In The SUPREME COURT OF OHIO
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1 ORIG1NAx: State of Ohio, ex rel., Columbus Southern Power Company, Relator, In The SUPREME COURT OF OHIO Original Action in Prohibition V. Supreme Court of Ohio Case No. John A. Bessey, Judge, Franklin County Court of Common Pleas, 369 South High Street, Courtroom 8D Columbus, Ohio 43215, Respondent. RELATOR'S MEMORANDUM IN SUPPORT OF ITS WRIT OF PROHIBITION Marilyn McConnell (Reg. No ) Counsel of Record Steven T. Nourse (Reg. No ) American Electric Power Service Corporation 1 Riverside Plaza, 29`h Floor Columbus, OH (614) Fax: (614) mmcconnell.@aep. com stnoursegaep.com Attomeys for Relator, Columbus Southetn Power Company Ron O'Brien (Reg. No ) Franklin County Prosecuting Attomey 373 South High Street, 10, Floor Columbus, OH (614) Fax: (614) Attorney for Respondent,r---"3 ^ L E B JUL 0 2 2G1(1 CLERK OF COURT SUPA^^^ Of t
2 MEMORANDUM IN SUPPORT INTRODUCTION By improperly entering a continuing order prohibiting utilities from following their tariffs, the Franklin County Court of Common Pleas is undermining the Public Utilities Commission of Ohio's (Commission) exclusive initial jurisdiction over matters involvin;g Title 49 of the Revised Code and is interfering with this Court's exclusive jurisdiction to review Commission orders. The issues in this case are identical to issues raised in two other original actions in prohibition pending in this Court-the first, styled State of Ohio ex rel. Columbus Southern Power Company v. Kimberly Cochroft, was filed by Relator on May 24, 2010, Case No.: , and the second action was filed by Relator on June 29, 2010, styled State of Ohio ex rel. Columbus Southern Power Company v. John A. Bessey. Relator asks that these cases be combined for reasons of judicial economy. In the first action, Judge Cochroft signed a receivership order prohibiting utilities from either disconnecting the property that was the subject of the receivership or from charging a deposit. hi the second action, Judge Bessey signed a receivership order prohibiting utilities from disconnecting service for non-payment of bills issued prior to the date of the Order appointing the receiver. The Order also required utilities to forfeit deposits held to secure the customer's account above the amount of any arrearage, and to turn them over to the receiver, and prohibited utilities from demanding any deposits going forward. This Order 2
3 is virtually identical to the Order at issue in the instant matter. All of these actions directly contradict Columbus Southern Power Company's (CSP) Commission approved tariff and interfere with this Court's exclusive jurisdiction to review Commission orders. CSP's Commission approved tariff governs its ability to charge a customer a deposit or disconnect an account for non-payment, and such actions are expressly authorized by Title 49 of the Revised Code. Further, the Commission has exercised its authority under Title 49, and promulgated detailed rules under Chapter 4901 of the Ohio Administrative Code regarding mandatory deposit and disconnect procedures. By forcing utilities to turn over deposits held as security and prohibiting utilities from charging a deposit going forward, and also prohibiting utilities from disconnecting utility service, the Respondent is improperly exercising judicial power over Relator's tariff and the provisions of Title 49. Respondent's Order for Appointment of Receiver ("Order") interferes with the General Assembly's unified statutory scheme for public utility regulations which states that decisions of the Commission, which includes CSP's tariff, can only be reviewed by this Court. Proceedings on a petition for writ of prohibition "test the subject-matter jurisdiction of the lower court." State, ex rel. Corn v. Russo, 90 Ohio St.3d 551, 554, 740 N.E.2d 265, 268 (2001). The purpose of a writ of prohibition is to prevent an inferior court from exceeding its jurisdiction. State, ex rel. Barton v. Butler Cty. Bd. of Elections, 39 Ohio St.3d 291, 530 N.E.2d 871 (1988). To obtain a writ of prohibition, a relator must show: (1) that the court against whom the writ is sought is exercising or about to exercise judicial power, (2) that the exercise of power is unauthorized by law, and (3) that 3
4 denying the writ will result in injury for which no other adequate remedy exists in the ordinary course of law. State, ex rel. Columbus Southern Power Company v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P15; State, ex rel. The Illuminating Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Ohio St.3d 69, 72 (2002); State, exrel. Cleveland Electric Illuminating Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447, 449, 727 N.E.2d 900, 902 (2000); State, ex rel. Ohio Edison Co. v. Parrott, 73 Ohio St.3d 705, 707, 654 N.E.2d 106, 108 (1995). Where there is a patent and unambiguous lack of subject-matter jurisdiction in the court exercising judicial authority, however, it is not necessary to establish that the relator has no adequate remedy at law in order for a writ to issue. Id. Respondent's Order presently asserts jurisdiction over CSP's Commission approved tariff, a matter that is within the exclusive initial jurisdiction of the Commission. Two judicial (or quasi-judicial) bodies cannot simultaneously exercise jurisdiction over the same dispute. Like the Relator in State, ex rel. Northern Ohio Tel. Co. v. Winter, 23 Ohio St.2d 6, 260 N.E.2d 827 (1970), CSP faces the prospect of directly conflicting legal requirements: Relator is in the precarious position of having to either violate [the trial court order] or to violate the Revised Code sections requiring adherence to filed rate schedules, prohibiting free service and forbidding discrimination among its customers. R.C , and Other than the requested writ there is no other remedy which can solve relator's irreconcilable conflict. 