STREETER, J.—
Here we decide whether the Public Utilities Commission (CPUC) properly awarded fees and costs to two interveners, The Utility Reform Network (TURN) and the Center for Accessible Technology (CforAT), for their work in a complex telecommunications merger review proceeding dismissed by the CPUC as moot for reasons unrelated to anything that happened in the proceeding itself.
We deny the requested writ relief, but for reasons explained below will nonetheless vacate the challenged awards without prejudice to the renewal and redetermination by the CPUC of TURN's and CforAT's requests for fees and costs.
Five years ago, AT&T sought to acquire T-Mobile USA, then a subsidiary of Deutsche Telekom, and merge the operations and infrastructure of T-Mobile USA into itself. The prospect of this combination attracted immediate and intense regulatory scrutiny nationwide.
Beginning in approximately April 2011, when the AT&T/T-Mobile merger proposal was announced, and for the next five months, the Federal Communications Commission (FCC), the United States Department of Justice, and various state regulatory agencies, undertook overlapping investigation and review proceedings to determine whether the merger would have adverse effects on competition and customer service, and if so, whether mitigation measures were warranted as a condition of regulatory approval. In California, the center of the action was the CPUC's investigatory proceeding in this case, investigation No. 11-06-009 (hereafter Docket No. I11-06-009), which commenced June 9, 2011, pursuant to an order instituting investigation (OII). Among the participants in Docket No. I11-06-009 were the petitioners here, New Cingular Wireless PCS, LLC, AT&T Mobility Wireless Operations Holdings Inc., Santa Barbara Cellular Systems, Ltd., and AT&T Mobility Wireless Operations Holdings, LLC (collectively, New Cingular), which are all entities owned directly or indirectly by AT&T.
The OII set an expedited schedule under which any and all comments from interested parties had to be submitted within 60 days. Procedurally, the CPUC sought to carry out and complete the investigation of a complex transaction having national scope within a few months, and in doing so, to build an
TURN appears to have taken a leading role in the proceeding from the beginning, starting with its successful advocacy concerning the need for an intensive review of the proposed transaction before the OII even issued.
The CPUC placed a high priority on obtaining maximum public input during the investigatory process. Thus, "[c]onsistent with the direction set forth in the OII, the assigned Commissioner and ALJ held workshops and public participation hearings throughout California during the month of July [2011], to gather information on specific issues related to the proposed merger and to hear public comment. Each workshop was facilitated by the assigned ALJ, with the assigned Commissioner and other Commissioners in attendance. Participants at each workshop included independent experts, representatives of the respondents and other market participants, and representatives of other interested groups, including unions, consumer advocates, and others. Each workshop consisted of panel presentations, and provided opportunities for parties to ask questions of panel members. Each workshop also included time during which members of the public could comment." (Decision Dismissing Investigation into Acquisition of T-Mobile by AT&T and New Cingular Wireless (Aug. 23, 2012) Cal.P.U.C. Dec. No. 12-08-025 [2012 Cal.P.U.C. Lexis 365, p. *8] (hereafter Final Decision and Order).)
A key piece of the CPUC's record-building process in Docket No. I11-06-009 was economic analysis, which is often at the core of antitrust litigation, and is something that typically requires examination of voluminous financial data. In this area, the bulk of the work was done by TURN's expert economist, Dr. Trevor Roycroft, who filed a detailed affidavit setting forth his opinions in August 2011. Before filing his affidavit, Dr. Roycroft appeared and presented his views at a public workshop on July 22, 2011. At all three workshops, speakers from TURN presented their views, arguing that the proposed merger would have serious anticompetitive effects in California. Consistent with the position it took from the beginning of the proceeding in favor of public transparency, TURN later sought to persuade the ALJ that the
Before the CPUC had occasion to prepare comments for submission to the FCC, AT&T and Deutsche Telekom unexpectedly announced the withdrawal of their proposed merger transaction (see Federal Communications Com., Order No. DA 11-1955 (Nov. 29, 2011) p. 2, at <https://apps.fcc.gov/edocs_public/attachmatch/DA-11-1955A1.pdf> [as of Apr. 19, 2016].), and in November 2011 moved to dismiss Docket No. I11-06-009 on grounds of mootness. The CPUC granted that motion on August 23, 2012 (the Final Decision and Order). The Final Decision and Order was more than a naked, unexplained dismissal. It addressed and decided a number of collateral matters, including whether to adopt all of the interim rulings that had issued in the course of the proceeding. In section 5 entitled "Affirmation of All Rulings" (boldface omitted), the CPUC explained: "All Rulings by the assigned ALJ and assigned Commissioner in the course of this proceeding, including rulings made by electronic mail, are affirmed. Rulings affirmed through this decision include the July 5, 2011, ruling requiring that AT&T provide and pay for support services for all workshops and public participation hearings held in this proceeding. In addition, this decision affirms various electronic mail rulings modifying the proceedings schedule, granting party status to [specified interveners], and addressing other procedural issues." (Final Decision and Order, supra, 2012 Cal.P.U.C. Lexis 365 at pp. *16-*17.)
