Zahn v. North American Power & Gas, LLC
2016 IL 120526
Ill.2017Background
- Peggy Zahn, a residential electricity customer, sued North American Power & Gas, LLC (NAPG), an Alternative Retail Electric Supplier (ARES), alleging overcharging after switching from Commonwealth Edison (ComEd).
- Zahn alleged fraud, breach of contract, and unjust enrichment; she initially filed a class action in federal district court under diversity jurisdiction; the district court dismissed for lack of subject‑matter jurisdiction.
- The Seventh Circuit appealed and certified the question to the Illinois Supreme Court: whether the Illinois Commerce Commission (ICC) has exclusive jurisdiction over a Sheffler‑defined "reparation" claim brought by a residential consumer against an ARES.
- Under Illinois law, "reparations" claims against public utilities fall exclusively within the ICC’s original jurisdiction per Sheffler and section 9‑252 of the Public Utilities Act; ARESs, however, are statutorily excluded from the definition of "public utility."
- The Rate Relief Law (creating ARESs) subjects ARESs to certain ICC‑administered requirements (certificates, marketing/billing rules, penalties), but does not expressly give the ICC exclusive jurisdiction to award reparations for overbilling by ARESs.
- The Illinois Supreme Court held that because ARESs are not public utilities and the statute lacks an explicit grant of exclusive ICC jurisdiction for such reparations claims, circuit courts retain subject‑matter jurisdiction and the ICC does not have exclusive original jurisdiction over Zahn’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ICC has exclusive original jurisdiction over a Sheffler "reparation" claim against an ARES | Zahn: ICC lacks exclusive jurisdiction because ARESs are excluded from "public utility" and statute contains no explicit grant of exclusive ICC jurisdiction for reparations against ARESs | NAPG: Legislative scheme and ICC oversight of ARESs imply ICC should have exclusive jurisdiction | Held: No — ICC does not have exclusive original jurisdiction; circuit courts may hear such claims |
| Whether Sheffler’s reparations rule (for public utilities) extends to non‑utility ARESs | Zahn: Sheffler applies only to public utilities; ARESs are nonutilities so Sheffler does not bar court claims | NAPG: Functional regulatory scheme and consumer‑protection provisions indicate reparations should be channeled to ICC | Held: Sheffler does not control because ARESs are statutorily excluded from "public utility" definition |
| Whether broader statutory framework demonstrates legislative intent to vest exclusive jurisdiction in ICC for ARES disputes | Zahn: No explicit statutory language shows exclusive ICC jurisdiction; absence of such language is dispositive | NAPG/State: Statutory consumer protections and ICC enforcement powers show intent to centralize remedies at ICC | Held: No explicit intent in statute; examining the statute as a whole does not show exclusive ICC jurisdiction |
| Whether technical rate‑making expertise of ICC necessitates exclusive jurisdiction over ARES rate disputes | Zahn: ARES rates are contractual and not subject to ICC rate‑making; technical expertise not required | NAPG: ICC’s regulatory role over ARES practices supports ICC forum | Held: ARES pricing is contract‑based, not subject to ICC rate‑making; rationale for exclusive ICC jurisdiction over public utilities is absent for ARESs |
Key Cases Cited
- Sheffler v. Commonwealth Edison Co., 2011 IL 110166 (distinguishing reparations claims against public utilities and assigning exclusive ICC jurisdiction)
- J&J Ventures Gaming, LLC v. Wild, Inc., 2016 IL 119870 (legislative intent to vest exclusive administrative jurisdiction must be explicit; consider statute as whole)
- McCormick v. Robertson, 2015 IL 118230 (circuit courts have original jurisdiction over justiciable matters unless statute clearly divests them)
- Commonwealth Edison Co. v. Illinois Commerce Comm’n, 328 Ill. App. 3d 937 (2002) (ARES characterized as nonutilities licensed to sell retail electricity)
- Local 777 v. Illinois Commerce Comm’n, 45 Ill. 2d 527 (1970) (purpose of Public Utilities Act and ICC’s role in balancing rates and services)