Leslie Bridges v. Veolia Water Indianapolis, LLC, Veolia Water North America Operating Service, LLC, and The City of Indianapolis, Dept. of Waterworks , 978 N.E.2d 447 ( 2012 )

FOR PUBLICATION FILED
Nov 01 2012, 8:58 am
CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES VEOLIA
WATER INDIANAPOLIS, LLC and
PETER S. KOVACS VEOLIA WATER NORTH AMERICA
Stewart & Irwin, P.C. OPERATING SERVICES, LLC:
Indianapolis, Indiana
ROBERT D. MacGILL
T. JOSEPH WENDT
Barnes & Thornburg LLP
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE CITY OF
INDIANAPOLIS, DEPARTMENT OF
WATERWORKS:
KARL L. MULVANEY
BRIAN W. WELCH
CARL A. HAYES
Bingham Greenebaum Doll LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
LESLIE BRIDGES, individually and as Class )
Representative of all those similarly situated, )
)
Appellant-Plaintiff, )
)
vs. ) No. 49A02-1112-CC-1097
)
VEOLIA WATER INDIANAPOLIS, LLC, )
VEOLIA WATER NORTH AMERICA )
OPERATING SERVICE, LLC, and THE )
CITY OF INDIANAPOLIS, DEPARTMENT )
OF WATERWORKS, )
)
Appellees-Defendants. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Heather A. Welch, Judge
Cause No. 49D12-1103-CC-8409
November 1, 2012
OPINION - FOR PUBLICATION
BRADFORD, Judge
After Veolia Water twice turned her water off for non-payment, appellant Leslie
Bridges filed a class action seeking return of her $25 reconnection fee and other unspecified
damages and attorney’s fees. The trial court dismissed, concluding that Bridges had failed to
exhaust the administrative remedies available at the Indiana Utilities Regulatory
Commission. We conclude that the trial court was correct to hold that Bridges was obliged to
seek those remedies before seeking judicial relief.
FACTS AND PROCEDURAL HISTORY1
In or about March of 2002, the City of Indianapolis, Department of Waterworks (the
“Department”) acquired the waterworks assets of IWC Resources Corporation. In acquiring
the waterworks assets, the Department explicitly agreed that it would remain subject to the
jurisdiction of the Indiana Utility Regulatory Commission (“IURC”) for purposes of rates and
charges, and that it would operate the waterworks systems in accordance with the IURC’s
rules of service. The purchase was approved by the IURC on March 28, 2002 (the “2002
1
We heard oral argument in this matter on October 11, 2012, and wish to thank counsel for their
presentations.
2
Order”). The 2002 Order reiterated that the Department would remain subject to the IURC’s
jurisdiction for purposes of rates and charges and that the Department would operate the
waterworks systems in accordance with the IURC’s rules of service.
The Department is a municipal water utility. Veolia Water Indianapolis, LLC and
Veolia Water North America Operating Service, LLC (collectively, “Veolia”) is an
independent contractor who, at all times relevant to this appeal, managed and operated all
water treatment and distribution facilities owned by the Department. Under the terms of its
contract, Veolia managed and operated all meter reading, billing, and collection functions.
Veolia was responsible for handling all customer complaints and service requests. Veolia
was also responsible for performing any disconnection of residential water service for
nonpayment.
The services provided to residential customers by Veolia were governed by a tariff
(the “Tariff”). The Tariff was approved by the IURC on September 11, 2002, and contained
approved fees and procedures relating to the disconnection of residential water service for
nonpayment. According to the terms of the Tariff, the procedure for involuntary
disconnection was as follows:
(D) Procedure for Involuntary Disconnection of Residential
Customers. Immediately preceding the disconnection of service to a
residential customer, the Department’s employee designated to perform such
function will attempt to identify himself to the residential customer or other
responsible person then at the premises. The employee will announce the
purpose of the visit, and a record of the visit will be maintained for at least
thirty (30) days. The employee will also attempt to inform the residential
customer or other responsible person of the reason for disconnection including,
if the reason for disconnection is nonpayment, the amount of any delinquent
bill. The employee will request from the residential customer any available
3
verification that the reason for disconnection of service is no longer valid (such
as, but not limited to, written evidence that the delinquent bill has been paid or
evidence that the conditions, circumstances or practices which caused the
disconnection have been corrected) or that the reason of disconnection is
currently in dispute and under review, pursuant to Rule 11. The employee will
not be required to accept payment in order to prevent the service from being
disconnected for nonpayment; however, the Department’s 24-hour payment
agreement will be offered as an option to disconnection should the customer or
other responsible party offer such payment. Upon the presentation of
satisfactory evidence or acceptance by the customer or other responsible party
of the Department’s 24-hour payment agreement, service will not be
disconnected. When the employee has disconnected the service, he will give
to a responsible person at the residential customer’s premises, or if no one is at
home, will leave at an entry way on the premises, a notice stating that service
has been disconnected and the address and telephone number of the
Department where the customer may arrange to have service reconnected.