The Final Decision and Order also addressed the issue of intervener compensation, explaining as follows: "The former merger proponents moved to dismiss this proceeding after approximately six months of concentrated effort to evaluate the proposed transaction, undertaken in good faith by Commission staff and parties participating in this proceeding. Given the advanced stage of the proceeding at the time the respondents abandoned the proposed transaction and requested dismissal, it is reasonable for the Commission to acknowledge the work done by parties to this proceeding, and to explicitly state that requests for intervenor compensation are appropriate." (Final Decision and Order, supra, 2012 Cal.P.U.C. LEXIS 365 at pp. *14-*15.) TURN and CforAT then moved for awards of intervener compensation, and in subsequent orders — each of which, in turn, was based on detailed findings explaining the "substantial contributions" TURN and CforAT made to specific rulings prior to dismissal — the CPUC issued the compensation awards that are now at issue (respectively, the TURN Award
New Cingular now petitions for review in this court, urging us to reverse the Final Decision and Order insofar as it finds TURN and CforAT to be eligible for intervener compensation, and to reverse outright the three orders that followed the eligibility finding — the TURN Award, the CforAT Award, and the Rehearing Decision.
Article 5 opens with a broad statement of purpose: "The purpose of this article is to provide compensation for reasonable advocate's fees, reasonable expert witness fees, and other reasonable costs to public utility customers of participation or intervention in any proceeding of the commission." (§ 1801.) There follows a more specific statement of legislative intent. "It is the intent of the Legislature that: [¶] ... [¶] (b) The provisions of this article shall be administered in a manner that encourages the effective and efficient participation of all groups that have a stake in the public utility regulation process. [¶] ... [¶] (d) Intervenors be compensated for making a substantial contribution to proceedings of the commission, as determined by the commission in its orders and decisions...." (§ 1801.3, italics added.) Next, there is a series of definitions, including the following: "(f) `Proceeding' means an application, complaint, or investigation, rulemaking, alternative dispute resolution procedures in lieu of formal proceedings as may be sponsored or
These definitional sections are followed by a series of clauses addressing eligibility for compensation. "Participation by a customer that materially supplements, complements, or contributes to the presentation of another party, including the commission staff, may be fully eligible for compensation if the participation makes a substantial contribution to a commission order or decision, consistent with Section 1801.3." (§ 1802.5, italics added.) The core eligibility criteria — and the focal point of the dispute in this case — are twofold. "The commission shall award reasonable advocate's fees, reasonable expert witness fees, and other reasonable costs of preparation for and participation in a hearing or proceeding to any customer who ... satisfies both of the following requirements: [¶] (a) The customer's presentation makes a substantial contribution to the adoption, in whole or in part, of the commission's order or decision. [¶] (b) Participation or intervention without an award of fees or costs imposes a significant financial hardship." (§ 1803, italics added.)
Finally, Article 5 concludes with a series of clauses that set out preconditions to eligibility, mostly procedural in nature, including the following: "(c) Following issuance of a final order or decision by the commission in the hearing or proceeding, a customer who has been found ... to be eligible for an award of compensation may file within 60 days a request for an award. The request shall include at a minimum a detailed description of services and expenditures and a description of the customer's substantial contribution to the hearing or proceeding.... [¶] ... [¶] (e) Within 75 days after the filing of a request for compensation pursuant to subdivision (c), ... the commission shall issue a decision that determines whether or not the customer has made a substantial contribution to the final order or decision in the hearing or proceeding." (§ 1804, subds. (c) & (e), italics added.)
