12924 v. State of Connecticut Department of Public Utility Control (2012)

MEMORANDUM OF DECISION

Connecticut Independent Utility Workers, Local 12924, and the United Steel Workers, Local 12000 (collectively the plaintiffs or the unions), appeal from a declaratory ruling of the state of Connecticut department of public utility control (DPUC),¹ issued on February 3, 2011 (Docket No. 10–07–13).   Upon holding that the practice of designating entities as “participants” in uncontested proceedings before the DPUC bestows no particular rights, plays no role in the conduct of proceedings, and does not, in and of itself, yield a substantive result, the DPUC concluded that General Statutes § 4–167(a) did not require the promulgation of procedural regulations to govern each aspect of an uncontested proceeding.   The plaintiffs appeal pursuant to § 4–176(h) and § 4–183(a).

The record provides as follows.   The unions collectively represent some 400 Connecticut residents employed in the natural gas industry.   As a result of two rate case decisions rendered by the DPUC on June 30, 2009 and July 17, 2009, the Connecticut Natural Gas Corporation and the Southern Connecticut Gas Company (the gas companies) were authorized to lay off a number of employees, including approximately 35 individuals represented by the unions.

At a subsequent DPUC hearing, held pursuant to § 16–11, the unions requested party status on the grounds that members of the bargaining unit would potentially be affected by the proposed layoffs.²  Although the unions argued that union members held many of the positions slated for elimination and that many union members were also consumers dependent on the gas companies for safe and reliable service, the requests for party status were denied.   Instead, the unions were designated “participants” without any description of their rights.   While the unions were ultimately permitted to appear before the DPUC and to present argument and evidence in support of their position, they were denied the right to cross-examine witnesses.

On July 23, 2010, the plaintiffs filed a petition for declaratory relief (the petition) with DPUC requesting that a declaratory ruling be issued.   The petition requested that the DPUC find:

1. “Participant status” in DPUC non-contested cases is separate and distinct from status as a “party” or an “intervenor.”

2. The terms “participant” and “participant status” are not defined in any regulation promulgated by the DPUC in accordance with the Connecticut Uniform Administrative Procedure Act (UAPA).

3. The rights afforded to a “participant” at a hearing in a DPUC non-contested case are not defined in any regulation promulgated by the DPUC.

4. The UAPA and applicable case law require that the DPUC promulgate regulations for the conduct of business before the agency, and any regulation which is not adopted in accordance with the procedures set forth in the UAPA is invalid.

5. Although the DPUC regulations define “party” and “intervenor,” at all times relevant to the proceedings leading to the issuance of the decision, no regulation promulgated by the DPUC in accordance with the UAPA defined “participant” or “participant status” in a non-contested case or set forth the rights to be afforded to a “participant” in such a DPUC hearing or proceeding.

6. The DPUC's invocation of “participant status” and its selective award of rights with respect to such status constituted regulations;  however, the DPUC failed to comply with the UAPA in its adoption of such regulations.

7. The DPUC's denial of the unions' request for party status, its designation of the unions as “participants,” and its refusal to allow them the right to cross-examine at the hearing on the subject matter was arbitrary, illegal, in violation of its authority as set forth in applicable law and its own regulations, and in violation of the unions' right to due process.

(Citations omitted.)  (Return of Record (ROR), Section I, Item 1, p. 2.)

On September 20, 2010, the DPUC issued a letter stating that it would only consider those aspects of the petition that apply generally to the use of participant status in DPUC proceedings.  (ROR, Section VIII, Item 1, p. 2.) Accordingly, the only issue undertaken by the DPUC was whether the practice of designating entities as “participants” in uncontested proceedings before the DPUC is a regulation that must, as a matter of law, be promulgated pursuant to § 4–168.  (Id., p. 3.) Since all entities are labeled “participants” at the outset of an uncontested proceeding, the DPUC found that the designation bestows no particular rights, plays no role in the conduct of proceedings, and does not directly yield a substantive result.  (Id., p. 8.)

