November 13, Citizens Against Rate Excess v Upper Peninsula Power Company Case No. U-20150

Transcription

1 Founded in 1852 by Sidney Davy Miller SHERRI A. WELLMAN TEL (517) FAX (517) Miller, Canfield, Paddock and Stone, P.L.C. One Michigan Avenue, Suite 900 Lansing, Michigan TEL (517) FAX (517) MICHIGAN: Ann Arbor Detroit Grand Rapids Kalamazoo Lansing Troy FLORIDA: Tampa ILLINOIS: Chicago NEW YORK: New York OHIO: Cincinnati CANADA: Toronto Windsor CHINA: Shanghai MEXICO: Monterrey POLAND: Gdynia Warsaw Wrocław November 13, 2018 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 W. Saginaw Highway, 3 rd Floor Lansing, MI Re: Citizens Against Rate Excess v Upper Peninsula Power Company Case No. U Dear Ms. Kale: Enclosed for electronic filing is Upper Peninsula Power Company s Brief in Reply to MPSC Staff s Supplemental Brief. Also enclosed is the Proof of Service. If you should have any questions, please kindly advise. Very truly yours, Miller, Canfield, Paddock and Stone, P.L.C. By: Sherri A. Wellman cc: ALJ Sharon L. Feldman John R. Liskey Spencer A. Sattler Gradon Haehnel

2 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the complaint of ) CITIZENS AGAINST RATE EXCESS ) Case No. U Against UPPER PENINSULA POWER ) COMPANY. ) ) UPPER PENINSULA POWER COMPANY S BRIEF IN REPLY TO MPSC STAFF S SUPPLEMENTAL BRIEF Now comes Upper Peninsula Power Company ( UPPCO or the Company ), by and through its attorneys, and, pursuant to Rules 403, 432, and 434 of the Michigan Administrative Hearing System s Administrative Hearing Rules, 2015 AC, R , R , and R , files, in accordance with the schedule established at the October 1, 2018 motion hearing in this matter, this Reply to MPSC Staff s October 29, 2018 Supplemental Brief in Response to UPPCO s Motion for Summary Disposition. In support, UPPCO states as follows: Introduction Staff continues to argue that Enbridge s appeal of Case No. U tolled the time for CARE to bring its formal complaint (the Complaint ) in this case, pursuant to MCL (b). Essentially, Staff s argument throughout is that MCL (b) allows a potential plaintiff to adopt a wait and see approach when a different plaintiff diligently pursues her rights in an action that involves legal issues similar to those that the potential plaintiff might eventually like to raise. But Michigan law does not afford dilatory plaintiffs extra time to decide whether it might be worth bringing their claims depending on how successful their diligent

3 counterpart is in asserting her rights. In a word, Michigan law does not allow litigation freeriding. Instead, MCL (b) protects the rights of industrious plaintiffs who through excusable mistake make[] a false start within the time limits of the statute of limitations and subsequently learn[] that the action cannot continue. Mair v Consumers Power Co, 419 Mich 74, 83 (1984). To this day, CARE and Staff have given no explanation why CARE did not bring the Complaint five years ago, as Enbridge did in U CARE not only did not make a false start ; it made no start at all. Accordingly, the Commission should reject Staff s claim that the time for CARE to bring the Complaint was tolled by Enbridge s pursuit of an appeal in U In arguing against this conclusion, Staff fails to discuss or distinguish or even mention a number of on-point, binding cases addressing when a statute of limitations may be tolled because of a prior action. Mair v Consumers Power Co, 419 Mich 74 (1984) is only the most important of the many such cases Staff has entirely omitted from its Supplemental Brief. Instead, Staff relies almost exclusively on nonbinding cases that are entirely inconsistent with current law, while at the same time asking the Commission to expand the law beyond anything the courts have ever said even in the nonbinding cases Staff relies on. The Commission should, therefore, find that CARE s complaint is subject to MCL (g) s two-year statute of limitations, reject Staff s claim that the time for CARE to bring the Complaint was tolled by Enbridge s pursuit of an appeal in U-17077, and dismiss the Complaint as time-barred. Alternatively, the Commission should dismiss the Complaint for any 1 Enbridge s complaint in Case No. U was based on the Court of Appeals decision In In Re Detroit Edison Co., 296 Mich App 101; 817 NW2d 630 (2012), which held that the Commission lacked the statutory authority to approve an RDM for an electric utility. Nothing precluded CARE from filing a complaint at that time and relying on this court decision. 2

