Southern Montana Telephone Co. v. Montana Public Service Commission, 2017 MT 123

Southern Montana Telephone Co. and Lincoln Telephone Co. are privately owned Montana telecommunications companies certified as eligible telecommunications carriers (ETCs) and receive federal Universal Service Fund (USF) subsidies.
The Montana Public Service Commission (PSC) began requiring regulated ETCs to disclose names and total compensation of executives/managers earning over $100,000 in their annual reports to promote transparency about use of USF funds.
Southern and Lincoln filed motions for protective orders to keep employee compensation confidential, offering to provide data to the Commission but not the public, citing trade secrets and privacy concerns.
The PSC denied the motions and for the first time announced a three-part "rubric": (1) employee is manager/executive; (2) compensation exceeds $100,000; and (3) at least one-fifth of Montana revenues derive from ETC-linked sources — if met, public right-to-know outweighs privacy.
The companies sought judicial review; two district judges upheld the PSC, concluding the rubric was a case-by-case balancing tool, not a MAPA rule. The Montana Supreme Court reversed on MAPA-rule grounds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether PSC's "rubric" is a rule under MAPA	The rubric is a de facto rule implementing PSC policy to increase transparency and thus required MAPA rulemaking	The rubric is an internal balancing tool for constitutional rights to be applied case-by-case, not a rule	The rubric is a rule under MAPA and was adopted without required rulemaking; invalid
Whether PSC complied with MAPA rulemaking procedures	PSC failed to provide notice/comment or adopt advisory designation	PSC not required to do so because this was adjudicative application of constitutional balancing	PSC did not comply with MAPA; rubric invalid for lack of notice/comment or proper adoption
Nature of the rubric (legislative vs. interpretive)	Rubric functions as a substantive standard of general applicability	Rubric merely guides individualized determinations	Court found the rubric sets a general standard and therefore constitutes a rule; PSC did not follow either legislative or interpretive rule processes
Remedy — whether to remand or defer PSC application	Companies sought vacatur/remand for proper process and reconsideration	PSC argued orders should stand and apply rubric in adjudications	Court reversed district court, vacated PSC orders, and remanded for further proceedings on protective orders

State v. Vainio, 306 Mont. 439 (2001) (agency must follow MAPA notice-and-comment rulemaking; failure renders rule invalid)
Northwest Airlines v. State Tax Appeal Board, 221 Mont. 441 (1986) (agency adoption of a standard procedure amounted to a rule requiring MAPA compliance)
Rosebud County v. Department of Revenue, 257 Mont. 306 (1993) (agency attempt to change assessment method without proper rulemaking was invalid and deprived public participation)