On its face, the above language yields no definitive answer to the statutory construction question presented here. That question turns on the meaning of the phrase "order or decision," which appears in sections 1802, subdivision (i), 1802.5, 1803, subdivision (a) and 1804, subdivisions (c) and (e). The context surrounding the use of "order or decision" in each of these clauses sheds no particular light on the meaning of the phrase. Semantically, the
New Cingular's position runs contrary to the statutory language contemplating that even a "procedural recommendation[]" (§ 1802, subd. (i)) if adopted by the CPUC in a "final order or decision" (§ 1804, subd. (c)) will justify an award of compensation. Here, section 5 of the Final Decision and Order affirms all interim decisions of the ALJ and assigned commissioner. Some of the procedural positions taken by TURN are reflected in formal interim rulings, and some others, although not memorialized in any written order,
The model for Article 5 was a set of regulations adopted by the CPUC in 1980 pursuant to a federal statute, the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 United States Code section 2601 et seq. Section 122 of PURPA allows interveners in electric utility regulatory proceedings to bring an action for reimbursement of their participation costs in state court for having "substantially contributed" to those proceedings. (16 U.S.C. § 2632(a)(1); see 16 U.S.C. § 2632(a)(2).) But resort to state court is not required under PURPA if the state regulatory authority has a "reasonable procedure" for awarding compensation on the same basis. (16 U.S.C. § 2632(a)(2).) To establish such a procedure, on June 27, 1980, the CPUC promulgated regulations permitting interveners to request compensation in regulatory proceedings contemplated by PURPA. (See Cal. Code Regs., tit. 20, art. 18.5, former §§ 76.01-76.11 (rules 76.01-76.11) & history foll. § 76.01, p. 22.2 (hereafter PURPA Regulations).) Under rule 76.06 of the PURPA Regulations, the basic test for entitlement to an award, a test which in turn comes from section 122, subdivision (a) of PURPA (16 U.S.C. § 2632(a)), authorized awards of compensation to any participating "consumer" in a covered electrical utility proceeding who "substantially contributed to the adoption, in whole or in part, in a Commission order or decision, of a PURPA position advocated by such consumer related to a PURPA standard." (PURPA Regulations, rule 76.06.)
From the beginning, the CPUC took the view that because it could not anticipate the procedural nuances of every situation that might arise in the application of the "substantial contribution" test, it would have to flesh out the meaning of that concept over time, using its discretion. In its order adopting the PURPA Regulations, the CPUC noted that, since Congress intended the term "substantially contributed" to be broadly construed under PURPA (Utah State Coalition of Senior Citizens v. Utah Power & Light Co. (Utah 1989) 776 P.2d 632, 638; H.R.Rep. No. 95-1750, 2d Sess. (1978),
Outside of the context of electric utilities regulation proceedings covered by the PURPA Regulations, the CPUC initially viewed its authority to award interveners compensation for participating in its proceedings as quite limited. In Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891 [160 Cal.Rptr. 124, 603 P.2d 41] (CLAM), the California Supreme Court adopted that view as well, at the CPUC's urging. In CLAM, two consumer advocates sought compensation for their participation in CPUC proceedings. The first of these parties, Consumers Lobby Against Monopolies (CLAM), filed a reparations complaint with the CPUC alleging that Pacific Telephone and Telegraph (Pacific) was failing to collect equipment disconnection charges from commercial customers. Following a settlement in which Pacific agreed to pay $400,000 into a CPUC-approved fund for public benefit, CLAM sought reimbursement for the time and expenses it spent pursuing the matter. (Id. at pp. 897-898.) In a separate proceeding, the second consumer advocate group, TURN,
In consolidated writ proceedings, the Supreme Court reversed in part. (CLAM, supra, 25 Cal.3d at pp. 915-916.) Drawing a distinction between quasi-judicial proceedings, such as the complaint proceedings in which CLAM had been involved, and quasi-legislative proceedings, such as the rate-setting proceedings in which TURN had been involved, the court ruled that the CPUC had authority to award compensation to CLAM, but not to TURN. (Id. at p. 913.) In quasi-adjudicatory proceedings, the court explained, the CPUC has equitable powers analogous to those of a judicial tribunal, and thus a fee award was justified under the "common fund" doctrine where a litigant confers a significant benefit on others. (Id. at pp. 905-908.) But with respect to TURN, the "[c]onsiderations ... militat[ing] in favor of recognizing equitable jurisdiction to award attorney fees in reparation cases ... do not apply...." (Id. at p. 909.) Echoing concerns that the CPUC itself raised, the court held that because of the complexity of the issues in rate-setting cases, the task of evaluating and separately valuing the contributions of the many parties involved was impracticable. (Id. at pp. 909-910.) The petitioners attempted to argue that section 701, a broad and expansive grant of CPUC regulatory authority, may be read to confer blanket authority to award intervener compensation, but the court was unpersuaded. (25 Cal.3d at pp. 910-911.) "The decision to include such `public participation costs' in rate-making proceedings is ... appropriately within the province of the Legislature," the court said. (Id. at pp. 911-912.)
