ROBERT BURNS, Plaintiff/Appellant, υ. ARIZONA PUBLIC SERVICE COMPANY, ET AL., Defendants/Appellees.
No. CV-21-0080-PR
SUPREME COURT OF THE STATE OF ARIZONA
September 27, 2022
Appeal from the Superior Court in Maricopa County, The Honorable Daniel J. Kiley, Judge, No. CV2017-001831, VACATED. Opinion of the Court of Appeals, Division One, 250 Ariz. 607 (App. 2021), REVERSED AND REMANDED
William A. Richards (argued), Richards & Moskowitz PLC, Phoenix, Attorneys for Robert Burns
Mary R. O‘Grady, Joseph N. Roth, Matthew J. Stanford, Osborn Maledon, P.A., Phoenix; Matthew E. Price (argued), Jenner & Block LLP, Washington, DC, Attorneys for Arizona Public Service Company, et al.
Edward F. Novak, Jonathan G. Brinson (argued), Polsinelli PC, Phoenix, Attorneys for Arizona Corporation Commission, et al.
Sarah L. Barnes, Broening Oberg Woods & Wilson, P.C., Phoenix, Attorneys for (Former) Commissioner Boyd Dunn
JUSTICE BOLICK, Opinion of the Court:
¶1 In this case we hold that the Arizona Corporation Commission (“Commission“) acting by a majority of its commissioners may not prevent an individual commissioner from exercising investigatory powers pursuant to
BACKGROUND
¶2 During the 2014 primary and general elections for the Commission, allegations were made that two elected commissioners received anonymous campaign contributions from Pinnacle West, using funds derived from Arizona Public Service Co. (“APS“). Pinnacle West is the holding company of APS, a public service corporation (“PSC“). In November 2015, Robert Burns, then a member of the Commission, requested spending reports from APS regarding the 2014 election cycle. APS did not comply. Subsequently, Burns requested and received an opinion from the Attorney General, who concluded that
¶3 In August 2016, the four other commissioners voted to refuse to fund Burns’ investigation into APS‘s records for its pending rate-making case before the Commission (the “Rate Case“). In turn, later that month
¶4 Shortly after, in March 2017, Burns sued APS for declaratory relief, arguing that individual commissioners have authority to demand compliance with subpoenas without the approval from other commissioners. APS moved to dismiss, arguing that Burns failed to exhaust his administrative remedies as to both sets of subpoenas. Ruling in favor of APS, the superior court stayed both proceedings so that Burns could first exhaust his administrative remedies.
¶5 During the Rate Case, Burns attempted to call six witnesses, including APS and Pinnacle West‘s president and board chairman. The administrative law judge (“ALJ“) declined to call the witnesses without approval from the other Commission members. In response, Burns sought emergency relief from the ALJ. He also moved to disqualify two commissioners, alleging they had received “dark money” from APS and Pinnacle West during the 2014 election. The ALJ did not rule on either motion.
¶6 Burns next sought compliance with his issued subpoenas. On June 20, 2017, the Commission held a public meeting to consider his motions. An interlocutory order was issued on June 27, 2017 on behalf of the Commission and approved by the four other commissioners. The order denied Burns’ motions. In the interlocutory order, the other commissioners found that Burns’ motions sought information that was irrelevant to the Rate Case; the subpoenas were overly broad, burdensome, and would not produce admissible evidence; and Burns’ requests for witnesses were irrelevant and would not lead to admissible evidence.
¶7 In response, Burns sought leave to amend his superior court complaint to challenge the interlocutory order and add the Commission and the four other individual commissioners as defendants. The superior court granted Burns’ motion to amend, and on August 4, 2017, he timely
¶8 Shortly after, the other commissioners reached a settlement agreement that the ALJ approved over Burns’ opposition. Following the settlement, both APS and the Commission moved to dismiss Burns’ First Amended Complaint. The superior court held that (i) the case was not moot; (ii) the request for declaratory relief was appropriate to determine the commission‘s investigatory powers; (iii) the subpoenas did not improperly interfere with the legislature‘s or Commission‘s powers; and (iv) Burns had the authority to issue the subpoenas as an individual commissioner. However, the court also ruled that although individual commissioners may issue subpoenas, the power to enforce subpoenas rests with the Commission as a body. For that reason, the court dismissed Burns’ First Amended Complaint.