4 or all of the other reasons given by the Company in its August 7, 2018 Motion for Summary Disposition. Argument 2 I. The tolling statute must be strictly construed, not liberally construed. Relying on two nonbinding cases, Staff argues that the Commission should liberally construe MCL See Staff Supplemental Brief pp But the Commission is precluded from doing so, under clear and binding precedent of the Court of Appeals that Staff omits from its Supplemental Brief. Exceptions to statutes of limitations are to be strictly construed. Lindsey v Harper Hosp, 455 Mich 56, 65 (1997). This includes tolling provisions (a.k.a. savings provisions ). See id.; Mair v Consumers Power Co, 419 Mich 74, 80 (1984); Turner v Mercy Hosps & Health Servs, 210 Mich App 345, (1995). Staff cites Affiliated Bank of Middleton v American Ins Co, 77 Mich App 376 (1977) and Sanderfer v Mount Clemens Gen Hosp, 105 Mich App 458 (1986) in support of the contrary idea that tolling statutes may be liberally construed. But Staff itself admits that those cases are not binding. Lindsey, Mair, and Turner are binding, and the Commission is required to follow the precedent established in these court cases. II. No case supports extending prior-action tolling to plaintiffs without the same interests, and doing so would be contrary to binding precedent and principles of statutory interpretation handed down by the Michigan courts. 2 A Note on Nomenclature: Staff and UPPCO agree that MCL (b) applies to toll the limitations period for a plaintiff in a second action based on the circumstances and disposition of an earlier action. For ease of reference, this Reply refers to the first action as Case #1, to the second action as Case #2, and the plaintiffs in the cases as Plaintiff #1 and Plaintiff #2, respectively. 3

5 Staff argues that [t]here is no binding precedent requiring that parties have the same interests to be saved by the tolling statute. Staff Supplemental Brief p 1. That statement is true. But as UPPCO explained in its Supplemental Brief, that cuts against Staff s argument, not in favor of it. Every single binding case from the Michigan courts has stated that MCL (b) applies when Plaintiff #1 and Plaintiff #2 are one and the same. See, e.g., Hoekstra v Bose, 253 Mich App 460, 465 (2002) ( [t]he tolling statute applies to prior lawsuits between the parties which have not been adjudicated on the merits ). See generally UPPCO s Supplemental Brief pp 7 8 (citing cases). Some older, non-binding decisions, by contrast, held that MCL may apply to different plaintiffs who represent the same interests. See Affiliated Bank of Middleton v American Ins Co, 77 Mich App 376 (1977); Fed Kemper Ins Co v Isaacson, 145 Mich App 179, (1985). But no case, published or unpublished, recent or dated, interpreting MCL (b) or its predecessor statute, has ever stated, let alone held, what Staff first asks the Commission to rule here: that there is absolutely no requirement that parties have the same interests to be saved by the tolling statute. Staff Supplemental Brief p 1. 3 Not only is there not a single case to support Staff s argument, but that argument also makes a nullity of other clearly established principles of Michigan law. Take, for example, the limits of the relation-back doctrine. MCR 2.118(D) provides that certain amendments to a pleading will relate back to the date when the pleading was originally filed. For a complaint, the effect of that Court Rule is thus that a statute of limitations will not bar a plaintiff from adding certain new causes of action to her complaint despite the fact that those causes of action would be time-barred if brought in a new, separate proceeding. 3 Indeed, UPPCO is not aware of even a Michigan trial-court order or agency decision holding (or even stating) that Plaintiff #2 can avail himself of tolling under MCL (b) when he does not at the very least have the same interest as Plaintiff #1. 4