Following the decision in CLAM, the CPUC shifted course and began to take a broader view of its authority to grant intervener compensation in ratemaking proceedings. In May 1983, it promulgated a new set of regulations, providing for the award of public participation costs to eligible interveners in virtually all formal CPUC proceedings, including rate-setting proceedings. (Cal. Code Regs., tit 20, art. 18.6, former §§ 76.21-76.32 (rules 76.21-76.32) & history foll. § 76.21 (the OII 100 Regulations).) In a reversal of the position it took in CLAM — where it argued that it did not have authority to award intervener compensation under section 701 (CLAM, supra, 25 Cal.3d at pp. 897, 906) — the CPUC cited section 1701, the basic grant of
In the OII 100 Regulations, the CPUC formally codified the idea — announced in 1980 in its Order Establishing PURPA Regulations — that it would use its discretionary judgment to establish the contours of what constitutes a "substantial contribution," which it defined as "that contribution which, in the judgment of the Commission, greatly assists the Commission to promote a public purpose in a matter relating to an issue by the adoption, at least in part, of the participant's position. A showing of substantial contribution shall include, but need not be limited to, a demonstration that the Commission's order or decision has adopted factual contention(s), legal contention(s), and/or specific recommendation(s) presented by the participant." (OII 100 Regulations, rule 76.26, italics added.)
The OII 100 Regulations drew an immediate challenge from a group of utilities in Southern Cal. Gas Co. v. Public Utilities Com. (1985) 38 Cal.3d 64 [211 Cal.Rptr. 99, 695 P.2d 186] (Southern California Gas) on the ground that the CPUC's assertion of regulatory authority to provide for intervener compensation was directly contrary to the Supreme Court's decision in CLAM. But while Southern California Gas was pending in the Supreme Court, the Legislature enacted Article 5, passing it in the form of Senate Bill No. 4 (1981-1982 Reg. Sess.), which was signed by Governor Deukmejian on July 5, 1984. (Stats. 1984, ch. 297, § 2, pp. 1526-1529.)
Although the open-ended framing of the "substantial contribution" definition in rule 76.26 (a "showing of substantial contribution shall include, but need not be limited to ...") (OII 100 Regulations, rule 76.26) was in some respects more expansive than the definitional language ultimately adopted by statute in Article 5, there is no indication in the legislative history that the definition of "substantial contribution" was intended to be different, in substance, from that used in rule 76.26. Indeed, in other respects the definitional language adopted by statute was slightly broader than that used in rule 76.26.
Responding to a report of the California Auditor General entitled "The California Public Utilities Commission Can Improve Aspects of its Program to Compensate Intervenors" (1992) (the State Auditor's Report),
The 1992 Amendments, especially when taken together with the broader history of Article 5, appear to be inconsistent with New Cingular's core position in this case, resting, as it does, on the premise that there can be no "substantial contribution" to an "order or decision" of the CPUC without a merits determination. The heart of New Cingular's argument, drawn from the statutory structure, is that Article 5 unfolds in a logical progression, becoming increasingly specific, from generalized statements of purpose in section 1801.3, to more specific language in section 1802, subdivision (i), to even more specific language in section 1804, subdivisions (c) and (e), where the references to "final order or decision" appear (§ 1804, subd. (c), italics added). But that mode of interpretation begs the ultimate question here, since it tells us little about whether an "order or decision" must be on the merits. It also assumes the Legislature intended Article 5 to be a complete expression of every circumstance in which intervener compensation could be awarded, leaving for the CPUC only a narrow ministerial role in applying the statutory language. The legislative history suggests otherwise, showing that, from the beginning, when Article 5 was enacted in 1984, the Legislature contemplated a significant role for the CPUC in defining the scope and meaning of the
We now turn to the scope of our own review of the agency decisions at issue in this writ proceeding, focusing particularly on how much deference we should give to the CPUC's interpretation of its power to award intervener compensation, as conferred upon it in Article 5. Having satisfied ourselves that the TURN Award and the CforAT Award are based on a reasonable construction of Article 5, the CPUC contends our task is complete. According to the CPUC, the applicable standard of review is so narrow that we should simply defer to its decisionmaking, without further inquiry, denying the writ and leaving these awards undisturbed. Considerable deference is warranted, we agree, but in our view, the applicable standard of review calls for a more searching inquiry than the CPUC would have us apply, one that ultimately leads us to reject the CPUC's stated reasons for issuing the awards at issue here, while deferring to its overall conclusion that TURN and CforAT are eligible for compensation.