¶9 Following that decision, Burns sought leave to amend his complaint a second time to request specific declaratory relief on the superior court‘s rulings in his favor, and to argue his due process right to investigate and present facts about APS‘s financial support to the commissioners’ campaigns. The superior court granted leave to amend in part, denying Burns’ request for declaratory relief as to its prior rulings.
¶10 After Burns’ Second Amended Complaint was filed, APS and the Commission moved to dismiss it. On January 17, 2019, the superior court dismissed the case and entered judgment against Burns. The court held that Burns lacked standing to assert his due process argument. Additionally, the court held that Burns was not legally entitled to initiate and maintain an investigation to disqualify other commissioners.
¶11 Burns timely appealed to the court of appeals challenging the dismissal of his two amended complaints. The court of appeals affirmed the trial court‘s ruling, holding that individual commissioners lack authority to enforce investigatory subpoenas in rate-making cases because that authority rests solely with the Commission and a majority of its
¶12 We granted review on two issues. First, whether the Arizona Constitution allows a majority of commissioners to prevent any single commissioner from exercising the investigatory powers expressly granted to each in article 15, section 4. Second, whether the Arizona Uniform Declaratory Judgment Act (“UDJA“) grants a commissioner standing to seek a declaration of his and his colleagues’ rights. These are significant issues of statewide concern. We have jurisdiction over the appeal pursuant to
DISCUSSION
¶13 We note at the outset that the questions on which we granted review are narrow. Moreover, we focus only on the subpoenas issued by Burns in the Rate Case that the other commissioners effectively quashed. Therefore, we will neither resolve all the issues addressed in the courts below nor the appropriate scope of Commission rules and proceedings going forward. But we agree with the court of appeals that the questions as presented are important and that we should resolve them even though Burns and his colleagues are no longer commissioners. Burns, 250 Ariz. at 611 ¶ 14. Because they present purely issues of law, we review them de novo. Johnson Utils. v. Ariz. Corp. Comm‘n, 249 Ariz. 215, 219 ¶ 11 (2020).
¶14 The Commission is established by
¶15 Even within its plenary ratemaking authority; however, the Commission remains “subject to constitutional constraints and requirements, both general (such as due process) and those specific to the entity.” Sun City Home Owners Ass‘n v. Ariz. Corp. Comm‘n, 252 Ariz. 1, 5 ¶ 16 (2021). Those boundaries are subject to judicial review. See Johnson Utils., 249 Ariz. at 227 ¶ 52 (“Although we certainly recognize the constitutional authority of the Commission, it is our duty to interpret the limit and extent of that authority.“).
A. An Individual Commissioner‘s Investigatory Authority
¶16 Burns argues that his authority as an individual commissioner emanates from article 15, section 4, which states as follows:
The corporation commission, and the several members thereof, shall have power to inspect and investigate the property, books, papers, business, methods, and affairs of any corporation whose stock shall be offered for sale to the public and of any public service corporation doing business within the state, and for the purpose of the commission, and of the several members thereof, shall have the power of a court of general jurisdiction to enforce the attendance of witnesses and the production of evidence by subpoena, attachment, and punishment, which said power shall extend throughout the state. Said commission shall have power to take testimony under commission or deposition either within or without the state.
Burns asserts that this constitutional text specifically authorizes not only the Commission as a whole, but each of its “several commissioners,” to inspect
¶17 Burns further identifies as a source of authority
The commission, each commissioner and person employed by the commission may, at any time, inspect the accounts, books, papers and documents of any public service corporation, and any of such persons who are authorized to administer oaths may examine under oath any officer, agent or employee of such corporation in relation to the business and affairs of the corporation.
Burns also notes that
¶18 APS and the Commission counter with several arguments. First, they note that under
¶19 Beyond these constitutional provisions, the Commission and APS cite
¶20 Although not addressing the specific subpoenas at issue here, the Attorney General, in his opinion responding to Burns’ inquiry, concluded that an individual commissioner is authorized to unilaterally issue subpoenas to PSCs, pursuant to both
¶21 The court of appeals, by contrast, agreed with APS and the Commission. It noted that under
¶22 With respect to the narrow issue presented here of a single commissioner‘s authority to inspect the books of a PSC and depose its officials, we agree with the Attorney General and Burns: the principal source of that authority is
¶23 Our role in constitutional interpretation is to construe the text, when possible, in accord with its plain meaning. Morrissey v. Garner, 248 Ariz. 408, 410 ¶ 8 (2020). We seek to give effect to every word, so as to render superfluous none of the text. Id. We also read the provision at issue in its broader context. Id.
