Discussion
of Issues
Issue 1:
Should oral argument on SSGC’s and Leesburg’s Motions
to Dismiss be granted?
Recommendation:
Yes. Oral argument on
SSGC’s and Leesburg’s Motions to Dismiss should be granted. The parties should
be allowed 5 minutes per side to make their arguments. (Harper)
Staff Analysis:
Procedural Rule
25-22.0022(1), F.A.C., provides that a request for oral argument should be
timely filed and shall state with particularity why oral argument would aid the
Commission in understanding and evaluating the issues to be decided. Rule 25-22.0022(7), F.A.C., states that oral
argument at the Agenda Conference will be entertained for dispositive motions
such a motions to dismiss. SSGC’s and
Leesburg’s requests for oral argument on their motions were timely filed. SSGC’s
and Leesburg’s motions request 10 minutes be allowed for oral argument.
Peoples
filed a response in opposition to the requests for oral argument, stating that oral
argument would not assist the Commission in its ruling on the motions. However,
Peoples asks that if the Commission decides to grant oral argument that Peoples
be given an amount of time equal to the time granted to SSGC and Leesburg.
Rule 25-22.0022(3), F.A.C. provides that granting or
denying a request for oral argument is within the sole discretion of the
Commission. Staff believes that oral
argument will assist the Commission in understanding and evaluating issues and
arguments raised in the motions. If oral
argument is granted, 5 minutes for each side appears to be reasonable.
Issue 2:
Should the Commission grant SSGC’s and Leesburg’s Motions
to Dismiss Peoples’ Petition?
Recommendation:
Yes. The Commission should grant SSGC’s and Leesburg’s
Motions to Dismiss. (Harper)
Staff Analysis:
The Commission should
dismiss Peoples’ Petition because: (1) staff does not believe the Commission
should exercise its discretion to issue a show cause order in this docket; and (2)
the alternative request for a declaratory statement does not meet the necessary
requirements for a declaratory statement.
Staff’s analysis is discussed in detail below.
Peoples’ Petition
The first
part of Peoples’ Petition asks the Commission to issue an order or orders to
show cause Leesburg and SSGC for acting as a public utility. The Petition
states that Leesburg is a Florida municipality which operates a natural gas
distribution system in a portion of Lake and Sumter Counties and is a “natural
gas utility” as defined by Section 366.04(3)(c), F.S., subject to the
Commission’s statutory jurisdiction. The Petition states that SSGC is a Florida
limited liability company formed on or about March 22, 2017, and Peoples
believes SSGC currently provides no natural gas service and has no customers.
Peoples’
Petition alleges that Leesburg and SSGC have entered in an agreement for the
construction, purchase, and sale of certain natural gas distribution facilities
for the purpose of providing natural gas service to customers located within
the service area described by the agreement. The Petition states Leesburg will
pay to SSGC each month a portion of the revenues charged to natural gas
customers within the service area (i.e., they will share the revenues from the
provision of natural gas service to the customers in the service area).
Peoples’ Petition further states that the City of Leesburg has adopted an
ordinance, Section 22-250 of the City’s Code of Ordinances, which establishes
the rates to be charged to Leesburg customers within the service area pursuant
to the agreement between Leesburg and SSGC.
Peoples
attached the agreement between SSGC and Leesburg to its Petition. Peoples’ Petition
argues that the agreement between SSGC and Leesburg is evidence that SSGC and
Leesburg are acting as a public utility. For example, Peoples cites Section
366.02(1), F.S. which defines a public utility:
… every person, corporation,
partnership, association, or other legal entity and their lessees, trustees, or
receivers supplying…gas…to or for the public within this state.
Peoples
argues that while according to the plain meaning of the statute a municipality
such as Leesburg is not a public utility, a partnership, association, or other legal
entity which supplies natural gas to the
public is a public utility under Section 366.02(1), F.S. Peoples states that
Section 366.02, F.S., does not define the terms partnership, association, other
legal entity, but Peoples submits that by the plain and reasonable reading of
those words, the agreement between SSGC and Leesburg meets that description.
Peoples’
Petition also states that the nature of the agreement is such that SSGC and
Leesburg are partnering or associating to supply gas to the public. Peoples
states that there is no purchase price or closing date in the contract, and,
unlike a typical purchase and sale agreement, this agreement contemplates a
continuing association between SSGC and Leesburg for an initial term of up to
30 years for the supply of natural gas to the public, thereby usurping or
circumventing the regulatory power of either the Commission or the Leesburg
City Commission.