23 Ohio St.2d at 8-9, 260 N.E.2d at 829. Absent intervention by this Court, CSP faces the prospect of a Court of Common Pleas order that directly conflicts with its Commission-approved tariff. More importantly, as a substantive legal matter, the Court
5 of Common Pleas patently and unambiguously lacks jurisdiction to enjoin a tariff approved by the Commission. Thus, the Court should issue a peremptory writ or an altemative writ of prohibition to the Court of Common Pleas. STATEMENT OF THE FACTS AND THE CASE CSP is a "public utility" under Revised Code The Ohio General Assembly created the Commission and empowered it with broad authority to administer and enforce the provisions of R.C. Title 49. The Commission possesses extensive and exclusive regulatory authority over public utilities (subject to review only by this Court), including but not limited to provisions found within R.C. Chapter 4905 granting the Commission supervisory oversight of utility rates, services, accounting requirements, financial approvals, service standards and utility practices. Pursuant to its statutory authority, the Commission promulgated mles and procedures in the Ohio Administrative Code regarding when and how a utility may charge a deposit or disconnect a non-residential customer. Additionally, the Commission approved a tariff for CSP that governs when it may charge deposits and also when it may disconnect a non-residential customer. According to the pleadings filed in the receivership, FairlSort Gardens, Ltd., the entity that is the subject of the receivership ("Customer"), owns the property known as Fairport Gardens Apartments, which property is a non-residential customer of CSP. CSP's relationship to the Customer is defined by its tariff and the rules embodied in the Ohio Revised Code and the Ohio Administrative Code, as stated below. 5
6 In CSP's tariff under the general heading of "Terms and Conditions of Service" and a more specific subheading of "Deposits," it states, in part, that CSP "may require a deposit by the customer... unless such customer be a financially responsible freeholder or give reasonably safe guaranty in an amount sufficient to secure the payment of bills for a sixty days' supply..." See PUCO No. 7, First Revised Sheet No. 3-4, Original Sheet 3-6, 9 (Complaint, Exhibit A). Also under the tariff s Terms and Conditions of Service and the specific subheading of "Disconnect Provisions-Non-Residential," the tariff states that CSP "reserves the right to discontinue the supply of electric energy and disconnect its lines and remove its property for any of the following reasons:... H. For nonpayment." See PUCO No. 7, First Revised Sheet No.: 3-8 and 3-9, 22 (Complaint, Exhibit A). The Commission, pursuant to its statutory authority under Revised Code , , , , , has promulgated specific and detailed rules regarding how and when a utility may charge a customer a deposit, as well as how and when a utility may disconnect a nonresidential customer. Ohio Administrative Code 4901: regulates how and when an electric utility may charge a customer a deposit. Ohio Administrative Code 4901: , titled "Reasons for denial or disconnection of non-residential utility service," is just that-an enumeration of the reasons a utility may deny service to, or disconnect a non-residential customer. Ohio Administrative Code 4901:10-17, titled "Payment schedule and disconnection procedures for nonpayment by nonresidential customers" outlines very detailed requirements to be followed by a utility when a non-residential customer is delinquent. 6
7 This section defines when such a customer is delinquent, 4901: (A); when the disconnect notice is to be mailed to the customer, 4901: (B); and what language and information the disconnect notice must contain, 4901: (C). 