DiFranco v. FirstEnergy Corp. , 134 Ohio St. 3d 144 ( 2012 )


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  • [Cite as DiFranco v. FirstEnergy Corp., 
    134 Ohio St. 3d 144
    , 2012-Ohio-5445.]
    DIFRANCO ET AL., APPELLEES, v. FIRSTENERGY CORPORATION ET AL.,
    APPELLANTS.
    [Cite as DiFranco v. FirstEnergy Corp., 
    134 Ohio St. 3d 144
    , 2012-Ohio-5445.]
    Public Utilities Commission—Exclusive jurisdiction over rate-related matters—
    Common pleas court lacks jurisdiction over claim of fraud in terminating
    discount for all-electric residential customers.
    (No. 2011-2025—Submitted September 26, 2012—Decided November 28, 2012.)
    APPEAL from the Court of Appeals for Geauga County,
    No. 2010-G-2990, 2011-Ohio-5434.
    __________________
    MCGEE BROWN, J.
    SUMMARY
    {¶ 1} The Cleveland Electric Illuminating Company (“CEI”) and Ohio
    Edison Company, appellants, are public utilities under R.C. 4905.02 that supply
    electricity throughout northeast Ohio, including Geauga County. CEI and Ohio
    Edison (collectively, the “companies”) are wholly owned subsidiaries of appellant
    FirstEnergy Corporation, which is not a public utility.                      The appellees are
    residential customers of CEI and Ohio Edison.
    {¶ 2} The customers filed a class-action complaint against FirstEnergy and
    the companies in the Geauga County Court of Common Pleas.1 The complaint
    raised four causes of action: (1) declaratory judgment, (2) breach of contract, (3)
    fraud, and (4) injunctive relief.            The customers alleged that the companies
    promised to charge them a discounted rate for electricity if they purchased all-
    electric homes or equipped their homes with electrical heating systems and
    1. The customers also requested class-action status. That issue is not before the court.
    SUPREME COURT OF OHIO
    appliances. The customers further alleged that the companies guaranteed the
    discounted rate for as long as the customers maintained their all-electric status.
    The customers contend that the companies unilaterally terminated the discount
    rates in May 2009 and that they now pay a higher rate for electricity.
    {¶ 3} The sole issue before this court is whether the customers properly
    filed their fraud claim in the common pleas court or whether that claim should
    have been filed with the Public Utilities Commission of Ohio (the “commission”
    or “PUCO”). For the reasons that follow, we find that the commission has
    exclusive jurisdiction over the allegations of fraud set forth in the complaint.
    BACKGROUND
    {¶ 4} In 1974, the companies implemented commission-approved special
    discount rates for certain of their customers. Residential customers who used
    electricity as their main source of energy were charged rates lower than those paid
    by the companies’ standard-service residential customers. The companies’ all-
    electric rate schedules used a “declining block rate structure,” a rate design that
    encouraged customers to use more electricity because the customer’s rate declined
    with greater energy usage.      See In re Application of Ohio Edison et al. for
    Approval of a New Rider & Revision of an Existing Rider, Pub. Util. Comm. No.
    10-176-EL-ATA, at 2 (May 25, 2011).
    {¶ 5} In 2006, the commission approved FirstEnergy’s rate-certainty plan.
    The approved plan included a provision that certain all-electric rate discounts
    would no longer be available to new customers or new premises beginning in
    January 2007. Existing all-electric customers were, however, allowed to continue
    to receive discounted rates.       The commission stated that the purpose of
    discontinuing the all-electric rate schedules for new customers and premises was
    to promote energy conservation by eliminating rate discounts to customers who
    use large amounts of electricity. In re FirstEnergy, Pub. Util. Comm. No. 05-
    1125-EL-ATA, Rehearing Entry, at 7–9 (Mar. 1, 2006).
    2
    January Term, 2012
    {¶ 6} In January 2009, the commission issued an order in FirstEnergy’s
    most recent distribution rate case. In re FirstEnergy, Pub. Util. Comm. No. 07-
    551-EL-AIR (Jan. 21, 2009). At that time, CEI had 12 residential distribution rate
    schedules and Ohio Edison had 7. The commission approved the consolidation of
    these different rate schedules into one residential distribution rate for each
    company. 
    Id. at 23-24.
    The consolidation, however, harmed some all-electric
    customers because it removed the substantial discounts they were receiving on
    their winter heating rates. To mitigate the rate increase, the commission approved
    a rate credit (Rider RDC) for these customers. 
    Id. {¶ 7}
    In March 2009, the commission issued its second order in
    FirstEnergy’s first electric-security-plan case.     In re FirstEnergy, Pub. Util.
    Comm. No. 08-935-EL-SSO (Mar. 25, 2009). In order to create a generation rate
    structure similar to the consolidated distribution rate structure approved in
    January, the commission consolidated the companies’ various residential
    generation rate schedules into a single generation rate schedule for each company.
    Like the consolidation of the distribution rate schedules, this consolidation
    increased the rate for a number of customers receiving discounted service under
    the all-electric residential rate schedules. The commission therefore approved
    another residential rate credit (Rider EDR) to mitigate the effect. 
    Id. at 9-10;
    No.
    10-176-EL-ATA, at 3.
    {¶ 8} In addition, in FirstEnergy’s second electric-security-plan case, the