"[T]he [C]PUC is not an ordinary administrative agency, but a constitutional body with broad legislative and judicial powers." (Wise v. Pacific Gas & Electric Co. (1999) 77 Cal.App.4th 287, 300 [91 Cal.Rptr.2d 479].) On judicial review, the CPUC's decisions historically have been generally presumed valid, not to be disturbed absent a manifest abuse of discretion or unreasonable interpretation of the relevant statute, particularly on matters of procedure. (See Greyhound Lines, Inc. v. Public Utilities Com. (1968) 68 Cal.2d 406, 410-411 [67 Cal.Rptr. 97, 438 P.2d 801] (Greyhound); Southern Cal. Edison Co. v. Public Utilities Com. (2000) 85 Cal.App.4th 1086, 1096-1097 [102 Cal.Rptr.2d 684].) "[W]hen no constitutional issue is presented, a [C]PUC decision has the same standing as a judgment of the superior court: it is presumed correct, and any party challenging the decision has the burden of proving that it suffers from prejudicial error." (Pacific Gas & Electric Co. v. Public Utilities Com. (2015) 237 Cal.App.4th 812, 838 [188 Cal.Rptr.3d 374]; see generally City and County of San Francisco v. Public Utilities Com. (1985) 39 Cal.3d 523, 530 [217 Cal.Rptr. 43, 703 P.2d 381]; Southern California Edison Co. v. Public Utilities Com. (2014) 227 Cal.App.4th 172, 185 [173 Cal.Rptr.3d 120].) "Indeed, our Supreme Court has repeatedly called the presumption in favor of the Commission's decision a `strong' one. (Greyhound[, supra, at p. 410] [`There is a strong presumption [in favor] of [the] validity of the commission's decisions....']; Pacific Tel. &
But the call for deference to agency decisionmaking is not uniformly compelling in all circumstances. The final word on questions of statutory interpretation always rests with the judiciary. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7, 11 [78 Cal.Rptr.2d 1, 960 P.2d 1031] (Yamaha).) The rationale for deference is strongest when the challenged action by the agency results from a rulemaking decision within the authority delegated to the agency (id. at pp. 11-12), where the agency interprets one of its own regulations (Pacific Gas & Electric Co. v. Public Utilities Com., supra, 237 Cal.App.4th at p. 840; Utility Consumers' Action Network v. Public Utilities Com. (2010) 187 Cal.App.4th 688, 697-698 [114 Cal.Rptr.3d 475]), or where the agency engages in factfinding based on conflicting evidence (Pacific Gas & Electric Co. v. Public Utilities Com., supra, at pp. 838-839). One basis for challenging a CPUC decision is that the CPUC acted "without, or in excess of, its powers or jurisdiction." (§§ 1757, subd. (a)(1), 1757.1, subd. (a)(3).) Where the statute subject to interpretation is one that defines the very scope of the CPUC's jurisdiction, Greyhound deference is not appropriate. (San Pablo Bay Pipeline Co., LLC v. Public Utilities Com. (2015) 243 Cal.App.4th 295, 310 [196 Cal.Rptr.3d 609]; PG&E Corp. v. Public Utilities Com. (2004) 118 Cal.App.4th 1174, 1194 [13 Cal.Rptr.3d 630].) And the CPUC may not exercise its jurisdiction in a manner inconsistent with other express provisions of the Public Utilities Code. (PG&E Corp. v. Public Utilities Com., supra, 118 Cal.App.4th at pp. 1198-1199; see Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 299-300 [105 Cal.Rptr.2d 636, 20 P.3d 533].)