4901: sets forth the circumstances under which an electric utility must reconnect the customer's service. On February 17, 2010, Orix Capital Markets, LLCl (hereinafter referred to as "Orix") filed a Complaint for Damages Foreclosure and Other Relief in the Franklin County Court of Common Pleas, Case No. 10 CV , against Fairport Gardens, Ltd. for the property known as Fairport Garden Apartments and located at 17 Fairway Boulevard, Whitehall, Ohio CSP was not a party to this action. (Complaint, Exhibit B2). On. February 17, 2010, Orix filed a motion requesting the appointment of a receiver under the terms of the parties' mortgage. The Respondent granted this Motion and entered an Order for the Appointment of a Receiver oxrfebruary 18, On March 10, 2010, Orix filed a Motion to Amend Order Appointing Receiver (Complaint, Exhibit C), which Motion was granted on March 22, 2010, and an Amended Order Appointing Receiver was entered on March 29, 2010 (Complaint, Exhibit D). The Amended Order ' The full name of the Plaintiff is "Orix Capital Markets, LLC as Special Servicer for Wells Fargo Bank, N.A. as Trustee for the Holders of JPMorgan Chase Commercial Mortgage Securities Corp. Commercial Mortgage Pass-through Certificates, Series CIBC8." z The Exhibits to the Complaint filed in the Franklin County Common Pleas Court have not been included in Exhibit B as they are voluminous and do not relate to the issues addressed in the Complaint for Writ. They consist of: Limited Power of Attorney; Affidavit; Title Commitment; Fixed Rate Note; Assignment of Mortgage and Security Agreement; Notice of Default; Mortgage and Security Agreement; UCC Filings; Assignment of Leases; and Guaranty. 7
8 prohibits any utility from charging a deposit or disconnecting the service at the property that is the subject of the receivership for pre-receivership debt, and further orders all unused deposits currently held by utilities to be immediately transferred to the Receiver. (Complaint, Exhibit D, 30 and 31). CSP's first notice of this action enjoining its right to disconnect or charge a deposit was when the Receiver faxed a copy of the Original Order to it on March 3, 2010 (Complaint, Exhibit E). CSP was not sent a copy of the Amended Order. LAW AND ARGUMENT As referenced above, to obtain a writ of prohibition, a relator must show: (1) that the court against whom the writ is sought is exercising or about to exercise judicial power, (2) that the exercise of power is unauthorized by law, and (3) that denying the writ will result in injury for which no other adequate remedy exists in the ordinary course of law. State, ex rel. Columbus Southern Power Company v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P15, quoting State ex rel. Westlake v. Corrigan, 112 Ohio St.3d 463, 2007 Ohio 375, 860 N.E.2d 1017, P The Court of Common Pleas is exercising judicial power. By ordering utilities not to disconnect or charge a deposit and to surrender the deposits on the accounts, the Court of Common Pleas has asserted jurisdiction over Relator's practices and remedies and that action constitutes the exercise of judicial power. Likewise, the Court of Common Pleas would presumably enforce its explicit order if CSP were to apply the deposits to the property's electricaccount arrearages, or to follow its tariff and require deposit or payment in order to avoid disconnection of service. 8
9 Either way, prohibition is appropriate to prevent the future unauthorized exercise of jurisdiction and "to correct the results of prior actions taken without jurisdiction." State, ex rel. Goldberg v. Mahoning Cty Probate Court (2001), 93 Ohio St. 3d 160, 162. This Court has consistently held that enjoining a utility from following its tariff practices satisfies the first requirement for a writ of prohibition. State ex rel. Columbus S. Power Co. v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P27, State, ex rel. Northern Ohio Tel. Co. v. Winter, 23 Ohio St.2d 6, 8 (1970). II. The Court of Common Pleas lacks subject-matter jurisdiction to prohibit CSP from following its tariff and its Order is unauthorized by law. The Order issued by the Court of Common Pleas grants certain powers to the receiver as authorized by the Revised Code sections on Receivership. Revised Code , titled "Powers of Receiver," merely states: Under the control of the court which appointed him, as provided in section of the Revised Code, a receiver may bring and defend actions in his own name as receiver, take and keep possession of property, receive rents, collect, compound for, and compromise demands, make transfers, and generally do such acts respecting the property as the court authorizes. This section is silent regardi g utilities. None of the code sections dealing with receiverships authorize the Common Pleas Court to enjoin a utility from following its tariff or to disrupt the comprehensive legislative scheme for regulation of utilities under Title 49. As stated by this Court in numerous decisions, "[t]he commission has exclusive jurisdiction over various matters involving public utilities, such as rates and charges, classifications, and service, effectively denying to all Ohio courts (except this court) any 9