The DPUC noted that participation rights are determined at the sole discretion of the presiding officer at a time and in a manner wholly separate and distinct from the administrative act of labeling an entity as a “participant.”  (Id.) On February 3, 2011, the DPUC issued a final decision holding that § 4–167(a) did not require the promulgation of procedural regulations to govern each aspect of an uncontested proceeding.  (Id.)

On appeal by way of declaratory judgment, the plaintiffs now allege that the DPUC erred in concluding that the use of participant status and the rights thereunder need not be promulgated as a regulation because the designation has a substantial impact on the rights and obligations of parties who may appear before the agency in the future, and that the DPUC violated the plaintiffs' constitutional rights to due process and equal protection.

In opposition, the DPUC contends that (1) the superior court lacks subject matter jurisdiction due to lack of aggrievement, (2) the DPUC correctly concluded that the use of a participant designation need not be promulgated as a regulation, and (3) the plaintiffs' constitutional rights were not violated.

Regarding the issue of standing, the court's subject matter jurisdiction is implicated.   See St. Paul's Flax Hill Co-operative v. Johnson, 124 Conn.App. 728, 737 n.8, 6 A.3d 1168 (2010), cert. denied, 300 Conn. 906, 12 A.3d 1002 (2011).  “Standing is the legal right to set judicial machinery in motion.   One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy ․” Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 411, 35 A.3d 188 (2012).

“Standing ․ is not a technical rule intended to keep aggrieved parties out of court;  nor is it a test of substantive rights.   Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented.”  (Internal quotation marks omitted.)   Sastrom v. Psychiatric Security Review Board, 291 Conn. 307, 326, 968 A.2d 396 (2009).  “These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury he has suffered or is likely to suffer, in an individual or representative capacity.”  (Emphasis added;  internal quotation marks omitted.)  Douglas v. Planning & Zoning Commission, 127 Conn.App. 87, 93, 13 A.3d 669 (2011).

“It is ․ fundamental that, in order to have standing to bring an administrative appeal, a person must be aggrieved ․” Sastrom v. Psychiatric Security Review Board, supra, 291 Conn. 326.³  “Aggrievement does not demand certainty, only the possibility of an adverse effect on a legally protected interest.”  (Internal quotation marks omitted.)  Douglas v. Planning & Zoning Commission, supra, 127 Conn.App. 95.   Furthermore, “[a]s long as there is some direct injury for which the plaintiff seeks redress, the injury that is alleged need not be great ․ [and] need not be primarily economic[.]”  (Internal quotation marks omitted.)  Water Pollution Control Authority v. Keeney, 234 Conn. 488, 495, 662 A.2d 124 (1995).  “Two broad yet distinct categories of aggrievement exist classical and statutory ․” Sastrom v. Psychiatric Security Review Board, supra, 291 Conn. 326.

“Statutory aggrievement exists by legislative fiat, not by judicial analysis of the particular facts of the case.   In other words, in cases of statutory aggrievement, particular legislation grants standing to those who claim injury to an interest protected by that legislation.”  (Internal quotation marks omitted.)  Andross v. West Hartford, 285 Conn. 309, 322, 939 A.2d 1146 (2008).   The plaintiffs have failed to identify any such legislative grant of authority;  thus, plaintiffs must rely on classical aggrievement.

“Classical aggrievement requires a two part showing.   First, a party must demonstrate a specific, personal and legal interest in the subject matter of the [controversy], as opposed to a general interest that all members of the community share ․ Second, the party must also show that the [alleged conduct] has specially and injuriously affected that specific personal or legal interest ․” Bingham v. Dept. of Public Works, 286 Conn. 698, 702, 945 A.2d 927 (2008).

Plaintiffs have a bona fide interest in the ability to advocate for the personal and legal interests of their members through meaningful participation in proceedings before the DPUC. As an example, plaintiffs cite the denial of the right to cross-examine witnesses upon being named “participants” during an uncontested hearing before the DPUC in 2009 as evidence of the manner in which that interest has been and will likely continue to be adversely impacted by the absence of an established rule concerning the use of participant status in uncontested hearings, and by the refusal of the DPUC to adopt and make available to the public such regulations.   See plaintiffs' October 17, 2011 reply brief, p. 24.