Citing Greyhound and its progeny, the CPUC urges us to recognize the "`strong presumption'" that Greyhound sets up in its favor. Under the Greyhound test, the CPUC argues, "the [C]ommission's interpretation of the Public Utilities Code should not be disturbed unless it fails to bear a reasonable relation to statutory purposes and language." (Greyhound, supra, 68 Cal.2d at pp. 410-411.) New Cingular, on the other hand, takes the position that the CPUC has acted in excess of its authority and argues that we have an independent obligation to construe the statutory language under Yamaha, supra, 19 Cal.4th at page 11. We conclude New Cingular has the better of the argument on this point. Because we are reviewing the CPUC's interpretation of a statute that defines the reach of its power to enter the awards under review, Yamaha, not Greyhound, governs the applicable standard of review. It is not enough for the CPUC simply to demonstrate that its proffered interpretation bears a reasonable relation to the language and
Conceptually, the Yamaha framework rests on "two classes of [administrative] rules — quasi-legislative and interpretive...." (Yamaha, supra, 19 Cal.4th at p. 10.) "[B]ecause of their differing legal sources," the rules in these two categories "command significantly different degrees of deference by the courts." (Ibid.) "One kind — quasi-legislative rules — represents an authentic form of substantive lawmaking: Within its jurisdiction, the agency has been delegated the Legislature's lawmaking power. [Citations.] Because agencies granted such substantive rulemaking power are truly `making law,' their quasi-legislative rules have the dignity of statutes. When a court assesses the validity of such rules, the scope of its review is narrow. If satisfied that the rule in question lay within the lawmaking authority delegated by the Legislature, and that it is reasonably necessary to implement the purpose of the statute, judicial review is at an end." (Id. at pp. 10-11.)
Barely a year after Yamaha was decided, the California Supreme Court unanimously adopted Justice Mosk's clarifying qualification, explaining that because the Yamaha framework is a "continuum," some agency decisions will be hybrid in nature, having "both quasi-legislative and interpretive characteristics, as when an administrative agency exercises a legislatively delegated power to interpret key statutory terms" (Ramirez, supra, 20 Cal.4th at p. 799, italics added), allowing it to "`fill up the details' of a statutory scheme" (ibid.). Without resolving what standard of review applies to agency decisions of this kind, Ramirez analyzed the decision under review there — a wage order issued by the California Industrial Welfare Commission, defining a statutory term in section 1171 of the Labor Code — as a hybrid decision, testing it under the standards applicable to both quasi-legislative and interpretive
Whether a unitary standard of review applies to agency action with characteristics of both quasi-legislative and interpretive decisionmaking, and if so, what that standard is, has not yet been settled by the California Supreme Court. (See Western States Petroleum Assn. v. Board of Equalization (2013) 57 Cal.4th 401, 436 [159 Cal.Rptr.3d 702, 304 P.3d 188] (conc. & dis. opn. of Kennard, J.) ["This court has not resolved what standard of review applies to such hybrid cases." (original italics)].) But in the meantime, the Courts of Appeal have used the same two-track approach that the Supreme Court used in Ramirez, analyzing such decisions under the standards of review applicable to both. (See Diageo-Guinness USA, Inc. v. Board. of Equalization (2012) 205 Cal.App.4th 907, 917-922 ]140 Cal.Rptr.3d 358] [regulations adopted by the Board of Equalization defining the statutory term "distilled spirits" found to be both quasi-legislative and interpretive; regulation invalidated]; Megrabian v. Saenz (2005) 130 Cal.App.4th 468, 477-487 [30 Cal.Rptr.3d 262] [benefits eligibility decision by the State Department of Social Services, embodied in its manual of policies and procedures, found to be both quasi-legislative and interpretive; agency decision upheld].) In this case, the first step of the Ramirez test is easily satisfied, since the interpretive position the CPUC has taken is broadly within the scope of authority conferred upon it by Article 5, as recognized in Southern California Gas, and bears a reasonable relation to the purposes of Article 5. The question remains, however, what weight the CPUC's decision in this case should be given, applying Yamaha with Ramirez in mind.