    commission ordered that Rider EDR be extended until May 31, 2014. In re
    FirstEnergy, Pub. Util. Comm. No. 10-388-EL-SSO (Aug. 25, 2010); No. 10-176-
    EL-ATA, at 3. In sum, the distribution and generation credit riders amounted to a
    total rate discount of approximately 3.6 cents per kilowatt hour. 
    Id. at 4.
           {¶ 9} Despite these discounts, there was substantial public concern during
    the 2009-2010 winter heating season regarding the bills of all-electric residential
    customers. In order to provide rate relief to residential customers who were
    3
    SUPREME COURT OF OHIO
    harmed by the rate-schedule consolidations, FirstEnergy filed an application with
    the commission on February 12, 2010, to revise its current tariffs. 
    Id. {¶ 10}
    Four days later, on February 16, 2010, the customers filed the
    underlying complaint against FirstEnergy and the companies in the common pleas
    court. The customers alleged that the companies had offered to charge them a
    discounted rate for electricity if they purchased all-electric homes or equipped
    their homes with electrical heating systems and appliances. According to the
    customers, the companies guaranteed that the discounted rate would not end as
    long as they maintained their all-electric status, even if the companies removed
    the rate from their tariff schedules on file at the PUCO.           The customers
    maintained that they relied on the promised discount and purchased all-electric
    homes or electrical heating systems and appliances instead of those powered by
    natural gas or other sources of energy. The customers contend that despite the
    guaranteed discount, the companies eliminated the discount rate in May 2009, and
    the customers are now paying a higher rate (four cents or more per kilowatt hour)
    for electricity.
    {¶ 11} The complaint raised four causes of action: (1) declaratory
    judgment, based on an alleged contractual obligation by the companies to
    permanently provide the discounted rates, (2) breach of contract, based on the
    companies’ termination of the discounted rates, (3) fraud, for inducing customers
    to purchase all-electric homes, electrical heating systems, and appliances by
    falsely representing that reduced rates would be permanent, and (4) injunctive
    relief, based on the contract and fraud claims, to enjoin the companies from
    charging customers more than the discounted rate.
    {¶ 12} On March 3, 2010, the commission issued an order in No. 10-176-
    EL-ATA approving FirstEnergy’s application with modifications. As it relates to
    this appeal, the order provided interim rate relief for the companies’ all-electric
    customers until the commission could determine the best long-term solution to the
    4
    January Term, 2012
    electricity rate increase brought about by the commission’s orders in
    FirstEnergy’s distribution and electric-security-plan cases.      Specifically, the
    commission ordered FirstEnergy to file tariffs for all-electric residential
    customers that would return their electric rates to December 31, 2008 levels. 
    Id. at 3.
      FirstEnergy filed Rider RGC—which provides another rate credit to
    electric-heating customers in addition to Riders RDC and EDR—to comply with
    the commission’s directive.
    {¶ 13} On March 18, 2010, FirstEnergy filed a motion to dismiss the
    customers’ complaint in the common pleas court under Civ.R. 12(B)(1). The
    motion asserted that the common pleas court lacked subject-matter jurisdiction
    over the claims. On September 7, 2010, the trial court granted the motion, finding
    that the PUCO has exclusive jurisdiction over the allegations in the complaint.
    {¶ 14} The customers appealed the trial court’s order on September 29,
    2010. While the case was pending before the court of appeals, the commission
    issued a decision in No. 10-176-EL-ATA that addressed the appropriate long-term
    rates to be charged to all-electric residential customers of FirstEnergy.         The
    commission ordered that Rider RGC—which provided a credit for electric-
    heating customers to return their rates to 2008 levels—would be frozen for two
    years and then phased out over the following six years. The commission also
    ordered that the rate credits being provided to FirstEnergy’s electric-heating
    customers through Riders RDC and EDR would remain unchanged. See Pub.
    Util. Comm. No. 10-176-EL-ATA, at 8, 20 (May 25, 2011).
    {¶ 15} On October 21, 2011, the court of appeals affirmed the dismissal of
    the customers’ claims for declaratory judgment, breach of contract, and injunctive
    relief. The court of appeals found that each of these claims stemmed from the
    companies’ alleged breach of promise to charge a discounted rate and that
    challenges to rates and rate-related matters are within the exclusive purview of the
    PUCO. 2011-Ohio-5434, 
    969 N.E.2d 1241
    , ¶ 54-56.
    5
    SUPREME COURT OF OHIO
    {¶ 16} The appellate court, however, reversed the trial court’s decision
    that the PUCO had jurisdiction over the customers’ fraud claim. The court of
    appeals first determined that the trial court had jurisdiction because fraud is a civil
    action that existed at common law in Ohio. 
    Id. at ¶
    55, citing Milligan v. Ohio
    Bell Tel. Co., 
    56 Ohio St. 2d 191
    , 195, 
    383 N.E.2d 575
    (1978). The court also
    determined that the PUCO’s expertise was not necessary to resolve the fraud
    claim and that the act complained of was not a practice normally authorized by
    the utility. 
    Id. at ¶
    58-59, citing Allstate Ins. Co. v. Cleveland Elec. Illum. Co.,
    