At the commencement of proceedings on September 24, 2009, the unions were informed that they would be permitted to “submit, under correspondence, any materials that are pertinent to [the] issue [under consideration].”   The unions were further assured that any materials so submitted would be included “as part of the record and ․ given thoughtful consideration.”   See plaintiffs' June 6, 2011 brief, Exhibit B. The presiding official subsequently declared that “[t]he only cross-examination done today will be by the DPUC staff, the Office of Consumer Counsel, and the AG's office.   If I determine after today that there is a need for additional information, I will reconsider my position on this matter and possibly consider opening the cross-examination to other persons under the strictest of guidelines.”  Id.

“The purpose of a declaratory judgment action ․ is to secure an adjudication of rights [when] there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties.”  New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 747 (2012), quoting Bysiewicz v. Dinardo, 298 Conn. 748, 756, 6 A.3d 726 (2010).   In Connecticut, the declaratory judgment statute is “unusually liberal.   An action for declaratory judgment ․ is a statutory action as broad as it well could be made.”   (Internal quotation marks omitted.)  Id., 748.  “Indeed, our declaratory judgment statute is broader in scope than ․ the statutes in most, if not all, other jurisdictions ․ and [w]e have consistently construed our statute and the rules under it in a liberal spirit, in the belief that they serve a sound social purpose ․” (Internal quotation marks omitted.)  Id.

In light of the foregoing, the interest invoked by the plaintiffs is sufficient to endow the unions with a significant personal stake in the outcome of the controversy and provides the requisite assurance of concrete adverseness and diligent advocacy.   The plaintiffs are within the scope of protection and were harmed by the denial of the DPUC to spell out their rights.   Therefore, the plaintiffs have satisfied both prongs of the classical aggrievement test, and have adequate standing.   Accordingly, the superior court is vested with the subject matter jurisdiction requisite to hear the appeal pursuant to § 4–183(a).

Turning to the merits of the case, the UAPA does not itself impose on any agency the requirement that it hold formal hearings;  instead, it only specifies that a hearing shall be held if required by state statute or regulation.   See § 4–166(2);  see also Morel v. Commissioner of Public Health, 262 Conn. 222, 811 A.2d 1256 (2002).   For the procedures to be followed when a contested case hearing is required, see §§ 4–176e, 4–177, 4–177a, 4–177b, 4–177c, 4–178, 4–178a, and 4–179.

In the absence of a statute or regulation requiring adjudication on the record, an administrative agency enjoys considerable discretion in defining its own procedures for the conduct of a hearing in an uncontested case.   This broad discretion is grounded in the need to balance the protection of civil liberties against functional considerations such as expertise and efficiency.   Nevertheless, an agency remains subject to any statutory restrictions imposed by the legislature and by certain due process and equal protection limitations imposed by the United States Constitution.

In their petition for declaratory judgment, the plaintiffs call into question the statutory sufficiency of the rules of practice adopted by the DPUC. “In [Burinskas v. Dept. of Social Services, 240 Conn. 141, 147, 691 A.2d 586 (1997) ], we noted that where the construction of a statute ․ has not previously been subjected to judicial scrutiny [or to] ․ a governmental agency's time-tested interpretation ․ that construction constitutes a question of law for which deference is not warranted.”  (Internal quotation marks omitted.)  Assn. of Not–for–Profit Providers for the Aging v. Dept. of Social Services, 244 Conn. 378, 390, 709 A.2d 1116 (1998);  see also Connecticut Light & Power Co. v. Texas–Ohio Power, Inc., 243 Conn. 635, 642, 708 A.2d 202 (1998).   Although § 4–167 has been subjected to judicial review, this particular aspect has not been directly addressed;  nor has the DPUC assessment thereof been the object of time-tested agency interpretation.   Therefore, the meaning of § 4–167 remains a pure question of law for which no deference to the DPUC is owed.

Section 1–2z provides that “[t]he meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes.   If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered.”   Therefore, the court's analysis begins with the text of § 4–167(a).

