Opposition — City of Cincinnati v. Public Utilities Commission

"Gupreme Court, 3

FILED

JAN 19 1979

Supreme Court of the UnitedStages 8%

October Term, 1978

No. 78-909

CITY OF CINCINNATI, OHIO,

Petitioner,

VS.

THE PUBLIC UTILITIES COMMISSION OF OHIO,

THE CINCINNATI GAS & ELECTRIC COMPANY,

Respondents.

PETITION FOR WRIT OF CERTIORARI

To THE OHIO SUPREME COURT

BRIEF OF RESPONDENT THE CINCINNATI GAS &

ELECTRIC COMPANY IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

WILLIAM J. MorAN

JAMES J. MAYER

THE CINCINNATI GAs & ELECTRIC COMPANY

139 East Fourth Street

Cincinnati, Ohio 45201

ALAN P. BUCHMANN

WILLIAM C. DONAHUE

Wititiam H. BAUGHMAN, JR.

SQUIRE, SANDERS & DEMPSEY

1800 Union Commerce Building

Cleveland, Ohio 44115

Attorneys for The Cincinnati Gas &

Electric Company

THE GATES LEGAL PUBLISHING Cu., CLEVELAND, OHIO—TEL. (216) 621-5647

TABLE OF CONTENTS

NTE nn euteensanetsenninnnasann

Counter Statement of the Case

Reasons for Denying the Writ

The only question raised by the petition is factual

in nature, has no importance other than to the par-

ties to the proceeding below, and was correctly

decided by the Ohio Supreme Court ...........-..............

EL ONS

TABLE OF AUTHORITIES

Cases

Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945)

Lopresti v. Community Traction Co., 160 Ohio St. 480,

I cena aetercntionngensnmneense

Transcom Builders, Inc. v. Lorain, 49 Ohio App. 2d 145,

359 N.E.2d 715 (Lorain County, 1976) —........2000.......

Washington Utilities and Transportation Comm'n v.

FCC, 513 F.2d 1142 (9th Cir.), cert. denied, 423

ae cintioconnycnsncasvenstonenneencontonenn

Delta Air Lines, Inc. v. CAB, 497 F.2d 608 (D.C. Cir.

1973), cert. denied, 417 U.S. 930 (1974) .................. 5-6, 7

B. J. McAdams, Inc. v. ICC, 551 F.2d 1112 (8th Cir.

ET

Great Western Packers Express, Inc. v. ICC, 263 F.

ee OD ..

Il

Cincinnati v. Public Utilities Comm’n, 55 Ohio St. 2d

OR POA Ge EE | ane

Southern Power Co. v. North Carolina Public Service

Co., 263 U.S. 508 (1924). ....................... eee oe a

Constitutional Provisions and Statutes

Ohio Const., Art. XVIII, §§ 4 and 5 ......000.... es

Ohio Rev. Code § 4909.18 et seq. 22.2.2... cccccceccsececeeeseeeeees

2

Supreme Court of the United States

October Term, 1978

No. 78-909

CITY OF CINCINNATI, OHIO,

Petitioner,

vs.

THE PUBLIC UTILITIES COMMISSION OF OHIO,

THE CINCINNATI GAS & ELECTRIC COMPANY,

Respondents.

PETITION FOR WRIT OF CERTIORARI

To THE SUPREME COURT

BRIEF OF RESPONDENT THE CINCINNATI GAS &

ELECTRIC COMPANY IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

QUESTION PRESENTED

Whether two applications for increases in rates for

natural gas service provided in areas served by respondent

The Cincinnati Gas & Electric Company outside the cor-

porate limits of the City of Cincinnati and a third appli-

cation for increases in rates for natural gas service by The

Cincinnati Gas & Electric Company to customers residing

within Cincinnati were mutually exclusive, thereby pro-

tN

hibiting the Ohio Public Utilities Commission from ren-

dering a decision on the former two applications prior to

reaching a decision on the third under the principle enun-

ciated in Ashbacker Radio Corp. v. FCC, 326 U.S. 327

(1945).

‘COUNTER STATEMENT OF THE CASE

Over the years respondent The Cincinnati Gas & Elec-

tric Company (hereinafter ““CG&E”) has followed a prac-

tice of negotiating ordinance rate contracts, setting rates

for gas and electric service, with many municipalities

throughout its service area, pursuant to Article XVIII,

Sections 4 and 5, of the Ohio Constitution (Respondent

PUCO’s App., p. 18). With respect to some other munic-

ipalities and unincorporated areas, its rates have been set

by the Public Utilities Commission pursuant to Ohio Re-

vised Code, Section 4909.18 et seq. (Petitioner’s App. H,

pp. 94a-97a). Owing to variables in the negotiating pro-

cess and to differing ordinance dates, CG&E’s rates for

the same kind and class of service varied widely through-

out its service territory. As a consequence, prior to the

relevant proceedings below, CG&E had in effect six tariff

schedules fer natural gas service, varying in amounts solely

by reason of political boundaries.

