile": 0.3229259698152286 }, "sha256": "257036e96d47520d7c3e289a505d36f77369a92455dfce210715773c4869d632", "simhash": "1:890ad43a5c592a54", "word_count": 2038 }, "last_updated": "2023-07-14T18:05:31.519627+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges EAGLES and WALKER concur." ], "parties": [ "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; and CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant, Appellees v. PUBLIC STAFF\u2014NORTH CAROLINA UTILITIES COMMISSION, Intervenor, Appellant" ], "opinions": [ { "text": "JOHN, Judge.\nCarolina Water Service, Inc. of North Carolina (CWS) filed an application with the North Carolina Utilities Commission (the Commission) 29 December 1994 requesting permission to relinquish its certificate to serve Mallard Crossing subdivision in Mecklenburg County and to sell that water and sewer system to the City of Charlotte. CWS further requested that its shareholders retain 100 percent of the capital gain on such sale, consistent with the policy articulated by the Commission in Docket No. W-354, Subs 133 and 134 (the policy), that\nin future proceedings, the Commission will follow a policy, absent overwhelming and compelling evidence to the contrary, of assigning 100 % of the gain or loss on the sale of water and/or sewer utility systems to utility company shareholders. . . . Such policy serves the public interest by promoting efficiencies through economies of scale and generally results in more favorable rates and an enhanced quality of service.\nOn 23 January 1995, Public Staff recommended to the Commission that it approve the transfer, but requested deferral of a ruling on distribution of the gain on sale until this Court resolved Public Staffs pending challenge to the Commission\u2019s ruling in Docket No. W-354, Subs 133 and 134. By order dated 3 February 1995, the Commission authorized transfer of the system, denied Public Staffs request to defer ruling, and awarded 100 percent of the gain on sale to the shareholders of CWS. The Commission concluded:\n[t]he Public Staff alleges no \u201coverwhelming and compelling evidence\u201d in this proceeding to convince the Commission to depart and deviate from the policy announced in the Order entered in Docket No[]. W-354, Subs 133 and 134 on September 7, 1994, to henceforth assign 100 percent of the gain or loss on the sale of water and/or sewer systems to utility shareholders.\nThe order further required CWS to file a report within 20 days showing calculation of the gain and related bookkeeping entries.\nOn 13 February 1995, CWS moved for additional time to file its report. Public Staff filed a response 17 February 1995 again requesting that the Commission\nissue an Order deferring its determination of the regulatory treatment to be afforded to the gain on CWS\u2019s sale of its Mallard\nCrossing system until after the North Carolina Court of Appeals rules on the Public Staffs appeal in Docket No[]. 354, Subs 133 and 134.\nBy order dated 14 March 1995, the Commission granted CWS\u2019s request for additional time, but once more denied Public Staffs request for deferral.\nOn 15 March 1995, Public Staff moved for an evidentiary hearing. The Commission denied the motion 12 April 1995, concluding Public Staff had failed to make a timely request for hearing when the matter was initially presented to the Commission, and thus had \u201cwaived its right to request such a hearing.\u201d\nIn State ex rel. Utilities Commission v. Public Staff, 123 N.C. App. 43, 46, 472 S.E.2d 193, 196 (1996) (No. COA95-27, filed 2 July 1996), this Court rejected arguments by Public Staff that the policy set out in Docket No. 354, Subs 133 and 134 was arbitrary and capricious, and unsupported by competent, substantial, and material evidence. However, Public Staffs challenge to future applicability of the policy was determined to be \u201cprospective in nature\u201d and thus not properly before the Court as it \u201chad no bearing upon this case\u201d and was \u201cnot ripe for determination.\u201d Id. at 51, 472 S.E.2d at 199.\nFrom the Commission\u2019s orders dated 3 February 1995, 14 March 1995, and 12 April 1995, Public Staff appeals.\nPublic Staff attacks the Commission\u2019s reliance in the instant case upon the policy, contending that through its enactment, the Commission exceeded its statutory authority by unlawfully engaging in legislative rulemaking through ad hoc adjudication. We disagree.\nBy enactment of Chapter 62, our General Assembly has conferred upon the Commission\nbroad powers to regulate public utilities and to compel their operation in accordance with the policy of the State, as declared in G.S. 62-2.