RT COMMUNICATIONS v. PUBLIC SERVICE COM'N

79 P.3d 36

2003 WY 145

RT COMMUNICATIONS, INC.; Range Telephone Cooperative, Inc.; Union Telephone Company; and Dubois Telephone Exchange, Inc., Appellants (Petitioners), v. The PUBLIC SERVICE COMMISSION FOR the STATE OF WYOMING; and Contact Communications, Appellees (Respondents).

No. 02-144.

Supreme Court of Wyoming.

November 10, 2003.

Representing Appellants: Bruce S. Asay of Associated Legal Group, LLC, Cheyenne, WY. Argument by Mr. Asay.

Representing Appellee Public Service Commission: Hoke MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; and Harry D. Ivey, Assistant Attorney General. Argument by Mr. Ivey.

Representing Appellee Contact Communications: Alexander K. Davison and Wendy J. Curtis of Patton & Davison, Cheyenne, WY. Argument by Ms. Curtis.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

LEHMAN, Justice.

[¶ 1] RT Communications, Inc., Range Telephone Cooperative, Inc., Union Telephone Company, and Dubois Telephone Exchange, Inc. (collectively petitioners) seek reversal of an order entered by appellee Wyoming Public Service Commission (PSC). After administrative hearing, PSC approved appellee Contact Communications' application (Contact) for a concurrent certificate of public convenience and necessity to provide local telecommunications exchange services. Eventually this matter was certified to this court after petitioners filed a petition of review in the district court questioning such order. Upon our review, we affirm.

ISSUES

[¶ 2] Petitioners identify the following issues:

[1.] Did the Wyoming Public Service Commission misinterpret the Wyoming statute for certificates of public convenience and necessity?

[2.] Did the Wyoming Public Service Commission err as a matter of law in refusing to follow the provisions of its own regulation?

[3.] Was the commission's finding that the applicant possessed sufficient technical, financial and managerial resources to provide safe, adequate and reliable local exchange service supported by substantial evidence?

[4.] Were the petitioners deprived of due process and a fair hearing by action of the commission in considering an ex parte document?

[5.] [Were t]he petitioners ... deprived of due process and a fair hearing by the commission's refusal to allow appropriate participation in the rehearing[?]

[6.] Was the decision of the commission contrary to law in that it impermissibly took official notice of non-cognizable facts?

PSC states the issues as:

I. Did the Wyoming Public Service Commission follow and apply applicable law when it granted the Certificate of Public Convenience and Necessity?

II. Is the Wyoming Public Service Commission's decision supported by substantial evidence?

III. Did the Wyoming Public Service Commission base its decision on an ex parte document?

IV. Were applicants provided due process in proceedings before the Wyoming Public Service Commission?

V. Should the Wyoming Supreme Court consider issues raised for the first time on appeal?

Contact postures the issues before this court in an affirmative phrasing:

1. The decision of the PSC was in accordance with law.

2. The decision of the PSC was supported by substantial evidence.

3. The letter from Contact Communications was correctly not considered by the Commission.

FACTS AND BACKGROUND

[¶ 3] On April 2, 1997, Contact, then known as WYOCOM, filed an application with PSC for issuance of a certificate of public convenience and necessity to provide local telecommunications exchange services as a reseller of services in service areas with fewer than 30,000 access lines. On May 15, 1997, petitioners, along with TCT West, Inc. and Tri County Telephone Association, Inc., moved to intervene with respect to the application, and PSC granted this motion.

[¶ 4] On March 24, 2000, Contact amended its application. Thereafter, PSC approved the amended application orally in an open meeting, ruling that Contact had made a prima facie showing that it possessed sufficient technical, financial, and managerial resources to provide safe, adequate, and reliable local exchange services. Shortly after this oral approval, petitioners filed a motion to set aside PSC's action and requested that a fair hearing be held.

[¶ 5] On June 27, 2000, PSC issued a Notice and Order confirming its oral approval of the application. However, on October 6, 2000, PSC issued a procedural order setting a hearing concerning the motion to set aside PSC's approval of Contact's application, and PSC conducted a two-day hearing on January 25-26, 2001, regarding such issues. At the conclusion of this hearing, PSC orally advised the parties of its tentative decision.