Appellant’s App. pp. 46-47. The Tariff also provided that a residential customer would be
subject to a $25 re-connect fee after having their water service involuntarily disconnected for
nonpayment. Further, in addition to its other terms, the Tariff set forth the administrative
process to be utilized by aggrieved customers. Specifically, the Tariff provided as follows:
(A) Complaint. A customer may complain to the Department at any
time about any bill which is not then delinquent, a security deposit, a
disconnection notice, or any other matter relating to the Department’s service
and may also request a conference about such matters. The complaints may be
made in person, in writing, or by completing a form available from either the
[IURC] or from the Department at its business office. A complaint shall be
considered filed upon receipt by the Department, except mailed complaints
shall be considered filed as of the postmark date. In making a complaint or
requesting a conference (hereinafter “complaint”), the customer shall state his
name, service address and the general nature of his complaint.
(B) Investigation of Complaint and Notification of Proposed
Disposition. Upon receiving each such complaint, the Department will
investigation [sic] the matter, confer with the customer when requested and
notify him, in writing, of its proposed disposition of the matter. Such written
notification will advise the customer that he may, within seven days following
the date on which such notification is mailed, request a review of the
Department’s proposed disposition by the [IURC]. If the customer requests a
4
special meter reading, the first reading of the customer’s meter by the
Department during its investigation shall not be subject to the charge for a
special meter reading prescribed in the Department’s rate schedules.
Subsequent readings, however, if requested by the customer, will be subject to
the charge.
Appellant’s App. p. 63. The IURC has also established and made available procedures for
the handling of complaints against a utility.
On March 4, 2011, Bridges filed a complaint in the trial court alleging that Veolia
and/or the Department (collectively, the “Appellees”) committed a breach of contract by
violating the terms of the Tariff governing the service provided to residential customers.2
Specifically, Bridges alleged that Veolia turned off her residential water service without
following the procedures set forth in the Tariff on two separate occasions. In bringing the
suit, Bridges sought damages,3 attorneys’ fees, and costs. Bridges also requested that the trial
court impose an injunction prohibiting Veolia from continuing to disconnect residential water
service in a manner not permitted by the Tariff.4
On May 16, 2011, the Department moved to dismiss Bridges’s complaint alleging that
the trial court lacked subject matter jurisdiction over the matter because Bridges had failed to
2
We note that while Bridges asserts that she filed suit individually and as a representative of a class of
those similarly situated, there has been no class certification in the instant matter.
3
It is unclear what monetary damages Bridges is alleging, if any, in addition to the $25 re-connect fee
that she was charged on one of the two instances that she claims her residential water service was improperly
disconnected. When asked at oral argument what these damages might be, counsel for Bridges was unable to
articulate any specific additional damages and acknowledged that, with respect to Bridges, there were no easily
calculated damages other than the $25 re-connect fee.
4
The parties agree that Bridges’s request for an injunction against Veolia is moot because at some
point during 2011, the Department sold the waterworks assets to Citizens Energy Group and Veolia is no
longer involved with the waterworks functions in Indianapolis.
5
exhaust the administrative remedies available to her through the Tariff. Bridges filed a
response to the Department’s motion to dismiss on June 13, 2011, in which she argued that
the trial court had jurisdiction because she presented her claim as a breach of contract action
and also that utilization of the Tariff-prescribed administrative remedies would have been
futile. On June 21, 2011, Veolia joined the Department’s motion.5
The trial court heard argument on the Appellees’ motion to dismiss on July 22, 2011.