    119 Ohio St. 3d 301
    , 2008-Ohio-3917, 
    893 N.E.2d 824
    . Having determined on
    two separate grounds that the trial court had jurisdiction over the fraud claim, the
    court of appeals remanded that claim to the trial court for further proceedings. 
    Id. at ¶
    82.
    {¶ 17} FirstEnergy appealed to this court.     We accepted discretionary
    jurisdiction over the appeal.
    DISCUSSION
    Subject-matter jurisdiction
    {¶ 18} The sole question for our consideration is whether the court of
    appeals erred in holding that the trial court—instead of the PUCO—has
    jurisdiction over the customers’ fraud claim. For the reasons that follow, we
    reverse the judgment of the court of appeals and reinstate the judgment of the
    common pleas court.
    {¶ 19} The General Assembly enacted R.C. Title 49 to regulate the
    business activities of public utilities, including the regulation of utility service and
    the fixing of rates. Kazmaier Supermarkets, Inc. v. Toledo Edison Co., 61 Ohio
    St.3d 147, 
    573 N.E.2d 655
    (1991). R.C. 4905.26 confers exclusive jurisdiction on
    the PUCO to adjudicate complaints filed against public utilities challenging any
    rate or charge as “unjust, unreasonable, * * * or in violation of law.” See also
    State ex rel. Columbia Gas of Ohio, Inc. v. Henson, 
    102 Ohio St. 3d 349
    , 2004-
    6
    January Term, 2012
    Ohio-3208, 
    810 N.E.2d 953
    , ¶ 16; State ex rel. Illum. Co. v. Cuyahoga Cty. Court
    of Common Pleas, 
    97 Ohio St. 3d 69
    , 2002-Ohio-5312, 
    776 N.E.2d 92
    , ¶ 18.
    {¶ 20} The court of common pleas, however, retains limited subject-
    matter jurisdiction over pure tort and contract actions involving utilities regulated
    by the commission. State ex rel. Ohio Edison Co. v. Shaker, 
    68 Ohio St. 3d 209
    ,
    211, 
    625 N.E.2d 608
    (1994). See 
    Kazmaier, 61 Ohio St. 3d at 154
    , 
    573 N.E.2d 655
    (“pure common-law tort claims may be brought against utilities in the
    common pleas court”); Milligan v. Ohio Bell Tel. Co., 
    56 Ohio St. 2d 191
    , 195,
    