Section 4–167(a) provides, in relevant part, as follows:  “In addition to other regulation-making requirements imposed by law, each agency shall:  ․ (2) adopt as a regulation rules of practice setting forth the nature and requirements of all formal and informal procedures available ․” (Emphasis added.)   The natural and ordinary meaning of this statutory text is plain and unambiguous, mandating that Connecticut agencies promulgate regulations setting forth the nature and requirements of any available administrative proceeding, whether formal or informal.⁴  In so doing, the legislature imposed a statutory restriction on the scope of administrative discretion in both formal and informal proceedings.⁵

The designation of individuals as parties, intervenors, interested persons or participants, and the subsequent discretionary assignment of certain rights and privileges thereto, constitutes a fundamental element of an informal proceeding.   While a detailed description of the processes and procedures to be utilized by the DPUC in the conduct of informal proceedings is not legally necessary or practically desirable, something more than the existing administrative framework is called for under § 4–167(a).   Otherwise, as observed by District Judge Clarie, there is the potential that an individual judge's “whim and fancy” could contribute to “an inconsistent non-system [.]”  (Internal quotation marks omitted.)  Silverman v. Browning, 414 F.Sup. 80, 82 (D.Conn.1976).   This concern equally applies to informal proceedings held before commissioners of the DPUC.

In endowing the administrative judge with virtually unbridled discretion in the conduct of uncontested hearings, and subsequently refusing to promulgate regulations setting forth the nature and requirements for informal proceedings before the DPUC, the DPUC has misinterpreted the restrictions on administrative discretion imposed by § 4–167.   Consideration of the due process and equal protection concerns raised by the plaintiffs is not necessary as the statutory restrictions imposed on agency discretion and autonomy by the legislature exceed the constitutional constraints on agency authority.

Pursuant to § 4–183(j), the court finds that certain substantial rights held by the plaintiffs have been prejudiced because the administrative findings, inferences and conclusions contained within the final decision issued by the DPUC on February 3, 2011, were affected by an error of law.

Accordingly, the declaratory ruling is set aside, with instructions to grant the plaintiffs' petition for declaratory relief insofar as necessary to ensure compliance with the holding herein.

Henry S. Cohn, J.

FOOTNOTES

FN1. Subsequent to the commencement of this declaratory judgment action, the department of public utility control (DPUC) became the public utilities regulatory authority (PURA).   For purposes of this decision, DPUC will be used..  FN1. Subsequent to the commencement of this declaratory judgment action, the department of public utility control (DPUC) became the public utilities regulatory authority (PURA).   For purposes of this decision, DPUC will be used.

FN2. General Statutes § 16–11 provides, in relevant part, that the DPUC “shall, so far as is practicable, keep fully informed as to the condition of the plant, equipment and manner of operation of all public service companies in respect to their adequacy and suitability to accomplish the duties imposed upon such companies by law and in respect to their relation to the safety of the public and of the employees of such companies.”.  FN2. General Statutes § 16–11 provides, in relevant part, that the DPUC “shall, so far as is practicable, keep fully informed as to the condition of the plant, equipment and manner of operation of all public service companies in respect to their adequacy and suitability to accomplish the duties imposed upon such companies by law and in respect to their relation to the safety of the public and of the employees of such companies.”