At Bridges’s request, the trial court provided the parties with the opportunity to file
additional post-hearing submissions. On August 25, 2011, the trial court granted the
Appellees’ motion to dismiss. Bridges filed a motion to correct error on September 26, 2011,
which was denied by the trial court on November 9, 2011. This appeal follows.
DISCUSSION AND DECISION
On appeal, Bridges contends that the trial court abused its discretion in denying her
motion to correct error after the trial court granted the Appellees’ motion to dismiss her
complaint for lack of subject matter jurisdiction pursuant to Indiana Trial Rule 12(B)(1).
Motions to correct error are governed by Trial Rule 53.3. Trisler v.
Executive Builders, Inc., 647 N.E.2d 390, 393 (Ind. Ct. App. 1995), trans.
denied. “That rule provides that a motion to correct error ‘shall be deemed
denied’ if a trial judge fails to rule upon it ‘within thirty (30) days’ after it was
heard or forty-five (45) days after it was filed, if no hearing is required....”
Ind. Trial Rule 53.3(A). “This denial is automatic; it is ‘self-activating upon
the passage of the requisite number of days.’” Trisler, 647 N.E.2d at 393(quoting Remington Freight Lines, Inc. v. Larkey, 644 N.E.2d 931, 936 (Ind.
Ct. App. 1994)). Trial Rule 53.3(A) further provides, “Any appeal shall be
initiated by filing the notice of appeal under Appellate Rule 9(A) within thirty
(30) days after the Motion to Correct Error is deemed denied.” T.R. 53.3(A).
5
Because Veolia joined the Department’s motion, we will hereinafter refer to the motion as
“Appellees’ motion.”
6
Generally, a trial court has wide discretion to correct errors, and we will
reverse only for an abuse of that discretion. Paulsen v. Malone, 880 N.E.2d
312, 313 (Ind. Ct. App. 2008). An abuse of discretion occurs when the trial
court’s action is against the logic and effect of the facts and circumstances
before it and the inferences that may be drawn therefrom, or is based on
impermissible reasons or considerations. Id.Wurster Const. Co., Inc. v. Essex Ins. Co., 918 N.E.2d 666, 671 (Ind. Ct. App. 2009).
In arguing that the trial court abused its discretion by denying her motion to correct
error, Bridges claims that the IURC did not have exclusive jurisdiction over her claim.
Alternatively, Bridges claims that even if the IURC did have exclusive jurisdiction over her
claim, her failure to exhaust the available administrative remedies should be excused because
the exhaustion of said remedies would have been futile. For their part, the Appellees argue
that the IURC did have exclusive jurisdiction over Bridges’s claim. Appellees further argue
that exhaustion of the available administrative remedies would not have been futile, and, as
such, Bridges’s failure to exhaust said remedies should not be excused.
A. Whether Bridges Was Required to Exhaust the Available Administrative
Remedies Before Bringing the Underlying Action in the Trial Court
The General Assembly created the [IURC] primarily as a “fact-finding
body with the technical expertise to administer the regulatory scheme devised
by the legislature.” United Rural Elec. Membership Corp. v. Indiana & Mich.
Elec. Co., 549 N.E.2d 1019, 1021 (Ind. 1990) (“UREMC”). Its authority
“includes implicit powers necessary to effectuate the statutory regulatory
scheme.” Office of Utility Consumer Counselor v. Public Serv. Co., 608
N.E.2d 1362, 1363-64 (Ind. 1993). Still, as a creation of the legislature, the
Commission may exercise only that power conferred by statute. UREMC, 549
N.E.2d at 1021.
United States Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790, 795 (Ind. 2000).
Any attack on the validity or application of a utilities’ tariff approved by the
utility commission is within the exclusive jurisdiction of the Public Service
7
Commission (now the IURC). Indiana Bell Tel. Co., Inc. v. Friedland (1978),
175 Ind. App. 622, 373 N.E.2d 344, cert. denied, 440 U.S. 916, 99 S.Ct. 1233,
59 L.Ed.2d 465. Where the legislature has provided an exclusive
administrative remedy, the courts are without jurisdiction until the statutory
procedure has been exhausted or denied. Indiana Forge and Machine Co., Inc.
v. Northern Indiana Public Service Co. (1979), Ind. App., 396 N.E.2d 910.