    383 N.E.2d 575
    (1978) (claim that telephone company invaded customer’s
    privacy was actionable in common pleas court); State ex rel. Illum. Co., 97 Ohio
    St.3d 69, 2002-Ohio-5312, 
    776 N.E.2d 92
    , ¶ 32 (the commission has no
    jurisdiction over pure contract claims that do not require consideration of R.C.
    Title 49 or commission regulations). The PUCO is not a court and has no power
    to ascertain and determine legal rights and liabilities. State ex rel. Dayton Power
    & Light Co. v. Riley, 
    53 Ohio St. 2d 168
    , 170, 
    373 N.E.2d 385
    (1978); New
    Bremen v. Pub. Util. Comm., 
    103 Ohio St. 23
    , 30-31, 
    132 N.E. 162
    (1921).
    {¶ 21} The question, therefore, is whether the customers’ fraud claim
    relates to utility rates or service, or whether it is a pure tort action.
    The court of appeals’ reliance on Milligan was misplaced
    {¶ 22} We first address the court of appeals’ reliance on Milligan v. Ohio
    Bell Tel. Co., 
    56 Ohio St. 2d 191
    , 
    383 N.E.2d 575
    . The court of appeals first held
    that, pursuant to Milligan, the court of common pleas has subject-matter
    jurisdiction to adjudicate the fraud claim “because fraud is a civil action that
    existed at common law in Ohio.” 2011-Ohio-5434, 
    969 N.E.2d 1241
    , at ¶ 55.
    {¶ 23} This court held in Milligan that a court of common pleas lacks
    jurisdiction to hear a complaint regarding a utility’s rates and services. Milligan,
    paragraph two of the syllabus. The Milligan court also held that a common pleas
    court has jurisdiction pursuant to R.C. 2305.01 to hear a properly stated invasion-
    7
    SUPREME COURT OF OHIO
    of-privacy claim against a public utility.       Milligan, paragraph three of the
    syllabus. Thus, Milligan recognized that “pure common-law tort claims may be
    brought against utilities in the common pleas court.” 
    Kazmaier, 61 Ohio St. 3d at 154
    , 
    573 N.E.2d 655
    . This court did not hold in Milligan, contrary to the court of
    appeals’ assertion, that the common pleas court has jurisdiction over an action
    against a utility so long as the action existed at common law.
    {¶ 24} The court of appeals relied on the following language from
    
