RIVERDALE JEWISH CENTER v. Long Island Power Authority, Defendant–Respondent–Appellant. (2025)

Order, Supreme Court, New York County (Barry R. Ostrager, J.), entered September 1, 2023, which, to the extent appealed from, granted defendants’ motions to dismiss the amended complaint to the extent of staying the putative class action pending plaintiffs filing administrative complaints before, and determination thereof by, the Public Service Commission (PSC) or other authorized administrative agency, and declined to dismiss the action as against defendant Long Island Power Authority (LIPA), unanimously affirmed, without costs.

Supreme Court providently stayed the action under the primary jurisdiction doctrine (see Flacke v. Onondaga Landfill Sys., 69 N.Y.2d 355, 362, 514 N.Y.S.2d 689, 507 N.E.2d 282 [1987];  Capital Tel. Co. v. Pattersonville Tel. Co., 56 N.Y.2d 11, 22, 451 N.Y.S.2d 11, 436 N.E.2d 461 [1982]).  The first cause of action for breach of contract essentially alleges that defendants misapplied their tariffs by charging plaintiffs, religious organizations entitled to residential gas and electric utility rates (Public Service Law § 76), corresponding gross revenue tax (GRT) surcharges or, for defendant LIPA, GRT payments in lieu of taxes (PILOT) surcharges at residential customer rates (see generally Tax Law § 186–a).  The second cause of action alleges that, other than LIPA, the GRT surcharges are not “just, reasonable, or allowed by law or order of the PSC,” in violation of Public Service Law § 65(5).  In either case, the determination of whether the utility company “misapplied the applicable tariff, resulting in overcharges” (Township of Thompson v. New York State Elec. & Gas Corp., 25 A.D.3d 850, 851, 807 N.Y.S.2d 203 [3d Dept. 2006], lv denied 6 N.Y.3d 713, 816 N.Y.S.2d 748, 849 N.E.2d 971 [2006];  see also Matter of Black Radio Network v. Public Serv. Commn. of State of N.Y., 253 A.D.2d 22, 25, 685 N.Y.S.2d 816 [3d Dept. 1999]), and the “reasonableness of a utility's rates, rules, or practices” is properly submitted to the agency authorized to “regulate and review such matters” (Brownsville Baptist Church v. Consolidated Edison Co. of N.Y., 272 A.D.2d 358, 359, 707 N.Y.S.2d 493 [2d Dept. 2000]).

The doctrine of primary jurisdiction also applies to plaintiffs’ claims of fraud, deceptive business practices, or unjust enrichment, “even if the agency has no power to award the damages” plaintiffs seek in this action (Heller v. Coca–Cola Co., 230 A.D.2d 768, 768–770, 646 N.Y.S.2d 524 [2d Dept. 1996], lv denied in part and dismissed in part 89 N.Y.2d 856, 653 N.Y.S.2d 275, 675 N.E.2d 1227 [1996];  see also Olsen v. Stellar W. 110, LLC, 96 A.D.3d 440, 441–442, 946 N.Y.S.2d 128 [1st Dept. 2012], lv dismissed 20 N.Y.3d 1000, 959 N.Y.S.2d 683, 983 N.E.2d 761 [2013];  Porr v. NYNEX Corp., 230 A.D.2d 564, 567–568, 660 N.Y.S.2d 440 [2d Dept. 1997], lv denied 91 N.Y.2d 807, 669 N.Y.S.2d 260, 692 N.E.2d 129 [1998]).  We note also that LIPA is empowered to consider customer complaints, with intermediate steps of review involving the PSC (see generally Public Authorities Law § 1020–f;  Gunter v. Long Island Power Authority/Keyspan, 2011 WL 1225791, *12–13, 2011 U.S. Dist LEXIS 32693, *39–44 [E.D.N.Y., Feb. 15, 2011, No. 08–CV–498 (RRM)(LB)], adopted by 2011 WL 1154382, 2011 U.S. Dist. LEXIS 32717 [E.D.N.Y., Mar. 29, 2011]).  As such, complaints about its billing practices are properly presented to LIPA under those procedures (see Matter of Black Radio Network, 253 A.D.2d at 25, 685 N.Y.S.2d 816).

We decline to dismiss the action against LIPA under the filed rate doctrine, as the applicable rate is yet to be determined and plaintiffs apparently seek to establish “equal rates” for all religious organizations entitled to utility services at residential rates (see Porr, 230 A.D.2d at 573–574, 660 N.Y.S.2d 440;  see also Matter of Multiple Intervenors v. Public Serv. Commn. of State of N.Y., 194 Misc.2d 85, 91, 750 N.Y.S.2d 480 [Sup. Ct., Albany County 2002] [GRTs are “part of a utility's cost structure that is recovered through Commission approved rates”]).  We also decline to reach the remainder of LIPA's dismissal motion, in light of the stay issued under the primary jurisdiction doctrine.

We have considered the parties’ remaining contentions and find them unavailing.