The exhaustion of administrative remedies is the necessary precursor to
judicial review. Id.Haggard v. PSI Energy, Inc., 575 N.E.2d 687, 690 (Ind. Ct. App. 1991).
“It has long been Indiana law that a claimant with an available administrative remedy
must pursue that remedy before being allowed access to the courts.” Turner v. City of
Evansville, 740 N.E.2d 860, 861 (Ind. 2001). “If a party fails to exhaust administrative
remedies, the trial court lacks subject matter jurisdiction.” Id. at 861-62. The rationale
underlying this policy is that administrative bodies have specialized expertise and, as such,
are better suited to settle disputes between customers and regulated utilities. State v. Sproles,
672 N.E.2d 1353, 1358 (Ind. 1996). “Even when neither statute nor agency rule specifically
mandates exhaustion as a prerequisite to judicial review, the general rule is that a party is not
entitled to judicial relief from an alleged or threatened injury until the prescribed
administrative remedy has been exhausted.” Austin Lakes Joint Venture v. Avon Utils., Inc.,
648 N.E.2d 641, 644 (Ind. 1995).
The Indiana Supreme Court has, on several occasions, articulated that the reasoning
behind the policy of requiring exhaustion of administrative remedies before review by the
courts is permitted is that “[p]remature litigation may be avoided, an adequate record for
judicial review may be compiled, and agencies retain the opportunity and autonomy to
correct their own errors.” Advantage Home Health Care, Inc. v. Ind. State Dep’t of Health,
8
829 N.E.2d 499, 503 (Ind. 2005); Turner, 740 N.E.2d at 862; State Bd. of Tax Comm’rs v.
Montgomery, 730 N.E.2d 680, 684 (Ind. 2000). “Even if the ground of complaint is the
unconstitutionality of the statute, which may be beyond the agency’s power to resolve,
exhaustion may still be required because administrative action may resolve the case on other
grounds without confronting broader legal issues.” Turner, 740 N.E.2d at 862 (internal
quotation omitted).
“The exhaustion doctrine is intended to defer judicial review until controversies have
been channeled through the complete administrative process.” Austin Lakes, 648 N.E.2d at
644.
The exhaustion requirement serves to avoid collateral, dilatory action of the
likes of the instant action and to ensure the efficient, uninterrupted progression
of administrative proceedings and the effective application of judicial review.
It provides an agency with the opportunity to correct its own errors, to afford
the parties and the courts the benefit of [the agency’s] experience and
expertise, and to compile a [factual] record which is adequate for review.
Id. (internal quotations omitted).
Again, Bridges argues that the trial court abused its discretion in denying her motion
to correct error because her claim against the Appellees did not fall within the exclusive
jurisdiction of the IURC, and, as such, she was not required to exhaust the available
administrative remedies before bringing her claim in the trial court. Alternatively, Bridges
argues that even if required, her failure to exhaust the administrative remedies should be
excused because exhaustion would have been futile. Therefore, upon review, in order to
determine whether the trial court acted within its discretion in denying Bridges’s motion to
correct error, we must determine whether Bridges’s claim fell within the type of claims
9
covered by the exclusive jurisdiction of the IURC, thus requiring exhaustion of the available
administrative remedies. If so, we must further determine whether exhaustion of said
remedies would have been futile.
It is undisputed that the Department is a municipal utility and that the IURC’s
jurisdiction over municipal utilities is somewhat more limited than its jurisdiction over public
utilities. In the instant matter, Bridges asserts that the Appellees committed an unreasonable
act, i.e., disconnecting her residential water service in violation of both the Tariff and 170
IAC 6-1-16-(f). Thus, Bridges argues that her claim against the Appellees is governed by
Indiana Code sections 8-1-2-34.5 or 8-1-2-54.
Indiana Code section 8-1-2-34.5 reads, in relevant part, as follows:
(a) The [IURC] shall establish reasonable rules and regulations to govern
the relations between public utilities and any or all classes of their customers.
Those rules and regulations shall cover the following subjects:
(1) extension of service;
(2) extension of credit;
(3) deposits, including interest thereon;
(4) billing procedures;
(5) termination of service;
(6) complaints; and
(7) information and notice to customers of their rights under the
rules.
