The Utility Reform Network

166 Cal. App. 4th 522, 2008 Cal. PUC LEXIS 1376 (August 29, 2008)

The Court of Appeal (Second District, Division 8) affirmed in part and reversed in part a Commission order denying a 2004 request by TURN for intervenor compensation.  In an earlier decision by the Court, it agreed with TURN that it was entitled to intervenor compensation for its efforts in Federal Court defending the Commission’s post-transition rate making decisions (See Para. 27, infra).  At issue here was TURN’s request for intervenor compensation for its later efforts challenging the lawfulness of a subsequent settlement between the Commission and Southern California Edison.  TURN’s challenges to the settlement failed in the Federal District Court, the Ninth Circuit Court of Appeals and in the California Supreme Court.  Nonetheless, TURN’s 2004 request for intervenor compensation included a request for compensation related to (1) its work in the earlier Federal Court litigation, (2) its work related to the Court of Appeal decision in Edison (Para. 27, infra) and (3) its unsuccessful challenges (in Federal Courts and in the California Supreme Court) to the Edison/Commission settlement.  In April of 2005, the Commission denied much, but not all, of the request.  TURN sought rehearing and, almost two years later, rehearing was denied.  The portions of the denial order at issue in this matter were (1) the Commission’s denial of compensation for TURN’s unsuccessful challenges to the Edison/Commission settlement and (2) the Commission’s refusal to compensate TURN’s outside counsel at the comparable rate for other outside counsel, choosing instead to compensate that counsel at the rate paid to TURN’s in-house attorneys.  The Court deferred to the Commission’s construction of Section 1801.3 (“substantial contribution”), concluding that it did not “fail to bear a reasonable relation to the statutory purposes and language” a portion of the decision which today has to be read in light of New Cingular Wireless I and II (Paras. 3 and 4).  (But see, Edison, Para. 27, infra).  The Court noted that TURN was not “entitled, as a matter of law, to an award of compensation for pursuing a position that the PUC, two Federal Courts and the California Supreme court rejected.”  (TURN sought review of this aspect of the decision in the California Supreme Court but that Court (by a 5-2 vote) denied review.)  The Court of Appeal, however, reversed the Commission’s refusal to award TURN compensation for the efforts of its outside counsel at hourly rates paid “to persons of comparable training and experience who are offering similar services.”  (Section 1806).  The Court held that the Commission abused its discretion by simply capping the compensable rates for the outside counsel at the rates paid to TURN’s in-house attorneys “who are expert at administrative litigation before the PUC.”  The court appears to have been displeased by the Commission’s summary rejection (as “unpersuasive”) of TURN’s evidence regarding (a) rates TURN had requested for outside counsel, (b) rates paid to PG&E’s lead counsel, (c) rates appearing in a survey of outside counsel rates and (d) the rates charged by TURN’s outside counsel to that counsel’s fee paying clients.  This decision is notable in that it is one of the few decisions where the court has expressly applied the “abuse of discretion” standard set forth in Section 1757(a)(5).  Huntington Beach (Para. 14) does so but the actual ground for reversal there was more properly described by Section 1757(a)(2) since the Commission transgressed the Scoping Memo.

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