In September, 1974, CG&E filed an application with

the Commission, styled Case No. 78-581-GA-AIR, for an

increase in rates for gas service to customers in those

territories that had previously been subject to the Com-

mission’s jurisdiction (7.e., where ordinance contracts had

not been or could not, under Ohio law, be negotiated).

Subsequently, on March 25, 1975, CG&E filed Case No.

75-205-GA-AIR for an increase in certain rates for ser-

vice to customers in the City of Cincinnati, rates pre-

viously fixed by ordinance contract. Finally, in August,

1975, CG&E filed a third application, styled Case No.

75-641-GA-AIR, for an increase in rates to customers in

some sixty-three municipalities, rates previously fixed by

municipal ordinances. The three cases together covered

all of CG&E’s retail natural gas sales."

Petitioner, the City of Cincinnati (hereinafter the

“City”), petitioned the Commission for leave to intervene

in Case No. 75-205-GA-AIR (hereinafter the “‘in-City appli-

cation”) only (Respondent PUCO’s App., pp. 21-23), and

that petition was granted by the Commission (Respondent

PUCO’s App., pp. 24-25). By an entry dated June 9, 1976,

the Commission consolidated the three applications for

purposes of public hearing, and set July 12, 1976, as the

date for that hearing (Petitioner’s App. I, pp. 99a-102a).

Prior to the public hearing and during the course of

the proceedings, discussions were held between the parties

with respect to possible stipulation of all or some of the

issues and settlement. Contrary to the City’s contention

(Petition, p. 6 n.6), those discussions were not without

notice to the City. The City was invited, at the earliest

opportunity, to participate but declined. Eventually

CG&E, the Commission’s Staff, and all other parties par-

ticipating in Cases Nos. 74-581-GA-AIR and 75-651-GA-

AIR (hereinafter the “out-of-City applications”) were able

to reach agreement and to submit a recommendation to the

Commission that, if accepted, would dispose of those cases

in their entirety. Consequently, a motion to sever was

1. Although it is convenient to distinguish these cases in

terms of municipalities, it should be noted that No, 74-581-GA-

AIR actually included certain customer classes throughout CG&E’s

entire service area. Historically, service to these customers, prin-

cipally industrial users, had not been regulated by ordinance,

even where other service in a particular municipality had been so

regulated.

made, and was subsequently granted by an Opinion and

Order of the Commission entered on July 23, 1976 (Peti-

tioner’s App. D, pp. 39a-64a). That Order approved the

tendered recommendation and settlement agreement and

rejected a number of arguments raised by the City, in-

cluding the arguments raised in this petition.? Hearings

continued on the in-City application and an Opinion and

Order in that case was issued on September 8, 1976 ( Peti-

tioner’s App. E, pp. 65a-84a).

The City filed an application for rehearing on the out-

of-City applications, which the Commission denied by

Order dated September 15, 1976 (Petitioner's App. F, pp.

85a-88a). The Commission likewise denied the City’s ap-

plication for rehearing on the in-City application (Peti-

tioner’s App. G, pp. 89a-97a).

The City then appealed to the Ohio Supreme Court

from the Commission’s Orders on both the in-City appli-

cation and the out-of-City applications. Those appeals

were heard together, and the Court affirmed both of the

Orders appealed from. 55 Ohio St. 2d 168, 378 N.E.2d 729

(Petitioner’s App. A and B, pp. la-37a). Among the argu-

ments raised by the City and rejected by the Ohio Supreme

Court were the same arguments made in the instant

petition. The City’s motion for rehearing was also denied

(Petitioner’s App. C, p. 38a).

_ 2. The petitioner does not dispute, nor can it, that the Com-

mission was required by Ohio law to decide the in-City applica-

tion on its own record, notwithstanding the Commission’s entry

of an Order disposing of the out-of-City applications with which

it had been consolidated. See Lopresti v. Community Traction

Co., 160 Ohio St. 480, 483, 117 N.E.2d 2, 4 (1954): Transcom Build-

ers, Inc. v. Lorain, 49 Ohio App. 2d 145, 149-50, 359 N.E.2d 715.

718-19 (Lorain County 1976). CG&E, therefore by agreeing to the

settlement on the out-of-City applications despite the City’s re-

fusal to settle on the in-City application, bore the risk that it would

not have a uniform rate throughout its service area if the record

on the in-City application did not support the establishment of

rates in the City at the “uniform” level.

REASONS FOR DENYING THE WRIT

THE ONLY QUESTION RAISED BY THE PETITION

IS FACTUAL IN NATURE, HAS NO IMPOR.

TANCE OTHER THAN TO THE PARTIES TO

THE PROCEEDING BELOW, AND WAS COR.

RECTLY DECIDED BY THE OHIO SUPREME

COURT.

Petitioner the City of Cincinnati (“City”) argues that

the Ohio Public Utilities Commission denied it due process

of law by entering a decision on two applications for

natural gas rate increases filed by respondent The Cincin-

nati Gas & Electric Company (““CG&E”) for areas served

by CG&E outside the City while reserving CG&E’s applica-

tion for natural gas rate increases to customers within

the City for later decision. Citing this Court’s decision

in Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945),

the City maintains that the three applications at issue

were “mutually exclusive” and that the Commission’s de-

cision on the two out-of-City applications rendered its

subsequent hearing on the in-City application an “empty

thing.”