6 What is relevant about the doctrine here is the fact that the Supreme Court has expressly held that the relation-back doctrine does not apply to the addition of new parties. Miller v Chapman Contracting, 477 Mich 102, 106 (2007) (citations omitted). So when an improper plaintiff brings an action and, after the statute of limitations has run, seeks to amend the complaint to name the proper plaintiff (against the same defendant(s) and for the same claims), such an amendment is properly denied as futile, and the case must be dismissed as time-barred. Id. at If Staff s argument were true, though, the proper plaintiff could always bring a new action after dismissal of the prior action, because the statute of limitations would have been tolled during the pendency of that prior action. As one court appropriately noted, that result is entirely illogical : Michigan law clearly bars an improper plaintiff from adding the proper party after the statute of limitations has run and relating-back to the original date the suit was filed. Plaintiff s proposed construction [of MCL ] would allow the proper plaintiff to file a new suit in the same court against the same defendants and rely upon the fact that the statute of limitations had been tolled [when] the improper plaintiff filed their claim. This result is illogical. Therefore, it appears implicit in the Miller decision that if [the] relation-back doctrine does not extend to the addition of a proper plaintiff, it is because the statute of limitations has continued to run [for that second plaintiff] despite the filing of the original suit. Taunt v Oakwood United Hosps, No , 2008 WL at *6 n 3 (ED Mich May 2, 2008) (emphasis in original). In a word, if Staff s argument were true, a court could never deny as futile a plaintiff s request to amend the pleadings to add a new plaintiff to the case, because the statute of limitations for that new plaintiff would have been tolled from the time the original complaint was filed. The requested amendment would therefore not be futile. But Michigan courts have consistently denied as futile requests to amend a complaint to do no more than to add a new plaintiff to the case. See e.g., Miller, supra; Salem Springs, LLC v Salem Twp, 312 Mich App 5

7 210, (2015). Staff s argument is entirely inconsistent with all such published, binding cases. The Commission must therefore reject it. Staff attempts to avoid confronting or distinguishing the mass of binding caselaw by appealing to the plain-language canon of statutory interpretation. See Staff Supplemental Brief pp 3 4. But statutory interpretation does not proceed by willfully pulling subsections of the Michigan compiled laws out of all statutory context. See, e.g., Deruiter v Twp of Byron, Mich App, 2018 WL at *3 (correct interpretation of a statute requires (1) reading it as a whole, (2) reading the statute s words and phrases in the context of the entire legislative scheme, (3) considering both the plain meaning of the critical words and phrases along with their placement and purpose within the statutory scheme, and (4) interpreting the statutory provisions in harmony with the entire statutory scheme ) (citing Bush v Shabahang, 484 Mich 156, 167 (2009)). Accordingly, in Mair, the Supreme Court specifically explained that MCL (b) could not be read independently of the surrounding statutory subsections. See 419 Mich at 82 ( the first and third sections of the statute speak with great specificity, as did the predecessor statute, in terms that can only refer to a lawsuit ). Applying these principles to MCL supports UPPCO s reading of MCL (b), not Staff s. All three subsections of MCL are written in the passive voice, but all three nonetheless contemplate that the stated actions will be taken by the plaintiff or in the plaintiff s name. Subsection (a) provides that the limitations period is tolled [a]t the time the complaint is filed, if a copy of the summons and complaint are served on the defendant [...] MCL (a). Obviously, filing the complaint and serving a copy of the summons and complaint are actions taken by the plaintiff or in the plaintiff s name. Subsection (c) provides 6