(b) Notwithstanding IC 8-1-2-45, the [IURC] may investigate and enter
orders on complaints filed by individual customers arising under this section.
The [IURC] may establish an appeals division to act on its own behalf
regarding individual customer complaints. The decision of the division shall
be binding on all parties to the complaint. The [IURC] shall review decisions
of the appeals division upon timely request by an affected party.
(Emphasis added).
Indiana Code section 8-1-2-54 reads as follows:
10
Upon a complaint made against any public utility by any mercantile,
agricultural or manufacturing society or by any body politic or municipal
organization or by ten (10) persons, firms, limited liability companies,
corporations, or associations, or ten (10) complainants of all or any of the
aforementioned classes, or by any public utility, that any of the rates, tolls,
charges or schedules or any joint rate or rates in which such petitioner is
directly interested are in any respect unreasonable or unjustly discriminatory,
or that any regulation, measurement, practice or act whatsoever affecting or
relating to the service of any public utility, or any service in connection
therewith, is in any respect unreasonable, unsafe, insufficient or unjustly
discriminatory, or that any service is inadequate or can not be obtained, the
commission shall proceed, with or without notice, to make such investigation
as it may deem necessary or convenient. But no order affecting said rates, tolls,
charges, schedules, regulations, measurements, practice or act, complained of,
shall be entered by the commission without a formal public hearing.
(Emphasis Added).
The clear language of both Indiana Code section 8-1-2-34.5 and 8-1-2-54 limits these
sections’ application to complaints against public utilities. In Gypsum, the Indiana Supreme
Court held that in light of the clear language of Indiana Code section 8-1-2-54, the IURC’s
jurisdiction under Indiana Code section 8-1-2-54 is limited to public utilities and does not
extend to municipal utilities like the Department. See 735 N.E.2d at 797.
For their part, the Appellees contend that, Bridges’s claim effectively amounts to a
challenge to the imposition of a charge that had been approved by the IURC, and, as a result,
relevant statutory authority expressly grants the IURC exclusive jurisdiction over Bridges’s
claim against the Appellees. Again, the Appellees acknowledge that the IURC’s jurisdiction
in certain circumstances is limited to public utilities. See Ind. Code §§ 8-1-2-34.5 and 8-1-2-
54. Appellees, however, argue that this court should look beyond the statutes relied on by
Bridges to determine whether any other relevant statutes confer exclusive jurisdiction to the
11
IURC over complaints against a municipal utility like the Department.
This Court has previously determined that the IURC’s power to approve rates and
charges for municipal utilities necessarily gives rise to the power to investigate the justness
of the application of these rates and charges, make findings, enter orders, and order payment
for the expenses of the investigation. See Bloomington Country Club, Inc. v. City of
Bloomington Water & Wastewater Utils., 827 N.E.2d 1213, 1219 (Ind. Ct. App. 2005), trans.
denied. In Bloomington Country Club, the Country Club filed a petition with the IURC
claiming that the utility’s application of the water rate was unreasonable and unjustly
discriminatory. Id. at 1217. The Utility filed a motion to dismiss claiming that the IURC
lacked jurisdiction to grant the Country Club’s request to investigate the reasonableness of
the irrigation rate. Id. The IURC denied the Utility’s motion to dismiss. Id. On appeal, the
Utility argued that the IURC lacked jurisdiction to investigate the already adopted rates and
charges of a municipally owned utility because Indiana Code section 8-1-2-68 does not apply
to municipally owned utilities. Id. at 1218-19.
Indiana Code section 8-1-2-68 reads in relevant part:
Whenever, upon an investigation, the commission shall find any rates, tolls,
charges, schedules, or joint rate or rates to be unjust, unreasonable,
insufficient, or unjustly discriminatory, or to be preferential or otherwise in
violation of any of the provisions of this chapter, the commission shall
determine and by order fix just and reasonable rates, tolls, charges, schedules,
or joint rates to be imposed, observed, and followed in the future in lieu of
those found to be unjust, unreasonable, insufficient, or unjustly discriminatory
or preferential or otherwise in violation of any of the provisions of this chapter.