\nState ex rel. Utilities Comm. v. Mackie, 79 N.C. App. 19, 32, 338 S.E.2d 888, 897 (1986) (citation omitted). See also State ex rel. Utilities Comm. v. Southern Bell, 307 N.C. 541, 545, 299 S.E.2d 763, 765 (1983) (pursuant to N.C. Gen. Stat. \u00a762-30, \u201clegislature has granted the Commission \u2018such general power and authority to supervise and control public utilities of the State as may be necessary. . . .\u2019 \u201d). In Chapter 62, the Commission is declared to be an \u201cadministrative board or agency\u201d and is empowered to employ \u201crule-making functions\u201d as well as \u201cfunctions judicial in nature\u201d in the exercise of its legislatively designated responsibilities. N.C. Gen. Stat. \u00a7 62-23 (1989); see also N.C. Gen. Stat. \u00a7 62-31 (1989) (\u201cPower to make and enforce rules\u201d) and N.C. Gen. Stat. \u00a7 62-60 (1989) (Power to \u201cact[] in a judicial capacity\u201d). These functions have been distinguished as follows:\n[A]djudication involves a specifically named party and a determination of particularized legal issues and facts with respect to that party. Rulemaking, by contrast, involves general categories or classes of parties and facts and policies of general applicability.\nDaye, North Carolina\u2019s New Administrative Procedure Act: An Interpretative Analysis, 53 N.C.L. Rev. 833, 868 (1975).\nAs an administrative agency, the Commission may establish rules through ad hoc rulemaking in an adjudicative proceeding as well as through general rulemaking proceedings. Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 413, 269 S.E.2d 547, 569 (1980).\nAccordingly,\n[t]he scope of [judicial] review of an administrative order wherein a new principle is announced and applied is no different from that which pertains to ordinary administrative action. The wisdom of the principle adopted is none of our concern [citations omitted]. Our duty is at an end when it becomes evident that the Commission\u2019s action is based upon substantial evidence and is consistent with the authority granted by [the legislature].\nId. (citing Securities & Exchange Commission v. Chenery Corporation, 332 U.S. 194, 207, 91 L. Ed. 1995, 2004-05 (1947)). See also Public Staff (COA95-27), 123 N.C. App. at -, 472 S.E.2d at 196 (role of this Court \u201cis not and should not be ... to determine the merits of policy positions adopted or rejected by the Commission\u201d).\nHaving previously held in Public Staff, 123 N.C. App. at-, 472 S.E.2d at 196, that the policy was not \u201carbitrary and capricious\u201d and that it was supported by \u201csubstantial evidence,\u201d see Rate Bureau, 300 N.C. at 413, 269 S.E.2d at 569, we now consider Public Staff\u2019s argument herein that pronouncement of the policy in an adjudicative proceeding was not \u201cconsistent with the authority granted [the Commission] by [the General Assembly].\u201d Id.\nG.S. \u00a7 62-23 provides, inter alia, that\n[t]he Commission shall separate its ... rule making functions, and its functions judicial in nature to such extent as it deems practical and advisable in the public interest.\nG.S. \u00a7 62-23.\nHence the Commission is specifically authorized by statute to exercise in its discretion rule making functions within the course of its \u201cfunctions judicial in nature.\u201d Id. See also Rate Bureau, 300 N.C. at 413, 269 S.E.2d at 569 (citation omitted) (\u201cchoice . . . between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency\u201d). The Commission thus acted in accordance with the discretionary authority accorded it by the General Assembly in the adjudication of Docket No. W-354, Subs 133 and 134 when it declared the policy would have prospective application to future proceedings. Public Staffs argument that the Commission thereby exceeded its statutory authority is unfounded.\nThe sole question remaining is whether enactment of the policy by the Commission within an adjudicative proceeding constituted an abuse of discretion. Exercise of discretionary powers of the Commission will not be reversed by reviewing courts except upon a showing of \u201ccapricious, unreasonable, or arbitrary action or disregard of law.\u201d Utilities Commission v. Coach Co., 261 N.C. 384, 391, 134 S.E.2d 689, 695 (1964) (citation omitted). The arguments advanced by Public Staff in this regard are essentially identical to those found unpersuasive by this Court in Public Staff when considering whether the policy was arbitrary and capricious. As in Public Staff, we similarly conclude that declaration by the Commission of the policy in the course of adjudicating Docket No. W-354, Subs 133 and 134 was not an abuse of the Commission\u2019s legislatively accorded discretion.\nPublic Staff also maintains the Commission unlawfully exceeded its statutory authority by \u201c[d]enying all of the Public Staffs requests for a trial-type hearing.