8 that the limitations period for a medical-malpractice action is tolled [a]t the time notice is given in compliance with the applicable notice period under section 2912(b). MCL (c). Section 2912b, in turn, explicitly states that a person wishing to commence a medicalmalpractice action must give written notice of her intent to file a claim. See MCL b(1). That is, the notice of intent is specific to the plaintiff, and must be given either by the plaintiff or in the plaintiff s name. Similarly, when MCL (b) states that the limitations period is tolled [a]t the time jurisdiction over the defendant is otherwise acquired, this contemplates that jurisdiction over the defendant will be acquired as a result of actions taken by the plaintiff or one acting in the plaintiff s name. See, e.g., Mair, 419 Mich at ( the tolling statute takes away any harshness that might occur if the plaintiff, in good faith, commenced a suit without having the merits adjudicated and later learned that because of that mistake the statute had run ). Here, CARE took no actions to cause the Court of Appeals to acquire jurisdiction over UPPCO; Enbridge did. Thus, Staff s statutory-interpretation argument would fall flat even if it were not expressly precluded by all the caselaw adduced above and in UPPCO s Supplemental Brief. III. The same-interest exception is not good law, but in any event, Enbridge s and CARE s interests are not the same. As UPPCO acknowledged in its Reply and its Supplemental Brief, there is dated, nonbinding caselaw to the effect that Plaintiff #2 need not be the same as Plaintiff #1 if the two plaintiffs represent[] the same interest. See UPPCO s Supplemental Brief p 8 9 (discussing Fed Kemper Ins Co v Isaacson, 145 Mich App 179 (1985) and Affiliated Bank of Middleton v American Ins Co, 77 Mich App 376 (1977)). For the reasons discussed in UPPCO s Supplemental Brief, Affiliated Bank and Fed Kemper s statements of the same-interest exception appear no longer to be good law. See UPPCO Supplemental Brief pp 8 9 (discussing Affiliated Bank s reliance on the idea that tolling 7

9 statutes should be liberally construed). What s more, the two decisions are inconsistent with the holding of Miller v Chapman Contracting for the same reason discussed at length above: adding a different plaintiff to a complaint never relates back to the original date of filing. That implies that the statute of limitations continues to run for any potential plaintiff other than the one(s) who filed the complaint. Staff states that it has found no binding cases that say that a statute of limitations could not be tolled for later suits by different plaintiffs. See Staff Supplemental Brief p 4 (stating that to the extent [Great Lakes Gas Transmission Co v State Treasurer, 140 Mich App 635 (1985) and Darin v Haven, 175 Mich App 144 (1989)] suggest a lawsuit must be between the same parties to toll the statute of limitations, they are not binding, because they were published before 1990). But a 2002 case from the Court of Appeals says precisely that. See Terrace Land Dev Corp v Seeligson & Jordan, 250 Mich App 452, 461 (2002) (stating that [t]he McDougall decision did not overrule the Buscaino Court s determination that MCL applies to cases where a prior lawsuit was involved between the parties, and going on to state that because plaintiffs action was never dismissed and refiled, MCL has no application to this case, in that there is no tolling issue ) (emphasis added). The same plaintiffs requirement is thus alive and well and binding. 4 But even if there were no binding case saying that MCL comes into play only where Plaintiff #1 is identical to Plaintiff #2, there are a number of recent, unpublished cases 4 A reading of Gladych v New Family Homes, Inc, 468 Mich 594 (2003), which overruled another aspect of Buscaino, plainly shows that that decision, too, did not overrule the Buscaino s Court s determination that MCL (b) applies where a prior lawsuit was involved between the parties. 8

10 saying as much, all of which freely rely on earlier published cases from the Court of Appeals. See, e.g., Markabani v Al-Rekabi, unpublished per curiam opinion of the Court of Appeals, issued February 9, 2016, (Docket No ), 2016 WL at *2 (citing Darin v Haven, 175 Mich App 144, (1989)); Underwood v Carto, unpublished per curiam opinion of the Court of Appeals, issued August 28, 2014, (Docket No ), 2014 WL at *4 (citing Roberts v City of Troy, 170 Mich App 567, 581 (1988)); U.S. Motors v General Motors Europe, unpublished per curiam opinion of the Court of Appeals, issued January 17, 2012, (Docket No ), 2012 WL at *2 (citing Sherrell v Bugatski, 169 Mich App 10, 17 (1988)). Given the number of such cases, they should be seen as overwhelming persuasive authority for the same-parties requirement. The Commission should therefore follow them, as the Court of Appeals itself has done. Finally, Staff repeats without much elaboration its previous claim that CARE here and Enbridge in Case No. U have the same interest, namely not being charged an unlawful RDM surcharge. UPPCO has already addressed, at length, why that abstract interest is entirely insufficient for tolling purposes. See UPPCO Supplemental Brief p The few cases that have allowed Plaintiff #2 to take advantage of tolling when she was not involved in Case #1 have applied the same interest requirement extremely stringently. See Fed Kemper, 145 Mich App at 184 ( plaintiff stands in the same position, with all the same rights, as its subrogor ) (emphasis added). Staff has cited no case involving less stringent requirements, and to UPPCO s knowledge, there are no such cases. Staff nevertheless apparently wants the Commission to invent a new and more generous definition of same interest out of whole cloth, to fashion that definition entirely without reference to any case ever decided in this state, and to 9