Upon review, we noted that Indiana Code section 8-1-2-68 did not explicitly limit its
application to “public utilities” and concluded that because it authorized the IURC to act
12
upon an investigation that leads to certain findings, the power to initiate such an investigation
was implied. Bloomington Country Club, 827 N.E.2d at 1219. In addition, we further noted
that “[a] subsequent section provides for payment of the IURC’s expenses ‘upon any
investigation made under the provisions of this chapter, either upon complaint against any
municipal utility, or upon the petition of such municipal utility....’” Id. (quoting Ind. Code §
8–1–2–70).
In light of the well-settled principle that “[c]ourts will not construe a statute in a
manner that will render another a nullity,” we concluded that “[a] reading of the provisions
together leads to the conclusion that the IURC has been granted the power to initiate an
investigation as to whether a rate is ‘unjust, unreasonable, insufficient, or unjustly
discriminatory’ along with its power to issue an order addressing such a finding and to order
payment for the expense of its investigation.” Id. We further concluded that “such a
conclusion is consistent with the undisputed authority of the IURC to approve the rates being
applied by” municipal utilities, id., and that “[g]iven the statutory provisions discussed, to
hold that the legislature did not grant to the IURC the authority to investigate the municipal
utility’s application of rates which it had approved would produce an absurd result, and a
statute ‘is to be construed so as to not bring about an absurd result.’” Id. at 1220 (quoting
Citizens Action Coal. of Ind. v. N. Ind. Pub. Serv. Co., 796 N.E.2d 1264, 1269 (Ind. Ct. App.
2003), trans. denied).
Likewise, we believe that the rationale behind our conclusion in Bloomington Country
Club can reasonably be extended to Indiana Code section 8-1-2-69, which, like Indiana Code
13
sections 8-1-2-68 and 8-1-2-70, does not contain language expressly limiting its application
to public utilities. Indiana Code section 8-1-2-69 provides in relevant part:
Whenever, upon the investigation made under the provisions of this chapter,
the commission shall find any regulations, measurements, practices, acts, or
service to be unjust, unreasonable, unwholesome, unsanitary, unsafe,
insufficient, preferential, unjustly discriminatory, or otherwise in violation of
any of the provisions of this chapter … the commission shall determine and
declare and by order fix just and reasonable measurements, regulations, acts,
practices, or service to be furnished, imposed, observed, and followed in the
future in lieu of those found to be unjust, unreasonable, unwholesome,
unsanitary, unsafe, insufficient, preferential, unjustly discriminatory,
inadequate, or otherwise in violation of this chapter, as the case may be, and
shall make such other order respecting such measurement, regulation, act,
practice, or service as shall be just and reasonable.
Thus, applying the rationale behind our conclusion in Bloomington Country Club, we
conclude that Indiana Code sections 8-1-2-68 through 8-1-2-70 grant the IURC exclusive
jurisdiction over Bridges’s claim regardless of whether it is treated as a challenge to and
request for reimbursement of the $25 re-connect fee imposed by the Appellees or as a
challenge to the Appellees’ allegedly improper act of terminating Bridges’s residential water
service in a manner inconsistent with the terms of the Tariff. As such, we conclude that the
IURC has exclusive jurisdiction over Bridges’s claim.
Furthermore, to the extent that the Tariff amounts to a contract between the
Department and its customers, the Tariff binds customers to exhaust administrative remedies
when filing a complaint against the utility or challenging an act of or charge imposed by it.
In filing suit in the trial court without first exhausting the available administrative remedies,
Bridges is effectively seeking to enforce one portion of the Tariff while disregarding the
provision requiring the exhaustion of administrative remedies. Bridges may not do so. See
14
Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App. 2007)
(providing that the language of a contract should be construed so as not to render any words,
phrases, or terms ineffective or meaningless); Francis v. Yates, 700 N.E.2d 504, 506 (Ind. Ct.
App. 1998) (providing that specific words and phrases found in a contract cannot be read
exclusive of other contractual provisions and that the meaning of a contract is to be
determined from an examination of all its provision, and not from a consideration of
individual words, phrases or even paragraphs read alone).