    Milligan, 56 Ohio St. 2d at 195
    , 
    38 N.E.2d 575
    , to support its holding: “Whereas
    the right of privacy has been recognized as a legal right existing at common law
    in this state, * * * it follows that the Court of Common Pleas has subject-matter
    jurisdiction pursuant to R.C. 2305.01 to hear a complaint alleging a violation of
    this right by a utility.” 2011-Ohio-5434, 
    969 N.E.2d 1241
    , at ¶ 28.
    {¶ 25} Despite this language, the dispute over jurisdiction in Milligan did
    not turn on the status of the claim as a common-law tort. Rather, jurisdiction over
    the privacy claim turned on the fact that nothing in the record indicated that the
    trial court lacked subject-matter jurisdiction. This court was “not convinced” that
    the trial court properly dismissed the privacy claim for lack of jurisdiction
    because the plaintiff in Milligan had set forth no operative facts regarding his
    privacy claim. 
    Id. at 195-196.
    Ohio Bell had likewise provided no evidence to
    support its Civ.R. 12(B)(6) motion to dismiss for lack of jurisdiction. In short, the
    record was silent as to whether the privacy claim involved utility rates or services
    or whether it was a pure common-law tort. This court, therefore, had no basis to
    uphold the trial court’s dismissal for lack of subject-matter jurisdiction. 
    Id. {¶ 26}
    Furthermore, the court of appeals’ interpretation of Milligan finds
    no support in our more recent decisions. We have held in cases involving public
    utilities that merely casting the allegations in the complaint to sound in tort “is
    insufficient to confer jurisdiction upon the common pleas court.” State ex rel.
    Columbia Gas of Ohio, Inc. v. Henson, 
    102 Ohio St. 3d 349
    , 2004-Ohio-3208, 810
    8
    January Term, 
    2012 N.E.2d 953
    , ¶ 19. See also Hull v. Columbia Gas of Ohio, 
    110 Ohio St. 3d 96
    ,
    2006-Ohio-3666, 
    850 N.E.2d 1190
    , ¶ 34 (casting allegations to sound in tort or
    contract is insufficient to confer jurisdiction on trial court); State ex rel. Illum. Co.
    v. Cuyahoga Cty. Court of Common Pleas, 
    97 Ohio St. 3d 69
    , 2002-Ohio-5312,
    