11 do so without giving UPPCO a chance to respond to the particular proposal. The Commission should refuse to do that. IV. Prior-action tolling applies only if the prior action was not dismissed on the merits. Staff next argues that the doctrine that the statute of limitations can be tolled only if there has been no adjudication on the merits has been overruled. 5 Staff Supplemental Brief p 5. That is simply false. For example, in Ashley Ann Arbor, LLC v Pittsfield Charter Twp, the Court of expressly stated that MCL (b) s tolling provision applies when an action is dismissed or transferred on some ground other than on the merits. 299 Mich App 138, 153 (2012) (quoting Kiluma v Wayne State Univ, 72 Mich App 446, 449 (1976)). Similar statements abound in other published decisions of the Court of Appeals that the Commission must follow. See, e.g., Hoekstra v Bose, 253 Mich App 460, 465 (2002); Yeo v State Farm Fire and Cas Ins Co, 242 Mich App 483, 484 (2000); McNeil v Quines, 195 Mich App 199, 204 (1992). Staff selectively quotes from Gladych v New Family Homes, Inc, 468 Mich 594 (2003) to suggest that the Supreme Court has rejected the requirement that Case #1 must not have been adjudicated on the merits, but that is simply not true. The Supreme Court in Gladych criticized the Court s prior decision in Buscaino v Rhodes, 385 Mich 474 (1971) for limiting the application of MCL to situations in which [Case #1] was not adjudicated on the merits. 468 Mich at 599. That is, the Gladych Court held that MCL s restrictions went far beyond establishing a not-adjudicated-on-the-merits requirement. The Court never held, stated, or implied that it was thereby doing away with the longstanding threshold requirement 5 Staff wisely does not attempt to argue that Case No. U was not resolved on the merits when the Commission on February 5, 2018 dismissed Enbridge s complaint with prejudice. 10

12 that Case #1 was not adjudicated on the merits. Instead, the Court in Gladych added extra requirements to further restrict plaintiffs ability to rely on MCL in Case #2. Rather than loosening the requirements for tolling, the Court in Gladych tightened them. Staff s ratchet goes the wrong way. Staff follows up by arguing that the rule against tolling the statute of limitations for cases that have been decided on their merits should not apply in utility cases. See Staff Supplemental Brief pp 6 7. But the Commission has no power to carve out such an exception; it is obligated to follow the binding precedent of Ashley Ann Arbor, Hoekstra, Yeo, and McNeil, above. And even if the Commission were somehow not obligated to follow those binding decisions, Staff s policy arguments for a utility-case carve-out would still be unconvincing. Staff cites the Enbridge decision for the notion that a settlement agreement that must be filed with and approved by a regulatory agency loses its status as a strictly private contract and takes on a public interest glass. Staff fails to mention that the agreement between UPPCO and Enbridge in U was a purely private one. It was not a settlement agreement that must be filed with and approved by a regulatory agency. Indeed, the Commission in accordance with its longstanding practice in formal-complaint cases never even asked to see the terms of the Enbridge-UPPCO settlement agreement. That makes sense, because that settlement has no impact whatsoever on UPPCO s other ratepayers. Unlike a settlement in a rate case, it was a strictly private contract without a public interest gloss. Further, should Staff s reference to a settlement agreement at page 7 of its Supplemental Brief be the Settlement Agreement which gave rise to the RDM in the general rate Case No. U-15988, let s keep in mind that the Order approving that Settlement 11