B. Whether Bridges’s Failure to Exhaust the
Available Administrative Remedies Should be Excused
Having concluded that the IURC has exclusive jurisdiction over Bridges’s claim
against the Appellees, we must next consider whether Bridges’s failure to exhaust the
available administrative remedies should be excused. Again, Bridges argues that even if the
IURC did have exclusive jurisdiction over her claim against the Appellees, she should be
excused from exhausting the available administrative remedies because the exhaustion of the
available administrative remedies would have been futile. Appellees, for their part, argue
that exhaustion of the available administrative remedies would not have been futile.
While “exhaustion of administrative remedies may be excused if the
exercise would be futile,” M-Plan, Inc. v. Ind. Comprehensive Health Ins.
Ass’n, 809 N.E.2d 834, 839 (Ind. 2004), “the exhaustion requirement ... should
not be dispensed with lightly on grounds of ‘futility.’” [Town Council of New
Harmony v. Parker, 726 N.E.2d 1217, 1224 (Ind. 2000)]. To prevail upon a
claim of futility, “one must show that the administrative agency was powerless
to effect a remedy or that it would have been impossible or fruitless and of no
value under the circumstances.” M-Plan, 809 N.E.2d at 840.
Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979, 984 (Ind. 2005).
15
In the instant matter, Bridges sought damages, attorneys’ fees, costs, and an injunction
prohibiting the Appellees from continuing to disconnect residential water service without
following the terms of the Tariff. The request for the injunction is moot, however, because
the Department sold the waterworks assets in 2011 and Veolia is no longer involved in the
administration of waterworks assets. The damages sought by Bridges appear to be merely the
recovery of the $25 re-connect fee that she incurred after one instance when she claims he
residential water service was disconnected in violation of the terms of the Tariff.
In Northern Indiana Public Service Co. v. Citizens Action Coalition of Indiana, 548
N.E.2d 153, 160-61 (Ind. 1989), the Indiana Supreme Court held that Indiana Code section 8-
1-2-69 provided the IURC with the power to order a refund of charges collected by utilities,
plus interest. Furthermore, opinions of the IURC indicate that the IURC has the power, and
in fact does, award refunds of charges paid by customers to utilities, including municipal
utilities. See, e.g., In re Town of Cedar Lake, IURC Cause No. 43895, 2010 Ind. PUC
LEXIS 298 (Aug. 25, 2010) (ordering a refund of $9000); In re Easterly v. Ind. Gas Co.,
IURC Cause No. 43841, 2010 Ind. PUC LEXIS 222 (June 23, 2010) (ordering a refund for
service and investigation fees); In re Brenston v. N. Ind. Pub. Serv. Co., IURC Cause No.
43708, 2010 Ind. PUC LEXIS 169 (May 19, 2010) (ordering a refund of $12.30); In re Park
Jefferson v. N. Ind. Pub. Serv. Co., IURC Cause No. 42671, 2005 Ind. PUC LEXIS 383
(Nov. 2, 2005) (ordering that Complainant shall be responsible for ½ the disputed amount
and the utility shall be responsible for the other half). Thus, because the IURC would have
the authority to order the Appellees to refund the damages allegedly suffered by Bridges, it
16
would not have been futile for Bridges to exhaust the administrative remedies available to
her.
Furthermore, even if Bridges were to be unsuccessful in an administrative challenge,
resort to the IURC may produce a reasoned explanation of the lawfulness of the Appellees’
actions, and that, in and of itself, could be of value before resorting to the courts to resolve
such an issue. See Johnson, 829 N.E.2d at 984. The same is true even if Bridges were
alleging damages in addition to the refund of the $25 re-connect fee because the IURC would
be given the opportunity to use its expertise and experience to determine whether the
Appellees acted in a manner inconsistent with the procedure for the disconnection of a
customer’s residential water service set forth in the Tariff. If the IURC were to determine
that the Appellees did, in fact, violate the terms of the Tariff, Bridges would then have the
opportunity to seek any additional damages incurred beyond a refund of the $25 re-connect
fee in the trial court.
In sum, having concluded that Bridges’s claim falls within the exclusive jurisdiction
of the IURC and that exhaustion of the available administrative remedies would not have
been futile, we conclude that the trial court acted within its discretion in denying Bridges’s
motion to correct error because the trial court did not have subject matter jurisdiction over
Bridges’s claim.
The judgment of the trial court is affirmed.
ROBB, C.J., and SHEPARD, SJ., concur.
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