¶24 Article 15, section 4 confers the power to inspect and investigate upon “[t]he corporation commission, and the several members thereof.”
¶25 “Several” in this context means separate, respective, or individual. Several, Merriam-Webster, https://www.merriam-webster.com/dictionary/several (last visited Sept. 21, 2022)1; cf.
¶26 The Commission argues that the introduction to the second part of the provision—“for the purpose of the commission” — restricts the investigatory powers to the purpose established by the commission.
¶27 This interpretation is consistent with the Commission‘s structure. Our constitution‘s framers could have provided for a single commissioner. Instead, it comprised the Commission of three members, later enlarged to five, three of whom are elected at one general election and
¶28 Moreover, other provisions of article 15 (§§ 3, 5, 6, 14, 19) confer authority exclusively upon the “commission,” whereas “and the several members thereof” is confined to section 4. Where the drafters used different language in different provisions, we imply that a different meaning is intended. Rochlin v. State, 112 Ariz. 171, 176 (1975) (“If the authors of the constitution had intended the sections to mean the same thing they could have used the same or similar language. The fact that they did not, requires the conclusion that the sections were meant to be different.“). The framers plainly meant to authorize not only the Commission but also individual commissioners, for their purposes, to issue investigatory subpoenas.
¶29 Reading article 15 in its entirety dictates that any other interpretation would render section 4 superfluous. It would expressly vest powers in individual commissioners but then subordinate that right to the unreviewable determinations of other commissioners. Burns’ allegations demonstrate how untenable such a construction is, whereby a commissioner‘s investigation into possible improprieties concerning his colleagues can be squelched by the very subjects of the investigation.
¶30 The court of appeals emphasizes the regulatory authority conferred upon the Commission by
¶31 Nor does the fact that the subpoenas were issued in the context of a ratemaking proceeding under article 15, section 3 alter the analysis. Although that section invests the Commission with plenary authority to regulate rates, it neither furnishes additional authority to the Commission to establish procedural rules (which is conferred by section 6) nor cancels an individual commissioner‘s investigatory powers under section 4. Indeed, as the circumstances here illustrate, it may be especially pertinent for a commissioner to deploy such investigatory powers to determine possible conflicts of interest in a rate case. And as we emphasized in Johnson Utilities, even the Commission‘s plenary ratemaking authority is constrained by the constitution. Johnson Utilities, 249 Ariz. at 221 ¶ 23. Again, we seek to harmonize the powers and constraints set forth in article 15.
¶32 Moreover, the court of appeals omits a crucial part of the constitutional passage conferring regulatory authority. It cites the language from section 6 that “the commission may make rules and regulations to govern [proceedings instituted by and before it],” Burns, 250 Ariz. at 612 ¶ 20 (alteration in original), but fails to acknowledge the temporal limitation immediately preceding it: “until such rules and regulations are provided by law.”
¶33 Though Burns argued he had authority under § 40-241(A), the court of appeals nowhere addressed that statute, instead proceeding directly to the agency‘s rules, specifically
¶34 That does not mean that the individual commissioner‘s subpoena powers are without constraint. To the contrary, they are bound by the Commission‘s own limited constitutional authority, as well as the overarching requirements of due process. Polaris, 133 Ariz. at 507. The target of a subpoena may seek judicial recourse through a declaratory judgment action and
¶35 Likewise, the Commission may adopt and enforce subpoena procedures. See
B. Availability of Relief Under the Uniform Declaratory Judgment Act
¶36
¶37 As we held above, Burns has a statutory right to investigate PSCs. Moreover, we have applied the UDJA to administrative orders. Polaris, 133 Ariz. at 504; see also City of Surprise v. Ariz. Corp. Comm‘n, 246 Ariz. 206, 210 ¶ 9 (2019) (holding that indirect assertion of regulatory authority provides “sufficient injury to provide standing“).
¶38 No party seriously disputes Burns’ standing to pursue relief under the UDJA. Rather, the Commission and APS argue that the courts below were correct in denying declaratory relief. On the narrow substantive issue on which we granted review, we disagree and remand to the trial court to determine if any further proceedings are warranted given that Burns no longer serves on the Commission.
C. Attorney Fees
¶39 Per Burns’ motion, we award his attorney fees pursuant to
CONCLUSION
¶40 We vacate the opinion of the court of appeals, reverse the superior court‘s denial of summary judgment on the issues before us, and remand the case to that court for any further proceedings consistent with this ruling.