13 Agreement was final and non-appealable long ago, and cannot lawfully be the subject of reversal and retroactive refunding. 6 V. Because Staff now asserts that CARE s claim accrued upon delivery of electric service, the Complaint is time-barred under (g) even if Enbridge s appeal tolled the limitations period for CARE. Staff now apparently concedes that the two-year limitations period under MCL (g) begins to run when the electricity in question is delivered. See Staff Supplemental Brief p 9. If MCL (g) is applicable to claims against an electric utility, such claims accrue upon delivery of service just like, under MCL , claims against common carriers accrue upon the delivery or tender of the shipment of property. From that, it follows that CARE s claim accrued throughout the calendar years 2010, 2011, and Those are the years when UPPCO delivered electricity to its residential customers under the RDM program approved by the Commission in Case Nos. U-15988, U , and U Staff claims that tolling began upon Enbridge s appeal of Case No. U But Enbridge filed its Claim of Appeal only on May 27, So even if Staff s tolling theory were correct which it is not, for all the reasons discussed above then the only (g) claims tolled would be those relating to the 2013 RDM program, because claims relating to the 2010 and 2011 programs were by then already more than two years old. But Enbridge never challenged the 2013 RDM program, so CARE s (g) claim as it relates to that program was never tolled by the Enbridge appeal of its Complaint in U In other 6 Further, Staff s statement that the Commission has a responsibility to ensure that rates are just and reasonable for all ratepayer, not just one complainant (p 7), must be considered in the context of the scope of the Commission s lawful authority. It is well settled that the Commission has no inherent or common-law powers; it has only those powers the statutes expressly grant. 7 As UPPCO has already pointed out, administrative proceedings do not toll the limitations period, pursuant to Mair. See UPPCO Consolidated Reply 35 n

14 words, even if Staff were correct that Enbridge s appeal tolled the time for CARE to bring the Complaint, it would not matter: CARE s claims would still be time-barred under MCL (g) s two-year limitations period. Conclusion and Relief For the reasons addressed in the foregoing paragraphs, the Commission should dismiss the Complaint under the two-year limitations period of MCL (g) notwithstanding the arguments in Staff s Supplemental Brief, because CARE s time to file the Complaint was not tolled by Enbridge s prosecution of its appeal of Case No. U As a result, CARE s claim is time-barred, and should be summarily dismissed on the grounds further stated in UPPCO s August 7, 2018 Motion for Summary Disposition and October 29, 2017 Supplemental Brief in Support of Its Motion for Summary Disposition. WHEREFORE, UPPCO respectfully requests that the Commission grant its Motion for Summary Disposition pursuant to MCR 2.116(C)(4) and (8) and dismiss CARE s Complaint with prejudice. Respectfully submitted, MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. Dated: November 13, 2018 By: Sherri A. Wellman (P38989) Paul M. Collins (P69719) Russell J. Bucher (P82349) Attorneys for Upper Peninsula Power Company One Michigan Avenue, Suite 900 Lansing, MI (517) \

15 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the complaint of ) CITIZENS AGAINST RATE EXCESS ) Case No. U Against UPPER PENINSULA POWER ) COMPANY. ) ) STATE OF MICHIGAN ) ) ss COUNTY OF INGHAM ) PROOF OF SERVICE Kimberly Fox, being first duly sworn, deposes and says that on November 13, 2018 she served Upper Peninsula Power Company s Brief in Reply to MPSC Staff s Supplemental Brief upon the parties listed below via electronic mail. Administrative Law Judge Honorable Sharon Feldman 7109 W. Saginaw Hwy. Lansing, MI feldmans@michigan.gov Citizens Against Rate Excess John R. Liskey 921 N. Washington Avenue Lansing, MI john@liskeypllc.com Michigan Public Service Commission Staff Spencer A. Sattler Assistant Attorneys General Public Service Division 7109 W. Saginaw Highway, 3 rd Floor Lansing, MI sattlers@michigan.gov Kimberly Fox Subscribed and sworn before me on this 13 th day of November, Jennifer Joy Yocum, Notary Public State of Michigan, Ingham County My Commission Expires: December 17, 2018 Acting in Ingham County \