Las Cruces v. Pub. Reg. Comm.

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This decision was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of non-precedential dispositions. Please also note that this electronic decision may contain computer-generated errors or other deviations from the official paper version filed by the Supreme Court. 1 IN THE SUPREME COURT OF THE STATE OF NEW MEXICO 2 Filing Date: _______________ 3 CITY OF LAS CRUCES, 4 Complainant-Appellant, 5 v. No. 34,339 6 NEW MEXICO PUBLIC REGULATION 7 COMMISSION, 8 Appellee, 9 and 10 MOONGATE WATER COMPANY, INC., 11 Respondent-Appellee. 12 APPEAL FROM 13 COMMISSION 14 15 16 17 18 THE Keleher & McLeod, P.A. Kurt Wihl Thomas C. Bird Anastasia S. Stevens Albuquerque, NM 19 Office of the City Attorney 20 Harry Sinclair Connelly, Jr. 21 Marcia B. Driggers NEW MEXICO PUBLIC REGULATION 1 Las Cruces, NM 2 for Appellant 3 Lisa G. Adelman 4 Michael C. Smith 5 Santa Fe, NM 6 for Appellee New Mexico Public Regulation Commission 7 8 9 10 11 Cuddy and McCarthy LLP Patricia S. Ives Patrick T. Ortiz Young-Jun Roh Santa Fe, NM 12 for Appellee Moongate Water Company, Inc. 13 14 DISPOSITIONAL ORDER OF REVERSAL {1} This direct appeal having come before the full Court, the Justices having read 15 the briefs, heard oral argument, and otherwise having fully informed themselves on 16 the issues and applicable law as raised by the parties; and 17 {2} All of the Justices having concurred that there is no reasonable likelihood that 18 a written decision or opinion would affect the disposition of this appeal or advance the 19 law of the state; 20 IT IS ADJUDGED AS FOLLOWS. 21 {3} Moongate Water Company is a public water utility with operations throughout 22 the East Mesa of Las Cruces, New Mexico. Moongate is subject to the New Mexico 2 1 Public Utility Act (the PUA), NMSA 1978, §§ 62-1-1 to -6-28 (1884, as amended 2 through 2013) and NMSA 1978, §§ 62-8-1 to -13-15 (1941, as amended through 3 2011); see § 62-13-1 (specifying the statutes under the PUA). Between July 2005 and 4 April 2007 Moongate filed three extension of service reports Line Extensions Nos. 5 9, 10, and 11 with the New Mexico Public Regulation Commission under 17.5.440 6 NMAC proposing to expand its infrastructure to deliver water to several developing 7 areas of the East Mesa. 8 {4} In May 2007, the City of Las Cruces, which operates its own municipal water 9 utility that has not elected to come under the PUA, filed a complaint with the PRC 10 against Moongate pursuant to Section 62-10-1 which authorizes the PRC to hear 11 complaints from municipalities acting in the public interest or the interest of 12 consumers. The City s complaint under Section 62-10-1 implicates the doctrine of 13 parens patriae wherein a government seeks to prosecute a lawsuit on behalf of its 14 citizens. See City of Albuquerque v. N.M. Pub. Serv. Comm n, 1993-NMSC-021, ¶ 19 15 n.8, 115 N.M. 521, 854 P.2d 348 ( Parens patriae . . . has become a concept of [the] 16 standing [of a government] to protect those quasi-sovereign interests such as . . . 17 welfare of the people. (internal quotation marks and citation omitted)). In essence, 18 the City s complaint asserted that Moongate lacked the legal authority and the 19 financial and operational capacity to undertake Line Extensions Nos. 9, 10, and 11. 20 {5} The PRC assigned the case to a hearing examiner and ordered Moongate to file 21 an answer and the PRC Utility Division Staff (Staff) to file a pleading addressing 3 1 jurisdiction and probable cause, as required by former rule 17.1.2.18 NMAC 2 (12/31/2001); see also 1.2.2.15 NMAC (replacing 17.1.2.18 NMAC on 09/01/2008). 3 In its filing, Staff argued that the PRC had subject matter jurisdiction over Moongate s 4 rates and charges, the adequacy of its service, and its service area and that Section 625 10-1 allowed municipalities to file complaints but that the PRC should dismiss all 6 claims in the complaint that challenged Moongate s authority to serve because the 7 City lacked standing insofar as it was seeking to protect the interests of its municipal 8 utility. The only part of the complaint that Staff believed the PRC did have 9 jurisdiction to hear was the claim regarding Moongate s failure to obtain approval for 10 the per-lot fees, which Staff believed was a genuine parens patriae effort by the City 11 to protect the interests of its inhabitants. 12 {6} The hearing examiner issued a recommended decision on jurisdiction and 13 probable cause stating that the City s complaint should be dismissed for lack of 14 jurisdiction because it involved a territorial dispute over which the PRC did not have 15 jurisdiction. The hearing examiner concluded, Basically, the City alleges that 16 Moongate, because it cannot provide just, reasonable and adequate service, should be 17 prevented from expanding into the new territory, thereby allowing the City to be the 18 sole provider of utility service in that area. As for the per-lot fees, the hearing 19 examiner recommended that Moongate file an application with the PRC for its 20 approval. 21 {7} Four years passed before the PRC took any action on this case in part because 4 1 the parties were actively litigating another case in the Court of Appeals and this Court. 2 See Moongate Water Co. v. City of Las Cruces, 2013-NMSC-018, ¶ 15, 302 P.3d 405 3 (holding that Moongate s certificate of public convenience and necessity does not 4 prevent the City s municipal utility from competing in the certified area). Soon after 5 this Court issued that opinion, the PRC issued its final order in this case, essentially 6 adopting the recommendations of the hearing examiner by dismissing the City s 7 complaint for lack of jurisdiction and opening a separate docket to investigate the per8 lot charges. Given the length of time that has passed since the issuance of the 9 [hearing examiner s] Recommended Decision the PRC directed Staff to investigate 10 the per-lot charges independently rather than adopting the hearing examiner s 11 recommendation to order Moongate to file an application for them. 12 {8} On direct appeal to this Court pursuant to Section 62-11-1, the City argued that 13 the PRC should not have dismissed its complaint because the PRC has jurisdiction 14 under Section 62-10-1 to hear complaints by municipalities acting as parens patriae 15 to protect residents from unreasonable service practices and rates relating to public 16 utility line extensions. We agree with the City. 17 {9} The PRC in this case manufactured a jurisdictional bar through an overly 18 expansive reading of our opinion in Moongate Water Co. To clarify, our holding in 19 Moongate Water Co. does not abrogate the PRC s jurisdiction over parens patriae 20 complaints. Municipalities including those with their own utilities that do not fall 21 under the PUA have standing under Section 62-10-1 to complain on behalf of their 5 1 citizens to the PRC. Once such a complaint is filed, the PRC must determine whether 2 there is probable cause for the complaint. Beyond this mandatory probable cause 3 determination, the PRC has discretion under Section 62-10-1 to decide how to handle 4 the case. 5 {10} Although this appeal is moot because the PRC is currently addressing the issues 6 in the City s complaint in PRC Case No. 14-00098-UT, the City has standing to 7 intervene and be heard in that matter. 8 {11} IT IS SO ORDERED. 9 10 ___________________________________ CHARLES W. DANIELS, Justice 11 12 ___________________________________ BARBARA J. VIGIL, Chief Justice 13 14 ___________________________________ PETRA JIMENEZ MAES, Justice 15 16 ___________________________________ RICHARD C. BOSSON, Justice 17 ___________________________________ 6 1 EDWARD L. CHÃ VEZ, Justice 7

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