The second
part of Peoples’ Petition is a request, in the alternative, for a declaratory
statement. Peoples seeks a declaratory statement from the Commission as to
which utility (Leesburg or SSGC, or a partnership, joint venture or other legal
entity created by the agreement between the two) Peoples should negotiate with
in an effort to resolve the territorial dispute in Docket No. 20180055-GU,
which is the Commission docket established to resolve the territorial dispute
between Peoples and SSGC and Leesburg. Peoples alleges that the Commission’s
determination of which utility (Leesburg or SSGC) it must work with to resolve
the dispute described in the territorial dispute docket (Docket No.
20180055-GU) will affect its substantial interests.
Peoples’
Petition states that a declaratory statement “will involve the Commission’s
determination as to whether the Agreement creates a separate entity which is a ‘public
utility’ as defined Section 366.02(1), Florida Statutes.” Peoples refers to Section
180.06, F.S., in its Petition, stating that the section lists the activities authorized
by municipalities and “private companies” such as SSGC. Peoples concludes that
it is “in doubt regarding which of SSGC, Leesburg, or another entity create by
the agreement, should have sought Peoples’ consent to the Construction of the
System, which is ongoing.”
SSGC’s
and Leesburg’s Motions to Dismiss
SSGC argues that the Commission
should decline the invitation to issue the requested show cause order. SSGC
states that the Commission has the right to initiate a show cause proceeding,
not a party. Further, SSGC argues that a show cause order would be
inappropriate because Peoples’ failed to plead sufficient facts as to a
violation of order, rule, or statute.
SSGC argues that Peoples’
alternative request for declaratory statement should be denied because the
requested declarations would require a resolution of pending, disputed issues,
which would be inconsistent with the purpose and intention of the declaratory
statement statutes and rules. SSGC also states that the declarations sought by
Peoples’ Petition are directed solely to the conduct of third persons: SSCG and
Leesburg. Further, SSGC argues that Peoples’ request for declaratory statement
is dependent on speculative and uncertain facts and events that affect the
future actions of third parties rather than Peoples’ own particular facts and
situation.
Additionally, SSGC argues that
Peoples is attempting to utilize the declaratory statement procedures to
resolve the pending litigation in its favor rather than as a means to avoid
litigation. SSGC states that the subject matter of the declaration request by
Peoples is the same subject matters at issue in Docket No. 20180055-GU and,
thus, cannot be resolved by declaratory statement.
Like SSGC, Leesburg argues that
the Peoples’ requested show cause order is unnecessary. Leesburg states that
many of Peoples’ allegations are disputed in Docket No. 2018055-GU and, thus,
should be addressed in that docket only. In addition, Leesburg argues that
Peoples’ declaratory statement petition should be dismissed because Peoples’
Petition inappropriately requests the Commission to opine on the conduct of
Leesburg and SSGC and matters that are currently pending in Docket No.
20180055-GU. Additionally, Leesburg
states that Peoples’ request for declaratory relief asks the Commission to
interpret Section 180.06, F.S., which is not applicable to the facts and should
not be considered in the analysis of the declaratory statement.
Peoples’
Response to SSGC’s and Leesburg’s Motions to Dismiss
Peoples
asserts that SSGC and Leesburg are acting as a public utility. Peoples argues
it has properly stated a cause of action in its Petition for issuance of a show
cause order. Peoples admits that the underlying facts alleged in its Petition
involve SGGC and Leesburg, but argues that it seeks Commission guidance
concerning which entity Peoples needs to resolve the dispute with and which
entity would be responsible for seeking consent from Peoples for operation of a
system under Section 180.06, F.S. Peoples also argues that while it is true
that Docket No. 20180055-GU and its Petition in this docket involves similar
matters, there is little chance for inconsistent rulings. Peoples states that
unless the Commission declares that it intends to either consolidate the two
dockets or resolve the issues raised by Peoples’ Petition in this docket, it
would be appropriate for the Commission to issue the orders to show cause and/or
a declaratory statement in this docket.
Peoples’
response to Leesburg’s Motion to Dismiss reiterates its belief that SSGC and
Leesburg are jointly selling natural gas to the public and are acting as a
public utility. Peoples also argues that an answer to its requested declaratory
statement is necessary because Leesburg’s motion highlights the need for
clarity as to the applicability of Section 180.06, F.S., which Peoples states
applies to activities involved with building a natural gas distribution
systems.