10 jurisdiction over such matters." State ex rel. Columbus S. Power Co. v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P19, State, ex rel. The Illuminating Company v. Cuyahoga Cty. Court of Common Pleas, 97 Ohio St.3d 69, 72, 776 N.E.2d 92, 96 (2002) quoting State, ex rel. Cleveland Elec.Illum:Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio rst.3d 447, 450, 727 N.E.2d 900 (2000). Similarly, the Court has concluded that "the jurisdiction specifically conferred by statute upon the Public Utilities Commission ove'r public utilities of the state... is so complete, comprehensive and adequate as to warrant the conclusion that it is likewise exclusive." The Illuminating Company, 97 Ohio St.3d at 72, 776 N.E.2d at 96 (and cases cited therein). The Court has also observed that: The General Assembly has by statute pronounced the public policy of the state that the broad and complete control of public utilities shall be within the administrative agency, the Public Utilities Commission. This Court has recognized this legislative mandate. There is perhaps no field of business subject to greater statutory and govelnmental control than that of the public utility.. Kazmaier Supermarket, Inc. v. Toledo Edison Co., 61 Ohio St.3d 147, , 573 N.E.2d 655, (1991). Likewise, the Court has held that "when the General Assembly has enacted a comprehensive scheme of public utility rate regulation and has specifically conferred regulatory jurisdiction upon the commission, such jurisdiction is exclusive." State, ex rel. Cleveland Elec. Illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447, 450, 727 N.E.2d 900; 903 (2000). As the Commission's jurisdiction over public utilities involving Title 49 matters is exclusive, so is this Court's jurisdiction to review Commission decisions and orders. 10
11 The Court of Common Pleas patently and unambiguously lacks jurisdiction over commission orders. No court other than the Supreme Court has the "power to review, suspend, or delay any order made by the public utilities commission, or enjoin, restrain, or interfere with the commission or any public utilities commissioner in the performance of official duties." Ohio Revised Code This Court's exclusive jurisdiction to review, suspend, enjoin, or delay any order of the Commission extends to Relator's tariff: As we held in State ex rel. N. Ohio Tel. Co. v. Winter (1970), 23 Ohio 'St.2d 6, 9-10, 52 0.O.2d 29, 260 N.E.2d 827, "[o]nly [the Supreme Court of Ohio] has the power to review, suspend, delay, or restrain orders of the commission." Consequently, "[a]n injunction issued by a Court of Common Pleas, which enjoins a public utility from following tariffs filed with and approved by the Public Utilities Commission, amounts to a review, suspension and delay of orders of the commission, and is a usurpation of authority." Id. at paragraph two of the syllabus. State ex rel. Columbus S. Power Co. v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P27 Respondent's Order enjoining utilities from accessing a customer's deposits, charging a customer a deposit, or disconnecting the property for non-payment of its electric bill amounts to an improper interference with an order of the Commission- CSP's tariff-and wrongfully usurps the authority of this Court. TII. As Respondent patently and unambiguously lacks subject matter jurisdiction, Relator is not required to establish that it has no adequate remedy at law. Where there is a patent and unambiguous lack of subject-matter jurisdiction in the court exercising judicial authority it is not necessary to establish that the relator has no adequate remedy at law in order for a writ to issue. This Court has consistently held "[i]f 11
12 a lower court patently and unambiguously lacks jurisdiction to proceed in a cause, prohibition... will issue to prevent any future unauthorized exercise of jurisdiction and to correct the results of prior jurisdictionally unauthorized actions." State ex rel. Columbus S. Power Co. v. Fais, 117 Ohio St. 3d 340, 2008 Ohio 849, P16, quoting State ex rel. Mayer v. Henson, 97 Ohio St.3d 276, 2002 Ohio 6323, 779 N.E.2d 223, P 12. Even though not required for a writ of prohibition, CSP has no adequate legal remedy in this situation. The Amended Order made clear that the Respondent has and will continue to exercise judicial power with respect to utilities' compliance with that Order. In the absence of a writ restraining its exercise of judicial power, the Respondent will continue to prohibit CSP from following the disconnect and deposit portions of its tariff, unlawfully invading the exclusive jurisdiction of the Commission, and unlawfully ordering CSP to disgorge deposits held as security. This Amended Order, and further proceedings based on the order before the Court of Common Pleas, is unauthorized by law and have and will cause injury to Relator for which there is no adequate legal remedy. CONCLUSION For the foregoing reasons, the Court should issue a peremptory writ or an alternative writ of prohibition to the Franklin County Court of Common Pleas. 12
13 Respectfully submitted, PROOF OF SERVICE Marilyn McConnell (Reg. No Counsel ofrecord Steven T. Nourse (Reg. No ) American Electric Power Service Corporation 1 Riverside Plaza, 29`h Floor Columbus, OH (614) Fax: (614) nuneconnell@aep.com Attorneys for Relator, Columbus Southern Power Company I hereby certify that a true copy of the foregoing Memorandum submitted on behalf of the Columbus Southern Power Company, was served by regular U.S. mail, postage prepaid, upon the following parties of record, this,-f D^^2010. PARTIES OF RECORD: Ron O'Brien (Reg. No ) Franklin County Prosecuting Attorney 373 South High Street, 14th Floor Columbus, OH (614) Fax: (614)
ANSWER OF RESPONDENT JUDGE JOHN A. BESSEY. Now comes Respondent Judge John A. Bessey (Respondent) and for his answer to the Complaint
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