    776 N.E.2d 92
    , ¶ 21 (same). Moreover, in Allstate Ins. Co. v. Cleveland Elec.
    Illum. Co., 
    119 Ohio St. 3d 301
    , 2008-Ohio-3917, 
    893 N.E.2d 824
    , ¶ 8, we
    rejected the notion that alleging a common-law tort is sufficient, by itself, to
    confer jurisdiction upon the common pleas court.
    {¶ 27} In sum, jurisdiction is not conferred in cases involving public
    utilities based solely on the form of action. Allstate at ¶ 8; State ex rel. Columbia
    Gas of Ohio, Inc. v. Henson, 
    102 Ohio St. 3d 349
    , 2004-Ohio-3208, 
    810 N.E.2d 953
    , ¶ 19. Instead, courts must look to the substance of the allegations in the
    complaint to determine the proper jurisdiction.          State ex rel. Illum. Co. v.
    Cuyahoga Cty. Court of Common Pleas, 
    97 Ohio St. 3d 69
    , ¶ 21, citing 
    Kazmaier, 61 Ohio St. 3d at 154
    , 
    573 N.E.2d 655
    . See, e.g., Allstate at ¶ 14; Henson at ¶ 20.
    We therefore find that the court of appeals erred when it held that pursuant to
    Milligan, the common pleas court has subject-matter jurisdiction over the fraud
    claim.
    The Allstate test
    {¶ 28} The court of appeals also held that the common pleas court had
    jurisdiction over the fraud claim pursuant to Allstate Ins. Co. v. Cleveland Elec.
    Illum. Co., 
    119 Ohio St. 3d 301
    , 2008-Ohio-3917, 
    893 N.E.2d 824
    . In Allstate, we
    adopted a two-part test to determine whether the common pleas court or the
    PUCO has jurisdiction over a tort action against a public utility. Under this test,
    we ask (1) whether the PUCO’s administrative expertise is required to resolve the
    issue in dispute and (2) whether the act complained of constitutes a practice
    normally authorized by the utility. If the answer to either question is “No,” the
    claim is not within the PUCO’s exclusive jurisdiction. 
    Id. at ¶
    11-13.
    9
    SUPREME COURT OF OHIO
    The court of appeals erred in applying the Allstate test
    {¶ 29} FirstEnergy contends that the court of appeals erred in applying the
    Allstate test. We agree.
    Is the commission’s expertise necessary to resolve the issue?
    {¶ 30} The court of appeals determined that the PUCO’s expertise was not
    necessary to resolve the fraud claim. The court, however, did not explain how it
    reached that conclusion. 2011-Ohio-5434, 
    969 N.E.2d 1241
    , at ¶ 58. This was
    error because many of the same determinations that the court of appeals said
    would be necessary to resolve the contract claims—which the court of appeals
    determined did require PUCO expertise to resolve—would be equally necessary
    to resolve the fraud claim.
    {¶ 31} Before discussing the fraud claim, the court of appeals determined
    that the PUCO’s expertise was required to resolve the contract claim because
    decisions would have to be made concerning: (1) whether [the
    customers] were promised rates that were in violation of the
    PUCO-approved tariffs or were not authorized by the PUCO; and
    (2) the amount of the rate overcharge, if any, based on an analysis
    of the difference between the charges imposed using the former
    discounted rates and the amounts charged based on the rates,
    discounts, and credits subsequently imposed after the discount
    program was eliminated.
    2011-Ohio-5434, 
    969 N.E.2d 1241
    , ¶ 58.
    {¶ 32} In their fraud claim, the customers allege that the companies (1)
    deceptively induced them to purchase all-electric homes and appliances by
    promising them a discounted rate as long as they used electricity as their sole
    source of energy and (2) eliminated the discounted rate in May 2009 and are
    10
    January Term, 2012
    charging them a higher rate, even though customers continue to maintain their all-
    electric status. To prevail, the customers would have to prove, among other
    things, that the companies guaranteed them a specific discounted rate and that
    since May 2009, the companies have charged them more than the promised rate.
    To determine whether the customers are being overcharged will require
    comparing the discounted rate to the rate charged after May 2009.              Such
    comparisons will in turn require a review of the companies’ various residential
    rate schedules and customer billing records. And given the PUCO’s authority to
    set rates and approve tariff schedules, any review will also require analysis of
    various orders entered by the commission. See generally R.C. 4905.22, 4905.30,
    and 4905.32.
    {¶ 33} Such a review could prove particularly difficult in this case.
    According to the customers’ complaint, the companies’ fraudulent conduct
    allegedly lasted nearly 40 years and involved over 60 named plaintiffs. And
    before the commission consolidated the companies’ residential rate schedules into
    one schedule in 2009, CEI had 12 residential rate schedules and Ohio Edison had
    7. See In re FirstEnergy, Pub. Util. Comm. No. 07-551-EL-AIR, at 23, fn. 1 (Jan.
    21, 2009). Another complicating factor is that the discount rate charged to all-
    electric customers was not a fixed charge. Under the companies’ rate design for
    all-electric customers, the rate charged to customers varied depending on the
    amount of electricity the customer used. See Pub. Util. Comm. No. 10-176-EL-
    ATA, at 2 (May 25, 2011) (describing the declining block rate structure). Thus,
    any comparison of the discount rate and the postdiscount rate would require a
    review of charges that varied from month to month based on the amount of
    electricity a customer used. In addition, beginning in 2009, the commission
    issued a series of orders that approved rate credits (Riders RDC, EDR, and RGC)
    for all-electric customers that were designed to mitigate the elimination of the rate
    discounts. See Pub. Util. Comm. No. 07-551-EL-AIR, at 23–24 (Jan. 21, 2009);
    11
    SUPREME COURT OF OHIO
    No. 08-935-EL-SSO, at 9–10 (Mar. 25, 2009); No. 10-388-EL-SSO (Aug. 25,
    2010); and No. 10-176-EL-ATA, at 8, 20 (May 25, 2011). Consideration of these
    credits would be necessary to decide whether the customers are being
    overcharged, as they allege, and if so, by how much.
    {¶ 34} In Kazmaier, this court held that the commission’s expertise was
    required to determine the existence and amount of a rate overcharge, which
    “would require an analysis of the rate structure and various charges that were in
    effect under each of the tariff schedules during the 
    period.” 61 Ohio St. 3d at 153
    ,
    
