This appeal flows from our court’s decision in Arkansas Gas Consumers, Inc. v. Arkansas Public Service Commission,
Arkansas Gas Consumers, Inc. (Gas Consumers) a collection of non-residential gas utility customers, challenged the Policy, alleging that the PSC had exceeded its legislative authority by mandating the Policy. The PSC rejected Gas Consumers’ challenge, and Gas Consumers appealed the PSC’s decision to the court of appeals, which affirmed the PSC. Gas Consumers then petitioned this court for review. Upon that review, this court held in a 4-3 decision that the PSC had exceeded its authority. Arkansas Gas Consumers,
Shortly after this court’s opinion in Arkansas Gas Consumers was handed down, appellant Fern Austin filed a class-action complaint, naming the PSC and three natural gas utility companies — appellees Centerpoint Energy Arkla (Arkla), Arkansas Oklahoma Gas Corp. (AOG), and Arkansas Western Gas Co. (AWG) — and alleging that she had paid the surcharge pursuant to the Policy. Austin brought her suit as one for an illegal exaction, contending that PSC and the gas companies had charged “an illegal tax on their paying customers in the form of a surcharge.” In addition, Austin alleged that the PSC and the gas companies had violated the Arkansas Civil Rights Act, Ark. Code Ann. § 16-123-105 (Supp. 2003), by “wrongfully violating] Plaintiffs’ due process property rights by taking money from Plaintiffs, in the form of a government mandated tax[.]” Austin’s complaint sought restitution of the amounts paid, in the form of “a refund for the amount of the surcharge, with interest.”
The various defendants all filed motions to dismiss, contending, among other things, that the circuit court did not have subject-matter jurisdiction over Austin’s complaint, that Austin was required to exhaust her administrative remedies before proceeding in circuit court, and that Austin had failed to state facts upon which relief could be granted. 1 After a hearing on September 8, 2004, the circuit court entered an order granting the defendants’ motions to dismiss, finding that the assessment at issue was a rate, and not a tax; therefore, the PSC had exclusive jurisdiction to hear the matter. All other claims were dismissed for failure to state facts upon which relief could be granted.
Austin filed a timely notice of appeal, and now argues that the circuit court erred in three respects: 1) in finding that the PSC had jurisdiction to resolve Austin’s claims; 2) in finding that Austin was required to exhaust her administrative remedies before initiating an action in circuit court; and 3) in determining that the filed rate and primary jurisdiction doctrines are applicable to this case.
In reviewing a circuit court’s decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff. Hames v. Cravens,
In her first point on appeal, Austin argues that the PSC had no authority to resolve the claims she brought in her complaint. She raises three subpoints under this heading, arguing that the PSC had no authority to 1) resolve her “public rights” claim; 2) resolve her “private rights” claims; and 3) hear illegal exaction claims. None of her arguments has merit.
This court and the court of appeals have recognized that the legislature intended to place primary jurisdiction over consumer disputes in the PSC. See Ozarks Electric Cooperative Corp. v. Harrelson,
(a)(1) Any . . . customer of a public utility [or] any person unlawfully treated by a public utility . . . may complain to the commission in writing. The complaint shall set forth any act or thing done or omitted to be done by any public utility or customer in violation, or claimed violation, of any order, law, or regulation which the commission has jurisdiction to administer.
(d) The commission shall then have the authority, upon timely notice, to conduct investigations and public hearings, to mandate monetary refunds and billing credits, or to order appropriate prospective relief as authorized or required by law, rule, regulation, or order. The jurisdiction of the commission in such disputes is primary and shall be exhausted before a court of law or equity may assume jurisdiction. However, the commission shall not have the authority to order payment of damages or to adjudicate disputes in which the right asserted is a private right found in the common law of contracts, torts, or property.
(f)(1) It is the specific intent of the General Assembly... to vest in the Arkansas Public Service Commission the authority to adjudicate individual disputes between consumers and the public utilities which serve them when those disputes involve public rights which the commission is charged by law to administer.
(2) Public rights which the commission may adjudicate are those arising from the public utility statutes enacted, by the General Assembly and the lawful rules, regulations, and orders entered by the commission in the execution of the statutes. The commission’s jurisdiction to adjudicate public rights does not and cannot, however, extend to disputes in which the right asserted is a private right found in the common law of contracts, torts, or property.