[¶ 6] On April 9, 2001, the president of Contact sent a letter to PSC expressing Contact's frustration with the tentative ruling made by PSC, most particularly the restrictions PSC was considering placing on Contact upon granting the application. This letter was carbon copied to petitioners' attorney of record. On April 13, 2001, petitioners filed a Motion to Dismiss Application and Revoke Certificate. PSC issued its formal memorandum opinion, findings, and order approving Contact's application for a concurrent certificate of public convenience and necessity to provide local telecommunications exchange services on May 2, 2001. This memorandum, findings, and order granted Contact's application but included the restrictions earlier verbally expressed to the parties.

[¶ 7] Contact then filed a petition for rehearing with PSC contesting certain restrictions PSC had placed on Contact and requesting clarification regarding the geographic area. This was followed by petitioners filing their objection to Contact's petition for rehearing. Eventually, PSC entered an order setting rehearing and specifying that the parties were required to file contemporaneous disclosure statements including the witnesses and documentary evidence they intended to offer at the rehearing. Petitioners objected to this disclosure proceeding, arguing that it was unfair that the disclosure be contemporaneous. Rather, petitioners asserted that Contact should be required to file its disclosure first, allowing petitioners to review such disclosure and conduct additional discovery and then file their disclosure. After consideration, PSC denied petitioners' objection. Subsequently, petitioners failed to file any disclosure as ordered by PSC, and PSC refused to allow petitioners to offer witness testimony at rehearing as a result.

[¶ 8] On July 23, 2001, PSC conducted a hearing on Contact's petition for rehearing. On December 5, 2001, PSC issued its Order on Rehearing affirming its previous grant of Contact's application but removing the previously imposed restrictions. Petitioners later filed their Petition for Review in the district court. On March 18, 2002, the district court certified this matter to this court.

STANDARD OF REVIEW

[¶ 9] In Sinclair Oil Corp. v. Public Serv. Comm'n, 2003 WY 22, ¶¶ 6-7, 63 P.3d 887, ¶¶ 6-7 (Wyo.2003), we reiterated our standard of review with respect to administrative matters:

Our review of administrative decisions is guided by the standards set forth in Wyo. Stat. Ann. § 16-3-114(c):

(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:

(i) Compel agency action unlawfully withheld or unreasonably delayed; and

(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:

(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(B) Contrary to constitutional right, power, privilege or immunity;

(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

(D) Without observance of procedure required by law; or

(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

See Newman v. State ex rel. Workers' Safety & Compensation Div., 2002 WY 91, ¶ 9, 49 P.3d 163, ¶ 9 (Wyo.2002) and McTiernan v. Scott, 2001 WY 87, ¶ 11, 31 P.3d 749, ¶ 11 (Wyo.2001).

We further enunciated in Powder River Coal Co. v. State Bd. of Equalization, 2002 WY 5, ¶ 5, 38 P.3d 423, ¶ 5 (Wyo.2002):

When we review cases certified pursuant to W.R.A.P. 12.09(b), we apply the appellate standards which are applicable to the court of the first instance. State by and through Wyoming Department of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶ 5, 18 P.3d 1182, ¶ 5 (Wyo.2001); see also Union Telephone Company, Inc. v. Wyoming Public Service Commission, 907 P.2d 340, 341-42 (Wyo.1995). Judicial review of administrative decisions is governed by Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2001). Buggy Bath Unlimited, Inc., ¶ 5; W.R.A.P. 12.09(a); Everheart v. S & L Industrial, 957 P.2d 847, 851 (Wyo. 1998).

In addition, in Powder River Coal Co., at ¶ 6 (citing Chevron U.S.A., Inc. v. State, 918 P.2d 980, 983 (Wyo.1996) and State by and through Dep't of Rev. v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶ 6, 18 P.3d 1182, ¶ 6 (Wyo.2001)), we noted when this court reviews questions of law posed in an administrative context, this court must conduct a de novo review. We affirm an agency's conclusions of law when they are in accordance with the law. However, when the agency has failed to properly invoke and apply the correct rule of law, we correct the agency's error. Id. See also State ex rel. Workers' Safety & Compensation Div. v. Garl, 2001 WY 59, ¶¶ 8-9, 26 P.3d 1029, ¶¶ 8-9 (Wyo.2001).

[¶ 10] We went on in Sinclair Oil Corp., at ¶ 8:

When issues are presented to us concerning whether there exists substantial evidence

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