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Class Action Defense Cases-Anchor Lighting v. SoCal Edison: California Public Utilities Commission Has Exclusive Jurisdiction Over State Utilities

California Courts Lack Jurisdiction Over Class Action By Commercial Electricity Customer Against Electricity Supplier

A commercial electricity customer, Anchor Lighting, filed a putative class action against electricity supplier Southern California Edison after it failed to qualify for a 10% rate reduction; the trial court agreed with defense attorneys that it lacked jurisdiction over the claims and dismissed the lawsuit. The California Court of Appeal affirmed, holding that the California Public Utilities Commission (CPUC) had “exclusive jurisdiction over the regulation and control of utilities and that jurisdiction, once assumed, cannot be hampered or second-guessed by a superior court action addressing the same issue.” Anchor Lighting v. Southern California Edison Co., ___ Cal.App.4thh ___, 47 Cal.Rptr.3d 7810, 784 (Cal.App. August 30, 2006).

The appellate court explained that California’s Electric Utilities Restructuring Act (“the Act”), enacted in 1996, required electricity suppliers to reduce rates for residential and small commercial customers by at least 10% and to work with the CPUC to implement cost recovery plans to be paid by rate reduction bonds from California’s Infrastructure and Economic Development Bank. Anchor Lighting, at 781-82. “In short, each electrical corporation had to submit rate reduction and financing proposals to the CPUC, and the Legislature understood that the revenue lost by the reduced rates would be replaced by rate recovery bonds authorized by financing orders approved by the CPUC.” Id., at 782. Southern California Edison submitted such a plan to the CPUC, and the plan was approved. Id. Though the opinion is unclear, Anchor Lighting apparently filed an administrative claim with the CPUC.

Several years later and while the administrative claim was pending, Anchor Lighting filed a putative class action alleging that it was a “small commercial customer” within the meaning of the Act and therefore entitled to the 10% rate reduction, but that Southern California Edison had refused to give it a rate reduction. Id., at 783. Defense attorneys demurred; the trial court dismissed most of the claims and stayed the lawsuit on the remaining claims pending completion of Anchor’s administrative claim. Id. After Anchor lost its administrative claim, it amended its state court complaint. The trial court granted a defense motion for summary judgment, and Anchor appealed. Id., at 784.

The Court of Appeal found that Section 1759(a) of the Public Utilities Code controlled. That statute provides, “No court of this state, except the Supreme Court and the court of appeal, to the extent specified in [the Public Utilities Code], shall have jurisdiction to review, reverse, correct, or annul any order or decision of the [CPUC] or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the [CPUC] in the performance of its official duties, as provided by law and the rules of court.” The appellate court had no difficulty in holding that the superior court lacked jurisdiction over the class action complaint: “By its plain language, section 1759 deprives the superior court of jurisdiction to entertain an action that could undermine the CPUC’s authority.” Anchor Lighting, at 784. Accordingly, it affirmed the judgment.

Download PDF file of Anchor Lighting V. Southern California Edison