§ 23-3-119 (emphasis added).
However, the legislature has chosen not to limit the PSC’s jurisdiction to the powers expressly set out in these statutes. See, e.g., Brandon, supra (holding that the PSC had the authority to hear a class action involving allegations of violating the “least-cost gas purchasing statute,” although such a power is not specifically enumerated in § 23-3-119, because such a claim would necessarily affect numerous ratepayers, and it was “logical” to conclude that the legislature intended for the Commission to have the authority to hear such actions).
Austin argues that her complaint alleges wrongdoing on the part of both the gas companies and the PSC. In addition, she contends that her complaint did not allege that the gas companies had violated “any order, law, or regulation which the commission has jurisdiction to administer”; rather, the wrong of which she complained was the PSC’s unauthorized promulgation of the Policy and the gas companies’ collection of monies thereunder. Austin asserts that nothing in the plain language of the statute gives the PSC jurisdiction to resolve disputes involving itself.
Austin’s argument, however, appears premised on a fundamental mischaracterization of her own complaint. Although she argues that she has alleged wrongdoing on the part of the PSC, and that the trial court’s ruling means that the PSC will be called on “to address the constitutionality and legality of its own actions,” she is incorrect. This court has already decided the constitutionality and legality of the PSC’s actions in Arkansas Gas Consumers, supra. Further, the relief Austin sought in her complaint was “restitution ... in the form of a refund for the amount of the surcharge.” Those surcharges were collected by the individual gas companies, not by the PSC, and the PSC has primary jurisdiction “to mandate monetary refunds and billing credits[.]” § 23-3-119(d).
In a second subpoint, Austin argues that the PSC had no authority to hear her “private rights” claims; here, she claims that she alleged the “violation of private rights found in the common law of contracts, torts, or property.” For example, she points to her replevin claim, a tort claim that is generally cognizable in circuit court.
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Austin also argues that the PSC did not have the authority to consider her civil rights claims, wherein she argued that the PSC and the gas companies violated her “due process property rights by taking money from [her], in the form of a government mandated tax, without the legislative authority to do so in violation of the Arkansas Constitution.” On appeal, Austin argues that, because this court has “implicitly recognized” that a civil rights claim under § 16-123-105 is a tort claim, see, e.g., Rudd v. Pulaski County Special School District,
However, despite Austin’s use of the phrases “replevin,” “tort,” and “civil rights,” Austin is nonetheless ultimately seeking a refund of the surcharges paid to the utility companies; those surcharges were assessed as part of the utility companies’ rates. In reality, Austin’s action is a dispute over rates, and the PSC has primary jurisdiction to consider Austin’s claims under the plain language of § 23-3-119(d). This court has held that when a plaintiffs tort action is nothing more than a collateral attack on a utility’s rate-making authority, the tort action impermissibly encroaches on the exclusive authority of the PSC to fix rates. See Cullum v. Seagull Mid-South, Inc.,
In her third subpoint, Austin argues that the PSC did not have the authority to consider her “illegal exaction” claim. In her complaint, under a heading captioned “Illegal Exaction,” Austin alleged that the PSC, in implementing the Policy, ordered the gas companies to charge an illegal tax on their paying customers in the form of a surcharge. Austin’s complaint stated further as follows: “This government mandated tax was intended and had the effect of raising revenue in order to further the Gas Companies’ ability to reconnect Arkansas gas customers that had been disconnected due to non-payment of gas bills.” On appeal, Austin continues her argument that the money collected by the gas companies was an illegal tax, for which an illegal-exaction claim is proper. Because the surcharge was a “tax,” according to Austin, she had a valid illegal-exaction claim, which can only be heard in circuit court. See Barker v. Frank,
However, Austin’s argument is once more premised on a flawed foundation. In order for Austin to have a valid illegal-exaction claim, there must necessarily be a tax. In McGhee v. Arkansas State Board of Collection Agencies,
The surcharge imposed by the gas companies at the insistence of the PSC was simply not a tax. A “tax” is a “burden imposed by a government upon a taxpayer for the use and benefit of that government.” City of Hot Springs v. Vapors Theatre Restaurant, Inc.,
In her second major point on appeal, Austin argues that she should not have been required to exhaust her administrative remedies before filing her claims in circuit court; she alleges four reasons in support of this argument: 1) the PSC lacked-subject matter jurisdiction to adopt and implement the challenged policy; 2) she did not have to exhaust her administrative remedies prior to filing her civil rights and illegal-exaction claims in circuit court; 3) pursuit of her claims before the PSC would be futile; and 4) the PSC is biased against constitutional or statutory challenges to the Policy.