\u201d This argument cannot be sustained.\nPublic Staff does not dispute that it failed, at the initial hearing or even prior to the Commission\u2019s final disposition of the matter, either to request a \u201ctrial-type hearing\u201d or to allege any evidence, much less \u201coverwhelming and compelling evidence,\u201d in an effort to challenge the Commission\u2019s reliance upon the policy as announced in Docket No. W-354, Subs 133 and 134. Public Staff instead elected to respond to CWS\u2019s request for 100 percent of the gain on sale herein by asserting a single recommendation \u2014 deferral of decision pending issuance of this Court\u2019s opinion regarding the policy. Not until 15 March 1995 did Public Staff ultimately move for an evidentiary hearing, this request coming seven weeks after it brought the instant matter before the Commission and six weeks following the Commission\u2019s 3 February 1995 dispositional order.\nAs Public Staff\u2019s request for a \u201ctrial-type hearing\u201d of substantive arguments was not before the Commission prior to its 3 February 1995 order applying the policy established in Docket No. W-354, Subs 133 and 134, the Commission was under no duty to rule upon the necessity of, nor grant, a hearing prior to applying that policy. See State ex rel. Utilities Comm. v. Nantahala Power & Light Co., 313 N.C. 614, 745, 332 S.E.2d 397, 474, (1985) rev\u2019d on other grounds, 476 U.S. 953, 90 L. Ed. 2d 943 (1986) (N.C.G.S. \u00a7 62-79 requires Commission to \u201cconsider and determine [only] controverted questions\u201d (emphasis added)). Consequently, we hold the Commission correctly concluded Public Staff had \u201cwaived its right to request such a hearing,\u201d and reject Public Staff\u2019s remaining arguments which essentially rest upon the Commission\u2019s refusal to conduct an eviden-tiary hearing. See Nantz v. Employment Security Comm., 28 N.C. App. 626, 630, 222 S.E.2d 474, 477 (1976) (\u201c[a] litigant may not remain mute in an administrative hearing, await the outcome of the agency decision, and, if it is unfavorable, then attack it on the ground of asserted procedural defects not called to the agency\u2019s attention... .\u201d). The Commission therefore properly applied the policy in the case sub judice when it stated:\nThe Public Staff alleges no \u201coverwhelming and compelling evidence\u201d in this proceeding to convince the Commission to depart and deviate from the policy announced in the Order entered in Docket No[]. W-354, Subs 133 and 134 on September 7, 1994, to henceforth assign 100 percent of the gain or loss on the sale of water and/or sewer systems to utility shareholders.\nAffirmed.\nJudges EAGLES and WALKER concur.", "type": "majority", "author": "JOHN, Judge." } ], "attorneys": [ "Hunton & Williams, by Edward S. Finley, Jr., and James L. Hunt, for applicant-appellee Carolina Water Service, Inc. of North Carolina.", "Public Staff, Antoinette R. Wike, Chief Counsel, and Paul L. Lassiter, Staff Attorney, for intervenor-appellant Public Staff-North Carolina Utilities Commission." ], "corrections": "", "head_matter": "STATE OF NORTH CAROLINA ex rel. UTILITIES COMMISSION; and CAROLINA WATER SERVICE, INC. OF NORTH CAROLINA, Applicant, Appellees v. PUBLIC STAFF\u2014NORTH CAROLINA UTILITIES COMMISSION, Intervenor, Appellant\nNo. COA95-609\n(Filed 20 August 1996)\nUtilities \u00a7\u00a7 11, 51 (NCI4th)\u2014 pronouncement of policy in adjudicative proceeding \u2014 discretionary matter \u2014 specific policy \u2014 no abuse of discretion\nThe Utilities Commission did not exceed its statutory authority by the pronouncement of a policy in an adjudicative proceeding, since the Commission is specifically authorized by statute, N.C.G.S. \u00a7 62-23, to exercise in its discretion rulemaking functions within the course of its \u201cfunctions judicial in nature\u201d; furthermore, the Commission did not abuse its discretion in declaring, in the course of adjudicating a particular case, as policy that 100% of the gain or loss on the sale of water/sewer utility systems should be assigned to the utility company shareholders.\nAm Jur 2d, Public Utilities \u00a7\u00a7 230, 232.\nAppeal by intervenor-appellant from orders entered 3 February 1995, 14 March 1995, and 12 April 1995 by the North Carolina Utilities Commission. Heard in the Court of Appeals 27 February 1996.\nHunton & Williams, by Edward S. Finley, Jr., and James L. Hunt, for applicant-appellee Carolina Water Service, Inc. of North Carolina.\nPublic Staff, Antoinette R. Wike, Chief Counsel, and Paul L. Lassiter, Staff Attorney, for intervenor-appellant Public Staff-North Carolina Utilities Commission." }, "file_name": "0623-01", "first_page_order": 657, "last_page_order": 662 }