Applying Yamaha's "situational" factors on this record, three factors — agency expertise, longevity of the CPUC's interpretive position, and the contemporaneousness of that position with enactment — appear to be most important, and they all cut in favor of giving deference to CPUC's interpretation. First, it seems undeniable that the CPUC has considerable expertise relevant to its interpretation of Article 5, since the origin of the "substantial contribution" test goes back to a set of regulations that the CPUC itself adopted in 1980, and since the CPUC has decades of accumulated practical experience applying iterations of that test. It also seems clear that when the Legislature enacted Article 5, and then amended it significantly in 1992, it
Second and third, the interpretive position taken by the CPUC in this case — at least in its outcome, putting aside for now its reasoning — is one of long standing, so long standing, in fact, that it dates all the way back to Article 5's enactment, and before. For context here in particular, the statutory history must be kept in mind. Left unaddressed explicitly in Article 5, even as amended in 1992, was a question brought into sharp focus by the broadened definition of "proceeding" in section 1802, subdivision (f) as revised: What happens with fee eligibility when an intervener participates extensively in proceedings such as workshops, mediations, settlement conferences or any other of the many forms of informal proceedings (coming into use in the early 1990s more and more often, as Assemblywoman Moore pointed out) in which no one wins on the merits in the conventional sense? Clearly, the Legislature contemplated that there would be fee eligibility in such proceedings, for that was why Assembly Bill 1975 expressly included nontraditional types of proceedings in the definition of "proceeding." But other than that, nothing in the amended language of Article 5 speaks to the issue directly. And while there is no explicit answer to this question in the revised language of Article 5, by 1992 the Legislature was acting against a backdrop in which there was already a clear answer.
The CPUC first answered the question in November 1981 in The Environmental Defense Fund Requests Compensation for Its Participation in SoCal Edison Co.'s Application for a Certificate for the Harry Allen/Warner Valley Energy System (1981) 7 Cal.P.U.C.2d 75 (Allen/Warner), the very case that led the CPUC to promulgate the OII 100 Regulations. In Allen/Warner, Pacific Gas and Electric, Southern California Edison and several other utilities sought a certificate of public convenience and necessity to operate a coal-fired power plant. The Environmental Defense Fund (EDF) participated extensively in these certificate proceedings as an intervener, but ultimately there was no decision on the merits because the certificate application was abruptly withdrawn by the utility proponents on the eve of the hearing. (Allen/Warner, supra, 7 Cal.P.U.C.2d at pp. 78-79.) Acknowledging that strict application of the "substantial contribution" test required a showing that it had "adopted" some "factual contention(s), legal contention(s), and/or specific recommendation(s)" of EDF in an "order or decision," the CPUC decided that an "exception" was warranted for the "unique circumstances" of an unexpected, abrupt dismissal. (Allen/Warner, supra, 7 Cal.P.U.C.2d at pp. 103, 95.) This exception — explained in Allen/Warner as a discretionary rule, applicable as a matter of equity — was ultimately codified in rule 76.26 of the OII 100 Regulations, which provided that "In proceedings where some or all of the relief sought by a participant is obtained without a Commission order or decision, the participant may be entitled to compensation by clearly
Since Allen/Warner was decided in 1981, the CPUC has invoked its discretion to award intervener compensation many times in cases resolved without a decision on the merits, in a wide variety of settings.
MCI was a case much like this one, where the impact the interveners had in an aborted merger review proceeding was reflected in a series of procedural victories. In finding that the interveners had established that they made a "substantial contribution" despite the withdrawal of the proposed merger and the dismissal of the proceeding on mootness grounds, the CPUC explained: "A party may make a substantial contribution to a decision in a number of ways. It may offer a factual or legal contention upon which the Commission relies in making a decision, or it may advance a specific policy or procedural recommendation that the ALJ or the Commission adopts. A substantial contribution includes evidence or argument that supports part of the decision even if the Commission does not adopt the party's position in total. The Commission has provided compensation even when the position [on the merits] advanced by the intervenor is rejected." (MCI, supra, 2002 Cal.P.U.C. Lexis 438, at p. *12, citing Cal.P.U.C. Dec. No. 89-03-96, fns. omitted.)