Generally, the doctrine of exhaustion of administrative remedies provides that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed statutory administrative remedy has been exhausted. Old Republic Surety Company v. McGhee,
There are, however, exceptions to the exhaustion requirement. For instance, this court has recognized that exhaustion of administrative remedies is not required where no genuine opportunity for adequate relief exists, or where irreparable injury will result if the complaining party is compelled to pursue administrative remedies, or where an administrative appeal would be futile. Cummings,
Austin first reasons that she need not exhaust her administrative remedies “because the PSC has already been found by this court to have exceeded [its] statutory authority when it adopted the Policy and authorized the collection of funds pursuant to that Policy.” In other words, she contends that, because the orders adopting the Policy were unlawful, the PSC had no jurisdiction to “adjudicate claims arising from . . . the lawful rules, regulations, and orders entered by the commission in the execution of the statutes,” under § 23-3-119(f)(2).
Austin relies on Middlewest Motor Freight Bureau v. United States,
Moreover, Austin has once again misconstrued the scope of the PSC’s duties in the event of a suit, like this one, that seeks a refund of the surcharges paid pursuant to the Policy. There is no need for the PSC to determine whether the Policy was unlawful; that decision has already been made by this court in Arkansas Gas Consumers. The PSC will only be required to determine the proper amount of any refund, an act which it clearly has the jurisdiction to undertake. See § 23-3-119(d).
Austin’s next reason is that she is not required to exhaust her administrative remedies before filing a civil rights or illegal-exaction claim in circuit court. As just discussed, Austin did not have a valid illegal-exaction claim, because the surcharge was simply not a tax. In addition, Austin’s “civil rights” claim was premised on a claim that the PSC and the gas companies had violated her “due process property rights by taking money from [her], in the form of a government mandated tax, without the legislative authority to do so[.]” Once again, though, the surcharge was not a tax. In addition, as for her replevin claim, Austin sought a refund of the money she paid to the gas company. The PSC clearly had jurisdiction to address Austin’s refund claim.
For her third reason, Austin claims that she should not have been required to exhaust her administrative remedies because “pursuit of her claims before the PSC is futile.” See Staton v. American Manufacturers Mutual Ins. Co.,
Austin’s concerns are unfounded. This court has told the PSC that it did not have the legislative authority to impose the surcharges. The only issue that is left for discussion is how much of a refund the utility customers are entitled to, should someone bring such a case before the PSC. Simply stated, the PSC does not have the option of ignoring the findings of this court if any action is filed seeking a refund of the amounts paid because of the Policy.
Fundamentally, Austin’s argument ignores the principles announced in Withrow v. Larkin,
The contention that the combination of investigative and adjudicative functions necessarily creates an unconstitutional risk of bias in administrative adjudication has a much more difficult burden of persuasion to carry. It must overcome a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a realistic appraisal of psychological tendencies and human weakness, conferring investigative and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.
Withrow,
In her final argument on appeal, Austin argues that the trial court erred in its conclusion that “the assessment at issue was a rate . . . not a tax.” Austin contends that this case does not involve a challenge to a rate; accordingly, she argues, neither the “filed rate doctrine” nor the “primary jurisdiction doctrine” should be applied in this case.
The filed-rate doctrine, adopted by this court in Cullum v. Seagull Mid-South, Inc., supra, forbids a regulated entity from charging rates for its services other than those properly filed with the appropriate federal regulatory authority. Cullum,
Austin contends that the filed rate doctrine is inapplicable, and thus the PSC does not have exclusive jurisdiction, because her case does not involve a challenge to a “rate.” However, the controlling statutes define “rates” broadly:
“Rate” means and includes every compensation, charge, fare, toll, rental, and classification, or any of them, demanded, observed, charged, or collected by any public utility for any service, products, or commodity offered by it as a public utility to the public and means and includes any rules, regulations, practices, or contracts affecting any compensation, charge, fare, toll, rental, or classification;
Ark. Code Ann. § 23-1-101(10) (Repl. 2002).