Pursuant to the Ashbacker doctrine, in a factual situa-

tion where the nature of two applications are such that

the granting of one of the applications as a practical matter

effectively precludes the granting of the other, the body

ruling on the competing applications must decide their

merits at the same time. Ashbacker Radio Corp. v. FCC,

supra, 326 U.S. at 330. The fact of mutual exclusivity

between applications is prerequisite to the applicability

of Ashbacker. Id. at 333; Washington Utilities and Trans-

portation Comm’n v. FCC, 513 F.2d 1142, 1165-66 (9th

Cir.), cert. denied, 423 U.S. 836 (1975); Delta Air Lines,

Inc. v. CAB, 497 F.2d 608, 614 (D.C. Cir. 1973), cert.

denied, 417 U.S. 930 (1974). Where such mutual exclu-

sivity is absent, there is no requirement of a consolidated

or comparative hearing on the applications. B. J. Mc-

Adams, Ine. v. ICC, 551 F.2d 1112, 1115 n4 (8th Cir.

1977); Great Western Packers Express, Inc, v. ICC, 263 F.

Supp. 347, 350-51 (D. Colo. 1966).

The City is asking this Court to review the factual

determination made by the Ohio Supreme Court that the

three applications at issue were not mutually exclusive.

The Ohio Supreme Court based its decision on the City’s

Ashbacker claim on the absence of mutual exclusivity.

“We do not find, however, that the Ashbacker

doctrine applies to the instant cause. Under the facts

of the Ashbacker case, the grant of one station’s radio

broadcasting application meant the automatic denial

of the second station’s license request. The two appli-

cations were mutually exclusive. In the instant cause,

the commission’s grant of one rate outside the City

did not preclude the possibility of a different rate in-

side the city.” Cinncinnati v. Public Utilities Comm’n,

55 Ohio St. 2d 168, 170-71, 378 N.E.2d 729, 731-32 (1978)

(Petitioner’s App. A, p. 4a; App. B, p. 23a) (emphasis

by the Court).

Certiorari is customarily not granted to review factual

determinations made by lower courts. E.g., Southern

Power Co. v. North Carolina Public Service Co., 263

U.S. 508, 509 (1924). With respect to the particular

factual determination germane here, mutual exclusivity of

applications, in the thirty-three years since Ashbacker,

this Court has never issued an opinion addressing the

question of whether applications were or were not mu-

tually exclusive in the Ashbacker sense, and, as iate as

1974, denied a petition for writ of certiorari raising such

a question. Delta Air Lines, Inc. v. CAB, 497 F.2d 608,

614 (D.C. Cir. 1973), cert. denied, 417 U.S. 930 (1974).*

The instant petition should likewise be denied.

The nature of the City’s mutual exclusivity argument

further militates against the granting of the writ. The

City does not contend that the Commission was required

to reach the decision that it did on the in-City application

by force of law or because of the impact of its prior

decision on the out-of-City applications upon the facts

relevant to the in-City application. Rather the City argues

that mutual exclusivity should be presumed because the

record on the in-City application does not contain sub-

stantial evidence to support the Commission’s decision and

because that decision is consistent with the prior one

entered on the out-of-City applications.* As a prerequisite

to resolving the question of mutual exclusivity, therefore,

this Court would have to address the question of whether

the record contained substantial evidence supporting the

challenged rate decision, a question not only inappropriate

for review on certiorari but also of no importance to any-

one but the parties to the proceeding below.

The Ohio Supreme Court correctly decided that

after entering a decision on the out-of-City applications,

the Commission was free to decide the in-City application

on its own record, and that substantial evidence on the

record supported the Commission’s decision on the in-City

3. The question presented by the petition in Delta Air Lines,

Inc. v. CAB, supra, is stated in 42 U.S.L.W. 3534 (March 17, 1974).

4. This respondent is aware of no authority supporting peti-

tioner’s contention that where two applications are not mutually

exclusive in the Ashbacker sense, by their nature, mutual exclu-

sivity may nevertheless be presumed from the decisions on the

merits of those applications, nor does the authority cited by

the petitioner support that contention.

8

application. 55 Ohio St. 2d at 170-71, 378 N.E.2d at 729,

731-32 (Petitioner’s App. A, pp. 4a-5a; App. B, pp. 23a-

24a). Accordingly, the instant petition should be denied.

CONCLUSION

For the foregoing reasons, it is respectfully submitted

that this petition for writ of certiorari should be denied.

Respectfully submitted,

WILLIAM J. MorRAN

JAMES J. MAYER

THE CINCINNATI GAs & ELECTRIC COMPANY

139 East Fourth Street

Cincinnati, Ohio 45201

ALAN P. BUCHMANN

WILLIAM C. DONAHUE

WILLIAM H. BAUGHMAN, JR.

SQUIRE, SANDERS & DEMPSEY

1800 Union Commerce Building

Cleveland, Ohio 44115

Attorneys for The Cincinnati Gas &

Electric Company