The Department of Insurance administers a statutory intervener compensation program under a statutory scheme analogous to Article 5, and in turning back a challenge to an interpretation of that scheme by the Department of Insurance — a challenge strikingly similar to the one mounted in this case — the Court of Appeal recognized the Insurance Commissioner's delegated "gap-filling" power. That case, Association of California Ins. Cos. v. Poizner (2009) 180 Cal.App.4th 1029 [103 Cal.Rptr.3d 458] (Poizner), involved section 1861.10 of the Insurance Code, which, like Article 5, allows awards of compensation to interveners who make a "substantial contribution" to "the adoption of any order, regulation or decision" in covered regulatory proceedings. (Ins. Code, § 1861.10, subd. (b).) The Insurance Commissioner issued regulations permitting awards of compensation in proceedings resolved by settlement "where there is no hearing on the merits." The Court of Appeal rejected an argument from a group of insurers that these regulations exceeded the Insurance Commissioner's statutory authority. "[N]ot all details of the administrative rate review process are `established' by the statutes," the Court of Appeal explained. (Poizner, supra, at p. 1048.) "Many procedures and details were necessarily left to regulations and rules to be promulgated by the Commissioner." (Id. at p. 1049.) "[T]he absence of specific statutory provisions... relating to the resolution of a rate application without a public hearing, as, for example, by way of a settlement, does not mean that regulations permitting such resolution exceed statutory authority, but only that the electorate deferred to and relied upon the expertise of the Commissioner as to such matters." (Id. at p. 1053.) We reach the same conclusion as to Article 5 and the CPUC's role in implementing it.
The CPUC appears to agree with this reading of Article 5 — certainly its extensive history of administrative decisionmaking in non-merits intervener compensation cases, at least prior to this case, suggests it is in agreement — but we cannot be sure, for the reasoning it employed here pays insufficient heed to the statutory text. Rather than anchor its rationale in its own factual findings and show how those findings fit into the statutory language, the Rehearing Decision identifies a "conflict" between section 1801.3, subdivision (b) (the Legislature's directive that the CPUC administer Art. 5 to promote wide participation in its regulatory proceedings by all stakeholders) and section 1802, subdivision (i) (the definition of "substantial contribution") and then announces that, to avoid "absurd consequences," New Cingular's
"Since `an agency's order must be upheld, if at all, "on the same basis articulated in the order by the agency itself "'" (Pacific Gas & Electric Co. v. Public Utilities Com. (2000) 85 Cal.App.4th 86, 96 [102 Cal.Rptr.2d 20]; see Securities and Exchange Comm'n v. Chenery Corp. (1947) 332 U.S. 194, 196 [91 L.Ed. 1995, 67 S.Ct. 1575]), we will set aside the challenged awards in this case, without prejudice to reinstatement after further consideration by the CPUC in view of this opinion. At oral argument, New Cingular's counsel suggested that, if the only basis to award compensation here was for work done on minor matters such as obtaining extensions of time to file pleadings, the amounts awarded could never have been justified and should have been far less. We express no view on that issue, except to note that, because of the breadth of the legal rationale the CPUC relied upon to justify its exercise of discretion, we cannot tell whether the CPUC considered whether the amounts
We decline to adopt the interpretation of Article 5 proffered by New Cingular in this case. For many decades, the CPUC has taken the position it has discretion to award intervener compensation in proceedings that end without a decision on the merits, and the awards to TURN and CforAT here are consistent with that long-standing position. More importantly, however, the awards are consistent with the text of Article 5 and with our reading of legislative intent. Indeed, we find abundant evidence in the history and prehistory of Article 5 showing that this particular statutory scheme has been built, in effect, on a shared enterprise between the Legislature and the CPUC, with the CPUC having delegated authority under section 1801.3, subdivision (b), to flesh out lacunae in the statutory language, incrementally, when called upon to do so in the course of implementing the overall statutory scheme. Denying the CPUC the role envisioned for it in this enterprise would do just as much violence to the integrity of Article 5 as misapplying its plain terms. Still, despite what appears to be ample support in the record for the compensation awards to TURN and CforAT, we cannot accept the legal rationale relied upon by the CPUC in the orders under review, and thus we will vacate the TURN Award, the CforAT Award, and the Rehearing Decision without prejudice to renewal of requests for fees and costs by those interveners, and redetermination of awards to them consistent with this opinion.
The TURN Award and the CforAT Award are vacated, as is the Rehearing Decision, without prejudice to reinstatement of the awards, in the same or different amounts, on grounds consistent with this opinion. Except as so ordered, New Cingular's petition for a writ of review is denied. The parties shall bear their own costs.
Ruvolo, P. J., and Rivera, J., concurred.