¶41 I agree with my colleagues that Burns has standing under the Uniform Declaratory Judgments Act,
¶42 As a commissioner, Burns had constitutional authority to inspect and investigate “the property, books, papers, business, methods, and affairs” of APS and its holding company, Pinnacle West Capital Corporation. See
¶43 APS‘s rate case began in 2016 when it filed an application to set new utility rates. The Commission then issued orders setting a procedural schedule, granting several interventions, and consolidating the rate case with two APS audits. Most of the approximately forty parties in the case reached a settlement agreement that increased APS‘s base rate, and after reviewing documentation and conducting a seven-day evidentiary hearing, an administrative law judge (“ALJ“) recommended that the
¶44 During the rate case proceedings, Burns renewed his quest to obtain information about APS and Pinnacle West‘s spending. He issued two subpoenas duces tecum compelling the companies to produce documents and information identifying political and charitable contributions and lobbying and marketing/advertising expenditures from 2011 through 2016. APS and Pinnacle West moved to quash the subpoenas, but the Commission never ruled on the motion. See
¶45 Thereafter, and as pertinent here, Burns filed motions to (1) compel APS and Pinnacle West‘s compliance with the subpoenas; (2) require the ALJ to call several previously unscheduled witnesses during the evidentiary hearing and permit Burns’ private attorney to question those witnesses; and (3) stay the entire rate case until Burns completes his investigation. The Commission, with Burns dissenting, denied the motions, ruling the information sought was irrelevant to the rate case, and the subpoenas were overbroad, unduly burdensome, and sought information outside the 2015 “test year,” which was the only year relevant in applying the rate-setting formula. See Residential Util. Consumer Off. v. Ariz. Corp. Comm‘n, 240 Ariz. 108, 110 ¶ 6 (2016) (describing the formula);
¶46 The issue here is whether the Commission‘s ruling in matters properly brought before it in the rate case violated Burns’ constitutional authority under article 15, section 4 of the Arizona Constitution, to inspect and investigate. Unlike the majority, I conclude it did not.
¶47 First, even assuming Burns’ subpoenas and requests constituted an “investigation” under section 4, nothing in that provision authorized him to compel the other commissioners or the Commission as a whole to enforce his efforts. See City of Surprise v. Ariz. Corp. Comm‘n, 246 Ariz. 206, 212 ¶ 20 (2019) (noting that the Commission, and necessarily
¶48 Second, Burns’ subpoenas and requests were not, in fact, an inspection or investigation authorized by section 4, but instead they formed part of a contested rate case subject to Commission authority. The Arizona Constitution grants the Commission, not individual commissioners, “full power” to prescribe just and reasonable utility rates (except as to towns and cities). See
¶49 By filing his motions, Burns did not “inspect and investigate” as authorized by section 4. Instead, he participated in the rate case by issuing discovery requests through subpoenas and seeking rulings from the ALJ and the Commission to enforce his individual determination of what was relevant and admissible in the rate case. Had he issued his subpoenas in his 2015 docket or opened another docket for investigatory purposes while the rate case was pending, I would agree that the other commissioners had no authority to interfere with his efforts to investigate APS and Pinnacle West‘s spending. But section 4 did not authorize him under the guise of an “investigation” to hijack a contested rate case involving numerous parties that properly followed procedures laid out by the Commission under its constitutional authority. See
¶50 The majority‘s opinion has lasting consequences that both violate the constitution and leave confusion, and potentially chaos, in its wake. Now individual commissioners can compel the Commission to enable and enforce their inspection and investigation efforts, despite the plain language of section 4, which does not direct that result. Also, an individual commissioner, under the pretext of inspecting and investigating, now can determine what discovery is permissible in rate cases, despite section 3, which explicitly gives the Commission as a whole full power to make those decisions. It remains uncertain whether an individual commissioner may be permitted to insist that certain witnesses be called and questioned at a rate case hearing, as Burns argues is within his constitutionally bestowed investigatory right. Regardless, it is not difficult to imagine that the flow in rate cases could quickly enter choppy waters,
¶51 For all these reasons, although I agree with much of the majority‘s analysis, I respectfully disagree that the Commission here prevented Burns from exercising his investigatory powers under section 4. I would therefore affirm the superior court‘s judgment.
ANN A. SCOTT TIMMER
VICE CHIEF JUSTICE