    573 N.E.2d 655
    . Likewise, the customers’ fraud claim requires a determination
    whether the companies are overcharging all-electric customers by eliminating the
    discounted rate. Thus, resolution of the fraud claim in this case requires the same
    kind of analysis that Kazmaier stated was best accomplished by the PUCO. In
    short, the commission is the fact-finder best suited to review and analyze various
    charged rates, rate designs, tariff schedules, and commission orders. We therefore
    conclude that the commission’s expertise is required to resolve the fraud claim.
    Does the act complained of constitute a practice
    normally authorized by the utility?
    {¶ 35} As to the second part of the Allstate test, the court of appeals
    determined that with respect to the fraud claim, the act complained of did not
    constitute a practice normally authorized by the utility. The court of appeals,
    however, failed to clearly identify the act of the companies that the customers
    were complaining of. Nor did the appellate court clearly articulate why that act
    was not a practice normally engaged in by the companies. 2011-Ohio-5434, 
    969 N.E.2d 1241
    , ¶ 58.
    {¶ 36} After review of the customers’ complaint, we find that the act
    complained of here was the companies’ offer to charge a discount rate to
    customers who used electricity as their main source of energy. Offering special or
    discounted tariff rates to certain customers is a practice normally engaged in by
    12
    January Term, 2012
    the utility.   In fact, the practice is specifically authorized by statute.   R.C.
    4905.31, which allows for “reasonable arrangement[s]” between utilities and
    customers, permits a public utility to classify its customers for rate-making
    purposes. R.C. 4905.31 also gives the commission the authority to approve rates
    tailored to govern a specific customer’s service. See In re Application of Ormet
    Primary Aluminum Corp., 
    129 Ohio St. 3d 9
    , 2011-Ohio-2377, 
    949 N.E.2d 991
    ,
    ¶ 1. Likewise, R.C. 4905.33 allows the charging of different or special rates
    unless the utility is performing “a like and contemporaneous service under
    substantially the same circumstances and conditions.” And R.C. 4905.35 allows
    utilities to make or give preferences and advantages to customers, so long as they
    are not “undue or unreasonable.” See, e.g., Weiss v. Pub. Util. Comm., 90 Ohio
    St.3d 15, 
    734 N.E.2d 775
    (2000) (rejecting the argument that the utility’s
    program—which charged discount rates only to certain customers located within
    the utility’s service territory—violated R.C. 4905.33 and 4905.35).
    {¶ 37} In sum, the statutes and case law do not require absolute uniformity
    in rates and prices; they allow utilities to charge different and unequal rates so
    long as there is some actual and measurable difference in the furnishing of
    services. See Mahoning Cty. Twps. v. Pub. Util. Comm., 
    58 Ohio St. 2d 40
    , 43-44,
    
    388 N.E.2d 739
    (1979). Thus, because the offering of special or discount rates is
    a practice normally engaged in by public utilities and authorized by the
    commission, it follows that the commission is best suited to adjudicate any claims
    regarding the reasonableness and lawfulness of the companies’ offer.
    CONCLUSION
    {¶ 38} Based on the foregoing, we find that the customers’ fraud claim is
    not a pure tort action. The fraud claim is, in essence, a claim that the companies
    are overcharging the customers for electric service. No matter how their claim is
    labeled, the customers are challenging the propriety of the rates that the
    companies are charging for all-electric service. Complaints challenging the rates
    13
    SUPREME COURT OF OHIO
    charged for utility service fall within the exclusive jurisdiction of the PUCO.
    R.C. 4905.26.
    {¶ 39} Therefore, we reverse the judgment of the court of appeals and
    reinstate the order of the trial court dismissing the fraud claim.
    Judgment reversed.
    O’CONNOR, C.J., and LUNDBERG STRATTON, O’DONNELL, LANZINGER,
    and CUPP, JJ., concur.
    PFEIFER, J., dissents and would affirm the judgment of the court of
    appeals.
    __________________
    Jones Day, David A. Kutik, Jeffrey Saks, and Chad Readler, for
    appellants, FirstEnergy Corporation, the Cleveland Electric Illuminating
    Company, and Ohio Edison Company.
    Michael E. Gilb and James E. Grendell, for appellees.
    ______________________
    14
    

Document Info

Docket Number: 2011-2025

Citation Numbers: 2012 Ohio 5445, 134 Ohio St. 3d 144

Judges: Brown, Cupp, Lanzinger, Lundberg, O'Connor, O'Donnell, Pfeifer, Stratton

Filed Date: 11/28/2012

Precedential Status: Precedential

Modified Date: 8/31/2023