FN3. Only an individual aggrieved by the final decision of an administrative agency and having exhausted all available administrative remedies may appeal to the superior court.   See § 4–183(a).   Section 4–166(3) of the UAPA defines a “final decision” as follows:  “(A) the agency determination in a contested case, (B) a declaratory ruling issued by the agency pursuant to section 4–176 or (C) an agency decision made after reconsideration.”   Section 4–176(a) provides that “[a]ny person may petition an agency, or an agency may on its own motion initiate a proceeding, for a declaratory ruling as to the validity of any regulation, or the applicability to specified circumstances of a provision of the general statutes, a regulation, or a final decision on a matter within the jurisdiction of the agency.”   Pursuant to § 4–176(h), a declaratory ruling issued by an administrative agency “shall be a final decision for purposes of appeal in accordance with the provisions of section 4–183.”   Therefore, the declaratory ruling, concerning the use of participant status in uncontested proceedings, issued on February 3, 2011, is a final decision for purposes of appeal under § 4–183..  FN3. Only an individual aggrieved by the final decision of an administrative agency and having exhausted all available administrative remedies may appeal to the superior court.   See § 4–183(a).   Section 4–166(3) of the UAPA defines a “final decision” as follows:  “(A) the agency determination in a contested case, (B) a declaratory ruling issued by the agency pursuant to section 4–176 or (C) an agency decision made after reconsideration.”   Section 4–176(a) provides that “[a]ny person may petition an agency, or an agency may on its own motion initiate a proceeding, for a declaratory ruling as to the validity of any regulation, or the applicability to specified circumstances of a provision of the general statutes, a regulation, or a final decision on a matter within the jurisdiction of the agency.”   Pursuant to § 4–176(h), a declaratory ruling issued by an administrative agency “shall be a final decision for purposes of appeal in accordance with the provisions of section 4–183.”   Therefore, the declaratory ruling, concerning the use of participant status in uncontested proceedings, issued on February 3, 2011, is a final decision for purposes of appeal under § 4–183.

FN4. Similarly, the federal administrative procedure act, 5 U.S.C. § 552(a)(1)(B), provides that “[e]ach agency shall make available to the public information as follows:  ․ [e]ach agency shall separately state and currently publish in the Federal Register for the guidance of the public—statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available[.]”  Quoting this statute, then circuit judge Warren Burger, later Chief Justice of the United States, issued a declaratory judgment setting aside a debarment proceeding in the department of agriculture for failure to adopt regulations governing debarment.   He stated as follows:  “Such debarment cannot be left to administrative improvisation on a case-by-case basis.   The governmental power must be exercised in accordance with accepted basic legal norms.   Considerations of basic fairness require administrative regulations establishing standards for debarment and procedures which will include notice of specific charges, opportunity to present evidence and to cross-examine adverse witnesses, all culminating in administrative findings and conclusions based upon the record so made.”  Gonzalez v. Freeman, 334 F.2d 570, 578 (1964)..  FN4. Similarly, the federal administrative procedure act, 5 U.S.C. § 552(a)(1)(B), provides that “[e]ach agency shall make available to the public information as follows:  ․ [e]ach agency shall separately state and currently publish in the Federal Register for the guidance of the public—statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available[.]”  Quoting this statute, then circuit judge Warren Burger, later Chief Justice of the United States, issued a declaratory judgment setting aside a debarment proceeding in the department of agriculture for failure to adopt regulations governing debarment.   He stated as follows:  “Such debarment cannot be left to administrative improvisation on a case-by-case basis.   The governmental power must be exercised in accordance with accepted basic legal norms.   Considerations of basic fairness require administrative regulations establishing standards for debarment and procedures which will include notice of specific charges, opportunity to present evidence and to cross-examine adverse witnesses, all culminating in administrative findings and conclusions based upon the record so made.”  Gonzalez v. Freeman, 334 F.2d 570, 578 (1964).

FN5. This UAPA rule-making requirement is subject to an exception for procedures merely relating to internal management.   See, e.g., In re Leisure Hills Health Care Ctr., 518 N.W.2d 71, 73–74 (Minn.App.1994) (court approved an agency's decision not to promulgate a regulation related to a licensing survey of nursing homes).   This exception is inapplicable in the present case as it concerns the duty to enact regulations related to the conduct of informal hearings.   Such regulations are certainly matters of public concern..  FN5. This UAPA rule-making requirement is subject to an exception for procedures merely relating to internal management.   See, e.g., In re Leisure Hills Health Care Ctr., 518 N.W.2d 71, 73–74 (Minn.App.1994) (court approved an agency's decision not to promulgate a regulation related to a licensing survey of nursing homes).   This exception is inapplicable in the present case as it concerns the duty to enact regulations related to the conduct of informal hearings.   Such regulations are certainly matters of public concern.

Cohn, Henry S., J.