Austin argues that the amounts collected by the gas companies “were not collected in connection with a service, product, or commodity,” and therefore, they were not rates. However, the surcharge implemented by the Policy was intended to compensate the gas companies for bad debt incurred as a result of the implementation of the Policy. In Arkansas Gas Consumers, this court appears to have recognized that the utilities’ existing rate bases (that is, prior to the implementation of the Policy) included an allowance for bad debt. Arkansas Gas Consumers,
This court’s conclusion that the rate was unlawful does not make it any less of a rate while it was being charged and collected by the gas companies. Once the PSC issued the Order containing the Policy, the gas companies were bound to follow it under Ark. Code Ann. § 23-3-421 (c)(1) (Repl. 2002), which provides that orders of the PSC “shall take effect and become operative immediately upon the service thereof, unless otherwise provided, and shall continue in force either for a period which may be designated therein or until changed or revoked by the commission, or vacated upon review.”
Moreover, Austin sought a refund of the monies paid pursuant to the Policy. The only way to determine the proper amount of the refund would be to “measure[ ] . . . what was the filed rate with the PSC and what the rate should have been.” Cullum,
Finally, Austin argues that the primary jurisdiction doctrine is inapplicable. The doctrine of primary jurisdiction is “concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties.” United States v. Western Pacific Railroad Co.,
No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation. These reasons and purposes have often been given expression by this Court. In the earlier cases emphasis was laid on the desirable uniformity which would obtain if initially a specialized agency passed on certain types of administrative questions. More recently the expert and specialized knowledge of the agencies involved has been particularly stressed. The two factors are part of the same principle, now firmly established, that in cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over. This is so even though the facts after they have been appraised by specialized competence serve as a premise for legal consequences to be judicially defined. Uniformity and consistency in the regulation of business entrusted to a particular agency are secured, and the limited functions of review by the judiciary are more rationally exercised, by preliminary resort for ascertaining and interpreting the circumstances underlying legal issues to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more flexible procedure.
Id. at 64-65 (emphasis added) (internal citations omitted).
This court has acknowledged this reasoning in numerous cases. See, e.g., Teston v. Arkansas St. Bd. of Chiropractic Examiners,
Orderly procedure and administrative efficiency demand that the regulatory body be vested with authority to make preliminary determination of legal questions which are incidental and necessary to the final legislative act. Otherwise endless confusion would result because different phases of the same case might be pending before the Commission and the courts at one time.
McGhee,
With respect to the PSC, the legislature has expressly given that body jurisdiction to “mandate monetary refunds and billing credits, or to order appropriate prospective relief as authorized or required by law, rule, regulation, or order.” § 23-3-119(d). This jurisdiction “is primary and shall be exhausted before a court of law or equity may assume jurisdiction.” Id. Austin’s complaint sought a monetary refund; therefore, primary jurisdiction of her claim is in the PSC.
Austin further argues that the primary jurisdiction doctrine is inapplicable because she is not challenging the reasonableness of a rate or rule, but is instead challenging the legality of the Policy. Her argument is simply of no avail, however, because, as stated repeatedly above, this court has already decided the legality of the Policy. In sum, once more, she seeks a refund of rates that were paid pursuant to a policy that was later determined to be invalid; regardless of this determination of invalidity, however, the rates were nonetheless rates, and exclusive, primary jurisdiction of questions concerning rate refunds lies with the PSC.
Affirmed.
Notes
Although Austin’s complaint was originally filed in Saline County Circuit Court, Austin moved to transfer the action to Pulaski County. The Saline County Circuit Court entered an order on April 28,2004, granting Austin’s motion.
See Ark. Code Ann. § 18-60-804 (1987) (“[i]n all cases.. .wherein a party claims a right of possession of property in the possession of another, the party may apply to the circuit court or the municipal court for issuance of an order of delivery of the property”); see also Drug Task Force v. Hoffman,