Standard
of Review for Motion to Dismiss
A motion to dismiss raises as a question of law the
sufficiency of the facts alleged in a petition to state a cause of action. Varnes
v. Dawkins, 624 So. 2d 349, 350 (Fla. 1st DCA 1993). The standard to be
applied in disposing of a motion to dismiss is whether, with all allegations in the
petition assumed to be true, the petition states a cause of action upon which
relief may be granted. Id. When
making this determination, all reasonable inferences drawn from the petition
must be made in favor of the petitioner. Id. All of the elements of a
cause of action must be properly alleged in a pleading
that seeks affirmative relief. If they are not, the pleading should be dismissed. Kislak v. Kreedian, 95 So.
2d 510 (Fla. 1957).
In determining the sufficiency of the petition, the
Commission must confine its consideration to the petition and the grounds
asserted in the motion to dismiss. Flye v. Jeffords, 106 So. 2d 229 (Fla. 1st
DCA 1958). Moreover, the Commission must construe all material facts and
allegations in the light most favorable to the petitioner in determining
whether the petition is sufficient. Matthews v. Matthews, 122 So. 2d 571 (Fla.
2d DCA 1960).
Staff’s Analysis and
Recommendation
Staff recommends that the Commission grant SSGC’s and Leesburg’s Motions to Dismiss
Peoples’ request for show cause orders. The decision to issue a show
cause order lies with the Commission, not parties.
Staff does not believe that the Commission should exercise its discretion to
issue a show cause order at this time. Docket No. 20180055-GU is in its
initial stages and discovery has not yet occurred. As the record is developed
in Docket No. 20180055-GU, staff will have the opportunity to review and
monitor the evidence and issues presented. If any matter appears to rise to the
point where a show cause order is necessary, staff will bring the matter to the
Commission for consideration.
Staff also
recommends that Peoples’ alternative Petition for Declaratory Statement be
dismissed. The purpose of a declaratory statement is
to allow a petitioner to select a proper course of action in advance to avoid costly
administrative litigation. See Chiles v. Department of State,
Division of Elections, 711 So. 2d 151, 154 (Fla. 1st DCA 1998).
Peoples filed its request for a declaratory statement after it initiated
litigation against Leesburg and SGCC in Docket No. 20180055-GU. Peoples’
Petition then asks the Commission to declare who it should litigate against,
either Leesburg or SSGC. However, it appears Peoples has already answered its
own question as to whom to litigate against. Therefore, a declaratory statement
is neither necessitated nor would it be helpful to avoid litigation.
Moreover, a declaratory statement is not an appropriate
remedy where there is related pending litigation. Couch v. Florida Dept. of
Health and Rehabilitative Services, 377 So. 2d 32 (Fla. 1st DCA 1979).
Because Peoples filed its request for a declaratory
statement after it already initiated litigation against Leesburg and SGCC
in Docket No. 20180055-GU, it is inappropriate
for the Commission to opine in a declaratory statement on the same matters.
“[T]he rule is declaratory statement proceedings are not properly filed on
issues simultaneously litigated in judicial or other administrative
proceedings.” Gopman v. Dep't of Educ.,
908 So. 2d 1118, 1123 (Fla. 1st DCA 2005).
Moreover, it is not proper for the Commission to
issue a declaratory statement determining the conduct of third persons. Rule 28-105.001, F.A.C. Peoples’ states in its
request that an order by Commission declaring who it should negotiate with
would require the Commission to declare whether SSGC and/or Leesburg are public
utilities. Thus, a declaratory statement would affect the legal obligations and
conduct of Leesburg and SSGC, in contravention of Rule
28-105.001, F.A.C.
Finally, Rule 28-105.001, F.A.C., allows a declaratory
statement as a means to resolve a controversy covering the applicability of
statutory provisions over which the agency has authority. In its Petition,
Peoples seems to ask the Commission to interpret Section 180.06, F.S., a
statute that is not enforced by the Commission. This would not be appropriate
for a declaratory statement.
Conclusion
For the
reasons set forth above, the Commission should grant SSGC’s and Leesburg’s Motions
to Dismiss Peoples’ Petition.
Issue 3:
Should this docket be closed?
Recommendation:
If the Commission approves staff’s recommendation in
Issue 1, the docket should be closed. (Harper)
Staff Analysis:
If the Commission approves staff’s recommendation in
Issue 1, a final order will be issued. Thus, the docket should be closed.
